Friday, October 09, 2009

Megan McArdle Fisks the New Health Plan's Bogus Numbers

The Atlantic's Megan McArdle sticks up for truth, justice and the American Way, sort of, in exposing what one commenter calls ""technical refinements in their estimating procedures = Baucus and Rahm Emmanuel taking CBO to the woodshed until a more favorable number is produced."

When I saw a cretinous grin on the prognathic mug of a shortish CNN WH correspondent named Dana [What Mike Tyson Did to MY FACE!] while she intoned "there are VERY IMPORTANT changes in the CBO estimates, I knew that the RICO scammers in the WH had put the fear of God in the petty functionaries of the CBO, and James Taranto puts it in his roundup of the Afternoon Follies
"So Congress is going to reduce the deficit by increasing spending $829,000,000,000.00? Doesn't this sound like--well, a joke? Too good a joke to check, evidently.
Through what voodoo exactly does the CBO surmise Congress will cut the deficit while spending close to a trillion dollars? CNN does not even attempt to detail the argument:Instead we have to turn to Megan McArdle of The Atlantic::
most of the major components of the program are scheduled to either cost more, or raise less revenue . . . but overall, it's generating a bigger surplus. It's the healthcare economist's version of "We're losing money on every unit, but we'll make it up in volume!"

Going by the fairly sketchy description, virtually all of the extra benefit appears to come from estimating that employers will see their health care costs fall, mostly because they put those workers into federally subsidized programs, pass the resulting savings along to their workers in the form of higher wages and salaries, and that the Treasury will thereby gain, at a rough guess, about $12-15 billion a year in tax revenues.

This is somewhat confusing to me. The CBO seems to be assuming it will get just about 20% of the amount spent on subsidies back in the form of tax revenues. But the effective income tax rate on the quintiles covered by the subsidies, according to the CBO, is less than 5%. Perhaps the savings comes from the payroll tax, but even including the payroll tax, it's less than 15%. And the tax rates are directly proportional to the size of the income, while the subsidies are inversely proportional. I'm sure I'm missing something that would make the math work, but I can't figure out what.

Perhaps the 6'3" Megan should ask the 4'10" Robert Reich for an explanation based on his viewpoint from the rarified atmosphere of cloud-cuckoo-land, where he and econometric other giants like Enron Advisor [ret.] Paul Krugman breath the nitrous oxide that gives them the Olympian understanding to impart to us innumerate unwashed plebeians below that James Taranto refers to when he says:
Aw, c'mon, Megan, it's a joke! It isn't funny if you have to explain it!

Meanwhile, one poll has the American voter against ObamaCare, or the five versions of it, by a margin of 47-40%.

And a White House Press dude named Gibbs blames the press for Obama's negative image.....this guy actually makes the turncoat cretin Scott McClellan look competent in comparison.Yet another joke on Obama's unendiing campaign to win the hearts and minds of the American people. A double-digit IQ simpleton named Gibbs attacks the press for being anti-Obama. Who writes his stuff!?

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