Motley Moose – Archive

While reading about the Incredible Shrinking Deficit, I ran across something that got me thinking about Pres. Obama and Simpson-Bowles aka The Catfood Commission.

My theory is that the President created the Commission in order to buy time until the deficit declined due to facts already on the ground. The biggest key was in bending the cost curve of healthcare via the ACA along with trends already under way (such as ‘Seismic Shift’ below).

On the revenue side:

1. The Bush Tax Cuts expiring (eventually)

2. Recovery of revenues as the Great Recession gave way to economic recovery and (coming soon) expansion

On the outlays side:

1. Declining stimulatory expenditures

2. Declining UE expenditures

3. Good news on healthcare projections as they bend the cost curve

4. David Cutler (see below Lower health care costs may last)

The latest CBO Projections:

Updated Budget Projections: Fiscal Years 2013 to 2023

If the current laws that govern federal taxes and spending do not change, the budget deficit will shrink this year to $642 billion, CBO estimates, the smallest shortfall since 2008. Relative to the size of the economy, the deficit this year-at 4.0 percent of gross domestic product (GDP)-will be less than half as large as the shortfall in 2009, which was 10.1 percent of GDP.

With the largest revision in outlays in healthcare:

Medicare and Medicaid spending projection cut by $900 billion

The CBO cut its deficit projection for the next decade by $200 billion, with this year’s deficit shrinking to $642 billion, the smallest shortfall since 2008. A relatively huge chunk of that decrease-$900 billion-is in Medicare and Medicaid spending

Here’s an example of ongoing savings trends:

In ‘seismic shift,’ primary care physicians creating revenue for hospitals

Here’s another shift in health care to go along with shrinking rate of growth in health care spending over the last few years: For the first time, primary care doctors are driving more revenue on a per/physician basis for hospitals than specialists.

From the source document:

“Seismic shift” lifts primary care’s impact on hospital revenues

   For 2013, the median revenue per primary care physician ascribed by about 3,000 hospital chief financial officers is nearly $1.6 million, and it is a little more than $1.4 million for specialists. In 2010, the last time Merritt Hawkins did such a survey, primary care was at more than $1.4 million, and specialties were at nearly $1.6 million. Specialists have outpaced primary care in Merritt Hawkins’ survey, which began in 2002, continued in 2004 and has been conducted every three years since. The survey includes both inpatient and outpatient revenue generated for hospitals, and it does not give an aggregate total of the revenue generated by primary care and specialty physicians. […]

   “A seismic shift is taking place in medicine, away from specialists and toward primary care physicians,” said Mark Smith, president of Merritt Hawkins, in a statement. “Primary care physicians are increasingly employed by hospitals and in new delivery models, such as accountable care organizations. They are taking a greater role in driving both the delivery of care and the flow of health care dollars.”

And here’s the smoking gun:

Lower health care costs may last

In a paper published in the May issue of Health Affairs, David Cutler, the Otto Eckstein Professor of Applied Economics, and co-author Nikhil Sahni, a senior researcher in Harvard’s Economics Department, point to several factors, including a decline in the development of new drugs and technologies and increased efficiency in the health care system, to explain the recent slowdown.

…

“Historically, as far back as 1960, medical care has increased at about one and a half to 2 percent faster than the economy,” said Cutler, who served as a health care adviser to the 2008 Obama campaign. “In the last decade, however, medical care has not really grown as a share of the GDP. If you forecast that forward, it translates into a lot of money.”

Bold for emphasis.

So there it is. David Cutler, as Obama healthcare advisor (with others of course) and Obama initiate the ACA and successfully bend the cost curve. Deficit goodness becomes apparent in 2013, just before any Simpson-Bowles cutbacks are legislated.

More Joan McCarter

CAP’s Michael Linden has a fun comparison: Today’s CBO estimate puts the deficit at 2.1 percent of GDP by 2015. Simpson-Bowles called for reducing the deficit to 2.3 percent of GDP by 2015. So we got beyond their recommendation without punishing any old people or cutting taxes even more for the wealthy and corporations.

I’ll leave it to the reader to judge whether all the outrage of the emoprogs towards the Catfood Commission and Pres. Obama was a complete fucking waste of time. Or not.

Something interesting may be going on. It appears that the Establishment is having their come to Jesus moment. While wanting to continue their Bush tax cut rates, they also realize that Romney would be a total disaster ala W as President. So there are articles appearing that seem meant more to influence opinion makers than the common electorate.

Three examples starting with David Stockman:

Except Mitt Romney was not a businessman; he was a master financial speculator who bought, sold, flipped, and stripped businesses. He did not build enterprises the old-fashioned way-out of inspiration, perspiration, and a long slog in the free market fostering a new product, service, or process of production. Instead, he spent his 15 years raising debt in prodigious amounts on Wall Street so that Bain could purchase the pots and pans and castoffs of corporate America, leverage them to the hilt, gussy them up as reborn “roll-ups,” and then deliver them back to Wall Street for resale-the faster the better.

…

The Bain Capital investments here reviewed accounted for $1.4 billion or 60 percent of the fund’s profits over 15 years, by my calculations. Four of them ended in bankruptcy; one was an inside job and fast flip; one was essentially a massive M&A brokerage fee; and the seventh and largest gain-the Italian Job-amounted to a veritable freak of financial nature.

In short, this is a record about a dangerous form of leveraged gambling that has been enabled by the failed central banking and taxing policies of the state. That it should be offered as evidence that Mitt Romney is a deeply experienced capitalist entrepreneur and job creator is surely a testament to the financial deformations of our times.

Mitt Romney: The Great Deformer

Just a short diary on the Ryan pick for VP.  About a month ago, Rachael Maddow said that she must be the only person in America who thought Ryan would be the VP choice. I told my sister that, no, she would be the 2nd.

Because, 14 months ago, an MM member wrote this:

Since you cannot get political news

I will bring you this from the future:

Romney/Ryan 2012

Rep. Paul Ryan would be the best fit for Romney. I wrote earlier that he would choose someone with fundie or TP cred. I will amend that to eliminate the fundie side. The last thing Romney wants is to open the religion issue in his campaign. A fundie VP pick would do just that. So TP it is and Ryan fits to a T. Romney’s no spring chicken (64) and Ryan gives him some youth and sex appeal.

The weird thing is this would be similar to the Dole/Kemp ticket of ’96 (although Kemp wasn’t young). Get this, Ryan was a speechwriter for Kemp back in the ’90s. That’s spooky.

by: virginislandsguy @ Sun May 29, 2011 at 09:16:31 AM EDT

It goes without saying that this move by RMoney is a sign of desperation and weakness.

For my next trick, I’m predicting that the BLS employment numbers for August, September and October will be good to explosive on the upside. This is because the seasonal adjustments have been out of whack for the last 3 years.

Floyd Norris of the NYT analyzes this in “Another (Seasonally Adjusted) Slowdown”

The result is that the seasonal adjustments make things look better than they are in the winter, when fewer workers are being let go than the government expects, and worse in the spring and summer, when the workers who were not let go cannot be rehired. There is, of course, more than seasonal adjustment going on, but I suspect that the underlying swings are far more modest than the monthly figures seem to indicate.

…

If that analysis is correct, the job numbers are likely to seem poor for the next two months, but to pick up with the September report on Oct. 5, and then to look impressive in the October report, which will appear on Nov. 2, four days before the election.

Anecdotally, from the comments:

I know somebody who works for BLS and makes exactly the same argument . I don’t know why this is not more widely communicated

If this comes true, it will destroy the sole rationale for RMoneys campaign. I stick by my prediction of Obama 53%, RMoney 43%, Johnson 2%, Goode, etc 2%.

This is the first of a weekly series of diaries covering the Republican Presidential Primaries or “Who’s Going to be Wiped Out by Pres. Obama in 2012”. First up is discussion of who, and more importantly, who is not going to file and run.The candidate must file with the FEC in order to be considered a bonafide runner.

For the sake of establishing an historical baseline, below is the list of candidates and decliners for 1996. This roughly reflects 2012: A Democratic President running for reelection, a Democratic Senate, a Republican House via a decisive midterm resurgence. The tally was 11 bonafide candidates and 21 declinees.