The Future of China

Matt Yglesias ponders a Ryan Avent post that is apropos of that Chris Hayes quote below. Somewhere, off in the distance, Kevin Bacon barked.

At any rate, Avent looks at that ~$650B (again, that doesn’t even include Afghanistan and Iraq) expenditure and wonders:

With that kind of money you could entirely build out a national network of true high-speed rail. One year’s worth of defense spending gets you that. Which makes one wonder: where are all the economists, wringing their hands over cost-benefit analyses of these defense expenditures?

[…]

What was the cost, human and economic, of the I-35 bridge collapse? Of the Metro crash and resulting limitations on service? Of the Bay Bridge shutdown? And of course, investments in infrastructure constitute positive contributions to the economy, which ultimately strengthen our ability to direct resources toward defense. Aimless defense spending, on the other hand, may well make us poorer and less secure.

Which I think is absolutely right. Both Yglesias and Avent toss this chart into the mix:

The nut? Yglesias provides:

…if we took 10 percent of the defense budget and re-allocated that to infrastructure, we could have a national [High Speed Rail] network in ten years. And we’d still be spending over triple what our nearest rival spends.

[…]

a Chinese official [reportedly told] him “over the past decade you’ve spent $1 trillion on Iraq and Afghanistan, we’ve spent $1 trillion building the future of China”

Who can argue with that last statement? We’re pissing it away. And they know it. That’s the reason they buy up our debt: to help us piss away Our Current Advantage (such as it is). All the F22s ever built aren’t going to be worth a damn in 20 years when we can’t afford to gas them up, much less use them on our primary creditor. The paper lion indeed.

But, by all means: defense spending is inviolable. It’s utterly remarkable that Obama (the do-nothing President, natch) managed to cut as many idiotic spending programs from that budget as he did. Amtrak? Now there’s a program that needs to turn a massive profit while serving disinterested and actively hostile Member districts. It’s just a needless sap on federal coffers, after all, sucking up nearly $490 MILLION DOLLARS in FY2008. That sort of spending is clearly unsustainable for a democracy.

Anyone notice that the pres signed a $680 BILLION defense approp bill [that doesn’t include Iraq or Afghanistan] in the midst of our debates about $90b a yr for hc?

Chris Hayes

(Not) Frakked Up

This curve (Austin Frakt via Kevin Drum) gave me the heebeegeebees yesterday:

Depending on our positions on that curve, reforms could actually increase costs…and it’s unclear just where we are. Turns out, those fears were (likely) misplaced. Results from Our Beloved Commonwealth (we’ve had the Death Panels up and running for a while now…) seem to imply that, hey presto, this healthcare reform thing can actually drive down costs:

the most authoritative objective voice in this debate suggests that reform will significantly reduce, not increase, nongroup premiums.

This conclusion is consistent with evidence from Massachusetts. In their December 2007 report, AHIP reported that the average single premium at the end of 2006 for a nongroup product in the United States was $2,613. In a report issued just this week, AHIP found that the average single premium in mid-2009 was $2,985, or a 14 percent increase. That same report presents results for the nongroup markets in a set of states. One of those states is Massachusetts, which passed health-care reform similar to the one contemplated at the federal level in mid-2006. The major aspects of this reform took place in 2007, notably the introduction of large subsidies for low-income populations, a merged nongroup and small group insurance market, and a mandate on individuals to purchase health insurance. And the results have been an enormous reduction in the cost of nongroup insurance in the state: The average individual premium in the state fell from $8,537 at the end of 2006 to $5,143 in mid-2009, a 40 percent reduction, while the rest of the nation was seeing a 14 percent increase.

Imagine that. Increasing the pool size, having a mandate, and guaranteeing coverage reduces rates by spreading risk. Will wonders ever cease?