Month: June 2021

Medicaid is the federal government's single biggest social welfare program aimed at helping the poor. It has grown steadily since its founding, aside from a brief growth spurt after Obamacare was passed, and currently serves about 70 million people representing more than 20% of the total US population:

The cost of Medicaid grew rapidly through the '80s and '90s thanks to the high growth rate of medical costs in general. However, its cost has mostly flattened out over the past couple of decades:

Medicaid is financed jointly by the federal government and by state governments. Last year, total spending on Medicaid amounted to $650 billion, of which one-third was paid by the states and two-thirds by the federal government.

Data through 2017 comes from the 2018 CMS actuarial report here. Data from 2018-2020 was extrapolated from growth rates reported by the Kaiser Family Foundation here.

What is this? The first person to correctly identify it gets the warm thrill of being right.

UPDATE: And the winner is D_Ohrk_E1, who correctly recognized this as a parking structure across the street from the UCI Medical Center in Orange. One side is covered in mostly bluish flaps and another in mostly reddish flaps.

The history wars, they are a comin'. Actually, they're here, as red states across the nation take a stand against teaching our kids about Critical Race Theory. Never mind that most of what they object to has nothing to do with CRT, which is just a handy label for scaring the rubes. The important point is that there really are things they object to and they're mad as hell about it.

It's worth noting that (a) this is nothing new, and (b) both sides take it seriously because they know that what we teach our kids will eventually become what they believe as adults. It's well to remember that 2,500 years ago Socrates was executed less for his heterodox beliefs than for the fact that he insisted on teaching them to the impressionable youth of Athens. More recently, these kinds of fights have been common in the postwar era, centering on evolution, reading, math, history, civics, and just about every other subject imaginable.

But I have a . . . test? Yes, a test for you. It's easy to vaguely take one side or another in the latest history war, which primarily relates to how much American children should be taught about slavery and racism in both the past and the present. So let's quantify this with a scale from 0 to 10. The extreme ends look something like this:

I imagine that few of you are on either of these extremes. But where are you? Let's expand our scale a bit:

A numerical score may seem almost pedantic at first, but it forces you to take a real stand. Just how much should our ugly past dominate the teaching of history? And how does this change at different grade levels? No one thinks we should teach third graders the full, gruesome facts about slavery and native genocide. At the same time, nobody (I hope) thinks we should withhold this kind of thing at the university level.

So go ahead. Pick a score for elementary school, high school, and college. Just how much should our history curriculum emphasize slavery in the past and systemic racism in the present?

Over at the Wall Street Journal, Greg Ip takes on the question of why job growth has been relatively slow:

The economy is booming. Why isn’t job growth?

Payrolls have risen 1.6 million in the past three months and are up 1.7% this year through May, which in normal times would be impressive. But these aren’t normal times. The economy is rapidly reopening, consumers are flush with federal stimulus cash, and retail sales, factory orders and housing are all booming. Inflation-adjusted gross domestic product is up 5.3% through May this year, according to a monthly series calculated by IHS Markit.

The gap between GDP and jobs is explained by soaring output per worker. The U.S. is in the midst of a productivity boom.

In other words, many businesses are making do with fewer employees by adopting labor-saving technology. But it's worth noting that this is pretty common toward the end of recessions:

During recessions, many employers start looking at technological improvements that didn't seem worth considering when business was booming. Then, when the recession ends, they just keep on using it if it turned out to work well. I don't know for sure if we'll see the same dynamic this time around, since many employers explicitly viewed the recession as limited in time, but I wouldn't be surprised.

Tomorrow the BLS will announce the headline inflation rate for May and there will be much gnashing of teeth and hot takes everywhere. I've already warned you that the official number will be unrealistic because it's based on a comparison to last May, which was artificially low. But what is realistic? Behold my handy inflation calculator:

As an estimate of the real-world inflation rate, I've eliminated the dip in 2020 and replaced it with a straight line. Using this, the CPI index in May 2020 was 259.391.

So when the BLS announces its growth number, ignore it for a moment and instead take a look at the raw index. Then divide it by 259.391 to get a more realistic growth rate.

Please note that this is not an attempt to "deskew" the inflation number or to provide a "true" inflation number. The BLS number will be correct. However, it will also be misleading if you want to know the true state of the economy. My version is less misleading, even though it's technically wrong.

But fear not, inflation hawks! Even using my calculator, the inflation rate for May is likely to be fairly high. It will be at least 3% and probably a bit higher. That's plenty high enough to run around demanding that we throttle the economy now now now in time to affect the 2022 election rein in spiraling inflation.

Here’s the officially reported coronavirus death toll through June 8. The raw data from Johns Hopkins is here.

Just in case you're confused:

• Joe Biden's infrastructure bill can be passed by reconciliation, which means it only needs 50 votes (plus Kamala Harris) to pass in the Senate. It currently has 49, so all Biden needs to do is win Joe Manchin's vote by showing that he's done his honest best to bring Republicans on board but they refuse to cooperate.
• The voting rights bill cannot be passed by reconciliation, so it needs 60 votes in the Senate. This is never going to happen. The only way to pass this bill is to kill the filibuster, which is opposed not just by Manchin, but probably by several other Democrats who are keeping a low profile.

Roughly speaking, what this means is that an infrastructure bill of some kind remains a possibility. A voting rights bill has never been a serious possibility and still isn't.

Federal housing assistance has long been a troubled program. For the past few decades it has helped a steady 5 million households per year even as the US population has grown. This naturally represents a dwindling percentage of all households:

The decline in the share of households receiving assistance is not due to lack of need. It's due to lack of funding. Section 8 vouchers, in particular, are enormously backlogged and have a waiting time of years to get on board.

The amount of assistance has risen since 1980, but since 1995 has flattened out at about $10,000 per household:

Republicans have been effective at blocking higher levels of housing assistance, probably because there's also a strong constituency of landlords who dislike it. This is obviously unfortunate since the cost of housing has increased significantly over the past 20 years and has become an ever larger burden for low-income households.

All data comes from a 2019 CRS report.

Good news! The Senate has voted 68-32 to pass a $250 billion welfare bill. How did this bipartisan miracle happen?

• It's a corporate welfare bill, not a bill to benefit regular people.
• It's an immense hodgepodge of pet anti-China proposals that have been buzzing around Congress for years. Finally the timing was right to bundle them all together into an immense anti-China act.
• It's mostly not funded. That's left up to future Congresses.

This just goes to show that Congress can get things done. The lesson for President Biden's infrastructure bill is:

• Sell it as a bill to benefit corporations, which it is, actually.
• Make sure there's a ton of pet programs in it, something for everyone. I imagine this is already taken care of.
• Fund about 10% of it and leave the rest for future Congresses.
• AND MOST IMPORTANT, make sure to invent an "infrastructure war" with China in which we are getting our capitalist butts kicked.

See how easy it is when you just apply the right marketing? I don't understand why so many presidents have such a hard time with politics.

ProPublica reports today that someone at the IRS has leaked a "vast trove" of private data on the tax returns of thousands of the nation’s wealthiest people. This is disturbing, but what's done is done. ProPublica acknowledges that publishing this information is a violation of privacy but says they eventually concluded that "the public interest in knowing this information at this pivotal moment outweighs that legitimate concern."

It must be a bombshell, then. Let's take a look:

To capture the financial reality of the richest Americans, ProPublica undertook an analysis that has never been done before. We compared how much in taxes the 25 richest Americans paid each year to how much Forbes estimated their wealth grew in that same time period. We’re going to call this their true tax rate.

....In 2007, Jeff Bezos, then a multibillionaire and now the world’s richest man, did not pay a penny in federal income taxes....His tax avoidance is even more striking if you examine 2006 to 2018, a period for which ProPublica has complete data. Bezos’ wealth increased by $127 billion, according to Forbes, but he reported a total of $6.5 billion in income. The $1.4 billion he paid in personal federal taxes is a massive number — yet it amounts to a 1.1% true tax rate on the rise in his fortune.

This is the gist of the entire piece. ProPublica simply asserts that taxes as a share of wealth represent the "true" tax rate even though the United States taxes income, not wealth. Bezos, for example, paid 22% of his income in federal income taxes. This is close to average for the top 1%. The same is true to varying degrees for the other billionaires ProPublica profiles. So what exactly have we learned?

• Wealth is not income.
• The US taxes income, not wealth.
• The income of the super rich varies greatly from year to year.
• The super rich make use of tax avoidance strategies unavailable to wage slave schlubs like you and me.

I don't know about you, but I already knew all this. The ProPublica piece is, essentially, not a revelation but merely a long op-ed arguing that we should tax wealth, not income. That's fine, but does it justify publishing private tax returns? I'm skeptical. If you aren't, keep in mind that using the IRS for political purposes has an ugly history that in no way always benefits progressives. It's not something we should take lightly.