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Krugman to Obamacare doomsayers: Nothing you predicted has come true

Paul Krugman has a strongly argued column Monday morning that’s about two big things. One: Obamacare is working better than even its supporters predicted. Two: In today’s post-fact society, none of its critics are acknowledging the wrongness of their predictions of doom.

He goes through the major predictions from the right (“rate shock,” with premiums doubling, “death spiral” in which only the sickest sign up, more people would lose coverage than gain it, the cost of the program would drive the deficit to the sky, and more).

None of it happened. The opposite happened. Uninsured rates dropping. Cost-containment mechanisms working. Average premiums last year even lower than the bill’s architects predicted. Writes Krugman: “This is what policy success looks like, and it should have the critics engaged in soul-searching about why they got it so wrong. But no.”

Which brings him to the second level of Krugman’s preachment. In a truth-seeking society, those who make dire predictions of disaster, who turn out to be wrong, should come forward, acknowledge they were wrong, seek to learn from their mistakes going forward. But who among the wrong predictors is coming forward to do that? On the contrary, Krugman says, those who made the predictions are denying they ever made them. Concludes Krugman:

Policy debates always involve more than just the specific issue on the table. They are also clashes of world views. Predictions of debt disaster, a debased dollar, and Obama death spirals reflect the same ideology, and the utter failure of these predictions should inspire major doubts about that ideology.

And there’s also a moral issue involved. Refusing to accept responsibility for past errors is a serious character flaw in one’s private life. It rises to the level of real wrongdoing when policies that affect millions of lives are at stake.

Comments (61)

  1. Submitted by Paul Brandon on 04/27/2015 - 09:27 am.


    But those are just facts.

    • Submitted by RB Holbrook on 04/27/2015 - 10:06 am.

      Yeah, but

      “If you like your plan, you can keep your plan.” That is not literally true, so none of the factual poicy arguments matter.

      Also Benghazi.

  2. Submitted by Dean Carlson on 04/27/2015 - 10:04 am.

    Where’s the Media

    Isn’t this also on the media? Shouldn’t the media hold those who’s predictions were wrong accountable? Every time they are interviewed asked about their wrong predictions and if they are not willing to come clean, not broadcast their views anymore.

    One reason why politicians make such outlandish statements is because no one really holds them accountable.

    • Submitted by Todd Hintz on 04/27/2015 - 10:42 am.

      Erality [sic] Check

      Who are we kidding? Interviewers don’t even hold them accountable fro blatantly false statements during the interview, let alone statements made a couple of years ago. How many times do you see some talking head mention the Obama recession? They should be called to the carpet immediately and told it was the Bush recession and the Obama recovery.

  3. Submitted by Dennis Tester on 04/27/2015 - 10:04 am.

    Obamacare is working so well

    Its elimination will be a primary theme of the GOP nominees in the 2016 race because most people (54%) still oppose it.

    • Submitted by Paul Brandon on 04/27/2015 - 10:51 am.

      That’s why they’ll lose again.

      They only listen to people who tell them what they want to hear.
      You can find a summary of the various polls at
      Of course, the ‘against’ category includes people who are critical of the ACA because it doesn’t go far enough, which is not, I think, your point.

      And there was one poll that found that more people favored the Affordable Care Act than Obamacare, which says something about how polls are worded and the people who respond to them.

    • Submitted by Todd Hintz on 04/27/2015 - 10:39 am.

      Hate It!

      I would love to repeal Obamacare too, but only if it’s replaced with a universal single payer system. Anything else will just lead to more horrendous inflation like we had before ACA.

      • Submitted by Karen Sandness on 05/01/2015 - 10:06 am.

        Me too!

        I am still annoyed that the ACA specifically allows insurance companies to price-gouge enrollees over the age of 50 and that Obama bowed to the wishes of the small Blue Dog Caucus and not to the wishes of the much larger Progressive Caucus when he scrapped the public option.

        Health insurance companies still act like vultures and try to provide the least amount of service for the highest premiums. The ACA is pure corporate welfare in that it guarantees a customer base for the insurers and provides subsidies for insuring low-income people.

        But really, what else would you expect from a plan dreamed up by the Heritage Foundation and first implemented in real life by Mitt Romney? What else would it be but corporate welfare?

        Of course, the present-day Republicans are against the ACA because a) a Democratic president proposed it, and b) It insures low-income people, who evidently do not deserve to live unless they “go to school and qualify for better jobs.” If John McCain had been elected in 2008 and proposed exactly the same program, Republicans would have been touting it as the best program since the Homestead Act.

        What if Obama had instead gradually lowered the age of eligibility for the popular Medicare program, a plan that would be not only less complicated but also would shore up Medicare’s finances by adding younger, healthier people to the mix?

        No, that would have made too much sense.

        • Submitted by John Appelen on 05/01/2015 - 12:50 pm.

          Come now

          Now you do realize that insurance companies are losing money on the policies for older people. Remember: that is why the ACA folk needed more younger participants to make this work.

          Please remember also that the Medicare trust fund is going to be out of money in 15 years. Lowering the age requirement would make it go to zero sooner unless you find another funding source.

          After the trust fund is out, then benefits will need to be cut to match the revenues coming in. (ie from payroll taxes) Or someone’s taxes will need to go up.

          • Submitted by Karen Sandness on 05/01/2015 - 07:31 pm.

            No, bringing younger, healthier people in

            would increase the number of people paying premiums but using the system less than the older people. This is exactly the same arithmetic that is supposed to make the ACA work.

            The Republican proposals to raise the age of eligibility to 70 would be disastrous on two levels:

            1) No company really wants to insure older people, especially not for any price that the average retired person without a company or union retiree’s health benefits can afford. Right now I’m paying huge premiums for a not-very-generous policy, which has me actually looking forward to turning 65, enrolling in Medicare, and having a few hundred dollars more of disposable income each month. (I hardly ever get sick, by the way, and I’m on no prescription drugs, so at the moment, I’m paying hundreds of dollars a month for nothing.)

            Right-wingers forget that Medicare was instituted for a reason. The private insurance available to older people was unaffordable for the average person, even back in 1965. When Medicare was first proposed, the Republicans’ “solution” was the Kerr-Mills Law, which required older people to apply on an individual basis for reimbursement for high medical expenses and otherwise pay out of pocket. Imagine what a bureaucratic mess that would have been if it had continued to the present day.

            2) It’s just a fact that the average 70-year-old has more health problems than the average 65-year-old. By taking the healthiest segment of the senior population out of the premium-paying mix, the Republican proposal would actually worsen the system’s finances.

            The proposals to replace Medicare with vouchers to buy insurance on the open market would be just more corporate welfare, and it would be surprising, considering the Republicans’ all-around stinginess with benefits, if the vouchers even came close to covering or even significantly alleviating the cost of insurance.

            I’ve mentioned this to older right-wingers, and the typical response is, “Well I have no trouble paying for private insurance.” Further questioning reveals that they’re on their working spouse’s policy or a corporate or governmental retirees’ policy or they’re simply wealthy enough not to need to count their pennies.

            It’s the typical right-wing approach to life: “It’s not a problem for me, so anyone who has a problem with this obviously made bad decisions earlier in life.”

            • Submitted by John Appelen on 05/02/2015 - 09:48 pm.


              I don’t know much about Medicare, however here is some simple logic.

              If people keep working until 70, they will keep paying FICA longer which in part funds Medicare. Also, they will not make claims on Medicare for another 5 years. And their claims during that period will need to be picked up by ACA or company health insurance plans.

              Since none of us have any legal right to the money the government has been collecting during our working life. It was determined that they were taxes, not contributions. I keep proposing the crazy idea that we end social security and medicare, and just expand welfare and medicaid. That way poor people will not need to pay FICA and rich people will not get any retirement benefits. It seems like what Liberals want.

              Of course it probably wouldn’t be very popular when everyone would need to spend down their assets before getting government assistance.

    • Submitted by RB Holbrook on 04/27/2015 - 10:49 am.

      A Rasmussen Poll!

      Now, there’s a byword for reliability!

      A Kaiser Foundation poll shows that public opinion is basically tied (43%-43%). Other polls show no support for an outright elimination, but have the public favoring fixing the law.

      • Submitted by Mark Ohm on 04/27/2015 - 11:42 am.

        Depends on How You Ask the Question

        YouGov poll shows that

        1. More people see Obamacare as a failure than a success, but the success number is growing (now 42 to 30). See chart at link.

        2. HOWEVER, more people want Obamacare kept the same or expanded, rather than repealed (49 to 41). That keep or grow number is growing too. See chart at link.

        As mentioned above, the “Obamacare is a failure” group is made up of two very different groups: one wants it eliminated, one thinks it didn’t go far enough. To cite this number as proof for repeal is simply incorrect.

        • Submitted by RB Holbrook on 04/27/2015 - 03:51 pm.


          It is, however, an article of faith among conservatives that Obamacare is wildly unpopular, and that repealing it and replacing it with “free market solutions (tax credits for get well cards?)” is the key to their imminent electoral victory.

        • Submitted by Steve Titterud on 04/30/2015 - 12:17 pm.

          It also depends on WHO you ask.

          There is plenty of polling advertised as “based on a random sample” which are not so random.

          • Submitted by Karen Sandness on 05/01/2015 - 07:34 pm.

            Yes, I was once polled online before the 2002

            Congressional elections. The poll was set up so that you could see a breakdown of the results after you had answered your questions. What I found was that the pollsters had seriously oversampled rural voters and self-identified Republicans (compared to their actual percentage of the population of Oregon, where I was living at the time).

      • Submitted by Thomas Swift on 04/27/2015 - 04:39 pm.

        RB, you do realize the Kaiser

        RB, you do realize the Kaiser Foundation is the official Obamacare spin clinic, right?

  4. Submitted by Todd Hintz on 04/27/2015 - 10:55 am.


    I’m in the process of signing up for Obamacare as I was reading this article. The MNSure web site has a few glitches (a continue button wouldn’t work initially), but it basically took me half an hour to create an account and get to the point where I could look at some premiums.

    Another issue: I filtered for just gold plans, but the list seems to still include plans of all types. Annoying, but not the end of the world.

    Price-wise I’m looking at roughly $970 – $1100 for the plan type and deductible I would like. For comparison, the employer subsidized plan I used to have was $720/month and COBRA is $1530.

    The plus side that gets lost in all this talk about plans, costs, and deductibles: I’m able to survive an interruption in employment without undue worries about health coverage. Universal health care would make that even more of a non-issue, but if it weren’t for Obamacare I would be sweating bullets as the family crosses their fingers and hopes that no one gets sick until I get a job with benefits.

    I hope you’ll allow me a moment to send President Obama a heart-felt thank you for instituting ACA and for our Democratic legislature for implementing MNSure. They’ve been a big help for me as I look for a new job.

  5. Submitted by Thomas Swift on 04/27/2015 - 04:37 pm.

    How long will Krugman punish Princeton for showing him the door? How long will he punish people who know anything about economics, or government?

    • Submitted by Paul Brandon on 04/27/2015 - 05:23 pm.


      left Princeton voluntarily because he was moving to NYC because of his increased NYT commitments.
      I believe that he is still affiliated with Princeton.
      Krugman has certainly disagreed with other economists (and noneconomists making statements involving economics). I’m not aware that he has ‘punished’ anybody.

      • Submitted by Thomas Swift on 04/28/2015 - 09:47 am.

        Krugman is a laughing stock among his peers, Paul. I know you are aware I could post pages of links to prominent economists ripping his ludicrous rants to shreds.

        The only people that give Krugman any credibility are partisan leftists, and even they do so carefully and with caveats.

        • Submitted by Paul Brandon on 04/28/2015 - 08:03 pm.

          When facts fail

          cite the law.
          When the law fails pound the table.
          You’re pounding the table.

          • Submitted by Thomas Swift on 04/29/2015 - 09:12 am.

            Look. Obama promised his plan would save everyone $2500, we said baloney.

            Who was right?

            Obama promised we could keep our existing plans and doctors, we said baloney.

            Who was right?

            Obama promised his plan would help people get medical attention, we said the deductibles would make Obamacare worthless to most of the people it was supposed to help.

            Who was right?

            The list of perfect predictions is longer than I care to tap into a phone. The point is this, Krugman says our predictions failed to materialize. How can anyone take him seriously, faced with facts anyone paying any attention knows are true?

            Call it pounding on the table, Paul. I’ll call it truth.

        • Submitted by Theo Kozel on 05/01/2015 - 01:47 pm.


          “A sample of 299 U.S. economics professors, presumably random, responded to our survey which asked …favorite economist in their respective categories are Adam Smith (by far), John Maynard Keynes followed closely by Milton Friedman, Gary Becker, and Paul Krugman.”

          The laughing stock isn’t Krugman.

          • Submitted by Paul Brandon on 05/01/2015 - 05:40 pm.

            Oh, but that’s just

            people who have spent their lives studying economics.
            They could hardly be expected to know as much about it as a radio talk show host.

  6. Submitted by Thomas Swift on 04/27/2015 - 04:44 pm.

    The employer mandates don’t

    The employer mandates don’t kick in until this year…prepare for epic unhappiness.

    The good news is the GOP doesn’t have to do anything. In June the SCOTUS will gut Obamacare (can’t thank Jonathon Gruber enough!), and everyone can just stand back while it collapses under it’s own weight.

  7. Submitted by Tom Anderson on 04/27/2015 - 08:22 pm.

    What amazes me

    Is how many people are still uninsured given that it is against the law to be uninsured and that the ACA is working so well. The amount of money spent so far to insure about 15 million more people (not counting those who lost their insurance) seems rather excessive. I’m ballparking the 47 million pre-ACA figure tossed about with the about 32 million supposedly still uninsured.

  8. Submitted by William Hunter Duncan on 04/27/2015 - 10:23 pm.

    Fair Enough

    If those who predict “doom” should hold themselves accountable, so should those who prophecy good times eternal.

  9. Submitted by John Appelen on 04/30/2015 - 12:59 pm.

    How full is the glass

    It seems to me that supporters are determined to see the positives of ACA, and the opponents are determined to see the negatives of ACA.

    I like to think of it as Medicaid_Lite, many of the people who did not qualify for medicaid and yet could not afford Typical Insurance are now able to afford insurance because the rest of us who pay taxes, buy medical devices and have traditional company supported plans are subsidizing their premiums. Plus we are paying more to cover kids until they are 26 and to ensure that people with pre-existing conditions can get reasonable coverage.

    It is an extra expense for most of us, but I am not sure it is “terrible”. It helps some people to have coverage, but I am not sure it is “great”.

    The worst thing about the bill was the billions of dollars spent to just set up these unnecessary exchanges. Maybe a tax credit that varied based on income level would have been more cost effective.

    • Submitted by Connie Sullivan on 05/04/2015 - 03:54 pm.

      There is a tax credit based on income in Obamacare!

      I will never forget the Kaiser survey of people who were asked about the Affordable Care Act: most of the people knew very little, or nothing specific, about it. That was just before implementation but still reflects generalized ignorance today.

      Now we see that people who do not have to rely on Obamacare, but want to criticize it, don’t even know the basics about it! You have to have health insurance of some kind (a lot of people are going to get hit that this year: hundreds of dollars, or more, in penalties for “not bothering”). And if you’re too poor to pay the premiums, you get a hefty tax credit to help you do that. I’m shocked at how many people don’t know that.

      As Krugman says: Obamacare works. Millions of people who were without health care are now covered by Obamacare. They’re not dying unnecessarily, they go to doctors and get treatment, and they can even have operations! And the taxpayer subsidy is much less than what we were paying to have emergency care for those formerly uninsured. Taxpayers, the insured-through-work, and healthcare users were paying for all those uninsureds to go to the emergency room. If the uninsured hadn’t already died of untended medical problems.

      Maybe you folks aren’t old enough to remember the debates about the health care situation of seniors when Medicare was instituted. Old people died in destitution in this country before Medicare came to help them both eat and have medical care. And Medicare today is income-modulated: if you have a solid retirement income, you pay 50%, then 100% more premium dollars than the norm, and you lose your Part D (drug) premium subsidy. It’s part of a Democratic progressive scale for this safety net for our elders. Like Social Security. Not a savings account, but a shared safety net so the weakest among us don’t just die in the gutters.

  10. Submitted by Jay Willemssen on 04/30/2015 - 03:19 pm.

    Greed does not qualify a person to speak on economic matters

    It’s always a good chuckle reading right-wing posturing about economics, as if somehow getting angry about taxes and general selfishness is the same as being properly educated in economics.

    Over the past several decades, the US has changed in an odd way such that we’re now in a place where being uneducated is a badge of honor as part of the right-wing identity. No more Buckley as archetype. The great benefit of such an approach is that if you don’t know what you’re talking about, you can pretty much say anything and pretend it’s an accurate and useful insight. Underachievers can pretend they know more than Nobel laureates.

    It’s economically and psychologically counterproductive to embrace ignorance, but the benefits of feeling right all the time, without the burden of knowledge to know you’re not, seem to outweigh it for a surprisingly large number of people. It’s also a heck of a lot less work than the long slog of good education and getting one’s beliefs aligned with reality.

    • Submitted by lee wick on 04/30/2015 - 04:14 pm.

      Don’t need a Nobel

      I don’t need a Nobel or a degree in economics to know my premiums jumped 50% and my deductibles 600%. The deductible has put me in the position to pick and choose what doctor visit is more important, what medicines to drop and how often I go the doctor and my health has declined. I have raised two kids and three grandkids and I have never experienced such an outrageous increase in medical expenses. All the media out there tells us the same thing.ACA has helped millions but adversely affected more.

      Just because Krugman has a good resume doesn’t mean he tells the total facts in his column. It is full of holes to suit his adoring audience. For Peter’s sake, Obama has a Nobel and so does Gore. How pathetic is that. Neither one contributed anything to deserve the awards.

      • Submitted by John Appelen on 05/01/2015 - 07:31 am.


        I love that comment, it gets to the crux of the situation and explains why the two views are so divergent. Krugman and crew focus on the millions helped. And the Conservatives focus on the many millions paying to help the millions. And both ignore the other’s group of citizens.

        “ACA has helped millions but adversely affected more.”

        • Submitted by RB Holbrook on 05/01/2015 - 10:39 am.

          “ACA has helped millions but adversely affected more.”

          How many more? Can we see some numbers?

          • Submitted by John Appelen on 05/01/2015 - 01:01 pm.

            No Numbers Just Rationale

            First, everyone who used to have a medical FSA used to be able to put $5,000/year in it. Now we can only put $2.500/year in it.

            When the insurance pool increased in size and risk, everyone needed to pay a bit more to absorb the higher expected payouts. This risk and size were the addition of people with pre-existing conditions and free coverage until age 26.

            Medical device taxes are paid by the the insurance companies when patients need the device. Premiums need to increase somewhat to cover this tax.

            Wealthy people pay higher taxes to cover the cost of ACA.

            Remember: Few things are Free in this Life. Someone is paying for the set up and operation of the exchanges and for all the health insurance premium subsidies, and it mostly us who had company subsidized health insurance policies and the wealthy.

            • Submitted by RB Holbrook on 05/01/2015 - 02:27 pm.


              And here I thought you were all about the numbers (percentages of GDP, and what not). All you are giving me is a list of things that supposedly “stand to reason.” I’ve heard all the anecdotes, but I have seen nothing that tells me the negatives are universal experiences, or even the experiences of a significant number.

              How many people are, as a practical matter, impacted by the FSA rules? How many people had the $5000 available to max out their FSA contributions?

              “Everyone needed to pay a bit more.” How much more? How many people weren’t, for whatever reason, paying anything?

              “Wealthy people pay higher taxes to cover the cost of ACA.” Mr. Appelen, I have to ask: why do you think that would be a persuasive talking point for most of the readership here?

              As you pointed out, everything has its price. No one expected the benefits of the ACA to come free. What was expected is that there would be significant improvement overall. Has that not happened?

              • Submitted by John Appelen on 05/01/2015 - 06:57 pm.

                That Depends

                Significant improvement overall…

                I suppose that depends if you are the person receiving the tax payer subsidized health insurance or the person paying for the tax payer subsidized health insurance?

                • Submitted by RB Holbrook on 05/02/2015 - 10:20 am.

                  Another way of looking at it

                  It sounds like you’re telling me that a policy is not a success unless everyone benefits equally from it.

                  By that metric, capitalism has been an unmitigated failure.

                  • Submitted by John Appelen on 05/02/2015 - 09:34 pm.

                    benefits equally

                    I don’t think they need to benefit equally, however if a policy arbitrarily takes money from one group and gives it to another group. I am pretty sure the group being taken from won’t be too happy. The trick in our country is to take more from the smaller groups of citizens, since they don’t have the votes to stop it.

                    The USA’s Capitalistic Mixed Economy gives something to everyone who wants to learn, work, exercise self control and continuously improve. Some get more and some get less based on luck, capability, work, self control, etc and that is why our total tax is progressive.

                    • Submitted by RB Holbrook on 05/03/2015 - 12:28 pm.

                      Something to everyone

                      I believe that’s what they say in Appalachia after a mine cave-in. “We could have been rich, if we had exercised a little self control.”

                      That’s the lesson they’re learning in Bangladesh. Collapsing factories just serve to emphasize the point.

                    • Submitted by Matt Haas on 05/04/2015 - 10:40 pm.

                      Here, let me fix that

                      “Some get more, some get less based on luck.” The fundamental truth that all conservatives ignore. Hard work, education, perseverance, all those lovely palliatives you tell yourself to make you feel superior mean nothing in the absence of opportunity. Opportunity (whether you delude yourself into believing you “make” it for yourself or not) is encumbent on any number of factors beyond any one persons control. Its luck, pure and simple. Conservatives seem to believe we should base society on the random spinning of some cosmic slot machine, let the winnings fall where they may.

  11. Submitted by Jay Willemssen on 04/30/2015 - 05:54 pm.

    Good – someone volunteered to demonstrate my point

    First we see the basic error resulting from an excessively self-centered outlook – confusing one unverifiable anecdote with verifiable, long-term, national data. Luckily, we have such data, and having even a basic understanding of economics and its proper data would allow a person to know such a thing.

    The Bureau of Labor Statistics (BLS) has over a century of Consumer Price Index (CPI) data. Medical care is one of 8 major groups of the CPI and the BLS has monthly, seasonally-adjusted data for medical care going back to 1947 (series ID: CUSR0000SAM). It has a separate index for all items less medical care dating back to 1957 (series ID: CUSR0000SA0L5).

    With this data, we can calculate the difference between changes in US medical care prices and the changes in prices of all other items. We can then compare what happened under presidents from Kennedy to Obama.

    Difference between average annual rate of medical care inflation and all items less medical care, ascending order:

    -0.90%: Jimmy Carter
    +1.03%: Richard Nixon and Gerald Ford
    +1.31%: Barack Obama
    +1.39%: Bill Clinton
    +1.85%: John Kennedy and Lyndon Johnson
    +1.88%: George W. Bush
    +3.85%: Ronald Reagan
    +4.19%: George H. W. Bush

    The latest data is March 2015, so we have fairly equal numbers of years under Democrats (26.2) and Republicans (2).

    The best performer (President Carter) is a leader right-wingers like to characterize as a failure. President Obama comes in 3rd, the best results in 35 years. Democrats hold 4 of the top 5 spots.

    We can also see the three worst periods were all under the most recent Republican presidents from the “fiscally responsible/drown government in a bathtub” era. The second worst performer is a quasi-diety in US right-wing mythology.

    Here are the factor differences between those three and President Obama, in descending order:

    3.19, or +219%: George H. W. Bush
    2.94, or +194%: Ronald Reagan
    1.43, or +43%: George W. Bush

    Based on the hard facts, anyone who believes that health care costs are out of control compared to recent history is not working from reality but a distorted, possibly intentionally dishonest belief.

  12. Submitted by Jay Willemssen on 05/01/2015 - 02:38 pm.

    Obsequiousness and its cognitive consequences

    It’s quite telling when someone thinks it’s companies, not their fellow taxpayers, who are subsidizing their employer-sponsored health insurance.

    From 2014 to 2023, excluding employer-sponsored health insurance from taxable income will cost $3.36 trillion, or 1.6% of the GDP over that 10-year period. It is by far the largest tex expenditure in the United States, followed next by the exclusion of pension contributions and earnings.

    By contrast, the new credits for premiums in health exchanges will amount to a $920 billion tax expenditure from 2014 to 2023. Taxpayer subsidy for employer-sponsored health insurance is 3.6x that large. And those subsidies disproportionately flow to higher income filers.


    One could also discuss the massive subsidies certain incoherent ingrates get when sending their children to public school.

    • Submitted by John Appelen on 05/01/2015 - 07:15 pm.

      Credits vs Deductions

      Are you saying that businesses should pay taxes on expenses now? Maybe they should pay taxes on their other expenses also? Maybe we should start paying taxes on our mortgage interest?

      The ACA costs are significantly different, it is real money flowing out of the treasury. Not our typical deductions. And only certain people bet the subsidy, thus it is similar to welfare, without the work requirements.

  13. Submitted by Jay Willemssen on 05/02/2015 - 10:46 am.

    Obsessed with tax complaining / profound tax ignorance

    Pretty stunning how some people don’t even understand the rudiments of how taxation works.

    Employer-sponsored health insurance is compensation. Like any business expense, it lowers the taxable income of a business.

    This is not what the massive tax expenditure for employer-sponsored health insurance is. What the tax preference does is lower an employee’s adjustable gross income. If Person A and Person B both receive the same compensation of, say, $60,000, but Person A’s compensation is $10,000 in subsidized health insurance premiums and $50,000 in cash income, while Person B just receives $60,000 in cash income, there is a $10,000 difference in their taxable income.

    This has three tax consequences. It lowers the individual’s income tax, lower’s the individual’s FICA assessment, and lower’s the employer’s FICA assessment for Person A. The deduction of compensation from the taxable income of a business is the same in both cases of Person A and Person B. It is a pretty massive misunderstanding about taxation and running a business not to know this, yet offer opinions about it. It’s yet another perfect demonstration of my prior comments about intentional ignorance as identity and its consequences.

    This brief explains this specific tax expenditure clearly:

    What’s also fascinating is the profound ignorance about accounting. $10 going out and $10 not coming in has the exact same effect on a balance. This is an extremely basic, common sense concept.

    Guess some people just feel the need to rationalize their own welfare from the hard work of other taxpayers.

    • Submitted by John Appelen on 05/02/2015 - 09:25 pm.

      Money going in = Private Property
      Money going out = Public Property

      You are kind of correct. To the Treasury it looks the same, however the 2 monies are very different. Or at least us more Conservative folks see Private Property Rights as an important concept.

      Regarding your clarification, you would like to make health insurance benefits taxable? So Employers would pay more FICA, employees would pay more FICA and employee’s would pay more income taxes. I assume it is set up the way it is to encourage companies to offer, administer and fund these benefits.

      I guess it may be a good idea if you want to go away from the company contribution model. That would be a pretty big change.

  14. Submitted by Jay Willemssen on 05/04/2015 - 10:17 am.

    Levies are sometimes tough

    While our resident detractors try reciting out long language, they have yet not attained much effect in swaying adversarial positions past even limited established norms.

    Yet our understanding about required elements to have economic maturity over sopohomoric tirades behooves others researching issues not giving sufficient time up past inordinate demands. Some essential look for intelligence might preclude our reasons to attend not to bombast, instead going over things outside norms, making inroads near necessary pursuit of simple truths.

    Some usually can know it, too.

  15. Submitted by John Appelen on 05/04/2015 - 10:51 am.

    Cave in

    “I believe that’s what they say in Appalachia after a mine cave-in. “We could have been rich, if we had exercised a little self control.” Or they maybe would say,

    “I really wish I had not entered this mine of my own free will.” or
    “I really wish I would have studied harder and earned a better job” or
    “Maybe that truck with the big shiny wheels wasn’t worth the risky job.”

    • Submitted by RB Holbrook on 05/04/2015 - 01:34 pm.

      And don’t forget:

      “I really wish someone enforced the mine safety regulations.”

      “I really wish I was privileged not to grow up in a part of the country that has been ravaged by extractive industries for the last 100-some years, so that the idea of a better life was realistic.”

      “I really wish I was in a position to be condescending about the aspirations of people who work at unpleasant, hazardous jobs.”

      • Submitted by John Appelen on 05/04/2015 - 06:44 pm.

        Key Difference

        Sorry for my posting the comment in the wrong place. I think you have identified a key difference between mind sets. One set of statements takes personal responsibility for one’s choices in life, the other denies personal responsibility and blames their current state on others and/or bad luck.

        I think that is very meaningful.

        • Submitted by Matt Haas on 05/05/2015 - 08:30 am.

          And per usual

          You have it entirely backwards. Your choices play a role in what outcomes you might experience, but your flaw is in the belief that your choices are free from the influence of chance. Circumstance prevents the correct choice from being made, or even known, continuously throughout every persons life. Similarly, chance can ameliorate the consequences of risky choices and provide great success where none should occur. The problem lies in the conservative habit of describing the first example as moral failing, and the second as virtuous “entrepreneurship” and believing that “personal responsibility” has anything to do with either.

          • Submitted by John Appelen on 05/05/2015 - 09:54 am.

            Circumstance prevents

            I understand that circumstance and luck are factors, however the words “circumstances prevent” are absolutely depressing and silly. Especially since our current President overcame some interesting circumstances.

            Remember the saying about horses and water.

        • Submitted by RB Holbrook on 05/05/2015 - 09:34 am.

          Bad luck

          Of course, luck plays no role in a person’s success. Just ask Mitt Romney.

      • Submitted by Matt Haas on 05/04/2015 - 10:52 pm.

        Conservative logic

        Is like my 10 year old self playing a game of horse. When I missed a ridiculous shot, it couldn’t possibly be as a result of my lack of skill, it was simply bad luck, or my competitors cat calls etc… Conversely, upon making the over the shoulder eyes closed bank shot from half court, what was the instant refrain “all skill!” When one is unable to realize how big a factor uncontrollable chance playsnin their life’s success, it becomes nearly impossible to understand how such an unfathomable lack of good fortune in other’s lives could have such a profound effect. Egotistical blindness, would sum it up I guess.

  16. Submitted by Jay Willemssen on 05/05/2015 - 02:25 pm.

    Taking the unserious seriously

    Dr. Krugman nicely demonstrates the ill-advised nature of taking unserious people seriously. We would all be wise to follow his example.

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