My submissions to yourPAbudget.com

This is a new privately funded website aimed at giving voice to money-saving ideas. The ideas are all listed one after another with buttons to the right so you can vote to agree or disagree with them. Friday’s (6/18/10) Inquirer says the site, launched Wednesday by Democratic House “backbenchers,” had over 200 submissions already. Now there are over 800, too many to read at once, although I scanned a couple of hundred. The site would ideally categorize them and encourage people to comment on the existing ones rather than repeat them. There were, for example, numerous suggestions to eliminate the state store system, to replace the property tax with a sales tax, to drug-test welfare recipients, to tax (or further tax) tobacco, alcohol, and marijuana, and so on. Forcing the user to categorize the suggestion would also cut down on people who combined multiple unrelated suggestions in one comment.

I submitted two suggestions:

• Funnel punitive damage awards to fund state victim's compensation funds and/or other court expenses. Since these funds are not intended to compensate plaintiffs, a plaintiff should only be allowed to keep, say, 10% or $50,000, whichever is less. (This gives the plaintiff an incentive to seek the punitive damages in the first place.)

• Impose steep fines for litterers, at least $500 for a first offense. This may be better imposed by municipalities, in particular Philadelphia, but in any case there is no cost to anyone for simply putting your litter in a can, not on a street.

The personal computer in 1982

I just read James Fallows’s July 1982 Atlantic Article, “Living with a Computer.” This captures the approximate period when computers began to evolve from being the domain of hobbyists and technologists to being tools for ordinary folks, at least ordinary folks who had a few thousand dollars to invest. Fallows was apparently a very early adopter, spending some $4000 (excluding later upgrades) on a system that would allow him to write words that would appear on a screen, save a few thousand words at once, and even print. In this era, storage of data is typically on 5 1/4- or 8-inch floppy disks. Unreliable tape drives are becoming obsolete, and hard drives (“from two or three on up to several dozen megabytes”!), though available, are an expensive luxury. Fallows calls the hard drive a “hard disk.” There is one brief reference to “computer mail.” The standard operating system is made by a company called Digital Research. Fallows uses a discontinued word-processing program called the Electric Pencil. In fact the very computer he had purchased just a couple of years earlier is discontinued, and has no successor. The company is out of business. Along with familiar names like IBM and Apple, the article mentions faded names like Atari and Commodore, and others than few will remember—Osborne, for example, which had recently produced the first successful portable (23 pounds) computer. The article is a stark reminder that the early electronics-product adopter runs a high risk of paying a lot for a product that may become not only obsolete, but not forward compatible. Fallows writes: “The microcomputer industry these days is like the auto business in 1910.” Clearly, some people bought the equivalent of cars with steam engines. As for Microsoft, it is unmentioned, although the IBM PC, which used MS-DOS, is. Presciently, Fallows writes, “The new [16-bit] machines will require different disk-operating systems, and may therefore inspire another DOS war.”

All of the good ideas are taken

In the movie Knocked Up, Seth Rogen and his buddies think they have a great idea for a website, one that identifies the nude scenes in non-porn movies. Then they find out someone else has already done it. That’s the problem with the Internet. With a couple of billion users, what hope is there of thinking of something original? As my previous post shows, even an original pun is hard to come by.

I swear I had the idea for a blog like the Paleofuture blog. That is, look at people’s predictions about the future to see if they really came true. Of course, I wouldn’t have done anything much with my idea, so it’s just as well someone else has been doing it. As I suspected, the blog shows how difficult it is to predict the future, and how foolish those who try to wind up looking. This month’s Atlantic carries an item about a 1999 piece it had published predicting the Dow Jones Industrial Average would fairly soon rise to 36,000 or so, then plateau. Ten years later, a reader who’d bet the authors that it would be closer to 10,000 at the end of 2009 won.

My predictions: legal marijuana in states with over half the population within ten years. Printed books begin to become specialty items by then. People commonly use iPad-like computers. Possibly they can fold up. More to come.

A “bad air day” over European skies

Can it be that this guy was the only person to make a “bad air day” pun about the grounding of most flights over Europe because of the volcano in Iceland, Eyjafjallajökull? That’s the only one that turned up on a Google search. There are, however, several references to April 14, when it began its current activity, as “ash Wednesday.” Only a user ID here mentions it being a “plane shame,” though, and there are but two references to “plume and gloom.” The rhyming “eruption disruption” produced many hits but is not an actual pun. Here is a report on the “ash kicking” even train travelers got due to the grounding of all the planes.

I looked this up because Jon Stewart suggested last night that the big snowfalls this past winter in the East had produced better puns, e.g. Snowpocalypse (204,000 Google hits, despite being kind of lame). The only one they came up with was the variation Volcanolypse.

Letter to a health care reform opponent

Letter writer wrote today:

Health-care reform will cost more

The Chip Bok editorial cartoon on Wednesday depicting Massachusetts Gov. Mitt Romney with an albatross around his neck that represented his state's health plan makes a point probably not intended.

When the original plan was introduced, it was projected to cost $88 million per year. Today the cost is more than 10 times that, and it is projected to exceed a billion dollars next year. This should be all the warning anyone needs about the likely cost of the federal plan forced through Congress. The Congressional Budget Office estimate of its costing less than a billion dollars is ludicrous, being based on phony figures.

A guide to what is more likely to happen: Medicare in 1965 cost $3 billion. The CBO projected it to grow to $12 billion by 1990; the actual cost was $107 billion. Today Medicare is half a trillion dollars. The Massachusetts plan has essentially bankrupted the state. The Obama/Democratic plan will do the same to the United States.

Nick O'Dell

Phoenixville

I replied:

You are not entirely wrong about the cost, but the Massachusetts comparison is inexact, even though that state’s plan has some similarities with the federal plan. While it’s fair to say that many of the cost controls were bargained away during the effort to pass the health care bill, the federal government has a greater ability to “bend the cost curve” than Massachusetts. Some of the many pilot programs established by the bill are aimed at pointing the way to delivering the same level of care cheaper (for example, by creating substitutes for the fee-for-service payment system that health-care economists say encourages unnecessary procedures). I predict that as the government winds up paying for more health care it will be forced to take steps to reduce costs.

To me, the focus on the government’s costs, while not entirely misguided, misses the larger point, which is the overall cost of health care. Every year this goes up. Roughly half of bankruptcies are related to health care costs. This is completely avoidable. Millions of people can’t pursue different jobs for fear of losing health care coverage. Millions of others can’t get coverage because of pre-existing conditions. Insurance costs continue to rise, putting pressure on businesses and individuals. Hospitals are forced to eat the cost of indigent care. It’s not clear why the economic impact of these things is more benign than how it will be under the new bill simply because they are borne by the private sector and individuals.

I can understand if opponents of reform simply oppose the bill on philosophical/libertarian grounds. I can also understand many of the specific objections to this law. I myself would have preferred a single-payer system, which could have facilitated things like creating standardized forms. (We know one reason American health care is expensive is because of all the billing clerks doctors must employ.) But the insistence that any such system will raise costs and lower care baffles me. As you must know, the United States spends the most of any country, measured by percent of GDP or any other way, on health care. Americans used to live the longest, but that hasn’t been so for a long time. Other countries have also surged ahead of us on things like infant mortality. No doubt things besides health care contribute to this. But still, to say a national health care plan cannot improve things, either cost or quality of care, is to say that the United States cannot do what dozens of other countries have done, that copying the countries that spend less would somehow make us spend more. To say that tort reform and simpler market-based reforms can insure everyone is to say that we can do it in a way no other country has managed (though Switzerland, for example, tried) and to say we cannot insure everyone is to say that we are not capable of what, for example, Costa Rica, has done.

The aspersions commonly cast at these other systems seem to be bland assertions that these systems won’t be able to be maintained, that problems particular to the Canadian and British systems must be true of all of them (they’re not), and that any problems such systems have make them worse than ours. Of course, all systems do have problems, and upward cost pressures will affect all of them. But to my knowledge, there has been no serious discussion of simply scrapping the ones in Europe, Japan, South Korea, Australia, Canada, and so on. In multinational surveys I have seen, residents of all other countries exhibited a higher level of satisfaction with their system than Americans. The middling support for the particular bill that just passed shouldn’t be mistaken for approval of the status quo.

A real free market system would mean, at a minimum, not treating people who couldn’t afford to pay. There are people who would be comfortable with this, but it’s not how things work. And for this and other reasons (e.g., the difficulty of “shopping around” when one has a heart attack) nothing like a free market is currently operating or feasible. Rest assured, to have let things continue as they are would have created much bigger economic problems for the nation than the new law, even if they would have been less obvious than a budget shortfall. Even from the narrow cost-to-government point of view, the new law may be preferable. Remember that it mostly requires people to buy their own insurance, and that even without it government (at all levels) was projected to pay more than half of health care costs within a year or two. So the additional health care cost per year to government is not actually that great, even ignoring that tax increases are projected to pay for the increase. (The CBO projections of cost are likely wrong, but they may be wrong in either direction, or both.) And government costs were going to rise significantly without reform. But the exchanges the law sets up will at least provide a framework for the federal government to do something if the projected savings envisioned by the bill (there are some, if not enough) don’t materialize.