The Great American Rip-off: The High Cost of Low Taxes

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Editor’s note: This is the first in a series on the high cost of low taxes.

The American people pay a similar amount for social services – health care, retirement security, disability and unemployment insurance and the like – as citizens of European countries with supposedly lavish social safety nets.

But there are two significant differences. First, we pay a hugely disproportionate share of the costs out-of-pocket*, through the private sector. And when things go badly – when misfortune hits — the safety net that we fall back on is truly pathetic in comparison. Call it the great American rip-off.

Nobody needs to tell Leslie Boyd, a former newspaper reporter in North Carolina, about the human costs of this. Her son, Michael Danforth, was born with a defect that made him more likely than most to contract colon cancer. “He could not get insurance at any cost,” she told Moyers & Company, “and he needed colonoscopies every year” to screen for the disease. Danforth’s doctor demanded immediate payment for services rendered – $2,300 for the procedure. “My son was a student so he didn’t have the money,” recalls Boyd. “He didn’t tell me because he didn’t want me to worry.”

Danforth skipped the screening. Two years later, he got sick. He went to emergency rooms for the acute pain he was suffering, but was misdiagnosed three times. The six-footer weighed just 110 pounds when he was finally admitted to a hospital. “His kidneys had already shut down and they found cancer,” says Boyd. “And it had spread — it was too late to save his life.”

Danforth’s wife had a part-time job, which gave the couple too much income to qualify for Medicaid, so they split up as his condition worsened. He applied for Social Security disability benefits but it took 37 months for his application to be processed.

“The first check came nine days after he died,” says Boyd. He was 33 years old.

The High Cost of Low Taxes

Delinking taxes from the services they pay for has arguably been the modern conservative movement’s greatest success. No politician has ever been booed off a stage for promising to cut taxes. But decades of public opinion polling shows that, with a few exceptions, Americans are actually quite fond of the goods and services the public sector provides. They may be wary of the idea of “big government” in the abstract, but they like well-maintained infrastructure, safe food and clean water, efficient firefighting and policing, Medicare and Social Security and virtually every other government-provided service you can name.

This paradox is well known to politicians and policymakers, and has caused a good deal of hand-wringing among those who favor a progressive tax system that raises enough funds to cover the services Americans expect. But there’s another consequence of anti-tax demagoguery: low, low taxes come with a steep cost. In fact, a lower tax bill – especially for federal taxes — actually works against the economic interests of most Americans.

Stroget shopping street in Copenhagen, Denmark

Stroget shopping street in Copenhagen, Denmark. The country had the highest tax burden in 2010. (iStock)

That’s because we pay ridiculously high out-of-pocket costs for things that are provided by the public sector in other developed countries. The difference is quite dramatic. The Organization for Economic Cooperation and Development (OECD) — also known as “the rich countries club” — tracks both public and private financing of social spending. Americans pay almost four times as much as the citizens of other wealthy countries for things such as retirement security and health care on the private market – 10.6 percent of our economic output versus an average of just 2.7 percent among OECD member states.

Contrary to popular belief, American families and corporations enjoy relatively low taxes – in the OECD, we ranked third from the bottom in total tax burden in 2010 – but it’s almost a wash when you add back what we spend out-of-pocket. The eight OECD countries with the highest tax burdens in 2010 (Denmark, Sweden, Norway, Belgium, Italy, France, Austria and Finland) paid out an average of just over 32 percent of their economic output for social services, while we forked over just under 30 percent.

The difference is that we ranked near the bottom in the OECD (26th out of 34 countries) in terms of public spending on these services. Government-provided services accounted for around 19 percent of our gross domestic product (GDP), compared with 29 percent of GDP in those high-tax countries. The difference was made up from out-of-pocket spending by citizens.

In the chart below, roll over the colored bars to see the exact numbers.

Breaking it Down

Consider some basic social safety net services and other OECD data:

  • An American losing a job that paid an average wage will get 47 percent of his or her income replaced by unemployment over the short term. The average replacement rate is 55 percent across the OECD and 57 percent in those eight social democracies (XL).
  • A single American parent of two down on his or her luck will be eligible for cash and in-kind benefits (welfare, housing assistance, food stamps, etc.) equal to 24 percent of the median income. The same person would see an average of 40 percent of the median across the OECD (XL).
  • Our public pension system – Social Security – replaces just over 39 percent of average earnings. In the eight social democracies with the highest tax burdens, that figure is almost 54 percent (XL).
  • Only seven of the 34 countries in the OECD had shorter average life expectancies than US citizens in 2008 (XL). Between 1983 and 2008, average life expectancy grew by six years across the OECD; in the US, we gained a little over three. And only three OECD countries – Chile, Mexico and Turkey – have higher rates of infant mortality (XL).
  • During the Great Recession, the social safety nets in the eight social democracies kept poverty rates in those countries significantly lower than in the US. Only three OECD countries – Mexico, Chile and Israel – had a higher rate of poverty than the US (XL).

Family Values

Yet those data don’t capture the simple truth that citizens of other wealthy countries enjoy benefits that Americans can only dream of – things like publicly funded pre- and after-school programs, paid maternity and paternity leave, and wage replacement for people who suffer from extended illnesses.

Perhaps the most dramatic differences in our priorities are reflected in public expenditures on family support. Only two OECD members devote less of their economic output to these benefits: South Korea and Mexico. And we spend dramatically less than the rest – 60 percent less than the OECD average (XL).

The Great Risk Shift

That Americans pay through the teeth for social services isn’t an accident. It’s the result of decades of policymaking based on what’s been sold as an “ownership society.” Yale political scientist Jacob Hacker called it a “personal responsibility crusade” that’s been firmly embraced by corporate America and conservative politicians.

In his book, The Great Risk Shift, Hacker detailed how a huge share of the retirement security and health care burden has been shifted from employers and the government onto the backs of working people themselves. These are the insurances that mitigate one’s risk in a capitalist society, and their loss has left American families exposed and economically insecure. “Social Security, Medicare, private health insurance, traditional guaranteed pensions – all sent the same reassuring message: someone is watching out for you, all of us are watching out for you, when things go bad,” wrote Hacker. “Today, the message is starkly different: You are on your own.” And it turns out that it’s a pretty costly message.

Next in the series: The great private sector health care ripoff.

*I’m using “out-of-pocket” as a shorthand for all private-sector social spending, including things like charitable donations, employers’ and workers’ share of health insurance premiums, contributions to 401(K) plans and similar retirement vehicles, etc. 

Joshua Holland is a senior digital producer for BillMoyers.com. He’s the author of The Fifteen Biggest Lies About the Economy (and Everything Else the Right Doesn’t Want You to Know about Taxes, Jobs and Corporate America) (Wiley: 2010), and host of Politics and Reality Radio. Follow him on Twitter or drop him an email at hollandj [at] moyersmedia [dot] com.
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  • Abimael Chavez-Hernandez

    Reminds me of the great report from the OECD entitled “Is the European Welfare State Really More Expensive?”. Cull through the data and you will find that no, the European welfare state is not very expensive.

    http://www.oecd-ilibrary.org/social-issues-migration-health/is-the-european-welfare-state-really-more-expensive_5kg2d2d4pbf0-en

  • Russell Scott Day

    Growing up I was taught being in a Union was stupidly paying to have a job. I noted it looked like all we got was wars and roads. So now what do we get? We are asked to give and give and volunteering is all lauded. Fine. The government is actually supposed to give us protections for free speech and borders with Mexico are war zones and Canada would be too if there were more poor Mexicans there making crack, I guess.

  • cary4

    I live in Europe and would not even consider returning to my native country. People here pay taxes with a mind to getting them BACK in really amazing public services at a reasonable price…if that’s socialism, I’m all for it

  • Tom Payne

    Our gullible populace swallows the corporate sound bite “small government” without ever considering what they are swallowing. Most “small government” ideologies believe it will mean smaller lines at the DMV and less taxes for them…when, in reality, “small government” is just a corporate euphemism for less corporate taxes and industry deregulation. It has nothing to do with YOUR taxes, except they will go up, and nothing to do with lines at the DMV. As a matter of fact, “less taxes” and “deregulation” are the foundation of modern conservative ideology and the very basis of the corporate takeover of our economic system.

    When you look back at the most prosperous time in America (when blue collar workers could buy a home and raise a family) tax rates were double to triple of what they are now and businesses invested in their employees rather than maximizing profits.

  • Anonymous

    The phrases “personal responsibility,” “ownership,” “self-reliance,” “smaller, more efficient government” and “family values” are hauled out by both neoliberal and neoconservative politicians and eagerly consumed by a population that is as ignorant and gullible as they are illiterate and naive. Most of the American population are so clueless about the actual functioning and policy of government that they have no idea what’s actually in store for them when they embrace the mantras of “smaller government” and “ownership society.”

  • http://www.nameperfection.com/ David Sandy

    france and england have a reasonable number of nuclear weapons for one.

  • Tom Reynolds

    The article starts with a sad story to set the tone for the article and convince us that Obamacare is right and just. But it would be easy to tell an equally sad story about socialized medicine countries that are being praised where inefficiencies also lead to deaths. And the article ignores the cost of these benefits to many countries that are going bankrupt. (ever heard of Greece? Spain?) This is an old trick to get everyone focusing on the small picture and ignore the big picture results.
    Also consider that the USA has provided military protection for these countries since we bailed them out in WW2. If they cannot make it with the USA bearing the cost of protecting them, how well would they have done if they had to pay for their protection form the big bad Russian bear?

  • Anonymous

    We spend more than we take in.

  • Anonymous

    I’m not saying that the ACA has no connection whatsoever to do with the topic at hand, but given that I don’t mention Obamacare anywhere in this article I find it pretty fascinating that this reader came away with the impression that it was the subject.

  • Anonymous

    So, we’re huge suckers, hunh? We spend a fortune on our military to protect them, while they invest in better infrastructure, deeply subsidized education and a much more robust social safety net.

    Once one realizes that we’re the chumps in this arrangement, the normal reaction, I would think, is not to defend the status quo. Maybe we should spend a little less on the military — invest a bit more at home — and force them to spend more!

    Max Boot made the same argument a while back….

    Are We Giant Suckers? While the US Blows Money on the Military, Europe Spends Dough on Social Programs

  • John

    You comment is sheer utopia. Who in the world would start a business and
    take risk to fail, put all his resources on the line… to invest in
    their employees? You have a backward liberal thinking that is flawed to
    the core. Every single person who starts, builds and invests in their business does it
    for their own profit so they can better feed, clothe and entertain their
    own family. Their OWN, not other people. Wake up!

  • Anonymous

    And yet worker-owned businesses are all over the place, and many are very successful. There are all sorts of business models out there.

  • John

    I was born in impoverished conditions, my mother was making $200 per month at her job, there was not even a college in the remote place where I lived. Traveling the world, learning foreign languages, graduating with MBA from a western university, working for one of the 500 fortune companies, having a nice house never even crossed my mind because my future seemed oblique with limited options when I was a kid. Yet, because I CHOSE to work hard towards it, everything I could not even dream of became a reality, through perseverance, studying, learning and focusing. Now, tell me how is it selfish to work my butt off at the job that I studied for and CHOSE and enjoy the benefits of my hard work? I think it is very Christian, because the only one that helped me on my way up was God, so Praise the Lord!

  • John

    That’s fine, they are there for a reason – profit is number one reason. You take profit away from any business (not public service, not charity), and business is gone.

  • Stephen

    There are two things I have heard consistently from countries with socialized medicine: non-existent care or terrible care and massive corruption. I have never spoken with anyone who has used Europe’s hospitals and came away with a satisfactory experience. Every thing I have read in history about large governments has indicated they were even more dysfunctional than the US, but Obamacare may change that.

  • mark cathcart

    I must admit I don’t see how you get this from the article. Europe needed America some 60-years ago, it maybe needed America some 20-years ago, but it no longer needs America now, especially since America has proven it cannot be trusted not to spy and collect data when ever it wants. American wants the forces, the bases, the ports in Europe, the europeans for the most part don’t.

    Your fear of China is uneducated and underestimated. For the most part, the Chinese government has through its various agencies and programs secured sufficient futures contracts on most everything that it needs. Currently its uses those contracts to make goods in huge numbers for US Citizens, it doesn’t have to. It agencies have already worked with most African nations, many middle east nations, and increasingly European nations. Just this week the British Government announced it would build its first nuclear power station in a private public contract with a Chines company. US bases and forces not much use defending against that eh?

    Do yourself a favor and admit that the US Military is a giant government subsidized employment and manufacturing program. It will no more be needed at the scale it was 60-yearrs ago than the Chinese will ever need to invade most countries more than they already have through their economic, trade, and futures buying already has.

  • Anonymous

    John – people were starting small businesses & innovating in Eisenhower’s time with top marginal tax rates at 90%. Tax rates have never stopped a real.entrepreneur – never.

  • mark cathcart

    There are lots of us like you. What we had was the opportunity, god given or not. There are huge swathes of America now where people don’t have opportunity. The jobs that they were groomed for, undereducated for and prepared for, for 10-years have gone. Not to the next town, not to the next state, a few went to the next country, but most went to the other side of the world. Would you have everyone without opportunity move to where the jobs are?

    ps. Depending on your Mothers age, $200 a month was a good wage. If you don’t tell us when she was earning that, its an otherwise meaningless piece of information. Certainly in 1970′s I was earning less than that per month.

  • Anonymous

    Well let the members of the working group, those you elect & those you have supported know what you want in terms of dod reductions. I want a base closure commission (chaired by Sen Harken & Gen. Powell) to reduce the number by half, bring all dependents home from overseas bases and dispose of related facilities & infrastructure. If the military does not want the F35 cancel it. Do give the coast guard the couple each of heavy & middle wt. nuclear powered ice breakers for arctic duty.

    Personally I want to see military facilities in Florida, Alabama, Georgia, etc prioritized for closure. The red/TP states want smaller government lets give them smaller.

  • dnarich

    When my 4 month old son was sick and we were traveling in Canada, we were seen immediately, the care was excellent (physician’s office, not an emergency room), and when we were ready to depart, much to my surprise, they said I owed nothing. I protested, saying “but I’m American, I’m not a Canadian citizen”…to which they replied “that doesn’t matter, healthcare is paid for while you are in Canada”. Astonished, and well-satisfied with good care and not bothered with collecting information a copies of insurance cards, driver’s licenses etc., we left smiling at our Canadian neighbors.

  • Anonymous

    Tax revenues are in the 15-18% level. Even Warren Buffett asserted last week that tax revenues should be in 20-22% level. The Alt. Min. Tax & Fed. Min. Wage should be fully indexed and kept that way.

  • Anonymous

    I have friends in Canada & relatives in Ireland & England. They are perfectly fine with their system even though there are longer waits for some services but instsnt emergency services. Just as it is here.

  • dnarich

    You are so absolutely right to point to the good fortune – truly good fortune – of many of our wealthiest and high earners (I am one). I realized a few decades ago that had I been born in ill health, on the continent of Africa, to uneducated parents, in a poor society – I would almost certainly not have enjoyed the life I have. People will point to me and say “but you have worked hard, you deserve it” or “you spent a long time getting educated” – and indeed both are true, but would not have been possible in the situation so many find themselves in – simply because of the good or bad fortune of their birth. Yet, it is common for those that are successful to beat their breasts and brag about how they deserve all their wealth because they were clever, smart, hard-working etc. etc. Indeed it is long past time that we started paying attention again to our less fortunate citizens who are where they are often through no fault of their own. There should be no place for smug arrogance in this world!

  • dnarich

    You clearly had the good fortune to have good health, and the intellect and perseverance to succeed. Congratulations. Just because you had these personal qualities though does not entitle you to look down on those who are no less human, but were not equally blessed.

  • Steve McGrath

    As part of the Main Street Alliance of Oregon, a group of over 1500 small businesses throughout our state, I can categorically state that your description does NOT represent the attitude of our members. We all recognize that the most important thing we need to succeed is customers, not tax cuts, and the customers come from our being contributing members of a robust and healthy community. Those who continually argue for lower corporate taxes do not speak for the majority of small businesses in America.

  • Anonymous

    You forgot to mention none of these other “rich countries” have crazy medical lawsuits like USA.

  • Terri EC Mom5

    It makes me want to move out of the U.S.

  • Anonymous

    Here in Spain. I have the highest praise for all the attentions
    we and our five children (and now their children) have received over
    the past four decades under universal health care (which Americans
    call “socialist” but here is just “medicine”). We
    have never received a doctor’s bill. No, never. Private health plans,
    which connect patients quicker to specialists and reduce waiting
    lists, are also available at relatively-low rates and also are
    committed to 100 per cent coverage for insurers and their dependents.
    Many companies offer their workers free private coverage that is
    subsidzed by the State; again, no medical bills.

  • Anonymous

    “Citing recent studies, including two new economic papers published only last month, CBO concludes that limiting malpractice liability would reduce total national health care spending by about one-half of 1 percent, or about $11 billion this year.”

    http://www.factcheck.org/2009/10/malpractice-savings-reconsidered/

  • Anonymous

    No, lots of non-profit businesses exist and flourish. What you’re saying is a very basic econ theory, not real world economics.

  • Anonymous

    The majority of lawsuits are to establish liability: who is on the hook to pay the medical bills (short & long term). If we, in the US, had universal healthcare there would be a dramatic reduction in liability lawsuits as there would be no need since the medical care would be covered.

    The underlying message of the “socialized medicine is bad” meme is that US politicians are too stupid and the population too moronic to devise a good working system that would benefit the entire population. “Pay or suffer and die” is the preferred system of the mammon worshipers whose sense of superiority and entitlement leaves them incapable of empathy and unable to visualize the fragility of their own economic position.

  • Anonymous

    Pure corporate propaganda from a shill or parrot.

    1. Humans are social creatures.
    2. Every structure, every social group can be framed as “Socialism”.

    3. What you are implying is that Americans are too stupid, greedy, and incapable of devising A BETTER “socialized medical” system then Europe or Canada.

  • Eva Dickman

    Our tax dollars go to the military, corporate subsidies, GMO farmer subsidies, roads and bridges. In Europe, it goes to social programs, free education, public transportation and supporting local farmers and organic food. My daughter lives in Germany and is enjoying the excellent green lifestyle the cities provide. We are retiring soon and thinking of moving to Europe.

  • Anonymous

    It’s interesting that so many believe that the U.S. and other highly developed countries have fundamentally different economic systems. It’s not true. None of the social democracies are “socialist.” All wealthy countries feature mixed economies, with capitalism the primary driver of wealth production and a social safety net to maintain a minimal existence for those at the bottom.

    What we see are small differences in priorities which, when you’re talking about huge economies, produce significant differences in outcomes. But it’s all the same mixed-economy model.

  • Anonymous

    Many don’t. I don’t think the NFL is terribly representative of the nonprofit world – it’s an association of for-profit enterprises.

  • Tom Creacy

    CUT BUREAUCRATS NOT BENEFITS. I calculate that 85% OR $866 Billion of the $1-trillion 83-program Federal Welfare budget is “lost” due to waste, corruption, and in my opinion outright theft by bureaucrats.

  • Nancy Lewis

    Both our daughters were born in Europe, and the care and hospitals were EXCELLENT.

  • Jerome Bigge

    One reason for this is the USA spends a lot more on its military than any other country. Money spent on the military can’t be spent on anything else. However for those businesses involved, a big defense budget is a bonzana. BTW the USA has lowest taxes of any developed country. All the rest collect more taxes than the US. This is why the rest of the developed world provides “benefits” that the US does not.

  • Jerome Bigge

    The concept of “social darwinism” is uniquely American. We also are the only country with a “Rich People’s Party” (aka Republicans). The “conservative parties” in the rest of the developed world are actually somewhat to the “left” of our own Democratic Party. For example, the British Nationalist Party is mostly just opposed to immigration. The party supports the British national health care system which is paid for by taxes. From what I’ve learned, “conservative” in the European sense is much different than “conservative” in the American sense. The word may be the same, but the basic core of beliefs is different.

  • Jerome Bigge

    Total US military spending is actually in the trillion dollar a year range when you include military pensions, the VA and its services, along with everything else. The amount spent by the US is close to 50% of total world military spending. Yet we are only 5% of the world’s population. Thus our per capita military spending is far greater than that of any other country on Earth. We also hold more people in prison both on a per capita basis and as a total. Much of this is due to our “War on Drugs”.

  • Jerome Bigge

    Our military adventures in the Middle East have not been “productive”. The overthrow of Saddam resulted in an Iraq that is in the throes of a civil war. Afghanistan is a lost cause even though we finally caught Osama bin Laden (in Pakistan). We have however made a lot of enemies here.

  • JonThomas

    Good observation. For many people, this is more than just simply a lack of education or knowledge.

    It always grinds on me when I hear or read intractable discussions about “Socialism” or “Socialist Countries.”

    Anytime I hear any “-ism” I shutter a bit. The adherents of “Capitalism” are just as intractable as any “-ist”.

    It’s funny, once a person devotes themselves to an “-ism,” suddenly everything else is antithetical. There is no room to consider other ideas, regardless of how beneficial.

    In the person’s mind (consciously or subconsciously,) anything that does not fit into the “-ismistic” paradigm is rejected as a perceived heretical compromise against what is seen as ‘moral’ principles.

    It’s as if the mind automatically associates such doctrinal and ideological beliefs and adherence with something akin to morality. When alternatives are presented, they are immediately rejected, not as merely preferential differences, but as ethical, and yes, as immoral breaches.

    For example, when you try to explain to a person that medicare and Social Security are ‘Social Programs,” their mind swings into rationalization mode.

    It’s as if the leap from the adherence of their “ism,” to a more correct, nuanced understanding of the world, would collapse everything they believe.

    The mind starts racing to hold on… the mind fools them (and yes us too) into thinking it’s something like death. It’s suddenly fight or flight – mixed with survival. Like trying to catch an insect that you want to put outside. It fights until it thinks it’s about to die. We can’t really communicate with insects, but it’s funny that the mind has such a difficult time in distinguishing what is often in the person’s best interest.

    Ehhhh…I suppose it’s the primitive brain vs. the reasoning brain. It seems to be the way the mind operates during the initial teaching and learning process.

    IE…Recognition of plants come first, then understanding categories of shrubs, trees, flowers, bushes, vegetables, etc…We don’t even question these anymore.

    If we could do better at delineating the categories, then we could by-pass the misunderstandings. But the lexicon must first be written, and that is tough when you have powerful, vested interests and agendas.

    Instead of dividing economic models into Capitalist, Socialist, etc… it might be more beneficial to to define the subject more closely in terms of “fiscal-viability.” The models would fall by the wayside, and what would remain are the pragmatic choices.

    What they / we usually do not understand is that their/our “ism,” for whatever reason, was built on false, temporary foundations. A false foundation of myopic, often narrow-minded self-preservation. It’s like building your first hut on a deserted island too close to shore, before you know the tides, the wind, the sun, and the sands.

    Then, when you realize you have to leave the shore, others are determined to stay.

    Therefore, I do my best to not adhere to “isms.” It is the human tendency to make things simple – to find rules, but the wisdom of a choice is something that must be considered. Each decision must be weighed on it’s own merits and individual circumstances.

    The easy way, and part of the learning process, especially for those who have other, often more pressing concerns, is to just categorize… thus the “isms.”

    Even the term “mixed-economy” attempts to categorize. But I guess such understandings must begin somewhere. A term like “mixed-economy” is a good one because it allows a person to take a small step off of the faulty “ism,” taking with them what was true and solid, without having to collapse into nothingness.

    Btw… I find the same trouble when talking with people who define themselves as “Socialists” or “Communists.” It can be difficult for those “-ists” to recognize (or admit) the validity of profit (as an ethical achievement) and individual effort.

    Sorry so long and philosophical (maybe even sophistry,) but I’ve always found these matters extremely interesting.

  • John

    You are right, public school did not help me much, my grades there were bad until I decided to get somewhere. I have an average IQ, nothing special, like many people else, it was hard to study and being from a poor family did not help. Resourseful? All the resources my single parent had was an small and cold apartment, no bedrooms, bathrooms, just the common area and a small kitchen nook. Nope, no scholarships, small public library – yep that was one of the resources. My mistake, it was not $200 per month, it was 200 in local currency… $95 at most, in the 90s, it does not translate to anything special, don’t hold your breath. Yet, I never complained about my parents, system, government, wealthy people, more affluent neighbors, no one! Instead I thought if i wanted to get on my feet and live life I want, I will study hard and someone will want to pay for my knowledge and skill. You seem to belong to people blame all their woes on someone else and try to find faults with this and that. That’s not my approach. The only person that’s responsible for the situation I am in is me. Hard work and knowing where you want to be is the answer, not someone else’s pocket or a handout.

  • Tom Reynolds

    So, if someone disagrees with you, they must be paid commenters who are out to lunch. Certainly, we “lunchers” cannot measure up to those, such as yourself, because we dare to have a bigger picture view.
    Some people seem to be “telescopers” when reading articles. (When looking through a telescope you have limited field of vision and miss things – such as an elephant standing 10 feet away.) Of course, if you don’t want to see the elephant… I prefer to try and put things in a larger context.
    As to why I read the article and commented, I saw the headline for the article and am interested in many things such as this, so I clicked on it. One sided examples, such as the one at the start of the article disgust me, as they are emotional attempts rather than fact based attempts and – as I mentioned – it is very easy to find offsetting examples. None of which may be representative of the issues at hand. And when I see these emotional attempts, I am suspicious of anything that follows which is presented as “facts”. So I wanted to comment.
    Sorry to disturb your cheering section for liberal ideals with contrary thoughts.

  • Tom Reynolds

    You limited your comparison of retirement benefits to Social Security. But, a huge number of people get Civil Service and state pensions which are significantly better as to benefits. For example, the earliest a SS beneficiary can retire on full benefits is 66 while the comparable Civil Service age is 55. And there are many articles written showing the very high levels of pensions for these government employees.
    Basically, there are so many variables that macro comparisons are rarely valid.
    And your “emotional” story at the start does not reflect the many examples of slow and inefficient service of government run health care. The point here is that, “What are you getting – for what you paid?” I worked with government run healthcare and other government agencies (Medicaid, Medicare, DOH, HUD, etc) and they are significantly less effective than private institutions. Just because something is more expensive does not mean it is better.

  • Tom Reynolds

    Check your history as to Russia’s “interest” in these northern and central European countries during and at the end of WW2 and then tell me who is brainwashed.

  • John

    Non-profit is not a business. It is more like a charity.

  • John

    Right, it has never hurt, I never excluded that. The PRIMARY reason one starts a business is not their employees, but their own desire to invent, better something, build, resell, all for profit. No one will start a business for free.

  • John

    Nope, I am not deluding anyone. I know myself more then you do, please! And all the thanks is to God, yep, not to me. I am just a tool in his marvelous hands. And I am very grateful to him.

  • John

    Nope, it was not a fortune. I was born with a heart condition and was sick a lot. Great misfortune. But the difference is that I never complained! Moreover, I tried to eat healthy, never drank, smoked, never did drugs. Fortune? Not! Just common sense. Intellect? I would not brag about it and be honest about it, it is average, like most people, so no super luck there. Now, perseverance and hard work ARE the factors that make everyone achieve their goals. And that’s not a fortune, that’s just taking responsibility for your own success. Anyone can do that if they just stop complaining and counting other peoples’ stuff. Period

  • John

    Really? A poor international student with no money, needing to work day and night for years to afford the tickets across the ocean, not fluent in English, no connections or knowledge of American culture has an opportunity and a local person does not? BS Local people do not want to help themselves because they feel they are entitled to stuff. I did not, so I had to earn everything and work hard for it.

  • John

    With God’s help, of course!

  • John

    You are right, a good start in life helps immensely. However, those who are less fortunate should not complain, that does not help in studying or acquiring the skill people would be willing to pay you for. If you read the book “Millionaire Next Door” it clearly shows that 95% of all the wealthy in America are first generation of the wealthy, and only the minority 5% inherited their wealth and status. The book clearly shows that whoever works hard and is frugal gets there, no one says it is easy, but very possible and achievable. The arrogant people who feel they are entitled to everything don’t get there.The book is a great motivator, leaves no excuses for anyone to complain.

  • John

    I would not have children until I got completely on my feet and knew for a fact I could support them. Yep, that includes saving up for the great unexpected emergencies and various circumstances, starting their university fund early, that’s called being a responsible parent.

  • John

    Cut benefits AND people administering them. They need to do something more valuable and creative then re-distributing other peoples’ money… oh, that’s not even interesting…

  • John

    Canadians fly to the USA to do certain heart surgeries. In Canada the same surgery is available, but the line to get it is 2 yrs. In 2 years the heart with that condition deteriorates past repair. What’s the point of such healthcare system? Europe – same example with back surgery, they fly here. Yep, they pay money, but they stay alive! No lines either. First hand experience :)

  • Anonymous

    I love it when people bring up the cushy Federal Civil Service Retirement System. From the time it was instituted in 1920 until it was ended in 1987, the Federal Government only paid their portion from 1964 to late 1986. They did however plunder the account to pay for World War II, and never returned the funds taken out of it. And those who retired under CSRS in general lost the money they paid into Social Security. You’re welcome.

  • wordsonfire

    Just had to go to Costa Rica for major surgery. I find the healthcare in our country to be appalling.

    Contrary to what you’ve been told. We have very bad healthcare in this country. My husband was just diagnosed with Parkinsons. He can’t get to see the neurologist for 3 months. My 24 year old stepson was diagnosed 6 months after college graduation with Crohn’s disease last year. His mother’s insurance covered the Mayo Clinic which is great. But my insurance would’t have covered any place to get high quality care for him. He’s in China now (finally got well enough to move a year later for a job there) and he’s getting the necessary treatment in china for 1/4 the cost of the US with more knowledgeable doctors.

    You do know that 45,000 people die every year in the US because they cannot access necessary care?

    Don’t believe the hype about how great the care is in the US. Some is. Some isn’t and if you don’t have really good group insurance you probably can’t use it anyway. 75% of all people who go bankrupt for inability to pay medical bills had medical insurance.

  • Tom Reynolds

    Based on your thinking, if an investment adviser charges 3% and produces a 6% return, that is better than an investment adviser who charges 5% and produces a 10% return. That’s the principle why I’ll take the latter. Effectiveness is not measured by the size of the CEO’s paycheck but what is produced. (However, I do believe that many CEO’s are overpaid, from having worked with them for years. From my own experience, I worked directly with 6 college presidents and only 1 was worth the money and 3 were disasters). But as with the original article’s “emotional” beginning, pointing out an emotional exception – making $100 million is rare – does not add weight to your argument, it only adds emotion.
    Is it fair what celebrities / athletes are paid? (In some cases yes).
    And as to civil service, do you know the difference between defined benefit and defined contribution plans? The former are a reason why states and cities are going broke.
    And Medicare (administered by private companies) is better run than Medicaid, a bureaucratic disaster, which is administered by the government. (I worked with both for 9 years working in the health sector). So you agree that private sectors are more efficient.

  • Tom Reynolds

    So why should Civil Servants retire 11 years earlier than the private sector and on defined benefit pensions?
    You will note, too, that the Social Security Trust Fund and the Medicare Trust Fund are actually empty, consisting only of accounting entries. They too have been looted – so don’t think that there is a “high ground” for civil service. Of course, to balance the federal budget, the only consideration is diluting social security.

  • Tom Reynolds

    In NY State two thirds of those signing up in the exchange are going on Medicaid which is, not exactly, a private insurance company.
    Although there are private insurance companies, the government regulations (central government socialized control) are so all encompassing as to do away with an effective the free marketplace. Companies now compete in the halls of congress and not in the marketplace. That’s socialism.

  • Tom Reynolds

    a billion here, a billion there, and someday you might be talking about real money!

  • Tom Reynolds

    Liability lawsuits mean somebody screwed up in providing care, not because insurance coverage was available or not. Universal healthcare doesn’t stop caregiver screw ups, and may encourage screw ups since the providers can be immunized from liability suits by law. The government has a long history of screw ups for which the public has no direct recourse and even when recourse is available, it is a very, very expensive proposition to sue the government.
    By the way, the government can only be sued if it agrees to be sued.
    We need the ability to hold people responsible. The real problems are: (1) that litigation lawyers own many legislators and these legislators prevent any effective revisions to the law – see Sheldon Silver the Speaker of the NY Assembly for a lesson in this corruption and (2) juries have gone overboard in awarding penalties since they believe it is only the insurance companies who pay when it is the policy holders who pay through increased premiums.

  • Tom Reynolds

    Ever hear of “lend Lease”.

  • Tom Reynolds

    Who are the Koch brothers? I want to send them a bill.

  • Anonymous

    Why are you arguing for a system that rewards this kind of imbalance at all? WHO IN THE WORLD is worth $100 million a year? No one can spend it. At some point it makes no sense at all. No one benefits from it. To pay someone for a perceived value is absurd. That’s like jello molded like a diamond is worth more than a flat pan full. It has a value. The job gets done. To pay more is a disservice to those buying the products.

    The days of “Rule of the Jungle” must end. There is a greater responsibility to the society. Measuring the value of someones work by dollars is ridiculous. Just an example: Take away money completely. Does the CEO have a nice house? Yes. Does hisher family eat well? Yes. Will they ever lack? No. Do they need 7 other houses and fifteen polo ponies and a $50 million dollar jet? No. Will they miss them? No. Then the value they provide is not monetary. It is the efficiencies and safeguarding of the companies they lead. The money they do not spend is the money that is NOT in circulation, and available for others to use. To each proportionately. For each, the value they bring to the society.

  • ha

    Our biggest problem is that we spend an extraordinary amount of our tax dollars on ‘defense,’ which none of the Scandanavian countries do.

  • Suzanne

    An excellent article, but I wish you’d use another term for the chart besides Reagan’s “tax burden.” It’s a term that gives a negative connotation to what used to be considered a civic duty, a shared responsibility for the betterment of our country. If we change the frame, we have a better chance of changing minds.

  • Anonymous

    Average state pension=$22,000/ year, and many don’t qualify for Social Security so that’s all they got.

    http://www.alternet.org/story/148633/right-wingers_using_public_employees_as_21st-century_welfare_queens

    The next piece is about health care. Our system relies most on the private sector and is the least efficient, by far, of any wealthy country’s.

  • Anonymous

    An excellent article, Joshua. It’s hard to argue that big-profit medicine and other social “services” are for the public benefit. Quite the opposite.
    Looking forward to your next investigation in this area!

  • Anonymous

    Civic duty and public obligation–yes, these phrases are unhappily out of usage. We can blame the conservatives nowadays more. Theirs is a world of devil-take-the-hindmost and atomistic goals.
    Not the most appealing type of human image. It’s hard to like them.

  • Anonymous

    Well it’s true that some states have given outrageously high pensions to their state and municipal employees. NY and NJ are at the top. It’s enough to turn my wife and I into Republicans–except that the GOP is just as much into this as the Dems in these states. We have friends who both retired as municipal librarians in NY. The husband retired with 106,000 pension, the wide, 96,000 pension. THIS DOESN’T INCLUDE THEIR SS pensions on top of that.
    Other new Yorkers are hopping mad at this circumstance. One reason property and state taxes are so high there. This ain’t right.

  • Tom Reynolds

    You are absolutely correct that both parties are at fault.

  • Tom Reynolds

    Not a single republican voted for Obama’s Unaffordable Care Act. If republicans are at fault it is for not working harder to defund it.
    Having worked closely with a single payor plan (Medicaid) it is a disaster! It may have been founded for the poor, but it now exists for the primary benefit of the bureaucrats who run it and the politicians buying votes. I say this from personal experience having seen the gross waste in it and seeing no intentions of cleaning it up.

  • Tom Reynolds

    Worth is not determined by whether or not one can spend it. it is determined by what one produces for what one costs.
    And, “the money they do not spend is money that is not in circulation”. Do you really believe these people stuff it in their mattress? They INVEST it to make money and their investments create jobs.
    And “paying someone for perceived value is absurd”. Are you a union representative? Sure sound like it.
    I don’t want to defend all CEO salaries, but your logic for opposing them is not logic. The primary reason CEO salaries are so high is that they are set by boards consisting of other CEOs. Which is normal – though not to be admired.

  • Tom Reynolds

    Read the last paragraph and quote it, too.
    And though many do not qualify (define many – that’s a lot like the concept of “fair”) it is safe to say that many DO qualify. And the greatest abuse / disparity is in the liberal states like NY

  • Bev Mabry

    so, you did not go to public schools funded by taxpayers, travel on public roads, etc., etc, did not have any individual ever take a special interest in you, or play “mentor,” or anyone hire you for a job when they could have hired someone else? or tolerate your shortcomings (I’m thinking now of arrogance)? I grew up poor too, put myself through college, and there were many who helped me try to reach my dreams, some in small ways like encouragement, but that was important too. You remind me of a gal I loaned money to and when I asked her to pay me back, she told me to rely on God. God did not borrow the money – and I loaned it to her, not God.

  • Vigi

    I have. In Sweden.

  • letthemsee

    yes “Russian Bear” bled to death to win that war….somebody got in at the end and claimed We saved you! Yes solders lost their lives but polititians had done it for different reasons!

  • letthemsee

    well said!

  • letthemsee

    completely agree!

  • onthefly

    While in mumbai, india, last year i came down with an acute intestinal infection commonly known as Delhi belly. My tour director and the hotel had a doctor at my bedside within an hour. After receiving an injection to stop the vomiting and diarrhea and diarrhea and about a half dozen meds to kill the infection, control the nausea, and rehydrate me, i was charged $40 for everything. Any American would know that would fost hundreds of dollars in the US. The ACA is a deeply flawed law but it is a start. Its opponents will do whatever they can to scuttle it and then do nothing to correct the disastrous course the current system is on.

  • Anonymous

    “Somebody screwed up in care” is only one form of liability. The hole in the concrete in front of the store that the patron trips in, the ice on the sidewalk that someone slips on and gets a concussion, the back injury in a car wreck: these instances are where the liability is in who will pay the doctor bills and insurance companies overhead.

  • Tom Reynolds

    You’ve expanded the discussion beyond medical malpractice liability, which is what I was referring to. Medical malpractice is the big cost that is driving up medical costs and it is about screw-ups – not coverage – and it is not covered by health insurance, it is a separate Malpractice policy taken out by the caregivers.
    This gets very complex and I don’t have the time to develop
    the kind of in depth answer I would like to give.
    I would restate, as to medical malpractice, that universal health care would have little if any impact. Over 80% of Americans already had some form of medical insurance. (30 million uninsured out of 300 million is actually 90%) So universal care would only impact the 10% uninsured.
    Most big medical related lawsuits are Malpractice, which are about screw-ups with a minimal number about who pays the medical bill. Before establishing who is at fault, one has to establish that there was liability / negligence. (No negligence, no liability). Yes, the actual medical claim gets paid, but the lawsuits seek additional compensation. (Loss of services, pain and suffering, etc) and tose additional claims will not go away due to universal health care.
    I have no idea what you were trying to say in your second / last paragraph.

  • Dan R

    The GOP had a great deal of input. They are the very reason Single Payer Plan was taken off the table. As the program developed they refused to support it.

    Since taken the position they had no input at all and that is ludicrous.

    They then refused to support their very own input with no vote.

    Pres. “O” should never had yielded from the Single Payer system. Bev Mabry is correct “GIVEAWAY to Insurance CORPORATIONS” was very much a GOP partnership in ACA

    His compromise was early in his first administration, thinking that compromise would mature into a working relationship with the GOP

    BIG MISTAKE!!

    I hope that ACA is the first step to a Single Payer Plan.

  • Sai Das

    It is deeply flawed because it was an unnecessary compromise with the Right, and as a result, is a system that very people like. I lost all respect for Obama for this horrendous blunder. Single Payer/Medicare for All is the only sustainable system. We will get it eventually, but after much continued loss and suffering.

  • Anonymous

    Actually, that’s fascism.

  • Anonymous

    But Medicare and Social Security are well run. As is the VA. And what about Bethesda Medical Center where Cheney finally got a heart?

  • Anonymous

    First of all, most of them have socialized insurance, not socialized medicine. This is something most of you Righties can never keep straight. Great Britain has socialized medicine – the National Health Service. France has public single-payer insurance and privately delivered health care (voted best system in the world in 2000). Funny you’ve heard horror stories about European health care. I’ve heard just the opposite.

  • Anonymous

    Not only can both co-exist, but we must have public goods provided by the public sector. With few exceptions, the profit motive is simply not compatible with prisons, health care, education.

  • Tom Reynolds

    Talk about being programmed…
    Did you know that New Jersey had a strong yacht building industry (employing hundreds). Yachts are bought by the wealthy. New Jersey taxed it to death and there is not a yacht industry in NJ anymore (loss of hundreds of jobs). The wealthy are buying yachts elsewhere. This is not just lesson in taxes but one example that the wealthy do create jobs. You may not approve of how they spend it or where the jobs are created (that is your choice) but don’t use an inane argument that the wealthy don’t spend and thus create jobs.
    You are confusing your hatred of CEO’s compensation with basic economics. Feel free to hate CEO’s but get straight on economics 101! The wealthy / corporations are not in business to sock away wealth. Cash does not add to the bottom line from a technical accounting or a business operations standpoint. Using that cash is what creates profits and wealth.
    And who is to decide what CEO’s should make? A CEO of a $20 million corporation who doubles stockholder equity versus the CEO of a $1 billion corporation who increases stockholder equity 10%. And why should it be limited to CEO’s (and if the gov’t does it, it will not be limited). How much should a baseball player make? A .270 shortstop versus 20 homer outfielder? A singer? Should a rap singer make as much as an opera singer? It becomes endless.
    Corporate employees “sacrifice their lives”… Give me a break… Do you write union commercials? Mother Theresa sacrificed her life for the good of other people but the AFL and SEIU do not sacrifice their lives.. The employees make a conscious choice about how they will spend their working hours (basically, a cost versus benefit analysis, even if they do not realize it.)
    When people get a tax break, they decide what to do with their money and unless they stuff it in a mattress, it all contributes to expanding the economy. If they pay off debt, that creates available capital for the lender to loan out for cars, houses, appliances, etc., which creates jobs. If they buy corporate bonds, that gives the corporation cash to invest in the business, which creates jobs. If they buy a product..well..you must get it by now.
    Have you ever tried to start a company. Which do you believe would be an easier way to borrow $1 million? Get $1 thousand from a thousand people or $1 million from one loaner?
    Your personal likes and dislikes are not Economics.

  • Tom Reynolds

    Well run? Based on what, a government analysis?
    Wanna bet that Cheney got special treatment? And one example is not a trend.
    What is the cost of running these organizations versus the the work performed. For example, in analyzing social security costs, is a portion of the IRS allocated to Social Security’s cost, since the revenue (premium) to finance it comes from our paychecks which is collected by the IRS. Private companies must collect premiums so an apples to apples comparison would necessitate that.
    And by the way, the SS and Medicare trust funds do not have any money in them. All they have are IOU’s from the government to the government. They are Ponzi schemes. So if you think they are well run, you must really like the way Bernie Madoff ran his company.

  • The Gorn

    Complete BS. The average pension in NY is $2,200 / month. Not exactly ‘outrageously high’. In fact tax payers only pay 23% of the cost, the rest is paid by the employees and investment income. Your friends are most likely lying about their pensions or they had a job that paid $250,000 while they were working. Hard to believe as most state workers make well below the equivalent private sector job.

  • Anonymous

    What planet did you say you were from Gorn?
    Where shall I begin–well, our friends who told us how much they made retiring as municipal employees in NYC and Nassau county were not lying–they had no reason to lie, since they were somewhat ashamed of what they were making. Two, this is common knowledge, debated hotly openly in the tri-state area for years! End of story.

  • ChipM

    No, France does not have single-payer health insurance.

  • Tom Reynolds

    One of the “abuses” is that many plans called for retirement pay based on their highest years’ pay, including overtime, etc. So, when close to retirement, they worked tons of overtime, holidays, weekends, etc to puff up their pay.

  • Tom Reynolds

    Private sector employers dropped defined benefits because they could not compete including the costs of this benefit. Governments don’t compete and the pensions become just a locked in (non discretionary) expense.
    When there was talk of doing away with defined benefit plans for government workers, the NY Times made it seem like the most cold hearted idea in the world. But within the last year or two, the Times was faced with a strike because the Times was doing away with defined benefit plans. Touche’.
    And one of the many reasons that prices did not decrease when defined benefit plans were dropped is because the savings were put into other compensation, such as double digit increases in medical insurance. I know because I did budgets for 36 years in the private sector, education, health care and social services.
    And yes, it is an injustice when private sector people have to subsidize public employees who get better compensation & benefits because of political connections. (Check out who makes the biggest contributions to political parties. It aint corporations. 12 of the 20 biggest donors to national campaigns for the last 20 years have been unions. And the very biggest one – not a union – was a democratic PAC)

  • Tom Reynolds

    Oh yeah. Obamacare really reflects republican input. Interesting how you twist Obama & Reid’s non negotiating stance into the republicans fault.

  • Tom Reynolds

    Read the note to the financial statements. 98.1% of assets are in government securities. So, one branch of the government owes money to the other branch. Sound like a house of cards?
    And how will those government securities be financed when redeemed? By new taxes and borrowing.
    Look at the USA’s budget. SS and Medicare are current operating government revenues and expenses, not a separate trust fund. They get spent every year in / out of the same pool where income taxes, tariffs, etc. get deposited.
    And did you know that China is not buying our new government debt? It is the Federal Reserve and is called Quantitative Easing. And they are buying it by printing / digitizing money to the tune of $85 billion a month – $1 trillion a year. It would be hard to find an economist who does not believe that printing money leads to inflation and, as many of us are concerned, to runaway inflation because of the current government policies.
    However, runaway inflation makes it easier to pay off low interest debt. Hmmm. Hidden government agenda here?
    So, let’s get this straight: The Fed is printing money to buy government bonds so the US Treasury has the cash to redeem other government bonds owned by Social Security so SS benefits can be paid.
    Ponzi and Madoff were pikers.
    And under Obama, the “full faith and credit” is looking more like “you can keep your medical insurance”

  • Tom Reynolds

    Malpractice isn’t a big cost but it is a cost that could be addressed except for political cowardice and bribery.
    The insured have historically overused the emergency room, too. I administered a plan and saw it reflected in our claims. Just having insurance does not make one a smart shopper. Many insurance companies try to build a disincentive in their plans to stop this but they are not very successful because it is difficult to identify.
    It would be a rare insurance company that makes 15-20% profit on policies. Most hold their costs plus profits to under 15% with 6% a closer range for profits. If some one is calculating 15%, there is some funny figuring going on.
    The biggest cost – by far – of insurance policies are claims with stop loss insurance getting more expensive. After that are administrative costs and the smallest is profits.
    While I do not want to defend insurance companies, they are far from saints, we get no where with this blind corporate hate which prevents us from dealing with real issues by throwing up false information on “profits”.

  • Tom Reynolds

    You have so many false assumptions that it is not worth my time to reply. All you are writing are the standard liberal talking points, which are emotional and not factual.

  • Anonymous

    And you write all the conservative talking points that hold no water either. GW and Repub’s were in charge for 6 straight years. How’d that all work out? Badly I might say.

  • Tom Reynolds

    Let’s review a little history:
    GB2 inherited the Clinton recession and, so, cut taxes. In fact, he sent checks for the tax cuts to taxpayers ( a real stimulus package). Result, recession ended and 6 YEARS OF ECONOMIC EXPANSION. So, years of GB2 and republicans were not so bad”
    When the housing bubble crashed in 2008, it had many fathers, including the Community Reinvestment Act and Freddie Mac and Fannie Mae as well as some mortgage options that were used by people who could not afford them. (To GB2′s credit, he tried to warn of problems but Barney Frank (D from Massachusetts) said all was OK with his buddies at the FM’s. To his discredit, GB2 did not pursue the issue strongly and did not kill the Community reinvestment Act).
    How’s ‘them’ for talking points!
    My ‘talking points’ are developed from studying facts and history. I’m not going to defend all that GB2 did nor anything that BO has done, the federal government was and is corrupt. But the liberal talking points about wealth have NO substance.
    At least the conservative principles work! Unfortunately, very few politicians will follow them since the principles cut down on their ability to buy votes

  • Anonymous

    I’m not disagreeing that this whole debacle is full of holes like swiss cheese but to lay it solely on Democrats is a bit of a stretch. Republicans are very good with “spin” and Democrats are pretty inept at defending themselves. The whole leadership of our Nation does what they’re told by their donors. If you don’t agree with that read no further. This is some game they play against each other to garner votes to stay in office to accomplish nothing for the common working person. Oh, sent checks, hmmm…then people claimed it as income, I remember it well. Another con by the con artists themselves. Both sides are pretty worthless unless you’re Sheldon Adelson or the Koch Bros. or George Soros. Ever read Jack Abramoff’s book? It tells how he just kept buying republican politicians left and right and handing out envelopes with 25k in them to certain people. And those same people he gave cash to were the ones that grilled him about his dastardly deeds. But he agreed not to say anything while being in front of his accusers that were the ones that he paid off.

    Bush did foresee the danger posed by Fannie Mae and Freddie Mac, the government-sponsored mortgage finance giants. The president spent years pushing a recalcitrant Congress to toughen regulation of the companies, but was unwilling to compromise when his former Treasury secretary
    wanted to cut a deal. And the regulator Bush chose to oversee them – an old school buddy – pronounced the companies sound even as they headedtoward insolvency.

    As early as 2006, top advisers to Bush dismissed warnings from people inside and outside the White House that
    housing prices were inflated and that a foreclosure crisis was looming. And when the economy deteriorated, Bush and his team misdiagnosed the reasons and scope of the downturn. As recently as February, for example,Bush was still calling it a “rough patch.”
    The result was a series of piecemeal policy prescriptions that lagged behind the escalating crisis.
    “There is no question we did not recognize the severity of the problems,” said Al Hubbard, Bush’s former chief economic adviser, who left the White House in December 2007. “Had we, we would have attacked them.”

    Looking back, Keith Hennessey, Bush’s current chief economic adviser, said he and his colleagues had done the best they could “with the information we had at the time.” But Hennessey did say he regretted that the administration had not paid more heed to the dangers of easy lending practices. And both Paulson and his predecessor, John Snow, say the housing push went too far. “The Bush administration took a lot of pride that home ownership had reached historic highs,” Snow said during an interview. “But what we forgot in the process was that it has to be done in the context of people being able to afford their house. We now realize there was a high cost.”