aGameOfThrones
01-20-2014, 03:51 PM
Mods move it or don't.
Is Obamacare a big flop? That depends on whom you ask.
The program's proponents can point to an estimated 9 million newly insured Americans -- 3 million who are now covered under their parents' plans until age 26, 2 million who've bought policies on the Obamacare exchanges, and more than 4 million now signed up for Medicaid -- as proof that Obamacare is having its intended effect. Opponents note that the low percentage of young enrollees undermines promises of a better risk pool, to say nothing of the program's exorbitant costs, which include anywhere from about $300 million to more than $2 billion just to set up and operate the maligned Healthcare.gov website.
But if you ask political historians, you might be surprised. The United States has been rolling out major new social-insurance programs for eight decades now, beginning with Social Security's first tax levies in 1937. While Social Security and the Medicare-Medicaid combination were certainly more ambitious reforms than Obamacare from a coverage and governance perspective, their early costs and rollout hiccups can be instructive for anyone fretting about costly "death spirals" or unintended budgetary consequences. And there were hiccups.
Social Security and the Roosevelt recession
President Franklin D. Roosevelt signed the Social Security Act into law in 1935, but the program began collecting taxes in 1937. That year, $767 million flowed into federal coffers from new taxes, but nearly no one received benefit payments, which were paid as one-time lump sums until 1940. This was one of the largest tax increases in modern history, if not the largest -- federal tax receipts soared by 72% from 1936 to 1938, and government balanced-budget efforts, implemented at the same time, caused a sharp and devastating "Roosevelt recession" that undid much of the progress made to that time against the Great Depression.
The best way to compare this new cost to Obamacare is to look at nominal national GDP in 1937 and GDP today. Social Security's new taxes hit so hard and so rapidly that the economy was already sliding into recession by the time 1937's first-quarter GDP numbers were known. However, even at the year's high-water economic mark, Social Security taxes amounted to nearly 1% of the economy, and this was simply to begin collections for a program that was set to cover only half of the workforce.
A $2 billion hit in 2014 for Obamacare program maintenance doesn't come close -- it's barely a hundredth of 1% of the most recently reported GDP figures. Even if you add in the Congressional Budget Office's estimates on Obamacare's total costs -- which includes Obamacare exchange subsidies and new outlays for Medicaid and other programs -- the new total of $51 billion is still only a third of 1% of American GDP. That might pinch the economy, but it's not likely to hurt growth the same way that Social Security did in its first year of tax collection.
http://www.fool.com/investing/general/2014/01/18/obamacare-might-be-the-best-managed-new-social-pro.aspx
Is Obamacare a big flop? That depends on whom you ask.
The program's proponents can point to an estimated 9 million newly insured Americans -- 3 million who are now covered under their parents' plans until age 26, 2 million who've bought policies on the Obamacare exchanges, and more than 4 million now signed up for Medicaid -- as proof that Obamacare is having its intended effect. Opponents note that the low percentage of young enrollees undermines promises of a better risk pool, to say nothing of the program's exorbitant costs, which include anywhere from about $300 million to more than $2 billion just to set up and operate the maligned Healthcare.gov website.
But if you ask political historians, you might be surprised. The United States has been rolling out major new social-insurance programs for eight decades now, beginning with Social Security's first tax levies in 1937. While Social Security and the Medicare-Medicaid combination were certainly more ambitious reforms than Obamacare from a coverage and governance perspective, their early costs and rollout hiccups can be instructive for anyone fretting about costly "death spirals" or unintended budgetary consequences. And there were hiccups.
Social Security and the Roosevelt recession
President Franklin D. Roosevelt signed the Social Security Act into law in 1935, but the program began collecting taxes in 1937. That year, $767 million flowed into federal coffers from new taxes, but nearly no one received benefit payments, which were paid as one-time lump sums until 1940. This was one of the largest tax increases in modern history, if not the largest -- federal tax receipts soared by 72% from 1936 to 1938, and government balanced-budget efforts, implemented at the same time, caused a sharp and devastating "Roosevelt recession" that undid much of the progress made to that time against the Great Depression.
The best way to compare this new cost to Obamacare is to look at nominal national GDP in 1937 and GDP today. Social Security's new taxes hit so hard and so rapidly that the economy was already sliding into recession by the time 1937's first-quarter GDP numbers were known. However, even at the year's high-water economic mark, Social Security taxes amounted to nearly 1% of the economy, and this was simply to begin collections for a program that was set to cover only half of the workforce.
A $2 billion hit in 2014 for Obamacare program maintenance doesn't come close -- it's barely a hundredth of 1% of the most recently reported GDP figures. Even if you add in the Congressional Budget Office's estimates on Obamacare's total costs -- which includes Obamacare exchange subsidies and new outlays for Medicaid and other programs -- the new total of $51 billion is still only a third of 1% of American GDP. That might pinch the economy, but it's not likely to hurt growth the same way that Social Security did in its first year of tax collection.
http://www.fool.com/investing/general/2014/01/18/obamacare-might-be-the-best-managed-new-social-pro.aspx