Why Are The Washington Post Wonkbloggers Repeating A Romney Campaign Falsehood About Medicare?

The Washington Post’s WONKBLOG has been repeating the Romney Campaign's falsehood about Obamacare and Medicare. From their fact check of Bill Clinton's 2012 DNC Speech:

FALSE: [Clinton:]“Both Governor Romney and Congressman Ryan attacked the president for allegedly robbing Medicare of $716 billion. That’s the same attack they leveled against the Congress in 2010, and they got a lot of votes on it. But it’s not true.”

The Affordable Care Act did indeed cut Medicare spending by $716 billion, as the Congressional Budget Office wrote in a July 24 report. It does that by reducing payments to Medicare hospitals and doctors, essentially ratcheting down the amount they receive when they see a patient.

...these Medicare cuts do indeed exist.

However, all three major fact checkers have come to pretty much the opposite conclusion:

• FactCheck.org (here, here, and here) 
• Washington Post Fact Checker (here and here)
• Politifact.com (here, here, here, and here):

In my post on Ryan’s Medicare claim, I explained why this is the case using the findings of both FactCheck and The Washington Post Fact Checker (PolitiFact did an exceptionally poor job explaining the problem):

"Medicare payroll taxes go to pay for Medicare Part A. What revenue is left over goes into the Medicare Hospital Insurance trust fund. And that fund goes to finance shortfalls in Medicare Part A. As of late, there is not enough revenue coming from payroll taxes to cover hospital insurance for medicare beneficiaries. As a result, the trust fund is being drained and will eventually be empty, meaning Medicare Part A will become insolvent. To help mitigate the problem, the Affordable Coverage Act slows the amount of money coming out of the trust fund via reduced payments to hospitals. Obama can get away with those reduced payments to hospitals largely without causing them to drop out of the program because of a deal he stuck with hospitals, promising new patients through the ACA, more than making up for the lost revenue. This saved money stays in the trust fund (although it can be loaned out, more on that later). It does not go to cover the uninsured not currently in Medicare. In addition, Obama increases the revenue coming into the trust fund via a 0.9 percent tax "on earnings above $200,000 for single taxpayers or $250,000 for married couples."

The savings from Medicare that actually go into Obamacare come from Medicare Parts B, C, and D, and only from funds that come from congress (income taxes, corporate taxes, etc...) to cover outlays. This accounts for approximately 2/3 of $716 Billion in slowed medicare growth. Obama decreases the growth of money congress spends on Medicare from general revenue using the Independent Payment Advisory Board, which is incredibly limited in what it can target."

...a bill can both reduce the deficit and not be "paid for." This is because some of the revenue that comes in goes "into savings" instead of being used to pay the bills. And just like a bank uses savings accounts to make loans, so too can this Medicare money "in savings" be loaned out to pay for other programs. FactCheck explains:

"What happens in government accounting is that after Treasury issues a bond that it will have to pay later, it can spend the money it received on other things. And it often does, whether that’s coverage expansion, as called for in the health care law, or any number of things. The Romney spokesman said it was “a shell game.”"

But that doesn’t mean that the Medicare trust fund will be slashed or its “piggy bank” “robbed” or “raided,” or any other claim we’d put firmly in the category of “senior scare.” (emphasis mine)

Romney does have a point in essentially calling this an accounting trick. And he could spend time making that claim instead of a demonstrably false one. You can argue over whether or not the CBO was therefore wrong to say the ACA cuts the deficit. But you cannot say payroll taxes are going toward the ACA anymore than you can say your personal savings in the bank are going toward someone else's loan. Just like those savings are still legally yours, so are the trust funds still legally Medicare's. Any money that is borrowed from the fund has to be paid back.

I am not quite sure why the Wonkbloggers are doing this. And I can find no explanation as to why they keep coming to the exact opposite conclusion as these major independent fact checkers, including the Washington Post’s own Glenn Kessler. Could It be the double counting? Romney could certainly say Obamacare isn’t paid for, or that it adds to the debt (but not deficit). However, as Glenn Kessler has noted, that would open Republicans (including his own VP Pick) to criticisms of hypocrisy since those claims can be leveled at nearly any deficit reduction plan, including many of the GOP's own.

No Paul Ryan, Payroll Taxes Are NOT Going Towards ObamaCare

Paul Ryan has been LYING about Obamacare and payroll taxes.

During a campaign stop at Miami University in Ohio, Paul Ryan made the claim that payroll taxes will now be used to fund the Affordable Care Act:

"Ryan slightly reframed the attack by arguing that Obamacare is effectively taking hundreds of billions from payroll taxes. “Take a look at your paycheck next time. Look at that line on your paycheck that [reads] payroll taxes," Ryan said. "You see our payroll taxes from our paychecks are supposed to go to two programs--Social Security and Medicare period. Now because of Obamacare they’re also going to pay for Obamacare." The crowd booed." (emphasis mine)

One problem with this: It is completely false. And the Romney campaign knows it.

Earlier this week, FactCheck.org released probably the best article on Mediscare claims since they began resurfacing after the Ryan VP pick. This article is an absolute must read for anyone wanting to understand how Medicare works, as well as what Romney, Ryan, and Obama each plan to do about Medicare's fiscal problems. The article begins with explaining the troubles Medicare faces down the road, mainly focusing on insolvency (which is different from bankruptcy). The article then summarizes the history of Medicare, as well as the different "Parts" of Medicare (A,B,C, and D). Understanding this is crucial for understanding the Ryan, Romney, and Obama Medicare plans (Obama has already passed his plan as part of the ACA). Here is a basic summary of what each Part of Medicare covers:

• Medicare Part A: Hospital insurance
• Medicare Part B: Insurance for doctor visits
• Medicare Part C (Medicare Advnatage): Combines both Part A and B but uses a private insurer.
• Medicare Part D: Prescription Drugs

The article also debunks the claims from both the Obama and Romney campaigns about how each candidate plans to cut benefits and push the cost of healthcare further onto seniors. I will not spend any time in this post talking about whether or not either campaign's arguments hold water (See my previous post and Roundup from last week for that). This post will be dedicated to understanding why Paul Ryan is lying about payroll taxes going to fund the Affordable Care Act (Obamacare, PPACA, ACA).

One area where FactCheck's article falls a bit short is on explaining why Paul Ryan's claim mentioned above is wrong. The article is a bit vague and inconclusive. However, a campaign speech by Paul Ryan finally motivated FactCheck to get more detailed and help explain specifically why Paul Ryan's claim is wrong (the article also debunks Medicare bankruptcy claims). This article is another absolute must read. I will summarize and expand here:

Medicare payroll taxes go to pay for Medicare Part A. What revenue is left over goes into the Medicare Hospital Insurance trust fund. And that fund goes to finance shortfalls in Medicare Part A. As of late, there is not enough revenue coming from payroll taxes to cover hospital insurance for medicare beneficiaries. As a result, the trust fund is being drained and will eventually be empty, meaning Medicare Part A will become insolvent. To help mitigate the problem, the Affordable Coverage Act slows the amount of money coming out of the trust fund via reduced payments to hospitals. Obama can get away with those reduced payments to hospitals largely without causing them to drop out of the program because of a deal he stuck with hospitals, promising new patients through the ACA, more than making up for the lost revenue. This saved money stays in the trust fund (although it can be loaned out, more on that later).³ It does not go to cover the uninsured not currently in Medicare. In addition, Obama increases the revenue coming into the trust fund via a 0.9 percent tax "on earnings above $200,000 for single taxpayers or $250,000 for married couples."

The savings from Medicare that actually go into Obamacare come from Medicare Parts B, C, and D, and only from funds that come from congress (income taxes, corporate taxes, etc...) to cover outlays. This accounts for approximately 2/3 of $716 Billion in slowed medicare growth. Obama decreases the growth of money congress spends on Medicare from general revenue using the Independent Payment Advisory Board, which is incredibly limited¹ in what it can target.

So it should be pretty clear Paul Ryan's claim is false. But remember I accused Ryan of more than just telling him a falsehood. I accused him of lying, meaning he knew what he was saying was false. What is my evidence? Besides Ryan's work on the medicare program (meaning he should know this Medicare 101 knowledge) and acceptance of Obama's ACA Medicare savings (he should know what he is accepting), when FactCheck asked Romney's campaign about their claims, the campaign responded this way:

"When we asked the campaign how it could argue that Obama’s spending reductions didn’t extend the life of the trust fund, a spokesman replied that it didn’t extend the fund “unless the administration is ready to admit their law blows a huge hole in our deficit.”"

So essentially they are accusing Obama of double counting the savings from hospital insurance. If that money has to be put into the trust fund, it can't also cover the non-Medicare related Obamacare expenses. Fact Check explains (from their original article):

"The fact is that CBO and the guardians of the hospital trust fund say Obama’s health care law does both extend the life of the trust fund and reduce the deficit, but can’t be also counted as paying for the law’s added spending."

This may sound a bit confusing. It essentially comes from the fact that a bill can both reduce the deficit and not be "paid for." This is because some of the revenue that comes in goes "into savings" instead of being used to pay the bills. And just like a bank uses savings accounts to make loans, so too can this Medicare money "in savings" be loaned out to pay for other programs.² FactCheck explains:

"What happens in government accounting is that after Treasury issues a bond that it will have to pay later, it can spend the money it received on other things. And it often does, whether that’s coverage expansion, as called for in the health care law, or any number of things. The Romney spokesman said it was “a shell game.”"

But that doesn’t mean that the Medicare trust fund will be slashed or its “piggy bank” “robbed” or “raided,” or any other claim we’d put firmly in the category of “senior scare.” (emphasis mine)

Romney does have a point in essentially calling this an accounting trick. And he could spend time making that claim instead of a demonstrably false one. You can argue over whether or not the CBO was therefore wrong to say the ACA cuts the deficit (see Update 8/28/12). But you cannot say payroll taxes are going toward the ACA anymore than you can say your personal savings in the bank are going toward someone else's loan. Just like those savings are still legally yours, so are the trust funds still legally Medicare's. Any money that is borrowed from the fund has to be paid back. The Romney campaign knows this and it is reasonable to assume Ryan does as well. So he knows payroll taxes will not fund the ACA, yet he still makes that claim. It is a lie.

¹ Most of what the IPAB targets is the extra money paid into Medicare Advantage (Part C,except for hospital insurance), making costs from the expensive program fall into line with traditional Medicare. You can argue this will indirectly affect benefits, but the program is forbidden from directly cutting benefits. Romney and Ryan, on the other hand, give congress practically unlimited power to save money however they desire, including through benefits (and we all trust congress, don't we). As Ezra Klein and others have repeatedly noted, ObamaCare and Ryan's plan call for approximately the same-sized reductions in future medicare growth. The difference is in how it is implemented. Without a doubt though, Romney's plan to avoid the $716 in slowed growth is the worst. It will actually hasten insolvency.


Update 8/28/12:

For the last few weeks, the Washington Post Fact Checker has been on vacation. So he as not been posting fact checks on this issue since the Ryan VP pick. Today he finally posted a response to readers' questions on Medicare Cuts, bankruptcy, and cost shifting. Overall, the post was not all that impressive compared to FactCheck's posts. However, he did link to an old article talking about the "double counting" issue mentioned above. This article is another absolute must read for anyone interested in this issue. It turns out double counting has been an acceptable practice for both parties for the last few decades. That's right, Republicans use this as well:

"When President Bill Clinton signed the Balanced Budget Act of 1997, then House Speaker Newt Gingrich (R-Ga.) was one of the speakers. “On Medicare, we came together and we saved the system for at least a decade,” he declared. How could he make this claim? Through the same double-counting that Republican now decry. The

Fact Checker especially frowns on hypocrisy, and Republicans should acknowledge that they have gladly played this game before, including under President George W. Bush." (emphasis mine)

However, playing the "you did it too" game is not a good excuse for doing something potentially harmful. But it does turn out this practice isn't really that bad, since it increases gross debt without increasing public debt. The Fact Checker explains:

"Some argue that the increase in the gross debt is evidence of double-counting but the CBO has said that focusing on the health care law’s impact on the gross debt is not very illuminating: “That measure of debt conveys little information about the federal government’s future financial burdens and has little economic meaning.” (emphasis mine)

This may explain why the Romney campaign has avoided this line of argument and instead chosen a demonstrably false line of argument. He would be open to criticisms that both parties do this and could put the reputation Reputation of congressional Republicans in 1997 in jeopardy. It is much easier to tell a simple lie.

Note: Just to head off a potential criticism, Ryan cannot say that he was talking about Medicare funds being loaned Obamacare when he said payroll taxes were being used to fund Obamacare. If he had meant it in this way, he would have to admit payroll taxes also fund national defense, congressional pay, the war on drugs, and most any program funded by congress through general revenue. However, his statement started by claiming that payroll taxes only fund Medicare and Social Security. So either way, he was lying.

² I reworded this to make it clearer. It used to say "However, as with any "savings account", that money is available for other uses when it's not being spent"

³ I added the qualifier in parenthesis to make it clear that this money can still be loaned out, even if it still belongs to the trust fund. It has to be paid back.

The Roundup

Best Thing to Happen to The Internet Since Al Gore! ... Here is a cat singing the theme from Game of Thrones (Thanks to The Washington Post):

Yet another reason to subscribe to Ezra Klein's RSS...

Steven Novella: Nocebo Nonsense

"Chopra’s article was inspired by a New York Times article by researchers into nocebo effects. The researchers, however, make very different points from Chopra. They review the scientific evidence, which is pretty clear. People will report negative side effects even when taking placebos. If they are warned about a particular side effect, they are more likely to report that one. Again – there is no reason to think this is anything other than subjective reporting. Stress is the one factor that can cause real physiological consequences, and therefore illnesses that significantly respond to stress (like heart disease) can be affected by anxiety or hopefulness. This is not true, however, of most diseases." (emhpasis mine)

The Solyndra Standard
A MUST READ on the GOP's hypocrisy in the Solyndra case. Stephen Lacey puts the case in context:

"And here’s the really astonishing disconnect: While supporting tens of thousands of jobs, the loan guarantee program is expected to cost $2 billion less than Congress budgeted for, according to an analysis from Herb Allison, John McCain’s former National Finance Chairman.

Meanwhile, amidst the Solyndra saga, we casually accept a $300 million aircraft failure without batting an eye. No outrage. No sustained political campaign. It’s just another day testing our military toys.

Why? Because we don’t often see programs like this as a “failure” in the political arena. We would never use one failure as an excuse to abandon investment in new technologies. Most politicians accept losses in military R&D expenditures because the long-term gains are potentially so important for national defense and for eventually developing technologies for civilian use.

We should always strive to make programs as efficient and cost-effective as possible. But a few bankrupt clean energy companies representing a fraction of the program’s budgeted cost is no excuse for abandoning federal investments in clean energy — a strategically important sector that is becoming one of the largest drivers of business this century." (emphasis mine)

Will the Fed’s efforts to boost the economy only benefit the wealthiest?
Thanks to the inaction of congress, quantitative easing may be one of the last options to help stimulate the economy. It effectively lowers the value of debt using inflation, which could help tackle the crippling deleveraging that is keeping consumer demand down and slowing the recovery (particularly in the housing market). But there is a price. That price is increased income inequality.

Great hyperinflation episodes in history — and what they tell us about the Fed
A MUST READ:
A look at historical cases of hyperinflation point to why it is absurd to suggest it will happen in the US any time soon:

"none of the most severe instances of hyperinflation appear to be triggered by a central bank simply trying to inject money into a basically intact economy in order to reduce the unemployment rate." (emphasis mine)

Conservative Group Plans to Push Republicans Toward Action on Climate, Cleaner Energy

"Leading members of the Christian Coalition and the Young Republicans on Monday will launch nationwide the Young Conservatives for Energy Reform, a grassroots group aimed at engaging Republicans on the goals of cutting oil use, backing alternative energy and clean-air regulations, and fighting climate change."

Can these groups pull the GOP away from the propaganda of the fossil fuel industry?

The politics and philosophy of racism
Two points:

1. Turns out racists aren't necessarily more likely to be republican than democrat. 
2.  Libertarianism will not sure racism for essentially the same reason free markets work: individual cases of racism are "spontaneous orders—of phenomena that are the product of human action, but not of human design" 

2013 may be the year of Austerity. Isn't that what the GOP wanted so badly back in 2010?

Poll: Republicans Really Aren't Big Fans of Arabs or Muslims

Brutal Attack On Palestinian Met With Near-Universal Rebuke among Israelis

On the Progressive Consumption Tax and What it means for people like Romney.

Very good story about the debate over the minimum wage.

Quote of the Day: Early Voting a Bad Idea Because it Makes it Easier for Blacks to Vote

NPR debunks the myth of the "independent voter".

The Roundup: Abortion Edition

Todd Akin is taking the GOP down with him.

Yes, Plenty of Republicans Want to Ban All Abortions, Full Stop
The Todd Akin incident reminds us that this election could easily decide the future of a woman's right to choose. Multiple states have attempted to pass bills that could effectively ban all abortions if Roe v Wade was overturned (thanks to a conservative appointee from a Romney administration and the inevitable GOP controlled senate).

PolitiFact: Women's group says Paul Ryan would "outlaw in vitro fertilization”

"UltraViolet has a point that the bill Ryan backed could significantly alter the way in vitro fertilization is practiced. However, the group exaggerates when it says the bill in question would "outlaw in vitro fertilization." The bill doesn ’t outlaw the procedure directly -- whatever impact it has would likely require action by states, which many states may be unwilling to undertake. And while the bill likely outlaws specific practices that have historically been considered important for practicing in vitro fertilization, it would not ban the procedure itself."

FactCheck: Another Abortion Falsehood from Obama’s ‘Truth Team’
Some clarification on the 2012 GOP platform on abortion:

"It’s true that Romney has voiced support for the 2008 platform’s call for an unspecified “Human Life Amendment” to the Constitution, and the language approved by the party’s platfor m committee for 2012 is identical. But that’s a far cry from advocating an abortion ban that would apply in cases of rape or incest."

And it turns out that we have been to careless over speculation that these Human Life Amendments will ban abortions in the cases of rape and incest:

"As we’ve said before, there have been numerous versions of human life amendments proposed over the years, some of which include exceptions for rape and incest and some of which don’t. For details, see our July 31 item, “Falsifying Romney’s Abortion Stance, Again.” Most of these amendments didn’t get out of committee."

However, the speculation is not entirely unfounded:

"Furthermore, Romney’s chosen running mate, Paul Ryan, opposes exceptions for rape or incest. And it would be accurate to say that the GOP platform calls for a constitutional amendment that would leave states free to adopt abortion bans without exceptions."

So Red States would be screwed still....

However, as Suzy Khimm of The Washington Post finds, it may also be the case that none of this matters.

"But do party platforms even matter? Much of the political science research suggests not — at least when it comes to the candidates’ own views and actions. “The nominee is not necessarily constrained by the formal platform. They can agree with whatever bits and pieces and ignore the rest,” says John Sides, a political science professor at George Washington University."

Imagine You Were Raped. Got Pregnant. Then Your Rapist Sought Custody.

"The debate over Rep. Todd Akin's widely condemned comments on "legitimate rape" has largely centered on abortion and Republican efforts to outlaw the procedure, even in cases of rape. But the controversy has also uncovered a little-discuss ed issue: When some rape victims do choose to give birth to a child conceived through sexual assault, they find that the legal door is left wide open for their victimization to continue. It sounds unfathomable, but in many states the law makes it possible for rapists to assert their parental rights and use custody proceedings as a weapon against their victims."

The Doctor behind Akin's offensive unscientific statements

Update 8/27/12:

The Weekly Standard Defends Ryan on Redefining Rape

"More broadly, the "they only intended to exclude statutory rape" defense misses the point. Most serious abortion foes oppose the rape exception—full stop. It's no surprise that the abortion rights opponents who wrote H.R. 3 didn't foresee that simply narrowing the rape exception—a move far short of their preferred position—might provoke more controversy than opposing the rape exception itself."

...

"While I was reporting out the forcible rape story last year, one of the sources I called, a very accomplished woman, told me she had been a victim of statutory rape as a young teenager. Decades later, she nearly broke down about it on the phone while talking to a stranger. Should she have been denied the option of a Medicaid-funded abortion because her rape wasn't rapey enough?" (emphasis mine)

The Roundup: Taxes And Budget Debate Edition

Private equity firms: Job creators or job destroyers? 
The jury is still out. Why? Maybe because these firms aren't interested in creating American jobs. So are they afraid of the results?

Would an income tax hike hurt hiring? 
One thing not mentioned: A lot of these tax increases only happen on the portion of their income above $250,000. For a business making $250,001, only $1 would be affected the the rate increase. So I'm curious where the concentration of those businesses lie, close to the $250,000 mark or high enough for the tax increases to be significant.

David Frum: The Deficit Won't Go Down Till The Private Sector Goes Up 
Many economists have been saying large government deficits have come about as a result of the recession, NOT runaway government growth. The evidence to back this up is quite strong. Deficits for 2009 were originally projected to be ~$200 bi llion... until the recesion hit and deficits were then projeted to be ~$1.2 trillion. The Obama administration raised that to ~$1.4 trillion. This also further undermines the popular conservative belief that we need to jump into immediate austerity to fix out budget problem.

Bruce Bartlett: Will Defense Cuts Kill the Anti-Tax Pledge?

"Republicans are between the rock of defense cuts that they view as unpalatable and the tax pledge hard place. There is no doubt that Democrats would agree to a tax increase to offset the defense sequester, but would oppose any other altern ative except, perhaps, putting off the entire sequester, including domestic spending cuts, for a year. It’s doubtful that the GOP’s Tea Party wing would support that."

The Republican Plan to Tax the Poor

"According to CTJ, virtually all of these tax increases would apply to families making less than $50,000—people for whom a few hundred dollars can make a huge difference. Unfortunately for them, the media is focused instead on how Obama's tax increases on incomes above $250,000 will make life intolerable for rich people."

Paul Krugman: The Hobbled Recovery

"Business investment has actually gone up a lot; maybe you think it should have gone up even more, but it’s not the heart of the problem. On the other hand, we’ve had a lot of cutbacks in government — mainly at the state and local level, but federal aid could have avoided that. (emphasis mine)

This isn’t a picture of an economy hobbled by Big Government; it’s a picture of an economy hobbled by premature austerity."

Brad DeLong: Hopeless Unemployment

"The current balance of probabilities is that two years from now, the North Atlantic’s principal labor-market failures will not be demand-side market failures that could be easily remedied by more aggressive policies to boost economic activity and employment. Rather, they will be structural market failures of participation that are not amenable to any straightforward and easily implemented cure."

Paul Krugman: The Secret of Our Un-success

"The Wall Street Journal — yes, the WSJ — explains: Government Cutbacks Separate This Expansion From Others. Over at Angry Bear, Spencer shows that private GDP — GDP not including government spending — has risen almost exactly as fast under Obama as during the “Bush Boom”; of course, if government spending hadn’t been falling despite a weak economy, there would have been more jobs, and private spending would have risen faster." (emphasis mine)

Paul Krugman: Poles Apart

"So actually Poland’s success suggests that (a) big government isn’t so bad (b) sometimes its good to debase your currency. Doesn’t anyone tell Romney to do his homework?"

Paul Krugman: Dooh Nibor

"The question one might ask is, did TPC – which is actually painstakingly and painfully nonpartisan – make questionable assumptions to get its results, so that some other set of assumptions might portray Romneynomics in a more favorable lig ht? And the answer is no: TPC actually bent over backwards to literally give Romney every possible benefit of the doubt.

...

So they’re actually giving Romney every possible benefit of the doubt – and still his plan is a redistribution from the middle class to the rich. In practice it would surely be much worse." (emphasis mine)

WP Fact Checker: Obama’s new campaign ad on dueling budget plans

"Romney’s continued failure to provide enough specifics about his plans certainly lets the Obama campaign openly speculate about the impact. The president, by contrast, is required to present a real budget with actual figures — but as we ha ve shown, he can still play budget tricks to make the numbers add up. So even more detail from Romney might not make the budget dispute any clearer."

Why Washington Accepts Mass Unemployment 
A MUST-READ ON THE POPULAR VIEW OF THE RECESSION AMONG THE WASHINGTON ELITE!

"There are signs we’ve hit bottom. Nothing to worry about here. Why risk the possibility of a small outlay merely to provide relief to hundreds of thousands of des perate people? This is such a perfect statement of the way the American elite has approached the economic crisis. They concede that it is a problem. But there are other problems, you know."

FactCheck: Does Romney Pay a Lower Rate in Taxes Than You?

"“Bottom line,” said Eric Toder co-director of the Urban-Brookings Tax Policy Center, “if you look at income taxes only, Obama’s statement is not true for most Americans. If you add in payroll taxes, however, it is probably true for lots of people.” (emphasis mine)

No matter how you slice it, Toder said, Romney’s tax rate is very low for someone with his level of income. The average income tax rate for the top 0.1 percent (which is where Romney falls) is 23.6 percent."

Nine takeaways on Romney’s tax plan 
Romney's tax plan will hopefully become his biggest handicap in this election. This is the bottom line. Surveys show the American population generally thinks Romney is more able to handle the debt and deficit than Obama. Understanding the f laws with Romney's plans for growth and fiscal reforms should help Americans doubt Romney's competency on these core issues. It will help ensure Romney either fixes the problems with his plan (doubtful, since the problems are fundamental), or loses this election for the right reasons.

AEI Economics: Better Late Than Never 
AEI is a bit late to the game, but they are early compared to many Republicans:

"In his podcast Pethokoukis asks the most important question conservatives will have when they hear about this policy for the fist time: Isn't this just promoti ng inflation? In response, Sumner clearly explains why short term inflation is not the same as the Carter-era inflation that many conservatives fear might repeat itself." (emphasis mine)

FACT CHECK: Social Security adds to budget deficit
a MUST READ Fact Check on the question of whether social security is adding to the national debt. It is more complex than most people realize.

Note: Most of our debt does not come from china. Former Sen Judd Gregg has presented a false dichotomy.

Both parties unfazed as ads fail fact-check
The Obama campaign is finally calling out the Romney campaign for its hypocrisy in their insults to Obama's political ads:

""Mitt Romney won the Republican primary only by tearing down each of his opponents with ruthlessly negative campaig ning," said campaign spokeswoman Lis Smith. "His campaign has questioned whether the president understands what it is to be American, attacked his patriotism, and is currently running an ad that a former president [Clinton] and authors of the welfare-to-work legislation have called a flat-out lie. When the Romney campaign finally reaches the high ground, we look forward to greeting them there."" (emphasis mine)

One interesting thing here is that these negative ads seem to be benefiting Obama much more than Romney:

"Political scientist John Geer of Vanderbilt University, who has been testing voter reaction to ads, has found that some of Obama's ads attacking Romney have moved voters. But Romney's attacks, so far, have not.

"People know what they think of Obama. Their judgments can't easily be moved," he said." (emphasis mine)

In addition, some of these political ads may be relying on fact checker debunkings:

"Indeed, with the ad about the cancer death, the Democratic super PAC, Priorities USA Action, appeared to have gone the fact-checkers one better — exploiting attention to the ad's veracity to get free air time for a spot that has not appeared anywhere as a paid commercial. The ad has been replayed extensively on television news segments that have debated it and has been viewed more than half a million times on YouTube. The largest number of views have come from five states — California and four election battlegrounds, Florida, Pennsylvania, Ohio and Virginia, according to Priorities.

The Democratic super PAC has raised considerably less money than its Republican counterpart, making the free publicity particularly valuable.

Asked whether the prospect of controversy leading to free publicity was part of the calculation, Paul Begala, senior advisor to Priorities, did not hesitate.

"Absolutely," he said. "We're provocateurs."" (emphasis mine)

 The Case of the $100 Billion Error¹

"Multiple members of Congress have warned that slashing defense spending by $600 billion would devastate the military, with Sen. Lindsey Graham this month predicting the cuts would deal "a death blow to our ability to defend ourselves."

There's just one problem: The number they cite is wrong.

The law triggering the cuts does not slash the military budget by $600 billion. That figure — which has also been widely cited in the media — overstates the amount of military cuts by more than $100 billion." (emphasis mine)

Paul Ryan’s imaginary expertise¹
Professor Mark Thoma of the University of Oregon explains how Paul Ryan doesn't uderstand basic monetary or fiscal policy. His budget makes unre alistic assumptions which are backed by few details. Is this what we should expect from the "intellectual leader of the Republican Party."

 "Only about one-third of American families will surpass their parents in wealth and income and climb to a new rung on the economic ladder, a new study out today from The Pew Charitable Trusts concludes."

The NFIB is now only representing at most 2% of small businesses.
 
The Tax Foundation is dishonest about income inequality.

Economists who once supported austerity in the UK are changing their minds   

Paul Krugman makes the case that markets are allowing the US to borrow for free, meaning now is the time for short term stimulus and long term austerity.

Paul Krugman explains the euro crises: a central currency with no central government. He then presents potential solutions to the crisis. He Ends by suggesting the euro should be saved but probably won't.

Why does the middle class let politicians get away with unfavorable tax plans? They trust politicians just wouldn't do such a thing. 

Charts: America Has the World's Luckiest Billionaires

Arthur Laffer on income inequality, raising taxes

 Six Policies Economists Love (And Politicians Hate)<sup>1

1</sup>: Update 8/18/12

The Roundup: Romney's Bain Edition

Romney tells Obama to stop sharp political attacks
I find it ironic that Romney accuses Obama of lying, while following up with lies of his own.

And Romney continues to lie...
 
WP Fact Checker: 4 Pinocchios for an unproven Romney claim of ‘crony capitalism’

FactCheck:‘You Didn’t Build That,’ Uncut and Unedited

WP Fact Checker: Romney’s claims of misspent stimulus money 
 
WP Fact Checker: An Obama quote taken out of context, yet again

Politifact: Mitt Romney says a lawsuit filed by President Obama's campaign challenges voting privileges for the military

FactCheck: Does Obama’s Plan ‘Gut Welfare Reform’?

Note that half of these fact checks come from the same fact checker Romney cited when demanding an apology from the Obama campaign...

An amazing take-down of the ideas that underlie Romney's economic and fiscal agenda.


Mitt Romney and Bain: a Fact Checker collection  
 After citing Kessler in an a calling Obama dishonest for the bain claims, Romney and Bain fail to provide evidence showing he had "no role whatsoever" in Bain between 1999 and 2002. As a result, the Fact Checker is at an impasse. Romney's secrecy continuing to become a major problem for him.
 
David Frum: With nothing else to do, Obama calls Romney a criminal or a liar

"Romney’s best biographers, Michael Kranish and Scott Helman (both of them also Globe reporters), support Romney’s version of events. They describe Romney’s departure from Bain as so sudden and total as to have nearly capsized the company.

On the other hand, he did keep signing forms and cashing checks. Also on the other hand, the harsh things that happened post-1999 followed from decisions made pre-1999."

David Frum: Romney: Too Weak?
Is David Frum going to re-think his vote this November?

"at every point, Romney has surrendered to the fringe of his party. Weak. And now in his first tough encounter with Barack Obama, Romney is being shoved around again. This is not what a president looks like - anyway, not a successful president."

Paul Krugman: The Class-Warfare Election

"So like it or not, we have an election in which one candidate is proposing a redistribution from the top — which is currently paying lower taxes than it has in 80 years — downward, mainly to lower-income workers, while the other is proposing a large redistribution from the poor and the middle class to the top."

Paul Krugman: Pathos of the Plutocrat

"Clearly, Mr. Romney believed that he could run for president while remaining safe inside the plutocratic bubble and is both shocked and angry at the discovery that the rules that apply to others also apply to people like him. Fitzgerald again, about the very rich: “They think, deep down, that they are better than we are.”"

The Creepy Small Lies of the Romney Campaign

"If Republicans are willing to just flat-out lie about what he said, it's impossible to self-edit your remarks enough to avoid it. We've now seen the Romney campaign make hay out of three wild misquotations"

"I know I keep asking this, but has any previous campaign ever done this on such a routine basis? I don't mean to suggest that no campaign has ever been as nasty. Obviously Willie Horton and "creating the internet" and the Swiftboating of 2008 were worse. And both sides traffic in distortions and cherry picking all the time. But there's something about the methodical small lies of the Romney campaign that seems quite new." (emphasis mine)

Romney’s World: Mitt’s insults, mistakes, and blunders abroad aren’t gaffes. They actually represent his true worldview

"The thing that Krauthammer doesn’t get is that Romney is not the sort of businessman—that his brand of capitalism is not the sort of enterprise—that requires even the most elementary understanding of diplomacy, courtesy, or sensitivity to other people’s values, lives, or perceptions."

They Also Serve Who Play Whack-a-Mole with People Who Do Not Understand the Gordon Equation for Valuing the Stock Market

"Suppose that you had told me, 15 or 30 years ago, that there was an economist who did not understand the Gordon equation for stock market valuation: somebody who, instead of knowing that the Gordon equation was P=D/(r-g) (where P is the va lue of the stock index, D is the dividend paid on the index, and r and g are the required rates of return and expected dividend growth rates respectively) thought instead that it was P=E/(r-g) (where E is the account earnings of the index). Suppose you had told me that that somebody would be a respected senior economic adviser to Republican presidential candidates. Suppose you had told me that that somebody would be taken seriously by the press as an authority. And suppose you had told me that I would feel compelled to play whack-a-mole, in a largely vain attempt to limit the spread of misinformation…

I would simply not have believed you…"

Walter Jones On Mitt Romney's Tax Returns: 'I Don't Think This Will Go Away'

"Many Republicans have called on Romney to release more than two years of tax returns to make the issue go away, including his former rivals Newt Gingrich, Rick Santorum, Rick Perry and Jon Huntsman. Conservative pundits Bill Kristol and Ge orge Will, as well as the editors of the National Review, have also called on Romney to release the returns."

PolitiFact: Mitt Romney says Barack Obama’s plan for welfare reform: "They just send you your check."

"Romney’s ad says, "Under Obama’s plan (for welfare), you wouldn’t have to work and wouldn’t have to train for a job. They just send you your welfare check."

That's a drastic distortion of the planned changes to Temporary Assistance to Needy Families. By granting waivers to states, the Obama administration is seeking to make welfare-to-work efforts more successful, not end them. What’s more, the waivers would apply to individually evaluated pilot programs -- HHS is not proposing a blanket, national change to welfare law."

And Obama's counter claim that Romney requested a waiver like this himself back in 05 is actually comparing apples to oranges.


WP Fact Checker: Romney’s economic scorecard: Promising success, comparing records

"The scorecard’s simple arrows don’t account for the fact that Massachusetts lagged behind the nation as a whole in certain areas of the economy — jobs, home values and family incomes — while Romney was in office.

The scorecard also hides the fact that some economic conditions deteriorated for Massachusetts during the candidate’s last year in office, as is the case with home values and family income.

As for the budget-deficit comparison, it suggests Romney had a choice about whether to balance the Bay State’s budget during each year of his administration. But Massachusetts law required him to do so.

Finally, the scorecard gives the president no credit for taking office in the midst of the most severe recession in modern times. Obama’s numbers are generally positive since the end of the downturn, even if the recovery has been relatively slow. Democrats would argue that Congress is as much to blame as the president for that.

Nothing on Romney’s scorecard is flat-out false, but just about all the comparisons either lack context or ignore facts that contradict its assertions. Overall, the Romney campaign earns two Pinocchios."

Mitt Romney: Not a Murderer

"The problem with the ad, rather, is that it relies on an argument Obama obviously doesn’t believe: that a business owner engaging in layoffs is morally responsible for what happens to his employees afterward."

PolitiFact: Harry Reid says anonymous source told him Mitt Romney didn't pay taxes for 10 years 
Reid needs to give up. You don't spread speculation like this, especially when the likelihood of it being true is so unbelievably low:

"Reid has produced no evidence to back up his claim other than attribution to a shadowy anonymous source. Romney has denied the claim, and tax experts back him up, saying that the nature of Romney's investments in Bain make it highly unlikely he would have been able to avoid paying taxes altogether -- especially for 10 years."

And from the WP Fact Checker:

"In other words, this tax return shows a portfolio that is not structured to yield zero taxes. We spoke to a number of tax experts, all of whom said that, given Romney’s current portfolio, it was highly improbable for Romney to have had 10 years with taxfree returns — though there could have been one or two years with little or no taxes." (emphasis mine)

Is it just me or are the liberal claims about Romney's time at Bain beginning to look like the birther fiasco? 

PolitiFact: Checking the facts about Romney and Bain Capital  

"Bain and outsourcing are likely to remain sources of conflict between the candidates as the campaign goes on. It's ironic, then, that when it comes to the basic economics of outsourcing, the candidates basically agree—as do most economists . Many voters, however, see things differently—which is probably why neither of the candidates is talking about what they have in common."

The AP mentions fact checks that have debunked things Obama has said about Romney while neglecting to mention fact checks that debunk what Romney has said about Obama. What Liberal Media?

Stop celebrating Harry Reid for the same crap we berated the TEA Partiers for.

Obama Knocks Romney for Saying True Things About Coal

A Primer on Political Fact Checking: Index

more to come...

Republican Delusions In Front of Holy Reagan

Political debates tend to be great forums for spreading misinformation. Of course, the September 7th, 2011 Republican debate at the Reagan Library was no exception. Three major fact checking sources have already taken aim at a few of the claims given during the Republican debates:

• Fact Checker: "Fact checking the GOP debate at the Reagan library"
• Politifact: "Fact-checking the Reagan Library debate"
• FactCheck: "FactChecking the Reagan Debate"

In addition to these, I thought I would share a bit more, as well as highlight a few major points.

Perry blew it

As conservative blogger David Frum put it "The revelation from the Republican presidential debate: Rick Perry and his team utterly failed to prepare answers to utterly predictable questions":

1. "Perry’s Social Security answer delivered President Obama the perfect clip for a 2012 negative ad"
2. “military adventurism”
3. Perry's performance was "Nervous, irritable, stuttering, floundering"
4. Perry failed to explain away the lousy statistic about health insurance coverage in his state.
5. "How could a Texas governor be unready to talk about immigration?"

Utterly unimpressive.... I can only hope it hurts is image solely with non-Republicans.
Of course the most memorable part of the night was when Rick Perry referred to Social Security as a "Ponzi Scheme". For a moment, let us set aside the fact that this may not sit well with the 75% of Americans who support Social Security. Politifact has already tackled this claim quite often in the past and found it to be incredibly misleading at best. This comment also motivated Glenn Kessler to write "A primer on Social Security"


Bachmann misses the market crash

Michelle Bachmann made an interesting comment during the debate:

Don't forget the day that President Obama took office, gasoline was $1.79 a gallon. It's entirely possible for us to get back to inexpensive energy.

Politifact rated the statement True. Of course they also pointed out how little the president can do about gas prices:

"Other than lip service, there is little any president or member of Congress can do about the price of gas, since 70 percent of the cost of a gallon is determined by the cost of crude oil," said John B. Townsend II, a spokesman for the mid-Atlantic region of the American Automobile Association... (emphasis mine)

So, although the statement is technically true, the context in which it was given (that it was Obama's fault and she can fix the problem), is almost entirely false.
However, what seemed to be left out of the analysis is that the reason gasoline prices were at $1.79 when Obama took office is almost entirely due to the fact that much of the world was falling into a deep recession, significantly lowering the demand for gasoline. There is little evidence that increased drilling would have nearly the effect on gasoline prices that Bachmann predicts. The only realistic way to get gasoline prices THAT low during a Bachmann presidency would be another massive recession (which may not be all that unlikely during a Republican presidency). Does Bachmann want that?

Perry gets it spectacularly wrong on Galileo

During the debate, Rick Perry made an interesting remark about climate change and Galileo:

“The idea that we would put Americans’ economy in jeopardy based on scientific theory that’s not settled yet to me is just — is nonsense. I mean, it — I mean, and I told somebody, I said, just because you have a group of scientists that have stood up and said, here is the fact — Galileo got outvoted for a spell.”

Henry Fountain of the New York Times dove right onto this statement (with some help from historian Thomas Mayer):

Galileo, whose astronomical observations confirmed the Copernican theory that the Earth revolved around the Sun, was basing his assertions on empirical knowledge and faced opposition from the Roman Catholic Church, which supported the Ptolemaic view of an Earth-centered universe.

Mr. Perry, by contrast, has said repeatedly that he does not believe the empirical evidence compiled by scientists in support of climate change, but that he does adhere to faith-based principles.(emphasis mine)

In other words, Perry got it spectacularly wrong. Galileo was not a "maverick" among scientists. Scientists often agreed with him. His real opposition was from the Church. And that was mostly due to disobedience, as well as his attempt to fit the Copernican model of the solar system to the bible.

Update 9-12-11: Chris Mooney brings up a few more points on the Perry/Galileo comment.

Job Spin

No political debate would be complete without a few politicians either taking credit or dishing out blame for job creation (or the lack thereof). Romney, Perry, and Huntsman each had a little share in this sort of fun. Of course, this tends to be an issue mostly with candidates who have previously held (or currently hold) executive positions (presidents/governors/mayors). In this case, all three of these candidates have had experience with such a position. FactCheck took on a few of these claims:

• Romney tried to take credit for reversing the job situation in his state when he assumed office. However, he left out the part where Massachusetts also ranked 47th in the nation in job growth.
• Perry once again attempted to spin his "success" with job creation as governor of Texas. However, he left out quite a few other statistics, ones that would not look so favorable. For instance, while actually being nothing special in regards to unemployment (27th in the nation at 8.4% in July 2011), Texas also has the highest percentage of hourly workers paid at or below minimum wage as well as the highest proportion of medically uninsured people in the nation.
• Huntsman used BLS survey data to support his claim that Utah was #1 in the nation in job growth from Jan 2005 to Aug 2009. However, using payroll data (a preference for most economists), Utah only ranked 4th (notably behind Texas).

Update 9-12-11: The Fact Checker takes a look at the claims of Perry, Romney, and Huntsman about eachother's jobs records.

Recently Republicans have had little trouble divorcing themselves from reality. These Republican debates provide no divergence from this trend.