Abolish the Debt Limit

House Budget:Why Congress Needs to Abolish the Debt Limit, February 16, 2022

The debt limit is almost never an issue when one party holds the White House and both Chambers, although the lack of comity between the parties in both chambers with a slim majority in the Senate provides us with an exception. In periods of divided government, the debt limit almost always comes up, especially with Democrats in the White House. When the issue is raised, it is usually done so in an attempt to restrict discretionary spending or build support for cutting entitlements.

The best way out of this is to have more unanimous consent agreements, ending the use of Senate holds for purposes of grandstanding and a return to OPEN RULES in the House, especially on fiscal issues. As an aside, 55 is a nice number for cloture - although any limit can be misused by members of the majority with both eyes on the TV cameras.

I hope for comity, but do not expect it for now. Many have hopes for it once filing deadlines for the November election have passed, although it may take as decisive result in November to achieve that. Think 1974 rather than 2010.

Many constitutional and budgetary scholars believe that the debt limit is unconstitutional under the provisions of the 14th Amendment. This is likely correct. It is also likely seen as a political question - and testing it as a legal matter involves the likelihood of lawsuits after bonds are issued without regard to the limit in an effort to prevent default. No thank you.

The constitutional issue is best settled in bipartisan legislation to further define 14th Amendment procedures regarding insurrectionist candidates for congress and the presidency (and specify provisions to cure such disability as part of electoral vote counting). Such legislation should also include rules for how constitutional convention calls are received. 

Currently, the lack of rules is the main obstacle to the process. Specifically, must convention calls focus on a single issue or call for a general convention and must all petitions, like other legislation, be received anew at the commencement of each Congress. The proposed provisions of a balanced budget amendment, which effectively stop action by the majority and prevent tax increases, will never get 2/3rds support of both houses. Settling convention call rules is relevant to the issue at hand (the debt) and offers conservatives an olive branch.

The one situation where leaving debt limits in place is justified is when the budget process is reformed to allow for automatic budget allocations under the Budget Control Act and automatic appropriations under either Budget Control Act or Joint Budget Resolution marks. We have detailed such reforms many times over the past decade. A summary of these is attached to these comments.

Enacting such reforms would require realistic, rather than punitive, budget allocations. Budget Act markups would also include automatic debt limit extentions.  The threat of an automatic process may assure it is never used, although I never thought I would see Americans storming the Capitol building to overturn an election either. If such toxicity continues, automatic provisions may be needed to keep the lights on without grandstanding.

In most cases under this proposal, a debt limit challenge would simply not happen unless the economy and government spending are truly out of control, resulting in hyper-inflation. In such cases, an emergency brake may be useful.

What is not useful is tapping the brakes constantly and in such a way that the car can never get out of second gear - which is where the nation now finds itself.

Let us also take this opportunity to address our current debt explosion. The end of the pandemic and the eventual return to normalcy is the surest way out of our short term problem. The long-term solution is adequate tax revenue. The best way to not need a Debt Limit is to balance the budget by taxing those who hold most of the assets which hold Treasury Notes and Securities.  Any other path will reduce economic growth and result in more, not less, debt.

It is important to understand who owns and owes the debt. We are currently revising our previous study: Settling (and Squaring) Accounts: Who Really Owes the National Debt? Who Owns It? available from Amazon at https://www.amazon.com/dp/B08FRQFF8S  I can provide free copies of the prior version upon request and will distribute the latest edition once it is completed. The most recent bottom line estimates can be found in the second attachment. This shows who is on the hook for the debt and who benefits from it.

Note well that the top 22,000 households break even on debt owned and owed. Everyone else is in hock. Such an unbalance cannot continue.

A main conclusion of our analyses is that the national debt is the leverage for capitalism to the extent that debt securities allow Wall Street to offer riskier assets, such as mortgage backed securities embedded in Exchange Traded Funds, as well as more traditional offerings. Wealth held by the few (and the attachment shows how very few we mean), provides management absolute control of most workplaces. Employee-owned firms would not need such an unbalanced economy leveraged by American Treasury holdings.

Our third attachment details a series of tax reforms which will encourage a more balanced economy (and therefore broader based taxation), an end to deficit spending and an unwinding of both public debt and concentrated wealth.

The past few centuries have shown that “the masses” will never vote out capitalism and inequality. Economic progress is evolutionary, not revolutionary. Indeed, for taxes to go up, people with high incomes and wealth (and especially their children) need to benefit from such reforms. The same truism applies to the climate crisis as well.

To get there, calm discussion, rather than grandstanding - particularly over the Debt Limit, is absolutely essential.

Comments Video

Attachment – The Budget and Appropriations Process Video

Attachment - Debt Ownership as Class Warfare Video

Attachment - Tax Reform with videos

Debt Ownership as Class Warfare

Visibility into how the national debt, held by both the public and the government at the household level, sheds light on why Social Security, rather than payments for interest on the debt, are a concern of so many sponsored advocacy institutions across the political spectrum.

Direct household attribution can be made by calculating  direct bond holdings, income provided by Social Security payments and secondary financial instruments backed with debt assets for each income quintile.

Responsibility to repay the debt is attributed based on personal income tax collection. Payroll taxes create an asset for the payer, so they are not included in the calculation of who owes the debt.  Using 2019 tax data and the national debt as of COB February 15th, 2022. the ratio is $19 of debt owed for every dollar of income tax paid. Note well that the adjusted gross income of the bottom 80% is just over that garnered by the top 10%.

Public Debt by Income Class

The bottom 80% of taxpaying units hold few, if any, public debt assets in the form of Treasury Bonds or Securities or in accounts holding such assets and only take home one-third of adjusted gross income. Their main national debt assets are held on their behalf by the Government. They are owed more debt than they owe through taxes. The next 10% (the middle class), hold more in terms of long term investments and mutual fund and bond assets. They hold a bit under a fifth of social insurance assets.

The top 10% pay more than half of income taxes (the dividing line is about 97.5% - and has been for a while). Asset shares within the top 10% are estimated using the same breakdown as the entire population, that is, the top 1% hold 54% of Federal Reserve and Long Term Investment Assets and 77% of mutual funds and bonds as held by the top 10%. A similar fraction is used to estimate holdings by the top 0.01% - which is consistent to how much income they receive (note that I did not say earn. 

This illustration shows who benefits the most from having a national debt, therefore who has the most to lose through default.

Economic Impact of Federal Infrastructure Investment

WM, Special Revenue, Examining the Economic Impact of Federal Infrastructure Investment, February 15, 2022

What is infrastructure?

Federal infrastructure is many things to many people. It includes both soft and hard infrastructure. Soft infrastructure includes building human capital and making sure it can be employed. The Build Back Better Act, still under consideration, contains such investments. 

The biggest investment is not just human capital, but humans. Life and capitalist economies are both Ponzi schemes. You need more entrants than exits due to death or retirement. The current economy shows the effect of large numbers of people retiring unexpectedly. A more generous, refundable, child tax credit - even beyond BBA - as well as a higher minimum wage - are needed to meet these needs. Any pro-life legislative agenda must include this type of human capital. That this has not been mentioned as an abortion issue is a shame shared by both sides of the debate on the Act.

Having more children means more household consumption, which fuels jobs, investment and the demand for services from the government - which fuels more consumption. A rising tide that lifts all boats.

Economic Analysis

The same analysis also applies to the physical infrastructure already passed and signed into law, which is presumably the entire scope of this hearing.

As a former contract specialist, budget analyst, program manager and government contractor proposal manager, I have a unique perspective on the main question of the impact of this bill:

It will not be like the New Deal. Sufficient firms already exist for all of the projects under consideration and they will be the most likely contract awardees. As we all know, the recent law reauthorizes current spending levels as well as adding new projects. The creation and destruction of firms to do this work will occur regardless of funding levels. Firms will likely grow, but some will fail spectacularly - just as they do now.

More and newer equipment will be purchased as the result of increased infrastructure spending. 

Employment will increase in three areas. Construction and architectural firms, et al, will add staff - including at the entry level. This is primary employment. Secondary employment increases will occur among those firms which supply equipment and resources - from office supplies to asphalt. Tertiary employment supports the spending by households who engage in the other two types of employment. 

The demand for goods and services will increase in all supportive industries - including housing, food, cars and gasoline. Such demand will further grow the construction, manufacturing and energy sectors - and increase infrastructure needs further.

All types of employment and related sales will provide for increased taxes at the federal, state and local levels, as well as contributions to Social Security. 

To the extent that wages go up (which could be helped by higher minimum wages), future and current retirees will be made better off. Union labor will also gain from better blue collar job opportunities.

Local public services, both education and infrastructure, will improve because of increased funding. Grow the economy enough and the next round of infrastructure spending will be easier to pass.

This brings us to the political issues. 

More than one member of Congress and the Senate who voted against the infrastructure bill are now pointing to its likely benefits. It would have been a better bill with more support - but we are at the beginning, not the end.

Between funding and ribbon cutting, members of both parties will facilitate project completion by serving as links between the federal and local governments in all matters from project planning to keeping funds flowing as the years go by. Congressional-local relationships are vital in getting infrastructure done -as both a congressional intern and an appointee in the highest levels of local government.

There is nothing like actually doing the work of government to make the political system work. Every member needs to be socialized on this fact, especially the members of the Freedom Caucus.

Eventually, fuel taxes will need to go up to fund increased infrastructure needs. Transportation funding must be broadly based and funded, to the greatest extent possible, by its users. 

Motor fuel taxes must remain a direct excise. Taxing a percentage of the price is unconstitutional because prices vary from state to state. This would violate Article I, Section 8's prohibition requiring equal national excise taxes, although individual states could explore the idea. Regardless, the coalition for a higher national excise collapsed long ago, causing our infrastructure crisis.

The reason for this collapse is the end of earmarking. The late Senator John McCain (God rest his soul), was a driving force in the elimination of this funding tool, while Congressman Bud Schuster was its champion.  

Earmarks lost favor because of the bad publicity on Alaska's Bridge to Nowhere, which was necessary to reach a vital airport destination. Ironically, the road to the bridge was built and became the road to nowhere because it was part of the overall plan. Governor Sarah Palin's lack of courage in defending the project led to the downfall of earmarks and the coalition for higher fuel excise taxes. 

Earmarks simply codified agreements by the local members of Congress and the Senate, the Federal Highway Administration and state and local government to plan specific projects rather than leaving their planning solely up to the Department of Transportation. Without these constituencies, the natural constituency for higher fuel taxes could not hold out against general anti-tax sentiment. In essence, the government stopped doing its job to represent the interest of society rather than its vocal anti-tax minority.

Bring back earmarks and projects will go forward and fuel taxes can be raised with little heartburn.

Carbon Added Taxes could be adopted in place of Motor Vehicle Fuel taxes. These would fund both infrastructure and research. Unlike simple carbon taxes, the total carbon added at purchase would be laid out on the receipt. This will allow for comparisons by consumers rather than having carbon tax effects linger in the shadows. The inelastic nature of energy usage (and carbon) means that some portion of the tax will be absorbed by merchants - meaning that they will pay more than they collect.

Gas Prices

Gasoline usage is very inelastic. If workers and their families own a car and need to drive to work or get groceries, the price of gas will not stop them. It takes very high prices before people start looking for alternative transportation methods. Also, many professionals who work from home have less gasoline expenses as a whole, so high prices do not affect them.

This is not to say that, in order to increase gas taxes, something needs to be done about the current price of gas. Everyone agrees that it is too high.

The current scapegoat for high prices is uncertainty over Ukraine (as if there were no reserves on the planet). While, in general, prices are higher because of supply chain issues, there is no disruption of oil imports. Barrels of oil do not sit on the docks. Container ships pull up to a pipe and offload their oil from offshore. There is no line of ships waiting to do so.

Are refineries having supply chain issues? We would have heard about it, so no.

Fuel prices are high for the same reason they were high in 2007 - an out of control futures market. Part of the Dodd-Frank law created regulations to prevent bad behavior in the NY Mercantile Exchange (NYMEX). These reforms helped keep the price of gas in a reasonable range.

When Mick Mulvaney was serving as OMB Director, he was also acting director of the Consumer Financial Protection Authority.  Little is reported as to what he did while there, but the proof is in the pudding. There should be joint hearings with the Financial Services Committee and this subcommittee to find out what happened to allow price to be so terribly different from what Supply and Demand would explain. It is best to look at this sooner than later. 

The current market resembles the market for cryptocurrency (which also demands further study). Prices are so highly inflated that the market is not a measure of value so much as a game of musical chairs. 

The goal is to sell futures contracts to the next available sucker (and not to be that person). The last time something was done, oil traders had to cover their bets by selling mortgage backed securities. This was in 2008. It did not go well.

Again, fix the Exchange’s trading rules and there will be plenty of room in what people will pay in taxes to fund infrastructure (and research) adequately. Allow us to describe one such research project as it relates to infrastructure. It has two components, one technical and one managerial.

The Future is Calling

Two technologies are not yet ready for prime time: electric cars with lithium ion batteries and self-driving cars. There is a better way that is less likely to result in individual failures. These options are overhead transmission lines - a mature technology for bus and rail - and central computer control (also through overhead lines). 

Build the interface into a roof deck, which would be covered with grass, and block pedestrian access and fatal traffic accidents (including drunk driving, mechanical failure and pedestrian) will become but a sad memory. Testing this concept would be both easy to do and inexpensive.

The managerial concept is as important. Rather than having fuel, road building and government owned and operated independently, combine them into a single enterprise in a geographic area. Include car companies, energy companies, local governments, infrastructure contractors (with supporting suppliers), electronic payments and selected local employers.

For the driver, this will appear as one-stop shopping. They can either own their own cars or call for a car from a common pool. Their banking information will already be programmed in or they can insert a fob into a common pool car. They enter (or say) the destination and the computer does the rest. 

Prices would vary based on congestion and vehicles could be taken to a public transportation hub (which might be located at their children’s school), with the vehicle returning home empty or going to the next fare. If congestion is low, it may be affordable to drive to work. If it is high, prices for public transit and commuting would be adjusted accordingly.

This solves the problem of having to walk to and wait for the bus. At the end of the day, your car picks you up from the train or from work. It is always hooked up to diagnostics and, if necessary, will take itself to get fixed, (because dangerous cars will not be allowed in the system). 

The power grid would be redone at the same time and Internet services could be included to both home and office. 

The question of gasoline is also important, that question being: in refining oil for plastics will gasoline be burned anyway? If so, burn it at the refinery to power generators and sell the power into the grid. This converts gas and oil companies into electric companies. 

In a cooperative economy, employers would pay for commuting (including taking kids to school) and for going to cooperative owned stores. Part of the process of accumulating retirement shares would be accumulating shares in the local transportation and energy system - enough so that transportation in retirement is paid for by dividends or by former employers. Some shares would be voting - some would be preferred.

There would be no need for a separate carbon added tax or motor vehicle taxes. Intercity consortia may even include linkages to rail and aviation - although for larger families there is nothing like traveling by car - especially an automated one. With Tesla could come SpaceX, linking spaceports into the system.

Implementing such a system allows us to reduce the role of politics in infrastructure, especially national politics. Cooperative employment and transportation can be extended to cooperative human services and education with both secular and religious options, at the choice of workers - both individually and collectively.

We only need willingness to do this. The technology is already there, or can be easily demonstrated. Even the managerial portion can be designed easily. The concepts have already been developed. The Future is Calling.

Health Equity Gaps for the Disabled

WM, Health:  Bridging Health Equity Gaps for People with Disabilities and Chronic Conditions, February 3, 2022

The major healthcare problem for people with disabilities is qualifying for SSDI and/or surviving on Supplemental Security Income. Their biggest problems are adequate shelter, food and spending money for such luxuries as toilet paper. Inadequate funds for food means higher carbohydrate diets than are healthy. 

The food inflation subsequent to the pandemic shifted to such a diet, which added pounds and the need to eat more frequently. The recent cost of living increase has improved my diet, as well as the realization that this was necessary for long-term health. Still, the recent COLA is inadequate to do much more than pay rent and buy food. 

My housemate’s situation, because he was not a high earner, has forced him to rely on SNAP and the addition of Medicaid to his Medicare. With these benefits, we have roughly the same standard of living.

My experience included Medicaid for the first two years of my disability. My health benefits have had various copay levels. I used Kaiser for Medicaid, Medicare Parts B and D and now Medicare Part C. 

Mental healthcare has been more fluid. On Medicaid, I had access to nurse practitioners for my needs, but was also able to participate in a Psychiatric Rehabilitation Program. My therapist came from a separate list of social workers. Currently, all of my mental healthcare needs are carried out with Kaiser, but I no longer have access to a PRP. I have the freedom to change plans every year. 

Meanwhile, my housemate has to recertify annually. Because his literacy is limited, either I or an overworked social worker provided through our housing provider must help him do so. Because he uses county services (he does not wish to join Kaiser or a similar plan), it is a good thing that he lives in the State of Maryland, which has an integrated system. The other main difference in our care is that mine includes free rides and he has to take the bus (actually three buses). 

The pandemic has given both of us access to telemedicine - because I am paying for cable internet. He has recently gotten a free tablet for his telemedicine needs. While he could do a hot spot on his phone, he currently uses my wireless to access his care.

I have past experience in constituent services as both an urban ombudsman and a congressional intern, so I can navigate the system. Most people have more trouble.

Returning to the main topic, for most of the disabled and underserved, especially undocumented workers who now rely on emergency room care and have little access to specialists, all solutions require a dedicated and well-paid cadre of social workers. They are the lynch pin to navigating gaps in coverage in the current system. Integrating care systems is not enough, although it has been a major improvement. This integration must include data systems so that case management is seamless in not only healthcare, but in managing all benefits. 

This takes money, as well long-term reform. I will address this shortly.

Before going on, we must address the need for comprehensive sick leave. On more than one occasion, I have needed care in an emergency room. In those instances where I needed late night care, the waiting room was packed with parents with sick children who could not get time off to take them to the doctor during normal office hours. This care is very expensive, not because of its inherent cost but because of billing practices. A new model with separate centers for non-urgent care is helpful in this regard. Hopefully, it will be universal in time.

The other major gap in care is undocumented workers. They often cannot pay for care, so the medical charities fund will cover the costs - after rounds of bill collection. For the merely poor and uninsured, medical bankruptcy is used to end collections - but undocumented workers have no access to this tool. 

The whole point of doing healthcare reform was to close gaps in coverage. Not including undocumented migrants was an olive branch to the Republicans. When support was not forthcoming, care for such workers should have been added to the Affordable Care Act. This exclusion must be repealed or the inherent cost shifting problems, especially for those disabled by doing the hard work of feeding America, will remain.

The pandemic has almost run its course, with Omicron likely providing universal immunity. The current supply chain issue in food, however, comes from undocumented workers having to either work sick or being too sick to work. We need to learn this lesson and cover such workers with universal coverage, mandatory sick leave and an end to right-to-work laws. Union coverage is the quickest way to close the gaps in care.

Comprehensive change is also needed. Please see the attachment for more details on the forthcoming.

Universal coverage, starting with a public option under the Affordable Care Act, with eventual evolution to some type of single-payer system seems like our best path. A public option will only pass if pre-existing condition reforms are abolished with public option enrollment being automatic upon rejection. 

The public option must be subsidized, replacing Medicaid for the disabled and those not requiring long-term nursing care. Long-term care should be removed from states and replaced with a new federal Medicare Part E.

The profit motive, with the need to constantly increase profits to attract Wall Street investment or keep stock prices growing will lead to an ever increasing number of people who will be considered uninsurable, thus relying on the public option.

Most healthcare systems will provide services to both comprehensive insurance beneficiaries, the retired, the disabled and those with the public option. In other words, Medicare for All is our future, with the only exception being firms abandoning the system and providing their own doctors while making arrangements with local hospitals and specialists - essentially creating local HMOs. 

The major issue here is funding, although more efficiency will reduce prices. Costs are already minimized by the for profit and by governmental medical care (which often uses for profit networks). To repeat, with a shout THE ISSUE IS PRICE, NOT COST!

The problem with the Affordable Care Act is that much of its funding came from taxes on capital gains and income falling on the top third of taxpayers. In other words, the upper and upper-middle classes. IRS data shows that about half of Adjusted Gross Income for these classes is from non-wage income. Membership in these classes is limited to the top 4% of taxpayers.

This is politically unacceptable, as the multiple attempts to repeal the ACA have shown. Broad based taxes are necessary and should be bipartisan. Any political promise to the contrary must be broken. No votes will be lost to either party by doing so. Few members of the middle or working classes will shift their allegiance to the other party because of tax policy changes. 

Members of the current majority party will simply not give up on their political home because their taxes go up. One of the key reasons for party identification among frequent voters is economic policy - not the details but a belief in who should be taxed. Progressives will never join the Republican Party for a campaign promise not kept.

The stupidest myth in American history is the belief that anyone held George H.W. Bush to account for breaking his “no new taxes” pledge. They did not vote for Perot because of it - his voters were sending a message to the entire system and drew from both parties. If anyone believes that any Bush voter shifted to Bill Clinton for violating the NNT pledge, I have a collection of bridges over the Potomac you may be interested in purchasing.

Payroll taxes are regressive, so they should not be used to fund the public option, et al. Indeed, all Medicare taxation should be shifted to a less regressive consumption tax. This tax is less regressive because it takes from profit and wages in equal measure. Taxing only wages or only capital leads to either too much progressivity or too little.

The only question is how to collect these taxes. If it is more important to give exporters (and overseas customers) an economic break, the standard border adjustable goods and services tax is best. 

To preserve the private option - either for comprehensive insurance or employer-provided care - a subtraction (aka net business receipts) value added tax is best. Such a tax should also include distribution of (more generous) child tax credits. 

Paying these taxes through employers, rather than the Internal Revenue Service, corrects the economic failure that simply relying on privately negotiated wages creates while taking away the “stink of welfare” found in the American Recovery Plan Act’s distribution mechanism.

The provisions in the Affordable Care Act creating surtaxes to fund healthcare must be repealed, as should both dividend, interest and capital gains taxation (as well as rent) currently collected through personal income taxes. Instead, tax transactions, rather than people at the same rate now paid for the highest rate for  long-term capital gains. The current rate (including ACA taxes) is just short of 23.8%. The proposed rate is 28.8% (adding proposed surtaxes for high incomes).

Much money is spent on campaign contributions to continue going back and forth between these rates. I have little hope for compromise - although splitting the difference between 26% and 27% seems reasonable.

What would such a tax pay for, if not healthcare? Fund the military - especially overseas deployments which serve our security and economic interests abroad, repayment of the Social Security Trust Fund and begin funding Net Interest rather than rolling it over into new debt. The international economic system can only favor the Dollar and U.S. Debt for so long. Every empire falls. The question is, who will lose the most if American debt becomes worthless? 

Using data from the Federal Reserve Survey of Consumer Finance, the top 10% of households indirectly hold 56% of debt held in Federal Reserve and Bank Assets and Long Term Investments and 77% of mutual fund and direct debt holdings. According to the Pareto Rule, half of each of these fund pools is owned by the top 1% of households. They have the most to lose if the debt crashes. Use an Asset Value Added Tax (on transactions) to decrease what is becoming an unworkable level of debt. 

Attachment: Single Payer

Attachment: Tax Reform

Hospital Insurance and Medicare Reform

Finance, Fiscal Responsibility and Economic Growth: The Hospital Insurance Trust Fund and the Future of Medicare Financing, February 2, 2022

The Hospital Trust Fund (Medicare Part A), even though it has no cap, is funded by a payroll tax that leaves non-wage income on the table. Wages have mostly declined, while the top 4% of filers (who take home 33% of Adjusted Gross Income) receive only half of their income from wages. The other half is not touched (and is a product of the labor of the lower 96%). 

It is no wonder that the fund is endemically close to falling below revenue. Raising the HI payroll tax to 5% would balance the fund forever - but it leaves too much of AGI on the table.

Among the elderly and severely disabled, there is a constant battle between nursing homes and hospitals for cost avoidance, with patients in the middle.

There is certainly much more to be said, and I count on the listed witnesses to say it. I am sure that some of them have interesting proposals for reform. I have my own, which I will now detail.

HI cannot be treated as one component without affecting all other components. This is especially the case as some form of single payer system is inevitable. Whether you call the public option Expanded Medicaid or the real thing, the entire system is in need of change. More detailed analysis of single-payer options can be found in the Attachment.

Universal coverage, starting with a public option under the Affordable Care Act, with eventual evolution to some type of single-payer system seems like our best path. A public option will only pass if pre-existing condition reforms are abolished with public option enrollment being automatic upon rejection. 

The public option must be subsidized, replacing Medicaid for the disabled and those not requiring long-term nursing care. Long-term care should be removed from states and replaced with a new federal Medicare Part E.

The profit motive, with the need to constantly increase profits to attract Wall Street investment or keep stock prices growing will lead to an ever increasing number of people who will be considered uninsurable, thus relying on the public option.

Most healthcare systems will provide services to both comprehensive insurance beneficiaries, the retired, the disabled and those with the public option. In other words, Medicare for All is our future, with the only exception being firms abandoning the system and providing their own doctors while making arrangements with local hospitals and specialists - essentially creating local HMOs. 

The major issue here is funding, although more efficiency will reduce prices. Costs are already minimized by the for profit and by governmental medical care (which often uses for profit networks). To repeat, with a shout THE ISSUE IS PRICE, NOT COST!

The problem with the Affordable Care Act is that much of its funding came from taxes on capital gains and income falling on the top third of taxpayers. In other words, the upper and upper-middle classes. IRS data shows that about half of Adjusted Gross Income for these classes is from non-wage income. Membership in these classes is limited to the top 4% of taxpayers.

This is politically unacceptable, as the multiple attempts to repeal the ACA have shown. Broad based taxes are necessary and should be bipartisan. Any political promise to the contrary must be broken. No votes will be lost to either party by doing so. Few members of the middle or working classes will shift their allegiance to the other party because of tax policy changes. 

Members of the current majority party will simply not give up on their political home because their taxes go up. One of the key reasons for party identification among frequent voters is economic policy - not the details but a belief in who should be taxed. Progressives will never join the Republican Party for a campaign promise not kept.

The stupidest myth in American history is the belief that anyone held George H.W. Bush to account for breaking his “no new taxes” pledge. They did not vote for Perot because of it - his voters were sending a message to the entire system and drew from both parties. If anyone believes that any Bush voter shifted to Bill Clinton for violating the NNT pledge, I have a collection of bridges over the Potomac you may be interested in purchasing.

Payroll taxes are regressive, so they should not be used to fund the public option, et al. Indeed, all Medicare taxation should be shifted to a less regressive consumption tax. This tax is less regressive because it takes from profit and wages in equal measure. Taxing only wages or only capital leads to either too much progressivity or too little.

The only question is how to collect these taxes. If it is more important to give exporters (and overseas customers) an economic break, the standard border adjustable goods and services tax is best. 

To preserve the private option - either for comprehensive insurance or employer-provided care - a subtraction (aka net business receipts) value added tax is best. Such a tax should also include distribution of (more generous) child tax credits. 

Paying these taxes through employers, rather than the Internal Revenue Service, corrects the economic failure that simply relying on privately negotiated wages creates while taking away the “stink of welfare” found in the American Recovery Plan Act’s distribution mechanism.

The provisions in the Affordable Care Act creating surtaxes to fund healthcare must be repealed, as should both dividend, interest and capital gains taxation (as well as rent) currently collected through personal income taxes. Instead, tax transactions, rather than people at the same rate now paid for the highest rate for  long-term capital gains. The current rate (including ACA taxes) is just short of 23.8%. The proposed rate is 28.8% (adding proposed surtaxes for high incomes).

Much money is spent on campaign contributions to continue going back and forth between these rates. I have little hope for compromise - although splitting the difference between 26% and 27% seems reasonable.

What would such a tax pay for, if not healthcare? Fund the military - especially overseas deployments which serve our security and economic interests abroad, repayment of the Social Security Trust Fund and begin funding Net Interest rather than rolling it over into new debt. The international economic system can only favor the Dollar and U.S. Debt for so long. Every empire falls. The question is, who will lose the most if American debt becomes worthless? 

Using data from the Federal Reserve Survey of Consumer Finance, the top 10% of households indirectly hold 56% of debt held in Federal Reserve and Bank Assets and Long Term Investments and 77% of mutual fund and direct debt holdings. According to the Pareto Rule, half of each of these fund pools is owned by the top 1% of households. They have the most to lose if the debt crashes. Use an Asset Value Added Tax (on transactions) to decrease what is becoming an unworkable level of debt. 

Attachment: Single Payer

Attachment: Tax Reform

Mental Health Care in America

WM: America’s Mental Health Crisis, February 2, 2022

Finance: Mental Health Care in America: Addressing Root Causes and Identifying Policy Solutions, June 15, 2021

Re-funding Mental Health

The largest provider of mental health services (including to veterans) is the correctional system. Job one is to shift from correctional modalities to new methods featuring mental health, education (including ESL programs) and addiction medicine. Warehousing young males of any race, but particularly African-Americans multiplies societal pathologies. While some forms of illness, such as sexual violence and physical violence or murder may require higher security, others can be treated as patients rather than criminals.

A pilot program could be developed to respond to certain incidents (especially those involving mental illness or alcohol) with immediate dispatch of emergency medical teams. This would require more ambulances, more mental health facilities and a pause in applying restraints until medical personnel arrive.

Funding more hospitals and ambulances would be part of this, possibly with some form of federal grant program. Private corrections facilities can also be transformed into contracted medical facilities with security contracting provided as a subcontract to mental health systems, both secular and religious. Catholic Health Association members come to mind. Both public and private educational systems would be an integral part of such facilities and be treated as an essential function, rather than the first item cut when states wish to minimize their spending by essentially torturing (and dehumanizing) inmates.

New standards of individual and societal protection must be developed. Improved standards of care and security will require much more funding than state and local governments are willing to commit to. This simply drives the problem to the correctional system, which is the largest provider of mental healthcare in this nation. The term for this practice is pennywise and pound-foolish.

It is too easy to get out of treatment and too hard to get it. Hospitalization for medication management is sometimes needed but rarely given. Often, people are released before a stable routine is established, including management of side effects. It is hard to create a good care plan in a five day hold. For both mental illness and alcoholism, it must be harder to simply sign out without a real prospect for long- term recovery. Again, the term is penny wise and pound foolish.

A final reform, which will save money and resources, is to create a plea in criminal cases of guilty by reason of insanity. Those who enter this plea would be confined in the facilities detailed above for at least the minimum sentence for their offences, with no release after that if the subject remains a danger to society. 

If relapse occurs or treatment protocols are evaded after release, rehospitalization must be automatic and last until a treatment program is more deeply ingrained. There should, of course, be protections on both sides in the decision to release subjects - both for the protection of the rights of subjects who made be held for punitive, rather than hygienic reasons and, as importantly, the interests of the victims of crime, including but not limited to the possibility of physical danger. Sometimes, exile should be a part of release.

Cost of Living

Even before the pandemic, my SSDI was inadequate for food, medicine, clothing and cable. If I owned a vehicle, there is no way I could maintain it or even buy gas. I have an above average benefit, high enough to be ineligible for SNAP or Medicaid. Many are not so lucky, even on a good day. 

Bold and underline: food prices are still skyrocketing. Part of the problem may be too much money chasing too few goods, but retirees and the disabled find (our)selves between a rock and a hard place. We need a COLA and we need it now. Most of us cannot even afford cola. Because this is a short term emergency due to the Pandemic, it should be funded out of the general fund until the normal process kicks in for next year.

The important point is that, if wage growth is considered inflation, the retired and disabled can be given not only a Cost of Living Adjustment, but also have their income history rebased for inflation. Even with Chained CPI, such an increase will take the financial pressure off of many such households, including mine. 

Low wages are endemic among the mentally ill. We need a raise, along with the rest of the working poor (and not so poor - who make more when the minimum goes up). The Minority proposed a $10 wage as a counter-offer to $15. A $12 wage for a 40 hour week puts us at parity to 1965, when the wage peaked and the war over wages started with the Kennedy-Johnson tax cuts. An $11 wage with a 32 hour week is also acceptable. With increased productivity, the work week should be shorter. The minimum wage should be indexed to inflation, including during any transitional period - which should have the goal of $18 per hour ($15 is a 20th Century goal).

Not raising minimum wages has been justified by the reactionary sector that claims that in the end, the market will sort everything out.  The perception that doing the right thing makes a business non-competitive is the reason we enact minimum wage laws and should require mandatory leave. Because the labor product is almost always well above wages paid, few jobs are lost when this occurs. Higher wages simply reduce what is called the labor surplus, and not only by Marx. Any CFO who cannot calculate the current productive surplus will soon be seeking a job with adequate wages and sick leave.

The requirement that this be provided ends the calculation of whether doing so makes a firm non-competitive because all competitors must provide the same benefit. This applies to businesses of all sizes. If a firm is so precarious that it cannot survive this change, it is probably not viable without it.

Mentally ill people deserve to have families, just as others do. Increasing the child tax credit is as essential to us as to anyone. The child tax credit level passed in the American Recovery Act should be made permanent and doubled, with distribution through private sector payrolls, unemployment insurance benefits, emergency benefits for families and paid participation in educational programs.

There are two avenues to distribute money to families. The first is to add CTC benefits to unemployment, retirement, educational (TANF and college) and disability benefits. The CTC should be high enough to replace survivor’s benefits for children. 

The second is to distribute them with pay through employers. This can be done with long term tax reform, but in the interim can be accomplished by having employers start increasing wages immediately to distribute the credit to workers and their families, allowing them to subtract these payments from their quarterly corporate or income tax bills.

Community Healthcare and Medicaid

Home and Community Based Health Care are addressed in the President’s Budget. Home and community-based care  should be funded by goods and services taxes as part of a newly created Medicare Part E. Senior Medicaid should be entirely federalized, with other clients insured through the President’s proposal for a public option. 

President Reagan’s New Federalism proposal would have removed Medicaid from state budgets in exchange for ending or block granting other federal programs. This was a good idea then and a better idea now. Medicaid Part E should be created to both relieve states and the District of Columbia (or Washington, Douglass Commonwealth) from providing Medicaid for Seniors and the Disabled and seeing to the enforcement of practice standards for nursing homes who receive these funds.

For workforce development and general recovery, Psychiatric Rehabilitation Programs, such as the Center for Behavioral Health in Rockville and Cornerstone Montgomery in Gaithersburg are essential. To make them more attractive, and to increase our ability to manage - especially in the period before disability programs kick in, participation should be paid at the minimum wage. 

People will participate in this care more frequently if their opportunity costs are met. Those with less than a full education should receive it through public and private providers and also be paid to do so.

Health care currently provided through Medicaid should be dual eligible for everyone, regardless of income and before it kicks in entirely be a public option. Instead of using a larger system, clients should have the option of receiving coverage through the PRP provider’s employee plan.

Veterans

In recent decades, the problem of veteran disability determinations has remained troubling, with the Pandemic complicating processing. When a job gets too big to manage with staff, two options remain - contract out as much work as possible, including consolidating case files and making easy determinations - and sharing responsibility for processing with the Department of Defense. The handoff from DoD to DVA should be seamless. 

The mental health and housing needs of veterans, both recent and lingering, is endemic. This is another area where coordination with DoD would prove helpful. This help must go beyond management and computer systems and include the human element of soldiers, veterans using services and those who need services can interact on a less formal, but not unprogrammed basis.

The DVA and DoD must both actively facilitate this and join state and local governments in reaching out to those who suffer, from active duty soldiers to veterans both receiving and in need of services. For those mentally ill or addicted veterans who do not trust the system, less restrictive systems should be developed - including providing camping supplies and a place to camp and a more permissive attitude to active drinking and drug use until help is sought. Such systems do not encourage use. No addict needs encouragement. They build the trust that makes recovery possible.

Digital Mental Health

Mental health care and addiction services stood up rather well during the pandemic. Zoom, and similar platforms, have stepped in nicely to continue face to face care where needed. Phone appointments and video calls have also worked in family practice settings where medication management is the only task. 

Managing my prescriptions and assisting my housemate in managing his contacts with his are much easier than a trip to our respective mental health providers.

There is one area of major concern that must be addressed, although I am not sure how we can go about it.  During this crisis, before there was vaccine hesitancy, there was Zoom hesitancy. Some of our older members simply could not figure out or declined to use video calls to attend meetings. 

I experienced this reticence myself, not wanting to download software to my phone that was unknown to me. In the beginning, I was also too ill to do much more than eat, be tired from eating, rest and then go back to bed. It was only the usual miracles experienced by those who are spiritually awake that had me download the software and attend a midnight meeting.

My housemate is not technically savvy. Without my help, and the use of my Chromebook, he would still be visiting his psychiatrist in person, where he would be taken into a room for a teleconference with his doctor. 

He is a victim of the digital divide. It inhibits him (as well as the lack of a computer of his own) to seek English as a Second Language courses, which are free at Montgomery College (our local community college). His disability, which is matched by his lack of education and equipment hamper both his treatment and his ability to improve his skills. 

This is where improvement is necessary. As I have stated in previous comments for the record, paying a stipend to undertake both computer and basic literacy training is an essential incentive to seek it. Such stipends should not count against his disability payments. If they did, they would be a disincentive toward learning. It is a conservative meme that poverty leads to self-improvement. Research has shown that the opposite is the case. It certainly is for him.

And yes, better broadband in some areas of the country would be helpful, although this would not solve the problem of digital illiteracy, especially among vulnerable populations. Most people have access to the Internet through their cable companies, although those that do not should be given free access paid for by higher cable fees. 

During the pandemic many mentally ill SSDI beneficiaries  were not going out much and did not have many places to go. Libraries and movie theaters have been closed. Some were working in tense situations and need a vacation or just help going outside. Also, to repeat the most important point - we need a COLA ASAP, not next January.