Professional Documents
Culture Documents
1NC
Medicare Part E
The counterplan achieves universality and cost savings of single payer while
preserving employer-based insurance and Medicaid---that’s key to public
acceptance and policy durability
Jacob S. Hacker 18, the Stanley Resor Professor of Political Science at Yale University, 1/3/18,
“The Road to Medicare for Everyone,” http://prospect.org/article/road-medicare-everyone
But Democrats should not make the opposite mistake either. A proposal must have a realistic path to enactment.
But it also has to be ambitious enough to inspire supporters, and compelling and understandable enough to
convince others to become supporters. It has to be grounded in policies that are popular and known to
work—policies that can actually reach universal coverage and restrain health-care
prices .
Perhaps most important, it has to be able to command support not just before it passes, but also
afterward . If the troubled saga of the exchanges tells us anything, it’s that even the most technically
sound policy will fall short if it does not generate and sustain pressure for
continuing expansion and improvement . Successful policies do not just reflect the
politically possible; they reshape it .
I’ve already said I don’t think the public option is robust enough to create such pressure, even though it would do
much good. As a rallying cry, “Make Medicare available to the 12 million people buying insurance through the ACA marketplaces!”
leaves much to be desired. Instead, the message should be at once simpler and bolder: “Make Medicare available to
everyone.” All Americans should be guaranteed good coverage under Medicare if they don’t
receive it from their employer or Medicaid.
To achieve this goal, a new part of Medicare would need to be created for those not already covered by the
program. I’ve been calling this new component “Medicare Part E” (for “everyone”)—a term that’s been used before by
Johns Hopkins’s Gerard Anderson and others. Medicare Part E would cover the broad range of benefits covered
by Medicare Parts A (hospital coverage), B (coverage of physicians’ and other bills), and D (drug coverage).
The central feature of Medicare Part E is guaranteed insurance. All Americans would be presumed to
be covered. They would not need to go through complicated eligibility processes or hunt down
coverage that qualified for public support or even re-enroll on an annual basis. Once someone was in Part E, they
would remain in Part E unless and until they were enrolled in a qualified alternative —whether an
employment-based health plan with good benefits or a high-quality state Medicaid program.
Thus, the centerpiece of Medicare Part E is the same as that of single-payer : a
guarantee that Medicare is there for everyone. Unlike single-payer , however, Medicare Part E
seeks to improve employers’ role rather than replace it . It does so by establishing new
standards for employment-based plans and requiring that all employers contribute to Medicare if
they do not provide insurance directly to their employees.
In this respect, Medicare Part E builds on the ACA’s requirement that large employers provide
coverage or pay a penalty. Under the 2010 law, companies with more than 50 full-time workers are
already required to pay a penalty if they don’t offer insurance and their workers get subsidized
ACA marketplace coverage. The penalty, however, is modest compared with the cost of health benefits, and there’s no
guarantee workers whose employers pay it actually get marketplace coverage.
Democrats knew this was a problem back in 2010. In fact, they tried to fix it: The House version of the Affordable Care Act required
that employers that didn’t insure their workers not only pay a fee, but also provide the federal government with the information to
enroll those workers in health coverage though the marketplaces. Like the public option, however, this provision was dropped in the
Senate.
It should be resurrected. Under the proposal I’m describing, employers would either provide insurance that was
at least as generous as Medicare Part E’s or they would contribute to the cost of Medicare Part E,
which would automatically enroll their workers. Because the contribution requirement is central to signing people
up, it should cover the entire workforce—including independent contractors and other self-
employed workers (who would pay the contribution directly, as they do Medicare and Social Security taxes). But the level
of contribution should vary with wages. That’s how the House bill worked: The contribution would have risen from
nothing for the lowest-wage firms up to 8 percent of payroll for the highest-wage firms.
Health policy wonks call this “play or pay .” Employers would either play by offering qualified coverage to their workers
(and their workers’ families) or pay the federal government to cover their workers (and their workers’ families) through Medicare
Part E. Under this system, everyone who worked or lived in a family with a worker—including the self-
employed—would be automatically covered. Those without any tie to the workforce could be
signed up when they received other public benefits or filed their taxes or sought care
without insurance . But just as important as signing people up is making sure they remain signed up. Once people
were enrolled in Medicare Part E, they would remain enrolled for as long as they didn’t have
verified alternative insurance.
1NC
IRS Tradeoff
The IRS is focused on implementing the new tax reform bill---it will take all of
their resources
Roger Russell 18, senior editor for tax with Accounting Today, “Tax reform means tough times
at the IRS,” 1/30/18, https://www.accountingtoday.com/news/tax-reform-means-tough-times-
at-the-irs
Everson noted that the IRS will have to be very careful about prioritizing the guidance they will
need to promulgate. “Taxpayers will try to figure out what is most beneficial and still be within the law,” he explained. “The IRS has to clarify
what the proper interpretation of the law is. There will be litigation on top of that, and many challenges
will go to court. It will take a long time to get these new issues resolved.” ¶ “Anytime you have a tax bill of this
magnitude, a lot of people will be waiting for the IRS take on how the bill will work ,” agreed Roger Harris, president of
Padgett Business Services. “Most tax professionals are concerned about IRS funding because whether you like them or not, they are a reality and they need to do their job
The IRS is overloaded and underfunded, but they will do what is absolutely
properly.”¶ A junkyard dog¶
necessary to administer the new law, according to Marty Davidoff, CPA, Esq., of E. Martin Davidoff & Associates CPAs. “The IRS is
going to do what it has to do , minimally, to make sure the new law is enforced,” he said. “They’re not
going to help people learn it or answer questions about it, because they don’t have enough personnel to answer questions on the existing law. Their dramatically reduced budget
and dramatically reduced personnel over the last seven years has caused a diminution in services, and a diminution in enforcement.Ӧ Davidoff cited a recent phone call from an
Appeals officer as evidence of the degree to which the service is constrained: “We had already agreed on the adjustment, had agreed on the numbers, and all we needed was a
conversation regarding the wording in the report they asked us to sign, because the wording was unclear. I wanted clarification of the wording, and she basically told me, ‘Marty,
accept the wording as is or I’m going to close the case as unagreed.’ She was going to take the deal off the table, which would have meant dozens of hours to start over. It wasn’t
the IRS is that they’re so pressured by
normal for this Appeals officer to act this way. She just seemed under intense pressure.”¶ “What’s happening to
a shortage of staff, and the work doesn’t go away, that they’re not allowing processes to happen the way they’re designed,” Davidoff
continued. “Imagine a dog that’s well-cared for and which the owner likes. It’s a friendly, happy dog. But take the exact same dog, don’t feed it regularly, and the owner says,
‘You’re a bad dog.’ It ends up as a nasty dog in a junkyard. That’s what is happening. Congress — the owner — is turning the IRS into a junkyard dog.”
The plan drains IRS resources and causes backlash which crushes tax compliance
Kristin E. Hickman 16, Harlan Albert Rogers Professor of Law at the University of Minnesota
Law School, “The IRS's Multi-Mission Mismatch Problem,” 3/14/16,
http://www.taxanalysts.org/content/irss-multi-mission-mismatch-problem
Congress has burdened the IRS with too many secondary social welfare and regulatory programs, most of which
have little to no relation to its primary function: collecting taxes . These secondary functions
divert too many resources from the IRS's core mission. The IRS and its personnel lack the
expertise to assess the political consequences of many of the day-to-day administrative decisions
that must be made. Politically controversial decisions upset taxpayers and give rise to
skepticism regarding the fairness and legitimacy of the tax system, thus imperiling tax
compliance. Spinning off some of the largest and most politically fraught non-revenue-raising functions from the IRS, such as
exempt status determinations or health policy administration, would allow the IRS to avoid this political turmoil and return its focus
to its core expertise.
Nuclear war
The Economist 18, 1-27-18, “The growing danger of great-power conflict,”
https://www.economist.com/news/leaders/21735586-how-shifts-technology-and-geopolitics-
are-renewing-threat-growing-danger
Even if China stays out of a second Korean war, both it and Russia are entering into a renewal of
great-power competition with the West. Their ambitions will be even harder to deal with than
North Korea's. Three decades of unprecedented economic growth have provided China with the wealth to transform its armed
forces, and given its leaders the sense that their moment has come. Russia, paradoxically, needs to assert itself now
because it is in long-term decline. Its leaders have spent heavily to restore Russia's hard power,
and they are willing to take risks to prove they deserve respect and a seat at the table.
Both countries have benefited from the international order that America did most to establish and guarantee. But they see its
pillars--universal human rights, democracy and the rule of law--as an imposition that excuses foreign meddling and undermines
their own legitimacy. They are now revisionist states that want to challenge the status quo and look at their regions as spheres of
influence to be dominated. For China, that means East Asia; for Russia, eastern Europe and Central Asia.
Neither China nor Russia wants a direct military confrontation with America that they would surely lose. But they are using
their growing hard power in other ways, in particular by exploiting a "grey zone" where aggression and
coercion work just below the level that would risk military confrontation with the West. In Ukraine
Russia has blended force, misinformation, infiltration, cyberwar and economic blackmail in ways that democratic societies cannot
copy and find hard to rebuff. China is more cautious, but it has claimed, occupied and garrisoned reefs and shoals in disputed
waters.
China and Russia have harnessed military technologies invented by America, such as long-range
precision-strike and electromagnetic-spectrum warfare, to raise the cost of intervention against them
dramatically. Both have used asymmetric-warfare strategies to create "anti-access/area denial"
networks. China aims to push American naval forces far out into the Pacific where they can no longer safely project power into
the East and South China Seas. Russia wants the world to know that, from the Arctic to the Black Sea, it can call on greater firepower
than its foes--and that it will not hesitate to do so.
If America allows China and Russia to establish regional hegemonies, either consciously or because its
politics are too dysfunctional to muster a response, it
will have given them a green light to pursue their
interests by brute force . When that was last tried, the result was the first world war.
Nuclear weapons, largely a source of stability since 1945, may add to the danger. Their command-and-
control systems are becoming vulnerable to hacking by new cyber-weapons or "blinding" of the
satellites they depend on. A country under such an attack could find itself under pressure to choose
between losing control of its nuclear weapons or using them.
Vain citadels
What should America do? Almost 20 years of strategic drift has played into the hands of Russia and China. George W.
Bush's unsuccessful wars were a distraction and sapped support at home for America's global role. Barack Obama pursued a foreign
policy of retrenchment, and was openly sceptical about the value of hard power. Today, Mr Trump says he wants to make
America great again, but is going about it in exactly the wrong way . He shuns multilateral organisations,
treats alliances as unwanted baggage and openly admires the authoritarian leaders of America's adversaries. It is as if Mr Trump
wants America to give up defending the system it created and to join Russia and China as just another truculent revisionist power
instead.
America needs to accept that it is a prime beneficiary of the international system and that it is
the only power with the ability and the resources to protect it from sustained attack. The soft
power of patient and consistent diplomacy is vital, but must be backed by the hard power that China and
Russia respect. America retains plenty of that hard power, but it is fast losing the edge in
military technology that inspired confidence in its allies and fear in its foes .
To match its diplomacy, America needs to invest in new systems based on robotics, artificial
intelligence, big data and directed-energy weapons. Belatedly, Mr Obama realised that America required a
concerted effort to regain its technological lead, yet there is no guarantee that it will be the first to innovate. Mr Trump and his
successors need to redouble the effort.
The best guarantor of world peace is a strong America . Fortunately, it still enjoys advantages. It
has rich and capable allies, still by far the world's most powerful armed forces, unrivalled war-fighting experience, the best systems
engineers and the world's leading tech firms. Yet those advantages could all too easily be squandered. Without
America's commitment to the international order and the hard power to defend it against
determined and able challengers, the dangers will grow . If they do, the future of war could be
close r than you think.
1NC
Midterms
Dems win the midterms in a wave now, but health care policy saves the GOP
Peter Roff 3-2, U.S. News & World Report contributing editor for opinion, formerly senior
political writer for United Press International, visiting scholar at Asian Forum Japan, senior
fellow at Frontiers of Freedom, 3/2/18, “How to Win in 2018,”
https://www.usnews.com/opinion/thomas-jefferson-street/articles/2018-03-02/how-
republicans-win-the-2018-midterms
IN CASE YOU MISSED IT, a new USA Today/Suffolk University poll has more than eight out of every 10 Democrats
and seven out of 10 independents saying the country is on the wrong track. That's bad news for
the GOP because it suggests the upcoming November 2018 contest is going to be a change election .
Sure, seven out of 10 Republicans in the same survey said things are on the right track. If the GOP could win elections all by its
lonesome, that wouldn't be a problem. But if Republicans are going to keep control of Congress and of the
various statehouses and governorships they won during the Obama years, they're going to have to convince at least some
of those who self-identify as independents to come along. So far, at least according to this one poll, they're not
doing that .
There's already enough evidence to allow for the possibility of a big, blue wave in November . Nearly
40 state legislative seats, which admittedly is a fraction of the total, have flipped from R to D since Trump was
elected despite the fact some of these districts went to Trump by overwhelming numbers in 2016.
The Republicans have also had to fight tooth and nail to keep control of seats in the U.S. House that have come vacant since Trump
was elected. These include several that are among the safest in the country like Georgia's Sixth Congressional District. That should
have been an easy win for the GOP after Tom Price resigned; instead, it turned into a very expensive almost loss.
The key finding in this phone survey of 1,000 registered voters nationwide is "By close to 2-1, 58%-32%, those surveyed say they
want to elect a Congress that mostly stands up to the president, not one that mostly cooperates with him."
60 percent of those surveyed said they disapproved of the job
That should come as no surprise. According to the poll,
Trump is doing as president. Outside his base, which is considerable, he's not popular. His policies may be
working but, seeing as how he and his appointees are hounded at every turn by his opponents in the advocacy media as well as by
no one should
those who pretend to be actual, authentic conservatives but are instead simply solid "never Trumpers,"
expect his numbers or his image to improve in time to make a meaningful
difference .
If they're going to hold on to power, the Republicans need to look to other leaders besides Trump to
expand their electoral coalition. If they were smart, and there's no reason to believe they're not, House Speaker Paul Ryan
and Senate Majority Leader Mitch McConnell should use the next recess period to schedule a summit meeting of the parties
legislative leaders with an eye to hammering out something like 1994's Contract with America to develop an agenda GOP
majorities can begin work on in the summer and through the fall and which, if they are returned to office in the majority,
they can finish implementing.
One issue that has started to show up with considerable consistency is the cost of health care .
Continually rising premiums and drug costs are breaking family budgets. The voters want relief , but congressional
Republicans, having failed on several occasions to repeal Obamacare (admittedly by a single vote, at least when it mattered)
are reluctant to take the issue up again.
It may be that those who say Obamacarewill never be repealed "root and branch" are right. That means
alternatives that work within the existing system or which can be achieved by tinkering with it need to be pursued.
The focus must change from repealing what Obama and the Democrats hath wrought to finding ways to bring
costs down and generally make the system more consumer friendly. The president has taken the first step in
this regard by expanding the availability of temporary policies that can be purchased outside the annual window in which policies
can be changed, but there's more to be done.
Working together federal and state leaders can develop a pathway forward to make it easier for states to engage in experimentation
in the insurance markets. They can find ways to make it possible for insurance to be bought across state lines – something that
would alleviate the problem that has arisen for some many families now that so many of the nation's counties are served by only one
or two providers.
Kentucky Republican Gov. Matt Bevin is leading the way by establishing sensible work requirements for able-bodied individuals
enrolled in Medicaid, which, thanks to Obamacare, many states have expanded. There's more to be done in this regard. Bevin and
the Republican leaders in the Kentucky legislature could point the way for other states, as well as advise McConnell and Ryan on just
what is needed from Washington to get the bureaucracy out of the way.
There are perhaps a thousand good ideas out there for health care reform. If the debate centers
on the repeal of Obamacare, most of them will never get off the ground . McConnell and Ryan
could provide the forum and the impetus for making them reality . What works can be replicated, what fails
can be set aside – but only if the GOP maintains the majority of the majorities it currently holds.
That's means congressional leaders need to take the polls seriously, get the focus off Trump as much as
possible as fast as possible and onto the exchange of ideas that will improve the quality of life for the
average American much like the tax cuts are doing. Trump can always come along later and
claim credit . He's not being cut out of the process, he's just being put in the place where the
voters the GOP needs to earn re-elected majorities next November seem to
want him .
former military officer who talks tough and promises to clean up the country’s politics. All of this suggests that the world will be in
New fears of high wage growth and inflation cause stock crash and fast rates
hikes---recent reports assuage fears now---no alt causes
Pedro da Costa 3/13, senior correspondent at Business Insider, 3/13/18, “Wall Street gets a
reprieve on 2 of its biggest worries about the economy,” http://www.businessinsider.com/low-
inflation-lack-of-wage-growth-should-calm-wall-street-fed-fears-2018-3
Two of Wall Street's biggest worries on the economy, inflation and wage growth , showed
signs of moderation in February.
Labor Department data shows not only a subdued inflation trend but also suggests wage
growth is moderating rather than picking up steam.
Diplomatic tensions with No rth Ko rea. A criminal investigation into possible conspiracy against the United States.
The sudden, unexpected firing of Secretary of State Rex Tillerson.
Such massive turbulence has barely registered on the market's radar . Instead, traders
are fretting over the possibility that slightly higher inflation might drive the Federal Reserve to raise
interest rates more aggressively , possibly compromising the economic expansion.
Two major economic reports out Tuesday allowed investors to put their concerns into
perspective: Consumer prices rose only modestly and, more importantly, median wages are
actually trending lower.
It was a surprise spike in wages reported last month that sparked a large selloff in stocks that
reintroduced volatility into placid financial markets, a wild ride that has since persisted.
US consumer prices rose 2.2% in the year to February while prices excluding food and energy rose just 1.8%. Fed officials target a 2%
rate on another inflation measure, the personal consumption expenditures index, which has remained below the central bank's goal
for much of the recovery.
A separate Labor Department report was even more instructive. It showed average hourly earnings adjusted for inflation are
weakening, not strengthening— as Fed officials hope and market participants fear. Not only did earnings stagnate last month,
the following chart shows just how much conditions have deteriorated in the last year — for workers across the board
and for non-management employees in particular .
The Fed has telegraphed its intention to raise interest rates three times this year. Wall Street, accustomed to the stunted optimism of
recent years, shifted rapidly from not believing officials would move more than twice to suddenly pricing in the possibility of four
interest rate hikes for 2018.
The latest inflation figures should, at the very least, assuage worries that the central bank will
need to react more rapidly to an unexpected spike in consumer prices — and/or wages.
Rate hikes cause recession---low threshold for the link because the fed is skittish
Mark Kolakowski 18, M.B.A. in finance from the Wharton School of the University of
Pennsylvania, 1/16/18, “Why The 1929 Stock Market Crash Could Happen In 2018,”
https://www.investopedia.com/news/1929-stock-market-crash-could-it-happen-2018/
After the experience of 1929 , the Fed has been indisposed to tighten monetary policy in an attempt
to deflate asset bubbles. However , as economic growth reports improve, the Fed is
increasingly concerned today about keeping inflation in check. Any miscalculation that
raises interest rates too high, too fast could spark a recession and send both stock and bond
prices tumbling downwards . (For more, see also: How The Fed May Kill The 2018 Stock Rally.)
Quick rate increases pop the renewable energy bubble---crushes the industry
Peter Schiff 3/8, CEO and chief global strategist of Euro Pacific Capital Inc., a broker-dealer,
“Could Rising Interest Rates Pop the Renewable Energy Bubble?,” https://schiffgold.com/key-
gold-news/could-rising-interest-rates-pop-the-renewable-energy-bubble/
Could rising interest rates pop the renewable energy bubble ?
As the Federal Reserve and other central banks try to turn off the easy money spigot, we will likely see a growing
number of corporate bankruptcies in the coming years. The renewable energy sector is
particularly vulnerable and exemplifies broader problems in the global economy.
Last year, we saw a number of high-profile corporate bankruptcies, particularly in the retail sector. Toys R Us was probably the most
high profile. It ranks as the second-largest US retail bankruptcy ever, according to S&P Global Market Intelligence. The story behind
the Toys R Us bankruptcy gives us a glimpse at a fundamental problem eroding the strength of the economy – easy money created
by Federal Reserve monetary policy. The ability to borrow a lot of money at low interest rates fueled borrowing and speculation.
Malinvestment has distorted the economy and inflated bubbles that will eventually pop. This is exactly what happened at Toys R Us.
The rate of bankruptcies will likely accelerate over the next several years and spread into other sectors if the Fed follows through on
its monetary tightening policies. The ugly truth is that these overleveraged companies simply can’t survive in anything remotely
resembling a normal interest rate environment.
As economist Daniel Lacalle noted in an article on the Mises Wire, the past eight years of easy money and massive liquidity enabled
companies to increase imbalances and create complex debt structures. Two facts bear this out.
Corporate net debt to EBITDA levels is at record highs. About 20% of US corporates face default if rates rise, according to the IMF.
The number of zombie companies has risen above pre-crisis levels according to the Bank of International Settlements (BIS).
The incredible transformation of the renewable energy sector over the last decade was
built on easy money and government subsidies. Lacalle said understanding that disruptive technologies
cannot be more leveraged than traditional technologies is key to understanding what’s
going on in the renewable energy sector.
When technology reduces costs and disrupts inflationary models, basing the business on ever-increasing subsidies and higher prices
and financing it with massive debt is suicidal. In the era of cheap money and extreme liquidity, many companies
used the ‘green’ subterfuge to implement an extremely leveraged builder-developer model, ignoring demand,
costs, and competition . A model whose sole objective was to install for the sake of installing
capacity , whether there was a demand or not, and that pursued subsidies while stating that it is very competitive.”
Even in a period of low interest rates and ample liquidity, we’ve seen a number of spectacular
bankruptcies in the renewable energy sector . In fact, solar company bankruptcies have exceeded those of
coal and fracking companies combined. As Lacalle says, if the renewable sector is already struggling, imagine what will
happen as interest rates rise.
Extinction
Robert A. Schultz 16, retired Professor and Chair of Computer Information Systems at
Woodbury University, 2016, “Modern Technology and Human Extinction,”
http://proceedings.informingscience.org/InSITE2016/InSITE16p131-145Schultz2307.pdf
There is consensus that there is a relatively short window to reduce carbon emissions before
drastic effects occur. Recent credible projections of the result of lack of rapid drastic action is an
average temperature increase of about 10o F by 2050. This change alone will be incredibly disruptive
to all life , but will also cause great weather and climate change. For comparison purposes, a 10 degree (Fahrenheit) decrease
was enough to cause an ice layer 4000 feet thick over Wisconsin (Co2gether, 2012). Recently relevant information has surfaced
about a massive previous extinction. This is the Permian extinction, which happened 252 million years ago, during which 95% of all
species on earth, both terrestrial and aquatic, vanished. The ocean temperature after almost all life had disappeared was 15 degrees
(Fahrenheit) above current ocean temperatures.
Recent information about the Permian extinction indicates it was caused by a rapid increase in land and
ocean temperatures, caused by the sudden appearance of stupendous amounts of carbon in the form of greenhouse gases
(Kolbert, 2014, pp. 102-144). The origin of the carbon in these enormous quantities is not yet known, but one possibility is the
sudden release of methane gases stored in permafrost. This is also a possibility in our current
situation. If so, extinction would be a natural side effect of human processes . There is also
a real but smaller possibility of what is called “runaway greenhouse,” in which the earth’s temperature becomes like Venus’ surface
temperature of 800o
The threat of extinction here is not entirely sudden. The threat is, if anything, worse .
Changes in the atmosphere--mainly increases in the concentration of greenhouse gases in the atmosphere-- can start
processes that can’t be reversed but which take long periods of time to manifest. “Runaway
greenhouse” may be the worst. Once again, suggestions of technological solutions to this situation should be treated with some
skepticism. These proposals are often made by technophiles ignoring all the evidence that technology is very much subject to
unanticipated side effects and unanticipated failures. What has happened concerning the depletion of the ozone layer should be a
clear warning against the facile uses of technology through geoengineering to alter the makeup of the entire planet and its
atmosphere.
The complicating factor in assessing extinction likelihood from climate change is corporations,
fossil fuel corporations such as Exxon-Mobil and Shell. Through their contributions, they
especially American
have been able to delay legislation ameliorating global warming and climate change. As mentioned before,
recently released papers from Exxon-Mobil show that the corporation did accept the scientific findings about global warming and
climate change. But they concluded that maintaining their profits was more important than acting to ameliorate climate change.
Since it is not a matter of getting corporations to appreciate scientific facts, the chances of
extinction from climate change are good . To ameliorate climate change, it is important to
leave a high percentage of fossil fuel reserves in the ground. But this is exactly what a profit-seeking fossil fuel
corporation cannot do. One can still hope that because fossil fuel corporations are made up of individuals, increasingly bad
consequences of global warming and climate change will change their minds about profits. But because of the lag in effects, this
mind change will probably be too late. So I conclude we will probably see something like the effects of the
Permian extinction perhaps some time around 2050 . (The Permian extinction was 95% extinction of all species.)
This assumes the release of methane from the arctic will take place around then.
1NC
NHS CP
The United States federal government should establish a National Health Service.
f the larger ailment. Treating symptoms often makes sense, and we should treat this one. But that doesn't get us to a cure. ¶ The key
to the cure is understanding that there is more than enough money already sloshing around the health care system to ensure every
the current practice of American medicine , whether financed
American access to quality care. Unfortunately,
by Medicare, insurance companies, or other sources, is stunningly inefficient, unsafe,
unscientific , and getting worse. And that's why it costs so bloody much . ¶ Americans spend more per
person on health care than residents of any other country, and they have very little to show for it except more medical bills and too
many ineffective, and even harmful, treatments. Americans, for example, pay twice as much per person as
Britons for health care. Yet even though the British are more prone to drink heavily and are just as likely to smoke as
Americans are, they live longer and are far healthier. ¶ This is true even among privileged members of
both nations. For example, a study published in the Journal of the American Medical Association in 2006 found that the
prevalence of diabetes among American college graduates aged fifty-five to sixty-four is 9.5 percent, compared with 6.1 percent
among British college graduates of the same age. Even after one controls for the fact that Americans of all classes are more prone to
obesity, the disparity remains, with Americans of all classes more likely than their counterparts in Great Britain to suffer from
diabetes, heart disease, and cancer. ¶ Similar health disparities exist between Americans and the citizens of all other advanced
nations. Why? You don't have to travel to some far-off foreign country like Sweden, or even to Canada, to find the answer. Nor do
you have to rely on mere econometric speculations. The cure to America's health care crisis is a system that's
already up and running right here in the U nited S tates, with facilities in every state, plus the District of
Columbia and Puerto Rico. It is, in-fact, the largest integrated health care system in the United States, and it points the way to the
future. ¶ Most of its doctors have faculty appointments with academic hospitals--over the years, two have won the Nobel Prize for
medicine. The system's innovations have included the development of the first artificial kidney, the cardiac pacemaker, the first
successful liver transplant, and the nicotine patch, plus many advanced prosthetic devices, including hydraulic knees and robotic
arms. ¶ More impressively, health care quality experts also hail it for its exceptional safety record, its use of evidence-based
medicine, its health-promotion and wellness programs, and its unparalleled adoption of electronic medical records and other
information technologies. Finally, and most astoundingly, it's the only health care provider in the United States whose cost per
patient has been holding steady in recent years, even as its quality performance is making it the benchmark of the entire health care
sector. ¶ Though comparatively few Americans, especially among coastal elites, have any contact with this system these days, and
even fewer qualify for its services, its example shows that it is possible to make vast improvements in the quality, safety, and
effectiveness of the health care all Americans receive, and to do so for a fraction of what an unreformed health care system would
cost. ¶ I'm talking about the Veterans Administration , which over the course of the last decade or so has undergone
a remarkable transformation. Even with its problems, the VA's model of care turns out , in study after
study, to be the best the American health care system has to offer. As Harvard's John F. Kennedy School of Government
gushed, in awarding the VA a top prize in 2006 for innovation in government: "While the costs of health care continue to soar for
most Americans, the VA is reducing costs, reducing errors, and becoming the model for what modern health care management and
delivery should look like." ¶ This is another inconvenient fact absent from the health care debate. What can you say about it? The
VA is an example of the government running a health care system, not just writing
checks to cover other people's medical bills , which is all that Medicare does. The VA also has a
near-lifetime relationship with its patients and therefore has an incentive to invest in prevention,
disease management, and protocols of care that demonstrably work --incentives that are
weak or absent throughout the rest of America's fragmented health care system . Medicare for
everyone, or some similar scheme for universal coverage , just doesn't address the root cause of
America's health care crisis, which is poor-quality, uncoordinated care. The VA
model of health care does . ¶ Yes, I know there was a scandal at Walter Reed Army Medical Center. But Walter Reed
is an Army facility and not part of the Veterans Administration system. Yes, I know there is an emerging consensus that the Bush
administration and the Republican Congress did not provide the VA with enough money to cope with some forms of care needed by
some returning veterans--notably mental health services. But this problem, like most of the others at the VA, have to do with access,
not with the quality of care received by those who get in. ¶ Upon hearing some anecdote about the VA, we should always ask,
"Compared to what?" As a system, the VA outperforms the rest of the health care sector by every
conceivable metric, including wait times and, of course, protection from catastrophic
medical bills. And it is more cost-effective: for every patient who switched from Medicare to the
VA, the taxpayers would save about one-half to two-thirds in medical costs, while the patients
themselves would receive demonstrably higher-quality care. Step one on the road to true health reform
should be to allow all veterans on Medicare to use their entitlement for VA care, and then gradually expand access to
the VA model of care for all Americans . ¶ Adopting the VA model , with its salaried doctors
and its extensive use of electronic i nformation t echnology and e vidence -b ased m edicine, would cure
the American health care crisis . Throwing more money into the current, fragmented, profit-
driven system without changing the actual practice of American medicine might ease the problems of the uninsured
temporarily, but would also give us more inappropriate , sometimes dangerous, and ever-more-
expensive care . ¶ It's important to remind Americans, as Cohn does admirably, that our current method of financing
health care puts them at grave and growing financial and medical risk if they lack insurance. But what is ultimately the greatest
threat to the public's purse and the public's health, while also ultimately the best argument for a universal,
government-controlled health care system, isn't the problem of the uninsured. It's the problem of every
American who wants to stay or get well.
Bioterror Advantage
Mismanagement and inadequate planning undermines solvency
Michael A. Diamond 9, family medicine doctor in Miami, Florida and is affiliated with multiple
hospitals in the area. 2009. “Con: Single-Payer Health Care Why It's Not the Best Answer”
http://www.atsjournals.org/doi/full/10.1164/rccm.200906-0882ED
Single-payer health insurance would also lead to rationing and long waiting times for medical
services. The adverse consequences of waiting for health services in countries with single-payer
insurance are well documented (12, 13). Access to a waiting list for health care does not equate with access to health care,
which is one reason why patients from abroad often prefer to come to the U.S. for treatment. It is unlikely that Americans would
welcome these changes.
The strongest argument against a single-payer system may well be the outcomes in states that
have attempted to expand health care access through the use of government programs and mandates.
TennCare was a widely touted managed-care Medicaid program adopted by Tennessee in 1994
that was characterized as the solution to providing health insurance to most uncovered residents
while simultaneously controlling costs (14). TennCare's subsequent collapse has been attributed to
The plan causes doctors to quit and crushes R&D---turns access and outcomes
Christopher Castaldi-Moller 16, Bridge the Divide, 11/14/16, “Against Single Payer,”
https://www.bridge-the-divide.com/single-post/2016/11/14/Against-Single-Payer
Secondly, the ways through which some progressives propose to cut potential medical expenses are either infeasible or immensely
problematic. Relying on an incredibly high reduction in pharmaceutical costs in America wouldn’t be very
wise – while prices would surely go down under single-payer, they can’t such that the
budgetary impacts of a national healthcare scheme would be minimal. What the government could do
instead is cut the paychecks of American doctors to ensure that the cost of single payer can
be at least slightly contained. But this would, of course, be an utter disaster for a broad variety of reasons. First, by
reducing medical salaries, America's hospitals and clinics would see doctors either exit the profession
or retire early . This is not a speculative forecast – as Dr. Robert Book of the Heritage Foundation explains,
low Medicare and Medicaid payouts induce doctors to drop those patients covered by the two public
plans in favor of the privately insured. Under a single payer system, the fact that there would be no
private alternatives means that doctors might have no choice but to leave their field if they
are frustrated by lowered salaries. Meanwhile, the deterrent effect caused by reduced physician pay
would mean that many talented individuals – confronted with a plethora of lucrative career
opportunities and the arduous process of earning a medical degree – may simply opt out of becoming doctors in
the first place. In the short term , this would harm patient access to their doctors of choice, cause
a ‘ brain drain ’ of experienced and trained doctors, and reduce the time doctors spend on individual patients by
decreasing the supply of medical professionals. But more dangerously, a reduced pool of medical professionals and
a cut profit incentive would cause reduced focus on and investment in advanced
medical equipment and research projects. This would not only mean that specialized and cosmetic care would
be hindered under a single payer scheme, but that the rate of treatment and cure discovery would be slowed .
Therefore, single payer may not only cost Americans their favorite doctors, but it will also cost lives by slowing
medical research.
No impact to bioterror
Filippa Lentzos 14, PhD from London School of Economics and Social Science, Senior
Research Fellow in the Department of Social Science, Health and Medicine at King’s College
London, Catherine Jefferson, researcher in the Department of Social Science, Health, and
Medicine at King’s College London, DPhil from the University of Sussex, former senior policy
advisor for international security at the Royal Society, and Dr. Claire Marris, Senior Research
Fellow in the Department of Social Science, Health and Medicine at King's College London, “The
myths (and realities) of synthetic bioweapons,” 9/18/2014, http://thebulletin.org/myths-and-
realities-synthetic-bioweapons7626
The bioterror WMD myth. Those who have overemphasized the bioterrorism threat typically portray it as an
are. The assumption is that terrorists would seek to produce mass-casualty weapons and pursue capabilities on the
scale of 20th century, state-level bioweapons programs. Most leading biological disarmament and non-
proliferation experts believe that the risk of a small-scale bioterrorism attack is very real and present. But they consider the risk of
sophisticated large-scale bioterrorism attacks to be quite small. This judgment is backed up by
historical evidence . The three confirmed attempts to use biological agents against humans in terrorist attacks in the past were
small-scale , low-casualty events aimed at causing panic and disruption rather than excessive death tolls. ¶ The second dimension involves capabilities and the level
of skills and resources available to terrorists. The implicit assumption is that producing a pathogenic organism equates to
producing a weapon of mass destruction. It does not. Considerable knowledge and resources are
necessary for the processes of scaling up, storage, and dissemination. These processes present
significant technical and logistical barriers .¶ Even if a biological weapon were disseminated successfully, the
outcome of an attack would be affected by factors like the health of the people who are exposed and the speed and manner with which public health authorities and medical
Inequality has only a minor effect on growth at worst, especially in the U.S.
Chris Giles 15, Economics Editor for FT, “Inequality is unjust, not bad for growth,” Aug 18
2015, https://www.ft.com/content/94a7b252-45a1-11e5-b3b2-1672f710807b
Disparity of income is both a virtue and a vice. The virtue of providing rewards for effort and generating
economic growth must be balanced against the vice of inequality’s manifest injustice. Riches derived through good
fortune, good parents or being born at a good time are far from easy to defend. The problem for society and governments is to determine an acceptable
degree of redistribution, balancing the remaining inequality with the blunted incentives from higher taxes and benefits. Or so we thought. ¶ The
past two years have witnessed huge growth in the industry of academic research rejecting this
trade-off. Lower inequality boosts growth, its advocates claim , so countries really can have more redistribution, a
narrower gap between rich and poor, alongside more sustained economic expansion. ¶ Leading the charge towards the new consensus are two somewhat
surprising institutions — the International Monetary Fund and the Organisation for Economic Cooperation and Development. Are these traditional
bastions of orthodoxy infusing their policy prescriptions with the most up-to-date empirical evidence or merely following fashion? ¶ There is no doubt
that the new ideas are strongly held. Angel Gurría, head of the OECD, is convinced of the new reality. “Addressing high and growing inequality is
critical to promote strong and sustained growth,” he says only to be outbid in rhetorical certainty by Christine Lagarde, the fund’s managing director.
She reckons the rich should thank the poor. “Contrary to conventional wisdom, the benefits of higher income are trickling up, not down,” she says. ¶
For all the excitement among this rarefied global elite, the research results are mundane. Economic
performance varies wildly over time and across countries, yet the evidence suggests inequality
explains only a tiny fraction of these differences. Whatever effect the gap between rich and poor
might have on growth, other forces dominate , so we should not look to redistribution as the new engine of growth.¶
With the results almost entirely based on cross-country correlations, they also have troubling inconsistencies . Ms
Lagarde and the IMF research think that a higher income share for the rich harms economic
performance while the OECD says only inequality between the poorest and the middle
matters . The Paris-based international organisation concludes that a lack of access to skills among the poor is the mechanism by which higher
inequality hits growth at the same time as finding no role for skills in its equations on growth. ¶ If the global results are weak, they also
have close to zero policy prescriptions for rich countries where the results have caused most excitement — the
US and the UK in particular. Far from being examples of the worst excesses of capitalism, these Anglo-Saxon nations emerge
from the IMF data set as countries with relatively strong growth, low inequality and
high redistribution .
Lower spending might seem like a good thing, until you consider the poor incentive it creates for
innovation. Other things equal, people and firms tend to invest more in medical innovation
when they expect a higher return, when the returns last longer and when the returns arrive
sooner.
As Sidney Taurel, former CEO of the pharmaceutical giant Eli Lilly ( LLY - news - people ), once put it: America, “though hardly
‘free’ of government intervention … is the one market where global innovators find the
incentive they need to keep pushing the boundaries .” Critics often describe America’s high level of
per-capita medical spending as a problem—but when encouraging innovation, it’s a feature.
The aff causes info overload which crushes solvency
Richard Harris 17, NPR reporter, “Researchers Gather Health Data For 'All Of Us',” 12/31/17,
https://www.npr.org/sections/health-shots/2017/12/31/572674823/researchers-gather-health-
data-for-all-of-us
Gathering huge data sets may be useful for merchants trying to suss out consumer spending patterns, but he cautions that
in biology, it may lead to more confusion than clarity . That is because many health conditions
involve hundreds of genes, and the pattern is different in every individual . As it is, the
more scientists look the more variants they find . So, he says, think about what that will
look like when they have gathered a million samples.
"Bigger and bigger samples will just in a way identify more and more very rare or very
weak effects ,
and the upshot will be each person will become even more different in terms of the identifiable genetic effects," Weiss predicts.
When the human genome was sequenced, many scientists hoped they would quickly be able to
identify the common genes that are responsible for common diseases, like diabetes, heart disease, high blood pressure and
so on. That simply didn't pan out . Common diseases don't have common genetics. Weiss says it's time to cut our
losses pursuing that concept.
"I think we're already at the diminishing returns point for many of the complex traits that
important to our society in terms of health."
The solutions to these common conditions lie largely in changing diets, exercise habits and tobacco addiction. Focusing genetic
resources on diseases that do have strong genetic components makes a lot of sense, he says.
"But pouring more and more investment into these huge studies based on the idea that if you
search enough computer data you will get an answer, I think is a false promise ," he says.
The aging crisis stabilizes global great power relations by forcing reductions in
power projection capabilities and decreasing military modernization
Mark L. Haas 17, Department of Political Science, Duquesne University, July 2017, “Population
Aging and International Conflict,”
http://politics.oxfordre.com/view/10.1093/acrefore/9780190228637.001.0001/acrefore-
9780190228637-e-589
A second way in which population aging is likely to negatively affect states’ military power is
through the creation of crowding out dynamics: The more that governments spend on elderly
welfare, the less they are likely to spend on all other purchases, including on the military. All governments in the
industrialized world have made commitments to pay for substantial portions of the retirement and health-care costs of their elderly
citizens. The projected increases in governmental spending for the elderly in coming decades are massive. Annual public
benefits to the elderly (both pension and health care) as a percentage of GDP are forecasted to rise between
2010 and 2040 by 7.6 percentage points in China (to an overall percentage of 11), by 7.4 percentage points in the United
States (to an overall percentage of 18.5), by 7.3 percentage points in Germany (to an overall percentage of 24.3), by 5.8 percentage
points in Japan (to an overall percentage of 20.9), by 5.7 percentage points in France (to an overall percentage of 24.3), by 5
percentage points in the United Kingdom (to an overall percentage of 18.9), and by 2.7 percentage points in Russia (to an
overall percentage of 10.9) (Jackson, Howe, & Peter, 2013, p. 14). These
expenditures on the elderly will create a
very tight fiscal environment that will put pressure on all other areas of spending .
Finally, aging is likely to affect states’ capabilities by pushing militaries to spend more on
personnel and less on other areas, including weapons development \
and procurement . Aging, in other words, will tend to affect not only the size of military budgets, but
its composition. Aging societies are likely to dedicate a growing percentage of their military budgets to personnel expenditures
for two main reasons. First, as societies age, more people exit the workforce than enter it. Increasing numbers of retirees in relation
to new workers are likely to create labor shortages relative to previous levels of employment. The result of this trend will be
increased competition among businesses and organizations—including the military—to hire workers. Consequently, if states’
militaries want to be able to attract and keep the best employees, they are going to have to pay more to do so.
A second factor that is increasing states’ military personnel costs at the expense of weapons procurement is the aging of the military
itself. The great powers’ pension obligations to retired military personnel are considerable . Russia,
for example, in the 2000s consistently spent significantly more on military retirees than on either weapons procurement or military
research and development (Haas, 2007, p. 142). Similarly, rising pension costs, according to China’s government, were the second
most important reason (after pay increases for active personnel) for increases in Chinese military spending in the 1990s and 2000s
(People’s Republic of China, 2004).
Given these relationships, it is not surprising that the
oldest of the great powers are already devoting
significantly more resources to military personnel than weapons purchases and
research . In 2016, Germany spent nearly 3.5 times as much on personnel expenditures than military equipment, France
almost twice as much (NATO, 2016). Increasing personnel costs as a percent of Japan’s military budget, according to Brad
Glosserman and David Kang (2014), have helped make claims of Japanese “remilitarization” due to increases in military spending in
recent years a “myth.”
Growing military personnel expenditures due to increasing per-unit labor and pension costs will reduce
states’ ability to project power . Unless military budgets are expanding (and aging’s negative effects
on economic growth makes this less likely), increasing per-unit labor costs will result in a reduction in the
number of military personnel. In these conditions, the same amount of money will pay for fewer soldiers. Growing
pension costs for military retirees not only do not add to states’ capabilities, but likely subtract from them due to crowding out
dynamics.
2NC
Medicare Part E
OV---2NC
“Single payer” is not a magic word and you should be skeptical of their ev that says
it’s the only solution---their authors care more about single payer orthodoxy than
the ultimate goals of universal coverage and cost control
Jacob S. Hacker 18, the Stanley Resor Professor of Political Science at Yale University, 1/3/18,
“The Road to Medicare for Everyone,” http://prospect.org/article/road-medicare-everyone
THE BIG UNANSWERED QUESTION is whether those now demanding single-payer will fight
for these changes , even if they fall short of Medicare for All. Every social movement in our
nation’s past has featured tensions between pragmatists and purists. These fissures can be
painful, but they can also be productive. The Social Security Act passed only because powerful
grassroots forces were pressing for more.
The passion of those who resist half-measures is essential. But passion should not
blind[ obscure ] us to political risks . The test of seriousness should not be whether
politicians say, “I support single-payer,” but whether they are willing to support
policies that will truly achieve its goals : health care as a right, at a cost our
nation can afford.
Solves Coverage---2NC
The CP achieves 99.6% coverage while avoiding massive tax hikes and public
backlash
Jacob S. Hacker 18, the Stanley Resor Professor of Political Science at Yale University, 1/3/18,
“The Road to Medicare for Everyone,” http://prospect.org/article/road-medicare-everyone
Of course, even with these savings, Medicare Part E would require additional financing beyond the
employer contributions. For starters, those enrolled in Medicare Part E should have to pay an
additional premium beyond the payroll-based contributions made by employers (or by self-employed
workers). As in Medicare Part B, these premiums should cover only a modest fraction of the total cost of
Medicare Part E, and they should vary by income , with lower-income enrollees paying a minimal
amount. (For workers, these premiums should be automatically deducted from pay.) The exact
premium would depend on the precise benefits covered, as well as the employer contribution
rate. But the full charge for higher-income enrollees would likely be in the range of $300 per
month for family coverage. This estimate is based on a 2008 analysis conducted by the Lewin Group—an
independent consulting firm with expertise in micro-simulation modeling of health-care plans.
To be sure, other sources of financing would also be needed. The improved benefits for current
Medicare beneficiaries could be financed, in part, by increasing the Medicare tax paid by
workers (which the ACA applied, for the first time, to capital as well as labor income). There is also a strong argument
for bridging some of the remaining funding gap with relatively progressive tax sources, such as
an income-tax surcharge on extremely high-income households . Still, because most
Americans who receive employment-based insurance will continue to do so, the new costs are
much more modest than those for single-payer . In its 2008 analysis, Lewin estimated that
99.6 percent of Americans would be covered and that the proposal would lower
national health spending and require modest new federal spending . Over time, it was
projected to produce enormous savings for employers, households, states, and the federal
government.
AT: Cost-Sharing
The counterplan has zero cost sharing for people up to 150% of the Federal Poverty
Level, which includes everyone on Medicaid and more --- anyone poor enough to
be super sensitive to cost-sharing wouldn’t have any
Medicaid expansion states go up to 150% of FPL, but non-expansion states only go up to 133% of
FPL
CAP 18 – Center for American Progress, Health Policy Team, 2/22/18, “Medicare Extra for All,”
https://www.americanprogress.org/issues/healthcare/reports/2018/02/22/447095/medicare-
extra-for-all/
Medicare E xtra would provide comprehensive benefits , including free preventive care, free
treatment for chronic disease, and free generic drugs. The plan would guarantee the following benefits:8
Primary and preventive services
Hospital services, including emergency services
Ambulatory services
Prescription drugs and medical devices
Laboratory services
Maternity, newborn, and reproductive health care
Mental health and substance use disorder services
Habilitative and rehabilitative services
Dental, vision, and hearing services
Early and periodic screening, diagnostic, and treatment services for children
Over time, these benefits would be updated, just as benefits are updated under Medicare, through its National Coverage
Determination (NCD) process.
The Center for Medicare Extra (described below) would determine base premiums that reflect the
cost of coverage only. These premiums would vary by income based on the following caps:
For families with income up to 150 percent of the federal poverty level (FPL), premiums would be zero.9
For families with income between 150 percent and 500 percent of FPL, caps on premiums would range from 0 percent to 10 percent
of income.
For families with income above 500 percent of FPL, premiums would be capped at 10 percent of income.
The average share of costs covered by the plan, or “actuarial value,” would also vary by income. For
individuals with income below 150 percent of FPL, the actuarial value would be 100 percent—meaning these
individuals would face zero out-of-pocket costs . The actuarial value would range
from 100 percent to 80 percent for families with middle incomes or higher.
Consistent with these actuarial values, the Center for Medicare Extra would set deductibles, copayments,
and out-of-pocket limits that would vary by income. For individuals with income below 150 percent
of FPL and lower-income families with incomes above that threshold, the deductible would be set at
zero . Preventive care, recommended treatment for chronic disease, and generic drugs would be free.
Enrollees would have a free choice of medical providers, which would include any provider that participates in
the current Medicare program. Copayments would be lower for patients who choose centers of excellence
that deliver high-quality care, as determined by such measures as the rate of hospital
readmissions.
With the exception of employer-sponsored insurance , private insurance companies
would be prohibited from duplicating Medicare Extra benefits, but they could offer
complementary benefits during an open enrollment period. Complementary insurance would be subject to a limitation on
profits and banned from denying applicants, varying premiums based on age or health status, excluding pre-existing conditions, or
paying fees to brokers.
That means the counterplan is the best of all worlds. It creates no cost-sharing for
the truly impoverished, but leaves some cost-sharing for those who can afford it.
That creates a goldilocks amount of access where people naturally only demand
the services they actually need, and they demand value. The plan’s elimination of
copays forces back-end rationing which is vastly worse for coverage---this straight
turns the advantage.
Kristian Niemietz 13, Head of Health and Welfare at the Institute of Economic Affairs (IEA),
London, 8/25/13, “Co-Payments Could Be Beneficial for Both the NHS and Its Patients,”
http://www.huffingtonpost.co.uk/kristian-niemietz/nhs-fees_b_3495313.html
Would you like to receive something for free? Or would you prefer to pay for it , out of your own
pocket? Phrased in those terms, the issue of top-up payments for medical treatments appear to be a no-
brainer. But these are not the alternatives we are faced with in healthcare, and it is a serious misunderstanding to
think of the issue in this way.
The NHS is under severe financial pressure. Demand
for healthcare services is growing, and this trend is
expected to continue, which means that maintaining a given standard of healthcare - never mind improvements - will get
more and more expensive. The Nuffield Trust forecasts an annual funding gap of at least £12billion (in today's prices) by 2021, even
under the assumption that public healthcare spending continues to increase in line with economic growth.
For the time being, a major surge in public health expenditure is not a realistic option , and it is not even
clear whether it would be desirable. Contrary to popular belief, in terms of public healthcare spending, the UK is already in the top
group internationally. The UK government already spends 8% of GDP on healthcare, a higher share than in Sweden and Finland, in
Switzerland and Luxembourg, in Spain and Italy, or in Iceland and Ireland.
Unless we get a productivity revolution, this means that demand for healthcare services will
have to be limited , and there are, in principle, only two ways how this can be done: rationing
and financial incentives . Top-up fees and co-payments fall into the latter category. So the question should
really be phrased as: Would you prefer to have some say over which healthcare services you use, even
if it means accepting some of the financial responsibility for it? Or would you prefer to fully
delegate these choices to healthcare administrators , and put yourself entirely at their mercy? After
all, just because something is notionally offered 'for free' does not mean you can easily
obtain it . Think of 'free beer' promotions: These occasions rarely entail unlimited drinking, because the owner of the venue
will find non-monetary ways to limit consumption. They will understaff the bar to produce long queues, store the best beers away,
instruct their staff to leave a large head, etc.
Healthcare rationing is not that different. You may never have to reach for your wallet , you may never have to fork
But you will find your choices limited in more subtle ways, such as a denied
out money.
referral , an outdated treatment, or a withheld new drug . Monetary payments are far from the only mechanism
to limit demand. But they are the most explicit, the most visible mechanism to do so. This is precisely why many are so emotionally
uncomfortable with the idea: It replaces covert, hidden ways of rationing with a brutally honest one.
In the absence of financial incentives, demand has to be limited in more roundabout
ways - but this relationship also holds in reverse. If we introduced smart financial incentives to encourage a
more economical use of medical resources, crude rationing tools would become much
less necessary . A properly devised system of co-payments would make you think twice , or thrice,
before using a medical service, but unlike in a system of pure top-down rationing, you would still be
the judge .
Issues of equitable access to healthcare can be dealt with quite easily. The poorest could be
exempted from co-payments altogether , just as they are currently exempted from
prescription charges. To avoid penalising the long-term sick, co-payments could be capped, for example through an
annual ceiling. For those with cash flow problems, an instalment plan could be worked out. In short, these are merely technical
issues, which are clearly resolvable. There is no need to compromise the objective of
universal healthcare .
But the devil will be in the detail. A co-payment system will achieve little if the funds raised just disappeared into the
black hole of the public finances. But if healthcare providers were given the right to keep and re-invest the co-payment revenue they
raise, co-payments could be turned into catalysts of competition. Good healthcare providers
would be able to expand, and poor providers would be forced to shape up .
But perhaps the most beneficial effect of a co-payment system would be in its impact on our attitudes
as medical consumers. Whenever we pay for something ourselves, we are much less willing
to put up with shoddy services . Co-payments would make us much less tolerant of the medical establishment's
capriciousness. We would start to hold providers to account, and demand value for money , rather
than bow our head and be content with what we are given.
Solves PM
Davis
Notably, payer systems that have low patient turnover, such as integrated systems like
Kaiser Permanente in the United States or single-payer systems in Europe, are
less exposed to this incentive challenge.
Inequality Advantage
No Growth IL
There is no tradeoff between inequality and growth---the newest high-quality data
proves
Nathalie Scholl 16, PhD in Globalization & Development from Göttingen University, Research
Associate with the Development Economics Research Group at Göttingen University, and
Stephan Klasen, Professor of Development Economics at the University of Göttingen, director of
the Ibero-America Institute for Economic Research, Coordinator of the Courant Research
Center, PhD in Economics from Harvard, “Re-estimating the relationship between inequality
and growth,” Courant Research Centre: Poverty, Equity and Growth - Discussion Papers, No.
205 [rev.], September 2016,
https://www.econstor.eu/bitstream/10419/146554/1/868722448.pdf
In this paper, we have revisited the inequality-growth relationship using an enhanced panel data set
with improved inequality data and special attention to the role of transition countries. We based our analysis on the
specification of Forbes (2000), but also addressed the functional form concerns raised by Banerjee and Duflo (2003). Using the SWIID
data, which provide an improved and substantially longer panel dataset, we can avoid several
of the data concerns brought up by the literature, such as consistency over time and between
countries, and a low within-country variation. We also take into account the unique experience of transition countries, which
suffered a large negative output shock at the start of the transition period in the early 1990s from which they slowly recovered in the late 1990s and
early 2000s. This was coincidental with large increases in inequality, which had been kept at low levels during the Communist rule. ¶ Using
robust dynamic panel estimation and multiple imputation estimation, we find no robust,
systematic relationship between inequality and subsequent growth, neither for levels
nor for changes in inequality. While higher inequality appears to be significantly associated with higher subsequent growth when
Forbes’ and Banerjee and Duflo’s basic specifications are used, we find that this effect is entirely driven by the experience of transition countries and is
not present in the remaining country sample. Once we introduce separate time effects for the transition countries, these associations disappear for this
group of countries as well. These results hold for different lag structures as well as for the medium- rather than the short term, and the empirical
patterns observed emerge not only in the SWIID, but also the WIID data. ¶ Our
results point to two conclusions. First, there
does not appear to be a trade-off between inequality and growth . Second, because the positive
impact of inequality on growth in transition countries is not robust to the inclusion of separate time effects, it appears to be driven by other events. Our
findings are hence consistent with the claim that the relationship is due to the particular timing of inequality and growth dynamics in transition
countries. In particular, the rise in inequality in the 1990s coincided with a sharp output collapse, leading us to find an association between the large
increase in inequality in the early 1990 and a growth recovery in the late 1990s.
No Credit Booms
Local data disproves the inequality-crisis link---poor families borrowed more in
areas with less inequality---answers Morelli
Derek Thompson 14, senior editor at The Atlantic, citing study by Olivier Coibion, Associate
Prof @ the University of Texis, Austin, PhD in Economics from the University of Michigan;
Yuriy Gorodnichenko; Marianna Kudlyak; and John Mondragon, UC Berkeley, “The Keeping-
Up-With-the-Joneses Myth,” Jan 24 2014,
https://www.theatlantic.com/business/archive/2014/01/the-keeping-up-with-the-joneses-
myth/283330/
Behind the Great Recession, there was a credit crunch. Behind the credit crunch, there was a housing bust. And behind the housing
bust, there was an explosion in debt in mid-2000s among low-income households .¶ So what was behind
that? ¶ One explanation begins with inequality. The idea is that the rich-poor gap leads to credit booms—
as the poor try to close the gap with borrowed money— and this leads to defaults, financial busts,
and recessions. This story would make the "keeping-up-with-the-Joneses principle" a key player in the great crash. It would also implicitly
shift some of the blame to low-income people being, well, jealous and greedy for the lifestyle of their richer neighbors. ¶ There are two
problems with this story. First, there's no evidence that inequality actually leads to credit
booms, in the first place. Second, a new paper finds that the parts of the country where poor
families took on the most debt weren't the areas with the most inequality. They were the areas with the least
inequality . ¶ To examine whether big rich-poor gaps turn poor people into big borrowers,
researchers looked at local levels of income inequality and debt-accumulation. They found that
poor households didn't borrow more in high-inequality areas. Instead, poor households
borrowed more in poorer areas (i.e.: areas with less overall inequality ). In short, it's the opposite of
what the keeping-up-with-the-Joneses effect would predict. Poor households borrowed more when they had poor
neighbors, not rich neighbors.
Regs
No financialization impact
Martin Neil Baily 16, holds the Bernard L. Schwartz Chair at the Brookings Institution, was
chairman of the Council of Economic Advisers from 1999 to 2001, “Stop worrying. The financial
sector isn’t destroying the economy.,” https://www.washingtonpost.com/news/in-
theory/wp/2016/04/21/stop-worrying-the-finance-sector-isnt-destroying-the-economy/?
utm_term=.27b27133a2b4
That criticism can be applied to the financial services industry. Many say that it grew too large, triggered a financial crisis and
damaged the rest of the economy. Is that still the case, and is
financialization spoiling the economy? Despite
the alarmist rhetoric around today’s finance sector, the answer is generally “no” because of changes made to financial
regulation.
First, a check on the facts: How large is the industry, and how much has it grown? The
broad definition of the financial
sector includes finance, insurance and real estate, known by the acronym FIRE. It was 17.5 percent of gross domestic product in
1990 and rose to 20 percent in 2014, but that figure is misleading as it includes office and apartment
rents and leases — stuff that has little to do with Wall Street.
Finance and insurance separately peaked well before the financial crisis at 7.7 percent of
GDP, which was up from 5.8 percent in 1990, according to data from the Bureau of Economic Analysis. In 2014, it was 7 percent of
GDP. Employment in finance and insurance has been on a downtrend since 2003 and is currently 4.25
percent of total nonfarm payrolls. Most of those jobs are in offices and bank branches around the country.
Still, salaries and bonuses at the top are extremely attractive, so perhaps the externality plays out by drawing the best and brightest
away from other more productive activities. The Harvard Crimson reported that in 2007, 23 percent of graduating Harvard seniors
said they planned to enter finance. That is an impressive number, but things turned around sharply, with the 23 percent figure
falling to 11.5 percent in 2009 after the financial crisis. At this point, the financial industry really isn’t large enough
to crowd out other parts of the economy.
Meanwhile, the insurance industry serves an important social purpose providing life, property and casualty
insurance. AIG got into trouble in the crisis because it strayed into providing very risky financial services, not because of its main
insurance business. Likewise, the core value of banks is financial intermediation between savers and
investors, giving savers relatively secure and liquid assets while also funding
investment .
There are critics of how well our banking industry serves this core purpose, a quality that is hard to determine. My judgment
is that it does the job pretty well compared with the banking industry in most other countries . As the
International Monetary Fund reported in September 2015, the non-performing loan problem among European banks remains
severe, whereas most
U.S. banks now have strong balance sheets . Good financial
intermediation means that most of the savings dollars are transferred to investors and are
not lost through inefficient bank operations. A 2002 study that I participated in found bank productivity higher in
the United States than in France or Germany.
The parts of the financial sector that give rise to the most concern are market-making, deal-making and the creation and trading of
derivatives on Wall Street. The volume of market trading has increased exponentially because of the increased speed of computers
and communications. Up to a certain point, the increased volume is helpful because it adds to the liquidity of markets, but the
advent of high-frequency trading has taken us over the top. As Michael Lewis describes in his book “Flash Boys,” high-speed traders
are finding ways to shave milliseconds off the time needed to make trades. That is thoroughly wasteful. As for deal-making, it has
been going on for a long time — indeed the go-go years for deals were in the 1980s — so it is hard to blame the recent slowing of
economic growth on this activity.
Still, the explosion of derivatives and other overly complex instruments was problematic, and it is crystal
clear that the mortgage market became too opaque and removed accountability from the system. The layering of complex derivatives
on top of lousy mortgages (and other shaky assets) distorted the economy, resulted in the overbuilding of houses and caused the
financial crisis. Plenty of people are at fault besides the bankers, but the smart people on Wall Street were driving the process, and
they should have known better. The excessive financialization obscured the reality of loans that depended upon ever-rising home
prices and thus were never going to be paid back. There was an externality because the private calculations of potential profit
ignored the risks being imposed on society.
Is that still the situation today? No. Things have changed. Banks and other financial institutions
that create risks for the whole economy are now required to hold sufficient capital to cover losses even in periods
of economic and financial stress, plus a liquidity buffer (they must pass “stress tests” administered by the Federal Reserve).
The screws have been turned pretty tight , and the owners of large financial institutions
will bear the costs of future failures — not taxpayers. This brings private incentives in line with
the public interest, getting rid of the externality that gave us too much
financialization in the first place . But to keep the future safe, we’ll have to make sure that no one forgets what
happened in the last crisis and ensure that new risks are not created in other, less-regulated parts of the industry.
3.2 indicate that neither directly affects chauvinism . H4 is therefore not supported. The results suggest, however,
that both have a negative effect on the national-identification slopes. Contrary to our
expectations, countries with higher levels of economic and ethnic division appear to exhibit a
weaker relation between national identification and chauvinism . While these findings might seem to
contradict H5, the pattern was caused by outliers . After excluding South Africa—the most unequal and ethnic diverse country in our sample—the
effect of ethnic diversity is not even of borderline significance. After excluding Chile—the most unequal country in our sample— the
interaction effects for economic inequality were also far from significant . The results,
therefore, do not support H5.21¶ Conclusions¶ During the historic phone call between President Obama and Iranian President Sheikh Hasan Rouhani in September 2013, the
latter stated that his country’s nuclear program ‘represents Iran’s national dignity’.22 This declaration reflects the common perception that Iran’s nuclear program mobilizes
Iranians in support of resisting further national humiliation at the hands of foreigners (Moshirzadeh, 2007). This reflects the important role national feelings play in the
contemporary international arena. Evidence from other examples—such as the Israeli-Palestine conflict—indicates that national identity serves as a key factor in conflict
resolution. The prominence of national feelings is not limited to the Middle East, their effect on public attitudes towards international issues, and conflicts also being manifest in
scholars seeking to develop a better understanding of
the West (Billig, 1995; Kinder & Kam, 2010).¶ It is thus hardly surprising that
in the data that we are on the cusp of an acceleration in inflation,” he said.¶ Just to be safe, though, the Fed took
out a little insurance against the economy overheating by raising its benchmark interest rate for the sixth time since 2015. That put the so-called fed
funds rate at 1.5% to 1.75% — the highest level in almost 10 years. ¶ Rates TMUBMUSD10Y, +0.00% are still extremely low by
historical standards, but they can still pinch. Higher rates make stocks SPX, -2.10% less attractive than bonds, for instance, and it means
home or car buyers have to pay more for loans.
How much higher rates go — and how fast — will depend on inflation . In all likelihood,
inflation pressures subsided in February after a runup in January largely caused by higher oil prices. The cost
of petroleum fell last month.
The 12-month rate of inflation measured by the PCE could even dip to as low as 1.5%, analysts say, well
below the Fed’s 2% target.
Indeed, the central bank is sticking to its forecast for three rate hikes this year in part because it
BMO Capital Markets. “This more than anything explains the Fed’s go-slow approach .”
The fed will hike rates three times this year---but unexpected increases in inflation
trigger more aggressive moves which cause recession
Matthew Boesler 1-11, Bloomberg writer, 1/11/18, “Fed's Dudley Worries Tax Cuts Risk
Overheating U.S. Economy,” https://www.bloomberg.com/news/articles/2018-01-11/dudley-
says-he-worries-tax-cuts-risk-overheating-u-s-economy
"Moreover, if the labor market were to tighten much further, there would be a greater risk that inflation could rise
substantially above our objective," which in turn could force the Fed to raise rates faster and
potentially trigger a recession by doing so , he added.
Dudley, 65, plans to retire this year when the New York Fed finds a replacement, following a decade running the bank. The search
for his successor is under way.
Fed officials expect tax cuts signed into law by President Donald Trump last month to boost economic growth
this year without putting upward pressure on prices , according to projections they published after
their Dec. 12-13 meeting. The median estimate of the 16 participants on the interest-rate setting Federal Open Market
Committee was that it would be appropriate to raise rates in quarter-point increments three times
this year.
Dudley told the audience during a question and answer session that three moves this year “doesn’t seem to be an
unreasonable sort of starting point,” though the ultimate pace of policy tightening will depend on how
the economy evolves.
“If the economy is stronger than we think, if inflation rises more quickly , then I can certainly imagine that we’d
do more than we said. If the economy is weaker than we think, or inflation stays stubbornly low, we could do somewhat less
than we think,” he said. “So, I think it really depends on how all of these things sort of evolve. But clearly the financial conditions
piece pushes on the side of going faster.”
Investors are giving them good odds of achieving the projection for three hikes this year,
according to the prices of futures contracts linked to the U.S. central bank’s benchmark federal funds rate. Still, lingering
uncertainty about why inflation has remained below the FOMC’s 2 percent target despite a declining
unemployment rate, and about whether it will pick up this year , is clouding the outlook.
Dudley said in his speech that the tax cuts and recent strengthening of economic momentum prompted him to raise his forecast for
U.S. economic growth in 2018 "by about half a percentage point to three quarters of a percentage point to a 2.5 percent to 2.75
percent range." The tax legislation accounts for about two-thirds of the upgrade, he said.
Rates Hikes IL Must Read
The difference is rapid hikes --- they’re being hiked at quarter now --- rapid
financial collapse---it also causes the Treasury to strip authority fro m the Fed
which liquidates the international economic order
Jeffrey Moore 18, senior analyst at Global Risk Insights, 2/28/18, “COULD THIS INTEREST
RATE CLIFF-EDGE CRIPPLE THE U.S. ECONOMY?,” https://www.ozy.com/opinion/could-
this-interest-rate-cliff-edge-cripple-the-us-economy/83758
It now appears that inflation is on the move — 2.2 percent in February, according to the producer price index. The
market brushed aside the news, but some anxious investors are wondering what happens if inflation
starts to gallop ahead of the target? Central banks have worked for years to stoke inflation: What if they finally
get more than they bargained for?
Out-of-control inflation is a gray rhino — a high-impact, negative occurrence that is
rationalized until it is too late . The government’s response, though, could lead to a true
black swan : a low-frequency, high-impact event that no one sees coming. And it could be that the Fed will be
forced to jack up interest rates at a speed not seen since the 1980s . Even the perception of
such actions could spook bond markets .
That scenario would make interest payments the federal government’s largest single
expenditure — bigger than Social Security ($916 billion in 2016), defense ($605 billion) or Medicare ($594 billion).
What’s more, if the Fed and the European Central Bank respond to runaway inflation with accelerated large
interest rate increases and the expedited removal of monetary stimulus, it could turn current all-time-high
markets to years of lows in the space of a few months .
It was back in 1996 when the yield on the 10-year U.S. Treasury note last traded at these levels, and the sky did not fall. Moreover,
the economy in the ’90s is generally regarded as emblematic of the “good times.” So why would a sudden return to these levels be
such cause for concern?
For starters, the national debt is now more than four times as large as it was in 1996 — $20 trillion and growing, compared to just
under $5 trillion. While some of the national debt is essentially made up of IOUs that the government owes itself, the vast
majority consistsof debt on which the federal government must pay interest . That means as
interest rates rise, the federal government must pay more to service the debt. With more debt than ever
before, the associated costs with higher interest rates are astronomical.
At the very least, monster interest payments would cause massive disruptions in global
financial markets , exacerbated by the lofty valuations markets have achieved in the past several years.
But a more radical black swan may glide into view. As
high interest rates paralyze[constrain] the U.S.
government and corporations by exponentially increasing debt-servicing costs, the U.S. Treasury may see no other
option than to relieve the Federal Reserve of its rate-setting authority , take over that function
itself and enact a 2.5 percent cap on 10-year U.S. Treasury notes to release fiscal pressure. Such a move
would mean an end to more than a century of independent Federal Reserve policy and bring a new paradigm to
the world financial order . The unintended consequences of price-of-money controls could
cause the American — and global — monetary systems to dissolve .
AT: Stock Alt Causes
The correction won’t become a crash at current rate levels, but rapid inflation and
hikes change that
Larry Elliott 2/6/18, Larry Elliott is the Guardian's economics editor and has been with the
paper since 1988, “Stock market fall looks like a correction, not a crash,” The Guardian,
https://www.theguardian.com/business/2018/feb/06/stock-market-fall-correction-crash-
shares
This was the first big share price fall of Donald Trump’s presidency and there was a notable
absence of tweeting from the White House boasting about how Americans had their president to
thank for booming stock markets. Instead, there was talk of bubbles being burst following a rise
of more than 40% in the Dow Jones industrial average since Trump defeated Hillary Clinton in
November 2016.
So far what has happened amounts to a correction rather than a crash. The 1,100-point
drop in the Dow Jones sounds like a lot but in percentage terms it amounted to a decline of less
than 5%. On two consecutive days in October 1929, the Dow plunged by first 13% and then 12%.
The record one-day fall for the Dow was a 508-point drop in October 1987, which wiped more
than 20% off the value of the US’s leading companies. That was a crash, albeit a brief one.
Shares were down sharply at the start of London trading but after a 3% drop the FTSE 100
recovered a bit of the lost ground and closed 193 points down on the day. Wall Street opened
more than 500 points lower but, like the London market, steadied as morning trading wore on.
Why are markets down? In part, because they have gone up too far too fast and were ripe for a
fall. More importantly, it is because central banks have supplied copious amounts of money to
the markets at ultra-low interest rates. In recent days, investors have looked at rising bond
yields, higher wage growth and dearer commodity prices and started to fret about something
that has not concerned them in recent years: inflation. They have woken up to the possibility
that the Fed might get more aggressive in removing the stimulus provided since the collapse of
Lehman Brothers in September 2008.
AT: Collapse Inevitable
The economy can sustainably grow for years on its current trajectory because
inflation will stay manageable---unexpected inflation causes Fed tightening which
is the only thing that can collapse the global recovery
Chris G. Christopher 3-1, executive director of the U.S. Macro and Global Economics practice
at the research and analysis firm IHS Markit; and David Deull, senior economist at the
economic research and analysis firm IHS Markit, 3/1/18, “Economic outlook improves
worldwide,” http://www.supplychainquarterly.com/topics/Finance/20180301-economic-
outlook-improves-worldwide/
The recovery from the financial crisis of 2008-09 is finally expanding beyond a few national
economies .
Until recently, the recovery from the global financial crisis of 2008-09 was one of the most disappointing seen in the
postwar period. Even as late as last year, many economists were convinced that the world had entered "secular
stagnation"—a permanent downshift in economic growth. The anemic global recovery was powered primarily by
moderate growth in only a few economies, including the United States, the United Kingdom, and Germany.
For its part, economic growth in the U nited S tates continues to strengthen. U.S. gross domestic product (GDP)
grew at a 2.6 percent annualized rate during the fourth quarter of 2017, and the pace of inventory building was well
below the sustainable level, which means that inventory investment will likely boost
growth in the near term . In addition, employment markets are strong: job growth remains
brisk, and average hourly earnings have accelerated , which bodes well for domestic consumer demand. Finally,
the trade value of the U.S. dollar dropped at the beginning of the year, improving the outlook for U.S. exporters.
The near-term U.S. outlook has also strengthened thanks to the Tax Cuts and Jobs Act (TCJA), which,
among other things, cuts personal taxes through 2025, allows full expensing of equipment through 2022 and partial expensing
through 2026, and permanently reduces the corporate tax rate from 35 to 21 percent. Although there will likely be some
payback when these provisions expire and the government faces a tighter fiscal situation, over the next
couple of years, at least , the TCJA should result in increased personal income , which
will further spur domestic consumer demand . Taken together, these improved conditions have caused IHS
Markit to raise our forecast for U.S. growth in 2018 to 2.9 percent, which would beat each of the two previous years.
While the previous stages of the recovery were largely based on growth in a small number of countries, worldwide
economic
growth in the past year—the biggest improvement since 2011—was built on broader foundations . In
particular, the economic prospects of the eurozone and Japan (shown in Figure 1), and some large emerging
markets, such as Russia and Brazil, have turned around.
We estimate that the eurozone economy expanded 2.5 percent in 2017 to achieve its best year of growth since 2007. Labor markets
in Europe continue to improve; with inflation falling back in recent months, the weak wage growth that has been seen in some
countries will take less of a toll on real household incomes. The European business climate is likely to remain favorable, and a still-
competitive euro should help exports, although political uncertainty related to Italy's elections, the possibility of Catalonian
independence, and ongoing Brexit negotiations remains high.
As of the third quarter of 2017, Japan had experienced its longest stretch of economic growth since 2001. As a consequence, Japan's
unemployment rate fell to a 24-year low of 2.7 percent in November. And despite major structural challenges that are likely to drag
down growth in the medium run, the Chinese economy is still showing resilience, with retail sales, exports, and housing starts all
making strong showings at the end of 2017.
As the United States' outlook has improved, that of its northern neighbor has, too. The Canadian economy likely roared ahead in
2017 at a 3 percent rate, and given advances in the labor market and a resilient housing sector, domestic demand looks likely to
maintain much of its momentum. Output continues to trend upward, consumer sentiment is climbing, and Canada's consumers do
not seem bothered by existing debt burdens.
The outlook for emerging markets continues to improve as well. Commodity prices are still rising strongly, which has stabilized the
economies of commodity exporters, and the fall of the U.S. dollar is removing a major source of downward pressure on the
currencies of developing economies.
Whereas much of the global economic recovery had been characterized by strength in a few key countries, global growth is
now becoming more harmonized . Consequently, world growth is likely to remain robust for at least
most of the coming year and probably through 2019 . Interrupting this global expansion would
require a large shock . Recently, U.S. and international equities markets have been hit with a wave of
selloffs and volatility,
but market declines of 10-20 percent are not unusual ; historically, they occur
every two or three years. On their own , these declines should not be enough to trigger contraction
in the broader economy .
Emerging price pressures on supply chains?
For years, the slowness of the economic expansion kept inflationary pressures at bay . But now that
prices have gained traction, inflation anxiety is on the rise . The 10-year break-even point—a measure of inflation
expectations based on the U.S. bond market—rose 2.0 percent for the first time since last March. These inflation expectations fell to
around 1.7 percent last summer but rebounded sharply in January of this year. With U.S. growth strengthening and the
unemployment rate expected to approach 3.5 percent in the next couple of years—well below most estimates of "full employment"—
inflationary risks are overwhelmingly on the upside. Japan, Brazil, and India are seeing a quickening of inflation as well. The major
exception is the eurozone, where the indolence of prices can be attributed to a strengthening euro and still-significant slack in the
labor market. Commodity prices, as measured by the IHS Markit Materials Price Index, have risen steadily since early November
2017 and, although they have begun to slip a bit, still stand at close to their highest level since November 2014. (See Figure 2.)
What does this mean for inflation? Despite the rally in commodity markets at the end of last year, IHS Markit
expects commodity prices to remain within a moderate range. Recent price increases in many
sectors are the result of attempts to control supply or of special factors that have disrupted supply chains,
such as China's effort to improve air quality and limit waste-material imports. Additionally, in the last week of January commodity
markets saw their first decline in 12 weeks.
Still, a sharper-than-expected hike in inflation rates could interrupt the
trajectory of economic growth and disrupt global supply chains . If central
banks tighten more aggressively than financial markets expect , the damage to
confidence and the expansion could be substantial .
The next year could be a turning point for many of the world's major central banks, including the European
Central Bank and the Bank of Japan, which will take their feet off the accelerator and may even start to touch the brakes. After raising the federal funds
rate by 25 basis points at its December 12-13, 2017, meeting (an expected move), the
U.S. Federal Reserve Bank's Open Market Committee is
poised to hike interest rates three times in 2018. IHS Markit believes that the Fed will raise interest rates in March. This
means that short-term interest rates will be a little higher for the next couple of years, but that inflation is
the next year to derail the global recovery . In short, the global economy is open for business—and we should
have at least a few good years ahead of us .
AT: Plan Solves
No offense ---- there are no macroeconomic benefits to wage increases now
---consumer spending is high despite low wage growth
Lucia Mutikani 17, Reuters Correspondent, 7/28/17, “U.S. economy speeds up in second
quarter, wages continue to lag,” https://www.reuters.com/article/us-usa-economy/u-s-
economy-speeds-up-in-second-quarter-wages-continue-to-lag-idUSKBN1AD0GX
A resurgence in consumer spending accounted for the bulk of the pickup in economic
growth in the second quarter. Consumer spending, which makes up more than two-thirds of
the U.S. economy , grew at a 2.8 percent rate. That was an acceleration from the 1.9 percent pace logged in the
first quarter.
But with wage growth remaining sluggish despite the labor market being near full employment, there are concerns that consumer
spending could slow in the third quarter.
In a separate report on Friday, the Labor Department said wages and salaries increased 0.5. percent in the April-June period after
accelerating 0.8 percent in the first quarter.
They rose 2.3 percent on a year-on-year basis. There were, however, strong wage gains in the information, finance and natural
resources sectors.
Slideshow (2 Images)
“A tightening labor market ought to put upward pressure on wage rates, but employers are likely to resist increases as long as they
can, given the state of productivity,” said John Ryding, chief economist at RDQ Economics in New York.
Inflation was subdued in the second quarter. The Fed’s preferred inflation gauge, the personal
consumption expenditures (PCE) price index excluding food and energy, increased at a 0.9
percent rate.
That was the slowest rise in more than two years and followed a 1.8 percent rate of increase in the first quarter.
The gross domestic purchases price index, another measure of inflation pressures in the economy, increased at a 0.8 percent rate
after advancing 2.6 percent in the prior quarter.
Businesses helped to carry the economy in the second quarter, with spending on equipment
jumping at a rate of 8.2 percent, the fastest in nearly two years. It was the third straight quarterly increase.
AT Spross (No Link)
Even if this evidence is right, perception of possible massive inflation increases
will cause fed to increase rates – that’s the 1nc evidence
Concludes the plan causes wage growth & fed will respond with rate hikes
Spross 17 – Jeff Spross, economics and business correspondent at TheWeek.com (“This radical
money policy would easily pay for Bernie Sanders' Medicare for all,” The Week, September 18th,
http://theweek.com/articles/724863/radical-money-policy-easily-pay-bernie-sanders-
medicare-all)
Despite eight years of recovery from the Great Recession, the U.S. economy remains in a
very deep hole . No one really knows how deep. But there's good reason to think the annual
hole is still well in excess of $2 trillion . In other words, the economy could probably absorb
$2 trillion in new money every single year without sparking inflation . That's right around
Medicare-for-all's public shortfall.
Now, it would still be prudent for Sanders to match some of the new spending with new taxes
because as the economy improves, there will be less wiggle room to spend. But he hardly needs
to match all of it. Reasonable assumptions suggest his plan would already result in a bit over $1
trillion in new revenue.
Furthermore, once Sander's maximalist opening bid has gone through the legislative bargaining
process, it will almost certainly include some cost-sharing, more limited coverage, and an initial
squeeze for providers. All of which would bring that $1.9 trillion figure down. (Adopting Canada
or Britain's cost-sharing levels would knock at least $250 billion off the federal price tag all by
itself.) So now we're only adding $500 or $600 billion in new deficit spending, and quite
possibly less.
Now, all that new deficit spending ought to stimulate the economy, bringing us
closer to maximum output . And at maximum output, we really should try to match all
spending with tax revenue. But how long would it take before dropping that extra money into a
$2 trillion (or more ) became unsustainable? It's unclear. There are a lot of forces pushing the
economy up and down at a given moment, and we've already been deficit spending
hundreds of billions annually for many years with little inflation to show for it .
[Harvard Card Ends]
There are a few things to keep in mind, however: As the economy improves, tax receipts go up
due to higher incomes, and the deficit closes to some degree even without Congress altering tax
law. Plus, hiking taxes when the economy is going gangbusters will be much easier politically
than it is now. Finally, tax hikes aren't our only option for keeping the economy from
overheating. The Federal Reserve could also hike interest rates . It isn't ideal, but it makes
much more sense — and is far less damaging — when the economy is at full steam.
Reject the Spross evidence --- it just asserts that there’s 2 trillion of slack in the
economy with zero data --- slack disappearing from economy due to mild inflation
Richard Turnill 11/27, BlackRock’s global chief investment strategist, Goodbye reflation, hello
inflation, https://www.blackrockblog.com/2017/11/28/goodbye-reflation-hello-inflation/
The U.S. economy is poised to eliminate its post-crisis slack. We see a return of mild price
pressures keeping the Fed on track to lift rates further. Richard explains.
The U.S. economy is shifting from reflation to inflation—and we have greater confidence in
inflation returning to its medium-term trend and the Federal Reserve’s (Fed’s) target. Better
wage growth and potential fiscal stimulus should cement this transition.
Investors are slowly waking up to an outlook of mildly higher U.S. inflation am
id a backdrop of solid economic growth. This year’s surprise was better-than-expected growth
coinciding with cooling inflation, partly due to one-off factors. We see that changing in 2018 as
the U.S. economic slack created by the deep 2007–09 recession disappears. The market pricing
of higher Fed rates has shifted up, yet the chart below shows it remains well below the Fed’s and
our own outlook. We believe the Fed is on course to increase rates in December and match its
projection of three increases next year. We see the potential for four rate rises in 2018 if growth
gets a boost from fiscal stimulus.
2018 is likely to see an important transition in the U.S. economy. We see economic slack mostly
disappearing as the labor market strengthens and the expansion motors on. Inflation
expectations were dented this year due to the surprise slowdown, tied to major one-off drops
and moderation in some categories such as housing. Yet we see inflation expectations firming up
as prices climb at a gradual pace. We launched the BlackRock Inflation GPS earlier this year to
help cut the noise on prices. The Inflation GPS is consistent with core prices climbing back
toward the Fed’s 2% target. The October Consumer Price Index supports the signal from the
Inflation GPS. Still, we believe structural factors—including the role of technology—should keep
price pressures in check.
AT: Aging Crisis
No economic impact to aging crisis and increases in productivity are inevitable and
solve
Lincoln Caplan 14, Visiting Lecturer in Law and a Senior Research Scholar in Law at Yale Law
School, 7/18/2014, “Baby, it’s you: Why boomers are an economic boon”, WTTW,
https://www.pbs.org/newshour/nation/baby-boomers-economic-boon
The dependency ratio is only occasionally mentioned in debates about public policy, but its premise — that the growth in the
ratio indicates how greatly baby boomers will burden the rest of society — is shaping some of the
most consequential debates in the United States today: about the size of the federal government, about how
government expenditures should be allocated, and about the nation’s financial viability in the next generation. ¶ A demographic
tool has become an economic one, treating a demographic challenge as both an economic crisis
and a basis for pessimism justifying drastic reductions in bedrock government programs, including those supporting
children and the poor. Even at state and local levels, the aging boomer demographic is repeatedly
blamed for our economic difficulties. That is a lamentable mistake . The United States has serious
economic problems, and the aging population poses significant challenges, but those challenges are not the main cause of the
problems. They should not be treated that way. ¶ The dependency ratio does not justify the solutions that
the
alarmists propose. Just as important, perhaps, it fails to account for the striking benefits
accruing from the dramatic increase in life expectancy in the United States during the 20th century –
what the MacArthur Foundation’s Research Network on an Aging Society called “one of the greatest cultural and scientific advances
in our history.”¶ Although the concept of the dependency ratio dates back to Adam Smith’s 1776 “The Wealth of Nations,”
remarkably, there seems to be no published history of the concept as it is used today. The inclusion of young people over the age of
14 in the productive segment reflected in the traditional ratio suggests that it was developed in the 19th century, when America’s
farm economy still required their help. But as late as 1933, in “Recent Social Trends,” a vast and definitive statistical portrait of the
United States in that era, the dependency ratio was not referred to or used. ¶ By the 1940s, however, the ratio became a regular tool
among the different measures the government employed to describe the state of the nation and to project what it would look like in
the future. Although no group was spared in the Great Depression, older Americans were especially hurt. Social Security was the first
national program to ensure that Americans 65 and older would have at least a minimum of income to pay for food, clothing and
shelter. That program, which became law in 1935, started to make monthly payments in 1940. Social Security’s large scale required
the government to anticipate how many Americans it would cover, which made the dependency ratio, and the old-age ratio in
particular, an important demographic measure.¶ The U.S. government has been calculating what it calls the economic dependency
ratio, which includes in the productive segment people who are still working after the presumed retirement age of 65. In 2010, it was
22 percent of men that age and older and 14 percent of women and, by 2020, it is projected to be 27 percent of men and 19 percent of
women. Even that ratio is crude, but it is less crude and more accurate than the traditional old-age dependency ratio. ¶ “…our society
has chosen to regard older people as a burden when age alone does not make them so.” ¶ Still, the revised calculation does not
address fundamental concerns that scholars have raised in the recent past. They have criticized the dependency
ratio for its blatant oversimplification of reality and for its ideological bias. In 1986, sociologists
Toni M. Calasanti and Alessandro Bonanno described the bias as the “social construction of the elderly’s obsolescence.” They meant
that our society has chosen to regard older people as a burden when age alone does not make them so. Age is accompanied by
decline, but different people decline in different ways. A person’s race, ethnicity, wealth, and level of education are often better
predictors of that decline than age.¶ Sociologist Donald E. Gibson wrote in 1989 that “it has become commonplace to predict or
assume that demographic trends will lead to an economic crisis in the third or fourth decade of the next century.” He went on: “ All
current versions of the dependency ratio, however, share one important deficiency.” They fail
to take account of economic productivity , and how improvements in productivity lead to
progress through increases in income and in “the country’s capacity to support people.”¶
Projections in the 1980s of an aging crisis rested on the assumption that, in the subsequent half
century, the American economy would perform poorly and produce little improvement in real income. In fact,
between then and now, real income has grown somewhat more than was predicted, with dramatically unequal distribution. (The rise
in real income for nine out of 10 Americans has been slight. The rise for the top 10 percent has been much higher — and higher still
for the top one percent.) Gibson’s point was more fundamental, however. “Very often this assumption is not explicated,” he wrote.
“Not to do so is to present an economic problem as a demographic problem.” ¶ In a similar argument last year, economists Ronald
Lee at Berkeley and Andrew Mason at the University of Hawaii criticized the dependency ratio for being “incomplete and
misleading” and for exaggerating “the adverse impact on the macro-economy of population aging,” because it does not reflect that in
the United States the elderly “rely heavily” on income from their own private wealth to support them — in economic terms, to pay for
their consumption.¶ In general, Lee and Mason reported, “Net transfers from the working age population,
mostly through the public sector in the form of Social Security benefits, Medicare, and Medicaid,
make up only about 40 percent or less of funding for consumption .” As a result, the aging of the U.S.
population will mean an increase in the number of older people who are only partially dependent on the government, not wholly
dependent, as the dependency ratio assumes.¶ By contrast, Lee and Mason assume that the increasing number of elderly
boomers in the United States will arrive at old age having accumulated assets similar in amount
on average to those who are currently elderly. More older people per capita will mean more
assets per capita. These assets will generate national income, boost productivity, and contribute
to a future justifying a more optimistic outlook rather than the pessimistic one t hat the ratio is used to
justify.
AT: Salzman
The global economy is kicking ass now---fears of slow growth or recession should
be conclusively discounted and current inflation is manageable---the only thing
that can collapse global recovery is fast wage growth in the U.S. prompting
aggressive monetary policy
Tim Wallace 3-14, the Telegraph's Senior Economics Correspondent, 3/14/18, “Boom is back:
world economy to put on strongest spurt since before the financial crisis,”
https://www.telegraph.co.uk/business/2018/03/14/boom-back-world-economy-put-strongest-
spurt-since-financial/
Edited to change the weird way British people express percentages
Global economic growth will rise by more than 3pc[ 3% ] in three consecutive years, in a
performance not seen since the years leading up to the financial crisis.
Fears of permanently lower growth will be swept away by the prediction from analysts at Fitch Ratings.
And the economists do not think this will lead to a surge in inflation which would require
sharply higher interest rates, potentially casting the world into recession – suggesting the
world economy is in a sweet spot and can sustain the healthy performance .
“World growth forecasts have been upgraded again as the eurozone recovery powers ahead, US
fiscal policy is eased by more than anticipated and higher commodity prices underpin the emerging-
market recovery,” said Fitch.
Confident companies in advanced economies are investing more, strong jobs markets are
boosting consumer spending and even choppier financial markets do “not look like a signal of
rising recession risk”.
“The balance of inflation risks has clearly shifted – cementing the move towards normalisation by the world’s
major central banks – but Fitch does not foresee a disruptive outburst of inflation that would
prompt sharp, growth-negative monetary policy adjustments in 2018,” the analysts said.
Fitch now estimates GDP growth hit 3.2pc last year and will come in at 3.3pc for 2018 and 3.2pc for 2019, up from 2.5pc in 2016 and
an average of 2.8pc over the past four years.
Britain’s growth is predicted to slow from 1.7pc in 2017 to 1.4pc this year before bouncing back to 1.7pc in 2019.
This is expected to result in one interest rate hike this year and two next year, as the economy is deemed to be close to full capacity.
Globally, Fitch said “central banks are becoming less cautious in their approach to normalising monetary policy as labour markets
tighten and spare capacity disappears.”
The economists predict four interest rate hikes in the US this year as growth stays strong , while the
European Central Bank is gradually moving towards tightening – which could mean a rate rise in late 2019.
Although Fitch does not expect a sharp rise in rates it does acknowledge this is a
key risk to world growth .
One threat is “a sharp pick-up in US core inflation, prompting Fed tightening on a much more
aggressive scale than assumed in the forecast, and a major global interest rate shock ,”
the report said.
“A rapid pick-up in wage growth in the context of increasing labour shortages would be the most
likely catalyst for this . This would be growth negative .”