The Kansas-California experiment

In 2010 Kansas elected extreme conservative Sam Brownback governor and put Tea Party Republicans in charge of the legislature. Together they passed a program of deep tax cuts and spending restrictions that they promised would quickly lead to a massive economic boom and bigger tax receipts.

At the same time, much more liberal California elected Jerry Brown governor and gave Democrats overwhelming control of the legislature.

We should obviously be wary of inferring too much from the results of this experiment, given the small sample size and how different the states are. But it’s still interesting that since then Kansas has done so much worse economically than have similar neighboring states. Plummeting revenues forced the state to slash education and other spending, and the legislature finally had to raise taxes, over Governor Brownback’s vetoes, to prevent bankruptcy.

(Brownback is no longer in office, having resigned in January to become the Trump administration’s ambassador-at-large on international religious freedom, an appointment criticized by religious freedom groups and one that required Vice President Pence’s tie-breaking vote to confirm.)

California, in contrast, is in excellent financial shape, with moderate taxes, an $8.8 billion state budget surplus, and a gross domestic product that has recently passed even that of the significantly more-populous United Kingdom. If California were an independent country, its economy would be the fifth largest in the world. In first place would be the remainder of the U.S., followed by China, Japan, and Germany. (Russia, by the way, is in 12th place, with an economy smaller than Canada's.) For a list of countries by GDP see this link.

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The Congressional Budget Office projects a soaring national debt

In June the Congressional Budget Office released a report titled The 2018 Long-Term Budget Outlook. It projects a national debt larger than GDP by the late 2020s, just 10 years in the future. That hasn't happened since the 1940s

Worse, they project that it will climb to 152 percent of GDP by 2048, far higher than it has ever been in all of American history.

And worst of all, this is the optimistic scenario, one that assumes last year's tax cuts for very-high-income individuals are allowed to expire. The tax law made big cuts for corporations permanent, but made those on rich individuals temporary in order to get the bill through the Senata under fillibuster-proof "reconciliation" rules.

If the tax cuts are made permanent, as at least some Republicans in Congress advocate, the debt will expand even faster and total more. And obviously the debt would be much lower if the previous tax rates had simply been left alone to start with. Those rates were essentially the same as the ones in force during most of the 1990s, the longest period of economic expansion in American history. They were also the tax rates through most of the economic expansion that began under President Obama and is still continuing.

Last year Republicans rushed through their damaging tax cut bill by ignoring congressional norms for major legislation, without even holding hearings, and in a mad dash before seating the new Democratic senator from Alabama. I hope there are fiscally responsible Republicans left who now realize their mistake in believing the tax cuts would pay for themselves, a perennial claim that has yet to come true.

For a summary of the specific problems with the tax cut bill, see Paul Krugman's December 21 piece from The New York Times. See also this June blog post by Kevin Drum titled "CBO: Republicans Have Blown Up the National Debt Again."

As Drum points out in that post, the national debt grew at a faster rate under Reagan and the two Bushes than under Obama despite the fact that Obama took office with the economy in free fall and resorted to a deficit stimulus to ward off a threatened major depression. Under Clinton, of course, the budget reached record levels of surplus, allowing the dollar value of the national debt (not just the debt-to-GDP ratio) to be reduced for the first time since Lyndon Johnson's final budget. In fact, when Clinton left office, the debt was on track to be paid off in less than a decade. That dream was cut short by George W Bush's two rounds of tax cuts for the well off along with other things financed entirely by borrowing, such as the was in Iraq and a new Medicare drug benefit that was very helpful to seniors but was adopted with no notion of how to pay for it.

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A dental torture device that was new to me

The upper right side of my mouth started bothering me several months ago and I worried it might be the start of gum disease, but when I went to my dentist’s office for an already-scheduled regular cleaning, it turned out my gums were fine. I just had a cracked fillings in two of my teeth. Luckily they were able set up an appointment for me the following week.

That visit was pretty routine up through the drilling phase, but when it came time to put in the actual filling I got to experience something new. To prop my mouth open for comfort and convenience (theirs, not mine) they employed a complicated looking piece of clear plastic, slightly flexible but still firm (al dente and then some), that comprised two distinct sections. The front was a roughly box-shaped “bite block” that was jammed between the upper and lower teeth on my left side, opposite the work zone, to force my jaw open more or less like a python's. Growing out of the back was a sort of flexible vertical beaver tail, but sideways, as if the bite block were a beaver sleeping on his side. The tail crossed over to the right side of my mouth to keep my tongue out of the way. It also had tiny little holes in it so a suction hose plugged into the front of the apparatus could suck out saliva.

Now, this may sound petty unpleasant, but the reality was worse than you might imagine.

I bravely held on through the filling of the back-most remaining tooth on the upper right, which is number 2 as dentists count (clockwise from top left according to their viewpoint; this will be on the exam). When that was done I started gesticulating, first pointing at the evil plastic thing and then up and out, like Ralph Kramden reminding Alice where the Moon was. This proved sufficient to convey my meaning, and to their credit they did remove it pretty quickly. (Btw, the entrance to my dentist’s building has a sign indicating that firearms are not allowed on the premises. This may be why.)

Hero that I am, after some whimpering and moaning and recovering I valiantly let them stuff the vile thing back in, but not so far back, so they could fill number 4. This proved slightly less awful, and I survived. In the end it cost under $600, and my teeth no longer hurt.

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The worsening U.S. budget deficit

As Kevin Drum pointed out in a June 27 blog post, the head of the White House National Economic Council, Larry Kudlow, had just said on Fox Business that economic growth had reduced the budget deficit. In fact, the deficit did decline as the economy improved in the Obama years, but the deficit so far this fiscal year is actually worse than last year.

When Drum wrote his blog post, the Treasury Department had released the data only through April, so I decided to look at updated numbers (now including May) and also check the numbers for the individual months of April and May. It appears that Kudlow may have been talking about just the month of April, which was the latest available in late June when Kudlow made his claim. April tends to be in surplus because that's usually the top month for tax receipts, and April of 2018 had a larger surplus than April of 2017 -- $214 billion, up from $182 billion in 2017.

That's good, and it's possible that economic growth was a contributing factor, but it could also be a matter of when people made their tax payments. The cumulative total amount of the surpluses and deficits from the start of the fiscal year in October through April is less subject to short-term variation, and unfortunately that number looks worse for 2018 than for 2017. (You can find the raw data on the Treasury website here.)

The deficit was also bigger in May of 2018 than the year before, and the cumulative October-through-May deficit is also bigger this year than last.

In the table below the numbers are in billions of dollars. Positive numbers indicate a budget surplus (more coming in than going out) and negative numbers mean a deficit.

Fiscal Year Apr May Oct-Apr Oct-May
2017 +182 -88 -344 -433
2018 +214 -147 -385 -532
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Medical billing is just weird

I've had a fair number of medical bills since my car was read-ended at the start of June last year (2017). Every month my insurance company sends me an Explanation of Benefits (EoB), and I've been reading them. They are weird.

For example, last year I spent a fair amount of time seeing doctors and physical therapists, and over the busiest six months of this, the local medical empire billed a total of $21,779.25. But of that, my insurance company approved only $4,756.59. They paid $3,375.76 and I paid $1505.77. Notice that their share and mine together add up to $4,881.53, which is about $125 more than the approved amount. What was that, a tip?

On the other hand, one of my physical therapy visits was billed at $780.00, but the insurance approved only $121.94, and the total amount actually paid ($40 by me, the rest by insurance) came to $120.30, which is $1.14 short of the approved amount. There's no explanation of this that I can find in the Explanation of Benefits.

The biggest difference, of course, is between the amount billed and the amount approved. I suspect nobody actually pays full list price, even the uninsured. It may be there just to make patients think they're getting a bargain.

One more oddity: Several times recently I've received checks for modest amounts of money from the aforementioned healthcare empire. The accompanying statements indicate they are refunds, but don't say for what. I've have no idea, but that doesn't stop me from depositing them.

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I'm back

I've been sick, fortunately with nothing serious, but that and general business has cut into my time. But I'm going to try to start posting here again more or less regularly, for whatever that's worth.

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Immigration and crime

The Marshall Project, an independent nonprofit news organization devoted to researching crime and the criminal justice system, has released an interactive report on line examining the relationship between immigration (both legal and illegal) and crimes such as robbery, murder and assault. They assembled data from 200 U.S. cities and for the nation as a whole, and they provide graphs of immigration and crime rates that you can review for yourself here.

In brief, an overall increase in the number of immigrants since the 1980s has been accompanied by a drop in crime. Cities such as Oakland, California, have seen immigration nearly double while violent crime has fallen by more than half. The evidence here and in other studies pretty clearly contradicts the notion that immigration increases crime. In fact, other studies have found lower crime rates in high-immigrant areas and in so-called "sanctuary cities," and that immigrant populations on the whole tend to commit crimes at rates somewhat lower than the native-born population. (See this previous post on evidence that sanctuary cities tend to have lower crime and better economies.)

This of course doesn't mean that there are no criminal immigrants, or that the drop in crime is attributable mainly or entirely to immigration. Nationwide, including in areas with relatively few immigrants, crime has fallen a great deal since roughly 1990 for reasons that aren't clear and likely have to do with a combination of things. (See this post from last fall.) Kevin Drum has argued fairly convincingly that one major factor has been the reduction in lead in the air resulting from the switch to unleaded gasoline. Lead compounds can damage children's brains in ways that decrease impulse control, which in turns increases tendencies toward violent crime. For a summary of his evidence see this link.

Below is a 4-minute report from Sunday's edition of PBS NewsHour about the Marshall Project analysis.

(Incidentally, ignore the dumb thumbnail picture which, unless they've changed it, makes it look like an anti-Trump piece. It isn't. It's a straightforward report that mentions President Trump only in passing, because he has sometimes implied erroneously that immigration increases crime.)


Link: https://youtu.be/7RXs_1b-yJs

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Heart stents might be just a placebo

Pediatrician, author, and medical school professor Dr Aaron Carroll surveys the evidence that cardiovascular stents, which are intended to help keep clogged heart arteries open, may be no better than treatment with drugs alone. One reason this is surprising is that patients who get stents typically have a marked reduction in chest pain, but the research suggests this might simply be a placebo effect.


Link: https://youtu.be/5TjsRjLQk_E

Placebos -- sugar pills or sham treatments -- are especially good at reducing all sorts of pain, at least for a substantial majority of patients. A clever drug dealer might try selling fake opioids, which could benefit a lot of people with chronic pain, and if they get addicted to a placebo, that's not so bad. Actually, I've seen homeopathic drops sold for ear pain in name-brand pharmacies, which amounts to the same sort of thing. (Homeopathic remedies are substances thought to cause the symptoms they're supposed to treat, but diluted to such an extreme that often not one molecule of the original substance remains. There are people who really believe in this despite both hard evidence and common sense.)

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