Universal Pre-K FTW!

I was psyched to see President Obama endorse the idea of universal pre-K last night, since that seems to be something the education profession believes could make a huge difference in student achievement all through life. That’s especially the case when it comes to learning self-command skills.

Naturally this will be a contentious because one of our two major political parties is controlled by anti-tax radicals, but like health care and old age pensions, it is a fight progressives can win eventually, and the real significance was mainly that Obama put it on the agenda for the future.

It’s a reminder too that reducing health care costs will free up more money for Big Government. If we could stop spending 18% of our GDP on health care, by bringing US health care providers’ prices into line with what they are in other developed countries,  then we’d have a lot of extra money around to pay for universal pre-K, or more generous Social Security benefits, or more generous family leave policies, and all the rest. The liberal project of cradle-to-grave public services is kind of stalled until we do something about health care prices.


  1. Actually, since Obamacare is a revenue generation program and not a cost reduction program, there will not be extra money laying around looking to be spent.

    Please dont’ tell me that Obamacare will reduce the deficit and that’s your extra money. There are two rebuttals to that – 1) it won’t; and 2) Everyone agrees that Obamacare will result in increased federal spending. That you believe it reduces the deficit only means we’re borrowing less, not that “there’s extra money lying around.”

    I also find it interesting that you believe that if there’s any extra money lying around that it needs to be spent by the likes of you instead of being kept by the people that earned it to begin with.

    • CBO says it reduces the deficit. That is not some lefty organization, they also estimated Iraq War costs at 10% of what they were. In fact they said it was deficit reducing in 2010. Now? Even better: http://www.forbes.com/sites/rickungar/2013/02/12/new-data-suggests-obamacare-is-actually-bending-the-healthcare-cost-curve/

      • Rich I don’t believe it will reduce the deficit over the long term. I also don’t pay any attention to 10 and 20 year projections as too much can happen over that length of time.

        Have you been keeping up with the IRS and CBO revisions on who is covered, how much coverage will cost, and what the impact to state budgets will be? They’re already substantially different than they were even a year ago, much more expensive with millions less being covered. This isn’t working as advertised.

        And as you also know, Obamacare front loaded revenue and back loaded expenses, so of course it looks great now when the expenses don’t start in earnest until 2014. Talk to me after we start paying for all this stuff.

        And having said that, even if it does reduce the deficit, all that means is we’re borrowing less. It doesn’t mean there’s a “alot of extra money around” waiting to be spent.

        • I’d argue there’s a ton of money lying around now. People buy our bonds like it’s going out of style, and the interest rates are near zero.

          I don’t believe the sky is blue, but it is. CBO is usually reliable (Iraq example aside), and they’re the non-partisan guys who judge this stuff. They said it would lower the deficit. Absent someone showing why their work is wrong, and not just disagreeing with it, there’s no reason to doubt them. That health spending is already down is even better.

          I see no way this doesn’t lower the deficit. You have more people covered, saving money for other consumers. Paying up front for someone to get care is cheaper than paying for them in the emergency room, already ill, and uninsured. If you have a basic understanding of how insurance works, you realize that it doesn’t matter how you manage to cover everyone, you just have to cover everyone. It almost can’t fail.

          • Jon Geeting says:

            The current ultra low yields on Treasuries won’t last though. It’s a consequence of extremely weak growth. Once the growth rate picks up, our borrowing costs will increase. So I don’t think it’s a good idea to finance universal pre-K with debt. Doesn’t mean we ever have to balance the budget or anything. But it would be better, politically and on the merits, to identify a pay-for. PAYGO is a good rule, not least because it insulates our favorite programs from the deficit hawks.

        • Jon Geeting says:

          You’re wrong. If we get health spending down to like 10% of GDP, we don’t have a long term deficit problem. We have a surplus.

          • And if a frog had wings it wouldn’t bump its ass.

            That saying has about as much applicability in the real world as yours does. Never happen while you’re spending someone else’s money like a drunken idiot.

    • Jon Geeting says:

      Obamacare raises enough money from taxes to pay for the coverage expansion. It also created dozens of pilot programs that CBO can’t score, because nobody actually knows what technical and efficiency reforms will reduce health care costs. The idea is that the most promising ones will be scaled up, but that remains to be seen. What we definitely know works is the kind of price controls every other developed country uses, and if these pilot programs don’t turn out to do the trick, then we’ll have to do it the obvious way.

      Obviously we disagree about tax levels and the appropriate level of services, which is why you vote for Republicans and I don’t.

      • At least you finally recognize that Obamacare is a revenue generation model.

        Other countries use both price controls and rationing.

        We have never agreed about the appropriate level of services, we disagree in that I’d like to find a way to pay for it and you want to just borrow into oblivion.

  2. “People buy our bonds like it’s going out of style, and the interest rates are near zero.”

    Are large part of the bonds that are being bought are being bought internally by the fed and not outside sources such as China and Japan.

    • Jon Geeting says:

      Who cares?

    • Actually, they still buy from us too. If there has been any drop, that is less because of our deficits, and more because they can get higher interest rates in other places, and can afford the risk.

      Either way, if it’s the Fed or China, if our bonds are selling, they’re selling. It’s not like it “counts less” or something.

      • Rich when we’re monetizing debt it does count less. It artificially lowers rates which everyone on the planet except Jon acknowledges. Once that ends (and your vaunted CBO has stated often it has to, that the level of deficit spending we’re on is not sustainable) you’re going to see that increase in rates and it will be painful.

        • What we’re doing is selling bonds, which is something just about everyone does. It doesn’t matter much who buys them. Frankly as long as the global economy stays tepid at best, we’ll have a window to spend how we need to. Even if we have to stop, the only thing we really have to cut to be fine is the military right now, which is simple, if we had the political will on the right. We’re not running deficits on other stuff. It’s on defense and health care. We just began to address health care, and that shows that we’ll see savings. Whether it’s a revenue plan or not, if we bring in a bunch of revenue to provide insurance to people, it means less uninsured people passing their bills to us anyway, and it means healthier people costing less. Obamacare’s a winner either way.

          • Taking it on a very micro level, i can tell you that since Obamacare was implemented, my health care costs (company wise)have increased 15%.

            That is 15% i have less to spend on business improvements, salary increases etc. I laughed when Obama said that we are saving money on healthcare for the SOTU, because i do not know anybody in the business world that is.

            Regarding the massive printing and buying, John explains the main problem pretty well. Another problem though is the continued abuse of the US dollars reserve status in the world. You are already seeing nations move away from the dollar and performing transactions in commodities (oil/gold etc) and just in Nov, the IMF has started to look at Canada and Australia dollars as potentially being granted reserve status. When the US is not the only game in town status wise, there will be big issues on what the true worth of the dollar is and at what interest rates people will lend to us

          • Jon Geeting says:

            Check your baseline assumptions mang! Health care price inflation has been a problem and continues to be a problem. It’s not Obamacare causing the price increases. Premiums definitely would’ve gone up more in the absence of Obamacare.

            The true value of the dollar is whatever people are willing to pay for it on international currency markets. The price of the dollar needs to go down some more.

          • Jon, you’re right that the true value of the dollar is what a willing buyer is willing to pay.

            We’ll see what happens when the Fed stops its massive market intervention.

          • Jon Geeting says:

            What to you mean “stops”?

          • Funny, every time that i am up for renewal, the insurance providers point out the fee for the additional regulatory costs of Obamacare that they are passing on to us. Real world experience Jon, not something on politico.

          • Jon Geeting says:

            Oh I’m sure that’s what the insurance companies say is happening. That’s a politically palatable way for them to shift blame for the increases that were coming anyway.

          • What part of “stops” are you having trouble understanding? Too big a word for you?

            No one, not even that hack Kruger, believes this can go on forever. Your vaunted CBO has said time/again that it’s unsustainable as well.

          • Jon Geeting says:

            My point is that the Fed is always and all the time doing a “massive market intervention.” They are always directing the path of growth. There’s no such thing as a neutral Fed.

  3. A just to give a comment on Jon’s original comment on universal Pre-K. This is something i would actually support (and pay for) as i believe there is a direct correlation between early education and the cycle of poverty.

    You are never going to break the cycle of poverty via handouts and subsidies. You create lazy parasites to the system. Empowerment through education is what i feel the best way to get them out of the poverty cycle. I am sure it is better bang for the buck also as it is cheaper to beef up education on the front end vs. paying for them sitting in jail on the back end

    • Jon Geeting says:

      I think both are appropriate. Teach kids self command early on, and give poor people cash.

      • I’m a fan of early education, but we also need to break this belief that you can only succeed if you go to college. We have a huge shortage of skilled labor, good paying jobs. There needs to be a strong emphasis on filling that aspect of the labor market vs. for example, lawyers, which are the last thing we need.

        And Jon, you show all that is wrong with far left radical liberalism with one sentence. You’re not helping a poor person by giving them cash, in fact you’re hurting them. We need to break your party’s love of making people dependent on government and someone else’s money.

        When I was a kid, anyone who was on welfare or unemployment wanted off it in the worst way – it was a negative. Now it’s not only socially acceptable but we have created a society where people refuse to work if they won’t make substantially more than their unemployment check. That’s wrong and we have to stop.

        • Jon Geeting says:

          Actually, giving poor people money is the ultimate poverty fighting tool. The problem poor people have is that they don’t have enough money. Rightwingers always like to imagine they must really be having some other problem that causes them not to have enough money. But mainly it’s just the money. We don’t have to design all these paternalistic workaround programs that treat poor people like irresponsible children. We can just give them the money directly.

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