It was conceived by a dead man, sustained by phantasmic means; it will never come to life and yet it cannot ever be killed. It is based on an unnatural supposition in order to benefit people who may never even use it. It is one of the centerpieces of the Obama administration’s health care program, something Washington insiders are calling “the zombie in the budget”. The best thing is about is that despite the fact that it doesn’t exist it will produce $80 billion of “savings” in the next ten years.
The creature is called CLASS, the Community Living Assistance Services and Supports program. The program was the brainchild of the late Senator Edward Kennedy, “who envisioned a voluntary, long-term care insurance plan sponsored by the government, without the overhead costs of private insurers, or the rigorous pre-screening they require”. It was like getting something for nothing, but there was only one problem. It required an endless supply of chumps to keep it going.
But a central design flaw dogged CLASS from the beginning. Unless large numbers of healthy people willingly sign up during their working years, soaring premiums driven by the needs of disabled beneficiaries would destabilize it, eventually requiring a taxpayer bailout. …
It’s a long-term care plan the Obama administration has put on hold, fearing it could go bust if actually implemented. Yet while the program exists on paper, monthly premiums the government may never collect count as reducing federal deficits.
There it remains; a program too caring for anyone to oppose, for beneficiaries that will never exist, running on a prospective basis that is too dangerous to implement and producing savings that are entirely illusory. What could be better? The best part is that is completely unkillable.
Why? Government needs to keep up the pretense of phantom savings to prevent a worsening in the deficit. If you don’t count the money you’re really not saving, then you might actually have to save money to replace the money you only imagine that you are saving.
Don’t expect CLASS to go away easily. If the congressional supercommittee tackling the debt decides to recommend repeal, the panel would have to come up with about $80 billion in other cuts — possibly real and painful — to offset the hypothetical savings from CLASS.
But the solution to the problem should be easy. All the government needs to do is to print more money. Anyone who has met a man afraid of pink elephants knows it is only a matter of giving him an equally imaginary pink elephant gun to allay his fears. If you’ve ever met a man playing solitaire with invisible cards, why sit down and and offer to engage him in a game of imaginary blackjack. It works every time.
All Ben Bernanke needs to is start up the presses and they can create whatever savings they want. They will be as real as the one provided by CLASS. It really isn’t hard to be a superlative public policy wonk. You just need imagination.
Back in 2008 I remarked that the financial crisis was really a crisis of information. There are two sets of interest: There is the set of real goods and services and a set of enumerators that is placed in correspondence with it. The first we may call the “real world”. The second is the financial world. It consists of money and financial instruments of all sorts.
Claims on things on the real world are calculated by manipulating the financial notation. We don’t actually cart real world things around. We send people financial instruments, whose operations are such that if everything cleared, all the objects in the real world including expected but (real) inflows from the future would be accounted for. Thus, if you spent all the financial instruments in the world they would clear against all the objects in the world. When the smoke cleared it would all even out: you would own what you were supposed to own and be able purchase what the money said you could purchase. All would be right on heaven and earth.
Except that now our set of enumerators is all screwy. The system won’t clear and the keepers of the books know it. If it were allowed to clear then the wrong entries would have to be written down, which means that people who are “rich” according to the enumeration will actually be very poor or even in debt. While it would make perfect sense to conform the financial world to the real world, such an adjustment would create political havoc. Too many important people would suddenly stop being important. That would cause a revolution and the keepers of the books know it. So to “fix” things, a background process is entrained to gradually re-equilibrate the system.
This is called deficit reduction and it is like pulling teeth. Every effort will be made to ensure that spending isn’t cut, borrowing is not limited and deficits are not increased. It’s impossible, but when your goal is not to rile up the powers that be, then don’t step on any toes. Keep the fiction going, and going, and going while the real adjustments go on just under the surface.
This “fix” consist of many little nips and tucks from here and there so that the ordinality of the system is preserved. In other words the ideal solution is to maintain the fiction until by means various it can be made into fact. Until the people who are supposed to be rich really are rich. And the people who should borrow can really borrow.
The problem is that always pits fiction against fact; the system will only be solvent in the future after the fix. And the fix is really a form of retail robbery, but as long as nobody notices …
For the present it is bankrupt should it be made to clear. What we are watching is the fancy footwork of the fictionalists trying to keep one step ahead of the facts. It is marvelous to behold, like the Thriller dancers in the video their caperings are antic. But how long can the bankrupt system keep covering up its tracks, keep kiting its checks, keep borrowing from part to pay off the other part?
That’s what we’re about to find out.
Storming the Castle at Amazon Kindle for $3.99
It’s just another reason to repeal ALL of Obamacare…think of the savings!
Whn did our government transform from a mighty and superlative form of government, unequalled in human history, into the pathetic hoax we see today?
I missed something. I thought opposition was building to CLASS, and wasn’t aware that it was “unkillable.”
Western social democracy finds itself in the monkey trap- the monkey puts his hand through the hole to take the bait, but then can’t his hand out. He won’t give up the bait though, and loses everything.
*Theoretically* we have the ability to deal with political and social problems of a grand scale without violence or chaos, but how is that going to happen?
Teddy was a genius. The logic is irrefutable. If you create a program that will cost 80 billion dollars and you don’t implement it, then you have reduced the debt by 80 billion dollars. And if it does get implemented and nobody pays into the system, then our grandkids will have to pay for it. What’s wrong with that?
Well Teddy was a leprechaun
A pot of gold on every lawn
Though when you look it’s always gone
Just some more sleight of hand
With faeries dancing in the mist
The bureaucrats prepare their list
We’re saving billions they insist
Just join the piper band
No one pays in, but that’s okay
We’ll put that off another day
Our innocent grandkids will pay
That’s how the whole thing’s planned
It matters not that we’re in debt
Or how deep in the hole we get
There ain’t a lefty we have met
Who won’t think this is grand
#4 Thrasymachus- “without violence or chaos ,how is that going to happen?” Good question. My feeling is that isn’t going to happen. Now we’re dealing with dopey little
idealists. Wait until closer to next November when the radicals turn the thugs loose. Then it gets ugly.
@2. I have yet to nail down what the hoax means. There seem to be several layers of hoaxes, but only the visible ones look sinister to me.
Unless they seriously blunder or somebody fills us in, perhaps we can only have faith that the highest powers under God are doing something good with the earth, whether we like it or not, and we should relax.
OK, Now I get the ruse. Pretty good scam, worthy of a chapter in Gulliver’s Travels. The biggest such smoke-and-mirrors flim/flam is the notion that, because we’re drawing down (cutting and running) in Iraq and Afghanistan, we’re going to reduce the deficit by $1.1 trillion in the out years.
Morton Doodslag @ 2: When did our government transform from a mighty and superlative form of government, unequalled in human history, into the pathetic hoax we see today?”
An excellent question. Clearly, the deterioration has been “progressive” over time. If we had to fix a date for the start, my first thought was the 1970s decision to follow up NASA’s successful Apollo program with the “reusable” (progenitor of “renewable”) Space Shuttle. The beginning of the process of committing irreplaceable resources to wishful thinking rather than to realism.
But on further consideration, we have to go back to President Wilson’s ill-advised decision in 1917 to commit the US to supporting French & English imperialists in the ongoing European War. The rot started there, empowering the Europhiliacs & communists and leading to the uncontrolled (and unsustainable) expansion of centralized state power.
Not to worry. The problem is self-correcting. But the resolution process is going to be very hard on hundreds of millions of human beings.
I am sure they can find some 80G$ to cut. I would start by shutting down the Departments of Education, Transportation, and Housing.
9. Kinuachdrach
Wilson was pro-German, to a very large degree. Read his PhD thesis.
We entered the war because of Zimmerman. Period.
Wilson had to entirely flip-flop his prior positions — and eat plenty of crow, too.
Wilson has many, many faults… but entry into WWI against Germany was not of his doing. He literally couldn’t stop the flow of events anymore.
The ONLY solution for the national budget is to lift retirement ages — and for public servants, too.
Only innumerates — which dominate the Democrat Party — can’t figure that out.
Creating a budget and living by it is extremely difficult. Making up numbers to game the system is corruption and should be punishable by a public execution. I recommend that Barney Frank and Chris Dodd go to the head of the line. It would be good for morale.
I still say that there are only two ways to solve the cost problem. Both are “Modest Proposals.”
1. Ban all medications, instruments, diagnostic tools, treatment techniques, and knowledge that was discovered or invented after 1964. Make the start date the same date Medicare was enacted. Then we can get all costs back to 1964 levels. Think of the money that would save.
2. Alternatively, we could simply kill everyone over age 80 who contributes less in taxes than they consume in services. The age can be adjusted as needed. Jonathan Swift would smile. This would not only solve the health care “crisis” but would also take care of the Social Security shortfalls.
They’ll pass some small insignificant rule, some hidden tax, and it will be like Mr. Creosote’s final mint. It will be an explosion/implosion so fast and large that they can’t print enough money fast enough to keep the farm implements out of their behinds.
“But the solution to the problem should be easy. All the government needs to do is to print more money.’
I think that is precisely what they will do. It is the political path of least resistance. No need to cut spending or raise taxes and upset the electorate. Just print money.
And if inflation begins to rear its ugly head from the increasing supply of money, that will be the fault of Big Oil, Wal-Mart, Greedy Industrialists, Bankers and whomever else is guilty of raising prices.
Wait and see. It will work for a while longer.
b @ 14: excellent modest proposals, though we might fiddle the numbers, age 80 life expectancy is a mismatch for 1964 technologies. maybe something with a lot of 69′s in it would make a good campaign slogan, let’s see Michelle Bachmann find the devil in that!
Problem is the numbers just plum don’t work for CLASS – or medicare even without Obambus making it worse. Obambuscare is very big on collecting premiums for X years before the first benefits, which will then run in the red for Y years – and then go broke. In those terms, a Ponzi scheme is more reliable, they tend not to have clear drop-dead dates, just ask Madoff or FDR.
Obambus was whining today about his “jobs” bill being killed by those wascally wepublicans who are against more jobs for teachers yada yada. Like a working stiff goes to the Cadillac dealer and looks wistfully at an Escalade, and the salesman starts berating him for not buying, because of all the fine craftsmen who were depending on his purchase, has he no heart?
It’s like being lectured by your five year old for not keeping an unlimited freezer full of ice cream so you can all live on it.
… but I thought that the CLASS thing was scuttled quietly a few weeks ago. No?
CLASS has functionally hidden information. As such, it fulfills Claude Shannon’s definition of entropy: information that is hidden before reception.
The Koch brothers have an new video relating how wealth follows economic freedom. A pity economies are not machines that can be steered – rather they require an act of faith in the collective wisdom of individuals’ pursuit of self-interest. I stand with John Taylor and friends – the sooner we return to the rule of (transparent and simple) laws from the current “rule of discretion” (aka no way of calculating and monetizing risk given government/we-the-people thumbs on the scale) the sooner markets and price signals will be able to right-the-boat. In the U.S. this likely means that the dramatic shift of wealth from the young to the old over the last 50 years will be reversed (by inflation) and return to some past midpoint. Or (political) revolution. Or both.
http://www.youtube.com/watch%3Fv%3DF4fWQnguR1E
Batman, I didn’t know you were secretly working for Obama. But you f’d up my man. You were supposed to shroud those proposals in secrecy and grant the authority to use them to an appointed hallowed elite /authority panel.
Blert @ 11: “Wilson has many, many faults… but entry into WWI against Germany was not of his doing. He literally couldn’t stop the flow of events anymore.”
Fair enough. Congress actually declared war back in 1917 — can’t ascribe all the blame to Woodrow Wilson. Nevertheless, he was President and chose not to resign rather than implement Congress’s Declaration. The buck has to stop somewhere.
Regardless of to whom we pin the blame, 1917 was the path not taken, the point at which things started to go wrong.
If the US had stayed out of the European imperialists’ unnecessary war, it would have ended with a stalemate in the west and German triumph over Russian communism in the east. No Treaty of Versailles; no WWII; no United Nations. Without WWII, FDR’s first steps towards towards overbearing US central government would have failed 70 years ago, and the current global disease of excessive government & destructive regulation would probably have been avoided. In short, the world (not just the US) would have been a better place.
11. blert We entered the war because of Zimmerman. Period.
Follow the money. We entered the war to guarantee our investments. The Triple Entente was hocked to the gills to keep going, and the US was bankrolling most of it. Where do you think all those hundreds of millions of fine troy ounces of gold in Fort Knox came from? If the Kaiser won, all those wartime loans would have been so many worthless I.O.U.s. The Zimmerman cable was just a proto-Gulf of Tonkin incident, the Battleship Maine or yellowcake uranium of its day.
15. Toadold-That mint need only be “waffer-thin.” Always loved the Creosote-Big Government analogy.
“The ONLY solution for the national budget is to lift retirement ages.”
We’d still just be chasing our tail. The problem is we killed off 50 million people in the U.S., each of whom would have produced 1/2 million more in their lifetime than they consumed. Since we decided “be fruitful and multiply” was hogwash, it’s been a long, slow downward spiral.
Two trillion in lost revenues here in the U.S., the irrevocable demise of Western Europe, and other countries like Japan and South Korea going off a demographic cliff as we speak. In 2040 the global jig is up. That’s when the slowing of the increase in global population turns into an actual decline and we old fogies see what our stupidity and liberalism have wrought.
22. Teresita
You’re NOT entitled to your own facts.
The VAST bulk of American gold flooded in during the 1930′s AFTER FDR bumped the price to $35 per ounce.
NO gold flowed during WWI to speak of.
—–
Please READ.
Start with the Zimmerman Telegram.
You’re done.
@20: Unsk — Let there be light! ;–)
Kool Vid!
Bar MItzvah or wedding? How many cases of beer were consumed during rehearsal?
There is a Mencken Solution ( for those of you who slept through Sys101, the Mencken solution is one that is guaranteed to work but impossible to implement).
Fix (flat) tax rates and budget in arrears. The feds can only spend what they collected the year before.
This won’t happen because government DEPENDS on cronism. The President’s cronies pay to get him elected and by god they want a return on their investment! I wonder what Mitt promised Christie? The sky’s the limit when you pay your promises with OPM.
There will NEVER be a balanced budget amendment out of Congress. They would be cutting their own throats, breakinh their own rice bowel.
That is why I was calling for a Article V convention. You have to take the politicians out of the equation to solve it. IC’s don’t do that, which means L3 is wasting his time and talent. Pity really.
Oh well, when it all falls apart, there is always the trees and rope option.
Re: Mr Creosote as Big Government and the wafer of excess public policy. Is this the birth of new tactic? Can we popularize a reverse Cloward Pliven strategy to bring down Socialism by crashing it with to many inputs so that the leaders span of control is broken and the internal contradictions become manifest to the masses? Objectively Socialism thrives in Academia because there theory is unimpeded by accountability to results.
We can have fun turning the rhetoric of the Old Left back on them. Lillian Hellman should suffer in the knowledge.
Another problem with printing money as a solution is a little less obvious. It almost certainly won’t be actually printing money; what is much more likely is that it will be done by what’s being called in the UK “quantitative easing” – which is some sort of arcane process by which banks’ balance sheets are inflated by issue of some sort of bond – the details are not clear to me or anyone else except financial professionals, and that’s the whole idea no doubt.
Anyoen think the banks, in the current economic circumstances, are going to do anything but keep the money? I suppose some fraction might be handed out to individual bankers as bonuses, but one thing the increased money supply won’t cause is more loans to businesses, particularly small businesses.
IMHO it would be muchy better to literally print the money and physically hand it out to individual citizens. But that won’t attract political contributions from banks to any of the parties, so…
Regarding zombie programs and budgetary savings; it strikes me as odd that you can make cuts in the budget as far into the future as ten years and claim them as savings today. What they are playing us for are fools, sadly many buy the line of B.S. and think that these idiots are actually saving us money. Setting up a huge, expensive program (that we couldn’t afford in the first place) and then cutting it makes no difference in the real world. They may not be interested in reality, but reality is interested in them, and I am fearful that RWS’s lamppost shortage may come to pass.
@29. Fletcher Christian
You are right, they hold onto the “imaginary money” to create a balance-book liquidity, they use this Money to hide the fact that they are really broke (due to buying things like MBSs and PIIGS bonds), they then leverage this money in the derivative market so that they can create more imaginary wealth and give themselves big bonuses. All out of the taxproles pocket, of course!
I am not advocating the use of this product, simply making clubbers aware of its availability….”just in case”:
http://www.thetruthaboutguns.com/2011/10/robert-farago/new-hornady-zombie-ammo-revealed/