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One in six dollars generated by the U.S. economy goes to pay for health care, almost twice the average for rich countries. It hurts America in many ways; by being a burden on the taxpayer when it comes to Medicare and Medicaid paying for the poor and the elderly, on companies being one reason GM went bankrupt, it eats up federal and state budgets, rising costs make any form of future coverage for all unsustainable, and it robs other priorities such as infrastructure building and other national scale investments. The Economist says that if it had to design a system from scratch, it would go for a system based mostly around publicly funded health care. For the uninsured the solution of an employer mandate is now well accepted, so this is not an issue. What is an issue is how to make the new system affordable? Here the Economist says that whether in stages or in one move, the tax deductability of employer paid health insurance, which is costing the U.S. government $250 billion ayear, has to go. It is necessary to remove this deduction, and its something all interests involved will have to swallow, as other savings are smaller and will not be adequate. The deductability of insurance makes the true cost of insurance transparent, so it supports gold plated insurance. This does not make cost control the pressing priority it needs to be. So the deducatability of employer paid health insurance hurts both ways. The other necessary action is in the area of moving out of the current culture where most doctors work on a fee-for-service basis, where the more tests they prescribe or procedures they perform the greater their incomes. This acts as a perverse incentive, and has aruinous effect in mushrooming health care costs in America. Cutting back on unnecessary tests and procedures, and prescriptions , would save 10% to 30% of health costs says the Economist. And it says this has been proven with the Mayo Clinic in Minnesota and Kaiser Permanente in California showing that cutting back doesn't hurt care and outcomes., so much so that cutting back would occur along with improved outcomes. But Americans with employer paid insurance just take things for granted as its not much out of pocket expense for them. THis creates the lack of a force for controlling costs even as employers are shouldering abigger and bigger burden, and the employee who thinks he is doing fine actually is seeing more of his salary dollars going to pay for his health insurance. In a way the consumers of health care are stuck with the perception that they are not somehow paying for these mushrooming costs and too manytests, procedures and prescriptions. This perception leads them a false sense of comfort with the system they are in, and a fear of something new fanned by the medical lobbies, that any change will impact users negatively. This makes the whole discussion on health care or the process of finding solutions to become an exericize in which terms like "rationing" and "choice" play a distorting role. ...

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This report in the WSJ by Peterson and Hackman shows how the American Health Care Act proposed by Speaker Paul Ryan provides less financial support and allows premiums to go higher for seniors approaching retirement in the 50-64 year age group. Premiums are allowed to go up 5 times that of premiums of young people in the Ryan House  plan compared to 3 times in the Affordable Care Act. Subsidies in the form of tax incentives provide $2000 to younger people going up by age not income to $4000 in the Ryan House plan. By contrast someone 60 years old making $20,000 a year can get Affordable Care Act credit of $9874, and making $40,000 a credit of $6752, according to analysis by Kaiser Family Foundation. The Ryan plan makes health care costs lower for young people in an effort to bring more young people who use less services into the system to support its overall financial condition. Another feature of the Ryan Plan is that it allows only for CPI index +1% even if health care costs are rising faster. Deep cuts to Medicaid affect lower income seniors on Medicare. As a result the AARP organization representing seniors has come out in opposition to the Ryan bill. The GOP plan wants to reduce premium costs yet in the process it makes vulnerable seniors with lower incomes pay more, which is likely to hurt Republicans who won by winning a large part of the senior vote. ...

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How much room is there to raise interest rates. Patrick Minford of the University of Cardiff says a lot more. At the rate of 9-10% inflation in Britain more interest rate increases are likely. Minford is advising Liz Truss who is candidate for prime minister. Minford's main ideas are- Get interest rates back up to what was considered normal in previous decades- 5-7% for mortgage rates is what it used to be. At that rate it protects people's savings something that did not happen in the last 2 decades of ultra low rates worsening the wealth gap for Britons in different classes. Cutting taxes is about providing the economy a boost as rates go up. It is not about huge cuts, just modest cuts like the 30 billion pound cuts proposed by Truss. Minford is not talking about low taxes. He is simply talking about having taxes at levels that will promote growth- "the key to growth is not having high taxes. We're not talking about cutting them, just talking about not having them at catastrophic levels." Here is what Liz Truss is proposing- Reverse the recent rise in national insurance. Scrap the increase in corporation tax. About this plan Minford says- "If we raise corporation tax we will kill off growth." Minford dismisses concerns about borrowing. " It's crazy to begin to try to drop the debt to GDP ratio 5 minutes after Covid." With higher rates Minford also think there will be fewer "zombie" companies eating up the nation's capital, while protecting the savings of hard working ordinary people in Britain which hasn't happened in the last two decades of ridiculously low rates, worsening wealth gaps in British society. Minford calls Sunak's policies "puerile" and too much beholden to Treasury thinking. Liz Truss says Sunak's policies are for Brexit in name only, not taking advantage of Brexit to rid Britain of cautious policy that does not capitalize fully on cutting the bureaucratic and regulatory burden to get growth, and trade that favors Britain. ...

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The asymptomatic coronavirus infected people are a large fraction of the people with coronavirus. This is a huge problem as these people unaware of the danger are unwittingly spreading the virus. This is one of the most unusual aspects of this virus compared to other virus epidemics, and why it has become so dangerous. It is also why social distancing alone is not enough. Strict enforcement of stay at home orders by public health authorites, state and federal governments is essential as the unwitting spread by asymptomatic people who are not following the required guidelines is a huge problem.  Even as the public now calls for stricter action the lax behaviours in March in U.S. Britain, France, Germany, and in Italy in February, have created a population of infected people that acts as a backlog for testing, creating a surge in April. One of the novel features of this public health crisis is that lax behaviours stemming from a lack of understanding of the severe contagiousness of the coronavirus is making it a larger crisis on a scale not encountered before.  The contamination potential of this virus is only now being tackled with experts in fluid dynamics at labs such as the MIT Lab in the U.S. looking into how it can contaminate environments, as shown on BBC News.  With pieces of the contamination puzzle only now being put together. Heeding public health expert warnings and guidelines is all the more essential for this reason. ...

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Feldstein says that for the 85% of the people who have healthcare the Obama proposals are not a good deal. The Obama proposals mean higher taxes in the long run to pay for the $1 trillion cost of healthcare for the uninsured group over 10 years. This lower income group has no coverage despite the $300 billion Medicaid program. Feldstein says there surely must be better and less costly ways of getting this lowincome group healthcare. Raising the top income tax rate to 45% from 35%- as a result of letting the Bush tax cuts expire and adding aproposed health surcharge on higher income individuals- would actually lower revenues for the government, as it would change behavior of high income individuals in ways that lower their taxable inome. The result is higher deficits and higher taxes when even without this large deficits are projected for the future. How to slow the rapid growth in healthcare spending? The Obama plan is to cut spending on Medicare. Feldstein sees the govenment's effort aimed at reducing the amount of medical services, as reduced spending comes from fewer services, not reduced payments to providers. Will this result in enough of acost reduction to make the system work. And if the cost reductions are too heavily weighted towards reduced services and not reduced payments to providers would this result in large cuts to services to affect the quality of healthcare for the 85% who are accustomed to a different pattern of healthcare, even though it is structured to allow cost escalation. Feldstein offers no solutions to the problems of cost escalation except to suggest that the Obama plan does not really tackle the cost escalation issues directly with providers, and instead burdens the national finances to an extraordinary degree. And the need for apause and reflection....

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Both candidates Mr. Trump and Mr Biden put forward their positions on immigration, the coronavirus response, the economy, and racial justice, in the final debate of 2020. This was a calmer debate with policy details and the candidates delivered their points without the sharp attacks of the earlier debates. At some points in the debate the discussion turned to Mr. Biden and dealings of son Hunter Biden with a Ukrainian company. Mr. Biden raised the issue of Mr. Trump's tax returns not being disclosed. The Affordable Care Act and coverage for Americans lacking health care, immigration and the wall with Mexico, and the oil industry were other issues in the debate.

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French president Macron is skipping attending the Swiss Davos conference in 2019, as he attends to pressing problems at home. A year ago after attending Davos Macron appeared as a champion of globalization and took some risky actions in the euphoria over his win- stripping job protections at a sensitive time of rising inequality, and abolishing a decades old wealth tax. The election showed a regional and urban-rural divide in France even though Macron gained a large majority in the Assembly. The yellow vested protestors showed no particular allegiance to parties, only showing a sense of dissatisfaction with neglect of working class struggling to make a living. All that is changed now after yellow vested protestors rioted week after week over neglect of working class issues.Macron has resisted pressure to reinstate the wealth tax. He has suspended plans to increase fuel taxes and introduced 10 billion euro worth measures to boost purchasing power of working class French people, a major demand of the yellow vests. A series of town hall meetings are planned for Macron to listen to the voices he has not paid enough attention to before in his aloof style of governing. ...

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Matina Stevis provides this exceptional account of 3 Greek leaders who fought hard for reforms to put Greece in the right direction for euro currency membership responsibilities, and lost. They tell Stevis they were savagely attacked in the media, by labor unions, and in their own party, so that the fight came at a high personal cost. The 3 politicians now mentioned inside Greece as having done the most to ensure euro currency responsibilities were taken seriously are- Alekos Papadopoulos, who as finance minister fought with Pasok party premier Simitis in 2002 about the dangers of cheap credit coming with the euro currency, Tassos Giannitsis who as labor minister was driven out of Pasok for proposing pension reforms in 2001, and Stefanos Manos who was driven out of New Democracy Party in 1998 after warning of risks in the economy from wasteful spending, including mismanagement of railways, and proposing changes. As Greece commits to a new program under the Syriza left government as a matter of "national responsibility," with reforms to pensions, fixing tax evasion to ensure the tax burden is evenly distributed, reduced military spending, and changes in other areas, the questions in the EU about Greece are about the degree of commitment to changes. In an intervew with WSJ's Bret Stephens Tsipras is candid about the situation when he says the country on its current course would build up the debt all over again, if the debt were to be written off. Problems Tsipras cited in that interview- bribery in health care, tax evasion, burden of taxes on the middle class and honest citizens, large inefficient bureaucracy. Yet 2 years after that intervew in the WSJ, Jan. 28, 2013, Tsipras headed a Syriza government that had no proposals on tackling tax evasion, aggravating the problem of moral hazard seen by the Europeans and the IMF under Lagarde. Stefanos Manos writes in the foreword to his book that its incomprehensible how the public good is ignored by so many people who seek only individual gain. ...

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A Yale Brown universities study in 2024 shows the huge dividends from investments in childcare in the early part of schooling years- $1 invested in free full time daycare for preschoolers generates $6 in economic benefits. It only includes the economic benefits from the lack of affordable childcare for parents that lead to cutting back on work hours and changing careers. This does not even include the results decades from today in 2050 when these children provide the Nation with a strong educated workforce to propel industry and the economy forward in new ways. Catherine Rampell in the Washington Post shows that these economic benefits are  just the beginning, as the effects ripple through to local economies, touching on kids, parents, employers, local tax revenue. This is not counting the effects on mental health of parents struggling with childcare and the overall mental wellbeing of the Nation knowing that it has got the priorities right for a better future.   ...

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How the French health care system works. France comes in first and the USA 37th in aWHO health care ranking. THe difference in deaths from respiratory disease is half that in the USA, and lower rates of death from heart disease and diabetes. IT has more hospital beds and doctors per capita than the USA. 65% of French people are satisfied with their health system compared to 40% in the USA, and yet France spends 10.7% of GDP on health care and the USA spends 16% for poorer results. THe French system is more generous to its seniors. Unlike Medicare there are no deductibles, just modest co-payments that are often dismissed for chronically ill. And diabetes and critical surgeries are covered 100%. French also buy supplemental insurance like Medigap for extra expenses like dental and eyglasses. Cancer patients are treated free of charge. Avastin treatments costing $48,000 a year are provided at no charge. France's PMI or Protection Maternelle et Infantile, is rated highly. It is anetwork of thousands of healthcare facilities, that ensure that every mother and child in the country receives basic preventive care. Mothers even receive afinancial incentive for attending their pre and post natal visits. France makes this care affordable by reibursing doctors at a much lower rate. The average yearly net income for doctors is around $55,000, about athird of what doctors in the USA make. But French doctors don't have to pay back huge student loans as medical school is paid for by the state and malpractice insurance premiums are only a tiny fraction of that in the USA. And again the French government pays two thirds of the social security tax for most French physicians- which is typically 40% of income. So the $55,000, is more like $92,000 taking that into account and more like $110,000 when student loans and malpractice is taken into account at US levels. Specialists who have 4 or more years experience can charge what they want, but as one gastroenterologist says, there in an unspoken and undefined limit to what you can cahrge or what is socially acceptable. Yet even in France there is inflation in health care costs that the government deals with through price controls and more spending. The French national insurance system is running increased deficits each year and this is now $13.5 billion, and it has led to higher taxes for employers and workers. ...

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The US is facing a new pattern of demographic changes and their impact on Medicare and Social Security programs. The number of people on Medicare will grow in 2 decades, 2010- 2030, from 47 million to 80 million for Medicare, and from 44 million to 73 million for Social Security, according to this estimate. The workforce will grow more slowly and the tax base wiill shrink accordingly during this period. This pending worker-pensioner imbalance and the jump in the cost of the bill for Medicare and Medicaid, as well as the federal health benefit for poor people, create a major problem for the US. At the same time the group of people over 65 will rise in these 2 decades from 17% of the voting age population to 26%. This group and the people who expect to soon join this group will resist any changes to Medicare or Social Security programs, making it that much harder for the political process to tackle these issues to make the programs sustainable in the long run.

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Most Americans pay less in taxes, including state, local and federal taxes, today than in 1980 in inflation adjusted dollars. The taxes have gone down by 2-3% for incomes in the range of $50,000 to $150,000, and gone down by 3-4% for incomes between $150,000 and $350,000. Taxes have gone down over 7% for incomes above $350,000. The main reason is the decline in federal income taxes.Tax rates increased in the period to 1990 and declined from 1990 to 2010. The Democratic party and president Obama are pushing for increase in taxes for incomes above $250,000. Republicans are resisting the changes citing disincentives to investment and growth for small business which generates a large proportion of new jobs created in the U.S. economy. The New York Times study shows the percent of the U.S. population that makes between $200,000 and $350,000 almost doubling in the period 1980-2010 and at the same time its share of the U.S. income remaining the same - many small business owners who hire employees would fall into this income category. Republican's response is for tax reforms that reduce loopholes, deductions and other tax expeditures that disproportionately help the wealthy. Democrats say this cannot create enough revenues to address the deficit, when mortgage deductions, charitable deductions are excluded. The back and forth is leading to stalemate but also opening up discussion for the first time on whether the mortgage and charitable deductions make sense in today's environment. A significant portion of revenues lost in the mortgage deduction goes to affluent households, subsidizing larger borrowings to build larger homes than otherwise, according to the Brookings Institution. Politicians have resisted changes that would go against powerful lobyying groups in the past, yet the impasse has opened up new thinking outside the box because of the pressing need to come up with a solution....

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Abrams and De Acosta, Bellman of the WSJ look at growth and modernization in India in comparison with China and other countries. GDP per capita would take 10 years to reach the stage at which spending power of the people equals that in China today. At one point in 1980 China and South Korea were closer in GDP per capita than India. It is only now that India is accelerating towards the scale and depth of modernization done in China.  India's growth rate of over 7% is likely to surge after some of the problems in bad loans in the banking sector are cleared up. A wave of technological advances would help accelerate growth. Ease of doing business and foreign investment are on upward trend, for absorbing new technology from advanced countries. A shift to very low prices for data use with rapid development of 4G services is one of the recent achievements. Manufacturing growth remains a challenge to be tackled to create the jobs needed.  Revamping tax structures such as GST and shifting the economy towards use of electronic cash has increased revenues needed to invest in infrastructure, health and education.  As much of the potential for future growth comes from people at the lower income levels, improving social indicators such as sanitation, cleanliness, farmer incomes, universal bank accounts, universal access to health care, are steps that lay the foundation for the future. ...

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G-7 nations reach agreement for a global minimum tax of 15% a floor for taxes that the Biden administration finds acceptable. This agreement was reached at a meeting of the Treasury chiefs of the 7 G-7 countries in London on June 5, 2021. The G-7 countries are Canada, France, Germany, Italy, Japan, UK, and US. Next agreement from Russia, China, India and Brazil in the G-20 nations would establish new ground rules for the major economies. The G-20 meeting is in Venice July 9-10. The OECD is steering the international efforts to achieve that goal. For the agreement to be effective a number of small nations that use tax rates of below 15% to attract business have to be part of the new rules. One of these countries is Ireland with a tax rate of 12.5%. For the Biden administration in the US the goal is a significant one as president Biden seeks business to pay its fair share so that long neglected priorities for education, healthcare, infrastructure, post pandemic improvements can be met. France and other nations in the EU face similar needs in the post pandemic environment. By setting a floor the Biden administration is both creating a new cultural concept of fairness in taxation and making it possible to finance the $2 trillion spending programs for these priorities of president Biden. Behind this are important facts that have left the large tech businesses paying little or no tax depriving governments of the very revenues that are needed for infrastructure and services for a modern well run state. The Biden administration seeks to include the tech businesses as well as all businesses in the new tax rules so that a uniform idea of fair taxation applies across the whole economy for the first time in two decades. In this way it makes up for the missed opportunities in the OBC administrations of Obama, Bush, Clinton that have led to loss of faith in the state and institutions in the US. A similar situation prevails in the UK,  France and Germany where previous administrations failed to address this important issue of fair taxation and financing infrastructure and priorities in health, education, and critical needs of the people.   ...

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India's economy is at 2.597 trillion dollars at the end of 2017according to World Bank figures, surpassing 2.582 trillion for France. India's economy has doubled in a decade and is expected to pass Germany and Japan in GDP by 2032, to become the third largest after the U.S. and China.

As China's growth has slowed India's is growing. It recovered by July 2017 from one time events designed to actually spur growth such as the effort to implement a nationwide tax for GST. Demonetization also contributes to growth by accelerating the shift away from cash to recorded and taxable transactions. The tax revenue is increasing as less of the economy is in the black market sector. Higher tax revenues enable larger investments in health, education and infrastructure.

New bankruptcy law and speedy resolution of bad debt of banks is also laying the ground for future growth with new investment.

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Charlie Rose talks to Bowles and Simpson of the President's Deficit Commission. On health care and Paul Ryan's point that the Deficit Commission did not take on health care, Simpson says they did not do as much as Paul would like to see, but they have $500 billion in cuts for the next 10 years. Simpson says its garbage to say that they balanced the budget on the backs of Social Security, and Bowles says they took a very balanced approach. With the Social Security Trust fund running out in 2037, Bowles-Simpson raises a little bit of revenue, benefit cuts mostly on upper-end people. On the Bush tax cuts Bowles says, if you give more tax cuts you lose revenue. Their approach was to broaden the base, bring down rates. Bowles points to $1.1 trillion worth of tax expenditures, what he calls spending, in the tax code that benefit mostly upper-end people. Some of these are mortgage interest deductions, deductions for state and local taxes, charitable deductions, and he says their approach was to eliminate those and bring tax rates down to 8%, 14%, and 23%, and the corporate tax rate down to 26%....

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Wealth for top 7% of U.S. households averaged $3.2 million in 2011, compared to $133,817 for the other 93% of the population. Third quarter 2013 household net worth is 615% of after tax income, up from 570% in 2012. The uneven distribution of household wealth and the gains from the stock market recovery going disproportionately to wealthier investors, does not provide strong enough underpinnings for robust consumer spending.

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By 6-3 vote Supreme Court of US says the Transgender medical treatment Tennessee ban is constitutional. The Cass Commission in the UK review for the NHS UK looked into transgender medical treatments and has emphasized the risks to children and adults. It points to the "shaky foundations" for transgender medical treatments and suggests a more holistic approach. Much of the US had gone in a different an untested direction under previous administrations ignoring the important points in the UK NHS Cass Commission's findings in its Report in April 2024. It also played an important part in the defeat of politicians in 2024 with a lax attitude to important health and safety concerns of American parents.

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Latin America is hit hard by the pandemic. About 20% of the region's companies will close down or about 2.7 million companies, and loss of 8.5 million jobs. GDP decline in 2020 of about 10% is expected.

All the statistics of a fall in poverty in Latin America that used to be cited by economists have proved to have no good foundations. Even before the pandemic the economies of Argentina and Brazil were in trouble. The pandemic has worsened the situation. It shows how important it is for countries in Latin America to build on strong foundations of education, health care and good governance. With fall in trade and in tax income the debt to GDP levels are expected to go up from 57% to 70% and 30% drop in earnings coming from relatives overseas to support families at home, resulting in great difficulties. 

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Francois Fillon wins 44% of the vote to Alain Juppe at 28.6%.  Mr Sakozy suffers defeat in the election primary after 3 presidential debates in which Fillon's "statesmanlike" image came across better than the flamboyant style of Sarkozy. Another factor is that Juppe is seen as too close to former president Chirac and suffered from his effort to make changes and job cuts as prime minister under Chirac. Fillon is less well known which turned out to be an advantage. Fillon has the support of traditionalist Catholic groups. Fillon's platform is for 500,000 job cuts to reduce the large size of France's public sector, remove the wealth tax imposed by Hollande, reduce taxes, increase work week to 48 hours maximum and scrap 35 hour work week, gradually raise retirement age to 65, increase business incentives to improve economic growth. Fillon lives in Le Mans western France.

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Bump in the Washington Post cites the weekly poll from Gallup showing Trump's job approval rating with Republicans is at 84% among Republicans. Another poll from Survey Monkey shows 75% of Republicans are fine with the firing of FBI Director Comey by Trump. Republicans at this time see the firing as a distraction from other issues on the Republican agenda. Fox News presents a very different version of the story and it is what most Republicans watch. The health care bill from Republicans in Congress and the tax plan are also favored by a majority of Republicans in the polls, says Bump. Independents are wary and skeptical, Republicans see Trump as a way to get their own agenda implemented, and Democrats have serious issues with Trump.

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Tom Friedman makes the case for a gasoline tax. As the US engages in Afghanistan, Iraq and considers the cost of health care and a large deficit, he argues that 45 cents of each dollar of agasoline tax should go to paying down the deficit, 45 cents to pay for healt care, and 10 cents to pay for cushioning the burden of agasoline tax on the poor and people who need to drive long distances to work. Energy Economist Phil Verlager says that a$1 tax on gasoline and diesel fuel would raise $140 billion a year. Mention of the gasoline tax is considered risky by politicians of both parties though it would reduce gasoline consumption and dependence on imported oil.