Brad DeLong says that a return to growth is right around the corner and it’s going to suck:

But it will not feel much like a recovery. After the 1982 recession the turnaround in employment lagged the turnaround in GDP by only six months. Thereafter employment growth was very strong: in the eighteen months up until the end of 1984, growth in work hours averaged 4.8% per year. it took only 7 months after the 1982 recession trough for the employment-to-population ratio to rise above its trough level (1980: 2 months. 1975: 5 months. 1970: 18 months. 1961: 13 months. 1958: 4 months. 1954: 8 months.) By contrast, it took 29 months after the 1991 recession trough for the employment-to-population ratio to exceed its trough level, and 55 months after the 2001 recession trough for the employment-to-population ratio to do so. Productivity growth in the immediate aftermath of the end of the 1991 and 2001 recessions was surprisingly rapid: rapid enough to eat up all of real demand growth and more as businesses decided to take advantage of the economic downturn to slim down their labor forces and become more efficient.

Today–unless we get much faster real GDP growth than currently looks to be in the cards–we are headed for a jobless recovery. The answer to the economic question–was the stimulus sufficient to rapidly return the economy to something like normal unemployment?–is likely to be: “h— no, it was much too small…”

Note, however, that productivity growth and GDP growth absent employment growth tends to depress wages and therefore boost corporate profits. That, in turn, should boost financial markets. And thus to a Dow-obsessed and elite-dominated media culture, all will appear to be going well.

Useless against the Deceptacon threat (wikimedia)

Chris Preble had a good post up on the Cato blog yesterday praising Barack Obama’s veto threat over the F-22 issue. I continue to hope that folks will stay engaged with this question, because I think it’s more important than it first appears. I know that a lot of people, both on the progressive left and the libertarian right, would like to see a more ambitious cutback of the American defense posture than what you see in this initial budget proposal. But viewed in that light I think you need to see the issue on the table right now as whether or not the political system can impose any discipline on the military-industrial complex at all. If it can, then bigger change may be possible in the future. If it can’t, then it can’t.

At any rate, Preble is doing a talk at New America on the 24th about his excellent book The Power Problem: How American Military Dominance Makes Us Less Safe, Less Prosperous, and Less Free. It’s worth checking out. There hasn’t historically been much liberal/libertarian collaboration on these kind of questions, but hopefully there will be in the future. Making change happen is really hard and we need as broad a coalition as possible.

Sydney Hospital (cc photo by tobym)

An Australian who follows American political debates closely weighs in with a description of the joys of socialized medicine as practiced in the antipodes:

We have a wonderful balance here in Australia. If you need health care and can’t afford it, you can get it. Everyone can get it. There are a multitude of doctors who bulk bill. And you can use the public hospital system. But if you have a little more money, you can choose the extra cover. The government doesn’t decide what access I have- they just set a level of access, and everything beyond, I have to pay for.

Is that “rationing”? Perhaps. But at least we all have access to pretty good basic cover. At least a major illness will not bankrupt us. But, at the same time, if we have access to the extra funds, we can use them and pay for extra cover. [...] I am thankful for a system in which I can access a basic level of care regardless of my income, where I can choose to spend additional funds if I have them available, and where I have both public and private hospital options. For that, I’m happy to pay an extra $1.50 tax for every $100 I earn. It’s worth it.

I think these are really important points. Conservatives seem extremely worried about the possibility that the United States will implement rules that prevent people from paying for health care out of pocket or from acquiring private insurance. But no such proposals are on the table. A system that combines a government guarantee of coverage for certain things with governmental unwillingness to pay for certain other things doesn’t preclude the possibility that people will choose to pay for them. Here in the United States we have public schools and people also take violin lessons.

As alluded earlier the White House is preparing to really throw its shoulder behind the idea of reforming the Medicare Payment Advisory Commission as a way to get some more curve-bending into health care legislation. The latest sign of that is a letter from OMB Director Peter Orszag addressed to key legislative leaders in the House and Senate. The letter touts Senator John Rockefeller’s MedPAC legislation but really gets behind a slightly different idea.

Per the OMBlog:

The Independent Medicare Advisory Council (IMAC) would be an independent, non-partisan body of doctors and other health experts, appointed by the President, confirmed by the Senate, and serving for five-year terms. The IMAC would issue recommendations as long as their implementation would not result in any increase in the aggregate level of net expenditures under the Medicare program; and either would improve the quality of medical care received by the program’s beneficiaries or improve Medicare’s efficiency.

As with the military base-closing commissions, this proposed legislation would require the President to approve or disapprove each set of the IMAC’s recommendations as a package. If the President accepts the IMAC’s recommendations, Congress would then have 30 days to intervene with a joint resolution before the Secretary of Health and Human Services is authorized to implement them. If either the President disapproves the recommendations of the IMAC or Congress passes such a joint resolution, the recommendations would be null and void, and current law would remain in effect.

Orszag also shows why he’s not just a wonk, he’s also a diplomat. The way I earlier described the virtues of this idea was “that ‘Congress’ and ‘sound management of public policy issues’ aren’t really concepts that go together.” Orszag puts it differently, “This approach would free Congress from the burdens of dealing with highly technical issues such as Medicare reimbursement rates while rightly giving them, your representatives, a say in the matter.”

Free them from the burden!