In their sketch version of a budget (PDF) the Congressional Progressive Caucus makes a heroic effort to finance progressive government basically exclusively by raising taxes on rich people.

Specifically:

The big problem I have with this is that if you raise high-end marginal rates while leaving deductions alone, what you do is massively increase the value of the deductions. The home mortgage interest tax deduction, for example, is both distributively regressive and also economically damaging by shunting too much money into the housing sector. If wealthy people start paying a marginal income tax rate of 47 percent, then the incentive to overconsume housing becomes much more intense. A economically sound approach to the tax code needs to go after some of these deductions, and that means some middle class families will have to pay somewhat more.

Not so much a problem, but an observation, about this plan is that it actually does implicitly recognize the non-viability of a rich people only strategy. After all, even though the legal incidence of these corporate tax changes is on the corporations, the reality is that some of the bite will be felt by middle class consumers of these firms’ products and middle class employees of the firms. We really shouldn’t be handing out so much corporate welfare to oil and gas companies. But it’s not like everyone working in the oil and gas industry is an evil fatcat, it’s mostly regular everyday folks. And that’s fine. But once you’re willing to concede the point that pursuing increased revenue in a sensible way will entail some sacrifice by some middle class people, you may as well apply that principle to the individual income tax as well as the corporate income tax.

Unfortunately, a lot of discussions of Social Security and Medicare end up running together a number of different issues that it would be smarter to keep separate. The nation is simultaneously debating how to deal with demographic change, how large a share of national income should go to the support of the elderly, how large a share of support for the elderly should take the form of health insurance, and how best to organize the provision of health insurance to the elderly. What follows is long and I’ll put it below the fold.

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Suzy Khimm writes that “Some Republicans are now casting Rep. Paul Ryan’s budget plan as a form of ‘self-rationing’ that would place such decisions in the hands of private citizens, rather than cold-hearted bureaucrats.”

What I never understand about this is that all “rationing” is self-rationing. If we have a single-payer system that’s only willing to pay for certain services, then citizens are still free to pay out of pocket for other things. The fact that Medicare won’t pay for a MacBook Air doesn’t mean that grandpa can’t buy a MacBook Air, it just means he has to spend his own money on it if he wants one. Cato’s Michael Tanner tells Politico that “The question’s going to be, is that decision going to be made by government and imposed top down under the current system? Ryan wants to shift that responsibility to individuals and from the bottom up.”

But this isn’t the question at all. Under any conceivable system there are some things that the federal government will pay for, and other things people will buy on their own.

I think conservatives have gotten themselves tangled up in this web because they don’t understand that their own critique of big government rationing is a metaphor. Sometimes rationing really happens. During World War II, governments suffered from a lot of commodity shortages, and for the sake of equity chose to distribute the scarce commodities via rationing—hard caps on the quantity anyone is allowed to buy with his or her own money—rather than prices. Contemporary American cities often ration on-street parking. Meter rates are generally low, and resulting shortages are dealt with via rules limiting the maximum quantity of parking time you can purchase. This is real rationing, and it’s very inefficient. In theory you could institute a strict licensing regime on health care services, but nobody’s proposing to do so and there’s certainly no fiscal policy need to do so. What’s being proposed is to try to deploy evidence about the effectiveness of different treatments to limit what Medicare will pay for, leaving people free to pay for it themselves if they want to. Conservatives who don’t like this idea chose to metaphorically label this “rationing” but it’s no different from what they themselves are proposing to do. They just want to add a new layer of rent-seeking profiteers into the mix.