Let’s Tax and Spend for Better Health Care

U.S. weighs taxing health care benefits: Unusual coalition from both the left and the right looks at ending exemption for job-sponsored plans,” by Kevin Hall, Knight-Ridder, 17 July 2005, http://timesunion.com/AspStories/story.asp?storyID=379969&category=NATIONAL&BCCode=HOME&newsdate=7/17/2005.

Tax-free corporate health insurance, which super-empowers big business, is a relic of price controls from the Second World War

 

Today’s system of employer-provided health care dates to World War II, when the federal government imposed wage caps to help the wartime economy. Unable to offer higher wages to attract scarce workers, companies competed for them by offering health insurance.

 

The war ended, but job-based insurance stuck. By the mid-1950s the Internal Revenue Service code favored it. Companies were allowed to deduct the costs of employee health care plans from their taxable income. For employees, those often-generous benefits were separate from taxable wages.

This pork warps the free market

 

Some right-leaning advocates think the tax exclusion for job-sponsored health benefits should end because it distorts the free market. The Heritage Foundation, a conservative policy-research center, says the exclusion leaves consumers in the dark about the real costs of health care, leading them to make uninformed decisions that ripple through the health care economy, driving up costs.

 

And doesn’t help those who need it the most

 

The tax break is regressive because people at the lower-income brackets get less benefit. It does just the opposite of what it should,” said David Kendall, a senior health policy analyst at the Progressive Policy Institute in Washington, a research center for the centrist Democratic Leadership Council. “It promotes coverage for people who can already afford it.”

Census Bureau data show that 82 percent of Americans who earned more than $75,000 last year had job-sponsored health plans excluded from taxation, but only 23 percent of Americans who made less than $25,000 did.

 

But if we ended this regressive, distorting loophole, we could afford to give health credits to all Americans

 

Advocates on left and right agree on this: Ending the tax exclusion should be accompanied by a new national tax-credit system for health care.

 

It’s easy to do

 

Tax credits would exempt health plans from taxation up to a set dollar limit. Employers would put price tags on the benefits they provide to employees — many already do this to remind workers why wages aren’t rising — and anything above the government-set limit would be treated as taxable income. This would allow the taxation of so-called Cadillac health plans, the generous ones that cover everything from fancy eyeglasses to hair transplants.

 

“The mechanics of doing it don’t have to be revolutionary,” said Mark Pauly, an expert on health care costs at the University of Pennsylvania’s Wharton School. “The main problem now is that the exclusion makes expensive insurance look cheap.”

This is a first step to solving our biggest domestic problem. Let’s do it.

Orientation and Action, Part I: The OODA Loop

Our OODA loop helps us know where warfare is headed. Modern warfare is usually divided into the four generations of 1st Generation Warfare (1GW), 2nd Generation Warfare (2GW), 3rd Generation Warfare (3GW), and 4th Generation Warfare (4GW).


Modern War in the Context of the OODA Loop
  • 1GW
    • example: Napoleonic War
    • characteristic: mass armies
    • method of fighting: man-to-man
  • 2GW
    • example: First World War
    • characteristic: mass armies
    • method of fighting: fixed-artillery-to-men
  • 3GW
    • example: Second World War
    • characteristic: blitzkrieg, fast transitions from one maneuver to the next
    • method of fighting: tanks/bombers-to-cities/armies
  • 4GW
    • example: Vietnam War
    • characteristic: dispiriting the enemy
    • method of fighting: propagandists-to-populations

In a recent post where he tries to look ahead to what the 5th Generation of Warfare (5GW) would be, Mark Safranski writes

A strong possibility exists that given successive generations of warfare tend to drive ” deeper” into enemy territory, that 5GW will mean systemic liquidation of enemy networks and their sympathizers, essentially a total war on a society or subsection of a society. There is no where ” deeper” for 5GW to go but here. At the high tech end 5GW would be precisely targeted to winnow out ” the bad guys” in a souped-up version of Operation Phoenix but at the low-tech end we could see campaigns that would be indiscriminate, democidally-oriented death squad campaigns that shred 4GW networks by the same actuarially merciless logic that led the Allies to firebomb German and Japanese cities in WWII.

War is going deeper, but by that I do not mean “farther into enemy territory.” Certainly you can’t get any deeper than obliteration of Dresden or Hiroshima! For that matter, centuries ago Catholic terrorists tried to destroy the British Parliament, which was the deepest heart of the British government!

War is going deeper into enemy minds. Every generation of warfare aims for deeper in the enemy’s OODA loop

1GWs, like the Napoleon Wars, were extremely fluid. Armies could march whenever men’s feet could carry them. Information was relatively symmetrical — precise locations of either army were unavailable to any commander, while general knowledge of the land was known to all commanders. (Napoleonic “disinformation” was trivial compared to what was later devised.) Another feature of the Napoleon Wars was the army’s need to live off the land. 1GW was defined by conflict centered around an enemy’s ability to decide and act.

Aim Destroy enemy army

Visually:

2GWs, like the First World War, were sticky. Armies took marched, drove, or took trains to the front line — where they stopped. In 2nd Generation War, action is easy: charge. You know exactly where you are, exactly where the enemy is, and exactly where you are going to die (in the razorwire and minefield, hit by enemy crossfire). Thanks to telegraphs and modern communications, commanders are flooded with a tsunami of almost meaningless facts. Thinking now centers around where and when it makes sense to try to break through, as well as the how to move to advance evenly. This means that the heart of conflict “moves deeper” into the OODA loop. Another way to think of it is like a rainbow or spectrum, where the heart of conflict is “redshifting” away from acting. 2GW was defined by conflict centered around an enemy’s ability to orient and decide.

Offensives conducted on wide frontages—emphasizing few, rather than many, harmonious yet independent thrusts.

Evenness of advance maintained to protect flanks and provide artillery support as advance makes headway.

Visually:

3GWs, like the trenches for most of the Second World War or the Lawrence of Arabia campaign in the First World War, were fluid again. But conflict kept burrowing deeper into the OODA loop and redshifting further away from action. Victory in 3rd Generation Wars required the ability to instill madness — to mess with the enemy’s minds. The purpose of 3rd Generation Warfare is to paralyze the enemy with doubt. We move even deeper into the OODA loop, to the red end of the rainbow. 3GW is defined by conflict centered around an enemy’s ability to orient.

Taken together, the captured attention, the obscured view, and the indistinct character of moving dispersed/irregular swarms deny adversary the opportunity to pictures what is taking place.

and

Gain support of population. Must “arrange the minds” of friend, foe and neutral alike. Must “get inside their minds”.

Visually:

If older generations of war were like fluids, 4GW was like a gas. It spreads everywhere yet regular armies have a hard time even finding battles. Like 3rd Generation Wars, 4th Generation Wars focus on the picture inside the enemy’s head. But while 3GW tries to destroy the picture, 4GW builds a new one. This picture is built in that part of the OODA loop where people “wait and see,” the double-headed arrow between Observe and Orient. While 3GW tries to paralyze the enemy with doubt, 4GW tries to deny him even that much — 4GW drains the will of the enemy so he “waits and sees,” robbing him of his ability to want to do anything. In practice, this means 4GW tries to destroy an enemy’s civil society, turning his population into mindless cowards. To achieve this, 4GW is defined by conflict centered around Observe and Orient.

John Boyd’s words on the tactics of “moral warfare,” an important part of 4GW:

Create, exploit, and magnify … uncertainty

Impressions, or atmosphere, generated by events that appear ambiguous, erratic, contradictory, unfamiliar, chaotic, etc.

and…

Surface, fear, anxiety, and alienation in order to generate many non-cooperative centers of gravity, as well as subvert those that adversary depends upon, thereby magnify internal friction.

Visually:

So if these patterns hold, what will 5GW look like?

Visually, like this

The 4th Generation of War redshifts deeper into the OODA loop. It slides into the “Observation” realm. If traditional war centered on an enemy’s physical strength, and 4GW on his moral strength, the 5th Generation of War would focus on his intellectual strength. A 5th Generation War might be fought with one side not knowing who it is fighting. Or even, a brilliantly executed 5GW might involve one side being completely ignorant that there ever was a war. It’s like the old question of what was the perfect robbery: we will never know, because in a perfect robbery the bank would not know that it was robbed.

In his post, Mark Safranski noted that 4GW was around for decades its nature was recognized.

William Lind, one of the fathers of 4GW theory has welcomed yet cautioned against attempts to ascertain with too much precision any outlines of a 5th Generation Warfare that might be evolving within the dynamic of 4GW conflicts we see in Iraq, Afghanistan and in transnational terrorism. Yet according to theorists and practitioners of 4GW like Colonel Hammes, that form of warfare, although just now coming in to its own has already been present for some seventy years ! Undoubtedly then 5GW is also here with us, waiting for the next Mao or Rommel to fit the disparate puzzle pieces into a coherent pattern.

This means that, in their pragmatic attempts to solve problems, both al Qaeda and the United States might be using aspects of 5GW right now. Where will historians of the future look to see aspects of a secret war? Of a war centered on ignorance?

The 9/11 Commission

Al Qaeda’s new brand of terrorism presented challenges to U. S. governmental institutions that they were not well-designed to meet. Though top officials all told us that they understood the danger, we believe there was uncertainty among them as to whether this was just a new and especially venomous version of the ordinary terrorist threat the United States had lived with for decades, or it was indeed radically new, posing a threat beyond any yet experienced. As late as September 4, 2001, Richard Clarke, the White House staffer long responsible for counterterrorism policy coordination, asserted that the govern-ment had not yet made up its mind how to answer the question: “Is al Qida a big deal?”

A week later came the answer. Policy Terrorism was not the overriding national security concern for the U. S. government under either the Clinton or the pre-9/ 11 Bush administration.

The policy challenges were linked to this failure of imagination

President Bush:

Our response involves far more than instant retaliation and isolated strikes. Americans should not expect one battle, but a lengthy campaign, unlike any other we have ever seen. It may include dramatic strikes, visible on TV, and covert operations, secret even in success. We will starve terrorists of funding, turn them one against another, drive them from place to place, until there is no refuge or no rest. And we will pursue nations that provide aid or safe haven to terrorism. Every nation, in every region, now has a decision to make. Either you are with us, or you are with the terrorists. From this day forward, any nation that continues to harbor or support terrorism will be regarded by the United States as a hostile regime.


Orientation and Action, a tdaxp series
1. The OODA Loop
2. The OODA-PISRR Loop

FEC: Daschle Will Run for Senate Again in 2010

This letter constitutes formal written notification,” Federal Elections Commission, 14 June 2005, http://query.nictusa.com/showimg/25056.gif (from South Dakota Politics).

I don’t know what’s the most bizarre part of this letter: that Daschle’s mailing address isn’t in Aberdeen (that’s where he said he would move if he lost!), that the Federal Elections Commission thinks he is running against Thune in 2010, or that the the FEC uses fax numbers for email addresses.

Federal Election Commission
Washington, D.C. 20463

June 14, 2005

Thomas A. Daschle
P.O. Box 1656
Sioux Falls, SD 57101

Candidate ID Number: S6SD0028

Dear Mr. Daschle:

This letter constitutes formal written notification that “A LOT OF PEOPLE SUPPORTING TOM DACHLE INC” has filed reports of receipts and disbursements with the Commission and appears to have received contributions and/or made expenditures in support of your 2010 candidacy in excess of $5,000. Commission Regulations define a “candidate” as “… an individual who seeks nomination for election, or election, to Federal office, whenever any of the following events occur:

(1) The individual has received contributions aggregating in excess of $5,000 or has made expenditures aggregating in excess of $5,000.

(2) The individual has given his or her consent to another person to receive contributions or make expenditures on behalf of that individual and such person has received contributions aggregating in excess of $5,000 or made expenditures aggregating in excess of $5,000.

(3) After written notification by the Commission that any other person has received contributions aggregating in excess of $5,000 or made expenditures aggregating in excess of $5,000 on the individual’s behalf, the individual fails to disavow such activity by letter to the Commission within 30 days receipt of the notification.” (11 CFR § 100.3(a)).

You have thirty days from receipt of this notification to disavow these activities. To disavow send a letter directly to the Commission, marked Attention: Reports Analysis Division, stating that you are not a candidate for Federal Office and that you have not authorized the solicitation of contributions nor the making of expenditures on your behalf.

If you do not disavow these activities, you should file a Statement of Candidacy (FED Form 2). The FEC FORM 2 can be downloaded from the FCC website at http://www.fec.gov, or requested through the FEC Faxline at (202) 501-3413. (11 CFR § 101.1(a)).

Please note that Senate candidates must send a copy of their Statement of Candidacy to the FEC via fax (202-219-0174) or electronic mail (2022190174@fec.gov), in addition to filing their official copy on paper with the Secretary of the Senate. (11 CFR § 400.20(b)(1))

 

Update: Ryne McClaren picks up the story (courtesy South Dakota Politics).

Update 2: On the same day, Clean Cut Kid and David Kranz of the Argus Leader pick up the story. Both are Democrat-sympathizers, so it is not surprising that they took their time with the information. At least CCK bothers to post his work online, unlike Kranz.