Here’s from a new op-ed by Paul Krugman in the New York Times online, more statistics and large economic numbers:
” The budget office predicts that this year’s federal deficit will be just 2.8 percent of G.D.P., down from 9.8 percent in 2009. “
So, those claims by Tea Partiers that Obama is racking up the deficits with verve and abandon are absurd– he has (actually, his government has) reduced the deficit by three-quarters. Not bad at all, and just goes to show that Democrats reduce deficits; Clinton managed to eliminate the deficit, and Bush promptly ballooned it again.
“…stabilizing the ratio of debt to G.D.P. at its current level would require spending cuts and/or tax hikes of 1.2 percent of G.D.P. if we started now, or 1.5 percent of G.D.P. if we waited until 2020. “
To do better than Obama has done, we would need a 1.2 percent correction in the budget– achievable if it is thought to be essential.
Alan Greenspan warned in 2008 of rising inflation:
“But that was more than four years ago, and both inflation and interest rates remain low. Maybe the United States, which among other things borrows in its own currency and therefore can’t run out of cash, isn’t much like Greece after all.”
Alan Greenspan has been thoroughly discredited, first for his advocacy of deregulation for financial markets, and now for his claims of impending inflation. There’s no inflation because the spending power of the average American has weakened dramatically, especially over the last five years. Without demand, you can’t have inflation.
This from commenter Karen Garcia:
“It’s been estimated that the $398 bn wasted on the F-35 fighter alone could buy each of the 600,000 homeless Americans a $600,000 home.”
Sleater, another commenter:
“The supposed “deficit” and “debt” crises were always a tale fostered and furthered to ensure fiscal austerity now (which we’ve had), and lock in those lower Bush tax rates and the giveaways they enabled, to the tune of $6.6 TRILLION, as that recent study by Pulitzer Prize-winner David Cay Johnston showed. “
Now recall that the costs of the Iraq and Afghanistan wars exceeded $3 trillion, and you can understand the $17 trillion debt of the US gov’t. Besides, the US has $300 trillion in assets according to another commenter… so plenty of collateral.
Another view of debt, from John F. McBride of Seattle:
“Since Ronald Reagan Conservative fiscal policy proposal resulted in:
* Reagan and Bush: $3.4 Trillion increase in debt
* George W. Bush: $6.1 Trillion
A total of $9.5 Trillion.
But wait! There’s more! Just as all of us who borrow also owe interest by September 2010 alone:
* Interest on Reagan-Bush debt under Clinton: $2.2 trillion
* Interest on $11.7 trillion after G. W. Bush: $0.3 trillion
Total Reagan-Bushes debt with interest: $12 trillion.”
It seems that Republicans create deficits, and Democrats get blamed for them.
The New York Times online has published an opinion piece by Joe Nocera that reveals how the drug development system works. Vertex, the company that has brought Kalydeco to market, says that they have spent $6.5 billion on drug development so far, and Kalydeco is the only drug they have to show for it so far. They do have another drug in development that may target a much larger percentage of patients with cystic fibrosis, and their research has led to a better understanding of the disease.
At any rate, for $300,000 a year and 2,000 patients, you are getting $600 million a year. In ten years, you will have made back most of your investment. Of course, your 2,000 patients will continue to need your drug for the rest of their lives, which will be greatly extended by the drug itself.
If Vertex develops another drug which comes to market, which seems increasingly likely, the initial investment will get further return and perhaps the drug’s costs will decline. Or so one might think, if one were a reasonable person. But drug prices aren’t reasonable, and there doesn’t seem to be much pushback from insurers. It appears that Vertex, and many other drug developers, are sitting on a gold mine.
The risks are high: only ten percent of drugs developed are brought to market. The costs, reflecting so many failures, are said to exceed 6 billion dollars per drug.
Medicaid has balked at paying for Kalydeco in one state so far; they are likely to cave in, however, according to Joe Nocera’s opinion piece. Since a lot of cystic fibrosis patients are on Medicaid, this is going to be a federal government problem that really could use an efficient solution. Like this one, from the comments:
“I’m a veteran drug rep, and I can tell you that the only way Americans can avoid paying these sorts of prices for drugs is to nationalize drug development. Obviously, this would be paid for by a federal tax, but it would dramatically reduce the cost of drugs because profit would be removed from the equation.
In addition, a government-run drug development program would save billions of dollars in wasted pharmaceutical research, because we would focus on develop much-needed drugs–such as antibiotics–and we would not waste money developing me-toos (for example, new statins or SSRIs) and patent-extenders (drugs in which a very minor change was made, in order to extend the patent).”
That’s right, nationalize drug development. The federal government pays so much for drugs, through the Veteran’s Administration, Medicare, and Medicaid, that it makes sense to create a federal system to develop drugs. The potential benefits would be really dramatic. Small government advocates will swoon at this advice, but Medicare has been such a success that we feel comfortable advocating national drugs as well.
Here is a link to the NYT opinion piece: http://www.nytimes.com/2014/07/19/opinion/joe-nocera-cystic-fibrosis-drug-price.html