Mike Kueber's Blog

November 15, 2012

Driving off the fiscal cliff with Thelma & Louise

Filed under: Economics,Issues,Politics — Mike Kueber @ 1:42 pm
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President Obama held his first post-election news conference today.  Although I missed catching the event on TV, I was able to read an on-line transcript.  Three subjects dominated the questioning – Benghazi, David Petraeus and the so-called fiscal cliff. 

This post is about the third subject – the fiscal cliff.  According to Yahoo.com news, it consists of the following severe economic developments that are scheduled to occur at the end of the year unless government takes action:

  • The Bush tax cuts will expire.  President Obama wants to retain the tax cuts only for those who make less than $250k, which effectively increases the marginal tax rate for the rich from 35% to 39%.  The Republicans want to retain the tax cuts for everyone.  If the Bush tax cuts are allowed to expire for everyone, the federal government will obtain an additional $330 billion a year in revenue.
  • Sequestration.  As part of the debt-ceiling deal last year, the parties agreed to reduce both defense and domestic spending by $55 billion each.
  • Long-term unemployment benefits.  Last year, in return for the Republicans agreeing to allow these benefits for up to 99 weeks, the Democrats agreed to retain the Bush tax cuts for everyone, including the rich.  Now the Democrats want to keep the long-term unemployment benefits, but they want to repeal the Bush tax cuts for the rich.
  • Cuts to Medicare reimbursements.  Medicare reimbursements for doctors participating in Medicare will be severely cut by $11 billion.
  • Restoration of the full Social Security tax.  Last year, to stimulate the economy, Congress temporarily reduced the Social Security tax by 2%.  By resuming collection of this 2%, the federal government takes in an additional $95 billion a year.
  • Tax extenders.  A variety of smaller taxes cuts for both businesses and individuals collectively known as tax “extenders” cost the government $65 billion a year.  They include a tax credit for research and development and a deduction for sales taxes in states that don’t have an income tax.
  • The debt ceiling.  The $16.4 trillion debt ceiling will be reached in late December or early January.      

Both parties seem to agree that driving off the fiscal cliff – i.e., not doing anything to prevent these things from happening – would throw the American economy back into a recession.  That was exactly the position that most politicians adopted in agreeing to Obama’s $1 trillion stimulus in 2009.  But if this turns into a game of chicken like the debt-ceiling deal, some pundits think the Democrats are more willing than the Republicans to go over the cliff.

Back in 2009, the incipient TEA Party provided the vocal opposition to the stimulus and again later with the debt-ceiling deal, but they are surprisingly muted here, primarily because three significant components of the fiscal cliff are various tax increases, which are anathema to the TEA Party.

As a fiscal conservative and a debt hawk, I see a lot of positive things that would come from taking a Thelma & Louise plunge off the cliff:

  1. Everyone, not just the rich, would be asked to pay more.  Shared pain; fewer free riders.
  2. There would be painful cuts to defense and domestic spending.  Again, shared pain.
  3. Individuals would not be allowed to linger on unemployment benefits.  Discouraged dependency.
  4. The full revenue stream to Social Security would be resumed.
  5. Medicare spending would be trimmed.

The major negative result of going off the cliff is that it would over-emphasize short-term pain and ignore long-term reform of the entitlements – Social Security, Medicare, and Medicaid.  Too much short-term pain is what could cause a recession.  By contrast, long-term entitlement reform will save more money with less pain.

I agree with an article in the Washington Post that suggests the fiscal cliff could be a blessing in disguise because it might prompt the parties to reconsider something as big and comprehensive as the Simpson-Bowles solution. 

That is why Republicans should reject President Obama’s press-conference proposal to first raise taxes on the rich and then later consider tax and entitlement reform.  Instead, the increased taxes need to be the incentive to force the Democrats into agreeing to entitlement reform.

If this turns into a game of chicken, however, some pundits think Obama and the Democrats are now more willing to go over the cliff because they could blame any subsequent recession on the Republicans.  (Am I mixing metaphors?)   

This is getting interesting.  Either way, I see significant progress toward balancing America’s budget.

 

 

August 27, 2012

Where are the conservative (non-radical) Republicans when we need them?

Filed under: Issues,Politics — Mike Kueber @ 1:48 am
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MySanAntonio.com recently published an interesting column by NT Times columnist Thomas Friedman.  In the column, Friedman lamented the fact that America was unable to address the four great problems of today because control of the Republican Party had been ceded by the conservatives to the TEA Party radicals. 

What are America’s four great problems?  According to Friedman:

  1. The nexus of debt, taxes, and entitlements;
  2. Immigration;
  3. Energy and climate; and
  4. Education

Friedman suggests that the solutions to these problems are obvious if you are as smart as he is.  Debt, taxes, and entitlements – we need to adopt significant tax increases and spending cuts – i.e., the Obama position.  Immigration – we need to create a path to citizenship for illegal immigrants – i.e., the Obama position.  Energy and climate – we need to require that the energy industry be accountable for all of its costs and then let the markets work.  That makes sense.  Education – teacher evaluations, core standards, charter schools, vouchers, and the elimination of union rules.  That makes sense, too.

Friedman fears that unless the TEA Party is shunted aside by the Republican Party, neither Obama nor Romney will be able to address these problems.  I disagree.  The TEA Party is not opposed to Friedman’s suggested energy and education reforms.  And with respect to taxes and immigration, Friedman will eventually learn that his positions in favor of higher taxes and paths to citizenship may be in the mainstream at the New York Times, but they are extreme positions to most of America.

As President Obama is wont to say, elections matter, and the election of 2012 will break the current logjam.

November 2, 2011

The status of the balanced-budget amendment

Filed under: Uncategorized — Mike Kueber @ 2:56 pm
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You may have forgotten, but the debt-ceiling fix earlier this summer included the deferral of two important issues until November.  Well, November is here.

The most prominent of these issues was the creation of an ad hoc super committee that would cut $1.5 billion of federal government spending.  If the committee could not agree on the cuts, then cuts would be automatically applied to the Democrats’ sacred cow (Medicare) and the Republicans’ sacred cow (national defense).

News reports re: the work of the super committee sound much like the reports on the Obama/Boehner negotiations to raise the debt ceiling – i.e., some are horribly pessimistic and characterize the participants as similar to immature, squabbling children who can’t agree on anything; others are shockingly optimistic and discuss the possibility of a grand compromise (way beyond $1.5 billion in cuts) that will instantly, almost single-handedly solve America’s existential problem that has been decades in the making.  As an eternal optimist, I am hoping for a grand compromise.

The second debt-ceiling issue, which hasn’t received nearly as much attention, was the promise to have a vote on a balanced-budget amendment to the Constitution.  Although the prospects of such an amendment receiving the requisite two-thirds vote in the House and Senate are not good, it is important to get the legislators and parties on record on this issue.  Then the voters will be able to distinguish between those who merely talk the talk of fiscal responsibility and those who walk the walk.

An interesting article in USA Today describes some of the tactical things going on in Congress prior to voting in a couple of weeks, the most important of which is the precise wording of the amendment.   Small-government types are pushing for language that goes beyond balancing the budget to include a limit on the size of government vis-à-vis America’s GDP.

San Antonio congressman Henry Cuellar is quoted in the article as saying that the inclusion of small-government language in the amendment will transform it from a “policy” issue to a “politics” issue.  I couldn’t agree more.  There is bipartisan support for a balanced budget, with Blue Dog, fiscal conservative Democrats like Cuellar ready and willing to cast their vote in favor.

But those Blue Dog Democrats have never agreed to rolling back the role of federal government to 18% of GDP.  They envision the role of federal government gradually expanding, and they don’t want any constitutional obstacle to that happening.

As noted above, constitutional amendments require broad support (two-thirds in Congress and three-fourths in the states).  To have any possibility of passing, the Balanced Budget amendment needs to be written without the grandiose TEA Party ideology that will drive away the Blue Dog Democrats.

October 22, 2011

Comparing the Occupy Wall Street movement to the TEA Party movement

There is an effort in the media to characterize the Occupy Wall Street movement as a political counter-weight to the TEA Party movement.  An article in today’s New York Times is typical of that effort.

According to the article in the NY Times, the two movements share traits:

  • They emerged out of nowhere but quickly became potent political forces, driven by anxiety about the economy, a belief that big institutions favor the reckless over the hard-working, grievances that are inchoate and even contradictory, and an insistence that they are “leaderless.” “End the Fed” signs — and even some of those yellow Gadsden flags — have found a place at Tea Party and Occupy Wall Street protests alike.

The article thought the major difference between the two movements was substantive – i.e., where to place the blame:

  • While Occupy forces find fault in the banks and super-rich, the Tea Party movement blames the government for the economic calamity brought on by the mortgage crisis, and sees the wealthy as job creators who will lift the country out of its economic malaise. To them, the solution is less regulation of banks, not more.

Of course, this sort of article infuriates Tea Party partisans because for months they had to fight to earn credibility and legitimacy from the media, and now the media appears to be quickly handing over similar bona fides to a decidedly non-mainstream, unaccomplished movement.  What fair-minded person would conclude that Occupy Wall Street, like the TEA Party, was a “potent political force”?  Are you kidding?

The TEA Party is generally considered to be the dominant factor in one of the most important off-year elections.  What has the Occupy movement accomplished?

I recently heard Al Sharpton claim that the Occupy movement deserved great credit for succeeding in getting the conversation in Washington away from the debt/deficit and towards job creation.  I doubt that is true (and I certainly hope it isn’t), but it shows how hard the anti-TEA Party pundits are working to build up the bona fides of their protest organ.

All of this reminds me of the effort a few years ago to create liberal/progressive talk radio to provide a political counter-weight against Limbaugh, Hannity et al.  The most famous of these was called Air America, which brought us Ed Schultz and Rachel Maddow.  After six years (2004-2010), however, Air America went broke and filed for bankruptcy because there weren’t enough listeners.

From a non-partisan perspective, it would be nice if the left develops a movement that is similar to the TEA Party in terms of energy and idealism.  But America is not well-served by the media or anyone else granting bona fides to a group that has not yet earned them.

October 12, 2011

Who comprises the Occupy Wall Street movement?

Filed under: Culture,Politics — Mike Kueber @ 8:51 pm
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Until today, I had heard no hard numbers of who comprises the Occupy Wall Street movement.  But based on news reports and the punditry, I’ve assumed that the Occupy Wall Street movement is about as far left as the TEA Party movement is far right.  Today, however, I heard hard numbers that suggest the Occupy Wall Steet partisans will be significantly less pragmatic than the TEA Party partisans.

According to New York magazine, it asked the Occupy Wall Street people to rank themselves on a scale of liberalism:

  • Not liberal at all: 6%
  • Liberal but fairly mainstream (e.g., Barack Obama): 3%
  • Strongly liberal (e.g., Paul Krugman): 12%
  • Fed up with Democrats, believe country needs overhaul (e.g., Ralph Nader): 41%
  • Convinced the U.S. government is no better than, say, Al Qaeda (e.g., Noam Chomsky): 34%

Wow!  Eighty-seven percent think Obama is too conservative, even though there is no serious thought of anyone challenging Obama from the left in the Democratic primary.  These Wall Street people seem to be way left of the Democratic mainstream, and I didn’t think there were many of such people in America.  But I could be wrong because I am getting retired and don’t interact with the world as much as I used to.  Instead I rely almost exclusively on the mainstream media for my second-hand information.  There could be something going on, and I may be one of the last to learn of it.

 

Bait & switch?

Filed under: Issues,Politics — Mike Kueber @ 7:28 am
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Rachel Maddow and her liberal cohorts are accusing the TEA Party of engaging in a campaign of “bait & switch.”  (I recognize that this is only a metaphor, and I will not charge the libs with unfairly comparing a TEA Party practice that is legal to something else that is actually illegal.  But I wouldn’t be surprised to see The Daily Show make fun of the libs because they have previously charged Rick Perry with unfairly comparing a legal practice, Social Security, to an illegal practice, a Ponzi scheme.  Stewart is a master at calling out hypocrites of all stripes, although he seems to especially enjoy calling out the FOX people.)

What was the TEA Party’s bait & switch?  Maddow and the liberals charge that the TEA Party campaigned on a program of jobs and the economy.  Then after being elected, they dastardly turned to their real agenda – immigration, unions, voter fraud, abortion rights, redistricting, same-sex marriage, etc.

Maddow is correct that in that conservatives (Republicans, but not the die-hard TEA Party proponents) have aggressively legislated on social issues instead of fiscal issues.  Furthermore, she will probably get even more exercised when she reads about another heretofore obscure issue that the Republicans in the state legislatures are bringing to the front burner nationally.

According to an article in the NY Times, policy makers in 36 states are attempting to establish drug-testing as a condition precedent to receiving various public benefits, such as food stamps, public housing, welfare, or unemployment compensation.   My first thought when reading about this issue was that the requirement wouldn’t be legal.  That goes to show that I don’t think out of the box enough because, thus far, the only legal challenge to enjoy even a modicum of success is the argument that mandatory testing violates an individual’s constitutional right against unreasonable search.

The Times article describes some other more emotional arguments against the drug-testing requirement:

  • Reinforces the stereotype of government beneficiaries as undeserving and morally lacking.
  • Unfairly singles out victims of the Great Recession even though studies consistently suggest that government
    beneficiaries are no more likely than the general public to use drugs.
  • Discourages individuals from applying for the benefits.
  • The cost of administering the program safeguard will exceed the savings.

These arguments are easily refuted by proponents of the testing.  Testing actually helps eliminate the stereotype because taxpayers are reassured that individuals are not concurrently receiving benefits and using drugs.  And although drug users may be discouraged from applying for program benefits, non-users of illegal drugs are not.  What’s wrong with that – America has no interest in creating sanctuary for drug-users?  And most importantly, the disbursement of government benefits needs to be aggressively managed and controlled; not placed on some sort of entitlement cruise-control.

This issue reflects how much America has changed in the past few years.  A few years ago, there would have been a knee-jerk reaction against implementing this type of reform.  At that time, there was almost no trepidation to extending in-state tuition to illegal immigrants (at least in California and Texas).  Those days are gone.  If you want to spend government money today, especially if you want to redistribute it, you’d better have a solid program and a damned good reason for doing it.

October 9, 2011

The Wall Street movement takes shape

Filed under: Economics,Issues,Politics — Mike Kueber @ 3:48 pm
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The Sunday talk shows spend an inordinate amount of time this morning trying to figure out the Occupy Wall Street movement.  Conservatives generally see the movement as a cynical gathering of scheming liberals who were disillusioned by President Obama’s ineffectiveness, whereas liberals see it as a spontaneous outburst of idealistic citizens who were shocked that America had become a government of the feckless, by the corrupted, for the connected.

Although both the TEA Party and Wall Street movements arguably sprung to life from spontaneous, decentralized groundswells, they were also both quickly co-opted by the established parties.  The TEA Party and Republican Party might act as if they were independent entities (with the Republican Party playing the “good cop” to the TEA Party’s “bad cop”), but there is no denying that the TEA Party is pushing the Republican agenda while the Wall Street movement is pushing the Democratic agenda.

President Obama has given up on achieving any significant legislation before the 2012 election, and instead is trying to frame the deadlocked
issues in a way favorable to the Democrats.  For now, he is starting class warfare by demonizing the rich.  Not coincidentally, Obama’s stalking horse, the Occupy Wall Street movement, is screaming about “economic justice” for the 99%.

Conversely, the TEA Party, which is the Republican Party’s stalking horse, demonizes most of the federal government and will not consider $1 in additional taxes, even if offset by $10 of expense cuts.  That will enable moderate, “good cop” Republicans like Speaker Boehner to later agree to a compromise that is heavily slanted in favor of cutting government expenditures.

One of the Wall Street movement’s compelling proofs that is currently circulating the internet is a chart revealing that the ratio of CEO-to-worker pay in America is 475:1.  The country with the next highest ratio is Venezuela at 50:1; Japan is at 11:1 and Germany is 12:1.  When I conceded to a friend who posted this chart on my Wall that this was a serious problem in America that should be addressed by getting workers to be more productive, the friend responded by saying increasing worker productivity usually inures to the benefit of the CEO and employer, not the employee.  What do you say to that?  I suspect we have to agree to disagree unless Milton Friedman will agree to arbitrate this issue.

October 5, 2011

The Occupy Wall Street movement

Filed under: Issues,Politics — Mike Kueber @ 4:13 am
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I was one of those guys who were late in arriving at the TEA Party.  In early 2010 a local TEA Party group invited me as a congressional candidate to an event of theirs at the Magic Time Machine in San Antonio.  Although the movement had been in the national media since its seminal event on April 15, 2009, I had only the slightest idea of what the party stood for – Taxed Enough Already.  Because I never refused an opportunity for exposure, I attended the event and was disappointed by the attendees’ anger because I was running on a platform of pragmatism and toning down the rhetoric.  These guys (and a few gals) were into full-throated venting, and I couldn’t imagine them becoming the dominant force in the 2010 elections across the country.

As little as I knew about the TEA Party movement in early 2010, I know even less about the Occupy Wall Street movement today.  Because I spend a lot of time surfing the internet, I have probably been exposed to dozens of news articles on the Wall  Street protests, but I have consistently sailed past the articles and have absorbed nothing about it that wasn’t in the headlines.  Now is a good time to correct that.

According to an article in the New York Times earlier yesterday, the Occupy Wall Street movement consists of a motley assortment of  people who are motivated by a motley assortment of issues, but the unifying  thread is that America’s current economic and political system is no longer Lincoln’s  “of the people, by the people, for the people.” Instead of serving the people, it serves the aristocracy.  Or as Time magazine’s David  Von Drehle opined in November of 2010, America is currently “government of the feckless, by the crooked, for the connected.”  In this regard, the Occupy Wall Street people are closely related to the TEA Party people – i.e., they both want to take America back.  That is quintessential  populism, with the TEA Party movement drawing in right-leaning people while the  Occupy Wall Street movement attracts left-leaning people (including unions).

There are obvious synergies if these two movements can be coordinated into pulling in the same direction.  But keeping the focus on core principles is difficult, as the TEA Party proponents are discovering in trying to keep social  conservatism from intruding on its fiscal undertakings.

Earlier this week, an Ezra Klein column in the Washington Post discussed the corrupting influence of corporate money on politics.  That is an issue near & dear to my heart, and although I believe the Citizens United case was correctly decided in accordance with Free Speech under the Constitution, there are a myriad of things that the combined efforts of populists from the left and right could do to ameliorate the pernicious effect of the holding.

How about this unifying creed from the 60s – Power to the People?

September 16, 2011

“Let him die?” – part II

Filed under: Issues,Media,Medical,Politics — Mike Kueber @ 11:58 pm
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My previous posting concerned an incident that occurred during the CNN/TEA Party presidential debate.  In my post, I described the incident as follows:

  • CNN’s Wolf Blitzer teed-up the issue by asking Ron Paul what the government should do if a 30-year-old man chooses not to buy health insurance and then finds himself in intensive care.  Paul responded, “That’s what freedom is all about — taking your own risks.”  Not satisfied with that answer, Blitzer pressed him to elaborate – “Should society should just let him die?”  According to a column by Paul Krugman in today’s NY Times, “And the crowd erupted with cheers and shouts of ‘Yeah!’”  I wasn’t at the debate, but I was watching it on TV, and I assure you that the crowd did not erupt with cheers.  All I heard were a few of voices saying “Yeah.”  Obviously, Krugman is trying to create a villain by building on the response of the debate audience a week earlier to a Brian Williams question to Rick Perry on capital punishment.  Even that audience did not “erupt,” but its response was clearly more pervasive than the few voices saying “Yeah” to Blitzer’s question.

Shortly after posting the preceding entry, I was watching America Live with Megyn Kelly on FOX News, and she was discussing the same incidents with two guests – one a TEA Party leader and the other a liberal progressive.  When Kelly asked the TEA Party leader to explain the audience reaction to Blitzer’s question, the TEA Party leader said that “audience” hadn’t reacted, but some hecklers had.  She said the hecklers didn’t represent the TEA Party movement, which has, as a matter of practicality, decided against taking positions on social questions, like the one posed to Ron Paul.  Instead the TEA Party has focused its energy and resources toward fiscal matters.

Upon hearing the TEA Party position, Kelly’s liberal progressive guest almost came out of his shoes.  Although he didn’t argue that the audience reaction more than some hecklers, he did assert forcefully that providing universal healthcare is not a social issue, but rather is a fiscal issue.  He also declared that this outburst in the audience showed that the TEA Party consisted of extremists.

Kelly then segued into the capital-punishment outburst during the previous debate, and the TEA Party leader surprisingly defended the audience there.  She claimed that the audience was showing its support for Rick Perry for following the law in Texas.  At that point, the arguments lost me, and I don’t recall any cogent pros or cons, so after the show I was left to my own research and analysis on whether “Let him die” is consistent with TEA Party orthodoxy.

Because the TEA Party is decentralized, it doesn’t have an official platform, but one of the leading TEA Party cells is TheTEAParty.net, and it lists the following as its fundamental values:

  • Limited federal government
  • Individual freedoms
  • Personal responsibility
  • Free markets
  • Returning political power to the states and the people

TEAPartyPatriots.org lists its core values as:

  • Fiscal Responsibility
  • Constitutionally Limited Government
  • Free Markets

And finally, Wikipedia describes the TEA Party movement as follows:

  • The Tea Party movement (TPM) is an American populist political movement that is generally recognized as conservative and libertarian, and has sponsored protests and supported political candidates since 2009.  It endorses reduced government spending, opposition to taxation in varying degrees, reduction of the national debt and federal budget deficit, and adherence to an originalist interpretation of the United States Constitution.

Based on those descriptions, I think the TEA Party leader was correct in stating that Blitzer’s question – “Let him die?” – is not a fiscal matter on which they are working, although they would certainly argue that providing universal healthcare is something for state and local governments to consider, not the federal government.  The TEA Party means Taxed Enough Already, and it stands for having the federal government living within its means and doing the necessary prioritizing.

But I also understand the liberal progressive argument that universal healthcare is not a social issue, like abortion or same-sex marriage.  Universal healthcare is all about financial wherewithal, and ObamaCare is in deep trouble more because of America’s fiscal mess and less because of constitutional conservatism.

“Let him die.”

The CNN/TEA Party presidential debate raised a number of important issues – e.g., Social Security, political cronyism, and illegal immigration – most of which put Rick Perry figuratively on the ropes.  But one issue that continues to linger, even grow, involved Ron Paul and the TEA Party audience.  That issue is how to reconcile the conflict between (a) personal liberty to decline to buy health insurance and (b) personal responsibility for your irresponsible decisions.

CNN’s Wolf Blitzer teed-up the issue by asking Ron Paul what the government should do if a 30-year-old man chooses not to buy health insurance and then finds himself in intensive care.  Paul responded, “That’s what freedom is all about — taking your own risks.”  Not satisfied with that answer, Blitzer pressed him to elaborate – “Should society should just let him die?”

According to a column by Paul Krugman in today’s NY Times, “And the crowd erupted with cheers and shouts of ‘Yeah!’”

I wasn’t at the debate, but I was watching it on TV, and I assure you that the crowd did not erupt with cheers.  All I heard were a few of voices saying “Yeah.”  Obviously, Krugman is trying to create a villain by building on the response of the debate audience a week earlier to a Brian Williams question to Rick Perry on capital punishment.  Even that audience did not “erupt,” but its response was clearly more pervasive than the few voices saying “Yeah” to Blitzer’s question.

Some have argued that these questions reflect the liberal bias of the mainstream media.  Last night, one of the conservative talk shows included a segment that contrasted the tough questions posed by Williams and Blitzer during the debates to the soft-ball questions posed by Williams to President Obama during a recent sit-down.

I don’t have a problem with the tough questioning of the candidates during the debates, and I like the follow-up questions.  Both the capital-punishment and let-him-die questions included important follow-ups.  But, as Michele Bachmann noted in a post-debate interview, it’s too bad  that the large number of candidates precludes each from getting a chance to respond to every question.  She lamented that she had many excellent responses that she was not able to give.

Which brings me back to Blitzer’s question to Ron Paul.  Although Paul, as a libertarian, is the natural recipient of the question, the more interesting answers would have been from the other candidates.  How would they reconcile the conflict between personal liberty to decline to buy health insurance and personal responsibility for your irresponsible decisions?

I think the correct answer is to maintain the status quo – i.e., some states, like Romney’s Massachusetts, may adopt a state-wide mandate based on its police powers, while other states, like Perry’s Texas, would shift the responsibility for providing low-income healthcare to county/local government.

Most of the Republican candidates, however, have rejected the concept of state mandates.  Those candidates need to answer Blitzer’s question.

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