5 Point Plan for the Future - BU Prof. Kutlikoff

Thomas -- WR -- Economy I think he remains in a Malays despite the fact the numbers are starting to show improvement. The improvement this kind of thing this is economists know about I don't think it's impacted people on on a street level but let's talk to the professor about it. -- professor Lawrence copilot -- from Boston University is is I guess he's joining us on the line here on WRKO and just just a little bit of background a few months ago he he offered us. Kind of a five point plan that I think caught each of our attention Todd. And we you know we talked about it such as we can get this -- don't we get get this guy and so it's taken us a little longer than we hope professor but delighted that you're able to join us and he had an at least Todd night and I think a great deal what a great many of lawlessness. Sink in that notwithstanding. Upbeat report so prognostications from the White House. This economy situation is he is really not positive. And I suspect a lot of graduates from -- a -- place so there -- come out a finding it very very had to go out and you know find a way to move forward productively in life. Yeah we sort of 129 million people either out of work are short on work so the economy is so kind of stuck in a bad spot. And also we have very very substantial long term problems political problems. You know it's not just the tax system of the -- but it shut up not generating enough revenue. So Austria worse financial shape than it's ever been. The health care system has four federal systems now that each of which can run that can -- this broke. So we have to fix these things and also in a Wall Street remains a big threat through two main street. So I've laid out how to fix these things on a site called colored top 2012 dot org and it's called that because I'm actually running for president on his -- on this new Americans election. Got to work platform that you made so today you may have we've really rich. Here where we we we heard about it Indian guy I think anytime anybody wants to bring light and attention. To see the economy and as you say some of the long term problems. We were instantly all he is around here because that really our audience gets very engaged on -- kind of war or just -- just announces his presidential campaign news -- right over like it was nothing more than because -- running for president he's a substantive candidate you're not doing -- and the -- and what substance we don't want -- -- the fact that he's putting yourself on -- I deserve the country I'll stop this way instead professor -- Mr. President. How could you give us a sketch of the for a state of the union speech about -- Hot hot we're we're all gonna have you guys thought they -- that did go okay this is -- -- stereo. So anyway congratulations on the candidacy. Thank you -- Gets a bit of a plunge but you know -- uses this platform allows. Somebody like me -- you know the billionaire to actually. Get onto the ballot -- at all or the other two candidates probably Rick Santorum and President Obama and and whoever that person -- -- chosen by the Americans select dot org. Website can you vote campaign and then. Person will have looked pretty good. Opportunity -- particularly -- approached him and their community. A -- he's got the best. All you you must draw over the idea that you can actually be up at a podium with a major. Party candidates what would you. What's your biggest fantasy about what we do you would say. Well look drooling over tournament I think I think. Because this is not all about -- -- really good debaters so it's really about how to fix the economy short term and long term so that. I say look we have -- taxes and ultimately we have you politicians have made a -- for six decades. You bring creation of in a Ponzi scheme taking from young people giving old people. This is that's. Dramatically increase the consumption the only and I looked -- talking about poor old people I'm talking about original people why we need poor young kids. Contributing money to -- there's huge amounts of money every year alarmed -- it just. I know the this thing we're doing and in terms of equity so we've had a fixed decades Ponzi scheme. It's both parties have been running its. Let our national savings rate to literally be zero or domestic investment grade. Is it a postwar low current and this is and it's affecting our. Real wage growth because -- that the stagnant real wages in terms and take home pay per since 1964. So there really don't -- This is that the economy is so -- in terms of its long term trajectory. And it. I other economists have been simulating wrong. Computers. These policies -- bits that we've been running for the last six decades. And you see economy. In front have you on the computer screen Gaudin -- had to be simulated. Economies so. So let's say look we need a six taxes and these other programs Social Security healthcare and a fundamental way. Wall Street as arranges this part too dangerous to take the economy down again we're seeing this in Europe you know. They have the banks -- -- sovereign bonds are banks bought toxic. The sub prime mortgages. The banking system has a range is far too dangerous so I've got a proposal quote limited purpose banking which has been endorsed by a virtual it's. Bill Bradley Robert Reich. Major players in the policy world. As well as -- a -- it's an economics credit fixes a lot of talking about some pretty strong medicine but it also medicine that economists. Thank you we'll say is what's needed we've ever had an economist run for president before I like to -- the country text. You -- the first. Yeah I give us some specific should mention taxes a couple of times the tax system being just ridiculously dysfunction and you also mentioned entitlement reform can give -- one or two. -- the extra bucks each actually throw quick we have we have I get -- I would get rid of the income tax the corporate income tax and estate and gift tax and I'm sure some of your readers think that's gonna be highly regressive what I'm talking about. Replacing them -- but I'm not. I'm talking about. Putting him in their place say highly progressive payroll tax take your payroll tax which is highly regressive and making it highly progressive. I'm talking about having a highly progressive consumption tax and a highly progressives. Inheritance tax now. It's taken me progressive without super high tax rates at the top the tax rates trichet these taxes is 15% took -- 151515. Plan. But it is possible what inside -- maintains. And he is gonna pull this service -- pocket. And you know real else's serve. Who was gonna get hurt it was gonna help your help this thing entirely progressives in terms of the compared to the current system. Because. It really goes after people -- well. Differently compared to workers workers get a break. Poor lower earning workers that the biggest break and when I'm proposing. And rich people like Mitt Romney. Get to pay more and they need to because in general we're collecting far too little revenue which were -- -- like -- 15% of GDP we need. At least 20% of GDP you know we need to cut spending on entitlements. Here's what I would do on health care I wouldn't -- -- Everybody needs -- basic plan so we don't need to go broke providing and so what I would do is get rid of Medicare get rid of Medicaid get rid of again we could get rid of the employer based health care and get rid of these new health exchanges start with a clean slate. And and instead I would -- every person in the country every American in the country -- Belcher survive basic health care plan. From an insurance company. Every year you get a new voucher and that you would depend on your preexisting conditions. So we would use. Existing technology to give you -- bigger voucher to have diabetes surged more what I would depend on your expect to help. Crossover voucher would be large helicopters -- -- by the way he's an economist at Boston university and a candidate for president. Upon the what's the name of that website at an indoor work Americans -- -- which is an opportunity for national selection of the candidate. Outside of the party system to be able to get on the ballot with the other big guys. So they did it give us a little more. -- So look because I've got diabetes I guess they've got church you're perfectly healthy get a small one. We got the insurance industry we we -- choose an insurance companies say here's my voucher. You've got to give me the basic plan because that's the law nobody can turn you turn anybody down no insurance company and in my proposal. And every insurance company has to offer exactly the same basic plan and the coverages as a basic pilot beset by a panel. -- -- -- Here's sort of way the state does auto insurance. -- and exactly end. Guess what the how would determine the coverages what's included under the basic plan. So that the cost of the vouchers never exceed 10% GDP. So that's a huge number actually. But this CBO has the government's perjury is projecting that the government's federal state are going to be spending. Not 10% of GDP into the future for 23%. Which is completely crazy in terms of what it's gonna give our kids and tax rates and things US deficit. So we need to keep an attempt percent of GDP that's a huge numbers what Germany and Switzerland. Its ban on all their help -- based -- 11% of all on all their health care I'm talking about 10% per basic plant. -- this plan. May sound like it's extreme compared to what we now have but -- -- we now have is driving a server clips so that's really the radical choices stay where we are. What's wrong room who you're talking about the all the obamacare plan or leave. I'm talking about you know I call obamacare is because I believe the president that cares deeply about getting people covered than I do too I think everybody does anybody sensible. He knows everybody needs to basic plan but we can't go broke as the country's I would get rid of -- Obama cares -- Medicare Medicaid. And get rid of side employer based health care and give everybody that this subsidy to employer based health care which is -- enormous and growing that's why are taxes I don't have me growing. Very -- earlier -- you know hours at such a low level because we're giving so much. -- see your -- for your voucher then would be for everyone to get a basic healthcare plan and then. Everything else that this will get rid of I would guess a lot of the mandates that we see now the drive up the cost professor here a few -- skinny weight throughout your news update and we'll talk more for third period sorry thank you professor -- -- car from -- new. Stay tuned for more because. We will break down much more this -- this is interest things ultra so tough guy and it's from an economist as opposed to a political viewpoints so. Maybe you'll learn something about how to get this job done properly. State tunis summit Todd WRK. Thomas Todd WR scale that some talk -- -- you -- network capital funding corporation. Your future financed. Professor Larry -- -- -- a lot of scuttling top from the EU is I guess he's also a candidate for the presidency but we've been talking to about a very intriguing health -- Alternative plan that he's discussing him professor Todd and I Wear red chat during the news break via about. This basic healthcare plan as I is I recall you description of I have diabetes is solid get a lodge your vouchers then you would who you know is is enjoying fine health. -- but the catastrophic side of things worries I think every one. You know that you know that diagnosis of cancer and and the treatments how would you go about. You know. Basic plan and I'm talking about -- cover these catastrophic OK all right I was confused on that Todd had it right I was a little confused enough updates. Aren't you can -- And I cut it may not cover angioplasty is 98. But it's gonna cover the basics and catastrophic care for cancer is certainly one of the worst. So what are your proposal basic health -- -- one of the things I've always found confusing. Is that the thing that drives the need for health insurance. He is. The expensive it. So if you were gonna make a plan that was universal try to find a way to get more people on you would try to get rid of mandates and have the simplest possible plans. To cover people against being financially destroyed when they get a big disease instead they purchased in the opposite. Let's have basic plans that cover condoms and I've never understood that what's your take on an up and approach. You know we have to move make clear that -- we can't. Afford. Everything's and our kids can't afford everything as usual really leaving all the bills -- -- you know this new tax cut that we just passed. You know yesterday in the process is being cats and passes through a tax cut its felt great but -- -- gonna pick up an extra hundred billion dollars. We are kids. -- not -- the next generation it's not us. It's not a freebie yeah we have if you look long term -- what we're what we're loading onto our kids it's just choruses -- bankrupt situation in terms of so what we're doing to them so. Yeah we need to get. Health care for everybody -- basic plan there's really just cover all the essentials including cancer treatment but not go broke doing -- this is. Another proposal that's been endorsed by you have many prominent people five Nobel laureates in economics of endorsers it's very hard to get five economists agree on anything. -- five Nobel Prize winners to endorse the health care plan is exceptional. And I call these plans to purple plans because they're designed to appeal to both. -- Democrats and read Republicans and blue and red makes purple. So you have the purple health plan not a word worker -- campaign site which is color cut 2012 dot org. You'll see. What I'm talking about here and and for Democrats who don't like the word Belcher this seems to be a really bad word for. For people on me. You know from the democratic side but -- -- realize that. The poor are -- on average than the rich and therefore they're gonna get bigger vouchers. On average than average. And older people get bigger vouchers than younger people because all the people are higher expected health care costs because again they're sick on average than the young. And is that precisely that word in the use of the vouchers that you would say red red you know Republican voters drawn to the notion of a voucher fueling beyond. Orientation he had not you know I didn't hear the word vouchers to make anybody upset sure I use the word without really trying get -- That the Republicans to look at this carefully. And get the Democrats to you know so it's. So the Democrats may not like that where they can replace there was another word takes but the key thing is that this is a highly progressive reform. And it's also they've got the essence of the Obama -- plan it's also the essence Paul Ryan's proposals for fixing Medicare. And it's also the essence of what the Germans in the Dutch and Israelis and the Japanese are doing. So this is not rocket science getting healthcare straits. And you'll give you folks were just referring to the cost of the inflating costs of health care. We're really means is that of this is that when you have a basic commodity at the same exact. Policy that has been provided by all the insurers sort of provide basic care. The model that we can if we're rich enough we can buy supplemental policies. They can give us angioplasty. Protection in 98. The when you get companies compete on a homogeneous product. Then he gets. You get real competition and you can get. Because of the insurance companies. To come down. Okay so you do is have a standardized again like what we have an auto insurance the state makes the rules. Four or what will be in different packages and then they would set -- seeing in different get different coverages. But the idea is that it standardized season compare apples to apples. And that allows companies to go head to head and say we can do it cheaper when you see ads on TV compete on service yup yup. Exactly because these insurance companies we'll try and -- fine print and they'll say hey I'm gonna cover. This procedure and -- procedural none of us can really figure that stuff out. And that's just -- Setting things up to be scammed. I want compare another we don't need that. And then we don't know what's gonna actually be covered when it flushes out. -- you know when -- through the claims process is already against -- organization would help professor -- -- is with us from view -- do you mind if we -- couple questions from the first. Absolutely right you're on don't you argue that morning. Hey don't want to -- that they might call more impressed I want to ask. Two questions when they want about it use your banking proposal I'm curious if you looked at C Canadian banking system. And also a proposal includes things they feel like putting back black people or preventing. Banks that bravely getting fed access. And what you would like to hear your thoughts about. Education public education. My opinion a major metro area that there is a fifty year failure. It would be cool economy. Good question is Iran let's toss it right to the professor on banking and then on public education. Through banking. The Canadians did a better job regulating their system that basically. Their system like all the banking systems in the world. Are. Are just problem ready for for in the making because it is if people outside the banks not trustworthy they all run on them. And then the banks won't have enough money because they promised to pay back on the -- Things that they can cover and that can bring down the banks. And we need to let financial panic what we just sat in 2008 and I can discourage the economy. And lead to riots. The widespread unemployment so what I'm proposing is to have the financial system. It's perfectly safe and here's what you do it's very simple -- take all the financial corporation's. And you say look if -- operate would limit the liability and not be personally liable. In terms of -- taking on risk here's what we need you do you have to do the following which is to operate as. A mutual fund holding company and you can only. Do one thing prettier. A commercial banking investment bankers hedge fund and insurance company or you can do is market mutual funds and you know mutual fund -- marketer can be 100%. What we call equity finance you're gonna get your money in to the individual mutual funds not by -- borrowing the mutual fund can't borrow. They can just sell shares. And you were we're all familiar with mutual funds because we have 401 -- etc. So the mutual funds sell shares teleglobe bank itself shares they've taken money and they invest -- things they specialize in. They can never go broke so they've taken money from Republican investor mortgages they take money from the public they invest some corporate bonds they invest in foreign stock. All of this as -- as banking and this is financial remediation what we don't need to have is the intermediaries gamble. So that's what I would say on banking and this is a proposal which again has gotten widespread endorsement. And it's a way to have a completely safe banking system we have doesn't always right now in Europe there would be no Euro crisis there will be no sovereign debt crisis. Big defeat these shareholders. Mutual funds in Europe that it. World. World invested in Italian government debt winner at -- would have already taken a hit the terms of the value of their shares. And like -- They were removed on a professor are short on time so address the education question. -- education yet to businesses. And very bad shape. I'm trying to get more input on my education policy that what I heard. From people in the education field is that we need to improve the quality teaching them and that master teachers who are training other teachers is the key. And also early intervention. And teaching people not just. We're not trying not just trying to educate young kids that very -- early stages but also to try and teach them. Personality skills like. Just. Ability to be patient and -- to work hard and they're sick completed task. Some of these basic skills today stay we view the rest your life and are very important for determining how well you do in life. -- leader -- Robert good morning or WRQ with professor Lawrence holocaust. Diaz drew a quick 80 now look that -- Forma -- have endowed by media your old -- -- our narrows do you use an example be -- to have replaced. And he came right out of the loop and -- -- to -- his way to do it takes 20% of the top and they give to the torrent -- on the bottom pathetic question field. Tell me what you -- thought about the pioneer project in which they've -- medical records. Well they don't let -- electronic medical records are very important and I'm using those in my plans to figure out the so vouchers to sizing each person's Belcher. But I'm not sure really the pioneer. Proposals -- -- that what. Now he's gone -- maturities argument either. Let's get one more call and Donald ER WRKO with the professor McDonald. I do I think that the protestors -- is such some high cost of energy. In the USA it was his posse Peter -- can't stop -- Hideki you don't think everything medical costs food you name -- What church busting your energy costs. Well yeah I think -- did the other world is exploding in terms of having a population explosion worldwide and that's driving up the cost of energy and also. We have this so this incredible dirty energy this. Destroying the environment for -- for our children so well my proposal appears to have work a carbon tax which. Taxes. Production dirty energy but the fact of the carbon tax would be. Would be unbearable. If the price of energy went up the carbon tax rate would go down so that we were trying get a a floor on the prices dirty energy so that. Clean energy producers will know that the alternative. That they're competing against will never be cheaper than a certain. Amount Mike port -- are down for -- -- -- translated that way. Now. So I I think our only real hope here is they bring in. Clean. New technologies that. And to look to science and innovation. To -- to help lower the cost of energy. And I think if we can assure. Alternative energy producers sit. That dirty energy that coal and oil just some lesser extent natural gas are not going to be. Dramatically cheaper in the future and they are now and not have the ability just to move ahead I don't think we should be picking winners and losers in the energy area I think we should be. Appropriately taxing. Hey. Energy it's causing what we economists call negative extreme reality it's hurting people whenever somebody comes scares of pompous scientists. Helping somebody drive but -- turning everybody else in terms of what they're reading what's going on to the climate. Professor I'm afraid Florida times who got a hold you there. -- -- what costs 2012 dot org is your website and read it thank you for spending the time Yasser Lawrence caught look off. Economist at Boston University who has a lot of time it's an interest and stuff to chat about. All right good stuff -- say professor Jason we take a couple calls we continue Tom and Todd WRKO. We are. And then your off moss loose talk seizure KM sixty T know where you -- -- it's.