I am quoting the article in full, and inserting my comments after each paragraph, to show the full extent of their biases and incompetence.
Merkel changing her tune on taxes
BERLIN. Eight months into her term as chancellor, Angela Merkel is on the verge of raising taxes for the second time, in this case for a vast and bureaucratic health care system.
The proposal by her coalition of conservatives and Social Democrats envisions an expansion of the system to cover children that could cost taxpayers from €16 billion to €25 billion, or $20 billion to $31 billion.
Let's note first of all that neither the lead nor the title focus on the actual content of the reform, or even on the topic of healthcare, but only on the fact that the reform will increase taxes.
Even that fact that the apparent intent of the reform is to provide healthcare to children (something actually false, as children are already covered under the existing system in Germany) is not enough to make a tax hike palatable.
The message is clear: taxes are bad. And public healthcare = bureaucracy = bad. Even providing for children is not a goal worthy of tax increases.
Merkel hopes to spur the birth rate, an aim already given a boost when the government agreed this month on incentives to give working women generous financial help to have a family and then return to work. The final health care proposal should be ready by the end of this week and presented to Parliament before it goes on its summer break next week.
Merkel is already under fire from the business community for doing little on the reform front, and the costly new program will force her to decide how to pay for it. One choice is some kind of indirect tax, such as the value-added or sales tax; another is to raise the income tax.
No input on the content of the reform, but we know that it follows another costly incentive (to help women have children and then get back to work, again, what an outrageous public policy goal), and that the business community is unhappy about it.
It's costly, it's a tax, and it's not a "reform". (And how dare she want to actually pay for public spending she is committing the government to...)
Either measure is sure to be unpopular, particularly since Merkel has barely weathered the storm over raising the sales tax from 16 percent to 19 percent, an increase that takes effect next January. Economists have attacked this tax, saying it would do nothing to encourage consumer spending and thus to cut the unemployment rate of 11 percent.
(Note - a factual mistake: it's not a sales tax, it's the VAT which has been increased. The nitpicking is all the more relevant that there is a terrifying dearth of facts in that article).
The only justification for the unpopularity of the measure is to mention (unnamed) "economists".
But let's flag one sentence here: "it would do nothing to encourage consumer spending and thus cut the unemployment rate."
As I wrote in an earlier story (Claiming Germany), Germany is the poster child of "reform": it has cut wages, boosted labor flexibility and massively improved the competitivity of its companies which, as a result, are taking full advantage of globalisation, boosting their exports, and enjoying record profits. Sadly, this has not been reflected in the real economy, whose growth is lagging because consumption is weak - because wages are stagnant.
So all seem to agree that increasing consumption (and thus wages) is the solution. But that goes directly against the whole logic of "reform". So what's the solution? (Cut taxes, of course)
Merkel came to office promising to cut taxes, reduce bureaucracy, and encourage competition and transparency.
Well, she came to office after negotiating with the social democrats, so her pre-election promises (even if the above over-simplification was correct) had to be adjusted to the reality of coaliton government. The conservatives did not win the elections, so their promises are moot.
But after spending several Sunday nights closeted in the chancellery with health experts from her conservative union and the Social Democrats, a plan is in the works that seems likely to create more bureaucracy at a higher cost to the government.
The decision has the makings of "bureaucratic monster," and an expensive one at that, said Winfried Fuest, economics professor at the Institute for the German Economy in Cologne.
Still no mention of the content of the plan, but sure enough, two more paragraphs to describe it as "bureaucratic" and a "monster" and costly. And, again, that's in a news piece...
Germany is beset by spiraling costs for medication, a declining birth rate and an aging population. All that is adding pressure on the health care system that insures 90 percent of German adults through 250 health care insurance companies, a system that eats up money with little accountability.
"There is absolutely no transparency in the way doctors charge patients in the public health system," said Fuest, whose institute is one of five economic research centers that advise the government. Nor is there transparency in the ties between drug companies and the doctors, he added.
"Spiralling costs" "a system that eats up money with little accountability". Sounds bad, right?
In fact, Germany seems to be spending pretty much the same kind of money on health care as most of its neighbors, not to mention less public money than the USA...
But still no mention of what the current plan is about, but yet another "economist" quote".
(click for larger version)
Patients in the public system do not receive bills. Instead, the doctor is reimbursed through the patient's public insurance company. Conversely, in the private health insurance system, patients receive a bill that meticulously records the cost of each treatment.
private = meticulous
public = ?? Unaccountable? Inefficient?
We "report", you decide.
But under the plan being fashioned, analysts say it is unlikely that the public health system will become more transparent and subject to competition.
"For years, politicians have spoken about the need to introduce transparency, but nothing has happened," said Fuest, a process that seems to be continuing under Merkel, despite her election promises to cut taxes and reduce bureaucracy.
Okay, we get the point. Merkel is bad, evil, horrible because she is raising taxes and not fighting bureaucracy. But WHAT'S IN THE FUCKING PLAN? Will we ever get the information, instead of endless editorial comment on the plan?
Elga Bartsch, a German economics analyst at Morgan Stanley, said: "When it comes to health reform, it seems this government is doing what the former coalition of Social Democrats and Greens did to finance the pension reform: They raise taxes.
"Merkel is already warning the public that the health reforms will be more expensive. The pity is that it will not lead to a structural reform."
[My comment: see comment above]
Before Merkel became chancellor in November, she said she wanted to introduce a flat health care fee of €109 for almost all adults; low-income earners and children would have been subsidized and contributions by employers into the health system would have been capped at 6.5 percent of wages. Skeptics of the scheme warned that it would result in a financial shortfall of €20 billion.
The Social Democrats wanted a people's insurance, or Bürgerversicherung. The idea was to bring into one public health system all the privately insured people - mostly high-income earners - but also civil servants and self-employed.
Ok; progress of sorts: actual information on earlier campaign proposals.
Depending on the details of the compromise now in the works, the health and finance ministries estimate that the costs of the reforms, particularly for insuring children, will range between the €16 billion and €25 billion.
Christian Dreger, macroeconomist at the German Institute for Economic Research in Berlin, said there was still no decision over whether the taxes would be direct or indirect. "Whichever way, it will not boost consumer spending," Dreger said.
This would be the second big tax rise since Merkel come to power. This month, plans to increase the value added tax from 16 percent to 19 percent effective next Jan. 1, became law, a step Merkel said was necessary to reduce labor costs and to trim Germany's budget deficit and adhere to the fiscal rules of the European Union's Growth and Stability Pact.
The hope to get facts on the plan was swiftly dashed, wasn't it? Back to "economists" and tax rises.
Luckily for her, the economy is growing, but consumers, fearful for their jobs, are saving instead of spending. Household savings have risen from 9 percent of disposable income to 11 percent, according to the Finance Ministry.
Speaking after last Sunday's seven- hour session in the chancellery, Merkel said that "in no way" would the people have to pay more for the health reforms.
But she has not fully explained how she will manage the costs. She said the aim was to use tax revenues to lower contributions from both the employers and employees. But even in her own party, leaders are skeptical and even fearful of a backlash from the public.
That's the only inkling of the actual content of the plan, which, according to dvx basically aims at transferring some of the funding for healthcare from payroll taxes to income taxes. But you basicalyl have to know the information already to be able to find the nugget in that paragraph...
But there's still more ink on "costs" and "backlash".
Wolfgang Böhmer, the conservative state premier of Saxony-Anhalt and himself a doctor, said he had no idea "where the money would be coming from," adding that the income tax should not be raised any further.
Others criticize the size of the bureaucracy the government is creating. According to some proposals, the employers, the employees and the state will all pay their contributions into a giant fund out of which the health insurers will receive a flat fee for every patient.
Any insurer that cannot manage with the allotted sum will have to collect additional revenue from patients. Bartsch of Morgan Stanley said she was not optimistic that the reforms would lead to much more efficiency. "In terms of transparency, the reforms do not get to the heart of the matter," she said. "In any event, the reforms will be costly."
So, that was the finale, with more "bureaucracy", "cost" and anonymous criticism, and still no description of the plan. How fucked up is that?
What a sad, sad piece of journalism. And the media wonders why people are turning to blogs and away from them?
Hint to newspapers: there are other constituencies in our countries than businessmen and financial analysts. Some of these "citizens", "workers" or "consumers" are even interested in news at times, in accessible healthcare (and not just in tax cuts), and certainly not in mindless editorial pro-business diarrhea.
