Where are all of our doctors?

November 20, 2013

The following post is written by Tsion Ghedamu, a junior Economics and Public Policy double major from Tucker, Georgia.

As the population of the United States grows and ages, the need for primary care doctors is rising exponentially. According to the Association of American Medical Colleges, we will be facing a shortage of 90,000 doctors by the year 2020 and this number will grow to 130,000 by 2025. Currently, primary care doctors are seeing an overabundance of patients with less and less time available per patient. The passing of the Affordable Care Act may only exacerbate the issue due to millions of previously uninsured individuals entering the system.

Many medical students are going into specialized careers to pay off large debts acquired during school. The path to becoming a doctor includes eight years of undergraduate and graduate education followed by three more years of residency. This decade of education produces $100,000 of debt on average. Primary care doctors make $177,000 on average, while specialized doctors make $365,000 on average. As a resident just getting out of medical school and only making $50,000 to $60,000, it is reasonable to assume that gastroenterology, orthopedics, or radiology provide a more promising capability to pay off these debts.

One proposed solution is for medical schools to start encouraging students to go into primary care.

Another idea is to increase medical school enrollment. This idea has taken hold and is starting to have some impact across the country. By the end of 2016, there will be 30% more students enrolled in medical school.

Are there other ways to fix the shortage? If so, implementation needs to take place soon.  Primary care doctors are becoming increasing overworked every single day.

Systems matter

October 22, 2013

This post also appears on the writer’s personal blog, Young and in the way.

*****

“Hmm. It sounds an awful lot like the Mississippi congressman loves federal disaster relief, but only if it directly benefits Mississippi.”

That was Steve Benen at the MSNBC affiliate Maddowblog writing about the non-story of the month: people in Congress serve their interest by serving their constituents’ interests.

Edit: The page on which this quote appears has been moved due to a site restructuring. However, the sentiment later appeared in another piece affiliated with the show.

There’s not much more to the story than that, with Benen largely treating it as a chance to poke fun at someone acting like a fiscal conservative when the money is going to other districts, but acting quite differently when the money helps his constituents.

Closer examination reveals a few ways in which our political system greatly incentivizes Representatives and Senators to favor sending federal goodies to their districts, even if it is inconsistent with their ideology. First, having senators be elected by people in only one state makes them particularly sensitive to the needs of their constituents. This leads to politicians taking positions that may not be completely consistent with their ideologies, but that benefit their state. For example, a Democrat from West Virginia opposing legislation to protect the environment is acting in full awareness of his constituents’ preferences for coal mining.

The proposal- occasionally heard on the crazier parts of the internet- to repeal the Seventeenth Amendment, which provided for the direct election of senators, and go back to the election-by-state-legislature system would not fix this problem. However,there have been examples of changes in the voting system and how to run national elections- that could provide a whole new way of thinking about elections. The Single Non-Transferable Vote (SNTV), which is currently used in Afghanistan, or the Single Transferable Vote (STV), currently used in the Irish Republic, are potential alternatives. To be clear, I am not advocating such a change in our system. The current structure has much to commend it, including a clear relationship between votes cast and the election results that is noticeably lacking in the STV. The SNTV is only different from our current system when districts elect multiple legislators, which can lead to strategic voting as blocs attempt to ensure that as many of their preferred candidates get elected as possible. Unless we want to overhaul the basic structure of our government (which is a topic better suited to a book than a blog post), we’ll have to accept that Senators and Representatives will be particularly sensitive to the concerns of their state, with hypocrisy occasionally resulting.

The other predictor of such action is the way we seem to manage disaster funding. While I do not regularly keep track of this issue, it seems as if, despite having a permanent agency to deal with disaster relief, we tend to allocate a lot of relief funds in separate spending bills, such as that passed after Hurricane Sandy. Since the spending for each disaster gets its own bill, it makes a lot of sense to vote for the bills that spend money in your district and against bills that spend money elsewhere, particularly if you, as a matter of ideology, want total federal spending to be as low as can be attained. It seems possible to fix this issue by changing the way we think about disaster funding. Most households probably deal with disaster with a combination of two strategies: filing an insurance claim, or drawing upon savings. Both of these methods require saving a bit each month over many months so that you have enough to handle major issues. While the government is not a household and should not budget like one, the save-for-a-rainy-day model has some merits. To implement this plan, Congress could compile all of the disaster spending- FEMA, supplemental aid, and otherwise- for a multi-year period and take the yearly average. Appropriate that average amount between the various disaster agencies with the understanding that not all of it will be spent every year. Ideally, the agencies would accumulate a stockpile of cash for the Katrinas and Sandys so that they don’t need as much extra money when major events occur. My judgment of the political landscape suggests, however, that the ideal would not be met. Given the current mentality towards the budget among many politicians, which is largely summed up as “cut early and often,” the odds of Congress allowing a federal agency to hold on to what could very well become a slush fund to help states the President likes are about the same as the odds of them voting to become part of Canada. It’s not going to happen any time soon. However, there are some ways in which these difficulties could be resolves. For example, Congress could write the law so that the relevant executive official needs the approval of the relevant committee in one branch of congress before allocating funds from the rainy day fund. This standard should be low enough to clear quickly, imperative if the program is to be effective, yet high enough to ensure that the executive branch is using the money for a legitimate purpose.

Furthermore, there is the question of just where the money would be stored in the interim. The most obvious choice is to store the money at the Federal Reserve, which had the added benefit of avoid contentious questions over which private institution to patronize. The other reasonable option is to buy federal bonds with the excess, which makes sense from a financial standpoint, but lacks the immediate clarity that is essential for a change as controversial as this.

Clearly, our system of government is not perfect. Disaster relief, however, is one area that should be shielded as much as possible from these imperfections. Having local representation and irregular funding of disaster relief greatly encourage legislators to apportion as much of the money as they can for their districts. However, these attributes of our system also ensure that legislators are ultimately accountable to a specific set of voters rather than to party leaders, as well as giving the federal government the flexibility to deal with crises as they arise, rather than being bound until the next budget cycle. What we need is a way to allocate disaster funds in a manner such that the individual legislators from the harmed areas can’t control the system, as their incentive is to bring money to their districts regardless of need. The system outlined above should serve as a first step in removing disaster relief from the less palatable aspects of out political system and shift the focus back to delivering aid as quickly and effectively as possible, which is where it should have been all along. These sorts of projects are what come out of political science, and why research in the area is well worth funding. We can make government more efficient, more responsible to the people, and maybe even less prone to gridlock, but we must first know how to do so.

The following article is part of our “Ten Tar Heel Ideas” series, a set of articles published in the national 10 Ideas journals by members of our chapter. This article was published in the 2012 “10 Ideas for Healthcare“ journal. It was written by Wilson Parker, who currently serves as co-President of our chapter.

Background

While Medicare does an excellent job of delivering basic benefits to seniors, beneficiaries who want comprehensive rather than basic coverage are forced to choose between two bad options.

Their first option is to receive benefits under traditional Medicare (Parts A and B) and enroll in a private Medicare Supplemental Insurance (or Medigap) plan, which fills the gap between Medicare and full coverage. This option frequently involves unnecessary expense and red tape as a result of managing more than one healthcare plan; as Commonwealth Fund President Dr. Karen Davis put it, the “patching together of multiple plans creates confusion for beneficiaries; creates the potential for risk selection; and leads to higher administrative expenses.”[1]

Seniors’ other option is to receive all of their care through a Medicare Advantage plan that offers comprehensive benefits. Medicare Advantage Plans are offered through Medicare Part C and allow beneficiaries to receive the same level of coverage offered by traditional Medicare (Parts A and B) through a private insurer. Some insurers offer Medicare Advantage plans that only provide basic coverage, but others offer plans that provide comprehensive benefits by combining Medicare Part C and Medicare Supplemental Insurance in one private plan. For recipients of the latter type of plan, part of their premium is paid for by the government under Medicare Part C. They pay for the remainder through premiums. Unfortunately, these plans are often wasteful and inefficient in comparison to traditional Medicare. Representative Henry Waxman, citing a report issued by the Majority Staff of the House Committee on Energy and Commerce, said that Medicare Advantage insurers “squander billions of dollars on overhead costs.”[2] The report revealed that less than 85% of Medicare Advantage providers’ revenue is used to pay for actual medical expenses – in stark contrast to traditional Medicare, in which more than 98% of revenue is used to cover medical expenses. [3],[4]

Analysis

To provide our seniors with a responsible and efficient alternative to these options, Congress should create a comprehensive public benefit option modeled after the Federal Employee Health Benefits Plan. Doing so will provide beneficiaries with an option for quality, affordable, and efficient care.

Such a public option would be a program that offers comprehensive benefits to beneficiaries for a price that completely covers the cost of the additional benefits. This program would be administered by the Centers for Medicare and Medicaid Services, using the same provider system for Medicare Parts A and B but offering more benefits. It would be completely funded by premiums paid by beneficiaries for the additional coverage and would be revenue neutral.

According to the Medicare Payment Advisory Committee, a program offering such a public option “would benefit from reduced insurance administrative expenses.”[5] An analysis of this proposal, based on data from the 2000 Current Medicare Beneficiary Survey and published in Health Affairs by the Commonwealth Fund, found that this option would reduce the average annual paid by beneficiaries by $357 and out-of-pocket costs by an average of $60. Such a reduction is no small sum; the overall market savings resulting from such a plan would be more than $5 billion for consumers. It would also substantially increase the quality and value of the care that they receive. [6]

In addition to offering beneficiaries a better alternative, a public option would force insurers to cut unnecessary expenses and improve the quality of care in order to remain competitive. Unless Medicare Supplemental Insurers do a better job of integrating their plans with basic Medicare coverage, and unless Medicare Advantage providers deliver care more efficiently, their customers will switch to the government plan. Therefore, a public comprehensive benefit option would not just improve the services provided to seniors who enroll in it, but would improve the quality and lower the cost of care across the comprehensive Medicare plan market. Recipients would still have a wide array of options for types and levels of coverage, but these options would be more efficient because they would have to compete with a publicly provided model that does not spend wastefully.

Next Steps

Congress should enact legislation that creates a public comprehensive benefit option to ensure that Medicare beneficiaries have access to affordable and quality care. Doing so will make the Medicare market more efficient, improve the quality of care, and reduce costs to beneficiaries.



[1] Davis, Karen et al. Medicare Extra: A Comprehensive Benefit Option of Medicare Beneficiaries Health Affairs 2005. http://content.healthaffairs.org/content/early/2005/11/15/hlthaff.w5.442.full.pdf+html

[2] Committee on Energy and Commerce Majority Staff New Report Highlights Medicare Advantage Insurers’ Higher Administrative Spending Washington D.C December 9, 2009 http://democrats.energycommerce.house.gov/index.php?q=news/new-report-highlights-medicare-advantage-insurers-higher-administrative-spending

[3] Committee on Energy and Commerce Majority Staff Profits, Marketing and Corporate Expenses in the Medicare Advantage Market Washington D.C. December 2009 http://democrats.energycommerce.house.gov/Press_111/20091209/MedicareAdvantageReport120909.pdf

[4] Centers for Medicare and Medicaid Services National Health Expenditures Washington D.C. 2004

[5] Medicare Payment Advisory Commission, Report to the Congress: Assessing Medicare Benefits (Washington:

MedPAC, June 2002).

[6] Davis, Karen et al. Medicare Extra: A Comprehensive Benefit Option of Medicare Beneficiaries Health Affairs 2005. http://content.healthaffairs.org/content/early/2005/11/15/hlthaff.w5.442.full.pdf+html

The following article is part of our “Ten Tar Heel Ideas” series, a set of articles published in the national 10 Ideas journals by members of our chapter. This article was published in the 2012 “10 Ideas for Education“ journal. It was written by Kate Matthews, a former co-President of our chapter.

North Carolina should expand access to dual enrollment courses in an effort to increase the number of North Carolinians with a college degree.  By changing eligibility requirements of the Career and College Promise Program, it is likely that more minority, low-income, and first generation college students will pursue higher education.

Key Facts

  • First generation college students are more likely to benefit from dual enrollment participation than students with a college-educated parent.[i]
  • North Carolina Dual Enrollment requirements currently require participants to be a junior or senior, have a B average (3.0 GPA), and have demonstrated college readiness in the reading, writing, and math portions of an approved standardized assessment[ii].
  • Only 35.1% of North Carolina students graduate from a 4-year public university in 4 years and only 59.1% graduate in 6 years.[iii]
  • Changing eligibility requirements would extend Dual Enrollment to students who stand to gain most from participation.
  • Removing barriers to access would allow North Carolina to lead the nation in Dual Enrollment accessibility.[iv]

History

One of the most complex dichotomies in education is the struggle to ensure that more low-income, minority, and first-generation college students pursue higher education even while the cost of attendance at these institutions continues to rise.  Fortunately, many states, including North Carolina have chosen dual enrollment as a tool for addressing these issues.  Dual enrollment programs vary from state to state but tend to consist of partnerships with local colleges and universities that allow high school students to earn college credit before graduation.  These programs are often offered at no cost to the student.

Last year, North Carolina passed “College and Career Promise”, a sweeping reform to dual enrollment that was intended to help high school students accumulate 1-2 years of college credit at no cost.  The program is divided into 3 tracks; a college transfer pathway, a career tech pathway, and a cooperative innovative high schools pathway.  Here we focus on the need to change eligibility requirements within the college transfer track in an effort to promote college enrollment and retention among low-income, minority, and first generation college students.

Analysis

In the College and Career Promise overview, there is repeated mention of the state’s effort to help “qualified” students prepare for and reduce the cost of college.[v]  The eligibility requirements are stringent and require that students be a junior or senior, have a B average (or 3.0 GPA) and have demonstrated college readiness in the reading, writing, and math portions of an approved assessment such as PLAN, ACT or SAT.[vi]   Research shows that participation in dual enrollment programs can increase the number of underachieving and underrepresented students who complete high school and enroll in college.[vii]  During the last 10 years, longitudinal studies in several states have reported that, regardless of academic and social background, students who participated in Dual Enrollment programs were more likely to attend and complete college.[viii]  Therefore, North Carolina should broaden the eligibility requirements of these programs and work with high schools and colleges to ensure that students from nontraditional backgrounds are not excluded from dual enrollment.   Specifically, students should be allowed to supplant the GPA requirement with a teacher recommendation and community colleges should be allowed to develop course-specific prerequisites.

Administrators are undoubtedly concerned that students with traditionally weak academic success may not be prepared to succeed in Dual Enrollment courses.  North Carolina’s eligibility requirements are certainly in place to address this concern, yet they inadvertently exclude students who stand to gain most from participation.  Consider a student who does poorly on the math portion of an approved assessment but is trying to enroll in a Dual Enrollment English course.  They would be unable to participate in the program.  Likewise, a student with a 2.9 GPA at the time of application is automatically excluded from program participation, even if their GPA is expected to reach a 3.0 by the end of the semester.[ix]  The goal of Career and College Promise should not be to exclude students on the basis of technicalities but rather to include as many students as possible.  This approach was recently tested in California, where the Concurrent Courses initiative specifically targeted underachieving youth for participation in Dual Enrollment.  The study found that participants were more likely to graduate from college, transition to a four-year college, persist in postsecondary education and less likely to take a basic skills course in college.[x]

Additionally, expanding use of community college courses means utilizing available resources rather than funding new initiatives.  Many rural schools do not have the funds to hire an advanced placement (AP) teacher for new courses such as psychology or history that are increasingly in demand.  Yet, local community colleges often have seats available and, indeed benefit from the enrollment of additional students in these courses.   Therefore, the money schools save by utilizing community college resources rather than hiring new staff will likely decrease the overall cost of expanding dual enrollment.

Next Steps

 The North Carolina Department of Public Instruction should take immediate action to expand access to Career and College Promise by changing the dual enrollment requirements in a number of ways.   Firstly, interested students should be allowed to supplant the GPA requirement with a recommendation from a teacher or school counselor who will testify to their interest in and commitment to the proposed Dual enrollment course.  In addition, colleges should be given the authority to decide what qualifications are necessary for a specific course.  As a vital stakeholder in expanding postsecondary success, colleges should be careful to make courses as inclusive as possible by not requiring proof of success in a subject unrelated to the proposed Dual Enrollment course.  For example, an introductory English class should not require scores above 500 on the SAT Math portion.  These two steps will allow North Carolina to become a leader in Dual Enrollment access by taking a targeted approach to including more students who are currently unlikely to pursue college.  By including such students in Dual Enrollment, North Carolina will increase the chance that minority, low-income, and first generation college students will receive a postsecondary degree.



[i] An, Brian. “The Impact of Dual Enrollment on College Degree Attainment Do Low-SES Students Benefit?.” Educational Evaluation and Policy Analysis. http://epa.sagepub.com/content/early/2012/10/08/0162373712461933.full

[ii] NC Department of Education, “NC Career and College Promise.” Last modified 2013. Accessed February 28, 2013. http://www.dpi.state.nc.us/ccpromise/.

[iii] The Chronicle of Higher Education, “College Completion.” Last modified 2010. Accessed February 28, 2013. http://collegecompletion.chronicle.com/state/

[iv] Jobs for the Future, “Dual Enrollment.” Last modified 2013. Accessed February 27, 2013. http://application.jff.org/dualenrollment/index.php.

[v] ibid.

[vi] NC Department of Education, “NC Career and College Promise .” Last modified 2013. Accessed February 28, 2013. http://www.dpi.state.nc.us/docs/ccpromise/overview.pdf.

[vii] Hughes, Katherine, Olga Rodriguez, Linsey Edwards, and Clive Belfield. Community College Research Center, “Broadening the Benefits of Dual Enrollment .” Last modified 2012. Accessed February 27, 2013. http://knowledgecenter.completionbydesign.org/sites/default/files/407 Hughes 2012.pdf.

[viii] Bassett, Jessica. Educate Texas, “Study: “Dual enrollment” students more likely to attend, graduate from college.” Last modified 2012. Accessed February 27, 2013. http://www.edtx.org/media-center/news/study-dual-enrollment-students-more-likely-to-attend-graduate-from-college/.

[ix] NC Department of Education, “NC Career and College Promise .” Last modified 2013. Accessed February 28, 2013. http://www.dpi.state.nc.us/docs/ccpromise/faqs.pdf.

[x] Hughes, Katherine, Olga Rodriguez, Linsey Edwards, and Clive Belfield. Community College Research Center, “Broadening the Benefits of Dual Enrollment.” Last modified 2012. Accessed February 27, 2013. http://knowledgecenter.completionbydesign.org/sites/default/files/407 Hughes 2012.pdf.

 


The following article is part of our “Ten Tar Heel Ideas” series, a set of articles published in the national 10 Ideas journals by members of our chapter. This article was published in the 2013 “10 Ideas for Equal Justice” journal. It was written by Molly Williams, who currently serves as Director of the Center for Social Justice.

History

As of 2010, a majority of states provided no protection for rape victims who carry their pregnancies to term.7 Current laws regarding rape originate from a history of discriminatory denials of equalityand are perpetuated by societal myths surrounding rape. 7 As a survivor of rape, Shauna Prewitt says, “in a rape case it is the victim, not the defendant, who is on trial.5” Nationwide, there are 32,011 pregnancies from rape each year2 and about 10,3007 women who decide to carry those pregnancies to term. In 31 states, including North Carolina, the rapists can assert the same custody and visitation rights that other biological parents enjoy. 2

 

Analysis

In North Carolina, victims of rape also become victims of the legal system. Because of stereotypes about these victims, many people assume that no woman desires to raise a child conceived in rape.5 However, about 185,526 women in the United States choose to raise a child conceived in rape every year. 2 If the woman chooses to raise her child, she may be forced to share custody privileges with her rapist, ensure the rapist’s access to the child, and foster her rapist’s relationship to the child. 4 Most states, including North Carolina, have little or no protection in this regard for rape victims who carry their pregnancies to term.1 Unfortunately, the adoption process is often not a better option, as women are forced to obtain their rapist’s consent to place the baby up for adoption.1 These problematic policies are also costing taxpayers in North Carolina because the state subsidizes the costs of attorneys, therapists, supervisors, probation monitoring, and court hearings that accompany a rapist seeking custody. Bills passed in 17 states – Alaska, California, Connecticut, Delaware, Idaho, Illinois, Indiana, Maine, Montana, Nevada, New Jersey, New Mexico, New York, Oklahoma, Pennsylvania, South Carolina, and Wisconsin – provide a progressive alternative by requiring that men convicted of rape lose their custody and visitation rights.6

 

Next Steps

North Carolina should use the aforementioned bills, specifically those of Idaho, Oklahoma, and Pennsylvania, as models to introduce legislation that would achieve similar goals. Idaho Code Section 16-2005 states that the “court may grant termination of parental rights as to a parent who conceived a child as a result of rape.6” According to Oklahoma’s Statute Annotated Title 10 Section 7006-1.1, the court “may terminate parental rights if the child was conceived as a result of rape.6” Finally, in Pennsylvania, Consolidated Statute Annotated Section 2511 states “father’s parental rights may be terminated if child conceived as a result of rape or incest.6” It is essential for North Carolina’s policymakers, as well as policymakers in the remaining 30 states allowing parental rights to rapists, to understand the magnitude of these unjust policies and pass legislation to protect victims of rape and their children.

 

End Notes

  1. Bitar, Kara. “The Parental Rights of Rapists.” Duke Journal of Gender Law and Policy. Last modified 2012. Accessed November 10, 2012. http://scholarship.law.duke.edu/djglp/vol19/iss2/1.
  2. Holmes, MM, Resnick HS, Kilpatrick DG, and Best CL. “Rape-related pregnancy: Estimates and descriptive characteristics from a national sample of women.” Department of Obstetrics and Gynecology, Medical University of South Carolina. Last modified 1996. Accessed November 6, 2012. http://www.ncbi.nlm.nih.gov/pubmed/8765248.
  3. “Sexual Violence” from National Crime Victims’ Rights Week Resource Guide. National Crime Victimization Survey, Bureau of Justice Statistics. Last modified 2010. Accessed November 3, 2012. http://ovc.ncjrs.gov/ncvrw2012/pdf/StatisticalOverviews.pdf.
  4. Prewitt, Shauna. “Giving Birth to a ‘Rapist’s Child’: A Discussion and Analysis of the Limited Legal Protections Afforded to Women Who Become Mothers Through Rape”. The Georgetown Law Journal. Last modified 2010. Accessed November 17, 2012. http://georgetownlawjournal.org/files/pdf/98-3/Prewitt.PDF.
  5. Prewitt, Shauna. “Raped, pregnant and ordeal not over.” Cable News Network. Last modified 2012. Accessed November 20, 2012. http://edition.cnn.com/2012/08/22/opinion/prewitt-rapist-visitation-rights/index.html?eref=mrss_igoogle_cnn.
  6. Schroeder, Joanna. “Are States Giving Custody to Rapist Fathers?” The Good Men Project. Last modified 2012. Accessed January 21, 2013. http://goodmenproject.com/good-feed-blog/are-states-giving-custody-to-rapist-fathers/.
  7. West, Robin. “Equality Theory, Marital Rape, and the Promise of the Fourteenth Amendment.” Georgetown Law: The Scholarly Commons. Last modified 1990. Accessed November 27, 2012. http://scholarship.law.georgetown.edu/cgi/viewcontent.cgi?article=1647&context=facpub&sei-redir=1&referer=http://www.google.com.

The following article is part of our “Ten Tar Heel Ideas” series, a set of articles published in the national 10 Ideas journals by members of our chapter. This article was published in the 2013 “10 Ideas for Defense & Diplomacy” journal. It was written by Graham Palmer, who currently serves as co-President of our chapter.

Background

            The current promotion system in the military, codified in the Defense Officer Personnel Management Act (DOPMA) of 1980, is organized around the principle of  “up or out”. After a certain number of years, officers are eligible for promotion to the next grade level of ranks.[i] After the military passes them over for selection twice (once at higher levels), officers are required to leave the service.[ii] This system has become outdated and costly. Most officers who are forced out by this system still receive generous pension benefits, [B1]    and with pension costs currently 20% of the defense budget, reducing them would allow for reductions in defense spending without any damage to America’s military capability.[iii] [B2] By changing the promotion system for the armed services, savings can be realized while simultaneously improving the quality of American military officers.

Analysis                  

Promotion currently becomes less likely at higher ranks, just as officers reach middle age and are most financially vulnerable.[iv] [B3] This has led many officers to leave for more secure jobs in the private sector.[v] Many of these officers leave after 20 years or more of service, meaning that they receive benefits under the military’s pension plans. As a result, the military spends over $100 billion a year on retirement pay, and spending is projected to double by 2034.[vi] [B4] Much of this money is paid to officers who retire in middle age, when they could still serve for up to 20 more years.[vii] Many military thinkers have also come to believe that the promotion structure currently employed contributes to what Thomas Ricks has called a “culture of mediocrity” within America’s officer corps.[viii] Officers are encouraged to strive for a “risk-averse middle” so that they are not forced out, instead of showing initiative.[ix]

The “up or out” system should be adjusted so that fewer officers stay through their first few years of service. Higher ranking officers should have higher promotion rates and longer promotion periods. Under this system, the military can both save money and increase the quality of its officer corps.  The savings from implementing this system have been estimated at $100 billion over the next decade.[x] [B5]  Although private sector jobs offer better pay on average, job security is a major factor driving successful officers to leave the military.[xi] This system would increase job security, making the military a better long-term option and causing fewer officers to leave in the prime of their careers. Additionally, longer promotion periods would make senior officers more experienced, and thus more effective.

Next Steps

Military leaders may claim that this policy would be unfair to soldiers who have made sacrifices for their country. It should be emphasized, then, that this policy would only change the promotion system, and those who choose to leave after 20 years would still receive pensions. This policy would benefit the military by freeing up money for other uses and making the officer corps more effective. If Congress understands that this policy would strengthen our military while saving money, both parties should support this policy.



[i]Hauser, William L. “Winfield Scott vs David Petraeus.” (2012):

[ii] Schirmer, Peter, Harry J. Thie, Margaret C. Harrell, and Michael S. Tseng. Challenging Time in DOPMA: Flexible and Contemporary Military OFficer Management. RAND Corporation, http://www.rand.org/content/dam/rand/pubs/monographs/2006/RAND_MG451.pdf.

[iii] Korb, Lawrence J., Alex Rothman, and Max Hoffman. Reforming Military Compensation: Addressing Runaway Personnel Costs Is a National Imperative. The Center for American Progress, 2012.

[iv] Schirmer, Peter, Harry J. Thie, Margaret C. Harrell, and Michael S. Tseng.

[v] Ibid.

[vi] Korb, Lawrence J., Alex Rothman, and Max Hoffman

[vii] Ibid.

[viii] Ricks, Thomas E. “General Failure.” The Atlantic, November, 2012. http://www.theatlantic.com/magazine/archive/2012/11/general-failure/309148/1/.

[ix] Ibid.

[x] Ibid.

[xi] Hauser, William L.

[xii] Korb, Rothman, and Hoffman

[xiii] National Priorities Project. “Discretionary Spending FY 2013.” nationalpriorities.org. Last modified 2012. http://nationalpriorities.org/.

[xiv] Hauser, William L.

While stemming from a myriad of causes, the present economic crisis can be thought of as two distinct failures of monetary policy: a failure of the Federal Reserve to increase interest rates during the 2000s which caused a massive housing bubble and an inability of the Federal Reserve to take appropriately expansionary monetary policy action after the crash, which prolonged and exacerbated the downturn.

Roosevelt Institute Senior Fellow and author Jeff Madrick describes the first failure in his book Age of Greed. “Greenspan,” he writes, “cut the target federal funds rate to 1 percent and kept it there until mid- 2004, the lowest since the early 1950s.” Madrick says that these “low rates between 2000 and 2004 were the lifeblood of the housing boom.”[1]

The second failure is described beautifully by Dylan Matthews of Ezra Klein’s Wonkblog. “You can’t go below zero,” Matthews rights, “but man, it’d sure be nice if you could.”[2] What Matthews is describing is known as the zero lower bound. The Federal Reserve usually responds to economic downturns and recessions (when there is no risk of creating a bubble) by lowering interest rates. But it is unable to lower interest rates below zero. Indeed, Matthews cites some recent research out of the Cleveland Fed which suggested that optimal Federal Reserve interest rates would have reached -5% if they could go below zero.[3]

Fortunately, there is a simple solution available to both of these problems: nominal GDP targeting. According to the rules of this proposal, the Federal Reserve would establish a target for annual GDP growth (i.e. growth in dollars, not adjusted for inflation.) The advantage of this policy is that in situations where growth is strong, interest rates would automatically be raised in order to keep the economy from overshooting the target. This would prevent an error like that of Greenspan’s from recurring.

Furthermore, and perhaps even more importantly, a nominal GDP target would help the Federal Reserve take adequately expansionary action during recessions. As Mike Woodford explains in the seminal paper he presented at Jackson Hole last year, the Federal Reserve can make markets behave as though interest rates were below zero if it commits to keeping rates down for a long time.[4] To some extent, the Federal Reserve already does this: the Federal Reserve has already committed to keeping interest rates low until 2014.[5] But as Woodford writes, “A more useful form of forward guidance, I believe, would be one that emphasizes the target criterion that will be used to determine when it is appropriate to raise the federal funds rate target above its current level, rather than estimates of the “lift-off” date.” That way, markets will be assured that interest rates will stay low until well after the economy has recovered, rather than speculating about whether the date chosen by the Fed was too soon or late. “An example of a suitable target criterion,” Woodford writes, “would be a commitment to return nominal GDP to the trend path that it had been on up until the fall of 2008.” Such a commitment is, in so many words, nominal GDP targeting.

In addition to solving these two problems, a nominal GDP target may be able to make markets more stable. According to a National Bureau of Economics Research paper by Martin Feldstein and James Stock, “the Federal Reserve could probably guide M2 in a way that reduces not only the long-term average rate of inflation but also the variance of the annual rate of growth of nominal GDP.”[6] In other words, a nominal GDP target could reduce both long-term inflation and the prospect of more recessions.

Wilson Parker and Billy Hoo


[1]Jeff Madrick. Age of Greed. Qtd in Rolling Stone, “How Alan Greenspan Helped Wreck the Economy.” June 16, 2012. http://www.rollingstone.com/politics/blogs/national-affairs/how-alan-greenspan-helped-wreck-the-economy-20110616

[2] Dylan Matthews. Wonkblog “The Fed’s recession bind, in one chart.” October 15, 2012. http://www.washingtonpost.com/blogs/wonkblog/wp/2012/10/15/the-feds-recession-bind-in-one-chart/

[3] Ellis W. Tallman and Saeed Zaman. Federal Reserve Bank of Cleveland. Economic Commentary. “Where Would the Federal Funds Rate Be, If It Could Be Negative?” October 12, 2012. http://www.clevelandfed.org/research/Commentary/2012/2012-15.cfm

[4] Michael Woodford. “Methods of Policy Accomodation at the Interest-Rate Lower Bound.” August 20, 2012. http://www.kansascityfed.org/publicat/sympos/2012/mw.pdf?sm=jh083112-4

[5] Binyamen Appelbaum. “Fed Signals that a Full Recovery is Years Away.” New York Times. January 25, 2012.

[6] Martin Feldstein and James Stock. National Bureau of Economics Research “The Use of Monetary Aggregate to Target Nominal GDP.” 1993

Welcome to our new blog!

September 4, 2013

Welcome to the UNC Roosevelt Institute’s chapter blog. Our members will be sharing their thoughts on a wide variety of public policy topics on this blog in the months to come.

Best,

Wilson Parker
Co-President
UNC Roosevelt Institute