EVALUATING THE DEBATE. Dynamist helpfully located a transcript of the debate I skipped to work on a railroad. Sean at The American Mind has a roundup of commentary on the debate ... or to be precise, joint interrogation by Bob Schieffer, for those of you who wish to compare, contrast, or find an argument to raise with me. Here are a few things that stand out.

President Bush: You know, there's a lot of talk about how to keep the economy growing. We talk about fiscal matters. But perhaps the best way to keep jobs here in America and to keep this economy growing is to make sure our education system works.

I went to Washington to solve problems. And I saw a problem in the public education system in America. They were just shuffling too many kids through the system, year after year, grade after grade, without learning the basics.

And so we said: Let's raise the standards. We're spending more money, but let's raise the standards and measure early and solve problems now, before it's too late.

No, education is how to help the person who's lost a job. Education is how to make sure we've got a workforce that's productive and competitive.

Got four more years, I've got more to do to continue to raise standards, to continue to reward teachers and school districts that are working, to emphasize math and science in the classrooms, to continue to expand Pell Grants to make sure that people have an opportunity to start their career with a college diploma.
True up to a point, although not much help to the individual who made a human capital investment (or not) on the basis of the incentives 20-30 years ago. That was the big problem in Detroit when I worked there. No point doing college prep when the assembly lines would pay well to use you from the neck down. And today, the problem with the college diploma is that it might be, well, not indicative of much. There is still excess capacity in some parts of the academy.
President Bush: It's your money. The way my opponent talks, he said, "We're going to spend the government's money." No, we're spending your money. And when you have more money in your pocket, you're able to better afford things you want.

I believe the role of government is to stand side by side with our citizens to help them realize their dreams, not tell citizens how to live their lives.
A mixed metaphor, Mr. President? Where is the line between "standing" and "telling?"
President Bush: There's a -- no, look, there's a systemic problem. Health care costs are on the rise because the consumers are not involved in the decision-making process. Most health care costs are covered by third parties. And therefore, the actual user of health care is not the purchaser of health care. And there's no market forces involved with health care.

It's one of the reasons I'm a strong believer in what they call health savings accounts. These are accounts that allow somebody to buy a low-premium, high-deductible catastrophic plan and couple it with tax-free savings. Businesses can contribute, employees can contribute on a contractual basis. But this is a way to make sure people are actually involved with the decision-making process on health care.

Secondly, I do believe the lawsuits -- I don't believe, I know -- that the lawsuits are causing health care costs to rise in America. That's why I'm such a strong believer in medical liability reform.

In the last debate, my opponent said those lawsuits only caused the cost to go up by 1 percent. Well, he didn't include the defensive practice of medicine that costs the federal government some $28 billion a year and costs our society between $60 billion and $100 billion a year.
Good libertarian opener, with a dig at the trial lawyers. But you've had a Republican majority in both houses since 2002 and the medical reform that emerged was a taps-open prescription drug "benefit" that has the potential to turn all drugs into flu vaccine. The sentiments are fine, but where are the savings accounts?
Senator Kerry: In the Senate we passed the right of Americans to import drugs from Canada. But the president and his friends took it out in the House, and now you don't have that right. The president blocked you from the right to have less expensive drugs from Canada.

We also wanted Medicare to be able to negotiate bulk purchasing. The VA does that. The VA provides lower-cost drugs to our veterans. We could have done that in Medicare.

Medicare is paid for by the American taxpayer. Medicare belongs to you. Medicare is for seniors, who many of them are on fixed income, to lift them out of poverty.
The Senator, on the other hand, would prefer to turn all prescription drugs into flu vaccine. And he's pandering to his Silent Generation base, who avoided poverty by stealing prosperity from future generations. (Yes, I'm being provocative. I also have documentation of this for an upcoming post. As the election approaches, I'll be more active on political economy topics.) The Senator, unfortunately, subscribes to the fiction that each can live at the expense of everyone else.
Senator Kerry: Here's what I do: We take over Medicaid children from the states so that every child in America is covered. And in exchange, if the states want to -- they're not forced to, they can choose to -- they cover individuals up to 300 percent of poverty. It's their choice.
So you change the management and you shuffle some money through Washington. Right. But wait! There's more!
Senator Kerry: In addition to that, we're going to allow people 55 to 64 to buy into Medicare early. And most importantly, we give small business a 50 percent tax credit so that after we lower the costs of health care, they also get, whether they're self-employed or a small business, a lower cost to be able to cover their employees.
You know, there is a serious intellectual argument for the government as a minimum-variance pooler of risk, and a serious empirical question about whether that monopoly can in fact value the risk more efficiently than competing insurers, each of which faces a higher variance but a stronger incentive to estimate it correctly.

On to the next act of theft by the Silent Generation, otherwise known as the Social "Security" system.
President Bush: I believe that younger workers ought to be allowed to take some of their own money and put it in a personal savings account, because I understand that they need to get better rates of return than the rates of return being given in the current Social Security trust.

And the compounding rate of interest effect will make it more likely that the Social Security system is solvent for our children and our grandchildren.

I will work with Republicans and Democrats. It'll be a vital issue in my second term. It is an issue that I am willing to take on, and so I'll bring Republicans and Democrats together.

And we're of course going to have to consider the costs. But I want to warn my fellow citizens: The cost of doing nothing, the cost of saying the current system is OK, far exceeds the costs of trying to make sure we save the system for our children.
Good answer. Did he spend too much political capital on "cost of doing nothing" after the liberation of Iraq?

Senator Kerry, on the other hand, will complain but otherwise hope the problem can be finessed.
Senator Kerry: I have a record of fighting for fiscal responsibility. In 1985, I was one of the first Democrats -- broke with my party. We balanced the budget in the '90s. We paid down the debt for two years.

And that's what we're going to do. We're going to protect Social Security. I will not privatize it. I will not cut the benefits. And we're going to be fiscally responsible. And we will take care of Social Security.
Note he did not rule out means testing, or taxing benefits differently, or raising the retirement age ...
Senator Kerry: Now, if later on after a period of time we find that Social Security is in trouble, we'll pull together the top experts of the country. We'll do exactly what we did it he 1990s. And we'll make whatever adjustment is necessary.
If he's elected, don't say I didn't warn you.

President Bush finally got to say what had to be said.
President Bush: People need to remember: Six months prior to my arrival, the stock market started to go down. And it was one of the largest declines in our history. And then we had a recession and we got attacked, which cost us 1 million jobs.
Now for something different: immigration policy.
President Bush: Many people are coming to this country for economic reasons. They're coming here to work. If you can make 50 cents in the heart of Mexico, for example, or make $5 here in America, $5.15, you're going to come here if you're worth your salt, if you want to put food on the table for your families. And that's what's happening.

And so in order to take pressure off the borders, in order to make the borders more secure, I believe there ought to be a temporary worker card that allows a willing worker and a willing employer to mate up, so long as there's not an American willing to do that job, to join up in order to be able to fulfill the employers' needs.

That has the benefit of making sure our employers aren't breaking the law as they try to fill their workforce needs. It makes sure that the people coming across the border are humanely treated, that they're not kept in the shadows of our society, that they're able to go back and forth to see their families. See, the card, it'll have a period of time attached to it.

It also means it takes pressure off the border. If somebody is coming here to work with a card, it means they're not going to have to sneak across the border. It means our border patrol will be more likely to be able to focus on doing their job.

Now, it's very important for our citizens to also know that I don't believe we ought to have amnesty. I don't think we ought to reward illegal behavior. There are plenty of people standing in line to become a citizen. And we ought not to crowd these people ahead of them in line.
Hmm, were both of them reading this?
Senator Kerry: Number one, the borders are more leaking today than they were before 9/11. The fact is, we haven't done what we need to do to toughen up our borders, and I will.

Secondly, we need a guest-worker program, but if it's all we have, it's not going to solve the problem.

The second thing we need is to crack down on illegal hiring. It's against the law in the United States to hire people illegally, and we ought to be enforcing that law properly.

And thirdly, we need an earned-legalization program for people who have been here for a long time, stayed out of trouble, got a job, paid their taxes, and their kids are American. We got to start moving them toward full citizenship, out of the shadows.
Unfortunately, the Senator still is making light of 40 years of research in labor economics.
What we need to do is raise the minimum wage. We also need to hold onto equal pay. Women work for 76 cents on the dollar for the same work that men do. That's not right in America.

And we had an initiative that we were working on to raise women's pay. They've cut it off. They've stopped it. They don't enforce these kinds of things.
And here we go again with "comparable worth." None of the Senator's court intellectuals understand compensating differentials?? The President appears to reply with a non-sequitur, but think about it. Why do homes in school districts with high test scores command higher prices?
President Bush: But let me talk about what's really important for the worker you're referring to. And that's to make sure the education system works. It's to make sure we raise standards.
On the merits, I view the President as having made the better case. But he's had majorities in both Houses of Congress. Why aren't some of these libertarian policies on the calendar?

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