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Politics : A US National Health Care System?
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To: Road Walker who wrote (14410)3/12/2010 6:13:59 PM
From: TimF2 Recommendations  Read Replies (1) of 42652
 
Which brings me to the third myth: that health reform is fiscally irresponsible. How can people say this given Congressional Budget Office predictions — which, as I’ve already argued, are probably too pessimistic — that reform would actually reduce the deficit?

Because

1 - They are optimistic not pessimistic.

2 - More importantly the bill is set up to score well by manipulating the rules of CBO scoring. Most egregiously by offsetting 6 years of spending with 10 years of taxes, but also by counting spending reductions that will likely be fully or partially restored in a separate bill.

3 - Projections of large government health care program costs have almost always been way too low.

4 - Even in the very unlikely event that the bill doesn't add a lot to future deficits. Deficit neutrality (or even a slight reduction of deficits) is not enough to make the bill fiscally responsible. Extra spending is still extra spending and we are already on a path to spending beyond what any realistic future increase in taxes will be able to support. Also any savings in Medicare or Medicaid or elsewhere in this bill, and any additional taxes in this bill, will no longer be available to reduce future deficits.

Greg Mankiw detail that problem well, the short form is contained in the quote below, but I recommend you read the whole blog post, its not that long.

"Even if you believe that the spending cuts and tax increases in the bill make it deficit-neutral, the legislation will still make solving the problem of the fiscal imbalance harder, because it will use up some of the easier ways to close the shortfall. The remaining options will be less attractive, making the eventual fiscal adjustment more painful."

gregmankiw.blogspot.com
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