Will baselessly claimed health care reform plans will increase U.S. "debt and borrowing"
In his November 12 Washington Post column, George Will asserted that "[g]old increasingly looks to investors to be a more reliable store of value than governments' bonds are, especially U.S. bonds as the U.S. government threatens to pile a mammoth health-care entitlement onto the nation's Ponzi welfare state, increasing the nation's debt and borrowing." However, Will's suggestion that health care reform will "increas[e] the nation's debt and borrowing" is undermined by the conclusion of the Congressional Budget Office (CBO) that health care reform bills in the House and the Senate will reduce federal deficits over 10 years and are expected to continue to yield savings beyond 2019.
Will falsely suggested health care reform is not paid for
From Will's November 12 Washington Post column:
Last month, India purchased 200 tons of gold at $1,045 an ounce, before the price topped $1,108 on Monday. China, too, may increasingly diversify from paper -- i.e., bonds -- into gold, the price of which, some experienced investors believe, could soar to $2,500 an ounce in three to five years. One reason for all this is U.S. behavior.
India's 2008 gross domestic product was $1.2 trillion, so its $6.7 billion purchase was small beer. It may, however, be a large portent: Gold increasingly looks to investors to be a more reliable store of value than governments' bonds are, especially U.S. bonds as the U.S. government threatens to pile a mammoth health-care entitlement onto the nation's Ponzi welfare state, increasing the nation's debt and borrowing.
In fact, CBO found that House bill coverage costs are "more than offset"
Will ignored CBO's finding that bill would result in "a net reduction in federal budget deficits of $109 billion over the 2010-2019 period." CBO stated in a November 6 estimate that "CBO and the staff of JCT now estimate that, on balance, the direct spending and revenue effects of enacting H.R. 3962, incorporating the manager's amendment, would yield a net reduction in federal budget deficits of $109 billion over the 2010-2019 period." From CBO's cost estimate:
CBO expects continued savings from House bill after first 10 years. According to CBO, the House bill is expected to continue reducing deficits beyond the 10-year budget window that ends in 2019. From CBO's October 29 preliminary analysis of the House bill:
All told, H.R. 3962 would reduce the federal deficit by $9 billion in 2019, CBO and JCT estimate. After that, the added revenues and cost savings are projected to grow slightly more rapidly than the cost of the coverage expansions. In the decade after 2019, the gross cost of the coverage expansions would probably exceed 1 percent of gross domestic product (GDP), but the added revenues and cost savings would probably be greater. Consequently, CBO expects that the legislation would slightly reduce federal budget deficits in that decade relative to those projected under current law-with a total effect during that decade that is in a broad range between zero and one-quarter percent of GDP. The imprecision of that calculation reflects the even greater degree of uncertainty that attends to it, compared with CBO's 10-year budget estimates, and the effects of the bill could fall outside of that range.
Senate Finance Committee bill also projected to reduce deficits
CBO found that the legislation would reduce the deficit by $81 billion over 10 years. As of November 12, the Senate has not released its final health care reform bill. However, an October 7 CBO analysis found that the Senate Finance Committee's health care reform bill "would result in a net reduction in federal budget deficits of $81 billion over the 2010-2019 period":
According to CBO and JCT's assessment, enacting the Chairman's mark, as amended, would result in a net reduction in federal budget deficits of $81 billion over the 2010-2019 period (see Table 1). The estimate includes a projected net cost of $518 billion over 10 years for the proposed expansions in insurance coverage. That net cost itself reflects a gross total of $829 billion in credits and subsidies provided through the exchanges, increased net outlays for Medicaid and the Children's Health Insurance Program (CHIP), and tax credits for small employers; those costs are partly offset by $201 billion in revenues from the excise tax on high-premium insurance plans and $110 billion in net savings from other sources. The net cost of the coverage expansions would be more than offset by the combination of other spending changes that CBO estimates would save $404 billion over the 10 years and other provisions that JCT and CBO estimate would increase federal revenues by $196 billion over the same period.1 In subsequent years, the collective effect of those provisions would probably be continued reductions in federal budget deficits. Those estimates are all subject to substantial uncertainty.
CBO expects Senate Finance bill to continue to reduce deficits beyond 2019. From CBO's October 7 analysis:
All told, the proposal would reduce the federal deficit by $12 billion in 2019, CBO and JCT estimate. After that, the added revenues and cost savings are projected to grow more rapidly than the cost of the coverage expansion. Consequently, CBO expects that the proposal, if enacted, would reduce federal budget deficits over the ensuing decade relative to those projected under current law -- with a total effect during that decade that is in a broad range between one-quarter percent and one-half percent of GDP. The imprecision of that calculation reflects the even greater degree of uncertainty that attends to it, compared with CBO's 10-year budget estimates.
Let's file that question right next to:
"How can tax cuts increase tax revenue?"
As for government spending reducing the deficit, that's what O thinks he's doing by throwing some of the TARP money at the debt. In other words, he yelled EMERGENCY, EMERGENCY in February and forced through a $780B TARP bill to spend money we didn't have. Now, all you libs have forgotten that and you think he's actually paying off the debt. He's gonna look real good when he reduces the debt caused by the TARP bill with TARP money.
Dam_, that guy's good.
Medicare was estimated to cost $9 billion over the first 25 years. The REAL tab? $67 billion. They were off by only...oh...700 percent.
Has a government program ever come in under estimate? (well, the Medicare drug benefit did -- and it was a GOP plan)
Anyone with half a brain (obviously liberals are excluded) knows this one will be over-budget. Unless we go with the alternative and deny a massive amount of care
http://www.concordcoalition.org/issues/facing-facts/drug-benefit-wont-cure-what-ails-medicare-cut.
"If experience is any guide, even these figures may understate future costs. The history of Medicare cost projections, after all, is one of embarrassing underestimates, starting with the very first projection in 1965. It put spending on Medicare Part A at $9 billion in 1990. Actual spending that year came in at $67 billion. "
I just wonder at the other developed countries who somehow make their medical systems work. How are we unable to do the same? Are we so intellectually inferior?
Yeah, that's it.
All you libs should be proud of the high costs of medicine caused by these two phenomena -- we are redistributing our wealth to the poor of the world. That's good, right?
Remember, the poorest people in this country are living extravagantly by Malawi standards.
Wrong. Most research is government funded and is done at universities. Big Pharma's last big research breakthrough was boner pills.
What Bush did was hand out as much money as he could to the banks before he left office. In doing so, he left the next president with the impossible political choice of continuing the bailout and take the hit, or discontinue the bailout, allow the banks to fail, and take the hit.
Bush was too much of a coward, just like every long tongued Republican, too vested in corporate power to stand up to the banksters.
The shame of it all is that Democrats will not tap into all this populist anger over the Wall st. welfare act. The leaders of the liberal movement, elitists for the most part, tell us not to get upset or take to the streets or yell about the pain and suffering that Wall st. has caused. Meanwhile, Republican leaders like Bachman, Limbaugh, Beck, Palin and friends encourage people to get out and get angry. The thing is, these hack right-wing operatives are manipulating the working people who are hurt the worst by conservative economic ideology. We on the left fall into the elitist trap of dismissing the teabaggers as ignorant racists, when in reality; they're just working and middle class people who are hurting in this economy like everyone else. The difference is that the right-wing are offering them a narrative, as detached from planet earth as it is, it means something to working people. It has an enemy (government) defenders of the middle class (Republicans)and solutions (free markets.)
We could bring these folks to our side if our movement leaders were willing to fire us up, tell the truth of why our economy crashed under the conservative market fundie ideology of hands off, why taxing these rich bastards is justified and practical and make the case for investment in the commons.
The anger is out there, it ain't going away. The question is whether it can be directed at the real problems.
Roundhouse, you can't stabilize the economy with more debt. Nor are you going to create permanent productive jobs. You can create government jobs but those are not productive since the government does not produce a product. Government is pretty much a cost center not a profit center. Cost centers are what companies get rid of first during economic hard times. The worst of this economic mess is still to come. More government stimulus is not going to help it. If fact it is government meddling in the free market that caused the mess we are in now. You have to blame both the Democrats and the Republicans. The market has built-in safety valves. When left alone those safety valves release pressure and bubbles do not form. When the government messes with those pressure releases you get catastrophic results. Do you want an example? Play big government and tape down the pressure release on your hot water heater because you think that everyone in your house has a right to hotter water. Watch what happens but hopefully from a distance. Which is similar to what caused the housing bust. You had the Fed dropping interest rates to nothing which in turn caused a drop in interest rates that fueled massive home buying by people who probably shouldn’t have been buying houses anyway. You had Fannie Mae and Freddie Mac forcing banks to make bad loans through what can only be called mafia tactics. You had Bill Clinton not vetoing the repeal of Glass-Steagall. The repeal was introduced by two Republicans. (By the way, the banks hated Glass-Steagall. Glass and Steagall were both Democrats; maybe they knew something Clinton didn’t?) From everything I have read the repeal of Glass-Steagall was the cause of the banks becoming to big to fail and getting into risky repackaging of bad housing debt into securities. Add all of this together and it was the recipe for the disaster we are in now.
So my opinion is that both parties are at fault. You can’t fix the blame on anyone in particular. You can only blame greedy politicians that only seem to be interested in getting re-elected and serving special interests. The thing that bothers me the most is that politicians are put in power by the voters. If the politicians are an image of the voter’s desires then it doesn’t say much about the electorate of this country.
You can go ahead and rip my comments apart. For some reason Media Matters can’t seem to get my password reset so I will not be able to rebut anything once I sign off tonight.
Gosh, there are so many people out there that just can't grasp simple economics. When the credit market dried up, Chucky, nobody had any money to spend. Got that. No more equity loans, no more flat screens, no more vacations, no more fancy dinners.
Nobody was spending ANY money. The only entity with the ability to introduce capital/credit into the economy is....
THE GOVERNMENT.
You see, right now we're paying the bill for Bush's tax cuts for the top 1% and his deregulatory policies.
You need to read many of the analysis books that are out now and will be coming out. Our government is now attempting to solve problems they don't understand. If that's not scary, I don't know what is.
It's all Obama's fault.
(sarcasm)
The problems in California are, to a huge degree, the result of the application of conservative policies. It was more exposed than most other states to the housing bubble that was a result of conservative anti-regulation philosophies. It's been under republican governance for years. There is a long history, going back to Prop 13, of putting wacky conservative ideas into practice.
No one with an iota of common sense has ever looked at California and seen it as a "leftist utopia." That's purely a conservative fantasy.
2 wars that they started and failed at miserably. they couldn't win either one. tax cuts for rich people and an economy that completely collapsed.
yep, your side has done a terrific job.
please stop your crying and let us contine to clean up the mess you made.
But the Democratic bills SAVE a lot more money in the end, decreasing the projected budget by a lot more.
How is that? Because our side actually does something to try to bring down the cost curve.
And that's why it's a crisis that Obama had to address - the cost curve had to be taken care of. And the Republican bill didn't do hardly anything to address that!
Not only that, but since there will be a number of people who won't buy ins and will refuse to pay a fine, the government will have more poverty on its hands, not less. The only saving grace will be when the courts declare that there is no Federal power to force people to buy insurance. When that happens the whole HR3962 thing will collapse. [I defy you to find where in the US Constitution, the Feds have the power to force me, at the point of a gun, to buy insurance].
Neither Dem bill or Repub bills solve our healthcare problems. Rep bills lower costs but don't produce universal coverage. Dem bills raise costs and drive doctors out of the field. HR3962 is a disaster. Hopefully, if it passes it will be quickly neutered.
Once you've mastered that definition, your rants about the constitution, point of a gun, driving out doctors, blah, blah, blah, become quite meaningless fearmongering. Please stop.
to buy insurance and I'm not paying a fine. There are others of my persuasion. How does the CBO factor that into their static analysis?