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Monday, March 05, 2007
Walker, Budget Nutcase
GAO Chief David Walker showed up on 60 Minutes yesterday. Dean Baker has a nice takedown of what he said.
I accuse him of three more errors against entitlements and the long-term fiscal imbalance.
First, he limits options for policy solutions:
So where's that money going to come from?
"Well it's gonna come from additional taxes, or it's gonna come from restructuring these promises, or it's gonna come from cutting other spending," Walker says.
What about reforming the private health care system- the source of the problem?
Second, he distorts the opposition's beliefs:
The only dissenters seem to be a small minority of economists who believe either that the U.S. can grow its way out of the problem, or that Walker is over-stating it.....
"Unfortunately they don't get it. I don't know anybody who has done their homework, has researched history, and who's good at math who would tell you that we can grow our way out of this problem," Walker replies.
If Walker and CBS were good at reading, they would know that some people think the solution is to overhaul the health care system. Even CBO is starting to think that way. BNA ($) reported this morning that it's forming an advisory panel to study how to control costs in the private sector to contol costs in the public sector.
And third, he doesn't know what he's talking about.
Of course we can't grow our way out of an inefficient health care system; they have nothing to do with each other! Even if the economy was big enough to pay for our bloated health care system, it would still incredibly wasteful and inhumane. And you can't make it more efficient by cutting benefits or raising taxes. That just shifts costs around; it does next to nothing to control health care prices. CBO Director Peter Orszag said as much in today's BNA:
Reducing spending in Medicare and Medicaid likely will only shift costs to other parts of the health care system, doing little to sustain the overall health care system or those federal health care programs, he added.
Director Orszag seems like he gets it- I look forward to seeing what options his team comes up with. How about Walker keeps quiet until then?
Posted by Matt Lewis
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