By Dave Anderson:
Bernard Finel, and other bloggers I respect, have often made the argument that the Obama administration's policies are too expensive and there is deficit sticker shock that has created significant political costs for Democrats this cycle. I think this is a weak argument as the deficit is an undefined signifier of economic unease when there is a shitty ass labor market, 16% U-6 unemployment, and a balance sheet recession going on. Furthermore, the CBO and the Medicare actuaries are projecting that if Congress does nothing, major financial problems in the US are minimized over a multi-generation horizon despite high current and cyclical deficits.
Bruce Webb reads the 2010 Medicare actuary report and pulls out one very interesting factoid from Table III.B11
Equals unfunded for all participants for the inifinite future:-0.6 trillion dollars
According to the Medicare actuaries, the infinite future for Medicare is a slight surplus. This is a major departure from past actuarial projections which showed large scale deficits in GDP terms. The big change is the cost-savings measures, including comparative effectiveness research and the excise tax on high end insurance plans, from the Affordable Care Act. Over the long run, the Obama administration is being very reasonable, frugal and responsible. And they will get hammered for it in the short run.
Bruce Webb continues this analysis as the Pain Caucus will insist on inflicting unnecessary pain next winter:
Oddly this multi-multi trillion dollar turnaround did not result in
banner headlines in the NYT or the WaPo, nor did congratulatory
telegrams pour into the offices of Nancy Pelosi, Harry Reid and dare I
say it Barack Obama from the folk at Cato and Concord that have been
weeping bitter, bitter tears about 'intergenerational inequity' and
begging us to 'think about the grandchildren'. Because that is not how
they roll nor was any of this what the kerfluffle has been about. The
fundamental hostility to Medicare among the self-style deficit hawks is
not because it is broken, but instead because it works. For them that
infinite future $600 billion SURPLUS is terrible, terrible news.
Being long-run responsible is a mug's game.
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