Saturday, June 13, 2009

Spending yourself to fiscal balance rarely works. OK, it never works.

George Mason professor of economics Tyler Cowen has an opinion piece in the New York Times where he reviews some arcane economic theory:
The demand for universal coverage sounds like a moral imperative to “take care of everybody,” but in reality it would make only a marginal difference when it comes to the overall health of the American population. The sober reality is that universal coverage is another way to spend money, which may or may not be a good idea.

The most likely possibility is that the government will spend more on health care today, promise to realize savings tomorrow and never succeed in lowering costs. It is rare that governments successfully cut costs by first spending more money.

Mr. Obama has pledged to be a fiscally responsible president. This is the biggest chance so far to see whether he means it.
Spending costs money? Who knew? Thanks, professor!

1 comment:

Anonymous said...

I'm always amazed when dictators rig elections but don't bother to hire a decent statistician to develop numbers that will look good under outside analysis. I guess absolute power tends to make one stupid.