Friday, January 07, 2011

The willful suspension of disbelief will bankrupt us

If the stakes weren't so high, the argument over the CBO's latest scoring of Obamacare would be funny. The reality is that the estimations that Obamacare will reduce the deficit over time runs headlong against mathematics, common sense, history and the program's developing reality.

First, former CBO director Douglas Holtz-Eakin reviews the math and concludes:
In short, there was never any reason to believe that the law reduced the deficit by roughly $140 billion over ten years. Starting two new open-ended entitlements without fixing the existing budgetary cancers just doesn’t work that way.
But then do you really need arithmetic when the "mother of all entitlements" is staring you in the face?
Of all the claims deployed in favor of ObamaCare, and there are many, the most preposterous is that a new open-ended entitlement will somehow reduce the budget deficit. Insure 32 million more people, and save money too! The even more remarkable spectacle is that Washington seems to be taking this claim seriously in advance of the House's repeal vote next week. Some things in politics you just can't make up.
One need only look at the consistent over-expansion of entitlement programs to see why Paul Ryan's tie is safe from digestion.

And then there's Obamacare's high-risk pools which are already costing way too much, despite low participation:
Montana is one of a few states in which the medical bills from those who have joined are huge. New Hampshire's plan has only about 80 members, but they already have spent nearly double the $650,000 the state was allotted in federal money to help run the program, said J. Michael Degnan, its director.
Remember what The Boston Globe remarked about Massachusetts’s continually cash-short Medicaid program? “The money, it seems, is never enough." If nothing else I think it's impressive that, despite the ultra-low enrollment, New Hampshire has managed to burn through a multiple of its allotted funds already. Dramatically under-used and way over-budget? That takes effort.
The Obama administration made estimations of low costs and high tax revenues that were little more than wishful thinking or willful deception to keep the program's ten-year cost under a trillion dollars. There is no way - no way - Obamacare will keep the budget from blowing apart.

Extra - Nice roundup from Jennifer Rubin.


Anonymous said...

Does anyone, on either side, ever tire of citing the CBO numbers as gospel when they substantiate their biases, and denouncing them as nonsense whenever they don't?

Anonymous said...

View from 7:40 to 10:05:

Eric said...

Sounds like the basis for a Simon-Ehrlich wager.

Bet Favre said...

Or maybe not. Something tells me the costs and/or savings of Obama's health care package will be a liiiiiiittle less straightforward to calculate than a fresh pound of tungsten, and the "final bill" will be a liiiiiiittle more subject to preexisting red/blue talking points. Even Michelle Bachmann doesn't go on TV and say that today's commodity prices are a hoax.

Eric said...

Not predictable at all? Hmmm...Blue Cross of California wants to raise premiums by 59%. A rational person might think it's a liiiitle more likely that costs will outstrip revenues.