Conor Friedersdorf has a post despairing over our country's fiscal situation as part of it, he raises the fiscal issue again.
Does anyone who argues it’ll all be deficit neutral in the end, or that costs will go down, want to wager on that proposition? (Update on the prior paragraph: I’m told that any talk of costs going down is actually shorthand for slowing the rate of increase.)
I expect the Congress will keep putting off the Medicare cuts from before the bill, but that's the status quo. In all other senses, yeah, I think it will be deficit neutral and I'd bet at dinner at a reasonably nice D.C. restaurant (assuming Conor hasn't escaped DC by then) on the credibility of the CBO estimates and the Democratic Congress's willingness to not repeal key sections of the bill. It will be tricky to adjudicate the exact details here since healthcare reform is a multi-round process, but I'm flexible on the definition of terms. [I'm even willing to make this a one-sided bet. If I win I can make my self a nice curry to celebrate the improved fiscal situation and universal healthcare of America of the future.]
Why am I confident? See my post analyzing the political viability of the CBO analysis.
Side note on the term broke: the vast majority of our debt is held in U.S. dollars and the bonds are inflation adjusted. That's a privilege not shared by countries that go into default, the risk is that we'll be cut off, not that we can't pay off what we owe now. However, as Yglesias points out, bond rates are at nigh record lows, so it doesn't look like we'll be cut off anytime soon. This doesn't mean we don't need to worry about long term fiscal sustainability, it does mean that we are not in a debt crisis. The NY Times article is focused on the fact that interest rates will doubtless go up at some point, this is true, but that points to the important of deficit reduction in the mid-term. Spending money now to deal with record unemployment makes sense, so long as we organize the programs in such a way that don't require us to take on more debt as the economy improves. This is quite different than what happens with home owners in the crisis because they had adjustable rate mortgages. That's very different, it means that not just is your new debt at a higher rate, it also changes your old debt.
[Addendum: Jamelle over at the League of Ordinary Gentlemen also takes on Conor's piece.
The reflexive, evidence-free dismissal of the CBO scores (High Broderism at its finest) at the beginning of Conor’s post is enough to convince me that he isn’t actually interested in hearing liberal ideas for bringing the United States back on a firm fiscal footing. That said, it’s worth reminding Conor that in the three decades since the Republican Party became the dominant political coalition in American politics, the deficit has been reduced exactly once, and that was during Bill Clinton’s presidency. All three Republican presidents of the “conservative era” – Ronald Reagan, George H.W. Bush, and George W. Bush – were responsible for significant increases in the deficit, and in the case of the latter, a tremendous increase in the overall national debt.He's got a good graph to illustrate the point.]
[Update: Embarrassing title typo fixed]
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