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Opportunity knocks, but America probably won't answer

Ryan Avent posts a chart at his place that I find a bit hard to read but that takes dozens of countries and compares their total anticipated increase in health and pension spending from 2011 to 2030 with the total deficit reductions that they'll need to balance their budgets over that period. The United States does not look good on this chart. Which is a reminder that our eventual deficit reduction is primarily an issue of health-care costs. And they'll be going up at the exact moment our deficit needs them going down. Which is why, as Avent says, "the mark of someone serious about debt issues is an obsession with health cost control." Stimulus spending has nothing to do with it.

If you wanted to be optimistic about this, you could say that this represents a sort of opportunity. In sharp contrast to, say, France's health-care sector, our health-care sector is dramatically, joyously, wildly inefficient. We pay so much more than anyone else and get so much less that it's easy to imagine a world in which we have a drastically different health-care system that's both better than the one we have now and that's wiped out our deficit. I've always like CEPR's budget-deficit calculator, which allows you to plug other nations' per-capita health-care spending into our budget picture and see what happens. And what happens is that our deficit problem disappears entirely:

ceprdefgraph.jpg

Of course, what's almost impossible to imagine is how we get from here to there. The wrenching, agonizing process that got us the Affordable Care Act was attached to a pretty modest bill that was careful not to strike at the core of our system. And anytime anyone suggested arming the bill with more dramatic reforms -- converting the employer-tax exclusion to a standard deduction, or adding a strong public option into the market -- the politicians recoiled, and quick. So if the inefficiency of the status quo provides a sort of abstract budgetary opportunity, the ferocity and number of its defenders provide an almost insurmountable political obstacle.

By Ezra Klein  |  June 17, 2010; 11:02 AM ET
Categories:  Budget  
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Comments

Again, republicans just want Obama and anything he touches to fail. HCR is the best example, but the stimulus is also a case of republicans and conservadems deliberately making proposals either more costly or less effective or both to prove that Obama can't solve the problem.

Posted by: srw3 | June 17, 2010 12:42 PM | Report abuse

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