Four budget calculators, one story
The New York Times' deficit-reduction calculator is worth playing around with, though the Center for a Responsible Federal Budget's calculator is more comprehensive, and the calculator from the Center for Economic and Policy Research works harder to include policies that are too often left out of the mainstream debate. But they're all good, clean fun, and they all make the same basic point: It's the health-care system, stupid.
In the Times' calculator, the single biggest thing you can do is add a "magic asterisk" to the health-care system. We don't know how exactly we're going to hold Medicare's spending growth to GDP+1%, but if we manage it, we'll save $560 billion by 2030. No other option in their calculator -- and no other option in the Simpson-Bowles report -- is even close to those savings. If we get that growth rate, or something close to it, we can get the budget into balance. If we can't, well, we can't. It's really as simple as that.
In some ways, my favorite budget calculator is an older one released by the Center for Economic and Policy Research. This calculator doesn't give you any viable choices. Instead it allows you to plug in the per-capita health-care spending of other countries and then see what happens to our deficit. I've looked at this dozens of times, and I still find it startling: If we spent what high-performing, fully universal systems like France and Germany spend, we'd have no budget deficit.
In a follow-up post, I'll look at some of the options the Simpson-Bowles report offer for cutting health-care spending. None of them get us to French, German or Dutch levels of spending. But there's more there than I think people have recognized.
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