A Deficit Neutral Health Bill Isn't Enough
Greg Mankiw explains the spending problems with the healthcare bill through a short, imagined dialog between two friends. Here's the kicker:
Even if you believe that the spending cuts and tax increases in the bill make it deficit-neutral, the legislation will still make solving the problem of the fiscal imbalance harder, because it will use up some of the easier ways to close the shortfall. The remaining options will be less attractive, making the eventual fiscal adjustment more painful.
With the President's current budgeting trends (spend as much as you can, as fast as you can), we're facing an $11.3 trillion deficit by 2020. By that time, the federal debt will be a staggering $20.3 trillion. (The debt was $5.8 trillion at the end of 2008.)
It's not enough to be happy that we're maintaining the current levels of spending or -- even worse -- that we're managing to spend more in a "deficit neutral" way. It's serious business and it's time we stopped "kicking the can down the road to future generations", as the President likes to say.