Fiscal sanity

Slate makes an admirable attempt to bring the debate on the budget back down to Earth with its "Do-Nothing" budget fix. Noting that the CBO's baseline projection predicts that if present trends simply continue, the budget deficit will be gone by 2019, Annie Lowrey explains:

So how does doing nothing actually return the budget to health? The answer is that doing nothing allows all kinds of fiscal changes that politicians generally abhor to take effect automatically. First, doing nothing means the Bush tax cuts would expire, as scheduled, at the end of next year. That would cause a moderately progressive tax hike, and one that hits most families, including the middle class. The top marginal rate would rise from 35 percent to 39.6 percent, and some tax benefits for investment income would disappear. Additionally, a patch to keep the alternative minimum tax from hitting 20 million or so families would end. Second, the Patient Protection and Affordable Care Act, Obama's health care law, would proceed without getting repealed or defunded. The CBO believes that the plan would bend health care's cost curve downward, wrestling the rate of health care inflation back toward the general rate of inflation. Third, doing nothing would mean that Medicare starts paying doctors low, low rates. Congress would not pass anymore of the regular "doc fixes" that keep reimbursements high. Nothing else happens. Almost magically, everything evens out.

She agrees that we don't necessarily want all of these things to happen, and they don't have to, as long as Congress makes sure it pays for whatever changes it makes. But the point is that there is no massive, dramatic plan necessary to fix the deficit - just some tinkering will do.

That is because, by and large, the hard work of fixing the fat part of the budget has already happened—through health care reform. The Social Security crisis you sometimes hear about is essentially a myth. The trust fund will run out in 2037, "at which point tax income would be sufficient to pay about 75 percent of scheduled benefits through 2084." Full Social Security solvency would require only about 0.7 percent of GDP, which you can get to by exposing income above $107,000 to the payroll tax. There is no debt crisis, either, as long as the U.S.'s lenders remain confident in the country. The crisis lies in spiraling health care costs. The Obama health care reform bill might not work, but it does contain programs that could turn the tide over time. The big wheels of deficit reduction are already turning—and it might be better for Congress to step back, stick to pay-as-you-go, and let them turn.

See? There is an alternative.

From the buried lead department

The Guardian's story about the first full-face transplant to take place in the United States, received by Fort Worth resident Dallas Wiens, has this little tidbit in the middle:

The new federal healthcare law also helped Wiens by allowing him to get insurance coverage under his father's plan for the expensive drugs he will have to take for the rest of his life to prevent rejection of his new face. He will be covered until he turns 26 in May. He expects to be eligible soon under Medicare, which insures the disabled as well as those over 65.
Wiens had no insurance when he was injured; Medicaid covered about two dozen operations in Dallas until his disability payments put him over the income limit.

I am no fan of Obama's healthcare reform - I think it's inadequate and could potentially cause some serious problems. But it's important to recognize how much of a step forward it is. It's grotesquely unjust that a person's disability payments should make them ineligible for Medicaid, and while the reform didn't address the underlying insanity of the American welfare system, it has made and will make a huge difference for many, many people.

European-style socialized medicine

Polly Toynbee has an article in The Guardian today on the problems faced by the German healthcare system. She's writing about it in light of the Tories' proposed reforms to the NHS, but it's interesting to read from an American perspective - the Obama healthcare reform is creating a system that's not too far removed from the way Germany does it now, and it's likely that a lot of the problems they're having now we'll be having in the future.

Lansley starts the long walkback...

The Telegraph, The Times (paywall) and The Independent have all got on the front page Andrew Lansley's announcement that there might be a rethink on the NHS reforms in the face of ferocious opposition from the BMA, the Lib Dems, think-tanks, the health select committee, medical journals and, The Independent notes, "even David Cameron's cardiologist brother-in-law." Why this isn't on the front page of The Guardian (or, for that matter, the FT) is beyond me.

But the point is the same as on the forests - if you fight these bastards long and hard, they'll back down. Lansley is no expert and everyone knows these reforms were cobbled together last minute. He hasn't got the courage  of his convictions - he'll blink before you do. Remember Egypt - don't leave the square until you've got everything you asked for. Don't give up until they give in.