Funny Math: Federal Debt Style
Politics can intrude all over the place. No more so than in the aftermath of the great health care fracas. The losing side seems hell bent on stirring up anger over the legislation and, equally, on totally misconstruing it. The simple fact is that the health care reform as it has been signed into law is a great boon to small businesses, the middle class, the elderly, and those who previously who were uncovered. The only people who come out worse off are the highly paid folks – those with over $250,000 in annual income – who will see a modest tax increase, and the insurance companies who will have to make more pay outs than they used to.
There is no question that, over time, most voters confusion and anger will subside, and that health care reform will be as accepted as Medicare and Social Security already are.
Meanwhile we live in a fantasy world of the opposition’s making. Apart from the ludicrous charges leveled against reform, things such as ‘death squads’ and so on, one criticism that seems to have resonance with the public is the impact it has on the Federal deficit, and, by extension, on the national debt.
Let’s not belabor the point: such criticism is flatly incorrect.
The passage of health care reform reduces the debt, and it reduces the deficit. Cumulatively over the next ten years this reduction is expected to be approximately $138 billion. In the context of our total debt this is not a vast amount, but at least it is moving in the right direction.
Yet the hysteria continues. Articles are pouring out of various right wing pens full of the doom and gloom about the fiscal irresponsibility of the Obama administration and its vast new burden on the poor American taxpayer. Typical of this rubbish is Robert Samuelson’s article in the Washington Post. Samuelson’s main point is that the new law adds about $900 to ‘an already bleak budget outlook’. But he never mentions why that budget outlook is so bleak. Perhaps it’s because he supported all the policies that made it so. Then again maybe he suffers from amnesia.
His thinking is a great illustration of the funny math the Republicans are reduced to in order to foist the debt problems we have on Obama.
Let’s think this through a little more objectively.
In the past decade we have witnessed a number of key policy implementations that have had a material impact on the long term fiscal outlook that Samuelson says is now so bleak.
Here are the high points:
- The Bush tax cuts. Impact: increase the deficit by about $1,825 billion.
- The Iraq war. Impact: increase the deficit by about $750 billion.
- Health Care reform. Impact: reduce the deficit by $138 billion.
Hmmm.
Fiscal rectitude is a subject that anyone who supported the first two of these initiatives should not make a big deal of.
Setting all of this within the current crisis makes it a little easier for faux deficit hawks to make their case. After all we have just plunged deeply into the red in order to bail ourselves out of what could have been a nightmare. Yet the hawks fail to see it that way. They decry spending of any kind. The purpose of the spending is irrelevant to them, they simply oppose it. The fact that spending is the only policy we have to fend off depression is something they deny. They are still mired in market worship, of the Ayn Rand kind, a deeply mystical place where the market weaves magically to overcome all and every problem – even those the market itself caused.
Market magic is now debunked rubbish, but it still has a hold on the kind of conservatives who are repelled by all government spending.
Meanwhile they resort to funny math to cover their real motivation. Their scare stories about the ‘bleak debt outlook’ are a subterfuge. If they were truly scared of debt they would have risen in revolt at the Bush tax cuts and would have demanded that the Iraq escapade be paid for by raising taxes or cutting spending elsewhere. Based upon the evidence we have at hand their opposition to government spending is not that it adds, potentially, to the debt. It is that sometimes the spending is socially beneficial. That they cannot abide. The notion that – gasp – someone is better off as a result of a government program is anathema to them. Keep up with such programs, and before you know it America looks like those funny European countries who look after their poor and wretched citizens.
Nothing should rile Samuelson more than the French President’s comment yesterday. He remarked that he failed to understand the health care debate and the opposition. His reaction to the new law was that he welcomed America to the club of countries who cared for their poor. At last.
So scared are the conservatives that people might end up liking the reform that they are forced to twist the numbers about and talk as if they actually cared about deficits. They clearly forget their hero Dick Cheney’s famous dictum: ‘deficits don’t matter’. And they neglect to comment on those devastating tax cuts. Instead they weep and gnash about the horrors Obama has unleashed and his fiscal irresponsibility.
Unfortunately, we are stuck with an uncritical media that trots out the same garbage. We still read of a ‘$940 billion health care cost’ in the New York Times. It’s as if we all look at our expenses and not at all at our income when we discuss how we are doing financially. The reform law has a $940 billion cost over the next ten years. That’s why the same law covers those costs by legislating new revenues. So well crafted is the law that it ends up showing a profit. It’s called being fiscally responsible.
Only funny math can make that into a reckless thing.
Only funny math can distort reality to make Obama into someone deserving of the kind of accusation Samuelson makes.
Then again through the lens of funny math people like Reagan and Bush can appear to have been conservative. The two most profligate presidents of all time.
Funny. As in hilarious.
That’s funny math for you.
