TW: Brooks posits that Obama believes America needs investments in things like education, energy alternatives and health care in order to move our society forward. But he then frets that the means by which to pay for those investments, reduced health care expense growth amongst other initiatives, will not materialize. This is a very legitimate concern as certain Obama proposals on the revenue side have already been pushed aside by Congress.
Furthermore as Brooks says health care costs appear to be structurally oriented towards excessive growth to the point reforming them is practically impossible. Yet he essentially proposes no solutions merely fear. We should all be afraid of our collective fiscal situation but at some point the can has to stop being kicked down the road. Not in terms of halting spending amidst the Great Demand Contraction OR not investing in real needs such as education and infrastructure but in terms of facing up to the long-term fiscal realities.
I repeat where do you want the cuts? Defense, health-care or social security? Lets stop fretting and start doing something.
From David Brooks at NYT:
"Barack Obama came to office with a theory. He believed that the country was in desperate need of new investments in education, energy and many other areas. He also saw that the nation faced a long-term fiscal crisis caused by rising health care and entitlement costs. His theory was that he could spend now and save later. He could fund his agenda with debt now and then solve the long-term fiscal crisis by controlling health care and entitlement costs later on.
In essence, health care became the bank out of which he could fund the bulk of his agenda. By squeezing inefficiencies out of the health care system, he could have his New New Deal and also restore the nation to long-term fiscal balance.
...Obama believes these deficit levels are tolerable if he can fix the long-term fiscal situation, but he hasn’t been happy about them. He’s been prowling around the White House prodding his staff to find budget cuts. Some of the ideas they have produced have been significant (Medicare reforms), some have been purely political (asking cabinet secretaries to cut $100 million in waste, fraud and abuse), and many have been gutted on Capitol Hill (cap and trade, proposed changes in charitable deductions, proposed changes to the estate tax).
In any case, these stabs at fiscal discipline haven’t come close to keeping up with the explosion in spending...If he is going to sustain his agenda, if he is going to prevent national insolvency, he has to control health care costs. Health care costs are now the crucial issue of his whole presidency.
Obama and his aides seem to understand this. They have gone out of their way to emphasize the importance of restraining costs...Unlike just about every other Democrat on the planet, he emphasizes cost control as much as expanding health coverage.
...Obama aides talk about “game-changers.” These include improving health information technology, expanding wellness programs, expanding preventive medicine, changing reimbursement policies so hospitals are penalized for poor outcomes and instituting comparative effectiveness measures.
Nearly everybody believes these are good ideas. The first problem is that most experts...don’t believe they will produce much in the way of cost savings over the next 10 years. They are expensive to set up and even if they work, it would take a long time for cumulative efficiencies to have much effect. That means that from today until the time President Obama is, say, 60, the U.S. will get no fiscal relief.
The second problem is that nobody is sure that they will ever produce significant savings. The Congressional Budget Office can’t really project savings because there’s no hard evidence they will produce any and no way to measure how much. Some experts believe they will work...
If you read the C.B.O. testimony and talk to enough experts, you come away with a stark conclusion: There are deep structural forces, both in Medicare and the private insurance market, that have driven the explosion in health costs. It is nearly impossible to put together a majority coalition for a bill that challenges those essential structures. Therefore, the leading proposals on Capitol Hill do not directly address the structural problems. They are a collection of worthy but speculative ideas designed to possibly mitigate their effects.
...But Obama needs those cuts for his whole strategy to work. Right now, his spending plans are concrete and certain. But his health care savings, which make those spending plans affordable, are distant, amorphous and uncertain. Without serious health cost cuts, this burst of activism will hasten fiscal suicide."
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