Health care reform hangs in the balance. Its fate rests with a handful of “centrist” senators — senators who claim to be mainly worried about whether the proposed legislation is fiscally responsible. ...
But if they’re really concerned with fiscal responsibility, they shouldn’t be worried about what would happen if health reform passes. They should, instead, be worried about what would happen if it doesn’t pass. For America can’t get control of its budget without controlling health care costs — and this is our last, best chance to deal with these costs in a rational way. ...
You might think, given this picture, that extending coverage to those who would otherwise be uninsured would exacerbate the problem. But you’d be wrong, for two reasons.
First, the uninsured in America are, on average, relatively young and healthy; covering them wouldn’t raise overall health care costs very much.
Second, the proposed health care reform links the expansion of coverage to serious cost-control measures for Medicare. Think of it as a grand bargain: coverage for (almost) everyone, tied to an effort to ensure that health care dollars are well spent.
I really feel kind of silly posting this, because Krugman has just committed such a simple logical fallacy that it shouldn't even have to be pointed out. But one of my favorite quotes comes from Orwell: "We have now sunk to a depth where the restatement of the obvious is the first duty of intelligent men." I am not so stupid as to compare my intelligence to Krugman's, at least the Old Krugman, but in the interest of restating the obvious, here's what Krugman is saying:
1. We need to cut costs.
2. We should add some costs, but they won't be too big.
3. Then we should cut other costs, and the new savings will be bigger than the new costs. Honestly. Smart people who know nothing about politics say so.
What's the problem with this? Well, even if you believe #3 is feasible, and even if you believe that it is politically possible to cut Medicare by even one cent and live to tell the tale, there is NO REASON why enactment of #3 depends on the enactment of #2. In other words, if we can cut Medicare costs without sacrificing quality of care then we should do it. Absolutely. Yesterday. But that has absolutely nothing to do with whether we should then turn around and give those savings back to "relatively healthy" people rather than, say, balancing the budget. The case for #2 has nothing at all to do with the case for #3, and it directly contradicts #1.
The rational response to this sort of argument is to say "Yeah? Prove it. Cut Medicare costs without sacrificing coverage or quality of care first, build up a trust fund for this new expanded coverage with the savings (and without any other sources of funding), and if the balance of the fund is positive in say 2015 then we'll spend it on covering the 'relatively healthy' people who don't currently have insurance."
Think Krugman would take that deal? Of course not. Because he knows, as I know, that cuts to Medicare are politically impossible. And he knows, as I know, that magical mystery health care savings have a tendency to not materialize. And he knows, as I know, that universal health care is impossible without increases in taxes even if generating some savings from Medicare reform were possible. And he knows, as I know, that it is impossible to pay for health care reform without redistributing from "relatively healthy" people to "relatively unhealthy" people (i.e. it's not at all just a rich -> poor transfer).
Now that might be justifiable along any number of dimensions (although the median voter doesn't seem to think so, and Krugman knows that too, which is presumably why he's trying this end-around in the first place). But if it is than Krugman should make that case rather than the one that he is making, which amounts to "We all get health care and ice cream and pet unicorns and have money left over for cap-and-trade!"
He should really stop this. It's beneath him.
UPDATE: And here is Krugman complaining about good unemployment news because it will distract from what's really important: er, unemployment. What?