Saturday, August 7, 2010

Paul Krugman is pumped ! ! ! !

New York Times economist, Barackagandist, and all-around Statist lapdog Paul Krugman is pumped.  I mean PUMPED ! ! 
This is the chart that did it for him.  I gotta admit, my chair is getting a little moist because I'm looking at this chart:

Here's Dr. Krugman:
In other words, the Medicare actuaries believe that the cost-saving provisions in the Obama health reform will make a huge difference to the long-run budget outlook. Yes, it’s just a projection, and debatable like all projections. And it’s still not enough. But anyone who both claims to be worried about the long-run deficit and was opposed to health reform has some explaining to do. All the facts we have suggest that health reform was the biggest move toward fiscal responsibility in a long, long time.

Ok, here's my "explaining", since Krugman is feeling macho and has thrown down the gauntlet....

Things are expensive when they are 1) in demand, and 2) scarce. 
ObamaCare® does nothing to lower demand for medical care.  And it does nothing to reduce the scarcity of doctors, nurses, hospital, drugs, or bedpans. 
All it does is increase the size of the bureaucracy and prevent insurance companies from charging premiums to customers who aren't sick yet. 
Therefore ObamaCare® will raise the cost of healthcare, not lower it. 

I bet that I'm right, and that Paul Krugman turns out to be wrong. 
I repeat....Thirty years from now, it will turn out that a blogger/shipping manager with an Education degree from Delta State University was right about a simple economic concept.  The Nobel Prize winner in Statist Power Grabs Economics will be proven wrong.  

2 comments:

JustOneGroup said...

My own rebuttal was a bit simpler - the chief actuary of the Trustees Report, in a section titled "Statement of Actuarial Opinion", wrote that

"...the financial projections shown in this report for Medicare do not represent a reasonable expectation for actual program operations".

The chief actuary also provided an alternative forecast he considered to be much more reasonable.

So when Krugman writes "the Medicare actuaries believe that the cost-saving provisions in the Obama health reform will make a huge difference to the long-run budget outlook", he really meant "the actuaries *do not* believe...".

Krugman has some explaining to do himself about why he can't read a report, but my medical advice is, don't hold your breath.

Nick Rowe said...

Wow, you're not even an economist and you gave a Nobel Prize and Clark winner an @$$ whooping.

As you say, expanding access will increase demand and thus increase both price and quantity.

It's possible to lower costs through greater efficiency, but you can accomplish that WITHOUT expanding care. Why wasn't that passed on its own merits and who actually believes the government will become more efficient at anything?

Economies of scale could lower costs, but those have both it's limits and negative consequences.

The decline in medicare costs, if any, will come from shifting the costs elsewhere - the old shell game.

Bottom line is that health care expenditures are movin on up. We have an unhealthy, aging society and laws which prevent insurance companies from assessing proper premiums and containing costs.

They should revoke Krugman's Nobel, Clark, and PhD because he's forgotten Econ 101.