Ezra Klein has been going through the numbers and finds that we are, in fact, paying down the debt at a nice rate. If you agree (hard not to) that health care has been the most costly of our services, then you'll be interested to know that during the first 8 years of the new millenium, growth in the cost of health care was as great as 7%. But get to 2009 and the growth goes down to 4%.
"And Medicare is following suit, says Klein. "Spending in 2012 grew by only 3.2 percent." This could change as we pull out of the economic slump or we could continue to see the growth of costs slow down. As Klein says, "There's evidence to support both views."
So what's with the continued Republican insistence that we're on our way to hell in a handbasket? Well, you know and so does Ezra Klein. It's about politics.
... The truth is that deficit reduction is going better than you’d think from listening to the sniping in Washington. So why the continuous freaking out over the deficit? In part, it’s because deficits offer a convenient excuse for politicians to push policies that the American people wouldn’t support on their own terms. Republicans have long wanted to devolve Medicare to private insurers, for instance, but they didn’t get any traction with the idea until they cloaked it in the guise of deficit reduction. ...Ezra Klein, WaPo
Sure. Familiar territory. No wonder their credibility ratings are in the tank.
But that doesn't end the problem. Here's what we still have to worry about.
If you want to worry over the economy, don’t worry over future deficits, which we can and will get under control. Worry over the labor market, which is in worse shape than predicted a few years ago, and which exhibits fewer bright spots than the budget. The recession was deeper than expected, the recovery has been slower than predicted, and Washington has been feckless in its response than we would’ve hoped. Whereas in late-2011, the Obama administration was at least pushing a big jobs bill, now they and the Republicans have both fallen silent on the issue. At least the deficit has the two sides arguing and trying to act. ...Klein, WaPo
Obama's hands, as we all know, have been tied by a non-responsive, malign House. I think Klein gets that right, too.
Peter Orzag, who was once the director of the Office of Management and Budget and who now works at Citi, has the chart.
“This graph from S&P illustrates two key facts: health-care costs have decelerated over the past few years, and Medicare costs have decelerated more than other health costs. That pattern suggests at least part of the slowdown is structural (since if it were all just a reflection of economic weakness, we wouldn’t expect Medicare to slow down more than other health costs, but if it were partly structural, that’s exactly what we would expect). If this slower growth continues, the impact on our long-term fiscal gap will be much more meaningful than any plausible outcome of the fiscal cliff negotiations.” ...Orzag, from Joe Wiesenthal at Business Insider
Wiesenthal goes on to quote from Kaiser, always a key go-to source on health care and its costs:
In other words, when Republican deficit hawks (actually, vultures) wheel around your head, they're just trying to stir things up again. But they don't have the numbers to back their claims. They are doing what vultures and hawks sometimes do: they're just shittin' you.
In an update to its January report on the nation’s budget and economic outlook, CBO said that outlays for Medicare will total 3.7 percent of the gross domestic product in 2013, rising to 4.3 percent of GDP in 2022, as enrollment in the program increases.
But the report also noted that for the third year in a row, CBO expects the growth in Medicare spending in 2012 to be “substantially slower” than anticipated earlier in the year.
CBO Director Doug Elmendorf said at a press conference that the slower growth in Medicare is consistent with slower health care cost growth throughout the economy, which many analysts have observed. But he said it’s still unclear why the slowdown is happening.
“Presumably, the weak state of the economy is a factor, but given the magnitude of the slowdown in national health spending and the timing of that slowdown, which seems to have started before the recession, we and most analysts think there are probably structural factors at work as well,” he said. Those structural factors could include slower growth of spending on prescription drugs, changes in the health care delivery and payment system, and higher out-of-pocket spending for consumers, according to Elmendorf. ...Kaiser Health News