The Beltway media's conventional sputtering

Nowhere will you read a more conventionally sputtering assessment of George Stephanopoulos' recent interview of President Obama than in Jonathan Karl's reporting of the president's attitude toward current deficits as--and these are Karl's disbelieving words--"no big deal."

Warns the horrified Karl: "[T]here are two problems with that accounting." And they are? "First," CBO's projections, and "Second"--you guessed it!--"Erskine Bowles and Alan Simpson are now saying we are nowhere near accomplishing the amount of deficit reduction needed to put the government on sustainable path."

Why, Simpson even told Karl that "the failure to control entitlement spending [is] 'madness.'"

An amateur might think a professional journalist reporting on an economic story would consult a professional economist--maybe even an economist with, say, a Nobel Prize in economics?--rather than an epigrammatic, ad hominem-hurling crank of a retired pol who misses the kleeg lights. But where's the drama in that?

[T]he deficit is falling more rapidly than it has for generations, it is already down to sustainable levels, and it is too small given the state of the economy....

[T]he case for making the deficit a central policy concern, which was never very strong given low borrowing costs and high unemployment, has now completely vanished.

So writes Paul Krugman, whose reflections on Karl's "first problem"--CBO's projections--are here.

Karl's kind of reporting is still generally characterized as just tiresome conventional wisdom. But it's really just tiresome conventional sputtering.

Comments

[Peter G]

He's baaack! You know I've been making the same argument to Austrian school nutty buddies for years. You can issue government bonds and have a deficit eternally as long as the rate of economic growth over twenty years is greater than the bond yield on a twenty year bond. You will always have the money to repay it given reasonable amounts of borrowing subject to economic need. That being said the old crank Simspon is inadvertently right with respect to health care. Even your most efficient delivery systems, Medicare and Medicaid spend far more than any other industrialized economy for what they get. That has more to do with your overall byzantine system of health care delivery than anything else. The Brill article made much of hospital CEO salaries but didn't say a word about the fact that the advertising budgets for the same hospitals are far in excess of the CEO salaries. The only place in any first world nation you will see ads, on billboards and radio and television, touting the latest technology and the lowest wait times is in the US. I'll translate that into English for you, underutilized equipment and expensive staff waiting for millionaires to need treatment.

[Robert Lipscomb]

@PeterG: I finally finished Steven Brill's cover story for Time, "Bitter Pill: Why medical Bills are Killing Us". Even with all my panic about healthcare costs, apparently i have been overly optimistic.

Here are some rough numbers on a %GDP basis.

Recent federal spending - 25% GDP
Recent federal taxes - 15%
Net - -10% GDP

The recent (2 years) deficit cuts have tightened that quite a bit.

US Healthcare - 20% GDP
Sane World Healthcare - 10%
Net - -10% GDP

All these numbers are a bit rough but pretty close.

If the US cut the healthcare cost gap to "only" 15% GDP, the extra money could finance half of the federal deficit - with no pain except to the healthcare indusry. That does not include the savings to Medicare and Medicaid.

Let me add, the raw numbers indicate that our doctors, nurses and technicians are not "overpaid" by normal benchmarks.

Our current debt is about 75% GDP. With recent deficit cuts, it will top off at about 78% in two years and remain there for about 10; then take off again.

The electorate seems to have taken a right-of-center stand on taxes - except for the "rich". Obama understands that. Cutting federal expenditures to achieve sustainable will be a matter of cutting military spending and cutting healthcare spending.

Bill Clinton has put the Party on notice that Dems must take ownership of healthcare, including costs. We must find a way to cut costs without reducing benefits.

Given that only known workable solutions are socialist ones, this looks to be the basis for the political civil war coming upon us.

I think a Hillary landslide with long coattails in 2016 is our only hope, but a realistic one.

[Peter G]

Depressing isn't it Robert? Which is not to say socialist health care systems such as the one under which I am covered (and treasure) do not have problems. They do. But Jesus, my wife's most treasured and valuable possession is her OHIP health card. And she is an American citizen.