Yes we can
A fantastically important post from Professor Krugman. For years (decades really) republicans have been bleating about the upcoming budget catastrophe brought on by unsustainable debt:
"The story so far: We’ve all seen projections of giant federal deficits over the next few decades, and there’s a whole industry devoted to issuing dire warnings about the budget and demanding cuts in Socialsecuritymedicareandmedicaid. Policy wonks have long known, however, that there’s no such program, and that health care, rather than retirement, was driving those scary projections. Why? Because, historically, health spending has grown much faster than G.D.P., and it was assumed that this trend would continue."
This is a crucial point made by Professor Krugman: the projected “ginormous” deficit is being driven more by rising health costs than the demographics of an aging population (although that contributes significantly too).
The thing about it is that Democrats are fighting against the Medical-Industrial complex to keep medical costs down. Obamacare has many such cost cutting provisions (including medical price transparency). The republicans of course are on the opposite side, trying to keep medical costs up for their Medical-Industrial benefactors like Big Pharma (http://goo.gl/3YcPc). Fortunately the Democrats are winning:
"But a funny thing has happened: Health spending has slowed sharply, and it’s already well below projections made just a few years ago. The falloff has been especially pronounced in Medicare, which is spending $1,000 less per beneficiary than the Congressional Budget Office projected just four years ago."
If the Democrats continue to win this struggle to keep medical costs down, the implications are huge as Professor Krugman outlines:
"First, our supposed fiscal crisis has been postponed, perhaps indefinitely. The federal government is still running deficits, but they’re way down. True, the red ink is still likely to swell again in a few years, if only because more baby boomers will retire and start collecting benefits; but, these days, projections of federal debt as a percentage of G.D.P. show it creeping up rather than soaring. We’ll probably have to raise more revenue eventually, but the long-term fiscal gap now looks much more manageable than the deficit scolds would have you believe."
A second crucial implication is that to reduce the budget deficit you don’t have to cut benefits to the Middle Class and Lower Income, you can just cut costs i.e. reduce the exorbitant profits of the Medical-Industrial complex. The U.S. government reimbursing a medical device company millions of dollars for a simple screw is the type of “fat” that needs to be eliminated. Of course the republicans want that medical device company to achieve as much profit as they can; their answer is to kick people off of healthcare.
Or as much more eloquently put by Professor Krugman:
"For years, pundits have accused President Obama of failing to take on entitlement spending. These accusations always involved magical thinking on the politics, assuming that Mr. Obama could somehow get Republicans to negotiate in good faith if only he really wanted to. But they also implicitly dismissed as worthless all the cost-control measures included in the Affordable Care Act. Inside the Beltway, cost control apparently isn’t considered real unless it involves slashing benefits. One pundit went so far as to say, after the Obama administration rejected proposals to raise the eligibility age for Medicare, “America gets the shaft.”
It turns out, however, that raising the Medicare age would hardly save any money. Meanwhile, Medicare is spending much less than expected, and those Obamacare cost-saving measures are at least part of the story. The conventional wisdom on what is and isn’t serious is completely wrong.”
We return to our fundamental dynamic: republicans want to maximize the profit of corporations (hey Big Pharma are people too) and cut taxes on the 1% (and effectively eliminate taxes on the 0.01% by driving effective rates down to Mitt Romney levels) and pay for this by denying benefits (especially healthcare and food) to the Middle Class and Lower Income; the Democrats want to do the opposite.
Fortunately, We the People are not the idiots that the republicans think We are and We elected President Obama:
"What’s the moral here? For years, pundits and politicians have insisted that guaranteed health care is an impossible dream, even though every other advanced country has it. Covering the uninsured was supposed to be unaffordable; Medicare as we know it was supposed to be unsustainable. But it turns out that incremental steps to improve incentives and reduce costs can achieve a lot, and covering the uninsured isn’t hard at all.
When it comes to ensuring that Americans have access to health care, the message of the data is simple: Yes, we can.”