Suzy Khimm Smacks Down the Debt Alarmists of the Peterson Foundation
A more honest Peterson Foundation would say: if the ACA does not succeed in keeping health-care costs from exploding, we will have a big problem, but if it does not so much--we will know in a decade and should be ready now to do whatever is needed then.
Suzy Khimm administers the smack down:
How’s the deficit doing? Depends on your timeframe: The White House and its allies believe we’ve already come a long way on deficit reduction…. The Peterson Foundation has released a new analysis showing that the debt-to-GDP ratio will reach 200 percent by 2040….
The Peterson camp believes limiting budget projections to 10 years presents a short-sighted and misleading portrait of our real long-term deficits, allowing legislators to shirk from their real responsibilities to rein in the budget…. However, critics believe it’s the Petersonian analysis that’s distorting the magnitude of our fiscal problems. The model that creates these scary long-term projections relies mostly on assumptions about health-care cost growth remaining fast (even though it’s slowed in recent years) and is quite uncertain. It’s “mostly scaremongering—way too dismissive of progress made so far and over-emphasizing the very long term,” says Jared Bernstein…
In general, if there are worries about the debt you see them in (a) interest rates right now or (b) expected debt escalation in the near term. If you do not dare talk about interest rates and have to look 30 years in the future to produce a scarce debt escalation number, you are a bullshit artist.
Jared Bernstein comments:
Someone Else Who Wants Us to Remain in Deficit Crisis Mode: Suzy Khimm has a nice write-up…. Your first hint that there’s from fear mongering going on here comes from the image you see when you click on the link to the study—the Capitol building perched on the edge of an abyss, with chunks of the building already falling into the depths…. [T]he basic approach taken here is to get people worried enough about post-2022 projections that they’re willing to pass “entitlement reforms” now. That is both unwise and unnecessary…
