"We Will Control Healthcare Costs, Because We Have To"

More

This is a disturbingly common argument heard when one points out that the costs of the domestic programs we have are so far impervious to cost control.  Apparently, it is safe to enact a program that is going to blow a 10-gauge hole in the Federal budget, because the mere fact that we can't currently afford to pay for it will force us to, um, do something.

This is a terrible, horrible, no good, very bad argument in favor of more healthcare spending.  It is true that as the immortal Herb Stein once said, "If something can't go on forever, it will stop."  But, to belabor the obvious, there is more than one way to stop.  This is sort of like saying, "I know I'm going eighty-five now, but it's perfectly okay for me to press the accelerator here down to the floor, because after all, my current speed is already unsustainable."  One wants to know that one can stop with the brakes, rather than the trees decorating the sharp turn seven miles down the road.

People who aren't worried about setting up a big new entitlement, because after all, we're going to have to fix it eventually, are encouraged to read Paul Blustein's excellent book on the Argentinian crisis, And the Money Kept Rolling In (And Out).  Unsustainable fiscal policies can end when the government tightens its belt and raises taxes and cuts spending--or it can end when the whole thing melts down spectacularly. 

Now, we borrow in our own currency, so I'm not suggesting an actual replay of the Argentinian debacle--only that even when everyone knows that the thing is unsustainable, it can go on for a long time, and then implode in a virtual instant.  With an independent central bank, the US options for dealing with unsustainable debts aren't actually particularly attractive.  At best, when we do start cutting back, we will make various people who planned their lives around current government policy substantially worse off.  That's something that we should be thinking carefully about, not blithely endorsing.

Jump to comments
Presented by

Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

Get Today's Top Stories in Your Inbox (preview)

The Time JFK Called the Air Force to Complain About a 'Silly Bastard'

51 years ago, President John F. Kennedy made a very angry phone call.


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

Adventures in Legal Weed

Colorado is now well into its first year as the first state to legalize recreational marijuana. How's it going? James Hamblin visits Aspen.

Video

What Makes a Story Great?

The storytellers behind House of CardsandThis American Life reflect on the creative process.

Video

Tracing Sriracha's Origin to Thailand

Ever wonder how the wildly popular hot sauce got its name? It all started in Si Racha.

Video

Where Confiscated Wildlife Ends Up

A government facility outside of Denver houses more than a million products of the illegal wildlife trade, from tigers and bears to bald eagles.

Video

Is Wine Healthy?

James Hamblin prepares to impress his date with knowledge about the health benefits of wine.

Video

The World's Largest Balloon Festival

Nine days, more than 700 balloons, and a whole lot of hot air

Writers

Up
Down

More in Business

Just In