Tyler Cowen tackles Robert Reich and the rising health care costs fallacy once again:
...if Medicare were less generous, much less would be spent on health care. Now you might think that would be a bad result and that of course a debate worth having. But the mere fact that you favor some amount of Medicare does not lower the cost burden of the amount you favor. If your preferred policy induces say "40 percent more of health care costs" and you can't put all the blame on the preexisting level or path of health care costs. You also have to accept responsibility for the 40 percent boost or whatever the increment is.
Biggs also goes after the former Clintonite:
Reich says that higher economic growth would fix the [Social Security] problem. Well, GDP growth isn't a direct input into the system we don't tax GDP and we don't pay benefits based on GDP but we can analyze how higher wage growth would affect Social Security's finances. The answer is that even if real wage growth doubled, that would fix only around half the long-term Social Security deficit. And there's no way any policy can make long-term real wage growth double.
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