The Budget Must Be Judged As A Whole

The Social Security and Medicare trustees reports came out yesterday. Megan suggests that the entitlements can be funded but that there are "political risk" problems.  Elsewhere in the blogosphere, Ezra Klein tackles the report, and Tyler Cowen crushes health care costs budget fallacy:

I'm seeing nascent signs of a new (but actually old) fallacy, namely that since health care costs can (will?) crush the budget, we don't have to worry so much about other expenditures.  The mental story runs something like this: "if we don't cure health care cost inflation, it doesn't matter; if we do cure health care cost inflation, we can afford it."  That's exactly the kind of false mental framing that behavioral economics identifies as irrational in other settings.