Morning Edition Has Determined That the Deficit is a "Great Problem"
|Tuesday, 16 November 2010 05:20|
Listeners might have thought that 9.6 percent unemployment, with 25 million people unemployed, underemployed, or who have given up looking for work altogether was the biggest problem facing the country today. But, NPR knows better.
It concluded a fawning interview with New Hampshire Senator Judd Gregg by referring the deficit as a "great problem." It would have been interesting if they explained to listeners how they arrived at this conclusion.
People who know economics know that current deficits are due to the collapse of the housing bubble. NPR had virtually no time for analysts who warned of this entirely predictable disaster (unlike the endless hours that it devotes to deficits). If deficits were smaller today we would have fewer jobs and higher unemployment. It is not clear why anyone would advocate this outcome.
In the longer term, the large projected deficits are attributable to a projected explosion of health care costs in the United States. Per person costs are projected to rise from a bit more than twice the average of other wealthy countries to 3 or 4 times the average per person cost. If health care costs increase as projected, it will have a devastating impact on the economy. It will also lead to a large budget deficit. If U.S. health care costs were comparable to those in Canada, Germany or other wealthy countries, the United States would be looking at long-term surpluses, not deficits.
A competent interviewer would have asked Senator Gregg why he persists in misrepresenting a health care problem as a budget problem.