The NYT Can't Find Any Economists to Talk About the United States' Debt Problem
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Friday, 14 January 2011 06:22 |
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That appears to be the case. The NYT had an article discussing the warnings about downgrading U.S. government debt from S&P and Moody's, both of whom rated hundreds of billions worth of mortgage-backed securities backed by subprime mortgages as investment grade.
At one point the article notes that Moody's emphasized the deficit in the medium term, not the current deficit. It then tells readers that:
"For some economists, the failure to rein in the deficit now could spell trouble, not immediately but in 10 or 20 years."
However, the two people then cited are Peter G. Peterson, a wealthy investment banker, and David M. Walker, an accountant who has worked for organizations funded by Mr. Peterson. While both Mr. Peterson and Mr. Walker stressed the need to reduce the deficit, if the article had talked to an economist they might have pointed out that the projections of large long-term budget deficits are attributable to projections of exploding private sector health care costs. If per person health care costs in the United States were comparable to those in other wealthy countries the projections would show large surpluses rather than deficits.
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While health care is indeed the current driver of debt, the per capita cost is expected to decline sharply as sub-prime individuals pass their prime and wither away since there is no sub-prime market for high risk patients beyond privatized hospices which accept bets on who lives longest.
Economists emphasized that although per capita cost decline for everyone, per capita cost will still increase for a sub-group of prime individuals since they're the least likely to need health care as a pre-exising condition necessary to fund health insurers busy denying insurance to adversely selected sub-prime patients.
The AMA agreed, noting how doctors get paid is not important as long as they get paid twice the going rate as other countries based on moral hazard that is necessary to offset adverse selection.