Niall Ferguson Finally Renders Me Speechless
What a bizarre spectacle we have today between Paul Krugman and Niall Ferguson. In the latest issue of Newsweek, Ferguson writes that Barack Obama broke his pledge that healthcare reform wouldn't increase the federal deficit. In fact, says Ferguson, the CBO concluded that it will increase the deficit. Krugman shot back that CBO said no such thing: "Anyone who actually read, or even skimmed, the CBO report knows that it found that the ACA would reduce, not increase, the deficit — because the insurance subsidies were fully paid for."
Krugman is right, of course, and I was curious to know how Ferguson would respond. I'm gobsmacked to learn that this is Ferguson's defense:
I very deliberately said “the insurance coverage provisions of the ACA,” not “the ACA.” There is a big difference.
Krugman suggests that I haven't read the CBO's March 2010 report. Sorry, I have, and here is what it says:
“The provisions related to health insurance coverage—which affect both outlays and revenues—were projected to have a net cost of $1,042 billion over the 2012–2021 period; that amount represents a gross cost to the federal government of $1,390 billion, offset in part by $349 billion in receipts and savings (primarily revenues from penalties and other sources).”
But thanks for trying, Paul....
Seriously? That's it? By accounting only for the costs of ACA — that would be the insurance provisions — and not for any of the savings, Ferguson concludes that ACA increases the deficit? And then uses the CBO to back up his claim?
I'm speechless. How do you even react to something like this? Ferguson is like some clever middle schooler who thinks he's made a terrifically shrewd point by inserting "insurance coverage provisions" into his sentence so that he can later argue that it's technically correct if anyone calls him on it. You can almost hear the adolescent tittering in the background.
For the rest of us, the facts are simple: Covering 30 million people does indeed cost money, and Obamacare includes a number of offsetting savings to pay for that. This is what Obama promised to do: to pay for ACA. And CBO says he did. "Altogether," says their report, the various provisions of PPACA are "estimated to increase direct spending by $604 billion and to increase revenues by $813 billion over the 2012–2021 period." That's a net deficit reduction of $210 billion.
Here's more from Noah Smith, who managed to retain his powers of speech after reading Ferguson's piece. The worst part of the whole thing, I suppose, is that Tina Brown is probably delighted by all this. After all, food fights are good for circulation.