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Six years after the start of the Great Recession, there should be little disagreement what America's number one domestic priority should be. With unemployment still stuck around 7 percent four plus years after that recession was declared "over," creating jobs has to be Job #1. That urgency is underscored by the new analyses warning that the massive downturn that has cost America trillions in lost economic output will likely cost trillions more in what might be called a "permanent slump," one that is putting the future prospects for younger workers—and the entire nation—in deep peril.

Yet instead of pursuing pro-growth policies that ultimately are best route to reducing national debt, government at all levels has embraced austerity that to date has cost the U.S. economy at least two million jobs. The $1.2 trillion, decade-long budget sequester, which Republicans led by Senate Minority Leader Mitch McConnell, will only make things worse.

And that fixation is more than a little ironic, especially given House Speaker John Boehner's proclamation earlier this year that "we have no immediate debt crisis." Boehner is surely right. After all, federal spending is lower now and the annual budget deficit down to about half of what it was when Barack Obama first took the oath of office in January 2009. With the national debt as a percentage of U.S. GDP stable for the rest of the decade, America simply does not have a serious debt challenge in the near or even medium term.

As it turns out, the United States may not have a long-term debt problem, either. If the recent drop-off in the rate of growth of health care spending—the single largest driver of federal deficits—continues, the dire warnings about oceans of red ink 20 years from now simply will not come to pass.

A quick glance at the September long-term budget forecast (chart above) from the nonpartisan Congressional Budget Office (CBO) begins to explain why. As a percentage of the American economy, discretionary spending (that is, outlays outside of mandatory expenditures on Medicare, Medicaid, Social Security and interest on the national debt) will drop from roughly 9 to 7 percent by 2038. Non-defense discretionary spending (that is, education, infrastructure, R&D, transportation, foreign aid, and welfare and just about everything else) is already on a path to plummet to levels not seen since the 1950s. Even with America's rapidly aging population, over the next generation Social Security is forecast to grow from around 4 to 6 percent of GPD. With relatively minor policy changes—like raising or eliminating the $107,000 income cap on payroll taxes—Social Security's longevity can be secured. The real challenge to getting Uncle Sam's fiscal house in order in the decades to come, as Ezra Klein explained last year, is clear:

It's all about health care. Spending on Social Security is expected to rise, but not particularly quickly. Spending on everything else is actually falling. It's health care that contains most all of our future deficit problems. And the situation is even worse than it looks on this graph: Private health spending is racing upwards even faster than public health spending, so the problem the federal government is showing in its budget projections is mirrored on the budgets of every family and business that purchases health insurance.
All told, combined federal health care spending on Medicare, Medicare and subsidies for the purchase of private insurance on the Affordable Care Act exchanges is projected to grow from approximately 4 percent of GDP now to 8 percent in 2038 and a whopping 14 percent in 2085.

But as a new report from the President's Council of Economic Advisers this week shows, the news on health care costs public and private is good. It's a story, the Washington Post's Sarah Kliff quipped, "that contains billions of dollars' worth of good news!"

As Kliff explained, the CBO is now "constantly revising downward how much it thinks the federal government will need to spend on health care costs over the next decade. That's because health care costs have been growing a lot more slowly over the past few years than they typically do." That decline has been especially marked for Medicare, the old-age health care program that serves almost 50 million American seniors and represents the lion's share of federal health care spending.

The rapidly improving picture first became clear in March, when CBO projections showed a rapid deceleration in the rate of Medicare cost growth. As Sarah Kliff also reported in the Washington Post then ("Want to debate Medicare costs? You need to see this chart first"), that's the clear implication of a chart below from the previous Economic Report of the President. In a nutshell, the graph shows the trajectory for Medicare spending as a percentage of the American economy if the program grows at the much slower rates since 2009 compared to the much higher earlier projections. In February, the New York Times' Eduardo Porter explained:

Earlier this month, the Congressional Budget Office said that by 2020 Medicare spending would be $126 billion less than it predicted three years ago. Spending over the coming decade, it added, would be $143 billion less than it forecast just last August.
All told, the CBO in March predicted that total Medicare spending for the decade between 2010 and 2020 will be $511 billion less than the agency estimated just three years ago. (In the 2012 fiscal year, Medicare spending per beneficiary grew just 0.4 percent.) "If that cost growth persists, it could make all the difference for Medicare," Kliff pointed out. "The entitlement program would, by 2085, make up 4 percent of the economy instead of the previously projected 7 percent."

But the improvement in the long-term diagnosis isn't limited to Medicare. As Kliff notes:

In private insurance, the average spending growth rate per person has slowed a lot over the last few years. In Medicare, there was no spending growth between 2010 and 2013 and, in Medicaid, per person costs actually decreased some.

All told, health care costs have been growing more slowly over the last three years than any other time period since 1965. More recently, yearly health cost growth slowed from an average rate of 3.9 percent between 2000 and 2007 to 1.3 percent between 2011 and 2013.

If these cost trends continue, Uncle Sam may not have much of a long-term debt problem, after all. But that's a big if. It is the $2.7 trillion question.

There are grounds for cautious optimism that the slowdown in health care cost growth—or at all much of it—will continue in the near-future. To be sure, the recession helped cauterize out-of-control health care spending, as cash-strapped families deferred medical care or flat-out avoided it altogether. The economic recovery, along with the addition of 27 million newly insured Americans by 2023, will push national health care expenditures upwards. But changes in the health care industry itself, including important reforms introduced by the Affordable Care Act, appear to be driving structural changes to spending.

For example, the CEA's report shows a significant drop in preventable readmissions to hospitals, a welcome development which appeared "right around the time Medicare began penalizing such return trips to the hospitals." Along with the encouragement of coordinated care organizations (CCO's) that are compensated not by procedure but by overall patient health, the ACA may in fact be institutionalizing cost-savings. As Kliff reported:

"The slowdown is indisputable," Council of Economic Advisers chairman Jason Furman said. "A very important part of that is structure, and a very important part of the structural story is the Affordable Care Act."

Most health care economists now agree, at least to some extent, with this more structural view. Even those who argue that the current slowdown is unlikely to last, such as Harvard's Amitabh Chandra and Dartmouth's Jonathan Skinner, still expect slower health care cost growth in the next decade compared with the previous one.

And that difference could make all the difference when it comes to Washington's policies and priorities. The Republican drive to ration Medicare through an underfunded voucher scheme, a cost-cutting plan certain to dramatically shift health care expenses onto future seniors, is even less justifiable now. Even more important, the debt-reduction fixation of the Austerians who still dominate the debate on Capitol Hill and in the American media will seem even more dangerously out-of-touch than it is now. And that means President Obama, Congress and the American people can focus like a laser-beam on Job #1.

Creating jobs.

Originally posted to Daily Kos on Sun Nov 24, 2013 at 01:30 PM PST.

Also republished by Social Security Defenders.

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Comment Preferences

  •  CBO Projections on Medicare/Medicaid (4+ / 0-)

    that is some pretty dramatic changes in projected cost over 3 years.

  •  So I click on the CBO report (2+ / 0-)
    Recommended by:
    Jon Perr, hmi

    and the very first page (the chart) negates your title ("disappearing debt"). Te debt is not disappearing but rising dramatically in the next few decades, and is projecting to top 100% of GDP in 2040. A level not seen since the Great Depression. Or am I missing something?

    •  See The Third Chart in the Diary... (7+ / 0-)

      ...to get a better illustration of the issue here.  That's the chart that shows "Projected Medicare Spending as a Percentage of GDP, 2013-2085."

      You're absolutely right that the national debt is increasing.  But the CBO projections going forward use a higher growth rate for health care costs than the U.S. has experienced is recent years.  But if the current trends continued, federal health care spending (and Medicare in particular, as shown in the chart) will constitute a much smaller percentage of GDP than it is currently projected.

      So, while the entire national debt certainly would not disappear, trillions of dollars of it might.  Which means policymakers wanted to slash Medicare to "fix the debt" now could be making an historic and unnecessary mistake.

      •  No. Trillions of dollars will not disappear. (4+ / 0-)
        Recommended by:
        nextstep, Mister T, Denver11, hmi

        Less money will be spent on Medicare.
        Depending on the actions of employers, that may or may not be made up on ACA subsidies.

        Whether or not it is, the debt is growing and, according to the report you linked, will grow at an increasing rate after a short-term slowdown.

        As to slowdowns in medical spending, here is the CBO outlook:

        The growth of health care spending cannot exceed economic growth indefinitely, because if it did, total spending on health care would eventually account for all of the
        country’s economic output—an impossible outcome.
        [...]
        Thus, even in the absence of changes in federal law,
        growth in per capita spending on Medicaid and on health
        care financed through the private sector will gradually
        slow. The rate of growth of Medicare spending per beneficiary is also likely to slow, though to a lesser extent, even without changes in federal law—reflecting changes in
        medical practices common to all patients ...
        In other words, growth in medical costs will slow down because we simply won't be able to pay higher prices any more.  Frankly, I'm amazed that fewer people make the link between the incredibly high prices we pay now and the sluggish economy.

        LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

        by dinotrac on Sun Nov 24, 2013 at 02:12:46 PM PST

        [ Parent ]

        •  It's Worth Checking Out the CEA Report... (3+ / 0-)
          Recommended by:
          1BQ, TXdem, deepeco

          ...summarized here.

          For starters, Uncle Sam is already savings tens of billions of dollars just compared to projections from 2010:

          The recent slow growth in health care spending has substantially improved the long-term Federal budget outlook: The Congressional Budget Office has reduced its projections of future Medicare and Medicaid spending in 2020 by $147 billion (0.6 percent of GDP) since August 2010.  This represents about a 10 percent reduction in projected spending on these programs.
          And the benefits, if these lower-than-expected growth rates continue, are potentially substantial:
          In the short run, slower growth in health spending is a positive for employment: The slow growth in health care costs has reduced employers’ benefit costs, increasing firms’ incentives to hire additional workers.  Available estimates suggest that these gains could be substantial, although their magnitude is uncertain.

          Over the long run, slower growth in health spending translates directly into higher wages and living standards: If just half the recent slowdown in spending can be sustained, health care spending a decade from now will be lower by $1,400 per person, a benefit that workers will realize in the form of higher wages and that federal and state governments will realize in the form of lower costs.

          •  "Saving from projections" - also known as -- (0+ / 0-)

            the projections were wrong.

            LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

            by dinotrac on Sun Nov 24, 2013 at 07:48:51 PM PST

            [ Parent ]

          •  More likely a benefit that employers will realize (0+ / 0-)

            in reduced spending on personnel costs. There's no incentive for them to use it to increase wages.

            "All governments lie, but disaster lies in wait for countries whose officials smoke the same hashish they give out." --I.F. Stone

            by Alice in Florida on Sun Nov 24, 2013 at 08:40:56 PM PST

            [ Parent ]

          •  Health Care Costs Declining (0+ / 0-)

            Anyone that believes that any savings in health care costs, on the part of employers, will be passed on to employees, via higher wages and benefit packages -- those people must still believe in the tooth fairy.  Like everything else, any extra money will go right into the pockets of the corporations.  The 1% will do great, while the rest of us will still suck on the hind t*t.

        •  the CBO does (0+ / 0-)

          CBO does not say cost will go down because we simply won't be able to pay.  

      •  That's a lot of "ifs" (1+ / 0-)
        Recommended by:
        hmi

        A more accurate HL would be "If a lot of things turn out differently than the CBO says the debt might go down".  

    •  You're not missing anything. (2+ / 0-)
      Recommended by:
      nextstep, hmi

      From the report summary:

      The high and rising amounts of federal debt held by the
      public that CBO projects for coming decades under the
      extended baseline would have significant negative consequences for both the economy and the federal budget.
      Those consequences include reducing the total amounts
      of national saving and income; increasing the government’s interest payments, thereby putting more pressure
      on the rest of the budget; limiting lawmakers’ flexibility
      to respond to unexpected events; and increasing the
      likelihood of a fiscal crisis

      LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

      by dinotrac on Sun Nov 24, 2013 at 02:00:40 PM PST

      [ Parent ]

      •  CBO still assumes health spending returns (1+ / 0-)
        Recommended by:
        ybruti

        much closer to its historically high growth rates than the average over the last 4 or 5 years.

        They've been nudging their long-term forecasts down slightly.  Bu they still assume much faster health cost inflation in the future.

        They did a report this last August that examined why their baselines for health costs have been so overestimated in recent years.  At best they could explain only one-third of the overestimate via new information (better info on demographic trends, the impact of the recession etc.)

        http://www.cbo.gov/...

        Therefore they don't understand 2/3rds of why their forecasts have been too high, which is why many health economists -- though certainly not all, and perhaps not the majority -- think that structural changes may in fact be the explanation.

      •  Lol, there is so much wrong with that CBO line (1+ / 0-)
        Recommended by:
        Odysseus

        I can not believe you even quoted it.

        "The high and rising amounts of federal debt held by the
        public that CBO projects for coming decades under the
        extended baseline would have significant negative consequences for both the economy and the federal budget."

        Should read: "the high and rising amounts of Net Financial Assets held by the private and foreign sectors....."

        "Those consequences include reducing the total amounts
        of national saving and income;...."

        T-bonds are the savings of the Non-Govt, Govt spending = Non-Govt income or in other words, the Govt's deficit = the Non-Govt surplus

        " increasing the government’s interest payments,....."
        The Fed controls the interest rate, its not determined by the markets.  Long term rates are nothing but expectations of the short term rate plus inflation expectations.  If the Treasury wanted to issue nothing but 3-month T-bonds at .25% forever, of course they could do this, its their monetary system.  Congress passed all the laws that created our system this way. So if you want to say that interest rates are going to rise, you need to explain why the Fed is going to raise them.

        "thereby putting more pressure
        on the rest of the budget; limiting lawmakers’ flexibility
        to respond to unexpected events; and increasing the
        likelihood of a fiscal crisis."

        There is no such thing as the Govt ever running out of fiat money.  There is no way to arbitrarily crowd public investments in anything if We The People choose to let important investments be shrunk by special interests.  There is no magic % of GDP that Govt spending must stay under.  If Govt spending must increase to 30% of GDP to pay for our aging population then of course there is nothing stopping us from doing that.

        MMT = Reality

        "The Earth is my country and Science my religion" Christiaan Huygens. Please join our Kos group "Money and Public Purpose". The gold standard ended on August 15, 1971, its time we start acting like it.

        by Auburn Parks on Sun Nov 24, 2013 at 02:34:37 PM PST

        [ Parent ]

      •  Projections (0+ / 0-)

        IMO, the key to it all is to put all 3 branches back in dem hands.  Then raise the tax levels, for 10 years, back to the days of the Eisenhower Administration.  Let's get the economy cooking again.  Jobs, jobs, jobs.

        In the long run, Keynes is right on.  We need to deficit spend right now -- and big time.  Let's jump start our economy.

  •  so let me get this straight (0+ / 0-)

    "there should be little disagreement what America's number one domestic priority should be. With unemployment still stuck around 7 percent four plus years after that recession was declared "over," creating jobs has to be Job #1."

    So we should prop up an oppressive system that drives us to an early grave just so our children will have the privilege of drowning in our own wastes?

  •  The real question is why creating jobs was (4+ / 0-)
    Recommended by:
    hmi, Jim P, Sparky McGruff, Miira

    not priority 1 when unemployment was shooting through the roof and the current administration controlled both houses of Congress.

    Oh wait -- I remember now.
    Other things were more important.

    LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

    by dinotrac on Sun Nov 24, 2013 at 01:56:15 PM PST

    •  Well, duh, we strengthened the banks (1+ / 0-)
      Recommended by:
      ItsSimpleSimon

      Which now own roughly half the nation’s assets. Success!

      “The meaning of life is to find it.”

      by ArcticStones on Sun Nov 24, 2013 at 02:10:33 PM PST

      [ Parent ]

      •  And hey -- All those bailouts and bonuses must (0+ / 0-)

        have created a few jobs at high-end auto detailing establishments.

        LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

        by dinotrac on Sun Nov 24, 2013 at 02:13:59 PM PST

        [ Parent ]

        •  There was a chart on the Keiser Report (2+ / 0-)
          Recommended by:
          dinotrac, bryduck

          program the past week which graphed the rise in sales for mainstream stores and the high-end stores, like Tiffany's since the start of QE.

          The mainstream stores were flatlined, which the upper end just shot up 200-300%.

          See? The system works.


          Actual Democrats: the surest, quickest, route to More Democrats. And actually addressing our various emergencies.

          by Jim P on Sun Nov 24, 2013 at 03:17:29 PM PST

          [ Parent ]

    •  Controlled both houses of Congress? (2+ / 0-)
      Recommended by:
      indres, Satya1

      If I remember correctly, that was about six weeks.

      In the time it took Adam Lanza to reload, eleven children escaped. What if...

      by Sixty Something on Sun Nov 24, 2013 at 02:35:14 PM PST

      [ Parent ]

      •  Five or six months. n/t (0+ / 0-)

        Code Monkey like freedom / Code Monkey like peace and justice too
        Code Monkey very nerdy man / With big warm fuzzy bleeding heart
        Code Monkey like you!

        Formerly known as Jyrinx.

        by Code Monkey on Sun Nov 24, 2013 at 05:14:32 PM PST

        [ Parent ]

        •  Not really (1+ / 0-)
          Recommended by:
          GleninCA

          From July 7 to August 25, 2009 the Dems had 58 +2 Independents.  That was when Al Franken was finally confirmed until Ted Kennedy died.  Then again from September 25, 2009 to February 4, 2010.  That was when Paul Kirk was appointed to fill in for Ted Kennedy until Scott Brown was confirmed.  A big part of that was also recess.  At no point did the Dems have 60 votes to overcome a filibuster by the GOP and had to rely on the 2 independents, one of which was Joe Lieberman.  Also the 58 Dems included Blanche Lincoln, Arlen Specter (who had switched in April 2009), Ben Nelson and other conservadems who made life difficult for our side.  

          This is your world These are your people You can live for yourself today Or help build tomorrow for everyone -8.75, -8.00

          by DisNoir36 on Sun Nov 24, 2013 at 06:31:46 PM PST

          [ Parent ]

          •  Not a filibuster proof majority, but, as just (1+ / 0-)
            Recommended by:
            Odysseus

            proved, they didn't actually need one.

            LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

            by dinotrac on Sun Nov 24, 2013 at 07:44:15 PM PST

            [ Parent ]

            •  You're right (1+ / 0-)
              Recommended by:
              dinotrac

              They didn't need one but that wasn't the problem.  Even with 58-60 Dems in the Senate, they didn't have 50+1 to get meaningful legislation passed via reconciliation.  That's why you had suck things like the Louisiana Purchase and Cornhusker Kickback to try and entice recalcitrant Dems to support the final result.  Forget the more ambitious stuff like expansion of Medicare.  I really don't think the Dems had the necessary votes to overcome the GOP obstruction and pass it through via reconciliation. It's a shame because those would have been far better options but many of the Dems in 2009 were just not that good.  Some of the more odious elements have been washed away and replaced by more progressive members but it's too late.  The best we can hope for now is for a Dem hold in 2014 and a Dem wave in 2016 which will allow Dems to improve the ACA with GOP obstruction.

              This is your world These are your people You can live for yourself today Or help build tomorrow for everyone -8.75, -8.00

              by DisNoir36 on Mon Nov 25, 2013 at 04:22:28 AM PST

              [ Parent ]

              •  Democratic wave in 2016 seems unlikely, given (0+ / 0-)

                the American public's post 22nd amendment habit of quitting on a party after 2 terms.

                Not that the GOP won't do it's damnedest to help Democrats out by being complete fools, but Democrats really need the economy to improve in a way that helps more than wall street, and show up where people other than economists and pundits can see it.

                LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

                by dinotrac on Mon Nov 25, 2013 at 06:13:57 AM PST

                [ Parent ]

      •  And included Ben Nelson and Blanche (1+ / 0-)
        Recommended by:
        GleninCA

        Lincoln in the Democratic Senater ranks.  Plus independent Joe Lieberman.

        And has everyone forgotten the approx. $800 billion stimulus package?   It wasn't enough but it's not easy to see how it could have been much bigger.  By historic standards, it was ginormous.   And the new Obama Adminstration got it through Congress roughly a month or so after inauguration.  

        We must, indeed, all hang together, or assuredly we shall all hang separately. B. Franklin

        by Observerinvancouver on Sun Nov 24, 2013 at 05:25:59 PM PST

        [ Parent ]

      •  Was not even that long (0+ / 0-)

        Once you take into account the Blue Dogs who consistently vote on the Republican side.

    •  Democrats may have had a majority (1+ / 0-)
      Recommended by:
      GleninCA

      but the administration never controlled both houses of Congress--there were several conservative Democratic Senators who made sure nothing even vaguely progressive was going to pass.

      "All governments lie, but disaster lies in wait for countries whose officials smoke the same hashish they give out." --I.F. Stone

      by Alice in Florida on Sun Nov 24, 2013 at 08:48:27 PM PST

      [ Parent ]

      •  Isn't it amazing how Republicans have so much (1+ / 0-)
        Recommended by:
        Odysseus

        power with a bare majority in one house of Congress, but Democrats are powerless when they hold the White House and both houses of Congress.

        I've come to the conclusion that, whatever else their foibles, Democrats truly excel at one thing: making excuses.
        Well, there's passing the buck, too.

        That excuse would be a bit more compelling if Democrats in that period had actually tried to push through helpful legislation only to have it blocked.

        There is a reason why 2010 happened, and it wasn't the brilliance of Republican candidates.

        LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

        by dinotrac on Mon Nov 25, 2013 at 06:24:51 AM PST

        [ Parent ]

  •  What are the assumptions? (3+ / 0-)
    Recommended by:
    hmi, nextstep, coffeetalk

    “As a percentage of the American economy, discretionary spending (that is, outlays outside of mandatory expenditures on Medicare, Medicaid, Social Security and interest on the national debt) will drop from roughly 9 to 7 percent by 2038.”
    .

    All long-range economic models are based on assumptions. Interest rates are at an all-time low, and they can only go in one direction: UP!

    I really do wonder what assumptions are being made here about interest rates on Treasury bonds / borrowing. That may have a huge impact on costs.
    .

    “The meaning of life is to find it.”

    by ArcticStones on Sun Nov 24, 2013 at 02:07:16 PM PST

    •  Interest rates are determined by the Govt. They (0+ / 0-)

      are waht we want them to be.

      MMT = REality

      "The Earth is my country and Science my religion" Christiaan Huygens. Please join our Kos group "Money and Public Purpose". The gold standard ended on August 15, 1971, its time we start acting like it.

      by Auburn Parks on Sun Nov 24, 2013 at 02:35:45 PM PST

      [ Parent ]

      •  You’re kidding, right? (0+ / 0-)

        The interest rates have to be set high enough for the market to accept them – otherwise the bonds will simply attract no buyers.

        “The meaning of life is to find it.”

        by ArcticStones on Sun Nov 24, 2013 at 03:11:24 PM PST

        [ Parent ]

        •  There have been buyers at 0% (0+ / 0-)

          because everything else on offer was too risky, and that condition looks likely to continue as the rest of the world is even worse off than us.

          "All governments lie, but disaster lies in wait for countries whose officials smoke the same hashish they give out." --I.F. Stone

          by Alice in Florida on Sun Nov 24, 2013 at 08:51:09 PM PST

          [ Parent ]

    •  Really? (0+ / 0-)
      Interest rates are at an all-time low
      The ten year treasury bond in now about 2.6%.  Whereas not that long ago it was about 1.6%

      So, math is hard, I realize, but how can it thus be that interest rates are at an all time low?

  •  CBO does not have a strong record in forecasting (1+ / 0-)
    Recommended by:
    Denver11

    where reality comes even remotely close to forecast.  Taking a 5 year forecast is ok - 20 or 30 years implies forecasting abilities CBO just doesn't have.  At best, long term forecasts may hint than an inherently bad problem will result which is quite useful, but not forecasting problems does not mean major problems will not occur.

    As these measures are frequently against GDP, slower growth than forecasted can make the results far worse very quickly - especially over long times.

    As major changes are being made to healthcare economics with ACA, and major parts of ACA are just starting to go into effect, the reliability of CBO forecasts are far lower than when no policy changes are made.  If is also likely other changes to healthcare policy will occur after seeing the impact of ACA 1.0 after it is more fully implemented in 2015 and 2016.

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Sun Nov 24, 2013 at 02:11:23 PM PST

  •  A word of caution (7+ / 0-)

    Managed Care bent the cost curve even more dramatically in its early years in the US than even the ACA (well, really anticipation of the ACA) has done so far.  But what happened with Managed Care is that the payers met the enemy, and he was soon them -- if you'll allow a misquote of Pogo misquoting Perry.

    The big problem with the ACA is that it was intended as a fix for a situation created by cartel pricing in medical costs and medical insurance costs, but it did nothing to break up the cartels.  It was utterly predictable that the cartels would accept, even participate in, lower initial pricing.  But once they figure out the parameters of what the govt will let them get away with, they will proceed with a two-phase plan.  First they will use low prices to destroy or co-opt whatever little independent players have come up during this initial phase of the ACA.  Then, once the cartels are firmly re-established and free of honest competition, they will start to dial up the prices.  We'll be back on the original track of rising prices in no time, and probably soon be at an even steeper upward slope.

    The only way to end cartel pricing is to end the cartels.  We're just wasting time as long as we do anything other than ending the cartels.

    The states must be abolished.

    by gtomkins on Sun Nov 24, 2013 at 02:11:52 PM PST

  •  The Media doesn't understand Math (0+ / 0-)

    And therefore informative articles like the one above go unnoticed. This is proof positive that a right wing media is leading an American electorate not curious enough to do their own thinking, on how to think.

  •  Wishful thinking (1+ / 0-)
    Recommended by:
    nextstep

    Sure, if Mediicare/Medicaid aid costs don't continue on their overall upwards trajectory and if there is a recovery. OTOH, if we're reliving the Japanese experience (and there are good reasons to suspect we might be), we'll watch GDP sputter along and healthcare costs eat up an increasing percentage of our output. As far as useful prediction goes, might as well cast runes. But when you plan, you plan based on stuff going wrong.

  •  please don't upset (1+ / 0-)
    Recommended by:
    Observerinvancouver

    the rw crazies they can only blame the chicago socialists for cooking the figures for so long, even the short attention span american electorate will catch on eventually, won't they?

  •  It should be pointed out that some of this... (5+ / 0-)

    decline in Medicare spending has been due to the brutal and abrupt imposition of thousands of dollars in out of pocket costs onto low income seniors.

    It's like this:
    Medicare has always had rules regarding what is considered a reimbursable service, particularly when it comes to hospitalization. In years past, Medicare's payment gurus were generally content to accept physicians' judgment regarding when a frail elderly patient required admission.

    Not any more.

    This year, Medicare has abruptly imposed an extremely stringent interpretation of requirements for hospital admission upon patients. If I admit a frail 88 year old to the hospital with a broken pelvis due to a fall at home, Medicare now most often asserts - retroactively - that the patient did not require hospital admission because (in theory) 24/7 home nursing care might meet their needs. And consequently their stay in the hospital is deemed an 'observation' stay.

    What this means in the real world is that every single test, every x-ray, every blood analysis, is now considered an 'outpatient procedure' which Medicare will not pay for. The hospital charge is subject to the patient's yearly Medicare deductible and a 20% co-pay.

    The result: an 88 year old patient with a fractured pelvis being hustled out the door the moment she can totter to the bathroom with a walker...and being handed a bill for tens of thousands of dollars Medicare will not cover.

    I can send such frail patients home from the ER, and be held criminally negligent when they die of a complication. Or I can try admitting them, earning the family's rage when they get the bill.

    Mission accomplished!

  •  this is all an attempt (3+ / 0-)
    Recommended by:
    Jon Perr, indres, Urban Owl

    to distract the American people from the Iran nuclear deal.. :-)

    ObamaCare! Sign-up by phone: 1-800-318-2596

    by mwm341 on Sun Nov 24, 2013 at 02:26:39 PM PST

  •  unemployment rate race issue (1+ / 0-)
    Recommended by:
    Odysseus

    In the years leading up tot he 1970's the unemployment rate was low, less than 5%.  However, if you were black or hispanic the unemployment rate was at least twice that.  This was not a big deal overall because whites made up 85% of the population.  That meant that five non white people had to be unemployed for it equal 1 white person.  The focus of the economy could be on keeping white people working.  If white unemployment were 100%, and only half the minorities worked, it would still only be an unemployment rate of 7%.

    Today life is different.  White non-hispanics only make up 65% or less of the popoluation.  In the next generation it will be 50%.  Black and Hispanic unemployment is arguably worse today than it was in 1970.  Combined the black and hispanic population are 30% of the population, though the working age population right now is much less.  But the issue with the overall unemployment is that employment policy still assumes that it is ok for non-whites to remain unemployed.

    During the Clinton years this was not clearly so.  It seemed that everyone had a opportunity to work.    The overall unemployment rate is going to hang around 8% unless we get value all races.  We can't just say that the black population is going to stay 15%, so if 15% of them are unemployed it does not matter.  It does.  get it down to 8% like whites and we have a significant reduction in overall unemployment.

    Everyone wonders why conservatives do not care about unemployment.  It is because white unemployment has been falling steadily since 2009, and while not yet back to the 2-5% levels, at least it is not at or above 10% like hispanics and blacks.

  •  Speaking of Austerians... (0+ / 0-)

    Quick Pop Quiz:

    Who said this?:

    At the time of his announcement, ?????? said the cut was the first of many.

    "The hard truth is that getting this deficit under control is going to require some broad sacrifice," ?????? said. "And that sacrifice must be shared by the employees of the federal government."

    No Googling!
  •  You may ask yourself - how did I get here? (0+ / 0-)

    It's a reasonable question. One that is avoided by Kliff (well, largely avoided).

    It is an important question.

    A question that sets up a reasonable test case.

    Kliff's most optimistic projection from WonkBlog assumes there is nothing external influencing the trend - maybe ACA played a role. Thus the trend continues - patient is saved.

    An alternative view is that low real employment in years from '08 through '12 (labor force participation rate) leads to fewer families continuing employer provided health insurance. Some shirking of calender movable medical procedures in one year or another reduces outlays for a given year. Then the economy starts to pick up, somewhat. Then ACA (and reported rate increases) kicks in - but neither of those last two cost components are part of the measured public or estimated private health cost outlays important to even the May-13 CBO projections.

    But, they will be critical in the future. And, it is an interesting test case.

    1 - If the alternative (anti-Kliff) view is close then expect a tick up in health costs - ACA compliant health insurance prmium increases were predictive and CBO may be moving the curve north once more. Patient ails.

    OR

    2 - Kliff's optimistic assessment is closer to the truth. Yes, there is a tick upward in overall health care costs (ACA premiums, more participants) - But, then, because actual outlays for services did not shoot the moon we see news reports in Q3-4 '14 of returned premiums (80:20 rule). In coming years the curve shows a pimple near '13-'14 reflecting ACA initial uptick, but then stabilizes. Patient survives.

  •  National Health is National Wealth (1+ / 0-)
    Recommended by:
    indres

    We will be a greater nation by making many Americans more healthy than by making a few Americans more wealthy.

  •  I don't think 'creating jobs' should necessarily (1+ / 0-)
    Recommended by:
    Alice in Florida

    be the number one priority.  Per-capita inflation-adjusted GDP has never been higher.  Something is wrong if this is the 'best it has ever been' economy-wise, yet everyone is looking around and saying 'wow, this sucks!'.  I think it is really time to stop and think that maybe making the economy bigger isn't the solution.

    And we love to wear a badge, a uniform / And we love to fly a flag But I won't...let others live in hell / As we divide against each other And we fight amongst ourselves

    by ban48 on Sun Nov 24, 2013 at 03:26:53 PM PST

  •  Really? (0+ / 0-)
    With the national debt as a percentage of U.S. GDP stable for the rest of the decade, America simply does not have a serious debt challenge in the near or even medium term.
    You are kidding, right?

    How can you ignore the fact that the main reason the deficit is coming down is that the fed is printing $85 billion a month (which is now MORE than the monthly deficit) and keeping interest rates near zero? The $85 billion keeps the economy from going back into recession, and the low interest rates stop the debt from spiraling higher due to interest costs.

    There is still a crisis around the corner - if you dare to look.

    When the Fed can stop printing and rates return to non-zero then maybe we can talk about a real recovery and the end of the crisis. Until then any talk of such is delusional.

    There's room at the top they're telling you still But first you must learn how to smile as you kill If you want to be like the folks on the hill

    by taonow on Sun Nov 24, 2013 at 03:50:54 PM PST

  •  Effect of fraud clampdown? (2+ / 0-)
    Recommended by:
    indres, Observerinvancouver

    I'm wondering if the Administration's publicized attempts to squeeze the fraudsters, and put the worst of them out of business (and even in jail) is having a measurable effect on Medicare/Medicaid spending. If so, I wish they'd do more publicity on it. I would think that doctors (except the disreputable ones), patients, Congresscritters, and pundits would be able to agree that it's a good thing not to be paying fraudsters for motorized wheelchairs or whatever that the ID-stolen person does not need,  and may never have been delivered.

  •  Sorry, no. (0+ / 0-)

    The debt has exploded under Obama.  Our children will pay the bill.

    I heard it on TV.

  •  I don't think I am buyng it. (0+ / 0-)

    From http://www.usdebtclock.org
    Only allows stats from the current date in 4 year intervals

                                    11/24/2008    11/24/2013
    Official Unemployed      9.5 million      11.2 Million
    Actual Unemployed    13.5 million       21.4 Million
    National Debt             $10.1 trillion    $17.2 trillion
    Gross Debt as share
    of GDP                       72%                108%
    Living in Poverty         38.7 million       47.1 million

    The current budget deficit is $662 billion

  •  2017 Budget Estimates (0+ / 0-)

    http://www.usdebtclock.org/...
    2017 Budget estimates compared
    Debt below is in trillions
                                                          Debt   Debt-share of GDP
    CBO (Congressional BUdget Office): $19.9  100%
    OMB   (Office of Mgmt and Budget): $20.8  104.6%
    GOP         (For what it's worth):       $21     105.4%
    USDC   (USDebtClock current rates: $20.3  117.9%

  •  Lower Medical Costs (0+ / 0-)

    Isn't strange that the GOP constantly worries about the enormous debt we are leaving for future generations and demands that programs (especially those which are part of the safety net) be cut to eliminate that debt and save the country but absolutely refuses to approve the one proven way to reduce the deficit- the reduction of health care costs.  The ACA has contributed to the slowing of soaring health care costs but rather than discuss improvements or tweaks to make it even more effective; Republicans have only one response- Kill it!  So much for being the party of fiscal responsibility.

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