Monday, March 29, 2010

Becker and Posner on Health Care Reform

Becker finds nothing to like, and believes that real reform would be deregulatory. Posner finds several things to like in the health care reform legislation, but thinks it's a budget buster that moves the US in the direction of a  Greek-style economic melt-down, which he thinks might be a good thing for the US because it might finally force the federal government toward more efficient institutions. Their full analyses are here at the Becker-Posner blog.

I would agree that the reform legislation is likely, in the long-run (i.e., after all its provisions are implemented, which will not be for some time), to increase the budget deficit at least marginally, but will it threaten the overall stability of the US economy? It seems doubtful. Becker characteristically pretends that there is nothing structurally wrong with health care markets, aside from too much government interference; he blissfully ignores the fact that other advanced, industrial democracies obtain similar overall health outcomes at far lower cost than the US. Posner's view of the legislation is more nuanced and realistic, but the implicit prediction of doom in his analogy to Greece seems entirely too far-fetched. My relatively uneducated guess is that the CBO scoring of the health care reform bill will prove to have substantially underestimated the costs, but that the excess costs will not be nearly as great as Posner supposes.

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