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Archive for July 18th, 2011

Here’s a new video from the Cato Institute, featuring my pearls of wisdom, along with equally sage commentary from my colleague Chris Edwards.

We make two simple points. First, America faces a Greek-style fiscal crisis if we leave the federal budget on autopilot (actually, it will be worse since we won’t get a bailout from the IMF).

Second, the country can be saved from this fate with relatively modest spending restraint. Genuine spending cuts would be preferable, of course, but merely slowing the growth of spending can put America on a sustainable path.

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The Beacon Hill Institute in Massachusetts has just released a very good – but very depressing study. The research finds that costs have jumped under Romneycare, but that’s not surprising. After all, politicians always underestimate the cost of new entitlements.

The important revelation in this new research is the degree to which the system has been propped up by the federal government (i.e., taxpayers in the rest of the nation).

That’s probably good news for Bay State politicians, who get to shift a fiscal burden to people outside the state, And it’s probably good news for Mitt Romney, because it somewhat disguises the magnitude of the disaster he imposed on the taxpayers of his state.

But it doesn’t bode well for the United States. Who will be available to bail out Obamacare? The Chinese? Martians? The Federal Reserve creating money out of thin air?

While you ponder those questions, here are some key excerpts from the study.

In this study, the Beacon Hill Institute at Suffolk University (BHI) attempts to fill the gap by calculating the effect of health care reform on state and federal governments and the private health insurance markets, including employee contributions to their private insurance plans. We find that, under health care reform:

• State health care expenditures have risen by $414 million over the period;

• Private health insurance costs have risen by $4.311 billion over the period;

• The federal government has spent an additional $2.418 billion on Medicaid for Massachusetts.

• Over this period, Medicare expenditures increased by $1.426 billion;

• For a total cumulative cost of $8.569 billion over the period; and

• The state has been able to shift the majority of the costs to the federal government.

The federal government continues to absorb a significant cost of health care reform through enhanced Medicaid payments and the Medicare program. …We estimate the effects of health care reform by comparing the actual value of each variable with the value it would have had, based on recent trends, had health care reform not been implemented.

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