Washington’s New Math

Only in the hallowed halls of Congress could the notion of spending vastly higher amounts of money convince so many that the net result will be a reduction in spending. But such is the conceit with the new health care bill being hammered out these days.

The new legislation to expand health care insurance will reportedly cost $849 billion. But this massive increase in government spending will, we’re told by Senate Majority Leader Harry Reid, reduce the federal budget deficit by $130 billion.

If $849 billion will get us $130 billion in deficit reduction, will $1.698 trillion bring us a $260 billion in red ink? Have we, in other words, stumbled upon a budgetary fountain of youth? Ah, if it were only that easy. But attempts at spending our way to prosperity has a long and discouraging record. We can debate the social merits of expanding health care coverage by way of colossal increases in public expenditures, but promoting it as a deficit reduction measure as well strikes us as, well, unhealthy. Progress, or apparent attempts at such, cost money. There’s just no way to turn that mule into a horse.

Meantime, the last time we check, two plus two still don’t equal 5, or 3. In most cities, at least.

About James Picerno 895 Articles

James Picerno is a financial journalist who has been writing about finance and investment theory for more than twenty years. He writes for trade magazines read by financial professionals and financial advisers.

Over the years, he’s written for the Wall Street Journal, Barron’s, Bloomberg, Dow Jones, Reuters.

Visit: The Capital Spectator

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