Posts Tagged ‘healthcare’

Earlier this evening, Paul Krugman tweeted out a link to his blog post called “The Truth About Pensions.” In it, he links to a fascinating new report from the Center for Economic and Policy Research that makes the case that the recent hysteria about the role of public employee pensions in states’ fiscal imbalances is overstated, and that the identified culprits — greedy public employees who refuse to contribute more to their pension funds and irresponsible officeholders who don’t fund their states’ pension obligations — are actually far less responsible for the “crisis” than the real culprit: the crash of the stock market, which led to a sudden collapse in the pension accounts’ holdings. The entire report is worth a read.

What caught my eye, though, was David Frum’s immediate response on Twitter:

Do you see what just happened there? The title of Krugman’s post is “The Truth about Pensions,” not the “The Truth about State Retirement Liabilities.” The whole point of his post is that people with an agenda are systematically overstating the role of public employee pensions within the context of state fiscal imbalances (which Krugman also thinks are overstated, but that’s a different point). Frum’s response gives the game away — the big driver behind the state fiscal gap as it relates to state retirement liabilities is not pensions, but healthcare costs.

But this just isn’t as sexy for conservatives to confront. First of all, increasing healthcare costs are an economy-wide problem — as anyone paying health insurance premiums knows — so it’s much more difficult to pin the blame on the public employees themselves. Second, and more importantly, conservatives did nothing to confront rising healthcare costs when they were in power, and in fact they all voted unanimously against the largest effort to control healthcare costs in our nation’s history, the Affordable Care Act. In fact, they ran an entire election campaign on vague anti-Washington sentiment coupled with attacks about how Democrats had “cut Medicare by $500 billion.”

The irony here is that Krugman himself has described this exact dodge in the past, way back in a 2004 column where he explains his frustration that people wrongly talk about “entitlements” as if there’s one program called “Socialsecurityandmedicare.” As he said then, people “hope to use scary numbers about future medical costs to panic us into abandoning a retirement program that’s actually in pretty good shape.” Yes, state pension funds have problems. But the conservative conflation of pensions and health benefits is a little too convenient — it’s being done on purpose, and it makes us solving our real fiscal problems much more difficult.


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