Four Spending Myths That Could Wreck Our World


This post originally appeared on TomDispatch

We’re at the edge of the cliff of deficit disaster! National security spending is being, or will soon be, slashed to the bone! Obamacare will sink the ship of state!

Each of these claims has grabbed national attention in a big way, sucking up years’ worth of precious airtime. That’s a serious bummer, since each of them is a spending myth of the first order. Let’s pop them, one by one, and move on to the truly urgent business of a nation that is indeed on the edge.

Spending Myth 1: Today’s deficits have taken us to a historically unprecedented, economically catastrophic place.

This myth has had the effect of binding the hands of elected officials and policymakers at every level of government. It has also emboldened those who claim that we must cut government spending as quickly, as radically, as deeply as possible.

In fact, we’ve been here before. In 2009, the federal budget deficit was a whopping 10.1% of the American economy and back in 1943, in the midst of World War II, it was three times that -- 30.3%. This fiscal year the deficit will total around 7.6%. Yes, that is big. But in the Congressional Budget Office’s grimmest projections, that figure will fall to 6.3% next year, and 5.8% in fiscal 2014. In 1983, under President Reagan, the deficit hit 6% of the economy, and by 1998, that had turned into a surplus. So, while projected deficits remain large, they’re neither historically unprecedented, nor insurmountable.

More important still, the size of the deficit is no sign that lawmakers should make immediate deep cuts in spending. In fact, history tells us that such reductions are guaranteed to harm, if not cripple, an economy still teetering at the edge of recession.

Cynthia Potter
7/29/2012 6:35:55 AM

SteveCurtis, We already know how doctors would handle the situation. It would be one thing if no one had ever tried a system where doctors get paid flat rates, but it has been tried and works. First, every civilized country in the world does it that way along with some American institutions like the Cleveland clinic. Doctors who work for these nations and clinics actually care about healing and curing and order the correct test to find the pest way to treat their patients. More test does not necessarily lead to better outcomes and having not enough test because you can't afford them definitely doesn't. Don't worry Steve, doctors will still be able to afford a better house and car than me.

Steve Curtis
7/21/2012 2:22:41 AM

Clearly the writer has a strong bias for Euro-socialism, and is not above manipulating data to reach their predetermined conclusion. Just consider one point. Under the fee for service system, a doctor is paid for work or tests done. They have an incentive to get more information, and do more work, to help the patient. It may, repeat may, cost a bit more, but it promotes the best possible care. Under the proposed pay for performance system, a doctor loses money each time they order a test, or spend time with the patient. It strong incentives doctors to limit their activities on behalf of the patient, and hope for the best outcome with the absolute minimum input from them. How do you think you'd feel if your doctor stopped ordering tests or consultations, and you felt he was doing it just to save money!!!

Mike Won
7/20/2012 11:17:37 PM

Spit snot in our face and call it rain!

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