Mode-Hot 2011

This graph, from the Center on Budget and Policy Priorities, shows about as clearly as possible why it is healthcare that is the biggest challenge to future fiscal stability. Whether the current bill has enough cost saving measures to make a serious dent is an open question, but it is a start.  [HT: David Leonhardt]



But it is also important to note that the current healthcare reform debate has two main pillars that are often conflated and confused.  The first is what the graph above references: healthcare costs are soaring and becoming a serious fiscal issue for the United States and we have to do something about it.  To this part of the debate economists have a lot to say and contribute.  The second pillar is different.  This part of the debate is more of a moral and social argument: should a society be responsible for the health and welfare of its own citizens?  To this, economists have little to contribute other than mentioning the cost of providing critical care to the uninsured versus more comprehensive coverage.  This is the limit of economics - economics can help in determining the best way to achieve a social policy objective, but it is mostly silent on what those objectives should be.