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According to some experts, pessimistic estimates of what Obama’s newly proposed budget will do to the national deficit may be slightly exaggerated, and health insurance reform may play a role in that.
How is that possible? Initial projections of former President Bill Clinton’s first budget indicated that there would be an unsustainable budget deficit by the year 2000. Instead, the country ended up running a surplus. The healthcare issue comes into play because health care spending–including purchases of individual health insurance–is over one-sixth of the GDP.
Economics professor James K. Galbraith explains that predictions of the deficit in 2020 assume that U.S. healthcare costs will continue soaring at the same rate for the next decade. If comprehensive healthcare reform passes and succeeds in its goal of expanding access to while reducing the cost of care through regulation and increased competition, that portion of debt spending could stabilize or even decrease.
(Image: yomanimus under CC 2.0)
Tags: deficit, health care spending, health insurance, healthcare reform, obama budget
