The debt argument

Part of the rather maddening element of the health care debate is the deficit argument, which is that the $900 billion worth of reforms is too costly given our fiscal state. This is maddening primarily becuase, well, it's not accurate. Any health care reform, as laid out by President Obama last night, will be deficit-neutral in that it will feature sufficient cuts and revenue enhancements to balance out the cost of the program.

So, yes, the plan will cost $900 billion, but it already identifies ways to pay for it ... which is something that didn't accompany, say, the 2001 and 2003 tax cuts or the Medicare Plan D program. And those expensive outlays are what had a more direct and detrimental impact on the nation's debt than anything else.

Then again, as you can tell from 'The Global Debt Clock' from The Economist, the worry over the deficit - though legitimate - is also dramatically overstated. As Free Exchange noted ...

Just having a quick glance, three things stand out to me. The first is that among developed nations, America's level of debt per capita is pretty small, and it remains small relative to other developed nations in 2010 and 2011, according to The Economist's projections. The second is that rising levels of public debt in America are not unique; debt is rising basically everywhere and will continue to do so for the next two years. This reflects that rising debt levels are only partially a result of domestic policy choices, and are also heavily influenced by broader economic conditions and demographic change. And the third thing, the thing that immediately jumps out looking at the map of public debt per capita across countries, is that high debt levels are associated with wealth.