Saturday, February 04, 2006

Fiscal Schizophrenia—As Reported in The New York Times of Today, Feb. 4, 2006

Headline of The Times’ main story on page one:
“Bush to Propose Vast Cost Savings in Medicare Plan— $30 Billion Over 5 Years”

Headline and some text from a separate story on page 8:
“Bush Urges Study of Math and Science” “Mr. Bush was near Albuquerque, in the suburban city of Rio Rancho, as part of his post-State of the Union road show to promote major proposals in the address. In Rio Rancho, he pushed what the White House is calling the `American competitiveness initiative,’ which calls for, among other things, doubling federal spending on basic research grants in the physical sciences over 10 years, at a cost of $50 billion.”

Not counting the “among other things,” which will certainly add significant additional costs, Bush’s proposal on math and science works out to $25 billion in 5 years, almost enough just by itself to wipe out the “vast cost savings” of $30 billion projected in his Medicare plan.

In the article on his math and science proposal, the president is reported to have said (as a means of stressing the value of “mentoring”), “`I’m looking for a mentor, by the way, both in math and English.’” He should also be looking for one in logic. This conclusion, unhappily, is greatly reinforced by the observation in the article on Medicare that “Medicare spending totaled $333 billion last year. Under current law, it will climb by one-third in two years, reaching $445 billion in 2007, as the [president’s, the same president’s] new prescription drug program gets under way, the Congressional Budget Office says.”

In other words, the “vast savings” now being sought in the cost of Medicare, by such means as reducing “payments for oxygen equipment to Medicare beneficiaries,” are not much more than a mere 25 percent of the cost by which Medicare will increase, mainly as the result of the president’s own choices enacted just last year.

The questions must be asked: What is the president thinking? What are his advisors thinking? Do they think? Does he think? Do their right hands know what their left hands are doing? Do they know today what they did yesterday? Do they know today what they will do tomorrow?

This article is copyright © 2006, by George Reisman. Permission is hereby granted to reproduce and distribute it electronically and in print, other than as part of a book.
(Email notification is requested.) All other rights reserved.