Under the headline “Costly Bill Seen as Saving Money,” the San Francisco Chronicle last week began a front-page story with these words: “Many people find it hard to understand how the health care legislation heading for a decisive vote Sunday can cost $940 billion and cut the horrendous federal deficit at the same time.”
It’s not hard to understand at all. It is a lie.
What makes this particular lie pass muster with many people who might otherwise use their common sense is that the Congressional Budget Office vouched for the consistency of the budget numbers that say you can add millions of people to a government-run system and yet save money.
The Congressional Budget Office does honest work. But it can only use the numbers that Congress supplies — and Congress does dishonest work. It is not the CBO’s job to give their opinion as to whether any of the marvelous things that Congress says it will do in the future are either likely or possible.
The Congressional Budget Office is like a computer: Garbage in, garbage out. The numbers in the health-care bill are especially smelly garbage.
Do we really need a government agency to give us a false sense of security? Don’t we already have politicians to do that? Weren’t they doing that at the height of the housing boom that preceded the collapse, which then brought down the whole financial system and the whole economy? Many warnings were brushed aside by Barney Frank, Christopher Dodd, and many others in Congress.
What we really need — and will never get — is a Congressional Off-Budget Office. This would be an agency that does not have to accept whatever numbers Congress sends them and pretend to take those numbers seriously.
An independent agency could add up all of the government’s financial liabilities, whether they were in the official budget or not. For example, the Federal Deposit Insurance Corporation, which guarantees bank accounts, has only a fraction of the money that it is supposed to have on hand to see that people’s life savings don’t get wiped out when a bank fails.
No administration of either party is going to let people’s life savings get wiped out. That would be political suicide. FDIC is definitely too big to fail. But none of the billions of dollars that will be necessary to pour into FDIC at some point, as banks continue to fail and FDIC’s reserves continue to shrink, appears in the official budget numbers that the CBO sees.