EDITOR OF REDSTATE
Liberals in Denial About Obamacare’s Impact on the Deficit
Liberals are in absolute denial about what Obamacare will do to the deficit. More troubling, many of the liberals who attack conservatives for ignoring facts are having to ignore facts to get there.The General Accounting Office has released a report showing just how devastating Obamacare will be to the deficit. Instead of looking at the fact, liberals, like Jonathan Chait, have closed their eyes, refused to actually read the report, and attack the GAO.Ben Domenech has actually read the report Much of what liberals are saying to dismiss the GAO’s report has no relation to what the GAO actually said.The fact is, Obamacare will explode the deficit.
Carroll and Chait are essentially arguing you can take a lot more revenue out of the American economy in the age of Obamacare than you have historically. After year ten, GAO always assumes the same thing: a forty year historical average of revenues. They do this for a reason that has nothing to do with partisanship: over the long term, the tax system has yielded about 19% of GDP (see Hauser’s law). This doesn’t mean there are no fluctuations – revenue is higher when income growth is higher and lower when income growth is lower, as well as higher and lower in the immediate aftermath of a policy change. But things even out over time. (Note: Jon Chait has previously rejected that fact as a “scam”.) And this brings us back to the central question: why would Obamacare increase the revenue yield over the long run when no other single piece of legislation has accomplished that? Or is it that Chait is assuming the inevitability of a new, more European tax system outside of typical scoring norms? How would the GAO model that, exactly? The problem is that it is Chait and Carroll, not Sessions, who want GAO to ignore historical norms, ignore the conclusions of the actuary and the CBO, and invent an alternate assumption which is closer to what they predict will happen.