Krugman: Death Panels, VAT Will Fix Debt Crisis
http://www.newsmax.com/InsideCover/krugman-death-panels-vat/2010/11/14/id/377008?s=al&promo_code=B1AB-1
Economist and New York Times columnist Paul Krugman says the only way the U.S. will get its debt crisis under control is by the use of "deathpanels" and a national sales tax.
The national sales tax, referred to as VAT (value-added tax) and widelyused by governments across Europe, will help cut the U.S deficit,Krugman argues.
Krugman made his comments on ABC's “This Week with Christiane Amanpour” during a roundtable discussion about the economy and the recent findings of the U.S. Debt Reduction Commission.
Here's the key excerpt:
"Some years down the pike, we're going to get the real solution, whichis going to be a combination of death panels and sales taxes. It's goingto be that we're actually going to take Medicare under control, andwe're going to have to get some additional revenue, probably from a VAT.But it's not going to happen now."
The Obama healthcare plan passed by Congress in 2010 includes government-run healthcare committees with sweeping powers, including thepower to engage in competitive pricing and cost analysis, a system usedby Britain that has led to rationing of medical care for the elderly.
Critics of the Obama plan, including former Alaska Gov. Sarah Palin,quickly dubbed the committees "death panels," saying government agencieswould decide who would live and who would die. Supporters of the Obamahealth plan dismissed such suggestions as nonsense.
Krugman apparently thinks otherwise, and suggests that such death panelscould be one way the federal government will be able to deal withsoaring medical costs under control as the Baby Boomers enterretirement.
He continued: "If they [the Debt Commission] were going to do realitytherapy, they should have said, ‘OK, look, Medicare is going to have todecide what it's going to pay for. And at least for starters, it's goingto have to decide which medical procedures are not effective at all andshould not be paid for at all. In other words, it should have endorsedthe panel that was part of the healthcare reform.’"
Krugman also criticized Republican plans to fully extend the Bush tax cuts, including those who make more than $250,000 a year.
He said: "The cost of permanently extending just the upper-end Bush taxcuts, as opposed to only extending the middle-class tax cuts, the75-year cost of that is just about identical to the 75-year accountingshortfall in Social Security. So we've got people who are saying, ‘Oh,Social Security, got to do something about it, but let's extend thosetax cuts for rich people. This is showing how the priorities are allskewed.’”
Apparently realizing his comments were inflammatory, Krugman took to his blog Sunday afternoon to immediately “clarify” his comments.
“I said something deliberately provocative on This Week, so I think I’dbetter clarify what I meant, which I did on the show, but it can’t hurtto say it again,” he wrote. “So, what I said is that the eventualresolution of the deficit problem both will and should rely on “deathpanels and sales taxes”.
“What I meant is that:
"(a) health care costs will have to be controlled, which will surelyrequire having Medicare and Medicaid decide what they’re willing to payfor — not really death panels, of course, but consideration of medicaleffectiveness and, at some point, how much we’re willing to spend forextreme care
"(b) we’ll need more revenue — several percent of GDP — which might most plausibly come from a value-added tax
And if we do those two things, we’re most of the way toward a sustainable budget.
He then provided a link to a June 20th column in which he also described“death panels,” but only in passing and in a mocking way. The column isactually about budget deficits.
What he doesn't say is that he has written at least half a dozen columnsrepeatedly referring to death panels the last year in an ongoing effortto malign Palin and other conservatives.
Krugman also conceded his solution may be “politically impossible.” But,he added, “I believe that some day — maybe in the first Chelsea Clintonadministration — it will actually happen.”
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