It’s hard to even pack all of the falsehoods in Niall Ferguson’s Newsweek cover story into one post, so I’ll have to outsource some of this.
First of all, the thing to know is that Niall Ferguson is always wrong about economics. I mean with remarkable consistency. He has been spooked by imminent hyperinflation fears for four years, despite all evidence to the contrary. He still believes that half of all Americans pay no taxes, because only federal income taxes count, I guess. And he continues to believe that Paul Ryan represents a serious figure willing to get tough on the federal budget, which also happens to be wrong. I could also add the part where Ferguson blames Obama for increasing the deficit and then blames him for failing to tackle the fiscal cliff, on the grounds that it would reduce the deficit, but Noah Smith has you covered there.
But the most egregious problem with Ferguson’s article is what Paul Krugman unearthed. Ferguson writes:
The president pledged that health-care reform would not add a cent to the deficit. But the CBO and the Joint Committee on Taxation now estimate that the insurance-coverage provisions of the ACA will have a net cost of close to $1.2 trillion over the 2012–22 period.
See what he did there? Ferguson looks at only the spending side of the ACA and concludes that it raised the deficit, erasing the revenue-raising side out of existence. He’s basically saying that the subsidies in the Affordable Care Act will cost money. This is his entire argument. Krugman responds:
We’re not talking about ideology or even economic analysis here — just a plain misrepresentation of the facts, with an august publication letting itself be used to misinform readers. The Times would require an abject correction if something like that slipped through. Will Newsweek?
Ferguson’s rebuttal is even stupider:
I very deliberately said “the insurance coverage provisions of the ACA,” not “the ACA.” There is a big difference.
Krugman suggests that I haven’t read the CBO’s March 2010 report. Sorry, I have, and here is what it says:
“The provisions related to health insurance coverage—which affect both outlays and revenues—were projected to have a net cost of $1,042 billion over the 2012–2021 period; that amount represents a gross cost to the federal government of $1,390 billion, offset in part by $349 billion in receipts and savings (primarily revenues from penalties and other sources).”
But thanks for trying, Paul….
This is just a restatement of Krugman’s point. None of that takes into account the non-insurance coverage provisions of the ACA, aka the revenue-raising provisions. The $716 billion in “Medicare cuts” that everyone’s tittering about is part of that; those are not calculated in this circumscribed piece that Ferguson is using as the basis of his claim.
I don’t really care whether Niall Ferguson or anyone else wants to support a particular candidate for President. I care about the lying employed to make that case. And it’s very clear that Ferguson repeatedly misrepresents the truth on these matters; he has tenure at Harvard and a big platform for his misrepresentations, and an agenda to cut social insurance spending besides. As Kevin Drum says, at least people are talking about it, right Tina Brown?