Paul Krugman Spins Bush's Health Care Proposal

The National Center for Public Policy Research's health policy analyst, David Hogberg, is impressed by Paul Krugman -- by Krugman's mastery of spin, that is.

Here's David's look at the way Krugman is covering some of President Bush's recent statements on health care reform:

I have to admire Paul Krugman's ability to deceive with spin. He is a master at it. This passage from his last column is a quintessential example:
Mr. Bush is also proposing a tax increase ... on workers who, he thinks, have too much health insurance. The tax code, he said, "unwisely encourages workers to choose overly expensive, gold-plated plans. The result is that insurance premiums rise, and many Americans cannot afford the coverage they need."

Again, wow. No economic analysis I'm aware of says that when Peter chooses a good health plan, he raises Paul's premiums. [Italics mine].

Yes, it is true that research does not say that choosing a good health plan raises the premiums for others. However, the research does say that the current tax deduction for health insurance leads to over-consumption of health care. Martin Feldstein started this thinking with his 1973 paper, ""The Welfare Loss from Excess Health Insurance," and much subsequent research support it (go here (free registration req.) for a list of other articles).

It follows that if the tax deduction leads to the over-consumption of health care, then it causes the cost of health care to rise. And if the cost of health care rises, so must the cost of health insurance. So, Krugman's statement is technically true, as long as you don't draw the logical conclusion from the relevant research.

Wow. What mastery of spin!

Amy Ridenour
Amy Ridenour
Amy Ridenour is chairman of the National Center for Public Policy Research..