Thursday, April 07, 2011

The Difference is the Direction

Ezra Klein seems to have missed the point about Paul Ryan's plan for Medicare.

Klein's WaPo interview with some-time Ryan collaborator Alice Rivlin, who does not support the "Path to Prosperity" plan:
EK: Speaking of the Affordable Care Act, you’ve said before that the theory behind the exchanges in Ryan-Rivlin and the theory behind the exchanges in the Affordable Care Act are identical. That would mean Republicans who believe in Ryan’s model should be more optimistic about the Affordable Care Act. But Ryan has said the two of you simply disagree on how to build the exchanges. Can you explain to me the disagreement you have that would make Ryan-Rivlin different from the ACA?

AR: No. I can’t. I think he’s sort of backed himself into an intellectual corner here.

EK: When you would talk to him, did he seem to recognize that?

AR: Yes.

Sure, they're very similar.  The difference is the direction in which they are moving.

Medicare is currently a massively expensive single-payer plan with minimal market restraints. To attempt to save any money under the current Medicare system is necessarily an exercise in command-and-control planning.  The Ryan plan moves slightly away from that, and attempts to cap overall premium supports and let market participants figure out what to do with that money.

Obamacare goes in the opposite direction, moving from a system with significant (if insufficient) market-based checks, towards a system with more central control and higher levels of taxation and spending.

The lack of any frame of reference seems like an act of willful obfuscation. It would be like saying that one will experience hot weather when moving to Virginia.  Well, yes, it's hotter than Maine, but cooler than Texas.  

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