Obama’s health care plan faces rising cost estimates and declining support.
Public anxiety about red ink — muted during this winter’s debate over an economic stimulus package — has come roaring back, with a Gallup Poll showing deficits and spending as the only issues where more people disapprove of Obama’s performance than approve of it.
Megan McArdle asks, Is Comprehensive Health Care Reform Dead?
But two things are also clear: the Democrats overestimated the boost they’d get from both the crisis and Obama’s popularity. And they dissipated a hell of a lot of the money and political capital they’d now like to spend on the stimulus and the GM bailout. They got very carried away with visions of 1932.
But this is not 1932, and Obama is not FDR. FDR came into office with 20+% unemployment and a banking crisis that was wiping out peoples’ life savings every day. FDR also came into office with a trivial national debt, and a Federal government that consumed less than 4% of GDP. He had a lot of run room.
Tyler Cowne asks, Is the revolution over?:
I’d just like to repeat a simple question I asked at the beginning of the Obama administration: which would you rather have, the fiscal stimulus or $775 billion in public health programs? Even better, how about $300 billion in stimulus — the immediate stuff like aid to state governments — and $475 billion in public health programs?
And I don’t mean this post as a poke at Democrats in particular. Conservatives, libertarians, etc. all commit their own versions of this error, at least if they find their way to power. The basic mechanism is simply that policy advocates underestimate the opportunity costs of the measures they propose, as they tend to see those measures as more “win-win” than others are willing to believe.