Martin Feldstein on Obama

In the Wall Street Journal.

It’s interesting that he attacks the stimulus package from the left (too little government spending and too many tax cuts).   As a former economic adviser for Ronald Reagan, I can’t help but think that these views, if expressed a year ago, could have done tremendous good right about the time that Republicans were deciding that fiscal stimulus didn’t work anymore.  Instead, Feldstein, like many other center-right economists, was silent.  As for the rest of the article,  ever since an error riddled column for Project Syndicate a couple of months ago, I don’t really trust Feldstein on health care.  That being said, it’s interesting to compare what he says about the effects of health care reform with something Megan McArdle wrote earlier.

Feldstein

Because the new health law would require insurance companies to ignore pre-existing medical conditions, millions of middle-income individuals would have a strong incentive to drop their current coverage, pay a small fine for being uninsured and buy insurance only when they need expensive care.

McArdle:

Raise the Medicare tax by half a percentage point, and eliminate the tax-deductibiity of health insurance benefits for people making more than $150K a year in household income, $100K for singles.  Then make the federal government the insurer of last resort.  Any medical expenses more than 15% or 20% of household income, get picked up by Uncle Sam.

Ok, so the effects Feldstein predicts isn’t really the same as what McArdle wants, but they’re a little more similar than you might first think.

-Meusebach

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