Tyler Cowen has a lengthy and well-reasoned post on the Baucus health care proposal:
1. CBO scoring is a very useful institution, for purposes of fiscal discipline, but you shouldn’t confuse it with true cost estimates. Often a negative CBO score isn’t as bad as it sounds and a positive CBO score isn’t as good as it sounds. The deadweight cost of taxation matters, and we should fear future government insolvency, but at the margin a revenue transfer is simply that — a revenue transfer and not a social cost per se.
2. The main benefit of the bill is greater financial security, vis-a-vis health care expenditures, for many U.S. households. This doesn’t show up as a benefit in standard estimates of gross revenue flows.
3. The bill will, over time, create a economic and political dynamic that turns health insurance companies into regulated public utilities. You might think this is good or bad, but its one of the most important changes.
4. I fear what else might end up jammed into the required insurance policy. The political dynamic here has not been thought through very well and this will be important for the long-run fiscal impact.
6. The Baucus bill, and some of its cousins, is a bit like cap and trade in the sense that it postpones a lot of the expenditure-cutting pain into the future. If Obama — a relatively popular President with a Democratic Congress — can’t do it now why should we think we will find fiscal discipline in the future? With revisions this problem is likely to become worse. The proposed pilot programs for cutting costs I view as postponements of tough decisions, not impressive starts on the problem which will be pursued scientifically.
Much much more there. Cowen tends to think rigorously about this (and most) issues, and I tend to trust his instincts.