Straight Talk about the Federal Budget

Ezra Klein summarizes a little book by David Leonhardt titled Here's the Deal. Here are the two bits of this summary that I think are most important:

Eventually, the country will have to confront the deficit we have, rather than the deficit we imagine. The one we imagine is a deficit caused by waste, fraud, abuse, foreign aid, oil-industry subsidies and vague out-of-control spending. The one we have is caused by the world’s highest health costs (by far), the world’s largest military (by far), a Social Security program built when most people died by age 70—and, to pay for it all, the lowest tax rates in decades. . . .

Patients and doctors alike gravitate toward the latest, most expensive treatment, regardless of whether it is the most effective. Common treatments for prostate cancer, for example, range from about $25,000 to more than $100,000. “No therapy has been shown superior to another,” an analysis by the RAND Corporation concluded. But which therapies are growing the most rapidly? The most expensive ones, like proton radiation therapy. . . . The choice isn’t between rationing and not rationing. It’s between rationing well and rationing badly. Given that the United States devotes far more of its economy to health care than other rich countries and doesn’t get better results, it’s hard to argue that we are now rationing very rationally.

We can get serious about balancing the budget without either huge tax increases or radical cuts. But we must make a radical change in how we allocate our health spending. If we want a balanced budget without extremely high taxes, we must stop spending three times as much for therapies that work 1 percent better. Americans are horrified by the notion that we would deny anybody care that might have any chance of helping him or her, but that is very, very expensive, and since I don't think we are willing to pay that bill, we have to stop spending that money.