I’ve frequently criticized Paul Krugman for not extending his facility with economic analysis to politics, but Steven Landsburg criticizes him for not extending his facility with economic analysis to…economic analysis.
The House plan [to replace medicate with vouchers] assumes that we can cut health-care spending as a percentage of G.D.P. despite an aging population and rising health care costs.
The only way that can happen is if those vouchers are worth much less than the cost of health insurance.
And here’s Landsburg:
Well, this is just plain illiterate. In fact, the only way that can happen is if the voucher system affects people’s health care choices. Which is, you know, the whole point.
How about that? A Nobel Prize winning economist who doesn’t understand marginalism. Is that what happens when you spend too much time focusing on macroeconomics?