News Release

Commission: * Deficit “Hysteria” * Medicare


Ferguson and Johnson, who are with the Roosevelt Institute, just wrote the in-depth paper “A World Upside Down? Deficit Fantasies in the Great Recession.”

Key points include: “The current hysteria over deficits in the U.S. is unjustified. Markets for even long term U.S. government debt are strong. … Claims that economic growth falls off at anywhere near current U.S. levels of debt to GDP are untrue. Neither is it the case that cutting deficits magically stimulates the economy. … Private oligopolies in health and defense spending, along with the possibility of another banking crisis, are the real threats to the deficit, not entitlements. … Social Security is in essentially no danger for decades and does not require any fix. It would be easy to stimulate the economy with a program of public investment that would substantially reduce public debts in the long run.”

Ferguson is senior fellow at the Roosevelt Institute, professor of political science at the University of Massachusetts, Boston and the author of Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems. Johnson is director of the Project on Global Finance at the Roosevelt Institute. He was chief economist of the U.S. Senate Banking Committee under Chairman William Proxmire.

Flowers is congressional fellow for the 18,000-member Physicians for a National Health Program; Almberg is the organization’s communications director. The group just released a statement titled “Deficit panel’s Rx is wrong medicine.”

Flowers said today: “Seniors and people with disabilities in the Medicare program already face substantial financial barriers to care in the form of existing co-payments and deductibles. For example, recent research shows the 25 percent of Medicare beneficiaries with the highest spending spend at least 30 percent of their income on health care.

“Raising these financial barriers still further with increased deductibles and co-insurance costs will result in seniors delaying or foregoing doctor visits and other needed care, while increasing the incidence of costly hospitalizations. Greater out-of-pocket expenses will also increase the economic hardship faced by their families.

“The real culprit for skyrocketing costs is our irrational, fragmented, market-based model of paying for health care, which chiefly benefits the private health insurance industry and Big Pharma, not patients or physicians. The commission co-chairs are silent on this matter.”

For more information, contact at the Institute for Public Accuracy:
Sam Husseini, (202) 347-0020; or David Zupan, (541) 484-9167