I frequently hear and read remarks that we cannot afford the expensive Health Care Reform bill.

I find this argument incomprehensible when faced with the fact that the bill will cut the deficit over its first 10 years.  The cut in deficit will be even greater in the ensuing ten years and beyond.  How can we not afford to do something that will save us money?

I think one problem is the way the money is discussed by the media and the pundits, and even by proponents of the legislation.

You will see articles about the fact that the bill will cost $788 billion in its first ten years.  This seems unaffordable.  Then you read that the deficit will be cut by $143 billion over the time period.  These numbers come from the Congressional Budget Office report H.R. 4872, Reconciliation Act of 2010 (Final Health Care Legislation).

If you look at those numbers without thinking too much, you might think something like the cost of $788 billion dwarfs the savings of $143 billion.  Think a little more and you will realize that $143 billion is not the amount saved, but it is the difference between the amount saved and the cost.

The amount saved by the bill must be $931 billion. Spending $788 billion on something that saves $931 billion leaves you a net savings (spending reduction) of the $143 billion labeled as a deficit reduction.

The headlines should be

Health Care Reform Saves $931 billion

In the article under that headline it could say taking costs into account the net savings is $143 billion.