Honest Medicare Budgeting in Health Care Reform

J.D. Foster / December 07, 2009

The health care reform wallowing through Congress includes a ploy reminiscent of the “liar loans” prominent during the recent real estate bubble before its collapse. The bill cuts imaginary Medicare spending and uses the funds for real spending elsewhere. Senator Judd Gregg (R-NH) has blown the whistle on this charade. Health care reformers are not amused.

“Liar loans” describe so-called no documentation mortgage loans used to finance home purchases in the worst of the real estate bubble. In qualifying for loans, borrowers were on their honor not to misstate their income, liabilities, and assets. Many proved dishonorable, claiming income they didn’t earn. Few of the homes purchases with these loans escaped foreclosure. (more…)