Update: Read Krugman’s column and blog today:

. . . the fundamental fact is that we can afford universal health insurance . . .

If you believe this New York Times story, the multi-millionaires who comprise the US Senate, people whose health care is covered with Platinum health plans for life, are pretending that the US doesn’t have enough money to provide quality universal health care.

This story is beyond insulting and should result in a surge in sales of pitchforks.

All but one of the Senators quoted here are Republicans who have no intention of providing universal care even if they believed it was affordable. What Sens. Grassley, Graham, Lugar, and McCain are doing, though, is playing a dishonest zero-sum game.

Their phony argument is that the US cannot afford to provide health insurance to all the uninsured without extracting diminishing health care for those who already have it, particularly those on Medicare and Medicaid. And the super-wealthy Diane Feinstein falls for the zero-sum ruse:

“I don’t know that he [Obama] has the votes right now,” said Dianne Feinstein of California, who joined Republicans in voicing reservations about the White House proposal. “I think there’s a lot of concern in the Democratic caucus.”

Ms. Feinstein, who appeared on CNN’s “State of the Union,” also said controlling the cost of a new health-care system, estimated to be at least $1 trillion, “is a very major and difficult subject.”

Ms. Feinstein has threatened to vote against Mr. Obama’s health care bill if it draws Medicare funds from high-cost areas like California to low-cost areas of the country. Ms. Feinstein noted that California’s population is greater than that of 21 states and the District of Columbia combined.

Also on Sunday, she suggested that the results of Mr. Obama’s efforts to repair the economy and overhaul the financial-regulatory system should be measured before taking on health care.

“What all of the impact of this is not yet known,” Ms. Feinstein said.

Thanks, DiFi. You just just got duped. So let’s recall the essential math:

First, the CBO financial scoring of the HELP and Finance Committee proposals, which frightened the Senate when it came up with $1-1.6 trillion in federal budget impacts, did not include the key measures to reduce costs — a public health plan to compete against the more expensive and uncompetitive private plans or the cost-containment effects of a vigorous federal oversight entity. So until now, no relevant CBO analysis has been done on these plans.

In contrast, CBO has done relevant analysis on other plans, which are getting very little attention, showing that the US can both cover everyone and do so in ways that are either budget neutral or actually lower total outlays. In other words, the Republican story is another lie. Who could have predicted?

Second, Senator McCain, who never misses an opportunity to confuse and demogogue an issue for political gain, is pulling numbers out of his arse when he claims expaned coverage would cost $3 trillion; there is no basis for this number. None.

Third and most important, the Republicans have duped the Senate and apparently the New York Times into believing this is a zero-sum game. They’re pretending that if you expand coverage, you increase costs and so have to take it out of someone else’s benefits. Wrong.

The issue facing the nation is not just the impact on the federal budget; it’s the total effect of health care costs across the economy. "It’s the economy, stupid," not the budget.

If we can reduce the nation’s total health care costs, it’s not a problem if part of the payments for the system cycle through federal taxes and federal payments for the public components of the total system. What matters is the total national bill and how the government collects revenues for its piece. So if the total cost of health care drops from (e.g.) 15 percent of GDP to 10 percent of GDP, but the federal budget piece of that goes up but is paid for in taxes, the country comes out way ahead. Plus we get universal care and better care.

There is strong empirical evidence — multiple examples — showing we can cover everyone, lower the nation’s total costs and costs per capita and maintain or improve the quality of care. We know this because every other country that has solved the problem of universal care did so at a cost only one half to two-thirds of what Americans now pay for both equal or inferior care while falling well short of universal care. But Americans insist on being chumps, and it’s partly because of the stupid scare games the Republicans are playing.

Our wealthy Senators are looking for money in all the wrong places, frightening the gullible like DiFi that the only way to expand coverage is to steal money from California’s Medicare benefits. That false framing will induce other gullibles to vote against expanding coverage and lowering total costs. Wrong.

Get a clue, Congress: "It’s the economy, stupid."

More:
Paul Krugman — the basic argument for health reform
Brad DeLong adds to Krugman’s point:

When an economist thinks about American health care, he or she begins with what we give up and what we get: we give up $1 trillion dollars in real resources a year relative to other countries, and we get… what?… not much.

Crooks and Liars, Lindsey Graham on This Week on why the public shouldn’t have the public health system he’s used most of his life