President Barack Obama will have to raise taxes if he wants to push through his healthcare reforms, says Nobel Laureate economist Joseph Stiglitz.
And that's not necessarily a bad thing — if tax increases take place down the road when economic recovery is more prevalent, he says.
“If we get a more balanced view of our balance sheet, we’ll realize that if we spend our money well then these great extra expenditures are going to actually make our economy more productive in the future,” Stiglitz told Yahoo! Finance.
Spending on technology, education and infrastructure “will generate revenues that will allow us in the future to pay back any borrowing or lower taxes.”
President Obama said during his campaign that he would not raise taxes to finance healthcare reform. Yet his leading economists, Treasury Secretary Tim Geithner and National Economic Council Director Larry Summers, recently hinted that tax hikes may be necessary.
Stiglitz says we're already paying for not reforming healthcare by helping the uninsured with their medical costs — for instance, when hospitals write-off indigent care but raise prices on paying patients with health coverage.
"Right now we’re often paying for it in hidden charges so it’s like a tax but it’s a hidden tax,” Stiglitz said.
Costly healthcare reform would come about as the government spends in an effort to kick-start life into the economy, a move that Geithner admitted would be difficult.
“We have to bring (deficits) down to a level where the amount we're borrowing from the world is stable at a reasonable level,” Geithner told ABC News.
“And that's going to require some very hard choices. And we're going to have to do that in a way that does not add unfairly to the burdens that the average American already faces.”
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