Last month, when congress was busy telling us that the Health care bill would only cost us $848 billion and reduce the deficit by $130 billion, i was a little confused by how that would work. I sent an email to an economics professor and this is his reply:

"What this means is that they are going to spend $848 billion dollars more than they currently do, but tax us an additional $978 billion dollars to do so (taxes on the wealthy, taxes on cosmetic surgery, taxes on generous insurance plans, and fines on employers or employees who don't offer or don't buy insurance). Doesn't sound as great when expressed in those terms, huh?
It gets worse. This calculation is only over ten years. As it turns out, the taxes kick in immediately, but the expenses (i.e. great new health care plans!) don't start for three more years. That gives revenue a head start. In the last 5 years, the plans don't raise enough taxes on a yearly basis to pay for the yearly additional expenses.
Or in other words, we get 5 years of "deficit reduction" followed by an eternity of deficit increases. It just turns out that the first 5 years of positives are just enough to compensate for the NEXT five years of losses.
The honest calculation would be to take the present value of all future taxes compared to the present value of all future expenses, but that will certainly come out as a net deficit.
One final twist of brilliance. I looked at the Congressional Budget Office report on the Baccus Bill, and a lot of the "savings" comes for changes in social security payments/receipts. In other words, they are predicting that people will work longer and collect benefits later because of these health plans (gotta work to avoid the public option?). That savings accounts for all of the $130 billion."

I can't help but wonder what we are getting ourselves into. . .