The Purple Health Plan

Dear Fellow Economists and Other Concerned Citizens,

As you know, our healthcare system remains deeply troubled. It leaves one in six Americans uninsured, and its costs threaten our nation's solvency.

The new health exchanges, meant to expand coverage, are being challenged in the courts and may not be funded, in part because of concern about their ultimate price tag. And we have no reliable mechanism to contain the exploding explicit and implicit fiscal costs of Medicare, Medicaid, and employer-based healthcare.

We are at a crossroads. Based on the Congressional Budget Office's long-term forecast of June 22, 2011, our nation's fiscal gap - the difference measured in the present (the present value) of all future projected spending, including servicing the existing debt, and all future taxes is $211 trillion. The fiscal gap represents, in effect, the nation's credit card bill. Unfortunately, we're not even paying interest on this liability, which, in large part, is why it grew by $6 trillion last year.

The government's projected future healthcare expenditures is the primary reason for the fiscal debacle we're facing. Neither piecemeal reform nor maintenance of the status quo will suffice to reign in exploding government healthcare costs or ensure adequate basic insurance coverage for the entire population. Economists and other concerned citizens can play a pivotal role in providing our political leaders with a set of principles to guide fundamental healthcare reform as well as a specific plan to fix our healthcare system from the ground up.

To that end, I seek your endorsement of The Purple Health Plan, where "Purple" reflects the belief that both sides of the political aisle can agree to this plan. The plan would reduce our fiscal gap by roughly $130 trillion and make an enormous contribution to the wellbeing of our children who will otherwise face exorbitant taxes to cover our healthcare costs.

Please join me and other signatories, including economics Nobel Laureates, George Akerlof, Edmund Phelps, Thomas Schelling, William Sharpe, and Vernon Smith, in endorsing this plan by clicking the Show Your Support tab. Also, please send the url ( to other economists and concerned citizens you know.

Sincerely yours,

Laurence J. Kotlikoff
Professor of Economics, Boston University

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