If overall premiums increase quickly the subsidies increase, if the people tell Congress to subsidize more stuff the subsidies increase. In either case government spending would have to go up. If overall premiums stay flat, or increase at a reasonable rate, and the people don’t demand more subsidies government spending stay pretty much the same.

The public option is irrelevant to what the government decides to subsidize. If it turns out to be less efficient than the private plans it won’t get any customers, and its inefficiencies will be trivial in terms of overall costs. OTOH if it is more efficient than private companies it will keep costs down by providing increased competition.

This is a spectacularly stupid way to govern.

I’d like to point out that the reason we have a Republic and not a Democracy is, in fact, to deal with this precise problem. The Founders were not morons. They had this vague notion that people would like to have their cake and eat it too. Which is why they set up a system where we don’t put the budget up for a vote. We elect Representatives who are supposed to govern within the bounds of reality.

Sadly, we now have an entire political party that’s devoted to the notion that wars are free, that drives up spending while cutting tax rates, and that argues for trickle-down economics and the laffer curve. Where every president from that party has driven us ever-deeper into debt simply to gain political favor. This is when they’re not too busy going to tea parties. The elites in the Republican party have done what the Founders never expected a large group of elites to do: abdicated their responsibility to govern in a reality-based way.

If you’re mad at fiscal profligacy, blame the Republicans. George Bush’s “health reform” will cost $1 Trillion over the next 10 years. Not a nickel of it is paid for.