By Robert J. Samuelson, Published: July 28
If leadership is the capacity to take people where they need to go — whether or not they realize it or want it — then we’ve had almost no leadership in these weeks of frustrating and maddening debate over the budget and debt ceiling. There’s been an unspoken consensus among President Obama, congressional Democrats and Republicans not to discuss the central issue underlying the standoff. We’ve heard lots about “compromise” or its absence. We’ve had dueling budgets with differing mixes of spending cuts and tax increases. But we’ve heard almost nothing of the main problem that makes the budget so intractable.
It’s the elderly, stupid.
By now, it’s obvious that we need to rewrite the social contract that, over the past half-century, has transformed the federal government’s main task into transferring income from workers to retirees. In 1960, national defense was the government’s main job; it cons uted 52 percent of federal outlays. In 2011 — even with two wars — it is 20 percent and falling. Meanwhile, Social Security, Medicare, Medicaid and other retiree programs cons ute roughly half of non-interest federal spending.
These transfers have become so huge that, unless checked, they will sabotage America’s future. The facts are known: By 2035, the 65-and-over population will nearly double, and health costs remain uncontrolled; the combination automatically expands federal spending (as a share of the economy) by about one-third from 2005 levels. This tidal wave of spending means one or all of the following: (a) much higher taxes; (b) the gutting of other government services, from the Weather Service to medical research; (c) a partial and dangerous disarmament; (d) large and unstable deficits.
Older Americans do not intend to ruin America, but as a group, that’s what they’re about. On average, the federal government supports each American 65 and over by about $26,000 a year (about $14,000 through Social Security, $12,000 through Medicare). At 65, the average American will live almost 20 more years. Should these sizable annual subsidies begin later and be less for some? It’s hard to discuss the budget realistically if you ignore most of what the budget does.
That’s been our course. Obama poses as one brave guy for even broaching “en lement reform” with fellow Democrats. What he hasn’t done is to ask — in language that is clear and comprehensible to ordinary people — whether many healthy, reasonably well-off seniors deserve all the subsidies they receive. That would be leadership. Obama is having none of it. But the shunning is bipartisan. Tea Party advocates broadly deplore government spending without acknowledging that most of it goes for popular Social Security and Medicare.
I have written about these issues for years. But facts are no match for the self-interest of about 50 million Social Security and Medicare recipients and a natural sympathy for older people and for people who eagerly look forward to retirement. Public opinion becomes contradictory. While 70 percent of respondents in a Pew Research Center poll judged budget deficits a “major problem,” 64 percent rejected higher Medicare premiums and 58 percent opposed gradual increases in Social Security’s retirement age.
What sustains these contradictions is a mythology holding that, once people hit 65, most become poor. This justifies political dogma among Democrats that resists Social Security or Medicare cuts of even one dollar.
But the premise is wrong. True, some elderly live hand-to-mouth; many more are comfortable, and some are wealthy. The Kaiser Family Foundation reports the following for Medicare beneficiaries in 2010: 25 percent had savings and retirement accounts averaging $207,000 or more; among homeowners (four-fifths of those 65 and older), three-quarters had equity in their houses averaging $132,000; about 25 percent had incomes exceeding $47,000 (that’s for individuals, and couples would be higher).
The essential budget question is how much we allow federal spending on the elderly to crowd out other national priorities. All else is subordinate. Yet, our “leaders” don’t debate this question with candor or intelligence. We have a generation of politicians cowed and controlled by AARP. We need to ask how much today’s programs cons ute a genuine “safety net” to protect the vulnerable (which is good) and how much they simply subsidize retirees’ private pleasures.
Our politicians make perfunctory bows to en lement reform and consider that they’ve discharged their duty, even if nothing changes. We need to recognize that federal retiree programs often represent middle-class welfare. Past taxes were never “saved” to pay future benefits. We need to ask the hard questions: Who deserves help and who doesn’t? Because Social Security and Medicare are so intertwined in our social fabric, changing them could never be easy. But the fact that we’ve evaded the choices for so long is why the present budget impasse has been so tortuous and why, if we continue our avoidance, there will be others.
http://www.washingtonpost.com/opinio...tfI_print.html
Samuelson's shilling for the wealthy.
Put corporate, capital, income tax rates back to 1980, and everything's fixed.
It's not the elderly. It the VRWC predations on the lower 95% and resulting widespread stagnation of incomes while the top percentiles explode with wealth.
This guy sounds like he's on the right track:
http://www.huffingtonpost.com/jared-...comm_ref=false
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With widespread stagnation of household incomes, there is also a widespread reduction in payroll taxes. duh!
interesting that you post this. 2 years ago, I made this thread:
http://www.spurstalk.com/forums/showthread.php?t=133917
I think I will bump it
Looks to me like Samuelson is shilling for en lement reform.
But thanks for the vrwc non-sequitur.
God damn you libs are stupid. Take 100% of the millionaires and billionaires wealth and it's STILL won't be enough. Stop with this nonsense already.
It's a bot's life.....
Samuelson doesn't touch the explosion in sick-care costs as the avaricious docs, Big Pharma, for-profit (not for-sick-care) insurers suck the blood out of the country.
Samuelson's solution? He doesn't mention reducing the sucking, he wants to reduce sick-care for the elderly, disabled, poor. Typical wealthy elitist ing over the lower 95%.
If you really want to know how we got here, what's being going for decades, and what will continue to up the country, there are many articles like this one:
How the Rich Won the Class War
http://consortiumnews.com/2011/07/29...the-class-war/
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THE ELDERLY? G M A B F F B
This article misses the point in a few areas:
1) The only person I've heard during these negotiations mentioning SS and Medicare reform was actually Obama (surprisingly enough)
2) It's not just the Dems that don't want to reform those areas. The GOP when it had full control of the government, not only didn't reform, but substantially expanded it (i.e.: Medicare part D)
3) The elderly didn't vote this SS system in, nor the unfunded expansion of Medicare, etc.
4) The elderly actually paid IN the system with the promise they'll have the money when they retire. It's not them that raided that money.
Bottom line is that we're here because we have a de able political class on both sides of the aisle.
He has a point in that not long ago, with a little higher taxes, we had a balanced budget, which isn't the entire solution, but the very first step you have to have to start recovering from this mess.
There is an even easier way to fix our problem.
Import more workers. Throw open the doors to immigration, and put a massive effort into streamlining the process.
1) It would take away the demand for "illegal" immigrants, and the demand for people to get here illegally if you decrminalize it.
2) We can easily import all the educated people that other countries produce.
Bam. Problem solved. We can have an instant worker boom any time we want to.
You do understand the difference between "wealth" and "income" yes?
This particular talking point has already been shown to be disengenuous.
start at about 2:30
People should be taxed for watching YouTube at work.
Crisis solved.
That's all you've got? I'm at home btw.
All I need.I'm at home btw.You never admit when you are at work. Why should anyone believe you now?
I'm at work, AND at home.
I'd like to do that, eventually. Kids are a major distraction though.
When Samuelson starts talking about the explosion of medical/insurance prices over the past 20-30 years, like +7% per year in the 2000s, I might listen, but probably not.
sick-care costs have been gratuitously hiked out of range of most of Human-Americans. Insurance averages roughly $15K/year for family of 4, and estimates say over $20K in a couple years.
And it's all "tax free" for the employer and for the employee, a huge tax expenditure, like the mortgage deduction.
Last edited by boutons_deux; 07-30-2011 at 10:10 AM.
As someone who did it for 5 years - its not all its cracked up to be. At all.
Sure. And then cowboy came over, and decided to use it for more welfare instead of paying down debt.
New Health Expenditures Report Shows That Health Reform Was A Good Deal
In 2014, when the major coverage expansions of the health law begin to take effect, national health spending is expected to grow 8.3 percent, according to the new analysis. But spending growth should return to its 6 percent historical average from 2015 to 2020 as some employers drop coverage and the so called “Cadillac tax” on high-cost insurance plans takes effect in 2018. “The effect is likely to be a slowdown in the growth of health services, health insurance premiums and health spending overall,” the study said.
CMS is saying that the law expands coverage to 30 million Americans while increasing the average annual growth in national health spending by just 0.1 percentage points over 10 years and predicts that expenditures will fall as cost-controls like the excise tax decelerate health care spending over the long haul. That’s a good deal that establishes a more sustainable and stable health care system, and it will likely only improve as provisions like the Independent Payment Advisory Board (IPAB) kick into higher gear. The report also found that in 2014, “out-of-pocket spending is projected to decline 1.3 percent, largely as a result of the uninsured attaining health coverage through Medicaid or health insurance exchange plans.”
http://thinkprogress.org/health/2011...s-a-good-deal/
Just imagine what a hard-core universal public insurance option would do, collected as payroll tax.
Also, unless BigPharma can screw us again (they probably will, it's what they do best), some blockbuster patent drugs are coming off patent in the next 2 years.
Until one of those instant workers does something bad like bomb someplace, and then we'll slam the doors real quick.
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