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Obama’s Challenge Author Robert Kuttner on Deficit Hawks and Entitlements

With the budget deficit rising as the economic stimulus takes effect, deficit hawks—both the Republican and “Blue-Dog” Democrat varieties—are rolling out perennial target Social Security again. Robert Kuttner, co-founder of The American Prospect and author of Obama’s Challenge: America’s Economic Crisis and The Power of a Transformative Presidency, looks at the flaws in their argument against one of the most successful federal program in history in this article from the Washington Post.

What’s wrong with the story of entitlements wrecking the economy? Plenty.

For starters, the $56 trillion “unfunded liability” figure relies on creative accounting. Only about $6.36 trillion is the actual public debt, according to the U.S. Treasury. Most of the number Peterson cites is a combination of the 75-year worst-case projections for Social Security, Medicare and Medicaid.

These three programs face very different challenges and remedies. Social Security’s accounts are actually near long-term balance. The Congressional Budget Office puts the 75-year shortfall at only about one-third of 1 percent of projected gross domestic product.

Social Security is financed by taxes on wages — and since the mid-1970s, wage growth has stagnated. If median wages rose with productivity growth, as they did during the first three decades after World War II, Social Security would enjoy a big surplus. Even without a raise for working America, Social Security needs only minor adjustments.

Medicare really does face big deficits. But that’s because Medicare is part of a hugely inefficient, fragmented health insurance system. It makes no sense to “reform” Medicare in isolation.

If we just cap Medicare, needy seniors would get bare-bones care while more affluent people could supplement their insurance out of pocket. The decent cure for Medicare’s cost inflation lies in comprehensive universal health insurance so that the entire system is more efficient and less prone to inflation. You don’t hear many budget hawks supporting that brand of reform.

Read the whole article here.

Image courtesy of guardian.co.uk.


The Future Is Hopeless, So Give it Your All

The never-ending national election in the United States, the “surprise” pro-Brexit vote in the United Kingdom, climate change … the list goes on and on about how easy it can be to lose hope in the future.Like many of life’s frustrations, or overwhelmingly large topics, most people in our society find themselves somewhere on the […] Read More

How Carbon Farming Can Save the Planet

Carbon farming alone is not enough to avoid catastrophic climate change, but coupled with new economic priorities, a massive switch to clean energy, and big changes to much of the rest of the way our societies work, it offers a pathway out of destruction and a route to hope.Along the way carbon farming can also […] Read More

Look Under Your Feet for Global Soil-utions

For several years, Chelsea Green has been publishing books that look under our feet for solutions to some of the most vexing problems facing the planet – hunger, drought, degraded farmland and grasslands, damaged waterways, and much more. Those books focus on (mostly) one thing: Soil.  In 2016, we’ve published two more important books that […] Read More

Climate Change & the End of Stationarity

Just as predicting the rise of Donald Trump as a leading presidential candidate stumped even the best of political analysts (looking at you Nate “FiveThirtyEight” Silver), the advent of the Sixth Great Extinction due to climate change and an increasingly potent mix of carbon dioxide in the atmosphere has completely upended how we predict the […] Read More

Use Simple Games to Better Understand Climate Change

How is it that emissions keep growing despite rising concern about the climate change they cause? It is possible to identify several reasons for the paradox, most of which lie outside the scope of The Climate Change Playbook. But one important reason is relevant here: people do not understand the behaviors of the climate system.And […] Read More
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