…people paid for their Social Security and Medicare benefits. Social Security is a pension and insurance system run through the government. The elderly are entitled to these benefits in the same way that rich bondholders are entitled to millions of dollars of interest payments on their bonds. They paid for them.
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People should also be aware that politicians are true masters of evasion on these questions. A response like, “I support Social Security and Medicare,” should be taken to mean that they are prepared to support cuts for these programs. All of the people running for office are smart enough to know how to say that they oppose the cuts being put on the table, and they undoubtedly would say that they oppose the cuts, if it is true.
Similarly, a statement like, “I oppose the privatization of Social Security and Medicare” should also be taken to mean that they are prepared to support cuts to these programs. Again, they are not being asked about privatization, it’s not immediately on the table, why would they give an answer about privatization except to avoid admitting their support for cuts?
Another great article by Dean Baker.
The 2013 Social Security and Medicare Trustees reports will be released tomorrow. There is much discussion in policy circles of how the cost of these programs is projected to rise over the next three decades due to both the retirement of the baby boom cohorts and the increased cost of health care, which is the main factor behind the projected increase in Medicare costs. These projected cost increases have frequently been presented as implying a disastrous scenario for today’s young. In today’s edition, economist Dean Baker of the Center for Economic and Policy Research examines how the cost of these programs is likely to affect the financial well-being of our children and grandchildren:
Disaster stories about rising Social Security and Medicare costs ignore the fact that the tax increases projected over the next three decades are not very different than the tax increases that we have actually seen since 1980. Furthermore, the far more important factor in determining the well-being of our children and grandchildren is the extent to which their before tax wages increase in the decades ahead.
One of the most compelling lines put forward by those seeking cuts in Social Security and Medicare is that spending on the elderly is coming at the expense of our children. The people putting forward this argument typically point to the high percentage of children living near or below the poverty line. The argument is that if we could cut money for programs that primarily serve the elderly then we would free up money that could be spent to ensure that the young get a decent start on life.
When Senator Elizabeth Warren came out for increasing Social Security last month it set in motion a remarkable turn of events. For over a decade the only discussion of Social Security by the Washington power types was over how much to cut it and when. The extreme left position was that current spending was about right.
Yes, what else is new? The immediate topic is Gene Steuerle’s new book, Dead Men Ruling (reviewed here). The basic story, taken from the book, is that commitments made in the past, specifically Social Security, Medicare, Medicaid and interest on the debt, are taking up an ever larger share of the budget. This means that in the decades ahead people will have little say in how their tax dollars are spent, since they have already been committed by prior generations of “dead men.”
This is a classic case of the ends justifying the means. The end here is to cut the Social Security and Medicare benefits of middle income retirees. The Post sees this as the obvious policy option to pursue in a context where there has been a massive upward redistribution of income over the last four decades. And if they have to use a bit of deception to get there, well that’s okay.
via CEPR.
Further Reading:
Nope, I’m not kidding. We’ve seen a sharp slowdown in health care costs across the board over the last seven years. This has led the Congressional Budget Office to lower its deficit projections. In fact, the reductions in projected deficits due to this slowdown has been sharper than the reductions that we might have seen as a result of almost any politically plausible cut in benefits. But Robert Samuelson is not happy. He tells readers:
“No one truly grasps why Medicare spending has slowed so abruptly. A detailed CBO study threw cold water on many plausible explanations. What we don’t understand could easily reverse.”
The Washington Post gave Erskine Bowles and Alan Simpson another opportunity to push their case for deficit reduction, which includes plans for cutting Social Security and raising the age of eligibility for Medicare. The Post does not mention Mr. Bowles affiliation with Morgan Stanley. This could have something to do with his persistent refusal to ever include a Wall Street speculation tax in his deficit reduction plans.
The Washington Post gave Erskine Bowles and Alan Simpson another opportunity to push their case for deficit reduction, which includes plans for cutting Social Security and raising the age of eligibility for Medicare. The Post does not mention Mr. Bowles affiliation with Morgan Stanley. This could have something to do with his persistent refusal to ever include a Wall Street speculation tax in his deficit reduction plans.
They just don’t get it.
While this has a clear meaning to policy wonks, it is likely that most viewers won’t immediately know that “entitlements” means the Social Security and Medicare their parents receive. It’s a lot easier for politicians to talk about cutting wasteful “entitlements” than taking away seniors’ Social Security and Medicare.
Dean Baker via Truth Out.
Related Reading:
Will America’s Seniors Vote Against Their Own Self-Interests…Again?