Excerpt of the Day

Courtesy of Kevin Drum.

"Republicans, it turns out, actually spend a bit more money on social programs than Democrats, as the green bars in the chart below show (click for a larger image). The main difference? Democrats spend it on direct programs that largely serve "the elderly, the disabled, the unemployed, and the poor...ethnic minorities, racial minorities, and single mothers." Republicans spend it indirectly on programs that "are biased towards workers who are White, full-time, in large companies, and high-wage earners." But spend it they do."

Paul Krugman

On the same topic as the last post:

This brings me to the seventh word of my summary of the real fiscal issues: if you’re serious about the deficit, you should be willing to consider closing at least part of this gap with higher taxes. True, higher taxes aren’t popular, but neither are cuts in government programs. So we should add to the roster of fundamentally unserious people anyone who talks about the deficit — as most of our prominent deficit scolds do — as if it were purely a spending issue.

Another Example...

...of how so-called "deficit hawks" are really just "cut taxes for the rich hawks." From E.J. Dionne at the Washington Post -

"How do we know our difficulties stem primarily from a shortage of revenue? Consider what would happen if we allowed all the tax cuts scheduled to expire in 2012, including the ones enacted under Bush, to go away. That would produce nearly as much deficit reduction over the next decade - roughly $4 trillion - as all the maneuvers of the Bowles-Simpson commission put together. If you want to be serious about closing the deficit, ending the Bush tax cuts is a good place to start."

It's a good piece showing the hypocrisy of "deficit hawks" and also how the Democrats regularly get outflanked politically on issues such as this.

Is the Deficit a Crisis?

Kevin Drum gives the spot on answer for the Republicans.

Answer for Republicans: They don't think the deficit is a problem. If they did, they'd favor tax increases, Pentagon cuts, and Medicare cuts, since even the most dimwitted among them knows that cutting domestic discretionary spending won't make a dent in the deficit. But they favor none of these things.

Rather, they think federal spending on liberal social programs is a problem, and yammering about the deficit is a good way to force cuts to these programs. And there's nothing wrong with this. It's good politics. Why waste a crisis, after all? But anyone reporting on this issue really needs to be honest about what's going on. Republicans want to cut social spending. The deficit is just a handy cudgel to make this happen.

Another take on the Myth of the "Social Security Crisis"

According to Matthew Yglesias, it's got to do with how the Republicans favor policies that the rich like.

"For “you’re going to have to raise the retirement age for Social Security” to count as an “ugly truth” assumes that it’s true. And yet it’s not true. Closing the projected actuarial gap in Social Security requires some combination of more immigration, higher taxes, and lower benefits. Relative to higher taxes, lower benefits tend to be preferred by richer people. And of all the different ways to reduce benefits, raising the retirement age is the one that does the most to punish the poor and demands the least sacrifice from the rich. Christie, it’s true, isn’t saying “whatever the voters want to hear” but he’s not telling the truth either. What he’s doing is saying what rich people want middle class people to believe."

Social Security Solution of the Day

From Kevin Drum at Mother Jones.

"Social Security costs about 4.5% of GDP. That's going to increase as the baby boomer generation retires, and then in 2030 it steadies out forever at around 6% of GDP.

That's it. That's the story. Our choices are equally simple. If, about ten years from now, we slowly increase payroll taxes by 1.5% of GDP, Social Security will be able to pay out its current promised benefits for the rest of the century. Conversely, if we keep payroll taxes where they are today, benefits will have to be cut to 75% of their promised level by around 2040 or so. And if we do something in the middle, then taxes will go up, say, 1% of GDP and benefits will drop to about 92% of their promised level. But one way or another, at some level between 75% and 100% of what we've promised, Social Security benefits will always be there.

This is not a Ponzi scheme. It's not unsustainable. The percentage of old people in America isn't projected to grow forever. Lifespans will not increase to infinity."

Claims from those on the Right of a crisis in Social Security are not based in fact, but instead on ideological preference. They don't like the program and want rid of it. They use budget deficit hysteria as a convenient excuse to say we need radical cuts to Social Security.

Fixing the Budget Deficit

Kevin Drum has been beating this, uh, bongo for a while now. Here's the shorter version, which makes a lot of sense to me:

1. The budget deficit is big because the economy went in the tank.

2. The budget deficit will get smaller as the economy improves.

3. Medium term budgetary problems can be solved by letting the Bush tax cuts expire (all rates go back where they were under Clinton - hardly onerous levels).

4. Long term problems can only be fixed by addressing health care/Medicare.

5. I'd add - Social Security does not need major overhaul the way Medicare does. Claims to the contrary by conservatives actually indicate their ideological preference, rather than truth about the state of Social Security.