Wednesday, 22 December 2004

Entitlement reform

Once again I find myself in agreement with Joe Lieberman:

A rejoinder to this rejoinder is now being beta-tested by Sen. Byron Dorgan: Republicans exaggerate the “crisis” of Social Security, which can be fixed with a few modest tax hikes. Uh huh, in the sense that a bankrupt man might still be able to manage his car payments . . . if you ignore the fact that he owes house payments too.

House payments, in this case, are the unfunded liabilities of Medicare, which vastly outstrip even the unfunded liabilities of Social Security, by a margin of $62 trillion to $10 trillion. For several years, the nonpartisan board of Social Security and Medicare Trustees has flagged these figures, which everyone ignored. Joe Lieberman last year introduced a Senate bill to recognize these obligations in the federal budget. He was ignored.

Yet since Mr. Bush introduced the subject of Social Security reform at his party’s September jamboree, public debate has surged ahead of the White House and its Democratic sparring partners. USA Today, to give the underrated McPaper its due, produced a report in October forcing Medicare into the picture, noting it would take $53 trillion invested today to cover the $200 trillion in shortfalls the program is expected to generate just over the lifetimes of today’s youngest workers. By Monday night, even Peter Jennings of ABC News had decided there’s a story here.

Adding the unfunded liabilities of entitlements to the federal budget would be a great idea and would go a long way towards getting rid of the notion that there’s a trust fund, or that these benefits are “free”. It’s a good idea, so it naturally get’s dumped.

1 comment:

Any views expressed in these comments are solely those of their authors; they do not reflect the views of the authors of Signifying Nothing, unless attributed to one of us.
[Permalink] 1. Barbara Skolaut wrote @ Thu, 23 Dec 2004, 7:33 pm CST:

“It’s a good idea, so it naturally gets dumped.” That was my first thought, too.

I’d like to think I came to the same conclusion as you because I’m getting smarter, economics-wise.

But I think it’s more likely I’m benefiting from the “stopped clock” syndrome. ;-p

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