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Wednesday, August 01, 2007

Robert Samuelson's Three Beliefs

Someone said that Robert Samuelson thinks three things are true, deficits are bad, there's a demographic crisis coming, and both parties share the blame for any problem. Based upon these beliefs, he's been writing the same column in one form or another for many years. Notice, for example, how he weaves all three of these points into the opening of his latest column:

Making the Think Tanks Think, by By Robert J. Samuelson, Commentary, Washington Post: Just in case you haven't noticed, the major presidential candidates -- Republican and Democratic -- are dodging one of the thorniest problems they would face if elected: the huge budget costs of aging baby boomers. In last week's CNN-YouTube debate, New Mexico Gov. Bill Richardson cleverly deflected the issue. "The best solution," he said, "is a bipartisan effort to fix it." Brilliant.  There's already a bipartisan consensus: Do nothing. No one plugs cutting retirement benefits or raising taxes, the obvious choices.

End of story? Not exactly. There's also a less-noticed cause for the neglect. Washington's vaunted think tanks -- ... both liberal and conservative -- have tiptoed around the problem. Ideally, think tanks expand the public conversation by saying things too controversial for politicians to say on their own. Here, they've abdicated that role.

The aging of America is not just a population change or, as a budget problem, an accounting exercise. It involves a profound transformation of the nature of government: Commitments to the older population are slowly overwhelming other public goals; the national government is becoming mainly an income-transfer mechanism from younger workers to older retirees. ...

Consider the outlook. ... Social Security, Medicare and Medicaid -- programs that serve older people -- already exceed 40 percent of the $2.7 trillion federal budget. By 2030, their share could hit 75 percent of the present budget, projects the Congressional Budget Office.

These projections are daunting. ... Little wonder politicians stay silent. ... Wrenching honesty might be deeply embarrassing. Liberals might have to concede that government could grow too large and that spending and benefit cuts are needed. Conservatives might have to concede that, even with plausible benefit and spending cuts, tomorrow's government would be bigger than today's. For think-tank scholars, brutal candor might offend friends and political mentors. For the ambitious, it might jeopardize future appointments to top government jobs.

As an antidote to this timidity, I propose that some public-spirited sugar daddy (the MacArthur Foundation? Warren Buffett?) sponsor a short book. A possible title: "Facing Up to an Aging America." Six leading think tanks would be invited to participate: three liberal -- the Brookings Institution, the Center on Budget and Policy Priorities, and the Urban Institute-- and three conservative: the American Enterprise Institute, the Cato Institute, and the Heritage Foundation.

After an introduction describing America's aging, each think tank would receive 35 pages to respond to questions and to present its vision. Are the looming budget changes good for America? If so, how would they be financed? If not, why not? How could adverse consequences be avoided? The think tanks would be expected to be specific. Higher eligibility ages? Well, how much and when? Higher taxes? Which ones and how much? If a think tank rejected the invitation, the publisher would run 35 blank pages and an explanation: "Think tank X declined to participate."

This approach would force think tanks to compete. They'd have to make their vision of the future explicit within the untidy framework of government's past commitments. ... Writing for a general audience, it would favor plain English, not the usual technobabble. If published in April, the book might prod the presidential candidates to address the future. If they didn't, it would demonstrate the magnitude of their evasion.

If we are going to give think tanks an assignment coupled with a threat of bad press if they don't participate, let's have them work on the important part of the problem (there are other choices besides think tanks for such assignments). Social Security is not the problem, it won't take much to get it on solid footing, though the scare stories over the past several years have made many people believe otherwise (and Samuelson has helped to generate this false impression). The problem is not demographics either, though it certainly costs more to serve a larger number of people.

The main problem is rising medical costs, and unlike the misplaced emphasis on Social Security in the last election, there is a lot of focus on health care reform in the political debate this time around. Samuelson seems to have completely missed the connection between health care reform and his pet column peeve, hence his claim that the problem is being ignored in the political debate when that isn't the case. In addition, Samuelson's continual focus on the budget deficit obscures the real problem. It doesn't matter whether health care is in the public domain or the private domain, the costs will be daunting either way if they continue on their present trajectory, so finding ways to hold down health care costs is where the focus needs to be.

If Samuelson really wants to help, he can quit writing the same misleading and counterproductive column over and over again. Quit saying "cutting retirement benefits or raising taxes" are the "obvious choices" when it's not obvious at all. Cutting retirement benefits or raising taxes will do nothing to reign in health care costs so these measures do not address the main problem. It's time for Samuelson to write a new version of this column and address the core issues, or perhaps better yet, just stop writing about these issues altogether.

    Posted by on Wednesday, August 1, 2007 at 02:43 AM in Budget Deficit, Economics, Policy, Politics, Press, Social Insurance | Permalink  TrackBack (3)  Comments (48)

          

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    » Robert Samuelson: Banal and wrong! from Brendan Nyhan

    Mark Thoma distills the collected works of Robert Samuelson into three banal claims: Someone said that Robert Samuelson thinks three things are true, deficits are bad, there's a demographic crisis coming, and both parties share the blame for any problem. [Read More]

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