Wednesday, April 22, 2009

Where Reich (And the Left) Is Wrong

TW: Reich makes three points: 1) social security is not broken therefore leave it alone, 2) reforming Medicare will solve all problems without cutting much if anything, 3) screw the Republicans

Re #1: Reich and others on the left state a truism- the social security program in isolation is in fact more or less solvent if relatively minor tweaks are made to the future cash flows (either raise the taxes or cut the benefits). The challenge with that approach is that while the social security program may exist in a vacuum outside of the rest of the federal budget in theory it most definitely does not in practice. The social security surpluses have subsidized the rest of the budget for decades as the social security program moves from surplus to deficit the balance of the budget will come under tremendous stress. The social security program will need to take cuts in order to help support the rest of the program unless folks are comfortable with even more drastic reductions in health care and defense expenditures than will be needed otherwise. Seeking to treat the SS program in isolation is knowingly placing blinders on one's head.

Re #2: yes reform is needed but reform without acknowledging Americans consume much more service than they can afford is to deny reality. Those on the left seem to think that "reform" will magically solve the problem without pain, those on the right seem to believe if everything is privatized a similar if different magic world will result. Americans consume much more health care than almost any other nation whilst achieving results barely better than most. We are inefficient that means fewer services and lower pricing is needed. There are no magic wands, we have a complex, confusing, inefficient public/private hybrid that feeds on more and more services and reduced risks to the patients and providers. We need fewer services and for consumers to assume and get comfortable with more risks.

Re #3: while I would love to tell many Republicans to go pound (and many deserve it), one does not govern effectively that way. Obama knows this, but he will continually face chirping from the left to do so, which is fine it makes him appear more moderate.


From Robert Reich:
"...Obama must be careful not to put entitlement programs on the chopping block as part of a "grand bargain" to elicit Republican support for health care and cap-and-trade. Social Security is not in dire straights; it can be made flush for the next 75 years by ever-so-slightly lifting the ceiling on the portion of income subject to Social Security payroll taxes (and if Democrats are reluctant to do that on incomes over $100,000, then they could do so on incomes over $250,000).

Medicaid and Medicare are in trouble because health care costs are rising so fast, which argues for health-care reform rather than cuts in these important programs. Yet if health-care reform has any prayer of controlling the rising tide of health care costs, the plan must allow beneficiaries to opt into a public insurance plan -- something Republicans and the health-care establishment are determined to fight. So it's critically important that the Senate wrap health care into a reconciliation bill that can be enacted by a majority vote in the Senate.Obama should fast-track health care and stop trying to court Republicans. Every House Republican and all but three Senate Republicans voted against the stimulus; all Republicans in both houses voted against the budget. During the recess they hosted "tea parties" claiming that Americans are over-taxed. Over the weekend, House minority leader John Boehner called the idea of carbon-induced climate change "almost comical." Republicans are already off and running toward the midterm elections of 2010, even starting to run ads against House Democrats in close districts. They seem hell bent on on becoming a tiny, whacky minority -- the party that denies evolution, denies global warming, denies Americans need a major overhaul of health care, and denies the economy needs anything more than a major tax cut to get it moving again. The less Obama caters to them the better."
http://robertreich.blogspot.com/2009/04/where-government-spending-should-be.html

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