A Forum for Opinions on News, Politics, and Life
May 16th, 2011
By Tom Carter
Robert Samuelson has been writing on economics and business for well over 30 years. However, he’s not an economist; his academic field at Harvard was government and politics. That alone may explain why his views on economics are more logical than those of professional economists.
It should be clear to everyone at this point that government spending must be reduced significantly (along with tax increases) if we’re ever to climb out of the deficit and debt swamp that threatens to drown the country. The only way to do that is to reduce the costs of Medicare and Social Security. Samuelson stomps directly into that political minefield in a column today, “The elderly are better off than advertised.”
His principal point is that the retired elderly, contrary to conventional political propaganda, are not impoverished. They don’t live in hovels and eat dog food. While some may live in relative poverty, by official standards, the majority are doing better than younger people who are still working.
Any deal to raise the federal debt ceiling must include significant savings in Social Security and Medicare benefits. Subsidizing the elderly is the biggest piece of federal spending (more than two-fifths of the total), but trimming benefits for well-off seniors isn’t just budget arithmetic. It’s also the right thing to do. …
People do not lose their obligations to the larger society by turning 65. We need to refocus these programs on their original purposes. Social Security was intended to prevent poverty, not finance recipients’ extra cable channels. Medicare provides peace of mind as well as health insurance; wealthier recipients can afford to pay more for their peace of mind. Burden-sharing needs to include the elderly. This is the crux of the budget problem.
Facing it is both a moral and financial imperative. With the 2012 election looming, major overhauls of these programs seem unlikely. Still, more modest changes (slow increases in eligibility ages, added taxation of Social Security benefits, costlier Medicare for upscale beneficiaries) could produce significant savings. If even these are absent, the meaning will be plain: Old stereotypes continue to trump new realities.
There are other areas of federal spending that also must be cut, including defense. And taxes must be increased not just for the wealthy but for everyone. However, no matter how you parse the numbers, there is no rational approach that does not include cuts in Medicare and Social Security.
The present fiscal crisis is the greatest threat to America since the dark early days of World War II and the depths of the Vietnam War. We rallied and triumphed in the former, and we managed to muddle through the latter, barely. During World War II, the country rallied, people sacrificed for the cause, and even politicians generally behaved responsibly. During the Vietnam War, those positive factors were largely absent, but we managed to survive, although we still suffer the pains of national wounds inflicted by that godforsaken venture.
If the sense of necessary shared sacrifice that rallied the Greatest Generation can’t be revived, the future will be bleak indeed.
The shared sacrifice necessary now is for everyone to accept cuts in Medicare and Social Security benefits. Not just cuts that will apply to people who are in their twenties now and will take effect in 40 years, or some such scheme. That’s a political cop-out on the part of cowardly politicians. There needs to be means testing now for both Medicare and Social Security, and those who can must accept the reality that benefits must be reduced. That would mean increased Medicare premiums for those with higher incomes and reduced Social Security benefits, perhaps up to a maximum of 10 percent of Social Security retirement.
Maybe these reductions could be eased once our fiscal house is in order, perhaps in 10 years or so. That’s far preferable to the looming collapse that we face now. And maybe after this necessary pain is inflicted on the country, citizens will begin to understand that they have to vote for politicians who place the welfare of the country first and are willing to make difficult decisions on taxing and spending.
As one who benefits from Medicare and Social Security, I’ll say this without reservation: I’m willing to do my part. Are you?
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