Relevant and even prescient commentary on news, politics and the economy.

Barack Obama’s carefully crafted economic populism carries the day…and then the next three months?

Three writers point to the need to maintain energy and attention to the Obama Grand Bargain.

The media are a huge factor in most elections in the US, and outside of Fox News and the rightwing press, most of the major news outlets were more sympathetic to Obama than to Romney. They still helped Romney quite a bit, however, especially with swing voters, with poor reporting on key economic issues. Most Americans didn’t know that the federal stimulus had created an estimated 3m jobs; in fact, they didn’t even distinguish the stimulus from the unpopular federal bank bailout. They didn’t understand the benefits that people would derive from Obama’s healthcare legislation. They didn’t know that they’d had their taxes cut under Obama. And millions believed the hype that federal deficit spending and the US public debt were major problems. (For the record, the US currently pays less than 1% of GDP in net interest annually on the federal debt – less than it has paid during the past 60 years.)
The confusion on economic issues was probably the most important influence on swing voters, who supported Romney against their own economic interests, thinking that the economy might improve if he were elected. For this, and other misunderstandings, we can thank the major media, although we should also include the public relations blunders made by the Obama team. Perhaps the biggest strategic error wasPresident Obama’s refusal to go after Romney’s proposal to cut social security, thereby losing the majority of senior citizens’ votes (a big vote in swing states like Virginia and Florida), which he could potentially have won by defending America’s most popular anti-poverty program.

Obama’s silence on social security is a bad omen for the future of his second administration, when – facing almost immediately the “fiscal cliff” – political, media, and business leaders will be pressing for a “grand bargain” on budget issues that will screw the vast majority of Americans. It will take a lot of grassroots pressure to prevent the worst outcomes: likewise, to get us out of Afghanistan and to prevent another disastrous war, this time with Iran. Obama’s foreign policy has been mostly atrociousand the never-ending “war on terror” continues to expand, while most Americans’ living standards have been declining.

Bill Black interview

Bill BLACK: Yes. The president came into office talking about the possibility of this grand bargain—more than the possibility; this desire reach it. And then he tried to reach it in budget discussions with the Republicans. They refused.

He just a few days ago went and met with the editorial board of The Des Moines Register, the leading newspaper out in that portion of Iowa, and he had a discussion off the record, and emphasized that because it was off the record he could be more blunt, and said that his first course of business, and one that he believed he could get done very quickly should he be reelected, would be to strike a grand bargain. And he described the grand bargain, and there would be $2 in budget cuts for every dollar in increased taxes.
So this grand bargain is: we will weight this much more heavily towards killing social programs, or at least cutting them back significantly and raising taxes on the rich.

Now, that’s got most of the attention from progressives, but note two other things that he was saying. One, he’s talking about austerity. He’s talking about following exactly the kind of model that Europe has followed that put them gratuitously back into recession, and indeed into a Great Depression. And as we’re doing this interview, it has just come out that European unemployment reached a new high in September, which is the latest month that they had data for. So this has cost millions of Europeans their jobs, and it’s Great Depression levels of unemployment in Spain and Greece, and growing in many other nations. So this is insane to follow this strategy.

Glenn Greenwald at The Guardian  writes:

So the delirium of liberals this morning is understandable: the night could scarcely have gone better for them. By all rights, they should expect to be a more powerful force in Washington. But what are they going to get from it? Will they wield more political power? Will their political values and agenda command more respect? Unless the disempowering pattern into which they have voluntarily locked themselves changes, the answer to those questions is almost certainly “no”.
Consider the very first controversial issue Obama is likely to manage, even before the glow of his victory dims, literally within the next couple of weeks. It is widely expected – including by liberals – that Obama intends (again) to pursue a so-called “Grand Bargain” with the GOP: a deficit- and debt-cutting agreement whereby the GOP agrees to some very modest tax increases on the rich in exchange for substantial cuts to entitlement programs such as social security and Medicare, the crown legislative jewels of American liberalism.

Indeed, Obama already sought in his first term to implement sizable cuts to those programs, but liberals were saved only by GOP recalcitrance to compromise on taxes. In light of their drubbing last night, they are likely to be marginally if not substantially more flexible, which means that such a deal is more possible than ever.

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Three-Card Monte (Spring 2004)

Angry Bear archives reminds us of the longstanding strategies embedded in the current political debate, and trial balloons of possible current Super Committee proposals November 22, 2011. The Social Security surplus as a significant amount of money is recent, in the last fifteen years or so:

Tuesday, March 02, 2004

Three-Card Monte

Following up on Kash’s earlier post about Greenspan, Krugman’s op/ed also highlights a fairly bold bait and switch maneuver by Greenspan:

The payroll tax is regressive: it falls much more heavily on middle- and lower-income families than it does on the rich. In fact, according to Congressional Budget Office estimates, families near the middle of the income distribution pay almost twice as much in payroll taxes as in income taxes. Yet people were willing to accept a regressive tax increase to sustain Social Security.
Now the joke’s on them. Mr. Greenspan pushed through an increase in taxes on working Americans, generating a Social Security surplus. Then he used that surplus to argue for tax cuts that deliver very little relief to most people, but are worth a lot to those making more than $300,000 a year. And now that those tax cuts have contributed to a soaring deficit, he wants to cut Social Security benefits.

As you can see from this post last week, the 2004 deficit is only brought down to a mere $500,000,000,000 by starting with the non-trustfund deficit of $631,000,000,000 and subtracting from that the $154,000,000,000 surplus created by the payroll tax (money allegedly going into the trust fund/lockbox).
To summarize, here’s Greenspan’s 20+ year plan to roll back Social Security:

Step 1. Get appointed in early 1980s to committee to protect Social Security.

Step 2. Successfully propose substantial increases in regressive payroll taxes in order to save Social Security. Workers will pay higher payroll taxes but their retirement benefits will be assured.

Step 3. Wait 20 years; to pass the time, become Chairman of the Federal Reserve.

Step 4. Actively support large and regressive cuts in income taxes. Never mention payroll taxes.

Step 5. Repeat step 4.

Step 6. Observe that in 2004, steps 4 and 5 lead to a $631b shortfall; Step 2, however, created a $154b surplus.

Step 7. Reverse Steps 4 and 5.

Step 8. Just kidding about step 7. Seriously, the answer is clear: cut Social Security benefits.


UPDATE: CalPundit had a post on Sunday, THREE CARD MONTE WITH ALAN GREENSPAN, which made the same observation and concluded, “A normal person would at least be embarrassed by all this. But Alan Greenspan has never been a mere mortal, has he?”

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Update: By Dale Coberly (was inadvertently omitted as author, although regulars know and the label names him)



or how to lie with numbers

“Math doesn’t lie” seems to be the new focus group tested mantra  about Social Security that Congressmen and their journalists are so proud to repeat.  What it really means is “we put a lot of money into finding ways to make the numbers sound big enough to scare the children.”

Here is a recent example, which I found in

“Slate:Of course, old people today are no longer poor because of Social Security. But recently, GOP presidential contender and Texas Gov. Rick Perry called it a “Ponzi scheme.” And last month, the economist Laurence Kotlikoff said this in an interview with NPR: “We’ve got 78 million baby boomers who are poised to collect, in about 15 to 20 years, about $40,000 per person. Multiply 78 million by $40,000–you’re talking about more than $3 trillion a year just to give to a portion of the population. That’s an enormous bill overhanging our heads, and Congress isn’t focused on it.” But you’ve written that Social Security will be only a small contributor to the future budget gap. Are Kotlikoff’s worries unfounded?

A look at the 2011 Trustees Report Table IV.B2  shows that, sure enough, in 2025 there will be about 78 million beneficiaries to OASDI.    To find the “$40,000 per person” is not so easy.  Look at Table VI.F7, Cost of OASDI (“Social Security”) in 2025 will be $1213 Billion, not 3 Trillion, for a per person cost of about $15,551 in “constant 2011 dollars” , not  $40,000.  Hmmm, maybe he means “current dollars, that is inflated dollars.  Well, table VI.F8 gives  $1626 Billion for 2025, still not $ 3 Trillion, or $40,000 per person. 

Wait, maybe he is talking about Social Security PLUS Medicare (HI).  Getting closer. Table VI.F9 gives the combined cost for OASDI AND HI, in current (inflated) dollars as $ 2237 Billion.  Not 3 Trillion. Not $40,000 per person.

So where does Kotlikoff get his scary numbers?  Perhaps from the (Table VI.F9) “High Cost” estimate for 2025, in current dollars,for Social Security plus Medicare, of $ 2737 Billion. Close enough, if you don’t mind rounding up by 10%.

It is not honest to start out by talking about Social Security, then skip to talking about (mumble) “socialsecurityplusmedicare” without bothering to mention that you have done so, or pointing out that Medicare is a very different kind of problem than Social Security. And it is not honest to use a “high cost” estimate which even the Trustees regard as “unlikely,” without even mentioning that that’s what you are doing.  Nor is it honest to talk about inflated dollars without telling people that’s what you are doing and giving them a basis for understanding what the numbers mean in terms of the money they have in their wallet today.

Table VI.F4 gives GDP in current dollars for 2025 as $ 30 Trillion dollars. And the combined “high cost estimate” for the combined costs of Social Security and Medicare as 8.96% of that.  Table VI.F4 gives the intermediate (most likely) estimate of the combined cost of Social Security and Medicare to be 7.66% of GDP.

But even staying with Kotlikoff’s misleading estimate, a “high cost” estimate of feeding and housing, and basic medical care, for 78 million people, over a quarter of the adult population, may reach 10% of GDP.

Kotlikoff is pretty sure this is an “enormous bill overhanging our heads”….”just to give to a portion of the population.”

But “we” are not giving it to them.  They will have paid for it. 

And every one of us will one day be in that “portion of the population.”  Kotlikoff appears to be suggesting we just ask old people to step out into the blizzard, so “we” don’t have to pay for “them.”

But “we” will be paying for ourselves…  just in case, you know, we don’t want to go into the blizzard. “We” are “them.”

With pay as you go financing “we” pay for our future benefits over a forty year period, an average of 30 years before we will need to collect. This is no different than “saving” the money.  Because of inflation people cannot afford to just put the money under the mattress.  Before Social Security they would take it to a bank and hope the bank would pay it back, with enough interest to stay ahead of inflation.  Or they would “invest” their money in hopes of getting back more than they paid in by taking advantage of the growth in the economy.  The  success of this would depend upon picking the right investment on the right day.

Social Security avoids both the risk of inflation, and the risks of investments that go bad at the worst possible time.  By using your money to pay back the people who paid for their Social Security before you, they are able to pay those people with money that is worth more than the money the older people paid in.  This is very simple:  Those older people paid a tax on an income that was a lot smaller than yours.  You pay the same tax on a larger income. This makes more money available to pay the benefits due to the older people.

This is effectively the same as “interest”, and because it comes from the growth of the whole economy it is not subject to the same risk as individual investments.  And because it is paid in “current” dollars, it always keeps up with inflation.

And when it’s your turn to retire, you will get the same advantage the older generation got.  And when your children retire, they will get the same advantage you got.  And so on, forever.

But please note, it is YOU paying for your own retirement.  It is NOT you paying for granny.  She already paid for her own retirement. 

Don’t be confused by the pay as you go feature.  It is really not different from what happens when you put your money in the bank or buy stocks and bonds.

Your money goes, the same day you deposited it, right out the door to pay for the current uses of some other person.  And when you are ready to cash out your savings, or stocks and bonds, the money would come in the door, that very day, from some other person, presumably someone looking for a safe place to save for his retirement.

To get a more honest picture than the one Kotlikoff is trying to scare you with,  look at Table VI.F7,  and see that the intermediate (best guess) cost of OASDI in 2025 is projected to be $ 1212.8 Billion in “constant 2011 dollars”… dollars worth as much as the dollars in your wallet today.   Divide $1212.8 Billion by 78 million and you get $15,549 per beneficiary. 

Table VI.F2 says this is 15.67% of “taxable income.  The same line gives the SS income rate  as 13.15%.  This is the amount of money available to pay the benefits. It comes from the current payroll tax rate of 12.4%  and additional income… mostly a part of the income tax that IRS collected on income from benefits and kicks back to SS. This means a tax increase of about 2.5% (15.7 – 13.2) would be needed to close the gap. 

The best way to increase the tax this much by the year 2025 would be to raise the payroll tax about one tenth of one percent per year for each the boss and the worker.

But it turns out the need for the raise has long been anticipated and the workers have been “saving up for it” by paying a tax rate higher than needed for the usual pay as you go.  This gives SS a savings account (the Trust Fund) to draw on to ease the transition to the higher tax rate. The Trust Fund will still have about  2.6 Trillion dollars in it by 2025, helping to pay the increased costs (Table VI.F7). 

We could just let the Trust Fund make up the difference between the tax rate and the cost rate, but this would not be prudent.  It turns out that a gradual increase in the tax rate of ONE FOURTH  of one tenth of one percent per year for each the boss and the worker will keep Social Security “solvent” forever. This is about 20 cents per week per year for each.

Actually no increase at all would be needed to  keep Social Security “solvent.”  The increase suggested here is what it would take to maintain the current “replacement rate”.. that is the percent of your pre-retirement earnings that you collect from Social Security on a monthly basis, AND retire at the same age as current retirees.   It’s pretty certain you would want to do both of those things, and as we have seen, the cost is not even high enough to notice.

While your tax is going up one quarter of one tenth of one percent per year, your income is projected to go up over one full percent per year.  That means, essentially, that each year your tax is twenty cents more per week (forty cents if you are your own boss) and your income is 8 dollars per week more than it was last year.  Leaving you with MORE money every week than you had before, PLUS having paid for a longer, richer, secure retirement.

So Kotlikoff’s 3 Trillion dollar “enormous bill hanging over our heads,” just to “give” to a “part” of the population (you) turns out to be a need to raise your own tax… really your own savings… less than a tenth of a percent per year over the time between now and then.

Remember this is your own money.  Not “the government’s.”  It’s not welfare.  You pay for your own retirement.  There is no deficit or debt.  Just a need to pay for what YOU will need. And it won’t cost enough to even notice.

It’s just math.


The numbers I give above are for OASDI, Social Security proper, not Medicare, because Medicare’s problems are best addressed by controlling medical costs (not by cutting benefits).

But even if costs can’t be controlled,  we may decide we want to pay for the medical care anyway.  The cost of this would be about a fourth of the cost of Social Security.  So the same logic applies. Instead of raising your tax 40 cents per week each year, you might have to raise it 50 cents per week each year.  You are still going to have more money after paying the tax than you have today.  And you will still be paying, in advance, for your own needs…  not some other “portion of the population.”]

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by Dale Coberly


I was thinking that someone could fault my essay the other day about the “Intelligence Squared” debate. I said that Howard Dean’s side did not really help anyone understand why, or what, or how to “save the program.” I hope I helped explain the why and what, but I probably wasn’t any more clear than Dean about how.

This will attempt to address that. Recall the original article about the debate

Arithmetic still matters,” Zuckerman began. “Medicaid now pays for both health and long term care for roughly 55 million Americans. It finances more than one third of all births in the United States, and pays the cost of almost two thirds of the people in nursing homes. The federal government underwrites 50 to 77 percent of the cost, depending on the income level of each state. Even so, Medicaid is the second biggest and fastest growing category of state spending. Costs are up more than 60 percent in the last five years and are expected to exceed $450 billion this year and to keep growing by about eight percent annually for the next decade. In the next — by the mid-2030s, the 65 and over population will nearly double, and health care costs, which have been rising far faster than worker productivity since the end of World War II, may be completely out of control, resulting in a tidal wave of federal spending.

Perhaps arithmetic still matters, but Zuckerman is careful to avoid giving us any. Instead he seduces us down a path that begins with apparent sober numerical facts and ends with pure demagoguery.

You need to learn to beware of words like “costs are up more than 60%”…

Sixty percent of what? If Medicare costs went up 60%, they would go from 3% of payroll to about 5%. This might be more than you want to pay. It might even be more than it should be. But it is not exactly an intolerable burden if that’s what it costs to live a longer and healthier life.

But, just as a matter of “arithmetic,” note how a 2% increase in costs becomes a scary “60% increase.” This is typical of the “it’s just math” school of liars.

Similarly, the rest of Zuckerman’s seduction presents numbers intended to scare you into thinking that Medicaid costs are high and growing alarmingly. It would be just as reasonable to think that health care costs are high and will get higher, and that government programs are the best way people have to pay for them. Or even that government needs to step in and find a way to control costs (which is not the same as cut benefits).

But finally we reach the payoff.: be afraid of costs “completely out of control” and “a tidal wave of Federal spending.”

None of the “arithmetic” Zuckerman gives us here actually supports that scary rhetoric. His theorem amounts to: “If costs are going up, we must cut our insurance.”

I don’t know how much costs are going to go up. Neither does Zuckerman. But I can suggest that you try to find out what costs are now in terms of your own personal budget, and what they are likely to be in terms of your personal budget at some reasonable time in the future. And what the estimate is based on. And whether it is a cost you are going to have to pay one way or another… either through taxes or private insurance or out of pocket. Don’t forget this is insurance. You may be healthy today, but with insurance you are paying a little bit now “just in case” you are faced with life or death huge costs…personal costs…in the future.

And what is the safest way to pay for them. Private insurance cannot guarantee that it will be able to pay for your care, even after you have paid premiums for your entire life. The government can.

There is also some reason to suppose that the government might be in a better position to control prices than private insurance. But only as long as we can remind the government that we are paying for our own insurance here, and not just some budget item they can cut “to balance income” with no consequences to the people who thought they were paying for insurance that would be there when they need it.

Pay as you go is the only way that I can think of to make this work. Under pay as you go the people just pay for current costs. Their own future costs will be higher, so they are not bearing an unfair burden. Their own future costs will be paid for (directly) by the workers of that time… who will have higher wages and will be more able to afford it. Those future workers own higher costs in turn will be paid for by the workers of that later time… who will have higher wages… and so on.

Perhaps the process can’t go on forever. But it can go on a lot longer than retired people can afford to pay each month for the “insurance” that would pay for their current level of risk. The ultimate answer to high costs is to find a way to control them, and to decide how much of your current income you are willing to set aside for what level of health care you may want in the future. Please note there is no “looming deficit” here. We just pay the costs as they come up. The magic of pay as you go will assure than none of us pay more than our own “expected” costs. The fact that we are paying in advance of our own need does not mean that we are paying for “someone else” or that we are not paying for ourself.

I don’t know what the whole health care arithmetic will turn out to be when it is done by someone honest, but I can point at something which may be important to keep in mind:

Table VI.F2 of the 2011 Trustees Report tells us that the cost of Medicare (HI) in 2030 will be about 4.4% of taxable payroll, compared to about 3.8% today. This looks to me like about a half of one percent increase in your payroll tax, and half of that will be paid by your boss. That is not a staggering burden. [It might be more reasonable to compare the future cost to the present tax rate.. 2.9%, half from the worker, half from the boss. This would suggest a need to raise the tax 1.5% over the next 20 years. That would be less than half of one tenth of one percent per year for each the boss and the employee….still not a staggering burden. And it goes to pay for your own eventual health care needs.]

Moreover, the real wage is expected to increase at least 1.2% per year between today and 2030. This would result in a real wage that is about 25% higher in 2030 than it is today.

Lets say that today you are making 1000 dollars per week. You are paying 1.45% for Medicare or about $14.50 per month. (your boss pays another $14.50, but if you want to say that is “really” your money, you need to add $14.50 to your income. ) This leaves you with about $986 a week after you have paid for your Medicare.

In 2030, your income would be 1,250 dollars per week (real). And if there were no increase in the Medicare tax rate, your tax would be $18.12, leaving you with $1232 per week after you have paid for Medicare.

If the cost of Medicare goes up to 4.4% of taxable payroll and the tax rate is raised to meet the cost, your share goes up to 2.2%, and you would pay $27.50 per week for Medicare, leaving you with about $1222 after paying for your Medicare.

So even with the increased cost of Medicare, you would have 236 dollars in real money more than you have today AFTER paying for your Medicare.

There are, of course, other taxes, but the arithmetic is the same. After calculating the increased costs, and your expected increase in wages, you are going to be richer in the future, not staggering under a load of “debt”.

All you have to do is pay for what YOU ARE GOING TO NEED. You are not “paying for granny.” Granny already paid for herself.

Note that even if costs for health care go up faster than your wages … in real terms… you are still paying for something you may want more than a new car when you get sick.

I suggest this is the real arithmetic you need to keep in mind.

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by Dale Coberly


I am reading a short article on the Intelligence Squared debate I previously referred to in Social Security For the Young. It turns out they were more concerned with “insurance” than with Social Security.

But they don’t seem to understand the idea of insurance. The “for” side of the debate resolution: “Commitments made to seniors decades ago…saddle our children with unmanageable debt…” neglected to mention that Granny paid for those “commitments,” and there is no “debt,” manageable or otherwise. But granny didn’t get much help from the “against” side. Here are excerpts from the article here.

One shocking statistic is that 37 percent of those who came of age in this millennium are unemployed,” Rosenkranz said. “When consumers lack the confidence to spend, when businessmen lack the confidence to invest and to hire, it is the young that suffer most. The health insurance debate focused on the uninsured. But think for a moment about how health insurance is priced. Almost everywhere the young pay the same premium as their more illness prone elders. A massive subsidy for the old paid for by the young. Tens of millions of young people quite reasonably said no thanks to health insurance until the government mandated that they say yes.

The motion was that the young are being asked to sacrifice financially for the entitlement programs of the elderly, and the Conservative panelists argued in favor of that motion.

Arithmetic still matters,” Zuckerman began. “Medicaid now pays for both health and long term care for roughly 55 million Americans. It finances more than one third of all births in the United States, and pays the cost of almost two thirds of the people in nursing homes. The federal government underwrites 50 to 77 percent of the cost, depending on the income level of each state. Even so, Medicaid is the second biggest and fastest growing category of state spending. Costs are up more than 60 percent in the last five years and are expected to exceed $450 billion this year and to keep growing by about eight percent annually for the next decade. In the next — by the mid-2030s, the 65 and over population will nearly double, and health care costs, which have been rising far faster than worker productivity since the end of World War II, may be completely out of control, resulting in a tidal wave of federal spending.

But the Liberal camp did not see America’s entitlement programs as something that needs significant renovation.

The elderly used to be the poorest group in American until in 1926 the farm states where the Depression started began Social Security, which has then spread to a national program by Roosevelt in 1933,” Dean argued. “So this is a core program. We just need to make it work and we just need some mild tweaks. Health care needs a lot of tweaks, but the whole system needs tweaks, not simply Medicare. And we should stop victimizing Medicare for the sake of keeping our taxes absurdly low. The fact is people need to pay their fair share in America, and the Bush tax cuts need to sunset. You know, when the taxes were at Bill Clinton’s rate, the economy was a whole lot better than it is now. And I wouldn’t mind going back to those taxes and paying my fair share at all.

Beginning with the fatuous remark by Zuckerman that “Arithmetic still matters” it seems to me that neither side understands what they are talking about.

Arithmetic only matters if you understand the problem you are “solving” in the first place.

I doubt very much “the young” pay the same for private health insurance as “the old.” But in the case of Medicare, and less directly Medicaid or any government paid health insurance, the whole point is that THE YOUNG WILL BECOME THE OLD. It makes more sense for them to pay a small premium, while they are young and healthy and working, over a long period of time, so that they will have paid in advance for health care needs that will come when they are old and sick and not working. THAT IS THE WHOLE POINT OF “INSURANCE.”

And that is the whole reason that government paid insurance is “better than” private insurance. It just is not possible for a private company to pay for health care forty years after the premium was paid in. Government plans, whether explicitly “pay as you go” plans for which the insured person pays directly, as Medicare is in part, or just a general “we are all in this together” plan where “on average” younger workers are “paying for” older people out of general taxes… but will be paid for in their turn when they become older… can manage this kind of infinite “pay it forward” financing with no problem at all. No problem except for the political liars who pretend that the young are bearing the burden for the old.. as a trick to fool the young into voting for someone who promises to lift the burden… and leave them to the mercies of the free market when they get old and sick and out of work.

The fact that costs are going up is not an argument FOR cutting your insurance. In fact it would be insane to CUT your insurance because you think costs are going to go up. With pay as you go financing the increased costs will be to some extent subsidized by the “next” generation… but that generation will have its own increased costs subsidized by the following generation. Moreover each generation will be richer than the last, making it easier for them to pay the increased costs. This is not a Ponzi scheme, because each generation will get the same good deal as the last…and it can go on forever. In fact, it’s the best deal “the young” can hope for.

Unfortunately Howard Dean’s remarks, as quoted here, don’t seem to address this simple fact. Rather he offers a kind of vague “we need to pay taxes to save the program” which is true, but doesn’t really help anyone understand why. or what. or how.

Go back to what Rosenkranz said at the beginning of the excerpt: “When consumers lack the confidence to spend, when businessmen lack the confidence to invest and hire, it is the young that suffer most.”

And what does Rosenkranz think will happen to consumer confidence, and ultimately to business confidence, when young people finally notice that without Social Security and Medicare they are looking forward to an old age that is desperate,poor, nasty, brutal, and short?

I would add an entirely personal comment: The purpose of arguments like “honoring commitments to granny… impose intolerable debt on the young” is three fold.

First, encourage “the young” to continue to believe they will never get old.

Second, take the young despise the old, and everyone else: “we don’t owe them anything.” We are all proud, heroic, individuals. We don’t need “cooperation”, much less kindness.

And third, enable the young to tell themselves that “commitments” don’t matter. Not just vague promises here, but commitments to give people what they paid for.

Someone more old fashioned than we allow ourselves to be would say this is the way to a society of anxiety, pain, and misery. Pleasures, perhaps, for the “winners,” but no happiness at all, for anyone, win or lose.

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