StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



Robert Samuelson's Incredibly Misguided View Of The Federal Budget

03 Jan 2012
Posted by Stan Collender

The Washington Post published a column by Robert Samuelson on December 30 that has been troubling me ever since it appeared in print.

I'll leave it to Dean Baker and others to argue with Samuelson's take on other issues. My complaint is about this incredibly incorrect paragraph:

But given an aging baby-boom population and increasingly high health costs, spending on the elderly is already crowding out other important government programs and threatening steep tax increases on working Americans. I plead guilty to making this point repeatedly. Annual spending on Social Security already exceeds defense spending; Medicare is approaching the level of “non-defense discretionary spending,” a catchall of everything from highway spending to foreign aid to education.

There are several big problems with virtually everything here.

First, there is no evidence that spending on the elderly is crowding out other "important" programs. The federal budget is not a zero-sum game and an increase in one program does not automatically mean a reduction has to happen somewhere else. In fact, we know from experience that's not the case. In addition, in the current political environment there would still be pressure to reduce other programs even if spending on the elderly was lower. 

There is also no indication that these other "important" programs are a higher priority to a majority of Americans than Social Security and Medicare. Saying that other programs are as or more important is making a value judgment about what the government should do that is being presented as a fact.

Second, saying that annual spending on Social Security "already exceeds" defense spending implies that the Pentagon should always spend more and it's somehow wrong or inappropriate when that doesn't occur. As with any other federal function, the level of military spending should be dependent on the need rather than the type of artificial standard Samuelson tries to establish.

Third, the same can be said about Samuelson's statement about Medicare: The fact that it may be "approaching the level of non-defense discretionary spending" is a completely meaningless warning. Would Samuelson be happier if non-defense discretionary spending was increased so that it was greater than Medicare?

Finally, what in the world does Samuelson mean when he says that spending on the elderly is "threatening steep tax increases on working Americans"? Isn't Pentagon spending and interest on the national debt just as responsible for the deficit as other programs? And if there's a demand for these programs by working Americans (and you can see in any poll that there is), shouldn't they be asked to pay for at least part of them?

WaPo

It seems that the WaPo is becoming the WSJ editorial page lite. What is worrisome is how many people believe this dreck.


Like all the other

Like all the other Republicons, Samuelson is simply trying to steal workers retirement funds. The CBO projected that the surpluses Clinton left for Bush were enough to pay off the entire US debt by the time that the Social Security/Medicare trust funds would have to be amortized for beneficiary payments, all without having to raise taxes to pay for the amortization of those trust funds. These “surpluses” were made up entirely of excess payroll taxes building up the trust funds. Bush took those excess payroll tax receipts and gave them “back” as income tax reductions, heavily weighted to the wealthy–who didn’t create those surpluses in the first place. By doing this, Bush guaranteed that taxes would have to be raised in order to amortize the trust funds. The failure to do so simply permits the Republicons to steal the money contributed by workers for their retirement. Everything about not raising taxes or limiting expenses, is about stealing our money.


Not from the same bucket, either

It's also worth pointing out that Samuelson conveniently "forgets" that Social Security isn't paid out of general revenue - a standard wingnut maneuver.


Zero Sum Game

Unless we think revenue and spending can forever be disconnected (see, chfly, Europe), is
it not a zero-sum game? And that, increasingly, we must choose what we'll pay for, as opposed to what we merely promise to pay for?

http://mercatus.org/publication/reality-isnt-negotiable-government-cant-...


Isn't spending more for

Isn't spending more for medicare and SS (although as has been pointed out, SS doesn't come from the same bucket) than for defense the sign that things are going _well_ and thus something we should aspire to? Would people rather return to the relative spending levels of, say, WWII?


Crappy Priorities.

Defense spending is supposed to be less than taking care of nations citizens, especially those that paid into system. SS not an entitlement - its a pay back of money loaned to govt, with small interest added hopefully. U.S. still spends more on defense than the top "i dont know how many" nations. Twice that of China. Samuelson needs a vacation. Id suggest a permanent one.




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