Krauthammer on Obama’s Priorities

First off … let me emphasize that Obama isn’t doing any worse than almost all other politicians in the last generation.

Having said that, let me link to an op-ed piece by Charles Krauthammer that appeared in the local paper on March 15.

Krauthammer is no friend to Obama, but he’s not a bomb-thrower either. He’s the conservative column for the otherwise liberal Washington Post: so, he’s got to be good, but if he was idiotic that paper wouldn’t tolerate him. Note that the linked piece is from National Review, a conservative publication, so it won’t be as diplomatic as something in the Washington Post.

He starts with:

Everyone knows that the U.S. budget is being devoured by entitlements.

Fair enough. I think we can all agree on that. Then he states:

Everyone also knows that of the Big Three — Medicare, Medicaid, and Social Security — Social Security is the most solvable.

Again, there’s broad agreement there. The he spells out a simple plan:

Back-of-an-envelope solvable: Raise the retirement age, tweak the indexing formula (from wage inflation to price inflation), and means-test so that Warren Buffett’s check gets redirected to a senior in need.

Which brings us to current policy:

The relative ease of the fix is what makes the Obama administration’s Social Security strategy so shocking. The new line from the White House is: no need to fix it because there is no problem. As Office of Management and Budget (OMB) director Jack Lew wrote in USA Today just a few weeks ago, the trust fund is solvent until 2037. Therefore, Social Security is now off the table in debt-reduction talks.

This is the same position that is taken down in the Blahaus piece posted earlier in the semester.

This is the same position that has been rejected in every macroeconomics textbook for the last 20 years or so.

This is the same position that Al Gore adopted in the 2000 campaign, and for which he was widely criticized at the time (even by Democrats).

The sad part about all of this is that, theoretically, there is nothing wrong with a social security system, and they can be stable forever. But, on the ground, flawed humans have intentionally chosen an unstable path that favors people who are old enough to vote over those who are not old enough to vote (or not born yet).