Saturday, February 12, 2011

David Brooks' Math Problem

Like "everybody else", David Brooks wants to balance the budget.
The greatest pressure comes from entitlements. Spending on Medicare, Medicaid, Social Security and interest on the debt has now risen to 47 percent of the budget. In nine years, entitlements are estimated to consume 64 percent of the budget, according to the invaluable folks at the Committee for a Responsible Federal Budget. By 2030, they are projected consume 70 percent of the budget.

When you throw in other politically untouchable programs, like Veterans Affairs, you arrive at a situation in which a vast majority of the budget is off limits to politicians who are trying to control debt. All cuts must, therefore, be made in the tiny sliver of the budget where the most valuable programs reside and where the most important investments in our future are made.
Let's confront it at the outset: David Brooks is what some waggishly call a "very serious person" when it comes to balancing the budget, which means that he's not actually concerned with balancing the budget. Sure, he's worried about potential future growth in entitlements, and we do need to address that growth. But his seriousness begins and ends with "How do we cut entitlements". Not, "How do we reform entitlements to make them sustainable," or "How can we get the same benefits while spending less money." Nope, you do it his way or you get a dismissive sneer about how you're putting the "vast majority of the budget... off limits".

It's easy to find Republican commentators who complain, with reason, that Medicare and Medicaid are unsustainable and we must find a way to bring their cost growth under control. They're right. So let's look around the world, right now, at what other developed nations are doing. Are there any that spend as much as we do for health care? Are there others that get better outcomes? How about emulating them? Nope, not even a possibility. Not even if it will help control the cost curve and balance the budget.

It's a fair retort that other nations haven't achieved perfection. They may get similar or even better outcomes at much lower costs, but their medical cost growth curves (even if lower) are also unsustainable. But that's neither a valid basis to reject their approaches, nor to examine those elements that work and adapt them to the U.S. system. At least if the goal is to balance the budget. If you're willing to blow a huge hole in the deficit and allow out-of-control medical inflation due to your love of our pseudo-free market system, fair enough. But if so, why should anybody regard you as serious about balancing the budget. Your "my way or the highway" approach is every bit as obstructionist as that of your imaginary foe who won't agree to cut even a penny from Medicare.

As for Medicaid? Untouchable? Brooks can't be serious.

Social Security is not a pressing issue. It's budget is balanced well into the future. If you believe that the U.S. will be in such a bad position by then that it is going to start defaulting on its debts, well, what can I say? If that's our future, getting a Social Security check will be among the last things you'll be worried about. It's possible to balance Social Security for additional decades with relatively minor adjustments, but that will only have people like Brooks sounding the alarm about the next date after which Social Security is projected to be unable to pay full benefits.

I am perfectly content to talk about Social Security reforms and the impact of an aging population. People in Brooks' camp? They talk about privatizing Social Security, then they check the polls and find out that "privatizing" is not polling well so they start talking "personal accounts" (which must be selected from a narrow range of government-defined options, from which private managers will skim management fees, and for which there is no guaranteed return) while simultaneously complaining that it's unfair to speak of their plan as "privatization". Beyond that, what is Brooks offering? How... serious.

Brooks lectures the Republican Party that they have to do more than talk and dream about cutting entitlements - it's time to turn those dreams into reality:
Over the next few weeks, Republicans will try to cut discretionary spending to 2008 levels and tell their constituents they are boldly reducing the size of government. That is a mirage. Anybody who doesn’t take on entitlement spending is an enabler of big government.
Yes, the Republican budget plan is a joke. Has been a joke. Will be a joke. But wait a minute here. What word is completely absent from Brooks' editorial on how to be serious about the budget. He's mentioned interest, Social Security, Medicare, Medicaid, veteran's benefits.... That's right, in an editorial oddly titled "The Freedom Alliance",1 he has forgotten about that pesky military budget.

If Brooks wants to make a policy argument about why the military budget should be untouchable, he's free to do so. The New York Times would pay him for that column, as it does with any other. But as with the argument he doesn't make as to how we could save billions, right now, by adopting a different approach to health care spending, he has no discernible interest in the subject. He'll complain that Teach for America's $18 million earmark is at risk, but forget about paying for it by pulling 40 or so combat soldiers out of Afghanistan.

Note another concept missing from Brooks' analysis: the tax increase. He's sort of a twisted Marie Antoinette. "Hey you - you want some cake? You can eat cake. You just have to take it away from veterans, sick people and old people." Buy more cake? You gotta be kidding, right? Once again he could offer a policy argument - why the rich, who are richer than ever, should not pay more taxes. But nope. Instead he's championing the recommendations of the failed Simpson-Bowles deficit commission and telling us that if we want barely trained college grads teaching our kids, grandma's gotta give up her medicine.
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1. This "Freedom Alliance" apparently involves various groups that want government money teaming up to convince the masses that our freedom is at stake if we don't convince Congress to cut entitlement spending in favor of perpetuating their earmarks. Go grass roots!

2 comments:

  1. Here's a plan written by a senior who now lives on social securoty with Medicare benefits. I believe a majority of Americans are quite willing to support cuts in whatever entitlements they receive IF everybody shares te burden equally; if there is indeed "Equal Justice Under Law". Here's how:
    TAX AND ENTITLEMENT REFORM

    1. All persons residing in the U.S. shall come together in households for the purpose of reporting all income from any source, each item to be identified by payer's and payee's tax number, and for receipt of federal and state benefits. Members of a household need not be related, need not reside together, and a household may consist of as few as one person.
    2. Each year congress shall set by legislation a "minimum wage" and a "tax rate".
    3. The following income shall not be subject to taxation:
    • An amount equal to a year's earnings at the minimum wage rate, for each adult (age 20-65) member of the household, decreasing 10% per year to 50% at age 15, and increasing 10% per year to 150% at age 70.
    • All payments for what is classified as necessary health care for all members of the household including medical care, any pharmaceuticals prescribed by a recognized health care professional, vision and hearing aids, and membership fees for health-enhancing entities such as gyms or other exercise facilities. Health care insurance premiums may be deducted but not health care expense paid for by such insurance.
    • All educational expenses including day care for young children or legally incompetent persons, that portion of state and local taxes identified as spent on education, that portion of parochial school tuition, fees and other expenses identified as going for non-sectarian education, tuition, fees and educational materials for private school education at any level, and a per-diem allowance for students traveling more than 50 miles from primary residence for education.
    • All income saved into an identified account from which investments may be made. All withdrawals from this account for the benefit of any member of the household shall be reported as income to that member.
    4. The "tax rate" shall be applied to any income over and above the deductions listed above, regardless of amount.
    5. At the request, by legislation duly enacted by any municipality having greater than 100,000 inhabitants or any state, a surtax may be imposed on citizens of that municipality or state which shall be applied in a manner exactly as applied for the Federal tax.
    6. For households whose deductions exceed total income, the Federal Government shall make payment equal to the tax rate multiplied by the shortfall in income, as shall municipalities and states.
    7. There shall be no federal tax on corporations or other business entities.
    8. The Office of Management and Budget shall compute revenues to be expected using the newly set tax rate and minimum wage, applied to the previous year's reported incomes. No expenses in excess of that amount may be authorized or made by the federal government without approval by 75% of each house of Congress.

    Your suggestions sincerely requested. E-mail them to tbeebe6535@yahoo.com.

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  2. . . . at the risk of starting a conversation I don't want to sit through - it appears this system woould result in lots of people paying no tax whatsoever while simultaneously receiving government reimbursement out of a "very" small pool of money . . . unless they made the mistake of having good benefits, in which case they get taxed to death . . .

    CWD

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