Tuesday, December 17, 2013

Robert Samuelson Whines About Muddling Through

Oh, I cannot resist piling on, even though good old Dean Baker has already pretty much done the dirty job of once again showing how misguided and fixated on silly things Robert J. Samuelson is with his latest column in the Washington Post, 12/16/13, "The luxury of muddling through," although my effort to link to Dean's excellent post does not seem to be working.  In any case, the abysmal RJS complains that the latest budget deal is just "muddling through" and does not deal with "the central issue" of longer term deficits, which he sees as mostly a matter of not cutting retiree benefits, although he does note that Republicans do not wish to raise taxes, which he seems to accept as an unbudgeable given.  He does not note that this new budget cuts unemployment insurance and food stamps (SNAP), even as he whines about this muddling through. While this budget clearly "sucks," as Nancy Pelosi put it, at least it does mean that we are not likely to have a government shutdown or debt ceiling crisis for the next two years (although debt ceiling crisis is not completely off the table).

Dean accurately points out that RJS makes no allowance for the collapse in revenues due to the Great Recession and how our failure to get back to where we were is the main reason for the deficit.  He also  notes that for all RJS's whining about Medicare costs, he does not even mention once that the cost curve on medical care costs has been bent.  In all this RJS continues to follow the line of WaPo editorial page editor, Fred Hiatt, that cutting Social Security and Medicare is this very high priority that must be done ASAP, a line that many other WaPo columnists who are nominally liberal  Dems such as Ruth Marcus also spout.  Dean also argues that if SS and Medicare really were to get into serious trouble in the future, voters would probably support tax increases to support these popular programs.  Polls show even Republicans supporting such tax increases for these programs.

Let me just add a few more points to this drubbing that Dean missed.  One is that in fact the deficit has come down substantially over the last few years.  It is simply not in any dangerous state that would lead to the sort of crisis that RJS suggests in the column may be coming if muddling through is all that happens.  Furthermore, as Dean has noted in the past, but did not this time, the real measure of the burden of the debt is the interest payments on it measured as a percent of GDP.  That percentage is now only half of what it was 20 years ago.  We are simply nowhere near any sort of crisis point on all this.

What continues to be annoying about RJS, besides his fixation on wanting to cut these programs, is how ignorant he is of economics, although somehow he has been given this position of being the main regular economics columnist of WaPo.  This is best seen in the horror that he expresses in this column that the likely outcome of this budget is that "the current [upward] trajectory of the debt would not change."  Really.  Somehow he seems unaware that in the vast majority of years in US history we have run federal budget deficits, which means that the debt has risen in most years without any fiscal catastrophe ever happening.

Since WW II, there have been only a handful of years when the budget has run a surplus, most recently at the end of the 1990s, with that reflecting both rapid GDP growth and the tax increase Clinton put through in 1993, unsupported by even one Republican who loudly forecast imminent recession whereas instead we had rapid GDP growth, which brought us those surpluses, just as our current low GDP and growth is the main source of our current deficit.  There is simply no reason to aim at budget surpluses as a policy goal.  Again, it is the ratio of the debt to GDP that matters, and more importantly the ratio of the interest payments to the GDP that matter even more, and those are very far from what they were even quite recently when they did not trigger any sort of crisis.   Robert J. Samuelson's whining is simply completely out of touch with reality, but at least he is unlikely to lose his job at WaPo as long as the current editorial page editor continues to have his.

Barkley Rosser


Bruce Webb said...

Barkley as you well know from our many past conversations the fundamental problem for RJS etc is that they have invested themselves so heavily in 'Social Security is the problem' largely but not entirely to prove the Reagan case that 'Government is never the solution' that they are backed into a corner.

It is kind of the opposite of "Conservatism cannot fail, it can only be failed". In this case the arguement runs:

"Social Security cannot succeed, so it must BE failed" Otherwise several generations of "bi-partisan" "centrist" "sensible" conclusions dating back to at least the Kerrey-Danforth Commission of 1994 would have to be conceded as abject nonsense. And worse perhaps a certain Dean Baker (and Mark Weisbrot) as authors of 1999's "Social Security: the Phony Crisis" would have to be acknoweledged as having been right. Again. (With some spinoff credit to people like you and me that, you know, actually paid attention in real time).

And God Forbid we let the DFH's win. (or numerate economists like Dean and you).

rosserjb@jmu.edu said...

Needless to say, Bruce, I fully agree. At some level I feel sorry for Robert J. Samuelson, but not all that sorry. That WaPo crowd really needs to face up and fess up, but they are in no hurry to do so.

rickstersherpa@msn.com said...

RJS has made a small fortune singing this tune (at least small compared to the huge fortunes of his paymasters), so I think we have another example of the truth discovered by Upton Sinclair:

Upton Sinclair — ‘It is difficult to get a man to understand something, when his salary depends on his not understanding it.’

rickstersherpa@msn.com said...

Hence, I don't fell sorry for him, Fred Hiatt, Jeff Bezos, or Katherine Weymouth, for whom a one month social security check would be equal to the cost of one small dinner party for friends, son hence they don't see the significance of eliminating it..