More Redux: Robert J. Samuelson Goes After Social Security (And Medicare) Yet Again (And Again And Again And... )

Dean Baker today, to whom I seem never able to link, sarcastically opened his post today at Beat the Press about the column in today's WaPo by Robert J. Samuelson with, "Yes, it's a Monday morning at Washington Pos tand Robert Samuelson wants to raise the retirement age and cut Social  Security and Medicare benefits.  How else ould one begin a week?"  Dean then proceeds to point out that instead of doing these things one could 1) raise taxes, 2) cut payments to a host of way overpaid special interests in the US health care industry, 3) urge the Fed not to prematurely raise interest rates thereby probably slowing growth and tax revenues (not to mention job growth), and 4) or default on the debt.  He admits the latter is mostly sarcastic, but also notes that effectively based on the law cutting benefits to the SS recipients amounts to a default on a promise, so is this better than defaulting on debt held by high income holders of that debt?  Let me add a bit more, as I have done in the past.

So, RJS's column is entitled "Twisted budget priorities." He poses cuts in NIH research funding, funding of the IRS (which will reduce revenues by not catching cheaters), and defense as the prime examples of victims of  all this awful entitlement spending.  He also wants Amtrak and farm subsidies cut, before he launches into all the ways that old age entitlements should be cut (basically listed by Dean).  Amusingly (and in contrast with Dean) he actually does at one point say, "and pay for the rest of government with higher taxes."  This is in the midst of his litany of approved spending cuts (or constraints), led by the proposed  cuts for Social Security and Medicare.  In short, he is simply restating that old fave of the Bowles-Simpson VSPs, the Grand Bargain, in which entitlement cuts are coupled with appropriate tax increases, although he basically admits that "both Obama and Republicans evade this unpleasant exercise." (and well they should)  While, RJS did not specify which taxes, in the old proposed B-S deals the taxes that would be raised would be, ah ha!.fica taxes for Social Security! And, hey, not too long ago while the GOPsters refused to end the supposedly "temporary" tax cuts for high income individuals, they rushed forward to end the actually temporary fica tax cut under Obama (hack, cough!).  So, maybe...

Let me add another point here.  Of course, in Samuelson's discussion of government activities, supposedly in terrible danger due to all those entitlements for old people, he makes no comment about what has been going on at the state and local levels.  Bill McBride at Calculated Risk (need to scroll on the link, sorry to "best private job creation ever').  He reports indeed that indeed the rate of private job creation in the US during Obama's second term has been greater than in any presidential term ever.  Really.  He notes that in three fairly recent terms overall job creation happened at a faster rate: the two terms of Bill Clinton at the top (the second being #1), followed by Ronald Reagan's second term.  What put them ahead overall was that they all featured substantial public sector job growth, with, ironically, that commie socialist Reagan leading the pack on the rate of public sector  job growth of the bunch.  The rate of public sector job growth under Obama was severely negative throughout his first term and has been barely positive in his second term, like two orders of  magnitude lower than under Reagan in his.

Adding to all this in all these cases is what has happened at the state and local levels, where jobs grew substantially in those rivals to Obama's second term, but have only now also begun to grow again very slowly, after also declining sharply in his first term. Let us be clear that none of what goes on at the state and local level has anything to do with old age entitlements, but Samuelson is not even aware of any of this,even if lots of crucial public investments in infrastructure and education go on at this level.  He is lost in his VSP narrative about a non-existent Grand Bargain at the federal level.  In all of it, the one clear thing that he aims at is cutting those benefits for old people, not  noticing (as Dean points out) that an enormous amount of this has to do with out-of-control  medical care costs in general, not related to old people at all beyond the fact that they tend to consume more of that.

Barkley Rosser