Tuesday, January 29, 2013

Very Serious People Completely Missing The Boat On The Budget (Yet Again)

On Monday's Washington Post editorial page we have two of Washington's more self-important Very Serious People bloviating yet again on how the Most Important Thing that Obama must do if he is to be well regarded in history is to cut Social Security.  I am talking about WaPo ed page editor, Fred Hiatt (who gave this bum this job anyway?) and of course my favorite non-economist posing as one, Robert J. Samuelson.  Hiatt thinks the two big issues of the first term were the stimulus and health care, but is clearly upset that while Obama had apparently signaled early in his term that he was willing to cut SS benefits, he is not willing to do so now, which clearly Hiatt views as inimical to Obama's ultimate historical standing.  RJS discusses whether or not the 21st century will be another "American century," but finds the biggest threat to this to be that the US is in with Europe and Japan in that "Their welfare states are overwhelmed. Aging societies face a collision between promised benefits and acceptable taxes."  Acceptable taxes?  Gag me with a spoon.

As it is, both studiously ignore the much more reasonable column on the same page by E.J. Dionne who cites both Martin Wolf and Bruce Bartlett on how it is "madness" to be so worked up about the deficit.  The problem can be largely resolved if growth and jobs are able to be gotten back and a premature rush to sharply cut the deficit can lead to a failure to do that.  Indeed, the constant churning about deadlines for various fiscal cliffs is generating massive uncertainty that is damaging business activity and government agency planning, driving up costs needlessly.  Neither Hiatt nor Samuelson somehow notice this at all, nor do they notice that this churning is entirely due to inane tea party demands over the debt ceiling in Summer 2011, when the ridiculous sequester was cooked up, now being pushed by Paul Ryan and others as a tool to extract what H and S want, "entitlement" spending cuts.  That these threats are far more damaging than any social safety net expenditure to the economy somehow does not occur to these dim bulb VSPs.

Barkley Rosser

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