by which he means that the threat to the economic future of the United States supposedly posed by Social Security and Medicare is diminishing - for a variety of reasons - at least to the point where we should stop obsessing about that and focus on the real economic needs of our nation, which of course means the creation of jobs.
In this New York Times column, he begins with the CBO projections for deficits and debt which clearly show improvement, noting the lamentations from the austerians caused by dropping deficits (many have now noted the deficit has already dropped by more than what the austerians were demanding and debt is stabilizing). HE writes of the response of the deficit hawks
if you’ve built your career around proclamations of imminent fiscal doom, this definitely wasn’t the report you wanted to see.He then pivots to the safety net programs for seniors. asking a rhetorical question and answering it:
Still, we can always count on the baby boomers to deliver disaster, can’t we? Doesn’t the rising tide of retirees mean that Social Security and Medicare are doomed unless we radically change those programs now now now?It is that Maybe not that SHOULD be key to any future discussions about benefit cuts.
Krugman acknowledges that we still have work to do on both programs. The report of the trustees acknowledges that the ratio of those of 65 to those of "working age" will continue to rise.
What neither they - nor Krugman - acknowledge is that the percentage of those continuing to work past 65 (for Medicare) or for full retirement age (currently 66) for Social Security is continuing to rise. I am one example of that, as I hope to be back in the classroom full-time in August, and am already working halftime. Having just returned from the 40th reunion of my final college class (they are mainly 62 and 61) and having attended my 45th of my original class (now mainly 67) there are a significant percentage of both who are continuing to work for the foreseeable future because they enjoy what they are doing, or because they had children late and still confront educational expenses, or in some cases to have more money to help fund worthy non-profit efforts.
The trustees project the rise in Social Security payments "from 5.1 percent of G.D.P. now to 6.2 percent in 2035, at which point they stabilize." Thus the system will be able to pay most of the benefits as far as we can see into the future. While there is some possible future threat, Krugman writes against the demand for cuts to current benefits:
The risk is that we might, at some point in the future, have to cut benefits; to avoid this risk of future benefit cuts, we are supposed to act pre-emptively by...cutting future benefits. What problem, exactly, are we solving here?Of Medicare, Krugman acknowledges that even he has argued that it represented a greater long-term threat than did Social Security, but even here we are seeing significant improvement in the growth rate - the trustees report projects it rising from from 3.6 percent of G.D.P. now to 5.6 percent in 2035, a much smaller increase than previously projected. Krugman acknowledges that no one can completely explain what is happening - there may be "bending of the curve" as provision of ACA begin to kick in, with even more of that to come. Krugman also notes the real potential for savings because we American pay "far more" for medical procedures than in other countries and if this is contained the future for Medicare will be even brighter.
It is in the final 3 paragraphs that Krugman hammers home his argument against the austerians.
The combined increase in GDP for BOTH programs is 3%, which while a significant number, is not crushing, and as Krugman notes
The United States could, for example, close that gap entirely through tax increases, with no reduction in benefits at all, and still have one of the lowest overall tax rates in the advanced world.Here I think is a key point that is often missing from our public discourse and thus misunderstood by too many who do not pay close attention. We are NOT heavily taxed compared to the rest of the world. We ARE unfairly taxed, with too much of the burden falling upon those below the more wealthy who could easily accept shifting of part of the current tax burden to them AND Absorb some increased taxes without hurting either their individual accumulation of wealth or the obscene accumulation of untaxed profits by corporations. At some point I hope Krugman can be part of changing the public discourse so that the issue is no longer focused on how to cut taxes more than it is how to make taxes fairer and having those who can afford contribute their fair share to the economy that so enriches them.
KRugman's penultimate paragraph takes the austerians apart:
But haven’t all the great and the good been telling us that Social Security and Medicare as we know them are unsustainable, that they must be totally revamped — and made much less generous? Why yes, they have; they’ve also been telling us that we must slash spending right away or we’ll face a Greek-style fiscal crisis. They were wrong about that, and they’re wrong about the longer run, tooOf course, as we know, the mere fact that they have consistently been proven wrong, both in this country and in what we have seen of the impact of austerity in other nations in no way changes their rhetorical outlook. They double down on the scary language and refuse to allow discussion of alternatives. Which is why ordinary folks are not getting the benefits of what economic recovery there is, a recovery which has been hampered by things like cuts to public employment (think of the loss of the multiplier effect of the spending of those public employees who have lost jobs) and which would be really hurt by the loss of benefits under SNAP (food support) programs.
Which is why the final paragraph of this superb Krugman column is right on target:
The truth is that the long-term outlook for Social Security and Medicare, while not great, actually isn’t all that bad. It’s time to stop obsessing about how we’ll pay benefits to retirees in 2035 and focus instead on how we’re going to provide jobs to unemployed Americans in the here and now.YEs it is.
Which is why the ratio in the House of 37 votes to kill "Obamacare" to ONE vote on any kind of jobs bill is obscene.
Read the Krugman.
Pass it on.
And perhaps ask the question again and again, where are the bills to create jobs?