Hopefully he's not reflecting the general wisdom of the White House he just left.
...Social Security does face an actuarial deficit. Current projections suggest that, after 2037, benefits would need to be reduced by more than 20 percent to match revenue. Measured over the next 75 years, the deficit in Social Security is expected to amount to 0.7 percent of the economy — not a huge amount, but a deficit nonetheless.
So it would be desirable to put the system on sounder financial footing. And that is precisely what the co-chairmen of President Obama’s bipartisan commission on reducing the national debt have bravely proposed to do. It’s too bad their proposal has been greeted with so much criticism, especially from progressives — who really should look at it as an opportunity to fix Social Security without privatizing it. Although the plan leans too much on future benefit reductions and not enough on revenue increases, it still offers a good starting point for reform.
Social Security faces an actuarial deficit in 2037. A quarter of a century from now. He says it right there. Maybe that's one of many reasons why progressives have reacted so negatively to the recommendations coming from Simpson and Bowles--that and Social Security has never contributed to the deficit that the commission is nominally dealing with (with tax cuts!). There isn't any urgency to "fix" Social Security, just a decades-long effort on the part of many of the members of the deficit commission to gut it.
What is the urgent problem that liberals and progressives think should be solved now? The economy, stupid. And in this case, the catfood commission proposals could make it worse.
[T]he recommendations of the two co-chairs of the fiscal commission would make the prolonged stagnation worse, by commencing belt-tightening less than a year from now, at the beginning is fiscal year 2012 (October 2011) when most economic forecasts say unemployment will still be around ten percent.
The economy is on the brink of a period of prolonged deflation. With the Obama stimulus of February 2009 already starting to peter out, state budgets in free fall, home foreclosures proceeding at the rate of several hundred thousand a month, and job creation too low to cut the unemployment rate, the outlook is for endless slump -- unless we get more public investment, not less.
The problem right now is jobs. Perhaps Orszag should be spending less time telling progressives what they should believe and more time helping is former coworkers with a plan for boosting the economy.
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