Tuesday, June 15, 2010

The First Refuge Of Scoundrels

As someone nearing the age to qualify for Medicare and Social Security, I was more than a little nervous by the formation of the Simpson-Bowles Commission on the deficit. It was only too obvious that two of the major targets for reducing spending were not the Pentagon and Corporate Welfare, but rather Medicare and Social Security, the two most effective and efficient government programs around. That's why I was cheered by economist James K. Galbraith's comments in this morning's Los Angeles Times.

In American public discourse, national security is the first refuge of scoundrels. For six decades good and dreadful ideas alike have been buttressed by claims that they will help make us secure. President Eisenhower used the claim to promote spending on highways and education. President George W. Bush used it to justify wiretapping and torture.

Now deficit hysterics have started trilling the national security song to justify a coming attack on Social Security and Medicare. ...

The National Security Strategy doesn't mention either Medicare or Social Security by name. But the code words "medium-term deficit reduction" are there, and they are today's stand-in for cuts in those programs. "Everything must be on the table," we're told, as the Simpson-Bowles commission prepares to explain why Social Security and Medicare must be cut.

But why? Social Security and Medicare are not broken. They are successful, popular programs that protect America's elderly from poverty. Cutting them would be devastating. Today, at a time when people have lost jobs, investments and equity in their homes — the very things that an aging population counts on for economic stability — Social Security and Medicare are more important than ever. They are the most important bulwarks of middle-class life in America. And we can afford them. A rich nation can always afford modest retirement benefits and decent healthcare for its old. Cutting them would be, in fact, totally inconsistent with the spirit of the National Security Strategy, which correctly equates human security with national security around the world.

The facts are that Social Security and Medicare both work, and will continue to work with only minor tweaking. Social Security is still in the black, and would remain in the black for many decades by removing the ceiling on contributions. A tax on the rich? No more so than a tax on the poor and middle class. I prefer to think of it as an offset for the tax cuts the rich got under the last administration.

Medicare is one of the most efficiently run programs in the government. In fact, administration costs are far below those of private health insurance programs. Root out more of the fraud perpetrated by private businesses dealing with Medicare, and it too will continue to work well until the next time the conservatives want to pass the gravy to their corporate masters.

Blaming these two social programs for the current budget deficits is foolish. Professor Galbraith, who makes a pretty good argument for deficit spending right now in the rest of his opinion piece, nails the real villains for our current economic woes:

The real cause of our deficits and rising public debt is our broken banking system. The debts our economic leaders deplore were largely due to the collapse of private credit, and to the vast giveaways the federal government made to banks to prevent their failure when credit collapsed. Yet those rescues have failed to reanimate private credit markets and job creation, as the latest employment reports show. And so long as that failure persists, public deficits and rising public debt must remain facts of life.


If the Simpson-Bowles Commission wants to suss out some ways to save money, I'd suggest they take a look at what we are spending for two wars we didn't need or want. They might also take a look at the subsidies given agricorps or tax breaks given large industries. Let's let our owners share some of the pain.

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