The Post has a nice piece pointing out the disparities in life expectancy by income. As a result of these differences, proposals to raise the age of Social Security eligibility would disproportionately hit lower income workers.

At one point the piece tells readers:

"Advocates of raising the retirement age say only a relative handful of older workers would be harmed and that the vulnerable could be protected by enacting hardship exemptions."

It would have been worth noting that this practice of creating "hardship exemptions" was one of the policies that won Greece much ridicule in recent years. Its social security system allowed workers in many occupations to retire at younger ages. For example hairdressers were allowed to start collecting benefits at age 50, ostensibly because they worked with hazardous chemicals. 

Most countries have been moving away from policies that vary retirement ages by occupation in favor of uniform retirement age. It is striking that we have people in policy positions in the United States that are advocating the old Greek model.

Zero holds a bizarre place in policy debates. In the United States we have many policy types who seem to worship a balanced budget. At the start of the last decade there was a modest clamoring on the right for a monetary policy targeting zero inflation. In the same vein we continue to see assertions that deflation would pose some inordinate problem, as though something awful happens when the change in the aggregate price level turns negative.

The culprit today is the NYT, which has an article on the European Central Bank's decision to leave its short-term interest rate unchanged. At one point it told readers that deflation is:

"a broad decline in prices that, by discouraging consumer spending and business investment, can be more economically destructive than runaway inflation."

Actually, a moderate rate of deflation (e.g. less in absolute value than -1.0 percent) would have only a very modest impact in depressing demand. The inflation rate is an aggregate of hundreds of thousands of price changes. When the rate is near zero, many of these price changes are in fact negative. (Some are negative because of imputations of quality improvements by government statistical agencies, as has often occurred with new cars and computers. Actual prices in the market may be increasing.)

The shift from a low positive inflation rate to a low rate of deflation simply means that the price change is negative for a larger share of these items. It is not remotely plausible that this shift can have disastrous economic consequences.

There is a story where falling prices lead to more rapidly falling prices, which would have a devastating impact on the economy, but this acceleration downward is no more likely (and probably less likely) than a sudden acceleration upward. As a practical matter, the economy would benefit from a higher rate of inflation, since that would reduce real interest rates and thereby spur growth. In this sense, a 0.5 percent rate of deflation is worse than a 0.5 percent rate of inflation in the same way that a 0.5 percent rate of inflation is worse than a 1.5 percent rate of inflation. There is no magic to crossing the zero line.

The Washington Post once again left its readers stumped. It printed an op-ed column by David Goldhill, the president and CEO of the Game Show Network, the main point of which seems to be that Medicare must still confront rent-seeking by health care providers.

Goldhill apparently is arguing against the merits of expanding Medicare or adopting a single payer type system in the United States, telling readers:

"Single-payer advocates contend that other nations have managed to better control health-care spending — volumes and prices — by enforcing a true budget for cost. But any review of how our Medicare system actually works illustrates why a single-payer system would be so difficult here: Our government has a pervasive inability to say “no.” Only in the United States is public health care an unbudgeted entitlement: Our government promises to pay for any care seniors need and providers respond by relentlessly expanding the definition of need. It’s no coincidence."

This statement implies that Medicare somehow does worse in containing costs and preventing unnecessary procedures than private insurers. The data does not support this claim. According to the Center for Medicare and Medicaid Services (Table 3), the per person cost of Medicare has consistently risen less rapidly than for private insurers. Over the whole period from 1969 to 2011, costs in Medicare rose by an average annual rate of 8.6 percent compared to 9.9 percent for private insurers. For common services the gap was even larger, 7.9 percent compared to 9.3 percent. (Medicare has expanded services, most notably the prescription drug benefit. This expansion reflected the fact that prescription drugs were a trivial expense when the program was created in 1966 and therefore were not covered.)

In the most recent period, 2007-2011, the gap was even larger with annual costs rising 3.6 percent in Medicare and 5.3 percent for private insurers. For common benefits the numbers are 2.8 percent and 5.6 percent.

While lobbyists of providers will certainly try to push for higher payments for their clients, the evidence is that Medicare is still more effective in containing costs than the private sector. To bring costs in line with those in other wealthy countries it will be necessary to impose more market discipline on doctors, drug companies, medical equipment suppliers and other providers, but it seems clear that Medicare is better equipped to do this than private insurers.

A NYT piece discussing the prospects of another budget deal would have benefited enormously by answering this question. The piece referred to a proposal to restructure Medicare under which the government, "could potentially charge the affluent elderly more."

The definition of "affluent" matters enormously. When it came to raising taxes, President Obama and the Republican leadership agreed not to raise taxes for couples earning less than $450,000 a year. If this same definition of "affluent" is applied to elderly then it would only affect 0.1-0.2 percent of Medicare beneficiaries.

While the rich have a hugely disproportionate share of the country's income, their per person Medicare expenses are roughly the same as everyone else's. (Actually they would be somewhat less since the premiums for the program are already means tested.) This means that if President Obama and congressional leaders are planning to apply a cutoff for being affluent for Medicare that is comparable to what was used in the tax negotiations then the amount of money at stake is trivial and it is hardly worth the paper's time to be reporting on the negotiations.

Alternatively, if the proposal is intended to raise a serious amount of revenue then it will likely mean that seniors with incomes around $50,000-$60,000 would be paying more for their Medicare. This is not a level of income that is generally regarded as "affluent." If this is the sort of cutoff being considered in the negotiations then the NYT is badly misleading its readers by saying that they are discussing charging fees to the affluent elderly. In this case they are talking about charging higher fees to people who almost everyone would consider middle income.

In a Huffington Post column today, Jeffrey Sachs picks up where he left off in a co-authored column with Joe Scarborough that appeared in the Post last week. There are two main threads to Sachs' argument. The first is that we would have been much better off with an ambitious public investment agenda than the actual stimulus package that was passed by Congress. The second is that we would have been better doing nothing than getting a stimulus of the sort we got, or even worse, getting a larger stimulus of the same variety.

It is difficult to believe that Sachs thinks he is really quarreling with Krugman on the first point. Krugman has been a vocal advocate of exactly the sort of public investment that Sachs is advocating. (There may be an issue as to how such a stimulus should have been paid for. Sachs is advocating tax increases on the wealthy and a financial transactions tax, as has Krugman. It is not clear whether he thinks these tax increases should have been put in place in 2009 when the economy was collapsing.)

The real point of disagreement is the best route if you don't get a big public investment stimulus. Sachs' position seems to be that the sort of tax cuts and modest spending increases that were part of the Obama stimulus were worse than nothing. He argues that the tax cuts were largely used to pay down debt as was the case of much of the spending, which took the form of transfers like food stamps and unemployment insurance. The net effect then is to raise the debt without providing much boost to the economy.

Sachs' claim does stand at odds with much research on the topic. The standard Keynesian models, used by the Congressional Budget Office and others, showed the stimulus creating in the range of 2-3 million jobs. This view also has been borne out by empirical work on the effect of the stimulus. 

The Washington Post just loves the trade agreements that recent administrations have been pursuing. It is willing to abandon all journalistic standards to help promote them. Post fans may remember back in 2007 when a lead editorial claimed that Mexico's GDP had quadrupled over the prior two decades in an editorial touting the benefits of NAFTA. (Mexico's actual growth over this period was 83 percent.)

Anyhow, it's back in the trade agreement promotion business with a front page article that touts the trade agreements being pursued by the Obama administration as a way to create jobs. The hard sell begins in the very first sentence where it tells readers that these are "free-trade" agreements.

This is of course not true. Formal trade barriers are already very low between the United States and most of the countries with whom we are negotiating trade pacts. These deals are in fact about imposing a set of standardized commercial rules, some of which, like increased patent and copyright protection, are the direct opposite of free trade. It undoubtedly sounds better to call a deal a "free-trade" pact, since most Serious People then think they have to support it, but it does not reflect reality.

It is also absurd to describe these deals as part of a job creation strategy in a period where the economy is operating way below full employment. Incredibly, the article holds up the prospect of opening up Vietnam's economy to trade -- in the same way that China's economy was opened up in the 90s -- as a goal of current negotiations. Needless to say, trade with China has not been a net creator of jobs in recent years.

However the whole idea of trade agreements as a way to create jobs is ridiculous on its face. There is an argument for reducing trade barriers to increase economic efficiency (increased patent and copyright protection go in the opposite direction), however this will have minimal impact on job creation.

This would be comparable to selling electricity deregulation as a job creation strategy. If it worked, electricity deregulation would lead to lower electricity prices which would provide clear economic benefits, but the impact on employment would be trivial. 

The same is true with trade agreements as every intro textbook shows. It is understandable that the Obama administration would want to mislead the public to better promote its trade agenda. But real newspapers are not supposed to assist in this effort.   

I hate to spoil the party over the big February jobs numbers, but I guess I've always been more of a data geek than a party guy. Yes, 236,000 is better than expected and not a bad number in the scheme of things. But folks with a little bit of memory would be slower to bring out the champagne bottles. We created 271,000 jobs last February and 196,000 jobs in February of 2011. That makes the average for the prior two years 234,000, almost exactly the same as yesterday's job number.

Last year the story, as I said at the time, was that unusually good winter weather gave a boost to the February numbers. We didn't see snowstorms shutting down major cities across the Northeast and Midwest as we would in a typical winter. That story probably applies to some extent this year as well, even if Boston did take a hit over a mid-February weekend.

The 48,000 new jobs in construction would certainly be consistent with this story. You can believe that construction employment is growing at a 10 percent annual rate or that we saw a weather driven fluke in February. I vote for the latter, but we will have more information in another month.

Btw, if we take the 191,000 average rate of job growth over the last 3 months, we would not make up our 9 million jobs deficit until well into 2020. Things certainly could be worse, but that is not a terribly bright picture.  

Matt Yglesias is on the money when he points out that when progressives want workers to get more money, they must implicitly want someone else to get less. Now there is a real real big exception to this point, that being the current economic slump. In a context where the economy is producing at a rate that is around 6 percent (@ $1 trillion) below its potential, then we can literally talk about a situation in which we expand the pie and there is more for everyone.

This is why the concern about waste in the stimulus was so absurd. If the issue was whether we had spending that was partially wasteful or no spending, then the answer is spending that is partially wasteful. Otherwise the resources would just sit idle (meaning more workers are unemployed) and we get to celebrate that we didn't put people to work on partially wasteful projects. (Of course less wasteful is always better than more wasteful.)

But if we envision one day being back in a world where the economy is operating near its potential, the good guys getting more means the bad guys getting less. The right eats, breathes, and sleeps with this logic. They understand that when they push down autoworkers' or school teachers' wages, there is more for them. They understand that cutting Medicare or Social Security means more for them.

If progressives want to secure more income for ordinary working types and the poor then it will have to come at the expense of someone else. I have my list (CEOs and their friends, doctors and lawyers, Wall Street financial types, bringing corporate profits back to earth would also be a good idea). Others may have a different list. But if there is no one who is going to lose out in progressive policy post-full employment, then there is no one who is going to win either.

Of course at the speed we are getting to full employment many of us won't have to worry about this problem in our working lifetime. 

Addendum:

After reading the comments, let me make the point a bit more clearly. The right has found ways to use the market to kick our asses. Progressives should find ways to use the market to kick their asses. These ways are all over the place: opening up trade in health care, making it easier for foreign doctors and lawyers to practice in the country, make the financial sector pay the same sort of taxes as every other sector, ending too big to fail in the banking industry, etc. These are mechanisms that require the government to get out of the way (in the case of financial sector taxes -- not privileging one sector over others). If Occupy Wall Street was saying these things they were not very effective in getting their message out.

Joe Scarborough is apparently feeling emboldened by his exchange with Paul Krugman on the Charlie Rose show and is doubling down on his confused anti-deficit tirades. He is back with an oped in the Post, co-authored with Jeffrey Sachs, who should know better.

The piece is a cornucopia of confusion, beginning with the first sentence:

"Dick Cheney and Paul Krugman have declared from opposite sides of the ideological divide that deficits don’t matter, but they simply have it wrong."

I am not in the defense of Paul Krugman business, but surely Jeffrey Sachs knows that Paul Krugman does not argue that deficits do not matter as a general proposition. What Krugman has argued very vociferously is that deficits do not matter in an economy that is operating far below its potential, as is the case with the United States today. The Congressional Budget Office (CBO) projects that the economy's output will be more than 6 percent (@ $1 trillion) below potential this year. Projected 2013 output is almost 10 percent below the real level of output that CBO had projected in 2008 before it recognized the impact of the collapse of the housing bubble.

In a period of widespread unemployment and excess capacity, like the present, deficits cannot have the negative effect that they would if the economy were near full employment. In an economy near full employment, the argument would be that deficits push up interest rates. Higher interest rates will have the effect of reducing investment. They will also tend to put upward pressure on the dollar. A higher valued dollar will make imports cheaper, causing us to buy more from abroad. It will also make our exports more expensive, leading us to sell less to foreigners. The result is an increase in our trade deficit.

The Washington Post had a front page piece today warning that the spread of robots in the workplace may displace large numbers of workers. Incredibly, the piece never once mentions the implication of the displacement story for the demographic nightmare stories that endlessly fill its news and opinion pages.

Remember, the demographic nightmare story is that because of lower birth rates and longer life expectancies we are going to see a fall in the ratio of workers to retirees, from 3 to 1 today, to just 2 to 1 in 20 years. So, this is a story where we are suffering from a severe labor shortage. All of us aging baby boomers will be laying in our own waste because there is no one to change our bedpans.

Okay, now we have the story of sophisticated robots that will be able to replace human laborers in a wide variety of activities. The Post tells us that we should be worried about unemployment. Not really, because anyone who has read an intro econ textbook in the last 70 years knows that creating demand in an economy is very simple. Governments can run deficits. And if we need lots of demand, then we can run large deficits.

These deficits will give us the money we need to buy the output generated by sophisticated robots. And, when it is necessary, we will have the sophisticated robots changing our bedpans.

Of course there is a political problem. Folks like Peter Peterson and Washington Post don't want us to run deficits. They would rather see workers be unemployed. But hey, this is not the fault of the robots.

Advanced robots are simply another form of the productivity growth that we should all know and love. It increases the potential wealth of society. It is certainly possible that the rich and powerful will use their control over the political process to deny the bulk of the population the benefits of productivity growth, as they have largely done for the last 30 years, but the blame should be focused on the rich and powerful, not the robots. You might as well lash out at the wheel.