There are few things that get David Brooks more excited than seeing a politician beat up on the elderly and because he has a column in the New York Times, we all get to share the thrill. As Brooks tells us, Representative Paul Ryan, the Republican chairman of the House Budget Committee, has a long list of budget reforms and most importantly is prepared to go after Medicare. Ryan would replace the current Medicare program with a voucher system. This would end the commitment of Medicare to provide decent health care to the elderly and disabled. If private sector health care costs grow as projected the vast majority of seniors would soon find themselves unable to afford health care under Mr. Ryan's plan.
Brooks' excitement for Ryan extends beyond his willingness to cut Medicare benefits for retired workers. He tells us that Ryan would even, "reform the tax code along the Simpson-Bowles lines, but without the tax increases." What a guy, Ryan is even prepared to reduce taxes as he ends the security that Medicare provides for retired workers.
I'll confess to having gotten caught up in the excitement, but getting back to the facts that Brooks gets wrong, he tells readers that:
"The current welfare state is simply unsustainable and anybody who is serious, on left or right, has to have a new vision of the social contract."
Actually this is not true, as everybody who serious on the left or right knows. The U.S. health care system is unsustainable. If per person health care costs were the same as those in Germany, Canada or any other wealthy country, then the United States would be looking at long-term budget surpluses, not deficits. If the health care system is not fixed it will have a devastating impact on the economy regardless of what we do with public sector health care programs like Medicare and Medicaid.
Of course fixing the health care system requires going after powerful interest groups like the pharmaceutical and insurance industries and the doctors' lobbies. Attacking these powerful groups is less likely to draw praise from media pundits like Brooks. They don't get quite as excited when politicians attack the wealthy and powerful as when they attack ordinary workers.
Brooks is also excited by the fact that "the ex-chairmen of the Council of Economic Advisers and 64 prominent budget experts" signed letters stressing the urgency of reducing the budget deficit. While no one would want to question the credentials of these experts, they may want to question their competence.
Not one member of this group warned of the $8 trillion housing bubble, the collapse of which led to the worst downturn since the Great Depression. This downturn is likely to cost the economy close to $3 trillion in lost output and add a comparable amount to the nation's debt. In fact, if these budget hawks had a better understanding of the economy, they would have been focusing their concerns on the housing bubble instead of the deficit in the years from 2002-2006.
Their focus on the deficit distracted the public's attention from the economy's most pressing problem. Because of their prominence, these experts were able to draw media attention from those who were actually warning of the housing bubble. The result was the economic collapse that we are now experiencing and much larger deficits than the ones that had concerned them in the years prior to the collapse. There is no evidence that this group's understanding of the economy has improved in the last 4 years.
(Only one link allowed per comment)