Frank Bruni, one of the NYT's new columnists, ran a column today complaining about government corruption in Italy and the impact that an aging population in both Italy and the U.S. will have on reducing the living standards of our kids. This is one of those columns which could have been so easily prevented if the NYT just required a remedial 3rd grade arithmetic course for columnists that intend to write on economic issues.
For example, Bruni complains that seniors and older workers want to protect Social Security and Medicare. If he looked at the Congressional Budget Office's projections for Social Security he would see that they show a 1.6 percentage point increase in the payroll tax would leave the program fully solvent throughout its 75-year planning period.
By comparison, workers' wages are projected to rise by almost 40 percent over the next three decades. This means that the program can be kept fully solvent with a tax increase that is less than 5 percent of projected wage growth over the next three decades. This will impoverish our kids?
Of course most workers have not shared in the wage growth over the last three decades. The vast majority of wage growth has gone to those in the top 10 percent of the wage distribution. However this raises questions about government policies that redistribute income upward, like trade policy, Federal Reserve Board policy, and patent policy. However, none of these villains appear in Bruni's column, he just wants to take Social Security checks, which average less than $1,200 a month, from current and future retirees.
The same story applies to Medicare. The problem is not that Medicare beneficiaries are getting such great care. The problem is that we pay way too much to pharmaceutical companies, hospitals, and doctors. If we paid the same amount per person for our health care as people in other wealthy countries then we would not have to increase payments to Medicare for many decades into the future. But again, Bruni's target is the seniors getting Medicare, not the powerful interests driving up costs.
We find the same logic in Bruni's diatribes against Italy. He complains about the excessive pay and perks of the Italy parliament. While he may well have a case, if we take his numbers at face value, the 1000 member parliament costs Italy around $200 million a year. By comparison, Robert Rubin personally pocketed close to $120 million sitting near the helm at Citigroup, as the company was being driven into the ground and taking the economy down with it.
There is no excuse for public officials ripping off the people they are supposed to represent. But it is striking that they feature so prominently in Bruni's piece, while the barons of finance, who make the corruption of public officials look like chump change, are nowhere to be found.
Finally, Bruni somehow thinks that young Italians will be hurt by the country's low birth rate. In fact, this is likely to help future generations of Italians since it means that there will be shortages of workers. That will allow them to command higher wages. There are also many benefits of a smaller population that will not be picked up in official statistics. For example, public facilities like parks and beaches will be less crowded, as will transportation facilities. Also, it will be much easier to reduce emissions of greenhouse gases and other pollutants with a smaller population.
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