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Home Publications Blogs Beat the Press Morgan Stanley Director Erskine Bowles Calls for Cutting Social Security and Medicare

Morgan Stanley Director Erskine Bowles Calls for Cutting Social Security and Medicare

Sunday, 02 October 2011 09:05

Morgan Stanley Director Erskine Bowles, along with his sidekick former Senator Alan Simpson, once again used the Washington Post oped page to call for cuts to Social Security and Medicare. The two made the call in the context of a piece urging the congressional "supercommittee" to produce a large deficit reduction package.

They argued that it was necessary for cuts in "entitlements" to be part of any deficit package. "Entitlements" is the preferred euphemism for Social Security and Medicare for people who want to cut Social Security and Medicare.

It is once again interesting to note that in a call for shared sacrifice, Bowles and Simpson once again never mention the possibility of financial speculation tax (FST), which could raise over $1.5 trillion over the course of the next decade. Such a tax has been used in the UK for centuries and a proposal for such a tax has recently been put forward by the European Commission. It is remarkable that the elite political figures in the United States show so little interest in an FST.

The Bowles-Simpson piece also includes a bizarre criticism of President Obama's deficit reduction proposal complaining that:

"while it does (barely) stabilize the debt, it does so at a dangerously high level and with no margin for error."

Since Congress approves budgets every single year, and often makes major budget adjustments between budgets, it is not clear why Bowles and Simpson think they mean by "with no margin for error." If a budget plan approved by the current Congress fails to meet deficit targets for budgets 8-10 years in the future, Congress will have plenty of time to make whatever adjustments it views as necessary.

Of course as every budget analyst knows, the whole long-term budget problem is the result of our broken health care system. If the United States paid a comparable amount per person for its health care as people do in any other wealthy country, we would be looking at huge surpluses, not deficit. This point is rarely mentioned by Bowles and Simpson. 

Comments (8)Add Comment
Outliers and Outliars Exceed Margin for Error
written by izzatzo, October 02, 2011 12:16
...it is not clear why Bowles and Simpson think they mean by "with no margin for error."

Any economist knows from statistics while an outlier is an extreme data point deservedly removed from the regression an outliar is the fly in the ointment, the skunk at the party discreetly avoided and left to suffocate alone in a cloud of heresy.

By 'no margin for error' Bowles and Simpson as experts in standard deviation mean there's no room for outliers in the data on Social Security and Medicare nor outliars such as Baker who repeatedly parades these outliers as fact rather than the outliers they actually are.

It takes enormous courage to go after outliars and the outliers they spread to justify socialist entitlements and for that alone Bowles and Simpson are American heroes.

Stupid liberals.
written by jumpinjezebel, October 02, 2011 3:24
Bowles and crank Simpson should open a law firm dedicated to destroying the middle class. How about the rich paying now that they have almost all the wealth? How about Wall Street contributing with a transactional tax? How about eliminating the interest the Fed pays banks for parking their money instead of putting it to work?

Stupid Conservatives.
written by Jay, October 02, 2011 5:26
This is social darwinism. I don't know how a person can view medicare and social security to be undeserving entitlements.

However, the same person considers the best tax policy is to let the rich accumulate staggering amounts of wealth so they can bestow riches at their discretion upon others out of charity without any concern about inequality or the lack of revenue to fund government.

This person attributes an amount of virtue that probably wouldn't be in the possession of a person that accumulates a large amount of wealth.

The views propounded in the press display either an astounding amount of naivety, immunity to human suffering, or an incredibly disingenuous way to promote greed.

written by Kimber, October 02, 2011 8:46
The use of the word "entitlements" is very pervasive, even among more liberal minded type people. Entitlements is not a euphemism. I had to google to find out what it really is, which is a dysphemism: the substitution of a disagreeable, offensive, or disparaging expression for an agreeable or inoffensive one. It is very powerful to call our safetynet entitlements. We should rejuect this dysphemism. This word has bled even into liberal type minds.
written by Ethan, October 02, 2011 8:55
I appreciate your opinion, but Damn It I AM "entitled" to Social Security (I paid in all those years), and Medicare (I'm paying in now).
If I put money in a bank account, am I not "entitled" to take it out again?
I had a contract with my government. Is my government free to break its contracts whenever it decides what is most convenient for it or for the elite it favors? What ever happened to "sanctity of contract"?
written by Kimber, October 03, 2011 2:46
It's about the pejorative connotation of the word. You are right, that technically, there is nothing wrong with the word. Your approach seems to be to try take back the legal meaning of that word, and change the pejorative connotation most Americans have with that word. Good luck with that one, although it is possible. (I take your tack when it comes to the word socialism - so I hear what you are saying.) When it comes to Social Security and Medicare, I much prefer the term safety net myself. I believe conservatives renamed our safety net with the word entitlement in an effort to turn Americans against our safety net, and it seems to be working pretty well. But I get the drift of what you are saying as well, Ethan.
written by wkj, October 03, 2011 11:43
Recent coverage of Morgen Stanley in the NYT
http://www.nytimes.com/2011/10...&sq=morgan stanley&st=cse

suggests that Bowles may have to focus on ginancial troubles closer to home.
News Flash - The Rich claim that everyone else must sacrifice
written by H-Bob, October 03, 2011 2:17
Is there anyone on the Supercommittee who is not a millionaire (or likely to become a millionaire through inheritances) ? How about having a committee of people who actually will rely on Social Security for their retirement ?

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.