CEPR - Center for Economic and Policy Research

Multimedia

En Español

Em Português

Other Languages

Home Publications Blogs Beat the Press Robert Samuelson: "What Frustrates Constructive Debate is Muddled Pundit Opinion"

Robert Samuelson: "What Frustrates Constructive Debate is Muddled Pundit Opinion"

Print
Sunday, 17 March 2013 20:33

Okay, that's not exactly what Robert Samuelson said, but pretty close. He actually told readers:

"What frustrates constructive debate is muddled public opinion."

I just thought I would make a small change in the interest of accuracy.

Samuelson is very upset because almost no one, Democrat, Republican, or independent wants to go along with his crusade to cut Social Security and Medicare. He tells readers with disgust:

"In a Pew poll, 87 percent of respondents favored present or greater Social Security spending; only 10 percent backed cuts."

He then demands that President Obama rise to the occasion and insist that people accept lower benefits.

President Obama's time can probably be more productively spent teaching economics and arithmetic to people who write on budget issues in major news outlets. Most of the main assertions in Samuelson's piece are misleading or just flat out wrong.

First, the budget is only constrained at the moment by superstition. There is no obstacle to the government borrowing more money to meet needs and put people back to work. We are not spending more money because we have superstitious people with large amounts of power who are making claims about the dangers of deficits that they cannot support with evidence. Rather than lecturing seniors, who have a median income of $20,000, on the need for lower Social Security and Medicare benefits, Obama could try to confront the people spreading superstitions about deficits.

Samuelson's complaint about the size of spending on the elderly is also highly misleading. He complains:

"In fiscal 2012, Social Security, Medicare, Medicaid and civil service and military retirement cost $1.7 trillion, about half the budget."

That sounds really outrageous -- those damn old people. Samuelson case is considerably weakened by the fact that the vast majority of this money was paid into these programs through designated taxes. He might think it's fine to tax people for Social Security and Medicare and use the money for the military or to pay interest on Peter Peterson's government bonds, but the less educated public might not share this view.

In fact, according to the Social Security Trustees projections, Social Security is completely funded by its designated tax through 2034 with no changes whatsoever. While Medicare is projected to face a shortfall after 2024, the size of this projected shortfall has fallen sharply in recent years. If the path of slower health care cost growth over the last five years continues, then Medicare will be largely funded throughout its 75-year projection period with few changes.

Insofar as Medicare and Medicaid do pose cost problems the issue is that we pay too much money to doctors, drug companies and other providers, not that seniors are getting too much health care. If we paid the same amount per person for health care as people in other wealthy countries we would be looking at long term budget surpluses, not deficits. But Samuelson and his friends would much rather beat up on old people than on rich doctors and powerful drug companies.

One final point on which Samuelson is apparently confused is that the public does understand that there may be a need for money to pay for these programs and in fact is prepared to pay more for them, according to a recent poll conducted by the National Academy for Social Insurance.

Hey, but what can you do? We have a punditry that just won't accept reality and prefers to beat up on old people. If only President Obama could show some leadership and try to educate people like Robert Samuelson.

Comments (14)Add Comment
First things first
written by Jennifer, March 17, 2013 11:16
"It’s true that Republicans should also accept higher taxes — but only after the White House engages retirement spending."

That sums it up--lowest rates in years, especially if you are in the 1%--but make the old people pay first.
How about an Editorial
written by jumpinjezebel, March 18, 2013 1:31
I wish you could get your comments published in more newspapers - are you turned down or have a contractural arrangement that limits you? Small newspapers in the Midwest particularly have a vast need for educated input - they publish George Will 3 times a week for instance - along with other blather. People are in desperate need of the facts!!!
Never A Fair Fight
written by James, March 18, 2013 3:55
between the haves and not-so-haves since the dawn of days...

Jumpin...good luck in trying to convince a Midwest newspaper board to put Dean's on. They looked at Dean's research and concluded, "Ah...no." Syndicated? Na...

"A pundit won't accept reality."

For example, cutting Medicare payment to doctors? R u kidding me? They warned us that primary care physicians won't accept Medicare patients. They care more about the AMA, pharma, medical device inventors, etc. WTF

Midwest Newspapers
written by Dean, March 18, 2013 6:06
Jumpinjezebel,

I would be happy to get my stuff picked up in Midwest newspapers, but you really need a syndicate to carry you. I'm afraid that I don't have any takers.
...
written by f.fursty, March 18, 2013 7:55
Dean, you're great. But one small point, if I may. I don't think it's superstition that keeps these guys at it. They know quite rightly that in the long run, if benefits don't go down for others taxes will have to go up for them. Better to have poor people get less social security than raise the cap and have them pay more.

Its a sort of mofied Keynesianism: In the long run, maybe more poor people will be dead. It's cheaper that way.
Why Aren't Big Agriculture Subsidies Getting Slurred as Entitlements?
written by Last Mover, March 18, 2013 7:58
Since Robert Samuelson and George Will despise "entitlement" spending so much in the name of debt reduction, why don't they bash farm subsidies as much as SS and Medicare? Stick that in a Midwest newspaper and see how long their columns last with the austerian drivel.
Stuck in the muddle ...
written by David, March 18, 2013 8:14
Samuelson thinks the 90% are muddled by self-interest, like he is. But those 90% actually understand reality and Pete Peterson's political ploy. Team Peterson is just mad that they themselves can't be as succesful as Madoff was, even after successfully poisoning the waters of the media.
...
written by skeptonomist, March 18, 2013 9:32
The solution to any shortfall in Social Security as well as to the inevitable increase in elderly population is extremely simple, it is to extend the base of taxation; raise the upper limit on payroll taxes, and include capital gains, interest and dividends. The people who are getting that type of income can easily afford it - their wealth is not being used productively now. The elderly would spend almost all of the money transferred in this way.

The barrier to this is not superstition or ideology, but self-interest. The upper income people who pay those taxes don't want to pay more and they control the Republican Party, the WaPo and Robert Samuelson. The matter of who pays the taxes is not ideological; what philosophical or ideological principle (such as those discussed yesterday by Perlstein) dictates how people too old to work are supported? Of course someone like Samuelson will tell you he is motivated by ideology or even economic logic, but people always find it easy to "believe" in supposed principles which align with their material interests.
funding is the issue, of course skepto...but go for the low hanging fruit first...
written by pete, March 18, 2013 10:59
Clearly a carbon tax is preferred to more taxes on labor. Taxing carbon rather labor produces all the right incentives. I guess now that the "conservative" economists are for this, I suppose the "liberal" economists will poo poo it, speaking of a hidden agenda. The hidden agenda is to expose SS as the pay as you go system it is. Roosevelt brought the republicans on board by fraudulently claiming it was a defined benefits program. Folks like Dean repeat this fraudulent claim.

Tax bad things, subsidize good. Econ 101.
...
written by Kat, March 18, 2013 12:34
I wish you could get your comments published in more newspapers - are you turned down or have a contractural arrangement that limits you? Small newspapers in the Midwest particularly have a vast need for educated input - they publish George Will 3 times a week for instance - along with other blather. People are in desperate need of the facts!!!

Are large East coast papers any better? There seems to be a limitless supply of crap such as this right in the pages of the WaPo or the Times. Anyway, Mr. Samuelson is writing for the president. And it is apparent he has his ear.
...
written by Eric377, March 18, 2013 1:38
Social Security is entirely funded through 2034 provided the net redemption of the Trust Fund Treasury debt holdings goes through. That's something like $2.6 trillion dollars, I think. Now that has been the plan since the 80s, so you might have thought that the nation would be well prepared for this transition for accumulation to redemption. Except we really aren't. You can point at Bush tax cuts and unneeded wars as really complicating this transisiton and you would be correct, but nearly all of those income tax cuts have just been made permanent and the blood and treasure spent over the last decade are beyond recovery. So one can decide that all's well with Social Security for the next 2 decades since the law says it is. But critics are correct in saying that this process is going to be far harder to pull off than Reagan and O'Neill were planning on back 30 years ago - that is if they gave the matter any thought at all back then.
...
written by liberal, March 19, 2013 8:40
pete wrote,

Folks like Dean repeat this fraudulent claim.


No, folks like you are too stupid to understand that justice doesn't necessarily demand that people who have paid into SS all their lives aren't responsible for the implicit debt (lack of prefunding).
liberal...no SS to pay into...that is precisely the fraud...
written by pete, March 19, 2013 11:10
tax bad things to pay for SS...don't tax some 20year old 12.5% of their income for the next 45 years...geesh.
responsibility for future treasury bonds
written by NWsteve, March 21, 2013 10:45
@Eric377:
a point or two to add/takeaway:
why do any of us 'get-up-in-the-morning'?

after all, future-epectations are simply too daunting...

will the store have bread, will the electricity work, do the toilets flush...will the stock pay-back...will housing of any kind be available...will my children have good health...will my parents...will the 'world' survive...will i...will you...and for how long...will...

more or less: on and on...
an endless daily 'trust' as far into the future as we can imagine...

collectively, for better or for worse, we-all have more or less agreed that life can go on, in some fashion or another...even with incompleteness and uncertainties...

* * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * *

BUT: will any Investment Bonds be paid for...will they be re-purchased...will...
ah then, now the bogeyman has arrived...

the "2020" Treasury Bonds that will be issued (all other possibilities having been presumed to not be possible) are the result of the Bush era income tax cuts and the UNFUNDED 2 Wars---or any other prior government frivolities or investments that we can assign, and also including continuous private sector looting, individual greed, fate...just pick a few...

However: those 2020 TBs are NOT to fund nor to pay-for net out-going SS checks...ever...

that in 2013 (and earlier) the message-from-the-media continually states that future government borrowing is required to pay for citizens' retirement is untenable...

plain and simple...

now, repeat...

Write comment

(Only one link allowed per comment)

This content has been locked. You can no longer post any comments.

busy
 

CEPR.net
Support this blog, donate
Combined Federal Campaign #79613

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.

Archives