The New York Times Tells President Obama That He Has to Cut Social Security and Medicare

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Wednesday, 10 August 2011 04:36

The NYT ran a piece that told readers that it was necessary for President Obama to cut Social Security and Medicare for the good of the economy. This is not obviously true. There is no shortage of economists who would say that the economy's main problem is a lack of demand. This can be met by more stimulus, more aggressive action from the Fed, or a decline in the value of the dollar.

Remarkably, the NYT did not include the views of any economist who made these points. The only views presented in these articles were of those who wanted to cut Social Security and Medicare. The former is especially peculiar since the latest projections from the Congressional Budget Office projects that the program will be fully solvent until 2038 even with no changes and it could always pay more than 80 percent of scheduled benefits. Also, under the law the program cannot contribute to the deficit since it can only spend money raised through its designated tax.

One of the two experts cited in the piece suggested the need to means-test Social Security. Analysts familiar with the program generally do not support means-testing since it is likely to raise little money unless it is applied to people with very modest incomes.