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Home Publications Blogs Beat the Press Thomas Friedman Is Upset That President Obama Is Not Kicking the Elderly

Thomas Friedman Is Upset That President Obama Is Not Kicking the Elderly

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Wednesday, 21 September 2011 03:44

Thomas Friedman joined the ranks of the Peter Peterson deficit hawks and criticized President Obama for not wanting to beat up the elderly. Specifically, he is upset that President Obama did not propose cuts to Social Security and Medicare.

Apparently Friedman is not aware of the upward redistribution of income over the last three decades. Nor does he seem to understand that the government just needs to spend money to create jobs now.

The current crisis is the result of the collapse of a housing bubble that he and his deficit hawk friends allowed to grow unchecked. The construction and consumption demand created by the bubble was driving the economy. Now that the bubble has collapsed there is nothing to replace this demand.

In the short-term this demand can only come from the government. In the longer term it will have to come from more a smaller trade deficit as domestic production replaces foreign production. This will only come about from a lower-valued dollar.

The long-term deficit is driven entirely by the broken health care system in the United States. If the United States paid the same amount per person for care as people in any other wealthy country we would be looking at large budget surpluses, not deficits.

Social Security is already largely in balance. According to the Congressional Budget Office it can pay all scheduled benefits until the year 2038 with no changes at all. After that date it can pay more than 80 percent of scheduled benefits indefinitely. A tax increase equal to 5 percent of the wage growth projected over the next three decades would be sufficient to allow it to make all scheduled benefits indefinitely.

 

Comments (5)Add Comment
open a recent history book
written by frankenduf, September 21, 2011 10:32
friedman implies that a 3rd party platform would essentially address balancing fiscal and monetary policy, but this is not borne out by reality- the last 2 successful 3rd party platforms were essentially populist- one critiquing 'free trade' which would harm working class citizens, and one critiquing corporate public policies which harm working class citizens- of course the same is true today- a champion of middle class policies would be a very potent 3rd party platform, as opposed to championing accounting balances for the federal budget, something no doubt the two existant parties will bloviate about in the coming election
$2.5 trillion a year going to health care. Billion in waste, BUT it's dispersed . . .
written by Rachel, September 21, 2011 1:10
I just heard the bad news from San Jose, California. Budget crisis looming. All community centers, libraries to be closed. Fewer police, while gang violence increases.

At the same time, according to BLS, average annual RN wage is $116,150. Internist wage not given, but estimating from SJ/Oakland rn ratio, it's roughly $235,000.

So one side of San Jose's problem, to judge from what Dean Baker has explained, is that during the property bubble the city got used to very good tax revenues.

But the other side of the city's problems is that they never bothered to question the large sums going to some very expensive hospital chains. And now the local nurses are planning to go on strike, for still higher wages, benefits and lower staff ratios! (They do have a point about the staffing problem.)

So to respond to Frankenduf's idea, the difficulty is that a good portion of our problems are due to many, many professionals making too much money, not just a few fat cats. And it's not easy to make political hay while pointing out, however fairly, overpayments to nurses. Doctors are a bit easier, but when it comes to professionals, the media seems quite hopelessly biassed.
Thomas Friedman is a wealthy man.
written by trish, September 21, 2011 2:21
He will need neither social security nor medicare to live in comfort in his old age.

Just like many of those in government (already millionaires) with tax-payer-financed gold-plated health plans and coming tax-payer-financed pensions, and lucrative ties to big money to cash in later- they won't need it.

Same with the rest of the wealthy elite. Corporate media/entertainers, right-wing organizations, koch brother types, chamber of commerce plutocrats and all their hacks, millionaire-gazillionaires...they won't need it.

what's amazing is how they con the ones who will.
...
written by fuller schmidt, September 21, 2011 3:25
Jung says that the only escape from the darkness of greed is through education. Oops - we're going the wrong way.
credit crunch?
written by david, September 21, 2011 4:50
Joe Nocera at the NYT wrote an interesting piece http://www.nytimes.com/2011/09...redit.html, on Paul Kasriel's claim that the real problem is the credit crunch and an overreaction to the credit bubble. I would love to hear Dr. Dean's reflections on Kasriel's claims ...

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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.

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