Someone Else Who Wants Us to Remain in Deficit Crisis Mode

January 29th, 2013 at 7:28 pm

Suzy Khimm has a nice write-up of a Peterson Foundation piece that looks to me like another example of why we must all stay in crisis mode on the deficit or why won’t “cut deeply enough” or make the “hard choices” that the “serious people” know we must.

Your first hint that there’s from fear mongering going on here comes from the image you see when you click on the link to the study—the Capitol building perched on the edge of an abyss, with chunks of the building already falling into the depths.

While our approach at CBPP has been to point out what’s needed to stabilize the debt over the next decade—and stress that the extent of further-out-in-time budget pressures depend on health care costs and the impact of new policies to curb them—the basic approach taken here is to get people worried enough about post-2022 projections that they’re willing to pass “entitlement reforms” now.

That is both unwise and unnecessary.  First, as mentioned, we need to see the trajectory of health costs that have slowed in recent years.  If that sticks, the forecasts will be improved.

Second, this Congress is the wrong Congress with which to engage in such reforms.  They cannot be trusted to do so in such a way as to protect economically vulnerable beneficiaries.  They will fix social insurance by breaking social insurance.

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7 comments in reply to "Someone Else Who Wants Us to Remain in Deficit Crisis Mode"

  1. Pablo says:

    Stabilizing debt is not an adequate goal. It leaves us incredibly vulnerable to inevitable interest rate increases.

    Isn’t it a truism that the population is aging and healthcare costs are growing faster than inflation. Waiting several years to address the obvious just makes the inevitable adjustments harder to pass and more severe.

    • Bearpaw says:

      It’s true that the population is aging and healthcare costs are growing, but it does not automatically follow that the “inevitable adjustments” constantly and repeatedly pushed by the Very Serious People are the best solutions … or are even solutions at all.

      When someone says, “We have to do it My Way and we have to do it Now or Really Bad Things will happen”, it’s a pretty fair guess that they’re trying to sell something that the prospective buyer might not actually want. This is especially true if the person has a history of participating in similar cons in the past.

  2. perplexed says:

    When the fear mongers keep suggesting that we risk disaster by not acting now to cut deficits and debts, why don’t any economists just explain that we have almost $70 trillion in wealth in this country and, if the crisis we are being threatened with really ever develops as they project, we have the power to implement a wealth tax and can solve it almost immediately with such a tax? Why are we not talking about the ratio of our debt to our wealth? Is there a secret pact among card-carrying economists to never bring it up?

    A wealth tax would impact a very small percentage of the electorate and draw attention to what the real priorities are of the fear mongers. When everyone understands this a real option for this “pending disaster,” those who would allow us impose these indefensible costs on a huge number of unemployed people will stop bringing it up and allow us to focus on the real problems.

  3. Ogden Wernstrom says:

    When public approval of Congress remains low over a long period of time, as it has recently, the cartoon might cheer up most people.

  4. Tyler Healey says:

    If our debt is not stable, why are interest rates so low? Oh, right, because the Fed has exercised its total control over interest rates and made them low.

    Why does even Bill Clinton not understand this?