Free Markets, Free People

Suddenly We Have Problems (Update)

Funny how this works, eh?  

February, 2005:

Your lack of details is no surprise–an essential component of the government’s PR blitz is the obscuring of details because, in fact, Social Security faces no immediate crisis. President Bush is lying to us, again.Despite the president’s sky-is-falling forecasts, the system’s trustees give Social Security another four decades of soundness; the nonpartisan Congressional Budget Office gives it five. Many independent economists believe the program will stay healthy closer to six or seven more decades.

January of the same year:

It all sounds awful, but is it really so bad? Is there a Social Security crisis?

Most Democrats say no. They contend the president is trying to scare people into supporting his plan for drastically changing the program.

“The future is not as bleak as some people would have the public believe,” says Peter Diamond, an economics professor at the Massachusetts Institute of Technology. “Social security is not bankrupt in the usual sense of the term — not going broke, not going ‘flat bust.’”


But professor Diamond says, yes, in 2042, benefits will have to be cut, but retirees then would still get more money than today’s retirees.

“We’ve got 35 or more years to phase in very slow changes that people can certainly adapt to and live with,” he says.

And Medicare?

From the majority Democratic Congress of last August:

“The Medicare trigger was cooked up by Republicans behind closed doors as a political ploy to foster an unfounded panic about the strength of Medicare’s finances,” said Rep. Pete Stark (D, Calif.), chair of the House Ways and Means Subcommittee on Health. “We must turn off the trigger and reject Republican attempts to arbitrarily limit Medicare financing.”

Stark and other Democrats argue that Medicare’s trend to require an increasingly larger portion of its funding to be in the form of general tax revenues has no bearing on the program’s long-term solvency. Although Democratic lawmakers support some of the Bush bill’s provisions, they take issue with his proposal to ease the drain on tax dollars in part by charging wealthier seniors more for their Medicare drug benefit premiums.

Yet what is going to happen today?

On Monday, Obama will bring together more than 130 lawmakers, heads of advocacy groups and economists in the White House State Dining Room to lay out the bad news – a federal deficit of at least $1.3 trillion, the largest as a share of the nation’s economy since World War II. The fiscal summit is meant as a first volley in the battle to address runaway costs for Medicare, Medicaid and Social Security.

Runaway costs? But, but … I thought Republicans were trying to scare everyone? I thought Bush had lied? You mean they were right?  My goodness, you mean that it may have been the Democrats who were being disingenuous.

Heh … that can’t be so, can it?

Hope and change.

UPDATE:  Apparently Democrats are still pushing the “there’s nothing wrong with Social Security” meme.  From the Joe Scarborough show, and interview with budget director Peter Orszag, who will be chairing today’s “Fiscal Responsiblity Summit” (yes, it’s okay to laugh):

JOHN HEILEMANN: Peter, it’s John Heilemann from “”New York”” magazine. there’s a report in “”the New York Times”” today, this goes back to a question that Joe kind of hinted at a minute ago, which is that Barack Obama considers doing a White House task force on Social Security reform to announce today and he got pushed back from Democratic leaders in the House and Senate. is that report true? Is the question of Social Security reform still on the table for you guys, how important is it?

PETER ORSZAG: Well, I want to come back to the point that was raised earlier, which is that Medicare and Medicaid are the primary drivers of our long-term fiscal problem. We want to address that first. we want to get health care done this year. Social Security is also an issue and after we’ve dealt with health care I think it probably does make sense to try to get Social Security on sounder ground also, but let’s get the big problem fix first.

HEILEMANN: Peter, did you guys back down or not?

ORSZAG: I don’t think it’s constructive to get into the back and forth of discussions in, you know, in internal discussions. i think the important point is, the president is committed to addressing the largest problem that we face which is Medicare and Medicaid.

JOE SCARBOROUGH: Peter, please understand, it may not be constructive, but it’s an awful lot of fun. Did Nancy Pelosi tell you to back off of Social Security and Medicare and Medicaid reform?

ORSZAG: You guys are wild having fun like that. We want to get — I really want to focus on — SCARBOROUGH: Peter, it’s all we got.

MIKA BREZEZINSKI: He fits the show. Answer the question, Peter. You got an answer for us?

ORSZAG: Again, Social Security is, you know, does face a long-term deficit, it does need to be addressed, but it’s much smaller than the problems than Medicare and Medicaid and the health system. i think it makes sense to focus there first.

It doesn’t take a rocket scientist to see through Orszag’s rather poor attempt to obfuscate the issue. Apparently they did back down. Medicare and Medicaid only remain on the table because they are a means to an end – what the Democrats like to euphemistically refer to as “health care reform”. That, by the way, does not refer to making either Medicare or Medicaid more efficient, less costly or less wasteful, it instead refers to expanding both programs. That, in the era of Democratic rule is considered to be “fiscally responsible”.


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6 Responses to Suddenly We Have Problems (Update)

  • The generation in power seems to have no idea what planning for the future is. They only see smooth sailing when looking at issues. Its why so many are losing their homes, they thought nothing would change in their lives to mess up their 1 month at a time planning.

    • I tend to disagree. I think the people in power know exactly what they are doing.

      Making things so bad that the people willing give up all pretenses of freedom to them in order for something to be done.

      • SkyWatch is right: the filthy dems knew exactly what they are doing.  Bush foresaw a couple of problems during his administration in the mortgage industry (especially Freddie and Fanny) and the looming debt of Social Security.  Because his plans to deal with these problems didn’t involve greater power for the state, would have encouraged people to be a little self-sufficient, AND would have upset the gravy train for certain powerful democrats (spit), that collection of scum did everything they could to derail the process of reform – indeed, of even DISCUSSING reform.  It is obvious to anybody who anybody who looks at the numbers that SS is unsustainable over the long run as the ratio of workers to retirees continues to shrink, but the dems (spit) told us that it was all smooth sailing.  MiniTru, of course, backed them up.

        Now, however, the dems see yet another crisis they can use to advantage.  As McQ says, they’ll “save” entitlements by making them bigger.  Certain liberal idiots (redundant) will go along, singing the old song about how nationalized health care will actually be cheaper for the country.

        It’s enough to make me weep…

  • Remember the SOTU apeech where Bush said that they couldn’t get SS change through, and the Dems stood up and applauded?

    I’d say rerun the clip ad nauseum but nobody will care, just as nobody cares about the Barney Franks clip where he talks about how good and healthy Fannie and Freddie were.

    People have to learn the hard way- if they’ll learn at all

  • They don’t have until 2042.  When they need to tap into the SS Trust Fund and find IOUs, the party is over.  Unless they intend to send SS recipients an IOU?

    This could have been fixed, but for temporary partisan advantage, the Democrats refused.    

    • The FN NY Times is still repeating the lie that Social Security has a “reserve” that won’t run out until 2041.  The Social Security Administration will begin cashing in IOU’s in 2016.  We are in Alice in Wonderland territory now.
      “Social Security still runs a surplus, and its reserves will not be exhausted until 2041”