From giveaway to takeaway

Economy columnist Robert Samuelson sees our government having to transition from a “giveaway” mode, which dominated over the last half century with politicians doling out benefits and tax breaks, to a “takeaway” mode, in which many of such goodies have to be taken away.  Samuelson says, however, that the politics of doing so are just not possible.

Any resolution of the budget impasse must repudiate, at least partially, the past half-century’s politics. Conservatives look at the required tax increases and say, “No way.” Liberals look at the required benefit cuts and say, “No way.”

Each reverts to scripted evasions. Liberals imply (wrongly) that taxing the rich will solve the long-term budget problem. It won’t. For example, the Forbes 400 richest Americans have a collective wealth of $1.5 trillion. If the government simply confiscated everything they own, and turned them into paupers, it would barely cover the one-time 2011 deficit of $1.3 trillion. Conservatives deplore “spending” in the abstract, ignoring the popularity of much spending, especially Social Security and Medicare.

So the political system is failing. It’s stuck in the past. It can’t make desirable choices about the future. It can’t resolve deep conflicts.

An alternative theory is that we’re muddling our way to a messy consensus. All the studies and failed negotiations lay the groundwork for ultimate accommodation. Perhaps. But it’s just as likely that this year’s partisan scapegoating implies more partisan scapegoating. Political leaders assume that financial markets won’t ever choke on U.S. debt and force higher interest rates, stiff spending cuts and tax increases.

At best, this is wishful thinking. At worst, it’s playing Russian roulette with the country’s future.

via A country in denial about its fiscal future – The Washington Post.

 

Political dysfunction

Robert J. Samuelson on why are political divisions are growing, even as most Americans get along with each other pretty well, despite their political differences:

It’s not that the public has become sharply polarized. In 2010, 42 percent of Americans call themselves conservative, 35 percent moderates and 20 percent liberals, reports Gallup. In 1992, the figures were 43, 36 and 17 percent. So there’s a widening disconnect between the polarized political system and the less-polarized public. There are at least four reasons for this.

First, politicians depend increasingly on their activist “bases” for votes, money and job security (read: no primary challenger). But activist agendas are well to the left or right of center. So when politicians pander to their bases, they often offend the center. In one poll, 70 percent of registered voters said Republicans’ positions were too conservative at least some of the time; 76 percent likewise thought Democratic positions often “too liberal.”

Second, politics has become more moralistic from both left and right. Idealistic ideologues campaign to “save the planet,” “protect the unborn,” “reclaim the Constitution.” When goals become moral imperatives, there’s no room for compromise. Opponents are not just mistaken; they’re immoral. They’re cast as evil, ignorant, dangerous, or all three.

Third, cable television and the Internet impose entertainment values on politics. Constant chatter reigns. Conflict and shock language prevail; analysis is boring.

Finally, politicians overpromise. The federal budget has run deficits in all but five years since 1961. The main reason: Both Democrats and Republicans want to raise spending and cut taxes. To obscure their own expediency, both parties blame the other.

Politicians have always assailed one another. But the totality of these changes has altered the system’s character. Many players have an interest in perpetuating disagreements and differences. Advocacy groups and their allies derive psychic rewards (a sense of superiority) and political benefits (more members and contributions) from demonizing their adversaries. Cable TV needs combat, not comity.

The impulse is not to govern from the center, which still represents most Americans, but from “the base.” President Obama’s health-care “reform” was a good example. Strongly favored by Democrats, it was consistently opposed by about half of Americans. To be fair, George W. Bush governed the same way.

The result is mass discontent. Overwrought expectations are regularly disappointed. Liberal and conservative bases feel abused because their agendas are rarely entirely enacted. They are too radical or unrealistic. The center feels frustrated that the bases’ disproportionate power impedes action on long-standing problems (budgets, immigration, energy). Can next week’s election resolve this stalemate? It seems doubtful.

via Robert J. Samuelson – The dysfunction of American politics.

Health care reform will increase deficits AND costs

Robert J. Samuelson is an economics columnist who has never struck me as particularly conservative. But he delivers a pretty devastating critique of the current schemes for health care reform. He makes the point that the goals of health care reform are contradictory and that there is nothing in these bills that will do what the administration says must be done, namely, lower the nation’s health care costs. On the contrary, these schemes will mean that even more of our GNP will go for health care. Furthermore, he accuses the current administration of out-and-out deception:

[The] far-reaching overhaul of the health-care system — which Congress is halfway toward enacting — would almost certainly make matters worse. It would create new, open-ended medical entitlements that threaten higher deficits and would do little to suppress surging health costs. The disconnect between what President Obama says and what he's doing is so glaring that most people could not abide it. The president, his advisers and allies have no trouble. But reconciling blatantly contradictory objectives requires them to engage in willful self-deception, public dishonesty, or both.

The campaign to pass Obama's health-care plan has assumed a false, though understandable, cloak of moral superiority. It's understandable because almost everyone thinks that people in need of essential medical care should get it; ideally, everyone would have health insurance. The pursuit of these worthy goals can easily be projected as a high-minded exercise for the public good.
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It's false for two reasons. First, the country has other goals — including preventing financial crises and minimizing the crushing effects of high deficits or taxes on the economy and younger Americans — that "health-care reform" would jeopardize. And second, the benefits of "reform" are exaggerated. Sure, many Americans would feel less fearful about losing insurance; but there are cheaper ways to limit insecurity. Meanwhile, improvements in health for today's uninsured would be modest. They already receive substantial medical care. Insurance would help some individuals enormously, but studies find that, on average, gains are moderate. Despite using more health services, people don't automatically become healthier. . . .

Obama's top economic advisers assert that the present proposals would slow the growth of overall national health spending. Outside studies disagree. Three studies (two by the consulting firm the Lewin Group for the Peterson Foundation and one by the Centers for Medicare & Medicaid Services, a federal agency) conclude that various congressional plans would increase national health spending compared with the effect of no legislation. The studies variously estimate that the extra spending, over the next decade, would be $750 billion, $525 billion and $114 billion. The reasoning: Greater use of the health-care system by the newly insured would overwhelm cost-saving measures (bundled payments, comparative effectiveness research, tort reform), which are either weak or experimental.

Samuelson goes on and on in this vein. Can anyone answer his objections?


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