Guess what? "Reforming entitlements" isn't necessary
Following up on my post below, I think this piece by Jonathan Cohn is also an important addition to the growing body of work out there that shows this Fiscal cliff and Grand Bargain nonsense is focused on solving problems that are not acute and don't have to be solved. Cohn is a health care expert and his views on how these "entitlements" work and their impact on the deficit are worth paying attention to:
Conservatives and groups like Fix the Debt have set some fairly ambitious goals for deficit reduction, at least on paper. But the long-term goal of fiscal policy should be to stabilize the debt-to-GDP ratio—in other words, to make sure federal debt isn’t rising out of proportion to the wealth that the nation is generating. As a recent report from the Center on Budget and Policy Priorities pointed out, it’s possible to achieve that goal for the next decade or so without dramatic cuts to entitlements. Stabilizing the debt-to-GDP ratio after the next decade would indeed require additional revenue or spending cuts, but, at this point, why not wait and see whether the Obamacare reforms do the job? It’s entirely possible they might. If they don’t, we can make further adjustments in the future, whether those involve agreeing to higher taxes, lower spending, or bigger deficits.
No, that’s not an appealing option. But neither is cutting benefits now. Jared Bernstein, the former Obama Administration economist now at the CBPP, put it well on his blog: “Now’s the time to watch and evaluate, not to reduce access to what is a highly efficient, effective form of health coverage for the nation’s seniors.” The advocates for deep entitlement reductions don’t seem to realize that the people on Medicare and Medicaid need the protection those programs provide—and that, without those programs, they’d suffer. Given the very significant chance we can reduce health care spending without reducing benefits, we have an obligation to try. It’s the compassionate thing to do. And the smart thing, too.
So, again. We have a jobs crisis in the short term, which will likely be extended or made worse by this focus on the deficit. And legislation now to avert projected long term deficits are not necessary and may be counter-productive. moreover, the bond vigilantes and confidence fairy have been missing in action throughout the worst economic crisis since the Great Depression, so that rationale is inoperative.
No, the only reason to do this is to use the temporary deficits caused by bad wars, stupid tax cuts and an epic economic downturn as an excuse to destroy vital programs that Americans rely upon. That's a very bad reason. And it is likely to cause even more economic distress in both the short and long term. Just say no.