Thomas Friedman is once again orthogonal to reality. In his column today he urges a “grand bargain” where the Republicans abandon extremists of the right and agree to tax increases and Democrats abandon extremists of the left and agree to cut Medicare and Social Security (euphemistically referred to as “entitlements”). There is one little problem with Friedman’s story.
Support for Social Security and Medicare is not confined to extremists of the left. Overwhelming majorities of every group, including Republicans and self-identified supporters of the Tea Party, are opposed to cuts to Social Security and Medicare. The only people who seem to support such cuts are wealthy people like Mr. Friedman.
The reality is that Social Security is easily affordable as everyone familiar with the projections knows. According to the latest projections from the Congressional Budget Office the program can pay every penny of benefits for more than a quarter century with no changes whatsoever. To make the program fully solvent throughout its 75-year planning horizon would require a tax increase is equal to 5 per cent of the wage growth projected over the next 30 years. This is why people familiar with the program’s finances are generally unwilling to support cuts in Social Security benefits, unlike Mr. Friedman.
Medicare is more of an issue, but that is because the U.S. health care system is broken. We already pay more than twice as much per person for our health care as people in other wealthy countries. This gap is projected to increase in the decades ahead. If we had the same per person health care costs as any other wealthy country we would be looking at huge budget surpluses, not deficits. This is why serious people focus on fixing the health care system, not cutting Medicare.
The large deficits the country currently faces are due to an economic collapse caused by Wall Street greed and the incompetence of people with names like Alan Greenspan, Ben Bernanke, and Hank Paulson. Mr Friedman doesn’t call for sacrifices from these people, for example with a financial speculation tax like the one recently proposed German Chancellor Angela Merkel and French President Nicolas Sarkozy.
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