Thomas Friedman is once again pushing to cut back those lavish $1,100 a month Social Security benefits and to make seniors pay more for health care. That is the implication of his enthusiastic support for the proposal set forward by Morgan Stanley director Erskine Bowles and former Senator Alan Simpson.
This plan calls for Social Security cuts of roughly 3 per cent for near retirees by reducing the annual cost of living adjustment. It promises further cuts down the road by raising the retirement age and reducing benefits for middle income workers like school teachers and firefighters. It would also sharply reduce spending on Medicare, which could lead to seniors paying much more for their care.
Friedman argues that such cuts are necessary to allow the country to pay for health care. If he were not such an ardent protectionist he might instead consider more open trade in health care. He might also consider ending patent monopolies for prescription drugs, which could save the country $270 billion a year (5 times the size of the Bush tax cuts for the wealthy) on drug expenditures. He might also consider allowing people to buy into the Medicare system. These routes would provide enormous savings and efficiency gains, although the primary losers would be wealthy people instead of retired workers.
Friedman does usefully call for more immigration. If we had more open immigration for doctors and lawyers their pay could be cut around 50 per cent, bringing it more in line with the pay of professionals in other wealthy countries, and saving ordinary workers hundreds of billions of dollars a year. This doesn’t seem to be what Friedman has in mind, but it would be an outcome of a policy that allowed qualified professionals from other countries to compete on an equal footing with highly paid professionals in the United States.
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