One Big Money Pot
Obama’s new director of Office and Management and Budget, Peter Orszag, is one of the administration’s chief proponents of the idea that it’s wrong to think of Social Security as in “crisis,” because its problems can fixed with a few relatively minor tweaks. Instead, Orszag argues that country’s fiscal woes are primarily the result of exploding health-care costs, and that our top fiscal priority ought to be controlling those outlays.
There’s a lot to this idea — health-care costs are projected to expand dramatically, and Social Security costs look likely to level off — but over at The Plank, Josh Patashnik offers one of the better rebuttals to Orszag’s line of thinking:
I’ve never understood the argument that simply because their growth rates are close to zero they shouldn’t be part of the conversation. If you thought one part of your household budget were going to expand dramatically, wouldn’t you want to look for savings everywhere, rather than betting (probably unrealistically) that you can get the one offending budgetary item entirely under control?
President Obama’s laudable decision to move to honest budgetary reporting underscored the basic reality that, gimmicks aside, all federal revenue effectively goes into one big pot, and all federal outlays come out of it. Ultimately, we’ve got to decide where we want that last marginal dollar of federal spending to go. It’s true that Social Security, viewed in isolation, doesn’t have a major solvency problem—but why would you view Social Security in isolation? Of course it nominally has its own revenue stream, but the whole point here is that there are tradeoffs: dedicating that money to Social Security (or defense, or infrastructure, or anything else) means there’s less to spend in other areas. Those who advocate no changes to Social Security have to do more than point out that there’s no funding crisis; they need to make an affirmative case for why sending Social Security checks to future affluent retirees is a better use of that money than funding more expensive-but-livesaving health treatments, or child anti-poverty programs, or keeping future marginal tax rates to manageable levels, or anything else.
Orszag’s approach basically assumes there are no substantial inefficiencies in Social Security, no room to make the program all that much leaner, nothing to do with it except tinker at the margins. It implicitly suggests that not only is there no room to reconsider what Social Security does — provide Americans with a relatively safe retirement cushion — but that there’s no place for rethinking how the program accomplishes its goals.
Yeah, but Peter, if we really want to talk about one big money pot, then let’s talk about the biggest budget item out there, the military. We could dramatically lower our military budget and remain completely dominant militarily. But we’ve got to summon the political will.
It’s just not sensible to talk about one big pot of money and ignore the giant and unnecessary elephant in the room.
— Freddie · Feb 27, 10:41 PM · #
Like energy, there will not be the political will to tackle entitlement reform, from either the left or the right, until it is too late.
As a tax payer, I like the return on investment I get from those of my tax dollars that go into the military than those that go into entitlements. I’m perfectly capable of looking after my own health care and retirement. Subs, tanks, jets and the men and women who know how to use them, I’m going to have to join a co-op.
— Tony Comstock · Feb 27, 10:45 PM · #
Sure, stealing the pole from one part of the tent in order to hold up another is much better than getting a new pole.
— talboito · Feb 27, 10:46 PM · #
“Orszag’s approach basically assumes there are no substantial inefficiencies in Social Security”
Not at all. Honestly, this debate wants me to leap onto railroad spikes because it’s so tedious.
Here is the timeline of the argument (in gestalt):
1) Conservatives say we desperately need ‘entitlement’ reform, because ‘entitlements’ are projected to blow the budget soon. Social security is an entitlement. Therefore, we desperately need to reform social security.
2) Liberals point out (I think accurately) that in fact Social Security is relatively fine, and that the parts of the ‘entitlements’ package that makes it about to explode are the medical portions. In this light framing it as an ‘entitlements’ problem is overbroad at best and disingenuous at worst, and certainly using the looming ‘entitlement’ collapse to reform the one part of the entitlements bundle that isn’t going to collapse is prima facie absurd.
3) Pro-reform Conservatives now seem to be striking out on a rather evasive response. That, sure well yeah Social Security isn’t going to collapse but it’s a thing we spend money on and therefore could stand to be more efficient. This completely ignores the intent of argument 2) which is to undo the foundation of argument 1) (that fixing Social Security is an emergency because ‘entitlements’ are in crisis). It’s very frustrating for proponents of 2) because you’d like to know whether the argument got through. Do past proponents of 1) now agree that it was a poor argument for Social Security reform? And further, to Freddie’s point, if the argument for Social Security reform is now that it’s just thing thing we spend a lot of money on, it’s put in pretty crowded company and is certainly way behind Medicare and Medicaid on the priority list, as the current administration recognizes. So again, why the obsession with Social Security? And if we can all now have a kumbaya moment and agree that argument 1) was poorly founded, can someone call Sullivan and ask him to stop saying that people who deprioritize Social Security reform are somehow ignoring the ‘entitlement crisis’?
— sidereal · Feb 28, 12:44 AM · #
Um, really? Thought experiment: suppose for a moment that every single submarine in the United States navy was now located on the moon. In what way is your life affected, precisely?
Given that the US military was completely unable to prevent 9/11, which is essentially the only instance of domestic Americans being affected by foreign attackers in any significant way in the past two decades, the ROI for the US military seems relatively low. You could argue that, were it not for the military we might have been hit more often; but I could just as easily argue that were it not for the US military we never would have been hit at all.
The US military is an entitlement program – it’s a massive industrial giveaway. Which I’m not necessarily opposed to; I just wish all those manufacturers were making things more useful to Americans in America.
— Chet · Feb 28, 06:04 AM · #
Chet, you’re as bad as Peter. I say one thing, you write another.
You seem to think that I’m one of those people for whom “entitlement” is code for “giving my money to black people”. I’m not. I call entitlements entitlements because that’s what they’re called. If you’ve got some emotional baggage attached to the words or the programs, please don’t lay it on me.
I expect my government to be lazy, greedy, corrupt. How else has it ever been? How else could it ever be?
Because of this I have arrange my personal finances in a way that (hopefully) minimize my dependence on gov’t entitlement programs.
Also, you’re “last 20 years” argument is so stupid I’m not certain it’s even worth bother, but here we go anyway:
Even if we accept your argument for the last 20 years (which I don’t) you simply don’t get to start the clock where ever it suits your argument. Taken as a whole, having a robust military capability has proven to be of some utility in the history of this country, especially in the last 50 years. Having a lot of tanks, bombers, highly trained professional killers, etc is like having a boat — you may not use it as much as you use your car, it’s more expensive than your car, but when you need a boat, you can’t simply trade your car for a boat.
If this doesn’t make sense to you then you are a child or you think like a child or your brain is on the moon.
— Tony Comstock · Feb 28, 01:00 PM · #
What I think is that you have paranoid delusions. There’s nothing in my post that accuses you of that kind of racism. Where on Earth is this coming from, Tony?
But that’s absurd. We have to spend more on our military than the 2nd, 3rd, and 4th most expensive militaries combined because once, an expensive military helped us win World War II? That’s just plain stupid.
I do get to start the clock whenever I like, because military spending is something we can change every year. Every year we’re deciding how much to spend on our military; the need for additional tanks and airplanes in WWII don’t obligate us to buy any number of F-22’s today.
Absolutely none of the enemies we faced that necessitated that robust industrial military over the past 50 years exist anymore. Nazi Germany, the Soviet Union, Imperial Japan – all gone. And an F-22 fighter isn’t going to stop one guy with a suitcase nuke, and that’s where the threat is, today. And for the foreseeable future.
To say that military necessities of World War II should define our military provisioning and expenditures today is just incomprehensibly stupid, Tony. Where do you come up with this stuff?
The situation we’re talking about is like moving to the middle of the Sahara desert, and bringing along a boat because, back when you lived in Florida, you used it a lot. Except instead of one boat, we’re actually talking about a hundred boats – all because you might need a boat.
In the Sahara desert? Really? Or, to get back to reality – we really need several squadrons of expensive stealth fighters to attack enemies who live in caves (and more importantly don’t have radar)? We really need fleets of expensive first-strike submarines in an age when the most lethal weapon of war is still the machete?
The last time an expensive, billion-dollar-a-plane mobilized-against-another-industrial-power type military produced a “return on investment” was the Korean War. If another investment had not provided any utility since 1953 there’s no way you’d consider re-investing every year, regardless of how profitable it had been back then. But for some reason, when it comes to the military you have no problem saying the kind of stupid thing you said yesterday at 5:45.
— Chet · Feb 28, 05:52 PM · #
What sort of hysterical shrieking child are you? You think 9/11 was a threat to our national security? My office was a mile from the WTC and the lights didn’t even flicker. Suitcase nukes? Give me a freeking break. Do you even know what the best case scenario yield is for a man portable nuke? A few blocks at best. You’re as delusional and/or cowardly as the idiots who’ve been holding the reigns of power for the last years.
Get a hold of yourself, man. These are trivial inconveniences, and if they had been treated as such we might have actually formulated a rational and effective response to the “enemies who live in cave” in stead of running around like hysterical children, which is what you are doing right now.
Get a grip. Man up. Someday one of your children is going to get curious about who you were when you were young. Leave enough of this detritus on the internet and they just might find some of it. Please, save your children the embarrassment of finding out their dad was a putz when he was young.
— Tony Comstock · Feb 28, 06:03 PM · #
Not really, no. It’s simply the only example of a significant domestic attack on Americans by foreign enemies that could possibly necessitate a military response or interdiction – that is, that doesn’t fall under the rubrick of mere criminality.
And the military wasn’t able to stop it.
Sure, a few blocks. I’m not talking world-ending stuff, here, but these are the threats we face in terms of foreign enemies harming domestic Americans. Submarines and F-22’s are irrelevant to that mission. It may very well be that the entire US military is irrelevant to that mission, except maybe the Coast Guard. And the mission that the US military is adequately prepared for – bringing a multi-front war against an axis of modern, industrial superpowers with highly mechanized armed forces – is not something we need to be prepared for, for the simple reason that we’re the sole remaining military superpower. Who are we doing to fight, ourselves?
Tony, I wonder if you’ve read a single thing I’ve written. Your absurd diatribe shows absolutely no evidence of it. Here’s my point, again, since you’re apparently too illiterate to pick up on it – your position that the current absurd levels of military spending give us some adequate “return on investment” is as stupid as saying we should still invest all our money in buggy whips, because 50 years ago horses were the hottest thing going.
You’re a moron.
— Chet · Feb 28, 08:24 PM · #
“ your position that the current absurd levels of military spending give us some adequate “return on investment””
Um no.
I said, and you can read it again in my first post, “As a tax payer, I like the return on investment I get from those of my tax dollars that go into the military than those that go into entitlements.”
I said nothing about the return on investment being “adequate” that’s your word. In fact, with regard to the government, I said “I expect my government to be lazy, greedy, corrupt.” which would certainly include the administration of any monies spent on defense.
As to your analysis of what current threats we face, you are, in the parlance of arm-chair military pundits, fighting the last war. The fact is you don’t have any idea what national security threats we will be facing; not in 20 years, not in 10 year, not in 5, not tomorrow.
— Tony Comstock · Feb 28, 09:20 PM · #
Comstock usually makes more sense than this, I thought.
Anyway, in regards to medical spending, sure, it’s worth spending money to extend people’s lives. But how much? I mean, if we’re talking about medical spending reaching a third of GDP, then it becomes a matter of how many decades are you willing to work to extend your life by five years? And since medical spending will usually be by governments and insurers, it’s more like how many decades are you willing to work to keep someone else alive for five years?
Plus, consider exactly what kind of work we’re talking about here. Maybe you like your current job. But if medicine is the sole growth industry, then not only will you be working extra decades for all this medical spending, but you’ll have to work all day caring for the very people you’re being taxed to support. That’s gotta have some effect on your bedside manner.
— Consumatopia · Mar 1, 10:19 PM · #
Social security viewed in isolation doesn’t have a solvency problem???? Are you kidding? Look at the demographics: an aging population and fewer and fewer younger workers to support the retired. A one pot social security system without individual savings accounts is not possible to sustain without a significant increase in our rate of reproduction.
— Terro · Mar 2, 05:40 AM · #
Tony, I don’t know how to make it any clearer.
The existence of that return, currently, is what is under discussion. The best return you’ve been able to point to was the Allied victory in WWII. That was more than 50 years ago.
You said you like the return on investment. You must think some return therefore exists, otherwise how could you like it?
If we had a military that was only fighting the last war, that would be great. Much cheaper than the military we have today, which is fighting about four wars ago.
And, yes, I think we can be pretty much absolutely certain that when we wake up tomorrow, the war we’re fighting will still be the war against religious guys with cell phones and car bombs who live in caves. Try not to be a total moron for a minute.
Terro-
The short answer is that, as the GDP of the working population increases steadily – as it has always done – we need comparatively less of them to support the same sized retirement population. In other words it’s conceivable that Social Security can actually support an increasingly older population with fewer and fewer workers without becoming insolvent. Is it likely? Nobody that’s serious about the issue seems to think SS is in substantial danger, so apparently it must be.
— Chet · Mar 2, 06:29 AM · #
“the GDP of the working population increases steadily “
Everyone raise their hands if, on looking at the past couple of years of economic activity, they think it’s a safe bet to blindly assume that GDP will “increase steadily” over the next few decades. Anyone? Anyone?
— John Doe · Mar 2, 03:14 PM · #
John Doe,
If GDP doens’t raise for the next few decades social secuirty is going to be the least of our problems.
— Eric K · Mar 3, 12:50 AM · #
PLAY THE GAME
— JIM · Mar 13, 02:07 AM · #