Calm… At Storm's Eye?

Libertarians are no longer lonely Cassandras on exploding entitlement spending: Experts across the political spectrum seem to agree that federal fiscal irresponsibility is planting a debt time bomb for our kids. Usually, we contrast that sort of government stupidity with the relative efficiency and wisdom of markets. But as the Urban Insitute's Rudolph Penner observes, financial markets don't seem to be responding to the projected problem as one would expect. So what's up? Well, Penner doesn't seem too certain either, but check out the full report.

Comments

[Jason Ligon]

I'll bite. Even according to dire calculations, the crisis is too far in the future to be priced into the market yet. Current financial players view the crisis as real, but near term instabilities dominate.

My guess is that when we believe the meltdown is coming within the term of some benchmark like the 20 year note, look out.

There is quite a bit of denial out there. The left does not believe that any kind of drastic reform is necessary. The talk on from the left is all about 'not giving up' on the New Deal. Make rich people pay a little more in taxes, and wham, bang you are done.

Personally, I am waiting for the ultimate bipartisan compromise - means testing.

[thoreau]

Much as I support means testing Social Security and Medicare as a good first step, I fear it will never happen. The left will oppose it as a way to begin rolling back the welfare state. The right will oppose it on the grounds that it's "class warfare" or "redistribution" or whatever.

I just see it as a first step to averting crisis by reducing the size of these programs.

[Gadfly]

"Reagan proved deficits don't matter." --Dick Cheney

The shame of it is that it will take a Dem to clean up the mess while being pilloried by the supply siders for doing so.

[joe]

Yes, Jason, that crazy left, thinking that the problem you all like to shriek about can be solved relatively easily. At least those who know the issue best are backing your side up. Oh, wait.

I spent 2003 learning that the professional military are much more decent, honest, realistic, and discerning than their ideological cheerleaders on the right.

Perhaps I'll spend the rest of 2004 learning the same thing about financiers and their self-appointed groupies.

[Dick Cheney]

Actually, what Reagan said was "I plan to die before the shit hits the fan."

That's my plan too.

[KentInDC]

One would think that minorities would be pouncing on socialized insecurity as redistributionist and demanding privatization. Massive amounts of wealth are being transferred to old white folks from young Blacks and Hispanics because of whites' longer life expectancies and lower birth rates. Many Blacks realize it, but don't seem worked up enough about it to make a stink. If and when they DO get excited about privatization, the Democrats will either lose an issue or a constituency.

[anon]

"...., but don't seem worked up enough about it to make a stink."

What about not having the time? It can work to set your life aside when the stakes are high enough, when the risk of loss is severe enough. But when the problem is so far away as to seem too small to be worth dealing with, it is easier to keep on keepin' on.

[KentInDC]

anon,
The transfer of wealth is occurring now. I'm not talking about no benefits when they get old. I am talking about money being taken now when a large percentage - especially of Black males - will never be old enough to receive it. Privatization would at least allow the family to get something when people die before age 65 - which is about the life expectancy of Black males.

[notJoe]

The shame of it is that it will take a Dem to clean up the mess while being pilloried by the supply siders for doing so.

Hey Gadfly,

Do you really think there are enough "rich" people left to pay for FDR/Johnson's Ponzi scheme?

[George L.]

Please do not use the phrase "our kids". Children are not a collective resource, and the right of parents to raise their children without government meddling is shaky already.

[Ralph]

Forget playing the race card. I'm going to either be left high and dry when I retire or my kids are going to be taken to the cleaners. This nanny goat government is out of control. The window for privatizing SS and education is quickly closing. Another decade of this ineptitude is going to have some serious consequences for all of us in 2040.

[Rick Barton]

The political problem here, as I se it, is that the main constituency that has the sense to call attention to this impending disaster is somewhat muted because a Republican, and I use the term loosely (liberally?) in this case, is president and is, in specific ways, making thing worse.

The GOP congress has to come to the realization that Bush's policies are foe, not friend. They have given some evidence that they are moving in this direction.

[Jason Ligon]

"Yes, Jason, that crazy left, thinking that the problem you all like to shriek about can be solved relatively easily. At least those who know the issue best are backing your side up. Oh, wait."

I'm confused, who are those people who know the issue best and what are they saying?

By 'relatively easily', I gather you mean by taxing non democrats into oblivion? The denial is in the size of the problem and the consequent intrusiveness of the fix. It won't be a little raise in taxes, especially since we keep hearing how payroll taxes on 'working families' are terribly unfair, and that the primary failing of the recent medicare giveaway is that it is insufficiently large.

[Thorley Winston]

Much as I support means testing Social Security and Medicare as a good first step, I fear it will never happen.

Don?t be so certain. I recently attended a seminar on the new Medicare reform that was signed into law and each of speakers agreed that the bill began the process of means-testing the program and would probably lead to some form of privatization. Fiscal conservatives are rightfully upset at the $534 Billion price tag (although it is certainly better than the $700-900 Billion alternative bill pushed by Kerry and the Democrats) but need to keep in mind that it (a) gave us health care savings accounts, (b) eroded the notion that Medicare is a ?universal? entitlement by means-testing the drug benefit (which makes it politically feasible to go further) and (c) introduced some competitive measures into the program (albeit going from a monopoly to a system of regional oligopolies).

While I?m upset about the cost of the bill as much as anyone (except those who plan to vote for Kerry apparently), the other aspects of the bill do put us in a better position than before to enact further market-oriented reforms in Medicare and the health care system.

[Julian Sanchez]

"Children are not a collective resource"

I didn't think that was an implication of the phrase "our kids." Does that mean only a hydra can say: "We all shook our heads"?

[Robbin' Hoodlum]

Before means testing it's at least an honest, straigtforward Ponzi scheme; you knew the pyramid couldn't sustain itself, all you don't know is where on the pyramid you come in. With means testing it becomes a corrupt Ponzi scheme: if you can afford to pay in, you guarantee you won't get any pay out down the line. It's a pyramid for the payouts, and just a straight tax on everyone who isn't allowed onto the payout pyramid. Let's see which hand fills up first.

The good news is that these exact same policies bankrupted the USSR, even though Reagan gets all the credit. Their pyramid collapsed before ours, but they had a head start.

[joe]

"By 'relatively easily', I gather you mean by taxing non democrats into oblivion?"

Actually, I figure we'll just sell your children as dogfood.

Keep whipping up the panic. Since you lose on both values and numbers, I suppose it's all your side's got.