State Of The Debate

We know it is from Facebook but it still represents the state of the debate:

“Let us be clear about our choices.  When we raise taxes on the wealthiest Americans, no one dies.  When we cut Social Security and Medicare, people die.”

GOP candidates have been reluctant to emphasize economic issues.

Sidebar: What are economic issues (or is economics an issue)?  Growth is obviously one.  Is the deficit one?  Are Social Security and Medicare two more?  As we see it they are all tied into economics and it is a problem with debates.  We no longer watch debates because they are so uninteresting.  We need to know about priorities especially about these large issues with so many interconnected issues.  End sidebar.

The reluctance of candidates, other than Christie, to put any emphasis on Social Security and Medicare (SSM) leads to silly statements like the quote above not being laughed off the planet.  Raising taxes probably does kill folks but it would be hard to establish 100% causality.  On the other hand failure to cut SSM will kill people.  The Social Security money runs out in about 20 years (well, almost, 2034).  The cuts will be severe and life threatening then (25%).  If the cuts are made now they can be much less severe and based on means testing.  We would much prefer ownership of accounts but means testing seems like the politically viable solution for Social Security.  Nobody dies because of means testing.  It will probably take a few iterations to get the means testing right so start now and ramp up over time.  It is an easy fix compared to all other problems with the federal government.

It is a similar story with Medicare exacerbated by the lack of market mechanisms.  The current bankruptcy date is 2030.  There is more uncertainty about the exact date because changes in the price of medical care are more difficult to predict than the other variables like retirements and death.  The lack of market mechanisms makes Medicare a much more difficult fix than Social Security.

For reasons that are not entirely clear, Democrats are allowed to be foolish about SSM.  The country cannot afford for the GOP to be equally foolish.  Unfortunately, that is the state of the debate in February 2016.  Perhaps one of them will receive wisdom after they get elected but Congressional action is still required.  We need debate to shape action rather than the head-in-the-sand attitude of the quote.

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