The Do-Nothing Conspiracy

NY Times ^ | March 19, 2005 | David Brooks

[Crackingham]

f you want an image that captures what American politics will be like over the next few decades, imagine two waves crashing down upon us simultaneously, each magnifying the damage caused by the other.

The first wave is the exploding cost of the entitlement programs. The second wave is the ever-increasing polarization of the political class. The polarization will make it impossible to reach an agreement on how to fix the entitlements problem. Meanwhile the vicious choices forced on us by entitlement costs will make the polarization even worse.

The realities of the first wave - the looming fiscal crisis - are pretty well known. According to the Congressional Budget Office, Social Security, Medicare and Medicaid will consume 14 percent of national output in 2030 and 21 percent in 2075 - up from about 8 percent today. Partly as a result, the federal government will have to come up with an extra $50 trillion just to pay for the promises it's made as of today.

To cover these costs, federal officials will have several options, all of them horrible. If they acted immediately, according to the economists Kent Smetters and Jagadeesh Gokhale, they could increase federal income taxes by 78 percent; they could double payroll taxes; they could cut Social Security and Medicare in half; or they could do some combination.

Tax increases on that scale would decimate the economy. Benefit cuts would cause pain. Doing nothing would lead to enormous deficits, an immobilized government and stratospheric interest rates. It would mean the end of the United States as a great economic power.

[expatpat]

Already posted, with the exact same title. Did you search?

[EagleUSA]

Just leave it to the NY Slimes --- always INVENTING (news?) -- as if the CAUSE and SOLUTION to entitlement programs IS NOT WELL KNOWN...God, these people are both lost and incompetent. They are also liberals with a political agenda (profound statement, I know..).

[kevin fortuna]

tax and ss reform should be combined. nothing else makes sense. also, they need to stop saying personal accounts don't address the so-called "solvency issue." they don't address the short-term issue, true, but they would convert the system, gradually, away from being a pay-as-you-go system

[LauraleeBraswell]

Socialized healthcare anyone?

[Restorer]

Doing nothing would lead to enormous deficits, an immobilized government and stratospheric interest rates. It would mean the end of the United States as a great economic power.

It is relevant that all other industrial nations face similar or greater challenges of the same type.

Power, as such, is relative, not absolute. Thus, if other nations are in even worse shape than the US, we will still be a great economic power.