Opinion

The Great Debate

Aging Americans have a new companion: higher debt

I like to joke about the fact that I have a ten-year-old boy at the age when my mother was not only an empty nester, but also an empty nester with a son-in-law. (That would be my husband.)

What I don’t like to contemplate as much? That I will almost certainly have just finished paying for the college education of the same adorable ten-year-old when the law permits me to claim a monthly Social Security check.

In a society infatuated with youth, the message is that you are only as old as you feel.

What seems to get short shrift is the impact of forever-young finances on middle-aged balance sheets.

“Boomers don’t think they’re going to get old,” says Ann Fishman, the president of Generational Targeted Marketing.

2014: The Democrats’ dilemma

Washington has been fascinated by Republican self-laceration since the 2012 election. Karl Rove triggered a circular firing squad by vowing to take out unwashed challengers in GOP primaries. Louisiana Governor Bobby Jindal begged Republicans to stop being the “stupid party.” Strategists say the party can’t survive as stale, pale and male. Tea Party legislators knee-cap GOP congressional “leaders” and well-funded political PACs strafe any who dare deviate from the party’s unpopular gospel. Republicans are even talking about changing “Grand Old Party” to something more fashionable.

Representative Paul Ryan’s newest budget will put every Republican on record voting to turn Medicare into a voucher, gut Medicaid, repeal Obamacare, savage investment in education and leave some 50 million Americans without health insurance. Not surprisingly, polls suggest Congress is less popular than colonoscopies, and Republicans poll at lowest levels on record.

The re-engaged president is pressing reforms on immigration, gun violence, gay marriage and climate change. These issues help consolidate his majority – the “rising American electorate” of young voters, minorities and single women.

from Judgement Call:

The fiscal crisis nears – or not

Few economists preach spending cuts as a cure for high unemployment. Yet that’s exactly what Congress decided when it imposed, starting March 1, across-the-board spending cuts (the “sequester”). Despite Friday’s mildly upbeat jobs numbers, the economy remains limp, with 15 million or so unemployed individuals who want to work. Federal spending cuts won’t make their plight any better.

Congress has known for quite some time that the federal budget will turn sour in 10 to 15 years, with expected outlays far outstripping expected revenue. For complicated, if not odd, reasons, Congress now feels compelled to do what it ordinarily shuns: cut federal programs and raise taxes. That might seem politically brave and responsible. But brushed up against facts, the case for Congress taking swift action wobbles, hitting wrong targets at the wrong time.

Of the many reasons politicians offer for cutting federal spending during economically straitened times, two cry out for attention. First, many liberals and conservatives say, Congress needs to stanch soaring federal spending. Second, conservatives say, federal programs are growing ever more intrusive, ever more threatening to private initiative.

Why public debt is not like credit card debt

One big part of the well-financed campaign for economic austerity is the contention that the public debt is like a national credit card. If we keep charging on it, the argument goes, we’ll get overwhelmed with interest costs, suffer a reduced standard of living and, pretty soon, go bankrupt.

As David Walker, a prominent budget hawk and the former head of the billion-dollar Peter G. Peterson Foundation, has contended, “Both Republicans and Democrats in Washington have charged everything to the nation’s credit card, including tax cuts and spending increases, without paying for them.”

The Peterson Foundation is the leading sponsor of this brand of bogus economics. It is a spurious metaphor on so many levels that it’s hard to know where to begin.

Post fiscal cliff: The fix is in

We’ve been trying to deal with the national debt in this country for 30 years now.  The fiscal cliff is just the latest failed gimmick.  We’ve had more failed gimmicks than professional wrestling.

Failed?  Yes, because the whole idea of the fiscal cliff was to force the federal government to put in place a long-term reduction of the national debt.  And look what happened.  Instead of reducing the national debt, the deal passed by Congress late Tuesday night will add $4 trillion to the deficit over the next 10 years, according to the nonpartisan Congressional Budget Office.

In the 1980s, we tried the Gramm-Rudman-Hollings law.  If the federal budget missed its deficit-reduction targets, the law triggered across-the-board spending cuts (“sequesters”).  Guess what?  It never happened.  Congress exempted 70 percent of the budget from sequestration.

Fiscal cliffhanger: Ignore the partisans

It is never acceptable for elected officials to put partisan politics and special-interest pledges ahead of their country. But when the stakes are great, as they are with the fiscal cliff negotiations, it is reprehensible.

People who talk about the political benefits of heading off the cliff need to have their heads examined. The blunt ax of massive spending cuts, along with huge across-the-board tax increases, would be irresponsible, possibly triggering another recession. It’s offensive for some Democrats and Republicans to suggest their party could “win” under this scenario, since the country and the American people would be sure losers.

Both parties say they want a deal. The key question is whether they will resist their respective wings, special-interest pressures and short-term political considerations to achieve one.

The real winner: Inflation

I buy none of the post-election, prime-time hokum that what decided the presidential race was the Latino vote, women’s issues, the next Supreme Court justices, the view from the fiscal cliff or how drones are winning the War on Terror. This presidential election was, as always, a contest between gold standardists and inflationists.

The victors were the forces of cheap money. William Jennings Bryan would be proud ‑ as would bimetalists and Weimar Republicans.

Inflation won because it is the panacea for all that ails the body politic: a short-term cure-all that promises economic growth, the possibility of paying off runaway national and international debts, new-found prosperity for the middle classes and liquidity for the impoverished, who otherwise would be voting in the streets with rocks and burning tires.

Why left should seek a fiscal deal

“I am looking forward to reaching out,” President Barack Obama said Tuesday night after he had won reelection, “and working with leaders of both parties to meet the challenges we can only solve together.”

The progressive community must understand this and put aside its rigidity to help him meet this goal. As Obama also said early Wednesday morning, “We’ve got more work to do.”

Yet a network of liberal groups, on Thursday, plan to demand a national day of action against a balanced, grand bargain that could pull the nation back from the fiscal cliff it faces. The beef of this progressive coalition is that a real budget deal would almost certainly cut Medicare spending and may possibly include a proposal to make Social Security solvent through the century.

The consequences of Obama’s debt

This essay was submitted through the Romney campaign as a response to Lawrence Summers’ most recent column, “This election, Obama is the wiser economic choice.”

The large budget deficits and expansion of the national debt under President Barack Obama, unprecedented since World War II, have him set to bequeath an immensely costly legacy. Each of his deficits as a percentage of gross domestic product has been larger than the previous post-World War II record, for which Democrats excoriated President Ronald Reagan. Between the debt already racked up and what Obama’s FY13 budget projects, each income-tax-paying family will owe more in Obama debt than a new mortgage on a median-priced home and four years of college costs.

Yet more than three years into recovery from the recession, the president has not proposed a program to deal with the massive debt. Indeed, he abandoned even the long-run goal of a balanced budget, adopting the much weaker goal of stabilizing the debt-GDP ratio at the higher projected FY2016 level. But he did not budget for it, appointed the Simpson-Bowles Commission to propose how to do so, then ignored its recommendations. He has no serious proposals to deal with the even larger eventual long-run deficits in Social Security and Medicare, which total several times the current national debt. When Treasury Secretary Timothy Geithner was asked by Congress what the administration’s plan was, he said, “We don’t have one.” Vice President Joe Biden guaranteed, “No changes to Social Security.”

The sham of Simpson-Bowles

Erskine Bowles and former Senator Alan Simpson deserve some kind of medal for creating the widely held perception that their plan for reducing the deficit and debt is anything other than a bad proposal.

It has been nearly two years since the commission they chaired, which I served on, finished its work. The duo’s proposal has attained almost mythical status in Washington as the epitome of what a “grand bargain” should look like.

But everyone look again. They will discover that it is far less than meets the eye.

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