BRYAN CAPLAN
May 7, 2013
Keynesian Bets: What's Out There
May 6, 2013
Keynesian Bets Bleg
May 6, 2013
The Pyramid of Macroeconomic Insight and Virtue
May 2, 2013
A Natalist Provision
May 1, 2013
I Was a Teenage Misanthrope
DAVID HENDERSON
May 5, 2013
John Thacker on Vaccinations and the Sequester
May 3, 2013
Chef Rudy's Virtues Project
May 2, 2013
My take on Reinhart and Rogoff
May 1, 2013
Medicare Kills a Program
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If the republicans planned to "reform" entitlements the way they "reformed" medicare, the democrats were smart to say no.
Taxes will go up because you can't get something for nothing. People have a hard time with that concept. Basic physics. Law of the universe. Somebody, in the future, must pay for the spending that is not covered by taxes today. All arguments about growth and inflation are moot. The future still pays for the spending today.
The only caveat: default. The US could default on foreign holders of debt. Then everyone pays: big time.
Taxes are going up. The longer we wait, the more they go up.
I can believe that taxes are going up, but I also believe that entitlement spending is going down (or not rising as fast as projected, which is enough). Everyone says it can't happen, but it has happened in other countries. The political impasse can be broken. All it takes is a crisis, and we're going to get one.
The best example is Sweden in the early '90s, when government spending was cut by a staggering 15% of GDP. Reform does happen . . . once all other options are exhausted.
Yes, taxes will go up as they must to provide for a larger portion of the elderly. Cutting meager retirement benefits makes ever less sense as companies shed their pensions. Spending will go up, but not by as much as projected because healthcare will eventually be reformed when costs meet reality.
Taxes will go up because you can't get something for nothing. People have a hard time with that concept. Basic physics. Law of the universe.
No, T. R. Elliot, that's an economic law, and as you have stated before, all present economics is pseudoscience and can't be trusted. But then, that was one of your posts, so I guess I wasn't really supposed to take it seriously. But still, it was your post.
The Democrats didn’t really say “no” to reforming entitlements; they just insisted on a condition of “no privatization”. Whether or not it’s a good idea, privatization is not an indispensable element of entitlement reform. On the other hand, being the minority party in Congress, perhaps the Democrats should have been more willing to compromise.
Then again, being the majority party in Congress, the Republicans in theory didn’t really need the Democrats. In the end, apparently, a lot of Republicans couldn’t quite say “yes” to Social Security reform. And neither side has seriously discussed Medicare reform yet.