BCT Editorial – 10/25/06

This page was last updated on October 25, 2006.

Suicide watch; Editorial; Beaver County Times; October 25, 2006.

Below is a detailed critique of the subject editorial.

“The federal government pursues a course that will wreck the nation’s economy

“As our nation trudges through yet another dismal election cycle, one thing has become perfectly clear: few incumbents, few challengers and few Americans understand the Katrina-sized fiscal disaster the federal government is heading for, let alone do something about it.

“Laurence J. Kotlikoff, a professor of economics at Boston University, is trying to get the American people and their leaders to start paying attention.

“Here’s how bad the situation is. In a recent column, Kotlikoff reported that former Federal Reserve and Treasury Department economists Jagadeesh Gokhale and Kent Smetter estimate that the gap between the federal government’s projected future expenditures and its tax receipts is $63 trillion.”

[RWC] Once again, the Times fails to tell us the whole story because that would undermine its desired storyline. On the other hand, perhaps the author simply didn’t do his research.

When you review the full report, you find the $63 trillion is for the next 72 years and is solely the result of Medicare and Socialist Security. If it weren’t for projected “surpluses” in other areas, the gap would be about $69 trillion.¹

“To give you some idea of Washington’s profligacy over the last four years, they first made this estimate in 2002. At that time, they projected a gap of $45 trillion.”

[RWC] The editorial wants us to believe the problem is with spending of all types. The subject column shows that’s BS. According to the column, Mr. Kotlikoff asserts so-called “discretionary” spending would have to be cut by 91% to bring things into balance. That’s right, 91%! In case you haven’t already guessed it, programs like Medicare, Socialist Security, et cetera are considered “mandatory” spending. What counts as “discretionary” spending? One example is spending for national defense, and national defense is a responsibility mandated by the Constitution.

“‘The United States is now engaged in ... the maintenance of a suicidal status quo,’ he wrote. ‘Its policies are driving the country to fiscal, financial and economic ruin. The only question is when the crash will occur and which households will be in the passenger seats.’

“Check out the candidates running for office. It’s as if they’re in a vacuum. They’re promising more tax cuts (or some variation on that theme) or offering more spending programs (including incumbents who boast about bringing home the bacon).

“The bottom line, though, is that they’re promising tax cuts and spending sprees the nation can’t afford.

“But the American people must bear some of the blame. They are as unwilling to face the tough decisions that must be made as their elected leaders are to propose them.

“Everyone keeps spending money as if there’s no tomorrow. We’re killing ourselves and don’t seem to care.”

[RWC] Here’s the bottom line. The Times needed an editorial to make it sound as if the Times really is concerned about excessive spending (and to bash the Bush administration for it), but failed to note the sources of the problem are Medicare, Socialist Security, and income redistribution programs like Medicaid, welfare, et cetera.

1. Measuring Social Security’s Financial Problems; Jagadeesh Gokhale and Kent Smetter; Michigan Retirement Research Center; January 2005.