This is fun and interesting, Robert Reich proffers us his solution to the twin grand problems of American political finances. Or even the one grand one, entitlement spending, as evinced in Medicare and Social Security. That solution being c’mon guys, this is simple, let’s just tax the heck out of everyone and we’ll be fine.
Well, maybe – there are generally thought to be disadvantages to higher taxation, things like slower economic growth and so on. And it does also, quite obviously, mean that more people have more of their lives determined by the political classes than by themselves. That sort of diminution of freedom rather being why there is a United States rather than a Greater Britain, no?
The three strands of Reich’s solution are – but first, what actually is the problem?
Three Easy Fixes to Social Security and Medicare that Republicans Don’t Want You to Know About.
Republicans would love to get rid of Social Security and Medicare. But they can’t, because Social Security and Medicare are among the most popular of all federal programs. Besides, most Americans have been paying into them their whole working lives, and depend on them.
So how will Republicans attempt to end these programs? By doing nothing to save Medicare and Social Security.
The trustees for Medicare and Social Security – of which I used to be one – say Medicare will run out of money by 2026, three years sooner than last projected, and Social Security will run out in 2034.
But this doesn’t have to be the case.
OK, so, for the past generations we’ve been promising ourselves certain benefits from those two programs. We’ve also been paying taxes to pay for them. The problem is that we’ve not being paying enough in taxation to pay for the things we’ve promised ourselves. This isn’t unusual in politics over the long term. Taxes bite now and lose votes, benefits come as we age over the magic 65 and thus take generations to arrive. Classic to overpromise on the one side and undertax on the other.
So, what should we do:
First: Raise the cap on income subject to Social Security payroll taxes.
To translate Mr. Reich. I, and every other blowhard on the subject, have been lying to you these decades. You’re not really paying enough for what you’re being promised. Now that the bill is coming due we’ve got to tax some people more so it can all be paid for.
Second: To help rein in Medicare costs, allow the government to use its huge bargaining power to negotiate lower drug prices.
Those damn capitalists have gone out and discovered cures for all sorts of things. We’ve got to tear up the deal we offered them before they were all discovered and the heck with the incentives they’ll have to discover more in the future. For I, and every other blowhard on the subject, have been lying to you these decades. You’re not really paying enough for what you’re being promised. Now that the bill is coming due we’ve got to tax some people more so it can all be paid for.
Third: To deal with a basic reason why Social Security and Medicare are running out of money, allow more young immigrants into the U.S.
I, and every other blowhard on the subject, have been lying to you these decades. You’re not really paying enough for what you’re being promised. Now that the bill is coming due we’ve got to tax some more people so it can all be paid for.
It would have been easier – more honest even – to be taxing everyone the right amount in the first place. Charging what should have been charged to pay for the promises, the baubles and sweeties being dangled for votes. But then that doesn’t win elections, does it? The end result though is as it is. The solution is more taxes on everyone, to the point of gaining more people so that we can tax them. In an alternative universe somewhere there’s a Berkeley which manages better answers than this.