Once again, Michael Hiltzik clarifies the very things that need clarification, this time regarding the panic over the earned benefits programs Medicare and Social Security. Notice I didn’t refer to them as “entitlements,” which as Hiltzik correctly explains, is “a noxious way of referring to [them], excellent programs that most workers have paid for during their careers and that have kept millions of Americans healthy and out of poverty.”
He notes that all the scary forecasts and assumptions about which we’ve been hearing pundit after pundit yammer are questionable at best. Predictions are simply not accurate, so to base a premise or long term policy on them doesn’t make much sense.
[Social Securities'] trustees… also project that under certain conditions of economic and employment growth — all of them perfectly plausible — it might never run dry. You don’t hear much about that projection because it doesn’t fit into the narrative that Social Security is “going broke.”
Healthcare costs, with Medicare and Mediaid as big components, have been projected to rise to as much as 40% of gross domestic product by 2082 if not restrained. That’s a fearsome prospect, but it’s based on a long-outdated forecast by the Congressional Budget Office, which doesn’t use the same methodology anymore. It was highly implausible, if not impossible, in the first place.
For people like me whose eyes glaze over upon witnessing the usual sparring and doomsday scenarios, there’s this revelatory perspective on, well, perspective:
To put it another way, just because your son is 4 feet tall at age 6 doesn’t mean he’ll be 12 feet tall at age 18. And just because the average American born today will live to the age of 78 doesn’t mean that a baby born in 2032 will live to 100. [...]
The reason smart people and companies don’t make bets on the distant future is precisely because it’s unknowable. Try the following thought experiment: Instead of looking ahead 20 years, look back 20 years, and try to list all the events that have had immense, material effects on today’s economy, but were unimaginable in 1992.
Here’s my list: 9/11. The Afghan war. The Iraq war. The housing bubble. The crash of 2000. The crash of 2008. The crash of Lehman Bros. The iPod. The iPhone. The iPad. The founding of Google. Hurricane Andrew, Hurricane Katrina, Superstorm Sandy. Obamacare.
So all these projections from all these commentators who have all these agendas are probably useless. And all these panicky “fixes” would be worthless, not to mention harmful, remedies based on faulty estimates.
The life span of a congressional budget is two years, max, because no Congress can bind its successors. But changes in Social Security and Medicare are forever. So when you hear that we have to do it now, stat! or we’re doomed, take it for the snake oil that it is.
Hopefully, most Americans aren’t buying what they’re selling.