Some eccentrics have devoted years of their lives to searching for evidence of urban legends. Bigfoot. The Loch Ness Monster. Chupacabra. Almost everyone considers them to be little more than myths; but some intrepid explorers have pressed on, encouraged by the faintest of evidence, driven by an uncommon faith. I too have spent years searching for a creature that many would say simply doesn’t exist: A liberal willing to admit our budget is unsustainable. Finally, I’ve found one.
Danny Vinik writes for the New Republic:
In the coming years, the federal government is going to need more revenue. Nothing any politician says can refute the basic math that Americans are growing older and that’s going to cost a lot more money. But that doesn’t mean tax rates have to rise. In fact, Congress could increase the federal government’s revenue by hundreds of billions of dollars a year, while making the tax code more progressive—without raising current tax rates.
While the near-term deficit is no longer a problem, spending is still projected to rise considerably over the next few decades. The Congressional Budget Office’s most recent long-term budget outlook, released last July, forecasts debt rising from 74 percent of GDP in 2014 to 106 percent of GDP by 2039.
Vinik then goes on to correctly diagnose the main problems: Medicaid expansion, Obamacare, excess cost growth, and aging. All of those can be summed up in one word: entitlements.
These long-term budgetary disasters-in-waiting simply must be addressed. The Congressional Budget Office currently predicts that federal spending on Social Security, Medicare and Medicaid will rise sharply to 14 percent of GDP in the next 25 years, that’s double the amount we have spent on those programs over the last 40 years. As a result, the national debt will grow to more than 106 percent of GDP, greater than at any point since World War II. Those soaring costs don’t come without enormous economic pain.
“Such large and growing federal debt would have serious negative consequences, including increasing federal spending for interest payments; restraining economic growth in the long term; giving policymakers less flexibility to respond to unexpected challenges; and eventually heightening the risk of a fiscal crisis,” the CBO writes in its typically staid tone.
The biggest impact is that federal borrowing would draw money away from private investment and productive capital, which would inevitably curtail business formation, innovation, and job growth.
Oddly enough, despite identifying unsustainable entitlement growth as the main culprit of our impending budget crisis, Vinik then offers up a non sequitur: “All of this leads to one conclusion: The federal government needs more revenue.”
Actually, it seems to me to lead to a quite different conclusion: That entitlement programs should be made sustainable through commonsense reforms that recognize simple modern realities. For instance, that we live much longer now than we did in the 1950s.
Fortunately, Republicans are willing to tackle these issues head on, despite the potentially enormous political implications. The House Republican budget, compiled by Rep. Tom Price, would retool every major entitlement, from changing Medicare to a health-care voucher system to block granting Medicaid to give states more flexibility. Potential Republican presidential nominees are also offering up ideas, with New Jersey Gov. Chris Christie leading the charge.
Christie’s ideas include things like gradually raising the Medicare retirement age by one month per year so that the age would be 67 by 2040. For disability benefits, he wants to move towards the Scandinavian model, in which workers must create a rehabilitation plan before they can get benefits and employers get a tax-break for re-employing workers who complete their plan. And on Social Security his plan would means-test benefits for retirees whose non-Social Security income is more than $80,000 a year.
“Why would I say it if it isn’t true?” Christie asked a crowd after explaining the dire finances of our nation’s entitlements. “There’s no political upside to this, right? I’d love to come here and just give you happy time. Make you feel good, say I’m going to give you more money from someplace. The only reason I’m here to say this is because it’s an unavoidable truth. So let’s confront the problem head-on.”
It’s a truth so unavoidable that even liberals can’t turn away from it any longer. Now if only I could find one whose willing to drop the idea that we can tax our way out of this problem my quest for the holy grail would be complete.