Thursday, June 20, 2013

The Real Reason People Want To Cut Entitlements And An Update

Matt Yglesias made a great point today the fact that the US Chamber of Commerce is continuing to demand entitlement cuts despite the fact that healthcare cost increases are slowing down and future deficit projections have fallen as well.  As Matt sees it, the reason business elites want to cut entitlements is not to save them or stop us from turning into Greece.  Instead the powers that be hate things like Social Security in principle and use media coverage of big deficit numbers as a way to try and whip up support for their ongoing political goals of cutting entitlements.   As Yglesias has argued:
The Economy consists of adding up all the economically valuable stuff that happens. All the goods and services and labor that are bought and sold. And with most government spending, you can make some kind of case that the spending boosts The Economy. It boosts The Economy because we need infrastructure or educated workers or healthy ones...And mailing a check to your grandma doesn't fit the bill...

The important thing to note about this hatred [of Social Security] is that it's not unjustified. The haters aren't wrong. I loved both of my grandmothers, but they spent a lot of years just sitting around consuming goods and services while producing nothing of economic value. Retired people don't boost The Economy. Trimming their cost of living adjustments does. The more you trim, the more boost you get. Doing the reverse of Social Security and saying that everyone over the age of 65 has to write a check to the government or be turned into Soylent Green would boost The Economy even more.

Which isn't to say we should do any of that. But it is to say that there's an essential tension here. Most of us like the idea of spending funds on bolstering the living standards of elderly people. But the Job Creators who want public policy to serve the needs of The Economy are always going to dislike that idea. There's no magic formula of "tweaks" that will end the dynamic. Taxing working people to hand out free money so people don't need to work is antithetical to the spirit of capitalism, and so the leaders of the business community and their friends in government will always want to curb it. 
So while it might be interesting to have more policy descriptions about how to structure our increasingly wealthy increasingly old society, people at the US Chamber just aren't interested in that.  Don't expect them to change their tune, even when new numbers show their fear mongering is unjustified.  They are driven by ideology, not genuine concern.


In other news I am now the associate politics editor for The Good Men's Project.  I will be writing/editing about national politics over there at least a few times a week starting next week.  I will also be working with the other politics editor, Minneapolis's own Miranda Wilson!  Check out our intro post here.  Longwalkdownlyndale will continue to be an ongoing project of mine, but feel free to go over there as well.

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