NYT’s Keller gets it half-right on need to reform entitlements
In a column addressed to his fellow baby boomers (sorry, this Gen-Xer peeked anyway!) New York Times columnist Bill Keller says one way for his generation to shed its reputation of entitlement and selfishness is, well, to be less selfish about entitlements.
He refers to a study by the Democratic think tank Third Way that examines the tremendous growth of, as Keller puts it, the federal government’s “safety-net programs that provide a measure of economic stability for the aging and poor: Social Security, Medicare, Medicaid, etc.” The growth of this spending, he and Third Way argue, is crowding out federal spending for “‘investments,’ which includes maintaining our national infrastructure, keeping our military equipped, helping assure that our work force is educated to a high standard, and underwriting the kind of basic scientific research that is too risky or long-term to attract private money.”
The answer, he suggests, is for liberals to embrace reforms of the entitlement programs. I agree with his conclusion, but there’s an important misperception to correct along the way.
Here’s how Keller summarizes Third Way’s findings:
In 1962, we were laying down the foundations of prosperity. About 32 cents of every federal dollar, excluding interest payments, was spent on investments, only 14 percent on entitlements. In the mid-70s the lines crossed. Today we spend less than 15 cents on investment and 46 cents on entitlements. And it gets worse. By 2030, when the last of us boomers have surged onto the Social Security rolls, entitlements will consume 61 cents of every federal dollar, starving our already neglected investment and leaving us, in the words of the study, with “a less-skilled work force, lower rates of job creation, and an infrastructure unfit for a 21st-century economy.”
Sounds pretty bleak for “investments,” huh?
But what these figures obscure is that spending on Third Way’s “investments” category — adjusted for inflation and population growth — has in fact increased significantly during the past 50 years.
How can that be?
Start with the fact that, in 1962, federal spending (see Table 8.4) minus net interest payments equaled 17.6 percent of gross domestic product, or GDP. In 2012, it’s expected to hit 22.9 percent of GDP. So federal spending as a share of the economy is higher today by almost one-third.
Then move on to the fact that GDP, adjusted for inflation, is nearly 4.5 times larger today: Annualized, it stood at $13.56 trillion in the second quarter of 2012 (the most recent data available) compared to $3.06 trillion in the same three months of 1962.
Finally, consider that our population has grown by only about 70 percent during the past half century: from 186.5 million to 314.4 million (note: the Census Bureau has not yet released its estimate for July 1, 2012, so I took the figure for a year earlier and applied the same growth rate the Census Bureau applied for 2010 to 2011; my number ought to be pretty close to the eventual Census estimate, or at least close enough for today’s exercise).
Run the numbers, including Third Way’s calculations of “investments” and “entitlements” as percentages of the federal budget, and here’s what you get:
Inflation-adjusted, per capita federal spending
So, while it’s true that entitlement spending has grown massively since JFK’s presidency — by more than 1,000 percent on a real per capita basis — it’s also true that real per capita spending on that group of “investments” has grown by 60 percent. Not too shabby. Viewed similarly, spending on everything else (besides net interest payments) has also soared by almost 150 percent.
To reiterate: I agree with Keller and Third Way that entitlement reform is desperately needed. And I join them in urging boomers, particularly those of the liberal persuasion, to be open to such changes. Where I part company with them is in the reason this needs to happen.
It’s not to spend more money elsewhere in the federal budget, but to free the economy from the burden of all excessive federal spending.
– By Kyle Wingfield
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iggy
July 31st, 2012
11:08 am
“try to give a poor kid a decent lunch and everybody goes ape.’
A decent lunch is the job of the parents, not the State. Of course those parents that are just lazy and dishonest, the entitlement crowd, love the “free” lunch programs, WIC, and all the fixins as it allows them to drive their leased Pontiacs and the ever popular “Baby Benz”.
iggy
July 31st, 2012
11:08 am
151st and 152nd!!
YES!
Finn McCool (The System isn't Broken; It's Fixed)
July 31st, 2012
11:12 am
Jose, wrong again. I’m voting no.
Rafe Hollister, suffering through Oblamer's ineptocracy
July 31st, 2012
11:13 am
The people most distrusted by the NO voters on Tee Splat, is the bureaucrats in the GDOT. The ones who are responsible for many of the traffic nightmares, we face today, should not be given more money to waste.
The politicians come and go, the bureaucrats are never ending. Many have been there for 30 years or more.
stands for decibels
July 31st, 2012
11:15 am
btw, never believe anyone who thinks the SS trust fund actually exists.
Sorry, GW Bush already played the “Ah went to the file cabinet and all Ah found was Ah Owe Ewes” card already. This was shortly before his Social Security Piratization sailboat hit a reef and deservedly sank, in 2005.
Actual money taken from actual wages, actually owed. You don’t get to say “oops, spent it,” now that the obligations are starting to come due.
I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...
July 31st, 2012
11:18 am
The Obama administration declined to try to deport more than 36,000 illegal immigrants that were arrested on other charges between 2008 and 2011, including some who went on to commit 19 murders, 3 attempted murders and 142 sex crimes, the House Judiciary Committee said Tuesday.
Can you say Willie Horton?
md
July 31st, 2012
11:18 am
From sfd’s link:
“Our children and grandchildren will drown in debt if we don’t cut the social safety net. No, future generations will drown in debt—their own or the federal government’s—if we don’t address health care cost inflation. Cutting Medicare or Medicaid benefits just pushes costs onto the private sector”
Well, the answer certainly wasn’t to increase the role of the 3rd party……….epic fail.
And hate to burst her bubble, but not cutting medicare/caid also pushes those costs on the private sector……where does she think they come from??
Finn McCool (The System isn't Broken; It's Fixed)
July 31st, 2012
11:20 am
I’m voting no in hopes that the congestion and miserable commutes drives companies away from GA. That way, people will leave to follow the jobs and our commute will be much nicer.
JDW
July 31st, 2012
11:21 am
Irrelevant, the real question is do we collect more in Social Security revenue than we pay out and the answer is yes…
……………………………………….OASI……DI……HI….SMI
Assets (end of 2010)………$2,429..$179..$271..$72
Income during 2011…………$699..$106..$228..$301
Outgo during 2011……………$603..$132..$256..$292
Net increase in assets………..$95..-26….-$27…$8.6
Assets (end of 2011)….…..$2524..$153..$244..$80
In million of dollars
http://www.ssa.gov/oact/trsum/index.html
Normal Free...Pro Human Rights Thug...And liking it!
July 31st, 2012
11:22 am
Kyle Wingfield
July 31st, 2012
10:23 am
Won’t happen again…tho’ I do find it curious that you would espouse less governing, but make up more rules for your blog…
Ever wonder why Jay has more hits than you? It’s called freedom.
stands for decibels
July 31st, 2012
11:25 am
Well, the answer certainly wasn’t to increase the role of the 3rd party……….epic fail.
What’s that got to do with the point being made?
There isn’t a card carrying liberal I know who wouldn’t prefer a single payer program for all Americans. That’s what we’ll wind up having anyway, all this PPACA stuff is rearranging the deck chairs for the Private Insurance Titanic.
Finn McCool (The System isn't Broken; It's Fixed)
July 31st, 2012
11:26 am
Here, Erwin. These would benefit my commute:
Project ID
Project Name
RC02-000088
I-985 New Interchange North of SR 13 Near Martin Road
That’s just one. I haven’t looked in Gwinnett yet. Do you need more examples?
TEST
July 31st, 2012
11:27 am
@Tiberius…”btw, never believe anyone who thinks the SS trust fund actually exists. It’s GONE! Long gone.”
As usual, incorrect…the fund is 100% invested in Treasuries…backed by the full faith and credit of the United States of America.
stands for decibels
July 31st, 2012
11:29 am
Ever wonder why Jay has more hits than you?
I’m going to have to yellow-card you for that one. Kyle’s already said he isn’t interested in boosting comment counts, he’s implied that it isn’t the metric by which the AJC measures success, and I see no reason not to take him at his word.
getalife
July 31st, 2012
11:30 am
Yeah and the rich get richer while the majority get screwed.
We tried your failed trickle down lies.
Lets focus on the majority and not the wealthy for a change.
Four more years!
md
July 31st, 2012
11:32 am
“What’s that got to do with the point being made?”
Her point was about getting a handle on hc costs…….and the aca increased the role of the 3rd party…..which will only lead to even higher costs.
The 3rd party is a major part of the problem.
Tiberius - pulling the tail of the left AND right when needed
July 31st, 2012
11:34 am
“Actual money taken from actual wages, actually owed. You don’t get to say “oops, spent it,” now that the obligations are starting to come due.”
So much misguided faith in a government that can’t do very much right in the first place.
“As usual, incorrect…the fund is 100% invested in Treasuries…backed by the full faith and credit of the United States of America.”
Which, if you haven’t noticed, isn’t as credit-worthy as it used to be, and shows no signs of improving. Our treasuries will be useless in less than 50 years if we don’t get our spending under control soon.
getalife
July 31st, 2012
11:34 am
The best way to “fix” programs Americans paid for is to replace the money pols stole from the funds and provide jobs for the American people.
stands for decibels
July 31st, 2012
11:35 am
The 3rd party is a major part of the problem.
I agree with you; I guess we’ll just have to disagree on the methodology to fix the problem.
St Simons - he-ne-ha
July 31st, 2012
11:36 am
Tiberius, I would go for spending cuts, as long as defense was included
specifically the MIC, not the troops or their benefits
stands for decibels
July 31st, 2012
11:36 am
if you haven’t noticed, isn’t as credit-worthy as it used to be
um… we’re forced to pay, what, again, for interest on T-bills? How much interest to attract investors in this un-credit-worthy nation of ours? It must be in the double digits or something, right?
Normal Free...Pro Human Rights Thug...And liking it!
July 31st, 2012
11:36 am
getalife
July 31st, 2012
11:30 am
Too true.
Erwin's cat
July 31st, 2012
11:37 am
Finn…how is an interchange at I985 and SR13 going to relieve traffic congestion considerably south of there?….you know, where the traffic congestion is?
Is there grid lock in Hall county?
try again
Tiberius - pulling the tail of the left AND right when needed
July 31st, 2012
11:40 am
“Lets focus on the individual and not the nanny-state for a change.”
Fixed your typo, getalife. No thanks needed.
Normal Free...Pro Human Rights Thug...And liking it!
July 31st, 2012
11:40 am
stands for decibels
July 31st, 2012
11:29 am
Stands,
Accepted…from you.
Finn McCool (The System isn't Broken; It's Fixed)
July 31st, 2012
11:40 am
A quote from 1799:
Our treasuries will be useless in less than 50 years if we don’t get our spending under control soon.
A quote from 1849:
Our treasuries will be useless in less than 50 years if we don’t get our spending under control soon.
A quote from 1911:
Our treasuries will be useless in less than 50 years if we don’t get our spending under control soon.
A quote from 1968:
Our treasuries will be useless in less than 50 years if we don’t get our spending under control soon.
A quote from 2012:
Our treasuries will be useless in less than 50 years if we don’t get our spending under control soon.
@@
July 31st, 2012
11:41 am
Numbers-R-Us:
…you do not want to be forced to hear anyone reply about it’s presence or who left it or who should clean it up, etc.
Before I shut down to run errands.
I saw no responses addressed to @@.
I was talking about lib’s opinions in general. It’s not like I haven’t heard them repeated a thousand times or more. They never change, they only hope.
Have a nice day.
Finn McCool (The System isn't Broken; It's Fixed)
July 31st, 2012
11:42 am
Erwin, you said “it won’t relieve ANY traffic congest.”
It will in Hall county. Point is proven. You want to talk about Gwinnett or Fulton? Be my guest. But you can’t say with complete truth that “it won’t relieve ANY traffic congest.”
Tiberius - pulling the tail of the left AND right when needed
July 31st, 2012
11:42 am
“I would go for spending cuts, as long as defense was included specifically the MIC, not the troops or their benefits”
As would I, but I want to see 2 years of cuts FIRST, and then I’ll sit down and talk about increases in revenue.
Piedmont South from North Georgia
July 31st, 2012
11:44 am
That other is mostly defense. And entitlements is mostly Medicare, Medicaid and Social Security.
Exactly how should they be cut. Quit spending hundreds of thousands of dollars to keep terminally ill people alive for another two months. Sounds good to me.
Lots of fraud and waste in medicare.
And talk to me about raising taxes on the wealthy, those making over a million a year. Just as a show of good faith.
And vote no on the regressive one per cent increase in sales tax.
Skip
July 31st, 2012
11:44 am
How crazy will the cons be four years from now when Clinton takes over for Obama.
getalife
July 31st, 2012
11:45 am
The red States opting out will give us the public option.
That is the end game on health care.
Tiberius - pulling the tail of the left AND right when needed
July 31st, 2012
11:46 am
Finn, as usual, your comments have no meaning. Our debt in those years was either non-existent, or minimal compared to our GDP.
Come into the PRESENT and embrace the REALITY.
Our debt can now take down the entire world’s economy. Never has it been this way.
Erwin's cat
July 31st, 2012
11:47 am
It will in Hall county. Point is proven. You want to talk about Gwinnett or Fulton? Be my guest. But you can’t say with complete truth that “it won’t relieve ANY traffic congest.”
yes I can…and it won’t…not even in Hall Co..which I frequent…your “proven” point won’t ease ANY traffic congestion…try again
getalife
July 31st, 2012
11:48 am
How is that outsourcing to India working out for you?
They have no electricity cons.
Bring those jobs home cons.
Piedmont South from North Georgia
July 31st, 2012
11:48 am
Tiberius
Demanding two years up front. Not a show of good faith. Just more deadlock – gridlock.
stands for decibels
July 31st, 2012
11:49 am
Skip @ 11.44, I really don’t think Hillary will want to run in 2016. Sure, plenty of people will try to appeal to her sense of patriotism and all that happy horse-poop, but I suspect she’ll be ready to play the kind of role her husband’s been playing these past few years–a respected spokesperson who can earn a very easy and lucrative living in her dotage.
But I’m often wrong, so who knows.
Piedmont South from North Georgia
July 31st, 2012
11:50 am
getalife
July 31st, 2012
11:45 am
_______
Why would a businessman not opt to pay the penalty tax instead of providing health insurance. the tax is cheaper. And another step forward.
Piedmont South from North Georgia
July 31st, 2012
11:51 am
Hillary is not going to run. She has had it with serving in office. Cabinet, senate or otherwise.
Look somewhere else.
Tiberius - pulling the tail of the left AND right when needed
July 31st, 2012
11:52 am
” Not a show of good faith.”
Really, Piedmont South? When has this government actually CUT spending to any degree? And I’m not talking cutting the rate of increase, I’m talking actual cuts?
It is the ULTIMATE show of good faith – to the citizens – to show us that you’ll cut spending first.
Finn McCool (The System isn't Broken; It's Fixed)
July 31st, 2012
11:53 am
oh, great. Mitt’s foreign Policy chief is a neocon. Just what America needs next.
http://www.salon.com/2012/07/31/when_romney_wasnt_screwing_up/
Piedmont South from North Georgia
July 31st, 2012
11:56 am
Tiberius
____
OK. What significant cuts do you want them to make. Where and what exactly?
Finn McCool (The System isn't Broken; It's Fixed)
July 31st, 2012
11:57 am
If Elizabeth Warren beats Scott Brown (RINO) she will be the next POTUS. That’s my guess.
or maybe al franken??
JDW
July 31st, 2012
11:59 am
@Tiberius…”When has this government actually CUT spending to any degree? And I’m not talking cutting the rate of increase, I’m talking actual cuts?”
In real dollars total spending decreased compared to the prior year in….
2013 (Estimated)
2012 (Estimated)
2010
2007
1992
1987
1982
1969
1965
1963
Sorry to let facts get in the way of a good rant…
http://www.whitehouse.gov/omb/budget/Historicals
Finn McCool (The System isn't Broken; It's Fixed)
July 31st, 2012
12:00 pm
They can start by shutting military bases in places like Italy. What do we have to fear from Italy? Will they go rogue and give us Americans the olive-oil treatment?
shudder to think……
md
July 31st, 2012
12:00 pm
Why cut military spending? Just charge all those other countries that have been riding our backs for decades. No pay, we move on…….
All those countries in the EU have small defense budgets for a reason.
Not Blind
July 31st, 2012
12:00 pm
All these responses are a perfect illustration how the political parties have done an excellent job of dividing the citizenry and deflecting scrutiny from the real enemy which is the political parties, bureaucrats and the government they have hijacked.
iggy
July 31st, 2012
12:01 pm
“They can start by shutting military bases in places like Italy. What do we have to fear from Italy?”
I will agree with that.
southpaw
July 31st, 2012
12:02 pm
Finn @10:42
DOT isn’t on the ballot today. Can you tell me when it has been?
I certainly wasn’t the only conservative holding my nose while helping to elect the lesser of evils. I trust the elected officials to do their jobs–if I watch them like a hawk. Appointed officials, such as the ones who hope to spend T-SPLOST money–not so sure.
Not Blind
July 31st, 2012
12:06 pm
IMO the military is the first place to look for cost savings. $billion dollar jets ???? FOR WHAT ??? One hundred $10M jets would be more effective.
Military installations and troops in Japan ? Ditto for Europe. Bring these assets home and plunk them down on the southern border.