These Charts Should Revolutionize the Fiscal Debate

Moneybox
A blog about business and economics.
June 6 2013 9:41 AM

The Charts That Should Revolutionize D.C.'s Fiscal Policy Debate and Why They Won't

deficit

Michael Linden of the Center for American Progress has a great policy brief (PDF) out today calling for a reset of the fiscal policy debate in Washington. The core of the argument is the two charts I've reproduced above, showing that the medium-term debt and deficit projects look very different in the spring of 2013 than they did back in 2010 when the "pivot" to deficits began.

Some of that is because spending cuts have been enacted. Some of that is because taxes have been raised. Some of that is because those factors have reduced debt service costs. Some of it is that interest rates have been lower than expected. And some of it is that health care spending projections have fallen. There's a whole juicy report to read if you want the details. But the point is that the actual deficit and debt situation is totally different from the situation that obtained at the time the Simpson-Bowles Crew was first unleashed upon the universe, and yet the political dialogue on the subject doesn't seem to have changed at all.

This is the point at which, I think, it would be helpful to stop being polite (in the manner of a think tank PDF) and start getting real (in the manner of a blog). The dialogue hasn't changed because the elites steering the discourse don't care, even slightly, about deficits or debt.

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What they care about is reducing the federal government's fiscal commitment to bolstering the living standards of elderly people. The Powers That Be hate Social Security and always will because it's a program whose entire purpose is to pay people money not to work. That's not a perverse consequence of Social Security. It's not a contentious partisan claim about Social Security. It's not a dubious interpretation of what Social Security is all about. That's the point. It's to give people money so they can retire with dignity. "Retire" being a fancy word for "not working." You're never ever going to persuade business leaders to stop agitating for cuts in a program that has this feature. Business leaders want people to work! At a minimum, if people are hoping to not work, business leaders are going to want people to save (i.e., loan funds to business leaders) in order to achieve that purpose. Taxing people who are working in order to pay money so that people can enjoy retired life in peace is the antithesis of everything business elites want out of public policy.

And guess what we haven't done during this era of changing projections? We haven't cut Social Security benefits. We haven't raised the age at which people become eligible for Medicare. We've done things to reduce budget deficits, in other words, but we haven't really acted to make it tougher for people to retire. But people don't like to say they want to make it hard for people to retire so instead they talk about "the deficit," and they're not going to stop.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.