Motus Mentis

9 Comments

1. the one eyed man says

   I think Voegeli makes a thoughtful case and pretty much gets everything right. I agree with the liberal position that you start with what society needs as a baseline and see if it comes at an acceptable cost. I think that if you do it the opposite way, and start with a budget and then determine how to use it, when push comes to shove, the groups which get shafted are the ones with the least power. Using a John Rawls veil of ignorance, I don’t think that you create a just society that way. The groups who get shafted should be those who least require government largesse, not those who have the least leverage to obtain it.

   What Voegeli does not discuss is that although America has a cash flow problem, we also have a balance sheet problem. There is way too much debt on one side of the ledger, yet the assets which are on the other side are not monetized to pay down the debt. America owns a boundless amount of land, buildings, drilling rights, frequency rights, military bases, and so forth. When a corporation faces parlous times, it divests itself of non-core assets and uses the proceeds to pay down debt. We should do the same.

   In American politics, the word for a politician who campaigns to sell off national assets is “loser.” However, if you were to make a Venn diagram which matches solutions to the problem with what is politically feasible, you have a pretty skinny area in the middle. I live about two miles from a huge expanse of government owned land which would be worth a fortune if developed. I’m about fifteen minutes from the start of miles of government owned coastline. Do I like the fact that there is pristine mountain and seashore in my county? Of course I do. However, this sort of thing is a luxury we can ill afford, and — writ large — this sort of divestiture would go a long way to paying down the debt and the commensurate amount of interest we therefore pay.

   Both sides can agree that the time to hesitate is through. There’s no time to wallow in the mire. There are a number of options which offer solutions less drastic than Andy Borowitz’s notion of replacing Medicare with Groupon vouchers. However, most of the dialogue about fixing the debt problem is unimaginative, inflexible, and ineffective.

   Posted June 4, 2011 at 7:20 pm | Permalink
2. Malcolm says

   For once, Peter, we agree — though I take the conservative position that, like anybody else working out a budget, you start by saying what we can afford to spend, and then decide what you are going to spend it on. It is up to a humane society to allocate such resources fairly. But just saying “here’s what we are going to do”, and then simply hoping you can find a way to pay for it somehow, is ruinously irresponsible, as we are now seeing both here and in Europe.

   In particular I think we could divest ourselves of a great many of our military assets abroad, which we maintain at enormous expense. Of course even that vast expense is dwarfed by the cost of the big social-entitlement programs. But it would be a start.

   Posted June 4, 2011 at 10:47 pm | Permalink
3. the one eyed man says

   Well, people are strange. To hear some describe it, you would think that the future’s uncertain and the end is always near. However, I think we can break on through to the other side and restore fiscal equilibrium. First we have to get past the people saying this is the end, as their solutions are about as effective as petitioning the Lord with prayer.

   There are a number of ways to curtail entitlement spending without destroying the safety net. Means testing is one. Switching Medicare from fee-for-service to capitation could be another. I don’t think that reaching the age of 65 should automatically allow you to demand any medical procedure you want, regardless of cost or efficacy. If you want to call that rationing, that’s fine with me.

   However, you don’t need William of Occam to tell you that the simplest solution is usually the correct one. Taxes are too low. The last time marginal tax rates was this low was 1948 (at least I think so — I read this in an article which did not provide a source). People want the government to be around in case they are retired and need dialysis, or a tornado vaporizes their town, or they need a loan to send their kid to college. Nobel Prize winning economist and Princeton University professor Paul Krugman described the government as a big insurance company with an army. Well, fine, if you want these things you have to pay for them. You can’t have both low taxes and a decent safety net. We had a balanced budget ten years ago. Since then, things went out of whack when the government launched two wars and provided a prescription drug benefit while lowering the tax rate.

   We had stimulus spending which was necessary to revive an economy facing nuclear winter. Health care costs soared systemically, which increased the cost of government paid care. Demography plays its role, as we become an older society. These things makes the problem difficult, but not intractable. The real obstacle is the political reality that the solutions to the problem are not likely to be embraced by anyone who hopes to win an election.

   Posted June 5, 2011 at 12:07 pm | Permalink
4. Malcolm says

   Taxes are low now as a percent of GDP, but the absolute amount (in adjusted dollars) spent by the government per capita is many times what it was in 1948, and 100 times what it was a century ago.

   We have way more government now than we used to get by with, and it’s costing us a fortune. Even if you taxed all Americans at 100% of their income, it wouldn’t really make a dent in the entitlement mandates.

   But I agree with you that people on both sides of the political spectrum just love to vote themselves money.

   Posted June 5, 2011 at 12:19 pm | Permalink
5. the one eyed man says

   That’s not what the chart in your link indicates. If the chart is accurate, the amount spent per capita was about $9000 in 1948, and is $9500 or so today.

   Posted June 5, 2011 at 1:36 pm | Permalink
6. Malcolm says

   No, you’re looking at the anomalous peak during WWII. And right now it’s about $10K.

   Anyway, you are missing the point, which is the ever-increasing expense of government. 100-fold per capita in a century is an astonishing expansion. It’s gone up threefold just since we were kids.

   Posted June 5, 2011 at 1:43 pm | Permalink
7. the one eyed man says

   The chart is a little unclear — we could have hit the peak in government per capita spending after the war, with the Marshall Plan and repayment of war bonds. Hard to tell. Also we are now engaged in two wars, so I’m not sure how anomalous WWII was. However, I don’t dispute that government spending has risen inexorably over the past few decades.

   However, here’s what we have now that we didn’t have in 1948: Medicare, Medicaid, an interstate highway system, a military presence around the world, and a Department of Homeland Security. But wait! There’s more! Pell grants, foreign aid, block grants to states, Amtrak, NASA, and so much more. So suggesting that government is a big blob which just gets blobbier is unhelpful. The question is which of the services government provides are worth keeping and which, if any, are worth jettisoning.

   For example, you could certainly reduce the size and expense of government by eliminating Medicare. The ineluctable result is that some people will die and others will go bankrupt. You could reduce Medicare a la Paul Ryan, and the ineluctable result is that people will die and go bankrupt, albeit in smaller numbers. Or you could make the cost reductions which are part of Obamacare, which I think is a good start but insufficient. The choice is between spending more money than we have or making changes in which some people will get hurt. Ditto for Homeland Security: you could eliminate the department and increase the likelihood and effectiveness of a terrorist attack. Worth doing? As they say on ESPN: you make the call.

   I don’t pretend to have all the answers (actually I do, but modesty precludes me from acting that way.) My point is simply that political dialogue is so barren that all we’ve got is Manichaean ideologies whose advocates are dishonest and disingenuous. The best path forward would be to determine what the different options are, as well as what their consequences would likely be, and then make decisions regarding how much we are willing to pay for which defined set of services. Given the current state of the body politic: good luck with that.

   Posted June 5, 2011 at 2:41 pm | Permalink
8. Malcolm says

   The best path forward would be to determine what the different options are, as well as what their consequences would likely be, and then make decisions regarding how much we are willing to pay for which defined set of services.

   Well, exactly. Or even better, determine how much we have to spend, then see what we can afford.

   Posted June 5, 2011 at 2:44 pm | Permalink
9. Malcolm says

   Re Medicare: as currently constituted it is utterly unsustainable, in large part because with the government taking such a central role in its economic structure, health-care-service cannot operate as a normal commodity, seeking innovation and efficiency according to the demands of consumers in a competitive market.

   Medicare needs fundamental revision, and much of it should be eliminated. We can still provide assistance for the truly needy (and we should!), but as a blanket government entitlement it is little more than a huge Ponzi scheme, and is already collapsing. But such revision will never happen as long as anyone who suggests it is demonized as pushing Granny off a cliff, and as long as voters — both Democratic and Republican — continue to prefer slurping as much as they can from the public trough to keeping the nation’s economy from collapsing in ruin.

   Posted June 6, 2011 at 12:04 pm | Permalink