Monday, 15 Nov 2010 07:23 AM
By Julie Crawshaw
Economist Robert Reich says that the report from President
Barack Obama's commission on reducing the deficit largely
ignores the biggest driver of future deficits — the relentless
rise in healthcare costs coupled with the pending corrosion of
77 million boomer bodies.
"This is 70 percent of the problem, but it gets about 3 percent
of the space in the draft," Reich writes in his blog.
"The report suffers a more fundamental error — the unquestioned
assumption that America's biggest economic challenge is to
reduce the federal budget deficit," says Reich. “The size of the
budget deficit (and cumulative debt) is meaningless without
reference to the size of the economy.”
“What looks like a big debt 10 or 20 years from now may turn out
to be small if growth has been rapid in the intervening years.
By the same token, a seemingly small future debt can become
unmanageable if the economy tanks, or barely grows at all.”
Good reasons we should beware budget-deficit mania, according to
Reich, who describes the commission’s first draft as “a pastiche
of ideas — some good, some dumb, some intriguing, some wacky.”
“The only unifying principle behind their effort seems to be to
throw enough at the wall that something’s bound to stick,” he
says.
RetireSafe, a national advocacy group for older Americans,
blasted the deficit commission's draft report, which cites cuts
to Social Security benefits and a reduction in Medicare services
as ways to reduce debt.
"The deficit commission has chosen to put the burden of
Washington's debt on the backs of those who are least able to
bear it, America's older citizens," RetireSafe President Thair
Phillips told PRNewswire.
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