“There was a case for paying down debt before the baby boomers began to retire, making it easier to pay full (Social Security) benefits later. But George W. Bush squandered the Clinton surplus on tax cuts and wars, and that window has closed. At this point, ‘reform’ proposals are all about things like raising the retirement age or changing the inflation adjustment, moves that would gradually reduce benefits relative to current law. What problem is this supposed to solve?
“Well, it’s probable (although not certain) that, within two or three decades, the Social Security trust fund will be exhausted, leaving the system unable to pay the full benefits specified by current law. So the plan is to avoid cuts in future benefits by committing right now to . . . cuts in future benefits. Huh?”
in a New York Times column, The Dwindling Deficit,
Jan. 17, 2013.
Speaking common sense to power: Interestingly, this telling point was made as a side note to Krugman’s larger message. That message is that while we have a deficit problem — as opposed to the universally flogged and erroneous term “crisis” — there is no good reason to tackle the whole thing now. The fiscal situation of the 2030’s can probably be better handled by the public officials of the 2020’s.
Krugman winds up this excellent column with a bit of wisdom that should be embroidered in bold olde script, framed and placed on President Obama’s Oval Office desk.
“But neither the current deficit nor projected future spending deserve to be anywhere near the top of our political agenda. It’s time to focus on other stuff — like the still-depressed state of the economy and the still-terrible problem of long-term unemployment.”