Cutting Spending

Here are two (revised to make me look better) comments I wrote, after reading this post at Brad DeLong’s weblog:

Cutting Social Security and Medicare spending might move the costs a few steps away from the government, but it’s a very short term fix.

Most of the elderly are still going to get expensive medical treatment, and the citizenry is going to pay for it one way or another. Everyone else’s health care cost goes up, insurers raise rates, etc. If you think of paying for this spending as a tax, the tax just shifts to different payers. If you want to cut out the financial burden of caring for the elderly you have to pass laws allowing emergency rooms to refuse treatment. (I’m not advocating that, I’m pointing out that it doesn’t do any good to just cut the budget at the Fed level.)

Cutting Social Security spending might also make the government’s books look better in the short term, but then you’re talking about the elderly cutting THEIR spending in response, so the grocery stores, landlords, etc. suffer, and the tax base erodes. And for those lucky enough to have kids that make enough money, those kids will send a few hundred dollars a month, and cut their own spending accordingly, and the economy drops, and the tax revenue drops. (A side note – the 80’s ALSO began a wave of cutting off of pensions and companies moving to 401Ks which only benefit the upper middle… which raised stock prices, which passed the pension money up to the rich instead.)

So the Reagan/Bush tax cuts for the rich lead to government spending cuts which lead to costs increasing for the poor and middle class, (and companies that offer insurance.) Shifting even more costs from the rich to the rest of us. [Added, not in the original:] My point: Cutting spending just cuts the economy, which cuts tax revenues, which undoes some portion of the savings from cutting the spending, and, most important, IT HURTS PEOPLE. Cutting spending is not the answer.

Second comment:

I have a strong impression that everyone posting comments here is well-paid or comes from families that are. (One poster identified himself as a student.)

Here’s some news – most of the people in the country don’t make very much money and are falling further and further behind, and their health insurance is cutting back and cutting back – if they are lucky enough to have an employer that provides it at all – while the whole time the rich become vastly richer. For the majority of our elderly any cut in Social Security or Medicare would mean hunger. Real hunger. Many are already skipping meals to pay for essential drugs.

This is not a talking point, this is not a campaign line, this is not an academic discussion. This is what is happening out there in the real world of regular people who make the median and below while people like us are talking and talking.

Imagine yourself trying to survive even on the median and then imagine yourself trying to survive on Social Security AND paying for drugs that keep you alive! But here you’re all talking about cutting back on Social Security and Medicare. What has happened to people?