Samuelson’s Incredibly Misguided View of the Federal Budget

The Washington Post published a column by Robert Samuelson on December 30 that has been troubling me ever since it appeared in print.

I’ll leave it to Dean Baker and others to argue with Samuelson’s take on other issues. My complaint is about this incredibly incorrect paragraph:

But given an aging baby-boom population and increasingly high health costs, spending on the elderly is already crowding out other important government programs and threatening steep tax increases on working Americans. I plead guilty to making this point repeatedly. Annual spending on Social Security already exceeds defense spending; Medicare is approaching the level of “non-defense discretionary spending,” a catchall of everything from highway spending to foreign aid to education.

There are several big problems with virtually everything here.

First, there is no evidence that spending on the elderly is crowding out other “important” programs. The federal budget is not a zero-sum game and an increase in one program does not automatically mean a reduction has to happen somewhere else. In fact, we know from experience that’s not the case. In addition, in the current political environment there would still be pressure to reduce other programs even if spending on the elderly was lower.

There is also no indication that these other “important” programs are a higher priority to a majority of Americans than Social Security and Medicare. Saying that other programs are as or more important is making a value judgment about what the government should do that is being presented as a fact.

Second, saying that annual spending on Social Security “already exceeds” defense spending implies that the Pentagon should always spend more and it’s somehow wrong or inappropriate when that doesn’t occur. As with any other federal function, the level of military spending should be dependent on the need rather than the type of artificial standard Samuelson tries to establish.

Third, the same can be said about Samuelson’s statement about Medicare: The fact that it may be “approaching the level of non-defense discretionary spending” is a completely meaningless warning. Would Samuelson be happier if non-defense discretionary spending was increased so that it was greater than Medicare?

Finally, what in the world does Samuelson mean when he says that spending on the elderly is “threatening steep tax increases on working Americans”? Isn’t Pentagon spending and interest on the national debt just as responsible for the deficit as other programs? And if there’s a demand for these programs by working Americans (and you can see in any poll that there is), shouldn’t they be asked to pay for at least part of them?

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