Krugman was wrong to scold scolds

Sunday December 2, 2012

In his latest op-ed column (Nov. 27), Paul Krugman scolds the deficit scolds for continuing to predict a crisis that has yet to happen, diverting attention from our current problem of the weak economy. In so doing, it seems to me, he inadvertently and unintentionally illustrates a major contributor to many of our ongoing problems; a focus on the short term without adequate consideration to the effects of our actions on the longer term. To balance the picture a bit, let me state the case as I see it for concern about the long-term effects of our deficit and its continued escalation.

We have accumulated rough ly $16 trillion in national debt, or about $70,000 for each and every person in this country over the age of 20. But this does not include the unfunded liabilities of our government. We have long promised our elderly Social Security and Medicare or Medicaid benefits that far exceed the monies we have supposedly set aside to pay for these benefits. How much so? Based on the most recent Trustees report, about $20.5 trillion for Social Security and about $42.8 trillion for Medicare or about an additional $275,000 for each and every person in this country. If one totals up all such unfunded liabilities of our federal government the total would come to about $87 trillion!

So what does all this mean in the context of our short-term problems? For me, it illustrates our continuing hazardous prac tice of spending now and promising to pay later. Perhaps Krugman is right and the crisis envisioned by the deficit scolds has never happened before but I don’t find that a comforting argument as to why it can’t happen. And the man is downright silly to scold the scolds for being concerned about a future problem that hasn’t happened in the last year.

Lastly, we should consider the moral dimension of this problem. Is it right to be promising our younger adults that they can expect to have the Social Security and Medicare benefits currently promised knowing full well this is not possible? Is it right for those of us retiring now to expect to receive well more in benefits than we’ve paid into these systems? Do any of us feel an obligation to pay off our "fair share" of the actual debt incurred by our government over the course of our adult lifetime? Define "fair share" whatever way you want, I doubt many citizens passing away this year could pay off even 10 percent of the $70,000 per person in national debt we currently have.

If we’ve learned anything from the bursting of the recent debt bubble it is that bubbles go largely unrecognized and ultimately burst. Just how and when they burst is unpredictable. Let’s hope we have learned this lesson and start recognizing and fixing our national debt bubble before it too bursts.




If you'd like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.

Powered by Creative Circle Media Solutions