Paul Krugman points out yet again why, as the annual deficit continues to shrink, “deficit hawks” remain undeterred by the spectacular inaccuracy of their predictions:
But what about people who pay a lot of attention to the budget, the self-proclaimed deficit hawks? (Some of us prefer to call them deficit scolds.) They’ve spent the past few years telling us that budget shortfalls are the most important issue facing the nation, that terrible things will happen unless we act to stem the flow of red ink. Are they expressing satisfaction over the fading of that threat?
Not a chance. Far from celebrating the deficit’s decline, the usual suspects — fiscal-scold think tanks, inside-the-Beltway pundits — seem annoyed by the news. It’s a “false victory,” they declare. “Trillion dollar deficits are coming back,” they warn. And they’re furious with President Obama for saying that it’s time to get past “mindless austerity” and “manufactured crises.” He’s declaring mission accomplished, they say, when he should be making another push for entitlement reform.
All of which demonstrates a truth that has been apparent for a while, if you have been paying close attention: Deficit scolds actually love big budget deficits, and hate it when those deficits get smaller. Why? Because fears of a fiscal crisis — fears that they feed assiduously — are their best hope of getting what they really want: big cuts in social programs. A few years ago they almost managed to bully the nation into cutting Social Security and/or raising the Medicare eligibility age; they even had hopes of turning Medicare into an underfinanced voucher program. Now that window of opportunity is closing fast.
A few days ago I noted that, despite the enormous growth of the American economy, median household income has barely increased over the past 40 years, and has actually declined among younger households. There is, however, one group (other than, of course, the upper class) whose real income has increased substantially over that time: the elderly.
Median household income for households headed by Americans 65 and older has increased from $16,831 in 1967 to $35,611, in 2013 dollars. In the late 1960s, a large majority of elderly Americans either lived in poverty or close to it. (The current poverty line for a two-person household is $15,730). Today that bleak state of affairs has been altered drastically, largely if not exclusively as a consequence of Social Security and Medicare. These programs, born of the New Deal and the Great Society respectively, have been nothing less than fabulous successes, which is why they’re so popular.
Obviously both programs require some changes going forward, with Social Security needing some fairly modest tweaks to remain fully funded, and Medicare calling for more challenging reforms (the ACA is a good start in regard to the latter).
Progressives have been living in Nixonland for so long that it’s often easy to forget that most Americans actually like the results of Big Government (sic) just fine, at least as it’s manifested in our most expensive and important social programs.