In this words of Jim Pethokoukis, this piece by Matt Miller is a “perfect crystallization of liberal Wash thinking on taxes, spending”. Amazingly, some people think it’s a “brilliant taken-down” and Ezra Klein says that “Matt Miller is about as credentialed a deficit hawk as has ever walked the earth, so when he delivers this hard a blow to the fiscal commission, it’s worth paying attention.”
These plaudits surprised me, since Miller isn’t necessarily mathematically literate. He writes:
I don’t want to overreact. I’d hate to prematurely diss President Obama’s National Commission on Fiscal Responsibility and Reform, which held its fourth public meeting Wednesday. But the commission’s Democratic co-chair, Erskine Bowles, may have already blown it.
In little-noticed remarks a few weeks ago, Bowles suggested that the long-term goal the commission should adopt for federal spending should be 21 percent of gross domestic product. This sounds like a bookkeeping matter. But Bowles’ goal would end progressive ambition, ratify America’s declining competitiveness and bury the American dream.
Why? For starters, federal spending under Ronald Reagan averaged 22 percent of GDP. Under Bowles’s view, therefore, the outer limits of the Democratic Party’s 21st-century aspirations would be to run government at a size smaller than did a 20th-century conservative icon.
What’s more, Reagan ran government at this size at a time when 76 million baby boomers weren’t about to hit their rocking chairs. In 1988, 32 million retirees received Social Security and 33 million were on Medicare, our two biggest domestic programs. By 2020, about 48 million elderly Americans will receive Social Security, and 62 million Americans will be on Medicare (then the numbers really soar).
As a matter of math, if you run the government at a smaller level than did Ronald Reagan while accommodating this massive increase in the number of seniors on our health and pension programs, you have to decimate the rest of the budget.
Sorry Matt, but as a “matter of math”, you are wrong for at least two reasons. First, the absolute numbers don’t matter. What matters is the proportion of retirees to workers. But you don’t include this crucial statistic. I don’t know the size of the workforce today compared to 1988, but the U.S. population has increased about 20% since 1988.
Second, you are comparing government spending to GDP and only looking at the growth in people on Social Security or Medicare without looking at the growth in GDP. “As a matter of math” you GDP could grow to match the increased numbers on these programs. For example, since 1988, GDP has increased about 27% according to my calculations.
While Miller’s point about math isn’t necessarily correct, he is correct that it will be hard to restrain government spending and pay for Social Security and Medicare.
Why this Miller’s piece of “brilliant” is beyond me, but then again, I’m not a progressive.
Besides Miller’s lack of math skills, my favorite part of this argument is his lead argument against limiting federal spending at 22 percent of GDP—because that’s what Ronald Reagan did and we all know that he was the anti-Christ and the U.S. in 1988 was hell on Earth.