The Washington Post has a good editorial today criticizing the Senate Democrats’ budget for lacking seriousness about our long-term budget problems.
It is on the issue of entitlements that the Democrats’ document really disappoints. There is literally nothing — not a word — suggestive of trimming Social Security, whether through greater means-testing, a more realistic inflation adjustment or reforming disability benefits. The document’s fuzzy call for $275 billion in “health savings” is $125 billion less than the number President Obama has floated.
As for the coming flow of baby boomers into Medicare, the Democrats declare that “new retirees deserve the same promise of quality, affordable health care from which their parents have benefitted — and it is the position of the Senate Budget that they ought to get it.” There’s plenty of excoriation for the GOP “premium support” plan. But there’s no explanation of how the Democrats would pay for their “promise” — nary a hint of the many cost-saving reforms that would extend Medicare’s life without embracing the GOP plan.
In short, this document gives voters no reason to believe that Democrats have a viable plan for — or even a responsible public assessment of — the country’s long-term fiscal predicament.
On another note, I would highly recommend reading my colleague Eli Dourado’s really great piece entitled “Paul Krugman Is Brilliant, but Is He Meta-Rational?” The piece was published over at the excellent new website The Ümlaut. Here is a tidbit:
Suppose further that we agree that Krugman is smarter than I am. All it should take, according to Aumann, for our beliefs to converge is for us to exchange our views. If we have common “priors” and we are mutually aware of each others’ views, then if we do not agree ex post, at least one of us is being irrational.
It seems natural to conclude, given these facts, that if Krugman and I disagree, the fault lies with me. After all, he is much smarter than I am, so shouldn’t I converge much more to his view than he does to mine?
Not necessarily. One problem is that if I change my belief to match Krugman’s, I would still disagree with a lot of really smart people, including many people as smart as or possibly even smarter than Krugman. These people have read the same macroeconomics literature that Krugman and I have, and they have access to the same data. So the fact that they all disagree with each other on some margin suggests that very few of them behave according to the theory of disagreement. There must be some systematic problem with the beliefs of macroeconomists.
He follows with great comments about self-deception that apply to most of us, I am afraid. Enjoy.