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http://www.nytimes.com/2009/10/28/business/economy/28leonhardt.html?partner=rssnyt&emc=rss
He's completely right on this. If we don't have the stones to refrain from passing this special bonus, how are we going to have the courage to make necessary cuts in our already failing entitlement programs? To me, this is reason #1 why I'm strongly opposed to the creation of another entitlement program.
If you wanted to help the economy and you had $14 billion to bestow on any group of people, which group would you choose:
a) Teenagers and young adults, who have an 18 percent unemployment rate.
b) All the middle-age long-term jobless who, for various reasons, are not eligible for unemployment benefits.
c) The taxpayers of the future (by using the $14 billion to pay down the deficit).
d) The group that has survived the Great Recession probably better than any other, with stronger income growth, fewer job cuts and little loss of health insurance.
The Obama administration has chosen option d — people in their 60s and beyond.
The president has proposed sending a $250 check to every Social Security recipient, which sounds pretty good at first. The checks would be part of his admirable efforts to stimulate the economy, and older Americans are clearly a sympathetic group. Next year, they are scheduled to receive no cost-of-living increase in their Social Security benefits.
Yet that is largely because they received an artificially high 5.8 percent increase this year. For this reason and others, economists are generally recoiling at the proposal.
Just about everybody agrees that solving the deficit depends on reducing the benefits that current law has promised to retirees, via Medicare and Social Security. That’s not how people usually put it, of course. They tend to use the more soothing phrase “entitlement reform.” But entitlement reform is just another way of saying that we can’t pay more in benefits than we collect in taxes.
“If the long-term issue is entitlement reform,” says Joel Slemrod, a University of Michigan economist, “the fact that the political system cannot say no to $250 checks to elderly people is a bad sign.”
He's completely right on this. If we don't have the stones to refrain from passing this special bonus, how are we going to have the courage to make necessary cuts in our already failing entitlement programs? To me, this is reason #1 why I'm strongly opposed to the creation of another entitlement program.
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