With millions of Americans out of work, a
mounting federal debt, and the national economy at risk of a renewed recession,
no one seems to be thinking about the Social Security system at the moment. But
they should be. Fixing Social Security—that is to say, restoring the program’s
actuarial balance—would serve our economic needs in a number of ways. It would
help with our long-term fiscal problems without damaging our short-run outcomes;
moreover, it would be a lasting commitment, not a seeming fix that might be
undone. Most importantly, it’s something that our existing political system
might actually accomplish.In contrast to fixing Social Security, addressing now the budgetary elephant in the room, healthcare costs, has little to recommend it. We don't sufficiently understand how to make health care work better. We do understand how to shift costs from the federal government, but that does not address the root of the problem. We have a healthcare cost problem not only for the federal budget, but also for state and local budgets, for businesses and for individuals. In short, we have a system that doesn't work well. While there are some changes we should make now, learning how to fix it thoroughly is going to take experimentation, evaluation, and repeated corrections. Not to mention the fact that we have a history of some of the cost-lowering legislation in the health care sector getting canceled later. Tax reform has a similar history of some backtracking; a number of the important 1986 tax reforms have already been rolled back.
Continue reading "Want to Fix the Economy?"
