When House Speaker John Boehner calls for trillions of dollars of spending cuts, the message is clear. Any deal to raise the federal debt ceiling must include significant savings in Social Security and Medicare benefits. Subsidizing the elderly is the biggest piece of federal spending (more than two-fifths of the total), but trimming benefits for well-off seniors isn't just budget arithmetic. It's also the right thing to do.
Almost everyone considers the housing collapse a disaster, and it is. Since 2007, roughly 8 million homes have gone into foreclosure. If you're a homeowner, the steep fall in prices is calamitous. But if you're a future buyer, it's a godsend. What we're seeing is a massive wealth transfer from today's older homeowners to tomorrow's younger homeowners.
Vice President Biden, an avowed friend of good government, is giving it a bad name. With great fanfare, he went to Philadelphia last week to announce that the Obama administration proposes spending $53 billion over six years to construct a "national high-speed rail system."
Never underestimate Americans' capacity for denial. The upheaval in Egypt reminds us of lessons that, despite decades of warnings, we have consistently sidestepped: the United States and the rest of the world will depend on oil for the indefinite future, global oil markets remain hostage to political crises that cannot be predicted or controlled, and we have not taken the prudent steps that would reduce—though not eliminate—our vulnerability to catastrophic oil interruptions.
By all appearances, Chinese President Hu Jintao's visit to Washington last week changed little in the lopsided American-Chinese relationship. What we have is a system that methodically transfers American jobs, technology and financial power to China in return for only modest Chinese support for important U.S. geopolitical goals: the suppression of Iran's and North Korea's nuclear weapons programs. American officials act as though there's not much they can do to change this.
We are, it's said, living through the most wrenching period since the end of World War II. The feelings and facts are genuine, but the conclusion amounts to historical amnesia. At least one other period rivals the present for its disillusion and contentiousness—the 1960s.
Almost everyone who worries about America's "competitiveness" in the world bemoans the sorry state of U.S. K-12 education. The Chinese and others do better. We need to catch up.
President Obama must take some comfort that the latest economic forecasts are becoming more optimistic about 2011 and beyond. The more upbeat of these (from, say, Richard Berner of Morgan Stanley) have the economy's growth accelerating next year to about 4 percent from less than 3 percent and the unemployment rate dropping from the present 9.8 percent to 8.6 percent by year-end.
I received my Medicare card the other day, recognizing my 65th birthday and making me part of one of America's biggest problems. By this, I mean the burden that the massive baby-boom generation will impose on its children and the nation's future.
Except for those on Social Security and Medicare, government for most middle-class Americans consists mainly of schools, police, fire protection, roads and ambulance service. It's states and localities. How are they faring in the present economy? Conventional wisdom holds that they've been crushed by dramatic declines in tax revenues and have resorted to deep cuts in public services. Well, not exactly.