Its Monday again and Robert Samuelson has provided another argument for making large reductions in social welfare programs. More precisely, he has found another way to make the same argument that he and the Washington Post editors have been making for a long time. He correctly points out that spending on social welfare programs are growing faster than the growth in some other government programs. He concludes that this will reduce the capacity of government to function, and he mentions a few of the programs that may suffer a loss in funding. That leads him to argue that the welfare state is taking over government. He makes an attempt at bipartisanship by claiming that both parties are complicit in this process but he singles out the Democratic Party as the major culprit. He ends the article by claiming that the pro-government political party has become the anti-government party. It is the anti-government party because spending on social welfare programs is crowding out spending on more essential government programs.
There is no new information in Samuelson's article and he makes the same mistakes that he makes in the host of other articles that he has written on this subject. The first mistake is to lump Social Security and healthcare into an entity that he calls social welfare. Spending in both of these areas is rising because of an aging population. Social Security differs from healthcare spending, however, in an important way. It would require only modest adjustments in Social Security because the cost per beneficiary is only affected by the general rate of inflation. Spending on healthcare is much more difficult problem to correct because the cost per beneficiary has been subject to a higher rate of price inflation. Healthcare price inflation is a global problem, but it is a bigger problem in the US because of inefficiencies in our healthcare system. It has been politically difficult to correct the inefficiencies because any corrections would reduce the revenues that flow to insurance companies and healthcare providers. The Republican Party has been the major opponent of reforms that would lead to a more efficient healthcare system.
The second mistake that Samuelson makes is to single out a few areas of cuts that might be made in discretionary spending that are relatively modest. The elephant in the discretionary spending budget is defense spending. The US spends almost as much on defense as the rest of the world combined. Moreover, much of the spending is on weapons that were more suitable for World War ll than they are for defending the US from terrorism. In fact, Samuelson uses a potential cut in spending on a fighter plane as one of his reasons for making his claim that are becoming a social welfare state. The defense budget is sacred but spending on social welfare is only necessary because our politicians are intimidated by the voting power of the elderly. I was under the impression that government should be responsive to the electorate in a democracy.
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