We're not Greece (by Paul Krugman)

[DonCoquixote]

http://www.nytimes.com/2010/05/14/opinion/14krugman.html

Even though I sometimes disagree with Krugman, he can make great points. Here is the best quote:

"So here’s the reality: America’s fiscal outlook over the next few years isn’t bad. We do have a serious long-run budget problem, which will have to be resolved with a combination of health care reform and other measures, probably including a moderate rise in taxes. But we should ignore those who pretend to be concerned with fiscal responsibility, but whose real goal is to dismantle the welfare state — and are trying to use crises elsewhere to frighten us into giving them what they want."

[NJmaverick]

1. K & R!

[laughingliberal]

2. He hit the nail on the head, this time

I am glad to see him fighting the 'entitlement reform' propaganda.

[zipplewrath]

3. Gotta love this part

"...which will have to be resolved with a combination of health care reform ..."

Um, didn't we just do that? Or are we now admitting it wasn't health care reform, it was the "Health Insurance Industry Stimulus Package"?

The bill they passed was suppose to reduce the cost to government of the health care/insurance that the government pays for. Is Krugman claiming they didn't do well enough? Or is he saying that they didn't really control health care costs, just reduced the rate of increase for the government?

[Statistical]

4. I think it is the later.

There is nothing in the mandatory insurance scheme that will address the underlying rising cost of healthcare.

Health insurance companies are evil parasites but they only make about 5% profit annually. So imagine they were all nonprofits. Cost of healthcare would only be about 5% less.

There are larger issues with healthcare and Congress simply glossed over them. More people will have access to affordable healthcare but that won't do anything about the upward pressure on prices.

I expect my heatlh care bills to be higher next year, and higher the year after that, and higher a decade from now.

[zipplewrath]

5. It goes beyond profits

profit is only part of the problem. They serve no real purpose in the system, and they do not have a "stake in the game" for reducing long term costs. Either single payer, or the public option, both systems rejected by Obama, were systems in which the "insurer" was also the interested party in reducing the long term costs. The were also potentially the one with the legal clout to accomplish it. Instead, the entire bill ended up being focused on ensuring the health and longevity of health insurance companies, and will leave 25 million people uninsured, and no one guaranteed healthcare. Oh, and as Krugman points out, it's STILL going to bankrupt this nation.

[blindpig]

6. Right and wrong

He's right that the calls for 'fiscal responsibility' is an attack on the 'welfare state', not to mention a means of filling corporate coffers.

But he's wrong about 'us' not being Greece, they will make it so, with the contrivance of the two major parties.

[blindpig]

7. The bidness community responds:

Greece has the same entitlement problem, most notably people thought that they could work for 40 years and that the Government would be there for them to “bail them out” and provide them all with cushy pensions in their retirement years. The same thing goes for the average US citizen, who has already shown that they cannot accept personal responsibility for their actions. You saw it with the housing bubble: when prices were rising, people took all of the credit for building their “net worth” – what’s worse, they kept leveraging up and discussing it at cocktail parties about how many HELOC’s they had. When the music stopped, instead of accepting responsibility for their borderline reckless behavior (some of it actually borders on the edge of criminality – knowingly lying about one’s income, debt levels in order to obtain that HELOC to keep up with their counterparts at cocktail parties), these same people, many of whom actually get a tax “refund” and therefore don’t really pay any taxes (or very little at all) cried foul at the easiest target around – us evil bankers.

My point is simple, Professor Krugman: If you had 40-50 years in which to save for your retirement, and you chose not to do so, collective society should not have to pay extra taxes for you to continue to try to live your life keeping up with the Joneses. Everyone decries leaving debt around for future generations, however this is what is happening today. The younger generation, with already unacceptably high unemployment rates (around 27%) is now being forced to pay for those who have had their shot at the brass ring of life. While we are trying (hopefully) to save for our retirements so that we don’t end up in the cycle of depending on the Government to subsidize our way of life into retirement, we are being saddled with paying for the previous generation who failed to do so and now look to absolve all personal responsibility and shift the blame to someone else.

If the economy doesn’t see robust growth, which I honestly don’t believe we will—growth that creates real (not Government or temporary) jobs (remember, Government must create clear, business-friendly regulations that do not penalize or demonize businesses for becoming successful), we are going to find ourselves in the same position as Greece. The debt issued over the last 2 years in addition to the 8 years of debt created is not going to go down. We will become a nation that is much like the person who pays the minimum monthly balance (almost 100% interest), kicking the can down the road so that future generations are paying for the mistakes that the existing generations have created. Did President Obama say in his campaign that “he was not going to kick the can down the road” several times? What are we doing presently?

What’s so different about Greece, where people dodge paying taxes, but still believe that they are entitled to be taken care of by the Government while saddling the younger generation with all of the burden for their past mistakes? There has to be some vicious cuts to these entitlement programs – it will not be popular, it will be very painful, but it should serve as a lesson to future generations of what not to do. It should hopefully engrain in the younger generation that it is up to them to save for their retirements. Financial literacy needs to improve vastly in this nation to achieve that. What we do now will determine the next century for this nation.

http://www.businessinsider.com/dear-krugman-yes-we-are-greece-2010-5

They are coming to get us.