Monday, July 4, 2011

Fareed Zakaria is a Very Serious Person

For a person in the Very Serious crowd, I like Fareed Zakaria. He says smart things and points out the problems inherent in dogmatism very articulately. But he also very often can be trapped in the conventional wisdom of the day far too easily. His column in Time this week is a study in this duality. He rightly points out that America is not even close to Greece territory, regardless of what the bond vigilantly fearing conservatives may think. The points he makes about solving America's debt and the deficit are mostly sound, even if like the rest of the establishment media he thinks Simpson-Bowles is a centrist proposal when it is in fact a right/center-right one. Simply pointing out letting the tax rates revert to Clinton era rates would solve our short to medium term deficit problem.

Underlying all these good points however, is the fundamental flaw with the premise to begin with. The idea that we should even be talking about debt reduction at a time of 9% unemployment and slow GDP growth is bad policy and bad politics. When crops are beginning to rot on the vine, you don't worry about how you are going to pay for the seeds for you next batch of crops ten years from now. You figure out ways to pump resources into the field to make sure you pick all the crops you can before they go bad. A better column would talk about more stimulus and job creation, but alas the consensus says we must talk about our debt, so its a debt column we get.

Then Zakaria decides to go full Washingtonian when he veers into "pox on both your houses" territory.
The great truth facing the U.S. is not that we lack solutions to our problems but that our political system seems unable to do anything. With a deficit as large as the one we face, it should be clear that we cannot sort things out through either spending cuts alone or tax increases alone. (Spending on Social Security, Medicare and Medicaid is set to rise from 10% of GDP now to 15% by 2030. That is simply unsustainable.) And yet the two parties seem stuck in adolescent fantasies, one ruling out tax increases, the other ruling out any serious cuts in entitlement spending. Sure, in a country of 312 million, people will disagree. But on the deficit, the disagreement is not a theological one. Debates over money are always amenable to compromise. You can split the difference!
This is downright wrong. First the Democrats have a serious plan for entitlement reform. It's called the Affordable Care Act. They went ahead and cut $500 billion from Medicare last I checked. Furthermore they implemented the Independent Payment Advisory Board as a way to curb growth in Medicare spending. This is the type of policy somebody like Zakaria should love, it takes policy choices out of the hands of irresponsible politicians. But since it is an entirely partisan accomplishment, it gets overlooked.

Moreover, Democrats have agreed to $1 trillion in cuts over the next ten years. Those are serious cuts in entitlement spending. Republicans simply won't come to the table in an honest fashion, and are holding the entire economy hostage. He briefly talks about the Republican's irresponsibility, but doesn't explore the implications in any depth, preferring to simply revert to the Very Serious default of "both parties are irresponsible."

Both parties might be talking about the complete wrong topic, but only one party is willing to take us to a Greece type situation. Zakaria seems almost ready to say this, but as a Very Serious Person, he simply is unable.

No comments:

Post a Comment