NO ADVERTISING, GOVERNMENT OR CORPORATE FUNDING

  • Latest News
  • Pitch a Story
  • Work with a Journalist
  • Join the Blog Squad
  • Afghanistan
  • Africa
  • Asia
  • Baltimore
  • Canada
  • Egypt
  • Europe
  • Latin America
  • Middle East
  • Russia
  • Economy
  • Environment
  • Health Care
  • Military
  • Occupy
  • Organize This
  • Reality Asserts Itself
  • US Politics
  • A Looming Crisis in Social Security, Medicare, Medicaid? The "Fiscal Cliff" is a Scam Pt2


    James Galbraith: It's been known since the 1950's that there would be more demands on social security; If there was political will health care costs could be controlled, it's not a problem of Medicare -   December 2, 2012
    Members don't see ads. If you are a member, and you're seeing this appeal, click here

    Audio

      Share to Twitter
    Share to Facebook




    TRNN is a rare source of objective facts, analysis and commentary, not available in mainstream news. - Robert
    Log in and tell us why you support TRNN

    Bio

    James K. Galbraith teaches at the LBJ School of Public Affairs, The University of Texas at Austin. He is a Senior Scholar of the Levy Economics Institute and the Chair of the Board of Economists for Peace and Security. The son of a renowned economist, the late John Kenneth Galbraith, he writes occasional commentary for many publications, including Mother Jones, The Texas Observer, The American Prospect, and The Nation. He directs the University of Texas Inequality Project, an informal research group based at the LBJ School, and is President this year of the Association for Evolutionary Economics.

    Transcript

    A Looming Crisis in Social Security, Medicare, Medicaid? The PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Baltimore. And this is the second part of our series with Professor James Galbraith, who thinks the fiscal cliff is a scam. And he's written an article with six reasons why he thinks so, and this is reason number two. Thanks for joining us, James.

    PROF. JAMES K. GALBRAITH, LBJ SCHOOL OF PUBLIC AFFAIRS, UT AUSTIN: A pleasure.

    JAY: So, once again, Professor Galbraith teaches at the LBJ School of Public Affairs at the University of Texas Austin. He's the author of The Predator State and Inequality and Instability: A Study of the World Economy Just Before the Great Crisis.

    So part two of your article, you ask the question, is there a looming crisis in Social Security, Medicare, Medicaid. So is there? That's my question to you.

    GALBRAITH: No, of course there's not. Let's take them separately.

    Social Security is projected to rise very gently as a share of total output, total expenditure in the economy over the first half of this century. Why is that going to happen? Because the share of the population that will be receiving Social Security benefits is going to go up. That is in no sense a crisis. It's something which has been known since the 1950s, since the baby boomers came into existence. It's certainly not a secret to the United States census. It's something which was taken care of in Social Security's finances in the early 1980s.

    But it constantly gets raised by people who want to curtail the extent of Social Security benefits. And there are all kinds of devices that are routinely surfaced to achieve that goal—raising the retirement age on the pretext that people are living longer and therefore they should work longer. But the reality is that two-thirds of Americans who take Social Security take it at age 62, at the early retirement—when early retirement becomes available.

    Now, why is that? They—some of them are already unemployed. They don't have a job they can stay in, and therefore they need the money. Others have been working for, let's say, 40 years in tough jobs, jobs that require them to stand all day, jobs that require them to move heavy objects, jobs that require them to sit behind the steering wheel of a vehicle. And they're ready to leave the labor force at that point, and so they take the early retirement deal.

    When you raise the so-called retirement age, which would have no effect on, you know, someone with a comfortable position like you and me, what you're doing to those people is you're cutting their benefits. They're taking their early retirement anyway, and they'll have to take it at a deeper discount. That's a benefit cut.

    Similarly, if you change the basis in which on—of cost-of-living adjustment on Social Security (this is also something that gets trotted out and discussed in these matters), then what happens is that over time, older and older retirees find that they're living on less and less money. And the way this works, if you introduced what was called index-linked price adjustments, is that as people with less money give up certain items of consumption—let's say, fresh vegetables—then what happens is that that disappears from the consumption basket, and there you get only the price of canned or frozen vegetables brought in. And so the quality of life continues to deteriorate as time goes on.

    And this is a way of—you know, ultimately, people reaching their '90s will be consuming cat food, and only cat food will be in their consumption basket—not a very fair or reasonable thing to do. In fact, it's one of the most damaging, socially destructive, really cruel measures that's available out there. This is what people who want to fold Social Security into a grand bargain are aiming to achieve.

    I think they won't achieve it. They won't achieve it in the next three weeks, and I hope they won't achieve it next year, either. I hope they won't achieve it in—you know, basically hope that Social Security's left where it is. It's perfectly sustainable as it is, and it does a pretty good job of keeping the elderly population out of poverty.

    Okay. So Medicare, Medicaid. We can have a discussion about health care costs, but the thing about health care costs is that they apply to the whole health care system. And there's the cost of providing particular procedures, whether you're old or young, poor or not poor, in a public insurance system or a private insurance system. Targeting Medicare and Medicaid just because they happen to be the public insurance systems, and therefore on the federal budget, means that you're targeting the elderly and you're targeting the poor. It's not a reasonable way to deal with health care.

    And I think the president has basically said this numerous times, but the problem of health care costs is a problem of health care costs. It can be dealt with, but not by arbitrarily cutting back Medicare and Medicaid. If, for example, [incompr.] suggestion which has been in the news, you raise the eligibility age for Medicare, then what you're doing is privatizing it in part. What you're saying is that people who have employer-based insurance or other forms of private insurance have to hang on to that when they're 66 and into, say, 67 [incompr.] they hit the age when they can shrug it off and get onto Medicare. That's privatization. That's what it is. And I think that should also be off the table. It certainly should not be something that is folded into a deal intended to avoid, as I said earlier, the very artificial short-term effects of the so-called fiscal cliff in the early weeks of next year.

    JAY: Right, 'cause if the real issue was cutting costs, then number one, they wouldn't have made a deal with the pharmaceutical sector not really to touch their price structure, which is one of the biggest savings you get, for example, in places like Canada with single-payer, where they can negotiate far lower pharmaceutical costs, and then if—again, if the issue really is costs, then one would address that, as you're suggesting, not trying to privatize or change the age [crosstalk]

    GALBRAITH: Absolutely. Every country in the world that has a publicly administered health care system has a cost control mechanism. It basically imposes limits on what can be charged for certain procedures. We're very elastic about that in this country, and we allow our medical sector to be a [incompr.] of GDP. If we want it to be a smaller share of GDP, the right way to do that is not to reduce its size but to be a little bit more or maybe even substantially more rigorous about what can be charged for particular things.

    JAY: But this would take on very powerful sectors of the economy in terms of their political lobbying clout, and nobody wants to do that.

    GALBRAITH: Sure, sure it would. And, you know, if you ask me do I consider this to be the most important issue that we face, I really don't. It's an internal distributive issue. But if you ask me, would I rather have overpaid doctors and nicely, you know, overbuilt hospitals, or aircraft carriers that we don't need or jet fighters that can never actually be flown, I'll say I'll take the doctors and the hospitals. I can see working on this issue, but it's not going to be the end of American civilization if we continue to have a very large health care sector. In fact, quite the contrary. A very great economist, Paul Samuelson [inaud.] 15 percent of GDP, but it's the best 15 percent of GDP. And I think there's something to that.

    JAY: Okay. In the next segment of our series, we're going to talk about military expenditure. So please join us for the next segment of our series of interviews with James Galbraith, who says the fiscal cliff is a scam, on The Real News Network.

    Don't forget we're in our year-end fundraising campaign. Every dollar you donate gets matched if you click on that—up to $100,000, I should add—click on the Donate button over here. If you don't click on it, we can't do this.

    End

    DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


    Comments

    Our automatic spam filter blocks comments with multiple links and multiple users using the same IP address. Please make thoughtful comments with minimal links using only one user name. If you think your comment has been mistakenly removed please email us at contact@therealnews.com

    Comments


    Latest Stories


    The Modern History of Venezuela and Popular Democracy - Edgardo Lander on RAI (9/9)
    An Asia "Pivot" Should Mean Cooperating with China to Solve the Global Environmental Crisis
    Assessing the U.S. Environmental Movement
    Intimidation and Political Interference Goes Unpunished in UAW Case
    Exclusive Investigation Uncovers How BP Uses Bribes To Do Business
    The Modern History of Venezuela, The Protests and Democracy - Edgardo Lander on RAI (8/9)
    Greek Politics 4 Years After The Financial Crisis
    CBO Report Confirms U.S. Deficit Back to Normal Level
    Israel Uses Refugees as "Currency" in Arms Trade with Africa
    Who Will Pay for Climate Change Disaster?
    Canada Shifts to Right Under Harper, Mimicking the United States
    The Savings and Loan Crisis Demonstrates the Importance of Glass-Steagall
    South African Platinum Miner's Struggle Challenges ANC Leadership
    TRNN Original Report: Manning Determined to Fight Back After Army Upholds 35- Year Sentence
    Hundredth Anniversary of the Ludlow Massacre
    The Bundy Ranch Standoff Demonstrates Values Shared by Corporations and the Far Right
    The Resegregation of American Schools
    The Modern History of Venezuela, Why Still So Much Crime? - Edgardo Lander on Reality Asserts Itself (7/9)
    What Role Has Russia Played in Eastern Ukraine?
    Can Johns Hopkins Afford to Pay A Living Wage? (2/2)
    University Sit-In Targets World's Largest Private Coal Company
    The Modern History of Venezuela and the Need for a Post-Oil Economy - Edgardo Lander on RAI (6/9)
    Can Johns Hopkins Afford to Pay A Living Wage? (1/2)
    One Percent of Environmentalists Killings Lead to Convictions
    Investigation Finds Former Ukraine President Not Responsible For Sniper Attack on Protestors
    The Modern History of Venezuela from 1973 to the Caracazo Massacre - Edgardo Lander on Reality Asserts Itself (3/9)
    Ukraine Transitional Gov't Moves Militarily To Reclaim Seized Buildings
    IPCC Report Flawed By Narrow Focus on Carbon Emissions
    The Modern History of Venezuela: The Bolivarian Revolution - Edgardo Lander on Reality Asserts Itself (5/9)
    Obama Signs Directives to Reduce the Gender Wage Gap
    Eastern Ukraine Lacks Political Representation in Kiev
    Demystifying the Role of Mitigation in the Most Recent IPCC Report
    Hypersurveillance State Won't Prevent Another Boston Marathon Bombing
    The Modern History of Venezuela from 1973 to the Caracazo Massacre - Edgardo Lander on Reality Asserts Itself (3/9)
    Univ. of Maine Faculty Reinstated After Students Protest Against Cuts
    The Modern History of Venezuela from 1908 to 1973 - Edgardo Lander on Reality Asserts Itself (2/9)
    IMF Will Address Global Inequality, Says Managing Director Christine Lagarde
    Raising Big Banks' Leverage Ratio Good, But Not Nearly Enough
    TRNN Replay: Austerity Road to 19th Century
    Has Palestinian Maneuvering Revived Peace Talks?
    Late Jackson Mayor Lumumba's Son Wins Primary to Replace His Father, Runoff Election Ahead
    Quebecers Reject PQ and Elect a Liberal Government Representing Big Business
    TRNN Debate: Decriminalization vs. Legalization
    The Beginning of the Chavez Era - Edgardo Lander on Reality Asserts Itself (4/9)
    "Off With His Head": Court Upholds Obama's Power to Kill
    Workers at Nation's Top Hospital Strike For Fair Wages
    From Exile to Radicalization in Venezuela - Edgardo Lander on Reality Asserts Itself (1/9)
    Rwanda 20 Years Later: Genocide, Western Plunder of Congo, and President Kagame
    Ukrainian Protesters in the East Demand More Autonomy From Kiev Government
    Hunger Strikers Demand President Obama Halt His Record 2 Million Deportations
    Indian Parliamentary Elections - A Primer With Vijay Prashad
    West Looks to Carve Up Ukraine & Privatize Industries Held by Kleptocrats
    Where Are Israeli-Palestinian Peace Negotiations Headed?
    The Multiple Kingdoms of Saudi Arabia (5/5)
    Do the Afghan Presidential Elections Signify Progress?
    Republican Presidential Hopefuls Pay Homage to Billionaire Casino Tycoon Sheldon Adelson
    Will Extremist Lieberman Become Israel's Next Prime Minister?
    Why do the Saudis Want the US to Attack Iran? (4/5)
    Immigrant Advocates and Families Tell President Obama 'Not One More'
    Elections, Pipelines, and Protests - The Canada Panel
    Chris Hedges on "Israel's War on American Universities"
    Baltimore Residents Decry Lack of Affordable Housing
    Yellen Talks the Talk But Will She Walk the Walk?
    Hopkins Hospital Workers Speak Out against "Poverty Wages"
    Will Venezuela's New Floating Exchange Rate Curb Inflation?
    The European Central Bank's War on Wages is Pushing Europe's Economy to the Brink
    Supreme Court Decision Opens Floodgates for More Campaign Cash
    Charles Keating, the Financier Behind the Savings and Loan Scandal, Dies at 90
    Saudi Arabia and the al-Qaeda Monster (3/5)
    Maryland Residents Voice Opposition to Natural Gas Fracking Export Facility
    Supreme Court Ruling Gives Wealthy Individuals More Influence Over Elections
    What are the Saudis Afraid Of? - Madawi Al-Rasheed (2/5)
    Baltimore's MICA Adjunct Professors Set to Vote on Unionization
    Boycott of Israel Moving to Next Level?
    Hypocrisy Dressed Up as "Realism" Justifies American Alliance with Saudi Dictatorship
    Immigration Reform in the Shadows of Cesar Chavez's Legacy
    Leaked Senate Report Shows Use of Torture As "Ineffective"
    UN Report Says Climate Change Will Threaten Food Production Worldwide
    The Hypocrisy of US Calling for Enforcement of International Law
    How the Ecuadorian Economy Grew in a Global Recession
    'Shadows of Liberty' Trailer
    Kristina Borjesson on Why CBS Shut Down Her investigation into Flight 800 (2/8)
    Glen Ford on Racism in the American Media (3/8)
    Paul Jay on What Drives Corporate Media and What Drive The Real News (4/8)
    Creating a New Media Paradigm After Citizens United (5/8)
    Should The Left Engage with the Mainstream Media? (6/8)
    What Is the Financial Backing For The Real News? (7/8)
    Standing up to Character Assassination (8/8)
    Oligarchs, Fascists and the People's Protest in Ukraine
    TRNN Debate: Is Obamacare In the Interest of Workers?
    Too-Big-To-Fail Advantage Remains Intact For Big Banks
    Obama and the Saudi Agenda
    TRNN Replay: Investigating the Saudi Government's 9/11 Connection and the Path to Disilliusionment - Sen. Graham on Reality Asserts Itself pt 1
    The Iraq War's Real Legacy
    Petitions with 100,000+ Signatures Call for Snowden's Passport to be Reinstated
    We Need to Harness People Power - Andy Shallal on Reality Asserts Itself (4/4)
    BC Pipeline Fight and Quebec Elections - The Canada Panel
    Jonathan Schell - 1943-2014: Board Member of TRNN on Why We Need The Real News
    Teachers on Strike from the UK to Argentina
    Connecticut Poised to Become First State with $10.10 Minimum Wage
    Oil Spill Threatens Wildlife and Local Economy
    DC School Test Scores Up, But Poor Black Kids Are Doing Worse - Andy Shallal on RAI (3/4)
    Obama's Proposal To End NSA Bulk Data Collection Won't Protect Privacy
    How Google, Apple & The Biggest Tech Companies Colluded to Fix Workers' Wages
    An American Should be One that Questions Their Government - Andy Shallal on RAI (2/4)
    What's Driving Putin & Obama's Posturing on Ukraine?
    Hundreds of Students & Faculty Occupy College Campus to Fight Cuts to Public Higher Ed
    Due Process 'Impossible' In Harsh Death Sentencing Of Over 500 Muslim Brotherhood Members
    Has Anglo-American Capitalism Run Out of Steam?
    Being the "Other" in America - Andy Shallal on Reality Asserts Itself (1/4)
    TRNN Debate: Should Baltimore 'Ban The Box'?
    How Fallujah Became the Iraqi Government's New Battleground
    Why I Decided to Blow the Whistle on the NSA
    NASA Climate Predictions Show Serious Threat To Humanity
    Professor Who Teaches Israel-Palestine Conflict Accuses College of Violating His Academic Freedom
    CIA and NSA Wrongdoing Requires Independent Investigation, Says Former Church Committee Staff
    Are Tuition Breaks Enough To Combat High Student Debt And Low Graduation Rates?
    Industries Across the U.S. Are Stealing Wages From Their Lowest Paid Workers
    Who In Ukraine Will Benefit From An IMF Bailout?
    NSA Recording All International Calls From U.S.
    Israel "Making Lives Miserable" for Africans, Hoping They 'Self-Deport' (2/2)
    BP Gets Green Light to Drill in Gulf, But Has Safety Improved?
    Residents Still Not Drinking Tap Water Two Months After West Virginia Spill (1/2)
    Libya's Descent Into Turmoil Three Years After NATO Intervention
    From Pipelines to Peladeau - Canadian Report
    Israel "Making Lives Miserable" for Africans, Hoping They 'Self-Deport' (1/2)
    Congressional Progressive Caucus Budget Strikes Back Against Austerity
    Libya Three Years Later - Chaos and Partition
    Why Was Gaddafi Overthrown?
    Should Ukraine and West Accept De Facto Crimea Joining Russia? (2/2)
    Tony Benn Saw Socialism as the Culmination of Democratization
    Why Didn't Bush/Cheney Attack Iran and Can Obama Make and Sell a Deal? - Gareth Porter on Reality Asserts Itself (3/3)
    After Late Mayor Lumumba is Laid to Rest, What's Next for Jackson, Mississippi? (2/2)
    Crimea Referendum: Self Determination or Big Power Manipulation? (1/2)
    Sen. Graham: President Must Side with Openness About CIA and 9/11
    Manufacturing a Narrative for War - Gareth Porter on Reality Asserts Itself (2/3)
    Protesters Hit the Streets of Brooklyn to Demand $15 Minimum Wage
    Hammer: 'Moral Bankruptcy' Behind Massive GM Recall
    White House Withholds Thousands of Documents from Senate CIA Probe
    I Grew Up Believing in Time Magazine's Version of America - Gareth Porter on RAI (1/3)
    Western European Banks Vulnerable to Ukrainian Sovereign Debt Crisis
    TRNN Debate: What's Driving Inflation in Venezuela? (2/2)
    CIA vs. Senate: Who Is Obama Protecting?
    Will Tipped Workers Get Excluded Again From Minimum Wage Hike?
    TRNN Debate: What's Driving Inflation in Venezuela? (1/2)
    After Late Mayor Lumumba is Laid to Rest, What's Next for Jackson, Mississippi?(1/2)
    TRNN Replay: A Look at Who's Poised to Become No.2 at the Fed
    How Right-Wing Nationalism Rose to Influence in Ukraine (2/2)
    Netanyahu Attacks Boycott As Campaign Enters New Phase
    Moving Towards a Police State - Michael Ratner on Reality Asserts Itself (7/7)
    Fighting Reagan's Secret, Illegal Wars - Michael Ratner on Reality Asserts Itself (6/7)
    Puerto Rican Independence Movement and Cuba Further Radicalized Me - Michael Ratner on RAI (5/7)
    The Butcher of Attica - Michael Ratner on Reality Asserts Itself (4/7)
    MLK and a Radicalizing Moment in American History - Michael Ratner on Reality Asserts Itself (3/7)

    RealNewsNetwork.com, Real News Network, Real News, Real News For Real People, IWT are trademarks and service marks of IWT.TV inc. "The Real News" is the flagship show of IWT and Real News Network.

    All original content on this site is copyright of The Real News Network.  Click here for more

    Problems with this site? Please let us know

    Linux VPS Hosting by Star Dot Hosting