Other Views: America’s wealth transfer; Confederate flags; Obamacare
America to transfer wealth to the elderly
Veronique de Rugy in Reason: According to the Congressional Budget Office’s annual Long-Term Budget Outlook, if current laws were to remain unchanged, government spending as a share of gross domestic product would reach 22.2 percent in fiscal 2025, up from 20.5 percent today. By then, even under a very rosy GDP growth scenario, the debt would amount to 78 percent of the economy. To put this number in perspective, the debt-to-GDP ratio was 35 percent in 2007. In 2040, the debt could reach a whopping 103 percent of GDP. Spending on interest alone would consume 4.3 percent of GDP, a dramatic increase above the current 1.3 percent. Putting that in dollar terms, interest on the debt would jump from $235 billion to over $2.2 trillion. That’s a lot of money.
The deterioration comes fully from the explosion of major health care programs, Social Security and escalating interest on debt costs. More precisely, Medicare, Medicaid, Affordable Care Act subsidies, and Social Security are the drivers of our future debt. Spending on these programs alone could reach 11.8 percent of GDP in fiscal 2025 and 14.2 percent of GDP in 2040, up from 10.1 percent today.
Because spending on entitlements will continue to outpace all other spending for years to come, they will consume a large and increasing share of the budget. In layman’s terms, it means that the future of our government will be mostly to spend money on older Americans for their retirement and health care. Despite federal revenues slightly increasing during the coming decade, the government could still run cumulative deficits of $7.4 trillion over that 10-year period, according to CBO forecasts.
Confederate flags and institutional racism
Charles Blow in the New York Times: We should move overt symbols of racial division such as the Confederate flag to places like museums, where they can be displayed in proper context and where education is part of the mission.
And yet there is a part of me that still believes we are focusing on the 10 percent of the iceberg above the water and not the 90 percent below.
When do we move from our consensus over taking down symbols to the much harder and more important work of taking down structures?
I worry much less about individual expressions of racism than I do about institutional expressions of racism. And we live in an age where people are earnestly trying to convince us that institutional racism doesn’t exist.
In an interview for the podcast “WTF With Marc Maron,” President Obama used a racial slur to make the point that eliminating the use of such language from polite society wasn’t the “measure of whether racism still exists or not.”
The slur got most of the attention; far less was devoted to the point the president was making about the resilience of institutional, intergenerational racism.
As the president put it: “It’s not just a matter of overt discrimination. Societies don’t, overnight, completely erase everything that happened” 200-300 years ago.
This is not to deny progress, but only to point out that the process isn’t complete. It is to point out that overt displays of racism are not the appropriate measure thereof. Focus less on the individual and more on the institutions.
Supreme Court rewrites Obamacare
David French in National Review Online: With his opinion in King v. Burwell, Chief Justice John Roberts has sent a clear message to Barack Obama, Harry Reid, and Nancy Pelosi: “You can count on me.” Or, to use the language of younger readers, “I got your back.” In the face of clear statutory language indicating that federal subsidies are available only for insurance plans purchased through “an Exchange established by the State,” Justice Roberts — and five other justices — rewrote the law to enable tax credits for insurance purchased through federal exchanges as well.
In so doing, the justices not only saved the individual mandate, they essentially saved Obamacare. Had they ruled the other way, Americans living in the 34 states without a state exchange could no longer have purchased subsidized insurance on the individual market. As a result, the cost of the insurance would have grown to the point where consumers would no longer be required to purchase it. Under Obamacare, the individual mandate does not apply if the cost of insurance exceeds 8 percent of the taxpayer’s income.
This result would have been catastrophic for Obamacare — gutting a key provision — but whether it would have been catastrophic, meaningless, or even potentially beneficial for individual Americans would have been entirely up to the elected branches of government. After all, a Supreme Court decision applying the clear language of the statute wouldn’t have mandated any particular congressional or presidential reaction. Congress would have been free to reform Obamacare, rewrite it to include federal exchanges in the subsidy scheme, or enact entirely new policies.