In Semi-Defense of the Public’s Hypocrisy


Obviously on one level Doug Elmendorf is rigth about this:

The country faces a fundamental disconnect between the services the people expect the government to provide, particularly in the form of benefits for older Americans, and the tax revenues that people are willing to send to the government to finance those services.

But on another level, I think this is really mistaken. What we’re really talking about here, after all, is a future projection not a current situation. Right now, people pay more in Social Security taxes than Social Security pays out in benefits. When the United States began, in 2009, to run a very large short-term budget deficit for reasons that most economists think are perfectly good reasons to run a large short-term budget deficit, public opinion started freaking out. What we really see with the entitlement situation is a public refusal to think seriously about the future—a kind of myopia more than a refusal to pay the tab. What actually happens when the tab comes do? We’ll have to see. But I don’t think we really know what the public’s view of the coming crisis will be when it actually arrives.