Thanks for pointing it out, but I’m not going to post on it because I’d need to do a better job of dispatching the entitlements canard than I have time tonight. Which is too bad. Fisher had some really great stuff in the set-up.

He isn’t wrong that the budget deficits will get worse and are being massaged into looking less bad than they will be, but his analysis of the problem and the solution is disputed by those who have looked at the Social Security and Medicare math.

Social Security is not much of a problem at all and could be fixed with pretty minor tweaks (eliminating or merely raising the ceiling on payroll taxes, raising the retirement age a tad). The real problem is Medicare, and completely contrary to Fisher’s claims, the problem is not demographics. The problem is the escalating health care cost assumptions. Which in turn reflect the fundamental, worsening state of our health care system: it costs substantially more, per capita, than any health care system in the world, and delivers not very good outcomes (one comparison of the US system’s results versus that of five other countries scored us last. Many other studies produce similar results).

My favorite factoid: our public health care expenditures are more per capita than the per capita cost of the French health care system. We are doing something terribly wrong.

So if we fix our health care cost problem, that fixes Medicare. But that takes a lot of political will, and with all the looming problems, I suspect crisis management will supersede taking this one on.

http://www.dallasfed.org/news/speeches/fisher/2008/fs080528.cfm

Thanks!

Exactly like the die hards neocons keep wondering why everybody hates them for a war that will cost 2-3 trillions, at a 20 billions /month clip, when all this money could serve domestic priorities, like refurbish our national infrastructure for example.

Can’t let that happen can’t we? Imagine that: it could mean the go-vermin can do something useful.

Horror!

Bravo Anon 8:58, bravo. The republicans have abandoned the middle class, but no one but a die hard democrat thinks adding $250billion of social spending is good. Dleusional every last one of them delusional. Good, they’ll be the first ones wondering why everybody hates them in 2009 as we sink further into the abyss…

It will be interesting to see whether the senate will replace Mishkin any time soon. Bernanke all of a sudden looks isolated: even Yellen, a long-time dove, doesn’t necessarily buy into the Mishkin academic hocus pocus. The Chairman relies on Kohn like never before, but Kohn is only a recent convert to his line of thinking. One wonders how long the Vice-Chairman will continue to serve as an apologist for rising inflation.

According to Bob Novak, the Senate Democrats plan to withhold a vote on Fed nomines in hopes that they can get all vacancies filled under a Democrat president. http://www.realclearpolitics.com/articles/2008/04/wall_street_in_dc.html “The Fed is down to five members because the Senate refuses to confirm Bush’s nominees for three vacancies, waiting for a Democratic president to name governors who are even friendlier than the present board.”

I am guessing that that will be just as good a predictor of rate increases.