Thursday, April 07, 2005

Crisis? What Crisis?

President Bush is going around the country in an effort to draw attention to the "crisis" of Social Security. Never mind the fact that his plan is disliked by most Americans, or that his plan would cost trillions of dollars, or that his plan doesn't actually address the crisis that he's squawking about. My question is, why doesn't he focus on the more significant crises with the same level of zeal? Or with any level of zeal?

The price of oil has skyrocketed in the past few months, and nary a word has come from his lips. World demand is growing, not just because Americans still feel no pressure to conserve, but also because China's demand is exploding as it becomes more industrialized. World production isn't even maintaining peak levels from the past, and almost no new reserves are being discovered. Consequently, gas prices will continue to rise as the world oil supply dwindles. Even some conservatives are clamoring for development of alternative fuel technology, if only for national security reasons. Thus, Bush would have political cover to turn his attention to this issue. Of course, that might not go over well in Texas.

And it's not just energy vs. social security. What about the spiraling cost of health care? As this editorial observes, it's clear that health care is a much bigger hit on the economy and on workers than Social Security. Check out this gem of a passage:
By either the CBO [Congressional Budget Office] or the Social Security trustees' estimates, the hit to the economy from runaway health care costs is far greater than the potential damage of a Social Security tax increase. The ratios range from four times as great to 18 times as great, depending on which estimates one chooses.
The same article observes that both Medicare and Medicaid are in very precarious positions as well.

I'm not saying that Social Security doesn't have any problems, but it's clear that Bush has his prioirities screwed up -- far greater crises are being left to fester while the President goes off on Social Security. I don't pretend to read Bush's mind, but I'll wager it has to do with the location of the money. Bush seems to live in a world of black and white, no grays (hence, the infamous statement that either you're with us or you're the enemy) -- and as far as goods and services are concerned, they're either privatized (good) or public (bad). Both the energy and health care issues are tied to rising costs in the private sector, so he won't touch them. Medicare was made more privatized by the prescription drug bill, but it's already clear that doing so exacerbated Medicare's financial condition. As for Medicaid, I fear Bush is content to let the poor go without any health care whatsoever, though state governors, Republican and Democrat alike, have successfully besieged the Senate to prevent cuts in its funding. Politically, it would be impossible for Bush to dismantle Social Security -- all he can hope to do is privatize it. This (at best) indifference toward using a solution that doesn't shrink (the non-military component of) government may explain why Bush hasn't suggested a solution to Social Security, and only considered the peripheral issue (no matter that it adds trillions to the national debt).

From what quarter will responsible leadership emerge, or will Bush and the other powers that be fiddle while the USA burns (using wood, since there'll be no more oil)?


John Hart said...

Aaron, you're falling into the same sucker trap that *so* many other people are: You think his stated reasons for his actions have anything at all to do with his actual reasons for his actions.

My hypotheses on his reasons:
1. I invaded Iraq and took down Saddam because he took a hit out on my dad -- and NO ONE gets away with that!

2. I want less retirement investment going into SocSec and more going into the stock market, because that will make the stock market go up (e.g. Oil prices are rising in large part because pension plans are finally fullfilling their promise to divest a portion of their assets into commodities and the only commodity that consistently goes up without too much actual work is Oil) -- and Presidents who preside over rising stock markets generally get a good rep.

aaron said...

John, I generally agree with you, except for that part about my falling into a sucker trap. I'm not sure where in my post you're getting that I don't. The way I see it, my next-to-last paragraph dovetails nicely with your contention -- his goal is to privatize, not fix social security.

Incidentally, did you mean "invest" instead of "divest" in your pension plan observation?

John Hart said...

Actually, I didn't mean either of those words.
I should have said "diversify"...

Sorry, you didn't really fall into the trap of "believing," though maybe into to the one of "paying any attention to"...

A tangential statistic:
Every time there is a major survey of "proven oil reserves" (whatever that actually means -- not really sure myself), that number is larger than it was before.
So, while it seems inherently obvious that we can't go on burning oil forever without running out, measures of proven oil reserves don't seem to agree with this.
(ignoring entirely any issues of CO2 in the air...)