“They’ve been forced to start dreaming up new reasons to pull the plug on granny!” That was my first thought on reading David Brooks’ latest column. Does Brooks argue that current Medicare spending is simply “unsustainable” if we want to maintain existing, vital programs we’ve come to depend on? No. Medicare is the vital program we’ve come to depend on. But, hey, you know, there’s this other big, somewhat vague potential new government program Brooks would like to start spending on–a ” menu” of policies designed to “spark reinvigoration” among the “missing fifth” of the male population that is not in the labor force.
It will probably require a broad menu of policies attacking the problem all at once: expanding community colleges and online learning; changing the corporate tax code and labor market rules to stimulate investment; adopting German-style labor market practices like apprenticeship programs, wage subsidies and programs that extend benefits to the unemployed for six months as they start small businesses.
A few points:
a) As this post at Seeking Alpha suggests, withdrawal of men from the labor market is a real problem. But the most promising of Brooks’ suggested policies would not require massive new federal spending. Others are questionable or would pay for themselves if they worked.
Is the problem is too much labor market flexibility–reducing the incentive of firms to invest in workers (who are just going to leave)? Seeking Alpha actually agrees with left-winger Tom Geoghegan that it is. But isn’t inflexibility cheap? It seems more a matter of laws and culture than big Medicare-level federal spending. (There might be nasty side effects, though, to in effect promoting job lock.)
Meanwhile, costly government training programs are a swamp of questionable effectiveness, at least when it comes to building up marketable skills and income. Maybe they’d work better if the goal were simply to get laid off union steelworkers out of retirement and heading off to a job–any job. (Whether dispirited 58-year-olds are the demographic group best positioned to “instigate dynamism” through entrepreneurship is another question. But you never know.)
Changing tax and labor rules to “stimulate investment” sounds like a surefire good thing. But if those changes work, they will presumably produce a bigger tax base and largely pay for themselves. (And how much in federal budget dollars do new “labor market rules” cost anyway?)
I’d add one more item to the menu: a neo-WPA to employ men and women at the very bottom rung of the market, doing useful public jobs at a wage just below the private sector minimum. This would be cheaper than you’d think because not many men will show up for subminimum wage jobs. In any case, Brooks doesn’t mention it.
b) If you are worried about employing idle men without high school diplomas, a Brooks commenter notes, one solution might be to dry up the supply of illegal immigrants who are now doing the jobs those unskilled Americans used to do. Brooks doesn’t mention this, perhaps because he favors passing an immigration amnesty before the flow of additional illegal immigrants is verifiably stanched. So I guess we have to cut Medicare instead! I mean, it’s obvious. Sorry, granny.
c) If the problem is too many people retiring when they could still work, the logical solution is to tighten up the rules and make it harder for them to retire, no? Not make it harder for them to stay alive by cutting back on medical spending. As for risk-taking: I find it easier to take business risks when I know my health care, at least, will be covered. How about you?
d) Echoing the WaPo editorial page, Brooks denounces Medicare demagoguery from both sides:
Republicans decry the technocratic rationing model as “death panels.” Democrats have gone into demagogic overdrive calling premium support ideas “privatization” or “the end of Medicare.”
The gravest problem with these two competing irresponsible, demagogic charges is that they are both true. Obama’s cost-cutting bureaucrats would “be empowered to make rationing decisions,” as Brooks himself declares. “Death panels” is just a pithy pejorative phrase for where, as cost pressures grow, that might plausibly lead (the last stop being something like Britain’s NICE board). Meanwhile, the current Medicare system offers a virtual guarantee of services. If you substitute a mere subsidy for purchasing insurance, you are indeed ending Medicare and replacing it with something else. Maybe something pretty good, but not Medicare.
Brooks himself is guilty of a much deeper mendacity. He explains that there are “basically two ways to cut back on the government health care spending”–rationing by bureaucrat or a Ryan-style shifting of risk to consumers. That’s BS. There is a third way, and a fourth way. The third way is keeping Medicare and its guarantee but paring back benefits for affluent recipients who could pay for treatment on their own (“means-testing”). The fourth way is keeping Medicare and its guarantee but adding various across-the-board co-payments and deductibles to discourage overuse.
But these alternatives wouldn’t require rationing care or plug-pulling. There’s your trouble! If you read Brooks column as a whole–the inchoate, undissected reasons for big Medicare reductions (“doing something significant to invigorate the missing fifth”), the vague, untested “menu” of alternative programs, the deceptive narrowing of potential cuts down to rationing vs. Ryan, it’s not hard to suspect that for Brooks the real causality runs the other way: He doesn’t want to pull the plug to help the “missing fifth.” He’s talking about the missing fifth because he thinks it might convince some people to pull the plug.