The bad news? Romney once put his dog in a kennel strapped to the top of his car during a family vacation. The good news? Although the Medicare fund is set to go bankrupt by 2024 and the Social Security fund by 2033, the feds are pretty sure they’ll still be able to pay 87 percent and 75 percent of benefits afterwards respectively. Assuming, that is, that creditors foolishly continue to buy treasuries even as our debt piles up and our credit rating sinks.
So, in sum, a mixed bag tonight: Dog on roof, but looming fiscal catastrophe should be semi-manageable. More from Philip Klein:
I’ve broken down both sets of numbers in the chart below, which show a combined long-term deficit of $63.3 trillion. Keep in mind that this assumes that certain Medicare cuts go into full effect. For instance, the trustees assume that physician payments get cut by 30 percent in 2013, even though they acknowledge that, “it is a virtual certainty that lawmakers, cognizant of the disruptive consequences of such a sudden, sharp reduction in payments, will override this reduction just as they have every year since 2003.” It also takes as a given that all of the Medicare changes in President Obama’s health care law will go into effect exactly as written. Of course, Obama’s projected Medicare cuts don’t actually extend the solvency of Medicare in reality, because the money is already slated to be spent to help finance Obamacare’s $1.76 trillion in spending.
Though it’s difficult to grasp numbers so large over such a long time period, it’s worth keeping in mind that investors deciding whether or not to purchase U.S. bonds take into account the nation’s long-term fiscal picture, and thus could choose to stop buying Treasuries a lot sooner than an actual crisis is projected to hit, driving up borrowing costs dramatically. It’s also important to realize that the sooner we take action to reform these programs, the easier it will be to phase in changes to avoid massive tax increases that will crush the economy and much more disruptive cuts. Unfortunately, with a predictable crisis staring us in the face that promises to wreck the futures of younger Americans, Obama has spent his first term avoiding dealing with the problem so he has a free hand to attack his Republican opponents.
$63.3 trillion is the “infinite horizon” of unfunded liabilites; over the next 75 years, it’s “just” $35.5 trillion — again, assuming that no fiscal crisis intervenes and that Congress okays Medicare cuts that are already scheduled to take effect, which it never, ever does. The shortfall in Medicare funding last year alone was $288 billion and change. It’ll take unusual wisdom and bold leadership to solve a problem like that, but fortunately we have a choice: Barack Obama, who’s added $5 trillion in debt since 2009, or dog-on-the-roof guy. Can we really trust the latter?
There are two ways to deal with the stupidity of the Romney “dog story.” I’ve just given you one; the second clip below is the other.