Thursday, May 3, 2012

More Unreality by an Academic Economist

Today's New York Times has an article by Simon Johnson, who is billed as "Professor of Entrepreneurship at MIT," complaining about the Paul Ryan budget and Mitt Romney's support of that budget.

What is especially interesting is "Professor" Johnson's attack on Paul Ryan's funding proposal for future medicare benefits.  Johnson argues basically that old folks need unlimited funds available for their medical needs, so that future promises should not be limited in any way.  That's an interesting argument for an economist to make.  It must make life fun for Professor Johnson to teach students that there is no economic scarcity after all.  We are free to promise whatever we want to future medicare recipients with no plans whatsoever to fund it.  That is what Johnson proposes in his article.

Nowhere in "Professor" Johnson's article is any hint of how he would propose to fund medicare promises for future beneficiaries.  I guess, to him, that is beside the point.  Why does it matter if future benefits are unfunded  That seems to be the main point of "Professor" Johnson's article.

If you look at my previous blog post, you can see where this leads.  The argument against funding benefits is always simply a recounting of how wonderful the benefits are.  How does that argument provide any funding?  Exactly how does "Professor" Johnson propose to explain to future medicare beneficiaries that there is no money to provide the benefits that they have long been promised.

Perhaps, "Professor" Johnson should pay close attention to how Mariana Island authorities and Greek authorities are explaining to their citizens how having no funds available to pay promised benefits is, in reality, a good thing.  "Professor" Johnson, like many of those advocating big promises for the future while opposing any funding for those promises is one of the "1 percenters."  It's really not a problem he will personally face, so what does he care?

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