MacGuineas Rebuts Krugman on Long-Term Debt
In a letter to the editor submitted to The New York Times, CRFB president Maya MacGuineas rebutted NYT columnist Paul Krugman on his criticism of Sen. Rob Portman's (R-OH) op-ed in The Wall Street Journal on CBO's long-term budget outlook. MacGuineas pointed out numerous factual errors in Krugman's post and noted the dangerous implications of the debt in CBO's projections, which Krugman seems to dismiss. The letter is posted below in its entirety.
I was disheartened to read columnist Paul Krugman’s unsavory and misleading attack on Sen. Rob Portman’s straightforward portrayal of our nation’s debt situation.
Never mind that Dr. Krugman accuses Senator Portman of not disclosing his use of the “Alternative Scenario” – something Senator Portman mentions in his second paragraph – but Krugman gets many of his policy facts wrong as well.
Kruman argues that Senator Portman’s “policy recommendations [are] written as if he knows nothing about the ongoing discussion of these issues over the past decade,” but a quick look at the facts tells a different story.
Krugman argues that means-testing Medicare would cost money, never mind that the Congressional Budget Office, Medicare Actuary, and President Obama’s own budget all estimate savings of about $50 billion.
Krugman suggests there is no room to make Social Security more progressive, when a large number of proposals would do just that.
And he suggests that adjusting the Social Security normal retirement age is regressive, when every single study on the issue shows otherwise.
Not only are many of the Krugman’s claims misleading, more troubling, he does not appear to understand the very real implications of projected growth in the debt. Even under CBO’s baseline assumption, debt will reach record levels, only seen in the aftermath of a great depression and world war, within a quarter century – and will reach double that level by the end of the 75-year projection window. Under CBO’s alternative scenario, which assumes the type of fiscal irresponsibility we’ve continued to see from Congress, debt would be headed closer to six times the previous record by the end of the projection window.
As the Congressional Budget Office itself explains, even under the current law scenario, growing debt “would ultimately be unsustainable” and “Even before that point was reached, the high and rising amount of federal debt that CBO projects under the extended baseline would have significant negative consequences for both the economy and the federal budget.”
While there are many legitimate disagreements about how to fix these problems, there are a number of realities that cannot be ignored—the CBO’s Long-Term Budget Outlook report is a good place to start for a balanced assessment of those realities.
President, Committee for a Responsible Federal Budget