There have been three important recent fiscal policy speeches:
- Speaker Boehner’s May 9th speech to the New York Economic Club;
- House Budget Committee Chairman Paul Ryan’s May 16th speech to the Chicago Economic Club; and
- Treasury Secretary Geithner’s May 17th speech to the Harvard Club of New York.
Washington relies too much on off-the-cuff comments and tweets to drive policy debates. Serious policy addresses like these three provide depth that is essential to the national dialogue. I also wish we had more frequent serious policy speeches on the House and Senate floors.
Today I will begin to respond to the Geithner speech, which is the most effective presentation of the Administration’s fiscal policy argument I have seen. It’s a long speech with a lot that deserves analysis and response. Since the partisan policy battle is already fairly heated, and since I haven’t written in a while, I’ll start today with a reach-across-the-aisle post. Here are three important points where I agree with the Secretary. Disagreements will follow in future posts.
All quotes below are from Secretary Geithner’s speech.
1. The causes of future budget deficits
And we face unsustainable future fiscal deficits caused, in part, by the dramatic rise in the number of Americans who will turn 65 in the next decade, combined with the fact that we now live longer and will spend more on health care.
This is a fantastic statement. I’d fix it only by striking “in part.” Secretary Geithner is reflecting the conclusions of the Social Security and Medicare Trustees, issued last Friday, and he is saying something different from the Washington Consensus, which focuses only on health care cost growth. In fact demographics is a bigger deficit driver over the next 10-20 years than health care. Kudos to the Secretary for emphasizing both. He also correctly identifies the two subcomponents of an aging population: more Baby Boomers becoming retirees and longer lifespans. The first of these is big but temporary (one generation), the second is gradual and permanent.
2. We can’t wait.
blockquote>We do not have the option of leaving this problem to another day, another Congress, another President. …