Inkwell noted yesterday that “unexpectedly” is back-bad job figures are always unexpected by the media (at least in this administration). But we should expect them until policies change
Michael Milken has a piece in today’s Wall Street Journal that describes what kinds of policy changes he believes will turn things around. Love the optimistic headline: “Toward a New American Century.”
Has the American Century come and gone? I don’t believe so. Despite high unemployment, declining education standards and greater competition from China and other countries, we can extend America’s pre-eminence long into the future if the public and private sectors-and all of us as individuals-assume greater responsibility for our common destiny.
Milken singles out six facets of the economy that “provide opportunities for positive change:” housing, entitlements, education, health, and energy. If you read Miliken’s piece, you’ll see that in all these areas it was government decisions, not business decisions-which can be rectified quicker and tend to take less toll on the entire nation-that led to the current stagnation.
Those who want to spend more of the taxpayer’s money on “free” benefits should read especially Miliken on entitlements:
Unrealistic promises of overly generous health and retirement benefits forced General Motors, once the world’s largest company, into bankruptcy. Unfortunately the simple math of GM’s situation applies to many institutions, including state and local governments that face massive pension commitments.
Looming even larger are the federal government’s long-term obligations to recipients of Social Security and other entitlements. The problem is rooted in (a) unrealistic assumptions about rates of return on assets; (b) falling ratios of current workers to retirees; (c) workers who pay in to the system for too few years; and (d) pensioners who live longer than the original planners assumed. It’s a complex problem whose solution will almost surely involve a political compromise between higher wage taxes and lower real benefits. But an important first step would be to periodically adjust minimum retirement age to 85% of average life expectancy.
Things are so bad that the public really does want change. Assuming new people come into Congress next year, the test will be whether they have the stomach to fight for the changes necessary for a new American century.