This Week's Panel Is Very, Very Serious About Our Spending

You can tell how freaking out of touch these people are by the giant banner hanging behind Jake "The Snake" Tapper as they opine: IS THE U.S. HEADED TOWARD BANKRUPTCY? NO, JAKE! NO, WE'RE NOT. WE HAVE A FIAT CURRENCY, YOU CAN LOOK THAT
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You can tell how freaking out of touch these people are by the giant banner hanging behind Jake "The Snake" Tapper as they opine: IS THE U.S. HEADED TOWARD BANKRUPTCY?

NO, JAKE! NO, WE'RE NOT. WE HAVE A FIAT CURRENCY, YOU CAN LOOK THAT UP.

Sheesh.

All the tidal opinion currents of the Very Serious People are flowing toward one thing: Their beloved Grand Bargain, now perceived in the form of the Simpson-Bowles Super Master Economic Plan, is the lighthouse beacon toward which these political lemmings swim. All will be well, if only the little people will give up their stubborn insistence on food and medical care in their old age. Dear God, don't they understand?

You see, of course, who's missing from this ominous roundtable: Us.

TAPPER: Do you hear that in the distance?

Two ticking time bombs threatening to send the economy back into recession or worse.

The first, just over four months until it detonates. It's that fiscal cliff you've heard about. Unless Washington gets its act together...

From Clip: Let's get the job done and let's not play political games.

TAPPER: A big if, as we ring in 2013, the ball will also drop on the economy -- huge automatic government spending cuts, $110 billion total. That's like wiping out the economy of both the Dakotas and Montana overnight. Good-bye Mount Rushmore.

Simultaneously, tax increases will kick in for everyone -- the Bush income tax cuts, gone. The same with the payroll tax cuts. For a middle class family of four, a tax bill more than $2,000 higher. And that's just the short-term challenge.

This is a giant shell game based around one thing only: Avoiding inflation so rich people don't lose money on their investments. This goal is so widely accepted in the Village as Very Serious Economics, they don't even mention it. It's for the greater good, don't you know.

Their panel is front-loaded with those people who already agree with them. I mean, Grover freaking Norquist? That anyone would include him in a serious discussion about anything other than his role as perpetual spoiler is beyond me.

The long-term picture even worse.

And that brings us to the second time bomb. As the baby boomers retire, the commitments we've made to seniors will balloon. Over the next 75 years, Medicare will run a deficit of more than $30 trillion. That's two times the entire size of the United States economy.

Social Security will run out of money in just 20 years.

In short, if nothing is done, our national debt poses a clear and present danger to the United States.

And, yes, politicians have been warning about the nation's debt for decades, but already this year, we've seen economies destroyed by debt -- overseas in Greece, Italy and Spain. And here at home, with Stockton, California; San Bernardino.

So the big question -- are we next? Is the U.S. headed toward bankruptcy?

Who writes this swill? Jake, a serious question: You actually believe that the economy of the United States is comparable to Greece? Really? You've been listening to whacky Peter Schiff again, haven't you? Jake, some advice: You should not be in the business of journalism when your talents so clearly lie in the direction of PR.

Wait, I guess that's the same thing now.

(END VIDEO TAPE)

TAPPER: So with that, let's start with our first topic, which will be entitlement spending, specifically, can we fix the nation's finances without cutting entitlement benefits?

That's Social Security, Medicare and Medicaid, other mandatory spending programs.

Kim, can we?

KIMBERLEY STRASSEL, COLUMNIST AND EDITORIAL BOARD MEMBER, "THE WALL STREET JOURNAL": No, we can't. You know, we talk all the time about -- have fights over highway bills and farm bills, all this discretionary spending. Those things that you just mentioned, they are 60 percent of the federal budget. And we are already facing a huge problem. Medicare could go bust in as little as eight or nine years. We're already paying out more for Social Security than we're taking in.

And one of the problems here is that what we have to decide is -- is how we are going to rein in the costs.

Right away, you see the problem here. Strassel is from the editorial board of the Wall Street Journal. Said editorial board is famous for being plain batsh*t crazy, frequently contradicting the actual reporting done by its own staff. If you want someone you can take seriously, you don't invite someone from the Wall Street Journal editorial board, which exists only to inflame. They don't do nuance, as Strassel illustrates.

TAPPER: OK, so let's pick one of these entitlement programs. Let's pick Medicare, since there's been so much discussion of Congressman Paul Ryan's Medicare program.

Specifically, let's talk about what his proposal would do.

First of all, you have the government allocating a fixed amount of money for each senior.

And the question, of course, is, will that competition keep costs down or will health care costs continue to outpace inflation?

And then the second part of the -- the Ryan plan, seniors will be able to use money for traditional Medicare or for private insurance. And the question, of course, will this leave Medicare with only the seniors private insurers don't want?

Senator Toomey?

TOOMEY: What this plan does is it says we're going to have competition -- starting 10 years from now, mind you...

TAPPER: Right. This is for...

TOOMEY: -- anybody (INAUDIBLE) future seniors...

Jake Tapper: Anyone...

TOOMEY: -- who are less than 55...

TAPPER: -- under 55 years old. Right.

TOOMEY: -- everybody is currently -- who's currently getting Medicare gets exactly what they're getting now and that doesn't change.

But what happens is for someone such as myself, who's 50, when I reach retirement age, I'm going to have a range of choices. And the government isn't going to have a specified dollar amount, it's going to require insurers to compete. And it will set the dollar amount based on that competition, ensuring that I will always be able to receive from the government a premium necessary to buy a plan that's equivalent to current Medicare.

So the risk of escalating costs are not carried by the seniors. They're still going to be carried by the government. But we think this is a much better model, because the competition of the various private sector plans, I think, will inevitably discover better and more efficient ways to deliver services, much as some have already discovered this.

Pat is one of my senators - the really bad one. I guess he's included for his hedge fund gravitas? (When I call his office about legislation, his disdainful wingnut staffers actually argue with me.) And as usual, he's lying. It's something he's good at.

Because when, as they promise, the Republicans repeal Obamacare, the donut hole reappears and seniors pay hundreds more for prescription medications. Oh well! Plus, Ryan's proposal would indeed shrink the risk pool to the oldest and sickest. As costs rise, how likely is it that Republicans will continue to increase their so-called "premium support" (i.e. discount coupon)?

TAPPER: OK. And Congressman Van Hollen, you are going to be playing Paul Ryan in the debate preparation for Vice President Biden. So I'm sure that you're familiar -- I'm sure you're familiar with his work anyway, but now you're especially familiar with it.

REP. CHRIS VAN HOLLEN (D-MD), RANKING MEMBER, HOUSE BUDGET COMMITTEE: That's right.

TAPPER: Why do you oppose the Ryan plan?

VAN HOLLEN: The Romney-Ryan plan would immediately increase costs for seniors. By design, it saves Medicare money by providing seniors with a voucher that declines in value relative to rising health care costs. So health care costs are going up, the value of the voucher does not keep pace. Seniors will have to eat that cost, as opposed to the president's Medicare plan, which says we need to contain costs by changing the incentives in the health care system to reward providers for the quality of care they provide rather than the quantity of care they provide.

GOOLSEBEE: The thing that makes health care, as an industry of the free market quite different from anything else is the fact that if you allow cream-skimming, it will destroy the free market, because the healthy people will be the ones that sign up and insurance companies will say great, these guys are healthy, we can offer them cheap prices.

it's going to leave the Medicare program with all of the lower...

Unknown: But...

Austin Goolsbee: -- lower health, higher cost patients. And you threaten to blow up the entire program.

TAPPER: let me let Neil have a say. Somebody who has a foot in both Washington and outside Washington DC, which strikes you when you hear this debate?

BAROFSKY: Now’s just not the time to start tinkering with and shredding the most important parts of the safety net. I mean, the middle-class is getting pushed into poverty and the idea of contemplating cuts in Medicaid and food stamps, the things that are keeping people alive. I mean, we’re on the brink of third-world nation status in some ways.

And, you know, now is just not the time for us to be contemplating severe cuts for the people that need the help the most.

Grover Norquist: That’s what people said about Clinton’s welfare reform, they were wrong.

No, Grover, they were right. That's why so many people are in such dire straits now. But you, of course, were born rich and stayed that way. You wouldn't know anything about it.

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