The Economist on the SOTU address

Here are the concluding paragraphs of the Economist’s review:

If the state of the union is any guide, all this means that Mr Bush is planning to run on his record. With the economy rebounding, broad public support for the war on terror and big reforms in education and health under his belt, that may be understandable. But there is a risk. It is all very well claiming credit for, say, progress in Iraq, but this says nothing about the problems of transferring sovereignty in that country. It is fine to boast about the recovery, but this fails to address the problems of the soaring budget deficit in the short term. By refusing to offer some new theme for a second term, Mr Bush will find it harder to reply to such criticisms.

But perhaps there will be a theme. Arguably, there has to be. If Mr Bush were to win, his second term would end on the verge of the baby boomers' retirement. It would be a last, last chance to solve the great problem of American domestic politics: reform of the entitlement programmes of Social Security and health care. That may be the unspoken subject of the 2004 campaign.

Lest we forget that Sword of Damocles hanging over future generations, here’s a refresher from today’s Boston Globe:

Some economists project that Social Security, Medicare, and Medicaid, together with defense costs and interest on the national debt, will crowd out all other government commitments from the budget within eight years. By 2028, according to some estimates, the Social Security surplus the government uses to finance other programs will swing into deficit. By 2030, without significant changes, Social Security will rise to nearly 6 percent of GDP from 4.2 percent.

One of my great complaints about Bill Clinton is that as a lame-duck President and a Democrat, he had a unique opportunity to reform entitlements and avoid the sharp benefit cuts and/or massive tax increases that must follow if nothing is done. But, of course, he was “busy” with other stuff and it felt so much better to demagogue the Republicans if they had the temerity to suggest changes in the cornerstone of Democratic statism. It is my fervent hope that Bush finds the fortitude in his second term to make unpopular but necessary changes to entitlement programs before they engulf us all.

Extra: The Atlantic has “The $45 Trillion Problem”