Rebecca Hagelin shoudn’t try economics lah!


Ruben does economics

Another example of why people like Rebecca Hagelin shouldn't try their hand at economics!

In her latest typo filled article entitled THe Coming Entitlement SPending Tsunami?, Ms Hagelin goes into great detail explaining why the newly appointed Democratic majority in the United States is going to be causing a spending tsunami:

This tsunami is a financial one that threatens to bankrupt our children. The “perfect storm” has been created by the convergence of the promises our government has made through the Big Three entitlement programs: Medicare, Medicaid and Social Security.

If policymakers in Washington do nothing — and let’s face, inaction is a specialty of theirs – and the deficit keeps rising, then by 2027 the Big Three (plus the resulting interest on the debt) will consume the entire U.S. budget.

Sorry to rain on your party Ms Hagelin, but your argument that the Democrats are going to bankrupt the country is entirely backwards.

On Bill Clinton's watch (a Democrat), the United States government had a record government surplus. Under the fiscal mismanagement, wastage and corruption of George W. Bush's administration, the government has had the biggest deficit in history.

The reckless spending "tsunami" you describe isn't coming Ms Hagelin, it has already come through. The Republicans and George W. Bush caused it, eclipsing even Reagan's wasteful spending and damaging tax cuts (see my previous article). It doesn't take a bachelor's degree with minors in Keynesian theory and Microeconomics, (which I'm currently undertaking by the way) to see this.

Now granted the "Big Three" which you describe do cost large amounts of money, and it is true that it can put a strain on a government's budget; however your argument that they are the sole reason for possible bankruptcy is, to put it as politely as possible, absurd. Just because the government in power manages to blow incomprehensibly large amounts of money on pointless and irrelevant pet projects doesn't mean that social security spending becomes any more of a money drain. Quite the opposite, the relative percentage actually drops.

You don't solve a problem by patching up the symptoms, you solve a problem by attacking the root cause. In this case, you don't cut the "Big Three" because you have less money to spend (a symptom), you investigate the administration's ridiculous fiscal management and find out why you have less money to spend (the cause) and take steps to address it.

But as my wise and devilishly sarcastic granddad on my mother's side of the family always says: "very interesting article [Rebecca Hagelin], but please, don't let the facts get in the way of your argument!"

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