Meeting Report

Dr. Peter Lindert is a Distinguished Professor of Economics at the University of California at Davis. He is the author of "Growing Public," a comparative study of economic growth and social spending in Europe and America since the 18th century.

The talk was a reasoned and genuinely fair and balanced comparison of the economic positions taken by the two major presidential candidates. It was clearly not a campaign speech for either candidate. He talked about the current budget deficit and the relationship between it, the 2001 recession, the cost of the post 9/11 security and military expenditures and the enactment of the 2001-2003 Bush tax cuts. He did mention that if he is elected to a second term this November President Bush is likely to push for a simpler, less progressive tax system. Dr. Lindert is quite accepting of a flatter system as long as the net benefits to lower income people outweigh their increased tax burden.

He went on to talk about the unfunded Social Security liabilities. The ratio of retirees to workers is increasing. This is important as current Social Security taxes pay for the current retirement benefits. This demographic change must translate to either higher payroll tax rates or a scaling back of benefits. He did think the problem is manageable with a little tinkering. Other countries, such as Japan and Italy, are in much worse shape than America on this score. This is one area where immigration can benefit the economy. Kerry opposes cuts in benefits for those over 65. Bush would like partial privatization, to which Kerry is opposed.

Dr. Lindert was most critical about the way America handles health care. He thinks we made a fatal mistake years ago in connecting health insurance with employment. He also thinks that Medicare, a government health insurance program for the elderly and no one else, makes no economic sense. The recently passed and signed drug benefit bill is guaranteed to drive up drug prices. Kerry has said that he wants an overhaul of that bill.

Dr. Lindert also talked about trade matters, education, energy and the environment. He was most critical towards the political determination of policy in ways that did not make economic sense. This was particularly true of farm subsidies that, in addition to not making economic sense, violate World Trade Organization rules.

Report prepared by Wayne Luney, Recorder

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2004 Meetings