Top Economic Bloggers: Reduce Medicare and Social Security Spending

According to a new quarterly survey of the nation's leading economic bloggers raising income tax rates and the payroll tax are the two worst ideas for balancing the federal budget. But if the economic blogosphere has any say in matters, we'll all feel the deficit-reduction pain via reduced entitlement programs. The top economic bloggers say reforming spending on Medicare and Medicare and reducing spending on Social Security are the two best options for dealing with the ominously expanding federal deficit.

Economic Blogger Survey Says....
Top economic bloggers were asked to evaluate 11 possible forms of deficit medicine in the inaugural quarterly Kaufmann Economic Outlook. The preferred solutions among the 85 survey respondents are below:

Source:Kaufmann Economic Outlook

I am a bit curious how the top economic bloggers figure that touching Medicare/Medicare and Social Security is going to politically feasible, given the battle royal over health care legislation and the general gridlock that has consumed Congress.

Outlook for Interest Rates and Inflation Retirees and pre-retirees should also take note that after the budget deficit, the two variables the top economic bloggers say have the highest likelihood of increasing over the next three years are inflation and interest rates.

That creates a maddening conundrum for generating retirement income. Venturing out on the yield curve is especially dicey given the prospect that rates will be rising, but then again, staying short on the yield curve won't exactly help you generate inflation-beating income. There's no easy solution, but taking on more risk in the short-term just doesn't seem like a wise gambit given what the budget deficit may lead to. Dividend paying stocks might be the better income move right now.

Top economic bloggers (btw, MoneyWatch's Mark Thoma is in the mix, and was also part of the committee asked to design the survey questions) also were asked to weigh-in on the performance of various financial organizations. Turns out economic minds are pretty much in sync with the rest of us normal folk. Top grades went to federal watchdogs, the Congressional Budget Office and the General Accountability Office, while Wall Street firms (31 percent F's) and the U.S. Congress (51 percent F's) got the lowest grades.

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