Here's David Warsh explaining the position and taking some nasty swipes at the mental ability of Buffett:
The fiscal cliff negotiation is no better than a skirmish in what promises to be an epic ten-year struggle to achieve a new fiscal compact. For evidence of that, consider Warren Buffett’s entry into the debate last week, with a suggestion that negotiators seek to bring in revenues at 18.5 percent and cap spending at about 21 percent of GDP...Speaking of symbolic slaughter of the elders, Warsh is fast approaching 70.
It was the right argument, but Buffett had the wrong numbers. He apparently borrowed them from the National Commission on Fiscal Responsibility and Reform, led by Erskine Bowes and Alan Simpson, now more than two years old.
The first to say so was Matt Miller, a former McKinsey consultant and Clinton era advisor to the Office of Management and Budget, who has been slowly working his way into the upper ranks of the next generation of opinion-makers as a talk-show host and weekly columnist for The Washington Post...
If only because of the aging of the baby boom, Miller wrote, the future isn’t going to be like the past. The number of seniors on Social Security and Medicare will nearly double in the next fifteen years, to around 77 million persons.
There is the question of the trajectory of health care costs...
The significance of Buffett’s faux pas is that, for forty years, he has been such a sensible guy...
Unfortunately, Buffett’s op-ed article last week showed that he is no longer thinking seriously about the future. Despite its elaborate courtesy (“ I hate to pick a fight with the sage of Omaha…”), Matt Miller’s column was a good example of the symbolic slaughter of the elders that should occur more often when their opinions are no longer relevant to the debate.
So what’s the right number? Miller guesses 28 percent by the time the boomers’ retirement is in full swing. That seems plausible, though of course this is not the way that such targets are set. In each new era, policies are chosen. Appropriations are made. New sources of revenue are found (in the present instance, almost certainly a consumption tax.)
Buffet, though, has not likely lost his marbles. He is simply a clever opportunist who will misrepresent facts that will aid the government officials he plays footsie with. He knows damn well that a call for government spending at the 28 percent level would be lacking in political astuteness. Even though he may fully expect spending to eventually reach that level, given the current interventionist trends. In fact, he likely knows that government spending at some point will really skyrocket well beyond 28 percent of GDP because interest rates are likely to soar at some point.
The far left can't call Buffett on any of this, though, because they want that spending at 28 percent and beyond, now. So instead of correctly identifying him as a crafty oligarch, they call him nuts.