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June 18, 2010

Deficit Commission Co-Chair: Social Security T-Bills Have "Been Used"

-- by Dave Johnson

It's astonishing, watch the video to see Alan Simpson, Co-Chair of the National Commission on Fiscal Responsibility and Reform ("Deficit Commission") explain that buyers of US T-Bills don't necessarily need to get paid back because the money has "been used"!

Background: In the 1980s the Social Security payroll tax was increased, supposedly to set aside funds to cover the retirement of the post-WWII baby-boomer generation. But this extra revenue was instead used to give huge tax cuts to the wealthiest Americans. (Yes, that's right, they taxed working people and used the money to cut taxes for the rich.) So now that the boomers are retiring the money is needed. They want those bonds paid back now to cover Social Security payments.

The Commission: Now there is the Deficit Commission looking into how to raise money to cover what the government handed out as tax cuts to the rich. Rather than get the money from where the money went, the plutocrats are instead trying to convince people that it would make more sense to just cut Social Security instead, so they don't have to pay it back. The commission is meeting in secret, preparing to recommend cutting Social Security benefits. Hence the nickname for the Commission: "Catfood Commission," because cutting Social Security would force as many as 1.5 million old people into poverty and eating cat food for dinner because it costs less.

After Bush and Wall Street destroyed the economy older people were laid off in waves (because they're past a certain age), can't get jobs (because they're old), now have been denied extended unemployment and denied COBRA subsidies. Now they're called "lazy". They're threatened with the humiliation of drug tests. And finanlly, the Catfood Commission, meeting in secret, threatens any retirement security they have. Digby calls it "simple cruelty." And, as sTiVo pointed out in a comment at Open Left yesterday,

Since raising the retirement age is now on the table as a solution to the non-problem of Social Security, it is VITAL to raise this issue. WHAT JOBS????

Here is a simple idea for the deficit commission: everyone knows -- every one of us knows -- that the deficit was caused by tax cuts for the rich and huge increases in military spending. So to fix the deficit ... Duh? Can we connect the dots?

Connect the dots:But connecting those dots between the obvious causes of the deficit and the way to fix the deficit is beyond the mental abilities of people in "The Village."

The Simpson Video: Alex Lawson of of Social Security Works confronted Simpson leaving one of the secret meetings Thursday with a video camera and asked some questions about this. The video is above, transcript excerpts below: (h/t Jane Hamsher)

LAWSON: But what about the $180 billion in surplus that it brings in every year?

SIMPSON: There is no surplus in there. It’s a bunch of IOUs. ... It’s 2.5 trillion bucks in IOUs which have been used to build the interstate highway system and all of the things people have enjoyed since it has been set up.

LAWSON: Two wars, tax cuts for the wealthy.

Jane Hamsher writes,

Simpson starts from the premise that the Treasury will default on the bonds issued to the Social Security trust fund, because all the best people apparently know that it’s better to default on America’s senior citizens and plunge them into poverty than it is to default on, say, the Chinese.

. . . The commission is also looking into cutting Medicare benefits, because the deal guaranteeing no-bid Medicare contracts to the pharmaceutical industry by both Republicans and Democrats can’t possibly be abrogated. The committee claims it’s independent, but it’s not THAT independent. So, old people, too bad for you.

This is really important. They increased the Social Security tax on working people, gave the money out as tax cuts for the wealthy, created deficits on purpose to defund government, created a huge debt mess, and now the next stage of this plan is to gut social programs.

This is what the Deficit Commission is about. Tax cuts for the rich and military spending caused the borrowing and raising taxes on the rich can stop it. But the plan was to force a perception of a debt emergency to stampede people into accepting a dismantling of government that works for We, the People, and provides for us, empowers us and protects us. This is the confrontation of plutocracy vs democracy. We can't let them get away with it.

What can you do? Visit Social Security Works, get on their mailing list or follow them on Twitter.

Get mad.

And get informed.


This post originated at Open Left.

Posted by Dave Johnson at June 18, 2010 10:20 AM


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