December 20, 2012

Social Security Talk With Richard Eskow

This is a good time to remind people that I had a great Virtually Speaking talk with Richard Eskow, about Social Security that you should listen to.

I joined Campaign for America's Future's Richard Eskow to talk about the "fiscal cliff" scare, austerity, Social Security, Medicare and how we WON the election so we really should be talking about jobs instead.

This was a GREAT hour, and hold the information you need to arm yourself to win holiday-dinner conversations with your right-wing brother-in-law.

The conversation refers to my post, Fiscal Cliff Scare Talk Follows Shock Doctrine Script as well as several posts by Richard Eskow including,
Wall Street Finds a ‘Third Way’ to Plunder Our Wealth,
The “Fiscal Cliff” Is a Hoax … and a Mel Brooks Routine,
The Grand Swindle – Veterans on a Cliff,
After the Election, a New Mandate – and New “Fiscal Cliff” Math

Click here to listen, or listen using the widget below:


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December 19, 2012

Social Security is Still the Third Rail (You’ve Been Warned)

We JUST had an election where the public (not to mention Every. Single. Poll.) overwhelmingly said no cuts to Social Security or Medicare, and raise taxes on income over $250K. That ought to mean something. But the "word" out of DC is that a deal is underway that cuts the Social Security COLA and increases the income level subject to a higher tax from $250K to $400K.

Senators and Representatives who are thinking of touching the "third rail:" How many constituents are calling your office today to say, "Yes, I want you to cut the Social Security COLA"?

Readers: Have YOU called YOUR senators and representative yet to let them know how you feel?

Also: Click here to tell the President: No Deal That Cuts Benefits.

Political Suicide

Cutting Social Security makes no sense, and is bad politics because it hurts people. Old people depend on this meager benefit and by law Social Security can not contribute to deficits. But never mind the numbers, look at the social and political effects of a deal that cuts the Social Security cost-of-living-adjustment (COLA) immediately after the public voted not to do this.

The social effect: Does our society care about people, or just about money? Cuts in Medicare, Medicaid and Social Security hurt PEOPLE. Raising tax rates on the wealthy is just money. What does it tell the public about our society if their government cuts Social Security benefits immediately after we have an election in which the public overwhelmingly votes against cuts in Social Security or Medicare, and to increase taxes on $250K and up? This reported deal raises that $250K to $400K, reduces military cuts, and ignores that the same amount of money could be raised in ways that actually help the country and economy, like a Financial Transaction Tax.

Bankers got huge bonuses with government bailout money, and now you are cutting the meager benefits old people get? What does this tell the public, to cut this when one after another Democratic leader, including Vice President Biden, has stepped up to insist that Social Security is off the table? It tells the public not to trust their leaders, because the big money will win every time.

Talk about undermining "certainty" and "confidence." Wow.

The political effect: Suicide. Seniors pay attention to the yearly COLA increase. Every single year from now on when the COLA is announced it is more than likely that seniors will believe they are getting a lower increase because President Obama and the Democrats betrayed them. This is human nature, they will think they would have gotten more (and Republicans will tell them they would have gotten more).

It will become folklore -- conventional wisdom -- that they would have received a much higher increase, except Obama and the Dems betrayed seniors.


Need to raise some money? Here are a few things you can offer instead of cutting the Social Security COLA:

  • Financial Transaction Tax on speculative investments - a quarter of a penny per share.

  • A BIG surtax on incomes over $10 million until the debt is paid off.

  • Cut the military budget a lot more. Reagan doubled it and 'W' Bush doubled it again. The Soviet Union is gone.

  • Get rid of oil company subsidies.

  • Rebuild the nation's infrastructure (with American-made materials) thereby employing millions who will then be paying taxes and won't be getting assistance, and then our economy will be more efficient and competitive in the future.

  • Retrofit (with American-made materials) our buildings and homes to be energy efficient, thereby employing millions (etc) plus our economy will have to spend less on energy from now on.

  • Make companies bring home the money they are holding offshore, and pay the corporate tax on it.

  • A thousand other ways to cut the deficit without hitting old people with the bill.

Now Please Read Richard Eskow's Post

It seems like everything I try to say Richard Eskow succeeds in saying, and does so better than I ever could. (Seriously, read what he wrote about the CT shootings.)

Richard explains why this COLA-cut offer is a bad idea, in This Is Not America’s Deal,

This deal would make voters very unhappy. It reflects neither their wishes, their needs, or their values. They’ve already said so – to pollsters like ours and in the voting booth on Election Day. Instead of responding, this looks like another “insider deal” – another agreement that suggests the public’s values and concerns vanish once you cross the Beltway.

... The Republicans lost the last election - by a landslide, in fact, in both the Presidential and Senate races. They even lost the House — by more than 1.6 million votes. Only their gerrymandering, vote suppression, and billionaire campaign cash allowed them to retain control of that body despite a popular-vote defeat.

And only their outrageous abuse of Senate rules like the filibuster has allowed them to tie up that body and prevent it from doing its work.

Republicans lost because their ideas are unpopular. But this deal would turn those ideas into policy. This undemocratic ”Loser Take All” strategy will further alienate voters, while encouraging extremists in Congress to keep abusing the system.

... This deal would send the wrong message: that successful programs and policies – Social Security, Medicare, and progressive taxation – are problems to be fixed, not solutions to be implemented and strengthened. These programs reflect our finest values: fairness, self-sufficiency, and mutual support. And they work.

A deal like this would also distract the nation from the real sources of our economic difficulties – like wealth inequity, a shortage of good middle-class jobs, and the misdeeds of under-regulated banks and corporations.

No deal is acceptable that undermines our social contract — our common agreement to work together and help each other — as this one would. They’ve made us strong and prosperous and they must be protected.

PS If you really want to change the COLA formula, use a measurement that looks at the things old people actually spend their money on, like the cost of prescriptions or dental care. "Chained-CPI" doesn't look at these things, so it would lower the COLA. An honest look at how the cost of living changes for old people would mean a higher COLA than now, not a lower one.


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 8:58 PM | Comments (0) | Link Cosmos

November 26, 2012

Saying “Fiscal Cliff” Is Taking Sides

The term "fiscal cliff" is a one-sided propaganda phrase that misinforms and triggers public fear and anxiety. The fiscal cliff is not a "cliff" and the country isn't going to fall off anything at the end of the year. Journalists: don't help the misinformers -- don't say or write "fiscal cliff." Congress: when people are scared and misinformed our Congress should pause, step back and help inform us instead of rushing to take advantage of the fear.

What The Fiscal Cliff Is

At the end of the year the Bush tax cuts expire and several budget cuts start to phase in (including military spending cuts.) This reduces the deficit, and some of those cuts will slow the economy if nothing is done to restore them in the next several months. That is the "fiscal cliff" that you are hearing so much about. Except it isn't a cliff, it kicks in gradually, Congress has a lot of time to work it out and can fix anything that is a problem.

That's right, if nothing is done in the next several months -- there is no "cliff" at the end of the year -- some of those cuts will slow the economy. All the screaming and hysteria are about putting pressure on the "lame duck" Congress to do something in a big hurry, outside of the accountability of democracy and before the President and progressives have more leverage.

What The Fiscal Cliff Is NOT

Most people I talked to over Thanksgiving apparently think the "fiscal cliff" is the government runs out of money on December 31 because the deficit is so big and all kinds of terrible things happen on January 1. This is sort of the opposite of what is going on. Even the few who didn't think it was about the country running out of money were misinformed in one way or another, with most thinking something terrible happens January 1.

The "fiscal cliff" is about taxes going up and budget cuts, which reduce the deficit. And absolutely nothing in anyone's life will change on January 1, or for some time (weeks, months) after.

That's right, all the people who were hysterically screaming about the deficit are hysterically screaming now because of deficit cuts. Go figure. But the reason is that they have an agenda.

Journalists Should Not Help Misinform And Scare People

The very term "fiscal cliff" misinforms and scares people. Some media outlets, like FOX News, exist to misinform and scare people. But responsible media outlets should try to help the public understand complicated issues, not help scare and misinform.

Any journalist using the propaganda phrase "fiscal cliff" is taking the side of misinforming and scaring.

Settle Down, Beavis

Everyone should settle down. There is no "cliff." No one is going to fall off of anything. And after the first of the year the President and progressives have much more leverage in this fight than they do now -- hence all the pressure to act before then.

When people are this misinformed and scared the Congress owes it to the public to stop, take a break, work to inform the public and not act in a panic. Journalists, especially, owe it to the public to inform, not misinform and scare.

Update - I wrote this and went to bed. I wake up, and there is a perfect example in the Monday NY Times titled, Debt Reckoning, The Fiscal Deadline In Washington. The write-up in the morning NYTimes email is "The New York Times is beginning a new online feature that will chronicle the talks on the fiscal cliff between President Obama and Congressional leaders."

The clear message of this headline and summary is that the country is in crisis because of debt. The public cannot help but get the impression that the country goes broke in a few weeks. As I explained above (and as Paul Krugman explains today's in Fighting Fiscal Phantoms) this is really the opposite of what is happening.


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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October 3, 2012

Best Line Of The Debates

"If you are 54 or 55 you might want to listen now."

Seriously, what did you think "There will be no changes in Medicare for Social Security for current retirees" actually means?

Posted by Dave Johnson at 8:17 PM | Comments (0) | Link Cosmos

October 1, 2012

Jobs Are For We, The People. Budget Cuts Are For The Billionaires. Who Will Prevail?

We have millions unemployed with millions more underemployed or just gave up looking, our infrastructure is literally crumbling, our trade deficit is horrendous, our "safety net" has eroded below minimum acceptable standards, pensions are cut or gone, the climate is getting more and more unpredictable and dangerous, and how many other problems can you name? But the billionaires will tell you that our biggest problem is too much government -- the very entity that exists to fix those problems. Will we get the jobs that We, the People want or the cuts in government that the billionaires are pushing for?

Deficit Hysteria Is About Cutting Government

Keep this in mind in the coming months -- the deficit hysteria and the "fiscal cliff," are all about cutting government and the things We, the People do for each other, so that the billionaires can have more. Who benefits if we cut government - Medicare, Social Security, the "safety net" programs, education, health and safety regulation and inspection, environmental controls, bank regulation, etc.? All of these help We, the People but are in the way of the billionaires.

How do we get to this bizarre point where DC elite, the corporate media, etc are all talking about cutting the safety net and the things we do for each other, when the obvious problem is jobs? Why isn't this vast media machine writing and talking and showing videos about jobs and jobs and jobs?

Surplus To Deficit -- What Changed?

Before Reagan the country did not have a big debt problem - and then we did. Reagan implemented changes that create huge yearly deficits that added up to big debt. When Clinton left office we had huge budget surpluses, and we were actually paying off the debt. Bush implemented some changes that immediately turned the surpluses into deficits, and left office with a $1.4 trillion deficit -- in one year.

So ... something changed under Reagan and then under 'W' Bush. Are the deficit cutters talking about reversing those changes? Are they talking about fixing the things that caused the deficits that added up to this huge debt?


The deficit problem came from tax cuts for the rich, the size of the military budget (Reagan doubled it, 'W' Bush doubled it again), effects of the trade deficit, and the revenue loss and safety-net costs (due to lack of jobs) that fall out from the Wall Street financial crisis.

Instead of fixing what caused the deficits and debt, the elites say we should all make "sacrifices" to fix the problem. Except, of course, there are no "sacrifices" for the very ones who benefited from those changes Reagan and Bush made. They got huge, huge tax cuts and to pay for the results of those tax cuts We, the People are being pushed to accept "sacrifices." No one is talking about putting the top tax rate back up to pre-Reagan levels -- back when we took care of the infrastructure and funded our schools, etc. They are not talking about hiring millions to modernize our infrastructure and make our buildings energy-efficient.

Starting about the same time as Reagan cut taxes on the wealthy the wages of people who work for a living began to stagnate and the income and wealth inequality started to accelerate. In other words, almost all the benefits from gains in our economy started to go to a few at the top of the ladder. Some dramatic numbers illustrate this. For example, you may have read that in 2010 93% of the gains from the "recovery" went to the top 1%. Or you may have read recently that the wealth of the Forbes 400 went up by $200 billion last year.

But now that it is time to "sacrifice" who is supposed to do the sacrificing? We, the People, and programs like Medicare, Social Security, the "safety net," health and safety regulations, environmental protections, etc.

Another Billionaire Weighs In

Ross Perot is in the news today whipping up deficit hysteria, with a huge-headline assist from the Drudge Report pointing to this Politico story, Ross Perot: No 2012 endorsement, saying we could "lose our country" or "be taken over."

“We’re on the edge of the cliff, and we have got to start fixing it now. Otherwise, we’re leaving a disaster to our children’s and our grandchildren’s future,” he said.

... Perot talks about his fear of the United States being taken over.

“If we are that weak, just think of who wants to come here first and take us over, and the last thing I ever want to see is to see this country, our country taken over because we’re so financially weak we can’t do anything and we’re moving in that direct. … We could even lose our country if we don’t get this fixed and straightened out and nobody that’s running really talks about it, about what we have to do and why we have to do it. They would prefer not to have it discussed.

Krugman On Democracy

Today Paul Krugman, in The Real Referendum, points out that the public is turning against candidates who are exposed as wanting to cut the things We, the People do for each other,

Voters are, in effect, being asked to deliver a verdict on the legacy of the New Deal and the Great Society, on Social Security, Medicare and, yes, Obamacare, which represents an extension of that legacy. Will they vote for politicians who want to replace Medicare with Vouchercare, who denounce Social Security as “collectivist” (as Paul Ryan once did), who dismiss those who turn to social insurance programs as people unwilling to take responsibility for their lives?

If the polls are any indication, the result of that referendum will be a clear reassertion of support for the safety net, and a clear rejection of politicians who want to return us to the Gilded Age. But here’s the question: Will that election result be honored?

What he means is that the public's wishes are clear, but there are indications that after the election the "Grand Bargainers" are going to try again to cut the things We, the People do for each other, so the billionaires can have it even better. This is what the Simpson-Bowles plan is, this is what the "fiscal cliff" hysteria is about.

Will the election results be honored? Will it be jobs (We, the People) or budget cuts (the billionaires).

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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July 30, 2012

Another New York Times Columnist Attack On Social Security And Medicare

The New York Times contains another elite-columnist attack on our Social Security and Medicare systems today. This time it's in the form of an op-ed by Bill Keller. Recently and regularly, New York Times columnists David Brooks and Tom Friedman have also gone after the things We, the People do for each other.

First, The Basics Of The Borrowing

Any discussion of our deficit/debt "crisis" must start with a few quick points about the history of the "crisis":

1) January 26, 2000, Clinton to Propose Early Debt Payoff,

President Clinton said Tuesday that the budget he will send Congress on Feb. 7 will propose paying off the entire $3.6-trillion national debt by 2013--two years earlier than had been expected even a few months ago.

2) 2001 Alan Greenspan said we needed to pass the Bush tax cuts because we were paying off the debt too quickly.

3) Bush said it was "incredibly positive news" when the budget turned from surplus to deficit because budget deficits meant there would be pressure to cut entitlements. Bush wanted to continue the "strategic deficits" plan to "starve the beast" that was launched in the Reagan years.

Republicans are following a decades-old shock-doctrine plan:

  • Use tax cuts and military spending increases to create terrible deficits that add up to massive debt,

  • Then use the resulting "debt crisis" to scare people (esp elites like Keller, Brooks and Friedman) into cutting democratic government and our ability to control the billionaires and their corporations.

But cutting government doesn't mean the costs go away, it means that we each have to bear those costs ourselves, on our own, without the help of the rest of us. This is really about cutting democracy so the very rich can be even very-richer.

The Attack

With that out of the way, let us now turn to the latest elite attack on entitlements -- those things We, the People are entitled to: the fruits of the prosperity that democracy brings us.

In a NY Times op-ed, The Entitled Generation, Bill Keller writes about the "bloat" of projected entitlement spending, blaming "baby boomers" for future budget shortfalls, because they will need to retire without living in absolute poverty, and get health care.

He writes that because budget cuts have us spending less than we should on infrastructure investment, therefore we should also spend less on Social Security, Medicare and Medicaid. "In 1962 ... [a]bout 32 cents of every federal dollar, excluding interest payments, was spent on investments, only 14 percent on entitlements. In the mid-70s the lines crossed. Today we spend less than 15 cents on investment and 46 cents on entitlements. "

Keller writes, "So the question is not whether entitlements have to be brought under control, but how. " (These greedy seniors don't understand that the situation has changed -- we have cut taxes for the very wealthy and increased our military spending to prevent the Soviet Union from invading. Who do they think they are?)

Finally, ignoring the People's Budget, the Budget For All, the Schakowsky Deficit Reduction Plan and all the other sensible budget plans that have been proposed by progressives, Keller writes, "At least the Republicans have a plan. The Democrats generally recoil from the subject of entitlements."

Keller praises "bipartisan authors of the Simpson-Bowles report" -- even though there was no "Simpson-Bowles report." The commission couldn't come to agreement and issued no report. As for the "bipartisan" Simpson and Bowles, he is referring to former Republican Senator Alan Simpson, and member of the Board of Directors of Morgan Stanley Erskine Bowles. (Please click the link.) ("Bipartisan" as used by elites like Keller apparently refers to even and odd numbered addresses on Wall Street -- the crowd that gets the money if our Social Security system is dismantled.)

Social Security

Our Social Security system is critical to human beings and our economy, just like hospitals, highways, schools and power plants. It is a core institution, used by everyone, and is absolutely vital in most people's lives. It is the foundation of our retirement security. It is our most basic protection for our families if we become disabled or die.

Dean Baker of the Center for Economic and Policy Research explains just how crucial our Social Security system is to the lives of so many of us, in Bill Keller Wants to Take Away Your Social Security and Is Either Too Ignorant or Dishonest to Acknowledge that He Is Not a Typical Baby Boomer,

Does Keller know that the typical near retiree has total wealth of $170,000. This includes everything in their 401(k), all their other financial assets and the equity in their homes. Another way to put this is that the typical near retiree (between the ages of 55-64) could take all their wealth and pay off their mortgage. After that they would be entirely dependent on their Social Security to cover all their living costs.

In other words, half of near-retirees have less than that so they depend on Social Security even more than that.

We built and paid for our Social Security system. Each generation has done its part to maintain the system's foundations for over 75 years, and it has only become stronger. If the middle class can’t count on Social Security in their retirement years, what can it count on?

Social Security is a far safer bet than any other retirement savings available. It is vastly safer than a 401K, which is available only to a few anyway, and can disappear overnight. Corporate raiders can take your pension plan. You can't even count on a pension plan if you are a public employee. House prices can go up or down. But Social Security is always there for us. Even the most sophisticated investors can lose everything, but you can't lose your Social Security. Social Security is the one retirement system that really works.

Social Security is the most successful government program, and that is why so many elites hate it!

Medicare And Medicaid

A government budget cut is really like a huge tax increase on regular people because it increases what each of us pays for the things government does -- or forces us to go without. This is because cuts in government spending don’t actually cut the cost of things, they just shift those costs onto each of us on our own.

For example, if you cut the the government's Medicare or Medicaid budget our health problems don’t disappear, but each of us has to find ways to pay the cost of medical care or a nursing home on our own, with no help, often at a time when we are stressed by illness.

In Cost of Medicare Equivalent Insurance Skyrockets under Ryan Plan the Center for Economic and Policy Research (CEPR) explains what happens to the cost of health care if Medicare is eliminated. Summary: it shifts the costs to us, except each of us ends up paying seven times as much as the same care costs under Medicare. This is because Medicare covers millions, and that economy-of-scale means the government can negotiate bulk discounts, etc. that we cannot get on our own. From the CEPR explanation:

[The Republican] plan to revamp Medicare has been described as shifting costs from the government to beneficiaries. A new report from the Center for Economic and Policy Research (CEPR), however, shows that the [Republican] proposal will increase health care costs for seniors by more than seven dollars for every dollar it saves the government, a point missing from much of the debate over the plan.

... In addition to comparing the costs of Medicare to the government under the current system and under the [Republican] plan, the authors also show the effects of raising the age of Medicare eligibility. The paper also demonstrates that while [the Republican plan] shifts $4.9 trillion in health care costs from the government to Medicare beneficiaries, this number is dwarfed by a $34 trillion increase in overall costs to beneficiaries that is projected ...

Our health problems won’t disappear just because government cuts out Medicare and Medicaid. But the costs of treating – or not treating – those health problems will now fall on us, individually, on our own, instead of aggregated through the mechanism of democracy. And that is money that would otherwise be spent elsewhere in the economy.

The Money

So where do we get the money to pay our bills, if not from the things We, the People do for each other? Get the money from where the money went.

Start by ending the Bush tax cuts! The Bush tax cuts not only cut marginal tax rates for the wealthy, they cut taxes on capital gains and dividends -- money you get just for having money. And it dramatically cut the tax on income inherited from wealthy parents -- more money that one gets just because one already has money! But ending the Bush tax cuts is just a start.

Reagan dramatically increased the military budget: In 1980, before Reagan, the Defense Department budget was $134 billion, by 1989 it was $303 billion. But that was nothing. In 2000, before 'W' Bush, it was $294 billion. By 2008 it was $616 billion. But that doesn't count military-related items outside of the Defense Department. Depending on how interest debt is applied, total military spending is between $1 and $1.4 trillion. (And, by the way, wars are expensive.) ("Nothing is more important in the face of a war than cutting taxes." –Tom DeLay)

Fix health care. Today Mitt Romney praised the way that Israel's socialized health care system keeps costs low. WaPo: Romney praises health care in Israel, where ‘strong government influence’ has driven down costs,

He praised Israel for spending just 8 percent of its GDP on health care and still remaining a “pretty healthy nation.”

“Our gap with Israel [on health spending] is 10 points of GDP,” Romney said. “We have to find ways, not just to provide health care to more people, but to find ways to fund and manage our health care costs.”

... Israel created a national health care system in 1995, largely funded through payroll and general tax revenue. The government provides all citizens with health insurance: They get to pick from one of four competing, nonprofit plans. Those insurance plans have to accept all customers—including people with pre-existing conditions—and provide residents with a broad set of government-mandated benefits.

Get the economy moving again. Jeeze, instead of saying because we stopped investing in infrastructure therefore we need to cut other things, how about investing in infrastructure? We have millions of jobs that need to ing and millions of people looking for jobs. And we can finance it for free. The payoff will be enormous, all those people no longer needing unemployment and food stamps, all those people and construction companies paying taxes again, and the resulting economic growth cutting the debt-to-GDP ratio.

Don't Be Fooled By Elites Hating On Entitlements

Don't be fooled: this is really about shifting from democracy to a system where we are on our own, up against the wealthy and powerful. This is about shifting from a system where we can all be prosperous to a system where a few have all the wealth and power.

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 10:55 AM | Comments (0) | Link Cosmos

July 26, 2012

In Case You Don't Believe They Really Mean To End Social Security And Medicare

Nick Gillespie on C-SPAN, Talking About Ending Social Security, Medicare; Reveals What Planet He Lives On

Posted by Dave Johnson at 10:30 AM | Comments (0) | Link Cosmos

June 28, 2012

Pension Gimmicks Blamed On Workers

The student loan deal is badly needed. It should have just been extended - duh! But the 1 percenters took it hostage and demanded their pound of flesh before We, the People can preserve even this little bit of what we do for ourselves. So as part of the "sweetener" for those 1 percenters there is a corporate pension giveaway in the deal that has nothing to do with student loans. It appears they are going to let companies underfund pensions -- money that should be set aside for worker pensions tomorrow will instead go into 1 percenter pockets today -- and are setting up for a taxpayer bailout (or just stiffing retirees) later.

Pension Calculations Are Tricky But Regulated

This is kind of tricky, so bear with me. When companies (and governments) put money into pension funds they have to calculate how much will be needed to pay the promised pensions. This involves estimating things like how long (and how many) people will live, and how much "return" (interest, stock price increases,dividends...) to expect as the money is set aside. Key point: If you expect a too-high rate of return you can set less aside now (and put it in your pocket,) but when the time comes to pay the pensions you won't have enough.

This is supervised by government standards and regulations. They say how much of a rate of return is allowed to be used in these calculations. A higher expected-rate-of-return allowance means less has to be set aside, so more money can go into 1 percenter pockets. So there is a lot of pressure from corporations to let them get away with overestimating, and therefore putting more in their pockets today. Since this is complex, it is easier to get away with diverting promised-worker-retirement money into 1 percenter pockets.

This student loan deal apparently lets corporations claim a higher expected rate of return, thereby diverting more money today into 1 percenter pockets.

Money Into Worker Pensions Or 1 Percenter Pockets?

For a long time the government has been allowing pension funds to use a too-high estimated rate of return, with the result that many pensions are now underfunded. Money that should have gone into savings to pay worker pensions was diverted into 1 percenter pockets, either through improved corporate bottom lines in the case of companies, or through lower taxes in the case of state & local governments. (Of course, many companies shifted worker-pension promises into 1 percenter pockets using the 401K scam -- you fund your own retirement, on your own, with little help, and have to know how long you'll live, and it turns out badly every time -- but that's for another post.)

In fact, this worker-set-asides-for-later vs 1 percenter-pockets-today issue is similar to what happened with the Social Security Trust Fund. Money from workers was set aside into the fund but was used to pay for tax cuts (and massive military increases). Now 1 percenters are demanding austerity -- cutbacks in the things We, the People do for each other -- instead of workers getting the money back from where the money went, namely the 1 percenters.

And since this is about money for worker retirees, and retired workers don't have big, influential PR firms while 1 percenters do, it is convenient and easy to blame workers when the promised money isn't there for their retirement.

The Much-Hyped Public-Employee Pension Crisis

The supposed public-employee pensions crisis is partly the result of state and local governments not setting aside enough money to pay up on pension promises (because of tax cuts). It is also partly caused by Wall Street scamming on those same governments as they got into riskier investments trying to get a high enough rate of return to make good on their pension promises. But the blame is being placed on the workers themselves.

The post Discover The Network Out To Crush Our Public Workers traced just a few of the corporate-conservative think tanks (really just PR firms) promoting the idea that public-employee unions are responsible for pension shortfalls. Almost all of these organizations traced back to Wall Street firms and individuals for their governance or funding. They are engaged in a campaign to divert attention and blame the workers themselves for pension shortfalls,

These corporate/conservative organizations are very good at manipulating the media and public opinion -- it is their purpose. Their "experts" are well paid and always available to talk to reporters, appear on TV and radio shows and write articles and opinion pieces for newspapers, blogs and for their network of similar organizations. Their "reports' and "studies" reach the conclusions that fit the strategy, and are crafted to sound just right. And there are so many of them! The result is development of "conventional wisdom" about what is going on in our society. This is why that conventional wisdom more and more reflects the corporate/conservative line. And right now the corporate conservative line is that we should think that public employees and their unions are responsible for state and local budget shortfalls.

See also Understanding The Attacks On Public Employees, Ten Holiday Attacks On Public Employees and Are Public Employee Unions Strangling Us? Also, Rick Smith And Dave Johnson Counter The Attack On Public Employees.

Others See It, Too

NY Times Editorial, The Deal on Student Loans,

The pension provision is not ideal. It could mean that more companies will underfinance their pension liabilities, shortchanging employees down the road. Lawmakers have tried to address that potential shortfall by strengthening the agency that insures private pensions with more money from higher premiums.

Thus from the Competitive Enterprise Institute, usually a most unreliable source. (The check from the big corps who want to underfund pensions must have been late.) In this case it is the same gimmick but added the the highway bill...: Threat of Pension Fund Bailouts Lurks in Senate Highway Bill, "Pension Smoothing" a License to Make Up Numbers,

The bill ... would amend the Employment Retirement Income Security Act (ERISA) to allow for an accounting gimmick known as “pension smoothing,” whereby pension managers spread losses out over several years, while overestimating projected investment returns.

Specifically, this provision would expand the range of allowable projection figures, starting this year at a 20 percentage point range, to 60 percentage points after 2015. This is essentially a license to make up numbers for income projections four years out from now. ...

"This accounting trick will likely expose taxpayers to potential pension fund bailouts in the future. " ...

"It would further remove pension investment return projections even further from reality, by expanding the range of allowable projections so broadly as to render them meaningless."

Making Things Worse

To get a deal that keeps student-loan interest rates low enough for more people to afford to go to college, we had to pay off the 1 percenters with this "pension-smoothing" deal. Such is the way of Washington since we shifted from a democracy (rule by the people, for the people) to a plutocracy (rule by the rich, for the rich). Or, in this case a 1 percenter kleptocracy (rule by the rich, stealing from everyone).

But make no mistake, this deal makes the country's future pension problems even worse. It diverts even more money from promised pensions into 1 percenter pockets. The result will be clear in 10, 20 or 30 years when people are retiring and the money isn't there. Taxpayers will be asked for ever more "austerity" to cover money that was diverted to the 1%.

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 1:31 PM | Comments (0) | Link Cosmos

May 14, 2012

Why We Have A Deficit

Deficit theater is coming to DC tomorrow, with a well-funded "fiscal summit." The plot summary is that we have Deficit Trouble - Right Here In River City! so to fix it we need to cut Social Security and Medicare and the things democracy does for We, the People -- while cutting taxes on the rich and their corporations to make us more "business-friendly." (This musical is sometimes billed as "Simpson-Bowles" but it's the same old song.)

All of this deficit hysteria today - when just over ten years ago we had such a large a budget surplus that we were projected to pay off our entire debt in ... ten years! That's right, Ten Years Ago We Were Paying Off The Nation's Debt. But Then We Elected Obama.,

Just ten years ago this country was running huge surpluses and paying off its debt. But then we elected Obama and all hell broke loose. Oh, wait...

Between the time ten years ago when we had big surpluses and were paying off the debt and now when we are told the "Obama spending and deficit" mean we have to cut back on the things We, the People do for each other, something happened. Something changed. The things that happened, the things that changed, are being ignored in the current DC discussion about what we need to do to fix things.

Something happened. We had a surplus, and it was replaced by massive deficits. The last Bush budget year had a deficit of $1.4 trillion!

Why We Have A Deficit

What happened under Bush? We cut taxes on the rich and doubled military spending. (And started wars.) And don't forget collapsing the economy, forcing people onto unemployment and food stamps. That is why we have a deficit. We have a deficit because of tax cuts for the rich, huge military budget increases and the consequences of deregulating corporations.

Here are some questions for tomorrow's deficit theater:

  • How large was the country’s yearly budget deficit and total debt in the “Eisenhower/Truman” decades when the top tax rate was 90%?
  • Today we have an “infrastructure deficit” – the amount needed to repair our country’s roads, bridges, sewers, etc. – of somewhere upwards of $1.6 trillion. Was our infrastructure kept in good repair before the top tax rates were cut?
  • Concentration of wealth is long recognized as a threat to democracy, and now we are seeing a low-wage, everything-to-the-top economy with the greatest ever concentration of wealth going to a few at the top. Was the problem of wealth concentration increasing or decreasing before the top tax rates were cut?
  • When top rates were high people couldn’t take home vast fortunes in a single year. When it took several years to make a fortune did corporations depend on long-term or short-term thinking? Did the executives of corporations care if the infrastructure and communities their companies depended on were in good shape? Did large corporations fleece customers and exploit employees for quarterly returns as they do now?

How We Fix The Deficit

How do we fix this? Doesn't it make sense to look at what caused the deficits and fix that? There actually are budget plans that get rid of the deficit without cutting back on the things democracy does for We, the People. Here is a post about one of those budget plans: The People's Budget Balances The Budget -- Why Isn't It Part Of These "Deficit" Talks? Here is a post about another budget plan that fixes the deficit without cutting the thing democracy does for us Every Progressive Should Know About The “Budget For All”

So we know why we have a deficit, and we have realistic budget plans that undo the damage, maintain the things that democracy does for We, the People and invest in growing our economy. So why aren't these plans part of the big DC deficit discussion? Maybe progressive plans that cut the deficit are not part of the DC deficit discussion because cutting the deficit isn't really the point. This Deficit Story Can't Be Repeated Often Enough!,

So we went from big surplus to huge, huge deficits. Bush said it was "incredibly positive news" when we went back into deficit spending. He said it was good news because it continued the plan to use debt to force the government to cut back. He said that. It was the plan. (Don't take my word for it, click the links.)

The Reagan people said it too, back when they started the massive deficit spending. It was the plan: force the country into massive debt, "starve the beast," and use that to force the government out of business, or at least to be "small enough to drown in a bathtub." They forced the tax cuts and Reagan said this was "cutting the government's allowance." The point was to use revenue cutbacks to force government to shrink, to get out of the way of the 1%.

A Golden Oldie

From Dear Deficit Commission, It's Not Hard: (Click through to see bigger charts)

Dear Deficit Commission,

It's not hard to figure out why we have a huge deficit. It's so easy I don't have to use words. Here are some pictures:


Bill Clinton raised taxes on the rich. Bush cut them.

Now, about that huge national debt...


The second chart kind of explains itself. The third chart can help you find a place to get some money:


(Note: There is no more Soviet Union.)

In case that isn't clear enough, try this:

Defense Spending and Debt chart

Let me know if you still have any questions.

We had a budget surplus. We were paying off the debt. Then something changed. If you want to fix the deficits, change it back.

Don't fall for it. Deficits were the plan. Run up the borrowing, then come back with a scare campaign that stampedes people into accepting cuts in the things democracy does for We, the People. It was the plan.

If You Happen To Be In DC Tomorrow: May 15: Stand Against Austerity:

May 15, 2012 at 1 p.m. (Program starts 1:30 p.m.)
In Front Of the Peter G. Peterson Foundation Fiscal Summit
1301 Constitution Avenue NW, Washington, D.C.

Here's one of those charts again, larger:


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 12:00 PM | Comments (0) | Link Cosmos

April 18, 2012

Simpson-Bowles Zombie Returns

President Obama and many Democrats spent much of 2011 talking about deficits instead of doing something about jobs. Now, a too-close election is on the horizon (too-close because of spending 2011 talking about deficits instead of doing something about jobs) and we're being forced back to talking about deficits instead of jobs -- by a Democrat!

Senate Budget Committee Chairman Kent Conrad says he is going to introduce the "Simpson-Bowles" deficit plan as his fiscal year 2013 budget resolution. This is a plan put forward by Alan Simpson, a retired Republican Senator who hates Social Security, and Erskine Bowles, a member of the Board of Wall Street's Morgan Stanley. So here we are once again with the same old same old plan from the same old same old elites. Namely: cuts in Social Security and other things We, the People do for each other, combined with even more tax cuts for the rich. This austeridiocy plan to grow the economy by taking money out of the economy is a billionaire-backed zombie that never dies.

CNN: Bowles-Simpson back on table,

A key senator said Tuesday he would try to revive the so-called Bowles-Simpson plan as a starting point in negotiations over a long-term debt-reduction plan.

Democrat Kent Conrad, the Senate Budget Committee chairman, announced he would present the plan as his opening bid at the committee's budget mark-up on Wednesday.

Murdoc's (FOX) WSJ: Conrad’s Budget Surprise: Simpson-Bowles,

A key senator said Tuesday he would try to revive the so-called Bowles-Simpson plan as a starting point in negotiations over a long-term debt-reduction plan.

... The original Bowles-Simpson plan would reduce deficits by at least $4 trillion over 10 years by cutting defense and discretionary spending, curbing federal entitlement costs and reforming the tax code.

"Reforming" the tax code as used here means lowering tax rates for the rich and corporations, getting rid of a number of deductions to make it look like it isn't such a big tax cut and then later putting back lots of new deductions and breaks for the rich and corporations.

Now Mr. Conrad could try to force the first Senate vote on the measure, though it would likely first come from the members on his committee. Mr. Conrad was on the Simpson-Bowles commission and voted for the plan in 2010. He’s also on the so-called Gang of Six lawmakers looking for a legislative path to put the proposal into law. The plan was originally designed by former Republican Sen. Alan Simpson of Wyoming and former Clinton White House Chief of Staff Erskine Bowles.

Push It Through After Election?

Citizens don't get to vote on austerity plans.

This time they's going to try to get this austerity plan through when few are paying attention: after the election but before the newly elected Congress comes in. This way democracy won't get in the way, and the public doesn't get a chance to react and hold legislators accountable. This might sound rather like the Greek austerity plan to cut working people's wages, cut the things the Greek government does for its people, lay off public employees, and especially yo sell off the things the public owns and operates so a wealthy few can profit.

When the Greek Prime Minister proposed letting the public vote on this austerity plan he was removed, and bankers took control of the country, this is how it went:

Nov. 1, 2011: Greek PM puts bailout deal to public vote

Nov. 2: Greece sticks to bailout vote, as U.S., Europe weigh options

Nov 3: Greek prime minister abandons referendum on Greek debt plan

Nov. 9: Greek prime minister set to resign

Nov. 10: Ex-banker Papademos is new Greek prime minister

Ezra Klein talked with Conrad about his budget plan, and reports on the conversation in the Washington Post, Can Simpson-Bowles really pass the Senate?,

I’ve heard from some of my Republican colleagues who ... said you’re doing exactly what needs to be done but we’re not going to be able to do something like this until after the election. And I think that’s true for many Democrats as well. ... Simpson-Bowles put the vote of the commission after the 2010 election to try and insulate it from politics as much as possible. That’s what we’re trying to do here ... I don’t expect a vote after the election.

... We should be swift to say to people, however, that compared to current law, it’s a $1.8 trillion tax cut.

Grand Bargain - Till They Go Back On The Deal

Aside from the whole subvert-democracy thing where they decide this after the election so no one can be held accountable, the record for "deals" is not good. The "debt-ceiling" hostage deal finally ended with Republicans agreeing to "sequestration" that includes military spending cuts. But it hasn't worked out that way:

TPM: Bait And Switch: GOP Leaders Renege On Debt Limit Deal Defense Cuts

Oh, and if you really do want to do something about the deficit, think about this: Jobs Fix Deficits!

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 4:20 PM | Comments (0) | Link Cosmos

April 11, 2012

Why Do So Many Elites Hate Social Security?

This week there was another big attack on Social Security by another elite. This time the attack comes from an elite columnist, other times it comes from Wall Street types, wealthy CEOs or the kind of politicians that have been in DC way too long. These attacks never come from people who depend on these programs (i.e. almost all of us.) Why do the privileged elites hate Social Security so much?

Robert Samuelson wrote this week in the Washington Post, Would Roosevelt recognize today’s Social Security? Samuelson writes that Social Security, "has become what was then called “the dole” and is now known as “welfare.” " He discusses a book that, he writes, "shows how today’s “entitlement” psychology dates to Social Security’s muddled beginnings."


Elites hate "entitlements" -- those things we all are entitled to as are citizens in a We-the-People democracy. Democracies are based on "we are in this together" and "watch out for each other." Plutocracies are based on rule by the elites. These elites especially hate what Samuelson calls "entitlement psychology" -- a state of mind in which 99% of us forget our place and get all uppity about being citizens in a democracy and the things that entitles us to.

Samuelson's core attack on Social Security is that there is no trust fund, that the money has been spent, and it is just a program where working people pay for the retirement of older people,

Millions of Americans believe (falsely) that their payroll taxes have been segregated to pay for their benefits and that, therefore, they “earned” these benefits. To reduce them would be to take something that is rightfully theirs.

And, he restates, while people think they are entitled to their Social Security benefits it really is just "welfare," writing,

What we have is a vast welfare program grafted onto the rhetoric and psychology of a contributory pension. The result is entitlement.

The "rhetoric" and "psychology" of "entitlement." Public pride in We-the-People democracy. Gotta stamp that out!

(Samuelson, for some reason, does not talk about how the military budget trust fund is depleted and we need to cut back on the trillion-or-so we will spend this year, how it is bankrupting us, etc. Oh, wait, there isn't a trust fund at all for military spending... we just spend it.)

Dean Baker Responds

Dean Baker answered Samuelson, writing in Robert Samuelson Shows that the Post Has no Fact Checkers on Its Opinion Pages,

Social Security and Medicare are hugely important for the security of the non-rich population of the United States. For this reason, Robert Samuelson and the Washington Post hate them.

As we know, this is a question of basic political philosophy. In the view of Samuelson and the Post, a dollar that it is in the pocket of low or middle class people is a dollar that could be in the pocket of the rich. And Medicare and Social Security are keeping many dollars in the pockets of low and middle class people.

Regarding Samuelson writing that the funds were not segregated, and have been spent,

Of course Samuelson is 100 percent wrong here. Payroll taxes have been segregated. That is the point of the Social Security trust fund and the Social Security trustees report. These institutions would make no sense if the funds were not segregated.

Samuelson is welcome to not like the way in which the funds were segregated, in the same way that I don't like the Yankees, but that doesn't change the fact that the Yankees have a very good baseball team. Since its beginnings, the government has maintained a separate Social Security account. Under the law, no money can be paid out in Social Security benefits unless the Trust Fund has the money to pay for them.

In this sense, the funds are absolutely segregated. Samuelson doesn't like this, but why should any of the rest of us care? The rest of the piece shows the same dishonesty and lack of respect for facts.

Jared Bernstein Responds

In WaPo WAY Off on Social Security Jared Bernstein writes,

Here are the relevant facts about Social Security’s future (as we at CBPP see them):

–The trustees estimate that the combined Social Security trust funds will be exhausted in 2036 —a year earlier than they forecast in last year’s report.

–After 2036, Social Security could pay three-fourths of scheduled benefits using its annual tax income [Samuelson implies all benefits expire in three years!]. Those who fear that Social Security won’t be around when today’s young workers retire misunderstand the trustees’ projections.

–The program’s shortfall is relatively modest, amounting to 0.8 percent of GDP over the next 75 years (and 1.45 percent of GDP in 2085). A mix of tax increases and benefit modifications — carefully crafted to shield recipients of limited means and to give ample notice to all participants — could put the program on a sound footing indefinitely.

–The 75-year Social Security shortfall is only slightly larger than the cost, over that period, of extending the 2001 and 2003 tax cuts for the richest 2 percent of Americans (those with incomes above $250,000 a year). Members of Congress cannot simultaneously claim that the tax cuts for people at the top are affordable [or like the Ryan budget, add trillions more in tax cuts] while the Social Security shortfall constitutes a dire fiscal threat. And the shortfall is well under half the cost over 75 years of making all of the 2001 and 2003 tax cuts permanent.

Elites Hate It, Hate It, Hate It

At Balloon Juice, the first comment following John Cole's post, It Will Never Make Sense To Me nails the real reason the elites hate Social Security so much. Cole writes in the post that it will never make sense to him ...

Why our elites and media elites have such sheer contempt and hatred for social security. It’s there for everyone! It’s a solid government program which gives everyone the peace of mind that no matter what, there will be some money available for you to take care of yourself in your most vulnerable years. It’s such a miniscule portion of the taxes we pay, and for the ultra-rich screamers who hate social security the most, it’s a negligible portion of their income, and it’s capped! It’s not money wasted on fraud and abuse, it’s extremely efficient with the kind of overhead any charity or organization in the world would die to achieve, and it’s just an amazing program.

Actually that's the reason they hate it. But the first commenter nails it, writing,

They hate it because it works; Social Security is proof that government is capable and competent. That is why it MUST be destroyed.

For elites this is the problem. Government works, and that tells We, the People that we don't have to depend on elites. That really is why the elites hate Social Security: Because it works.

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 11:34 AM | Comments (1) | Link Cosmos

April 9, 2012

What Krugman Said

Here: "Why, you might almost think that the goal is just to undermine Social Security, using whatever argument seems handy."

Posted by Dave Johnson at 8:49 PM | Comments (0) | Link Cosmos

March 31, 2012

AARP: Social Security Should Not Be Part Of Deficit Discussion

Social Security does not contribute to the deficit in any way. The government has borrowed money from the program, not the other way around. Complaints about the need to come up with money to pay for people retiring are because Republicans used Social Security money to give tax cuts to the rich, and now that the money is supposed to be paid back so it can fund people's retirements -- which means getting the money from where the money went -- they are trying to make people think the greedy old people shouldn't be paid.

AARP: Social Security Should Not Be Part Of Deficit Discussion.

Here are facts: Social Security has a huge trust fund, and is self-funded. (Compare that to the huge military budget!) It is not in any kind of "trouble." The propaganda that it is "going broke" is part of a strategic plan hatched by corporate conservatives to prepare the public for accepting the dismantling of the program, nothing more. I have written about this many times. Here is one post that lays this out.

AARP had to be pressured by progressives to stand up for Social Security. From the story,

Three progressive organizations -- Social Security Works, Credo Action and the blog -- launched campaigns aimed at pressuring AARP to stand up for Social Security after HuffPost reported that the elderly lobby was planning to host a high-level "salon-style conversation" with deficit hawks and advocates of cutting Social Security. Tens of thousands -- including thousands of AARP members -- signed petitions urging AARP not to support benefit cuts.

Posted by Dave Johnson at 6:38 PM | Comments (0) | Link Cosmos

March 9, 2012

Cuts and Consequences - How Budget Cuts Hurt The Economy

Is smaller government really better for the economy? Conservatives chant that taxes and government "take money out of the economy" and we need to "cut and grow," meaning if government spending is cut way back the economy will grow as a result. Europe's conservatives are also forcing cuts in the things their governments do for regular people, claiming "austerity" will bring "confidence" that grows their economies. How is this experiment working out? What are we learning about the effect on the larger economy when government is cut?

What Does Government Do?

Almost everything the government does is because it needs to be done. We need roads, bridges, schools & colleges, dams, courts, police & fire departments, water management, etc. (We can discuss the need for military spending another time.)

These are all needed and contribute to the functioning of the economy. So if government is cut back and doesn’t do something that is needed, then how does it get done? Or does it just not get done? Either way, the real question we should be asking is what is the effect on the larger economy when our government cuts back on or stops doing needed things? If you save the “government” a bit of money but cost the economy a lot of money, are you saving money? Or are cuts in government really just shifting and even increasing the costs in the larger economy of doing these things?

Who Is Our Government For?

In the United States, our Constitution says that government is supposed to be of, by and for We, the People. The country was established after the colonists rebelled against the aristocracy of England -- a few people who had all of the wealth and power and would not let the colonists have a say in how things were run and who would benefit. So they fought the Revolutionary War and established a country where "We, the People" all have an equal say, and to "promote the general welfare." In other words, a country that aspires to be of, by and for the good of all of us.

So cutting back on government means cutting back on We, the People doing things for the good of all of us. It means cutting back on the things we have a say over. It means relinquishing the wealth and power that we hold in common to ... well, just where does our common wealth and power go if our government is cut back?

Medicare, For Example

Republicans say we need to cut back on what the government spends on Medicare. But if you cut Medicare the health problems of elderly people and the larger problem of fast-rising health care costs in the larger economy don’t disappear. In fact, both problems just get worse.

The "Ryan Budget" that Congressional Republicans voted to approve actually converts Medicare into a program that gives seniors a voucher that pays for part of a private medical insurance policy that seniors have to shop for. The Center for Economic and Policy Research (CEPR), in Cost of Medicare Equivalent Insurance Skyrockets under Ryan Plan, took a look at that plan and explains what happens to the cost of health care. Summary: it shifts the costs to us, except each of us ends up paying as much as seven times as much as the same care costs under Medicare. From the CEPR explanation:

[The Republican] plan to revamp Medicare has been described as shifting costs from the government to beneficiaries. A new report from the Center for Economic and Policy Research (CEPR), however, shows that the [Republican] proposal will increase health care costs for seniors by more than seven dollars for every dollar it saves the government, a point missing from much of the debate over the plan.

... In addition to comparing the costs of Medicare to the government under the current system and under the [Republican] plan, the authors also show the effects of raising the age of Medicare eligibility. The paper also demonstrates that while [the Republican plan] shifts $4.9 trillion in health care costs from the government to Medicare beneficiaries, this number is dwarfed by a $34 trillion increase in overall costs to beneficiaries that is projected ...

Repeat, the Republican plan to cut Medicare would cost the larger economy seven times as much as it cuts government spending.

Social Security, For Example

Conservatives have been trying to cut or gut Social Security for decades. While this might mean government has to pay out less of what is owed to seniors, such cuts would have a negative effect on the larger economy.

Social Security allows working people to retire with at least a minimal income. If this is cut many could not retire for many more years (if ever), which would increase the unemployment rate because their jobs would not open up. The same is true as the retirement age is increased - fewer job openings. If it is cut, the spending (on cat food) at local grocery stores and other necessities is reduced by the same amount. And the effect on children of retirees is increased, if they contribute to make up the difference.

This is why cutting Social Security or raising the retirement age only shifts costs onto the larger economy, dragging it down (and cruelly hurting our elderly).

Cutting Disease Control, For Example

One of the clearest examples of the way government helps us all, rich and poor, is the government's Center for Disease Control (CDC). One of the jobs of the CDC is to help prevent the spread of infectious diseases. If an epidemic is spreading and killing people it doesn't matter if those people are rich or poor. And if a serious outbreak spreads this can damage the economy as people are too sick to, or decide not to show up for work. So of course cutting back the budget of the CDC could cause damage to the economy in any given year and is certain to cause damage eventually. (The CDC budget was cut back 11% last year.)

Budget Cuts Hurt The Economy

The above are only a few examples.

A government budget cut is like a huge tax increase on regular people because it increases what each of us pays for the things government does -- or forces us to go without. This is because cuts in government spending don’t actually cut the cost or the need for those things, they just shift those costs onto the larger economy. But because these shifts attack the economy-of-scale, transparency, integrity and public-good management that government provides, they almost always increase the costs and harms to the larger economy.

  • As government health care is cut (or not provided in the first place) each of us must take on those costs on our own, and as demonstrated, pay up to seven times what the same care would/could have cost.
  • As infrastructure maintenance and modernization is cut, our economy becomes less competitive, unemployment increases and our wages and spending power fall.
  • As spending on education is cut, our costs of educating ourselves and our kids increase. College costs soar. And the overall education level of our people will decrease, making our country less competitive in the world.
  • As environmental regulation and enforcement is cut the costs of the resulting health problems and cleanups increase and our quality-of-life will decrease.
  • As enforcement of labor laws is cut, our wages and protections fall.
  • As etc. is cut, the costs of etc. are shifted to the larger economy, and the total costs of accomplishing etc. actually increase.

As budgets are cut, the costs are increased and shifted to the larger economy.

Austerity In Europe

Several countries in Europe are severely cutting budgets. The result is that the economies in those countries are slowing. Reuters: Euro zone's slump in late 2011 points to recession.

A collapse in household spending, exports and manufacturing sucked the life out of the euro zone's economy in the final months of 2011, the EU said on Tuesday, showing the scope of the downturn that looks set to become a fully fledged recession.

... The European Commission forecasts a recession of the same magnitude this year. That would be the euro zone's second contraction in just three years as the bloc's debt crisis drags on a region that generates around 16 percent of the world's economic output.

[. . .] The battle between austerity and growth was already evident in the fourth quarter. Euro zone government expenditure fell 0.2 percent, while industry contracted 2 percent and imports were down 1.2 percent, making for some of the worst readings since the world was dragged into the 2008/2009 financial crisis.

The austerity experiment is making the case: cutting government budgets just shifts costs and hurts the larger economy.

Who Benefits From Cuts?

Governments dance with the ones that brung 'em. Whoever controls government is naturally going to direct government to benefit them – and only them. We-the-People democracies do things for We, the People; plutocracies do things for plutocrats. So when, as now, plutocrats are running government, you will get a government that only does things that benefit plutocrats. And when We, the People were running government, we did things that benefit We, the People -- all of us.

The plutocrats now demanding government budget cuts obviously understand that this will result in slowing economies, but don't care -- they are already fabulously wealthy. What they want is reduced taxes and increased power. They say that cuts will bring growth, in order to persuade people to accept cuts. Blocking governments from providing things that don't directly benefit them and only them is a means to that end. And cutting government cuts government's ability to reign them in.

What We, the People Want

When We, the People are running government we insist that government increases overall prosperity. We demand laws and regulations that bring us good wages, benefits and safe working conditions. We demand good public schools & colleges, parks, safety and opportunities for our smaller businesses to fairly compete. We insist on a clean environment, consumer protections, regulations on business behavior, rules against monopolies and (after learning the hard way) rules that keep banks from taking risks that threaten the economy. And we want controls and limits on the use of wealth and power by the 1%ers.

Plutocrats -- the 1%ers -- of course see all of these protections of regular people as hindering their power and ability to make as much for themselves as they can grab. Plutocrats just don’t see how public parks benefit them. They just don’t see why they should have to pay for public schools. What good do public schools do them, today? Plutocrats don’t see why it should be anyone else's problem if old people don’t have health care -- health care for seniors certainly isn't their problem.

They explain that things for anyone other than themselves and their interests just “wastes money.” Things for regular people are not their problem. And when plutocrats run government, it isn't their problem.

The fact is a public park “costs money.” Schools and infrastructure are just more “government spending.” Things like that just "redistribute income" because taxes on the income of plutocrats is used to build that park or school that anyone can use. The basic message of the plutocrat is, "Why should I pay for anything that benefits you?"

You and I might argue that this kind of austerity, cutting schools, Medicare, infrastructure, etc. slows the larger economy, hurting the plutocrats, too. But that doesn’t hurt the ones who are already rich, which is the definition of plutocrat. It puts more in their pockets, today, by lowering their taxes. They want out of taxes and they don't want government (We, the People) interfering with their power.

What We, The People Need

Democracies where We, the People make decisions demand things that are good for regular people and their small businesses: pensions, health care, modernized infrastructure, good schools & colleges, child care, regulations on the behavior of giant corporations... This is why strong democracies have proven to be more prosperous for regular people and for longer than other forms of government that leave people on their own against the wealthy and powerful and drive all of the income and wealth to a few at the top. This is why so many regular working people in our country were so much more prosperous in the decades before the plutocratic 1%-favoring policies of Reagan steered us toward plutocracy.

Understand what is going on here. Demands for budget cuts and austerity are really about shifting from democracy to a system where regular people -- the 99% -- are on their own, up against the wealthy and powerful. This is about shifting from a system where regular people can be prosperous together, to a system where a few -- the 1% -- have all the wealth and power.

We, the People need democracy restored. We need to be in charge again, before the economy can improve.

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 7:51 AM | Comments (0) | Link Cosmos

December 30, 2011

Another Washington Post Social Security Mistake

See if you can spot the big mistake (giving them the benefit of the doubt) in this Washington Post story: Payroll tax cut raises worries about Social Security’s future funding:

This year, the Social Security system projects that it will pay out $46 billion more in benefits than it will collect in cash. It made up for the shortfall by redeeming Treasury bonds bought in years when there were cash surpluses.

Here is the mistake, thanks to Dean Baker: Social Security Is NOT Selling Government Bonds,

This is not true. The Social Security trust fund is projected to earn $114.9 billion in interest on the bonds it holds. It will use a portion of these earnings to pay current benefits. It will not be redeeming its bonds.

Social Security has a huge trust fund -- if you think $2.6 trillion is huge. That trust fund is invested in US Treasury Bonds, and earns interest.

When you hear that Social Security is "in trouble' or "going broke" you are hearing from people who ignore this huge, huge trust fund and the interest it earns. This trust fund, along with the money people pay in, means that Social Security has enough to pay full benefits until 2037. Even then it will still be able to pay everyone more than they receive today. (Yes, more, because of cost-of-living adjustments.)

One of the problems with Social Security is that the "cap" -- the top income that is taxed to pay into the fund -- was calculated in the 80's, and they didn't foresee that all income gains after the 80s would only go to those at the top, where the income isn't taxed to pay into the fund. So, since the 80s, as more and more of the income gains went to the top few, the Social Security fund started to not have quite enough to go on forever. So now it it projected to only last until 2037. This is, of course, easily fixed -- as are so many of our country's problems -- by asking those at the top to pay in a little more.

So ... will I be attacked with pepper spray and batons for suggesting that the rich should pay back a bit more?

See also, Jan 2010, Washington Post Joins Wall Street Sneak Attack On Social Security.

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 12:49 PM | Comments (0) | Link Cosmos

November 4, 2011

People Want Jobs - Congress Focused On Taking Money Out Of Economy

This situation of crony government protecting the connected rich while people are in the streets demanding change is more and more reminiscent of Egypt under Mubarak. In the real world tens of thousands are in the streets around the country demanding taxes on the rich and an end to corporate rule, as a new report lists profitable companies that pay no taxes at all. Today's jobs report is not enough to even keep up. But in the Congress Senate Republicans filibuster another jobs bill and the "super committee" is looking at how much to take out of the economy and out of the things We the People do for each other -- in order to keep taxes low for the rich and their giant corporations.

Filibustering Jobs

Yesterday Senate Republicans again filibustered a jobs bill - a plan to hire people to repair our country's infrastructure. This is work that has to be done, and right now millions of people need work. But Republicans filibustered this bill. The corporate-owned mainstream media, however, largely refused to tell the public what is happening, instead blaming "the Senate." The Washington Post headlined, Senate blocks $60 billion infrastructure plan, another part of Obama jobs bill. Politico blamed "both parties," with Both parties block jobs bills. MSNBC: Senate blocks $60B part of Obama jobs plan. CNN: Competing infrastructure spending measures fail in Senate.

So the big-corporate media leads the public to blame "the Senate" and government, providing few clues that tell people where to apply the pressure that makes representative democracy function.

Big Corps Paying No Taxes, Not Just Low Taxes

From Citizens for Tax Justice report: Corporate Taxpayers & Corporate Tax Dodgers, 2008-2010,

280 Most Profitable U.S. Corporations Shelter Half Their Profits from Taxes.

“These 280 corporations received a total of nearly $224 billion in tax subsidies,” said Robert McIntyre, Director at Citizens for Tax Justice and the report’s lead author. “This is wasted money that could have gone to protect Medicare, create jobs and cut the deficit.”

  • 30 Companies average less than zero tax bill in the last three Years, 78 had at least one no-tax year.

  • Financial services received the largest share of all federal tax subsidies over the last three years. More than half the tax subsidies for companies in the study went to four industries: financial services, utilities, telecommunications, and oil, gas & pipelines.

  • U.S. corporations with significant foreign profits paid tax rates to foreign countries that were almost a third higher than they paid to the IRS on their domestic profits.
  • Who Are "The Markets?"

    Who are we talking about, when we talk about "corporate taxes?" Just who do we mean when we talk about "the markets?" See for yourself why the #occupy movement talks about the 1% vs the 99%.

    When you hear about corporations and "the markets," think about how that connects to this chart:


    People In The Streets

    Yesterday, in the post, Oakland Occupied -- Will Washington Listen At Last?, I wrote about the large demonstrations that are spreading and growing: spreading to more and more cities, and growing with larger numbers in each city. I warned that this is starting to look like Egypt with the people in the streets protesting Mubarak's cronyism:

    A Warning Shot At Washington's Increasing Irrelevance

    As I said, this public protest is spreading and growing. People have had enough and are taking to the streets in increasing numbers. But Washington continues to ignore the public, debating a national motto, as Repubicans block jobs and an elitist "super committee" debates cutting the things government does for the 99%.

    Poll after poll shows the public overwhelmingly supports increasing taxes on the wealthy, bringing corporations under control, and reigning in trade agreements that suck our jobs, factories, companies and industries out of the country. People do not want Medicare, Social Security and other essential government programs cut, they want the rich and corporations and Wall Street to start paying their share.

    The public wants something done about these problems. They want jobs, they want something done about the increasing

    If Congress continues to ignore the people of the country it will not be long before the situation is like Mubarak pretending he is still in charge of Egypt, while the people of the country are in the streets planning how they will run the country without him and his cronies.

    Super Committee To Take Money Out Of The Economy

    A representative democracy serves the 99%, a plutocracy serves the 1%. Currently in Washington Congress' elite "super committee" represents the 1%, looking at ways to take more money out of the economy, discussing cutting Social Security at a time when many people have lost their pensions and savings. They are discussing cutting Medicare and other health services at a time when more and more people are in need. They are discussing cuts and cuts and cuts, when working people are falling behind and behind and behind.

    But the actual causes of the deficits that have Congress so concerned are ignored. Reagan and the Bushes cut taxes on the rich and increased military spending, and the deficits and resulting debt soared. It is right there in front of our faces. But even with such "concern" about deficits the tax cuts for the rich continue and the huge increases in military spending are left alone. Instead Congress discusses austerity - making the 99% pay for the benefits and bailouts for the 1%.

    People are fed up, and rightly so. Poll after poll shows that the public wants taxes on the rich increased to pay for the deficit, infrastructure, education, health care, retirement and the rest of the things We, the People need. But our captured government is only serving the top few when they talk about cutting these things in order to keep taxes low at the top. The 1% would be well-advised to pay attention to what has happened in other countries where government ignores the people and takes care only of the connected rich.

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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    Posted by Dave Johnson at 10:58 AM | Comments (0) | Link Cosmos

    October 19, 2011

    Scrap The Cap

    Just Scrap the Cap

    There is really only one way to fix Social Security and that is to scrap the cap: raise the limit on incomes that pay into Social Security. Income gains only go to the top few now, so the calculations that established the "cap" are wrong. So get rid of the cap and make the rich pay into the system.

    Cutting benefits only shifts costs onto seniors and their kids who will have to support them. This video shows what that will be like for the kids.

    Posted by Dave Johnson at 10:41 AM | Comments (0) | Link Cosmos

    September 7, 2011

    A Deficit Pitch Without Social Security--The Only Chance of Winning

    Josh Rosenblum

    This past Friday night in Washington, a New York Mets pitcher threw the type of pitch President Obama must use in his march to stop any new proposals to cut Social Security if he plans to make it through the game of the deficit talks and his reelection. In the recent past the President and his teams have pitched a slew of failed curveballs that would cut our Social Security. The number 43 Mets pitcher R.A. Dickey helped beat the Nationals 7-3 with his slow velocity, highly unpredictable knuckleball. The 44th President and his multitude of committees have taken an approach to cutting the deficit that replicates a tied baseball game, with no end in sight. Could knuckle balls from a President battling to win the game, save the economy, and win reelection save the tied ball game called the deficit debate? Let’s take a look at the tape.

    R.A. Dickey has been pitching great this season, and has the best earned run average of the starters on the Mets but you wouldn’t know it by looking at his record of 7-11, which reflects injuries on the Mets but also the poorest run support from hitters out of all the Mets starting pitchers. It’s unclear to Mets fans why Dickey hasn’t gotten the run support he so deserves, just as it’s unclear to the general public why we haven’t gotten the support Social Security deserves from the administration.

    If the President throws a Social Security curveball that cuts our benefits to the GOP team trying to beat him, he ought to get ready not to receive any run support, not just from Democrats and the left, but also from the independents and moderate Republicans his advisers are so intent on courting again. By attempting a pitch that doesn’t appeal to his base, independent voters, and moderate Republicans, he may lose the game, the season, and ultimately his Presidency.

    But President Obama can still throw an amazing Dickey-like pitch to the GOP’s deficit, defeat the nonsense, not cut Social Security benefits, and win reelection. If Obama fights for Social Security, America’s fans will cheer for him and we’ll give him all the run support he needs to win in 2012.

    Social Security has remained one of America’s most successful programs for 76 years. Before it existed and since it’s existed, Wall Street and right-wing conservatives have been telling us how much it stinks, hoping we might one day believe such lies through repetition. Even popular Republican President Dwight Eisenhower recognized how cutting it would be plain “stupid.” But that’s exactly what each of the deficit groups have attempted to do, each throwing their own curveball that would lead to Social Security cuts.

    The President started his deficit pitching rotation with the grizzled, often irrelevant old-timers Bowles and Simpson, who proposed to cut Social Security with the indifference of players who knew their time had passed. He then hoped the journeymen Gang of 6 could take on the deficit, but the bipartisan group of men never seemed to materialize on the playing field. Obama’s team, “America,” never got far in the batting order without loading the bases against the “GOP Deficit” team, which lead up to another call to the bullpen. An enthusiastic reliever, Vice President Biden came charging on to the field to lead his bipartisan “gang of dudes” with every intention to save the game, and no ability to corral the Republicans who calmly watched every one of his pitches thrown for balls float by and hit every strike for an intentional foul ball, upping the pitch count until Biden’s arm had vanished.

    Then came the President himself, rolling up his sleeves and bringing back the long vanished player-coach, determined to get the save for America, but giving the GOP a few hits and intentional walks in the process so he could get the job done. He’s out on the field and he appears determined to win for America, at any cost to his future as a pitcher and as our President, but the fans are hopeful he’ll win for his future and ours.

    The President even told us about his curveball to the GOP, who seem determined to fight against America, 1 minute in to this video, when he acknowledges that he’d offered the Republican Speaker a deal to cut Social Security, which suggests he may throw the same bad curve again if the Supercommittee wants to take it up.

    In the next couple of weeks President Obama may let loose with another Social Security curveballl, telling us we need a COLA cut for Social Security. But America isn’t certain whether player-coach Obama would put the important program on the chopping block again for the Supercommittee and the GOP Deficit. This pitch to the GOP Deficit leads to one place—a lost game for the President, and a lost future for Democrats. But a well-placed knuckleball that leaves Social Security out of the ball game and out of the deficit talks would help America and Obama win. If the President throws a slow, hanging knuckleball that’s tough for Republicans to hit but that his own team can cheer for, he’ll win the hearts of Americans including Democrats, independents and reasonable Republicans, whether the Washington Republicans try to screw over America again or not with attempted cuts to Social Security.

    Posted by Josh at 7:27 AM | Comments (0) | TrackBack | Link Cosmos

    August 26, 2011

    Sen. Sanders' Plan To Actually Fix Social Security

    You hear over and over that Social Security is "in trouble" or that we "can't afford it." This is as far from true as can be, and the idea behind this is to convince people to just give up on defending the program and let the haters have their way. The people who hate Social Security the most are the ones who say they want to make these changes to "save" it. Well Bernie Sanders loves the program and has introduced a bill that actually will save it.

    The Haters

    Conservatives have hated Social Security from the start, because it is a program that demonstrates once and for all the value of progressive governance. Social Security is as clear an example of We, the People watching out for and taking care of each other as there ever was. It has made a huge difference n the lives of older people, and their/our families. It works, is cost-effective and requires minimal overhead to keep it going. So they hate it.

    A very recent example of conservative hatred for Social Security came from Senator Marco Rubio of Florida, who said, that We, the People helping each other makes us weak,

    "These programs actually weakened us as a people. ... All of a sudden, for an increasing number of people in our nation, it was no longer necessary to worry about saving for security because that was the government’s job."

    Substitute the words "We, the People" or "each other" for "government" in Rubio's statement and you'll get the point: people don't have to worry so much because we're taking care of each other. He says that makes us weak. Yikes!

    Decades Of Attacks

    For decades conservatives who hate Social Security have been using every trick in the book to turn people against the program. Over and over you hear, "It's a Ponzi scheme." "It won't be there for you." This latest attack is that it "makes us weak." And of course the old classic: "Social Security is broke."

    The "it's going broke" and "won't be there for you" attack strategy goes back to a 1983 Cato Institute Journal document, "Achieving a Leninist Strategy" by Stuart Butler of Cato and Peter Germanis of the Heritage Foundation. The document is still available at Cato, and select quotes are available at Plotting Privatization? from Z Magazine. If you have time it is worth reading the entire document (in particular the section "Weakening the Opposition") to more fully understand the strategy that has been unfolding in the years since. But if you can't, the following quotes give you an idea:

    "Lenin recognized that fundamental change is contingent upon ... its success in isolating and weakening its opponents. ... we would do well to draw a few lessons from the Leninist strategy."

    " construct ... a coalition that will ... reap benefits from the IRA-based private system ... but also the banks, insurance companies, and other institutions that will gain from providing such plans to the public."

    "The first element consists of a campaign to achieve small legislative changes that embellish the present IRA system, making it in practice a small-scale private Social Security system.

    "The second main element ... involves what one might crudely call guerrilla warfare against both the current Social Security system and the coalition that supports it."

    "The banking industry and other business groups that can benefit from expanded IRAs ..." "... the strategy must be to propose moving to a private Social Security system in such a way as to ... neutralize ... the coalition that supports the existing system."

    "The next Social Security crisis may be further away than many people believe. ... it could be many years before the conditions are such that a radical reform of Social Security is possible. But then, as Lenin well knew, to be a successful revolutionary, one must also be patient and consistently plan for real reform."

    Here is what to take away from this: Every time you hear that "Social Security is going broke" you are hearing a manufactured propaganda point that is part of a decades-old strategy. Every time you hear that "Social Security is a Ponzi scheme" you are hearing that strategy in operation. Every time you hear that "Social Security won't be there for me anyway" " you are witnessing that strategy unfold.

    The Problem

    The Social Security program is entirely self-funded, separate from the way that the government taxes and spends for other programs. People set aside money in their working years, they get a monthly amount when they retire. (The program also has other benefits including disability benefits, survivors funds and others.) Social Security does not contribute to the deficit in any way.

    You never hear that the huge, vast, bloated, enormous, mammoth military budget is "going broke" or "won't be there for you." But year after year you hear that Social Security is "in trouble."

    Currently the program has built up a huge trust fund -- over $2.5 trillion. This is invested in US Treasury Bonds, and is earning interest. But there are projections that this trust fund will be depleted in approx. 2037, and if this happens the program will have to cut payouts by as much as 25%. (Hey. when does the military budget Trust Fund run down?)

    One big reason for this shortfall is that the last time the programs was comprehensively adjusted (1983, Greenspan Commission) certain economic growth and income projections were used to decide how much "payroll tax" to take out of people's paychecks. They increased the amount taken out of paychecks, and set up an increasing "cap" on the income that would be taxed. Right now 6.2% (temporarily reduced to 4.2%) is taken out of paychecks, and employers kick in another 6.2%, on income up to a "cap" of $106,800. There is no "payroll tax" on amounts above that "cap."

    But something changed between 1983 and now: almost all the income gains have gone to a few at the very top. Instead of people who mostly were under that "cap" getting raises, thereby increasing the amount they pay into the fund, the raises went to people who already pass that amount, so the increased income is not contributing to the program. So that money that was calculated would go into the Social Security Trust Fund instead went to the top few. As a result the program is no longer bringing in enough money to keep the trust fund fully-funded past 2037.

    Sen. Sanders' Solution

    Senator Bernie Sanders is introducing a bill to the Senate to fix this, once and for all. In simple terms, this bill will start taxing income above $250,000 a year to cover this Social Security shortfall. So instead of just "raising the cap" it lets that cap stay, and then takes it off again on income above $250,000. In effect it means there will be a gap between the current top income that is taxed, and $250K.

    Get the money from where the money went: So because much of the real Social Security problem is that so much income is now going to just a few at the top, this gets the money to fix the problem from those top-level incomes.

    Here is Sanders, talking about his bill:

    “When [Social Security] was developed, 50 percent of seniors lived in poverty. Today, poverty among seniors is too high, but that number is ten percent. Social Security has done exactly what it was designed to do!”

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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    Posted by Dave Johnson at 7:42 PM | Comments (3) | Link Cosmos

    July 20, 2011

    Will American Majority Outnumber Gang Of 6?

    Our deficit and debt came from cutting taxes on the rich and big corporations, increasing military spending and sweetheart deals with big pharma and health insurance companies. Elite “solutions” always involve cutting back what We, the People do for each other while keeping taxes low for the rich and big corporations. The latest “Gang of 6” solution is being pushed hard, manipulating a sense of inevitability, but is just more of the same. Don't be fooled, there is significant opposition. Grassroots organizations oppose it, progressives in Congress oppose it and The American Majority opposes it. But you won’t hear that from our elite media.

    The Latest Back-Room Deal From Well-To-Do Elites

    If you are following the day-by-day accounts of the back-room debt-ceiling “crisis” negotiations, the latest “deal” to emerge out of closed-room, secret negotiations between well-to-do elites is much like all the other deals that come out of closed rooms of well-to-do DC insider types: keep taxes low on the rich and corporations and cut back the things We, the People do for each other and for the non-Wall Street parts of our economy.

    These insiders serve the interests of the biggest corporations and the extremely well off, not the interests of regular people, entrepreneurs and small businesses that democracy protects and empowers. Their closed rooms never include low-wage working people, unemployed people, teachers, mechanics, roofers, carpenters, veterinarians, lab technicians, trash collectors, nurses or law-enforcement officers in them.

    If all you hear from is America’s elite media you would think the problem is solved and everyone is happy. You would think this is inevitable, and you must go along or be blamed for obstructing. The “gang of 6” deal is supposedly “bipartisan.” They say it is receiving a “warm reception” in Congress. For example, the Washington Post, New debt plan gains support in Senate, describes the “warm response” the proposal received in the Senate,

    In the Senate, the plan received a warm response, both during the invitation-only morning session and during separate luncheon briefings for Democrats and Republicans. Sen. Lamar Alexander (Tenn.),the No. 3 Senate Republican, offered strong support. And Sen. Tom Coburn (R-Okla.), a leader in the GOP on budget issues, backed the plan as well, after dropping out of the Gang of Six in mid-May.

    “There was palpable relief from folks in that room this morning. Like they were saying, ‘Here’s something we can actually be for,’ ” said Sen. Mark R. Warner (D-Va.), a Gang of Six member who has relentlessly pressed his colleagues to reach consensus.

    And the NY Times is on the bandwagon: Bipartisan Plan for Budget Deal Buoys President,

    Financial markets rallied on the news. And with time running out before the deadline of Aug. 2 to raise the government’s $14.3 trillion debt ceiling, Mr. Obama’s quick embrace of the plan left House Republicans at greater risk of being politically isolated on the issue if they continue to rule out any compromise that includes higher tax revenues.

    Higher tax revenues? Actually the deal lowers tax rates for the wealthy and big companies. It raises revenues by removing things like the mortgage interest deduction for the rest of us.

    Not So Fast

    But if you look at polls you start to see that the American Majority has come to some very different conclusions about how to fix America's deficit problems. The pubic says solve this problem the same way most economists say we should solve it. The public wants cuts in military spending, and increases in spending on infrastructure and other job-creation, economy-growing investment. The public wants taxes increased on the rich and big corporations. The public does not want Social Security benefits cut. The public wants health care reformed in the ways that the rest of the world has discovered saves money while providing better care.

    Not So Fast, says the CPC

    The Congressional Progressive Caucus says, "Not so fast!" Congressional Progressive Caucus (CPC) co-chair Rep. Raúl M. Grijalva today released the following statement on the Senate “Gang of Six” budget proposal:

    House "Gang of 70-Plus" to Senate "Gang of Six": We Outnumber Your Plan to Slash Medicare, Medicaid and Social Security

    “This terrible plan could cut Medicare and Medicaid to unsustainably low levels and put seniors’ well-being at risk. Anyone who wants to pass it through Congress should remember that more than 70 House Democrats have already pledged their opposition, and more are signing on every day. The letter we sent to Leader Pelosi July 8 vowing to oppose any cuts to Social Security, Medicare or Medicaid as part of these budget negotiations has become a growing wave of House resolve to protect these programs. We’re keeping it open for more signatures, and our Gang of 70-plus has the ‘Gang of Six’ completely outnumbered. Newly minted Rep. Janice Hahn signed on as one of her first official acts as a Congresswoman – that’s how quickly it’s picking up momentum.

    Republicans have already said they won’t vote for any package, period, because of their opposition to a functional economy. House Democrats hold the key to whatever plan can pass Congress. That’s why the Senate ‘Gang of Six’ proposal is dead on arrival. Instead of toying with ways to slash vital programs in just such a way as to make different budget numbers align on paper, Congress and the White House should follow the path of our People’s Budget: creating jobs, protecting Social Security, Medicare and Medicaid, ending corporate subsidies and millionaire tax giveaways, and ensuring our economy works for everyone rather than a greedy few.”

    Not So Fast, Says Senator Bernie Sanders

    Sen. Bernie Sanders has issued the following statement on a deficit-reduction proposal by a group of senators called the Gang of Six:

    “While all of the details from the so-called Gang of Six proposals are not yet clear, what is apparent is that the plan would result in devastating cuts to Social Security, Medicare, Medicaid and many other programs that are of vital importance to working families in this country. Meanwhile, tax rates would be lowered for the wealthiest people and the largest, most profitable corporations.

    “This is an approach that should be rejected by the American people. At a time when the rich are becoming richer and corporate profits are soaring, at least half of any deficit-reduction package must come from upper income people and profitable corporations. We must also take a hard look at military spending, which has tripled since 1997.”

    Visit for breaking news, world news, and news about the economy

    Not So Fast, Says MoveOn

    Here s a statement from Justin Ruben, Executive Director of on the Gang of 6 proposal:

    “While details are sketchy, the "Gang of 6" proposal appears to ask seniors, the middle class and the poor to bear the burden of deficit reduction, with cuts to Social Security benefits, billions in stealth cuts to be named later, and no real effort to make corporations and millionaires pay their fair share. MoveOn's 5 million members are counting on Leader Pelosi, Senate Majority Leader Reid, and other Democrats to stand by their promise to reject any benefit cuts to Social Security and Medicare. We cannot allow a minority of Tea Party led Republicans in the House to hold our nation’s economy hostage in order to protect tax breaks for the rich and corporations, while forcing cuts to programs families depend on. The President and Democrats in Congress must stand up for everyday Americans and not give into politicians more interested in protecting their corporate backers than ensuring our economy recovers.”

    Not So Fast, Says Citizens For Tax Justice

    Citizens For Tax Justice issued a statement, "Gang of Six" Plan Would Reduce Revenue and Encourage Corporate Tax Dodging,

    Because our tax system allows U.S. corporations to indefinitely “defer” U.S. taxes on their offshore profits, it already encourages corporations to move jobs overseas and to disguise their U.S. profits as “foreign” profits by shifting them to tax havens.

    There would be even more incentives for corporations to do both these bad things under the “territorial” tax system promoted by corporate lobbyists and included in the Gang of Six plan.

    Not So Fast, says Strengthen Social Security Campaign

    Nancy Altman, Co-chair of the Strengthen Social Security Campaign, released a statement (read the full statement here) in response to the release of the Gang of Six’s “Bipartisan Plan to Reduce Our Nation’s Deficits.”

    “The Gang of Six proposes immediate and significant cuts to Social Security benefits, and a process for addressing the program’s funding shortfall projected to appear 25 years from now. The process would virtually guarantee devastating cuts. This plan breaks faith with the American people, who overwhelmingly oppose benefit cuts.

    “The Gang of Six framework contains very few specifics but one is glaring – the immediate cuts that would affect all 55 million Social Security beneficiaries by changing the way the annual cost-of-living adjustment (COLA) is calculated. Their plan would substitute the less accurate and less-generous chained consumer price index (CPI) for the current CPI in calculating the COLA. This breaks a promise made by many politicians to not cut the benefits of anyone over age 55.

    Not So Fast, Says American Majority

    Polls show the public gets it. Along with the polling data on the American Majority Polling Page, here is some info from recent polls:

    • NBC News/Wall Street Journal, July,58% want tax increases on the wealthy as part of a deficit solution vs 36%.
    • Pew Research Poll, June 15-19, 60% say Keep Social Security and Medicare benefits as they are vs 32% say change them to reduce deficits.
    • McClatchy/Marist, 64% support raising taxes on income above $250,000.
    • And finally, this Gallup Poll just out today: Concerns About Economy, Jobs Outweigh Worries About Deficit,

      Americans name the economy and unemployment/jobs as the most important problems facing the nation, as they have all year, despite the dominant focus in Washington on the federal debt ceiling. The deficit comes in third as the top problem.

    Politicians In Peril

    Politicians who are fooled by this manipulated sense of inevitability, and who ignore deficit solutions the public wants, are asking for trouble. If they support these back-room deals made by elites the public won't support them.

    In addition Democrats who support any deal that cuts Social Security and/or Medicare undermine their ability to campaign as the defenders of the people, of Medicare, of Social Security over the interests of the wealthy and giant corporations.

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 4:37 PM | Comments (0) | Link Cosmos

    June 22, 2011

    How The Echo Chamber Works

    Counter the Koch billions. Protect Social Security.

    Posted by Dave Johnson at 11:03 AM | Comments (0) | Link Cosmos

    June 9, 2011

    Businesses Hire When Customers Are Coming In The Door

    Another bad jobless claims report... and this time Washington seems to have finally noticed that there are some unemployed people out here in the sticks. But instead of jobs programs the geniuses are proposing ... what else? ... even more tax cuts. (And after a few hours they'll go back to complaining about deficits but blame "spending.") And of course, they are once again trying to "appeal to Republican lawmakers" without getting it that Republican lawmakers are doing everything they can to slow job growth so they can win the next election.

    Bloomberg: Payroll-Tax Break Said to Be Discussed by Obama Aides Amid Slowing Economy,

    President Barack Obama’s advisers have discussed seeking a temporary cut in the payroll taxes businesses pay on wages as they debate ways to spur hiring amid signs that the recovery is slowing, according to people familiar with the matter.

    . . . The talks reflect the political constraints the White House is operating under with the Republican majority in the U.S. House pushing to cut federal spending. A hiring stimulus based on a tax break for employers may appeal to Republican lawmakers, many of whom have called for measures to help businesses.

    Companies Only Hire When Customers Are Coming In The Door

    Here is something the geniuses haven't noticed, in all their geniosity: It doesn’t matter how much more money you give to business owners, businesses are not going to hire any more employees until they have a REASON to – and that reason is customers coming in the door.


    Businesses are not going to hire people just to sit around and listen to iPods or read the paper, waiting for a customer.

    Terrance Heath, in America's Unhappy Anniversary: Ten Years Of The Bush Tax Cuts For The Wealthy,

    Republicans claim that preserving the Bush tax cuts for the wealthy is in the interest of small businesses, but small business owners are starting to demand a repeal of the Bush tax cuts.
    "We are fed by our consumers, not by our tax breaks," says Rick Poore, owner of Designwear, Inc., a screen-printing business based in Lincoln, Neb. "If you drive more people to my business, I will hire more people. It's as simple as that. If you give me a tax break, I'll just take the wife to the Bahamas."

    Businesses are fed by their customers, not by tax cuts. Tax cuts only feed deficits. Customers coming in the door is what causes businesses to hire. In case you missed that: Customers coming in the door is what causes businesses to hire.

    Direct Job Creation Is Needed

    Until there are more customers businesses are not going to hire. Why should they? So it is up to us (government: We, the People...) to create some customers. The way to do that is to hire people to do some of the things that it is government's job to do anyway, but government has been putting off because of so many tax cuts.

    Fix the infrastructure: Our infrastructure is crumbling. In Obama Should Call Chamber’s Infrastructure Bluff I linked to an Urban Land Institute report on the country's infrastructure, showing how we are falling behind countries like Brazil, China and India, and to the American Society of Civil Engineers (ASCE) Infrastructure Report Card, that says a $2.2 trillion investment is needed just to bring the country's infrastructure back up to current standards.

    This infrastructure work has to be done no matter what. The longer we delay it the more our country falls behind. It is millions of jobs that need doing at a time when millions need jobs! (And by the way the government can borrow at nearly zero interest rates right now -- one more reason to do it now.)

    Green jobs: And then there are the green jobs you should be creating. You should be hiring people to retrofit every home and building in the country to be more energy efficient. This pays for itself because we stop sending so much money to the oil-producing countries, stop putting so much carbon in the air, and our economy becomes more efficient. And put more money into alternative energy, too. I mean, jeeze, geniuses, what part of this is hard to get?

    Jobs fix deficits: Hiring people to fix up the infrastructure takes them off the unemployment rolls and off the other assistance programs, lowering government spending on those programs. Having those jobs means they are paying taxes again, raising government revenue. And fixing up the infrastructure makes our businesses more competitive again, growing the economy. It's a no-brainer which should mean even the DC geniuses can figure it out.

    Fix Trade

    Because of bad trade deals, much of any revival of our economy just means that we send more money out of the country. The trade deficits, especially with China, are also economy deficits. We are not just sending jobs and money out of the country, we are sending our chances of coming out of this economic slump out of the country as well.

    And these trade deals pit exploited, underpaid workers in non- or weak democracies against our workers who had been benefiting from the good wages, workers protections and other non-"business friendly" things that democracy brings along with it.

    Our trade deals have made our democracy and the resulting high standard of living into a disadvantage. Who were the geniuses that let that happen?

    Restore Long-Term Incentives

    Tax cuts have cut the incentive for long-term business models. It used to take time to build a fortune, so businesses had to place themselves within healthy communities with good schools, well-maintained infrastructure and solid, well-funded public structures like the court system. Cutting top tax rates changed business models to make more sense "harvesting" those things in a hurry and moving on to the next community with resources to plunder. Low top tax rates encourage quick-buck schemes.

    Propose The Right Thing

    Propose the right thing and do it publicly, instead of trying to appease a political ideology bent on destroying government. Doing the right thing is also the right thing politically. If the job situation doesn't get better you're going to be thrown out of office. So come one, geniuses, get smart and start hiring people to fix up the infrastructure and make the economy more energy efficient.

    10 years of Bush tax cuts is enough! Click here to demand your representative supports the Fairness in Taxation Act so the rich contribute their fair share.

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 12:17 PM | Comments (0) | Link Cosmos

    June 1, 2011

    Close The Social Security "Cap" Tax Loophole!

    Most people don’t know that there is a huge loophole in the Social Security tax. Believe it or not, after $107K income you don’t pay the Social Security tax at all. This loophole is called the “cap.” The "cap" loophole is bigger than the looholes that let big corporations get out of paying their taxes because while not all corporations avoid taxes the "cap" applies to everyone making over $107K. Closing this loophole would fix all of Social Security's so-called "problems."

    The "Cap"

    Working people pay into their Social Security account from every dollar they earn but high-income earners only pay on a fraction of what they earn. Most people don't make enough to take advantage of this loophole, so they don't even know about this loophole. But once you reach $106,800 of income you stop paying anything into Social Security.

    The Social Security "Problem"

    Social Security has built up a huge trust fund of money that people have set aside for their retirement. This trust fund covers everyone's Social Security benefits well into the future. But under some economic assumptions and with continuing concentration of wealth this trust fund begins to run out, and could be gone by approximately 2037. After 2037 the amount coming in from money people set aside could fall short of the amounts going out, and predictions are that without some changes the amounts paid out could be as much as 25% short. Of course, because of cost-of-living adjustments (COLA), benefit checks will be larger than now, even with this potential 25% cut. But this will be a blow to retired people, and should be avoided.

    Proposed Solutions

    There are several proposals to solve the problem of this potential cut in benefits in the year 2037. Many of these solutions involve schemes to cut benefits now, instead of in 2037, to avoid having to cut in 2037. But for some reason many people are skeptical and do not see the logic of making big cuts in Social Security now in order to avoid possible small cuts later.

    Other solutions involve raising the retirement age beyond the current retirement age of 67. People who do not sit at desks in their jobs and have to stand, lift, bend or use their hands worry that they will be unable to work until they die, and would rather see a solution to fixing the problem of a potential shortfall way off in the future than making them continue to work. Also, longevity studies show that people in higher incomes -- the very people receiving the "cap" loophole -- are living longer but not people who make less.

    Still other solutions involve "means testing" -- excluding some people from receiving benefits everyone has paid for. This is undemocratic -- we are all in this together and have an equal stake and are entitled to equal benefits. That is what the word "entitlement" means: in a democracy we are all equally entitled to certain things.

    These proposals all involve cutting or delaying benefits for recipients. But there is another solution that does not involve benefits: raising the cap on the level of earnings that pay into Social Security.

    Raise The Cap

    The one solution that is seemingly off the table in plutocratic circles is called "raising the cap." This means fixing the loophole that lets people making over $106,800 stop paying into the Social Security fund. This would, of course, solve the problem of any potential shortfall in Social Security and could even enable restoring a lower retirement age, which would help alleviate the chronic unemployment problem as well.

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 11:20 AM | Comments (3) | Link Cosmos

    May 25, 2011

    NY-26 Lesson: Don't Mess With Medicare -- Or Social Security!

    In 2010 Republicans and corporate front groups ran ad after ad after ad after ad claiming that Democrats had "Cut 500 billion from Medicare." Those ads brought them the senior vote, and they took the House. Confident in their ability to "create their own reality" they came out with a plan to privatize Medicare and told the public it would save Medicare. Well, last night's win by Kathy Hochul in the NY-26 special election -- with pretty high turnout in a Republican district -- shows that the American people are smarter than they look, and figured out what was what. The lesson: don't mess with Medicare.

    Soundly Defeated

    Yesterday's NY-26 Congressional election turned on Medicare and the candidate who supported Medicare won. The candidate who supported the Republican plan to privatize Medicare was soundly defeated.

    House Republicans voted to change Medicare from a single-payer plan to a private-insurance voucher plan as a measure to "cut government spending." Republicans had talked themselves into believing the public hates government as much as they do and therefore gutting it is what the public wants. Instead of working to control health care costs they just shifted those costs away from the government into "personal responsibility" land. In plain non-propagandized English personal responsibility means each of us on our own, alone, instead of all of us watching out for and taking care of each other.

    The public figured it out and voted to keep the Medicare-gutter out.

    American Majority

    The American Majority understands what is going on. They know that our budget problems come from tax cuts, military spending and the lack of jobs. Those are the things the public wants the Congress to fix.

    Where the deficits come from:

    What the public wants:

    Gallup Poll, January 14-16, 2011

    • 64% oppose spending cuts to Medicare.

    The Wall Street Journal/NBC News Poll, February 24-28, 2011

    • 54% believe it will not be necessary to cut spending on Medicare to reduce the national deficit.
    • 76% believe cutting Medicare to help reduce the budget deficit is mostly or totally unacceptable.
    • 60% oppose turning the Medicare system into a government-issued voucher program, which would require the beneficiary to purchase private health insurance.

    First Focus and Greenberg Quinlan Rosner Research Poll, April 13-18, 2011

    • 70% oppose cuts/changes to the Medicare system as described in the House Republican Budget.
    • 49% support not reducing funds to Medicare.
    • 53% believe replacing the current Medicare program with a voucher system in which retirees will receive vouchers to use to purchase subsidized insurance from private insurance companies for those 55 or older is totally or mostly unacceptable.

    CBS News/The New York Times Poll, April 15-20, 2011

    • 61% believe that Medicare is currently “worth the costs.”
    • 76% think government has the responsibility to provide health care coverage to the elderly.
    • 49% believe higher-income beneficiaries should pay more in taxes.

    Bloomberg News Poll, March 4-7, 2011

    • 54% oppose replacing Medicare with a system in which government vouchers would help participants pay for their own health insurance.
    • 76% oppose reducing benefits for Medicare.

    Pulse Opinion Research for The Hill Poll, April 28, 2011

    • 53% said they would oppose a reduction in Medicare benefits in order to get the deficit/debt under control.

    Pew Research Poll, March 8-14, 2011

    • 65% oppose changes to Social Security as a way to reduce the budget deficit.

    More recent polling shows the public has moved to an even strong support for Medicare, and will remove from office anyone who votes to cut it.

    Social Security The Same

    Those polls don't just test public support for Medicare, they test support for Social Security as well. The public feels just as strongly that politicians had best keep their hands off our Social Security.

    In order to reduce the national debt, would you support or oppose cutting spending on Social Security, which is the retirement program for the elderly? Ohio: 16% support, 80% oppose Missouri: 17% support, 76% oppose Montana: 20% support, 76% oppose Minnesota: 23% support, 72% oppose

    Reality Restored

    During the Bush years the idea of a "reality-based community" circulated after an article by Ron Suskind about a meeting he had with "a senior advisor to Bush." In the article he described how the aide scoffed at people who bother with reality:

    The aide said that guys like me were "in what we call the reality-based community," which he defined as people who "believe that solutions emerge from your judicious study of discernible reality." ... "That's not the way the world really works anymore," he continued. "We're an empire now, and when we act, we create our own reality. And while you're studying that reality—judiciously, as you will—we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors…and you, all of you, will be left to just study what we do."

    Republicans and their corporate money tried to create a reality that let them gut Medicare without the public rising up to do something about it. It didn't work.

    Do The Right Thing

    Well, reality is coming back. The public is figuring things out. Politicians should learn the lesson of NY-26: don't mess with Medicare -- or Social Security. To fix the deficit fix the causes of the deficit: invest in jobs through maintaining and modernizing our infrastructure, restore top tax rates to where they were before we had huge deficits and, by the way, the Soviet Union is long gone so cut military spending back to maybe only twice our nearest potential competitor.

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 9:14 AM | Comments (0) | Link Cosmos

    April 21, 2011

    Don't Make Us Work 'Till We Die!

    There was a time on this country when We, the People were in charge, and our government worked for us. Through our government we did things for each other and for our economy, and when we had economic success we paid back toward more such investment. Things are different today and We, the People are no longer in charge. In fact, We, the People are thought of now as "the help." And lately the Powers That Be have been thinking they aren't getting quite enough work out of us. So they want to make us Work 'Till We Die.

    The country has a budget deficit caused by tax cuts for the rich, huge increases in military spending, wars, covering problems caused by the Great Recession, and interest on the Reagan/Bush debt. To address these deficits the Powers That Be are coming up with plans to raise the retirement age, eliminate Medicare and cut the rest of the things We, the People do for each other -- while, of course, dramatically cutting taxes on the rich.

    In response the Strengthen Social Security campaign is launching Don't Make Us Work 'Til We Die -- a website, actions, video and petition.

    Local Actions April 28!

    Click here to find an event near you.

    Virtual Rally!

    If there is no event near you, you can participate in their Virtual Rally.

    This is great. Print out a sign and take a picture of yourself holding the sign. Email it to: with your City & State in the subject line, and be part of the Virtual Rally.

    Sign ideas:
    * Don't Make Me Work 'Til I Die
    * Don't Make My Kids to Work 'Til They Die
    * Make Your Own

    What Others Are Saying

    Left In Alabama: Don't Make Us Work 'Til We Die,

    There will be rallies in 18 states -- 52 of them at last count -- on April 27 and 28 where current retirees will demonstrate how hard or even impossible it would be for them to continue working at the jobs they retired from.

    Digby: Don't Make Us Work Until We Die.

    Evidently, this is the new fate for many more of the elderly. Between raising the retirement age, skimping on the benefits, wage stagnation and economic wipe-outs like the Great Recession, young and old alike will be competing for all those low paying jobs. But since three and four generations will all have to live under the same roof, perhaps they can come up with some sort of job share concept so that they can work in shifts and someone will be at home to take care of the children. As long as it doesn't inconvenience the employer, of course.

    Richard Eskow at Work 'Til You Die: The Alternate American Reality - And The Reality

    The retirement age is already scheduled to increase, and raising it even more is nothing less than cruel. That idea's part of the political trend toward "austerity economics," a resurgent anti-government ideology that'sengendered a wave of enthusiastic - no, make that orgiastic prose - from well-fed pundits. Their display of almost snuff-movie-like excitement should have been predictable, but I found it shocking anyway.

    AFL-CIO Now Blog: Tell Lawmakers, ‘Don’t Make Us Work ‘Til We Die’,

    There is a scary scenario in store if the Republican budget, drafted by Rep. Paul Ryan, is ever implemented. Take a look at this new video from Strengthen Social Security, Don’t Cut It, that takes us to a new dimension where “politicians are cutting our Social Security and Medicare and forcing us work until we die.”

    The Serlingesque video is part of a new campaign to fight back against the Republican budget and other proposals to raise the retirement age, turn Medicare over to Big Insurance and slash Medicaid for seniors, children and people with disabilities.

    Next week on April 27 and 28 in more than 50 cities in 18 states, activists from the Strengthen Social Security, Don’t Cut It coalition—the AFL-CIO and the Alliance for Retired Americans are part of the coalition—will hold events at congressional district offices to tell their lawmakers hands off Social Security. Click here to find an event near you.

    The Main Street blog

    Everyone who has worked in a physically demanding job knows what increasing the retirement age will mean. It’s one thing to preach the necessity of this from behind a desk in a cushy office. It’s another thing to be a miner, nurse, truck driver, cook, carpenter, janitor, or a waiter at age 67 - if our bodies last that long. For those who are among the still unemployed/underemployed, and over the age of 55, the promise of Social Security in the future is what keeps us going. We can’t let them pull the rug out from under seniors who have worked long and hard, and paid in to the Social Security Trust Fund.

    Dean Baker at CEPR: Why Do Real Men Want to Cut Social Security?

    It really speaks volumes about the nature of politics in Washington that in order to be accepted as a serious participant in the budget debates, it is now necessary to affirm a willingness to cut Social Security. This is bizarre from many different angles.



    Blue Hampshire

    Suburban Guerrilla

    Ellen's Illinois Tenth Congressional District Blog: Days of Action to Protect Social Security/Medicare,

    April 27th and 28th will be days of action to protect Social Security and Medicare. The themes are "Don't Make Me Work Until I Die" and "Don't Make My Kids Work Until They Die." Here's the video:

    ... If you're ok with foregoing retirement and health care when you need it most so some CEO of a multinational can walk away with billions (trillions) and take his jobs to India, China and Pakistan, then go ahead and vote for Republicans and do nothing on April 27th and 28th, but if you want US jobs and a US middle class that provides for a dignified retirement, then join Strengthen Social Security for its events, virtually if you cannot make a meeting.

    Crooks and Liars


    susan the bruce

    Dirigo Blue: SAVE THE DATE: Day of Action for Social Security: Don't Make Us Work 'Til We Die

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 11:24 AM | Comments (1) | Link Cosmos

    April 1, 2011

    Social Security "Cannot Exist" Says Rep. Cantor, House Majority Leader

    From Campaign for America's Future:

    Help Fight Cantor's Quest to Eliminate Social Security

    Last week, House Majority Leader Eric Cantor said out loud what he really thinks: He believes Social Security "cannot exist." At all. For anyone.

    This week NPR played Cantor’s remarks to the conservative Hoover Institution: He declared: "So we've got to protect today's seniors. But for the rest of us? For - you know, listen. We're going to have to come to grips with the fact that these programs cannot exist if we want America to be what we want America to be."

    These guys say things like this at right-wing think tanks, expecting that the folks back home won’t hear them. We want to make sure every person in Rep. Cantor's congressional district hears those words straight from his mouth.

    The Campaign for America's Future isn't letting Rep. Cantor get away with it. We have a TV ad that will let his constituents know about his extreme opposition to Social Security. But we need your help to get it on the air. The more you can donate, the more we can get his constituents to see the ad and the more we can spread the truth, and put him on the hot seat.

    Click here to help us keep this ad on the air »

    Here is what CAF sent out in an email:

    Help us expose Rep. Eric Cantor's plan to make sure Social Security "cannot exist." Contribute $10, $25 or $50 to our ad campaign.

    This week NPR played Cantor’s remarks to the conservative Hoover Institution: He declared: "So we've got to protect today's seniors. But for the rest of us? For - you know, listen. We're going to have to come to grips with the fact that these programs cannot exist if we want America to be what we want America to be."

    These guys say things like this at right-wing think tanks, expecting that the folks back home won’t hear them. We want to make sure every person in Rep. Cantor's congressional district hears those words straight from his mouth.

    Check out our hard-hitting ad. Then help us get it on the air.

    Help us expose Rep. Eric Cantor's plan to make sure Social Security "cannot exist." Contribute $10, $25 or $50 to our ad campaign.

    A significant ad buy in Rep. Cantor's central Virginia district would only require 100 supporters to donate $50 each.

    But the more you can donate, the more we can get his constituents to see the ad and the more we can spread the truth, and put him on the hot seat.

    Help us expose Rep. Eric Cantor's plan to make sure Social Security "cannot exist." Contribute $10, $25 or $50 to our ad campaign.

    All year, the Campaign for America's Future has been leading the fight to protect Social Security. And our polling shows that big majorities across the country want to strengthen Social Security – including in Cantor’s district.

    We helped stop the President from embracing disastrous Social Security cuts in his State of the Union address. Now, let's make sure the Republicans know what they’re in for if they try to abolish one of American's most successful, and most popular programs.

    Thank you for all of your support.


    Roger Hickey, Co-director
    Campaign for America's Future

    Posted by Dave Johnson at 10:21 AM | Comments (2) | Link Cosmos

    March 30, 2011

    IMPORTANT: Call Now To Save Social Security

    Today is a national call-in day to let Senators know that there is support for keeping Social Security out of the budget debate.

    Here are some facts. Social Security cannot borrow, so it does not contribute to the deficit. In fact, working people have been paying a large share of their earnings into Social Security to save for their retirement, and because of this the program has been running a huge surplus. The government has been borrowing FROM Social Security to fund tax cuts for the rich. This borrowed money was used to purchase Treasury Notes, just like China does when we borrow from them, and those notes earn interest, just like China's, which also helps fund the program. So all of this money people have been putting aside for their retirement adds up to a huge trust fund, which doesn't get used up until approx 2037 -- if the economy doesn't get better; later if it does. Even then it only runs a bit short.

    So the only threat to Social Security is that if nothing is done there might be some cuts in benefits in 2037. The solution is not to cut benefits to avoid cuts in benefits. That doesn't make sense. The solution is to "raise the cap." Today only incomes below about $100K pay into Social Security. Raising that $100K "cap" fixes the problem. Better yet, remove the cap on incomes above $250,000.

    The following is from the Strengthen Social Security coalition, of which Campaign for America's Future is part:

    We need you to call your Senators and demand that they vote for the Sanders/Reid Social Security Protection Amendment.

    Senator Sanders and Majority Leader Reid are leading the fight in the Senate to protect Social Security from drastic cuts.

    Their amendment simply says:

    Social Security benefits for current and future beneficiaries should not be cut and Social Security should not be privatized as part of any legislation to reduce the Federal deficit.

    Call your Senators RIGHT NOW at 1-866-251-4044. You’ll be given a choice of which of your state’s two senators to be connected with. Call BOTH of your senators if you have the time. It only takes a minute each.

    Tell the person who answers the phone:

    • I am a voter/constituent living in [your state]. I am calling to tell the Senator:
    • I oppose all cuts to Social Security and
    • I urge them to vote yes on the Sanders/Reid Social Security Protection Amendment.

    Please take the time for this very important effort today. This is for all of us who depend on Social Security.

    Call Today: 1-866-251-4044.


    Stay involved, the threat to Social Security continues. Please click to stay involved in the fight.

    Posted by Dave Johnson at 9:42 AM | Comments (6) | Link Cosmos

    March 29, 2011

    Call Today To Save Social Security

    Call Congress on Tuesday and Wednesday!

    Senate Majority Leader Harry Reid led a press conference and rally to save Social Security yesterday:

    Senate Majority Leader Reid, Other Democrats, Join Hundreds to Demand No Cuts to Social Security

    Sens. Reid, Harkin, Sanders, Franken and Blumenthal Follow Emotional Speeches by Americans Who Depend on Social Security and Oppose Cuts

    ... Under the slogans “Back Off Social Security” and “Hands Off Social Security,” more than 350 fired-up retirees and others packed a meeting room on Capitol Hill to hear from the Senators and program beneficiaries, and to demand no benefit cuts, no retirement age increase, and no privatization. The large public event happened as the battle heats up in Washington between those wanting to sacrifice Social Security as part of a deficit-reduction deal and those demanding that it not be cut.

    The following is from the Strengthen Social Security coalition, of which Campaign for America's Future is part:

    We need you to call your Senators and demand that they vote for the Sanders/Reid Social Security Protection Amendment.

    Senator Sanders and Majority Leader Reid are leading the fight in the Senate to protect Social Security from drastic cuts.

    Their amendment simply says:

    Social Security benefits for current and future beneficiaries should not be cut and Social Security should not be privatized as part of any legislation to reduce the Federal deficit.

    Call your Senators RIGHT NOW at 1-866-251-4044. You’ll be given a choice of which of your state’s two senators to be connected with. Call BOTH if you have the time. It only takes a minute each.

    Tell the person who answers the phone:

    • I am a voter/constituent living in [your state]. I am calling to tell the Senator:
    • I oppose all cuts to Social Security and
    • I urge them to vote yes on the Sanders/Reid Social Security Protection Amendment.

    Please take the time for this very important effort today. This is for all of us who depend on Social Security.

    Call Today: 1-866-251-4044.


    Stay involved, the threat to Social Security continues. Please click to stay involved in the fight.

    Posted by Dave Johnson at 2:58 PM | Comments (0) | Link Cosmos

    March 1, 2011

    Cenk Rants On Social Security

    Posted by Dave Johnson at 3:00 PM | Comments (0) | Link Cosmos

    February 18, 2011

    Blaming Social Security For Deficits Is Like Blaming Iraq For 9/11 (And Unions In WI)

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Isn't it funny how the corporate conservatives always offer the same solutions to every problem? Even when the solution doesn't really have much to do with the problem? Iraq didn't attack us, and Social Security doesn't have anything to do with deficits. But the "solution" to 9/11 was to attack Iraq, and the proposed "solution" to deficits is to "fix" Social Security. And the "solution" to state budget crises is to get rid of public employee unions. Why?

    Got a crisis? A tax cut will fix it. Getting rid of unions will fix it. Privatizing Social Security will fix it. And gutting government solves everything. Doesn't even matter what the problem is!

    "Nothing is more important in the face of war than cutting taxes" - Tom DeLay, 2003

    Iraq And 9/11

    Remember when everyone was in panic about Iraq? IA bunch of Saudis working with an organization based in Afghanistan attacked us on 9/11. The solution immediately offered by the corporate right was to invade Iraq, increase military spending and ... cut taxes!

    We were told that Saddam was getting ready to attack us with anthrax, smallpox, more terrorists and even nukes. Etc. On and on. How many different stories did we hear in the "runup" to the war of "shock and awe" that has cost so many lives and more than a trillion dollars? Let's teach "those people" a lesson. It will be "a cakewalk" and will "pay for itself."

    The thing is, invading Iraq was a pre-packaged solution waiting for an excuse. When the excuse came, they ran with it. It's what they do. We should learn from this.

    They have a number of pre-packaged solutions" on the shelf and when a crisis pops up -- or when they can create one -- the "solutions" pop out of the box, ready to go.

    Always A Crisis

    Isn't it funny how these "crises" keep coming up? People whipped into a panic, over and over (and over and over.)

    Right now people are whipped into a panic about the deficit crisis. The "solution?" Gut the things government does for regular people, including Social Security (which by law cannot borrow, so can't cause deficits._ They are even going to force a government shutdown -- another crisis. Meanwhile the huge military budget is "off the table." All this right after they just passed more tax cuts for the rich.

    Social Security is in "crisis?" People are in a panic. Everyone "knows" we have to "fix" it. We are told this over and over and over and over. (The "crisis" is that in 2037 it will have a shortfall, and might have to cut benefits. The solution to the crisis of a cut in benefits is to cut benefits.)

    State budgets are in crisis? People are in a panic. Solution? Blame unions and worker pensions (and cut taxes.) That's what's happening in Wisconsin. And Ohio. And Indiana. And Missouri. And New Hampshire. And Michigan. And Minnesota. And other states, many not even limiting the attack to public-employee unions.

    Corporate/Conservative Pre-Packaged "Solutions"

    How often do you see the same solutions offered up for any given problem? Tax cuts for the rich, gut government, get rid of unions, privatize Social Security, etc. (And more tax cuts for the rich.) When something shocking happens the right always has ready-to-go, pre-packaged solution waiting in the wings that they offer to fix the problem.

    Take Wisconsin for example. They ginned up the appearance of a budget crisis, got everyone worked up, and wham-o, introduce a bill to kill public-employee unions, gutting worker pay and pensions and their ability to do anything about it.

    But in fact, like so many of their "solutions" this was something they already wanted to do, and were just waiting for the opportunity to push it through, or creating the crisis to bring about the opportunity to push it through.

    These pre-packaged "free-market" "solutions" are not what the public wants, but are always forced through before anyone can react. They don't solve problems, just make the rich richer at the expense of the rest of us.

    The Solutions Never Work -- For US

    When the public is worried, stirred up, hopefully to the point of panic you put in your pre-arranged "solution" and start getting them stirred up about the next problem you will "solve." And those conservative solutions never seem to work out.

    The deficits get worse, wages don't go up, retirement gets harder... This is because the real purpose of these "solutions" -- cut taxes, cut what government does for regular people, get rid of unions, privatize social security and for good measure cut taxes more -- are not to solve the problem they were offered up to fix. They have another purpose: make deficits worse, make wages stagnate, make retirement harder...

    It always, always, always comes down to a simple formula: more (and more) to the rich at the expense of everyone else.


    People want jobs.

    Cutting Social Security doesn't create jobs.

    Getting rid of unions doesn't create jobs.

    Gutting the things government does for We, the People won't create jobs.

    Cutting taxes certainly doesn't create jobs.

    Where are the corporate/conservative job-creation solutions? There aren't any.

    March 10 Summit on Jobs and America's Future

    On March 10, 2011, the Summit on Jobs and America’s Future will bring together leaders and activists who understand that America faces a jobs crisis – and who are committed to building a political movement for sustainable economic growth, dynamic job creation, and a revival of the American economy.

    Free. $15 with lunch. Register here.

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 3:47 PM | Comments (0) | Link Cosmos

    January 27, 2011

    Cut Social Security To "Save" It From Cuts?

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Should we cut Social Security to "save" it from cuts?

    Just two days after the President pledged during the State of the Union address to improve Social Security "without putting at risk current retirees" and "without slashing benefits for future generations" the program is again being subjected to widespread, misleading attacks in the media.

    With the headline Social Security fund will be drained by 2037, AP ran a (since-changed, original is still available here. It is worth comparing the original with the revised.) op-ed story that began,

    Sick and getting sicker, Social Security will run at a deficit this year and keep on running in the red until its trust funds are drained by about 2037, congressional budget experts said Wednesday in bleaker-than-previous estimates.


    The CBO story about Social Security is part of a larger overall budget deficit projection, the result of the recent vote to give more tax cuts to the wealthy. The AP story, widely echoed in the media, is instead focusing only on Social Security. But it is not "news" that the trust fund will be exhausted in 2037 (assuming continuing poor economic and wage growth -- read this and everything Bruce Webb writes about Social Security at Angry Bear), it is the projection that had been understood for years. However, using better economic assumptions that could result from policies that increase the wages of working people and reduce the concentration of wealth the trust fund does not run out at all.

    Even so, in 2037, under these bad-case scenarios, Social Security will still be able to pay 78% of projected benefits, which are higher than today's benefits. So in this poor-case scenario, if nothing is done, recipients will face a cut of 22%.

    Saying that we need to cut Social Security now because it might -- might -- have to be cut 22% in 2037 is saying we need to cut it to "save" it from cuts.

    Deficit Commission Recommendations?

    The AP story wrongly stated that the "Deficit Commission" had made recommendations to increase the retirement age and cut the program through reduced cost-of-living increases. In fact the commission was unable to agree on any recommendations.

    A debt commission appointed by President Barack Obama has recommended a series of changes to improve Social Security's finances, including a gradual increase in the full retirement age, lower cost-of-living increases and a gradual increase in the threshold on the amount of income subject to the Social Security payroll tax.

    Obama, however, has not embraced any of the panel's recommendations. Instead, in his State of the Union speech this week, he called for unspecified bipartisan solutions to strengthen the program while protecting current retirees, future retirees and people with disabilities.


    To assist with its anti-Social Security formulation the AP story claimed "experts" (plural) are calling for "reform" by quoting one "expert" (singular) from the conservative think tank American Enterprise Institute.

    Running A Deficit?

    Conservative outlets are expanding on the CBO report, claiming that Social Security is running deficits -- as long as you don't cont the interest that the program's bonds earn. For example, note the use of the word "effectively" in CNS' CBO: Social Security to Run $45 Billion Deficit in 2011

    The Congressional Budget Office (CBO) reports that Social Security will effectively run a $45-billion deficit in 2011 and continue to run deficits totaling $547 billion over the coming decade.

    National Review, uses the word "broke" in CBO: Social Security Now Officially Broke, and claims the interest is only "camouflage,"

    Today’s CBO report has some bad news about the deficit. But CBO has some really, really bad news about Social Security: It’s officially broke.

    ... But there’s a bit of camouflage attached: If you include the “interest” that the federal government “owes” the fictitious Social Security “trust fund,” then the program is in the black.

    And so on...

    Cut The Program To Save It From Cuts?

    So does it make sense to cut the program to save it from cuts? The real agenda behind calls for cuts is so that the money does not have to be found elsewhere to repay the trust fund. The trust fund masked the harm done by tax cuts, and undoing tax cuts is what will be needed to pay back the money that working people have set aside for retirement,

    Claiming that Social Security needs to be cut, or the retirement age raised, so that Social Security needs less funding is like your bank telling you that you need to cut back on food so they won't have to pay you back the money you put into a savings account.

    Update - As this was posted AP released an astonishing new attack, Social Security posting $600B deficit over 10 years. Ignoring the program's huge trust fund and that there is no deficit at all when interest paid to that trust fund is counted, AP writes,

    Social Security will post nearly $600 billion in deficits over the next decade as the economy struggles to recover and millions of baby boomers stand at the brink of retirement, according to new congressional projections.

    This year alone, Social Security is projected to collect $45 billion less in payroll taxes than it pays out in retirement, disability and survivor benefits, the nonpartisan Congressional Budget Office said Wednesday. That figure swells to $130 billion when a new one-year cut in payroll taxes is included, though Congress has promised to repay any lost revenue from the tax cut.

    . . . But the new projections show nothing but red ink until the Social Security trust funds are exhausted in 2037.

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    Posted by Dave Johnson at 7:32 PM | Comments (0) | Link Cosmos

    Social Security Fight Not Over

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Tuesday the President pledged to improve Social Security "without putting at risk current retirees" and "without slashing benefits for future generations." With the State of the Union speech out of the way Progressives can claim some credit and breathe a little bit easier for a while. But the fight is not over -- it never is. The door is still open for new attacks. And Social Security's attackers never, ever, ever, ever give up.

    Demonstrating that, Ross Douthat in the NY Times calls President Obama's statement of support for Social Security "evasion," lamenting the “looming insolvency of our entitlement system.” Others in the "conventional wisdom" machine continue to demand cuts to ward off the threat of future cuts, claiming the cuts will "save" the system from cuts.

    There is one and only one reason Social Security is such a topic of discussion and that is because it is a target of the corporate-conservatives who denigrate government itself. Social Security is government, therefore it just can't be true that it works well, helps people and is the right thing to do. But it is. All the facts line up on Social Secuirty’s side, so they have to use trickery. They have to claim "insolvency." They have to claim that life expectancy is longer now -- even though they are referring to the effect of infant morality on statistics.

    If Social Security's attackers truly want to "save" entitlements they would address the cost of health care in this country. They would look at the rest of the world and realize that the only thing that can work for that is some form of Medicare-For-All.

    What Digby said,

    I'm glad that he said he didn't want "fixing" Social Security to come at the expense of the vulnerable or by restricting benefits, but like the AARP I think danger lurks in the fact that he spoke about it in the context of deficit reduction. Best to be vigilant on this one.

    By the way:

    Let's Keep the Success Going

    You did it! You helped the Campaign for America's Future sound the alarm to President Barack Obama that he must embrace jobs, not Social Security cuts. And he got the message. But the fight isn't over. And we need your help to keep fighting.

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    Posted by Dave Johnson at 7:32 AM | Comments (0) | Link Cosmos

    January 21, 2011

    Social Security Videos

    Sign this petition: Tell Obama: Keep Your Social Security Promise

    Spread these around:

    "I believe that cutting benefits is not the answer. ... Raising the retirement age is not the best option. ... Let me be clear, I will not do either. ... The best way forward is to first look to adjust the cap on the payroll tax." - President Obama during the campaign.

    From CAF's Social Security: Keep The Promise.

    "I'm 59 and I'm just trying to make it until I can retire at 62."

    From PCCC, click here.

    "Even though I don't get a lot of money I would be homeless right now."

    From Social Security Online.

    "What polls the worst is cutting Social Security." "It will destroy the Democratic Party."

    From Sam Seder Majority Report Radio Show.

    Another from Sam:

    "For the public cutting benefits is the problem, not the solution, when it comes to Social Security."

    Harry Reid defending Social Security.

    From The Young Turks.

    Sign this petition: Tell Obama: Keep Your Social Security Promise

    Posted by Dave Johnson at 10:05 AM | Comments (0) | Link Cosmos

    January 15, 2011

    "Half A Trillion In Cuts To Medicare"

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    Watch as GOP Rep. Jim Renacci (OH) is confronted at a local town hall meeting, asked what the heck he thinks he is doing saying he will vote to repeal the health care reform law. Renacci replies that he and fellow Republicans campaigned on reversing the "half a trillion dollars in cuts to Medicare." (From Daily Kos.)

    Republicans campaigned on protecting seniors from Medicare cuts. No way around it. In the 2010 election campaign Republican groups ran millions and millions of dollars of ads promising not to cut Medicare, and to increase Social Security. They campaigned against Democrats for "cutting $500 billion from Medicare" and not increasing Social Security cost-of-living. As a result, for the first time the senior vote went to Republicans.

    Here are just a few of the ads that saturated the airwaves, saying that Democrats should be thrown out for cutting Medicare:

    And voters were sent flyers like this: (click for larger)


    Conservative Strategists Warn Republicans Against Cutting Social Security

    National Review Senior Editor Ramesh Ponnuru, in a New York Times op-ed, How the G.O.P. Can Cut and Survive, warns Republicans not to touch Social Security,

    Ronald Reagan suffered a defeat in his first year when he tried cutting Social Security’s early retirement benefits. Newt Gingrich’s 1995 Republican revolution fizzled when President Bill Clinton fought him over Medicare cuts. President George W. Bush’s effort to reform Social Security in 2005 ended any political momentum he brought to his second term.

    Would-be reformers should draw two lessons from this history. The first is that reform can’t be sprung on the electorate. Reagan hadn’t campaigned on cutting Social Security in 1980, nor did the Gingrich Republicans promise to reduce the growth of Medicare.

    Well, actually they campaigned on restoring $500 billion to Medicare and increasing Social Security, but everyone except the "low-information voters" they targeted understood they meant the opposite...

    Keep in mind that most voters oppose cuts to Social Security and Medicare, so they are likely to be very nervous about any proposals to restrain their growth, especially if opponents portray such cuts as excessive. Even worse, most members of Congress are not well informed about these programs, so they’ll have a hard time soothing public anxieties.

    Don't Cut Social Security, It's A Trap

    Conservative and "centrist" (corporate) calls for President Obama to go after Social Security at the same time they are warning Republicans not to are nothing more than a trap. If the President calls for cutting Social Security you will see ad after ad after ad after ad after ad after ad blasting President Obama and Democrats in general for cutting Social Security and devastating seniors. The voters do not want Social Security cut and any politician who goes against the wishes of the voters will face their wrath. And cutting Social Security will devastate seniors. It is the wrong thing to do. So don't.

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    Posted by Dave Johnson at 2:37 PM | Comments (0) | Link Cosmos

    January 7, 2011

    Sen. Conrad Plutocracy Plan Vs. Democracy Deficit Commission

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    If you saw this morning's Progressive Breakfast, you know that Senator Kent Conrad has an op-ed in Politico, "Priority no. 1: Pass long-term budget plan," in which he proposes steps to do something about the borrowing caused by the tax cuts for the rich that he just voted for. (And if you didn't see this morning's Progressive Breakfast you really ought to sign up to receive it every day. Click here and scroll to the bottom to sign up.)

    In his op-ed Sen. Conrad claims that the President’s National Commission on Fiscal Responsibility and Reform -- the "deficit commission" -- released "a plan." This is surprising, because the deficit commission did not release a plan. The commission was assigned the task of coming up with an overall package that, taken as a whole, could receive 14 votes from the commission's members. Instead co-chairs Alan Simpson and Erskine Bowles, a conservative Republican and a Wall Street representative (a Director of Morgan Stanley) -- released a plan of their own that did not get the required support of the commission. Just two guys, not the commission.

    Saying “the deficit commission” recommended anything is a deception that pushes the Wall Street-favoring plutocracy plan from those two guys. Others one the commission also released plans that were much more aligned with the public interest than Wall Street's interests, but Conrad ignores those plans. There was The Schakowsky Deficit Reduction Plan: A Proposal That Actually Strengthens Social Security and doesn't raise taxes on the middle class. There was Andy Stern's Invest in America plan. There was EPI's plan, Investing in America’s Economy: A Budget Blueprint for Economic Recovery and Fiscal Responsibility. And there was a comprehensive plan from The Citizens' Commission On Jobs, Deficits And America's Economic Future. Conrad ignores those plans, favoring the Wall-Street/Simpson/Bowles plutocracy plan.

    Conrad says the Simpson/Bowles/Wall Street plan-for-plutocracy has "three basic principles [that] can serve as the foundation for a long-term deficit-reduction package." These are:

    1) Address our long-term budget issues now without damaging our economic recovery. Good start.

    2) Cut taxes on the rich while increasing them on everyone else. The plan goes off the rails.

    3) Cut Social Security, even though Social Security has nothing whatsoever to do with the deficit. The hidden agenda comes to light.

    This is what happens when Wall Street and conservative Republicans design a plan: give even more to the already-wealthy few, gut what our government does for We, the People.

    Here is the real deficit commission that you would expect to see if we were a democracy instead of a plutocracy: It would have 100 members:

    • 98 of the 100 members would make less than $250,000 a year.

    • 50 of the members would come from households in which the total income of all wage-earners is less than $50,221.

    • 17% of the commission members would be un- or underemployed, and would be wondering why they are on a deficit commission instead of a jobs commission.

    • 19 people on the commission would receive some form of Social Security benefits, 12 of those as retirees. And on this deficit commission they get to talk when the ones making over $250K propose cutting Social Security.

    • 43 of the commission members would have less than $10,000 saved up for retirement. 27 of those less than $1,000.

    • The commission would include the right proportion of factory and construction workers, and people who work in a kitchen, and waiting tables, and teaching, and nursing, and installing tires, and all the other things that people do except, apparently, those on DC elite commissions. (People who do manual labor get an extra vote each on what the retirement age should be.)

    • Include people who are on active duty in the military – the people who said they don’t need that expensive plane, but couldn’t get body armor.

    • 60 members would not have college degrees.

    • 13 members would be receiving food stamps.

    You get the idea. (2010 census data on race, marital status, etc. not yet located.) This democracy deficit commission would probably start fighting deficits by putting top tax rates back where they were when we didn't have huge deficits. It would probably understand that we don't have to pay to keep the Soviet Union at bay. It would recommend that we invest in our people and our infrastructure instead of giving even more to the already-wealthy at the expense of the rest of us. It would release a plan that is much more like the The Citizens' Commission On Jobs, Deficits And America's Economic Future plan than the Wall-Street/Simpson/Bowles plutocracy plan that Sen. Conrad is pushing.

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    Posted by Dave Johnson at 5:17 PM | Comments (0) | Link Cosmos

    The Retirement Age Is Too Damn High!

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    The D.C. elite insist that the retirement age should be raised even more than the current 67. They have jobs where they sit in nice chairs behind nice desks in nice offices in affluent areas. They don't even know anyone who waits tables or cleans or lifts boxes all day. They don't even know anyone without a fat 401K, or who is in their 50s who can't find work. That's not their problem; paying their share of taxes is what they are worried about.

    But when you leave the affluent areas it becomes obvious that the retirement age is too high and Social Security pays too little. The Great Recession began with waves of layoffs that seemed to concentrate on people over 50 -- because of health care costs and reasonable pay (and they just smell bad). Two years later these people are having a very hard time finding work -- and don't even mention health insurance. Their savings are gone, their unemployment checks are stopping (the "99ers") and they are heAded for the streets. The DC elite solution is to keep them on the streets even longer.

    Lowering the retirement age solves part of the unemployment problem. It solves part of the foreclosure problem by helping many people pay their mortgages. And this is a very out-of-date thing to say but it is humane. It helps people.

    James K. Galbraith writes in ACTUALLY, THE RETIREMENT AGE IS TOO HIGH,

    In the United States, the financial crisis has left the country with 11 million fewer jobs than Americans need now. No matter how aggressive the policy, we are not going to find 11 million new jobs soon. So common sense suggests we should make some decisions about who should have the first crack: older people, who have already worked three or four decades at hard jobs? Or younger people, many just out of school, with fresh skills and ambitions?

    The answer is obvious. Older people who would like to retire and would do so if they could afford it should get some help. The right step is to reduce, not increase, the full-benefits retirement age.

    Digby adds,

    When I was young, a long time ago, it was conventional wisdom that you wanted the oldsters to get out of the job market to make way for the youngsters. ... But somewhere along the line it became an article of faith that anyone who didn't want to work until they dropped dead was a spoiled parasite who expected young people to keep them in style by working 20 hour days.

    The retirement age is too damn high! It should be 62 at most. 55 would be better and we could do that if we weren't still paying for a military to keep the Soviet Union at bay. If affluent members of the DC elite want towork even longer, no one is stopping them. Of course, a lot of us have been wishing they would retire. I can think of a few pundits who have been writing the same column since the 70s.

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    Posted by Dave Johnson at 5:15 PM | Comments (0) | Link Cosmos

    December 20, 2010

    We CAN Protect Social Security!

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    There are rumors that President Obama is going to ask for cuts in Social Security in his State of the Union speech. We have 4 weeks to stop him. People, we can stop this.

    Tell The President: Stand Up To The Hostage-Takers! No Social Security Cuts

    Last week in Obama to blink first on Social Security, Robert Kuttner wrote that the President, in his coming State of the Union speech, might follow up on the recommendations of his deficit commission by announcing a plan to cut Social Security.

    If this happens it would be an utter disaster for Americans and for the future of American politics.

    Millions of elderly people now and in the future absolutely depend on Social Security as the only thing keeping them from eating cat food because they can afford nothing else. On top of that, Social Security is the bedrock of people's faith in and understanding of government. Politically, the Social Security program is the very symbol of what the Democrats Party is and does. If the Democratic Party doesn’t represent protecting Social Security then it represents nothing.

    If these rumors are true we owe it to those elderly people now and in the future to do what we can to head this off. We owe it to the idea of democratic government. And we owe it to the President to stop him from listening to bad advice from advisors who are so out of touch with the American people! There is an elite concensus in DC, created by expert Wall Street propagandists, that it is "responsible" to cut Social Security, and it is just wrong. It is not a correct analysis, and it is the morally wrong thing to do because so many people depend on Social Security. If anything the program needs to be expanded and increased because that is what would help the greatest number of people.

    We CAN stop this if we mobilize. We must spend the next month preventing this from happening. We shouldn't assume that is is out of our control. We should assume that we have it in our power to do something. The vast majority of Democrats don’t want this to happen. Heck, even most Republican don't want this to happen. Cutting Social Security would harm everyone (except Wall Street), including the President.

    People, we can stop this. We have to mobilize to stop it. Don’t assume that the President is going to do it -- we have to show up and make him not do it! Get engaged in the fight. Do not succumb to cynicism. Go out there and ask the president not to do this. Show up!

    Action: Tell The President: Stand Up To The Hostage-Takers! No Social Security Cuts

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    Posted by Dave Johnson at 10:10 AM | Comments (0) | Link Cosmos

    December 3, 2010

    Hidden Agendas Killed The Deficit Commission

    This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

    The National Commission on Fiscal Responsibility and Reform (“Deficit Commission”) was charged with coming up with a plan to reduce the budget deficits and accumulated debt caused by tax cuts for the rich and military spending increases. It was supposed to come up with a bipartisan package that, taken as a whole, would get votes from both sides of the aisle. It was supposed to vote by Dec. 1, and it was only supposed to issue recommendations if they got 14 votes.

    It didn’t work out that way. Dec. 1 has passed and the out-of-business commission apparently can’t get the required 14 votes. The commission has failed.

    What happened? Two hidden agendas were brought to the table, undermining the commission's work. Both come from longstanding campaigns by corporate-backed conservatives to undermine trust in, and ultimately defund democratic government. The first was an attack on Social Security. The second was a demand for even more tax cuts for the rich. It is no surprise that these undermined the deficit commission; the well-funded corporate-conservative anti-government agenda now undermines every effort to govern our country, solve our problems and help our people.

    From the start it was clear that the agenda to undermine Social Security was going to be a problem for the commission. Wall Street billionaire Peter G. Peterson’s Foundation, whose ongoing mission seems to be to turn Social Security over to Wall Street, was involved from the start (in many ways instigating the idea), even providing the commission with free staff. Peterson also launched a concurrent, multi-front public relations campaign involving town hall meetings, planting “news” stories – even starting its own "news" outfit, and releasing various “reports” calling for Social Security cuts.

    The commission did not help itself. After getting off to a slow start, the commission met in secret and maintained an elite attitude, undermining its credibility with the public. It ignored deficit and debt solutions the public favors, instead spending much of its time and energy on Social Security, which by law cannot borrow so it cannot add to the deficit. The focus appeared to be ideological, never addressing the fallout of the financial crisis or proven debt solutions like investing to grow the economy which reduces the debt's percentage of GDP, and creating jobs which brings in additional tax revenue.

    Members even insulted citizens and mocked their concerns. In June Commission co-chair Alan Simpson ranted at Alex Lawson of Social Security Works on camera, making it clear that the co-chair of the commission did not understand basic facts about the way Social Security is funded!

    As CAF's Richard Eskow explained at the time in his post, Simpson's Social Security Video Rant: Why It's Important,

    But, while Simpson's outrageousness makes the video entertaining, here's what makes it important: Alan Simpson is one of two chairs of a bipartisan commission created by President Obama to study the Federal deficit. His comments reveal a number of very important things about his biases, his tendency to distort and mislead, and his ideological extremism. These traits are likely to taint the Commission's work - work which has great implications for the future.

    Now it is that future and the commission has failed.

    Then there was Simpson’s famous “milk cow with 310 million tits” comment that angered women, all sane people, and probably even the dairy industry. See"310 Million Tits" - If Simpson Doesn't Resign, The President Must Fire Him, by Richard Eskow, Milk Cow Blues: Why The Alan Simpson Flap Won't Go Away by Richard Eskow and Women Confront Deficit Commission Over Social Security by some guy.

    Then, to make matters worse, in September another agenda surfaced when some commission members insisted that the commission propose tax cuts for the rich. As Talking Points Memo reported at the time,

    Republicans on President Obama's fiscal commission, which is tasked with coming up with ways to reduce the deficit, have privately argued in official meetings that the panel should recommend further corporate and capital gains tax cuts as part of its mandate. The panel has been charged with raising revenues and cutting spending, to bring the federal budget into greater balance. But if Republican members are successful, their advocacy would result in either an unbalanced report, dedicated wholly to spending and benefit cuts -- or to gridlock and, thus, no recommendations at all.

    Finally, when it was becoming clear last month that the commission was going to fail, its agenda-laden co-commissioners tried another path, releasing their own agenda packaged as commission recommendations but voted on by NO members of the commission. Of course the agenda included cuts in Social Security and tax cuts for the wealthy. As I wrote then, in Simpson & Bowles Show Deficit Commission Is Cover For An Agenda,

    They have released their own “plan,” separate from what the deficit commission might release, allow the press to refer to it as the commission’s plan, and say they are sticking with it no matter what the commission does. Why? It is clear these two came into this with an agenda to attack Social Security, and are using their role on the commission as cover for their agenda.

    [. . .] Agenda: Simpson and Bowles say they won’t compromise their plan to get 14 votes from the commission. What does that mean to a commission that is not supposed to release any plan without getting 14 votes? This clearly demonstrates that Simpson and Bowles have an agenda apart from the goals of the deficit commission.

    As CAF's Terrance Heath wrote Tuesday in his post, America Speaks. Will Washington Listen?

    On the one hand, the commission's co-chairs issued a chairman's mark that essentially painted a big fat bulls-eye on Social Security. On the other hand, the co-chairs went out of their way to separate Social Security from the mission of the deficit reduction. So, why include Social Security in a deficit reduction plan if Social Security has nothing to do with deficit reduction?

    Maybe someone at the commission is half listening to what Americans are saying about Social Security. Numerous polls show a majority of Americans oppose cuts in Social Security — including cuts in benefits and cuts via raising the employment age. Our August 2010 joint poll with Democracy Corps showed that 68% of Americans oppose major cuts in Social Security and Medicare to reduce the deficit. Additionally, 65% oppose raising the Social Security retirement age. A poll by Social Security Works and Lake Research, conducted between October 31 and November 2, 2010, showed thatoverall 82% oppose cutting Social Security to reduce the deficit, 63% oppose cutting Social Security benefits, and 69% oppose raising the retirement age. If the deficit commission and the administration were really listening to the American people, they'd take social security off the table.

    The key point:
    Again and again, Americans have spoken and said that they want their leaders to focus on creating jobs and fixing the economy. The existence of the deficit commission, let alone its co-chair's proposals, reflect that few in Washington are listening.

    There are good proposals for cutting the deficit without gutting Social Security and the middle class, while further enriching the already-wealthy:

  • First, read the proposal of The Citizens’ Commission On Jobs, Deficits And America’s Economic Future
  • Our Fiscal Security, a collaborative effort of Demos, the Economic Policy Institute, and The Century Foundation released a blueprint titled, Investing in America’s Economy.
  • Deficit commission member Jan Shakowsky offered a plan of her own.
  • Commission member Andy Stern has his, called The 21st Century Plan for America’s Leadership.

  • So at least in these proposals there is a path forward following the failure of the commission.

    Is there a lesson to learn from the failure of the deficit commission? If so, it is the same lesson that can be learned by the ongoing failure of our Congress and entire political system. The corporate/conservative agenda to undermine and defund democratic government is dividing us and making us fail as a country. Which, apparently, is the plan.

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    Posted by Dave Johnson at 7:45 AM | Comments (0) | Link Cosmos