The Political Class Attack on Social Programs: The Supposed Social Security Crisis is Fictional But Obama's Debt Commission Says Benefits Need to Be Cut So That the Federal Debt Can Be Paid Off By Taxpayers Rather Than Those Responsible for the Economic Implosion (the Too-Big-to-Fail Banks, Wall Street, Corrupt Politicians and Labor Unions, and Multi-national Corporations in Collusion with Government)Prominent figures in the US ruling elite have recently made a series of statements that forewarn of massive cuts in social spending, up to and including Social Security, the bedrock federal insurance entitlement for elderly and disabled workers. These comments reveal that they will set the stage for a bipartisan assault, in the name of “fiscal responsibility,” on what remains of the social reforms of the last century. The knives are already being sharpened for a long-awaited attack on Social Security, including raising the retirement age, perhaps to as high as 70, and cutting benefits as well as cost-of-living increases. There is unanimity in the ruling class in favor of the attack on Social Security. Workers are being conditioned to accept what is referred to as “the new normal” typified by low wages and benefits and the total absence of any form of social protection. Or, in the blunter words of Fiat head Sergio Marchionne, US workers must accept a “culture of poverty,” abandoning what he contemptuously referred to as a “culture of entitlement.” The class character of the calls for “sacrifice” and “responsibility” is increasingly naked. - U.S. Ruling Class Prepares Attack on Social Security WSWS.org, September 8, 2010
The U.S. Congress plans to slash social security 'entitlements' at a time when Wall Street has destroyed the home equity and private retirement accounts of potential retirees. Worse, they plan to increase the social security tax, disguised as a “mandatory savings tax.” This added tax would be automatically withdrawn from your paycheck and deposited to a “Guaranteed Retirement Account” managed by the Social Security Administration. Since the savings would be “mandatory,” you could not withdraw your money without stiff penalties; and rather than enjoying an earlier retirement paid out of your increased savings, a later retirement date is being called for. In the meantime, your “mandatory savings” would just be fattening the investment pool of the Wall Street bankers managing the funds. And that may be what really underlies the big push to educate the public to the dangers of the federal debt. - Ellen Brown, IMF-Style Austerity Comes to America, Web of Debt, March 2, 2010
All of the TARP money given to banks did absolutely nothing to help the ordinary consumer. All it did was positively adjust the balance sheets of the "too-big-to-fail" institutions. Most banks are sitting on cash and simply not lending unless they are in an extremely favorable position. This sounds ironic because it was their unhampered lending that created the mess in the first place. Contrary to the thinking of the government economists, banks are not going to lend money, even if it rightfully belongs to the taxpayer, simply to increase the number of nonperforming loans on their balance sheets. Why aggravate the situation? Anyhow, does anyone really think that the bailouts were aimed at helping the consumer? - Fred Buzzeo, The Allure of Real Estate, Ludwig von Mises Institute, January 12, 2011
For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together. - 50 Statistics About the U.S. Economy That Are Almost Too Crazy to Believe, End of the American Dream, June 2, 2010
Around the world, the International Monetary Fund is demanding that governments slash spending and impose the burden of debt incurred in bailing out Wall Street on the working class. In the wake of the 2008 financial crisis, millions of persons around the world are experiencing unprecedented levels of economic deprivation, resulting in record numbers of home foreclosures, repossessions, and sharply escalating levels of homelessness and hunger. Huge monetary bailouts for high-flying corporate institutions have become commonplace, while draconian cutbacks are targeted at ordinary citizens. Government deficits will be reduced at the expense of workers and the poor by increasing taxes on essentials, slashing social spending, and cutting jobs, wages, benefits and pensions.
The feds are still going to collect income taxes and Social Security and Medicare taxes, but they're going to reduce our benefits, imposing austerity programs that further erode the middle and lower classes.
The Real Agenda
June 27, 2011
The economic terrorists that caused the current financial meltdown have not stopped at it and continue to threaten countries with two different tactics — austerity and the threat of a catastrophe — if their proposals are not implemented. Since Greece, Iceland, Portugal, Spain and other European countries began to show signs of economic stress, the bankers who designed the system itself have told the public — through their bureaucrat pawns — that it is their way or the highway. Literally!
Although the countries with the most to lose are located in Europe, it was George W. Bush who first rang the debt crisis alarm. Bush’s economic team warned taxpayers that a massive bailout was needed to save the financial institutions that themselves caused much — if not all — of the financial crisis.
As we now know, all of the reported and unreported bailout monies went to European bank accounts in what we know today as the bank bailout of 2008. Although Henry Paulson told the U.S. Congress and the public that there were some entities that we could not afford to let go down, the $700 + billion — actually $24 trillion — were really not used to save anyone but the bankers themselves, who now are using the bailout monies to purchase Greece, Island, Spain and Portugal for pennies on the euro.
Since neither their bailout nor their QE’s worked, they have now moved to phase 3 of their plan. That is a massive reduction in government spending that cuts all kinds of programs which mostly benefit the middle and lower classes in Europe and the United States.
While the bankers and the corporations they own loot everyone, the governments are forced — through the World Bank and the IMF — to cut spending in something they call Austerity. But the austerity only applies to the poor, not to the banks, who as I said, are acquiring infrastructure everywhere they can and paying for it with taxpayer money.
The austerity tactic has enraged millions of people who took to the street to protest and ask their governments to reject IMF austerity policies and simply abandon their membership from this and other globalist financial institutions. Instead, governments like the Greek have decided that they are not accountable to its citizens and that austerity is the way to go. As a response, the Greeks went back out to the streets. While people’s anger grows as they see their pension funds stolen, their salaries cut or frozen and the cost of life growing exponentially, the financial terrorists at the top of the banking industry have decided to once again use their last tool: Financial Terrorism.
Financial Terrorism occurs when the people who engineer the financial crisis — the bankers — in order to consolidate economic power and tighten up their grip on their monopolies, call on their customers — the governments — to pay their debts all at once. Because it is impossible for any government to pay off all its debt to the financial sharks, their institutions such as the World Bank, the IMF, the Bank of International Settlements and the Federal Reserve demand that those governments impose austerity programs that further erode the middle and lower classes and that accept new loans with higher interests in order to pay for the older loans.
If a government defies their mandate, the banks impose financial punishments on the debtor countries by increasing the interest rates on their loans and lowering their credit worthiness. That in turn makes it more difficult for the countries to be able to borrow and, as a consequence, they keep on spiraling down into the hole of poverty.
Since countries are no longer able to borrow their way out of debt, the only solution left is to sell their infrastructure — ports, roads, institutions, services, industry and so on — in order to pay for the debt. As you may have guessed it, the buyers of such assets are the banks themselves, who arrive with taxpayer cash in hand to further consolidate their dominion of the borrowing nations.
The scenario that emerges from these actions is not only more ravaged countries with worse economic and financial policies — now under the complete control of the bankers — but also larger groups of poor people, a smaller middle class and a stronger oligarchy. The difference this time around is that the bankers do not only intend to liquidate a third world nation, but the largest more developed western nations including those with the largest amounts of natural resources and military power, which of course will also become property of the bankers.
The ultimate goal the bankers intend to accomplish is to control it all — not that they already not do that. For that, they built the system we now live in. They carefully socially engineered every single aspect of our lives. The result of such engineering is the passive state in which most people live, where they do not even know anything of this sort is happening, while many others simply do not care.
Given this scenario, it is really hard to see how the bankers will have any problem executing their long awaited plan. Even as millions of people rise from their long dormant state, the majority have no idea that their future is ending today. As it happened in the past, it will take a revolution from a minority to make sure that free people remain free. It would be much easier and effective, though, if more folks broke off from their trance and gave them a hand. Although a revolution by the minority may save the majority again, only a revolution from the majority will be able to root the cancer known as the economic and financial Cartel of the Eight Families.
July 11, 2011
Michael Hudson is a highly-regarded economist. He is a Distinguished Research Professor at the University of Missouri, Kansas City, who has advised the U.S., Canadian, Mexican and Latvian governments as well as the United Nations Institute for Training and Research. He is a former Wall Street economist at Chase Manhattan Bank who also helped establish the world’s first sovereign debt fund.
- The European debt crisis is really financial warfare by the banks
- Indeed, the banks are in warfare against the rest of society
- What's going on in Greece is exactly what's going to happen in America in a couple of weeks.
- The big banks are forcing their bad debts on government
- They are also forcing governments to sell off national assets so the banks can install a "neo-feudalism":
Professor Hudson explained in 2008:
You have to realize that what they’re trying to do is to roll back the Enlightenment, roll back the moral philosophy and social values of classical political economy and its culmination in Progressive Era legislation, as well as the New Deal institutions. They’re not trying to make the economy more equal, and they’re not trying to share power. Their greed is (as Aristotle noted) infinite. So what you find to be a violation of traditional values is a re-assertion of pre-industrial, feudal values. The economy is being set back on the road to debt peonage. The Road to Serfdom is not government sponsorship of economic progress and rising living standards, it’s the dismantling of government, the dissolution of regulatory agencies, to create a new feudal-type elite.I reported last year:
Foreign Policy magazine ran an article entitled "The Next Big Thing: Neomedievalism", arguing that the power of nations is declining, and being replaced by corporations, wealthy individuals, the sovereign wealth funds of monarchs, and city-regions.As I noted in 2009, a leading progressive economist that the true purpose of the bank rescue plans is "a massive redistribution of wealth to the bank shareholders and their top executives".
As the wholly non-partisan Australian economist Steve Keen notes:
- "This is the biggest transfer of wealth in history", as the giant banks have handed their toxic debts from fraudulent activities to the countries and their people
- The big banks blew bubbles - using fraud - because that's the only way they could make obscene profits (see this for for details)
Indeed, this isn't the "Great Recession", it's the Great Bank Robbery. The big banks have pillaged and looted the rest of the world.
And it is not only Greece which is losing its sovereignty ... the big banks have turned America into a banana republic as well. Remember, the trillions in bailouts went to banks, not Main Street ... and a large percentage of the bailouts went to foreign banks (and see this). And so did most of money from the second round of quantitative easing.
Indeed, the warfare by the big banks is global.
Postscript: If this sounds like breathless class warfare against the financial sector, remember:
- Inequality largely caused the Great Depression and the current economic crisis
- The father of modern economics - Adam Smith - didn't believe that inequality should be a taboo subject
- Warren Buffet, one of America's most successful capitalists and defenders of capitalism, points out:
There's class warfare, all right, but it's my class, the rich class, that's making war ....
- Conservatives - as well as liberals - are against rampant inequality. But all Americans underestimate the amount of inequality in our country
July 20, 2011
Defying a veto threat, the Republican-controlled House voted Tuesday night to slice federal spending by $6 trillion and require a constitutional balanced budget amendment to be sent to the states in exchange for averting a threatened Aug. 2 government default.
The 234-190 vote marked the power of deeply conservative first-term Republicans, and it stood in contrast to calls at the White House and in the Senate for a late stab at bipartisanship to solve the nation's looming debt crisis.
Democrats said the measure, with its combination of cuts and spending limits, would inflict damage on millions who rely on Social Security, Medicare and other programs.
"The Republicans are trying to repeal the second half of the 20th century," said Rep. Sander Levin, D-Michigan.
Boehner played a muted role in public during the day. He did not speak on the House floor on the legislation, but issued a statement afterward saying,
It "provides President Obama with the debt limit increase he's requested while making real spending cuts now and restraining future government spending and debt that are hurting job growth."
He did not discuss what alternatives he had in mind, although the Senate's top two leaders have been at work on one that would let the president raise the debt limit without prior approval by Congress.
The "Gang of Six" briefed other senators on the group's plan after a seemingly quixotic quest that took months, drew disdain at times from the leaders of both parties and appeared near failure more than once.
It calls for deficit cuts of slightly less than $4 trillion over a decade and includes steps to slow the growth of Social Security payments, cut at least $500 billion from Medicare, Medicaid and other health programs and wring billions in savings from programs across the face of government.
It envisions tax changes that would reduce existing breaks for a number of popular items while reducing the top income bracket from the current 35 percent to 29 percent or less.
The tax overhaul "must be estimated to provide $1 trillion in additional revenue to meet plan targets," according to a summary that circulated in the Capitol.
Some Republicans noted a claim contained in the summary that congressional bookkeeping rules could actually consider the plan a tax cut of $1.5 trillion. That credits sponsors for retaining income tax cuts enacted at all income levels when George W. Bush was president.
The group of six includes three Democrats, Sens. Kent Conrad of North Dakota, Mark Warner of Virginia and Dick Durbin of Illinois, a member of the leadership. The three Republicans, all conservatives, are Sens. Mike Crapo of Idaho, Tom Coburn of Oklahoma and Saxby Chambliss of Georgia, who has a particularly close relationship with Boehner dating to their days together in the House.
In recommending higher government revenues, Republicans in the group challenged party orthodoxy that has held sway for two decades, ever since President George H.W. Bush memorably broke his "no new taxes" pledge to make a deficit reduction deal with congressional Democrats.
In the years since, refusal to raise taxes has become a virtually inviolable article of faith among Republicans, and used by them and their allies in countless political campaigns against Democrats.
Recently, Republicans who voted to repeal a tax subsidy for ethanol production drew criticism from Grover Norquist, a prominent anti-tax activist, for not applying the savings to deficit reduction.
Even so, in the hours after the Gang of Six briefed other lawmakers on their plan, at least one member of the Republican Senate leadership, Lamar Alexander of Tennessee, signed on as a supporter. So, too, did Sen. Kay Bailey Hutchison of Texas.
"We have an opportunity to act like statesmen and avoid a debacle on Aug. 2, and it seems to me that all of our efforts should be focused on that," added Sen. Roger Wicker, R-Miss.
He and others said the plan was well-received at a weekly closed-door meeting of GOP senators.
Obama stopped well short of endorsing the plan, saying administration officials were analyzing it and not all details were known. But he said it included "a revenue component" along with savings in Medicare and Social Security, making it the sort of balanced approach he has long advocated.
He also noted that the Senate's two top leaders have been cooperating on a measure that would allow him to raise the debt limit without a prior vote of Congress while also setting up a special committee to recommend cuts from federal programs, including Social Security and Medicare.
"That continues to be a necessary approach to put forward. In the event that we don't get an agreement, at minimum, we've got to raise the debt ceiling," he said.
Low-income people on Medicaid wouldn't escape totally, either. If a deal ultimately leads to overhauling taxes, workers and their families could be on the hook also, facing potential limits on the tax-free status of job-based health insurance.
Health care is a main ingredient on both the spending and tax sides of the elusive agreement that Obama and Boehner, R-Ohio, are trying to reach.
The president has scheduled a meeting Sunday with congressional leaders to keep pushing for a compromise that would reduce future deficits in exchange for lifting the $14.3 trillion cap on the national debt. Action is needed so the government can keep paying its bills beyond Aug. 2.
No decisions have been made. With Congress politically polarized and skittish about next year's elections, it's unclear whether there's any combination of Democratic and Republican votes to pass major deficit reduction that cuts benefit programs and raises revenue.
"This is a Rubik's cube that we haven't quite worked out yet," Boehner said.But many of the health care options that negotiators are considering have been available for months. Proposals have come from the Obama administration, congressional advisers and bipartisan groups, such as Obama's debt commission. For Medicare, possibilities include higher premiums for upper-income retirees and new copayments and deductibles that affect all but the poor. For example, seniors do not currently face a copayment for home care. That might change if there's a deal.
"It's difficult to imagine a $4 trillion-plus budget package that doesn't include significant measures affecting beneficiaries," said economist Robert Reischauer, one of two public trustees who help oversee Medicare and Social Security finances.Obama's health care law already cut about $500 billion from projected payments to providers, and some experts say there's not much fat left there.
"It might mean more individual responsibility or a restriction of choices," said Sen. Mark Warner, D-Va., a member of a small bipartisan group that has been dealing with spending and taxes. An across-the-board increase in monthly premiums seems unlikely, Warner noted.Still, the bigger a deficit-reduction deal, the more likely it is that older people will take a hit.
"We are particularly concerned that a broader deal could include cuts to Social Security benefits and higher costs for people in Medicare," said David Certner, AARP's legislative director.Although Social Security previously had been considered untouchable, one measure under discussion would bring in close to $200 billion through a tweak that reduces benefits and increases the amount collected from payroll taxes.
A major proposal that would affect Medicare beneficiaries calls for changing the current cost-sharing rules, a hodgepodge of varying copayments and deductibles.
Older people would have to shoulder more of the expense of routine care. Under one version of the proposal, all but the poor would have to pay at least $550 of their annual medical bills.
The idea is to make people think twice before they schedule that test or exam that probably doesn't add a whole lot of information to what a doctor already knows.
But they would get a new benefit from the change. For the first time, Medicare would have an annual limit on out-of-pocket spending, protection against a catastrophic illness.
Further cuts to providers, including drug companies, hospitals, home health agencies and nursing homes also are possible. One proposal calls for seeking billions in rebates from drug companies for medications used by 9 million people covered under both Medicare and Medicaid.
Advocates for the poor are concerned about possible cuts to Medicaid, a federal-state partnership that covers low-income children and parents, the disabled, and many nursing home residents. The administration has proposed replacing an assortment of formulas for the federal share of the program with a single rate for each state. Officials say that could save $50 billion to $100 billion over 10 years, much of it from reduced administrative costs.
Governors are highly suspicious. They see a cut lurking behind the technicalities. Most of the governors believe the rate talk is budget-speak for dramatic cuts, said Washington state Gov. Christine Gregoire, a Democrat who heads the National Governors Association.
Still to be fleshed out is how a debt deal would affect the tax deductibility of job-based health care for workers and their families. The details might be left for Congress to work out later.
So far, Democratic lawmakers don't see much that they can support from the information dribbling out of the budget negotiations.
The explosion in federal debt was caused by the recession, the George W. Bush-era tax cuts, and the wars in Iraq and Afghanistan, not by seniors or low-income Medicaid recipients, said Rep. Xavier Becerra, D-Calif.
"I would not vote for something like that," Becerra said of what he's heard so far. "At this stage, unless we learn otherwise, House Democrats are pretty clear we should not balance the deficit on the backs of seniors, Medicare, Social Security and Medicaid."
April 13, 2011
Last December, the bipartisan debt reduction commission that President Obama created put out a series of recommendations supported by a majority of its members.
But, to date, those proposals, which would slash $4 trillion from projected deficits between now and 2020, have not been openly embraced by the president himself.
The White House said that Obama will "borrow" from the commission's proposals on Wednesday when he gives what may be a landmark speech on fiscal policy.
The Obama debt commission's final report was approved by 11 of the 18 commission members on an unexpectedly strong bipartisan basis.
Even those who voted for the plan, however, stressed there were parts of it that gave them "heartburn." But they voted for it anyway because they saw it as pushing the national conversation in the right direction.
Overall, the commission's plan would reduce the country's debt held by the public to 40% of the overall economy by 2035, down from the 185% currently projected.
Here's a look at the report's topline recommendations for getting there:
Set targets: The report recommends that spending ultimately not exceed 21% of gross domestic product. It would also cap 2012 spending at 2010 levels, cut it 1% from there between 2013 and 2015 and then limit growth to inflation.
Rein in spending: The report proposes close to $200 billion in domestic and defense spending cuts in 2015. That's a key way it would meet Obama's goal of working the annual deficit down to 3% of GDP by 2015. In fact, the final report would do one better, getting the deficit to less than 2.5%.
Control health care costs: The report recommends capping growth in total federal health spending -- everything from Medicare to health insurance subsidies -- to the rate of economic growth plus 1% after 2020.
It also proposes reforming physician payments, Medicare enrollee cost-sharing, malpractice law and prescription drug costs.
Set targets: The report recommends that taxes be capped at 21% of gross domestic product.
Reform tax code: The report would lower income tax rates and simplify the tax code by significantly reducing or eliminating the hundreds of tax breaks in the federal code that reduce federal revenue intake by more than $1 trillion a year. It would abolish the Alternative Minimum Tax -- the so-called wealth tax. And it would tax capital gains and dividends as ordinary income.
Raise gas tax: The report would raise the federal gas tax by 15 cents a gallon starting in 2013. It would dedicate the extra revenue to fund transportation and limit spending on projects to whatever has been collected by the increased tax that year.
The report aims to make Social Security solvent over 75 years.
Benefits: It would reduce initial benefits for high and medium-income retirees. And it would offer less generous annual cost-of-living adjustments for all retirees.
Retirement age: The plan would slowly usher in an increase in the retirement age from 67 to 68 by 2050 and to 69 by 2075. Over the same period, the early retirement age would increase gradually from 62 to 64. There would, however, those who are unable to work past age 62 would be offered "hardship exemptions."
Payroll tax: The report also recommends expanding over 40 years the amount of workers' income subject to the payroll tax, which funds Social Security. As a result, the amount of one's earnings subject to the payroll tax would rise to $190,000 in 2020, about $22,000 higher than it would be under current law.
Protection against poverty: To prevent seniors from falling into poverty -- a key mission of the Social Security program -- the report proposes creating a new special minimum benefit.
For low-income workers with 30 years of earnings, benefits could never fall below 125% of the poverty line in 2017, a level that would be indexed to wages thereafter. The formula would be reduced for workers with less than 30 years of earnings but more than 10.
In addition, to reduce the risk that beneficiaries run out of funds if they live to a very old age or are disabled for a long time, the report proposes a "20-year benefit bump-up." After 20 years of collecting benefits, a beneficiary would receive a benefit increase equal to 5% of the average benefit paid.
The earliest any of the recommended spending measures would take effect would be in 2012. And no tax change would begin before 2013 -- a nod to concerns that the economic recovery is still too weak to withstand any sort of belt-tightening.
"Budget cuts should start gradually so they don't interfere with the ongoing economic recovery," the report said. "Growth is essential to restoring fiscal strength and balance."
December 1, 2010
In a 59-page report released today entitled "The Moment of Truth," President Obama's federal-deficit commission outlined a sweeping plan to cut costs in an effort to nurse the country's ailing economy back to fiscal health.
The president had tasked commission co-chairmen Erskine Bowles and Alan Simpson with devising a plan to reduce the deficits and redirect the country from its "unsustainable" fiscal path. The end result is a wide-ranging and controversial report that its supporters touted as a good start to a tough problem.
But the plan may go nowhere because it needs the support of 14 of 18 panel members to get passed on to Congress.
"Our challenge is clear and inescapable: America cannot be great if we go broke," Bowles and Simpson said in the report from the National Commission on Fiscal Responsibility and Reform.
After the country racked up a $1.3 trillion budget deficit last year and saw the national debt soar to $13.8 trillion, both Republicans and Democrats agreed that something had to be done; although there is widespread disagreement on what precisely that is.
To dig the country out of debt, the plan put forth by the panel today calls for drastic changes such as raising the Social Security retirement age, making cuts to Medicare and doubling the federal gas tax. It made only minor changes to the earlier draft released by Bowles and Simpson last month.
The plan, according to the panel, would achieve nearly $4 trillion in deficit reduction through 2020, more than any effort in the nation's history; reduce the deficit to 2.3 percent of Gross Domestic Product (GDP) by 2015; sharply reduce tax rates, abolish the Alternative Minimum Tax and cut backdoor spending in the tax code; cap revenue at 21 percent of GDP and get spending below 22 percent and eventually to 21 percent; ensure lasting Social Security solvency, prevent the projected 22 percent cuts to come in 2037, reduce elderly poverty and distribute the burden fairly; and stabilize debt by 2014, reducing it to 60 percent of GDP by 2023 and 40 percent by 2035.
"The era of debt denial and the denial of its consequences is over," Bowles said. "We have started an adult conversation that will dominate the debate until the elected leadership in Washington does something real."
Deficit Plan Unlikely to Reach Congress
Just how divisive that debate could be is highlighted by the fact that one panelist -- Rep. Jan Schakowsky, D-Ill., -- wasted no time in voicing her opposition to the report. Schakowsky said her opposition to the plan stems partly from her belief that Social Security is not a problem connected to the deficit.
A slew of other panelists, including the Senate's No. 2 Democrat, Dick Durbin of Illinois, and the top Republican on the House Budget Committee, Paul Ryan of Wisconsin, have yet to state how they will vote.
But the panel's plan did secure the support of two key senators: Kent Conrad of North Dakota and Judd Gregg of New Hampshire, the Democratic chairman and top Republican on the Senate Budget Committee, respectively.
"I think this commission has already been a success because it has put front and center before the American people how big this problem really is," Conrad said.
"Is there 14 votes? I don't know, but I will vote for it," Gregg said.
The key vote will come Friday but some analysts think it is a foregone conclusion that the report will fail to garner the 14 votes it needs.
"It is becoming increasingly clear that the Bowles-Simpson plan will not receive the required 14 votes to send the report to the president and Congress," said John Irons, research and policy director of the Economic Policy Institute, a think-tank in Washington.
"The rejection of the proposal should not be seen as a failure to take deficit reduction seriously, but rather that the policy approach adopted by the co-chairs is flawed. Most fundamentally, the report fails to fully acknowledge the current economic crisis. ...Despite paying lip-service to a payroll tax holiday, the plan includes no concrete, immediate action to create jobs or to spur economic growth in the near term."
July 19, 2010
President Obama has put together this commission that is going to take a look at the federal deficit and then make recommendations.
One of the things this commission will be looking to do is to attack America's Social Security program as too expensive. President Obama has already stacked the commission with leadership that has come out against present social security benefits.
But is the social security system in trouble?
According to economist Dean Baker in an interview on Democracy Now the supposed social security crisis is fictional.
"....Just to be very clear, absolutely nothing needs to be done. If we look at the projections from either the Congressional Budget Office or the Social Security trustees—they’ve yet to come out with their new ones, but in any case, the one from last year—the program could pay all scheduled benefits well into the future, at least twenty-seven years into the future. And even after that, it could still pay the vast majority of benefits, assuming nothing is ever done. Now, somewhere down the road, we’ll probably make changes in the program as we’ve done in the past. But the idea that somehow something has to be done anywhere soon, this is crazy....." (source: Democracy Now)Still this commission, put together by Obama, will come out and say that Social Security Benefits need to be cut. They will make recommendations for the raising of the age at which benefits can be accessed.
How do I know this?
Well at the recent G-8/G-20 meeting it was decided that the industrialized world was going to cut social programs to pay for the bailout of the rich. They also decided that the elite financial class was to escape any penalty for bringing about the disaster. Instead the working and non-working people around the world were going to have to pay, according to the political puppets in Toronto.
Already this attack on social programs is occurring right now in Britain and other European countries.
Obama, like the Presidents before him, create smokescreen commissions to pretend that they are somehow looking at real alternatives to problems. In the end, it is nothing but a sick joke; and in the case of social security, it is being played on the sick and the aged.
Dean Baker offers his insight on the Obama commission.
"....Well, a commission is very, very worrisome. It’s chaired, you know President Obama picked Alan Simpson, former senator from Wyoming, who’s made a career out of beating up on old people—he thinks it’s cute. I don’t know if he’s delusional or what, but he talks about how old people drive into their gated communities in their Lexuses. Maybe his friends do. We have the data. Very few others do.But the commission was not meant to be balanced and the conclusions are already known.
And then the Democratic co-chair was Erskine Bowles, who’s getting—he’s a Wall Street guy. He gets over $300,000 a year as a director of Morgan Stanley, a firm that should be famous to everyone, because it would be out of business without the taxpayers’ support. And he, right off the bat, said, "Well, we’re going to have to cut Social Security."
So, President Obama’s two lead appointees, his co-chairs, are both on record saying they want to cut Social Security. This should have people very, very worried. That isn’t a balanced commission...." (source)
President Obama has emerged as an even worse nightmare than George W. Bush. At least Bush could no longer fool the American people. Obama still has his progressive and liberal supporters as he implements the same corporatist, neocon Bush agenda. But that support is drying up and for good reason.
February 23, 2010
Can the largest debtor nation in the history of mankind remain immune from the type of austerity measures imposed on less prominent borrowers by the International Monetary Fund (IMF)? Americans will learn the answer to this question before the year is out.
On February 18th, President Obama made good on his 2010 State of the Union speech pledge to create by executive order a “National Commission on Fiscal Responsibility and Reform.” The Commission is required to present its recommendations for improving the solvency of the United States government by “no later than December 1, 2010.”
2011 UPDATE: Review report here.That is a drop dead date worth noting. If what the commission is plotting is not exposed and blocked, Americans and residents of the United States who have not taken financial counter measures before that date could suffer the full consequences of the work-out plan being concocted to allow the federal government “to balance the budget, excluding interest payments on the debt, by 2015.”
All options on the table
In a giddy interview with the federal government's official propaganda organ on the day of the commission's creation, co-chairmen of the commission, former Clinton Chief of Staff Erskin Bowles and former Senator Alan Simpson (R-WY), spoke frankly. Responding to the first question of whether the retirement age would be increased for social security benefits, Bowles was blunt,
“Everything is on the table.”
Simpson was equally dramatic in addressing the naysayers who suggest his task is a suicide mission,
“There are a lot of bitchers and whiners and snorters out there and we intend to listen to them all and then crush them.”
As the three participants in the staged interview chuckled, Simpson clarified himself,
“I didn't mean that. Must have been a sick thing...”
A better admission of the kind of mind entrusted with resolving our looming sovereign debt default is hard to find. Yet, Simpson attempted to out do himself just a few days later in an interview with Alan Hunt on Bloomberg News. Cutting off Hunt who offered that,
“Voters would have some sense of the panel’s proposals before the November midterm elections...”Simpson interjected,
“We don’t dare put out a report before Election Day or it’ll be total cremation and we’ll have to move to the top of Mount Somewhere -- Erskine and I -- somewhere living up there like hermits.”
Translation: The arrogant plotters behind this commission have no intention of allowing Americans to know where their representatives stand on the pending austerity measures before they go to the polls. But, as the executive order also dissolves the commission thirty days after it delivers its recommendations, there is a clear intent to have a vote on the pending austerity measures occur during a lame duck session of Congress. This possibility is substantiated by the fact that the original bill in the Senate (S. 2853), which this commission is patterned off of, called for the recommendations to be made no earlier than November 3rd (the day after election day) and that a vote on them would be taken no later than December 23rd.
Though a commission formed by a presidential executive order cannot legally force Congress to vote on its recommendations, Mr. Simpson may have been reminiscing over the do as we say or else crime boss tactics used to force Congress to approve the TARP bill and AIG bailout less than 18 months ago.
Getting down to business, here is the short list of austerity measures co-chairmen Simpson and Bolwes and their backers expect to have on their table:
- Extend the retirement age for social security benefits.
- Cut Medicaid and Medicare services and reimbursements.
- Institute a valued added tax (VAT) - a national tax applied to every economic transaction in the country.
- Require all wage earners to deposit a minimum of 2% of their pay into mandatory savings accounts. (slide 27)
- Require a percentage of the funds in IRA's, 401K and new mandatory savings accounts to be held in US Treasuries. (As the smart money bails on US Treasury auctions, Americans will be forced to buy their own toxic debt.)
There is nothing in this list that hasn't been required of hapless marks in other countries that have found themselves on the hook to the credit syndicates running the IMF and The Bank of International Settlements (BIS). The syndicates already own the U.S. Senate. It is not a stretch to imagine that they are working on their end game — the takeover of the rest of our country that they don't already control.
If you're not at the table, you're on the table
But, it doesn't have to be this way. Americans who value their independence need to start organizing now to come up with a competing action plan. We need to be sitting at our own table with our own list of options. Here are the first two suggestions for our list:
- Rather than creating a commission to plot what IMF styled austerity measures Americans are going to be shaken down for, we should demand investigations and trials for the many racketeers who have been operating with impunity within our financial system. (The only reason these people are not already in jail is that they make the laws.) Those convicted, and the organizations they operate out of, should face asset forfeitures of their racketeering gains. These could be put towards paying down the morally legitimate portions of our national debt.
- All current members of Congress should be required to sign a legally binding pledge refusing to vote on any recommendations for fiscal reform during this year's lame duck session. The many needed fixes for our budget crisis need to be debated in the open during a regular session of Congress.
It's time to turn the tables on the accomplices aiding and abetting those who seek to extinguish our freedoms. It won't be easy. But, the alternative is worth avoiding with all of our strength.
Sidebar: It's not coincidental that one of the co-chairs of the commission, Erskin Bowles comes from an investment banking family in the state that is home to the country's second largest banking center. Bowles, who recently announced he is stepping down from his sinecure position as the president of the University of North Carolina, also sits on the board of directors of Morgan Stanley. The commission's connections to the same banking syndicate insiders that have fed off our central government since at least 1913, does not end with Bowles.
September 8, 2010
Prominent figures in the US ruling elite have recently made a series of statements that forewarn of massive cuts in social spending, up to and including Social Security, the bedrock federal insurance entitlement for elderly and disabled workers.
These comments reveal that, whatever the precise outcome of the midterm elections on November 7, they will set the stage for a bipartisan assault, in the name of “fiscal responsibility,” on what remains of the social reforms of the last century.
The knives are already being sharpened for a long-awaited attack on Social Security. In a rude and provocative e-mail to the president of the Older Women’s League dated August 23, former Republican Senator Alan Simpson—appointed by President Obama as co-chair of the National Commission on Fiscal Responsibility and Reform—revealed his deep hatred of both Social Security and the working people who depend upon it.
Social Security “has reached a point now where it’s like a milk cow with 310 million tits! [sic],” Simpson said. He blasted its recipients—retirees, those maimed and sickened by their work, and dependent survivors of dead workers—who, he said “milk it to the last degree.”
In an earlier outburst—in June, Simpson was caught on tape berating an independent journalist— he revealed the ruthless logic behind the ruling class drive for cuts:
Workers, whom Simpson dubbed “the lesser people,” live too long. When Social Security was created “they never dreamed that the life expectancy would go from 57 years of age to 78 or 75 or whatever,” Simpson said. “Who would dream that? No one. They just died.”
Simpson’s commission, established earlier this year by an Obama executive order to rein in budget deficits, is reportedly considering several measures, including raising the retirement age, perhaps to as high as 70, and cutting benefits as well as cost-of-living increases. It is expected to announce its recommendations in December—not accidentally, one month after the November elections.
There is unanimity in the ruling class in favor of the attack on Social Security. Co-chairing the Fiscal Responsibility commission is Erskine Bowles, formerly a White House chief of staff to Bill Clinton, and another long-time advocate of Social Security “reform.” And signaling the trade union bureaucracy’s active collaboration, Andy Stern, former president of the Service Employees International Union (SEIU), also sits on the commission.
“I agree with many Commissioners who have said that all entitlement programs should be on the table,” Stern has declared. “We should include as part of our agenda ideas for strengthening the private parts of the retirement security system, reviewing both the adequacy and the solvency of the Social Security system, and the possibility of universal add-on retirement accounts.”
Deepening the fiscal attack on the working class in the US, Europe and internationally was also the primary topic for discussion at the Ambrosetti Forum held last week on the shores of Italy’s elite Lake Como. Attended by political figures such as Spain’s José María Aznar, Italy’s Prime Minister Silvio Berlusconi, Henry Kissinger from the US and Israeli President Shimon Peres, as well as numerous European Union functionaries, top bankers, businessmen and academicians, the forum provides a sounding board for policies that few politicians would dare identify themselves with in public.
In one session, Hans-Werner Sinn of the University of Munich declared that Americans will “just have to go down in their living standards after years in which their living standards soared in part based on foreign credit which is no longer there.” And Jacob Frenkel, chairman of JP Morgan Chase International “urged the United States to rein in entitlements as part of a ‘political deal’ that recognizes reality,” according to an Associated Press account of the conference. JP Morgan has received tens of billions in loans, debt buy-downs, and direct cash infusions from the federal government.
The attack on entitlements and social spending is the second phase in a broad offensive against the living conditions of the entire working class, following quickly on the heels of the unprecedented attack on jobs and wages spearheaded by the Obama administration’s forced reorganization of the auto industry.
Workers are being conditioned to accept what is referred to as “the new normal” typified by low wages and benefits and the total absence of any form of social protection. Or, in the blunter words of Fiat head Sergio Marchionne,
US workers must accept a “culture of poverty,” abandoning what he contemptuously referred to as a “culture of entitlement.”
The class character of the calls for “sacrifice” and “responsibility” is increasingly naked. Even as Washington prepares for drastic cuts to Social Security and all manner of social spending, Congress appears likely to extend or make permanent the Bush-era tax cuts for the extremely wealthy, which have cost the federal government trillions of dollars.