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:
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 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 on 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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Does Mr. Johnson know that an average couple retiring last year paid nearly $600,000 in Social ecurity taxes (source the Urban Institute which is a liberal think tank). That sum is more than 3 times their personal savings.
(This doesn't reflect the current cost of the system because people retiring in 2011 had maybe 20 years of low-cost Social Security before the 1983 reform.)
The Supreme Court disagrees with this statement. In Flemming V Nestor, the people who get paid to determine what laws mean said that Congress can reduce your benefits to zero. There is no earned interest in Social Security as those of us born after 1960 found out in 1983 when our benefits were cut.
The system has a 20.5 trillion dollar shortfall, and that assumes that future generations will pay more to get even less.
Social Security is a jobs tax - it kills jobs which would create income taxes with which to control the debt. It also studies have shown that tax evasion is directly correlated to marginal tax rates. Increase the taxes for Social Security, and you will create evasion for income taxes.
The illusion that Social Security doesn't add to the debt is shown in the idea that we can raise taxes for Social Security with higher wage caps. If we raise taxes, those taxes could just as well be raised in the form of income taxes to control the debt.
Please provide credible links to support your claims that Social Security adds to the deficit. Don't bother to include the costs to the Federal government for borrowing from the Social Security Trust Fund. The Federal government has to honor all its debts. If it couldn't borrow from the Trust Fund, it would be borrowing more from China.
I am not asking you to sacrifice anything. I agree it is a disgrace that people like you (and me) have worked hard all our lives only to be confronted with the chilling possibility that we are not going to get that we have been promised.
My point about taxes is that even if they are raised considerably on the 1% the Government is so awash in debt and the deficit is so large that I am concerned we will not get what we are due.
While politicians and talking heads wish to make us believe that taxing the 1% more will solve all problems that is not the case and the sooner we realize this and start making tough decisions the better
People better wake up fast because this election is right around the corner. While everyone is watching these fake ads about how "you didn't build that", the right wing elitists are planning to destroy your old age, your wage base and the future for your kids. This is not a joke.
http://bluecravat.blogspot.com/2012/04/buffetobama-tax-deficit-problem-solved.html
The middle classes subsidize globalization and the low wages.
Slight problem. The US is bankrupt at almost all levels of government. Other than that everything is fine
everybody else, well learn to live on nothing and be happy about it, that doesn't seem at all fine to me....
What changed?
Tax cuts for the rich and huge military spending increases is what changed. Plus the payouts for unemployment, food stamps, etc. - the result of deregulation, cuts in government. We can fix that with a big infrastructure project that will pay for itself from the improvements in competitiveness. Plus a huge project to retrofit all our homes and buildings to be energy efficient...