Next weekend will feature another milestone in the drive to cut Social Security and Medicare. The organization America Speaks will be hosting a series of 20 meetings in cities across the country. They will ask the people at these meetings, a cross section of the nation, to come up with proposals for dealing with the country's projected long-term budget deficit.
The way the problem is outlined for these meetings virtually guarantees that most of the participants will opt for big cuts to Social Security and Medicare. The results of this song-and-dance exercise will then be presented to President Obama's fiscal responsibility commission on June 30th, which will use it as further ammunition for plans by its co-chairs to gut these programs.
The rigged deck approach should come as no surprise. America Speaks is largely funded by Peter G. Peterson, the investment banker billionaire who has been on a decades long crusade to gut these programs. In recent years, Peterson has redoubled his efforts, committing more than a billion dollars to a wide variety of groups in addition to America Speaks. To advance his agenda Peterson has even set up a fake news service, the Fiscal Times. To fill the staff, Peterson's son hired a number of reputable reporters who were displaced by the collapse of the newspaper industry.
Federal Budget 101, the guidebook for the discussion, follows a predictably shoddy path. The book discusses the budget in almost complete isolation from any larger discussion of the economy. There is virtually no discussion of the ways in which the budget fosters growth, for example by funding education, research and infrastructure; nor the way in which the pattern of growth affects the budget.
For example, the booklet never discusses the extent to which the economic mismanagement that allowed the unchecked growth of an $8 trillion housing bubble contributed to the debt that is its central concern. The downturn caused by the resulting economic collapse will eventually add more than $3 trillion to the country's debt, according to the Congressional Budget Office's projections.
The booklet also neglects to point out the extent to which the long-term budget disaster story is driven by our broken health care system. If per person health care costs in the United States were the same as in any other wealthy country, we would be looking at enormous budget surpluses in the long-term, not deficits.
Incredibly, the booklet does not even point out the fact that income is projected to grow over time. The average hourly wage is projected to buy 20 percent more in 2025 (the year for which participants are supposed to design a budget) than it does today.
This knowledge might affect how people view things like tax increases. For example, if we know that people will be on average 20 percent richer, we might be less concerned if their tax rate were to rise by 1-2 percentage points.
The booklet also never mentions the plunge in wealth that older workers have suffered as a result of the collapse of the housing bubble and plunge in the stock market. This has left the bulk of near retirees (those in their late 40s and 50s) facing retirement with almost nothing other than their Social Security and Medicare.
The booklet even gets its basic economics wrong, warning participants at the very beginning that rising deficits can lead to a weaker dollar. In the real econ 101, students learn just the opposite -- that budget deficits can jack up interest rates leading to a stronger dollar. This is how a budget deficit can be tied to a trade deficit -- by raising the value of the dollar. A higher dollar makes U.S. exports more expensive to foreigners and imports cheaper for people living in the United States.
People who want to see our trade deficit fall want a lower dollar. Getting the value of the dollar down (not up) is an argument that more serious people would give for a smaller budget deficit. Peterson should have been able to get a better product for his millions.
Finally, it is striking that not a single person connected with this project was among those who warned of the housing bubble before its collapse wrecked the economy. Ostensibly, America Speaks tried to include a diverse range of economists and policy analysts. Yet, in the category of people who recognized the biggest economic disaster of the last 80 years, America Speaks came up completely empty.
To put this in perspective, suppose Peter Peterson had funded this exercise back in 2004, when the housing bubble was already huge, but still at a point where it could have been deflated without devastating the economy. This group would have given us a great discussion of the 2020 deficit, but said nothing about the tsunami that was about to wreck the economy (and send the deficit skyrocketing).
Unfortunately, there is no reason to assume that the America Speaks crew's understanding of the economy is any better today than it was in 2004. We need more serious analysis than this propaganda exercise as a basis for deciding the fate of essential programs like Social Security and Medicare.
Obama: a vacuous opportunist, a good performer, a con artist with an empty rhetoric of hope and change
"I?ve never been an Obama supporter. I?ve known him since the very beginning of his political career, which was his campaign for the seat in my state senate district in Chicago. He struck me then as a vacuous opportunist, a good performer with an ear for how to make white liberals like him. I argued at the time that his fundamental political center of gravity, beneath an empty rhetoric of hope and change and new directions, is neoliberal…"
Obama "IS" successful. He "IS the most powerful man in the world and he DID make "white liberals" like him, after all, he did get 70% of the white vote? You speak of Obama in the past tense. He does not "want" to succeed in the areas you describe, "he HAS succeeded"! And he HAS done more for the Americans than any politician in decades.
We need to change our definition of success from private enrichment to public service. How about envying--and praising--the rich man who is a philanthropist rather than he who lives in a mansion, and drives a new Mercedes every year?
The game's the same; it's just that the goalposts will be moved.
http://farm.ewg.org/
The war munitions industries, Wall Street, the mendacious politicians & media moguls who support the elites (or are outright oligarchs themselves, unabashedly) are draining the American people of their resources. The middle class is in the process of being dismantled, intentionally. Dean Baker is correct on every point he makes.
The oligarchs would rather we waste our precious resources on domestic policies such as bailing out banks, but not schools or fighting these long wars against Muslim nations, rather than providing for decent health care for the American people. The oligarchs are enriching themselves & their children's children with the positioning of many of these families for transfer of intergenerational wealth out of the hands of the middle class, forever.
Our ancestors founded this nation, in part to get out from under the onus of control of wealth by the aristocracy. It's ironic that we find ourselves today, in the midst of the creation of a somewhat similar framework for society that won't bode anything but ill for most of our descendants.
...what you mean is that if we trust your predictions for 15 years from now, then we will be more willing to accept increased taxes instead of cuts to spending.
Please, please keep that attitude through November. Your kind deserves to lose.
If we would quit committing our government to an ever increasing percentage of life's expenses, then we'd have plenty of money for non entitlement spending.
They don't WANT to pay back the IOU's, then they won't have money for the wars!!!!!!!!!!!!!!!!!
start letting peterson et al frame it that way and before you know it, they'll have you thinking you aren't entitled to what you pay for.
I sat next to a Fauxaholic who spouted every right wing talking point, and there was another far right winger at my table, but they were largely unpersuasive.
If the right wing hopes to win with this forum, they are going to have to change the materials they hand out or lie about the results.