The country is still celebrating the inability of the supercommittee to cut Social Security and Medicare, but it is important to move on from this victory to retake control of the political debate from the One Percent. As it stands, the One Percent are insisting that the country genuflect over the non-problem of the budget deficit, at a time when tens of millions of workers are unemployed or underemployed, millions of people are facing the loss of their homes and tens of millions of baby boomers are approaching retirement with little other than their Social Security to support them.
The deficit is the agenda of the One Percent. There is no reason that the rest of us should be concerned about budget deficits when the rest of the country is struggling with the economic disaster created by the greed and incompetence of the One Percent.
This is not a statement of morality; it is a statement based on economic reality. Budget deficits can be a problem when an economy is near full employment and the deficit can be pulling resources away from private investment, thereby slowing growth. However, it is not a problem with large numbers of unemployed workers and vast amounts of excess capacity.
This is what the financial markets are telling us every day as interest rates on long-term government bonds hover near 2.0 percent. If deficits were really crimping the economy, we would be seeing interest rates of 6 or 7 percent, or even higher. The deficit hawks do not have an economic case to support their argument, just money and influence.
In the longer term, the deficit hawks can point to projections of outsized deficits, which they invariably attribute to Social Security and Medicare. The first part of this story is completely untrue.
Under the law, Social Security is financed from its designated tax. It, therefore, cannot contribute to the deficit unless Congress changes the law. (The payroll tax credit in 2011, which was replaced with general revenue, is an exception to this rule.)
According to the most recent projections from the Congressional Budget Office, Social Security benefits will be fully funded through the year 2038. After that date, if Congress does nothing to increase revenue, then the program would pay a bit more than 80 percent of scheduled benefits. (This would still be about 10 percent more than current retirees receive since benefits are projected to rise by approximately 1 percent a year.)
The real story of the soaring long-term deficits is exploding Medicare costs, which are in turn driven by our broken health care system. We already pay more than twice as much per person for our health care as the average for other wealthy countries, with little to show in the way of outcomes. This gap is projected to continue to grow in the years ahead.
To anyone who looks at the facts, the obvious answer to our deficit problem is fixing the health care system. This is difficult to do given the enormous political power of the pharmaceutical industry, the insurance industry, highly paid medical specialists, and the other members of the One Percent who profit from the waste in the system as it exists now.
If we can't immediately change the system, then why not take advantage of the gains from trade? If we change rules to make it possible for Medicare beneficiaries to buy into the health care systems in other countries or make it easier for patients to have medical procedures done at far lower cost elsewhere, it should be an enormous win-win, offering gains that could be in the trillions of dollars. And what free-market fundamentalist can argue against the principle of giving people a choice?
In fact, conservatives and self-described free traders run screaming from the idea of opening medical care to trade. They want trade that will lower the wages of auto workers and textile workers by putting them in direct competition with low-paid workers in the developing world; they hate trade when it threatens to reduce the income of the pharmaceutical industry, the insurance industry, and others in the One Percent.
It's time to expose the lies for what they are. The One Percent have rigged the deck over the last three decades to accomplish the most massive upward redistribution in the history of the world. These are not people who care about budget deficits or free trade or free markets. They care about making themselves richer at the expense of everyone else.
They have been fighting this class war for 30 years. It is long past time that the rest of us started fighting back.
Follow Dean Baker on Twitter: www.twitter.com/DeanBaker13
Unfortunately, it isn't that simple. The liberals and the Democrats and the pro-left lobbyists are just as guilty.
Congress people aren't getting under the table money from lobbyists. The real power now lies with special interest groups. Lobbyists don't lobby politicians. They lobby the special interest groups who own the politicians.
To get elected all politicians have to align themselves with specific groups. Politicians need these groups to endorse them, support them, volunteer to campaign for them. And in return they support these groups.
How does a drug company get a special loophole into a bill? Do they get a lobbyist to bribe a majority of politicians to vote for it? No. The lobbyists go to the cancer society and offer them free meds in return for support. They line up the AMA and AARP and anyone with a stake or maybe not. Phizer can simply offer the Sierra Club a tax deductable donation of an unlimited amount to support that loophole. Then these groups call their politicians and tell them to support that amendment. If you are a goodie 2 shoes politician who would never take a bribe and just want to save the polar bears, you'll still vote the way your special interest asks you to vote.
Hooray!!! So gald that you said this, Dean, and that it got published. Many of us have been saying this for a long time, but no one seems to listen to us.
We all should fight back to save our country and our heritage.
Oh, they're a tricky lot, the are. Yet, this is just the same shell game, bot on a global scale. Which cup is the nut under this time? It's always under their palm.
They realized the more money they had, they could lend out 10x's as much. So, they put a barrel of gold out fron with a guard. It made people rush to save their money there. Looking at all that gold! How safe they must be. How rich and powerful, how secure they felt.
Meantime, the barrel was filled with rocks. Only the top few inches was gold. Welcome to the Wild, Wild West!
While I agree with most of what Mr. Baker is saying, I strongly disagree with this statement. The deficit is a huge and growing problem. We must begin to deal with it. However, we didn't get here overnight and we won't fix it overnight. In addition, one of the best ways to begin to deal with it is to get people back to work, so they can stop needing government services and start paying taxes. It also wouldn't hurt if the wealthiest among us (aka those that can afford it) would pay more in taxes.
In many ways, Obama's 2008 victory typified the dsyfunction within the Democratic party. Sensing the potential for major electoral gains, the party pivoted to the left somewhat, endorsing a public option for healthcare and a free trade agreement moratorium and the Employee Free Choice Act, among other concessions. Once working class voters had been drawn to the polls and the swing states had been carried, party leadership quickly pivoted towards the right, shelving anything of substance in their platform. Sure enough, the party is again using the same tactic, openly embracing OWS, because, in their own words, doing so offers the potential for major electoral gains.
While the Republican party openly endorses austerity plans sure to not only increase unemployment, but increase federal debt and the interest on it, Democrats spin their own deficit plans as progressive. What's conveniently ignored is the fact that a focus on austerity means conservatives have succeeded in controlling the conversation.
Save for the fringes, no coherent alternative exists in Congress. The sooner we all realize this, the better.
But the artificial people can spend and unlimited amount of money to buy all of the votes they need to pass or fail whatever they want. They can buy as many votes in Congress as they want. They have pockets so deep they are unlimited and the Supreme Court has said that they can spend as much as they want, unlike real people.
Because we choose the Electors (Amendment 24) we tell then what we are looking for in the people to be elected. They must add WITH MY LIFE to their oaths, are willing to make the Constitution's Preamble their goal as an official, will ensure every bill passed will be within the constitution and live within the laws they make. That last phrase, "live within the laws they make", can be done to those in office now and in the past by impeaching all Congressman and President which takes away their retirement plan and make them live by whatever they have left. [Taking away retirement can also be imposed on all congressman and presidents since Reagan as co-conspirators.] We could also "tax" all savings they have obtained during their service by 50%, as bribes, for refusing to maintain their oaths of office. http://www.change.org/petitions/eliminate-capitalistic-military-regime That will do it.
Are you willing to publicize implementing such plan?
I heard one pundit on NPR say that Obama should have tackled the economy before health care. Huh? Health care is the economy.
Check your Current TV listing for a documentary on getting medical care abroad. A man travels from Houston where the nearly a dozen nationally accredited hospitals to get his hip resurfaced. The cost $8,000, including a 5 day rehab at a resort. In the U.S. the operation along would have been more than $50,000.
Americans have been brain-washed to believe we have the best medical care in the world. No, we have the best hype regarding care that allows tens of thounsands to die each year because medical care is out of reach. That doesn't include the hundreds of thousands forced to declare bankruptcy because of medical bills.
Medicial tourism is growing and it may be the only way to force the 1% and their lackies to understand that our current medical system is feudal and destroying our culture.
I was scheduled to go to Costa Rica for 2 weeks to get everything done, state of the art, at 10 cents on the dollar. Plus go somewhere that fixes backs and muscles, not mutilates them with this 5yr. success rate rule.
Then I lose a paid in full business before it ever gets started.