Why are the fears of a declining social safety net for social security and Medicare increasing? Barron's Gene Epstein recently warned of dire consequences for future generations as the 78 million baby boomers begin to retire:
"In short, the future has arrived, and it doesn't look pretty," said Epstein. The boomers in their 60s and the legions after them will put pressure on federal programs that support the elderly for years to come, according to projections by the nonpartisan Congressional Budget Office. The surge will fuel a process that eventually renders these programs too expensive to sustain. More ominously, the federal budget's burden of eldercare will get heavier, not lighter, even after the boomers leave the scene completely."
But Epstein's cure is really a veiled push for Republican Paul Ryan's budget plan, which is more of the same ideology -- tax and spending cuts that redistribute even more wealth from taxpayers to the wealthiest. It is part of their austerity agenda, which will continue to increase the budget deficit, as is happening in Europe.
We know when the current worries began over baby boomers retirement impacting social security and Medicare began. It's told in The Price of Loyalty, Bush Treasury Secretary Paul O'Neill's book with Ron Suskind. Bush and Karl Rove decided to use the four years of Bill Clinton's budget surpluses to fund tax cuts and the two wars G.W. and Dick Cheney were planning, instead of protecting social security and Medicare.
The problem is that it also 'funded' the largest budget deficits since World War II, when we add in costs of the Wars on Terror and Great Recession. Suskind's book documents the discussions that led to the second tax cut that mainly benefited corporations and stockholders, when President Bush had second thoughts about it. "He asks, 'Haven't we already given money to rich people? This second tax cut's gonna do it again,'" said Suskind.
"He (Bush) says, 'Didn't we already, why are we doing it again?' Now, his advisers, they say, 'Well Mr. President, the upper class, they're the entrepreneurs. That's the standard response.' And the president kind of goes, 'OK.' That's their response. And then, he comes back to it again. 'Well, shouldn't we be giving money to the middle, won't people be able to say, 'You did it once, and then you did it twice, and what was it good for?'"
It's all there in The Price of Loyalty, and was the reason O'Neill was relieved as Secretary of the Treasury in 2002. He objected to returning the hard-won surpluses to G.W.'s richest supporters, whether individuals or Cheney's military-industrial buddies such as Halliburton or Kellogg, Root and Brown that would most benefit from the Iraq invasion (i.e., oil and military supplies).
And Republicans are planning more of the same if the so-called Ryan budget plan, recently passed by the House of Representatives, becomes law according to the Center for Budget Policies and Priorities.
"The CBO report, prepared at Chairman Ryan's request, shows that Ryan's budget path would shrink federal expenditures for everything other than Social Security, Medicare, Medicaid, the Children's Health Insurance Program (CHIP), and interest payments to just 3¾ percent of the gross domestic product (GDP) by 2050. Since, as CBO notes, "spending for defense alone has not been lower than 3 percent of GDP in any year [since World War II]" and Ryan seeks a high level of defense spending -- he increases defense funding by $228 billion over the next ten years above the pre-sequestration baseline -- the rest of government would largely have to disappear."
The Clinton surpluses, the result of a record 10 years of uninterrupted economic growth, the longest growth cycle in U.S. history, had been projected to ultimately pay off all government debt accumulated since World War II. President Clinton predicted the increase in the expected surplus -- some $1.9 trillion--meant the government could be debt-free by 2010. But that depended on continuing his policies, such as his cutbacks in military and other government spending. And the dot-com recession followed, causing some $4 trillion in stock losses alone.
In fact, all of the Bush tax cuts cost taxpayers $1.85 trillion while government spending was boosted 23 percent in his first four years, according to Brookings economist William Gale, who worked on the Council of Economic Advisers under President George H.W. Bush. And just 3 million net jobs were created during the Bush years.
Then there is an alternative to Republicans' austerity agenda that will do much to save our safety net. It is a return to Clinton-era policies that created so much wealth in the 1990s -- raising tax brackets to their prior levels, cutting back on military spending, and putting back the pay-as-you-go rules of that era that didn't allow Congress to spend more than it taxed. So it turns out Republicans have been the biggest spenders.
Follow Harlan Green on Twitter: www.twitter.com/HarlanGreen
If that sounds simplistic, it is indeed simple. If poor folks had the same money to lobby with as Haliburton, Blackstone, Boeing, and the like, soup kitchens would be serving steak and the generals would be chowing down on MREs in the Pentagon cafeteria.
now hurry up and die.. why should seniors that worked hard all their lives and supported this country have an easy retirement... where do you think you live? Greece?
and get off the golf courses ...you clogging them up with your old guy smells.
VOTE OUT THE GOP LOCALLY AND FEDERALLY... FIRE THEM AND ENJOY YOUR RETIREMENT LIKE THOSE BANKERS THAT WASTED AWAY YOUR RETIREMENT MONEY....
VOTE OBAMA 2012...
A careful examination would likely show the dramatic rise in corporate profits & an ever-increasing rise in recipients of SSI benefits related to industrial accidents or disability. It effectively sentenced those truly permanently disabled and unable to work to a life of poverty, or great struggle. This was one of the first pegs in the systematic disintegration of the American working class.
You may also return to work and continue your Case as regards permanent injury/ratings or a negligence case outside the Comp system of adjusters and state appointed judges/commissioners. Your payments for lost wages end if you are working and getting the full pay rate at the time of injury. If your pay is less Comp pays the difference.
Everything you have stated here is incorrect. Was that intentional or ignorance?
"Clue" the most destructive move is to artificially "non market driven" raise wages on the high end through collective bargaining as this drives more production out of the high end labor area to the lower end. "Quick Answer" buy stock in corporations that pay dividends!!!!!
All that market force only appears to affect labor, but not management.
Corporations exist to serve people. They are artificial entities, granted out of nothingness as a privilege by our government. When they stop serving People, we have a right to change the way that works.
It's clearly time we People started to control what's being done with that abused privilege.
This is good for the economy why?
Only consider how many jobs we have lost overseas since 2000. Do you think China will up its wages and benefits to American levels if we say "pretty please" so we can bring all those jobs back home?
America is not operating in a vacuum. We are in cutthroat competition with countries which don't have our compunctions about using cheap coal to generate electricity and paying workers only the minimum which keeps them from revolting.
How do you propose we go forward in this new world? Right now we appear to be doing it with government tying one hand behind our backs and telling us to hop on one foot.
The other 3% the employee could use to opt into a state pension much like an annuity. This would be run through the creation of a State bank like North Dakota has. The bank then invests anti-cyclical to the business cycle and instate before sending the funds to Wall Street. The goal would to invest in entities that would pay a usage fee so it could be later sold to the private sector or made into a public utility. Allowing ALL a state's citizen to opt in would broaden the base and fix the current demographic issues. This would be a one-time fix to many pension plans, move pensions off the bargaining table and into the hands of a public-sector banker.
All the Fed has to say is six little words, "The Fed will buy PACE Bonds":
www.pacenow.org
This would jump start the economy by putting an estimated 3 million construction workers back the job, retro-fitting homes. Lower our trade deficit. And the Fed could even charge the homeowner only 4% interest and return the profit to the Treasury to reduce the public debt.