When you think about it, Alan ("Tits") Simpson is the ideal jester to deflect attention from the bigger joke -- the fiscal reform commission itself. The problem is less Simpson's dopey comments and more the idiocy of the rest of the commission.
Given what is happening to the real economy in the real world, the prospect of a double-dip recession and the prospect of a lost decade of high unemployment, the idea that the bigger menace is Social Security is just whacko. Let's recall that Social Security is in surplus until 2037!
Yet the idea that the road to recovery leads though cuts in Social Security, Medicare, and other social outlays that are keeping the depression from worsening, if anything, is gaining traction among opinion elites.
Exhibit A is a doubly dishonest column by the New York Times' new whiz-kid pundit, Matt Bai, who used a liberal congressman, Earl Blumenauer of Oregon, as a prop to make his misleading case.
According to Bai's column, Security is like a giant lottery, based on IOU's that will require a Ponzi Scheme of further debt. Now, it turns out that Bai is not just wrong on the issues, but Blumenauer doesn't believe what Bai attributed to him. In attacking the progressive coalition Strengthen Social Security, Bai wrote:
The coalition bases its case on the idea that Social Security is actually in fine fiscal shape, since it has amassed a pile of Treasury Bills -- often referred to as i.o.u.'s -- in a dedicated trust fund. This is true enough, except that the only way for the government to actually make good on these i.o.u.'s is to issue mountains of new debt or to take the money from elsewhere in the federal budget, or perhaps impose significant tax increases... So this is sort of like saying that you're rich because your friend has promised to give you 10 million bucks just as soon as he wins the lottery.
But this is total malarkey. In fact, the 75-year projection of Social Security's finances shows that under fairly pessimistic assumptions about economic growth, the shortfall in Social Security's finances is just over half of one percent of GDP. Lift the cap on earnings subject to Social Security taxes, and the problem disappears.
More importantly, get wage growth back to its historic trend of increasing as productivity increases (rather than the top getting the benefit of all the economic gains) and the problem vanishes without changing the tax code. Raise wages, and we could increase Social Security benefits.
Bai not only distorted the reality of Social Security, but he also distorted Blumenauer's views, cherry picking quotes from two interviews to make it seem that the congressman favored such drastic measures promoted by deficit hawks as cutting benefits or raising the retirement age. But the quotes in the column don't say that -- only Bai's gloss on them -- and the congressman believes nothing of the sort.
The trouble is that too many legislators make Delphic comments about whether Social Security should be "on the table," Bluenenauer's past vagueness gave Bai an opening, and Bai is all too representative of opinion elites -- including the Washington Post editorial page, columnists like David Broder, many Democratic as well as Republican congressmen, and some in the Obama administration.
It was former Budget Director Peter Orszag, seconded by chief of staff Rahm Emanuel and the pollsters, who persuaded President Obama that the fiscal commission was a good idea. The theory was that the commission would give the president "cover" and demonstrate that he was fiscally responsible.
But as events have played out, this premise totally backfired. The commission provides plenty of cover all right, as in burial cloth. Its proposals could bury both the economy and this presidency.
The commission has given a platform to clowns like Simpson. But worse, it has lent credibility to the idea that Social Security is somehow a drag on the economy -- creating a vicious circle of hawkish legislators and dishonest pundits like Bai feeding on each other.
The reality, of course, is that if the economy (and Obama's fortunes) are going down the drain, the reason has nothing to do with Social Security's finances in 2037 -- and everything to do with slow growth, high unemployment, and the lingering effects of a damaged banking system right now.
Yet the storyline being peddled by the commission, of a dire fiscal crisis, makes it politically more difficult for Obama to take the necessary steps to get a recovery going.
There is a whole other path to economic recovery and fiscal balance. That other path has five parts:
This strategy is better economics and better politics. Voters, by overwhelming margins, support Social Security. Over the years, Republicans have tried to tamper with it. And it is lunacy for Democrats to associate themselves with efforts to cut it.
But Obama's own fiscal commission has painted the president into a corner. Virtually all of the remedies we need to get a strong recovery going are seen as fiscally too costly; and willingness to go after Social Security is being touted as the test of fiscal responsibility.
The campaign to fire Simpson has the right spirit but the wrong target. Obama should draw a line in the sand and make clear that if the commissioners propose cuts in Social Security, he will consider the whole exercise tainted.
Maybe we should be grateful for Simpson and his 310 million tits. If his antics lead serious commentators take a closer look at the commission, perhaps they will also look deeper into the fiscal foolishness of Simpson's colleagues.
Robert Kuttner's new book is A Presidency in Peril. He is co-editor of The American Prospect and a Senior Fellow at Demos.
The problem with the analysis here is as usual we have someone taking the lovely trust fund for granted and saying not to trust anyone who dares question it.
Given the some 12+ trillion debt and likelihood it'll be around 20 by 2020 the prospects for us having growth in real terms aren't particularly grand.
What is promised to us instead is heaps of inflation. So sure we'll continue paying Social Security but it will inevitably become more and more meaningless as costs of living increase.
None of us who knows the power of fiat money and the printing press denies that the government can keep all it's obligations simply by printing. What is in contest is whether printing money is a generator of real wealth or whether it distorts the whole picture.
If our "real GDP" increases are predicated on factoring for CPI figures that leave out lots of products and services one has to wonder how real those "real GDP increases" are.
All I really see ahead is nominal GDP increases due to government spending of the same sort that has pushed much of the "growth" in China that hasn't done nearly so much for the population as it has for the elites.
Why aren't we on the offensive,
pushing to remove the income cap from social security.
Problems solved. health care, paid for.
Raise Taxes on the super rich!.
fair taxation in this modern tech automated world:
50% for 20 times the median income: personal income over 250k$,
90% for income over 2.5M$ (200 times the median income)
10 year income averaging instead of the capital gains tax.
remove the SS income cap, give the conservatives the flat tax they always pretend to want.
The USA became the worlds most powerful economy, with tax rate even higher.
If you don't like taxes, move to Somalia, or a desert island.
See how good you money is there.
High personal income taxes on the riches folks
Discourages GREED.
Greed is bad, not good, that should be obvious by now.
"The USA became the worlds most powerful economy, with tax rate even higher. "
Oh why not just take all of everyone's income and distribute it equally? Greed is bad after all. How dare you want 10$ more than your neighbor. You should both make the same. Never mind performance, never mind responsibility or ingenuity or consumer choice or any of that nonsense. Replace it all with perfect uniformity.
"If you don't like taxes, ... "
No. Did you take this argument seriously when the neo-cons told you to leave if you didn't like their regime? Get real.
"Greed is bad, not good, that should be obvious by now."
Greed is nothing more than self-interest. It's highly unlikely you wrote your own post without any self interest, so you are almost certainly a hypocrite.
Unless the rich literally (and only literally) stole the money or defrauded people to get it it was gained through voluntary interaction and choice on the part of people who believed they were paying a fair amount for the services rendered. The distortions of that are none other than the very policies you probably seek.
http://thehill.com/blogs/on-the-money/budget/117249-simpsons-remarks-provide-ammunition-for-critics-of-obamas-fiscal-panel
In defense of Alan Simpson
By Glenn Greenwald
http://www.salon.com/news/opinion/glenn_greenwald/index.html
The word is OUT! We must call and keep calling our Rep because this sure looks like another Lucy with the football from Obama.
We'll never get it back if it goes, folks. Remember what we got in exchange for Glass-Steagal.0/0
social security is one of the few programs that returns money to us
what a nerve for any politician to call the taxpayers parasites
if anything they are
Sorta changing the subject but a few years back I was driving through Arizona and decided to look at the Grand Canyon since I had never seen it before. They charged me $15 just to go to the rim, look, and leave. I got to thinking.....As an American citizen I am part owner of the public lands. As a taxpayer I am paying the salaries of the people who maintain the land. Just what do I get for my taxes?
That's why Obama says it will restore "credibility of the markets".
Mr. Obama! concentrating on sane trade policy and a real jobs bill would do more for "credibility of the markets".
unconstitutional. and Pelosi agreed to no amendments and an "up or down" vote after the "election" ,which virtually guarantees the corporations bills passage. Just like they did in 1912 with the Federal Reserve Act which took the power of the purse away from the House.
We can actually be thankful to Simpson because this was the blackest of Obama's backroom. simpson may be the dog in the manger for this commission. but WE must make our voices heard and very powerfully, because the right wingers are propagandizing their people calling SS a "Ponzi Scheme" and all sorta of other lies.
You know how the right doesn't want THEIR money to help anyone else...even if ti isn't THEIR money at stake.
I don't think it takes a nobel prize winning economist to see that Obama and his "team" have their eyes on the SS SURPLUS, now at $2.5 Trillion, just as all the Republicans before him have. Summers is likely telling him he can make the whole mess look like just a hiccup in the market if he had that money to work with. Obama had better think long and hard about any changes to the most successful government program in our history if he even has a glimmer of "HOPE" for a second term.
I hear Obama wants to dangle the carrot of a "paycheck tax holiday" to draw folks into seeing how much better it would be for them not to have to pay FICA.
But there's a catch: only employers would not have to pay it.....You still would.The gov is not going to stop bleeding US dry until we're complete husks.