alan simpson

Will Democrats Embrace "Austerity American Style"? Crash This Party and Find Out

Richard Eskow — Fri, 11 May 2012 07:31:21 -0400

Heard about the meeting that's being held to decide your economic future? If the answer's "no," don't feel bad: That's because you weren't invited. But Tim Geithner was. So was Rep. Paul Ryan, the Republican member of Congress whose radical right-wing plans for cutting Medicare have made him the subject of a Mitt Romney "bromance." So was Bill Clinton, who showed up last year and uttered the usual Beltway insider's falsehoods about what's really wrong with Social Security.

Hey, maybe your invitation to billionaire Pete Peterson's "Fiscal Summit" got lost in the mail. Or maybe they really, really didn't want you there. Who cares? That's no reason not to go anyway.

Hey, Sen. Bernie Sanders wasn't invited, and his proposal for Social Security was much more popular with the American people than anything that's likely to be discussed at this little get-together.

It's Your Party

That's right: There's a "summit," and nobody invited the American people. They didn't even invite the guy who proposed the fiscal plan that most Americans – including most Republicans – wanted, according to the polling data. But he's going anyway.

May 15, 2012 at 1 p.m.
In Front Of the Peter G. Peterson Foundation Fiscal Summit
1301 Constitution Avenue NW
Washington, D.C.

That's Bernie for ya.

In fact, there will be a rally outside and Bernie will be speaking there. The rally's on Monday, May 15, at 1 p.m. outside 1301 Constitution Avenue NW. Call it the "people's summit," the "sidewalk summit," or – in honor of MCA – a "fight for your right to crash their party." Whatever you call it, it's on. Some of my CAF colleagues will be there, along with some other good folks.

I'd go myself, but I burned through my travel hours this month by coming to Charlotte for the Bank of America shareholder's meeting and Occupy protests. That was another party where the public wasn't very welcome. (I'm on the plane back home right now, as a matter of fact. Inflight wireless: it's both a blessing and a curse.)

Party Favors

Peterson, who served in President Nixon's cabinet, has funded a lot of events and "educational" materials to promote the misguided and destructive ideas about government spending that dominate the discourse inside the Beltway. They're the same austerity ideas that have broken Europe's economy – and are now breaking down its social and political order.

These ideas that were most recently packaged as the "Simpson/Bowles" plan, which was put forward by those two individuals when they failed to lead their Presidential Deficit Commission to a successful conclusion. (These personal opinions are often misrepresented in the press as the "Deficit Commission proposal"; actually the Commission failed to agree on a proposal.)

The Simpson/Bowles plan will be the main course on this party's menu. It is a far-right proposal that leaves Bush tax cuts in place for the super-wealthy. It would even lower their overall tax rate, while providing cover for this radical wealth shift with the elimination of tax breaks that the middle class depends on. (They don't say which ones, but employer health insurance, child tax credits, and the home mortgage interest deductions are the main targets.)

The Simpson/Bowles plan would trigger across-the-board cuts to government spending, including programs that serve middle-class and lower income people. Corporate tax rates would be cut, too, while the middle class would be forced to contend with gasoline taxes and cuts to both Social Security and Medicare.

Its mix of spending cuts to tax increases confirms the fact that it's a far-right plan. Three quarters of Simpson/Bowles' deficit reductions would come from spending cuts, while only one quarter would come from tax hikes. (And those would be directed at everybody but the rich.)

Simpson/Bowles: It's Austerity, American-Style.

The Guest List

No wonder the public hasn't given the chance to have its say at Peterson's Summit. The public hated the Simpson/Bowles plan when it was announced, with 70 percent of those polled saying they were either "somewhat" or "very uncomfortable" with it. And if they're uncomfortable now, imagine how they'd feel after they retired.

But the political and economic lemmings who are pushing these ideas want us to jump off the cliff with them anyway.

Alan Simpson, the Republican co-author of Simpson/Bowles, is an intemperate motormouth whose rude and vulgar comments toward women and his fellow senior citizens earned him the justified disapproval of most Americans … except billionaire Peterson, who invited him to attend this year's summit again, and the undemocratically "bipartisan" Democratic pals who will join him once on the Peterson dais next Monday.

As far as I can tell, the only attendee at next Monday's Summit who isn't a return invitee from the "Austerity American Style" crowd is Chris Van Hollen, a Democratic House member who's closely allied with Minority Leader Nancy Pelosi. His remarks should be interesting, especially after Pelosi's shocking statement that she would have voted for Simpson/Bowles if it had come to the House floor – a comment she later affirmed.

Get Your Party On

Van Hollen has an opportunity to walk back those disastrous remarks on behalf of the House Democratic leadership. if he doesn't, the Dems are setting themselves up for another drubbing like the one they got in 2010. That's the year the WHite House's Simpson/Bowles-style "Grand Bargain" trial balloons gave the Republicans a chance to run against Dems on these popular programs … from the Left.

The GOP called its leftist-style rhetorical assault on Democrats the "Senior Citizens' Bill of RIghts." It was baloney, of course, but the Democrats gave them the cutting board and the knife that let them cut it up and serve it. Something like that could happen again this year.

When it comes to Democrats these days, you've got to fight for their party against its right.

That's one more reason to show up on Monday: To let Chris Van Hollen and other Democrats know they have only one choice. They can fight against cuts to Social Security and Medicare, or they can lose support – and seats – in November.

If you don't want that to happen (and who does?) – and if you want to protect Medicare, Social Security, and other vital government programs – why not show up and let them know how you feel? You'll be the life of the party crashers' party.

This post was updated to revise the time of the protest.

The Bowles/Simpson Medicine Show Is Back in Town

Richard Eskow — Thu, 29 Mar 2012 16:03:14 -0400

When millions of dollars are being pumped into Washington by anti-government and anti-tax ideologues, you're bound to find Democrats willing to play along. And when your Washington press corps can't be bothered to get even the smallest details right - well, that must mean the Bowles/Simpson Medicine Show is back in town.

It's here, folks. Journalists are still cooing over a failed proposal they're calling "moderate" and "centrist," based on the radical and unpopular plan put forward by two individuals named Alan Simpson and Erskine Bowles.

Another budget, one that's both economically sound and more politically popular, was summarily dismissed by the same media as 'partisan' and extreme.

All the News That Fits

Republican Steve LaTourette and Democrat Jim Cooper introduced a proposal based on the Simpson/Bowles assault on the middle class. It was promptly celebrated by the press as the "responsible" deficit-cutting alternative to the radical right-wing Ryan budget - even though it's not responsible and doesn't cut the deficit (not that deficits should be our national obsessions during this time of crisis).

By contrast, the budget proposed by the Congressional Budget Caucus did reduce the deficit, and in a way that suited the preferences of most voters - Republican as well as Democratic, Tea Party as well as Occupiers.

It was promptly dismissed by both journalists and the Washington elite.

Accuracy Optional

Your press corps can't even get the most basic details right: The Deficit Commission headed by Simpson and Bowles failed to agree on a set of recommendations. So Simpson and Bowles put out their own personal plan, based on ideas developed at the behest of anti-government ideologues like billionaire Pete Peterson.

Their ideas were rejected by members of the Deficit Commission, but a lot of journalists covering the budget don't seem to know that. Take a look:

Associated Press, March 28: " The bipartisan measure, patterned on a plan by President Barack Obama's 2010 deficit commission ... "

Alan Fram, Business Week, March 29: "The measure was modeled roughly on a package produced by Obama's deficit-reduction commission."

Erik Wasson, The Hill, March 29: " a bipartisan budget plan based on the approach of President Obama's fiscal commission ..."

Andrew Taylor, Associated Press, March : "The bipartisan measure rejected Wednesday was patterned on a plan by President Barack Obama's 2010 deficit commission ..."

Ed O'Keefe, Washington Post, March 27: "... the House could vote this week for the first time on a bipartisan deficit-cutting plan, modeled on the suggestions of a presidential commission ..."

There's more, but you get the idea.

Why does this matter? Because it tells you whether what you're reading was written by a journalist who cares about the facts and gets them right. And it matters because the myth-makers and propagandists pushing the anti-government austerity agenda want Americans to believe that this controversial and radical proposal represents the consensus view of a bipartisan commission - and mainstream political opinion.

It does neither.

A Radical Plan

Bloomberg's Mr. Fram compounds his errors in the typical fashion by saying that the LaTourette/Cooper bill, based on Simpson/Bowles, was a "compromise, bipartisan deficit-cutting plan by moderates of both parties that mingled tax increases with spending cuts."

Like Mr. Fram, a great many journalists have been trained or programmed into calling the Simpson/Bowles policy package "bipartisan" and "moderate." The Post's pre-vote headline even read "bipartisan bill appears headed for defeat" - a defeat that, as Ezra Klein satisfyingly points out, was truly bipartisan.

Moderate? Make no mistake: This is a radical plan that sharply cuts financial security for the elderly, guts other vital government programs, and - perhaps most radically of all - lowers taxes on the wealthy while raising them for everyone else. It's even more radical than the Simpson/Bowles proposal. As Michael Linden and James Horneyboth noted, it takes Bowles/Simpson's already-unacceptable 2:1 ratio of spending cuts to tax increases and hikes it to 7:1.

Those two self-promoting reprobates, Bowles and Simpson, were nevertheless happy to endorse anything with their names on it - even if that meant omitting the fact that this proposal was even more right-wing.

(Daniel Marans has more on the radicalism of the Simpson/Bowles plan here.)

Outside the Political Mainstream

The Simpson/Bowles plan is enormously unpopular among voters across the political spectrum. Members of all political parties and people across the political spectrum - including 76 percent of Tea Partiers - oppose cutting Medicare or Social Security to balance the budget. That hasn't changed in the two years since Simpson and Bowles introduced their own plan and only six percent of the electorate shared their priorities.

Voters also strongly prefer the exact opposite to the tax policy proposed here. They want tax hikes for millionaires to cover shortfalls in entitlements and other government programs that benefit the middle class.

Tax Hikes for the 99%, Tax Cuts for the 1%

Instead the LaTourette/Cooper proposal, like Simpson/Bowles, eliminates "tax breaks." One of the biggest "breaks" is the home mortgage deduction. Without it millions of additional homeowners would go into foreclosure, and the already-struggled middle class would be devastated once again. LaTourette and Cooper also explicitly planned to tax employer health insurance, leaving millions of working Americans even harder-hit over medical costs.

At the same time the wealthiest among us would have enjoyed a tax cut -- of somewhere between 23 and 29 percent. That means somewhere between 17 to 34 percent less than they're paying with their Bush tax cuts! Sure, those deductions might be eliminated for them, too - but most of these deductions affect a much smaller percentage of their income.

The LaTourette/Cooper proposal compounded this tax assault on the middle class by linking tax bracket changes to the so-called "chained CPI," meaning that people who aren't already in the top bracket will find themselves moving up - and being taxed at a higher rate - much more quickly.

The Pitchman's Secret

The plan radically restructures Social Security and cuts benefits for middle-class varieties in a number of ways (including the "chained CPI" trick). It also raises the retirement age even more than the currently scheduled increases would do.

It's not surprising that the radical far-right Concord Coalition endorsed the bill, since it is as extremist as the Coalition itself - and as far out of the political mainstream. And its equally unsurprising that the nonpartisan Americans for Tax Reform rejected it, noting that it represents a radical blend of tax increass and benefit cuts for the middle class in order to bestow further privilege on the wealthiest among us.

Meanwhile the House Progressive Caucus budget, which includes all the provisions that most voters want - and which most savvy economists agree would be wise. Predictably, it wasn't described by a single media outlet as "moderate," "sensible," "politically popular," or "pragmatic."

Nothing ever changes down at the Medicine Show. As soon as one pitch ends, another begins. So this ain't over, folks, because every good medicine-show pitchman knows: You gotta keep on offering the crowd that "grand bargain" until you wear 'em down and they buy it.

Killing Us Softly

Richard Eskow — Wed, 14 Sep 2011 00:03:53 -0400

Yesterday some prominent people signed a letter urging the so-called "Super Committee" to "go big" on cuts to the Federal budget. Many of these people would describe themselves as "moderate" and "centrist." Some would call themselves liberal. I've met a few of them casually, both Republicans and Democrats, and they seemed like very nice people.

They're nothing like the audience members at the Republican Presidential debate who shouted "yes!" when asked if society should let a young man die because he didn't buy health insurance. They're courteous and civilized, and were undoubtedly appalled by the shouts from the crowd.

That sort of thing isn't done in the salons or think tanks of Washington. You wouldn't catch anyone who signed that letter behaving that way.

But are they really all that different?

Donner, Party of Four

It's fair game to label today's Republicans as (in Terrance Heath's words) "Death's Own Party." The GOP earned that name when it filibustered disaster relief for flood and hurricane victims this week, as it did when it passed a budget that slashed funding for lifesaving weather warnings, police, and firefighters.

It's also reasonable to call the Tea Party's more blood-crazed members a "Cult of Death" funded by the ultra-rich, as William Rivers Pitt did after the debate. They cheered executions last week, and last night they let us know it's a death-penalty offense to make the wrong insurance purchasing decision, too.

These responses come from independent critical voices. It's different when powerful people, whether they're "moderate" Republicoans and self-described "centrist" Democrats, privately cluck over these Tea Partiers. These insiders are in a position to address their fears and explain what's been done to them, to channel their outrage constructively.

Instead they've formed a mob of their own, so they can urge leaders to "go big" with assaults on services that help average Americans - including those who follow the Tea Party.

Go Big

That phrase is just one more reflection of these Orwellian times. "Go big" really means "go small." Small government. Small future. Small dreams.

The letter said "we urge you to 'go big' and develop a large-scale debt reduction package sufficient to stabilize the debt as a share of the economy." It called for going "well beyond" the Committee's $1.5 trillion goal for additional deficit reduction, and proposed "major reforms (a Beltway code word for "cuts) of entitlements" and "reforms" to the tax code (which typically means lower taxes that would increase the deficit.)

The signatories proposed to "restore Americans' faith in the political system" - by imposing cuts that most Americans in both parties oppose. Now that would be a trick ...

The List

Who are they?

Many of the signers are the usual suspects, professionals from both parties who have pushed the same anti-government agenda for decades. They're functionaries and hired academic guns who have long benefited from the pro-austerity largesse of right-wing billionaire Pete Peterson and like-minded plutocrats. They're Democrats like Erskine Bowles and Alice Rivlin and like-minded Republicans like Alan Simpson (whose public outbursts make the worst Tea Party dustup look like a meeting of the Emily Post Fan Club) .

The list also includes some of the "bipartisan" architects of today's economic crisis, people like Robert Rubin. Rubin pushed for the deregulation that crashed the economy, joined the worst of the bloated and incompetent banks and made hundreds of millions, and is now pushing to have middle and lower-income America foot the bill for what he has wrought.

There were one or two disappointments like economist Laura Tyson, who's attaching herself to a document that any reasonable economist knows is a recipe for economic disaster. It calls for the same austerity that's decimating Europe and unraveling the social contract which built its postwar prosperity.

The austerity approach pushed in this letter has already shattered investor confidence in the US economy, driving down the stock markets and making them surge up and down like the paroxysmal double-takes of a vaudeville clown. And now they want us to "go big" with it.

And yet none of them, with the probable exception of Simpson, would ever shout anything crude about death in a public place.

Death in Private Places

That's ironic, since people will surely die as a result of the policies they're advocating. Somewhere between 35,000 and 50,000 Americans die each year because they don't have health insurance. If the President listens to the people who signed this letter, as many people believe he will, he'll propose raising the eligibility age for Medicare from 65 to 67.

One study showed that Medicare reduces mortality for its members by about 13% per year, and lowers the number of days spent in the hospital by about the same percentage. So the austerity economics these people are proposing will lead to death.

It's true that they're not shouting in public places. They're whispering their opinions in the ears of the powerful. You can decide for yourself which form of behavior is more obscene.

Hating the Victim

We're seeing it all across Washington: The demonization of the victim. It's in the public hatred for underwater homeowners, which began at the first Tea Party rally (on the floor of the Chicago Mercantile Exchange) and now reaches to the highest halls of power in both parties, where we told that helping struggling homeowners would be "rewarding the undeseverving."

(Funny - the word "undeserving" wasn't mentioned when both parties rescued Wall Street's megabanks. Rescuing homeowners, many of whom were persuaded to take out bloated loans by those same banks, would help stimulate the economy in a way those bankers have yet to do.)

We saw it in the question that stirred the bloodlust last night, too. Here's what Wolf Blitzer asked:

"You're a physician, Ron Paul... Let me ask you this hypothetical question: A healthy 30-year-old young man has a good job, makes a good living, but decides, you know what? I'm not going to spend $200 or $300 a month for health insurance because I'm healthy, I don't need it. But something terrible happens, all of a sudden he needs it.

Who's going to pay if he goes into a coma, for example? Who pays for that?

The spin in that question encapsulates the Beltway bias: A "healthy" thirty-year-old "makes a good living" (which is unusual, with youth unemployment at 25%) but cavalierly decides not to spend "200 or 300" dollars. That's the common insiders' picture of the uninsured American as the villain of the piece.

Reality TV

Blitzer didn't ask this, more realistic question:

"The father in a family of four lost his job, so his wife is working double shifts without health insurance to pay the bills. Premiums would cost at least $14,000 per year (let's say $7500 under the new law) for insurance that still sticks them with big out-of-pocket costs. They couldn't come up with the money to pay United Healthcare, and then he had this accident ..."

That's the kind of real-life scenario that doesn't get portrayed much on television these days.

Now let's change it again, in one detail: The man is 66 years old. The "go big" crowd is urging the President to exclude that man from Medicare, making him even more unemployable and his insurance even more unaffordable. And he's much more susceptible to life-threatening questions.

We'll ask the question again: How different are the people who signed the letter from the audience at the debate?

Civil Discourse

We're told we can disagree without being disagreeable. I hope so.

I've met Tea Party members, and I understand their fear and their anger. I think it's very misdirected, and at times very ugly. But I understand it. And as I've said, I've met a couple of the people who signed that letter, too. We had pleasant chats. If we meet again, that chat may be pleasant too.

But as long as we're talking, let's talk honestly. The shouters and haters are disturbing, and we face a terrible threat from the big-money financiers stoking their fears. But it's easy for civilized people in the corridors of power to look down on the shouting rabble. Easy - and cheap.

I worry just as much about the ones who are welcome in the salons of both parties, the ones who are heard at both ends of Pennsylvania Avenue. They're the powerful ones. They're the quiet ones. While we're looking at the loudmouthed shouters on television, they're the ones who are killing us softly.

Social Security and Medicare Cuts: Washington's War on the Young

Richard Eskow — Tue, 21 Jun 2011 22:05:12 -0400

t's one of modern political life's strange ironies that defending Social Security and Medicare is considered an "old people's issue." Old people are doing just fine with these programs, thank you very much -- at least so far.

Anti-government hawks like Alan Simpson and Pete Peterson also made a deft (if deeply cynical) move by framing these programs as a war between baby boomers vs. Gen X-ers, since some of their cuts would hurt boomers too.

But young people will take the worst of these cuts, since their impact increases over time. When you combine this assault on "entitlements" with other forms of austerity economics, the result is a plan to hand the next generation a nation with crumbling infrastructure, collapsing government services, and bleak economic prospects. It's an all-out assault on the future of the young.

That's no accident. Politicians know that seniors would rise up against any politician who crosses them. And seniors vote. They're also aware that baby boomers are a large and powerful voting bloc, not to be trifled with.

Young people, on the other hand, traditionally find it hard to imagine their own old age. On top of that, they've been barraged with propaganda designed to discourage them from believing these benefits will be there when they retire. That makes it easy for politicians to target them when designing their budget cuts, especially since its easier to hide their long-term impact from those they would hurt the most.

These cost cutting proposals, often described as "brave," target young people because that's easier and safer than taking on more politically powerful groups. Whether we're talking about "entitlement" programs, other spending cuts, or tax giveaways to the wealthy, each proposed austerity measure is a dagger aimed at the financial future of our children.

Raising the Retirement Age: From Twentysomethings to Newborns

The Simpson/Bowles proposal, for example, would increase the full retirement and early retirement ages over a 40 to 65 year timeline, a change that would begin to affect people now in their early to mid-twenties. That's the same generation that's currently facing record youth unemployment.

According to reliable studies, when a person is unemployed or earns less in the early years of their working life it affects their income over their entire lifetime. As a result, many of today's new graduates will pay less into Social Security over the course of their career. That means most of them can already expect to receive less in benefits when they retire, even under the current system.

And we're not talking about small change, either. If the full-retirement age is changed from 66 up to 69, as many people have proposed, that will result in a 20% loss of benefits.

If these changes to the retirement age were implemented today, they'd have the greatest impact on today's newborn babies. So the next time you see an adorable infant in a Snuggli, picture what Alan Simpson and Erskine Bowles want to do to it.

The Unfair, the Unnecessary, and the Un-COLA

Cost-of-living (COLA) increases, which have often failed to keep pace with actual out-of-pocket costs, would also be slowed down under many of these proposals. Unlike some other Social Security changes, that would also hit current retirees and baby boomers hard. Within 20 years, the average benefit would be cut by approximately $1000. Since that average benefit is less than $13,000 today (less than $10,000 for women), those are major cuts. And the effect of this rolling cut would be cumulative, becoming greater with each passing year. The younger a person is today, the more their benefit would be cut in their senior years.

But wait, as the late-night TV ads used to say. There's more.

The Simpson/Bowles proposal, which many Democrats and Republicans have called "a good starting point" for discussions, isn't done hammering away at the financial security of young Americans. Although two-thirds of its Social Security "savings" would come from benefit cuts, one-third would come from tax increases. But those tax increases aren't be aimed at wealthy Americans. Instead Simpson and Bowles have proposed raising taxes on middle-class Americans , by eliminating deductions for expenses like home mortgages and health insurance.

The most bizarre thing about this fiscal war on America's young people is that it's completely unnecessary. Lifting the payroll tax cap would make Social Security 100% solvent for the next 75 years. But that's off the table,. Republicans are adamantly opposed to any taxes that discommode the wealthy. And the White House embraced a "payroll tax cut" that creates a useful, if minor, stimulus effect - but at the effect of making the country's most effective and valuable program a target for future benefit-cutters.

MediGone

And we haven't even gotten to Medicare yet. The Republican House passed Paul Ryan's "serious" and "brave" plan, which would eliminate Medicare and then - in a move worthy of science-fiction writer Philip K. Dick - replace it with a voucher system that would be called "Medicare." (More here.)

The Republican Party's voucher plan would make Medicare (as opposed to "Medicare" vouchers) unavailable to anyone who becomes eligible after 2021. That means it affects anybody born after 1956, a date that eliminates a large chunk of the Baby Boom. The vouchers will cover less and less of health insurance's real cost with each passing year. That means the younger you are, the worse this plan will be for you.

If the Ryan plan becomes law, 90% of your Social Security retirement income will be eaten up by out-of-pocket health care costs by 2037. And that's a conservative estimate. Without the Medicare system's built-in controls on pricing and utilization, actual health care costs could be even greater.

False Progressivity vs. Real Solutions

Many of these plans include proposals that claim to spare the "neediest" of our young people from benefit cuts in their senior years, while asking more of the "well to do.". But most of these proposals are barely skin-deep. Means testing proposals, for example, wind up targeting people with modest lifetime earnings that can be as low as $20,000 per year (from the Concord Coalition). And by conflating social insurance programs like Social Security and Medicare with social welfare programs for the neediest among us, they're undercutting the structure that makes these programs strong.

Social Security can be stabilized easily and cleanly, just by asking the wealthy to pay their fair share. The only way to fix Medicare is by addressing our nation's broken health care system, which means taking on the structural flaws in our for-profit health economy.

But politicians on both sides of the aisle are reluctant to do either of these things. So they're targeting young people instead.

Misleading the Young

Why aren't young people protesting all this? Headlines like this one provide part of the answer: "Debt Commissioners: Baby Boomers Will Crush Social Security, Medicare." In fact, a Google search of the phrase "Will Baby Boomers Bankrupt Social Security and Medicare?" comes up with nearly million hits.

The shrewd foxes and Fox shills who want to destroy these programs have convinced many young people they have no hope of collecting these benefits. That's wrong. There's every reason to expect these benefits to be available when America's young people retire. All it takes is the political will to resist the slashers. But they've been trying to thwart that political will by reframing a matter of economic justice as an intergenerational war between boomers and young people.

If successful, that misdirection could cost America's young people their financial security.

Surrendering the Future

This nation is already neglecting its young people, even though our leaders love to tell us (correctly) that they're our future. Unemployment figures for today's twentysomethings are truly devastating. The Economic Policy Institute reported that "in 2010, the unemployment rate for workers age 16 - 24 was 18.4% - the worst on record in the 60 years that this data has been tracked."

The country should be rallying behind this generation by creating jobs for them. Instead we're abandoning them to a lifetime of lowered earnings and lowered expectations, made even worse by record levels of student debt. College and post-graduate debt already exceeds credit card debt in this country and is expected to reach $1 trillion in 2012.

That's a tough way to start your financial life as an adult. Our kids are likely to go through life with crushing debt and reduced earning capacity. And if the Simpson/Bowles/Ryan crowd has their way, they'll also face financial fear and deprivation in their senior years.

Washington should be helping these young people find jobs. Instead, too many policy makers are abandoning them just as their work lives begin. Worse, they're also trying to make sure they're abandoned when their careers end, too. Enough is enough. It's time to call these misguided austerity policies what they really are: a war on America's youth.

The Importance of Being Alan: A Response to Alan Simpson's Conservative Defenders

Daniel Marans — Fri, 27 May 2011 16:03:03 -0400

Try as they might, conservatives cannot rescue Fiscal Commission Co-Chair Alan Simpson from self-marginalization. But while Simpson’s revealing gaffes remain a welcome political gift for opponents of Social Security and Medicare cuts, his staying power in elite policymaking circles only attests to the sad and distorted state of our nation’s fiscal debate—and the powerlessness of mainstream America within that discussion. That Simpson was probably the most prominent Republican President Obama could find to chair the Commission, is just the latest sign of how Democrats have had to define “moderate” down to slightly-left-of-nutjob.

Charles Blahous, a conservative Social Security expert, and public trustee of the Social Security trust funds, tries to undo the damage done to the Fiscal Commission’s credibility by Ryan Grim’s conversation with Fiscal Commission Co-Chair Alan Simpson. While some of the points he makes are valid, all fail to restore confidence in Simpson as a prominent voice on Social Security policy, or the fairness of the process by which the Fiscal Commission developed its recommendations.

Here’s the rundown. Grim found Simpson cursing out AARP, calling Social Security a “Ponzi scheme,” and claiming that life expectancy was 63 when Social Security was created at an event hosted by the Investment Company Institute, a financial industry trade group.

Grim caught up with Simpson and challenged him on the life expectancy statistics. It turns out, Grim noted, that according to the Social Security Trustees, life expectancy if you reached age 65 was 79.7 years for women and 77.7 years from men. Overall life expectancy was lower because of high infant and childhood mortality rates that medical advances have since been largely eliminated. Contrary to Simpson’s implied argument that Social Security was intended to cover very few people, the life expectancy statistics at age 65 confirmed that it served a very real segment of the population.

Simpson responded with confident disbelief, saying, “Just because a guy gets to be 65, he’s gonna live to be 77? Hell, that’s my genre. That’s not true.”

Chuck Blahous defends Simpson, claiming that Simpson was clearly confusing life expectancy at any age with life expectancy at age 65. In any event, Blahous argues, Simpson’s point stands that overall increases in life expectancy have made Social Security’s finances unsustainable. Simpson’s statement does not discredit the Bowles-Simpson [Fiscal Commission] recommendations, because the “Commission” used SSA’s estimates of both kinds of life expectancy, regardless of what Simpson said. Finally, the ongoing 1983 increase in the normal retirement age from 65 to 67, Blahous says, does not account for the full increases in life expectancy.

But Blahous’s argument doesn’t hold water. In the first place, He gives Simpson far too much of the benefit of the doubt. What Simpson intended is not 100 percent clear; what he said is. And even then, what he intended is probably 99.9 percent clear. Simpson was evidently not familiar with the distinction between life expectancy at birth and life expectancy at age 65, and displayed a stubborn aversion to confirming the facts when he was presented with an account that did not square with his own.

It is really the latter aspect of the interaction, in which Simpson showed a total lack of intellectual curiosity, or openness to the possibility that he might not be familiar with the statistics being presented to him. If it were an aberration for Simpson that would be one thing, but unfortunately, Simpson has a long record of hostility to facts and people that challenge his glib pronouncements on Social Security. As head of the Fiscal Commission, he repeatedly derided critics who presented him with inconvenient information about the program’s finances (see Lawson, Alex), and was dismissive of Americans who rely on Social Security (see Carson, Ashley, and “cow with 310 million tits”).

More recently, Zach Carter heard Simpson parroting the oft-repeated myth that because Social Security had 16.5 workers for every 1 retiree in 1950, and only 3 workers for every retiree today, it is now de-facto unsustainable. In fact, the program had a 16-to-1 worker-retiree ratio in 1950 because of the addition of millions of farm, domestic and self-employed workers that year, who had not yet begun receiving benefits. Ten years later it was 5-to-1, and by 1975 it was at the 3-to-1 ratio it has now. More importantly, since 1961, as the number of workers supporting beneficiaries got smaller, Social Security’s tax rates and base have both more than doubled, going from 3% to 6.2% (on the employee side), and $30,000 to $106,800 (both current dollars), respectively.

As for Blahous’s argument that increases in the retirement age have failed to accommodate the financial impact of growth in life expectancy, he is comparing apples and oranges. As he concedes, growth in life expectancy is not the largest contributor to Social Security’s projected long-term shortfall (the decline fertility and increase in income not covered by the cap are the biggest causes). What Blahous doesn’t mention is that life expectancy’s financial impact is so insignificant that it could be entirely balanced by miniscule revenue increases. As Monique Morrissey of EPI explains, in her excellent paper, Beyond Normal: Raising the Retirement Age is the Wrong Approach for Social Security, longevity gains could be offset by a 0.01% increase in the payroll tax, phased in over 60 years from 2025 to 2084.

I disagree with Blahous that the Commission’s proposal must be considered independently of Alan Simpson. The Commission has been irrevocably discredited by Simpson’s record of ignorant and insensitive remarks. Blahous is correct that the Commission staff, who no doubt did the bricks-and-mortar work of running the numbers for the recommendations, know the correct numbers on life expectancy. But the Commission’s—or, more accurately, Erskine Bowles and Alan Simpson’s—proposal, has earned gravitas in the media and in Congress (where a group of Senators is using its proposal as the basis for a bipartisan deficit deal), at least in part by virtue of the distinction enjoyed by the two men who headed it. As evidenced by the location of his very encounter with Grim, Simpson continues to be an active spokesman for a center-right brand of deficit reduction, and use his perch to mischaracterize Social Security and other programs.

The practical implications of Alan Simpson’s leadership are two-fold. First, his constant repetition of exaggerations and myths about Social Security has no doubt contributed to the constant drumbeat of fear that has characterized debate over the deficit in general, and Social Security in particular. When the President’s Republican appointee as chair of the Fiscal Commission can spew such misinformation about Social Security and is received as “brave” and “honest” on all of the major television networks, is it any wonder that the public believes Social Security is “broke,” “not gonna be there,” and responsible for our debt?

More importantly, Simpson represents just what it means to meet Republicans on their terms in the current political climate in Washington. When President Obama, a Democratic president, appointed Simpson to be the Republican face of a blue-ribbon Fiscal Commission, Simpson was hailed for his spunk and wit, and willingness to “tell it like it is.” Without a Republican figure like Simpson who was willing to agree to cutting tax loopholes, which angered Grover Norquist, it is likely that a bipartisan Commission would not have been able to exist. But beyond ticking Norquist off, and not embracing the Ryan budget wholesale, Simpson is not especially “moderate.” And neither was the Commission he headed, for that matter. The composition of the Commission’s proposal was two-thirds cuts and one-third revenue increases at a time when tax rates on the wealthiest Americans have reached their lowest levels since the 1950s. Is it really worth courting moderates like Alan Simpson who are liberal only when compared to Grover Norquist and Paul Ryan?

In denouncing Simpson, we must also reject the logic of bipartisan appeasement that empowered him. Rather than work with Republicans to reduce the deficit on their unfair and ultra-conservative terms, we should stand our ground, knowing that the public stands with us.

The President's Deficit Speech: It's Time to Keep Up the Pressure

Richard Eskow — Wed, 13 Apr 2011 18:38:11 -0400

The President speech on the Federal deficit marked a brilliant return to what might be called his "holographic" style. Like a hologram, the President's speech was beautiful and evocative and shimmered with light. But like a hologram, what you see depends on where you stand.

Many progressives will hear a brilliant defense of government's role in the economy, and of the role that progressive taxation plays in a fair-minded economic system. Conservatives(those who aren't absolutely nuts) will hear a ringing endorsement of a plan that would downsize government and benefit the wealthy. And they'll love the President's "debt triggers," which could force the government to enact drastic cuts if targets aren't met.

This holographic quality, the ability to present himself as all things to all people, is the President's unique gift - unless, in the end, it turns out not to have been a gift at all.

What were the positives in the President's speech? It made a long-overdue case for government's vital role in society. It skewered the conservative notion that taxing the rich is unfair. And it took the right approach to Medicare by emphasizing the need to cut costs, not benefits.

Here's what the speech didn't do: It didn't emphasize the fact that we're in the middle of an ongoing jobs crisis, one that's left entire regions and social groups in a full-scale depression with no end in sight. It didn't explain why we urgently need short-term investment to reinvigorate the stagnant economy and avoid a double-dip recession. And the speech didn't tell us where the President stands on the most contentious budget issues..

Most of all, the President's speech failed to shift our national debate away from its obsessive focus on deficits - an obsession that's crowded out even more urgent problems like joblessness and the decline of the middle class. Polls show that the public considers the stagnant economy and unemployment to be much more pressing problems than the deficit. The President didn't move our national priorities toward these concerns, which are our greatest economic challenges. As long as deficits continue to dominate the debate, neither the President nor the public can win.

In the end, the President's actions will outweigh the impact of any speech he might give. The President's ambiguity means that his positions are still a work in progress. In one sense that's good news. It means they can still be molded by political pressure. The public still has time to call on the President to do what's needed: protect Social Security, preserve Medicare, assist the needy, and rescue the dying American middle class.

Here's an overview of the speech: the good, the bad, and the holographic.

The Good

President Obama gave as brilliant a defense of government's role as we've seen in a generation. After decades in which paying taxes, even for billionaires, has been characterized as "oppression," these Presidential words were refreshing and urgently needed:

As a country that values fairness, wealthier individuals have traditionally born a greater share of this burden than the middle class or those less fortunate. This is not because we begrudge those who've done well - we rightly celebrate their success. Rather, it is a basic reflection of our belief that those who have benefitted most from our way of life can afford to give a bit more back. Moreover, this belief has not hindered the success of those at the top of the income scale, who continue to do better and better with each passing year.

President Obama also explained the real causes of today's deficits in clear, direct terms:

We increased spending dramatically for two wars and an expensive prescription drug program - but we didn't pay for any of this new spending. Instead, we made the problem worse with trillions of dollars in unpaid-for tax cuts - tax cuts that went to every millionaire and billionaire in the country; tax cuts that will force us to borrow an average of $500 billion every year over the next decade.

To give you an idea of how much damage this caused to our national checkbook, consider this: in the last decade, if we had simply found a way to pay for the tax cuts and the prescription drug benefit, our deficit would currently be at low historical levels in the coming years.

The speech included a number of moments like these, and President Obama is to be commended for them. Most of all, he deserves credit for this important observation about Republican budget proposals: "Their vision is less about reducing the deficit than it is about changing the basic social compact in America. "

The Bad

It was a bad sign when the President gave an unscripted shout-out to Erskine Bowles and Alan Simpson, praising them for the brilliance of their work in co-chairing the Deficit Commission. They led a divided and contentious Commission, missed important deadlines, sowed public confusion, and violated the terms of their own Commission's charter. Both Bowles and Simpson were hobbled by their shared, long-standing animosity toward Social Security - an animosity that made them less than credible as unbiased arbiters of our Federal budget.

Worse, Mr. Simpson proved to be an ongoing public embarrassment for the President and the Commission, offering vulgar, offensive, and intemperate remarks (remember "310 million tits?" ?) that made him a likelier candidate for court-ordered anger management than Presidential praise. During his tenure, Simpson managed to offend older Americans, women, veterans, and any other demographic group that came into his mind.

The President's praise for their leadership was a jarring and odd moment, even as a tactical move, especially since the Commission became hopelessly deadlocked under their leadership and failed to produce a report (although the President, like others, continues to cite that non-existent document when referring to a proposal issued by co-chairs - one which merely states their own opinions, rather than those of the Commission.)

The President suggested that he would "borrow" from Bowles' and Simpson's personal suggestions in crafting his own deficit reduction plan. But the President's rhetoric was inconsistent with the personal ideas of these two gentlemen,which came to be widely - and falsely - described as the "Deficit Commission proposal" by the careless reporters (and by the President today). That proposal¹ would impose harsh benefit cuts on the elderly (elderly women would be hurt most of all). It would result in millions of lost jobs and would have a racially discriminatory impact. For Medicare, our gravest financial challenge, it would merely shift exploding healthcare onto older Americans, rather than actually controlling them.

The Simpson/Bowles proposal shrugs off the cleanest, most effective, and most publicly-supported solution to its long-term actuarial imbalance: lifting the payroll tax cap. Instead, the two individuals offer Draconian cuts that are neither humane nor necessarty. These cuts are sugar-coated - slightly - with a slight boost in benefits for the deeply impoverished (although Social Security is a self-funded form of insurance, not an antipoverty program) and a very slight benefit boost for the "very old" - a boost that would favor those wealthier (and whiter) recipients who live much longer on average.

In his gravest omission, the President failed to mention the 24 million Americans who are unemployed or under-employed. That mean he failed to shift the political center of gravity away from deficits and toward the millions of Americans who might be helped by short-term government spending.

The Holographic

By appearing to embrace the Simpson/Bowles proposals, the President stirred the hearts of those who want to see their conservative (marketed as "centrist") agenda imposed on the nation. But his rhetoric also gave encouragement to those who see that agenda for what it is: A rollback of the American dream and a vehicle for transferring even more national wealth to the already-wealthy. The President spoke stirringly about vital government programs, yet didn't indicate how deeply he would fight for them.. He offered "debt triggers" that would force additional spending cuts or tax increases, but the impact of those triggers remained cloaked in vagueness and the uncertainty of the future.

The White House seems to have floated quite a few trial balloons before the speech, which led to contradictory news stories that either suggested he would make a bold pro-government stance or embrace the draconian cuts in the Simpson/Bowles plan.

In the end he did both. If you're concerned about preserving our social compact, it's more important to make your feelings known now than it has ever been. The President has spoken. Now it's your turn.
______________________

¹ See "10 Reasons the Deficit Commission Proposal is Still Unconscionable and Unacceptable" (it was still a draft Commission proposal, rather than the co-chairs' personal recommendations, hence the title).

For more on public opinion and the public's priorities, see:

The New Silent Majority
... the Wisdom of the American Public ...
The Six Percenters

______________________________________________________________

Wall Of Shame

Joseph M. Firestone — Mon, 28 Mar 2011 20:12:43 -0400

Critical commentary by Warren Mosler on the recent statement by 11 former Chairpersons of the Council of Economic Advisers on the need for austerity policies such as those recommended in the Bowles - Simpson Report.

The Ministry of Truth: New Fronts In the War On Social Security

Richard Eskow — Wed, 09 Mar 2011 12:37:05 -0500

The phrase "Moment of Truth" first appeared in English in Ernest Hemingway's Death in the Afternoon. It was originally a Spanish expression for for the final sword-thrust in a bull-fight, the one that finishes off the bull after the matador is done taunting and tormenting him.

Remember that whenever you hear about "The Moment of Truth Project," the latest public relations venture from the Social Security-slashing Pete Peterson crowd. It could be el momento de verdad for your future financial security.

Orwell's Children

If the phrase also reminds you of the reality-twisting "Ministry of Truth" from Orwell's 1984, that's appropriate too. A highly-financed network of consultants, ex-government officials, and politicians has been deployed to mislead the public on basic, unequivocal truths about Social Security, whose$2.6 trillion dollar trust fund could bankroll a lot of tax breaks for the wealthy. All it takes is a campaign to mislead and confuse the public.

This determined group is in for the long haul and it was bound to step up its efforts after it suffered a major setback in January. Preparations for the next wave probably began when, thanks to public pressure, the White House relented on plans to propose benefit cuts (along with a very limited increase in the payroll tax cap) in the President's State of the Union message. This new blitz matches the one we saw last November, when they pressed Congress and the White House to enact their unpopular proposals after the election.

The Peterson team has relentlessly pushed its right-wing agenda through a seemingly endless series of vehicles: a slanted "news" organization named "Fiscal Times" (now providing content to the Washington Post); a film called "I.O.U.S.A"; a consultant-designed game called "Budgetball" (which we called "Ayn Rand meets Deathrace 2000"); the mock "Hugh Jidette" political campaign (Hugh Jidette - get it? sure you do) ; the "OweNo" ad campaign; The Rivlin/Domenici deficit group - and now, the Moment of Truth Project.

"And the Records Department, after all, was itself only a single branch of the Ministry of Truth, whose primary job was not to reconstruct the past but to supply the citizens of Oceania with newspapers, films, textbooks, telescreen programmes, plays, novels -- with every conceivable kind of information, instruction, or entertainment ..." - 1984

The Peterson Brigade

I get complaints from the Peterson Foundation[1] whenever I point out Mr. Peterson's long-standing conservative agenda against government in general and Social Security in particular, so let's get this out of the way first. For many years journalists have been documenting Peterson's efforts to gut Social Security and Medicare. As Robert J. McIntyre's 1994 article shows, his core tactics haven't changed. They include Peterson-funded "entitlement" and "deficit" commissions to push government cuts, the co-opting of centrist Democrats to endorse his conservative anti-government agenda, and a veneer of "bipartisanship" for his anti-government, flat-tax-like ideology.

The Peterson crowd changed its tactics after a series of polls showed that the public understands Social Security doesn't contribute to the deficit. Now the party line is that they want to "rescue" Social Security, with cuts that are larger than the shortfall that's expected in 27 years. But, as McIntyre reported sixteen years ago, Peterson and his staff had already written a book that was excerpted in the Atlantic under the title "Entitlement Reform: The Way to Eliminate the Deficit." (We've already analyzed the Orwellian strategy behind the phrase "entitlement reform," which is a well-crafted euphemism for "cutting services for the elderly." The idea that "cutting Is reform" is in the tradition of Orwell's "War Is Peace.") )

McIntyre's piece describes the tactics that are still in play today: on the co-opting of Democrats, the progressive gloss on conservative policies, and Peterson's determination to lower taxes for the wealthy while reducing services and imposing new tax burdens on the middle class. It's class warfare against middle-income Americans.

Debts in the afternoon

The "~~Ministry~~Moment of Truth Project" gave a presentation in Washington on Tuesday afternoon, and commemorated International Woman's Day by inviting a panel of thirteen presenters that didn't include a single woman. (You've come a long way, baby ...)

The Moment of Truth Project is funded by the Committee for a Responsible Federal Budget, which receives substantial Peterson backing[ 2], and whose President (Maya McGuineas) is a long-time Peterson operative fond of writing editorials with titles like this one: "SOCIAL SECURITY NEEDS TO BE FIXED. SO JUST DO IT" (the caps are hers). Sticking to the game plan, MacGuineas has backed away from claims that Social Security contributes to the overall deficit, but the usual falsehoods are there in abundance: "If there is one thing we know in "Budgetworld," it's that the largest entitlement programs have to be reformed." (Actually, no. Social Security doesn't need to be "reformed" - it needs a little more revenue, most or all of which could be provided by lifting the payroll tax cap) .

McGuineas also wrote that "Social Security, Medicare and Medicaid are growing at unsustainable levels because of the aging population and growing health care costs." These two sentence are part of the game plan, too. Here's the game plan for misleading the public, which you'll see a lot in coming weeks:

1) Pretend Social Security is "broken." Emphasize the cost of an "aging population," even though the age wave was anticipated and accounted for in 1983's revisions to Social Security.

2) Mix Social Security and Medicare together in people's minds by labeling them both "entitlements," saying we must cut both. (They don't want to fix Medicare, either, because that means reducing for-profit medicine, which is against their hidden ideology.) Never tell the truth: Medicare has serious problems and Social Security doesn't.

3) Now that you've conflated these two programs in the public mind, never describe what you're proposing as cuts. Call it "entitlement reform." (We have more on that nasty little bit of Newspeak here.)

4) Whatever you do, don't mention the real solutions: a payroll tax cap adjustment for Social Security and a restructuring of our health care system to fix Medicare. Behave as if these practical and overwhelmingly popular options don't exist. Remember these words from Orwell: "The whole aim of Newspeak is to narrow the range of thought."

The smell of self-satisfaction in the morning.

Here's another standard Social Security Slasher move: Members of the Peterson contingent love to congratulate themselves on the "courage" and "boldness" it takes to regurgitate and promote predigested falsehoods in return for a future filled with consultancies, commission slots, and think tank appointments.

Enter David Walker. He's the former head of the Peterson Foundation and a long-time collaborator. Walker's new book Comeback America promotes slashing entitlements, rather than investments in jobs and economic growth (as a reasonable person might infer from the title). Walker has spoken nostalgically about debtors' prisons, repeatedly demonstrably false canards about entitlement funding, and tried to terrify Americans by claiming their taxes could "double."

Walker's response to a William Greider piece in The Nation about Peterson was self-incriminating. He repeated false claims that Medicare and Social Security "are not in danger of being looted--they already have been looted," adding: "The federal government already has spent any related surplus and replaced it with non-marketable IOUs that aren't even considered liabilities by the federal government." (That's simply not true. A panel under President Eisenhower refuted identical charges in 1958. Besides, what ethical person wants to welsh on an IOU?)

Walker's parlayed a Bill Clinton appointment as Comptroller General into a lifetime career as a benefit-cut advocate, a career that not only pays well but provides enough over-the-top media flattery to embarrass a Maharajah. Yesterday's predictably fawning Post piece, for example, described him as a "prophet of deficit doom."

"I have a lot of nicknames," Walker tells the Post.

Paul Revere! Paul Revere. That's what Paul Volcker calls me ... "Fiscal Ranger. That's what CNBC calls me. "And when I was on Colbert," Walker says, "he called me, 'Walker, Taxes Ranger.'

(Apparently "paid hack for anti-government ideology" doesn't have the same ring to it.)

After Peterson's done singing his own praise song, the Post tells us that "yuk-yukking commences in the pack milling around Walker in the hallway of Georgia Public Broadcasting's studios... "

This "merry bunch of deficit hawks," in the Post's words, is proposing to impose severe financial constraints on America's elderly. We ran the numbers, and elderly women paying low rent for an urban apartment would be left with less than $45 a week for food, other necessities, and whatever pleasure they can scrape out of the remaining few pennies.

The Petersonites will say that Social Security was never meant to be the sole source of retirement income - but they won't mention the fact that Wall Street shenanigans and quarterly earnings pressure destroyed other sources of retirement security (investment accounts, corporate pensions, and real estate values). So while the rich continue to amass a level of national wealth unseen in other developed countries, the Peterson gang's out to rob the middle class.

The Gang of Six

And now the Peterson gang's recruited the Gang of Six, a group of Senators determined to enact the Peterson crowd's draconian agenda. The Senators are - you guessed it - "bipartisan," which means they belong to both political parties and reflect the majority views of neither.[3] And once again we're told they're "courageous" for putting themselves in line for campaign contributions and cushy post-Senatorial sinecures.

The Gang and its allies made sure Alan Simpson and Erskine Bowles, the two Peterson operatives who failed to get a report out of their own Deficit Commission, were invited to give a presentation before the Senate Budget Committee. Then they appeared with Simpson and Bowles at the "Moment of Truth" presentation. (All six Senators are male.)

"Deficit-Cut Salesman Hit the Road," reported the Wall Street Journal as the six appeared before two hundred business leaders. (Wonder why they chose that audience?) Their presentation was solid Peterson talking points from start to finish, including the choice of words: "The only way we're going to get this done is for everybody to have skin in the game and everybody to get their ox gored a little bit." "Financial Armageddon." "We have to do this now."

One Gang member, Democrat Mark Warner, said he would no longer support stop-gap budget measures. That will help put pressure on the White House to cut entitlements, despite having thought better of it a few weeks ago. Why? Warner says it's because more stop-gap extensions could hurt the stock market.

Going Post-al

Every Orwellian campaign needs a compliant press, and the Social Security Slashers have been particularly lucky (or effective) in this area. Here's how the Washington Post described the Gang of Six's well-scripted rollout: "While Washington bickers noisily over cutting a small slice of the federal budget, Sens. Mark Warner, a Virginia Democrat, and Saxby Chambliss, a Georgia Republican, launched a campaign Monday to convince the public that merely cutting spending will do little to tame the $14 trillion national debt."

Got that? Challenging slanted figures and dishonest statements is "bickering." Representing the majority's wish to raise the payroll tax cap rather than cutting Social Security benefits is "bickering" - and "noisily" at that. But doing Peterson's will? That's a campaign. And did they really say they would do more than just cut spending? From the Post's own report: "None of us have ever voted for a tax increase, and I don't intend to," said Sen. Chambliss.

Here are a couple more gems from a single day at the Post:

" ... the Senate and House continue to wrangle over how to keep the government funded through the end of September. Simpson, Bowles and the senators' group are working to turn attention back to the country's longer-term fiscal issues." (link)

"Even as congressional debate in recent years has been crippled by partisan rancor, Warner and Chambliss have entered quiet talks with four other senators from both parties in hopes of forging a compromise that could lead toward a more affordable government." (link)

And that's just from yesterday's edition. Who knows what they'll write today?

Last Words

"Entitlement reform" ... "financial Armageddon" ... "now or never" ... "brave" ... "bickering" ... "compromise" ... "affordable" ... "bipartisan" ... "wrangling" ... "Moment of Truth" ... "Paul Revere" ... "Hugh Jidette" ... "Comeback America" ...

Those communications consultants have been earning their money cooking up all these phrases. This crowd wants nothing less than the rollback of a key New Deal program.[4] The consultants who are cooking up all these phrases have learned well from the Ministry of Truth in 1984 , which believed that "the Revolution will be complete when the language is perfect."

They're counting on it.

________________

[1] For more information, see my response to the Peterson Foundation here.
[2] SourceWatch reports that the Committee for a Responsible Budget "receives large swaths of money from the Peterson Foundation via not only the Institute for the Advanced Policy Solutions at Emory University, according to a list compiled by Firedoglake's Jane Hamsher, but also straight from the Peterson Foundation itself, according to the Foundation's 2009 Internal Revenue Service 990 form."
[3] Three-quarters of all Republicans and Tea Partiers oppose cutting Social Security to reduce the deficit. Most Americans want to lift the payroll tax cap to correct Social Security's shortfall, which is expected to begin in 2037. Only 6% of those polled agree that Congress and the President should make deficit-cutting their priority - but they're making it their priority anyway. (There's even more polling information here.)
[4] More on the unconscionable Simpson/Bowles proposals here.

This post was produced as part of the Strengthen Social Security campaign.

Contempt

Richard Eskow — Mon, 07 Mar 2011 21:05:54 -0500

"Clueless." "Stupid." "Middle-class welfare." Sometimes a guy who likes facts and figures gets slapped in the face by reality, and apparently today's my day. Several recent stories showed me how some of these "austerity economics" advocates in Washington really feel about the middle class. I guess I always knew it intellectually, but these stories made me feel it on a visceral level. They let me know me exactly what these politicians and pundits feel toward me,my family, and the people I grew up with:

Contempt.

We're not talking about lofty and imperious disdain, either. This isn't the old-school,"look down your monocle with a lofty air" genteel antipathy once practiced by the gentlemen at the club. We're talking about complete and utter contempt, a repugnance so white-hot it feels like it could melt your face off.

Debts of a Salesman

How else are we to interpret remarks like these from John Boehner, the Speaker of the House of Representatives? "People in Washington assume that Americans understand how big the problem is," Boehner said of Social Security, "but most Americans don't have a clue." Boehner added, ""I think the president shrank from his responsibility to lead. He knows the numbers as well as we do."

The Wall Street Journal account of Boehner's remarks goes on to quote Democratic Rep. Rob Andrews who, according the the Journal, said "tackling big problems would be tougher if the two sides criticized each other." Rep. Andrews: "It's impossible if the process begins with the parties attacking each other."

Then allow me, Rep. Andrews: Boehner's remarks are profoundly insulting to the American people. Don't worry about his attacks on the President, who can presumably take care of himself. It's the rest of us I'm worried about.

The Speaker said: "I think it's incumbent on us, if we are serious about dealing with the big challenges, that we go out and help Americans understand how big the problem is that faces us ... Once they understand how big the problem is, I think people will be more receptive to what the possible solutions may be."

The Speaker's already on record with his recommended "deficit solution": cuts to Social Security that could, according to the Speaker, help pay for America's war. The Journal article reiterated that Boehner is "determined to offer a budget this spring that curbs Social Security and Medicare."

The most generous interpretation of Boehner's remarks to the Wall Street Journal would be to assume that the Speaker is profoundly ignorant of the funding process for Social Security. But why can't we believe that the Speaker is merely misguided, as comforting as that would be? Because he and his party pushed a tax cut through for the wealthiest Americans last year that would have paid for any expected Social Security shortfall for the next 75 years! Specifically, as Daniel Marans pointed out, "the cost of extending the Bush tax cuts for the top 2% of Americans is equivalent to the cost of filling Social Security's 75-year shortfall. Both equal 0.7% of the GDP."

In other words, the Speaker doesn't care about the deficit. Whatever "big challenges" we face financially are largely the making of his party's policies on taxation, military spending, and -- lest we forget -- deregulation, which led to the trillion-dollar Wall Street crash and the BP oil spill. Fellow conservative David Frum has the Speaker pegged when he describes Boehner's remarks this way - "Boehner: I can sell voters on benefit cuts."

That's exactly right. What Boehner's really saying is "I can make these rubes buy anything." Have you ever met a really slick and utterly amoral salesman? There's an uber-hustler personality that's common to all salesmen of this type, whether he's a Wall Street banker or a car salesman in Idaho. One of the most common characteristics of the super-salesman personality is a sense of utter superiority to your sales prospect -- your mark. Boehner's really saying "I can sell you on giving up your future for my rich clients, and I'll make you love me for it."

And yes, we know that Boehner comes from humble beginnings. A lot of super-salesmen do. With this kind of personality, that background creates even more contempt. I rose above your little world, they say to themselves, but you never will. And as for those of us from middle-class or lower class backgrounds who think there are more important things in life than dedicating yourself to the pursuit of money and power ... for John Boehner and his kind, we're the biggest suckers of them all.

Middle-Class Welfare Queens

Robert Samuelson just doubled down on an amateurish insult to the American middle class by repeating his assertion that "Social Security is welfare." He gets the economics of the issue completely wrong, but the real contempt comes through with his insistence that "We don't call Social Security 'welfare' because it's a pejorative term, and politicians don't want to offend."

No. We don't call Social Security "welfare" because that word, like all words, has a commonly accepted definition and Social Security doesn't meet it. Whether you're using the conversational definition ("aid in the form of necessities for those in need") or the legal one ("government benefits distributed to impoverished persons to enable them to maintain a minimum standard of well-being"), the word doesn't describe Social Security. Social Security doesn't target the "impoverished" or "those in need" by design. Here's the word Mr. Samuelson would have found had he done some research:

Insurance. Social Security is a social insurance program, not a welfare program. And like any insurance program, it's designed to pay benefits when an insured event happens: A car accident. A plane flight you had to cancel at the last minute. Your retirement. Insurance programs aren't "means tested." If you've paid your premium and the insured event takes place, you receive the benefit. And Samuelson's argument that you should get back exactly what you put in is shown to be ludicrous when the proper word is used. I haven't "gotten back what I paid in" on my car insurance. And I could die without ever collecting Social Security benefits. I'm not being ripped off, I'm being protected.

Since he couldn't be bothered to look up the definition of the word, Samuelson just made up his own: "Here is how I define a welfare program," he writes. "First, it taxes one group to support another group, meaning it's pay-as-you-go and not a contributory scheme where people's own savings pay their later benefits. And second, Congress can constantly alter benefits ..." Leaving aside the misleading statement that Social Security "taxes one group to pay another," what else could be considered "welfare" under the making-sh*t-up" Samuelson definition? Let's see ... Military paychecks. The President's salary. The Senate dining room. The coffee they serve when junior Cabinet members meet with members of the press.

Yes, Samuelson's argument is that absurd, and the pejorative overtones of the word "absurd" are deliberate.Robert Samuelson's essentially calling the American middle class, whose pension plan was funded through a government-managed trust fund, "welfare queens."

Contempt.

Stupid. Greedy. Teat-Sucking.

"You've got a country that is stupid, a government that is stupid," said the always-quotable Alan Simpson today. What's so stupid about us? Here's Simpson's explanation: "... (W)e're always talking about the couple at the kitchen table--well, here it is: For every buck we spend, we borrow forty cents. If that isn't stupid--we've got a country that is stupid, a government that is stupid, to borrow forty cents, not from your good old uncle Henry, but from the world."

We've already dissected the lame analogy that says our country's spending is like a family's budget. It isn't - not even a little. But what really expresses Simpson's contempt for the American public is this: The set of personal suggestions he put together with Erskine Bowles (after the Deficit Commission they co-chaired collapsed into deadlock and failure) actually proposes lowering the maximum income tax rate for for wealthy individuals and corporations. Like Boehner, Simpson thinks he's found a bunch of suckers he can hoodwink in the American middle class.

For the record, Simpson's first name really is "Alan" and not "Abe," although he shares the Simpsons character's tendency to go off on foul-mouthed, insulting rants (in what's an arguably ageist characterization). It was Abe - sorry, I mean Alan Simpson who sneered at the entire population of the United States by saying government programs were like "a cow with 310 million tits." (That makes every one of us a "teat sucker.") It was Simpson who insulted a representative for women - and a lot of other women, too - after she wrote about his comment. It was Simpson who called elderly Americans "greedy geezers." It was Simpson who screamed at a female reporter in the 1990's (she screamed back) and went off on an activist in a now-famous profanity-ridden video tantrum.

And it's Simpson who has now insulted younger Americans - the ones who would be most hurt by his draconian anti-Social Security proposals - with another logorrheic rant, this one against young Americans who, he says, are "walking on their pants with the cap on backwards listening to the enema man (presumably meaning Eminem) and Snoopy Snoopy Poop Dogg."

It's not funny anymore - not that it ever was. The typical DC elite's response - "Oh, Alan's being Alan again" - doesn't cut it. This is vile, contemptible, hate-filled behavior with creepy scatological overtones. The crowd that loathes bloggers for the rude language of anonymous commenters embraces Simpson on a daily basis. Who in either party has said of Alan Simpson, "I can't work with somebody so unpleasant, so close-minded, so rude, so uncooperative, and who clearly holds the public in such vile disregard?"

I'll make the answer easy for you: Nobody. Such is the arrogance of the Beltway insider, and such is alienation of Washington reality from the hard work and anguish of the American middle class. A Washington culture that prides itself on "bipartisan" civility - that is, politeness to fellow members of the elite - finds Simpson's abuse of the American public perfectly acceptable.

Like I was saying: Contempt.

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(Dean Baker has an excellent piece on Samuelson that makes many of the same points, plus quite a few others, and which reinforces this point: "Social Security is a pension that is run through the government.")

This post was produced as part of the Strengthen Social Security campaign.

The US Isn't a Company and It's Not a Family. It's a Country.

Richard Eskow — Fri, 04 Mar 2011 16:26:07 -0500

Let's begin with a multiple choice test. The United States of America is:

a) a for-profit corporation;
b) a family, like the typical American family in a 1960's sitcom;
c) a nation -- with a national economy and nation-sized problems.

If you answered "c," there's good news and bad news. The good news is that you answered the question correctly. The bad news is that you probably have no future as a pundit, where recycling bad metaphors is an essential job skill. (On second thought, that's probably good news too. You undoubtedly have better things to do with your time.)

Two metaphors keep reappearing in our national debate like comets on a too-tight orbit. One says that the government's finances are like a family budget, and the other says that the country needs to be run more "like a corporation." Both are routinely used as "nonpartisan" illustrations of the need to cut spending.

If I had a nickel for every time I've heard these misleading analogies, I'd have enough money to buy Alan Simpson a cow.

Dysfunctional Family Values

Conservative economist John Cogan puts it this way: " ... (I)magine that a mother sends her family to the store, tells her husband to buy beer, her teenage daughter to buy magazines, and her ten-year old son to buy candy. Imagine, moreover, that she sets no limits on how much each can spend. Each family member would then overspend ..."

Leaving aside our hypothetical family's more immediate needs (starting with a stint in rehab for Dad), the analogy doesn't work. Government spending doesn't take place in a "store." It takes place within a national economy, which is like a machine with many moving parts. Part of the government's job is to spend in a smart way that keeps the machine moving and functioning smoothly.

A comment from the Atlantic's Megan McArdle should be read in that context, too. McArdle writes: "We need politicians who think about these things the way a financially sound family thinks about their budget." Actually, we don't. We need politicians who think about a budget the way a financially sound nation thinks about a budget. If the government cuts spending in one area it affects the entire economy, and could wind up costing more than it saves.

If we spent $400 or $500 billion in the next two years on rebuilding our infrastructure, it wouldn't be "lost" money the way that the cost of a new 70-inch television would be "lost" to an American household. This money would be used to hire people and purchase raw materials. The people who were hired would no longer need financial assistance like unemployment, food stamps, or poverty assistance. And they would use their income to buy things, which would increase employment even more by creating jobs for people who provide the things they would buy... including televisions.

All of these newly-employed people would pay taxes, creating more government revenue. And as the economy grew it would develop its own momentum, eventually reaching a point where the extra spending wasn't needed and further cuts could be considered. The "family" analogy doesn't work at all.

Unfortunately, Democrats are sometimes all too eager to embrace their opponents' bad metaphors. From the president's State of the Union address: "Just like any family, we have to live within our means to make room for things we absolutely need." From White House Budget Director Jacob Lew: "(T)ackling our challenges in the long term ... starts with doing what families and businesses have been doing during this downturn: tightening our belts."

What a lousy analogy. This country doesn't have a deficit problem because Mom let it loose in some store and now Dad's getting drunk while Junior gorges himself on eskimo pies. It has a deficit problem because bankers broke the economy and we're living in the wreckage. It has a deficit problem because we've been giving the rich a free ride through tax cuts of unprecedented generosity. A couple of wars are playing their part, too.

People use the "family budget" analogy because we're supposed to respect the image of a thrifty, self-disciplined homestead. But consider this household: One son's a hedge fund manager who's taken most of the family income for himself and isn't even paying rent on his room. The other kids are struggling to pay the bills because the rich one's not pulling his weight. Hedge Fund Boy's living like a king, but money's so tight for everyone else that Mom and Dad have decided to feed Grandma less and turn her heater off for the winter. And Grandma built the house!

But when anybody suggests they're not treating Grandma right, they sneer and say "What do you want us to do? Buy her some food and put it on a credit card?"

The Business of America Is America

The latest entrant in the America-As-Corporation sweepstakes in Mary Meeker, an investment analyst and managing director with Silicon Valley investment group Kleiner Perkins Caufield & Byers. Meeker has weighed in with a 466-page PowerPoint presentation called "USA Inc.." "USA Inc." stumbles from the start because the metaphor, while already a cliché, is so off-base. Corporations have investors, unelected executives, and customers. Their responsibility is to turn a profit, and their activities must be directed toward that goal. The government is an expression of the national consensus, a work of community and ideals.

What's more, the American corporate model has just failed spectacularly... twice. The first failure was the Wall Street collapse, which forced America's biggest banks (including Ms. Meeker's former employer, Morgan Stanley) to be rescued by the taxpayer. The second was the BP oil spill, which proved that corporate risk management can't be trusted to protect the public. With this track record, is the American corporation really a model worth emulating?

From a business perspective, any consultant who shows up with 466 pages or slides has already failed. The consultant's job is to synthesize, analyze, and explain. A well-structured analysis of any scope can be presented with much less verbiage and raw data. There's far too much in these 466 pages to address it all, but here are a few samplers:

"USA Inc's financials are discouraging," says Meeker. Really? As L. Randall Wray points out, the US government has been in debt every single year since 1776. That's one of the ways a government operates. The question is, how much debt is appropriate?

Meeker combines health expenditures with Social Security under the "entitlement spending" heading, mimicking a right-wing messaging tactic that uses legitimate concerns about Medicare and Medicaid as a cover for cutting retirement benefits. And this question shows how deeply out of her depth she is when it comes to economics and social programs: "What level of entitlement spending can we afford without suppressing job creation?"

While right-wingers love to argue that government spending suppresses job creation, it's hard to make that argument when government spending is used to hire people (an option not raised in Meeker's report). As for so-called "entitlement" spending, studies show that this money is recirculated into the economy. That should lead to jobs and growth (as opposed to tax cuts for the wealthy or other benefits, which lead to savings or offshore investment and fail to produce employment).

Meeker's even more off-base on taxes. Her "corporation" has cut the "price" for the customers who have consumed more of its "product" -- national wealth - yet here's a typical tax-related question: "How crucial is the role played by lower relative tax rates -- especially for corporations -- in stimulating job and GDP growth ...?" "USA Inc." serves American corporations like a wholesale supplier, providing them with an educated workforce, a national defense, clean water to drink, and countless other services. USA Inc. needs revenue. Yet Meeker's only question seems to be, should we charge these big customers even less?

As Felix Salmon points out, Meeker ducks a lot of issues. And she asks a lot of questions like this one: "Imagine you're a shareholder in USA Inc. How would you feel about your investment?"

Oy.

This embarrassing performance reflects poorly on those involved, including her advisors -- a group that includes John Cogan (he of the drunk dad with a fat son metaphor), Meg Whitman, and Peter Orzsag (Jacob Lew's predecessor at the White House.) Meeker made her name by pumping up the Internet bubble in the 1990's, and she came under heavy criticism for it. Now we're in a Bad Metaphor For Government Spending Bubble, and it looks like she'll be riding that one too.

Here's the bipartisan agreement I'd like to see: A moratorium on lazy analogies for the national budget. If we can't set aside our partisan differences long enough to agree on that, how will we ever agree on anything else?

This post was produced as part of the Curbing Wall Street project and the Strengthen Social Security campaign.