Bink's Diary last Thursday highlighting Ben Bernanke's comments that "Social Security is where the money is" (and is thereby logical fodder for the chainsaw) seems to confirm William Greider's warning written this February for The Nation magazine:
Governing elites in Washington and Wall Street have devised a fiendishly clever "grand bargain" they want President Obama to embrace in the name of "fiscal responsibility." The government, they argue, having spent billions on bailing out the banks, can recover its costs by looting the Social Security system. They are also targeting Medicare and Medicaid. The pitch sounds preposterous to millions of ordinary working people anxious about their economic security and worried about their retirement years. But an impressive armada is lined up to push the idea--Washington's leading think tanks, the prestige media, tax-exempt foundations, skillful propagandists posing as economic experts and a self-righteous billionaire spending his fortune to save the nation from the elderly.
This is ...The Plan our Overlords have devised to ensnare our President into taking more from the middle class to accomodate the continued comforts of the Gulfstream Guard. And sadly, it looks like Obama may be giving them a hearing, which Chris Bowers aptly describes as a "national suicide pact"(Bowers might also have termed it a "political suicide pact," given the fact that Seniors are already being demagogued on Health Care reform):
Congress and the president enact explicit long-term budgets for Medicare, Medicaid, and Social Security that are sustainable, set limits on automatic spending growth, and reduce the relatively favorable budgetary treatment of these programs compared with other types of expenditures.
The programs be reviewed on a regular schedule by the Social Security and Medicare Trustees or the Congressional Budget Office to determine whether they will remain within budgeted amounts.
Significant long-term deviations from budgeted amounts trigger automatic adjustments in benefits, premiums, provider payments, or other revenues. These adjustments could only be over-ridden by an explicit vote of Congress and acceptance by the president.
By way of explanation, the outsize Federal budget deficits under Reagan necessitated hiking the FICA tax substantially in order to fund Social Security. Most of you see that deduction on your paychecks. The idea was to provide for the baby boomer generation when its massive ranks began to retire.
As result of these taxes, Social Security accumulated a vast, 2.5 trillion dollar surplus. Good news for a generation of retirees, right? Well, sorta. That money has been spent. When you hear someone talking about "Social Security in Crisis," that's what they're talking about. That's the "crisis." They're talking about the fact that Uncle Sam owes back that vast amount of money it has already spent.
Every year the Treasury has borrowed the surplus revenue collected by Social Security and spent the money on other purposes--whatever presidents and Congress decide, including more tax cuts for monied interests. The Social Security surplus thus makes the federal deficits seem smaller than they are--around $200 billion a year smaller. Each time the government dipped into the Social Security trust fund this way, it issued a legal obligation to pay back the money with interest whenever Social Security needed it to pay benefits.
* * *
That moment of reckoning is approaching. Uncle Sam owes these trillions to Social Security retirees and has to pay it back or look like just another deadbeat.
So, what to do? Ah, there's the rub!
But if the government cuts the benefits first, it can push off repayment far into the future, and possibly forever. Otherwise, government has to borrow the money by selling government bonds or extend the Social Security tax to cover incomes above the current $107,000 ceiling
That is what these "concerned" foundations and think-tanks, apparently now joined by the head of the Federal Reserve, are proposing. Cutting ordinary Americans' Benefits to pay for what the government already spent. And they're pressuring Obama to buy into it.
Obama is also playing footsie with the conservative advocates of "entitlement reform" (their euphemism for cutting benefits). The president wants the corporate establishment's support on many other important matters, and he recently promised to hold a "fiscal responsibility summit" to examine the long-term costs of entitlements. That forum could set the trap for a "bipartisan compromise" that may become difficult for Obama to resist, given the burgeoning deficit. If he resists, he will be denounced as an old-fashioned free-spending liberal.
Obama did in fact hold a Fiscal Responsibility Summit, by the way. Remember
that? Me neither.
So,who are the authors of this enterprise?
The authors of this plan are sixteen economists from Brookings and Heritage, joined by the American Enterprise Institute, the Concord Coalition, the New America Foundation, the Progressive Policy Institute and the Urban Institute. "Our group covers the ideological spectrum," they claim
Not exactly, as Greider points out.
All these organizations are corporate-friendly and dependent on big-money contributors. No liberal or labor thinkers need apply, though the group includes some formerly liberal economists like Robert Reischauer, Alice Rivlin and Isabel Sawhill
And who is its point man? A concerned billionaire named Pete Peterson. We're so lucky to have those concerned billionaires! Why, Newsweek just printed a heartwarming piece of self-adulation authored by Mr. Peterson, filled with such wondrous quotes as:
But immediately I began wondering: what do I do with $1 billion? The idea of trying to make the money grow felt empty to me.
He gave the "billion" to his own "foundation." What a soulful individual. The tender billionaire.... Oops? Not so tender?
The Peter G. Peterson Foundation, is against nationalizing health care in the US. Health care is one of the single biggest holes in the US social safety net today with record numbers of Americans going bankrupt to pay for essential medical care. The foundation is also against clean energy incentives, social security expansion, and extended unemployment benefits. Basically, the Peter G. Peterson Foundation is against some of President Obama's most socially relevant reforms.
Step back and conceptualize this for for a minute. This is your money. It came out of your paycheck. It will continue to come out of your paycheck. Your money, that you've faithfully let slide into the government's pocket with the assumption that it was going to pay for the Social Security you get when you retire. This is WHAT THEY WANT TO LOOT to pay off their DEFICIT. Not by raising taxes on billionaires like Mr. Peterson. Not by raising taxes on behemoth corporations offshoring their grunt work to farmers in India. You. They want YOUR HARD-EARNED MONEY. To pay for Bush's Trillion Dollar Iraq Fiasco, among other things...like Bailouts of AIG, Bank of America, and Wells Fargo, to name just a few.
Who exactly are the Greedy Bastards pushing this?
The American Enterprise Institute for Public Policy Research (AEI) is a conservative think tank founded in 1943. Its stated mission is "to defend the principles and improve the institutions of American freedom and democratic capitalism—limited government, private enterprise, individual liberty and responsibility, vigilant and effective defense and foreign policies, political accountability, and open debate."
They're the same people who caused the Economic Disaster to begin with:
AEI scholars are considered to be some of the leading architects of the second Bush administration's public policy. More than twenty AEI scholars and fellows served either in a Bush administration policy post or on one of the government's many panels and commissions. Among the prominent former government officials now affiliated with AEI are former U.S. ambassador to the U.N. John Bolton, now an AEI senior fellow; former chairman of the National Endowment for the Humanities Lynne Cheney, a longtime AEI senior fellow; former House Speaker Newt Gingrich
Well that's the AEI. How about the "New America Foundation"?
The New America Foundation is a Washington D.C.-headquartered think tank which states that it "invests in new thinkers and new ideas to address the next generation of challenges facing the United States ... With an emphasis on big ideas, impartial analysis and pragmatic solutions, New America invests in outstanding individuals whose ability to communicate to wide and influential audiences can change the country's policy discourse in critical areas, bringing promising new ideas and debates to the fore
Isn't it reassuring that we have our Billionaire class looking after our interests? The New America Foundation contains such luminaries as Eric Schmidt as its Chairman of the Board of Directors. Schmidt is the CEO of Google. It also boasts such ideologically diverse names as Laura Tyson and Francis Fukuyama, the repentant neocon and utterly clueless historian. And last but not least among its members is multimillionaire Christine Todd Whitman , she of EPA fame, whose last notable achievement was lying about the toxic air quality at Ground Zero so Wall Street could remain open for business while the firemen and police involved in the recovery effort continued to breathe fumes in a potentially toxic cauldron.
Aren't you glad these people are looking out for your Social Security money?
To be fair, New America also tolerates folks like Michael Lind who recognizes this bogus sleight of hand for what it is. Recognizing the argument that rather than our tax dollars, the Trust Fund contains
government bonds that are simply IOUs, a measure of how much the government owes the system." So government bonds backed by the full faith and credit of the U.S. government, a government that has never defaulted on its obligations in its entire existence since 1776, are not actual assets? Really?
Here's Peterson again, back in 2000, telling us it's time to tell the elderly they need to "adjust and prepare." So rich coming from a Billionaire:
"Our leaders face a choice. They can address the question of entitlements for the elderly while the economy is still booming and the budget is in the black, and before most baby boomers retire. Or they can delay until the window of opportunity closes. Either way, America will change course. If we act now, everyone, young and old, will have time to adjust and prepare."
Read the rest of the article and you'll see the "choice" is between cutting benefits or raising taxes, presumably on folks like Pete Peterson.
I have a Modest Proposal for Mr. Peterson. How about we nationalize 2 (just 2!) of your purported 2.8 Billion in Net Worth, and give 2 million Americans a check for $1000 each? It may not solve the deficit you folks created with your laissez-faire economic theories, but it might help out with the heating bills during this supposedly mild winter.
And I'm happy to give you time to "adjust and prepare."
And then we'll tap the folks who who make up the American Enterprise Institute, and so on. Because that's pretty much what you're proposing to do to us.
But let's let our Fed Chairman have the last word, shall we?
Bernanke worked to assure the committee he had nothing against old people. "I’m not in any way advocating unfair treatment of the elderly, who have worked all their lives and certainly deserve our support and help, but if there are ways to restructure or strengthen these programs that reduce costs, I think that’s extraordinarily important for us to try to achieve," he said.
Here it comes...