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social security
Kevin Drum writes:
I'm going to annoy a few of my fellow lefties and say that we should stop getting bent out of shape when people respond to the Trustees report by saying that Social Security is "going bankrupt" or "running dry" or some similar formulation. There's a hyperlegalistic sense in which this isn't accurate, but honestly, it would be a helluva dramatic event if the trust fund ran out of money and Social Security suddenly had to slash benefits by 25% in 2033 (see chart above). Referring to this as "bankruptcy" isn't all that big a rhetorical stretch, and everyone on both left and right should put away their fainting couches, ditch all the tired excuses, and get to work on a fix that would involve — say it in unison, folks! — a very modest and phased-in cut in benefits combined with a very modest and phased-in increase in taxes.
(Emphasis supplied.) Actually it is more than a "rhetorical stretch." It's a lie. And not for "hyperlegalistic" reasons.

Yes, bankruptcy and insolvency are "helluva dramatic event[s]." But sovereign nations who control their own currency don't go bankrupt or insolvent in the way the phrase is used with regard to Social Security.

What is Social Security? It's a program whereby the federal government pays benefits to persons who qualify based on formulas established by the Congress and the relevant executive branch agencies.

How is it funded? Through a dedicated tax on wages.

How would Social Security become "insolvent" or go "bankrupt"? It can't in the true sense of the word. It can't in the governmental sense of the word either.

What Drum describes are choices for the government. Choices the government has with EVERY SINGLE PROGRAM it runs. Oh, by the way, that includes the military. It includes Medicare. It includes funding for student loans for colleges. It includes enforcing the environmental laws.

It is as much a lie to say Social Security is "going bankrupt" or "insolvent" as it is to say the military is going bankrupt.

It treats government finances like household finances. It is stupid for anyone who claims to favor progressive approaches to government to accept this frame. Worse, it is accepting lies.

If the federal government does not want to slash Social Security benefits in 2033, assuming the Trust Fund runs out, then it does not have to. It can add funding from other sources. It can raise taxes. It can cut military spending. It can do any number of things.

The ability of the federal government to not cut Social Security benefits is obvious to anyone. Any insinuation to the contrary is a lie. And a malicious lie in my view.

Now, if Social Security is to be treated as a traditional pension fund, well then, let's be honest about THAT. But then let's also be honest about the deficits that tax cuts for the rich and military spending have caused. But no one talks about "bankruptcy" and "insolvency" when tax cuts and military spending are discussed. EVER.

Originally posted to Armando on Tue Apr 24, 2012 at 07:21 AM PDT.

Also republished by Discussing The Law: TalkLeft's View On Law and Politics, Social Security Defenders, Progressive Policy Zone, Money and Public Purpose, and Daily Kos.

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Comment Preferences

  •  Tip Jar (154+ / 0-)
    Recommended by:
    Karl Rover, Jim P, whaddaya, joanneleon, Azazello, terabytes, Ice Blue, VetGrl, Sixty Something, Supavash, xanthippe2, Egalitare, kck, tardis10, SpecialKinFlag, One Pissed Off Liberal, shaharazade, Jackson L Haveck, Dr Colossus, gulfgal98, basquebob, doingbusinessas, fcvaguy, cslewis, adigal, Robobagpiper, doroma, greenbastard, Deep Texan, Ken in MN, buckstop, jfromga, Melanie in IA, Jim R, The grouch, cpresley, ferg, Meteor Blades, Robert in WV, triv33, Ian S, magicsister, 3goldens, jediwashuu, Rich in PA, wxorknot, tonyahky, sostos, elwior, yoduuuh do or do not, semiot, hubcap, ratzo, OLinda, Nebraskablue, democracy inaction, MKSinSA, mygreekamphora, TimmyB, frandor55, Joieau, implicate order, sea note, Militarytracy, science nerd, sandrad23, Angie in WA State, kefauver, divineorder, poligirl, HCKAD, Geekesque, JesseCW, 420 forever, jamess, filby, redlum jak, Gary Norton, Sandino, brooklynbadboy, Carol in San Antonio, camlbacker, Preston S, sleipner, Eric Nelson, Susan Gardner, TomP, tidalwave1, fixxit, bubbanomics, Kurt Sperry, pgm 01, ParkRanger, dsb, wasatch, SoCalSal, Mac in Maine, GeorgeXVIII, oortdust, ladyjames, elengul, ozsea1, mikeconwell, Mike08, wu ming, drnononono, Mathazar, nicki37, PSzymeczek, Orcas George, priceman, wide eyed lib, reddbierd, Lucy2009, cocinero, frisco, dotdash2u, solesse413, anodnhajo, stormicats, happymisanthropy, verdeo, Greasy Grant, BradyB, spritegeezer, Bmeis, TAH from SLC, eddieb061345, Sanctimonious, JanL, Lost Left Coaster, expatjourno, Jack Hare, Yo Bubba, Kitsap River, RJDixon74135, Calgacus, profh, Simplify, rbird, Oddball, hnic357, TKO333, bryduck, jm214, wildweasels, Mr Robert, Matt Z, Letsgetitdone, thepook, Larsstephens, RenMin, MadEye, Bud Fields
  •  Yes (52+ / 0-)

    and thank you!  Thanks for framing it this way. That is a winner.

    What Drum describes are choices for the government. Choices the government has with EVERY SINGLE PROGRAM is runs. Oh by the way, that includes the military. It includes Medicare. It includes funding for student loans for colleges. It includes enforcing the environmental laws.

    "Justice is a commodity"

    by joanneleon on Tue Apr 24, 2012 at 07:26:54 AM PDT

    •  And that is OUR payroll deductions funding these (24+ / 0-)

      Social Security and Medicare programs 100%. Whatever benefits paid out have been fully earned by our decades of hard work and increasing productivity.  Every penny is to be credited towards each of our workers accounts to provide financial and health security in retirement, or to help sustain our families if dying or disabled before retirement, and to help support a surviving widow or widower or struggling disabled worker.  These programs are our most essential of social safety-net contracts with America's workers, retirees and disabled workers.  Our entitlement to these benefits comes from our hard work, delivering quarter after quarter of hard work-generated earnings to employers.  

      And about that miserly $300 death benefit--isn't it time we tacked on a zero to the end of that?  What year was that benefit amount set, sometime when the fixed gold standard ($35/oz) was still in effect and well-paid workers earned maybe $3,000 per year?  Yet, even if that Social Security death benefit was raised, reflecting costs of living and dying increasing over the last few decades, to $3,000 even that would barely cover the cost of basic cremation services, at least as rendered by the death industrial complex these days. $300 is barely buys death certificates, enough pine, nails and glue for a crude pine-box coffin, let alone the headstone and cemetary plot.  And the legally required embalming by a state approved and licensed local death industry franchise would be considerably extra.

      No silly do-it-yourself burying of deceased relatives is to be tolerated in this land, not when there's large legal profits to be freely made on behalf of free market-loving shareholder-owned death corporations.  It's illegal for citizens to bypass providing the free market establishments their full due, with indulging in such un-American shoddy selfishness in dealing with the dead.  Look, becoming a dead American does not entitle one any possibility avoiding of the final payments due our uniquely American free market's esteemed and properly respected business establishments.  There's no free ride in America, not even out of life. Skipping out could mean no ticket to heaven for chiseling cheapskates like you and purgatory for your dead relative, plus forfeiture of your All-American Bootstraps required to become healthy, wealthy and wise, possibly for multiple generations to come.  

      And Lord knows we just can't leave sorting the dead all out up to God--not without a decent $15,000 burial (an amount oddly similar to the average costs of a live 'normal' birth or getting married). Otherwise, we should not be surprised when the police are notified regarding your grave infractions and one must face the music of suspicion of some sort of foul play, if not murder, and crimes, yea verily--economic terrorism, committed without shame against decent American corporate and shareholder profits.

      Oops...this evolved into a small rant it seems...but can anyone guess I might have a recently deceased relative or watching the post-death struggles?  Especially interesting because the deceased man, a staunch libertarian Republican, had managed to get himself 100% invested in what now are all truly 'upside down' business real estate deals over the last decade or so.  Compounding the problem was his taking out reverse mortgages on said properties, just before the real estate market collapse around 2006.  So, his retired, partly disabled sister 'inherits' all these problems, as his 'estate', plus covering funeral costs, and, to triple her joy, just got the IRS letters questioning whether some of  those investments actually qualified for previously claimed 'non-profit' status since it seems that not enough of the housing units were actually offered to low-income renters. (He'd been telling her what a great investor/business savant was and how she'd inherit something bigger than she could imagine.)

      But wait, there's more and it's major deal in the Department of Unmitigated Karmic Irony, since a few decades back she was actually an IRS employee--and one who is said to have used her position to internally 'sic' IRS auditors onto a few of those who dared stand between her and what she felt and calculated she deserved. Do I cry and laugh out loud...or just sort of bow my head in respectful resignation, and try to cover and repress the urge to smirk?  Well, perhaps making a donation to the cancer society in their names would do best...and maybe the heart association...mental health..maybe something to the Democratic Party in their me, please, before I also ring the irony bell too loudly.

      When life gives you wingnuts, make wingnut butter!

      by antirove on Tue Apr 24, 2012 at 09:04:56 AM PDT

      [ Parent ]

      •  Excellent, please diary this (13+ / 0-)
        And about that miserly $300 death benefit--isn't it time we tacked on a zero to the end of that?  What year was that benefit amount set, sometime when the fixed gold standard ($35/oz) was still in effect and well-paid workers earned maybe $3,000 per year?  Yet, even if that Social Security death benefit was raised, reflecting costs of living and dying increasing over the last few decades, to $3,000 even that would barely cover the cost of basic cremation services, at least as rendered by the death industrial complex these days.
        I was not aware, thanks.
      •   a very nice rant, thanks (1+ / 0-)
        Recommended by:
        Eric Nelson
      •  I cremated a husband ten years ago. $700. (3+ / 0-)

        It was another couple hundred to rent an airplane that a friend piloted and scatter his ashes out the window atop a precarious slope in the Cascades that had never - and probably will never - see a logger's saw. You can, to some extent, do it yourself if you are the next of kin, as I did. I believe Charles wants similar done with his.

        I've already told Charles what I want done with my cremains. Mix some of them with herring, go take out a small fishing charter in Anacortes, and feed the salmon that have many times fed me. Then take the rest and mix them with the ashes of my beloved dogs here on our land.

        Organ donors save lives! A donor's kidney gave me my life back on 02/18/11; he lives on in me. Please talk with your family about your wish to donate.

        Why are war casualty counts "American troops" and "others" but never "human beings"?

        by Kitsap River on Tue Apr 24, 2012 at 03:17:53 PM PDT

        [ Parent ]

        •  Feeding the fish--I'd never have thought of (0+ / 0-)

          that way of enriching and appreciating nature and life cycles.  Technically that'd be feeding the fish eaten by the fish eating fish...but I digress and must confess this is spawning new ideas within my untrammeled imagination.  I guess I've sort of been stuck in the old fashion modes of cremain management--having to urn it.  It's sort of strange to worry about this because we've been sharing organic molecules with many forms of life for maybe 3 billion years or so and still I irrationally don't want to inhale.

          Recently I was contemplating if it might be possible to recycle cremains of certain politicians, lobbyists and billionaires as an ingredient in a new line of cat litter, call it "Buried Secrets" or "Rich & Paw-erfull"...although I'm unsure of the health risks to cats.  I'm concerned that PETA might find this problematic if cat health could be at any risk.  I'll have to make inquiries before any posters featuring naked fur-free famous humans are published against my idea.

          When life gives you wingnuts, make wingnut butter!

          by antirove on Tue Apr 24, 2012 at 10:34:45 PM PDT

          [ Parent ]

    •  latest SS report is very conservative... (3+ / 0-)
      Recommended by:
      BillLoney, hnic357, jm214

      And I mean conservative in the lying BS sort of way.

      Their projection for running out of money in 2033 depends on a 6.5% unemployment rate continuing to 2033, on wage growth continuing to be stagnant until 2033 growing inflation adjusted at about 0.5%, depends on almost no immigration and continued stagnant fertility rates.

      ALL of these ASSumptions are patently absurd.

      1. unemployment will go down heavily as more people retire, this will be unavoidable moving passed 2020 as retirement rates swing upwards. Also their are many delaying retirement atm which is also skewing this statistic in a negative way that simply won't hold for the next 20 years.

      2. As more people retire wage pressure will go up, This is a natural and obvious outcome. For the report to pretend that the wave of retirements won't effect wage pressure in the market smacks of delusional or conservatively manipulative designs.

      3. immigration being down is a temporary effect, current anti-immigration fervour is unsustainable for the farming industry and meat/ranching industries.

      4. immigration again will have upwards pressure from increased retirement rates, low hanging fruit of (citizen)American workers held up from job advancement due to delayed retirements will open up more low end opportunities as they are allowed to continue their job advancement after the retirement rate picks up again.


  •  Except That There Can Never Be Few Enough Conservs (6+ / 0-)

    in the Senate who won't block remedies while insisting that the lie is the truth.

    Functionally it's true.

    We're going to have to move on from the conceptual model of the United States we've been operating on for the past century. If we want that back we need to do somethings a whole lot more aggressive than voting and blogging. If we don't want to do that, we need to accept our new society.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Tue Apr 24, 2012 at 07:28:54 AM PDT

  •  A tax we've stopped collecting in part (35+ / 0-)
    How is it funded? Through a dedicated tax on wages.
    The first thing we should do is repeal the idiotic payroll tax holiday.
  •  The deficit is almost exactly equal (25+ / 0-)

    to the combo of military spending and (the bizarrely-named) Hömĕlānd Security.

    The kicker being that neither does anything but further our nation's enemies aims; undermining our National Security and surrendering our freedoms. We create indebtedness to China, an enemy we are supposedly trying to restrain, for example.

    But we're not allowed to say that and be taken as "Adults" in our imbecilic national policy making.

    I think it entirely defensible to assert that our National Security Agenda is completely in the hands of moles determined to destroy the nation and its people. Otherwise, we've got a bunch of delusional, trans-partisan, lunatics running the show.

    The Internet is just the tail of the Corporate Media dog.

    by Jim P on Tue Apr 24, 2012 at 07:32:46 AM PDT

  •  Social Security Tax has always been... (30+ / 0-)

    ...the most regressive of all taxes.  A simple fix would be to lower the rate for everyone, and remove the income cap.

    Drum is way off base, and almost into the land of Wingnuttiastan.

    (P.S. - does anyone read Kevin Drum anymore?)

    The test of whether we're willing to stand up to the thugs that wrote voter suppression laws is this: Are you willing to hold hands with someone that needs hand holding in order to qualify to vote?

    by Richard Cranium on Tue Apr 24, 2012 at 07:34:23 AM PDT

  •  We cannot simply print money forever (3+ / 0-)
    Recommended by:
    Sparhawk, AmericanAnt, hmi

    There is interest on all that debt.  And, printing money devalues money already in circulation which amounts to hidden inflation.

    But, once again, the only solution we hear is "don't worry about it.  It will be ok!".  "Just don't make us make any hard decisions today.. our kids can worry about it".  

    Thanks.  And our kids thank you too.

    •  Well (40+ / 0-)

      suppose that's true (it really isn't), then the whole GOVERNMENT is insolvent, not Social Security.

      Me I want to raise takes, especially on the rich. I want to cut military spending., I want to roll back tax expenditures for oil companies.

      How about you?

      •  All of the above (2+ / 0-)
        Recommended by:
        divineorder, hmi

        But, it's nowhere near enough.

        Allowing the Bush tax cuts (for all) to expire next year is a good start.  I hope they let the payroll tax holiday expire as well.

        Then close down military bases all over the world.  We are not the world's police force.

        But I'm also in favor of cutting back domestic spending.  Let's eliminate subsidies for oil companies.. but eliminate them for all industries... and agriculture as well.

        Then reduce corporate taxes just enough to encourage business growth here domestically.  Since Japan lowered its rates last month, we are now have the highest corporate tax in the world.

        •  Let's start with those things (8+ / 0-)

          and see where we are.

          •  These are what I call a good faith first steps. (10+ / 0-)

            I would add a modest hike in the Social Security cap on income contributions.

            First take good faith steps to get back to a rational level setting state and only then assess the long term needs for SS.

            Health care requires a national solution, not a federal budget solution.

            These things will fix the deficit.

            Eliminate the Bush tax cuts Eliminate Afghan and Iraq wars Do these things first before considering any cuts

            by kck on Tue Apr 24, 2012 at 08:36:21 AM PDT

            [ Parent ]

          •  C'mon Armando. That's too smart. (1+ / 0-)
            Recommended by:
            Matt Z

            Don't you realize? The libertarian/conservative answer is always that there is nothing we can do to solve our problems, so we have to kill the only agency that addresses them (i.e., the government.) Same thing applies to individual problems: if we can't solve the entire problem all at once, we shouldn't try anything at all.

            "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

            by bryduck on Tue Apr 24, 2012 at 05:05:39 PM PDT

            [ Parent ]

        •  The Big Lie --- U.S. Has Highest Corp Tax Rate (0+ / 0-)

          What bullshit!  We don't have the highest corporate tax rate in the World because we have various deductions, carry forwards and carry backs that go along with our high tax rate.

          The U.S. Has a Low Corporate Tax: Don’t Believe the Hype about Japan’s Corporate Tax Rate Reduction

          America has one of the lowest corporate income taxes of any developed country, but you wouldn’t know it given the hysteria of corporate lobbying outfits like the Business Roundtable. They say that because Japan lowered its corporate tax rate by a few percentage points on April 1, the U.S. now has the most burdensome corporate tax in the world.

          The problem with this argument is that large, profitable U.S. corporations only pay about half of the 35 percent corporate tax rate on average, and most U.S. multinational corporations actually pay higher taxes in other countries. So the large majority of Americans who tell pollsters that they want U.S. corporations to pay more in taxes are onto something.

          The U.S. Has a Low Corporate Tax

          Read the full Report Here

          Citizens For Tax Justice Report

        •  "We" are "the world's police force" the same way (0+ / 0-)

          The Summerdale Police District was "Chicago's police force" back in the late '50s, early '60s.

          "Is that all there is?" Peggy Lee.

          by jm214 on Tue Apr 24, 2012 at 05:49:01 PM PDT

          [ Parent ]

    •  Actually, we can. One reason the EU nations (5+ / 0-)

      face a more dire situation than the U.S. at present is that they relinquished their monetary sovereignty.  The U.S., having retained monetary sovereignty, can print as much money as it decides to.

      No one is seriously advocating printing trillions right now.  But, the federal government has the capacity to stimulate economic activity and reduce unemployment by injecting cash into the system.

      Unlike a private individual who has to pay back her/his debt to avoid bankruptcy, a government which is monetarily sovereign does not.  Thus, the U.S. needs only to make sure that the tax base grows more rapidly than the debt--and that is entirely doable if the political class and pundits will stop lying about how the increasing debt is the #1 problem facing our economy.  Funny how we ONLY hear that during Democratic administrations; and NEVER, EVER--as Armando points out--do we hear of the role of vastly increased military spending and unnecessary wars as main contributing factors to this debt.

      The U.S. only recently crested the 100% debt-to-GDP ratio.  Great Britain, by contrast, had a ration >100% for large chunks of the last 200 years.

    •  Printing money and the debt are different things (0+ / 0-)

      In fact, one is the opposite of the other.   If the country were actually short of money (which it is not) we could either borrow money or print more.   Either solution would eliminate the debt, but of course both have consequences.

      Printing money is also not "hidden" inflation, it is the definition of inflation.

      It is important to be precise when thinking about solutions.   The real issue for the country is as Armando states, it is really a matter of priorities and politics.   If Obama were a dictator and we really wanted to end the deficit, it could be done by the end of next year.

      When we almost had a surplus (pre-bush) serious economists were actually worried because US government notes (debt) are a key part of the world's economy.  

      •  No, they ARE the same (0+ / 0-)

        Not at all. They are not opposites.  Government money is debt & government debt is money. This is a key point, that everybody used to understand. FDR made a point of saying this in his second Fireside Chat.  

        You can't eliminate the Federal Debt without eliminating the base money in the economy. They are the same thing! A Treasury bond is nothing but (a sum of) dollar bills with dates in the future printed on them. A dollar bill is nothing but a matured treasury bond, a bond with a date in the present or past on it.

        A government exchanging its bonds for its dollars is NOT borrowing - it is a completely different transaction from borrowing, that happens to be called by the same word in order to confuse the suckers.

        Printing money is not the modern definition of inflation, although it may be an older one. The modern definition is empirical price-inflation, e.g. the CPI.

  •  No worries then,just raise taxes in 2033.One thing (0+ / 0-)

    What makes you so certain, that after paying the debt, which according to the CBO will exceed 200% of GDP by 2037, that there will be any money left over to tax?

    "If the past sits in judgment on the present, the future will be lost." Winston Churchill

    by Kvetchnrelease on Tue Apr 24, 2012 at 07:39:09 AM PDT

    •  So let's see (20+ / 0-)

      2% rates on 10 year bonds, let's do the math.

      Here's a question for you - do you think the US will default on its debt? Is that your thesis?

      But by all means, let's slash military spending to start. You with me?

      •  I'm with you. Cut military spending by half at (24+ / 0-)

        least. It's funny that no one can come to grips with the fact that there is no threat in the world against the US that can support the insane levels of military spending.

        The power of accurate observation is commonly called cynicism by those who have not got it. G.B. Shaw

        by baghavadgita on Tue Apr 24, 2012 at 07:55:28 AM PDT

        [ Parent ]

        •  So you don't think we need more aircraft carrier (9+ / 0-)

          groups, hundreds more stealth fighter jets and thousands of stealth cruise missiles, thousands of relentless drones and more battalions of gung-ho Marines, all to Win the War against The Threat of Total Global International Terrorism of The Most Inhuman Kind, and drugs, and all it's local franchised cells which could be hiding anywhere, even hiding in our schools and religious buildings and workplaces, and thus meriting constant vigilant spying and, if suspects are found, to be captured and tortured to no end?  

          Dare you try, even now, to say such things as might deter or prevent the future-obsessed DoD from completing Sky-Net and thence to delay it's becoming self-aware and which in turn gains complete cybernetic and privatized control of all military assets?  Or else having our military/government network turned into servile 'bots' controlled by one or several international gangs (employing hacker/cracker programmers) and the secret nation/state groups behind most major network attacks and infiltrations, much more so than 'Anonymous', and doing massive corporate espionage and theft of trade secrets, plans and other intellectual property.  If we downsize, there is less to steal, less to compromise, less to have turned against us in acts of cyber-terrorism, and less chance for T-1000's to be manufactured and unleashed to roam the Earth mercilessly, and finding John Conner's mother defenseless in the sanitarium.

          Okay, so yes, I'd agree cutting our defense spending by at least 50% seems very reasonable. Certainly we could consider dropping to the combined levels of Russia, China, India, and maybe share far more costs with the EU/NATO and Pacific Rim alliances.  It might be good to divert some spending to needed weather/climate satellites since defending our nation against losing hundreds or thousands of us to weather catastrophes would come far cheaper than our cost-ineffective millions spent per actual terrorist killed (plus the untidy expenses for collateral damage kills and maimings).  

          And if we have a few hundred billions extra, well, it's high time to start investing in the technologies NASA/ESA, Russia and China will need to cooperatively develop warp drives for interstellar travel and start the Interplanetary Federation of Sane Intelligent Peace-loving Species and zero-point free energy systems, tri-corders, phasers, space stations, transporters, light-sabers, jet boots, flying cars, star gates, food replicators if not advanced hydroponic food growth systems that are not fattening, and be transformed by mysterious black obelisques into embryonic cosmic trans-corporeal multi-dimensional consciousnesses, battle the Borg, choosing the red or blue pill, etc.  This might be where imaginative and progressive leadership could take us if we just invested in Peace and The Future, instead of War Now and Forever.  Sure, we may need some photon torpedoes and phase cannons, but we have to get out of our little world's limited, self-defeating perspectives and intense nationalized competition for scare resources and frakking wars with each other and Nature first.  What we really need is a Department of Peace and The Future!

          When life gives you wingnuts, make wingnut butter!

          by antirove on Tue Apr 24, 2012 at 09:56:09 AM PDT

          [ Parent ]

          •  Nicely done! You got me, I'm one of those (6+ / 0-)

            hippie peace loving folks commonly called a terrorist by today's right wing nuts.

            The power of accurate observation is commonly called cynicism by those who have not got it. G.B. Shaw

            by baghavadgita on Tue Apr 24, 2012 at 10:19:47 AM PDT

            [ Parent ]

            •  Yep...I remember when being called Peace-nik (3+ / 0-)
              Recommended by:
              Kitsap River, Calgacus, baghavadgita

              was about as bad as it got from 'average' conservatives. Okay, that along with mini-lectures like, "Are you really in agreement with all those protesters? Don't you realize you'll end up with an FBI file and deemed a known supporter of communists if you sign that petition to free those criminal protesters or are photographed in that peace march?  It'll go on your permanent record and then what will you do?"

              And then there was the occasional presumptive alpha-male outburst of something like "You're just a G-D_n F_n hippie-freak, free-love, draft-card-burning surrender-monkey who wipes his/her ass on America's burning flag every day while holding up a busted peace sign while clutching some hippie dippy peace slut...and, hey, let me show you my half'a peace sign, buddy! Right up the middle, you idiot goof-ball!  And pull me another American made beer from the cooler you ungrateful freak, then you can go waste your head blowing your Mexican weed or whatever drugs you like this week. And hey, Punk! Don't you ever get my daughter pregnant with your weak headed demon seed or I'll be running your sorry ass up that flag pole with that peace flag rammed up inside.  What was it that messed up your whole generation, the flouride in the water? Those foreign rock bands like The Beatles?"  

              And that was for having horn-rimmed glasses, hair that came over the tops of my ears just a bit, bell bottoms, a guitar, and expressing a concern about the futility of the war to carpet bomb Viet Nam and Cambodia, the human and environmental costs of Agent Orange, and the odd fact that rich 18 year olds of rich and powerful families seem to get easy draft deferrals, while other kids didn't.  And the rich kids got to join frats at fancy private colleges, pickling their brains binging on beer and shots and competing to bed coeds, all the while laughing at the poor slobs who get drafted and are compelled to go to the jungles and get maimed or die in Viet Nam, and I was wondering out loud what was so patriotic and right about that, and suggesting that everyone focusing on peace and love might be a whole lot more productive for the whole world, and that I had become a committed Consciencious Objector, which kept sounding like being a Commie Pinko to her dad.  

              It is a pretty crazy country where using one's rights to assemble and speak, to take a stand, articulating a clear position for peace, with consensus as a group, and this frightening spectacle gets the hot police response or national guard out in full military garb and there are violent beat downs of those criminally peace-loving drug-crazed youth--and that beat down of those foolish peace-loving hippies is what earns the attention and approval of such conservatives.  Being for the war, marching for the war and hurling insults at, or physically confronting peace advocates, and, no problem, there are no arrests, no tear gas, no police beat downs, nobody deems you foolish or as trying to subvert or overthrow 'the establishment'.  Although scary peaceful flowers might be offered them by peace-niks as the war-niks go by.

              Be against the war, calling for peace and justice, be for reasoning together towards common consensus and finding a fair compromise, and you learn to expect the local war to come in hard, to aim directly for your head and guts, after the volleys of tear gas.  Being for Peace, holding up flowers and hand-painted signs, is clearly one of the most threatening actions and offensive acts a citizen can do, with other citizens (besides all that icky free love stuff) and require battalions of police to repress, arrest and shut down, as the media pontificates on the foolishness and affirming the criminality of those daring to protest like that, in public places.  And being a Peace-nik only makes the news only if violently opposed with harsh prejudice and getting body parts bashed in, against a backdrop of TV newsworthy picturesque roiling clouds tear gas, and an incited bloody running riot of some kind or another, even if perhaps incited by the local 'Officers of The Peace' or FBI doing their COUNTER-INTEL thing.  

              And in this current age, being an advocate for Peace and Justice can result in being named to the no-fly list and deemed a potential domestic terrorist, belligerently inciting and encouraging others to think peaceful thoughts. Raising your arm to deflect a baton blow that seems aimed at one's spleen or other vital organs or head is deemed to be criminally resisting arrest and actively attacking an officer, and refusing to heed the directions of an officer, refusing to submit to a lawful arrest, conspiracy to incite a riot, etc. If one survives that direct on-slought, the legal battle begins where 'the book' is thrown at you and keeping you suffering pain in jail as long as possible seems to be the goal of some 'in the system'. Daring to video and document what appears to be outrageous police response has been criminalized in some states.  It's not cheap or easy to advocate for Peace and tends not to leave one injury free and deprived of electronic personal property (evidence proving conspiracy of course).  Peace-loving Americans do not seem to have a clear sort of majority representation, even in these days.  Not tolerating and forcefully repressing those who form groups in public daring to adovcate tolerance, fairness, justice and just getting along peacefully is what remains uniquely and exceptionally status-quo American.

              When life gives you wingnuts, make wingnut butter!

              by antirove on Tue Apr 24, 2012 at 12:46:48 PM PDT

              [ Parent ]

      •  Greek bonds... (2+ / 0-)
        Recommended by:
        Kickemout, hmi

        ...were trading at 4% in 2009. Unless you are arguing some kind of exceptionalism...

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Tue Apr 24, 2012 at 09:06:47 AM PDT

        [ Parent ]

        •  Well (14+ / 0-)

          Greece is certainly not the US, not the least of which is Greece does not have its own currency.

          I find your comment silly I admit, but I give you just one important data point as a difference.

          •  Countries that print their own currency... (3+ / 0-)
            Recommended by:
            Kickemout, AmericanAnt, hmi

            ...implode all the time, look at Weimar Germany. They tried to print themselves out of the mess they were in and ended up using wheelbarrows of cash to buy food.

            The thing to remember is that foreign investors don't give a rats ass about dollars. What they want is stuff. They send us 100 TVs, they want 105 back at some point. That's why you invest.

            I agree that the US does not look like it's going to collapse anytime soon, but neither did Greece...

            (-5.50,-6.67): Left Libertarian
            Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

            by Sparhawk on Tue Apr 24, 2012 at 09:16:55 AM PDT

            [ Parent ]

            •  Look at Weimar Germany!!! (17+ / 0-)

              Yes look at it.

              They wanted their currency to implode for a reason. You know it. I know it.

              Please, let's be real.

              The rest of your comment seems divorced from reality imo.

              Investors DO want dollars. They want security. For crissakes, people are buying US binds guaranteeing an investment loss.

            •  um no (9+ / 0-)
              The thing to remember is that foreign investors don't give a rats ass about dollars.
              They certainly care.  They were reluctant to keep buying during the dollar's decline in 2007 but have resumed.

              -You want to change the system, run for office.

              by Deep Texan on Tue Apr 24, 2012 at 09:49:07 AM PDT

              [ Parent ]

              •  They care... (0+ / 0-)

                ...because they have the impression that dollar = stuff and a dollar in the future will give you the same amount or slightly more stuff than today. (More precisely, that the dollar is the best option as a store of value as opposed to others).

                As soon as they get the idea that dollars do not equal stuff, they all leave and the economy implodes.

                The more money you print, the less stuff you imply every dollar will buy.

                (-5.50,-6.67): Left Libertarian
                Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                by Sparhawk on Tue Apr 24, 2012 at 03:21:07 PM PDT

                [ Parent ]

                •  Nope, you assume full employment implicitly here. (1+ / 0-)
                  Recommended by:
                  Deep Texan

                  The more money you print, the less stuff you imply every dollar will buy.

                  IF that were all that would happen. But this makes utterly invalid full employment (& completely accommodated savings desire) assumptions. At times like now, when the economy is starved for money, helicopter-dropping money would cause more creation of real stuff than the money represents.  

                  Printing money for a JG at a reasonable living wage for doing sensible things would be highly disinflationary in the USA, because it would crowd out a lot of insane, inflationary spending supported ultimately by government welfare, targetted to the rich.

                  What can "they" -  foreign investors - do if they think they will get less stuff? All they can do is spend their money in the USA . If they spend so much that they cause inflation in the USA, they are cutting their own throats.

                  Like Big John Connally said, "the dollar is our currency and your problem" (if they want to make it a problem).

            •  They imploded because of the gold standard (9+ / 0-)

              and a crazy monetary policy.

              Q: when did Germany return to growth?

              When Hitler reneged on Germany's debts and started a massive stimulus policy of building in the 1930s. You should look at the rip-roaring 1930s (especially late 1930s) in Germany when they were printing money left and right and had a great economy.

              If Hitler hadn't been an evil monster, he'd be thought of as the FDR of Europe for his Keynesian policies.

              There are two kinds of people in this world. The kind who divide the world into two kinds of people, and the kind who don't.

              by upstate NY on Tue Apr 24, 2012 at 10:00:24 AM PDT

              [ Parent ]

              •  Foreign-denominated debt was the killer (1+ / 0-)
                Recommended by:
                upstate NY

                More precisely, they imploded because the debts were denominated in gold or foreign currency. Such a debt can go to infinity measured in domestic currency. Germany had no alternative.

                Responding to Sparhawk - of course "foreign investors ... What they want is stuff."  is true But the point is that the foreign investors have no legal claim for "stuff" if they hold a fiat debt. MMT economists support a JG which would put an economy on a labor standard - in effect making the foreign investors have the right to be provided with the produce of quantities of unskilled labor in the domestic economy.

                In normal situations, this is the perfect anti-inflationary way to balance creditor & debtor rights. MMT policies would be very deflationary in the USA - see my reply to Sparhawk in another thread.

            •  You again? (1+ / 0-)
              Recommended by:

              I can only conclude that you are so very fond of your 1% exceptionalist authoritarian talking points that you have an unquencable compulsion to inflict them on the rest of the communtity; our reactions be damned.

              Get help.

              "What have you done for me, lately?" ~ Lady Liberty

              by ozsea1 on Tue Apr 24, 2012 at 12:53:34 PM PDT

              [ Parent ]

              •  Good progressive policy (0+ / 0-)

                Means actually understanding economics.

                (-5.50,-6.67): Left Libertarian
                Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                by Sparhawk on Tue Apr 24, 2012 at 01:48:58 PM PDT

                [ Parent ]

                •  really? (2+ / 0-)
                  Recommended by:
                  ozsea1, pot

                  coming from someone who thinks deflation is just a minor inconvenience?  I've never taken an economics class, but I understand it better than you do.

                  •  Deflation... (0+ / 0-)

           the cure, rather than the disease.

                    I hate analogies, but it's analogous to a heroin withdrawal. Sure, not having heroin is incredibly painful and giving more heroin certainly makes you feel better in the short term, but in the long term you have to get off the stuff (i.e. allow the economy to deflate down to sustainability).

                    (-5.50,-6.67): Left Libertarian
                    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                    by Sparhawk on Tue Apr 24, 2012 at 02:50:59 PM PDT

                    [ Parent ]

                •  LOL (0+ / 0-)

                  I understand economics very well, even liberrtarian economics.


                  "What have you done for me, lately?" ~ Lady Liberty

                  by ozsea1 on Tue Apr 24, 2012 at 02:21:06 PM PDT

                  [ Parent ]

                •  But the problem is (1+ / 0-)
                  Recommended by:

                  That you don't, but think you do.

                  Not your fault, it's a  worldwide dark age of economics. Studied a bit of econ back in the late 70s & early 80s. Some good, interesting stuff, but too much gibberish that simply didn't make sense.

                  Got a big shock when I opened up some recent textbooks. All the true, interesting stuff had been purged, while the gibberish had grown like cancer. Laughable, psychotic ideas like Ricardian equivalence & government budget constraints were taken seriously and pretend-proven.

                  In the interim, the enormous weight of gibberish innumerate neoclassical, pseudomathematical quackonomics propaganda had become so enormous I had started believing a little in its insane ravings. Some of the same things I had rejected before and stopped studying econ because of. Read some Keynes in the 70s, but not Lerner, hadn't heard of him - who fixed Keynes's confusions and made him clearer.  

                  A lot of the work of the MMTers is just cleaning up the absolute shit that dominated the last few decades, and just writing down carefully the things that everyone used to know, that went without saying, that hence nobody ever said. Such retrogressions, such amnesia in science are much more common than most people think, although economics is a pretty extreme case.

      •  There will come a time when the tidal wave of debt (2+ / 0-)
        Recommended by:
        Kickemout, hmi

        comes crashing down on the economy, and your 2 percent bonds will be long gone. Will the govt default? Never. However, I would be worried if I was someone under the age of 40, because to avoid default and to perpetuate its existence, the government will indeed be forced to cut benefits to its citizens. Your view of ignoring the debt is the type of herd mentality seen all too often by selfish, self serving people irrespective of party affiliation.

        My immediate suggestion is a ten percent salami cut for every govt agency, including the military. I don't understand people who will not sacrifice a bite today for ensuring a meal tomorrow.

        "If the past sits in judgment on the present, the future will be lost." Winston Churchill

        by Kvetchnrelease on Tue Apr 24, 2012 at 11:23:01 AM PDT

        [ Parent ]

  •  There is no political will for the easy fix (12+ / 0-)

    to social security. They just need to raise the upper income limit for social security taxation. I'm fully aware this won't happen but one can dream.

    The power of accurate observation is commonly called cynicism by those who have not got it. G.B. Shaw

    by baghavadgita on Tue Apr 24, 2012 at 07:53:54 AM PDT

  •  Excellent diary, Armando (24+ / 0-)

    Americans aren't always very good at picking up on attempts to cheat them. People have a built-in tendency to trust others and when someone yells and screams about how "the Government stole your Social Security" and "Social Security's broke and the Democrats stole it!" we become alarmed and tend to believe the con.

    But, that's what it is--a con that has taken years to perfect. People like Pete Peterson, a billionaire who made his money in the bond market, the Koch brothers and others who have prospered at the expense of the middle class have figured out that the best way to get people to give up Social Security is to tell them that it's going broke and nothing can save it. What will the billionaires do with the money we'd otherwise devote to SS? Well as far as they're concerned it doesn't matter what you think. Just hand over the money and STFU.  

    As Armando points out, we don't have to believe them. And, we don't have to let them get away with stealing our retirement security. Vote the R's out of Congress and put better Democrats in their place. Whaddaya

  •  The Financial Elites want us to feel guilty... (18+ / 0-)

    ...that we "cost so damn much."

    Why don't we just reserve ice floes for when we reach SS/Medicare eligibility like Patriotic 'Mericuns" ought to???

    When you are right you cannot be too radical; when you are wrong, you cannot be too conservative. --Martin Luther King Jr.

    by Egalitare on Tue Apr 24, 2012 at 08:05:09 AM PDT

  •  More proof on the pile (21+ / 0-)

    showing that Kevin Drum is worst prominent "liberal" blogger in the United States. His facile centrist contrarianism belongs at Slate or the New Republic, not Mother Jones, which is supposed to be liberal.

  •  You have Pete Peterson devoting his life and (16+ / 0-)

    $1 billion dollars to kill Social Security, Medicare and Medicaide. The left really needs to push back on that with their voices, like this diary.

    ❧To thine ownself be true

    by Agathena on Tue Apr 24, 2012 at 08:24:14 AM PDT

  •  It's a temporary bubble (11+ / 0-)

    A short-term cash flow issue, of the kind that businesses resolve every day by borrowing some money to tide them over until future income rolls in.

    The post WWII baby boom, coming as it did when the Social Security program was just getting started, created the bubble, and it will go away as the baby boom generation dwindles.

    Nevertheless, politicians and their media sycophants are DETERMINED to ignore that simple fact and even their own financial projections--and even when the deception is exposed they refuse to stray from the official line like this notorious example. Worse, they disparage baby boomers as "greedy" for refusing to let themselves be victimized by lies.

    Propaganda that extreme typically indicates a coverup of something that is very threatening to the power brokers. It has been said that politicians spent all of the SS surplus and don't want to do what is necessary to pay it back.  That would mean raising taxes on the 1% and cutting programs that are dear to them.

  •  fascinating (18+ / 0-)

    drum considers himself a lefty?

    The cold passion for truth hunts in no pack. -Robinson Jeffers

    by Laurence Lewis on Tue Apr 24, 2012 at 08:35:36 AM PDT

  •  My local paper ran a front page blurb today (19+ / 0-)

    True Chicken Little, "the sky is falling" mode.

    Social Security and Medicare are running out of money...


    Tell me folks -- when did the Federal Goverment cease to collect the Medicare and FICA payroll taxes? Do you REALLY think they'd do this? Really?

    I called the editor of the paper and said I'm dropping my subscription if they don't retract the story. His secretary took my phone number, but I'll be really surprised if he actually returns my call. (Ghods how I miss the Citizen-Journal.)

    I've worked for Social Security and HHS, and the SS Trustees Report is available for anyone with any sense to read.

    My fellow voters -- the Right is trying to take your cookie.

  •  There are various ways to make SS (14+ / 0-)

    both more fair and more solvent.Drum managed to hit on none of them. But Drum does manage to embrace lying about SS.How interesting.

    Makes me wish I believed in vengeful ghosts,because Kevin Drum is over due a visit from Mother Jones.

    "George RR Martin is not your bitch" ~~ Neil Gaiman

    by tardis10 on Tue Apr 24, 2012 at 08:44:06 AM PDT

  •  Newspaper headlines this morning (20+ / 0-)

    had the very same scare tactics regarding Social Security.  

    Never do the newspaper headlines tell us just how much our useless wars and obscene military spending (nearly as much as the rest of the world combined) are costing us in terms of our financial (as well as security) instability.  Never.  It is always the social programs that people pay into that are posed as being the problem.

    Thank you for this very timely diary.  

    "Growing up is for those who don't have the guts not to. Grow wise, grow loving, grow compassionate, but why grow up?" - Fiddlegirl

    by gulfgal98 on Tue Apr 24, 2012 at 08:44:27 AM PDT

  •  I assume Obama is pimping his Grand Bargain (7+ / 0-)


    A worker bee at a mainline investment bank told me last fall:


    Back in 2008 Wall Street was split 40-60 Obama-McCain. Now it is split 10-90 Obama-Romney
    As the saying goes, throw pearls before swine...ultimately they eat you up.

    Eliminate the Bush tax cuts Eliminate Afghan and Iraq wars Do these things first before considering any cuts

    by kck on Tue Apr 24, 2012 at 08:45:04 AM PDT

  •  How much and on whom (5+ / 0-)

    are the basics of every budget question.   Eventually how much has a limit a physical limit in the sense that real spending in terms of effect is based on the real movement of goods and services.  We are not near that limit.

    On whom is a limitless question,   we can always choose to spend in a different manner.

    The " Social Security is going bankrupt" problem is not a question of budget limits but limits on the hearts and minds of people who want all the money and the idjits that follow them.

  •  Drum is not completely off base (0+ / 0-)

    It is perfectly true if we do nothing benefits will be cut dramatically. And so far we are doing nothing. Nothing is far from the only choice, but it is all we have so far. Waiting does not make the problem better either, since we are effectively under-funding future benefits. A last-minute bailout would be very expensive and unlikely to happen IMO.

    I do however reject the meme that we must cut benefits. I'd really like to see a proposal to pay for current benefit levels, indefinitely, but we don't have and won't get that in the current Congress, or likely the next one.

    •  I quoted the part (8+ / 0-)

      I had a problem with.

      I think you make my point frankly.

    •  Simple Way to Fund SS Benefits Forever (17+ / 0-)

      Remove the cap on income subject to FICA taxes completely -- invoke the Buffet Rule on Payroll Taxes as well as Income Tax.

      Want even more money for Social Security? Make ALL income (including investments) subject to the FICA tax.

      As for Medicare, expand it to the entire US population, and have everyone pay the same premium that senior citizens pay.

      •  A transaction tax on shares traded and investments (3+ / 0-)
        Recommended by:
        divineorder, ozsea1, Kitsap River

        sold could help immensely as well.  Use some of that to increase the financial investigating teeth in the SEC, DoJ, FBI, etc. Use the rest to offset some of the federal taxation loads on working and middle class wage-earners.  Keep the Social Security & Medicare taxes, but eliminate income caps or set them to $250000 or higher.  

        I recall 2008 when $5 million income was the amount John McCain said represented the average income of a true middle class American...let's agree with Republican leaders like John McCain that this income level is certainly the ideal and representative income level of the real middle class America they are representing, and have Congress amend and set the income caps quite fairly at that.  Surely those enriched by their efforts and luck in this land of opportunity have the means to shoulder this future ensuring tax increase to strengthen our present and future Social Security and Medicare programs beyond the point where their futures could again be questioned.  Isn't that national peace of mind worth a little sacrifice now?  As long as austerity concerns are so profound a concern?  Americans having a secure retirement they can count on will be prepare to retire at a reasonable age, and release their good paying jobs to the younger generations, and start spending on all the stuff retirees like to buy, like food, drugs, and maybe even including some fun stuff for grandchildren.

        When life gives you wingnuts, make wingnut butter!

        by antirove on Tue Apr 24, 2012 at 10:26:57 AM PDT

        [ Parent ]

    •  but (1+ / 0-)
      Recommended by:
      we are effectively under-funding future benefits.
      So?  Benefits aren't supposed to be pre-funded.
  •  Still say (8+ / 0-)

    SS is too important to be intrusted to "Trustees" who turn out to be politicians.  We need a system of long- term non-politician trustees -- made up of economists, demographers, accountants and actuaries who can make technically sustainable and gradual changes in benefits, taxes, COLAs, eligibilities etc. to keep the system sound and out of the hands of un-trustable politicians.

  •  Strictly speaking, a melon isn't a horse (13+ / 0-)

    But if I want to call it one and I get paid big bucks to say so in the establishment media, who are you lousy liberals to say I can't? Stop censoring me!


    "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

    by kovie on Tue Apr 24, 2012 at 09:32:44 AM PDT

  •  It's the free market in punditry (3+ / 0-)
    Recommended by:
    ferg, Armando, happymisanthropy

    Even progressive punditry.  There's more to be made by deviating from progressivism every once in a while than by being progressive all the time.

    But nobody's buying flowers from the flower lady.

    by Rich in PA on Tue Apr 24, 2012 at 09:43:47 AM PDT

    •  Is it a contrary contrarian who gets the spotlight (1+ / 0-)
      Recommended by:

      from the free market's media focus managers these days?  

      Don't just try to head upstream and talk about something that improves our humanity and chances of long-term survival, or be content to scull in an eddy wondering how to get up to the liberal spawning grounds given current climate and bemoaning adverse conditions. But instead, even while the others are resigned to float and paddle along with the currents of mass media, heading downstream echoing the prevailing punditry, make your pundit's media-worthy mark by speeding your way downstream, while bewailing where it may lead...yet at the same time be sure to be seen  facing backwards and pointing out to the school of followers the spawning grounds high above?  Or is it the other way around?  

      Punditry's actual goals always seem to evade the identification of a 'true reckoning' path and instead focus on whatever is deemed the most feasible of bamboozlements Congressional folks are pushing, although they carefully express concern over the faltering disarray around it and lack of will to just get that ugly duckling done, stuffed and in the oven, or to just dump it in a partisan pique of political petulance.

      When life gives you wingnuts, make wingnut butter!

      by antirove on Tue Apr 24, 2012 at 10:50:24 AM PDT

      [ Parent ]

  •  Defense Payroll Tax (10+ / 0-)

    I think we should do defense like SS. We could cut income taxes and then make defense a payroll deduction.

    With no draft and defense coming out of the general fund most people have no direct interest in when and how we use our military might.

    If we saw the headline "Military Bankrupty by 2035" how many republicans would be rushing to do something??

    •  If I saw $300 out of my check for the military (1+ / 0-)
      Recommended by:

      that would get the attention of a lot of people really quick and force it to be funded at a more reasonable rate.  Like all the other countries combined instead of all the other countries combined times 10.

  •  I'm not too inclined to get desperate... (10+ / 0-)

    more than two decades out. Especially not when the crazies are in charge of the Rethug party. Any "compromises" reached today on SS are apt to spell disaster for the 99%.

    Just another faggity fag socialist fuckstick homosinner!

    by Ian S on Tue Apr 24, 2012 at 10:24:04 AM PDT

  •  This diary is an Armando classic, thanks for (7+ / 0-)

    coming back dude!  Facebooked it, hope you don't mind....

  •  Thank you. (14+ / 0-)

    Apparently Kevin has decided to join the ranks of the Very Serious People. Wanker.

    "There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning." —Warren Buffett

    by Joan McCarter on Tue Apr 24, 2012 at 11:30:26 AM PDT

  •  Absolutely correct. It should also (5+ / 0-)

    be noted that Republicans are increasingly frothing at the mouth about SS because the time is fast approaching when SS taxpayers will stop subsidizing income taxpayers and income taxes will have to go up to redeem Trust Fund dollars. They want SS changes so that day never comes.

    Further, affiant sayeth not.

    by Gary Norton on Tue Apr 24, 2012 at 11:37:03 AM PDT

    •  They may have already gotten it. (1+ / 0-)
      Recommended by:
      Gary Norton

      The payroll tax "holiday" is an ASSAULT ON FUNDING OF SOCIAL SECURITY. First they have to put these stressors in place, then they have to degrade it so much that the public comes to hate it, and then they can start to defund it. Raising the retirement age for full benefits because of an aging population that dies later is just another fallacy they propagate.  

      I want the politicians "chased down in the streets and hung from the lampposts" just like G.H.W. Bush reportedly told Sarah McClendon.

      •  I understand your skepticism but (0+ / 0-)

        don't share it. This assault has made Americans like SS more, not less and the Ds seem to have really figured it out. I was opposed to both payroll tax holidays but understood why the Pres. pushed it.

        In the lame duck session/or the new Congress we will see a real witches brew of expiring laws: Bush tax cuts for middle class and wealthy, payroll tax holiday, doc fix, Unemployment insurance extension plus a revisit of the Buffett rule.

        I'm hoping if we win the election the President plays hard ball and if necessary allows them all to expire and then deals with the new Congress. Part of that new deal could be a lifting of the cap. But we will see an increase in revenue and it has to happen then, in the glow of the election.

        Further, affiant sayeth not.

        by Gary Norton on Tue Apr 24, 2012 at 02:32:11 PM PDT

        [ Parent ]

  •  "Running Dry" And the GOP answer is always .. (4+ / 0-) privatize every one of the services listed here:

    What Drum describes are choices for the government. Choices the government has with EVERY SINGLE PROGRAM it runs. Oh by the way, that includes the military. It includes Medicare. It includes funding for student loans for colleges. It includes enforcing the environmental laws
    The republican party is all for these programs when they control the means of redistribution into their own pockets, and it's easy to see why the GOP strives to own/control/privatize all of these various revenue streams, never mentioned as a means for profit (which is exactly why the GOP wants ownership) but for purposes of "fixing" them.

    Excellent undoing of a heretofore hugely successful  frame - hope it gets picked up Armando

  •  Wonderful point, and it applies to the deficit (1+ / 0-)
    Recommended by:

    You hear all this end of the world moaning that "our country is going bankrupt" when we could have a surplus with a fairly small increase in taxes and companies making huge profits that pay little in taxes.

    True, the conservative impulse is a good check on theoretical unlimited spending and unlimited taxes which are unsustainable, but in the actual world that we live in the United States government could collect a lot more revenue with little-to-no economic impact.     When 25 people (hedge fund managers) can make $22 billion in one year, you know that there are a lot of untapped resources available to the government.

  •  ROCKIN reality check, Armando!!!! (1+ / 0-)
    Recommended by:

    You are right, it's all a matter of choices. In an ideal world, SS would continue to pay for itself 100% of the time. How can that be achieved???? By lifting the cap. Piece of cake, very easy, the rich won't even notice the difference and the middle class and pour will not die, or languish in extreme degradation and poverty when they are old and ill.  

    But even if the rich can't stand to pay the same % of their lifetime income into SS as the poor and middle class do, the govt can choose to fund SS because it is the right, moral, and just thing to do for the 99% of people who live in this country.

    Thank you for keeping it real.

    In celebration of Super Tuesday, Steven Colbert is partying! "I'm mixing up some margaritas! I could not find my blender so instead I'm using a transvaginal ultrasound wand." (watch the video, it's hysterical)

    by Lucy2009 on Tue Apr 24, 2012 at 01:44:04 PM PDT

  •  Great diary, Armando (2+ / 0-)
    Recommended by:
    Lucy2009, Calgacus

    You know your national accounting. I'm impressed. Many many people don't know the difference between countries that control their own currency and those that don't including Kevin.

    The sad thing is that this involves Intergenerational accounting and it pervades even the CBO and FASB who makes those like Kevin Drum seem like they know what they are talking about but don't. I've had to take on the FP about this sadly too, but not today. :-)

    Pro Life??? Conservatives want live babies so they can raise them to be dead soldiers! - George Carlin - ROUND 2: Vote! Send me to Netroots Nation!

    by priceman on Tue Apr 24, 2012 at 01:47:19 PM PDT

  •  We wouldn't even have to make this argument if (0+ / 0-)

    we didn’t start partially funding SS from the general fund, per the Payroll Tax Holiday, which now makes SS part of the federal budget, making SS a ‘budget issue’. Obama has also framed SS as part of the deficit problem, by making SS part of the deficit commission and putting a known SS hater (Alan Simpson) in charge of it.
    So to imply that SS is not part of the deficit problem is to go against the president’s own stance on the issue.

  •  Fascinating, this guy also supported Shock and Awe (2+ / 0-)
    Recommended by:
    ezdidit, Matt Z
  •  Armando are you an MMTer? (0+ / 0-)

    Some of your points seem to me consistent with MMT, but some don't.

  •  Why not just remove the caps and while there is a (2+ / 0-)
    Recommended by:
    ezdidit, Mike Taylor

    surplus use that to pay down other debt.  Or does that make too much sense?

  •  ("Drum Lies" would have been a more apt title (0+ / 0-)

    for your essay, Armando.)

    Authoritarian bullshit. Reaganonmics redux!!

    Makes me wanna cry. If the Democratic Party EVER caves on this issue like they did under Reagan, I hope that half the country will be gunning for them while the other half seeks out the Republican nabobs.  

    My own party has made me A FUCKING RADICAL!  

  •  this is utter crap (0+ / 0-)

    raise the limit on contributions (as noted in some of the comments) ..problem solved...oh and stop trying to use this to scare the ...out of people and try and make them think they have to vote for the "conservatives" who are, as we know, bigger spenders than the guy in the ad who goes to Las Vegas...

  •  Remove the cap; problem solved. (1+ / 0-)
    Recommended by:
    Mike Taylor

    Remove the payroll tax cap and the problem is solved. Stop letting Grover Norquist and his "starve the beast" bots set the tone. No cuts are needed. No delay in retirement age is required. ll that we need to do is remove the payroll tax cap. That's it.

  •  Gradually raise the tax? OK. Gradually cut (0+ / 0-)

    benefits? I'd sure rather not.

    My umderstanding is the the "official" leftist position on means testing is that we're against it. Would anyone care to explain why it would be a bad thing to deem ineligable for SS benefits those who truly do not need them?

    I know, or at least I assume, that we'd be talking about people who had paid into SS so I see where that is kind of a rip off, so how about giving them an additional tax break?

    Ds see human suffering and wonder what they can do to relieve it. Rs see human suffering and wonder how they can profit from it.

    by JTinDC on Tue Apr 24, 2012 at 02:14:00 PM PDT

    •  For one thing, (1+ / 0-)
      Recommended by:

      means-testing would make it politically more difficult to raise the maximum annual wage subject to Social Security tax, which is now $110,100 and needs to go up. If we started means-testing, the wealthy (i.e. politically powerful) would say "why should more of my income be subject to the SS tax if I'm going to receive fewer (or no) benefits due to means-testing. Not including everyone makes the program politically vulnerable. The best option is to raise the income limit and include everyone (which gives the wealthy the same incentive to support the program as the rest of us).

  •  Kevin Drum is being a good propagandist (0+ / 0-)

    for the DLC/Obama Administration.

    The ability of the federal government to not cut Social Security benefits is obvious to anyone. Any insinuation to the contrary is a lie. And a malicious lie in my view.
    Kevin Drum is helping to spread Obama's malicious lie.

    The right-wing propaganda and policies no no end under Obama, who is hell bent on putting Social Security on the path to privatization per the wishes of his corporate benefactors, e.g., rightwing billionaire Pete Peterson, whom Obama made the keynote speaker at his 2009 Fiscal "Responsibility" Summit.

    "It depends what the meaning of 'is', is"
    Platform of the Neo-Democratic Party
    Speaking out of one side of their mouth for the little guy, their nominal constituency, and the other for the plutocracy, their real constituency.

    by Sanctimonious on Tue Apr 24, 2012 at 02:17:57 PM PDT

    •  Pure bullshit this (1+ / 0-)
      Recommended by:
      Matt Z
      Obama, who is hell bent on putting Social Security on the path to privatization
      Prove it.

      Ds see human suffering and wonder what they can do to relieve it. Rs see human suffering and wonder how they can profit from it.

      by JTinDC on Tue Apr 24, 2012 at 02:24:10 PM PDT

      [ Parent ]

  •  even when the military does not want it (0+ / 0-)

    they force them to take unneeded big ticket weapon systems.  Someone should force defense contractors to be non-profits with the ceo and executive staff to be paid no more than 30 times the lowest paid worker.

  •  GREAT POST (0+ / 0-)

    Kevin Drum is a "tool."

     I hope that the messaging people involved in the Presidential and Congressional campaigns pair and compare the Defense Budget and tax cuts  together with
    Social security and the simple message that republicans always ignore the huge deficits created by those two bloated programs

  •  Guys like Kevin Drum (0+ / 0-)

    are the reason Democratic agendas are being smashed by the big red meanies. He wants to hold hands and negotiate with people who just want to bury him, and you, and certainly me.

    Armando is, as they say, "Right on" as usual.

    It's a lie and I will not stand still for it.  I will sling it back.

  •  You got that right, Armando (0+ / 0-)

    I like how they call the payroll tax mendacity a Holiday. It's always worse to hear this kind malicious lie from the Democratic side. The government really has become an ATM for the 'ownership class' and the privateers. The only insolvency and bankruptcy I see is occurring to ordinary people, globally. SS, or any government program we fund with our taxes shouldn't be about creating more profit for the 'vampire squid on humanities face' or paying off the debt they ran up with their endless war on terra.              

  •  Kevin Drum is a liar. n/t (0+ / 0-)

    Barack Obama: So morally bankrupt that he thinks people who tortured other people to death should get a pass. Likes to prosecute whistleblowers and pot smokers, though.

    by expatjourno on Tue Apr 24, 2012 at 02:39:21 PM PDT

  •  Economics (0+ / 0-)

    Never the strong suite here on DK.

    SocSec is supposed to be self-funding. It already isn't, at least for now, as we throw in $165 bn last year and this to make up for cuts in payroll tax. Anyone care to guess when, if ever, payroll taxes will actually be back up to funding this behemoth?

    And no longer does SocSec produce a vast surplus of borrowable funds. We (via general revenue) now owe ourselves (via special treasury bonds) a lot of money ($2.6+ trillion). To pay SocSec claims, we will have to eventually redeem those bonds by making some of those choices Armando refers to.

     The "any number of things" we can do is to cut spending and/or raise taxes. However, the sums that are coming due, for Social Security, Medicare, federal pensions and an expected slew of pension defaults "insured" by the Pension Benefit Guarantee Corporation, are mind-boggling and almost literally unpayable. The choices Armando blithely tosses out are almost certainly just the tip of a really nasty iceberg.

    The suggestion that we can simply inflate our way out of this (i.e. print unlimited amounts of money) is right on up there with energy independence through perpetual motion. Among other things, we depend on (mostly foreigners) to buy up our debt (at low rates)—something that becomes increasingly unlikely if the payback is obviously being severely eroded by an increase in the supply of money. Worse, it also erodes our internal buying power. Today's "moderate" 3% inflation means a steady erosion in your current buying power, flatlines in your savings and, all in all, dismal expectations especially for those who expected to live off their savings and investments.

    So, no, we're not Greece, in that we can (already do) play with our monetary controls to try to get through this current crisis. Instead, we're more like Britain, which has its own currency and is already (if inadequately) cutting back on public spending in order to avoid genuine crisis. Like they are already trying to do, we will also have to heavily tax our young to pay for the things we promised ourselves, but which we let our politicians tell us we could put off taxing ourselves for. One of those things will be Social Security, which could well eventually effectively, if not literally, default.

    •  One of the funniest comments ever (1+ / 0-)
      Recommended by:

      The economic illiteracy from beginning to end was hilarious.

      •  Punchy reply (0+ / 0-)

        Hard-hitting. Got all the specifics. I retire from the field, vanquished by your oh-so superior refutation.

        It is to laugh, were it not so damned sad. You really don't know much about this stuff, do you? No shame in that, but what gives you the illusion that you ought to write about it?

        •  Excuse me (1+ / 0-)
          Recommended by:
          Matt Z

          "Economics (0+ / 0-)

          Never the strong suite here on DK."

          You don;t deserve respect when you start like that.

          Want to start over? Don't start your comments with insults.

          And then don;t continue them with more insults:

          "You really don't know much about this stuff, do you? No shame in that, but what gives you the illusion that you ought to write about it?"

          Back atcha.

          FTR, you;ve written nothing that gives me any indication that you actually understand economics.

          Here's a a tell that you do not - "Instead, we're more like Britain, which has its own currency and is already (if inadequately) cutting back on public spending in order to avoid genuine crisis."

          Anyone who would write that is not well versed in macroeconomics in my opinion.

          Your mileage obviously varies. Hell, you must think Spain is the great example for us all.

          •  And yes (0+ / 0-)

            I've played this responding to stupid and insulting comments game for a long time.

            I don't do it much on my front page posts, but this was a diary so I'm indulging myself.

            •  Self indulgence (0+ / 0-)

              Thanks for something substantive.
              a) Does Britain have its own currency? Yes.
              b) Has it severely cut back on public spending? Why, yes, it has:
              c) Now, please explain what part of macroeconomics I don't understand.

              Spain is a terrible example, in all ways, shapes and forms.

              But here—try a simpler question.

              Let's pretend that this is 2032 but use 2012 numbers for a thought experiment. If GDP is $14 trillion (current), and (2032) SocSec costs are projected by the trustees at 12% of GDP (up from present 7%) with the trust fund at that point exhausted, please explain exactly where, in addition to the other things we will have to pay for, we will find $1.6 trillion dollars? This year's federal budget is about $2.6 trillion

              I know!. We'll rescind the Bush tax cuts!. Great—we've got an extra $120 billion. That'll help. All we need now is another 10+ sources of funds like that.

              Then remember that this is just Social Security.

              •  I know you believe in (0+ / 0-)

                "expansionary austerity" despite the conclusive evidence of its fallacy.

                Therefore, discussions between us would be pointless.

                Facts and evidence are not relevant to your beliefs on macroeconomics.

                I don't see the point to our discussing the issue.

                FTR, my post actually had not a thing to do with any of this.

                Merely the simpler point that Social Security is not "insolvent" or "bankrupt" and will not be in 2033.

                Frankly, I'm not even sure you actually disagree with my point.

                You took a tangent of insult and I responded accordingly.

                On the separate issue you now want to discuss, I think our understanding of what the evidence has demonstrated
                regarding "expansionary austerity" is so divergent, that there really is no point to our discussion.

                Just one final thought, do you really believe that THE MOST IMPORTANT ISSUE IN THE WORLD today is the "impending bankruptcy" of Social Security?

                I bet you don't.

              •  Couple of answers (0+ / 0-)

                (b) - why has Britain cut back?
                Ans: Because it is insane. Because the 1% want to attack the 99%. The 1% control the government & their academic errand-boys have convinced enough of the 99% that up is down, that black is white, and the vote to cut their own throats. No other reason.

                where, in addition to the other things we will have to pay for, we will find $1.6 trillion dollars?

                We, the USA, will find the money the only way any country has ever "found" money. By printing money, which is how we do it nowadays. By issuing debt. Government debt is money. The highest type of money is government debt.

                To quote FDR - government credit (=debt) & government currency are one & the same thing. Governments have an infinite amount of money. Nobody has ever found it difficult to go into debt = make promises = issue money!

                All the crap that the Fed & the Treasury & the banking system do is devoted to hiding this obvious fact that children know until academic morons diseducate them.

                •  Why bother? This kind of poster will refuse (0+ / 0-)

                  to believe that there is any other solution other than deflationary cuts. Even though we are already in a deflationary spiral, commenters like this will still insist that inflation is A Very Bad Thing.

                  "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

                  by bryduck on Tue Apr 24, 2012 at 05:15:21 PM PDT

                  [ Parent ]

                  •  You're right (0+ / 0-)

                    you'd have to go a long way to convince me (or any economist) that inflation is a good thing. Here's today's pop quiz: which do you prefer: 1% deflation or 2% inflation?

                    •  Long answer to your tricky question :-) (0+ / 0-)

                      Plenty of economists think inflation is a good thing. Krugman, Baker. People whose econ is pretty decent, but not quite right. They want to inflate in order to counter debt-deflation, balance sheet recessions, excessive & unpayable private debt. A laudable, necessary goal. Inflation may have some place in the ultimate ideal scheme of things to cure giant crises like this one.

                      But some of the policies they assume are inflationary - "loose money" - "financing deficits" by "printing money" are actually disinflationary in the long run, as shown by centuries of evidence. The standard econ of the last few decades gets everything backwards. A lot of MMT is just returning to the superior, logical, empirically correct econ of the leading thinkers of say the late 20s to the 50s.

                      MMTers, real Keynesians, real Institutionalists - are not so much inflationists - and they've said so - they get the Austrian weltanschauung. But the Austrian theory of money is the heart of bad economics.

                      To answer your question:

                      As long as you have a  job &-or money deflation is dandy. That's why the rich love depressions.

                      But the problem is that deflation causes/ correlates with depressions and unemployment, which wreck the real economy.

                      So accomodated deflation, deflation with a Job Guarantee, deflation with full employment, is Basically Good. Everybody is working & has the dough, which buys more & more stuff!

                      2% Inflation has no such automatic destructive effects, and can help debtors, e.g. some of its effect during the 70s were good for many, so it is Not So Good, but Not Really So Bad either.

                      Continued untreated serious deflation, probably 1% is bad enough, with the accompanying unemployment is horrendous, massively destructive. Very, Very Bad.  

                      And it where the world, especially Europe, is at or near. Becomes a negative sum game, where the rich get relatively richer, but the misery they inflict on the poor is far greater.

                •  Ah, the conspiracy theory (0+ / 0-)

                  explanation of cutbacks. Sorry, don't buy it. You, I take it, accept it as an article of faith.

                  In re: your monetary theory—
                  You confuse a bunch of things with similar names but different meanings, and not all debt is identical.
                  If all the gov't need do is print money, then we're in great shape. Unfortunately, if there are a million dollars in circulation and the government injects another million into the system, in short order the amount of widgets purchasable with that million will be cut more or less in half.

                  Governments have unlimited supplies of paper and ink, but they never, ever, have "an infinite amount of money." Frankly, I'm shocked that any adult could believe such a thing.

                  As for FDR, you ought to go back a reread his speech, and think about the part where he notes that, "Nevertheless, gold, and to a partial extent silver, are perfectly good bases for currency and that is why I decided not to let any of the gold now in the country go out of it."
                  A canny guy.

                  •  You are assuming (1+ / 0-)
                    Recommended by:

                    that the economy is already producing as many widgets as possible. That is not the case. We have about 8% unemployment in this country, and those 8% could be put to work making (alot) more widgets.

                    The government never "has" or "doesn't have" any money. To borrow an analogy from a book by Warren Mosler, the government is like a football stadium. No one ever asks whether the stadium has enough points available to it to put up on the scoreboard. When there's a touchdown, someone in the press box just pushes a button and voila! there are more points.

                    What is your point regarding gold and silver?

                    •  FDR's point (1+ / 0-)
                      Recommended by:

                      not mine. And his point was that even a fiat currency eventually rests on some estimate of tangible worth—in his time, gold and silver.

                      You imagine that governments simply wish money into existence and that's that. To stick with your analogy, you imagine that the stadium owner can just keep putting up points at will and ad infinitum. goals scored or not. But in fact, the owner is limited to adding in only the points the team is able to score. The team scoring is the source of value for the points, which must represent some source of value.

                      If your version were real, what reason is there that the government doesn't simply print up $15 trillion tomorrow and wipe out the national debt? If you think there are no constraints, you are living in a fantasy world. If you understand what the constraints actually are, you are one the path to beginning to understand why even a fiat currency must represent some sort of limited-supply value. This is econ, 101.

                      •  Here's some econ 101 :-) (0+ / 0-)

                        what reason is there that the government doesn't simply print up $15 trillion tomorrow and wipe out the national debt?

                        Doing this would not wipe out the national debt. It would merely transform it from bonds to dollars. It would be like replacing all the hundreds with two fifties. Big deal.

                        You don't understand FDR's basic MMT/Keynesian/Institutionalist/Chartalist point.  Government debt is government currency & vice versa.

                        Of course there are constraints. But not abstract financial constraints. "Governments simply wish money into existence and that's that" is absolutely correct.

                        The problem is that Econ 101 basically has taught pure shit to undergraduates for the last 30 odd years. I studied a bit of econ in the late 70s, stopped because there was too much nonsense in it. Looked at recent textbooks, and saw that the shit had completely taken over. A lot of the work of the MMTers is simply cleaning away this shit.

                        Gold & silver never really backed currencies. Intrinsically valuable fiat currencies backed these rather worthless commodities, driving them up to ludicrous prices. FDR knew this, which is why he went off the gold standard, to all intents and purposes converting money back to what it always was, fiat money, credit. Gold is valuable because you can get dollars for it, not vice versa -something gold mine owners know very well.

                        The true backing was the tax system & government spending, creating a monetary economy, where commodities were traded for credit = money. The responsibility of the government is that its credit=money does not inflate with respect to consumer goods.

                        It is tragic that adults have been brainwashed into the preposterous, psychotic belief that governments do not have an infinite nominal spending capacity - what I meant by an infinite amount of money, what Mosler & pivy mean by neither have nor not have.

    •  You're wrong about inflation (4+ / 0-)
      Recommended by:
      Calgacus, wsexson, bryduck, Matt Z

      Printing money to pay SS claims can only cause demand-pull inflation, which will only happen if aggregate demand exceeds the productive capacity of the economy, and we're not anywhere near that happening. And even if we were, the real decision is just whether we allocate our scarce real resources to our old folks, or we keep it for ourselves. There's no "funding" problem, there's no borrowing-from-China problem, there's no we're-burdening-future-generations problem. We don't depend on foreigners to buy our debt. There's no such thing as a bond vigilante: the federal reserve sets rates. We are like Britain in that we issue our own currency, and if the government foolishly proceeds down the austerity path, like Britain, we'll end up in the same place they are right now, which is headed back towards recession.

      •  Kindness of strangers (1+ / 0-)
        Recommended by:

        "We don't depend on foreigners to buy our debt."

        You jest. I think those dollars we send abroad to buy little things like, oh, barrels of oil, are instruments of debt that we are depending on foreigners to accept. They buy our debt with their oil (and their electronics components, automobiles, rare earth minerals, clothing, etc.). And when they buy our 25-year bonds, we take the money, spend it immediately, and leave it for future generations to worry about paying it back. As for the Fed setting rates—it does that by putting bonds up for auction. If they sell, fine. If they don't, then the rates we pay go up. Where do you imagine the rates that are set come from? If it's just up to us, whatever we want, why don't we set all bonds at .001%?

        •  Some of what you say sort of true, sort of not (0+ / 0-)

          MMT, real economics, incorporates your valid insights. And clears away the insane Big Lies so prominent in neoliberal era quackonomics.

          It's quite true that the dollars we send abroad are debt instruments, and in that foreigners are sending real goods in return for IOUs/debts, they are perhaps doing us a favor, being kind, e.g. if they are giving us ridiculously low prices for their real stuff.  

          Foreign dollar savings does in the short run increase the value of dollars, like any saving. It is deflationary. So much so, that it causes unemployment and interferes with the process of wealth creation. But our only implicit responsibility to foreign or domestic savers is that the dollars they save remain a decent store of value, do not inflate.  That is the only way that "future generations pay back".  "Paying interest" is a joke. It's just exchanging one kind of money (bonds) for another (currency).

          The solution to the problem of saving-->deflation-->unemployment is to simply print the money or bonds, to run a deficit to accomodate this saving. This is not inflationary or cheating savers. The saving itself is what depreciates the value of the saving in the long run, by the malign effects of uncountered deflation.  The worst thing we can do for future generations is not print the money and thereby wreck the real domestic economy.

          If it's just up to us, whatever we want, why don't we set all bonds at .001%?

          Because of psychotic miseducation, psychotic beliefs, complete ignorance and revision of history, propagated through the media and academic garbage "economics". The bizarre belief that low rates, "printing money" is hyperinflationary. The wacky idea that government spending should be matched 1-1 with bond issuance.

          Governments can & often have set bond rates.  The Australian "Tap System" until the 80s. The  US did during WWII, til 1951. Japan right now. The US right now, by "QE".

          Governments set interest rates exactly the same way they set the value of hundred dollar bills in terms of fifties or ones. They trade two fifties or a hundred ones for one Benjamin. If they decided they would always trade 1 Benjamin for 3 Grants or 150 Georges, then a Benjamin would be worth $150, irrespective of the number on the bill. The government wants some rate to be .001%? The Fed just buys enough T-bonds to drive up their price = lower the rate to that level. This is just counteracting the silly, unnecessary "intervention" procedure of selling the bonds, pushing up  rates for no reason, in the first place.

  •  The One-and-done Social Security Fix (0+ / 0-)

    - remove the cap on the payroll tax. Don't raise it, although that would also work. Remove it. If we get excess tax revenue as a result, you can gradually reduce the rate of payroll taxes we all pay.

    Done! Forever. And ever.

    If you want to keep it loophole free, add a 3.6% surcharge tax to capital gains taxes for all income above $100K (adjust for inflation) and apply it exactly the same way the payroll taxes are applied to salary. That way the Mitt Romneys of the world can't transfer all their earnings from salary to stock options to dodge taxes, even though they basically do it now.

    It's fair because it doesn't hurt Grandma who lives off her CDs (if she exists) and everybody who's earning before retirement pays in at the same rate.

    Some people are intolerant, and I CAN'T STAND people like that. -- Tom Lehrer

    by TheCrank on Tue Apr 24, 2012 at 03:31:59 PM PDT

  •  No, the tax holiday is a good, necessary thing. (0+ / 0-)

    Drum is good, but he doesn't go far enough. SStaxes were far too high for decades.

    The problem with SS is that we have been grossly overtaxing working people for decades to pretend-pay for SS, and have been using this deflationary tax on working people to maintain the value of dollars of lavish welfare-spending-for-the-rich. If we hadn't done such spending, the SS tax hike, the big Trust Fund would have caused a Great Depression decades ago. But Reagan & Greenspan's spending priority was robbing from the poor to give to the rich. The big Greenspan-Reagan Trust Fund is the scam. Social Security worked fine - much better - as pay-as-you-go, by not having a big Fund for 50 years.

    Raising taxes "to pay for SS" is crazy. If you want to play the big trust fund game - here is the simple solution to social security "solvency":  Have the bonds in the trust fund pay 10%, 20% or whatever. So the trust fund can have a trillion zillion dollars "in" it.

    Social Security was designed as an MMT program, by MMT economists, who were then called Keynesians or Institutionalists. FDR understood the economics quite well enough.

    For the umpteenth time, here is FDR on Social Security, the taxes, and their purpose. Read it again & again until you understand the game as well as FDR did.

    Luther Gulick Memorandum re: Famous FDR Quote

    In the course of this discussion I raised the question of the ultimate abandonment the pay roll taxes in connection with old age security and unemployment relief in the event of another period of depression. I suggested that it had been a mistake to levy these taxes in the 1930’s when the social security program was originally adopted. FDR said, “I guess you’re right on the economics. They are politics all the way through. We put those pay roll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program. Those taxes aren’t a matter of economics, they’re straight politics.”
    FDR knew taxes did not pay for SS benefits. He was thinking of having no Social Security tax AT ALL. Not just a temporary partial tax holiday.  The trick of Greenspan & Reagan  was to use innumerate "economics"  to make FDR's political protection into a weapon to destroy Social Security & the middle class.
    •  Hmmm. (0+ / 0-)

      I'm not sure how much of this I agree with. SS was overfunded for decades because everybody recognized that there would be a huge influx of retirees (compared to the number of workers) when the Baby Boomers started getting old--i.e., now--and to soften that blow to the workers who would ordinarily have had to fund those retirees, Boomers paid more into the fund that they themselves would draw out. That the fund in which these extra $ was put has been borrowed against (and that's what has been done, after all, since the funds were replaced with interest-bearing bonds, iIrc) merely means that the money is there in a different form. The only crisis exists because now those bonds need to be cashed in, and Republicans/conservatives don't want to honor that debt.
      As far as FDR's point goes, it really is irrelevant to today's discussion, imho, and in any case got solved by the increase in the taxes mentioned above. The economics work, actually; it is the politics that are messing things up.

      "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

      by bryduck on Tue Apr 24, 2012 at 05:25:03 PM PDT

      [ Parent ]

      •  Overfunding: the problem, not the solution (0+ / 0-)

        The FDR quote remains utterly relevant. Because he understood the economics, which is the same as it was then. To be unpleasantly blunt:
        You don't.

        Pivy bringing up the gold standard is a very red herring. What FDR & Gulick say is very modern MMT / "fiat" money thinking. The errors you make, seen everywhere nowadays, are from gold standard / commodity money / modern mainstream quackonomics thinking - which gets it wrong even if there IS a gold standard.

        The everything-backwards-quackonomists successfully brainwashed "everybody" in 1983 with a massive propaganda campaign so that "everybody recognized" that black is white, that up is down. Academic economics had been corrupted long enough, too many people who understood real economics had died off or retired.

        FDR saw the economics happen in real time. Part of the reason for the 1937-38 Roosevelt Recession was mistaken accounting for Social Security taxation, which took dollars out of the economy at a time when they were sorely needed - an experience FDR & Gulick allude to.  The Big Trust Fund - the impossible prepayment - the Greenspan/Reagan tax hike in miniature. Difference is 45 years later the quacks convinced everybody to cut their own throats in 1983, and continue to for thirty years, because they wanted to have a feudal society.  While FDR realized the mistake in months, and reversed it, because he didn't like feudalism. If one wants to have a Giant Teddy Bear Trust Fund , the sensible thing is to put magic 10% or whatever bonds in it -  Robert Eisner's  idea , see also Why it’s So Hard to Sign Progressive Petitions    

        The tax increase, the overfunding was NOT the solution
        It is & was the problem!!

        There WAS no problem to be solved.

        Germany remains on an FDR style pay-as-you-go plan, because it is the HIGHEST feasible, non-destructive rate of taxation. And it works just fine. Far better than the 1983 plan, which amounted to massive welfare-for-the-rich. The government spending characterized as "borrowing from SS" was the very necessary solution to the big problem created by SS overfunding "solution". There had to be welfare-for-somebody, or the economy would have collapsed because of the destructive "solution". Reagan & Greenspan said; Welfare for the rich!  Could have just rebated the dollars back to the workers they had been ripped off from, in effect returning SS taxation to sane levels. States cannot "prepay". They cannot save up their own money. A major Trust Fund of a country's own money is nearly always cover for a scam.

        "Soften the blow?"  That's like asking:  Would you rather be beaten with a baseball bat now - or 30 years from now, when you will probably be wearing armor (have money) that will really soften the blow? Anyone would say, 30 years from now, please. And then in 30 years, say, 30 years after please, ad infinitum. Greenspan / Reagan overfunding inflicted an utterly unnecessary, extremely damaging blow aimed straight at the working / middle class, and was quite successful in destroying it, and creating the worst 30 years in US economic history - even before the crisis!

        In real terms, the "blow" cannot be softened. If there is a geezer boom, because there was a baby boom long ago, society is going to have to devote that much more resources to the geezers - or grind them up into Soylent Green. Just like it devoted more resources to the geezers when they were babies - and that was a time of great prosperity, partly BECAUSE of the baby boom, because modern economies are demand-constrained.  Equally, the geezer boom might have become a time of excessive prosperity for the lesser people, and that is what the oligarchs fear above all.

        A pay-as-you-go system is macroeconomically neutral, just tracks real resource flows. So what if the tax might become higher 30 years from 1983?  People would have been much richer. The economy would be that much more financially stable, more equitable if we had kept the FDR plan.  It is much easier to pay a $10,000 tax out of a $100,000 salary than a $1,000 tax out of a $20,000 salary.  The SS Trust Fund is an accounting record of the destruction of the middle class.

        And now the thugs, whose mindless greed is boundless, who never stop making their Big Lies ever more outrageous, ever more innumerate, want to  rob working people once more by cutting benefits, by not (quasi) "returning" people's hard-earned, cruelly stolen money.

    •  I think we were still on the gold standard (0+ / 0-)

      when SS was enacted.

      •  Sorta, but not really (0+ / 0-)

        Sorta, kinda, but not really. In some crazy meaningless legalistic sense we still are on the gold standard. The big change was really FDR going off the gold standard, even bigger than 1971, and only partially, formally countered by Bretton Woods.

        The Bretton Woods era, til some time in the 60s (starting maybe late 50s) was comparable to the most ancient money - Silver in Mesopotamia. A quantity of silver just represented a quantity of Mesopotamian money. A quantity of gold - - most of the world's gold was owned by the US government, but forbidden to private US citizens - - just represented a quantity of dollars, by US government fiat.

        An ounce of gold was just a weird $35 dollar bill, used only for intergovernmental transactions, for all intents and purposes. The other Bretton Woods countries were just like backwater villages, tributaries to the Great King Uncle Sam, who had their own local currency (like Ithaca dollars) for local use, but settled internationally/villagely with dollars, sometimes using the weird $35 dollar bills.  Nixon just stopped the policy of printing the $35 bills, because they cost too much to make, just like changing the metal content of the penny.

        Look to the deficits - the USA ran the giantest deficits ever during the war. Vastly increased the supply of US dollar NFA. Of course didn't increase the gold supply. But the value of the dollar was supremely strong, uninflated for such a huge war. Obviously no gold constraint operated.

        In 1946 it was damn clear to all that the Dollar was Almighty & the only use of Gold was that you could get Dollars for it, and not vice versa. Took generations of "economists" to fill peoples heads up with everything-backwards sh*t after that.

  •  Was the graphic of SS on the hook (0+ / 0-)

    posted w/this diary this morning?

  •  Thanks Armando and here's more on SS (0+ / 0-)

    We've blogged a good bit about SS and entitlement issues at the Kos Money and Public Purpose group blog. Our blog reflects a brand of progressivism informed by the point of view of Modern Monetary Theory (MMT). I think I can speak for myself and others who blog in that small community in saying that a great deal of what Armando has said here is right in line with our thinking. But he wrote it short and sweet, without explaining everything. That's a talent I resist.

    Anyway, we've written some posts that back Armando's view, generally, at least, here, here, here, and here.

    And just because I can, here's another post illustrating Kevin Drum's less than progressive mind set.

  •  Drum is correct (0+ / 0-)

    when he says:

    nd get to work on a fix that would involve — say it in unison, folks! — a very modest and phased-in cut in benefits combined with a very modest and phased-in increase in taxes.
    Otherwise it WILL slash benefits, and VERY soon by the way. You can have your pipe dreams of vague
    "It can add funding from other sources. It can raise taxes. It can cut military spending. It can do any number of things."
    But let's be real. The only viable option is what Drum describes. Anything else is vapor.
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