The Republicans' long-term 'fiscal' playbook is so predictable. It's always the same, whether at the Federal, State or corporate level. Whatever the market is doing, they always choose to spin the numbers so that - in the long run - they can cut back on pension and medical benefits for workers and savers. And then they kick back the surplus to the 1%, their friends and contributors.
Romney and Ryan are playing the same game. They want to finish the job started by President Bush. They want to destroy social security and medicare - the pensions and benefits of most American workers.
Phase 1- Sell High
The Republicans are clever. When the market is high they don't try and reduce pension benefits directly. Instead they reduce the contributions. They sleazily hint that the market will stay high forever. They feed "stories" like that to idiot business journalists. They talk about "new economics", "business models", "paradigm shifts", etc.
And then they put out stories saying that pension funds are "over-funded". And then they get the legislatures to lower actuarial standards and so they cut pension contributions. What do they do with the diverted 'excess' contributions? They reduce taxes, mostly for the wealthiest. They don't do anything productive or progressive like, say, reducing class size in inner cities or reducing sales taxes.
Then a few years go by. And they wait. Like hyenas, crouching in the shadows.
Phase 2 - Buy Low
Then when the market reverses and goes low - they exclaim "surprise" and "shock" at finding the pension funds have deficits. They dissemble, blaming "bureaucrats" and "waste". They warn of the dangers of losing "competitiveness". They attack with un-representative stories, citing single cases of double-dippers, and then insinuate that fraud and abuse are rampant. (They never mention that a decade before they led the fight to lower contributions).
And then - they solemnly clear their throats and they say 'we have a serious problem'. They say '"we" can't afford to meet our obligations'. And they say we need 'reform'. But what they are really doing is breaking their promises. And then they legislate reductions to pension and medical benefits.
They break promises, and call it reform.
And they knew all along they would do this.
See how it works?
Sell high. Wait ten years or so. Then buy low. Just another manufactured crisis, and the Republicans and their friends get commissions and tax breaks from churning our pensions.
That's what the Republicans have done at the state level.
That's what Romney and Bain did to the workers of the companies they bought. (It usually doesn't take ten years in the private sector since as managers they can add debt as soon as they takeover).
And that's what the Bush/Romney/Ryan plan is for Social Security and Medicare. They say Social Security and Medicare are in a crisis - but who manufactured the 'crisis'? The Republicans did.
Many states are now facing pension deficits. One econo-blogger has placed a summary in this handy interactive map of state pension deficits. (Note that the map is actually from the conservative 'think' tank American Enterprise Institute. The fact they spent so much time on it shows you how interested they are in selling the crisis right now.)
But state pension plans weren't underfunded 10 years ago. It took deliberate malfeasance to do this.
New Jersey is one example - in the late 1990s Republican Governor Christine Todd Whitman executed the "sell high" phase of the con perfectly. This article shows how she declared a surplus at the high of the market and reduced contributions in the name of "competitiveness".
And now, his combativeness, Governor Chris Christie, has played the "buy low" card. He expressed surprise at the pension deficit and has succeeded in reducing future obligations to New Jersey's workers. Here's the article detailing his "reforms"
Generally the media just plays along, not reporting the long term perspective. They just echo the Republican talking points - they 'report' that 'reforms' are 'necessary', like in this weaselly op-ed from US News They say the "crisis" requires cut-backs. The papers proclaim Christie as a "leader".
But he is just a bag-man. He's just collecting the IOU Christine Whitman wrote to the 1% ten years ago.
Is just another manufactured crisis. (I don't mean to pick on New Jersey. I don't even live there. But I can see it from my front lawn.)
These crises are manufactured by Republicans over a decade. Its a win-win (for them) market timing strategy. They cut contributions when the market is strong; then they cut benefits when the market is weak. Net result -workers are screwed, the 1% get huge tax breaks.
And as Mitt Romney's record (what we can see of it, anyway)at Bain shows the Republican plan is the same when they take over businesses. Declare the pensions over-funded and so cash out the 'surplus'. Pay yourself a fee and give the rest of the surplus to investors. Then load the company with debt. Pay yourself a "management fee" for each transaction. If necessary let the Federal Government try and bail out the the pension fund. Keep the profits for yourself and your friends.
Here's a Reuter's story on Bain's takeover of GS Technologies and its subsequent default on pensions, and bank debt, and everything it owed everybody, except, of course, the fees Bain had already collected.
Bottom line - Bain made money; workers were ripped off.
Another manufactured crisis. More money for the 1%. And more broken promises for the rest of us.
And so now Romney and Ryan say they want to save Medicare and Social Security! But they lie. They are just trying to execute the buy low half of the Republican con. The Republicans manufactured this crisis.
The first half was selling high. That's what Bush did. In 2001 the Republicans and President G.W. Bush inherited a Federal surplus from President Clinton. Bush's reckless policies squandered the surplus. This NY Times graph shows how the Republicans under Bush gave out too many tax cuts based on too rosy an assessment of the economy's long term prospects. And then wasted trillions on wars we didn't need.
And so now they try and blame President Obama for the deficit. They have set him up, and they have set us up. Will Americans fall for this Republican con-game?
Ryan and Romney say they will "save Medicare". But read the fine print of the Ryan con. Medicare will remain if you are over 55.
But if you are under 55 you will just get some f*cking vouchers. Please. Those vouchers will be so worthless. They will probably just stick them in the Sunday papers, next to Parade magazine.
And they say they will privatize social security - another con. Bush wanted to privatize social security in 2007. Can you imagine what would have happened if he'd succeeded? Half the money would have been lost by the end of 2008!
So we are now at the low end of the decade-long election-economic cycle. With the Ryan plan, the Republicans are playing the "buy low" card. The Republicans say we can't fix the deficit by raising taxes on the job creators. Baloney. They say the deficit can't be fixed without destroying Medicare and Social Security (they call it "saving"). Baloney.
They are conning the Republic. They have stolen pension funds from state workers, and from the workers of the companies they 'manage'.
Now they want to steal social security and medicare.
They say they are Republican conservatives. Baloney.
They manufactured this crisis; and for the last four years they have deliberately sabotaged the economy. They just want to put their bag man in the White House and play the buy-low card and complete the theft of social security and medicare.
They are Republic- cons.