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Every once in awhile we read an article that's so spot-on it's impossible to pick just one excerpt to share with our readers.  Yesterday's opinion piece by the New York Times' Paul Krugman is just that type of piece.  It's that good and our "Networthy Award" winner this week.

September 30, 2012

The Real Referendum
By PAUL KRUGMAN

Republicans came into this campaign believing that it would be a referendum on President Obama, and that still-high unemployment would hand them victory on a silver platter. But given the usual caveats — a month can be a long time in politics, it’s not over until the votes are actually counted, and so on — it doesn’t seem to be turning out that way.

Yet there is a sense in which the election is indeed a referendum, but of a different kind. Voters are, in effect, being asked to deliver a verdict on the legacy of the New Deal and the Great Society, on Social Security, Medicare and, yes, Obamacare, which represents an extension of that legacy. Will they vote for politicians who want to replace Medicare with Vouchercare, who denounce Social Security as “collectivist” (as Paul Ryan once did), who dismiss those who turn to social insurance programs as people unwilling to take responsibility for their lives?

If the polls are any indication, the result of that referendum will be a clear reassertion of support for the safety net, and a clear rejection of politicians who want to return us to the Gilded Age. But here’s the question: Will that election result be honored?

I ask that question because we already know what Mr. Obama will face if re-elected: a clamor from Beltway insiders demanding that he immediately return to his failed political strategy of 2011, in which he made a Grand Bargain over the budget deficit his overriding priority. Now is the time, he’ll be told, to fix America’s entitlement problem once and for all. There will be calls — as there were at the time of the Democratic National Convention — for him to officially endorse Simpson-Bowles, the budget proposal issued by the co-chairmen of his deficit commission (although never accepted by the commission as a whole).

And Mr. Obama should just say no, for three reasons.

First, despite years of dire warnings from people like, well, Alan Simpson and Erskine Bowles, we are not facing any kind of fiscal crisis. Indeed, U.S. borrowing costs are at historic lows, with investors actually willing to pay the government for the privilege of owning inflation-protected bonds. So reducing the budget deficit just isn’t the top priority for America at the moment; creating jobs is. For now, the administration’s political capital should be devoted to passing something like last year’s American Jobs Act and providing effective mortgage debt relief.

Second, contrary to Beltway conventional wisdom, America does not have an “entitlements problem.” Mainly, it has a health cost problem, private as well as public, which must be addressed (and which the Affordable Care Act at least starts to address). It’s true that there’s also, even aside from health care, a gap between the services we’re promising and the taxes we’re collecting — but to call that gap an “entitlements” issue is already to accept the very right-wing frame that voters appear to be in the process of rejecting.

Finally, despite the bizarre reverence it inspires in Beltway insiders — the same people, by the way, who assured us that Paul Ryan was a brave truth-teller — the fact is that Simpson-Bowles is a really bad plan, one that would undermine some key pieces of our safety net. And if a re-elected president were to endorse it, he would be betraying the trust of the voters who returned him to office.

Consider, in particular, the proposal to raise the Social Security retirement age, supposedly to reflect rising life expectancy. This is an idea Washington loves — but it’s also totally at odds with the reality of an America in which rising inequality is reflected not just in the quality of life but in its duration. For while average life expectancy has indeed risen, that increase is confined to the relatively well-off and well-educated — the very people who need Social Security least. Meanwhile, life expectancy is actually falling for a substantial part of the nation.

Now, there’s no mystery about why Simpson-Bowles looks the way it does. It was put together in a political environment in which progressives, and even supporters of the safety net as we know it, were very much on the defensive — an environment in which conservatives were presumed to be in the ascendant, and in which bipartisanship was effectively defined as the effort to broker deals between the center-right and the hard right.

Barring an upset, however, that environment will come to an end on Nov. 6. This election is, as I said, shaping up as a referendum on our social insurance system, and it looks as if Mr. Obama will emerge with a clear mandate for preserving and extending that system. It would be a terrible mistake, both politically and for the nation’s future, for him to let himself be talked into snatching defeat from the jaws of victory.

**The only thing we'd add to this wonderful piece is that this "we must cut benefits" environment didn't happen organically.  It's the product of a billion dollar campaign funded by former Nixon Commerce Secretary, multi-billionaire, and anti-entitlement scold Pete Peterson, to persuade Washington that we can't afford America's safety net.  This campaign is years in the making and its funding has branched out to virtually every one of the so-called "non-partisan" groups who've dutifully written reports calling for benefit cuts, the media including the Washington Post, and has even provided staff for the Fiscal Commission.  In fact, the first question any journalist or reader of one of these reports should be asking is..."Is your organization funded by Pete Peterson?". The answer would shock you.

Originally posted to NCPSSM on Mon Oct 01, 2012 at 09:52 AM PDT.

Also republished by Social Security Defenders.

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Comment Preferences

  •  Tip Jar (2+ / 0-)
    Recommended by:
    Byrnt, Gary Norton
  •  Fix your diary (1+ / 0-)
    Recommended by:
    Mr Robert

    Unless you have written permission to  post the entirety Krugman's piece you are breaking fair use guidelines. Three paragraphs no more then add a link.

    The 47% also "pay all the taxes that are legally required and not a dollar more" but when Romney does it he thinks it's a virtue, while when they do it, he thinks they are deadbeats.

    by jsfox on Mon Oct 01, 2012 at 10:09:10 AM PDT

  •  Strongly disagree (0+ / 0-)

    The primary issue in the election is the economy.  Full time unemployment is around 16-18%.

    As per fiscal issues - the US is on a path to debt default and bankruptcy.

    If jobs are not created and deficit spending/national debt not addressed we will go off a cliff and any other issues at this point will be moot.

    Certainly economics/jobs are not the only issue, but they are the primary issue.

    The Fed has been able to get away with so much printing and artificially propping up the markets because Europe is in such bad shape, but there's a limit to how long printing will work.

    Ultimately it brings one to Weimar inflation and then hyperinflation.

    US govt. bonds are not a protection from inflation.  Oil based inflation is driving up the cost of food, electricity and all other retail goods.

    This will get worse unless the printing is reined in and jobs created.

    Keep in mind the Fed bought something like 75% of all Treasuries in 2011 and if they did not bond auctions would fail.  So the treasury bond market is not strong as you suggest.

    My gut is that in 2013 the global economy will unwind.  The Euro is going to fail - just a matter of time.

    Scary times for us all.

    "And there are those who give and know not pain in giving, nor do they seek joy, nor give with mindfulness of virtue; They give as in yonder valley the myrtle breathes its fragrance into space" Khalil Gibran

    by bcdelta on Mon Oct 01, 2012 at 10:29:39 AM PDT

    •  I'll go with Krugman's assessment. (0+ / 0-)

      Purging predominantly minority voters and requiring them to present IDs to vote in the face of VIRTUALLY NON-EXISTENT VOTER FRAUD is RACISM! I hereby declare all consenting Republicans RACISTS until they stand up and object to these practices!

      by Words In Action on Tue Oct 02, 2012 at 02:01:32 PM PDT

      [ Parent ]

      •  Fair enough (0+ / 0-)

        Just my 2 cents.

        "And there are those who give and know not pain in giving, nor do they seek joy, nor give with mindfulness of virtue; They give as in yonder valley the myrtle breathes its fragrance into space" Khalil Gibran

        by bcdelta on Tue Oct 02, 2012 at 04:01:43 PM PDT

        [ Parent ]

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