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The Congressional Budget Office’s new budget projections show that despite the sky-is-falling crisis calls made by Wall Street backed austerity fanatics like: Fix The Debt, Bowles-Simpson and the rest of the Pete Peterson funded anti-Social Security brigade, our deficit is now the smallest it's been since 2008.  And that’s without the so-called “Grand Bargain” this billion dollar lobby claims is absolutely necessary for our nation’s survival. The Daily Intelligencer explains:

It's hard not to see the CBO's projections as the latest in a long series of demoralizing developments for the Simpson-Bowles-led deficit scold movement. Overall, the CBO says that barring unforeseen policy changes, the deficit will shrink to 2.1 percent of GDP in 2015. That's better than the 2.3 percent target Simpson and Bowles originally set out in their 2010 report. And it will happen even without the grand bargain they've so desperately sought.

Neither is the federal debt piling up to unsustainable levels. As the CBO's chart shows, the debt-to-GDP ratio is now projected to peak in 2014 at 76.2 percent, before falling to 70.8 percent in 2018. That's a long way from the now-discredited 90 percent threshold budget scolds have used to scare policymakers, and the projections —combined with record-low interest rates and eerily calm bond markets — should put our concerns about an immediate debt crisis to rest.

Now, it’s really hard to keep a crisis mentality ginned up if the facts keep getting in the way (see also the Reinhart Rogoff debacle). So, as expected, the Wall Streeters have chosen just to ignore what doesn’t fit their frame:

The Campaign to Fix the Debt, which marshals corporate resources to lobby for deficit reduction, said that "the rosier-than-expected near-term projections do not change the fact that rising health care costs, an aging population, Social Security’s looming insolvency, and ever-increasing interest payments will greatly expand the national debt as a share of the economy starting at the end of the current decade."  The Hill Newspaper.
Again, the true challenge facing this nation is health care costs.  Reforms through the Affordable Care Act have helped reduce the deficit and  system-wide reforms need to continue, not just in Medicare. Talking about Social Security and Medicare, as if they’re the same program, is a favored ploy of these Wall Streeters; however, it conveniently ignores the fact that there is $2.7 trillion currently in the Social Security trust fund and that figure keeps growing. Economist Jared Bernstein offers some too-little-heard fact-based analysis:
Longer term, even with the recent improvement in the pace of health care costs, we still face pressure from the intersection of our aging demographics and health care spending.  To bend those curves at the end of the figure, we’ll need to keep up the pressure on health costs as well as boost our revenues.  Cuts alone won’t do it.

It would be nice if policy makers looked at the figure below and recognized that we need less austerity now and more health savings/revs later.  But that would mean spraying water on their flaming heads, and that can be kind of uncomfortable.

Originally posted to NCPSSM on Wed May 15, 2013 at 10:28 AM PDT.

Also republished by Social Security Defenders.

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Comment Preferences

  •  The Cons' opposition to these direct payment (4+ / 0-)
    Recommended by:
    jfromga, ferg, psyched, eyesoars

    is threefold:
    1) The automaticity of the programs precludes members of Congress from using them to reward or penalize populations to support their own tenure in office. Threats to cancel the whole thing have not had favorable results with the electorate.

    2) direct payments to pensioners and medical care providers cut out Congress' favorite middlemen, the banksters. Direct deposit, which requires recipients to set up bank accounts and give banks a regular stream of revenue to use as a float, aims to provide them an advantageous position. However, Congress doesn't get the credit and congressmen have no control over which financial institutions get the benefits.

    3) being obviously responsible for anything is contrary to the Cons' preference for misdirection, hidden motives and ulterior objectives. Ever since their sovereign immunity evaporated as a consequence of the Federal Tort Claims Act, Congress, which had been dispensing favors for almost two hundred years, has been at pains to distance itself from responsibilities (via privatization) even as it manipulates the economy from behind the scenes by rationing the currency and legislating monopolies.

    Note that I indict Congress. This is not a partisan matter. Doling out favors has a long tradition. Unfortunately, when favors are the issue, to make them really worth while somebody else has to be deprived. Not to mention that power, to be felt, has to hurt. So, if Congress is to be perceived as powerful, somebody has to be injured. Recent immigrants who don't vote are a natural target -- have been for a long time.

    We organize governments to deliver services and prevent abuse.

    by hannah on Wed May 15, 2013 at 10:57:24 AM PDT

  •  The end of the decade? (1+ / 0-)
    Recommended by:
    jfromga

    Why, then, should Congress even be concerned with austerity measures now?  That would completely fly in the face of their reactionary history.  Let's wait and see whether the Regressionary Think Tanks predictions come true first before we stir up the economy again.
    The opposite of "Progressive" is "Regressive", not "Conservative"  

    •  Opposite of "Progressive" is (2+ / 0-)
      Recommended by:
      quill, CroneWit

      "Reactionary"

      No snark at all.

      Progressivism and the concept of big P 'Progress' is historically a product of the Enlightenment (dating roughly to the late 16th and the 17th centuries) which taught that the Future could and in most formulations WOULD be better than the past. This was in direct contrast to Classical modes of thought that place Golden Ages in the distant past and saw history as a series of degradations (Gold to Silver to Brass). Even the Renaissance (literally the Rebirth and roughly the 14th to middle 16th centuries) only thought to reset the clock and that only to the Silver Age of Classical Rome and Greece.

      The Enlightenment ushered in the Age of Revolution and Radicalism (literally to turn on its head or to tear out at the roots respectively {'radical' from 'radix' root, hence 'radish'}. The pushback on this was consciously called the Reaction, hence 'Reactionary' which sought to preserve the Old Order, or having lost ground to restore it. Conservatives and Conservatism are the foot soldiers and philosophy backing Reactionaries (inherited elites mostly) and Reaction against Revolution which in the event was conceived as an self conscious agency of the Enlightenment.

      This isn't just an exercise in wordplay, much of the apparent oddities of current Movement Conservatsim, it's deference to inherited power and Revealed Religion even against its own material interests and it's Anti-Scientism is simply a mirror of the attitudes and events of the Age of Reaction of the early 19th century that was in conscious struggle with the previously dominant Age of Revolution of the late 18th.

      So while 'regression' and even 'repression' get you on the right track you get closer with 'restoration', or where that is not possible 'conservation' against 'progress'.

      After all famously Buckley defined Conservatism as jumping on the Tracks of History yelling 'Stop'. Even he had no real hopes of backing the train right back to the departing station, Holding the Line is realistically the best Conservatives can hope for. (as opposed to say Fascists and Dominionists who really DO want to turn back the clock)

      SocSec dot.Defender at gmail.com - founder DK Social Security Defenders Group

      by Bruce Webb on Wed May 15, 2013 at 12:03:57 PM PDT

      [ Parent ]

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