Tag: Social_Security

Why Paul Ryan Can’t Quit Donald Trump

Seth Anderson0 comment

Circular Reasons

Circular Reasons

Paul Ryan’s ideas are so toxic to the voting public, he can never articulate these ideas. He’s been a flim-flam man for so long, he’s probably forgotten what it is like to be honest. Perfect for the party of Donald Trump, in other words.

The details of Ryan’s vision have always remained somewhat foggy. The conservative revolution Ryan has in mind isn’t a popular or cultural one; it is entirely legislative. And the predicate for enacting it isn’t to sell a set of ideas to the public, but to steel the spines of legislators to vote for Ryan’s ideas no matter what the public thinks.

Ryan’s revolutionary ideas themselves aren’t entirely clear, either, though that wasn’t always the case. Before he became the undisputed intellectual leader of the conservative movement in the Obama era, he laid out a series of specific and radical reforms–including Social Security and Medicare privatization–in a 2008 bill called the Roadmap for America’s Future. When it fell to him as chairman of the House budget committee to draft a governing agenda for the whole party, though, many of the details vanished.

Ryan still wants to devolve Medicare into a subsidized system of competition between insurance carriers, but only for seniors in the distant future. He still wants to hand Medicaid over to the states and slash its budgets by hundreds of billions of dollars. He still wants to cut income tax rates for the wealthy to about a third of their current level. He still wants to spend lavishly on the military. But when asked how to pay for it all, he’s exceedingly vague. He promises to cut tax expenditures, but doesn’t say how or which ones. He promises to slash the domestic discretionary budget (which disproportionately benefits the poor), but won’t say which programs, or by how much.

All of that was to be decided after Republicans won the White House. That was Ryan’s game plan when he was budget chairman; it remained his game plan as the GOP’s vice presidential nominee in 2012. And the plan seemed to be well within reach when Republicans finally consolidated control of Congress in 2015, and a raft of talented candidates were lining up to fill the last piece of the puzzle: the presidency.

…

It’s impossible to fully grasp Ryan’s thinking without understanding how close he feels he’s come to realizing a decades-old dream. That dream, as Grover Norquist told CPAC four years ago, culminates with the election of a figurehead. “We are not auditioning for fearless leader. We don’t need a president to tell us in what direction to go. We know what direction to go. We want the Ryan budget…We just need a president to sign this stuff. We don’t need someone to think it up or design it. The leadership now for the modern conservative movement for the next 20 years will be coming out of the House and the Senate…Pick a Republican with enough working digits to handle a pen to become president of the United States.”

(click here to continue reading Why Paul Ryan Can’t Quit Donald Trump | New Republic.)

In a just universe, Donald Trump will lead to an overwhelming loss to the Republican Party, putting the GOP as the minority party for decades in both House and Senate. 

Social Security History and Life Expectancy

Seth Anderson0 comment

Forget-me-not Social Security
Forget-me-not Social Security

A frequently repeated assertion by Social Security opponents is that Social Security was not designed for a population such as ours, with advances in medicine, yadda yadda.

Or as Dr. Krugman calls it, the Life Expectancy Zombie…

If we look at life expectancy statistics from the 1930s we might come to the conclusion that the Social Security program was designed in such a way that people would work for many years paying in taxes, but would not live long enough to collect benefits. Life expectancy at birth in 1930 was indeed only 58 for men and 62 for women, and the retirement age was 65. But life expectancy at birth in the early decades of the 20th century was low due mainly to high infant mortality, and someone who died as a child would never have worked and paid into Social Security. A more appropriate measure is probably life expectancy after attainment of adulthood.

As Table 1 shows, the majority of Americans who made it to adulthood could expect to live to 65, and those who did live to 65 could look forward to collecting benefits for many years into the future. So we can observe that for men, for example, almost 54% of the them could expect to live to age 65 if they survived to age 21, and men who attained age 65 could expect to collect Social Security benefits for almost 13 years (and the numbers are even higher for women).

Also, it should be noted that there were already 7.8 million Americans age 65 or older in 1935 (cf. Table 2), so there was a large and growing population of people who could receive Social Security. Indeed, the actuarial estimates used by the Committee on Economic Security (CES) in designing the Social Security program projected that there would be 8.3 million Americans age 65 or older by 1940 (when monthly benefits started). So Social Security was not designed in such a way that few people would collect the benefits.

(click here to continue reading Social Security History.)

The problem with Alan Simpson As A Hero

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The Pope is Gonna Buy the Electric Company
The Pope is Gonna Buy the Electric Company

Cat Food Commissioner Alan Simpson was asked:

what do you say to those folks who don’t have the comfort of a pension? That don’t have a good job that they can get employed at all the way through the age of 70, say? How do you deal with that?”

His answer:

“I always say to people,” Alan Simpson told NBC’s Chuck Todd, “before you, you know begin to drool at the mouth, and  go crazy and scratch our eyeballs out, read the damn report. It was 67 pages, we put it in December 1, 2010 and people said, “What are you doing to the vulnerable?” And I said, read it. We don’t do anything to people on SSI, we don’t do anything with food stamp, we don’t do anything with people on — on unemployment. Get — get your — use your bean, instead of listening to crap all day long from the right, and the left.”

(click here to continue reading The problem with Alan Simpson.)

Somehow that doesn’t seem to answer the question.

The Pope Says Achieve
The Pope Says Achieve

Ezra Klein writes, in response:

Simpson’s answer, meanwhile, was no answer at all. It was just schtick. It does nothing to, say, rebut the Center on Budget and Policy Priorities, which took a close look at the changes Simpson-Bowles made to Social Security and concluded that the proposal “would generate nearly two-thirds of its Social Security savings over 75 years — and four-fifths of its savings in the 75th year — from benefit cuts,” and that “while these benefit cuts would be largest for workers with above-average earnings, they would affect the vast majority of retired and disabled workers.”

Fifteen years after he retired from the U.S. Senate, Simpson has become a key figure in American politics by picking the right issue, the right enemies, and the right language to describe them. He is like America’s cranky grandpa. A bit unfiltered, sure, but loved for saying what everyone else was already thinking. And it works because most of the people Simpson talks to — particularly the ones in the media — really do think like Alan Simpson.

For reasons I’ve never quite understood, the rules of reportorial neutrality don’t apply when it comes to the deficit. On this one issue, reporters are permitted to openly cheer a particular set of highly controversial policy solutions. At Tuesday’s Playbook breakfast, for instance, Mike Allen, as a straightforward and fair a reporter as you’ll find, asked Simpson and Bowles whether they believed Obama would do “the right thing” on entitlements — with “the right thing” clearly meaning “cut entitlements.”

(click here to continue reading The problem with Alan Simpson.)

Save Ten Percent with Pippin
Save Ten Percent with Pippin

and Paul Krugman adds:

As I’ve written on previous occasions, the Bernie Madoff phenomenon helped me understand a lot about the persistence of bad economics. Madoff flourished through “affinity fraud”; his investors thought he was their kind of guy, so they didn’t look hard at how he was allegedly making money. And I realized that a similar phenomenon explains the enduring popularity of goldbugs and fiscal doomsayers — including, say, the Wall Street Journal editorial page — despite years of being wrong about everything; their devotees, who consist in large part of cranky old white men, see kindred spirits and can’t see past that to the consistently terrible analysis.

…

Simpson is, demonstrably, grossly ignorant on precisely the subjects on which he is treated as a guru, not understanding the finances of Social Security, the truth about life expectancy, and much more. He is also a reliably terrible forecaster, having predicted an imminent fiscal crisis — within two years — um, two years ago. Yet he remains not only respectable among the Beltway crowd; as Ezra says, he’s lionized in a way that looks from the outside like a clear violation of journalistic norms…

So what is it that makes Simpson the figure he is? Clearly, it’s an affinity thing: never mind his obvious lack of knowledge, his ludicrous track record, reporters trust and idolize Simpson because he’s their kind of guy.

And think about what it says about them that their kind of guy is this cantankerous, potty-mouthed individual, who evidently feels not a bit of empathy for those less fortunate.

(click here to continue reading Alan Simpson and Bernie Madoff – NYTimes.com.)

Let the Games Begin
Let the Games Begin

and for good measure, William Greider wrote these words in 2010, which are still relevant…

Retired Wyoming Senator Alan Simpson, who inherited a soft-cushion career in politics from his father, is a garrulous old crank who at 79 seems desperate for attention. Simpson likes to pop off provocatively. He cannot resist mocking lesser mortals like Social Security recipients with meanspirited ridicule. Simpson is an always quotable darling of Washington reporters, who mistake his nastiness for straight talk, who are too lazy to check out his ugly distortions.

…

Senator Trash Mouth keeps messing up the plan, however, by provoking outrage with his tasteless zingers. Most recently, Simpson compared Social Security—the federal government’s most beloved program—to “a milk cow with 310 million tits.” 

 …

On the same page the Times reported Simpson’s latest gaffe, political reporter Matt Bai contributed a far more outrageous falsehood of his own. In condescending style, he dismissed opponents to Social Security cuts (dimwits like me) as stuck-in-the-past liberals, trying to defend big government against harsh reality. Bai celebrated the courage of Representative Earl Blumenauer of Oregon, a Democrat who evidently embraces the same view. Bai did not mention the people and public opinion overwhelmingly opposed to benefit cuts (check the polls if you doubt this). Someone should ask Congressman Blumenauer’s constituents how they feel about his brave stance.

Bai’s great falsification was to insinuate that the Social Security’s trust fund is bogus—that the massive surpluses collected from working people to pay for their future retirements are meaningless. Social Security, he acknowledged, has amassed a pile of Treasury bonds—IOUs from the government—but he says as a practical matter that money can’t be paid back because taxes would have to be raised or more funds borrowed elsewhere. “This is sort of like saying that you’re rich because your friend has promised to give you 10 million bucks just as soon as he wins the lottery,” Bai explains.

His comparison is a clever but consequential lie, consistent with the elite propaganda. Bai makes it sound like the government is going to give this money to retirees. In fact, it’s the other way around. Social Security collected this money from workers as their involuntary savings, better known as FICA deductions. Then the federal government borrowed the money from us and spent it on other things. Congress raised the FICA deductions twenty-five years ago on all working people to pay for the baby boom generation’s copming retirements. The Social Security trust fund has since built up massive surpluses–$2.5 trillion now and growing to $4.2 trillion in 2023—and set it aside for the future. But starting with Ronald Reagan, the federal government ran massive deficits on its own budgets and borrowed the savings from Social Security to pay for wars and military buildups, regressive tax cuts for the wealthy and corporations, among other things.

This vast wealth belongs to the working people who paid it—not to the federal government or Congress. Naturally, many politicians would like to get out of paying it back, but that constitutes a massive bait-and-switch swindle of working people. Bai and many other reporters of the mainstream media have been assured by their sources it is impossible to pay back that money, but that is a political choice, not a fiscal requirement. It would make working people pay for Republican gravy that went to someone else.

(click here to continue reading Alan Simpson, Senator Guttermouth, Spews Again | The Nation.)

A Minimum Tax for the Wealthy and the 2012 Fiscal Cliff

Seth Anderson0 comment

Million Dollar Quartets
Million Dollar Quartets

Warren Buffett’s Op Ed begins:

SUPPOSE that an investor you admire and trust comes to you with an investment idea. “This is a good one,” he says enthusiastically. “I’m in it, and I think you should be, too.”

Would your reply possibly be this? “Well, it all depends on what my tax rate will be on the gain you’re saying we’re going to make. If the taxes are too high, I would rather leave the money in my savings account, earning a quarter of 1 percent.” Only in Grover Norquist’s imagination does such a response exist.

Between 1951 and 1954, when the capital gains rate was 25 percent and marginal rates on dividends reached 91 percent in extreme cases, I sold securities and did pretty well. In the years from 1956 to 1969, the top marginal rate fell modestly, but was still a lofty 70 percent — and the tax rate on capital gains inched up to 27.5 percent. I was managing funds for investors then. Never did anyone mention taxes as a reason to forgo an investment opportunity that I offered.

(click here to continue reading A Minimum Tax for the Wealthy – NYTimes.com.)

Forget-me-not Social Security
Forget-me-not Social Security

And of course, he’s right, but logic has been banned from the modern conservative party. Historical perspective as well, apparently, unless Regan is involved. At least President Obama has said that Social Security is off the table, in the short term at least. Just waiting for Defense spending to join the deficit party – we could halve our military spending every year for the next ten, and still spend more than any other country on the planet. Even the Democrats never seem to mention slicing defense spending as part of the Grand Bargain.

In a speech at the Center for American Progress on Tuesday, Sen. Dick Durbin (D-Ill.) , urged progressives to be open to Medicare and Medicaid reforms as part of long-term deficit talks.

But he also said both entitlement programs, along with Social Security, should be off the table during fiscal cliff negotiations.

“Progressives should be willing to talk about ways to ensure the long-term viability of Social Security, Medicare and Medicaid, but those conversations should not be part of a plan to avert the fiscal cliff,” Durbin said in his remarks.

“I think the point we tried to make in the campaign was the Paul Ryan approach [turning Medicare into a quasi-voucher program] we think threatens the existence of these programs and the services they provide,” Durbin told reporters later in the day. “That’s unacceptable. There has to be a better, more positive approach that saves money and at the end of the day, is going to keep these programs alive.”

Sen. Jeanne Shaheen (D-N.H.) agreed with Durbin that Social Security should be off the table, noting that it has not contributed to the debt.

(click here to continue reading For Fiscal Cliff Talks, Medicare Reform Still On Table For Senate Democrats.)

Greg Sargent adds:

Now this is encouraging. I’m told that representatives of major unions and progressive groups met privately this morning with senior Obama administration officials at the White House — and were pleased with what they heard.

Things can always change at a moment’s notice. But attendees at this meeting came away convinced — for now — that the White House firmly believes it has the leverage in the fiscal cliff talks, and has no intention of budging on the demand for higher tax rates from the rich or on other core priorities.

Indeed, one person at the meeting — which included people from the AFLCIO, AFSCME, SEIU, MoveOn and others — came away convinced that the White House would ultimately prove willing to go over the fiscal cliff if necessary, rather than give ground on core demands, though this is not by any means a desired option and isn’t being discussed as a strategic possibility.

…“They remain in the same place: They expect taxes to go up on the wealthy and to protect Medicare and Medicaid benefits,” the attendee added. “They feel confident that they don’t have to compromise.”

White House officials also signaled in the meeting that they are going to insist that Republicans agree to resolve the need to raise the debt ceiling as part of the fiscal talks — and won’t abide a separate fight over it, attendees said. Also key: Attendees got the impression the White House does not view this looming debt ceiling battle in the same terms as the 2011 fight, where Republicans had the leverage.

(click here to continue reading Reasons to be encouraged about fiscal cliff’s endgame – The Plum Line – The Washington Post.)

For the Sake of Security
For the Sake of Security

David Dayen:

Sen. Dick Durbin (D-IL), who has almost become the liaison to the left for cuts to federal health care programs in the grand bargain, gave a speech today at the Center for American Progress that included a couple important points:

• Durbin sequenced the provisions of the deal, saying that Republicans would have to build the framework on taxes, which includes an increase in the top marginal rates, before any Democrat will even begin to talk about social insurance programs. This seems like a hardline stance, but it just mirrors the dominant conversation, which has focused on taxes to the exclusion of practically everything else.

• Though Durbin has sought to bring rank-and-file Democrats along on a grand bargain that would include cuts to those social insurance programs, he set out some red lines. In addition to rejecting the privatization of Medicare or Social Security and the block granting of Medicaid – a common tactic to reject the extreme view to provide space for more modest but still damaging cuts – Durbin took Social Security almost entirely off the table. This matches White House Press Secretary Jay Carney’s statements yesterday. It does appear that’s been filed away for the time being.

In addition, Durbin said, regarding spending cuts on anti-poverty social programs, “Let me be clear: Those cuts will not happen.” And he sought to line up with the Administration’s viewpoint that any changes to Medicare and Medicaid can happen without cuts to benefits, through payment reforms or provider cuts. This would “strengthen” those programs through the reform, he said. He also wanted to exempt infrastructure spending fully from any cuts.

(click here to continue reading Durbin Outlines Democratic Approach on Grand Bargain | FDL News Desk.)

Spare Change
Spare Change

Brian Beutler:

Democratic leaders, frustrated by the GOP’s unwillingness to reckon with the need to raise taxes, are publicly airing the hard-bargaining demands they’re bringing to budget negotiations with Republicans.

The Senate’s top two Democrats, in separate remarks Tuesday, each said that Congress could avoid looming across-the-board tax increases and spending cuts if House Republicans agree to freeze all the Bush tax rates except those benefitting top earners. If that were accompanied by an increase in the debt limit, and the creation of a separate track for reforming the tax code and social safety net programs in 2013, the near-term austerity problem will be solved, and lawmakers can call it a day.

In other words, Senate Democrats are staking out the position that entitlement reform should not be on the table in fiscal cliff negotiations.

“If we fail to reach an agreement, the average middle-class family will see their taxes go up by $2,200 a year,” said Senate Majority Leader Harry Reid (D-NV) told reporters at his weekly press availability. “As I’ve indicated, the Senate has already reacted to stop that and the House is one vote away from making that a reality for many millions of Americans who are middle class.”

(click here to continue reading Top Democrats Drive Hard Bargiain In Budget Talks | TPMDC.)

Social Security and the 2011 VP Debate

Seth Anderson0 comment

Forget-me-not Social Security
Forget-me-not Social Security

One other point on the VP debate, beyond Paul Ryan’s disturbing call for a theocracy, is that Social Security is not going broke. No matter how many times the beltway press claims it is, no matter how many times the political party that wants to privatize Social Security claims it, no matter how many times the other party which isn’t that enthusiastic a supporter of social welfare agrees: Social Security isn’t about to go broke. It just isn’t.

But it’s domestic policy where Raddatz, like Lehrer, blew it. She started by asking about unemployment, which is at least a gesture at the enormous suffering in the country right now. That set off minutes and minutes of rambling, all of which was boilerplate (though the stuff on the green stimulus was interesting, mostly because Ryan lied his ass off).

Then it was straight to “entitlements,” which, in case you weren’t aware of the Beltway CW, Raddatz introduced by saying, “Both Medicare and Social Security are going broke.” That is just absolutely, empirically false. Medicare is fine out to 2024 and easily fixable after that (it’s medical costs, not Medicare, that are the real problem). And Social Security quite literally cannot go broke. It too can be kept solvent for many decades with small tweaks. Neither is a problem until a decade from now.

Of all the requirements for a debate moderators, surely the very minimum is that he or she not introduce factual errors into the discussion. No?

And then it was on to taxes and the defense budget. I kept thinking, “This is exactly the stuff we went over the other night in the presidential debate! Where are immigration, education, innovation, housing, LGBT issues? Where is energy? Where is, God forbid, climate change?”

(click here to continue reading Questions at VP debate reveal bankrupt Beltway thinking | Grist.)

In honor of Tax Day
In honor of Tax Day

more on the fallacy from John Harvey, of Forbes, no less:

It is a logical impossibility for Social Security to go bankrupt. We can voluntarily choose to suspend or eliminate the program, but it could never fail because it “ran out of money.” This belief is the result of a common error: conceptualizing Social Security from the micro (individual) rather than the macro (economy-wide) perspective. It’s not a pension fund into which you put your money when you are young and from which you draw when you are old. It’s an immediate transfer from workers today to retirees today. That’s what it has always been and that’s what it has to be–there is no other possible way for it to work.

…

The most obvious and straightforward means is this: set a tax of 30% on the salaries of existing workers and give it directly to the retirees–right now, today, immediately. Have the money come straight out of your paycheck and right into your grandmother’s bank account. This accomplishes the goal neatly and directly–and it’s exactly what we do in real life. This is how Social Security actually operates. As you can see, this needs no prior financing or savings, nor would that appear to be particularly helpful. At the national level, maintaining a class of retirees (whether via Social Security or private pensions) means redistributing existing output, not putting money under your mattress. Although you can run out of money for retirement, we, as a nation, cannot.

What, then, you may ask, is the Social Security Trust Fund, the pool of money that people say will dry up and make it impossible for anyone to receive their Social Security payments? It is the surplus that resulted from having collected more in taxes than was necessary to pay out to retirees. Let me say that again: it is how much existing workers were overtaxed relative to the need to pay retirees in the past. It was never the source of the money we’ve been paying to Social Security recipients all these years. Strictly speaking, it’s completely unnecessary if we are able to precisely and continuously match tax revenues and pay outs.

(click here to continue reading Why Social Security Cannot Go Bankrupt – Forbes.)

Spare Change
Spare Change

Too bad this simple point is not repeated often by those who should know better. In fact, the only politician who I’ve heard correct this error forcefully has been Bernie Sanders, and he isn’t a Democrat or Republican…

The Real Referendum – NYTimes.com

eggplant0 comment

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?

Via:
The Real Referendum – NYTimes.com

Rick Perry grabs a third rail

Seth Anderson0 comment

Hold on, cowboy
Hold on, cowboy

I don’t think Rick Perry cares if anyone questions his logic; intellectual robustness is not part of Perry’s brand. Perry does want to privatize Social Security, critics be damned. Wall Street loves such talk after all, and they have money to contribute to Perry’s campaign.

Clarence Page writes, in part, about Perry’s equation of Social Security with a Ponzi scheme:

A real Ponzi scheme, for example, is an elaborate con game named after Charles Ponzi, who served time in the 1920s for operating one. Funds from unwitting new investors are used to pay phony dividends to old ones, which attracts newer investors. The scam collapses when it runs out of new suckers. Think Bernard Madoff.

In fact, memories of the convicted Madoff, a respected Wall Street figure until his fund turned out to be a multibillion-dollar Ponzi, give pause to many at the very notion of trusting even more of the nation’s retirement funds to Wall Street. At least with Social Security everybody is in on what the scheme is really about.

Before we talk about reducing what Social Security does, we need to talk more about why this New Deal-era program is so popular: It lifts 13 million elderly Americans out of poverty, according to the liberal Center for Budget and Policy Priorities, either as an income supplement or as sole retirement income. Without Social Security, the Washington-based center found, almost half of the elderly — 48 percent — would fall below the government’s poverty line, instead of the current 8 percent.

And more than 3 million children received benefits as dependents of retired, disabled or deceased workers, the center found, or by living with parents or relatives who received Social Security benefits.

Social Security is currently solvent until 2037, according to the Congressional Research Service. And it would remain solvent for decades after that, the CRS says, with such simple adjustments as lifting the caps that exempt upper-income earnings from the payroll tax.

(click here to continue reading Rick Perry grabs a ‘third rail’ – chicagotribune.com.)

Another reason why Rick Perry is not really a Christian, no? Aren’t Christians supposed to help the poor and elderly? Not kick them to the curb so that bankers can make obscene profits?

Muddying the Budget Waters With Social Security

Seth Anderson1 Comment

Forget-me-not Social Security
Forget-me-not Social Security

We’ve mentioned this before, but it bears repeating…

And that is the issue hanging like a dark cloud over the broader discussion to bolster Social Security, especially in such a politically charged atmosphere.

Many people misunderstand how the program operates. Payroll taxes stream into the trust fund that is used to pay current retirees’ benefits. When there is a surplus, that money is invested in a special type of Treasury bond that pays interest to the trust fund. At the end of last year, the trust fund had about $2.6 trillion. And though last year was the first year since 1983 that the fund paid out more than it received in tax revenue, it still continued to grow because of the interest accrued — and it is estimated to continue to grow through 2022.

Since the money in the trust fund is held in Treasury securities, taxes collected are essentially being lent to the federal government to pay for whatever it wants (and this allows the government to borrow less from the public). That is where some of the confusion comes into play about how Social Security is used to pay for things that are unrelated to the program. But it is really no different from China lending the government money by investing in Treasuries.

“Social Security does not, and cannot by law, add a penny to the federal debt,” said Nancy Altman, co-director of Social Security Works, an advocacy organization that promotes the preservation of the program. “It, by law, cannot pay benefits unless it has sufficient income to cover the cost, and it has no borrowing authority to make up any shortfall.”

And, she added, it is not in crisis. “Its long-range funding shortfall should be dealt with on its own legislative vehicle, separate from deficit-reduction talks and after those talks are concluded,” she added.

(click here to continue reading Muddying the Budget Waters With Social Security – NYTimes.com.)

 

Reporting without context on the greatest policy achievement ever

Seth Anderson0 comment

Forget-me-not Social Security
Forget-me-not Social Security

Larry Polivka1 argues we should double-down on Social Security instead of trying to gut it, or privatize it2

While Washington rushes to reduce benefits in the name of a nonexistent crisis, the overwhelming reality is that Social Security is becoming more, not less, essential for most Americans. Any changes should be with the goal of strengthening it, not reducing benefits.

Journalists covering the debate seem to have forgotten the essential context. Social Security, after all, is an extraordinary public policy achievement that provides economic security for millions of older Americans. Social Security is the major reason that poverty among those 65 and older has been reduced from 30% to under 10% since 1960. Without Social Security benefits, the percentage of older Americans below the poverty level would now exceed 40%. Over 70% of all retirees depend on Social Security for most of their income. Social Security is the essential pillar of the U.S. system of retirement security.

It is also rapidly becoming even more essential, not less, due to the erosion of the private retirement security system. Defined benefit private pensions have disappeared for most workers and been replaced by poorly funded defined contribution plans (401(k), IRA). Many of the remaining defined benefit plans in both the private and public sectors are underfunded. Most working families have meager savings caused by stagnant or declining incomes and the increasing costs of education, housing and health care. The wage replacement value of Social Security is already expected to decline from 40% to under 30% by 2030 due to increasing taxes and health care costs. These trends will increase the percentage of baby boomer retirees unable to maintain between 70 and 80% of their last wage while working. Over 50% of older boomers and over two thirds of those born between 1960 and 1964 will not be able to achieve that benchmark, which is generally considered necessary to maintain an adequate standard of living in retirement.

At this point, it looks as if most future retirees will be more dependent on Social Security than their parents for their economic security in retirement. This means that the preservation and strengthening of the program should be the central focus of efforts to ensure retirement security for decades to come.

The Social Security Trust Fund currently has a surplus of $2.6 trillion, which is sufficient to keep the program fully solvent until 2037. After 2037, the money flowing into the Trust Fund through the payroll tax will be enough to pay beneficiaries about 75% of benefits currently promised in law. Social Security is not facing an immediate funding crisis; only modest changes are needed to ensure the program’s long term capacity to pay promised benefits

(click here to continue reading Nieman Watchdog > Commentary > Reporting without context on the nation’s greatest policy achievement ever.)

 

Footnotes:
  1. Larry Polivka serves as Scholar in Residence of the Claude Pepper Foundation at Florida State University, focusing his efforts on issues relating to long-term care and retirement security. [↩]
  2. basically the same thing [↩]

Ayn Rand – Parasite?

Seth Anderson2 Comments

Blue and Moist

I wouldn’t even bother to comment about Libertarian icon Ayn Rand accepting free, govmint’ cheese if her name wasn’t so venerated by those enemies of the modern world, the Teabaggers, her anti-social service philosophy celebrated by reactionaries like Rand Paul and Paul Ryan and so on. But, I had a good laugh at this:

The Right should be commended politically for their ability to develop and stick to a unified message. But close inspection of this unified message reveals a disappointing secret identified by a student of the Godfather of Neo-conservatism, —- the University of Chicago’s Leo Strauss. The student, Anne Norton (“Leo Strauss and the Politics of American Empire”) identified what she called VIP-DIP meaning Venerated in Public, Disdained in Private. “Do as I say, not as I do.” The list of vip-dipers on the Right runs from Harold Bloom to Newt Gingrich, but certainly not Ayn Rand. Right?

Say it ain’t so Alisa Zinovievna Rosenbaum.

A heavy smoker who refused to believe that smoking causes cancer brings to mind those today who are equally certain there is no such thing as global warming. Unfortunately, Miss Rand was a fatal victim of lung cancer.

However, it was revealed in the recent “Oral History of Ayn Rand” by Scott McConnell (founder of the media department at the Ayn Rand Institute) that in the end Ayn was a vip-dipper as well. An interview with Evva Pryror, a social worker and consultant to Miss Rand’s law firm of Ernst, Cane, Gitlin and Winick verified that on Miss Rand’s behalf she secured Rand’s Social Security and Medicare payments which Ayn received under the name of Ann O’Connor (husband Frank O’Connor).

As Pryor said, “Doctors cost a lot more money than books earn and she could be totally wiped out” without the aid of these two government programs. Ayn took the bail out even though Ayn “despised government interference and felt that people should and could live independently… She didn’t feel that an individual should take help.”

But alas she did and said it was wrong for everyone else to do so. Apart from the strong implication that those who take the help are morally weak, it is also a philosophic point that such help dulls the will to work, to save and government assistance is said to dull the entrepreneurial spirit.

In the end, Miss Rand was a hypocrite but she could never be faulted for failing to act in her own self-interest.

(click here to continue reading Michael Ford: Ayn Rand and the VIP-DIPers.)

Do what I say, not what I do, in other words. Sound familiar?

Via

And for a laugh:

I watch a lot of old movies on TCM, mostly because TCM are my initials. (I’m Tallulah Clytemnestra Morehead) and I just finished watching a doozy of a terrible movie on TCM, one that has to be seen to be disbelieved: the ultra-hilarious piece of right-wing objectivist claptrap, the movie of Ayn Rand’s ridiculous novel, The Fountainhead, starring Gary Cooper and Patricia Neal, as glamorous, sexy Fascists, I mean an architect and his best gal.

I’m afraid Juliette’s blowing up the H-Bomb on that island on Lost must have screwed up the Time-Space Continuum. This can’t be Normal Reality, because this movie is the most absurd piece of twaddle I have sat through since the final season of Roseanne.

Enormously well-hung Gary Cooper plays Howard Roarke, the most brilliant, unpopular, and egotistical architect in the world. The movie is all about how people are always trying to get Howard Roarke to design buildings just like the same ones everyone else designs, but Howard is too great to listen to anyone, even his clients. People are always telling him his designs are too outré, although his houses are all Frank Lloyd Wright rip-offs, and his office buildings are all rectangular glass and steel structures that look exactly like every souless office building clogging the downtowns of every major city in the world, the very style that Jacques Tati spent his great movie Playtime attacking. “We can’t take a chance,” they always say to him, as though they were gambling their lives building an office tower or a block of flats. Has the designer of Disney Hall in Los Angeles been lynched yet?

The villain of the story is a newspaper architectural critic, who wields tremendous public power. He writes a column of architectural criticism, and his slightest word can bring the city to a halt. What planet is this? When the publisher fires the architectural critic, the staff walks out in support of the critic, and the paper buckles under to the critic, and the publisher shoots himself. Star Trek is more realistic.

Howard does not consider architecture to be a collaborative art. Rather, it’s the solitary work of a lone artist, toiling away in an attic somewhere. Making even the tiniest change in any of his designs is intolerable to Roarke.

(click here to continue reading Tallulah Morehead: The Insanity of Ayn Rand: The Fountain-Brain-Dead..)

and one last tidbit for your amusement:

The movie was written by the novelist-nutball, Russian-American, writer-philosopher Ayn Rand. She promoted a form of highly-anti-communist philosophy called “Objectivism,” probably because it is so objectionable.

Being virulently anti-Communism-and-Socialism, she believed that ownership and rights of property were sacrosanct, although when Howard Roarke, her Ideal Man, blows up other people’s property because he doesn’t like it, it’s a righteous act, not a violation of other people’s rights of property. Ayn was a hypocrite.

Ayn wrote every word of dialogue, and forbade a word of it to be changed. She was the Howard Roarke of screenwriters. What she was not was a good writer of dialogue, none of which sounds like human speech, and all of which sounds like a lecture from a Fox News lunatic.

Ayn insisted that Gary Cooper say every damn word of her summation speech, which is utterly nuts from beginning to end. Jack Warner, no slouch in the anti-Commie department himself, ended up cutting it down a little. It’s still six minutes of Gary Cooper standing in one place, making a completely insane-yet-boring speech, in praise of selfishness, condemning altruism, and stating that there are only two types of humans: “Creators” and “Parasites.” That’s it. No shades of gray. No middle-management.

Social Security and the National Dept

Seth Anderson1 Comment

Forget-me-not Social Security

Matt Taibbi notes, in the midst of skewering Matt Bai:

Social Security was never the cause of the nation’s debt problems. This issue dates all the way back to the Eighties, when Ronald Reagan hired Alan Greenspan to chair the National Commission on Social Security Reform, ostensibly to deal with a looming shortfall in the fund. Greenspan’s solution was to hike Social Security tax rates (they went from 9.35% in 1981 to 15.3% in 1990) and build up a “surplus” that could be used to pay Baby Boomers their social security checks 30 years down the road.

They raised the SS taxes all right, but they didn’t save the money for any old Baby Boomers in the 2000s. Instead, Reagan blew that money paying for eight years of deficit spending and tax cuts. Three presidents after him used the same trick. They used about $1.69 trillion in extra Social Security revenue (from the Greenspan hikes) to pay for current-day goodies, with the still-being-debated Bush tax cuts being a great example. This led to the infamous moment during Bush’s presidency when Paul O’Neill announced that the Social Security Trust Fund had no assets.

Well, duh! That is what happens to a fund, when you spend 30 years robbing it to pay for tax cuts for Jamie Dimon and Lloyd Blankfein. It will tend to get empty. But of course this wasn’t presented to the public as being the consequence of too many handouts to wealthy campaign contributors: this was presented as a problem of those needy goddamned old people wanting to retire too early and being just far too greedy when it came to actually wanting their Social Security benefits paid out.

(click to continue reading Matt Bai’s Post-Partisanship | Rolling Stone Politics | Taibblog | Matt Taibbi on Politics and the Economy.)

Furthermore,

Social Security taxes are capped, which means that above a certain level (I believe it’s $106,000 this year) there are no additional taxes. Which means that Jamie Dimon pays a disproportionately small amount of Social Security tax — an arrangement that makes sense, if that money is only going to one place, i.e. back, later on, to the person who paid the taxes, in the form of Social Security benefits.

But if all that money is just going into a big pile to be stolen by a long line of presidents who are using it to pay for things like pointless wars and income tax cuts for their rich buddies, the Social Security cap means that this stealth government revenue source disproportionately comes from middle class taxpayers. Add in the fact that the proposed solution to the budget problem now is cutting Social Security benefits, and what you get is a double-screwing of middle-class taxpayers: first they see their Social Security taxes used to fund tax cuts for the wealthy, and then they see cuts to their benefits to pay for the fallout from that robbery.

Grist for the mill of your next argument with a right-winger clamoring to privatize Social Security. Of course, facts have never been very important to right-wingers.

Two Dudes Deficit Commission

Seth Anderson1 Comment

(click to embiggen)

Kevin Drum has a good analysis of the Two Dudes1 deficit-reduction plan that the yammering class is discussing:

To put this more succinctly: any serious long-term deficit plan will spend about 1% of its time on the discretionary budget, 1% on Social Security, and 98% on healthcare. Any proposal that doesn’t maintain approximately that ratio shouldn’t be considered serious. The Simpson-Bowles plan, conversely, goes into loving detail about cuts to the discretionary budget and Social Security but turns suddenly vague and cramped when it gets to Medicare. That’s not serious.

There are other reasons the Simpson-Bowles plan isn’t serious. Capping revenue at 21% of GDP, for example. The plain fact is that over the next few decades Social Security will need a little more money and healthcare will need a lot more. That will be true even if we implement the greatest healthcare cost containment plan in the world. Pretending that we can nonetheless cap revenues at 2000 levels isn’t serious.

And their tax proposal? As part of a deficit reduction plan they want to cut taxes on the rich and make the federal tax system more regressive? That’s not serious either.

(click to continue reading Is the Deficit Commission Serious? | Mother Jones.)

Social Security is not the problem, health care costs is, especially as our population ages. However, the Republicans and their Wall Street buddies are salivating at the prospect of dismantling Social Security, and diverting the funds into the markets, so instead of talking about Medicare, they concentrate upon Social Security.

Footnotes:
  1. Alan Simpson and Erskine Bowles [↩]

Top 5 Social Security Myths

Seth Anderson0 comment

I’ve heard some of these assertions dozens of times, mostly from loud-mouthed, small brained Republicans. Helpful to have response handy…

Myth: Social Security is going broke.

Reality: There is no Social Security crisis. By 2023, Social Security will have a $4.3 trillion surplus (yes, trillion with a ‘T’). It can pay out all scheduled benefits for the next quarter-century with no changes whatsoever. After 2037, it’ll still be able to pay out 75% of scheduled benefits–and again, that’s without any changes. The program started preparing for the Baby Boomers retirement decades ago. Anyone who insists Social Security is broke probably wants to break it themselves.

Myth: We have to raise the retirement age because people are living longer.

Reality: This is red-herring to trick you into agreeing to benefit cuts. Retirees are living about the same amount of time as they were in the 1930s. The reason average life expectancy is higher is mostly because many fewer people die as children than did 70 years ago.3 What’s more, what gains there have been are distributed very unevenly–since 1972, life expectancy increased by 6.5 years for workers in the top half of the income brackets, but by less than 2 years for those in the bottom half.4 But those intent on cutting Social Security love this argument because raising the retirement age is the same as an across-the-board benefit cut.

Myth: Benefit cuts are the only way to fix Social Security.

Reality: Social Security doesn’t need to be fixed. But if we want to strengthen it, here’s a better way: Make the rich pay their fair share. If the very rich paid taxes on all of their income, Social Security would be sustainable for decades to come.5 Right now, high earners only pay Social Security taxes on the first $106,000 of their income.6 But conservatives insist benefit cuts are the only way because they want to protect the super-rich from paying their fair share.

Myth: The Social Security Trust Fund has been raided and is full of IOUs

Reality: Not even close to true. The Social Security Trust Fund isn’t full of IOUs, it’s full of U.S. Treasury Bonds. And those bonds are backed by the full faith and credit of the United States.7 The reason Social Security holds only treasury bonds is the same reason many Americans do: The federal government has never missed a single interest payment on its debts. President Bush wanted to put Social Security funds in the stock market–which would have been disastrous–but luckily, he failed. So the trillions of dollars in the Social Security Trust Fund, which are separate from the regular budget, are as safe as can be.

Myth: Social Security adds to the deficit

Reality: It’s not just wrong — it’s impossible! By law, Social Security funds are separate from the budget, and it must pay its own way. That means that Social Security can’t add one penny to the deficit.1

(click to continue reading MoveOn.org Political Action: Democracy in Action.)