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The United States has to cut back spending on the Commerce Department or it will bankrupt the country. Okay, I have no evidence for this and it really doesn’t make any sense. The Commerce Department’s budget is about $10 billion a year, less than 0.3 percent of total spending, but this note is written in the spirit of Thomas Friedman.
Just as Thomas Friedman can tell readers that Social Security and Medicare are bankrupting the country with no evidence, in my blognote I get to blame the Commerce Department. The reality of course is that Social Security is fully funded by its own dedicated tax revenue through the year 2036, meaning the program on net imposes no burden on the government.
Under the law, if nothing is done to increase revenues SS will only pay about 80 percent of scheduled benefits in years after 2036. It is prohibited from spending any money beyond what it collects in taxes. The projected shortfall over the program’s 75-year planning period is equal to 0.6 percent of GDP, about one-third of the increase in annual defense spending between 2000 and 2011. It is difficult to see how a program that can only spend what it takes in from taxes could bankrupt the country, but this is Thomas Friedmanland.
There is more of an issue with run-away Medicare costs, but everyone outside of Thomas Friedmanland knows that this is an issue of run-away health care costs. If the United States paid the same amount per person for our health care as people in Canada, Germany, or any other wealthy country we would be looking at huge budget surpluses, not deficits.
This means that if we fix the U.S. health care system, then there will be no Medicare or budget problem. On the other hand, if we fail to fix the system, health care costs will bankrupt the U.S. economy even if we eliminate Medicare and other public health care programs altogether. People know this outside of Thomas Friedmanland, but in Thomas Friedmanland, you get to just make things up.
29 Comments
(Standing on chair clapping loudly)
That was hysterical, I loved it. And coincidently it’s true, too!
Look up Thomas Friedman’s wife. OF COURSE he doesn’t need SS and Medicare and if Thomas Friedman doesn’t need something, nobody does. Sometimes I wonder if the more you travel, the smaller your world becomes.
Can’t these non-rich old people just hurry up and die already?
Whenever Thomas Friedman writes about the problems of the American economy, he always seem to ignore the reality of those of us on the ground living in the places that once employed thousands of high value workers, but now employ mostly lower paid retail sales clerks, security guards, and fast food or “service” workers. I can’t buy something as small as a paper clip, cat litter scoop or potato peeler that isn’t made in China And 100% of the computers, computer peripherals, shoes, and kitchen appliances that I see are made in China. I can not find a single refrigerator, microwave oven or television or any clothes with the “Made in USA“ label and the NY Times reports that 80% of our medicines come from China or India. No consumer knows how much of our food ingredients are imported (or from where) and now even the majority of our household goods, furniture, office supplies, paper goods, and dishes seem to be made in China. If 70% of our economy is consumer driven and 80% of consumer goods are imported, no economic “stimulus” is going to mean much to the unemployed. Spending a hundred dollars at Wal-Mart would seem to do absolutely nothing for our economic recovery.
In the last few decades, corporations have exported, out-sourced, off-shored, and automated so much good wage economic value added employment that the United States no longer appears to have the industrial or manufacturing infrastructure to support the good wage employment, decent incomes or high standard of living that we grew accustomed to after World War II. On June 9, the New York Times printed a front page article “Companies Spend on Equipment, Not Workers” that included the shocking and devastating fact that the “economy is producing as much as it was before the downturn, but with seven million fewer jobs.” The same output produced with 7 million fewer jobs!!! Neither Thomas Friedman, the economists nor any “political pundits” even come close to ever acknowledging this fact. And equally important, capital is mobile, looking for the lowest wages and the highest profits, and under the control of the very few who have no allegiance to the United States and no commitment to workers or their communities. America’s rapidly vanishing good wage workers, declining middle class, and millions of unemployed and under-employed are paying a permanent price for this brand of “economic recovery.”
Our economy is like the Titanic, massive, crippled, (with the rich in all of the lifeboats) and going down beneath the water, only the ocean that we will sink into won’t be frigid, it will be warm and devoid of life as the global and sea water temperatures rise.
Sheesh, thanks! Now I have to get to the ophthalmologist to have my eyes popped back into their sockets. Poor, poor Mr. Buchsbaum, er Moustache . . .
Well put, Dean. This exercise in circular reasoning totally captures the sublime perfection in how “the moustache of wisdom” processes his higher order thinking.
Too bad for Friedman that all his brains are to be found in his facial hair, just like the remnants of what he had for lunch.
well, it will all come to a head and end in about 9 months. Oh! I meant in about another 9 months or so. No, really, it will take just a little over 9 months! (snark)
Thomas Friedman is a Mall Rat – in every sense of the words.
Social Security is a government program; it benefits every American, especially the poor and middle income; its administrative costs are remarkably low; it does not directly benefit any private corporation. That’s why it needs fixin’. To the hundred millionaire plus Friedman family, that’s just natural.
Friedman is on the Kill Social Security Bus. He’s got his orders from Peterson, Obama, et al.
Friedman loves war and war spending. Freidman says (re: Brown skinned Arabs), “SUCK ON THIS! (re: US Military Might)”.
He is very clever and articulate. That’s why he gets the big writing and teevee gigs.
No, the more you travel the larger your world becomes unless you started out with a fucking stultified pea brain. No matter where Friedman travels I guarantee you he stays at the most expensive hotel, eating the finest cuisine, drinking the best wine available, and sleeping in air conditioned comfort.
He mixes with the masses as necessary but he has no empathy for their situation and he returns to the US with his pre-conceived notions about American exceptionalism reinforced.
His wife’s company didn’t lose nearly enough money to make this man a plebeian nor can he understand what it means to millions of Americans that their world is falling down around them while he decides they don’t need a safety net.
You do understand that those who are claiming that social security is a problem make that claim because they consider having to borrow money to pay back the 2.5 trillion that they previously borrowed from social security to fund wars and tax cuts as contributing to the deficit and debt.
We need a convincing argument to explain that theory away. The theory that the government bonds owned by social security are just worthless pieces of paper while the bonds owned by China, Japan etc, etc, etc are as good as gold. Where they get the idea that the government has two classes of debt, I don’t know.
They get that idea about two classes of debt from the same butt cheek where they get the “idea” that Soc Sec is allegedly an “entitlement” (but it’s not) and that it’s “broke” (but it’s not) and that it needs to be “fixed” (don’t drug addicts need a “fix”) in order to “save it,” so that our nation’s economy doesn’t crash and burn…. in other words: it’s all hogwash, b.s. and basically one big fat LIE.
THanks Dean, little tommy is alway good for a laugh and sad for how many people belive him
The blinders of the rich. But I remember in 2009 that Obama mentioned that among his reading material for a summer vacation was Friedman’s book THE WORLD IS FLAT, 3.0. I guess that might explain why in 2010 Obama selected Alan Simpson to head up his Deficit commission.
But as for Friedman, I’m 50/50 with him. His BS about Social Security I totally disagree with. But then some of his writing I find very interesting. For example his article that appeared in the Times back in March titles TRIBES WITH FLAGs
In the article, Friedman stressed that there are two kinds of states in the Middle East: “real countries” with long histories in their territory and strong national identities (Egypt, Tunisia, Morocco, Iran); and those that might be called “tribes with flags,” which are artificial states with boundaries drawn by colonial powers.
The problem is that these “Tribes with Flags” states have no real citizens in the modern sense. The tribes and sects that make up these artificial states are held together by the iron fist of colonial powers, kings or military dictators. These people never volunteered to live together and they have never melded into a unified family of citizens.
http://www.sangam.org/2011/03/Tribes_Flags.php?uid=4289
I seem to recall that 1 FU (Friedman Unit) = 6 months.
“If the United States paid the same amount per person for our health care as people in Canada, Germany, or any other wealthy country we would be looking at huge budget surpluses, not deficits.”
While this is partially true, it avoids the real nature of health care spending that causes costs to rise. The CBO in 2008 published an excellent report citing that technology advancement is responsible for roughly 50% of the increases we have seen in health care costs. In 2006, the CBO (when talking specifically about Big Pharma) also concluded that lost revenue by the medical technology sector would necessarily slow the rate of innovation.
The strategy employed by other countries is not applicable to the U.S. because their strategy is (put bluntly): “Let the Americans provide the profit motivation so new technologies are developed and we’ll pay slightly over the marginal cost after that.” It works for medicine, military hardware, computer technology, and everything else that the American marketplace demands rapid innovation. I should say, it works provided you are not America because there is no one that the United States can free-ride technology off of.
If we reduce health care spending in the U.S., either the rest of the world has to make up the difference (meaning that health care costs in Canada, Germany, or any other wealthy country will go up) or new technologies will come along less frequently. According to the CBO, the United States accounts for 75-80% of medical R&D spending. Cutting our share in half means the world produces medical tech at about 60% of the current rate.
If we are mostly happy with today’s health care rates, we can stop adopting new technologies and have little difficulty providing for everyone after say 2030 (we could easily afford universal coverage for all Americans at 1990 levels of care). Ultimately, whether we decide not to invest in new tech at breakneck speeds and save money from that or cut spending and dry up the medical technology sector, the end result will likely be about the same.
I tried explaining it to someone with this argument:
You borrowed money from your uncle to buy a boat. You can’t afford to make your payments to your uncle now. The solution is to sell the boat and pay your uncle back with the funds from selling the boat. The solution is NOT to tell you uncle that he has to cut back on his expenditures so that you can keep the boat without paying him back.
So, we borrowed money from social security to pay for tax cuts and wars. It’s time to make payments back to social security. We don’t have the money to make the payments. The solution is NOT to tell your creditor (social security) that they must cut back so that you can keep everything you bought with borrowed money.. The solution is to get rid of the tax cuts and wars that you bought with money borrowed from social security. Then use those funds to pay your debts to social security.
It isn’t social security that you can’t afford, it’s the things you funded with money borrowed from social security that you can’t afford.
None of the “fixes” for Social Security discussed to date inside the Beltway pays out benefits at the same rate as doing nothing. If none of these fixes impacts the budget, frustrating their putative purpose, then the fixes are designed to achieve undisclosed goals. One of those appears to be to diminish the lives of average Americans so that their elected representatives can claim “success” and put more money into their corporate patrons pockets.
At a minimum, this and the next Congress should do nothing to “fix” Social Security, since their fixes worsen the lives of average Americans.
If Congress really wanted to start fixing Social Security, it would figure out how to increase its benefits, not decrease them. If Congress were serious about the deficit it and its predecessors enabled, it would put people back to work. It would make their economic lives more secure by limiting the liability-free excesses of corporate America, by making their jobs, their pensions, their health care more secure, and their food and water safer to eat and drink. It woulds start educating their children instead of preening about teaching them about an intelligent designer; the evolution of Congress alone makes clear there is no such being.
Those would be serious goals for serious people. Congress won’t consider them. That should tell us what we need to know about how interested Congress is in addressing the needs of average Americans.
It’s a program which works, which is why the greedy want to siphon the money into a private program.
Brilliant!
You are wrong that SS is self-funding and poses no impact on the deficit through 2036. It may be true that the cumulative taxews collected for SS over the year would have been sufficient to fund SS through 2036 had they not been appropriated by our government, but there is absolutely an impact on the deficit.
What is my reasoning? Simple – from here on through 2036, the amount of annual tax receipts for SS fall below the projected outlays. The government is going to have to BORROW the money to repay the SS Fund to make up this difference, and those borrowed funds bear an interest rate that must also be paid by the government. Therefore, those annual interest payments are contributing to the deficit.
This may be a small point, but if we are going to be taken seriously we should actually use the facts when stating our case.
Thomas F has been wrong so many times that he has no creds at all…if it was up to him we would have a million troops in the middle east.. no creds on SS either thanks Dean!
You aren’t looking carefully enough then. Correle and Libby make excellent dishware here in the US of A. Carol Rose is just one of many labels made here. My New Balance shoes were made here(although they do also have foreign plants so you need to look at the label. By the way, they were CHEAPER than the shoes made overseas by sketchers and whatnot) So were my no nonsense socks. Hanky panky sells some outrageously expensive undies but they ARE made here. Oka b makes sandals. Is it easy to find products made here? No. Is it impossible? That’s a stretch. You just need to do some looking.
The government is going to have to pay interest on the money it borrowed from a self sustaining program. The fact that it has to pay interest is not because of the program itself. It’s the fault of the dolts in Congress who appropriated the SURPLUS for war and instead of making paying back that money a priority chose to fund tax cuts. The poster is exactly correct. What you are doing is the equivalent of blaming patrons of a bank for a bank robbery perpetrated by bank robbers. The problem isn’t the bank patrons but the robbery itself.
Or in other words the fact that the dolts stole the money from a self sustaining fund should not mean that Social Security gets the blame for the fact that the government has to pay interest on the borrowed funds. Congress could eliminate all this “woe is me, we can’t pay the money” crap if they eliminated the cuts, drew down their outrageous spending on Defense and Homeland Security and paid down the deficit just as easily as making some imaginary projection on what 2036 will look like if we don’t cut, cut, cut,now,now,now.
They aren’t fooling anyone and that is the fact that really matters.
Tax cuts contributing to the deficit- good
Self sustaining programs that Americans contributed to in good faith contributing to the deficit- bad
I’m so sick of the BS. They can afford to pay the money back, it just means they have to tell the rich that the tax breaks have to go bye bye so that the money can be paid back. They’d have to tell corporations like GE and Boeing, who have reaped the benefits of subsidized by taxpayer benefits like roads and defense that they need to pay their fair share. They shouldn’t ask the poorest among us to tighten their belts.
Truly Excellent, Sir !
Now that the NeoCons are firmly in control of Canada, they’re pushing the meme, that we simply cannot afford our present Health Care system … oy vey !
I was wondering when the modern day version of Bullwinkle J. Moose would show up. With this upbeat fool , pulling a rabbit out of his hat is the least of his problems. This what happen when happy fools put there ideas down.This self-aggrandizing and you start making shit up. I guess he never took a class in logic. I wonder what Bullwinkle definition of a fallacy is.
When right wing media has chosen its latest pinata, the hired pens that need something to write more often than they have actual thoughts have easy low-hanging fruit to choose. Social security is the latest plum.