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Bernie Sanders: Self-shackled Champion of the People

1:48 pm in Uncategorized by letsgetitdone

I gotta love Bernie Sanders, because he seems so much like people I grew up with and like myself too, and he also seems to have that passion for equality and democracy that is so important for the future of America. Sometimes I think Bernie is one of the few champions of the people left in Congress. But I also think that along with other progressives he has constructed chains for himself that prevent him from being as effective a champion of the people as he otherwise might be.

His chains are the chains of either false beliefs or a decision not to speak the truth about fiscal matters for fear that the “very serious people” in the Washington village will marginalize him even more than they do right now. I can’t say which of these is true, but I think whichever reason is operative, his self-shackling hurts his effectiveness.
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Dick Durbin Insults Everyone Else’s Intelligence About Social Security

3:33 pm in Uncategorized by letsgetitdone

Yesterday on Fox, Senator Dick Durbin said:

WALLACE: I’m going to talk about ObamaCare on a second, but you’re not answering my question. Why does taxes — why do taxes have to be on the table? Why can’t you just make a deal, short-term spending for long-term entitlement reform — which, Senator, you support and President Obama support. You have supported the idea of some entitlement reform.

DURBIN: That’s right. I do, and I’ll tell you why — because Social Security is going to run out of money in 20 years. I want to fix it now, before we reach that cliff.

Medicare may run out of money in 10 years, let’s fix it now. And that means addressing the skyrocketing cost of health care. That’s what ObamaCare is focused on, and yet, the Republicans want nothing to do with it.

If we don’t focus on the health care and dealing with the entitlements, the baby boom generation is going to blow away our future. We don’t want to see that happen. We want to make sure that Social Security and Medicare are solid.

The “. . . may run out of money. . . . ” and “. . . dealing with entitlements. . . “ memes, in reply to Chris Wallace’s question suggests that a deal trading increased revenues for Social Security and other entitlement cuts is acceptable to him. So, Durbin’s argument is that because Social Security Trustee and CBO projections, based on very pessimistic economic growth projections for the whole period, show a shortfall in the Social Security “Trust Fund” in 20 years, it is acceptable to make entitlement cuts now if the Democrats can get increased revenue from higher taxes, as if entitlement “reform” were the only way to meet the perceived Social Security solvency problem. But who would it be acceptable to? Read the rest of this entry →

The Right Message

10:23 pm in Uncategorized by letsgetitdone

The progressive counter-attack against the President’s emerging “austerity” political strategy and program is beginning to emerge. In the last few days, we’ve seen posts by Nancy Altman and Eric Kingson of Social Security Works, Jane Hamsher, Robert Kuttner, and Dean Baker writing against the thrust by the Administration, the National Commission on Fiscal Responsibility and Reform, the Peter G. Peterson Foundation and its network of related organizations, and the deficit hawks in the Congress, seemingly aimed at Social Security. These posts make or imply a number of points sometimes in the form of questions. They are:

– The commission is unaccountable.

– It meets in secret.

– Its members will keep their recommendations secret until after the election, and then will present them to a lame duck Congress that is itself unaccountable.

– That Congress will avoid open hearings, and debates, and also floor amendments in the House and Senate on the recommendations.

– The Commission lacks diversity in both opinion and also in racial and gender makeup.

– The Commission members appear to have already made up their minds that America’s fiscal problems are mainly due to over-spending rather than under-taxing, and, even though they insist, that everything is”on the table” seem to have decided that military spending can’t be cut.

– The co-chairs, Erskine Bowles and Alan Simpson, based on public remarks they’ve made appear to have a clear agenda oriented toward cutting Social Security and Medicare.

– Since the Commission appears to have already made up its mond about its findings, it’s whole process is just a way of avoiding accountability in the upcoming elections. It’s all just an end-run around the democratic process

– The Commission is working very closely with Peter G. Peterson, a multi-billionaire who has been persistently seeking the end of Social Security as it currently exists for decades. Peterson is leading a public effort calling for Americans to get ready for “tough choices” on entitlements and has held a “Fiscal Summit”, funded press outlets, made deals with the Washington Pot and CNN, funded America Speaks, an organization whose purpose it is to educate Americans in the Peterson deficit hawk point of view through a series of town halls held across the nation, and, evidently, a Peterson-funded non-profit organization is funding Commission Staff.

There is no particular reason at this time to focus on Social Security, which is now in surplus to the tune of trillions of dollars, and is many, many years away from financial difficulty even from the point of view of the most avid deficit hawk.

– Americans, when polled, have shown that they prefer tax increases to cutting Social Security benefits.

– To protect our grandchildren, the Commission shouldn’t be focused on cutting benefits and spending, but should be investing in providing jobs for parents and good educations for those grandchildren.

– Peterson has set up a network to control the media environment and is “buying off” the Press. He has been setting it up for years and is playing a similar role in this area to the one The Kaiser Foundation played in the health care reform fight.

– The Current budget deficit will be used to justify Social Security cuts.

– Peterson is setting the agenda for the Commission which will take Defense cuts and Medicare expansion off the table as means to cut Government spending. Instead that agenda will formulate questions with only one answer, cut Social Security.

“It’s going to be important to tell the tale of Peterson’s inexorable march and diffuse the notion that the Commission is simply responding to temporal economic factors. This is class war, pure and simple. The rich against the poor. Hedge fund billionaires and defense contractors against senior citizens struggling to get by.”

– As a cure for the financial crisis, austerity will be worse than the disease.

– Obama is using his fiscal commission to seek “a bipartisan consensus on both spending cuts and higher taxes.”

– The nations of the European Union are being used as an object lesson to justify the thrust for austerity.

– “The budget deficit here and overseas does need to return to a more moderate level — after we get an economic recovery.”

– “In this context, it is insane to think that we can recover from a financial panic and an economic recession by inducing a worse recession in the name of fiscal soundness. For now, while the real economy heals, there is no substitute for aggressive central bank intervention to restore markets in sovereign debt. The right grand bargain is tough financial reform and limits on Wall Street–so that this crisis is never repeated. The wrong grand bargain is austerity for everyone else.”

– To meet the present crisis, “. . . the new consensus in economic policy thinking is that we have to cut Social Security to establish our credibility with bond markets.”

– But the crisis we’re in now is due to the same people who were completely incapable of seeing the $8 trillion dollar housing bubble and the crash of 2008 coming, who persuaded us that we had to bail out the banks to save the financial system, and that we had to tolerate the outrageous bonuses that have accompanied the Banks getting back on their feet.

– These are the same folks who now tell us that we have to have austerity, and specifically that they want us to cut Social Security to please the bond markets, which really means, that they just want us to cut Social Security.

In the main, these are good talking points against the deficit terrorist effort. But, I can just see now how the proponents of these cuts will reply to them. They will say, well that’s all well and good, however, everything we’ve done is all justified because there really is a very serious crisis on our hands, and that is the crisis of fiscal unsustainability, of rapidly increasing deficits, national debts, and debt-to-GDP ratios, which will eventually make it impossible for the United States to borrow money at reasonable rates to fund our deficits. As our interest bills go higher and higher over time, a greater and greater proportion of the Federal Budget will go to financing the debt, and the United States will begin to face solvency problems, because it won’t be able to borrow and then we’ll have a ruinous tax burden for everyone and austerity anyway. On the other hand, if we impose a measure of austerity now and show that we are credit worthy there will be no borrowing problem, and the austerity will be less extreme.

In short, they will reply, we have a real problem, and it is that we are proceeding on an irresponsible path, that will lead eventually to insolvency, because Governments, like families, can’t run deficits forever, can they?

And then they’ll go on to argue that even Bob Kuttner agrees that “The budget deficit here and overseas does need to return to a more moderate level — after we get an economic recovery,” and even Keynesian economists like Paul Krugman believe that deficits can’t be run forever, and that we need less Government spending in the long run, and even Dean Baker is on record as saying that deficits can be a real problem under certain economic conditions. So, we are talking about a real problem and the way in which we differ from you progressives who are arguing against our position is not that you don’t think that deficits are a problem, but that you don’t think they are one right now. So, how about compromising on setting in place a framework for reduction in Government spending when the time is right, years down the road. That way you’ll be showing that you’re fiscally responsible, and we’ll get something important which is a set of controls on spending that can become operational when a measure like the debt-to-GDP ratio reaches a certain level that you and we can agree upon. And also, we can make small changes in Social Security that are not overly painful, but that build in a more responsible fiscal framework for the future.

To avoid an outcome and counter messaging like this, that is very likely to emerge from the political conflict over austerity, and to lead some bi-partisan compromise that includes cuts in Social Security, none of the messages we’ve seen from the posts by Altman and Kingson, Hamsher, Kuttner, and Baker are really sufficient. Messaging that can fight the kind of downward spiral of compromise that the deficit hawks are trying to set up has to go more directly at their assumptions. It has to argue along these lines.

1) There is no deficit problem for the National Commission on Fiscal Responsibility and Reform and the US Government to respond to in the first place. We are looking at a fantasy problem whose purpose is to distract us from the real issue of the impact of specific Government spending efforts relative to the Public Purpose.

2) There is no emerging solvency problem either for any of our entitlement programs, or for any other US Government programs. The President, and the other deficit terrorists are wrong when they say: “we are running out of money.” That is another fantasy that cannot apply to a Government sovereign in its own currency and owing no debts to anyone in any currency other than its own.

3) There is no need for an austerity program, and there will be no solvency risk for any of our Grandchildren, or any debt burden that they will have the least difficulty in managing, even if the Government continues to run deficits indefinitely.

And 4) the whole deficit terrorist position of the President, The Commission, and the Peterson Foundation and related interest groups is based on an erroneous and misleading analysis of our economic situation. Being charitable, this may be because their understanding of the monetary system, and of economics in a fiat monetary system is equivalent to their understanding of the economics that apply to people and other entities that are users of currency rather than issuers of currency. That is, they are confusing the players using dollars with the scorekeeper of dollars, who has an unlimited amount of points.

Uncharitably, however, many of the deficit hawks may understand very well that there is no solvency risk for the Governments sovereign in their own currency, but they may prefer to maintain the illusion that there is, because they think that then they can profit more from international markets, and prevent the people of various nations from realizing that interest rates on Government debt instruments can be entirely controlled by the Governments themselves, and imposed on the international markets, just as the Japanese Government has imposed near zero interest rates for short-term debt since the 1990s.

Messages 1) to 4) need to be sent by mainstream progressive organizations, because they are the only ones that can prepare the way for the total victory we need over the deficit terrorists. The people of the United States need an expansion of entitlements and the safety net. Not a contraction. The economy needs this too as a stabilizer of aggregate demand and as a hedge against excessive recession. As a nation we cannot afford to have the Administration and the Petersons of the world gain one inch of territory on the issues of cutting Social Security and Medicare. To prevent that, we need to discredit "their problem" as a the fantasy it is, and persuade people that the problem is the recession and lack of full employment, not imaginary fears about insolvency, deficits, or inflation appearing in the midst of a near depression.

Even more we have to persuade people that numbers like the deficit, the national debt, and the debt-to-GDP ratio are not measures of government profligacy, but measures of the extent to which the non-Government economic elites have created a failing economy that must be supported by the automatic stabilizers we have in place to protect against the consequences of their failures. The values of these measures will become less frightening when we treat the real problem, the ruined economy. And, until then, their relatively high level presents us with no solvency risk, and no threat to the well-being of our grandchildren or the future of the United States. Finally, we must message about the unimportance and irrelevance of the deficit so that it won’t continually be used by our leadership as an excuse for not solving American problems. If we fail to do that, we will be in a continuing fight over Government spending based on the very fact of it, every time we want to pass some progressive legislation, ignoring, in the process, the only relevant question about it, namely whether implementing a particular policy and the spending that goes along with it will benefit us or not.

(Cross-posted at All Life Is Problem Solving and Correntewire.com)

Opposing the American Death Panel

4:13 pm in Uncategorized by letsgetitdone

Nancy Altman and Eric Kingson Co-Directors of Social Security Works have written an article called “Has Obama created a Social Security ‘death panel’? In the article they raise questions about the composition, process, and intentions of the President’s National Commission on Fiscal Responsibility and Reform and say:

”We write to raise questions and encourage press inquiry now, before the commission reports, at which point its recommendations could be on track and moving fast.”

And the questions they raise include:

”Q. Have the members of the Commission made up their minds, at least with respect to the broad outlines, making the whole exercise simply an effort by elected officials to escape political accountability?
Q. Why is the Commission apparently working so closely with billionaire Peter G. Peterson, who served in the Nixon administration and who has a clear ideological agenda?”

And:

”Q. Why the urgent focus on Social Security? In the past, Social Security has always been considered under the normal legislative process, with the opportunity for full amendments. According to the program’s actuaries, it is able to pay all benefits in full and on time for over a quarter of a century. Even its most diehard critics, who try mightily to convince the rest of us that the program is in crisis, can’t mount an argument that there is a problem for another five years or so. So what is the rush? What is the need for such an unaccountable, fast-tracked process when one has never been needed before? Why, in spite of the evidence that Social Security is working as intended and that there is growing need for the kind of broad and reliable protection provided under the program, is it being singled out by Bowles and Simpson and seemingly by the White House for a major trimming?”

”Q. The American public has stated in a number of polls that they prefer to increase the program’s revenue, even if it means them paying more, rather than reducing the benefits that are so vital to almost all its beneficiaries. . . . So why does the commission seem so determined to ignore the views of the American people, and insist that there must be benefit cuts?”

”Q. The members of the commission wrap themselves in the mantle of their children and grandchildren. . . . but what about everyone else’s grandchildren? Especially those lacking privileged backgrounds; those more likely to need strong retirement, disability and survivorship protections as they grow and raise their own families and hopefully eventually reach retirement age? If these commissioners’ focus is on all grandchildren, shouldn’t they be more focused on investments today to ensure that their parents have good-paying jobs and that they can receive a first rate education? Why do they seem so intent on cutting the benefits of that future generation?

”Q. And finally, and perhaps most importantly, are there efforts to buy off the press? Just in time for this commission, Mr. Peterson, not content to buy access, has now used his fortune to establish his own news service, so the story gets reported his way. . . . “

In addition to these very important questions, Altman and Kingson, include another paragraph labeled “Q” that mentions Peter G. Peterson’s long term fight against Social Security, his funding of Commission Staff, America Speaks and other current activities indicating his close relationship to the Commission. But they never actually put a question about these activities.

All the questions raised by Altman and Kingson are very good ones, and are certainly questions the Press should look into (especially, since, as they also point out there are indications that the Commission is preparing an austerity agenda in secret that it will hide until after the Congressional elections, and then will try to ram through the lame duck Congress before it adjourns). But, curiously, the most important questions of all for the Press to investigate were left out of their article.

Those questions are:

1) Is there really a deficit problem for the National Commission on Fiscal Responsibility and Reform and the US Government to respond to in the first place?

2) Is there an emerging solvency problem either for any of our entitlement programs, or for any other US Government programs? Or, in other words, are we, as the President, and the other deficit terrorists say: “running out of money”?

3) Will there be a need for an austerity program, or any solvency risk for any of our Grandchildren, if the Government continues to run deficits indefinitely?

And 4) Is the whole deficit terrorist position of the President, The Commission, and the Peterson Foundation and related interest groups based on an erroneous and misleading analysis of our economic situation?

Altman and Kingson are not the only ones who won’t ask these last very central questions. Jane Hamsher in a blog post calling attention to the Altman/Kingson article says:

It’s going to be important to tell the tale of Peterson’s inexorable march and diffuse the notion that the Commission is simply responding to temporal economic factors. This is class war, pure and simple. The rich against the poor. Hedge fund billionaires and defense contractors against senior citizens struggling to get by. Altman and Kingson have done us all a tremendous favor by opening up the discourse and asking important questions that need to be answered before the Commission makes its report on December. That’s just in time to jam it through a lame duck Congress before the Christmas break, something both John Conyers and John Boehner have warned about — a repeat of what Bowles planned to do in the 90s.

Just so. That is what they’re fixing to do, or at least try, and it is a class war, or at least one of an emerging plutocracy against the rest of us. And because it is, it is very important to recognize and defeat one of the primary ideological tools that the elites use against the rest of us. That tool is the belief that fiscal responsibility and fiscal sustainability require balancing the budget, reducing the national debt, or failing these things, maintaining a certain arbitrary, pre-specified, public debt-to-GDP ratio. That is what Peterson and his allies are preaching, and that’s what underlies their arguments about why SS and Medicare must be cut.

One can argue effectively against Peterson, by raising the questions of Altman and Kingson, or as Jane does, by attacking the process involved in the Commission’s deliberations and Peterson’s involvement in and influence over the process and by making the point that the whole thing is very undemocratic. One can also point out that even from the point of view of the concerns of the deficit terrorists, there is no real problem with SS. One can also point out that far from cutting Medicare, it would be better for the American economy if Medicare coverage were expanded. All these things are true, and arguments like these and others may defeat Peterson and his allies this time and save SS and Medicare.

However, if we want to win the "class war" we need to do more than just save SS and Medicare. We need to raise the additional questions that Altman, Kingson, and Jane Hamsher haven’t raised about the legitimacy of the deficit terrorists’ whole conceptual framework. We need to undermine and defeat the neo-liberal notion that deficits, the national debt, and debt-to-GDP ratios somehow measure fiscal responsibility or sustainability, and also that they are important as causes of our poor economic condition. These ideas are false. They are pure myth. They are based on a confusion between the Federal Government and other entities including States in our Federal system, Eurozone nations, and households that aren’t sovereign in their own currencies. They are a distraction from the broader question of what the Government should be doing to enable and facilitate achieving public purposes, and they are also a distraction from evaluating all legislation from the viewpoint of its impact on achieving these purposes.

There’s a growing literature questioning the legitimacy of the foundations of the Peterson/Administration position. In a comment on Jane’s post, selise refers us to Randy Wray’s very good recent piece on deficits. Captjjyossarian adds two other references. Other important statements are here, here, and here.

These advance the contrasting point of view on fiscal sustainability. The point of view that was expressed in the Fiscal Sustainability Teach-In Counter-Conference, that is expressed in the audios and presentations offered here, and that will be expressed in the videos and transcripts from the Teach-In which will be released soon. That point of view is important because it strips away all the fiscally-based excuses of the Administration and the elite for not meeting existing American problems with legislative programs that will be effective, but will cost money. It relates not only to the non-existent solvency problems of Medicare and SS, it also relates to the programs we need, but will not legislate, relating to full employment, adopting enhanced Medicare for All, fixing our broken educational system and our infrastructure, protecting our environment, acting against global warming, and developing alternative energy foundations for our economy.

I ask that Altman and Kingson, Jane Hamsher, and others who want to oppose the deficit hysteria, consider and eventually use the alternative point of view I’ve referenced in pursuing their critique of “the cat food commission,” the Administration, and their allies. Asking the more fundamental questions about whether we really have deficit, or solvency problems won’t detract from the power of other current critiques, but it will broaden the scope of the issues and make clear that “the cat food commission” is not just about what might happen to SS and Medicare. It’s also about lost decades, ruined futures, and an America in continuing decline.

And beyond America, since much of the world follows our examples, both good and bad, it’s also about lost decades, ruined futures and regress for people all over the world who follow the deficit terrorist example the United States may set. It’s about the Eurozone splitting apart because the people of its member nations lose patience with an austerity imposed on them by an elite who doesn’t think that austerity applies to them. It’s about an Australia whose Labor Government betray its roots and insists on austerity, whatever the impact it may have on employment. It’s about a United Kingdom that in the name of austerity will cut back on the welfare state and expose its middle class and working class citizens to wholly unnecessary hardships. In short, “the Cat Food Commission” is about much more than simply a threat to SS and Medicare. It’s about the continued triumph of an economic ideology that threatens both real democracy and the betterment of the human condition all over the world.

To save Social Security and Medicare permanently, and to create an open future for all of us in the bargain, we need to defeat that ideology and its view of the world, and to come to understand that there are no fiscally responsible excuses for the Governments of nations to avoid taking the measures needed to solve the problems of the nations over which they preside.

(Cross-posted at All Life Is Problem Solving and Fiscal Sustainability