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Chained CPI Means You Can’t Have Nice Things

11:38 am in Economy by masaccio

circus clowns

Legislators clustered to meet with ALEC, @FixTheDebt, and President Obama

The Obama Budget Document includes 11 mentions of Chained CPI. Here are the first four:

In the interest of achieving a bipartisan deficit reduction agreement, beginning in 2015 the Budget would change the measure of inflation used by the Federal Government for most programs and for the Internal Revenue Code from the standard Consumer Price Index (CPI) to the alternative, more accurate chained CPI, which grows slightly more slowly. Unlike the standard CPI, the chained CPI fully accounts for a consumer’s ability to substitute between goods in response to changes in relative prices and also adjusts for small sample bias. Most economists agree that the chained CPI provides a more accurate measure of the average change in the cost of living than the standard CPI. P. 46

The first bold section tells us that Obama believes there is a bipartisan consensus that we have to cut Social Security and raise taxes on the middle class. I’m not seeing that in any segment of the political world except vicious jerks like the Club for Growth. I can’t wait to see the Hastert Rule operate in the House, forcing Speaker Boehner to admit that a majority of House Republicans thinks hiking taxes on the middle class and slashing Social Security is a terrible idea.

The second explains that this is good because when prices go up, or incomes drop, consumers can just buy some cheaper thing than the thing they really like. You can read a paper from the Bureau of Labor Statistics explaining this in detail here. The plain fact is that this is an outright admission of the utter failure of the consumption society.

The example you get is that if beef gets more expensive, you can substitute pork, without in any way affecting your life. In other words, the selections among beef, pork, chicken and catfood you currently make are assumed to give you a certain level of pleasure, but now you can’t have that level of pleasure. Either you eat less of something you like, or you just don’t get to eat it, and have to eat something you don’t like as much.

Suppose you lose your nice watch. If the price of your ideal watch has gone up for whatever reason, you get a cheaper watch, or no watch and use your phone. That nice watch you used to be able to have is now out of the picture, but that doesn’t matter because you can still tell time. That’s the magic of substitution.

There is an unspoken connection here: that your income is constant across all these time periods. That isn’t true either. People are losing their jobs and taking lower paid jobs. If you are still getting raises, they come in tiny increments every year. If you are retired, you get nothing on your savings, and little on any equities you might hold. To maintain your standard of living, you have to eat your savings or go into debt. Most likely, you can’t have nice things, so you get to substitute less nice things. No natural fibers for you, too expensive. So what? Just substitute something you don’t like as well, or do without.

There is one other key point: this analysis ignores the effect of substitution in oligopolistic markets. What is the free market for cell phone services or cable services? They are oligopolies. Your choices have nothing to do with the amount produced.Prices are not set based on the underlying cost of service, but upon whatever these people can get away with. They raise prices to maintain their profits. Your only substitution is to buy less service, in a downward spiral. Your life gets worse.

Of course, all this is irrelevant to the feral rich. Their income goes up as they suck out the money from you for your cell phone and your cable service and every other thing you buy. They don’t substitute for anything.

The real point of the Chained CPI is that you don’t get to live nicely. You can expect a declining standard of living. That is the message of your President and the oligarchy he serves.

The fifth mention of Chained CPI in the Budget explains that the switch to chained CPI will decrease the deficit by at least $230 billion over the next 10 years. This is the number in tables S-2 and S-3. P. 184, 186. Table S-5, p. 189, gives the number for Social Security: we are cutting payments to the elderly by $130 billion. Table S-6, p. 191, tells us that over 10 years the average savings is .1% of annual projected GDP. Table S-7, p. 193, gives the annual savings adjusted for population growth and some kind of inflation accounting. In those terms the total savings drop to $107 billion.

The last mention is in Table S-9. There is a line item labeled “Chained CPI: Adjust indexing and protect vulnerable populations”, which according to the footnote includes revenue effects. The ten year total is $230 billion, which includes Social Security cuts and $100 billion in new taxes that slug the middle class resulting from adoption of Chained CPI. That’s another chunk of not having nice things: you have to pay higher taxes, so forget that chicken, and buy a fifty-fifty mix of pink slime and hamburger.

Unless, of course you are in whatever the “vulnerable population” turns out to be. But don’t worry, even if you aren’t now, as inflation eats your savings and the Chained CPI cuts your Social Security, soon enough you’ll enter the vulnerable population. That’s already happening. This study says that 46% of Americans die with less than $10,000 in assets.

The President and the oligarchy are introducing the masses to their Brave New World of not-so-nice things. Or nothing at all. Read the rest of this entry →

Bernanke Says Interest Rates Are Low Because Industrial Economies Can’t Pay

2:22 pm in Economy by masaccio

We let you vote, leave us alone.

Fed Chair Ben Bernanke gave a speech recently in which he explained why long-term interest rates are so low. He started by saying that certainly central banks play a role in determining long-term rates, which seems right because the Fed is buying up long term securities Treasuries and mortgage backed securities issued by Fannie, Freddie and Ginnie Mae at a current rate of about $85 billion a month, for a total of about $2.8 trillion. First, he explains basic economic theory on setting rates, then moves to a recap.

Long-term interest rates are the sum of expected inflation, expected real short-term interest rates, and a term premium. Expected inflation has been low and stable, reflecting central bank mandates and credibility as well as considerable resource slack in the major industrial economies. Real interest rates are expected to remain low, reflecting the weakness of the recovery in advanced economies (and possibly some downgrading of longer-term growth prospects as well). This weakness, all else being equal, dictates that monetary policy must remain accommodative if it is to support the recovery and reduce disinflationary risks. Put another way, at the present time the major industrial economies apparently cannot sustain significantly higher real rates of return; in that respect, central banks–so long as they are meeting their price stability mandates–have little choice but to take actions that keep nominal long-term rates relatively low, as suggested by the similarity in the levels of the rates shown in chart 1. Finally, term premiums are low or negative, reflecting a host of factors, including central bank actions in support of economic recovery.

So that’s the reason savers are getting screwed: our fabulous economic system can’t pay decent interest, just like it can’t pay decent wages. The giant corporations that dominate our system, that are sitting on trillions of dollars, that don’t pay taxes, that hide money overseas, that cheat us at every step, that cut the pay of the average worker, that own the media and control public discourse, the poor babies just can’t afford to pay a decent interest rate to the dummies who scrimped and saved for a lifetime so they would be able to retire comfortably.

And there is nothing that the Fed, or any central bank, can do to help. They just sat there and watched the financial sector destroy the real economy. Housing Bubble? No such thing. Stock market froth? No, the market allocates capital wisely and generously. In the wake of the financial crisis, Bernanke has a simple suggestion: Screw you if you don’t want to put your money into the Wall Street casino; no returns for you. And @FixTheDebt adds to that: let’s cut Social Security, Medicare and Medicaid.

Now it’s only fair to point out that this means that those rancid corporations don’t get much in the way of a real return on their Treasuries. In fact, after inflation, they may be losing money. Maybe the point of low interest is to encourage them to invest. But that’s pushing on a string: with widespread underutilization of existing capital stock, why buy more capacity? And with the ability to screw workers, why pay more? It isn’t like the shareholders need the money; most of the stock is owned by the rich. It’s no different from blind support of banks in the hope they will increase lending.

Savers are toast in this brutal version of capitalism, but savers, like the unemployed, the foreclosed upon, people with underwater homes, government employees, corporate workers and just about everyone, except the feral rich, aren’t ever going to be helped by the captured Obama Administration, the vicious Republicans or the spineless Democrats. We’re all on our own. Read the rest of this entry →

Social Security Isn’t a Pension Plan But

11:58 am in Social Security by masaccio

From Shanghai, Photo by Sean Munson via Flickr,

The most obvious way Social Security is like a pension plan is that the rich are trying to destroy it, just like Hostess Brands wrecked the retirement plans of its bakers. But there are other similarities. Since 1983, we have all paid in a lot more money in FICA taxes than needed to fund current payments on the theory that it would be there for baby boomers when it was needed.

Pension plans do the same thing. They use actuarial calculations to figure out how much money they need in out years, and how much they need to take in today to make those payments. Then they invest the money as safely as possible so that it will be there when it is needed. The Social Security Trust Fund was ordered to use the excess contributions to buy Treasury obligations, albeit of a type supposedly not to be sold to the public. Those obligations are the bulwark of the demands of citizens who don’t want to see any more cuts to Social Security. They also constitute a partial explanation for the desire of the rich to cut Social Security: the bonds will have to be redeemed, meaning either the Treasury will have to sell bonds to replace them or we will have to increase taxes to fund the repayment of the bonds, or some other step will be necessary that the rich don’t like.

The deep desire not to pay the bonds is part of a longer term project, tax reduction for the rich. In fact, the use of the Special Treasury Obligation/Trust Fund was meant to disguise the reality of the huge tax cuts handed to the wealthy in the 1980s in a lovely bipartisan way. The unfairness and stupidity of the tax cut for the rich was hidden by the increase in the FICA taxes imposed only on income from work, and only modestly affecting the income of the rich. Meanwhile, the rich funded the increasing Reagan deficits by lending money to the Treasury that should have been paid in taxes.

Congress adopted a unified budget approach that folded the increased FICA taxes into the revenue side, making budget deficits seem much smaller than they actually were. (That was theoretically changed in 1990; see this for details of the current situation.) Now that it’s time to pay off the bonds held by the Trust Fund, the richest Americans have made their position clear: they aren’t paying back those bonds, and they won’t pay more taxes. They get support from their servant think tanks, like this from Jagadeesh Gokhale at the Koch Cato Institute:

Let us recognize that past excess payroll taxes relative to benefit outlays (past Trust Fund surpluses under the “off budget” perspective) have been spent on other government programs. Grants of additional spending authority for Social Security must ultimately be paid out of today’s and future taxpayer resources so making them whole is not really possible.

Gokhale says that the bonds held by the Trust Fund are like corporate borrowings, where the proceeds are used for corporate purposes. When due, they are either are paid from future income and assets, or are dumped in the trash through bankruptcy or negotiations with creditors. Let’s default, he says. He might want to check out the Fourteenth Amendment.

But the richest Americans plan to act on Gokhale’s advice. They are going to cut the retirement benefits of millions of fellow citizens rather than pay more taxes. And they have their hired hands in government to make that stick. Here’s their pet Senator, Mitch McConnell:

Predictably, the President is already claiming that his tax hike on the “rich” isn’t enough. I have news for him: the moment that he and virtually every elected Democrat in Washington signed off on the terms of the current arrangement, it was the last word on taxes. That debate is over. Now the conversation turns to cutting spending on the government programs that are the real source of the nation’s fiscal imbalance.

Where does that leave people dependent on Social Security, Medicare and Medicaid? The Center for Retirement Research at Boston College recently issued an update on its retirement risk index. Here is the conclusion:

The NRRI shows that, as of 2010, more than half of today’s households will not have enough retirement income to maintain their pre-retirement standard of living, even if they work to age 65 – which is above the current average retirement age – and annuitize all of their financial assets, including the receipts from a reverse mortgage on their homes.

President Obama sees himself as a moderate Republican. He thinks that if half of the families in the country can’t maintain their standard of living in retirement, they should simply substitute a less pleasant life. They could, for example, live on a moderate amount of catfood, which is the logical substitute for tuna fish under his Chained CPI proposal. The Republicans in the House and Senate have a counteroffer: the old should die in the street. I’m sure there is a compromise for this infinitely flexible President: maybe we can set up Federal Die-In Locations so the rich won’t have to see the dead.

A Vicious Assault on Retirees

2:46 pm in Failed government by masaccio

There is no other way to describe the machinations in DC today. The median Social Security benefit is $1229. The median net worth of retirees is about $160K, including home equity according to the 2010 Survey of Consumer Finances.

Chart from 2012 Annual Report of the Pension Benefit Guaranty Corporation

Any cut to the Social Security benefit is going to damage these average people seriously, and it’s worse for the people below the medians. But that isn’t the whole picture. The original idea behind Social Security was that it would be just of part of retirement, along with employer pensions and personal savings. As the graphic shows, the pension plan has gone the way of the Dodo.

Now think for a moment about the people above that median. These are the people who saved money to fund their retirement, and have some assets. They get no interest income, thanks the to the Fed and its zero interest rate policy (ZIRP). There has been precious little income from savings for the last few years, and the Fed promises that there won’t be any in the foreseeable future. That means that people are being forced to eat up their savings, or to put it with the wolves of Wall Street.

We aren’t talking about pocket change, either. For people in the 75-90 percentile range, the mean net worth in 2010 was $525K, down from $616K in 2007. The mean value of financial assets held by this group was $233K, down from $254K in 2007. That isn’t all that much money to last 20 or thirty years. ZIRP means that savers get screwed. Bloomberg reports that ZIRP is helping the rich and screwing everyone else, quoting Joseph Stiglitz: “Monetary policy has been indirectly, surreptitiously helping the top and hurting the bottom.” It describes a semi-retired college librarian:

…when he first started an annuity in 2005, his interest rate was 5.25 percent. Now it’s 2 percent, he said. That means that instead of getting a monthly payout of $700, he gets $413.

In the face of the horrible damage inflicted on all segments of the population by the richest Americans, aided by an ideologically insane party and a spineless party, President Obama and the rest of the Washington Elite insist on slapping retirees with Social Security cuts via the Chained CPI, and cuts to Medicare and Medicaid, to go with the demand that they eat up their savings or reduce their standard of living.

There is no excuse for this vicious assault on the retirement plans of millions of Americans. And there is no other way to describe it. It is a horrible and mean-spirited attack on every American except a few hyper-rich people.

The Liberal Myth That Morbid Wealth Is Just Fine

3:15 pm in Failed government by masaccio

This isn't like when rich people protest using Citizens United. Walmart strikers: bring out the Riot Police. Photo by Peoplesworld via Flickr

Liberals have been neutered by capitalism. Once upon a time, they spoke of Malefactors of Great Wealth. They said that these morally bankrupt jackals were ruining people’s lives. Nowadays, liberals just don’t talk like that. They begin any conversation about money by saying that they don’t begrudge the rich their wealth, they just want minor tweaks. It isn’t working.

As Chris Hedges argues, there was an alternative not so long ago:

The left once harbored militant anarchist and communist labor unions, an independent, alternative press, social movements and politicians not tethered to corporate benefactors. But its disappearance, the result of long witch hunts for communists, post-industrialization and the silencing of those who did not sign on for the utopian vision of globalization, means that there is no counterforce to halt our slide into corporate neofeudalism.

I remember the push against the commies. I wrote an essay in high school on Masters of Deceit by J. Edgar Hoover. I was quite proud of it until I showed it to a Dutch priest theologian who was a friend of my family. He explained gently that there was more to say about radicals than perhaps I could be expected to know as a young American.

There is a grain of truth in the notion that we don’t begrudge rich people their wealth. Robert Frank divides the wealthy into three groups in his book Richistan, Lower Richistan, with net worths of $1-10 million, Middle Richistan, with net worths of $10-100 million, and Upper Richistan, with net worths in excess of $100 million. Many of the people in Lower Richistan earned their wealth through merit and hard work. They are, by and large, the millionaire next door. They worked hard and played by the rules and saved and invested, and made it to the lower reaches of wealth. If this were what liberals meant when they said they don’t begrudge the rich their money, I would wholeheartedly agree. This differential in rewards seems perfectly consistent with the ideas of John Rawls in A Theory of Justice. And few of them are doing damage to the nation. They don’t have enough money.

Middle Richistan has about 1.4 million residents. Many of them use their wealth to encourage the stupid theories of the crazed right wing. We catch glimpses of them when they convene in secret to listen to Romney complain that 47% of their fellow citizens are leeches.

Read the rest of this entry →

Catfood Co-Chairs Explicitly Use Social Security To Cut Deficit

1:05 pm in Economy by masaccio

Social Security does not affect the deficit, according to the Catfood Commission Draft Report, above. They want to ‘Reform Social Security for its own sake, not for deficit reduction.” Page 43. The goal is to “Ensure Social Security solvency for the next 75 years while reducing poverty among seniors.” P.8

So, if Social Security doesn’t increase budget deficits, why is it in this plan? Take a look at page 11, which shows the sources of the deficit reduction, pointedly excluding Social Security reform. Now, look at the note at the bottom of the page:

Note: Projections based off of constructed plausible baseline (see last slide). Including off-budget savings from Social Security, the plan would reduce deficits to 2.0% of GDP in 2015 and 1.4% of GDP in 2020.

The big point of Social Security reforms as seen by the Catfood Co-Chairs is that it reduces the budget deficit after they apply the money we are paying in new excess taxes. The main chart shows that in 2015 the deficit is 2.2% of GDP, but as the note helpfully explains, we get a further reduction of .2% of GDP by spending the excess taxes. The same thing happens in 2020.

Obviously this is the reason to reform Social Security: it gives the Co-Chairs bigger deficit reduction.

Of course, this comes at the expense of practically everyone. For people in the middle quintile, the lifetime median loss is 8% of total benefits. P. 48 For people in the second lowest quintile, the loss is about 3%. They aren’t living in poverty (?), so the Co-Chairs feel justified in reducing their Social Security.

At least they are up front about this abuse.

Pete Peterson And the New America Foundation

2:00 pm in Economy by masaccio

by MNicoleM (flickr)When I wrote this piece, I just guessed that Matt Bai was relying on garbage from the Catfood Commission or its tools in his meretricious reporting on Social Security. Reader TomThumb checked for himself and found out that a) Bai was relying on information from the New America Foundation and the Committee for a Responsible Federal Budget, b) that the CRFB is a partner of the Peterson-Pew Commission on Budget Reform, and c) the PPCBR is a tool of the Peter G. Peterson Foundation. He also thinks that maybe we shouldn’t describe the New America Foundation as “left-leaning”.

Now one might be forgiven for thinking that Bai was just making it up when he described the New America Foundation as his source, and that he called it non-partisan, a group that just wants “to present the situation for what it is.” People who pay attention know that Peter Peterson has been trying to gut Social Security for years. He gave a billion dollars to the Peter G. Peterson Foundation, which didn’t dent the vast fortune he got in the finance business. Now he uses that foundation to fund his obsession with destroying Social Security.

The New America Foundation thanked Peterson’s foundation for its gift of between $250,000 and $999,999 in 2009. Another of his pet projects is the CRFB, which created a budget adjustment game in which the goal is specious and the choices so limited as to be pointless. It is funded in part with money from Peterson’s foundation. It is housed at the New America Foundation, which lists it as a related tax-exempt organization on its Form 990.

This is the way ideologues like Peterson operate. They give money to foundations with respectable reputations and the foundations provide a non-partisan veneer to their little obsessions.

As to the claim that the New America Foundation is left-leaning, here are the directors:

Liaquat Ahamed: investment manager
David Bradley: owner of Atlantic Media Company, member Trilateral Commission, Council of Foreign Relations
James Fallows: writer
Roger Ferguson: chair TIAA-CREF, former vice-chair of the Fed
Francis Fukuyama: Professor at Johns Hopkins, writer of The End of History
Atul Gawande: doctor and writer
William Gerrity: real estate
Ted Halstead: founder and author of The Radical Center: The Future of American Politics
Noosheen Hashemi: philanthropist, formerly officer of Oracle
Rita Hauser: lawyer with Stroock & Stroock & Lavan, Chair of The International Peace Institute
Laurene Powell Jobs: heads social reform group
Zachary Karabell: investment management and economic research
Jeffrey Leonard: Global Environment Fund, a private equity firm
Kati Marton: reporter, human rights advocate
Walter Russell Mead: Henry A. Kissinger senior fellow for U.S. Foreign Policy at the Council on Foreign Relations
Richard Medley: investment fund manager
Lenny Mendonca: Director in McKinsey & Company
Eric Schmidt: CEO Google
Bernard L. Schwartz: private investment firm, formerly CEO of Loral Space & Communications
Laura D’Andrea Tyson: Dean Business School at Berkeley, former economics advisor to Clinton
Daniel Yergin: Chairman of Cambridge Energy Research Associates
Fareed Zakaria: Editor-at-large, Time Magazine.

The CEO is Steven Coll, formerly with the Washington Post, and a writer for the New Yorker. Left-leaning? The public figures are a conventional consensus group of the usual suspects from within the Beltway. Then there are some wealthy people and one or two academics. It isn’t just new economists Bai needs to meet. He needs to meet some real left-leaning people. There are quite a few of us, but we don’t get paid by Peter Peterson or his foundation.

(photo: Matt Bai by MNicoleM via flickr)

Matt Bai Needs New Economics Advisers

4:18 pm in Uncategorized by masaccio

Matt Bai apparently plans to remain perfectly ignorant about Social Security and the Social Security Trust Fund. First he wrote this piece for the New York Times, in which he mingles his wrong-headed ideas with quotes from Earl Blumenauer in a way that makes it look like the mild-mannered long-term Congressman from Portland agreed with him. Blumenauer was forced to issue a denial. When asked about it by reader english444, who correctly describes the situation, Bai doubled down on his ignorance:

Well, this topic did come up a lot, and I’m not looking to get into a whole new debate about it here. But the most credible experts I’ve talked to believe we need to draw a distinction between principle and reality. The principle to which you’re referring is that the government guaranteed all of this Social Security surplus money (which it spent) with Treasury Bills. The reality is that redeeming that trillions of dollars in debt would require issuing trillions more in debt. Now, if deficits are low and the national debt is manageable, that’s not such a huge deal. But given the projections for the next few decades (the national debt could reach 90 percent of GDP by 2020, which puts us in Greece territory), issuing that kind of debt would still entail some serious budget cuts, either in Social Security or other social programs, or a sharp rise in taxes. The longer we postpone this debate, the more draconian those measures would likely be.

Now, I can sympathize with the view based on principle, but I can’t really understand why introducing the pragmatic side of this, as I did, is somehow immoral or requires my having some sinister “agenda.” And I find it amusing that it tends to be boomers — whose generation happily spent all this money and who are now collecting their full Social Security benefits — who do most of the lecturing about the sanctity of the trust fund. But that’s a discussion for another day.

Bai needs to learn the basics before he starts relying on anonymous “most credible experts”. Here’s a starting place: the US Treasury website that gives the national debt to the penny every day. At September 21, the total public debt outstanding was $13.477 trillion. The GDP can be found on here, Table 3 (.pdf). At June 30, 2010, the estimate is $14.575 trillion. That puts US debt at 92.5% of GDP, or as Bai would say, into Greece territory. In May, 2010, the debt-GDP ration of Greece was about 115%.

As Dean Baker has repeatedly tried to explain, most recently here in response to Bai, bonds are easy to understand. I lend you money. You spend it. Then you start paying me back. There is nothing nefarious about this process. Baker speculates that Bai may be arguing that the Treasury should default on some of that debt. That will cause some heartburn at the FDIC, because it invests in Treasuries. In fact, at May 31, the FDIC held $38.531 billion of that kind of debt, just in case some bank might fail.

It would also anger baby boomers, whose Social Security Bai wants to cut after they paid $2.54 trillion into the Trust Fund. Bai thinks they should just shut up, because it’s all their fault. Actually, of course, it’s the “fault” of a completely different group of people. The same failed economists who promised that cutting taxes for the very rich would raise total tax revenues were the people who in 2001 told Congress that it was a bad idea to run surpluses, I’m looking at you, Alan Greenspan. There wouldn’t be an issue if not for the ludicrous Bush tax cuts. Our borrowing capacity would easily absorb the tiny amount of money needed to fund Social Security.

The people who are collecting Social Security today include a few baby boomers, but mostly it’s our parents, and I don’t know about you, but I’m glad they will be able to live on their own.

To top it off, actual credible economists like Paul Krugman at Princeton and the NYT, and James Horney of the Center on Budget and Policy Priorities, don’t agree with Bai’s theory that bad things happen when debt hits 90% of GDP, or that the correct measure excludes intra-governmental debt.

Mr. Bai, tear down that wall of secrecy and put some names to those “most credible experts”. Or admit that you are just repeating the latest whispers from the Catfood Commission and its servile staff minions, or some other tool.

Social Security Talking Points For America Speaks

2:27 pm in Uncategorized by masaccio

America Speaks: Talking Points On Social Security

Peter Peterson, billionaire Social Security hater, is opening a tiny door for actual Americans to explain to the rich why this time we aren’t going along with their plans to screw Social Security. I hope FDL readers will check out this site and make an appearance. You won’t be alone: MoveOn wants its members to show up too.

I have written several posts explaining my views, and by clicking here you can see all of FDLs posts on this subject. I have a draft paper which you can find here , which includes selected legislative history. That reading with your own stories will arm you to the teeth for a great speech. They won’t know what hit them.

Here are the points I think are most important.

1. We have paid excess Social Security taxes for 27 years to fill the Trust Fund.

2. We have $2.5 trillion in Treasury Bonds, accumulated from those excess taxes.

3. We should not have to pay twice, once to fill the Trust Fund and again to pay off the bonds.

4. This is exactly what the Greenspan Commission intended and promised: there would be money to pay for benefits, even as the baby boomers aged.

5. Anything less than full benefits is unfair all of us who paid excess FICA for years.

When they ask who will pay to redeem those bonds:

1. No body asks that question when we pay bonds held by Pete Peterson or Goldman Sachs or Japan.

2. The money funded tax cuts for the wealthiest Americans, by taxing the poorest, while deficits piled up year after year.

3. Tax cuts during a deficit are loans.

4. Those tax cuts, those loans went to the wealthiest Americans.

5. Now those loans should be paid back by the people who got the tax cuts: the top 1%, those earning $400,000 per year and up.

Other points:

1. Social Security is pre-funded. Other government agencies do contracts for years without pre-funding. Why pick on the pre-funded programs instead of cutting unfunded programs?

2. Social Security is insurance, not welfare, and has been from the beginning.

3. People used to be able to save for retirement. They had pensions. And they had Social Security. In this Great Recession, savings are eaten up. Pensions were replaced with 401(k) plans, and the recession hammered those too. Homes used to be a possible source of money; that won’t happen now. Many people depend on Social Security. Taxing people more makes it harder for them to save. Making them work until they are falling down is obscene.

4. The people on the Commission aren’t poor, and they aren’t middle class. Who represents the poor and middle class?

5. The problem is health care. Congress refused to cut the future costs of health care. What does the Commission recommend about controlling health care costs? Will they have death panels?

Oh, sorry. The Commission doesn’t want any disagreeable people. Try to avoid words like death panel, fraud, cheat, liar and billionaire thug. I’d go for capitalist pig when referring to Peter Peterson, and running dog lackey for David Walker, his henchman.