The Obscenely Rich Men Bent on Shredding the Safety Net

By Lynn Parramore, senior editor at Alternet and founder of Recessionwire. Cross posted from Alternet

New York magazine calls it a “Mass Movement for Millionaires.” The New York Times’ Paul Krugman sums up the idea: “Hey, sacrifice is for the little people.”

The Campaign to Fix the Debt is a huge, and growing, coalition of powerful CEOs, politicians and policy makers on a mission to lower taxes for the rich and to cut Social Security, Medicare and Medicaid under the cover of concern about the national debt. The group was spawned in July 2012 by Erskine Bowles and Alan Simpson, architects of a misguided deficit reduction scheme in Washington back in 2010. By now, the “fixers” have collected a war chest of $43 million. Private equity billionaire Peter G. Peterson, longtime enemy of the social safety net, is a major supporter.

This new Wall Street movement, which includes Republicans and plenty of Democrats, is hitting the airwaves, hosting roundtables, gathering at lavish fundraising fêtes, hiring public relations experts, and traveling around the country to push its agenda. The group aims to seize the moment of the so-called “fiscal cliff” debate to pressure President Obama to concede to House Republicans and continue the Bush income tax cuts for the rich while shredding the social safety net. The group includes Goldman Sachs’ Lloyd Blankfein, JPMorgan Chase’s Jamie Dimon, Honeywell’s David Cote, Aetna’s Mark Bertolini, Delta Airlines’ Richard Anderson, Boeing’s W. James McNerney, and over 100 other influential business honchos and their supporters.

Corporations represented by the fixers have collected massive bailouts from taxpayers and gigantic subsidies from the government, and they enjoy tax loopholes that in many cases bring their tax bills down to zero. Sometimes their creative accountants even manage to get money back from Uncle Sam. For instance, according to Citizens for Tax Justice, Boeing has paid a negative 6.5 percent tax rate for the last decade, even though it was profitable every year from 2002 through 2011.

These CEOs talk about shared sacrifice, but it seems that they don’t intend to share anything but your retirement money with their wealthy friends. As New York mag reports:

Most on-the-record comments are a mishmash of platitudes about shared sacrifice and working together for the good of the country. But interviews with a number of organizers and CEO council members point to a massive networking effort among one-percenters — one that relies on strategically exploiting existing business relationships and appealing to patriotic and economic instincts.

As the Fix the Debt gang moves around the country spreading their message, they are starting to attract public protests. On November 27, they were greeted in North Carolina with a rally from NC Progress, which called for an end to the Bush tax cuts for the wealthiest 2 percent and told the group to keep its hands off the middle-class wallet. The fixers are often vague about their mission, and they tend to speak in coded language that conceals their actual goals. Let’s have some blunt talk about what the fixers want to do and why they want to do it – talk you’re unlikely to hear in mainstream media supported by corporate advertising.

1. “Fix” means cut: When they say “fix” Social Security, they mean cut Social Security. Fixers want to convince the public that a well-managed, hugely popular program that does not add to the deficit (it’s self-funded) is somehow in crisis and requires intervention in the form of various cutting schemes. They seek this because many of the rich do not want to pay taxes for Social Security, and financiers want very much to move toward privitization of retirement accounts so they can collect fees on such accounts.

2. “Reform” means rob. When the say “reform” the tax code, they mean “make taxes even lower for the rich.” The wealthy do not pay their fair share of taxes in the United States, which is a major reason there is a large deficit in the first place. When the very wealthy pay lower tax rates than ordinary working people, the result is an increasing redistribution of income upward that puts the U.S. in the top 30 percent in income inequality out of 140 nations, according to the Central Intelligence Agency. We’re a shameful #42. Income inequality is not only unfair, it’s dangerous and makes society unstable.

3.“Bipartisan” means all of the rich. Fix the Debt is a pro-business ideological movement pretending to be a bipartisan group of concerned citizens. But the group is really just a coalition for the greedy, unpatriotic rich. There are plenty of financiers and other 1 percenters in the Democratic Party, and some of them have decided to join forces with their GOP counterparts to work toward a goal that means a great deal to all of them: Making the rich even richer.

4. “Concern” means covet. There was a time, a couple of generations ago, when business leaders would not dare to go public with their desire to increase income inequality and stick it to hard-working Americans. When Owen D. Young, CEO of General Electric in the ’20s and ’40s, spoke to an audience at Harvard Business School in 1927, he emphasized that the purpose of a corporation was to provide a good life not only to owners, but also to employees. Corporations, he said, were meant to serve the larger goals of the nation:

Here in America, we have raised the standard of political equality. Shall we be able to add to that, full equality of economic opportunity? No man is wholly free unless he is both politically and economically free.

Fast forward to 2012: Jeffrey Immelt, the current CEO of GE, is a member of the Fix the Debt Campaign, which is designed to lower the expectations of hard-working Americans. Goldman Sachs honcho Lloyd Blankfein explained this recently in a CBS interview:

You’re going to have to do something, undoubtedly, to lower people’s expectations of what they’re going to get, the entitlements, and what people think they’re going to get, because you’re not going to get it.

5. “Fiscal conservative” means economically confused. Longtime Wall Street executive Steve Rattner, one of Obama’s auto bailout czars, has been using his influence to attract tycoons from the financial industry to the Fix the Debt movement. Over the last year, Rattner has been on a crusade to convince Americans that they should put aside their worries about real crises like unemployment to focus on the deficit. Rattner, like many of his cohorts, poses as a moderate whose thinking is needed to counter the advice of respected economists like Nobel Prize-winners Paul Krugman and Joseph Stiglitz, who have long been warning that defict hysteria is not only counterproductive, but based on a lack of understanding of how the economy actually works.

Political economist Thomas Ferguson, who teaches at UMass Boston and is a senior fellow at the Roosevelt Institute, described the dubious policies the fixers defend:

Talk about the audacity of hope! The people who brought you the Great Recession by pushing deregulation and financial leverage to insane dimensions are back. Now they propose to ‘fix the debt’ by throwing average Americans who generously bailed them out in 2008-09 over the fiscal cliff.

One trusts that even in our money-driven political system, their transparently self-interested nonsense will be firmly rejected. There is no reason why anyone needs to do anything at all about Social Security for a long time; as even Peter Orszag admits in the fine print. It just isn’t a driver of the deficit.

The U.S. does need to reduce its spending on defense and it certainly needs to aggressively contain medical costs. But you do both of those the old fashioned way. In the case of defense, you stop plunging into wars and attend carefully to what actually is needed to defend America. In the case of medical spending, you end ‘fee for service’ schemes that reward endless tests and procedures and you vigorously pursue anti-trust and regulatory remedies. You don’t simply cut Americans off from health care. It’s ridiculous that we have ‘single payer’ for ailing banks, but not citizens. If you are worried about the deficit, just let tax rates rise back to the levels of the Clinton era, when growth ran far ahead of today’s economy, and tax dividends, carried interest, and capital gains at the rates working Americans pay. And don’t, absolutely don’t, let American companies escape taxation by stashing their money abroad.

6. “Strip-mining is not leadership.” Fixers present themselves as magnanimous, responsible leaders doing what they believe is best for the country. But that’s a tough sell when you’re advocating policies that mainly benefit…yourself.

Economist Rob Johnson, director of the Institute for New Economic Thinking and also a senior fellow at the Roosevelt Institute, shared his view of the Campaign to Fix the Debt in an email. As he memorably put it, “strip-mining is not leadership”:

I believe that a convincing argument depends upon the demonstrated self-sacrifice of the leader offering a vision. This group does not appear to be doing something for the nation. They are doing something for their own self-interest (tax liability). There is confusion between: 1) what is good for business and therefore jobs, something we all should be concerned about; and 2) the personal benefit of CEOs based on who bears the burden of the debt reduction plan. This group does not seem to gain the credibility that comes from generous contribution through self sacrifice. As a result they will arouse great suspicion rather than inspire us as ‘leaders’ who are guiding the design of a just, productive and coherent society.

With all of the suspicion of leadership in America, business, media, scholars and politicians have to lead in a credible way. This just looks like guys defending their self-interest in a dysfunctional period of our nation’s history because elites take so much for themselves.

It’s no secret that the wealthy have done extremely well over the last several decades, even since the Wall Street-driven financial crash that devastated millions of Americans. In 2010, the top 1 percent of U.S. families raked in as much as 93 percent of the country’s income growth, according to Emmanuel Saez, a UC Berkeley economist who looked at IRS data.

Which raises several important questions for Bowles, Simpson, Blankfein, Rattner & Co.: How much is enough? How far are you willing to tip the balance of income in the country toward the wealthy? What concern do you really have about the deficit, or for that matter, the future of America? Inquiring minds want to know.

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    1. hunkerdown

      Ah, yes, the same traitor who repeated the voice vote for the Jerusalem-and-God plank at the Democratic National Convention twice until he had to call the results the masters wanted.

      Two Americas, indeed.

    2. Aquifer

      Well, when you sign up for all the bennies of being a Dem, there IS a playbook you have to follow …

  1. britlog

    you make this statement….Corporations represented by the fixers have collected massive bailouts from taxpayers and gigantic subsidies from the government, and they enjoy tax loopholes that in many cases bring their tax bills down to zero. Sometimes their creative accountants even manage to get money back from Uncle Sam. For instance, according to Citizens for Tax Justice, Boeing has paid a negative 6.5 percent tax rate for the last decade, even though it was profitable every year from 2002 through 2011….facts are that every penny of tarp was paid back with a big profit. the taxpayer is almost out of gm at a profit. the path on aig looks like the tax payer will be repaid. i agree with you on loopholes but surely that calls for a re think of the tax code as what normally happens is legal. my point is that it’s time to stop these types of rants and get to facts.

    1. H. Alexander Ivey

      tsh, tsh, what a low quality rant, britlog. You need to properly cap your abreviations and correctly indent your paragraphs, else your comment looks low rent. Not what the 1% wish to show…

    2. YankeeFrank

      Oh please. Massive bailouts, many of which were NOT repaid — e.g., the $12 billion Goldman received from AIG on its CDS exposure thanks to the taxpayers (just for one TINY example) — that money will never come back to us. And how much has four years and counting of 0% interest rates cost the American people, and how much of a continuing bailout is that to the banks? That money will never be repaid. And what is all this 0% interest money used for? To speculate on commodities, driving up costs for citizens on everything from gasoline to heating oil, to foodstuffs, etc. And what about the total corruption of our real property system, destroying the credibility of our court system via millions of document forgeries and chain of title destruction?

      And lets not forget that all this money doled out to the criminal corporations that drove the housing bubble using massively fraudulent predatory lending practices — that these criminals were never prosecuted but were given trillions in bailouts.

      I want my $1 billion bailout. Heck, how about even a measly $400,000 bailout to allow me to pay off my debts and to repay me for losing years of salary as the result of being laid off by a company that received tens of billions of bailout dollars! The American people have been robbed blind, millions economically destroyed for life, by these thieves and you claim that, because A SMALL PORTION of the money they were given was paid back with a low interest rate tacked on that we should stop ranting and deal with facts? How about the facts I just stated? Those are THE FACTS. britlog, either you are a part of the criminal, lying 1% or you are suffering from a severe case of Stockholm Syndrome.

      1. Lucy Honeychurch

        Bravo YankeeFrank!

        We could have paid-off EVERY SINGLE MORTGAGE IN THE COUNTRY MULTIPLE TIMES OVER with less money than the ONGOING Wall St. bailout is costing us.

        Now they want to skip that embarassingly public step of having to send Paulson (or Geithner, or the next Wall St. shill at the helm) to ASK for our tax dollars, by arranging to essentially ACAT our tax dollars directly to their balance sheets via ‘Fiscal Cliff’ scare tactics remeniscent of the ‘sky is falling’ Paulson pitch.

        Meanwhile the same bunch of guys want to de-fund the Dept. of Education.

        Their strategy is the gender neutral version of ‘Keep ’em Barefoot & Pregnant’.

    3. Cheyenne

      “facts are that every penny of tarp was paid back with a big profit… it’s time to stop these types of rants and get to facts.”

      You should try taking your own advice instead of repeating propaganda.

      The Treasury report from yesterday shows a TARP deficit of $30 billion.

      There are countless other unpaid bailouts as well.

      YankeeFrank mentions AIG counterparty Goldman’s $13 billion backdoor bailout. He could have just as easily mentioned limited himself to the top 3 FOREIGN bailouts by the NY Fed’s bailout of AIG’s counterparties (Societe Generale, Deutsche Bank, and Barclays) to arrive at a bailout figure–just for overseas banks–well north of $30 billion.

      Another bailout was Hank Paulson’s unilateral revision, of dubious legality, to sec. 382 of the tax code, which allowed banks (like Wells Fargo) to use other banks’ losses (like Wachovia’s) as their own after acquiring other banks. That giveaway alone was worth $140 billion.

      Have the banks paid that back? Hell, no.

      I’m not sure why people who don’t know any better are so eager to repeat the misinformation they hear on CNBC. It’s really depressing.

      1. Yata

        AIG, though maybe technically not in receivership, though it was one of the largest firms to be bailed out…well, no, there was Citi, but to the point were allowed to book around $10 Billion in losses against their tax bill.

        So you have one of the biggest bailout stories in history, majority owned between the FRB and the Treasury, filing losses against a tax bill they owe the majority holders.

        I think we were talking about bailouts here.

    4. Haloeffect

      Britlog – what does it really mean for a TBTF to make a profit? TBTF firms are in a position to largely write their own rules and also have access to resources at below market cost. So what does it actually mean for a firm in this situation to “make a profit?” Is this an accomplishment to be lauded? Or rather is it a mere bookkeepping feature that allows what are in effect government employees to pay themselves like they are Bill Gates? In 2008 many firms that were “profitable” for long periods of time (AIG, Fannie Mae, Bear Stearns, Lehmann etc) went under. Why? They lost control of the rules they had always played by and consequently access to cheap funding was lost. In some cases they needed to be bailed out (bigger players changing the rules) or they disappeared. Profit = revenues collected from customers who freely choose to buy – expenses obtained at market prices. The center of our economy is replete with firms who are entitled to abuse involuntary customers for extra revenue and avoid valid expenses. A lemonade stand might make you a billionaire should you get this deal.

    5. JamesW

      facts are that every penny of tarp was paid back with a big profit..

      Ha, ha, you’re funny….hold it, were you serious???

      Let’s see now, over $23 trillion pumped out worldwide by Federal Reserve Bank, along with those TARP funds so that John Paulson, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Deutsche Bank (Taunus Corporation), UBS, Darby Overseas Investments, et al., could be paid on all those credit default swaps (naked swaps as in unregulated insurance) because AIG sold $460 billion worth of CDSes they didn’t have the capital on hand to pay out (that is, they sold “insurance policies” with a potential payout of from $20 trillion to over $40 trillion — note the similarity to amounts pumped out by the Fed?).

      And those TARP funds? Other gov’t monies were accessed to pay those off, so taxpayer still owed big-time, really big-time.

    6. ZadoofkaFlorida

      Here is a fact: The two recent PowerBall winners paid more in taxes on their winnings than GE, ExonMobil, and Caterpillar have paid in the past 10 years!

      1. psychohistorian

        Assuming this is accurate it is a GREAT example of the hypocrisy of our NON taxation of the engines of business that use the public commons to pay for the public commons instead of fattening the rich more.

      1. abprosper

        Not exactly . Both candidates were to some degree liberals supporting health care for all and to a greater or lesser degree, some kind of welfare state.

        People voted in what they perceived to be the most redistribution oriented candidate at the time Obama.

        The Senate is also controlled by the most liberal party.

        The House, well yeah but its cultural and its supposed to be that way. People select the House candidate who is most like them and the US is far from culturally homogeneous. Westerners and Southerners among others have a different view of the role of the State and it doesn’t include much of what the current one is doing.

        Now as to the question at hand, if somehow we got more liberals, how would we pay for things? The most revenue we can get over a historical margin is about 19.5%, call it 20% of GDP at the Federal Level (so called Hauser’s law) of a 15 billion GDP This is around 3 trillion or 500 billion more than we are getting now

        This would still leave us 600 billion in the hole as of the 2011 budget. Thats with no new spending.

        That is not sustainable and like it or not, eventuality constant inflating will cause economic troubles, cureency repudiation and worse.

        The fix is getting well paying jobs producing real wealth but that is simply not possible as far as I can tell

        Not only is there a huge global pool of labor willing to work for a pittance (I can’t see liberals closing the immigration or trade doors) but automation is destroying job categories one after another.

        This leaves jobs only for the talented and even then we have no mechanism to tap a fraction of them.

        the US has huge sections of the country with broken families, who are alliterate (Laredo Texas, population 250,000 for example has no book stores at all) or illiterate or worse.

        More programs can’t change the culture at speed unless the culture wants to change and the damaged parts don’t. They want the familiar.

        Its just as it I was taught in psyche, people won’t change till its too painful to not change.

        1. Aquifer

          I repeat – we won’t even vote against the bastards …

          Your post doesn’t deny that – all it says, from what i can see, is that we are not hurting enough to do that yet …

          We had other choices and the vast majority didn’t choose them …

    1. Thom Tobiason

      Imagine that Tareer (sp?) Square had a number of gun shops surrounding it and the demonstrators could purchse semi-automatic assault rifles …

  2. Brindle

    Parramore mentions Obama just once—and she misses the mark.
    Obama does not to be pressured, he is already mostly there.
    Those folks (the group) are his peers and who he will be “networking” with when he is out of office.

    –“The group aims to seize the moment of the so-called “fiscal cliff” debate to pressure President Obama to concede to House Republicans and continue the Bush income tax cuts for the rich while shredding the social safety net”–

    1. YouDon'tSay?

      It’s all about appearances. The whole left-right dance is meant to give the illusion that there’s actual conflict going on in DC among fairly represented political constituencies. Instead, there’s only one constituency being served – EVER being served. Obama was a Trojan Horse from day 1, but his sap supporters were all either too naive or too scared of the Republican boogeyman to see it. There’s no actual “decision making” going on in DC these days at all. There’s only political theater to whet the public’s appetite for decisions that were already made elsewhere by the assorted interests who own the joint. One can only imagine the actual conversations that go on behind closed doors when the various “apposing” political actors get together to discuss their next act.

    2. Klassy!

      It is all very odd that the writer would feel that Obama is susceptible to pressure from us little folk. For an administration not particularly distinguished for its transparency, Obama has been admirably transparent in letting us know who his peeps are.

        1. Klassy!

          I like that phrase “when he’s shown on television”. The passive voice works well there. It gets to the heart of his stealthy nature.

    3. Yves Smith Post author

      You are really not on top of this at all.

      Obama BEFORE HE WAS SWORN IN made it clear that one of the big objectives of his presidency was to “reform” as in cut, Social Security and Medicare. He had dinner with a group of conservatives at George Will’s house ~ 10 days before he officially became President. His dinner companions reported they were very pleased, and that Obama said he intended to cut Social Security and Medicare as soon as the economy was stabilized.

      So he is very much part of the problem. And all he’s doing now is a headfake. The plan is a 2 part deal, one to patch things up and get past the cliff, with a bigger deal 6 months out that will include the Social Security and Medicare cuts.

      1. Brindle

        A headfake while wearing a mask. The same mask he has worn most of his political career; a mask that displays someone far more liberal that his actual ideology.

        He has been brilliantly successful in having liberals support his right of center policies. The liberals believe he is well intentioned—it’s just those crazy Repubs which have tempered his desired outcomes.

      2. denim

        On that slippery slope to perdition, compare history.
        These are historical quotes on social security by former presidents.

        Yes, even Obama is contaminated by Ayn Rand’s ideology from hell. The Bible thumpers of by childhood days would shun both this man and whom he trys to sell out to.

        BTW, beware of false prophets wearing sheep’s clothing, especially near D.C… you shall know them by their works.

    4. Aquifer

      Alternet is a Dembot site – they will critique the policy but their answer is always to “pressure” Dems to return to their “true” selves – never to throw them out on their asses …

      Parramore writes some good stuff, but at the end of the day is just another “prog Dem”, whatever that means, IMO …

  3. Bhikshuni

    Thanks for this report, however infuriating!

    I like the plan to meet these people in opposition on the road. Let’s plan to meet them wherever possible, especially among their own peer groups, be it board rooms, golf courses, or dinner parties, etc.

    Their citizens united corruption money didn’t buy them Romney, and now they are having a tantrum and trying to corrupt their way into continued policy failures.

    We need to find leverage against them and their elected, corrupt cronies.

    1. rob

      that is really where we need to occupy, to find out where these low-life deviants;I’ll call them”the auterity mongers” .,live,work and play….And people need to create the feeling around them as if they were child molesters…posters on telephone poles,at any place they go…put their face and business in public….this way, real americans can let them know what we think of them.Most people with power are really just people,maybe smug,arrogant people,brightish…sometimes charming,sometimes not.. but usually not as special as their entourage would have us make out.They shouldn’t be able to hide in luxury.put it out on the web where these people are. What street,what floor.what bistro,what gym,what island getaway…..these few and all their closest minions need to be boiled out of the fog they hide in….then we can have an honest debate about our best course of action….or something.

  4. Jim Haygood

    Claim: ‘Fixers want to convince the public that a well-managed, hugely popular program that does not add to the deficit (it’s self-funded) is somehow in crisis and requires intervention in the form of various cutting schemes.’

    Fact: Social Security’s negative net worth rose from $7.947 trillion in 2010 to $9.157 trillion in 2011. Source: Financial Statements of the U.S. government, page 46:

    Social Security’s negative cash flow in 2012 will come in at about $47 billion — the third year in a row of negative cash flow, which is being funded by issuing new debt to the public.

    Because of the demographic transition of Boomers retiring, Social Security will never again see a cash flow surplus under the current rules.

    Defending Social Security with false claims that are easily disproved with government documents is a losing strategy.

    1. SingleMalt

      This +1.

      Idiotic statements that are easily disproven with publicly available facts undermine the credibility of this entire essay.

      Well done, Lynn. Unless this whole thing was intended to be an inflammatory rant from the get go, then I think it it time to start looking for a new career.

      1. Yves Smith Post author

        Oh, I see you see fit to opine on Social Security while ignoring the fact that we are in the midst of having reduced payroll taxes. That’s going to reduce contributions to the Fund on a short term basis. And you are using that to jump on the bandwagon and treat this as a permanent situation. So we can see how good your analytical chops and intellectual honesty are.

        The idea that Social Security is in any kind of trouble has been debunked repeatedly, see:

        1. Hypothetical_Taxpayer

          FYI, the “temporary” 2% payroll tax cut is being made up by treasury contributions, so the cut has no impact on SS accounting.

          It just will give fodder to those who want to portray SS as welfare, because SS is less self funded as long as we have the payroll tax cut and the difference made up by treasury borrowing.

          1. sierra7

            How about the continuing multi-decades loss of decent paying manufacturing jobs that is pushing SS contributions lower and lower?
            As Ives stated, (para)…we have “single payer financial bailout” plans, but (now my comment) no progressive vision for single payer health care in this declining country.
            WE are a disgrace.

          2. Aquifer

            Hmm – if a diff is “made up” by Treasury, isn’t that how SS can now be said to be “contributing to the deficit”?

            As far as “temporary” I agree – everybody and their grandmother, including folks like Baker, (last i looked awhile ago) like this PTC, apparently oblivious to the fact that it is not only feeding but overstuffing the argument that SS is going broke but, IMO, creating another “meme” as well – that FICA, instead of being a valued contribution toward social insurance policies for retirement and medical safety nets in old age is now a “drag” on people’s income, keeping them poor and cutting or dropping it would be the real “stimulus” they need, i.e. FICA as an enemy …

            It really is infuriating to me how this obvious move to “starve the beast” when frontal assault failed has been so enthusiastically taken up by those who otherwise mock this fiscal cliff nonsense and so much other neoliberal crap ….

            I had a long conversation the other day over on the MMT site, where a post described those of us who argue for the payroll tax as being “progressives” who are willing to destroy the program rather than give up on the myth – the “myth” for them is that Taxes pay for Programs – their position, so I gather, is that taxes are not needed at all except to tone down inflation should that be necessary – so folks like myself who argue that taxes like this are useful, perhaps even necessary, even though they may not be needed for “revenue”, are, in their estimation, willing to destroy the program …

            So i will repeat – like the lone ranger – my thesis that what has kept SS/Med going for as long as it has, the 3rd rail in politics, in spite of repeated assaults from all sides is, ironically, the aspect of it that enables folks to say “Let the Gov’t keep it’s hands off MY Medicare!” “It’s mine, I paid for it!” It’s called skin in the game – it is that powerful instinct which will fight tooth and nail for a program, other than just the reason they get something out of it …. And cutting that tax – reducing that input, feeds not only those who say “it is broke” but undermines the psychological value of folks “paying for it” – the value that wily old fox FDR clearly understood when he set it up, that Johnson understood when he (or whoever) set up Medicare, that TPTB clearly understand in their desire to dismantle it ….

            So I part ways with MMT here, as though anybody but me gives a damn about that. Until they can actually implement a system that lives by their tenets, i implore them to stop inveighing against one that works and has for some time to keep the only decent safety nets we have fairly intact – the “tax” that people pay that provides them every right to say – “It’s mine! I earned it! Keep your bloody hands off it!”

          3. Hypothetical_Taxpayer

            Yup, all MMTers, including borderline types like Galbraith, came out in favor of the payroll tax cut. That’s the problem with believing in fairy tales – later on you find out the Tooth Fairy claims she went broke, or we now have inflation and they stopped making quarters, or some such bad news. Like maybe we have to pay regressive taxes or something. National Sales Tax being one plan in the R arsenal.

        2. Don Levit

          The sources you cite are from private individuals. How about providing something more objective, like:
          a paper entitled “The Federal Government’s Long-Term Fiscal Outlook, Fall 2012 Update:”
          Page 1 “GAO’s simulations continue to illustrate that the federal government is on an unsustainable long-term fiscal path.
          Page 3 “If however, the cost containment measures are not sustained over the long term – a concern expressed by the Trustees, the CMS Actuary, the CBO, and others – spending on federal health care programs grows much more rapidly. Spending on Medicare and Medicaid, CHIP, and exchange subsidies under the Alternative Situation grows to over 8 percent of GDP by 2030.”
          “In the Baseline Extended simulation, not only is health care spending slower, but revenue as a share of the economy is higher and discretionary spending lower than at any point in the last 50 years. Even in this simulation, revenue covers little more than spending on Social Security, Medicare, CHIP, exchange subsidies, and interest in 2040. There is little room for ‘all other spending,’which includes not only national defense, hpomeland security, veteran’s health care and investment in highways and mass transit, but also smaller entitlement programs such as farm price supports and student loans.”

          Don Levit

          1. Aquifer

            Everyone seems to agree the elephant in the room is healthcare costs …

            So, single payer – let the GAO stuff that into its computer and see what comes out – oops, we can’t do that, now can we – that just might fix a lot of it

            As for cutting defense and “homeland security”(domestic spying) budgets, i’ll drink to that and there might be enough left over so we could all drink to that …

          2. Yves Smith Post author

            Those “sources” are all relying on CBO forecasts.

            The CBO is in fact acting in a highly partisan manner, with “partisan” meaning favoring the interests of the financiers, rather than the traditional meaning of one party v. the other.

            Even Fed economists have savaged the CBO forecasts, see:


            And see more about the CBO’s dubious role in the budget debate:



            And Peter Orszag, who is pretty much an official source (former budget director, current Obama balloon-floater) has ‘fessed up that Social Security is not a significant driver of future deficits (and he’s accepting all those forecasts other experts question at face value):


            And the idea that “private sources” are somehow lest trustworthy is bunk. Your comment actually hugely funny. All you anti-goverment types like to say government is terrible and much less trustworthy than the private sector, except when it’s peddling your party line.

    2. James Shannon

      … and that i$$ue completely di$appear$ if you impo$e the $ocial $ecurity Tax all income and capital gain$ of the Malignant Narci$$i$t – the CentaMillionaire$ and Billionaire$ – who refuse to be Taxed like the re$t of the u$.
      CentaMillionaire$ and Billionaire$ have all but de$troyed the world in their $ick que$t for more and we the $tupid allowed it to happen!

    3. petridish

      Fact: Social Security’s negative net worth rose from $7.947 trillion in 2010 to $9.157 trillion in 2011. Source: Financial Statements of the U.S. government, page 46:

      Don’t get hysterical, Jim. We have “innovations” such as GMO “food,” a robust pharmaceutical industry, incurable diabetes and obesity and fracking which can be relied on to “eliminate” future social security outlays as required.

    4. Hypothetical_Taxpayer

      Oopsie. Someone misplaced the $2.7 Trillion trust fund again. I hate it when people lose $2.7 trillion of my money.

      Yes, SS went “cash flow negative”. It was supposed to someday soon. Happened a little sooner than expected – something about a recession reducing revenue due to less employed people paying payroll tax and more taking early retirement at 62(at reduced benefits) because they probably thought their job loss was going to be permanent.

      Yes, yes, the USG borrows from the public to pay off the special treasuries in the trust fund, same as they roll over maturing publicly traded treasuries. It’s all part of the $16 Trillion total National Debt figure.

      But the Trust fund still is forecast to cover Boomers thru 2033. Unless we have another financial crisis or need the money to finance Cold War II, of course.

      But then these same people are absolutely sure they can keep tabs on the “Present Value of 75 Year Actuarial Projections”, which is what your “Fact: Social Security’s negative net worth rose from $7.947 trillion in 2010 to $9.157 trillion in 2011. Source: Financial Statements of the U.S. government, page 46” tabulates.

      But why not look at all the 75 year projections of shortfalls:

      Medicare Part A — $3252
      Medicare Part B — $13854
      Medicare Part D (drug benefit) — $7466

      Just for comparison, if we take the 2011 defense budget of $711 Trillion and multiply by 75, look at this BIG Number!

      $53325 TRILLION. OMG ! My calculator groaned spitting that one out.

      1. Hypothetical_Taxpayer


        I meant Defense budget $711 Billion times 75 give $53325 Billion.

        But see how quickly I correct my typos? Doesn’t take me years or decades.

      2. Don Levit

        In one breath you say that redeeming the Tresaury securities requires general revenues (increased debt held by the public, if a deficit), and in the next breath, you say SS is solvent until 2033. Do you define solvent as spending new general revenues like any other expenditure, accounting for an immediate expense, and raising the deficit as solvent?
        By the way, rolling over debt is not like redeeming Treasuries from the SS trust fund.
        Rolling over debt keeps debt held by the public, level.
        Redeeming Treasuries out of the SS trust fund increases debt held by the public.
        Don Levit

        1. Hypothetical_Taxpayer

          Note to Lambert and/or Yves:

          Don Levitt has been making these sorts of “insightful” comments for about 3-4 years now at Angry Bear.

          D’ya think we all have given him enough opportunity to enlighten us? Maybe we should let him pursue a book contract with a publisher, or a post at the Peterson-Walker Institute of Higher Learning?

        2. Aquifer

          Look, Don, the bottom line here is this – the gov’t, at the drop of a hat, passes multiple “supplementals” to fund multiple arguably illegal military actions that nobody is ever asked to pay for at the time …

          Now we are told that the gov’t can’t pay for legal, longstanding programs that have not only been paid for on an ongoing basis but for which actual “trust fund” has been established ….

          So it doesn’t really matter what smoke and mirrors are put up or how the figures are played with – the fact of the matter is when the gov’t has the political will to find/make the money to do something, it does it – passes a law and the treas or fed of whoever “prints” the money to pay for it …

          It is a matter of politics and if we finally get smart enough to put folks in office who have the political will to find/create the funding for these programs – then we will also find/create some fancy computer programs that show this works out just fine ….

    5. Jerry Denim

      Exactly where does this number come from? I believe some austerian hack at the the Treasury department calculated existing liabilities for Social Security for every living man, woman and child alive in the US today if they lived to ripe old age but the check suddenly had to be paid right now. This number doesn’t include the future earnings and payments of said beneficiaries just some outlandish assumption of benefits paid over a very long life. Obviously that’s not how Social Security works so this is disinformation of the worst kind. Dishonest and irrational extrapolation like this would be like me trying to estimate every expense I will encounter over the remaining course of my life and claiming I am in debt or underfunded to by such an amount in order to declare bankruptcy or somehow short my creditors.


      1. sierra7

        Isn’t that what has been done to our US Postal System???????
        And, it’s being gotten away with……

    6. ambrit

      Mr Haygood;
      The argument could be made that all of that so called negative net worth is in US Government infrastructure. If I remember correctly, most of the SS Trust fund, all?, consists of US Govt bonds of some sort. Since just about everybody worldwide seems to view these bonds, or cousins of theirs, as about the safest investments in the world, what’s the SS Fund Trustees error?
      And please, don’t set up a strawman argument along the lines of confusing the cash flow with the net worth. The only way the SS Trust fund is going to go broke is if the US defaults on all its’ bonds. Which isn’t such a far fetched idea if these high rollers get their way. At which point, America would go into recievership. Now that would be an interesting event.

    7. Susan the other

      Do the Financial Statements of the US Gov trace how this 10Tr negative net worth happened over time? Is it true that SS has been raided ever since its inception to pay for the military or whatever? If the payouts for the boomers’ retirement tsunami are 47Bn/year at the beginning of the wave, how long until it crests? And why, if this information is being published, does everyone say SS is solvent. What is the disconnect between the opposing interpretations?

      1. LucyLulu

        I don’t know but when Reagan raised payroll taxes 30 years ago, the program was deemed fixed, 100% solvent. Somewhere along the way apparently miscalculations were made, my understanding due to overestimating birth rates and lackluster revenues due to an underperforming economy. So, SS couldn’t be accurately funded 30 years into the future during Reagan’s tenure, yet now the birth rate and economic forecast can be predicted 75 years into the future, even beyond, and thus what the amount of shortfall will be. Amazing progress we’ve made. If only this info would be shared so investment in the markets could be timed to earn maximum profits, then SS would be quite unnecessary, eh? /s

        1. Don Levit

          They did a relatively good job of projecting the numbers.
          The problem is that they are only numbers. The balance in the SS trust fund represents the amount that can be withdrawn from the general fund of the Treasury, without an appropriation. It is the same way we pay for all expenses, like battleships, although they need an official appropriation.
          I would be more disappointed in the Treasury borrowing the excess FICA dollars, so that the numbers were only numbers. If they had been invested in special-issue Trteasuries as designed by law,, to be used only for SS beneficiaries, the excess FICA dollars would have represented an actual store of wealth – which could have been liquidated to cash without the use of new general revenues – what FDR wanted with a self-sustaining program.
          Don Levit

    8. Lucy Honeychurch

      If we take your ‘facts’ as given, then why not choose to reduce the 50% of Revenues we spend on the military, or implement truly progressive real tax rates, or tax CapGains as Income, or eliminate the Carried Interest tax loophole, etc… to plug the big, scary gap Sally?

    9. Charles Fasola


      Your post is one full of misinformation and ignorance. Your figures are absolutely wrong and easily debunked. You have absolutely no idea of how the federal government spends and pays its bills. Beside the fact that there exists no Social security crisis and certainly no deficit crisis. You could not accurately define what the deficit is and consists of if it smacked you directly in tht as&^!le you call a face. Waht a moron you are!!

    10. bdy

      It’s indecent to suggest that a society can’t or shouldn’t provide for its old, its infirm, or its poor – especially when millions of unemployed are asking for nothing more than an opportunity to help contribute by simply taking a job.

      At the end of the day our conflicting numbers don’t mean shit. We’re America. We can do whatever the fuck we want (ask Dick Cheney). You might think that our aged don’t deserve a dignified retirement. For you there are maths out there that suggest they can’t be given one, and policies that can easily make those maths reality. The same is true for those of us who show a little more respect for the elderly. We can absolutely provide for our retirements, as multiple links throughout this post illustrate. Given that the compassionate represent such a strong majority (here and everywhere else in the world), you should be thankful we don’t live in a democracy.

      1. Aquifer

        Ha! – i just said something sorta like that above! Great thoughts must be floating around out there! LOL

    11. Procopius

      @Jim Haygood: My browser is currently not loading the link you provided, so I can’t find out what you are calling “negative net worth.” It’s not loading Google or Huffington Post, either, so that doesn’t mean your link is bad, it just means my ISP in Thailand sucks.

      As to Social Security paying out more than it’s taking in, that’s the way it’s supposed to work. That’s what the Greenspan Commission set up in 1983. That’s why we’ve been paying more Social Security taxes since 1983. That’s what the Trust Fund is for. That’s what budgets are for. You take in more than you spend for years and save the surplus because you know that you’re going to have many years of paying out more than you take in. So you cash in some of those treasury bonds and Bob’s Your Uncle, right? That’s called prudent planning, right? And if you want to tell me the U.S. Government can’t pay off its bonds because it’s broke, tell that to Bill Gross or Sheldon Adelson or Jamie Dimon or Wossisname Blankfein, all of whom own U.S. Government bonds.

      1. Don Levit

        You are correct about the trust fund IF the excess FICA dollars had been invested in special-issue Treasuries, to be used exclusively for SS beneficiaries, as designed by law. Instead, the excess FICA dollars were loaned to the Treasury to pay for current expenses. So, instead of cashing in the bonds, as a store of wealth, pre-funded and intact, new general revenues are needed when these so-called special-issue Treasuries are redeemed. It would be similar to an insurer tapping its reserves when the premiums are not enough to pay claims. Do you think that insurer borrows money rather than simply cashing in their pre-funded, intact reserve fund?
        If that was necessary, the state insurance commission would have issued a cease and desist order, and placed that insurer into receivership.
        Don Levit

    12. Doug Terpstra

      Ouch, Jim. You got trounced and pummeled in more than 20 rebuttals. Still there? Please stay away from sharp objects, tall buildings, and open windows for a while.

      Yves nailed it on the 2% payroll tax cut (a 32% reduction in the employee FICA tax rate), because even though “Hypothetical” is technically correct about the make up, the camel’s defunding nose and neck are now well into the tent, and it won’t be long before the humps rip the canvas. Then it will bleat “yes, but now Social Security is bleeding the general fund. We have to stop the bleeding!” It’s diabolically clever. Obama is Machiavelli reincarnate.

      1. citizendave

        I have been tracking the same idea, that Treasury making up the difference to compensate for the payroll tax reduction has introduced a political element that was not a factor before. Dave Dayan at FDL said that. If they simply allowed the trust fund to be depleted faster then nobody could logically claim an impact on the deficit. Machiavellian indeed.

  5. Klassy!

    No man is wholly free unless he is both politically and economically free.
    OMG there was a CEO who said this?

  6. James Shannon

    All government i$ about money and who get the Mo$t – period
    Malignant Narcissists rule the world – their lack a a conscience and their mental illness prevents them from having empathy for all others! They know money i$ power. Alway$ has been alway$ will be until a free $ociety Taxe$ corrupting power / $$$$$$ out of the hands of the few!
    CentaMillionaire$ and Billionaire$ are in control and they refuse to be taxed or pay for the damage they do to other$ in their quest for more! They are universally Malignant Narcissist$ and they are destroying the world!!!!! They exist because they own all the politicians! They exist because free societies allow them to float to the top – just like what happens in a septic tank!

  7. steelhead23

    Quick, someone find a copy of A Tale of Two Cities for Mr. Blankfein – clearly, he has never read it.

    I recall that a few years back Bill Gates’ dad was roaming the Sunday morning talk shows voicing his opinion that taxes on the wealthy were too low. Where have those voices gone? The time to speak up is NOW lest you come to share the tumbril with Mr. Blankfein.

    1. Susan the other

      Lloyd has been laying low since he was vilified for admitting GS did “shitty” deals and tried to say it was “god’s work.” His last communication with us earthlings was that smarmy interview (CNBC?) wherein he said GS was moving to Africa. And now, he’s getting so chatty. He’s The Mouth, saying all the hard things that Obama wants said by somebody besides himself, Timmy and Jamie Dimon. Obama doesn’t want to sacrifice Jamie Dimon’s last remaining shreds of likeability. Does this mean Dimon is going to Treasury? Or?

  8. Mista B

    Safety net? How is SS a safety net? It’s available to virtually all retirees, regardless of net worth. Let’s call it what it is: retirement insurance. You can’t even call it old age insurance, though that’s what it was originally designed for. But hey, it’s “popular”! That’s a well-thought-out reason to keep something, even though it’ll require raising the tax rates on future generations in order to keep it funded. Why not a retroactive tax, say going back to 1982, since all of the people employed over that time paid in less? The ceiling on SS wages has basically doubled in a little over a decade, thus doubling the SS taxes paid in by people who earn at the ceiling level. That’s a sneaky little tax raise. Yeah, it’s funded, so long as the ceiling keep rising (and likely the rate too). There used to be more than 10 contributors to SS for every person receiving benefits. Soon it will be 2 to 1. That’s great for those receiving benefits. Not so great for those paying for them. But who cares about them anyway? Not Democrats and not Republicans.

    1. BondsOfSteel

      I think people confuse social security with retirement plans. One of the biggest parts of social security is the disablity insurance:

      Also, social security wasn’t ment to provide lavish retirements… only the bare minimum. It sets the ‘floor’… kinda like a safety net.

      1. bdy

        It’s a safety net for folks who lost 40% of their 401k in the last four years, or whose pensions were gutted by banks as part of the DOJ settlement.

    2. Nalu Girl

      There should not be a cap at all on SS deductions. The fact that there is, is unfair to tow-earner families. For example, take two families, each with an income of $200,000. Couple A has a single earner. They are only taxed on $113,000 (I think, I don’t know the exact amount) Both can collect SS upon retirement. Couple B each make $100,000, and are taxed on their entire income. How is this fair, either to them or their employers, who match the contribution? In addition, why is some income, like capital gains sacrosanct? EVERYONE should contribute. And our government officials should have to participate in the same system we all use.

  9. Paul Niemi

    Our country, it seems, has about 600 professional CEOs, who dive from company to company collecting stock options and golden parachutes. Their remuneration, versus the average worker, is out of sight, notwithstanding the probability that many of these companies could run just fine without them. Now the so entitled, imbued with the vulgar sensibilities of the nouveau riche, have become alarmed by the benefits our society guarantees to ordinary people. So, mounted on their polo ponies, brandishing their BlackBerries, into the valley rode the six hundred, the valley of cutting Social Security. It is the charge of the CEO brigade, and it won’t end well for them, but it will impress the help, energize a few beltway scolds, and provide a wonderful rationale for handing out smaller bonus checks.

    1. Nalu Girl

      History may repeat itself, but it does rhyme. We are in a new Gilded Age complete with robber barons. Love your allegory! ;-)

  10. Pearl

    I think this is a fantastic post–it clarified a lot for me; I will definitely be forwarding it along.

    Any interest in re-naming this “fiscal cliff issue” to the “fiscal grift issue?” :-)

    I don’t write to President Obama very often, but I will today, and I will send him a link to this post.

    Thanks to Lynn Parramore for writing it and many thanks to Yves Smith for cross-posting it.

  11. juliania

    “Obama BEFORE HE WAS SWORN IN made it clear that one of the big objectives of his presidency was to “reform” as in cut, Social Security and Medicare. He had dinner with a group of conservatives at George Will’s house ~ 10 days before he officially became President. His dinner companions reported they were very pleased, and that Obama said he intended to cut Social Security and Medicare as soon as the economy was stabilized.”

    That’s the clincher.

  12. Jerry Denim

    Nice synopsis by Parramore, except one thing, this article reeks of the typical loser liberal pro-Obama derangement syndrome.

    I known this sentiment isn’t new ground for Naked Capitalism, but statements like this still drive me up the wall:

    “…which includes Republicans and plenty of Democrats, is hitting the airwaves, hosting roundtables, gathering at lavish fundraising fêtes, hiring public relations experts, and traveling around the country to push its agenda. The group aims to seize the moment of the so-called “fiscal cliff” debate to pressure President Obama to concede to House Republicans and continue the Bush income tax cuts for the rich while shredding the social safety net.”

    “Plenty” of Democrats? How about all Democrats except a select few which can be counted on one hand.

    “Pressure” Obama to “concede” to House Republicans? You mean the same President Obama that created the “National Commission on Fiscal Responsibility and Reform” in February 2010.

    Here are the President’s words from the White House Press Release: “For far too long, Washington has avoided the tough choices necessary to solve our fiscal problems – and they won’t be solved overnight. But under the leadership of Erksine and Alan, I’m confident that the Commission I AM establishing today will build a bipartisan consensus to put America on the path toward fiscal reform and responsibility.”

    Are these the words of a man having his arm twisted? Who the hell called this press conference and had the idea to form the Catfood Commission in the first place? Oh yeah, right… Barack Obama. So right in the middle of a terrible recession with rampant and wanton white-collar criminality laying about everywhere, the public outraged by the on-going Wall Street bailouts, the economy in shambles, millions of Americans out of work, income inequality is at its worst since 1929, the President decides the most pressing issue is tackling deficits? Deficits? Seriously? And to shrink the deficit the President taps two Wall Street friendly men known for their hatred of social programs and their love of tax cuts for the wealthy? Am I the only person alive in this country who can still remember way back to 2010?

    No Clinton-esque racial double entendre intended, but it is high time for liberals and progressives to call a spade a spade. Barack Obama is a Republican in Democrat clothing. Its like the old political joke about ‘Have you stopped beating your wife yet?’ When you’re in politics you don’t form a committee called the “Presidential Herpes Mitigation Committee” unless you want people to talk about the President having herpes. Barack Obama willingly adopted a right-wing Republican agenda when he created the Deficit Reduction Committee thereby conceding the high ground and admitting that the country did have a serious deficit problem. By conceding the country did indeed have a serious deficit problem he successfully steered the conversation away from any constructive discussion of the real pressing issues in this country, un-financializing the economy, creating jobs, income inequality, restoration of the rule of law, etc and instead mired the national conversation on exactly what the Norquists and Kochs of the world want: How much government do we cut and where? Almost three years later the country is still stuck with all of these Bush era problems which are worse now than when Obama was elected, and the national conversation is still stuck in a mindless loop debating how much we should cut Social Security or the top tax rates for the wealthy. All of this is Barack Obama’s fault or to his credit depending on who’s side you’re on.

    Democrats and progressives of the United States please come to grips with this fact and stop saying stupid things like “…pressure Obama to concede to House Republicans”. He already did a long time ago. It’s Obama who is driving their agenda. Someone quoted Albert Camus on this blog recently to the effect of ‘you must first be able to call a plague by its name if you hope to defeat it’ Call a spade a spade or a right-wing plutocrat boot-licker who hates the common folk Obama, but its time to know your enemy.

    1. Aquifer

      Jerry – i liked your post except for – “admitting that the country did have a serious deficit problem. By conceding the country did indeed have a serious deficit problem”

      What was there to “admit” or “concede”? Do we, in fact, have “a serious deficit problem”? If we do then why should we fault Obama for “admitting” or “conceding” it? Is it just his timing that is a problem? Or is it the fact that this “deficit problem” he speaks of is not an “admission” or a “concession” but an out and out “invention”?

  13. Joe The Economist

    This article is just a distraction created to hide the mess that Social Security’s finances have become. Instead of talking about the coming crisis, we want to shoot the messengers. These people are an unsavory lot, yes. But that doesn’t mean that Social Security is able to help future seniors.

    If you are 63 and younger, you expect to outlive the full benefits of Social Security.

    1. Myshkin

      @ Joe the Economist. You any relation to Joe the Plumber? You sound just about equally well informed.

      Nobody wants to shoot the messenger, just asking for a few straight answers from the crooked likes of Pete Peterson, Erskine Bowles and Alan Simpson. Why are they so desperate to fix something that ain’t broke yet? Particularly when there are more pressing budgetary drains.

      How ’bout turning our attention to the need for that new fleet of F35s for instance? 1.45 trillion dollars for 2400 fighters. Which would provide more security to the nation, a robust program of Social Security, Medicare, Medicaid or a roll out of a new line of jet fighters?

          1. Hypothetical_Taxpayer

            I think they can fly. I don’t want to be sued or disappeared for spreading misinformation.

            But the bang for the buck is not so good. And the “theater of war” looks like either terrorism, drug cartels or nuclear enemies, so….F-4s or Spitfires, or Sopwith Camels may do.

          2. Aquifer

            Or drones ….

            As for Sopwith Camels – I don’t think Snoopy would ever agree to anything like that …

  14. hunkerdown

    Yves, are there any interesting patterns to be found in the IP addresses of the pro-austerity shills, or are they mostly working from home?

    1. Yves Smith Post author

      I wish I had time to do that sort of analysis, but yes, these posts produce an unusually high level of first time commentors who run tired right wing talking points. So whether they are paid trolls or just look like them is almost irrelevant.

  15. Chauncey Gardiner

    As the author of this article stated, there is a very well funded effort underway to push through this policy. Trolls are out in force today repeating the Big Lie propaganda meme of inadequate Social Security and Medicare resources, diverting, attacking the messengers of truth such as the authors of this article and this blog, obfuscating the truth, and saying repeatedly, “Yes, it’s true, it’s true!… You’re effed!… Sorry!” as though through sheer repetition their lie becomes true.

    This pattern is not unusual. We have been treated to it many times in various forms over the past three decades. In fact, familiarity breeds contempt, and the level of respect has gradually become mutual.

    Learned a lot from Dubya. One of the things he taught us besides “My job is to catapult the propaganda” is that “The best defense is a good offense.” So in that vein I suggest we tax accumulated wealth – focusing particularly on inherited wealth, those current and former senior corporate executives who have benefited from “globalization” of American jobs, current and former senior corporate executives and bondholder beneficiaries of massive financial frauds and subsequent Treasury and Fed “bailouts” and hidden subsidies, and those who are enjoying the financial fruits of “privatization” of public assets.

    I’m sure others can add to this list, for example in the MIC and energy sectors.

    1. Kim Kaufman

      This petition had under 5,000 signers this morning. A little while ago, it had almost 10k. People in LA are pissed about this.

  16. Lil'D

    There is a lot of speculation about the evil motives, but most (not all) people actually tend to think they are doing the right thing, at least from their point of view.

    Thus, What colorable arguments does the “campaign to fix the debt” make?

    Are they misguided as to macro and believe they are doing something good?
    Are they trying to privatize public goods because “private sector is more efficient”?
    or just for the venal reason that there will be more fees to skim?

    I truly would like to understand the defense, and the reasoning & motivation.

    1. Aquifer

      While assigning motivation is always a “fun” exercise, sometimes it doesn’t really matter – what matters is the end result of their efforts, whatever the motivation – and in this case it is bad for the little folk …

  17. steve from virginia

    Let’s just say the govt. eliminates SS tomorrow. What next?

    (… silence …)

    Nobody would do a damned thing. A boss somewhere might become upset and not ‘give’ the person making noise a job. People would retreat … as they are doing right now … into themselves, television and Adderol.

    Look what happened to Occupy. The ringleaders wound up in front of a judge. “Let me see you in this courtroom again and this (misdemeanor conviction) will go onto your permanent record!” the judge thundered. “Oh my God, I’ll never get a job with a prestigious firm,” cried each of the defendents. “Whatever you say, Bwana!” they agreed as they vacated the public spaces, never to return. “Time for us to grow up, otherwise we cannot hope to repay our half-million$ in student loans!”

    They took on the student debt in the first place so they could become rich. Nobody is going to rock the boat because the citizens ARE the boat.

    The establishment has what the citizens by the short hairs because the establishment gained the monopoly over comfort and luxury. The public dares not risk comforts and luxuries as these are what the ‘conversation’ between the public and the establishment is about!

    There is more public outrage over the loss of Twinkies than the loss of social institutions … this includes traditional privileges. Where is habeas corpus? Where is our privacy? Where is rule of law? Where is accountability?

    (… silence …)

    Go ahead, jettison the safety net because nobody earned it.

    1. psychohistorian

      Is this snark or what?

      I paid into SS for 45 years and I intend to collect my share as long as I live. If you take it away I have very little and will fight to keep it or restore it….whatever it takes.

      SS is a conservative insurance program for the public commons. Is this not what government is for? Read this web site to understand all the details about SS:

      1. Aquifer

        Go get ’em! It is such conviction that has kept this program alive and, IMO, is the only thing that can ,,,,

    2. ginnie nyc

      What would happen? Nothing??!! “Nobody would do a damn thing?”

      Listen, pal, I’ll tell you what would happen:

      I would be thrown into the street (no rent, no housing), be unable to buy any food (starvation)or pay for my medication (not covered by Medicare Part D) – basically, I’d be dead in about six weeks.

      Talk about oblivious. At least, I hope your remarks are the joint result of stupidity and ignorance.

    3. Brooklin Bridge

      I may be wrong, but I think Steve is lamenting the apathy, the lack of public outrage, not endorsing it. He is uncharitable to OWS and dead wrong there. They were royally fu*ked by a Homeland Security coordinated police state effort with a nasty taste of things to come, it wasn’t from lack of trying. But still, I think Steve’s angry at the lack of outrage, not defending the current assault on the safety net.

    4. Nalu Girl

      You might see a lot of elderly bank robbers, trying to get into prison where they will get three meals a day, housing and medical care. Private prisons – the new growth industry.

  18. Generalfeldmarschall Von Hindenburg

    Since the bailouts were just about hitting the reset button, we can expect to see another system wide pump and dump – and another. Revolutions usually start when part of elite group feels its being sacrificed to prop up another that’s obviously becoming parasitical. The cops are more than happy to bash middle class skulls and utilize all that expensive less than lethal gear and Israeli training on the white collar people to. It’s going to take the professional classes and the lower level corporate types to change any of this. That or total meltdown.

    1. Aquifer

      Yo – General

      I might tend to agree with you, but here’s the problem – in my experience any member of the “professional class” that wishes to express solidarity with the “working class” is disdained as being “bourgeoisie” and handmaidens of TPTB, there to undermine the interests of the “working class” and so rejected as being “faux” ….

      Believe me. been there …

  19. Stratos

    Yves, thanks for cross-posting this. I especially liked the decoding of key words and phrases that the One Percenters and their media allies use to confuse and hoodwink the American public.

  20. Aquifer

    This is off topic, but – sometime during my time on this thread, the little box below the comment box that used to parrot the comment and could be used to “preview” it has disappeared and I don’t know where it went or how to get it back …

    1. Aquifer

      While i was typing “Yup!”, below – the little box magically reappeared – wonder where it went and what it was doing while it was gone, or maybe i don’t want to know …

      1. Brooklin Bridge

        The text display feature is great! It’s useful because you can put html directives (markup) in your text in the edit box and then see the results in the display area without the markup.

        What happened to you is just a little software glitch that happens due to refresh constraints. Nothing sinister (except that it can read our brain waves…) If you want to explicitly make it happen, just hit F5 or the “reload” button (under the View menu in Mozilla)

        1. Brooklin Bridge

          Note, it’s always good to use some other editor such as Word for the bulk of your comment so that you have a backup text in case something screws up and then cut and past into the NC editor and then make any small adjustments before pressing “Submit Comment”, especially when you do a refresh or reload or anything like that. Even just highlighting the text and then doing a copy is pretty good safety precaution (though I constantly forget).

  21. Tim

    I find the following quote excellent and the most important issue in the entire article. It is a very moderate perspective as well that I am happy to see on NC:

    The U.S. does need to reduce its spending on defense and it certainly needs to aggressively contain medical costs. But you do both of those the old fashioned way. In the case of defense, you stop plunging into wars and attend carefully to what actually is needed to defend America. In the case of medical spending, you end ‘fee for service’ schemes that reward endless tests and procedures and you vigorously pursue anti-trust and regulatory remedies. You don’t simply cut Americans off from health care.

  22. Brooklin Bridge

    Yves, who do you think is winning? Is that even a question?

    From here, it looks like O’butcher and his merry band of 1%ers are pulling off a slam dunk just like with the disappearing public option trick, and the re-introduction of street urchins via the disappearing ownership trick and torture via rendition, and the acrid smell of death at 6000 miles by Presidential whim and YES WE CAN’T protect the environment.

    No matter what the outcry, even if every single person in the country were shaking the white house fence and yelling at the top of their lungs to stop the insanity, and they are not, O’butcher and co. will simply proceed as planed. And after the deed is done and the Democratic brand of the last 70 years is lying face down in a pool of it’s own blood, they will tell a few media clowns with an absolutely straight face that the American public demanded it. Maybe Chris Matthews or Jon Stewart -yes Jon Stewart that sanguine rich asshole who is shamelessly running cover for bastard O’butcher. And then they will start over again.

    Sorry, back to the point, do you get the sense the opposition to this madness is getting anywhere?

    1. Brooklin Bridge

      I imagine if they bother to think of it at all, they might have Nate Silver plotting out the pros and cons of proceeding as though public opinion doesn’t exist and when they add up the sums involved, there simply are no cons.

  23. bxg

    > They seek this because many of the rich do not want to pay taxes for Social Security,

    Look, I’m with you on the overall message, but this just makes you look silly. Currently SS taxes are on a maximum income of about $110k. For such people it’s a just trivial amount of extra tax (at most 7k, or 11k, or 14k, depending on how you count, and that’s comparing to a world where there was us zero SS tax or their income went to zero!). Not to mention, the Mitt Romneys of the world aren’t going to let their income be taxed as ordinary income subject to SS anyway – but their reasons for not doing so leave SS in the small noise (bigger issues are, e.g., cap gains vs income, medicare which is uncapped, etc).

    No million$-incomer, let alone ten/hundred million$-incomer, is going to oppose social security just because it hurts them materially through their tax bill. It does not. No likely change in SS law is going to make an even an 0.1% dent in their tax bill!

    Sorry, that’s just silly and makes the argument look weak and wrong. Their reasons such people have for opposing this are different, and more despicable. But not this.

      1. Stratos

        Lambert, this is way off topic, but could someone at Naked Capitalism do a story on the outcome of the Montreal Student Movement actions. Their story is one of a positive outcome for the ordinary people of Quebec; a story that should be shared.

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