Trump Agenda: Privatization of Medicare and Social Security?

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Jerri-Lynn here: In this Real News Network interview, Nancy Altman, Co-Director of Social Security Works and the author of a book entitled, The Battle for Social Security: From FDR’s Vision to Bush’s Gamble, discusses the enhanced threat of privatisation of Medicare and Social Security raised by the membership of President-elect Donald Trump’s transition team and  recent nomination announcements.

I have some reservations about this interview but will only raise two quibbles here. First, there’s an assumption embedded in the framing employed herein that Democrats are angels who consistently and adamantly oppose tampering with Social Security and Medicare, and it’s only the nasty Republicans who seek to jettison these highly popular programs. To swallow this assumption is to ignore bald evidence to the contrary. Bill Clinton was poised to privatize parts of Social Security and might well have succeeded, but for the disclosure of his Oval Office dalliance with Monica Lewinsky. And also remember that it was the Obamamometer who in 2010 created the National Commission on Fiscal Responsibility and Reform — more widely known as the Simpson-Bowles Commission– that put “entitlements” spending on the chopping block. So both parties must be watched carefully– if we turn our backs, who knows what they might get up to?

Second, while it’s true that Speaker Paul Ryan and other Republican Party stalwarts have long had these popular programs in their crosshairs, I’m less certain than Altman seems to be that President Trump is looking to gut them fresh out of the starting gate– the worrisome appointments discussed below notwithstanding. The combination of more awareness that these programs are threatened– and the greater pushback thus triggered– might help keep the Donald from succumbing to these pressures.

KIM BROWN: Welcome to The Real News Network. I’m Kim Brown in Baltimore. President-elect Donald Trump, continues to round out his cabinet selections and the recent decision to appoint representative Tom Price, a six-term Republican Congressman from Georgia, has many in the medical community a bit alarmed, especially those who are concerned about protecting Medicare and Medicaid.

Today we are joined with Nancy Altman to discuss this. She is the founding Co-Director of Social Security Works. She has a 40-year background in the areas of social security and private pensions. She’s also the author of the book titled, The Battle for Social Security: From FDR’s Vision to Bush’s Gamble. And she’s also the co-author of, Social Security Works: Why Social Security Isn’t Going Broke, And How Expanding It Will Help Us All. Nancy, thank you so much for joining us.

NANCY ALTMAN: Thank you so much for having me.

KIM BROWN: Nancy, give us a bit of the background about Tom Cole [sic]. We know that he is a former orthopedic surgeon, but his selection by Donald Trump, really sent a red flag to many who are worried about whether or not Medicare and Medicaid will be on the table for privatization. What do we know about him?

NANCY ALTMAN: Well, first of all, privatizing Medicare has been in the crosshairs of Speaker Paul Ryan and the Republicans for a very long time. President-elect, Donald Trump said he would cut Medicare, but his selections really make you have us all concerned. Because Tom Price was a lieutenant of Paul Ryan, he is very much against Social Security and against Medicare. He was head of the Budget Committee but now he had him right in the Administration in a key position along with Paul Ryan, and these are not good signals for those of us who believe that Social Security and Medicare are extremely important programs that work and, indeed, should be expanded, not cut.

KIM BROWN: Yeah, 130 million Americans rely on Medicare, Medicaid, Social Security. So why are the Republicans so enthusiastic about gutting Medicare, Medicaid, Social Security, and making it available to be privatised?

NANCY ALTMAN: These are programs that work. They show government at its best. Social Security is extremely efficient, as are Medicare and Medicaid. They are indeed more efficient than private sector counterparts. They are an example of how government can fill needs not met by the private sector, and do it better than the private sector. This is against the anti-government zealot’s view. It really is a shining example of how government, which really is all of us just working together collectively, can work for us.

Since the 1930s with Social Security and since the 1960s with Medicare and Medicaid, the conservatives and anti-government types have had their eyes on getting rid of these programs, but they’ve never been able to. But now they have an opening, and we now have a president who at least said during the campaign he wouldn’t cut these programs, but he’s putting people in place who will. And it’s really… and, in fact, Speaker Ryan, right out of the block said he wants to take Medicare up in January as part of getting rid of the Affordable Care Act. Nobody voted to destroy Medicare, so there’s a bait-and-switch going on. But that is exactly what appears to be about to happen in 2017.

KIM BROWN: Well, Congressman Price has long held the position that he wants to limit federal Medicare spending by giving the states block grants, and Donald Trump has also said that he is supportive of the idea of block grants. Nancy, is this a bad idea? And if so, tell us why.

NANCY ALTMAN: It’s a terrible idea. There are two ideas. One is to block grant Medicaid, and the other is to turn Medicare, ironically, into Obamacare, instead of a government-provided, government-guaranteed program, they want to change it so all they do is they give seniors and people with disabilities some money and say, “Go out in the private sector and find some insurance for yourself.” That just doesn’t work.

It’s a way to make the federal government’s balance sheet look better, because both of these are expensive programs. They’re expensive not because they’re inefficient. They’re extremely efficient. They’re expensive because healthcare costs, private as well as public, are rising astronomically high, and we need to control healthcare costs in the private sector as well as in the public sector.

We shouldn’t be shifting costs and what the block rated Medicaid and turning Medicare into Obamacare does, is it shifts costs from the federal government, in the case of Medicaid, to the states, and in the case of Medicare, to seniors and people with disabilities.

KIM BROWN: Talk to us about some of Congressman Price’s affiliations. Because one person that he will be working with as Secretary of Health and Human Services is an individual named Seema Verma. Trump picked this person to run the Centers for Medicare and Medicaid Services, and she has a bit of an interesting background when it comes to privatization of healthcare.

NANCY ALTMAN: Yes. Despite his rhetoric in the… talking about Donald Trump, despite his rhetoric in the campaign, he’s surrounding himself with people who are hostile to Social Security, Medicare and Medicaid. We can start with his Vice President. Mike Pence is on record against all of these programs. He has advisors who have come out against them. And now it looks like, well, the announced nominee for Secretary of Health and Human Services, Tom Price, and the head of the Centers for Medicare and Medicaid programs, are both, along with Speaker of the House, Paul Ryan, both have had their eye… have wanted to end Medicare as we know it –all of them, I should say, have wanted to end Medicare as we know it for a very long time.

The transition team people he has looking at the Social Security Administration and they have an important part of Medicare. They are all privatized use, as well. And we don’t even have to imagine it, because Speaker Paul Ryan has already said that he wants to take up Medicare along with the Affordable Care Act, so-called Obamacare. And President Trump’s spokesperson has said that Trump will look at Paul Ryan’s alternatives, which is Washington-speak for, “Hey, I’m gonna go along with you, but I don’t want to say it because that’s not what I ran on, and that’s not what the American people want.”

KIM BROWN: Well, Nancy, I want you to paint a picture for us, because, as you mentioned, President-elect Trump and some of the appointments that he’s making are all individuals who are seemingly very hostile towards entitlement programs, and we’ve heard this sort of overarching theme consistently from Republicans about people being on the government dole, or on the government teat. But when we talk about privatizing these programs, Social Security, Medicare and Medicaid, what would the privatization of these systems look like for the 130 million Americans who rely on these benefits?

NANCY ALTMAN: An excellent question. Before I answer it, let me talk about some language embedded in your question, which has become common in Washington, but it should raise antennas: and that is that Medicare and Medicaid are earned benefits. They are benefits that people have paid for, have worked for, and have earned. Back in the 1990s, those who Paul Ryan and others, who’ve been against Social Security, have subtlety changed the language to call them “entitlements”, which sounds like government handouts, and talked about “Makers and Takers” and all of that sort of thing. These are programs that are earned benefits and Medicaid is a program for the lowest income and most vulnerable people around us.

What they would do, they would basically end all three programs. Social Security provides basic wage insurance when wages are lost in the event of death, disability, or old age. It’s been around for 80 years. It works extremely well. It’s extremely efficient. What they would do is, instead of money to pay for these guaranteed benefits – these are benefits you’re entitled to a percentage of your wages if you become disabled or died leaving dependents, or you reach old age – you’re entitled to a percentage of your benefits for the rest of your life. You cannot outlive Social Security, even if you live to 120.

What this privatizing means is, instead of setting the money aside and putting it in a trust fund in the government and having these guaranteed benefits, it would be invested in the stock market and you’d have the ups and downs of the stock market, all the risks, and if you run out of money, that’s your problem. You’re on your own. That’s Social Security.

Medicare right now, you sign up, you’ve got your card, you’ve earned it your whole working life. You go to a hospital, you go to your doctor, you present the card, and the costs are paid for. What this would do is the federal government would say, “Here’s some money, go out on the market and go talk to all these various insurance companies and figure out what you want.” Now, before Medicare was enacted, that’s what we had, except without the government subsidy. What seniors found and people with disabilities, where that most people couldn’t afford the insurance and when there was insurance, it was three or four times what other people paid. It is very expensive to cover these groups, and so forcing people just to go out to the market themselves is not going to work.

The third is Medicaid, and they talk about block-granting that. That now is partly paid by states and partly paid by the federal government. This would shift all the money to the states. The federal government has borrowing authority. Most states do not. So, this would mean that the states would be limited in how much they could spend, and the lowest income people would probably find that they were not able to afford the essential healthcare they need.

KIM BROWN: So, Nancy, this is not the first time that a Republican president has at least spoken or floated the idea of the privatization of Social Security, Medicare and Medicaid. Bush 43, President George W. Bush, made this a priority of his second term and in 2005 this is a campaign that he really embarked upon. And once he began to do that, that seemed to be a rallying point for congressional Democrats who stood uniformly against what President Bush was proposing at the time. And it sort of sent the Republicans in a bit of a tizzy and it drove his disapproval ratings upwards because most Americans don’t really want their Social Security privatised.

So, why did what President Bush try to do in his efforts to privatize these programs, why did it fail?

NANCY ALTMAN: Well, excellent question, and I think it’s going to be harder this time around. But let me answer why it failed. The American people are polarized about many issues but Social Security, Medicare and Medicaid, they are not. People will… poll after poll shows, whether you’re a Tea Partyer, or whether you’re a union member,in the household, whether you’re old, young, in the middle, that you understand that Social Security is incredibly important and more important than ever.

People who have… seniors who now are receiving Social Security understand how valuable it is. So when President Bush sought to privatize it, it was not like weapons of mass destruction in Iraq or something else. When the American people really had no way of knowing whether it was a good or bad idea, or whether it was accurate or not, this was one where everybody knows you’ve seen Social Security coming from your pay check, you know people who are receiving the benefits, and it’s a known commodity.

President Bush to his credit went around the country trying to sell his proposal, and everywhere he went he was met with opposition. And indeed, as you correctly said, even though there were Republicans control of the House and Senate, it never even got a vote, and really started to be the end of President Bush’s popularity.

The reason I say it’s different this time is, unlike President Bush, who went around and sold it, which is the right thing to do – we are a democracy –the Republicans Paul Ryan, Tom Price and perhaps Donald Trump, are going to try to do this in, kind of, the stealth of night. They’re talking about… first of all, they’re lying about it. They’re saying that it has to be done because of the Affordable Care Act. That is nonsense. The Affordable Care Act had very little to do with Medicare. And to the extent there were Medicare provisions, it actually increased the funding for Medicare, so quite the opposite of what’s being talked about, and they’re talking about. But the other thing they’re planning to do is use an arcane process known as reconciliation, which goes through a very fast, limited debate, no chance to filibuster, and so they can ram this thing through without the American people even knowing it’s happening.

This is why I’m so pleased that you are having this show and that you’ve invited me on, because they’re talking about perhaps as early as January and certainly within 2017. People who care about these programs have to know that this is going on.

KIM BROWN: So, Nancy, as you mentioned what the congressional Republicans and possibly, President-elect, Donald Trump plan to do is to make this a thing in the dead of night with limited public scrutiny available. What can the American people do to try to ensure that that doesn’t happen? Are there any recourse besides the obvious of reaching out to your public officials. I mean, how else can the American people pressure Washington to make sure that this is not rammed through, as you say?

NANCY ALTMAN: Again, wonderful question. Our organization, Social Security Works, is going to be working around the clock every day on this issue. We’ve already started. If people want to go to our website, which is, we have a petition about, Hands Off Medicare, and indeed, are going to be delivering it on December 7th, with Minority Leader Chuck Schumer in the Senate, Nancy Pelosi, Minority Leader of the House, Senator Sanders, Senator Warren, others. The Democrats are already on high alert about this.

So, if people go to our website, they can sign the petition, it will get delivered to Speaker Ryan and the President-elect Donald Trump, and it will… and they can also sign up for emails that will keep them posted on things that are going on. It’s very important to call your representatives and senators, it’s important to write letters to the editor, and it’s also important simply to talk to your friends and neighbors, urge them to go to Social Security Works or other websites to find out what is going on, and to join the fight. Because this is one where the American people are united. No one voted on these issues. They voted on many other issues including Obamacare, but not on Medicare, not on Medicaid, and not on Social Security. They should know that these are in jeopardy and people need to speak up.

KIM BROWN: We’ve been speaking with Nancy Altman. She is the founder and co-director of Social Security Works, and she’s also the author of The Battle for Social Security: From FDR’s Vision to Bush’s Gamble, and she’s co-author of Social Security Works: Why Social Security Isn’t Going Broke, and How Expanding It Will Help Us All. Nancy, we appreciate your expertise today. Thanks a lot.
NANCY ALTMAN: Thank you so much.

KIM BROWN: And thanks for watching The Real News Network.

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  1. The Trumpening

    This is a great issue for Democrats to hammer Trump on. Trump’s overall strategy statement on entitlements is that the problem is low-growth and not SS or Medicare themselves. The solution is to increase growth by overturning globalization and its growth-killing tendency to offshore high paying jobs to low pay countries by reversing the process, which should lead to high growth.

    Sometimes politicians known for one type of position are chosen for the cabinet with idea that they will use their accumulated political capital to do the exact opposite. Colin Powell as W’s SecState is the classic example. Instead of the Powell Doctrine in Iraq we go the exact opposite, with Powell furiously burning through his political capital to allow the Iraq debacle to occur.

    Trump’s chief strategist Steve Bannon has called for a 50 year TrumpenReich. If Bannon/Trump allow Paul Ryan to touch entitlements then Trump’s reign will collapse after the 2018 midterms where Democrats could get majorities in both Houses and launch impeachment hearings (at least in the House). Both SS and Medicare are very popular with the Trumpen-proletariat and these working class voters will turn on him on a dime if he touches these programs.

    Of course Paul Ryan and his GOPe cronies would love nothing more than to abort the TrumpenReich. While Breitbart may be shallow and not much more than a HuffPost for the right, one thing that makes visiting it useful is to see where Bannon’s mind is leaning. This summer Paul Ryan faced a primary challenge by Paul Nehlen who was heavily promoted by Breitbart. In the end Trump kinda endorsed Ryan for strategic reasons but there is no doubt that deep down Trump/Bannon detest Ryan.

    If globalization were to continue and the US were to be gutted of their middle class then the Ryan idea of killing America’s 1st world entitlements and replacing them by nearly 3rd world private schemes would make sense. On the other hand Trump’s 4% growth rate may take a year or two to achieve. In the meantime Trump will need to stall on any entitlement changes. If Trump is weak and lets Ryan have his way then that is Darwin’s way of saying the TrumpenReich was never going to happen. But something tells me Trump and Bannon are not stupid and they will string the GOPe along while they do everything to increase growth, then win a dominant victory in the 2018 mid-terms, and then execute a sort of Night of Long Knives on the establishment GOP!

    1. Damian

      Totally agree with your Trump / SS & Medicare assessment – Trump wont touch it.

      As to Ryan, he is a double agent in my view on a lot of subjects – the Illegal Immigration issue has been addressed for some time by Congressman Brian Babin of Texas and he has intentionally pushed him away and ignored him in the interest of promoting Cultural Marxism in concert with Obama rather than call him out – he has multiple other agenda mission(s) from the 1% against the citizens and was a Hillary supporter.

      1. John

        Trump is not only going to touch it
        he is going to take the lead in it’s “privatization” (destruction).

        His cabinet appointments are telling you that.
        Believe it.

        1. MyLessThanPrimeBeef

          Right now, the choices are 1. to believe it or 2. to not believe it.

          Gamblers may want to take bets. But all I can do is to monitor by reading this website daily, until something concrete comes along.

    2. collins

      This makes sense now and illustrates once again how the conventional pollsters missed the boat. When Trump as the nominee ironically said “I’m not there yet” regarding his opinion of Ryan, millions of people got the message – he was the true 3rd Party candidate that career politicians and crony capitalists on both sides of the aisle recognized as poison.

  2. Altandmain

    The left is on a 2 front war.

    The Democratic Establishment will vote for privatization of Social Security as well. The Clinton administration demonstrated this.

    The other front is the Republicans under Trump. If Trump is indeed what we think, a plutocrat pretending to be a right-wing populist, then he will, as the article notes, try to get Social Security eliminated in secret.

    1. Pat

      I’m a great believer that Price’s nomination hearing will determine how much the Democratic Party has gotten about what went just down. They need to lay down a clear position regarding Social Security AND all medical care in America – that these are rights and will be protected – and they need to stand clearly there is no privatization PERIOD. I realize that is a clear break with the neoliberal policies but it is a winner and they need to go there. If they don’t they are going to be a rump party for the foreseeable future.

      (I admit I have more faith that rank and file Republicans will kill any attempts at screwing up Medicare and Social Security, they I do about Democrats. Their leadership is that stupid, but the rest know those programs are deeply important to the people who have been making their lives miserable the last few years.)

      1. a different chris

        >I realize that is a clear break with the neoliberal policies but it is a winner

        “but”???? :)

        1. Pat

          Are you under the mistaken impression that neoliberal policy is to protect SS. Medicare, and Medicaid? The question is do they want to be small fish with less and less power or do they want to break a few oligarch hearts and win back voters. Fighting FOR the earned benefits and the right to healthcare without tolls is a winning strategy to gain back voters, but will piss off the wealthy donors they normally bend over backwards to please.

      2. Scott Frasier

        I wish I had some confidence in Democrats with regard to these programs, but I don’t. They seem to only defend them when they are in opposition.

        I am also dismayed by the nonsense that supposed defenders of Social Security spout, like the notion of a “trust fund”. This program is a social contract that is funded largely as a pay as you go program, and was designed as such from the beginning for many good reasons. Continuing to buy into the trust fund argument is what leads to arguments about the return on investment. There is no return on investment since nothing is invested and never has been. It is an income transfer program and it works.

        I’m sure the Trump people will attempt to privatize it because it will generate enormous fees for the money managers. The best way to defend it is to compare it with the worst images of Obamacare – crony financiers who force us to put our money into it.

        By fighting these ideas using property ownership rhetoric, the privatizers will be forced on the defensive. One strategy would be to propose that any privatization would make the programs voluntary and that past contributions be refunded because the promised benefits have been withdrawn. I’d like to see them fund current recipients without those payroll deductions, much less pay back all those who feel ripped off. That would either end the programs in a bang or make the opponents back off.

        1. Altandmain

          The Democrats don’t have a spine for defending public rights. Only a small number of principled people do amongst their ranks, but most Democrats don’t.

          Just wait. When it comes to bailing out Wall Street or voting for war, most will suddenly fiercely attack the left.

      3. Brad

        Please how can you say that the republicans will stand strong against privatization when it has been a dream of the far right for decades to get rid of these entitlements ,as they call them. When they use the term entitlements itself to put a bad connotation on the programs as if people are looking for a handout .When in fact the programs are a much needed retirement program , since the private sector doesn’t live up to it’s promise of taking care of it’s employees ,and has proved that fact over and over Welcome to the new corportacrcy

  3. BecauseTradition

    Privatizing Social Security would make it Social In-security. We doan need no boom-bust cycle wrt retirement benefits.

    But scam artists keep trying?

    Here a scam, there a scam
    everywhere a scam, scam.
    Ole McDonald lost his farm
    cause a bank he owed.

    Hint to Jim: Mankind is the measure of money, not vice versa.

  4. Msmolly

    I’m sure nobody here cares much about a lone senior citizen in Indiana, but for the record I have found NC deteriorating into an overall sarcastic and scornful “tone” over the past year that I find repellent. For example, the snarky asides posted along with links in the morning and at Lambert’s watercooler, and in derogatory and juvenile name-calling, such as “Clintoon” and (since Jerri-Lynn joined the site), “the Obamamometer.” I won’t read anything Jerri-Lynn writes now, and I’m probably missing good information hiding behind the snark. I respect Yves, and I haven’t seen her name calling.

    I am just one person who probably doesn’t matter, but I wonder if there are others–like me–who chose deliberately not to donate to NC during the last major fundraiser for exactly this reason? Are there others who are silently withholding support because they’re put off by the tone here? I come here for the sharp analysis and the insights; I don’t appreciate the negativity that seems pervasive in the posts and the comments. I did donate to the current fundraising because I abhor the McCarthyite smear from the WaPo. But I won’t become a regular supporter for now.

    Food for thought, perhaps…

    1. linda amick

      Cynicism is a legitimate response to the extreme bait and switch tactics we the people are enduring everyday by government leadership figures.
      Dispassionate responses suppose the authors to have no emotional responses to these dire times we find ourselves in.

    2. pretzelattack

      i think “obamamometer” captures his finger to the wind posture quite well. i could do without “clintoon”, i guess. it’s hard to be consistently positive about sellouts like obama and clinton. part of the value of the sharp analysis lies in stripping the hypocrisy of elite democrats bare.

      1. Msmolly

        You don’t have to be consistently positive to avoid name calling for the most part. If Obama is referenced to highlight “his finger to the wind” position on an issue (and what politician doesn’t have a finger to the wind?), then use “Obamamometer” if it makes you happy. Otherwise it is a gratuitous slur that adds nothing to the post.

        1. BecauseTradition

          Well, what can you expect from “deplorables”?

          But otoh, I find Trump’s call for peace with the rest of the world an implicit slap at Obama and Hillary that no name calling can match. Bravo Donald!

        2. pretzelattack

          obama stands out; he has both hands and his toes in the wind. so it’s an apt description, and very efficient if that is the aspect of his behavior you want to focus on. it would not be a fair characterization of his very firm and consistent support of the ruinous trade treaties.

        3. John Wright

          The “Obamamometer” reference came from Jerri-Lynn’s personal experience with Obama at Harvard Law School.

          Obama would have the last word by closing classes with some platitudes that no one could object to.

          This was early evidence of empty speechifying by Obama.

          I believe it is more descriptive in a longer form “empty-suit who gives heartfelt speeches” after seeing his actions in Obamacare (no single payer), overseas drones, surveillance, shopping possible grand bargain in SS, massive costly rescue of the financial industry with no prosecutions, “most transparent administration” and Libya/Syria.

          The Iran deal is a positive with me as is the somewhat opening of Cuba (but the embargo is still in place)

          Even Obama’s recent statement about Edward Snowden gives more evidence of Obamas calculating and cynical behavior.

          Obama: ” I can’t pardon somebody who hasn’t gone before a court and presented themselves, so that’s not something that I would comment on at this point. I think that Mr. Snowden raised some legitimate concerns. How he did it was something that did not follow the procedures and practices of our intelligence community.”

          Obama MUST know that Richard Nixon was pardoned by Gerald Ford before he was indicted, so this is very close to an outright lie.

          At the DNC, Obama illustrated ( this by saying:

          “And that’s why I can say with confidence there has never been a man or a woman more qualified than Hillary Clinton to serve as President of the United States of America.”

          In 200+ years, with successful candidates such as Washington, Jefferson, Madison, Lincoln, FDR, Eisenhower, LBJ and perhaps a number of unsuccessful but qualified candidates (Stevenson, Debs, McGovern), there is no one ever more qualified than HRC?..

          I believe “Obamamometer” is not a slur, but is simply imprecise in that it requires clarification.

          Is “cynical empty suit” a fair description of Obama?

          1. Jerri-Lynn Scofield Post author

            Exactly! Maybe not clarification exactly, but certainly context. After looking at other comments, I see that some readers missed my original post in which I explained how the Obamamometer came to be known by that name. Normally, when I use the term, I include a link to that earlier post, so that interested readers can see that far from being a mere snarky play on our current President’s name, the term aptly describes behavior I first observed at HLS back in the late 1980s and which continues to this day. I have added a link to that original post in the post above– click on Obamamometer to read it.

            I don’t think it’s damning per se to coin a word from a name: think spoonerism or malapropism– each of which fills a gap. I can only hope that the word Obamamometer has similar legs. (And for you language pedants out there, I am aware that only one of those two widely-used literary terms is derived from the name of a real person, the other from a character in a play. Doesn’t really matter, I believe, whether the name used is that of a real or fictional person in creating a word to describe specific behavior.)

            1. Lambert Strether


              Adding, the Obamamometer piece is important and readers should read it they haven’t. Obama’s current “victory lap” (as it were) is completelyl consistent with his behavior at Harvard Law; emitting unchallengeable because vacuous bromides at the end of class.

              1. Jerri-Lynn Scofield Post author

                I didn’t know the word bowdlerize was derived from someone’s name– thanks for making me look that up, Lambert. And being so memorialized is a fitting posthumous reward for publishing expurgated Shakespeare.

        4. MyLessThanPrimeBeef

          Msmolly, I respect your comment. You say you’re a senior. I believe I’m young at heart, but that’s another story, as my 90+ year old tea teacher always says, when asked how old, “I’m 39.”

          In any case, I’ve noticed over the years and decades, of us becoming less informal…in how we dress, how act and how we write…more tolerant of more severe imperfections, along with people living longer, and seemingly looking young – 60 is the new 40, or 50 is the new 18 (and 40 is the new 13???).

          What to do?

          If I see a drop of, say squid ink, into a bowl of clear water, and if I like to keep it as clear as possible, with that squid ink impossible to remove (for a Luddite like me, perhaps not so hard for some sharp technophile), I would try adding more clear water to dilute it. I can’t just sit back, expecting the mixed solution to clear up by itself. I have to become involved with that bowl of squid ink-water solution.

      2. pricklyone

        Finger to the wind implies direction, though, rather than temperature.
        “Windsock” gets more to the heart of it than Obamamometer.
        (Not to take away from Lambert’s coinage)
        On second thought, I was thinking thermometer, when I should have been thinking Anemometer.
        More clever than I was giving credit for. Bowing to the master!
        Carry On.

    3. Pat

      I’m very derogatory to both Clinton and Obama. My go to sarcastic position for Clinton is “HER”, since I thought so little of “I’m with HER”. It was so clear that none of this was about policy or what was best for the American public but about Clinton herself. I pick and choose when to become sarcastic regarding them. For instance I believe that Obamameter is an appropriate name for a clear Obama trait and can be used when he has read the tea leaves and steps in and says something relatively meaningless as far as actual action is concerned but makes him look caring or profound without changing anything.
      My reason for explaining this is that sometimes the choices are not just unthinking commentary but descriptive of some action or position of the person being referred to sarcastically. I’m sorry that you can not see that or read past that to get what does include clear and important information.

      Just out of curiosity, do you also object to people who might say the following:

      As Trump fills more positions in his administration one could wonder whether Obama will have to cede his title as Goldman Sachs’ favorite Puppet President as well as the White House to Trump on January 20th.

      IOW is sarcasm acceptable as long as it is not a name adaptation?

      1. Msmolly

        No need to put ME down to make your point, Pat. I can see past the sarcasm just fine, and I agree with you — mostly. There are some sites I visit knowing there will be put-downs and sarcasm and worse, some of it quite funny. But I tend to come to Naked Capitalism for the sharp analysis (and frankly, for the education in economic matters that I lack). The sarcasm to me is off-putting here. Others are free to disagree.

        It is not the name adaptation that has bothered me here for awhile, that is an example. It is a pervasive negative tone of some of the posts and some of the accompanying commentary that seems unnecessary to further the argument being made. And my reason for the comment is that I think it is more valuable to say something instead of just taking my small contribution and going away, even if my opinion doesn’t mean much in the overall scheme of things.

      2. Lurker

        I think it is. Sarcasm can be very useful and doesn’t have to involve making fun of someone’s name. For example, I very much liked the term Cat-food Commission to refer to Simpson-Bowles.

        1. sd

          Cat Food Commission is an accurate descriptor. Clintoon and Obamameter not so much.

          There was a good editorial recently about the danger of making Trump into Berlusconi. I think it applies generally to all public figures. Turning them into caricatures ignores the very real work policies they eschew.

          Just my 2 cents.

      3. Billy-bob

        Obomber, Obungler, Obankster…I’ve got a bundle of em. Not to mention all the crude ones I won’t share here. Sure it’s juvenile, but allows me to vent frustration and anger at these perpetual a-holes who are screwing us sideways at every opportunity.

        That said, I don’t mind a little bit of strategically placed name calling to break up the tension and intensity of a written piece and maybe even inject a little light humor. But I wouldn’t want to see it throughout…that’d be too Foxian.

    4. craazyboy

      Yes, I think we need to stay focused on the Evil Putin, Russian spies and fake Russian propaganda. After all, the MSM knows best, and Hillary is the legendary leader of utmost ability, virtue, and impressive civil service track record[Corrected (TM)) that can save us. Not that Obama hasn’t been a Great Maker of America the past eight years. It’s just that Hillary would have been even better.

      There is absolutely no reason to succumb to snarkiness just because of some perceived and totally imaginary imperfections in the System. Some imperfection is perfectly normal, as is everyone imagining and then perceiving the exact same things – which happens to be what makes these stupid childish snarky comments recognizable as snark by so many others. It may sound like a conundrum, but snark precedes group Wrongthink. If too much snark is foisted upon the world, next thing you know everyone begins to believe a bunch of totally made up imaginary BS and this clogs up the brain’s ability to digest GMO corn properly and shit it out the mouth. That is no way to consume food for thought. We must be mindful of what we feed our brains. Stick with the real news. Stay Very Serious. It’s certifiably eatable and non fattening to boot.

    5. flora

      ” I wonder if there are others–like me–who chose deliberately not to donate to NC during the last major fundraiser for exactly this reason? “

      Maybe. The great thing about NC, imo, is that the opinions and comments aren’t up for sale. my 2¢.

      1. tegnost

        For me I say language is power and try not to give a name but distinctly imply directionally and find that noting unmistakable policy positions is the heartiest blow one can land. No one can then hide behind a perceived slight or claim some kind of unfair characterization, as pat says Her, for instance, she chose that name for herself after the demise of many reams of post it notes…

        1. flora

          The Economist has an interesting, interactive graph of Prez election results by county starting in 1952. (Click on the bar dot above the map to change year displayed.)

          Interesting, to me, that Dems in ’52 and in ’80 it looked like a southern regional party. Thanks to Reaganomics, imo, Dems again began to move out into the whole country in ’88, and especially in ’92 with strength in the industrial Midwest (now known as the ‘Rust Belt’). Bill Clinton ran a a modernized New Deal type Dem but once elected enacted Reaganomic economic programs (neoliberal programs) and the Dem swath began to shrink. In ’08, starting from a smaller national base and again talking New Deal economics, Obama was elected, thanks in part to the industrial Midwest. He, too, once elected enacted Reaganomic economic policies where he could, and again the already reduced Dem footprints shrank even more, finally ceding red the industrial Midwest counties to the GOP in 2016.
          This has been a politically nerve wracking year. Dems who do not want more Reaganomics and were trying to tell the Dem estab it was a losing proposition were offered another Reaganomic Dem candidate in HRC. We were called “deplorable”, “stupid”, “racist”, and “idiot” by that campaign even when the electoral map shows Reaganomics are a losing proposition for the Dems. The frustrations with the Dem estab boiled over into intemperate language.

          1. flora

            adding: to be clear, “thanks to Reaganomics” means “thanks to disgust with Reaganomics by large swaths of the electorate”.

            1. flora

              adding: (oh dear. I do go on.)

              If the Dem party is by nature a regional party whose function is to correct the excesses of capitalism when necessary, that would be fine. I’d be OK with that. Unfortunately, for the past 25 years the Dem party has exaggerated the excesses of capitalism. It has made the excesses worse while hiding behind a shield wall of the weak and disenfranchised. That’s despicable, imo.

    6. Jeremy Grimm

      As I recall Yves expressed strong concerns about a deterioration in the quality of comments at NakedCapitalism. I’m hoping the end of the election cycle and some more definite indications of what a Trump presidency will mean will reverse this deterioration.

      I have mixed feelings about your name-calling concerns. I do find some of them amusing. However I also find myself puzzling over what some comments are saying as I attempt to parse the sometimes obscure names and the growing number of acronyms.

    7. PQS

      +1. While I didn’t withhold my support, I did mention in my email that I was disappointed in the election coverage and the constant Hillary bashing which was, IMO, over the top and catered to some pretty low conspiracy theories. (Even my Trump voting SIL thought the harping on her health was dumb.)

      I’m all for speaking truth to power, but if, as Lambert says, the way to reach regular voters is NOT by insulting or denigrating them, why isn’t this an applicable principle for those IN power? Basic respect seems like a good starting point for sharp criticism.

    8. Deloss Brown

      I agree with you, Msmolly. I doubt that the silly remarks on NC got Trump elected, but they have been difficult to bear. The cries of “Yes, but look what Clinton did! Look what Obama did!” are the stuff that the Trump campaign was made of. If you watch one his supporters on CNN–yes, I do watch CNN–their method of rebuttal is the same as what we read here: “Look what Clinton did! Look what Obama did!”

      However I suspect these arguments will become less popular (at least on NC) as Trump and a thoroughly Republican government make it clear just how insane, criminal and destructive politicians in power can be.

      I commented a couple of weeks ago that the Trump election had made everything NC was working for irrelevant.

      1. tegnost

        Sorry DeLoss, the candidate you supported was the problem, NC wasn’t working for Her and to imply as such is irrelevant. Also many negative and poorly argued points came from you and yours, sorry if you can dish it out, but not take it…the scolding, the handwringing, the pearl clutching, but never a cogent reason to support the candidate who called people deplorable.

    9. Axel Matthey

      I certainly agree. The anti-left cynism and barrage of false equivalencies are more and more off-putting. Pointing out the many faults of third-way democrats is great and one of the reasons I came here : the left needs to refocus on class-struggle. But, if being aware of those faults means going all in on “A plague o’ both your houses!” mentality, that’s ugly.

      Let me quote another NC reader (I save your post without your username, sorry) :

      “We could have had a long slow ascent with the democrat. But nope, not until the perfect, charismatic candidate who by the sheer force of their purity, transcend the vulgarity of politics as a beatific leader comes along we must meekly surrender to our fates. Better for progressive to hope for the whole thing to collapse so all those disrespected, forgotten souls who wouldn’t condescend to dirty their hands to leverage a political bar an inch, assuming they could recognize a pressure point from a bag of potatoes , will rise up in righteous indignation and forcefully overthrow their oppressors.” It’s sad.

      1. pretzelattack

        i don’t agree that we would have had a long, slow ascent with clinton. i just think she represented a greater danger of nuclear war, and otherwise they both represent very bad policies; she may have been more effective at carrying them out under guise of being vaguely, somehow, leftist.

    10. Lurker

      I’ve always been turned off by the name-calling. Making fun of someone’s name or turning it into a slur is so childish. Some writers mistake the use of $hillary or tRump for cogent criticism. It is counterproductive too- some readers/listeners will just tune out and miss whatever valid discussion follows. We need to delineate and criticize proposals and policies and referring to the Obamamometer (however apt) doesn’t do this.

      But NC is far from the worst offender.

    11. different clue


      If you decline to read these posts and threads any further because you don’t like the sarcasm and namecalling, at the risk of losing out on good information, the loss is yours and yours alone.

      At some point, the backed-up overflowing DemParty toilet covers the bathroom floor with so many Clinturds, Hillarrhoids and Obamafeces that one can no longer deny the reality of the smell and one is reduced to naming things by their right names. Even if it is impolite.

    12. oh

      I’m sorry to say this but you seem to be nitpicking on name calling instead of appreciating or refuting or even debating the comments/issues from the well informed readers here. You may not know it but it’s usually a diversionary tactic to take issue with language to try and discredit the person(s) making the comment(s). I may not always agree with everything the reader write here but I don’t pick on them on what may be a minor point.

      1. Lambert Strether

        Without commenting on the merits of the thread, that’s true. It’s also true (as we would accept) that the use of language is an excellent indicator of whether an argument is made in good or bad faith, as well as being a good index to a person’s style of thought (and, more importantly, what they cannot think about).

        Life is complicated!

  5. Jim Haygood

    “Gutting” Social Security is a radical misframing of a necessary response to the approaching exhaustion of the Trust Fund in 2034. That the Trust Fund is even ON a path to exhaustion, instead of fully funded, is a symbol of the extreme mismanagement engendered by 33 years of political deadlock, since “Sir Alan” Greenspan KBE last tampered with SocSec in 1983.

    An analogy: is Ted Eliopoulos, who wants to cut Calpers’ assumed return from 7.5% to 6.0%, trying to “gut” the pensions of California public employees? Of course not. He is trying to save their pensions, because Calpers is 68% funded, cash-flow negative, and headed for complete exhaustion of its investment capital over the next two or three decades.

    Public pension funds such as Calpers can either cut benefits or increase employer & employee contributions. They can’t increase investment returns, because they’re already heavily invested in equities. Dimson, Marsh and Staunton’s Triumph of the Optimists demonstrates with a century of empirical evidence that stocks have outperformed bonds in every country on the planet for which records are available.

    Unlike Calpers, Social Secuity DOES have the option of increasing investment returns, since it’s currently holding 100% Treasuries with a projected return of about two (2) percent. You don’t need a PhD Econ, or even a high school diploma, to fix this self-imposed ball and chain.

    But financial Luddites like Nancy Altman with their virgin-birth theory of Social Security (it was created perfectly-formed by Saint Frank in 1935) stick to their Third Rail fist-shaking at those who would rather increase the system’s returns than punish workers with reduced benefits or heavier FICA taxes.

    Head in the sand don’t cut it, Nancy. Participate constructively in the discussion, or be excluded.

      1. Jim Haygood

        Nothing is guaranteed. But over the multi-generational planning horizon of a perpetual program such as Soc Sec, the probability of equity returns exceeding bond returns is over 99 percent.

        This isn’t just personal opinion. Every pension system in the country, bar Social Security — thousands and thousands of them — invests in equities.

        There’s a reason for that. Modern Portfolio Theory was invented in the USA between the 1950s and the 1970s, and is universally accepted.

        1. BecauseTradition

          So you want the Federal Government to buy equities and thereby pick winners and losers? There’s a word for that? Begins with f?

          1. MyLessThanPrimeBeef

            Let’s privatize the Pentagon, and let Social Security invest in it.

            The Pentagon Inc. is very likely to outperform the S&P 500.

        2. BecauseTradition

          Besides, there’s no need to pick and buy equities since the Federal Government can simply tax (by fiat creation, if desired) the entire economy and thereby automatically pick ALL the winners.

          But that’s not welfare for the rich …

        3. pricklyone

          Because SS is intended to survive the failure of private pension systems, and the fickle financial markets? Only fails if USG fails, (or governance fails).
          Which is what we are watching now, IMVHO.

        4. Scott Frasier

          JH, the government could invest some funds for better return, but that is not possible without getting more funds. The “trust fund” is a joke and a pittance. It was meant to bridge the gap over the boomer generation. The tax cutters have used it to cut income taxes and hide worse dedicits.

          More broadly, I notice that those pension funds are not fully funded either despite using Modern Portfolio Theory, so I see no reason to believe this will solve the problem. The nub of the issue is that Social Security was never built as a pension fund or early recipients would not have received benefits until they had contributed for a full lifetime of working. It was and is largely an earned income transfer program from the young to the old.

          Finally, it is not clear that trying to run Social Security as an investment fund will even be possible. The scale of the capital needed to generate the necessary cash benefits would be so large that the return on capital would decline. There is not free lunch from all this financial engineering. The economy still only generates certain profits and the valauation of those profits is not going to change that much unless the return moves in the opposite direction.

          So you have two problems: 1) getting more incoming contributions to have a surplus to invest; 2) finding enough good investments to move the return needle. I doubt either of those a feasible.

          1. cnchal

            Great comment. As Yves reminds us occasionally , the big publicly traded companies are in a slow liquidation mode.

    1. John

      Please explain then where the Social Security surplus went since 1983?

      It’s my understanding the 1983 Greenspan law that Reagan signed
      doubled what people paid into Social Security in order to fund
      the current retirees and to fund the baby boomers’ retirement in advance.

      1. John Zelnicker

        @John – That was the propaganda, but the real reason was to create a surplus so that the consolidated federal budget would show a smaller deficit than otherwise. Reagan had instituted Laffer’s supply side tax cuts with the promise that they would fuel growth in the economy, increasing revenue and reducing the deficit. It didn’t (and never does) work that way, so he and Greenspan hiked FICA to create the Social Security trust fund surplus. Thus, the consolidated federal budget did not appear to have as large a deficit as it would have without the SS surplus.

        The trust fund is still there invested in Treasury securities, it’s just projected to shrink as benefits paid exceed revenue.

        @Jim Haygood – Current law requires the Social Security Trust Fund be invested in special Treasury securities that are not traded on any market.

        And, Jim, you have been around here long enough to know that the trust fund is just an accounting gimmick and the federal government can always pay the promised benefits by marking up beneficiaries bank accounts with keystrokes, the way the do now.

        1. John

          No I understand what they did with it.
          What I am saying is that we need to educate the people
          that the elites have stolen it from us for 33 years and we
          want it back.

      2. craazyboy

        “It’s my understanding the 1983 Greenspan law that Reagan signed
        doubled what people paid into Social Security in order to fund
        the current retirees and to fund the baby boomers’ retirement in advance.”

        Very true. It did happen, I was there and my paycheck did that. Then again when Bush 1 “saved” Medicare.

        Also, some people thing the term “fund” is just some imaginary word that uneducated money people made up to confuse us fiat aware people. So in that case, you may substitute the term “social contract” and take money completely out of the picture.

        But using the term “fund” is ok in my mind, because it doesn’t hurt to have a unit of measure in any kind of contract. Like we wouldn’t want people to “purchase” more vastly overpriced defense and healthcare than they’ve been able to produce in a lifetime working at normal people wages in other productive segments of the economy. That would be like wasting a huge amount of effort to buy some vastly overpriced nearly useless stuff!

    2. Katharine

      Regarding constructive participation, why do I see nothing here about lifting the cap on taxable earnings, or about providing universal single-payer healthcare? I don’t buy your “necessary” response, Jim. It is one alternative. I see no evidence that it is the only or the best alternative.

      1. Jim Haygood

        Didn’t mean “necessary” to imply “only,” Katharine.

        Rather that with the Trust Fund projected to reach zero in 2034, some mix of actions is necessary to avoid a 25% cut in benefits.

        1. Pat

          See my problem with this subject is that when the usual suspects bring it up, neither of Katharine’s solutions are on the table. The “solutions” that are mentioned almost invariably lead to a larger percentage benefit cut than just leaving things entirely alone. If the choice is between a 35 or 40% cut and a 25% cut, I think we all know what people would take. And we all know privatization is just about soaking the beneficiaries.

          1. sharonsj

            The average Social Security is $14,000 a year, meaning that half the recipients get less (mine is $12,000 a year). If you think I will take a 25% cut, you are wrong. I will be reaching for my rifle first, but it won’t be to commit suicide. And there could be 30 million more like me.

            1. Pat

              I am not saying you should. In fact I am of the opinion that not only should everything needed to insure there are no benefit cuts ever be done, but that benefits should be expanded and actually meet the needs of the beneficiaries so that no one has to pick between heat and food. What I am saying is that, similar to education reform, those most determined to fix Social Security would make it worse. Leaving even less for those who earned those benefits than just doing nothing. And therefore nothing is preferable to the current commonly suggested reforms from conservative and neoliberal hacks. Not that it is the best answer or route to a better guaranteed retirement program.

              But honestly before anyone sees SS cuts they are going to screw up your medical coverage. Keep your gun handy, that is likely to hit before the decade is out and hit big if Ryan and Price and the neoliberal have their way. (IMO noone will see Medicare coverage that was the norm ten years ago again including the over 55 cutout from the Republican platform.)

              1. JTMcPhee

                The question is, as in any war, “Where and who’s the enemy?” and then “where to direct one’s fire…” It’s like Froman and the Trade thingie — a faceless bureaucracy with enormous power, doing horrendous things mostly out of sight except to a diligent few who have the time and energy and knowledge to track the screwing away– and those screwers, in their little offices and cubicles, protecting their jobs by doing what they are told, not knowing things that it’s important not to know to keep their jobs, bent over keyboards and paper markups of text of “agreements” that are just corporatists making up whole new political orders and legal structures to suit themselves. Where is the point of aim? Where’s Headquarters, for possible decapitation? The Beast is a slime mold, interlinked into a single organism but distributed, thin on the ground… We with our individual sidearms and shoulder-fired weapons are so much more likely to get into shoot-em-ups with our neighbors and family members and rage-makers on the highway…

    3. BecauseTradition

      The US is monetarily sovereign. If you want higher Social Security benefits then call your Congressman and demand them.

      1. Jim Haygood

        Venezuela is monetarily sovereign too.

        Soon every Venezuelan will be a bolivar millionaire, if they can find a big enough wheelbarrow to truck their stash home.

        1. BecauseTradition

          The demand for US fiat is artificially low in that only depository institutions may use it except for unsafe, inconvenient physical fiat, coins and bills.

          How about we fix that and then more fiat can be created without price inflation risk?

        2. craazyboy

          Yes, but we have all those unemployed robots. Capacity utilization must be way down. The Fed is looking for a way to get inflation up, and free money to banks and rich people seems to take waaaay too long to work – tho it must work eventually, otherwise they wouldn’t have tried it this long? But maybe the tax cuts will help while the Fed noodles out a way to get the rest of us to demand capacity utilization.

          Then, if unemployed humanoid Americans can’t find work, they can always get a job being doctors and nurses. The industry could use the help.

          Economics is easy if you just stick to the math.

        3. BecauseTradition

          Also, Venezuela apparently made the mistake of becoming dependent on imports that it bought with a foreign currency, the US dollar, in which it is NOT monetarily sovereign.

          1. skippy

            Are you trying to say trade proceeds monetary factors…..

            Disheveled…. good grief you’ll be labeled a heretic…

        4. BecauseTradition

          Soon every Venezuelan will be a bolivar millionaire, Jim H.

          Debt-free millionaires since debt is owed in nominal, not real terms.

          But there’s a better way to purge unjustly created debt – eliminate privileges for depository institutions and counter the resulting deflation with equal fiat distributions to all adult citizens. Steve Keen has suggested something similar in his “A Modern Debt Jubilee”.

          A side benefit would be to greatly reduce relative* wealth inequality – at least wrt to account balances.

          *Suppose A has $1 and B has $1,000,000. Then B has 1,000,000 times more dollars than A. Now give each $10,000. A now has $10,001 and B has $1,010,000. B now has only ~100 times as many dollars as A – a 10,000 fold reduction in relative terms.

        5. Sy Krass

          It’s because their debts are denominated in dollars. You solve this by printing money. Plain and simple.

    4. heresy101

      Jim, your comments are usually on the mark, but investing in stocks makes me think you are from CO, WA, or CA and imbibing in the good stuff. Stocks are a guaranteed way to break SS. The MMT responses to just take it out of the budget could work but you forget that Congress works for the 1%.

      There is a way to kill two birds with one stone and I call it “pay yourself twice”. Many people lost their homes to the parasitic banks in 2008 because they refused to restructure their loans.
      1. The way to make SS solvent is to mandate (or kill) the Federal Reserve to loan SS $7 trillion for 60 years (about the lifetime of an individual)at 0.5% . They loaned/gave the banks at least that much in 2008. Supposedly, there is ~$3 trillion in the SS “lock box” (at least Al Gore told us that). The total of the two would be about $10 trillion, which is about the current value of single family homes.
      2. Freddie MAC would be preserved and use the $10 trillion to buy single family mortgages at 5% to provide a fixed income stream that is not subject to the grubby hands of the politicians. When 2008 deja vu occurs again, all the mortgages can be picked up to bring the total to $10 trillion, which would provide an income stream of $1.6 trillion per year after paying back the 60 year loan. I’d even be willing to refinance my mortgage to a higher rate if I knew that I’d get the money in my old age AND it wouldn’t go to the 1%.
      3. Annual SS taxes would be $1.1 trillion ($45K x 165M x 15.3%), even w/o raising the cap on income.
      4. A annual income stream of $2.7 trillion would provide an average annual SS income of $2,257 vs the $1,329 currently received. That amount would be sustainable and not subject to cuts by the politicians as well as being about a 50-60% increase in benefits.
      Work out the math for yourself.

      As for investing in the stock market, it would be/is wrong for retirement funds to do that. They should use the Warren Buffet strategy and BUY companies – he owns a couple of railroads and two electric companies among others. Retirement funds could buy all the heart of the economy – railroad, communications, trucking, utilities, large food processors, etc (parts of the economy with small risk and are required). Once purchased, the control of the company would be turned over to the workers (49% workers, 2% retirement funds, 49% other investors). The management would be limited to 5x the median income (~$250K) and outsourcing would become a thing of the past. Dividends would be set at 7% unless capex was required for expansion or rebuilding. No games with stock prices, rewards to executives, and other ripoffs. Retirement plans have about $15 trillion (not including IRAs), so a significant portion of the economy could be PURCHASED and put under control of the workers.

      1. Bryce

        From the perspective of our government, these really aren’t retirement funds since SS is run perpetually (or at least that is the plan). I get it from an individual’s perspective that retirement funds shouldn’t be stacked with equities due to the volatility and risk. However, the government can own more equities because they don’t need to sell them to fund their retirement like an individual does. If there is 3 trillion in a lock box, I wish they would have thrown into equities starting in the early 80’s :)

        The problem is that if the government bought stocks now, long-term returns are expected to be less than 2% over the coming dozen years. However, it would have been wise to buy stocks again in 2008-2009 when expected future returns were in the double digits. We could also use the government to only invest in SS funds when future returns are expected to be in the double digits. That seems like it would be a wise use of funds while having other benefits. It would help reduce volatility in stocks and fire sales during liquidation events. Think if SS bought even corporate bonds during the Great Recession and how much money would have been made. I do not want our government buying companies outright, that sounds like it would lead to nothing but trouble. However, I want our government to manage the funds so Wall Street doesn’t siphon off our money. Even then how do we determine how SS should vote on shareholder issues and would this lead to unintended consequences?

        I could also see SS investing more heavily into long duration government bonds Returns would be much higher while still being less risky than the stock market. If SS would have been buying long duration bonds over the last 35 years, solvency talks wouldn’t even be happening. Your idea looks like it would lead to SS having way too much exposure to real estate. It wouldn’t be wise to have all your retirement funds in real estate, would it? Let’s say SS bought 10 trillion worth of single-family home loans starting at the wrong time like 2005. How much would SS have lost from 2006-2012 when housing prices tanked? I know this is an extreme example, but so is having all of our SS funds in housing.

        Our government already provides a massive tax subsidy through deducting mortgage interest. Why not just end that subsidy since it benefits the owners of capital and distorts the housing market? By cutting this subsidy it would make home prices more affordable too since housing values would drop (that is the positive spin :)). There would be a lot of pain in the housing market, but it would lead to true price discovery without our meddling government getting in the way. I am guessing if we weren’t subsidizing homes we wouldn’t have built McMansions across the country because they would have been more expensive. Bigger homes mean less efficiency overall too since the same amount of people are living in these bigger homes. So how much did subsidizing hurt us? We used more resources, polluted more carbon, less efficient, etc. We could also cut taxes on income earned from labor since we were no longer subsidizing home ownership and it would be much more beneficial in the long run. We could also end the cap on SS income and solvency wouldn’t be an issue. I can think of much easier solutions with less risk than throwing all our SS funds in the housing market while getting similar returns.

  6. mad as hell.

    There is a lot more traffic here then there used to be. New names every day and a lot more posts. I don’t read all them anymore like I used to. Got to be almost a full time job monitoring the comments. Well that’s growth and like everything else time will tell. I will say that I am proud to be a daily reader of a Russian inspired propagandist rag sheet. Though this does have the potential of getting REAL ugly! The jokes could turn to gasps especially as we all get ready to embark on Trumpamania.

    1. tegnost

      It’s important for posters to not allow themselves to be drawn into acrimonious tirades, the easiest way to ruin the place is to turn it into an invective hurling madhouse. I have had the “Reply” option taken away and think it’s a strong hint that you’ve crossed the line. Keep it on point, less is more, let someone else devalue their own stance, I know I’m not always successful in that regard….

  7. nodlc

    I have to disagree with Ms. Altman. She said that no one voted for this.

    People most certainly DID vote for the privatization of Medicare. It’s all there in the 2016 GOP platform:
    Go to

    and click on the link:

    Medicare’s long-term debt is in the trillions, and it is funded by a workforce that is shrinking relative to the size of future beneficiaries. Obamacare worsened the situation — and imperiled seniors — by imposing hundreds of billions of dollars in cuts to Medicare providers to pay for its new spending. When a vital program is so clearly headed for a train wreck, it’s time to put it on a more secure track. That is why we propose these reforms: Impose no changes for persons 55 or older. Give others the option of traditional Medicare or transition to a premium-support model designed to strengthen patient choice, promote cost-saving competition among providers, and better guard against the fraud and abuse that now diverts billions of dollars every year away from patient care. Guarantee to every enrollee an income-adjusted contribution toward a plan of their choice, with catastrophic protection. Without disadvantaging present retirees or those nearing retirement, set a more realistic age for eligibility in light of today’s longer life span”

    It goes on to describe the GOP plan for Medicaid.

    The GOP platform IS what the Trump voters voted for.

    1. PQS

      You assume Trump voters are aware of this. The ones I’ve spoken to aren’t. And in fact when focus groups are conducted that clearly lay out Paul Ryan’s plans, people don’t believe them- too radical and cartoonishly evil. Can’t find a link right now…

      The problem is that regular people don’t follow this stuff closely and are distracted by non issues. The corporate media is full of wealthy people who will never need SS or Medicare so the don’t cover it, either. And let’s face it, how many living Americans remember life before either program?

      1. nodlc

        How many questions were there during the debates about Medicare?

        How many times did the press ask the candidates what their positions were?

        But that’s not the issue. Ms. Altman claimed no one voted for this. Yes, they did. They may not have known it, but that’s what they voted for.

      2. pricklyone

        Not disagreeing with you, just scratching my head, here.

        How anyone is not aware of this, after 8 years of Ryan, even the so-called MSM has not been able to avoid his obvious preferences. Everywhere I go, doctor’s offices, Moose lodges, tire stores, etc. has cable news on non-stop. For all the many faults of Fox, and the like, this was covered extensively last election cycle, even if the framing was ridiculous.
        Just the network coverage was enough to send me scrambling for more detail.
        I have friends who never watch anything but Netflix, and they are aware of this, through contact with their children, associates,etc.[And Me :) ]

    2. BecauseTradition

      and it is funded by a workforce that is shrinking relative to the size of future beneficiaries.

      So what? When robots can do almost all necessary work does that mean we can’t afford healthcare? Or does it mean that we can afford MORE healthcare and everything else too?

    3. pricklyone

      ” Impose no changes for persons 55 or older. Give others the option of …”

      This is/and was the most blatant use of deliberate ‘divide and conquer’ strategy ever devised.
      Left/Right, conservative vs. liberal (yeah, I know), wasn’t enough, add in Old v. Young to the mix.
      Consolidate the media, scream out of both sides of your mouth, until almost no one has any idea what’s going on, and then offer the bogus “fix”.
      I love the ‘choice of traditional medicare or…” I think they left out a clause. The one where they said ‘with a much lower benefit”. Not traditional Medicare at all.

  8. Inthebeltway

    ACA then Medicaid then Medicare in terms of risks. Those three can be done via reconciliation. Byrd rule prevents social security cuts in reconciliation.

    Medicare changes will be more about move to MA, not premium support. That’s a big lift on party line vote- hatch already signaled that.

  9. tom

    My predicted scenario:

    pass the tax cuts, turning a $500 billion deficit into a $1 trillion deficit

    increase defense spending, add another $50-100 billion

    “cry wolf” and go for the social spending

  10. jfleni

    The “Banana Republicans” are taking a very big chance; it won’t be only the income limits that could be raised for the rich (the tiny increases that have already happened are only crystal clear signals of the trend), but open season on the whole idea of gross income inequality for SSI & Medicare recipientes.

    A medicare beneficiary can get a whole body ultrasonic scan, but not a broken tooth fixed, or a despately needed hearing aid, both senseless and stupid policies.

    SSI benefits are widely recognized to be severely inadequate, so a push by the now
    dormant Sanders/Warren wing of the “dim-ocrats” could be a very unpleasant surprise for the “Trump-trumpets” and “Pence-clowns”.

    1. aab

      Small point: I think it’s a mistake to use the “Sander/Warren wing” as a term. That’s a corporate media creation, and it’s inaccurate enough to be useful only to bathe Warren in an unearned progressive glow.

      Yes, if she decides to back Bernie, she’ll be useful. If she decides to stick to her own original political book and push for restraints on financial malfeasance, that will also be useful. But the latter is pretty far away from Bernie’s proposals and underlying ideology. They may be allies in the coming years, but they are not a wing of the party now, nor are they likely to be. She’s basically a Rockefeller Republican. He’s a Democratic Socialist. The irony of the liberal Republican fitting nicely into the current Democratic Party, but the Democratic Socialist being an outsider speaks for itself about the party and its actual wings.

      1. Yves Smith

        I agree 100%. They may team up but Sanders has bona fide progressive positions on a large range of issues, while Warren is willing to stick her neck out on only a few. Look at Sanders v her on college education. All Warren has been willing to advocate is tweaks in student debt slavery. Even Trumps’s proposal on that front was better than any mainstream Dem student debt plan.

        1. Lambert Strether

          Sanders had the stones to run, and on a socialist platform. Warren did not, and would have run on a neo-liberal lite program of moar transparency (like CFPB). Simple as that.

  11. John

    Trump’s growth figures come from raising the
    Social Security age and denying Medicare
    that keeps people alive so that unproductive old
    will die much sooner.

    You want proof, see what having no access to
    health care is doing to 50-60 year olds.
    Their life expectancy is dropping dramatically.

    1. tegnost

      ok, trump is the president next year, your proof has been created by the current bunch, please argue better…also, have you never heard an elite democrat say that the old people will die off and we’ll have a cashless society run on iphones while being carted around in self driving cars as those youngsters take over? I am a 56 yo lifelong dem who has been completely screwed by them, trump at least is different and no one knows what he will do, it may be worse, but it wouldn’t be that hard to make it better, sorry.

      1. John

        Trump is going to end Medicare that now actually provides health care for people who are middle class and poor.

        So, we will get for seniors what we have now for the 50-65 year olds who have been laid off and cannot get jobs that provide insurance, which is people not getting health care.

        And I never said anything about Democrats actually providing for us.

  12. nodlc

    I disagree with Ms. Altman’s statement that no one voted for this.

    Yes, if you voted for the GOP, you voted for Medicare privatization. It’s clearly stated in the 2016 GOP platform.

    The platform is the link:

    from the website

    Their platform:

    Medicare’s long-term debt is in the trillions, and it is funded by a workforce that is shrinking relative to the size of future beneficiaries. Obamacare worsened the situation — and imperiled seniors — by imposing hundreds of billions of dollars in cuts to Medicare providers to pay for its new spending. When a vital program is so clearly headed for a train wreck, it’s time to put it on a more secure track. That is why we propose these reforms: Impose no changes for persons 55 or older. Give others the option of traditional Medicare or transition to a premium-support model designed to strengthen patient choice, promote cost-saving competition among providers, and better guard against the fraud and abuse that now diverts billions of dollars every year away from patient care. Guarantee to every enrollee an income-adjusted contribution toward a plan of their choice, with catastrophic protection. Without disadvantaging present retirees or those nearing retirement, set a more realistic age for eligibility in light of today’s longer life span

    It’s right there in the GOP platform. This is what Trump voters voted for.

    1. John

      Well, they voted for it, but they don’t know they voted for it.
      And even if you told them that’s what they voted for,
      they would interpret it as getting more,
      not less.

  13. Eureka Springs

    I have no health insurance and social security will at best pay my electric bill in 16 years if I live that long. That said I don’t mind contributing to others via social security deductions now… but I am furious about paying fines or being system d in order to say NO way to 400 a month bronze premiums with a 5 to 6k deduction. And I dare not try to work harder, earn an extra 10k or it will all go down that rabbit hole.

    If markets or free markets mean anything at all then a consumer/potential consumer must be able to walk away/say no dice to said market. Without single payer including serious price negotiations I will contunie to say no and just try to eat well with exercise.

    And this is why, Ms Molly… I run afoul on explitaves. I’ll try to cope/die better.

    1. MyLessThanPrimeBeef

      Counter-intuitive, at first, it seems, when one read this:

      And I dare not try to work harder, earn an extra 10k or it will all go down that rabbit hole.


      Surely one keeps some of that $10K, so it is still worthwhile, if one needs additional money.

      But it makes sense, if to make that extra $10K, and ending up keeping say, $5K (minus taxes, driving to work, paying more to eat on the go, or what not), one gets sick and have to pay more than that for health care.

      So, it is not always illogical that some people don’t want to make more.

      1. Eureka Springs

        What extra work I would have to do to keep a couple k out of the 10 would definitely be negative on my health. I have many friends in the 30 to 50k range who deliberately cut back in ’16 and certainly did not take on more for these reasons. Unless they could do so in a system d manner.

      2. bob

        Do the math on moving from making 35k to 40k a year.

        @35 you’re paying $5,250 in fed income tax, and after income tax bringing home $29,750.

        @40 you’re paying $10,000 in fed income tax, and after income tax bringing home $30,000.

        This is all before SS/FICA, and state taxes, which all have their own little intricacies.

        $250 more take home for $10,000 more. One of the wonders of the federal income tax system. Regressive.

        1. cnchal

          Something seems off with your calculations in that isn’t the 25% tax rate applied to taxable income above $37,650? So by using the tax brackets and basic exemptions shown, for an income of $35K for a single person the federal taxes due are (35,000 – 6,300) X .15 = $4,305 and for someone making 40K it is (40,000 – 6,300) X .15 = $5055

          Someone making $50K brings the 25% tax bracket into the calculation.

          (50000 – 6300) = taxable income of $43,700 and the first $37,650 is at a 15 % rate and the remainder, $6050 is at a 25% rate which brings the total federal tax to (37,650 X .15) + (6,050 X .25) = $7160.00

          These calculations also exclude SS/FICA and state taxes. Am I missing something?

  14. DeadlyClear

    The facts speak for themselves. Privatization through securitization cost pension and retirement funds across the nation a growing $3.4 TRILLION deficit.

  15. LAS

    I think Nancy Altman is right about what is unfolding before us. DT verbally tore holes in the social fabric of America and now he’s showing in his choices a decided intention to physically shred the safety net.

  16. MG

    Of course the GOP including Trump will push to privatize SSI and Medicare and block-grant Medicaid. The GOP has tried to block grant Medicaid since the ‘Contract for America’ with Gingrich in ’94 and it was a heated debate topic during the BBA process in ’97.

    Privatizing SSI and Medicare is also only going to effect new beneficiaries too. Basically anyone 56 or older won’t be effected from what I have seen and heard. It is the way for Trump and GOP plan to to protect their core voting demographic (white voters and the elderly).

    I don’t understand why people are mystified by this or that the GOP won’t make this a very high priority item after tax cuts and repealing Obamacare. When a man with a history of violence comes at you with a hatchet in his hand in an aggressive manner, you don’t stand there and debate whether or not that person will use it. You assume they will and act accordingly.

    1. Lambert Strether

      Making the Trump administration mainstream Republican, right? We survived Bush. The election was a horrible choice, once the Clintonites with the help of their buddies in the press rigged the campaign against Sanders. A commenter — too lazy/rushed to give a hat tip –recently compared Trump to the chemotherapy needed to kill a cancer on the Democrat Party, and I’m not sure they’re wrong. Yeah, chemo is horrible. Desperate times, desperate measures.

      1. pricklyone

        Chemo also has a tendency, if too strong dose, to kill the patient.
        The cancer won’t kill you, but an infection will.
        Who is the Neulasta in this scenario?
        Where are the white cells?

  17. Gerald A. Dunaway

    I could feel before Trump got elected that paul ryan would have trump wrapped around his little finger on medicare, and now the price is the lime light, paul ryan is foaming from the mouth that his wish will come true after 16 years trying to have his voucher system win. that 2000 dollar voucher will probably get you maybe the silver system that’s on obama care, if your luckey…The rest you pay.

    1. Lambert Strether

      FWIW, I think you’ve got it all wrong. Paul Ryan is a pathetic yutz who’ll never be President, trapped in a position he doesn’t want, and pulled between the “Liberty Caucus” and a base that hates everything about him, the remnants of the Republican establishment, and a press that treats him like a serious “wonk” because he puts out well-formatted policy proposals. If anything Ryan wants happens, it will be because serious players want it to happen (and that probably includes the neo-liberal rump of the Democrat Party, which has supported “entitlement reform” ever since Bill Clinton severed the link between party and working class base in favor of becoming the party of the 10% professional class).

      Remember when Ryan grew a beard? Then shaved it off? That’s Ryan.

      1. pricklyone

        I think Ryan is shorthand, maybe, for the group who made him their point man. He is just the visible face of it. They made him speaker, after all, after his little proposal blew up the news cycle.
        I used his name in a comment, in this fashion, as well.
        At least at the time, the serious players in the House thought he represented them pretty well.
        Does anyone think Ryan wrote that thing on his own?


    “And also remember that it was the Obamamometer who in 2010 created the National Commission on Fiscal Responsibility and Reform — more widely known as the Simpson-Bowles Commission– that put “entitlements” spending on the chopping block.”

    • Full Definition of ENTITLEMENT
    • 1 a : the state or condition of being entitled : right
    • b : a right to benefits specified especially by law or contract; a government program providing benefits to members of a specified group

  19. California Gold

    Am I the only one concerned about the Goldman Sachs statement on how Trump’s tax cut/spending plan will create a $1T deficit closely matches the $1.2T number that is being thrown around with Ryan’s plan to block grant and cut SNAP/Medicaid/SSI? Not a conspiracy theorist, but something feels ominous here…

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