dagblog - Comments for "From cat food to prime rib?"

Just got this in an email

we are stardust — Tue, 16 Nov 2010 23:38:27 +0000

In reply to From cat food to prime rib?

Just got this in an email from a far-away friend who may have been lurking here, dunno for sure. Timely coincidence, if not. ;o) Hudson has some pretty impressive credentials, and his hair is seriously on fire over some of these proposals via Obama. I learned several key things that seem obvious once he spells them out in such plain language.

http://www.creditwritedowns.com/2010/11/mr-obamas-most-recent-2-sellout-...

This is similar to the HCR

Obey — Tue, 16 Nov 2010 23:13:02 +0000

In reply to If we ran the circus, eh,

This is similar to the HCR bill in some respects. Have the middle class pay (with lower benefits, in this case - with a platinum tax in HCR) for the lower class, and let the rich have their tax cuts. Unbefuckinglievable that the Dems go along with this crap.

In the plan, as far as I can see, they raise the payroll tax ceiling, but they don't remove it. If they just removed it, SocSec would be fully funded for eternity, and given runaway raises in income at the top, probably more than fully funded. Then we could talk about how to fiddle with the details about who gets what.

In general, I don't see any urgency on SocSec. When the trust-fund runs out do you really think people are going to say, 'okay, that's the end of that'? Of course not. They'll just get the money out of general federal revenue. SocSec is NOT a subject on which Dems need to do the whole defensive-crouch routine. Quite the contrary. As for the restof the commission's plan, it is just arbitrary caps - like the 21% of GDP limit on stuff one can call "Government", which is wierd, and other stuff is just tax reform. The suggestions there are fine as far as I can see.

But it's not deficit reform. Because the deficit problem is entirely an issue of insanely high and rising health care prices in the US. And no one seems to want to even touch that. Not even this commission with its bipartisan cover.

'Circus'? ha. More like a Home for the criminally insane.

If we ran the circus, eh,

AmiBlue — Tue, 16 Nov 2010 22:15:32 +0000

In reply to Hi Ami, I just blogged about

If we ran the circus, eh, Obey? There are all kinds of fixes for SS, health care, poverty, hunger and the economy that are theoretically possible, but (I hate to say it) how many of them are possible? Trickle down economics has turned into trickle down religious dogma (or vice versa. I don't know which came first) The C street gang, where a good many of the rightwing pols hang out, preaches that you help the weak by helping the strong (seriously). So what is actually possible in this upside down world here in the USofA? And what is actually possible when you have democratic party leaders who lack the spine to fight for anything that could be labeled large D Democratic.

Raising the wage limit for taxation would be my first choice. That is in the chairmen's draft so I guess it's not enough to close the gap, or maybe they didn't go up far enough.

But these three additions to SS make the chairmen's draft a good starting point for discussion in my view:

Add a new special minimum benefit to keep full-career minimum wage workers above the poverty threshold.
Wage-index the minimum benefit to make sure it is effective both now and in the future.
Provide a benefit boost to older retirees most at risk of outliving other retirement resources.
Reduce elderly poverty by putting into place a new, effective special minimum benefit.

But then who wants social

Atheist — Tue, 16 Nov 2010 21:31:05 +0000

In reply to Hi Ami, I just blogged about

But then who wants social welfare, eh...?

Promoting the general welfare is unConstitutional, Obey!

Hi Ami, I just blogged about

Obey — Tue, 16 Nov 2010 21:14:57 +0000

In reply to From cat food to prime rib?

Hi Ami,

I just blogged about this the other day. When considering what is a reasonable deal, it really all is in the framing, isn't it?

So if this is framed in terms of 'saving SocSec' from those intent on destroying it, and that the chances it gets destroyed down the road are increasing, then sure, it is reasonable to accept benefit cuts.

But that seems the wrong frame to me. Here are some questions I find reasonable, and that reframe it differently:

(i) How much is the shortfall in funding?

About 1% of GDP, or $150 bn. That isn't a lot of money in the greater scheme of things. It could be easily covered by a tax on banks (on balance sheet, or on transactions, or both). It could be covered by a carbon tax (but that is regressive). It could be covered by dedicating just the funds from the expiring tax cuts on the rich to the SocSec trust fund.

This of course means that it stops being purely a non-profit mutual fund 'pays-out-what-you-paid-in' structure. Which to some seems 'unfair', but that raises the next question:

(ii) Is the problem with US society that the inequality in incomes that is currently trending wider fast, is not trending wider fast enough? Or should something be done in various ways to "bend the inequality curve", so to speak?

In my opinion, the latter. In which case it is not that future benefits should be cut, but they should if anything be raised. And then be funded out of a less regressive taxation system.

I realize it involves that dreaded notion of 'redistribution'. But how much redistribution are we really talking about? Putting its solvency beyond question requires, as I said, 1% of GDP of funding. And 1% of redistribution hardly seems excessive. 2% of GDP in redistributive funding would really improve social welfare. But then who wants social welfare, eh...? All these terms and frames that have been so vilified it is impossible to even mention them without raising hackles.

So lets go back to another question providing some context for the 'fairness' question of 'taking from the rich to give to the working class'.

(iii) Why exactly is there a shortfall in funding?

Workers' wages haven't kept up with increases in productivity over the last thirty years. In fact they have, in real terms, fallen! Average income for the bottom 90% of households are down to levels last seen in the sixties while their productivity is up 50%, while incomes for the top 1% have tripled. And SocSec is largely funded out of a percentage of the income of that bottom 90%. If the Reagan revolution - of deregulation, destruction of unions, imbalanced raising and lowering of trade barriers (hurting workers and helping the managerial and professional classes) - hadn't kept workers' income from keeping pace with productivity, there would be no shortfall. I.e. the GOP-constructed economic framework has redistributed income upward from workers to the rich. And it has in the process - surrepticiously - defunded Social Security.

In other words, the Social Security shortfall is part of a larger story - the general weakening of its funding base, that is to say the wages of the lower and middle classes. And, note that this weakening has been an intentional process. Government legislation and regulation has weakened those wages. And now, they turn around and get all outraged about 'redistribution' when it comes to covering the shortfall in SocSec? Chutzpah! Or something worse...

So you can fix SocSec just by raising the real minimum wage to what it was in the sixties - i.e. some 30% higher than it is now. You can stop subsidizing the Health Care sector - Doctors, Drugmakers, Equipment makers - and bring costs in line with other developed countries. That would raise taxable worker income up 10% or so. You can pass EFCA and encourage unionization and do all kinds of things to roll back the Reagan revolution, and you're likely to indirectly close that SocSec funding gap without anything that looks too ickily like 'redistribution' or 'welfare'.

I could go on. But you've probably had enough of my ranting...

;0)

Your last point is a

Oxy Mora — Tue, 16 Nov 2010 20:22:30 +0000

In reply to It would seem that if the

Your last point is a compelling one. With no overhaul now and a Rep. win in 2012 the overhaul could turn out much worse than now. With an overhaul now and a Rep. win in 2012, the R's would be ill advised to make it more severe. In the meantime if Rep's now are unreasonable O can make points. And an overhaul now could help turn around O's bad grades on the "deficit"(I give him my blessing to demagogue the crap out of this issue) plus take some SS arguments away from R's.

Yeah...We could create

chucktrotter — Tue, 16 Nov 2010 20:22:02 +0000

In reply to There is a provision for

Yeah...We could create something similar to those new-fangled "death panels!"

You said it best, AT. Those

AmiBlue — Tue, 16 Nov 2010 19:15:09 +0000

In reply to It would seem that if the

You said it best, AT. Those are my thoughts exactly. After reading the comments here I have to say that liberals seem to have their fingers in their ears hoping the subject will change.

Thanks for the links, star.

AmiBlue — Tue, 16 Nov 2010 19:09:56 +0000

In reply to Amiblue, RJ Eskow linked to

Thanks for the links, star. First of all, I'm not an Orzag fan and I was leary of the proposals when I read that he thought they were good. It wasn't until I read the draft that I thought it was a good place to start.

I agree with kuttner that now is not the time to deal with deficits. The subjuect has been broached, however, and it won't go away even if we try to ignore it. If dems do nothing, cons will just shout louder and continue to claim it as their own and get votes. The democratic leadership has been too passive and the cons have run with the script.

Second, even bowles and simpson keep SS out of the deficit argument. They declare plainly that it has nothing to do with the deficit. Kuttner relies on increasing wages to make up the SS shortfall and I believe this is short sighted. Wages have been stagnant, if not falling for the last decade. I have seen nothing that indicates that trend will change. The "wages" that are going up are the ones that are, for the most part, not taxed.

Strengthensocialsecurity.org has some powerful arguments against the chairmen's draft. I'm not enough of a statistician or mathmetician to evaluate their figures, and I don't know where they're getting all the details they cite. I do know that item #4 is at least partially wrong because the chairmen have made early retirement exceptions for people who are not able to work past agee 62.

I still believe the chairmen's draft is a fair place to start when considering the future of SS. There is no suggestion to privatize, and they have even added some provisions that seem big improvements over what we have now. There was no mention of these in the StrengthenSS site that I saw.

It would seem that if the

Elusive Trope — Tue, 16 Nov 2010 18:52:57 +0000

In reply to From cat food to prime rib?

It would seem that if the current parameters are basically adhered to in the ongoing negotiations, this plan would be the Democrats best bet to deal with the social security issue in a way that keeps it from being dismantled. Will it be ideal? No. But the compromise will keep those who truly do want it to go away at bay, at least for awhile.

I think the dog/cat food commission meme had been pushed so much that there many who calling the plan DOA out of principle. Unfortunately the battle over whether something / anything needs to be done was lost awhile ago. So the issue is not whether SS is sustainable or not sustainable in its current form, but rather since we need to rework SS to ensure its sustainability, how do we best do that. In that regards, it is, overall, a conservative victory. But if the liberals can keep it from going the way of privatization and reworked to help those who really need the income over those with higher incomes, then the liberals can achieve a few significant wins. Not only that, but they can use this time to set the talking points about the future of SS that will help ensure its long-term survival during those days when the republicans take over Congress and the WH, should that happen.