Posts Tagged 'social security'

Don’t Blink

This Saturday morning, July 23rd, the Senate was originally scheduled to vote on Cut, Cap and Balance, the Republican plan to cut $111 billion out of this year’s deficit, trim $4 trillion over ten years, and present a balanced budget amendment to the states.  Instead, Harry Reid moved the vote up to Friday morning, calling it a waste of time and the worst piece of legislation to ever come to the Senate floor.  It failed to pass on strict partisan lines.

Senator Schumer called the bill “Cut, Cap and Kill” because he insisted that the bill would kill Medicare.  Debbie Wasserman-Schultz declared in the House of Representatives that the bill would kill seniors and that it was the Paul Ryan plan on steroids.   The only problem is that in three different places Cut, Cap and Balance specifically exempted Medicare and Social Security from cuts and caps.  Had Republicans known, some of them might have been a little bit more up in arms about the bill.  It was actually a very good compromise.  It cut and cap wasteful spending on liberal social programs and government bureaucracy, not hot buttons like military, Social Security and Medicare.

Perhaps that is a more reasonable explanation of why Harry Reid went back on his promise to allow debate on Cut, Cap and Balance and instead moved the vote up.  Perhaps someone in the Senate actually read the bill and told Reid what was in it.  And then, as if scripted, suddenly news outlets started declaring a deal between Boehner and Obama that was so close Reid needed to get this bill off the floor and stop “wasting time” on it.  The only problem is there was no such deal.  Somebody was lying to provide the sense of urgency needed to cut off debate on Cut, Cap and Balance before it got out that Democrats were lying about it killing Medicare.

This has become the name of the game in budget talks.  Neither side is willing to give in because both sides know that 2012 elections hang in the balance.  The difference is that Republicans have actually gone so far as to write a good compromise bill.  Democrats can’t vote yes on it, not because it “kills Medicare” or kills seniors.  They can’t vote on it because passing Cut, Cap and Balance would destroy Democrat re-election hopes for 2012.  It would be a huge Republican victory because Republicans came up with it.

On the other hand, Democrats can’t write a plan of their own.  They haven’t submitted a budget in over 800 days, and they can’t submit one now or that will also destroy their chances of getting re-elected in 2012.  Democrats can’t write a bill that says “We want to raise taxes so that we don’t have to cut spending as much” and still win in 2012 because the vast majority of the country doesn’t want Democrats to raise taxes so that they can spend more.  They are spending enough already, and we are taxed enough already.  On the other hand, Democrats can’t write a plan saying “Ok, no higher taxes, just cuts” or they will lose their class warfare base.  The liberal base of the Democrat party does not want a bill that doesn’t raise taxes on the “rich”.  It’s not about raising revenue, it’s about punishing upper classes more.

Republicans submitted a plan and it was a good plan.  Obama has signaled that he is willing to let the country default on its debt rather than compromise with Republicans.  Democrats have proven that they are the party of no on a budget deal.  If Republicans end up caving in order to save our credit rating, I hope Americans get the right message.  It doesn’t mean Republicans are wimps and we need to get rid of them.  It means they can only do so much with just a majority in the House.  We need to give them the Senate and the Presidency in 2012 if we expect anything to get accomplished.


Obama’s big win of 2010:extending Bush’s biggest win of 2001

Victory, Immortal Fame!  So cries the last warrior standing, ironically right before he himself dies, after defeating his surrounding army.  The warriors of the mythical army, raised from serpent’s teeth planted in the ground, are tricked by Jason into battling each other.  So ends this humorous battle in Argonautica.

Not so different was the media coverage of the passing of the Bush tax cut extension.  After Obama defeated his fellow Democrats in passing this extension, the media hailed it as a much needed victory for the White House.

Wait.  What?

If you read Obama’s Tax Cuts of 2010, you shouldn’t be too  surprised.  In fact, the only thing that should surprise you is exactly how much of the Republican agenda Obama acquiesced to in this tax rate extension.  I predicted back in October, 2009 that Obama would extend the Bush tax cuts for at least the middle class, and that he would herald them as tax cuts instead of merely extensions of the Bush tax rates.  But at the time I figured it would come at the cost of no estate tax fix, higher rates for upper income earners, and other built in tax hikes.  Instead, this “White House victory” looks more like something from the last 8 years that supposedly “got us into this mess in the first place”.

The question then, if this is truly a White House victory, is if Obama has become a born again Capitalist.  The tax extension doesn’t just extend Bush tax rates for two years, it also gives a generous estate tax system that increases the exemption from $1 million to $5 million and lowers rates to 35%.  It also gives businesses of any size 100% bonus depreciation on new asset purchases in a tax gift to huge corporations.  And lastly, it replaces the Making Work Pay Credit with a 2% across the board cut in Social Security taxes.

The 2% Social Security cut was Obama’s answer to the expiring Making Work Pay Credit and is perhaps the greatest evidence of either a change of heart on Obama’s part, or a total victory on the Republican’s part.  In 2010, the Making Work Pay Credit will give families making less than $40,000 a credit of $800, while denying families making more than $175,000 any credit.  It was a perfect Liberal tax cut.  It was even poorly administrated.

On the other hand, the 2% Social Security cut is an across the board flat cut that is easy to administer and has no AGI cap.  So in 2011 a family that makes less than $40,000 will actually be paying more taxes, while a family with  a working husband and wife who make $200,000 combined will get a tax cut of $4,000.  This year they would have no tax break.  This non-progressive change is a White House victory?

The 2010 tax rate extension was an acknowledgment by the left that the policies of the last 8 years did not get us into this mess.  The Bush tax cuts got us out of the last mess and just might work this time too.  How they can claim that this Republican victory was anything else is beyond me.

The only thing the Democrats got out of this deal was not having to pay for the next unemployment benefits extension.  But in the end, Obama found it easier to defeat his own majority party than to take out the minority Republicans.  The result?  Your taxes aren’t going up next year no matter who you are.  And just as expected, Obama is saying it is because of him.

Only Government Can

Only government can build a rocket that would take us to the moon.  I’m not sure how many times I’ve heard that argument recently being applied to universal healthcare, the economy, ending global warming through oppressive taxes, etc.  Of course, this begs the question, why would any private enterprise want to go to the moon?  For the billions of dollars we have spent to send a man to the moon, the best thing we can claim out of it are some cool pictures and stories, definite proof that the Earth is round, an early real estate claim on lifeless rock (with no ocean view), and that we got there before the Soviets.  (Mommy, Mommy, what’s a soviet?  Ask your Grandpa, dear)

On the other hand, we put men in conditions that OSHA would never allow today, lost several men and women in rocket related disasters, violated all sorts of affirmative action quotas with our majority white male astronaut population, and probably caused more global warming with each rocket launch than you could in three lifetimes with your SUV, regular lightbulbs, occasional steak dinner, and failure to recycle.  When you start paying an extra $150 a month in your utility bill to fund Cap and Trade legislation, you can at least look up at the moon at night and say “hey, someone’s been there.”

I suppose that’s really why only government could go to the moon.  Not so much that NASA costs hundreds of billions of dollars with almost no financial return, meaning that no one would invest in it unless under compulsion.  More that with all the government regulation of private enterprise, only a government entity could get away with building something that burns tons of fossil fuels to create a hazardous explosion strong enough to send a group of white males into space.  If NASA had the same EPA regulations as the US private auto industry, we’d eventually have to sell our space shuttle production to Fiat too.

Can only government solve our economy?  That was the claim when Bush bailed out the banks. That was the charge from the Obama administration when they put together the $700 billion dollar pork stimulus bill.  Only the Government could take us to the moon, therefore, only the government can fix the economy.  We weren’t borrowing enough to keep our economy rolling along, so the government borrowed for us.  We weren’t buying enough cars and houses, so the government kept those bubbles artificially inflated through subsidies.  We weren’t getting jobs, so the government took our money and hired a bunch of us on short term government projects (in some cases in districts that don’t even exist).

Can only government make sure everyone is insured?  Why not, only government could make sure that everyone had a decent retirement.  Now our seniors get Social Security and they are no longer the poorest demographic in our country.  Instead, the poorest demographic are young people.  But at least those young people will grow up to have Social Security some day.  Right?

Get ready, the stage is set.  Only government can reduce unemployment.  Already Obama has attacked small businesses for being so greedy that they are not hiring people.  Nevermind that if you hire someone for $12 an hour you will end up paying twice that to cover their Social Security, Medicare, Obamacare, unemployment compensation tax, workers comp, and lawsuit when you discriminate against them and fire them for not showing up.

Actually, in this case, only government can reduce unemployment.  They can do that by no longer increasing unemployment.  Unlike a walk on the moon, in many cases hiring more workers can be very profitable.  When the economy is good and people are buying your products, unless you have no profits because you are paying them all in taxes, you are going to invest in a larger workforce.  It’s economics 101.

Unfortunately, the government is not interested in building a strong free economy.  We have a government that runs on the premise that only government can regulate businesses, only government can create jobs, only government can solve a crises, and only government can ensure your healthcare, welfare and retirement.  We have a government that made teens, college students, and veterans as unemployable as convicts and people with massive disabilities by artificially increasing the wage base in every state regardless of that state’s economy.  We have a government that takes 15% of your income straight off the top in order to fund your grandparents retirement.  We have a government that illegally and unconstitutionally favors union bosses in exchange for votes.  And of course we have a government that levies oppressive taxes on small and large businesses so that we can build large rockets and buy billions of dollars worth of fossil fuels to hurl them into space.

Don’t get me wrong.  This is not a critique of NASA.  God knows I appreciate the childhood dreams of seeing the Earth from space, a weightless environment, and wearing one of those cool space suits.  And we have many great technological inventions from our space explorations, such as dried ice cream and the ability to fly nuclear warheads all the way around the world in matters of minutes.  But when it comes to things that have tangible value to our real lives, such as creating jobs, insuring our families, saving for retirement, and borrowing at levels that are in line with our values, I think we should be able to manage such things on our own.

Begala Gives Conservatives a Lesson in Love

On September 13, Paul Begala decided that conservatives need a lesson in love. Apparently, out of a million TEA party protesters in Washington DC on Saturday, Begala found an offensive protest sign.  The sign said “Bury Obamacare with Kennedy”.  Obviously that is far more offensive than the call from the Left to “Pass Obamacare because Kennedy died”.  Begala writes an admonishment to the “hate-mongers” in his Huffington Post blog.

Begala has a point you know.  The only reason we could possibly not want free healthcare for all is because we hate Obama.  Chances are, it’s because we are all racists.  That is what causes Begala’s loving, yet somewhat harsh reaction to the sign he saw:

“The sign made me nauseous, made me embarrassed, made me wonder if at long last there is no decency on the far right…Oh, I get it. Sen. Kennedy is dead, and these slugs want health care reform to be dead too. That is so clever.”

That’s right, the embarrassing “slugs” want health care reform to be dead too.  He makes a good point.  Don’t the embarrassing “slugs” realize how hateful it is to want freedom in our medical choices, to not want to stack another trillion dollars onto the deficit, to not want to be forced into paying for abortion?  But no, the “right-wing hate mongers” have to use Kennedy’s death to “make a cheap point” about health care.  That is completely different from naming the bill after Kennedy and calling on people to vote for it in his honor.

Begala says that you can’t even imagine what the response would be if progressives had such a repulsive sign in one of their protests.  Progressives aren’t as hateful as the “teabaggers” (a reference to an incredibly offensive sexual act, used here in love by Begala).

Progressive protest signs are never offensive, argues Begala

Progressive protest signs are never offensive, argues Begala

He has a point.  How would we respond if we ever were to see a Liberal with an offensive protest sign?

“The inmates have taken over the asylum.”  It would be offensive, I guess, if it weren’t so true.  Begala guesses that the reason we are so hateful now is that Reagan is dead and has been replaced with “Joe the shouter…and Sarah Palin the screecher”.  What cute and friendly nicknames.

Begala points out that the “whack-jobs” at the DC demonstrations didn’t have signs saying to repeal Medicare or Social Security.  Apparently we all recognize how successful those are and wouldn’t want to touch them.  Also, none of them had signs protesting the billions wasted keeping our country safe from terrorists.  Apparently these “teabaggers” don’t care about overspending during the Bush administration.   Nevermind that the opening video at the protest highlighted Bush’s stimulus plan of 2008 as an example of government waste.

According to Begala, the TEA party is more about hate, not high-minded debate.  Thank goodness we have people like Paul Begala to let us know who the hypocrites are in this debate.

Other Great Public Options

Have you noticed that talking about the failures of the USSR, China, North Korea, Cuba, Venezuela and other Socialist and Communist states with anti-Constitutionalists is a conversation killer?  There is a disconnect that occurs when you get into international politics.  Most anti-Constitutionalists see the grandeur of tyrants’ palaces but overlook the plight of the workers.  At the same time, they claim to own exclusive rights to the title of the working people’s party.  Just look at China.  In the People’s Republic of China the people’s dictator prints the people’s money in order to grow the power of the people’s government so that the people can be the people’s slaves.

Foreign failures aside, I thought it might be interesting to just look at other public options here in the free United States of America and see how impressed we are with the government’s track record when they delve into the unconstitutional.

Most acknowledge now that Obama put his foot in his mouth when he used the Post Office versus Fedex and UPS as an example of a public option not hurting competition.  Among several points made by the Heritage Foundation, the USPS is facing a $7 billion loss this year even though they are the only entity allowed to deliver first class mail, and there is no “free” postage option.

We have a public option when it comes to school.  Perhaps the greatest testimony to the failure of this public option is that people who can afford it rarely send their children to public schools.  In fact, in studies private school students consistently have higher scores than public school students.  Meanwhile, despite the demand for private schools among the wealthy, the cost of sending a kid to public school is often the same or higher than sending a kid to the best private schools.

Now, I know your 401k hasn’t been looking so hot lately.  But what do you think is more likely to be there in 30 years, your 401k or Social Security?  Right now the public option for retirement is facing complete bankruptcy in 2037.  According to Newsweek, Social Security will face a $45 trillion shortfall over the next 75 years.  That’s more than a trillion dollars a year on average.  That would be a third of last years entire federal budget.  Meanwhile, you are putting probably between 3 and 10% into your 401k every paycheck AND paying a mandatory 12.4% tax to Social Security no matter how much you make each year.  The high school student who pours your coffee in the morning is paying the same 12.4% tax you are.  Imagine if the retirement public option was a choice and you could put that 12.4% into a private account.  Yet at Bush’s state of the union address, Democrats cheered when he said they had failed to fix Social Security.  Apparently the status quo was still in fashion back then.

But healthcare is different, right?  Not so much.  Turns out we already have a public option for health care.  Medicare has been given 8 years to live.  Despite Medicare’s pending financial ruin, Schumer argued over the weekend that the failure of Medicare is the reason we need a public option to be part of Obamacare.  Interesting argument.  By the way, in addition to whatever you pay for your health insurance, you are also paying a mandatory 2.9% in Medicare taxes no matter how much you make.  Even still, in a plan where 140 million Americans pay for the healthcare of about 40 million through mandatory taxes, the system will be completely broke by the time Hillary finishes her third Presidential primary race.

How about Medicaid?  According to the Wall Street Journal, it’s no bargain if you have any interest in quality.  In fact, people who have coronary bypass surgeries under medicaid were found to be 50% more likely to die. This is blamed on poor followup by greedy doctors who don’t like working for free.  In fact, according to the same article only half of doctors will take on new Medicaid patients due to the required discounts in services and Government failures in making timely payments and reimbursements.

Democrats say that the problems with Medicare and Medicaid are proof that we need a public option for healthcare.  On second thought, maybe expensive private schools aren’t all they’re cracked up to be.

Debts, Deficits, and the Myth of the Clinton Surplus

Originally posted April 3, 2009

We have all heard this before. When Bush took office in 2001 he inherited a surplus from Clinton and turned it into an $11 trillion debt. So, considering Clinton left office with the US $5.7 trillion in debt, I think it might be a good exercise to go back and look at the difference between debts and deficits and to examine what it actually was that Clinton left and Bush wasted.

Deficits, in most conversation, refer to the annual budget deficits where our government projects to spend more than it brings in. These deficits tend to be strictly on paper. For example, while he was $5.7 trillion in debt, Clinton projected a $236 billion surplus for 2000. Bush’s deficits never got to be much more than $400 billion a year, yet he increased the debt by $5 trillion. Do the math. Obama’s projected deficits come in about $100 billion below the Congressional Budget Office’s estimates until he leaves office, when his projected deficit comes in at about half of what the Congressional Budget Office estimates (about $700 billion in 2019 according to Obama, about $1.2 trillion according to the CBO). I guess when he leaves office he can blame the actual deficits on his predecessors.

Debt is what we actually owe to both our citizens through government bonds and debt and to other countries like China. It is also when we borrow from our “lock-boxes” like Social Security funds and other designated funds. This of course comes from spending more than we bring in, and from spending on items that don’t even make the budget.

When Clinton took office, the national debt was at $4.1 trillion. By the time Newt Gingrich and the Republicans took control of Congress after the 1994 election and began enacting the Contract With America, the national debt was about $4.8 trillion. When Clinton finally signed the Balanced Budget Act of 1997 the national debt was at about $5.4 trillion.

At the end of 2000 the national debt stood at $5.7 trillion. A year later, with Democrats in control of the Senate, and then 9/11 happening, the national debt stood at $5.9 trillion. 5 years later, at the end of 2006 and 5 years of Republican rule in both Congress and the White House, two wars, a tax cut inspired economic recovery, the national debt stood at $8.7 trillion. Two years later, under a Democratic congress and Republican president the national debt stood at $10.7 trillion. Today, three months later, it is $11.1 trillion. Feeling sick yet?

So what was Clinton’s surplus? Well, it wasn’t ever anything more than on paper. Every year of Clinton’s presidency the debt increased. In fact, his budget for the fiscal year ending September 29, 2001 resulted in a $133 billion deficit.

So why did Clinton say surplus? Well, first of all, as mentioned above there are two different kinds of debt. There is public debt (government bonds, etc.) and there is inter-government debt. Inter-government debt is when the government raids obligations like Social Security with the promise of paying it back. Right now the government owes $6.8 trillion to citizens and foreign countries, and owes $4.2 trillion to Social Security and other government funds and obligations.

When President Clinton said that he had a surplus, it was because his budget between 1998 and 2001 paid down about $450 billion in public debt. He did this by borrowing more than $800 billion from government lock-boxes. And the national debt increased even despite the Balanced Budget Act of 2007.

So the next time you find the words on the tip of your tongue that President Clinton had a surplus and Bush wasted it, just remember that in 2006 some projected the 2009 budget to have as much as a $38 billion surplus before Democrats took over congress the following


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