Showing posts with label Social Security. Show all posts

Tuesday, October 15, 2013

Senator Bernie Sanders is interviewed on CNN by presstitute Wolf Blitzer RE what should be done about the Republican blackmail

http://youtu.be/yJWe1v5KO8o

Sen. Bernie Sanders on The Situation Room with Wolf Blitzer (CNN)

Published on Oct 11, 2013

Friday, August 16, 2013

President Obama and many members of Congress claim that Social Security must be cut to reduce the national deficit. Nothing can be farther from the truth! First, Social Security will run a surplus for the next 20 years. Second, Social Security is a $2.8 Trillion insurance policy prepaid by the beneficiaries and by law is not permitted contribute to the national debt. Third, the national debt is now falling on its own accord (the Congressional Budget Office projects the current fiscal year deficit to be 4.0% down sharply from 7.0% last year) ...and any further reduction of the deficit would be a drag on the economy.

theREALnews Permalink

Social Security Act Turns 78

Signed into law in 1935, the Social Security Act launched an integral social safety net program, but is it still sustainable? - August 14, 2013

Blogger's Note: The part in my header having to do with the spontaneous reduction in the National deficit was found here: http://www.businessinsider.com/the-deficit-is-shrinking-2013-8

Wednesday, May 29, 2013

Number 8 below: "According to The Economist, the United States was the best place in the world to be born into back in 1988. Today, the United States is only tied for 16th place." Were we a great country ...or what?

Tuesday, May 28, 2013

40 Statistics About The Fall Of The U.S. Economy That Are Almost Too Crazy To Believe

By Michael Snyder (The Economic Collapse Blog | Original Link) May 28, 2013

If you know someone that actually believes that the U.S. economy is in good shape, just show them the statistics in this article. When you step back and look at the long-term trends, it is undeniable what is happening to us. We are in the midst of a horrifying economic decline that is the result of decades of very bad decisions. 30 years ago, the U.S. national debt was about one trillion dollars. Today, it is almost 17 trillion dollars. 40 years ago, the total amount of debt in the United States was about 2 trillion dollars. Today, it is more than 56 trillion dollars. At the same time that we have been running up all of this debt, our economic infrastructure and our ability to produce wealth has been absolutely gutted. Since 2001, the United States has lost more than 56,000 manufacturing facilities and millions of good jobs have been shipped overseas. Our share of global GDP declined from 31.8 percent in 2001 to 21.6 percent in 2011. The percentage of Americans that are self-employed is at a record low, and the percentage of Americans that are dependent on the government is at a record high. The U.S. economy is a complete and total mess, and it is time that we faced the truth.
The following are 40 statistics about the fall of the U.S. economy that are almost too crazy to believe…
#1 Back in 1980, the U.S. national debt was less than one trillion dollars. Today, it is rapidly approaching 17 trillion dollars…

#2 During Obama’s first term, the federal government accumulated more debt than it did under the first 42 U.S presidents combined.
#3 The U.S. national debt is now more than 23 times larger than it was when Jimmy Carter became president.
#4 If you started paying off just the new debt that the U.S. has accumulated during the Obama administration at the rate of one dollar per second, it would take more than 184,000 years to pay it off.
#5 The federal government is stealing more than 100 million dollars from our children and our grandchildren every single hour of every single day.
#6 Back in 1970, the total amount of debt in the United States (government debt + business debt + consumer debt, etc.) was less than 2 trillion dollars. Today it is over 56 trillion dollars…

#7 According to the World Bank, U.S. GDP accounted for 31.8 percentof all global economic activity in 2001. That number dropped to 21.6 percent in 2011.
#8 The United States has fallen in the global economic competitiveness rankings compiled by the World Economic Forum for four years in a row.
#9 According to The Economist, the United States was the best place in the world to be born into back in 1988. Today, the United States is only tied for 16th place.
#10 Incredibly, more than 56,000 manufacturing facilities in the United States have been permanently shut down since 2001.
#11 There are less Americans working in manufacturing today than there was in 1950 even though the population of the country has more than doubled since then.
#12 According to the New York Times, there are now approximately 70,000 abandoned buildings in Detroit.
#13 When NAFTA was pushed through Congress in 1993, the United States had a trade surplus with Mexico of 1.6 billion dollars. By 2010, we had a trade deficit with Mexico of 61.6 billion dollars.
#14 Back in 1985, our trade deficit with China was approximately 6 million dollars (million with a little “m”) for the entire year. In 2012, our trade deficit with China was 315 billion dollars. That was the largest trade deficit that one nation has had with another nation in the history of the world.
#15 Overall, the United States has run a trade deficit of more than 8 trillion dollars with the rest of the world since 1975.
#16 According to the Economic Policy Institute, the United States is losing half a million jobs to China every single year.
#17 Back in 1950, more than 80 percent of all men in the United States had jobs. Today, less than 65 percent of all men in the United States have jobs.
#18 At this point, an astounding 53 percent of all American workers make less than $30,000 a year.
#19 Small business is rapidly dying in America. At this point, only about 7 percent of all non-farm workers in the United States are self-employed. That is an all-time record low.
#20 Back in 1983, the bottom 95 percent of all income earners in the United States had 62 cents of debt for every dollar that they earned. By 2007, that figure had soared to $1.48.
#21 In the United States today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.
#22 According to Forbes, the 400 wealthiest Americans have more wealth than the bottom 150 million Americans combined.

#23 The six heirs of Wal-Mart founder Sam Walton have as much wealth as the bottom one-third of all Americans combined.
#24 According to the U.S. Census Bureau, more than 146 million Americans are either “poor” or “low income”.
#25 According to the U.S. Census Bureau, 49 percent of all Americans live in a home that receives direct monetary benefits from the federal government. Back in 1983, less than a third of all Americans lived in a home that received direct monetary benefits from the federal government.
#26 Overall, the federal government runs nearly 80 different “means-tested welfare programs”, and at this point more than 100 million Americans are enrolled in at least one of them.
#27 Back in 1965, only one out of every 50 Americans was on Medicaid. Today, one out of every 6 Americans is on Medicaid, and things are about to get a whole lot worse. It is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.
#28 As I wrote recently, it is being projected that the number of Americans on Medicare will grow from 50.7 million in 2012 to 73.2 million in 2025.
#29 At this point, Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years. That comes to approximately$328,404 for every single household in the United States.
#30 Right now, there are approximately 56 million Americans collecting Social Security benefits. By 2035, that number is projected to soar to an astounding 91 million.
#31 Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.
#32 Today, the number of Americans on Social Security Disability now exceeds the entire population of Greece, and the number of Americans on food stamps now exceeds the entire population of Spain.
#33 According to a report recently issued by the Pew Research Center, on average Americans over the age of 65 have 47 times as much wealth as Americans under the age of 35.
#34 U.S. families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.
#35 As I mentioned recently, the homeownership rate in America is now at its lowest level in nearly 18 years.
#36 There are now 20.2 million Americans that spend more than half of their incomes on housing. That represents a 46 percent increase from 2001.
#37 45 percent of all children are living in poverty in Miami, more than 50 percent of all children are living in poverty in Cleveland, and about 60 percent of all children are living in poverty in Detroit.
#38 Today, more than a million public school students in the United States are homeless. This is the first time that has ever happened in our history.
#39 When Barack Obama first entered the White House, about 32 million Americans were on food stamps. Now, more than 47 million Americans are on food stamps.
#40 According to one calculation, the number of Americans on food stamps now exceeds the combined populations of “Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.”

Monday, March 18, 2013

It's good that the GOP has admitted to lying about the fiscal crisis. However, the question remains: Will Obama now back off his plan to cut Social Security and Medicare?

MONDAY, MARCH 18, 2013 05:15 AM MST

GOP: We’ve been lying all along

Boehner's admission that we don't really have a debt crisis reveals his party's ulterior, program-cutting motives

BY DAVID SIROTA

John Boehner (Credit: AP/Susan Walsh)

I never thought I’d write these words, but here goes: Thank you, John Boehner. Thank you, Mr. Speaker, for finally admitting on national television that all the fiscal cliffs, sequestrations and budget battles you’ve created are, indeed, artificially fabricated by ideologues and self-interested politicians and not the result of some imminent crisis that’s out of our control.

America owes this debt of gratitude to Boehner after he finally came clean on yesterday’s edition of ABC’s “This Week” and admitted that “we do not have an immediate debt crisis.” (His admission was followed up by Budget Committee Chairman Paul Ryan, who quickly echoed much the same sentiment on CBS’ “Face the Nation”).

In offering up such a stunningly honest admission, the GOP leader has put himself on record as agreeing with President Obama, who has previously acknowledged that demonstrable reality. But the big news here isn’t just about the politics of a Republican House speaker tacitly admitting they agree with a Democratic president. It is also about a bigger admission revealing the fact that the GOP’s fiscal alarmism is not merely some natural reaction to reality, but a calculated means to other ideological ends.

Before considering those ends, first remember that Boehner (like Obama) is correct on the facts.

As Nobel-winning economist Paul Krugman has pointed out, “Even if we do run deficits, federal debt as a share of GDP will be substantially less than it was at the end of World War II” and “it will also be substantially less than, say, debt in several European countries in the mid- to late 1990s.” It is also lower than the 80 percent of GDP level that many economists say starts to put countries in a precarious position. Additionally, citing Congressional Budget Office data, the Center for American Progress notes that the long-term debt outlook is only dire because the projections simply assume without question that “future Congresses will enact huge new deficit-increasing tax cuts and spending hikes.”

“The debt outlook is bad (but) we’re not looking at something inconceivable, impossible to deal with,” writes Krugman. “We’re looking at debt levels that a number of advanced countries, the US included, have had in the past, and dealt with.”

So yes, we should start dealing with the long-term debt in a pragmatic and sober way, but we shouldn’t pretend it is some sort of imminent crisis worthy of draconian austerity measures.

If we could somehow do that, then there would be plenty of gradual steps that could be taken right now — steps that deal with the debt in measured ways that do the least harm to the overall economy. Those include starting to phase out the Bush tax cuts, which show no correlation with job growth and yet are the single largest driver of annual deficits; starting to reduce defense and war spending, which, job-creation-wise, is one of the least effective ways for the government to spend money; starting to move the United States toward the least costly, more efficient, and more effective single-payer healthcare system that most industrialized countries have, and that lowers overhead for employers; and starting to spend more money on social programs that fight economic inequality, with the understanding that driving down such inequality tends to boost macroeconomic growth and consequently boost public revenues (this is the Reagan-esque idea of growing one’s way out of debt).

But, of course, we aren’t having a sober and measured discussion about such pragmatic solutions. Instead, the national conversation about the budget is dominated by debt demagogues with ulterior motives. Taking a page out of the shock doctrine playbook that says every crisis is an opportunity, these alarmists have sought to create the perception of an immediate crisis in order to quickly manufacture opportunities to legislate their otherwise politically impossible agenda items.

In practice, that means Wall Streeters and conservative ideologues citing the supposedly imminent crisis to successfully nudge the political establishment to endorse cuts to Social Security, even though the program has almost nothing to do with the debt crisis. It also means a GOP budget that targets most of its cuts at the social programs that the poor and middle-class most rely on (this, at the same time most of these same alleged budget hawks supported an extension of most of the deficit-expanding Bush tax cuts; decry any cuts to the defense budget; and either outright oppose a single-payer system or support the Obama healthcare law that while certainly expanding coverage, nonetheless buttresses the private health insurance industry and, thus, arguably makes such a single-payer system more out of reach).

From Boehner to Ryan to the Bowles-Simpson tandem to an unending parade of television pundits, the last year has been marked by the most prominent political voices ignoring the more prudent way forward, and instead claiming that these shock doctrine prescriptions — i.e., Social Security/Medicare cuts, social program cuts, etc. — are all required. And not just required, but required immediately, because of the supposed urgency of the debt crisis.

Using that supposed urgency as a rationale to create fiscal cliffs, sequestration battles and debt ceiling crises, their talking points have lately assumed a similar tenor to that of the old Thatcherites’ “There Is No Alternative” mantra, the idea being that because the emergency is supposedly so imminent, there is simply no other way forward than the conservative neoliberal path of profligacy for the rich (tax cuts, continued corporate subsidies, etc.) and austerity for everyone else.

But suddenly, thanks to yesterday’s declarations by Boehner and Ryan, the charade’s most sacred lie has been exposed. In acknowledging that “we do not have an immediate debt crisis,” GOP leaders are admitting that there is, in fact, an alternative. They are also admitting that their longtime claims to the contrary were ends-justify-the-means tactics to manufacture an unnecessary panic — one that they hoped would scare America into abruptly accepting the kind of draconian policies polls show the public opposes.

Now that the truth is out, maybe a more reasoned debate can begin and more pragmatic policies can finally take center stage.

David Sirota is a nationally syndicated newspaper columnist, magazine journalist and the best-selling author of the books "Hostile Takeover," "The Uprising" and "Back to Our Future." E-mail him at ds@davidsirota.com, follow him on Twitter @davidsirota or visit his website at www.davidsirota.com.

MORE DAVID SIROTA.

Sunday, March 03, 2013

While the mainstream media continues to hype the supposed need for sequestration - including grievous cuts in the social safety net - in order to "save the economy," top economists like Bill Black know for certain that this sort of austerity risks throwing our economy back into recession!

Representative Conyers needs our Support to Kill the Sequestration’s Austerity

Posted on March 1, 2013 by Devin Smith Original Here

By William K. Black

We have been strangling the economic recovery through economic incompetence – and worse is in store because President Obama continues to embrace (1) the self-inflicted wound of austerity, (2) austerity primarily through cuts in vital social programs that are already under-funded, and (3) attacking the safety net by reducing Social Security and Medicare benefits. The latest insanity is the Sequester – the fourth act of austerity in the last 20 months. The August 2011 budget deal caused large cuts to social spending. The January 2013 “fiscal cliff” deal increased taxes on the wealthy and ended the moratorium on collecting the full payroll tax. The Sequester will be the fourth assault on our already weak economic recovery. We have a jobs crisis in America – not a government spending crisis and the cumulative effect of these four acts of austerity has caused a certainty of weak growth and a serious risk that we will throw our economy back into recession. The Eurozone’s recession – caused by austerity – greatly adds to the risk to our economy because Europe remains our leading trading partner.

President Obama and a host of administration spokespersons have condemned the Sequestration, explaining how it will cause catastrophic damage to hundreds of vital government services. Those of us who teach economics, however, always stress “revealed preferences” – it’s not what you say that matters, it’s what you do that matters. Obama has revealed his preference by refusing to sponsor, or even support, a clean bill that would kill the sequestration threat to our Nation. Instead, he has nominated Jacob Lew, the author of the Sequestration provision, as his principal economic advisor. Lew is one of the strongest proponents of austerity and what he and Obama call the “Grand Bargain” – which would inflict large cuts in social programs and the safety net and some increases in revenues. Obama has made clear that he hopes this Grand Betrayal (my phrase) will be his legacy. Obama and Lew do not want to remove the Sequester because they view it as creating the leverage – over progressives – essential to induce them to vote for the Grand Betrayal.

Further evidence of Obama’s continuing support for the Sequester was revealed in an odd fashion today. Bob Woodward is in a controversy because of his column about Sequestration. His column made two primary points. First, the administration authored the Sequester. Second, Woodward claimed that Obama was “moving the goal posts” by asking for revenue increases. Woodward was criticized by many Democrats for this column and created a further controversy by saying that the administration threatened him. It turned out that the purported threat was based on a statement by Gene Sperling, Obama’s economics advisor. David Weigel’s column summarizes the dispute.

Weigel comes out where I do on each of the three issues. Yes, the administration created the Sequester and has fought to keep it alive when Republicans tried to kill it. (The Republicans “started it” by their obscene extortion in 2011 in which they threatened to force a default.) No, Obama has not moved the goal posts. No, Sperling did not “threaten” Woodward. I raise this background simply to provide a context for Sperling’s comments about the reasons that the administration created and continues to support the Sequester.

“The idea that the sequester was to force both sides to go back to try at a big or grand bar[g]ain with a mix of entitlements and revenues (even if there were serious disagreements on composition) was part of the DNA of the thing from the start. It was an accepted part of the understanding — from the start. Really.”

There may have been big disagreements over rates and ratios — but that it was supposed to be replaced by entitlements and revenues of some form is not controversial. (Indeed, the discretionary savings amount from the Boehner-Obama negotiations were locked in in BCA [Budget Control Act of 2011]: the sequester was just designed to force all back to table on entitlements and revenues.)

Obama continues to want to “force” a “grand bargain” in which he proposes to make large cuts to social programs, some tax increases, and reductions in the safety net. Again, Obama can easily break with this strategy of choking our economic recovery by supporting a clean bill that would kill the Sequester instead of our economy.

The good news is that Representative John Conyers has made the Obama’s task simple by sponsoring exactly that clean bill in the one sentence form many of us have been urging: “Section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985 is repealed.” Amen.

I propose that we launch an effort, open to all, to support Conyers’ bill and demand that our representatives in the House and the Senate promptly enact it.

Thursday, February 28, 2013

Tomorrow the Congress and the President will decide who or what will be sacrificed to the gods of sequestration. Will it be Social Security, Medicare, Medicade, education and food stamps -- or will the giant corporations, many of which have managed to pay no taxes at all, be dunned to pay enough taxes to cover any short fall. Surely 99% of all Americans would vote for the latter ...but most of the Congress has been paid off by the 1% and Obama is under easily imaginable pressure.

Sanders on Sequestration

Friday, February 01, 2013

If Obama and/or the Congress begins to talk about cutting Social Security in any way whatsoever, We The People should not abide it!

Hands Off Social Security and Veterans' Benefits

January 31, 2013

Sunday, January 06, 2013

Economist Bill Black: "The fundamental insanity at all times was that [Obama and the Congress] put together, one, we must avoid the fiscal cliff because that's austerity and it'll throw us into recession, and two, therefore we must make far greater budget cuts, adopt far greater austerity. Now, obviously, that's insane logic.

theREALnews Permalink

January 3, 2013

Cliff Deal a "Moderate" Betrayal

Bill Black: Compromise on tax hikes on rich and allowing payroll taxes to rise sets the ground for a "grand betrayal" yet to come

Bio

William K. Black, author of THE BEST WAY TO ROB A BANK IS TO OWN ONE, teaches economics and law at the University of Missouri Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics. Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan Bank of San Francisco, and senior deputy chief counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement. Black developed the concept of "control fraud" frauds in which the CEO or head of state uses the entity as a "weapon." Control frauds cause greater financial losses than all other forms of property crime combined. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management.

Wednesday, January 02, 2013

Economist Michael Hudson explains how sovereign governments of, by, and for the People have only to print more money to achieve a soft landing when passing over any kind of "fiscal cliff," real or contrived. In contrast, the present government of, by, and for the wealthiest 1% has created a social safety net for the 99% that requires the 99% to pay for this "largess" by means of a users' fee (called the payroll tax) ...and this 1% is now preparing to steal this $2.7 trillion trust fund because of a "fiscal cliff" contrived explicitly to cover up this intended theft. On the flip side, governments of, by, and for the super rich, require no users' fees from the 1%, yet this same 1% can expect to be bailed out by We the People when their seafront homes are destroyed by a hurricane or the too-big-to-jail criminal banks run up gambling debts they can't pay off. When are We The People going to perceive this asymmetry and rise up against it?

MONDAY, DECEMBER 31, 2012

Michael Hudson: America’s Deceptive 2012 Fiscal Cliff, Part II – The Financial War Against the Economy at Large

By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is “The Bubble and Beyond.”

Today’s economic warfare is not the kind waged a century ago between labor and its industrial employers. Finance has moved to capture the economy at large, industry and mining, public infrastructure (via privatization) and now even the educational system. (At over $1 trillion, U.S. student loan debt came to exceed credit-card debt in 2012.) The weapon in this financial warfare is no larger military force. The tactic is to load economies (governments, companies and families) with debt, siphon off their income as debt service and then foreclose when debtors lack the means to pay. Indebting government gives creditors a lever to pry away land, public infrastructure and other property in the public domain. Indebting companies enables creditors to seize employee pension savings. And indebting labor means that it no longer is necessary to hire strikebreakers to attack union organizers and strikers.

Workers have become so deeply indebted on their home mortgages, credit cards and other bank debt that they fear to strike or even to complain about working conditions. Losing work means missing payments on their monthly bills, enabling banks to jack up interest rates to levels that used to be deemed usurious. So debt peonage and unemployment loom on top of the wage slavery that was the main focus of class warfare a century ago. And to cap matters, credit-card bank lobbyists have rewritten the bankruptcy laws to curtail debtor rights, and the referees appointed to adjudicate disputes brought by debtors and consumers are subject to veto from the banks and businesses that are mainly responsible for inflicting injury.

The aim of financial warfare is not merely to acquire land, natural resources and key infrastructure rents as in military warfare; it is to centralize creditor control over society. In contrast to the promise of democratic reform nurturing a middle class a century ago, we are witnessing a regression to a world of special privilege in which one must inherit wealth in order to avoid debt and job dependency.

The emerging financial oligarchy seeks to shift taxes off banks and their major customers (real estate, natural resources and monopolies) onto labor. Given the need to win voter acquiescence, this aim is best achieved by rolling back everyone’s taxes. The easiest way to do this is to shrink government spending, headed by Social Security, Medicare and Medicaid. Yet these are the programs that enjoy the strongest voter support. This fact has inspired what may be called the Big Lie of our epoch: the pretense that governments can only create money to pay the financial sector, and that the beneficiaries of social programs should be entirely responsible for paying for Social Security, Medicare and Medicaid, not the wealthy. This Big Lie is used to reverse the concept of progressive taxation, turning the tax system into a ploy of the financial sector to levy tribute on the economy at large.

Financial lobbyists quickly discovered that the easiest ploy to shift the cost of social programs onto labor is to conceal new taxes as user fees, using the proceeds to cut taxes for the elite 1%. This fiscal sleight-of-hand was the aim of the 1983 Greenspan Commission. It confused people into thinking that government budgets are like family budgets, concealing the fact that governments can finance their spending by creating their own money. They do not have to borrow, or even to tax (at least, not tax mainly the 99%).

The Greenspan tax shift played on the fact that most people see the need to save for their own retirement. The carefully crafted and well-subsidized deception at work is that Social Security requires a similar pre-funding – by raising wage withholding. The trick is to convince wage earners it is fair to tax them more to pay for government social spending, yet not also to ask the banking sector to pay similar a user fee to pre-save for the next time it itself will need bailouts to cover its losses. Also asymmetrical is the fact that nobody suggests that the government set up a fund to pay for future wars, so that future adventures such as Iraq or Afghanistan will not “run a deficit” to burden the budget. So the first deception is to treat only Social Security and medical care as user fees. The second is to aggravate matters by insisting that such fees be paid long in advance, by pre-saving.

There is no inherent need to single out any particular area of public spending as causing a budget deficit if it is not pre-funded. It is a travesty of progressive tax policy to only oblige workers whose wages are less than (at present) $105,000 to pay this FICA wage withholding, exempting higher earnings, capital gains, rental income and profits. The raison d’être for taxing the 99% for Social Security and Medicare is simply to avoid taxing wealth, by falling on low wage income at a much higher rate than that of the wealthy. This is not how the original U.S. income tax was created at its inception in 1913. During its early years only the wealthiest 1% of the population had to file a return. There were few loopholes, and capital gains were taxed at the same rate as earned income.

The government’s seashore insurance program, for instance, recently incurred a $1 trillion liability to rebuild the private beaches and homes that Hurricane Sandy washed out. Why should this insurance subsidy at below-commercial rates for the wealthy minority who live in this scenic high-risk property be treated as normal spending, but not Social Security? Why save in advance by a special wage tax to pay for these programs that benefit the general population, but not levy a similar “user fee” tax to pay for flood insurance for beachfront homes or war? And while we are at it, why not save another $13 trillion in advance to pay for the next bailout of Wall Street when debt deflation causes another crisis to drain the budget?

But on whom should we levy these taxes? To impose user fees for the beachfront reconstruction would require a tax falling mainly on the wealthy owners of such properties. Their dominant role in funding the election campaigns of the Congressmen and Senators who draw up the tax code suggests why they are able to avoid prepaying for the cost of rebuilding their seashore property. Such taxation is only for wage earners on their retirement income, not the 1% on their own vacation and retirement homes.

By not raising taxes on the wealthy or using the central bank to monetize spending on anything except bailing out the banks and subsidizing the financial sector, the government follows a pro-creditor policy. Tax favoritism for the wealthy deepens the budget deficit, forcing governments to borrow more. Paying interest on this debt diverts revenue from being spent on goods and services. This fiscal austerity shrinks markets, reducing tax revenue to the brink of default. This enables bondholders to treat the government in the same way that banks treat a bankrupt family, forcing the debtor to sell off assets – in this case the public domain as if it were the family silver, as Britain’s Prime Minister Harold MacMillan characterized Margaret Thatcher’s privatization sell-offs.

In an Orwellian doublethink twist this privatization is done in the name of free markets, despite being imposed by global financial institutions whose administrators are not democratically elected. The International Monetary Fund (IMF), European Central Bank (ECB) and EU bureaucracy treat governments like banks treat homeowners unable to pay their mortgage: by foreclosing. Greece, for example, has been told to start selling off prime tourist sites, ports, islands, offshore gas rights, water and sewer systems, roads and other property.

Sovereign governments are, in principle, free of such pressure. That is what makes them sovereign. They are not obliged to settle public debts and budget deficits by asset selloffs. They do not need to borrow more domestic currency; they can create it. This self-financing keeps the national patrimony in public hands rather than turning assets over to private buyers, or having to borrow from banks and bondholders.

Saturday, December 29, 2012

More from economist Bill Black on the "fiscal cliff," austerity, the "Grand Bargain" (more correctly termed the "Grand Betrayal") ...and Obama's role in inventing the cliff as an excuse to inflict on the American people austerity (which would result in more and deeper recessions and give rise to higher unemployment and national debt) and the Grand Betrayal (which would cut social programs and safety nets just when Americans would need them the most).

theREALnews Permalink

December 28, 2012

Fiscal Cliff: Going Nuclear and the Grand Betrayal

Bill Black: GOP threatens to use debt ceiling as leverage, creates conditions for more austerity measures by Obama

Tuesday, December 25, 2012

Economist Bill Black: "Everyone involved in creating the fiscal cliff acted irresponsibly and inhumanely in seeking to inflict austerity, cause a recession, and unravel the safety net." "The fiscal cliff was an act of idiocy in pursuit of a policy of depravity called 'the Grand Bargain' that was actually the Grand Betrayal." "President Obama wants to begin to unravel the safety net and cut social programs even though an overwhelming majority of Democrats oppose it and even though doing so will inflict even greater austerity. That will cause a deeper recession and likely make the deficit larger, so it is as nonsensical as it is cruel."

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President Obama and House Speaker John Boehner. (photo: Saul Loeb/AFP/Getty Images)

Kill the 'Fiscal Cliff' Instead of the Economy

By William K. Black, Reader Supported News

24 December 12

veryone now agrees that the so-called "fiscal cliff" is a stupid policy that threatens our economy and our people. Everyone agrees why the "fiscal cliff" is stupid -- it inflicts austerity at a time when it is likely to throw the nation into a gratuitous recession. Causing a recession leads to increased unemployment and a larger budget deficit. We have all seen austerity force the Eurozone into a gratuitous recession in which Italy, Spain and Greece have Great Depression levels of unemployment.

Here's the short version of why austerity is a self-destructive response to the Great Recession. A recession occurs when demand to purchase goods and services falls and the economy contracts, causing increased unemployment. This simultaneously causes tax revenues to fall and government expenditures for programs like unemployment compensation to increase. The fall in revenues and increase in expenses causes the federal budget deficit to grow rapidly.

Austerity is a policy of raising taxes and/or cutting governmental spending for the purported purpose of cutting the deficit. If one raises overall taxes in response to the Great Recession the result is a reduction in private sector demand. If one cuts governmental spending the result is a reduction in public sector demand. The result of reducing private and public sector demand in the recovery phase from the Great Recession, where overall demand is already grossly inadequate, is to throw the nation back into recession or even a depression. That causes the budget deficit to grow. A policy of austerity undertaken under the claim that it will reduce the deficit causes a gratuitous recession that leads to a massive loss of wealth, far higher unemployment, and in increased deficit. That is why austerity is a policy that is the self-destructive economic analogy to the medical insanity of bleeding patients.

We have known that austerity is an idiotic response to a severe crisis for 75 years. The U.S. was in the midst of a strong recovery from the Great Depression until FDR's neo-liberal economists convinced him in 1937 that is was essential that the U.S. adopt an austerity program to reduce the federal deficit. Austerity forced our economy back into a Great Depression.

It was only the stimulus of federal spending in World War II that brought the U.S. out of the depression. During World War II and for the remainder of that decade the ratio of debt-to-GDP was at or near historically record levels. The result was the greatest industrial expansion in history, full employment (including a massive influx of women), strong economic growth, and sharply declining deficits and debt-to-GDP ratio because the growth led to large increases in revenue and the low unemployment greatly reduced spending on the unemployed. We also defeated the Axis powers, created Social Security and the GI Bill, and began an extraordinary expansion of our housing stock to house the baby boom.

We learned many lessons from the catastrophic failure of austerity and the extraordinary success of stimulus in this era. The U.S. adopted a fiscal system of "automatic stabilizers." These are counter-cyclical (they push in the opposite direction of the business cycle) fiscal effects that are designed into the system and do not require new legislation once the recession or inflation begins. The result of these automatic stabilizers has been to reduce the severity and duration of recessions. Indeed, studies show that the larger the national governmental role in the economy, the less volatile the economy. This makes sense because the stabilization function should be more effective if the stabilizers are larger relative to the economy.

Unfortunately, these sensible counter-cyclical policies that make theoretical and common sense and have repeatedly worked in the real world were forgotten by many due to a campaign of deficit hysteria funded by Pete Peterson, a Republican billionaire financier who has made it his mission in life to destroy the safety net. His ultimate goal is to privatize social security so that Wall Street can receive hundreds of billions of dollars in fees investing our retirement funds.

I've explained in a prior column how the fiscal cliff was created through an insane bipartisan deal in August 2011. The fiscal cliff was always a terrible job-destroying idea that also began to unravel the safety net by cutting Medicare. Everyone involved in creating the fiscal cliff acted irresponsibly and inhumanely in seeking to inflict austerity, cause a recession, and unravel the safety net.

What is forgotten, however, in discussions of the idiocy of creating the fiscal cliff is that it was part of a broader bipartisan deal intended to inflict even more self-destructive austerity and even greater damage to the safety net. The fiscal cliff was an act of idiocy in pursuit of a policy of depravity called "the Grand Bargain" that was actually the Grand Betrayal.

The bipartisan madness has increased since the August 2011 budget deal. Today, the parties are simultaneously screaming (1) that the fiscal cliff is a disaster because it imposes austerity and will cause a recession and (2) that it is essential that we agree to a Grand Betrayal that will inflict even greater austerity and cause an even more severe recession. Indeed, the Grand Betrayal mandates austerity over a decade so it is likely to cause and/or deepen multiple recessions. The Republican and Democratic variants of the Grand Betrayal are doubly destructive and inhumane because they cut the safety net. President Obama wants to begin to unravel the safety net and cut social programs even though an overwhelming majority of Democrats oppose it and even though doing so will inflict even greater austerity. That will cause a deeper recession and likely make the deficit larger, so it is as nonsensical as it is cruel.

During this this entire financial farce I have been unable to get the dominant media to make the most obvious point. Since we all agree that austerity (the fiscal cliff) is a terrible idea that will cause a recession and likely increase the deficit, we must logically conclude that all variants of the Grand Betrayal are austerity programs that must be defeated in order to prevent a recession that is likely to increase the deficit. We should all be opposing any cuts in the safety net because they would inflict austerity. An overwhelming majority of Democrats and a majority of Republicans also oppose cuts in the safety net as inhumane.

So why don't the Democrats and Republicans stop trying to do a deal that will inflict austerity? Why not simply repeal the Budget Act of August 2011? That would kill the fiscal cliff. Repeal would kill austerity, prevent the recession, save the safety net, increase growth, and shrink the deficit. All versions of the Grand Betrayal (Republican and Democratic) inflict austerity, are likely to cause a recession, begin to unravel the safety net, destroy growth, and increase the deficit.

Under the same logic we should be able to agree on two related actions -- renew the extension of long-term unemployment compensation and renew the moratorium on collecting the payroll tax. These policies are superb counter-cyclical programs and have the added advantage of reducing human misery and inequality. Republicans and Democrats have agreed in the past on the desirability of both actions.

Reader Supported News is the Publication of Origin for this work. Permission to republish is freely granted with credit and a link back to Reader Supported News.

Economist Bill Black: "...since everybody agrees now that the fiscal cliff is incredibly stupid and really dangerous, in the sense that it's designed to impose austerity, and they're saying that if we were to continue this austerity for very long, we would throw the nation back into recession, I went back and looked. How did we come about—you know, who's the moron that created this fiscal cliff that they're talking about? And it turns out it's President Obama."

theREALnews Permalink

December 23, 2012

Black: Too Big to Prosecute and It's Obama's Fiscal Cliff

Bill Black: Criminal money laundering goes unpunished and Fiscal Cliff was created by Obama
Watch full multipart The Black Financial and Fraud Report:

Friday, December 21, 2012

THIS IS MY 959th POST SINCE JANUARY 2007, WHEN I FIRST BEGAN BLOGGING AMERICA'S CONCEALED DESCENT INTO FASCISM AND THUS THE U.S. GOVERMENT'S BECOMING OF, BY, AND FOR THE BANKSTERS, GIANT CORPORATIONS, AND THE KLEPTOCRATS THAT HEAD THEM -- CONCEALED FROM "WE THE PEOPLE" BY THE HEAR-NO-EVIL, SEE-NO-EVIL, SPEAK-NO-EVIL "MAINSTREAM" MEDIA. I BELIEVE THAT MY LONG SEARCH FOR THE TRUTH QUALIFIES ME TO VET AS TRUE THE DISMAL PREDICTION YOU WILL READ BELOW ...UNLESS WE THE PEOPLE TAKE TO THE STREETS IN VERY LARGE NUMBERS.

Headlined to H3 12/21/12
Obama/Boehner Two-Step

By Stephen Lendman (about the author) Permalink
OpEdNews Op Eds 12/21/2012 at 01:26:14

opednews.com

Obama/Boehner Two-Step
Both parties on board to destroy America's social contract.

by Stephen Lendman

Previous articles explained fiscal cliff duplicity in detail. At issue is destroying America's social contract. Both parties agreed early in Obama's first term. They plan killing it incrementally by a 1,000 cuts.

Class war rages. Private wealth and power are pitted against essential public needs. Property rights, individualism, and free-market mumbo jumbo hammer ordinary people mercilessly. Neoliberal harshness reflects it.

Warren Buffet once said, "There's class warfare, all right, but it's my class, the rich class, that's winning."

Obama, Boehner and complicit congressional leaders agree. Plans are to give corporations and America's privileged class more. Unprecedented wealth extremes will widen.

Public needs will grow. Shared sacrifice is one-way. Both parties concur. Obama and Boehner publicly dance around what both leaders agreed on months or years ago. Media scoundrels pretend otherwise.

On September 19, 2011, economist Richard Wolff headlined his Guardian op-ed "The truth about 'class war' in America," saying:

"Republicans claim (Obama's) millionaire tax is 'class war.' The reality is that the super-rich won the war" long ago.

Tax hike fear-mongering claims:

(1) raising them "amount(s) to un-American 'class warfare,' pitting" ordinary Americans against corporations and super-rich elites; and

(2) tax hikes negatively affect productive investment and job creation.

Evidence proves otherwise. Post-WW II, every personal income dollar raised was matched by $1.50 on business profits. Now it's 25 cents.

Ordinary households bear today's burden. Social justice are four-letter words. Corporations pay increasingly less. Nominally from 1989 - 2007, they paid 24.7% of profits. Since 2010, they averaged 12.4%. In reality, many pay much less.

Obama/Boehner's grand bargain assures new cuts. Obama's on record favoring lower corporate taxes. Expect nominal reductions from today top 35% rate to 28%. What's paid, of course, is much less.

Sometime next year, major tax code revisions will be quietly announced. Discussions about them are concealed. Otherwise, major social benefit cuts would look like double-dealing duplicity to fund corporate largese. More on what's coming below.

Wolff said US taxes over the last half century saw "a massive double (burden) shift from the richest individuals to everyone else."

Corporations and super-rich elites won America's class war. Everyone else lost out.

On December 13, Wolff revisited the topic. His Guardian op-ed headlined "Class war redux: how the American right embraced Marxist struggle," saying:

Republicans and conservatives used to say little about "classes and class warfare." America is a "classless" society, they claimed.

Most Americans are "wondrously comfortable and secure consumers," they say. Harsher views now prevail. Unguarded moments reveal them.

Prime targets are called "moochers." Romney called them "the 47%" always voting Democrat.
"Moochers" depend on government handouts, they claim. They include contractual federal obligations. They're for qualified eligible recipients.

Social Security and Medicare aren't entitlements. They're not welfare. They're insurance policies. They're funded by worker/employer payroll tax deductions.

Social Security provides retirement, disability, survivorship, and death benefits. It's America's most effective poverty reduction program.

It's worked remarkably well since inception. It once provided secure inflation-adjusted retirement or disability income. Manipulated CPI numbers erode annual amounts received.
It protects personal savings. It avoids risky private investments.

It's not going broke. When properly administered, it's sound and secure. Over time, it needs only modest adjustments. Doing so properly keeps it viable in perpetuity.

Medicare is America's largest health insurance program. Tens of millions are covered. Everyone over 65 and some younger disabled people qualify. So do others of all ages with end-stage renal disease.

Obama/Boehner/complicit congressional leaders/and corporate America want both programs privatized and eroded en route to ending them in their present form. They want Medicaid and public pensions treated the same way.

Death by a 1,000 cuts is policy. Expect it to play out over the next decade.

Both parties support class warfare. They want people most in need denied help. They want government reduced to militarism, national defense, homeland security, and defending corporate and super-rich privileges.

They want everyone else spurned, on their own, sink or swim. At issue is destroying America's social contract by neoliberal austerity.

Democrats feign resistance. It's cover for what they agreed on years ago. Obama's fully on board. He's corporate America's point man.

His people-friendly persona masks his diabolical dark side. No pun intended. He's contemptuous of popular needs. He heads the fight to destroy them.

Battle lines are drawn. Ordinary people are in the crosshairs. Political theater conceals what's coming.

Both sides agreed on $4 trillion in largely domestic cuts over the next decade. It's for starters. Quietly they're on board for much more.

Deficit cutting urgency is a ruse. Whatever amounts are cut, annual deficits will rise exponentially. Cutting them depends on sound policies both parties spurn.

They include ending permanent US wars, cutting defense spending sharply, shutting down overseas bases, reinstating progressive taxes, and making corporations and large investors pay their fair share.

Most important is putting money power back in public hands where it belongs. Doing so ensures long-term, inflation-free prosperity. It's possible with minimal taxes on ordinary people.

Good policy isn't rocket science. It's time-tested effective. What worked in other countries and colonial America can be replicated now. Both parties reject it. They have other fish to fry.

Their plans involve thirdworldizing America. Political theater will unveil it step by step. Obama agreed to $1.2 trillion in largely domestic yearend cuts.

Boehner raised his initial $800 billion to $1 trillion. Expect agreement on around $1.1 trillion. Simpson-Bowles recommended it two years ago for starters. All parties have much more in mind.

Boehner's on board for modest tax increases on incomes of $1 million or more. Obama suggests $400 million. Expect compromise around $600 million. On average it's what America's 1% earns.

Word awaits on expected tax revenues raised v. bracket manipulation and specific spending cuts. Expect Medicare and Medicaid to be hit hard.

Final deal terms may mandate around $500 million cut from Medicare alone. Expect it mostly in higher Part B and Part D deductibles and copays.

Defense increases, not cuts, are planned. War profiteers rest easy. Reductions will come from weapons systems Pentagon officials don't want, overseas troop drawdowns, and veterans benefits most of all.

Retirees will pay higher healthcare premiums and co-pays. Overall benefits will be cut. Promises made were broken. Neoliberal harshness targets them like other Americans. Even wounded and disabled vets increasingly are on their own.

"Broadening the tax base" is code language for major code revisions coming. Ordinary people will be hit hardest.

Expect mortgage deduction caps, state and local tax deduction limits, less allowed for charitable and medical insurance deductions, lower education credits, raising the Social Security retirement age to 67 or higher, and other ways to squeeze America's middle class and least advantaged.

Obama and Boehner feign negotiations. They're on board in principle. Public two-stepping is deceptive. Deal parameters and terms were agreed on long ago.

Corporate bosses are on board. Obama's been meeting with them multiple times weekly. Tax relief, greater handouts, and other incentives bought their support. What they back becomes policy.

Key bosses matter most. They're lobbying Congress for Obama. Heavy lifting is done. Final details await announcement. Most planned cuts are backloaded. They'll begin in 2014 or 2015. Others will kick in later.

December 31/January 1 are fictitious deadlines. Cuts can come any time. They can be made retroactive to yearend.

March 27, 2013 is a real deadline. America runs out of money when its debt ceiling is reached. US law requires Congress authorize borrowing limits to fund federal programs.

Doing it means raising the ceiling by late March or sooner. Expect agreement in principle by year end. Details come later. Two-stepping continues.

Media scoundrels provide background music. Corporate approval sealed a done deal. Neither side of the isle dares disagree.

Campaign contributions depend on going along. Money talks. In Washington it buys influence. It demands consigning America's social contract to history's trash bin.

Middle class and disadvantaged households are increasingly on their own. Harder than ever hard times await them.

A Final Comment

In 2009, the Nobel Committee continued its long/inglorious tradition. Another war criminal got its peace prize.

Obama followed Henry Kissinger, Shimon Peres, Yitkak Rabin, Menachem Begin, Al Gore, Kofi Annan, three other US warrior presidents, and other candidates deserving harsh condemnation.

On December 19, Time magazine added another award. Obama became its person of the year for the second time. It called him "both the symbol and in some ways the architect of this new America."

It omitted saying he helped make it unsafe and unfit to live in.

It ignored his war on humanity, his police state governance, his kill list, his self-appointment as judge, jury and executioner, and his self-designating himself power to have any US citizen arrested and imprisoned uncharged indefinitely for life.

It forgot about numerous other violations of international, US statute and constitutional laws. So many exist, it's hard remembering them all. Instead of denouncing his rogue governance, it praised what causes so much harm to so many.

It shouldn't surprise. In 1938, Time named Hitler person of the year. In 1939, Stalin followed. Future Nazi collaborator Pierre Laval won in 1931. So did Nazi sympathizer Charles Lindbergh in 1927.

In 1937, facist Chinese leader Chaing Kai-shek was Time's choice. Kissinger, Nixon, GHW Bush, Bill Clinton twice, Newt Gingrich, GW Bush twice, and Bernanke were future inglorious choices among others.

Perhaps Netanyahu will win next year. Qualifying depends on colonizing all valued parts of Palestine he doesn't yet control. Perhaps he's pushing overtime to meet Time's deadline.

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Stephen Lendman lives in Chicago and can be reached at Email address removed .
His new book is titled "Banker Occupation: Waging Financial War on Humanity."
http://www.claritypress.com/LendmanII.html

Visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.
http://www.dailycensored.com/obamaboehner-two-step/