The president's "Debt Commission" is busily moving into debt hysteria, as Dean Baker calls it. They're doing their best to ramp up paranoia about the costs of Social Security. Baker notes that Fred Hiatt's WaPo is faithfully megaphoning Pete Peterson's phony claims.
The Washington Post (a.k.a. Fox on 15th Street) told readers that: "Official forecasts suggest that without sharp changes in federal spending or tax collections, the United States could enter into a downward spiral of indebtedness that by the end of this decade would erode the country's ability to educate its children, care for the elderly or mount a robust national defense."
Wow, that sounds really dire. It would have been great if they gave a source for this one because that is not what the standard sources say. For example, if we go to our most recent Budget and Economic Outlook from the Congressional Budget Office (CBO), we find the economy growing at an average annual rate of 2.4 percent over the years 2015-2020. CBO also projects average productivity growth for this period at 1.8 percent a year, meaning in principle that living standards can rise at roughly that rate. It also projects an average interest rate on 10-year Treasury bonds of 5.5 percent, this is only slightly higher than the low-point of the budget surplus years at the end of the Clinton administration.
In short, there is no evidence in these projections of the sort of crisis described in the Post article. It would be interesting to see the document(s) that provide the basis for the Post's assertion.
(emphasis added)
It would be but you won't because they, um, don't exist. Except in Right-Wing LaLaLand. They never have. Never. It's pure invented schlock hysteria meant to scare everybody into hiking the SocSec tax yet again. Now why would they want to do that? Don't they want to kill it altogether?
Well, yes. But since that's unlikely given the catastrophe when Bush's Ownership Society crashed and burned - which even Grover Norquist admits - as a fallback position they'll accept yet again using SocSec to subsidize their rich bosses, a trick they've already used several times since they first thought of it in 1981.
"SocSec as a subsidy for the rich? Huh?"
Never heard of it, eh? That's what it became, though, after Reagan & Co "tweaked" the SocSec tax, one of the very first things Ronnie did as president, it was so important. In Perfectly Legal, David Kay Johnston explains.
From 1982 to 2002 the government collected $1.7 trillion more in Social Security taxes than the agency paid out in benefits to retirees, widows and orphans and in disability benefits.
***
From 1983, when overtaxing began, through 2002 Social Security benefits rose by half in real dollars while Social Security taxes almost doubled. As a result, three out of four households now pay more in Social Security than in income taxes.
And you can thank the Democrats who had a Congressional majority and could have told Reagan to stuff his little trick. Instead, they were already trying to pander to $The Money$ by out-doing Republicans in sponsoring tax-cuts for the rich. Those tax cuts - many of the least defensible were the work of Dems - had to be paid for somehow or else (Deficit Scare Version 1.0) THE WORLD WOULD COME TO AN END!!!
In the parlance of the time, tax cuts had to be "revenue neutral". Today they call it "Pay as you go", which is easier to remember for people whose biggest intellectual investment is in American Idol. But it's the same thing. It means that every bit of spending has to be offset by a cut somewhere else and every tax cut has to be balanced by cuts in spending. The way our corporate-owned party decided to "balance" the tax cuts for the rich was to raise taxes on the lower and middle classes. They couldn't be seen to do that - politically unhealthy, don'tcha know - so they ginned up a fear of the imminent collapse of Social Security and under the guise of "saving" it, wrote in a hefty raise for everyone making less than $87,000/yr. That's the legal cap, you see. After $87K of income, you pay NO SocSec tax.
Daniel Patrick Moynahan called this fake crisis "a phantom" and said flat out that all it did was "mask the drop in tax revenues caused by the Reagan tax cuts". Which, of course, it did. Beautifully. Nobody noticed.
In the two decades beginning in 1983 the government has spent almost $5.4 trillion more than it took in from income, estate, gift and excise taxes. The reason that government debt grew by only $3.6 trillion was because of those excess Social Security taxes that were used to finance income tax cuts for the rich.
Remember all that "lockbox" talk back during the Clinton Admins and then again when Bush tried to privatize SocSec so everybody would be forced to play stock market roulette for their retirement? How they were going to put the SocSec taxes in a separate account they weren't going to be allowed to draw from? Well, whether it came from Al Gore or Chimp Bush it was a lie and they knew it was a lie. Clinton and Georgie Porgie both threw the SocSec taxes into the general fund and used them to pay for wars and more tax cuts for corporations and the rich, and they knew they were going to do that when they said it.
Both wings of our one corporate party have "tweaked" the SocSec taxes several times since Reagan until now they are double what they were and the money supposedly put away by us for our futures has been spent in Iraq and Afghanistan, and on corporate perks for Big Ten CEO's like Blankfein and Jack Welch.
"Welch? Why pick on Welch? He retired 9 yrs ago."
Well, because Jack's retirement package from GE included the use of a free company jet "for life" and Jack isn't dead yet. That jet is estimated to cost taxpayers $3.5M per year. And we will pay that cost (which has probably gone up since that estimate was made in 1998) until Jack kicks the old bucket. I figure at least $35Mil of the money we were saving for our old age has gone to pay for Jack's shopping trips to Paris so far, and he may have another 20 years left in him.
When we subsidize the rich, it's for life, too.
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