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Mar 04 2013

Is the Tea Party inadvertently saving Social Security?

Whenever the political class, the major players in the business world (especially the financial sector), and their media lackeys, all of whom are collectively known as The Villagers, enthusiastically agree on something, concerned people should sit up and take notice because it signals that a big swindle is about to be perpetrated on the general public. The clue that such a thing is in the works in when the phrase ‘everyone knows’ is bandied around about a major policy proposal with absolutely no evidence to back it up.

As Alex Pareene points out, if you watch the TV talk shows (which I never do), currently it is taken as a given that ‘everyone knows’ that the budget deficit is a terrible thing that will impoverish future generations unless something is done immediately and that the main thing driving the deficits are the expenditures on earned benefits (like Social Security and Medicare) as well as on Medicaid and that these things must be cut if we are to prevent the collapse of civilization. (I have explained before why I refuse to use the popular term ‘entitlements’ to describe Social Security and Medicare and use ‘earned benefits’ instead.)

Since the US has now clearly shifted from being an inclusive state which gives “everyone access to economic opportunity” to an extractive state, one that is “controlled by ruling elites whose objective is to extract as much wealth as they can from the rest of society”, it follows that plans are afoot to cut earned benefits so that that money can be diverted to the oligarchy.

The whole sequester discussion is about how to do just that. What is interesting is that president Obama, a faithful servant of the oligarchy, has been signaling for a long time that he wants to make those cuts. The catch is, of course, that doing so would be seen as a flat-out betrayal of his supporters since preserving earned benefits has been one of the most successful political planks of the Democratic party. So he dresses it up as being part of a so-called ‘grand bargain’ in which those cuts (which will have a major impact on large numbers of people at the bottom of the economic scale) are accompanied by some pin pricks inflicted on the wealthy that they will hardly notice by closing some tax loopholes here and there. We will then be urged to sign on to the deal in the spirit of ‘shared sacrifice’ for the ‘good of the nation’ and other patriotic claptrap. And Obama’s supporters are so feckless that they will likely let him get away with this sellout.

But he has been stymied by the fact that the Republican political leadership is in the thrall of its Tea Party wing and they have signaled that anything that smacks of a tax increase, even if only on the wealthy, is anathema to them. Furthermore, they have convinced themselves that anything Obama proposes must be bad and thus opposed and so they are balking at the deal that Obama is offering them.

So in a curious twist of fate, the fanatical anti-tax ideology that the oligarchy has used so successfully to make themselves wealthy is now backfiring, preventing them from achieving their long-time goal of cutting earned benefits. Hence we are in the ironical situation in which Republican intransigence to making a deal is preventing them from accepting the fig leaf that Obama needs to hide his sellout on earned benfits.

Just after the November election, Michael Lind argued against the so-called grand bargain by pointing out that the situation is nowhere near as dire as is being made out by the ‘sky is falling’ deficit hawks and doomsayers, who are deliberately creating a sense of panic in order to push through this deal. He says that the deficit problems are long term and manageable. He marshals the data to show that any quick deal that

would trade modest Republican concessions on higher taxes on the rich for Democratic support for major cuts in Social Security, Medicare and other entitlements … would be a bad deal for mainstream Americans.

Social Security and Medicare have absolutely nothing to do with the short-term U.S. fiscal problem. Middle-class entitlements do have long-term problems, like inadequate payroll tax revenue for Social Security in the 2030s, and excessive medical prices in the U.S., which affect private healthcare as well as Medicare and Medicaid. But these are unrelated problems that deserve to be discussed in unrelated debates according to unrelated timelines.

He argues against the ‘chained CPI’, one of the mechanisms by which the proposed cuts in Social Security is being disguised.

What is chained CPI? It is a different way of calculating inflation adjustments for Social Security, which would allow inflation to reduce their real value over time, while fooling America’s elderly into thinking that they were receiving what they had been promised.

Is this really what Barack Obama wants as part of his legacy as president of the United States? Cutting Social Security for future 95-year-olds by 9.2 percent?

It is true that the absurdly high cost of health care in the US is a problem that needs to be addressed. But there are many ways to reduce those costs. My preferred one is to create a single-payer system by expanding Medicare to cover everyone so that the parasitic private health insurance industry that adds no value at all is eliminated. But even within the current private insurance system there are a whole host of other options that can be discussed. (Thanks to reader Norm for that link.) Of course, since this panel was convened by the Wall Street Journal, they seem to have made sure that no strong advocate of single-payer was included among its experts, though they could have easily found one through the Physicians for a National Health Program (PNHP).

Lind agrees that health care cost is the one serious issue that needs to be addressed.

In reality, the most important long-term challenge is reducing excessive American health industry prices, without reducing access to healthcare by ordinary Americans. If the prices and fees of doctors, drugs and hospitals in the U.S. were comparable to those in most other advanced industrial countries, we could have more healthcare at lower cost and the entire discussion about the federal budget would be radically different.

Lind ends by suggesting what needs to be done.

We don’t need a bad grand bargain. In fact, we don’t need a grand bargain of any kind.

In this lame duck session, Congress should agree on short-term deals to avert the sequester and to deal with the expirations of the Bush tax cuts and payroll tax cut and a few other minor patches — and nothing else. Long-term tax reform, Social Security reform, medical industry price and delivery system reform — these are jobs for future Congresses. Leave future legislators something to do.

There’s no hurry. We have plenty of time.

I agree.

4 comments

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  1. 1
    machintelligence

    Preventing the sellout on Medicare may not be a deliberate result for the Tea Party, but it is in line with some of their attitudes:

    President Obama at a town hall meeting last week described a letter he received from a Medicare recipient:

    “I got a letter the other day from a woman. She said, ‘I don’t want government-run health care. I don’t want socialized medicine. And don’t touch my Medicare.’

  2. 2
    atheist

    It would indeed be pretty funny if some loony Tea Baggers prevented some quisling Democrats from destroying Social Security.

  3. 3
    baal

    Lind is an interesting fellow but I have overall given up on reading anything he puts out. He has moments where he makes a lot of sense (as seen above) but othertimes he’s shilling for the Democrats or another interest group.

  4. 4
    smrnda

    Scary and hilarious. With people like this, most of the US populace might just be too stupid for democracy to work. I chalk it up to the fact that, outside or rare social circles, when a person states an opinion they aren’t asked for back it up with facts or evidence.

    This sort of reminds me of the whole Affordable Care Act. Someone told me that ‘nobody read it’ and I pointed out that, given the repetitive nature of most of it, I *HAD* read it, and that I knew of at least one professor who assigned the entire thing to read as part of a class on public policy. The ignoramus then went on to just disbelieve that ‘it even makes sense’ and that anybody who read it and said they understood *any* of it is lying, or part of some liberal conspiracy. Apparently, if something can’t be compacted into a sound byte digestible by the village idiot, it isn’t true.

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