Wednesday, November 24, 2010

Advocating For The Most Privileged

President Obama’s National Commission on Fiscal Responsibility and Reform is due to release its recommendations shortly but the two co-chairmen already have released their own draft proposal with its mix of tax increases, tax cuts, and cuts in spending. The Beltway elite, not surprisingly, are fairly enthused.

We have Washington Post columnist Ruth Marcus, blasting "the childishness of the extremes on both sides” for ignoring the “ looming disaster that inaction invites.” The following day and in the same publication, David Ignatius makes some sense but concludes “If Republicans and Democrats could unite to make the tough decisions needed to carry out at least some of the commission's reforms, this really could be a moment for change. That's what voters want, not more Washington tantrums and trauma.”

It's not only Marcus and Ignatius but also, according to Bob Somerby, the NY Times' Ross Douthat and David Brooks and the Post's Dana Milbank and David Broder. All deride the left but fail to address the complaint of Paul Krugman, who writes

suggest eliminating tax breaks that, whatever you think of them, matter a lot to middle-class Americans — the deductibility of health benefits and mortgage interest — and using much of the revenue gained thereby, not to reduce the deficit, but to allow sharp reductions in both the top marginal tax rate and in the corporate tax rate.

It will take time to crunch the numbers here, but this proposal clearly represents a major transfer of income upward, from the middle class to a small minority of wealthy Americans. And what does any of this have to do with deficit reduction?

Well, nothing. But it does have to do with expanding the ever-expanding gap between rich and poor, between rich and middle class, as depicted in the graphs below. (The first and second are from the Center for Budget and Policy Priorities; the second, from Thomas Ricks, in an otherwise unfortunate post.)

But, wait! Marcus and Ignatius have nothing on Joe Scarborough and Mika Brzezinski (video below):

SIMPSON: You’ve gotta go where the meat is. And the meat is health care, Medicare, Medicaid, Social Security. Not balancing the books on the backs of poor old staggering seniors to make the damn thing solvent for 75 years.

SCARBOROUGH: We were stunned, Erskine, by some of the things that were said after the commission report came out, saying, “Seniors are going to be thrown out on the street!” I looked at the numbers to be really honest with you, and I didn’t think you moved fast enough on Social Security and Medicare. We calculated that I guess, it was Trumka, who I like very much, Trumka said that this throws old people out. My two year old son Jack will get Social Security at 69. People in their 20′s and 30′s will be just fine.

BRZEZINSKI: In fact, I think you could’ve gone further.

SIMPSON: I know Rich very well. He’s a good egg. He has to say for what he has to say for his membership. But he knows I’m right.

BOWLES: What we’ve done is make Social Security solvent for the next 75 years. As you all know, Social Security runs out of money in 2037. We’re not making it up. That’s the law.

Scarborough says "people in their 20's and 30's will be just fine." As Think Progress notes, Scarborough's son Jack, if anywhere as economically privileged as Joe, may not need to retire at age 69. That legendary rise in life expectancy we're incessantly lectured on applies mostly to the affluent; for the others (who need Social Security income more), there has been little gain in life expectancy at retirement. Most of the gain has come from the decline in infant mortality.

Mika Brzezinski says "I think you could've gone further." Life is too short to comment on anything Mika Brzezinski says- ever.

Alan Simpson says "you've gotta go where the meat is." Yes, that's where the revenues are because the trust fund is financed by taxes on employes and employees and therefore is in relatively good shape. And because that's "where the meat is"- a self-financing, sound fund- it must be raided so that tax rates on the wealthy can be dropped from 35% to 24%. Remarkable logic- if it ain't broke, let's fix it!

And Erskine Bowles- that's Erskine Bowles, the Democrat- dishonestly says "As you all know, Social Security runs out of money in 2037. We’re not making it up." Yes, you are making it up. With no changes, full benefits are projected to be paid through 2037- and 78% of benefits as late as 2084.

And what could Bowles possibly mean by "that's the law?" It's "the law" that determines whether there are funds to pay benefits? Is Erskine Bowles deliberately trying to mislead the American people- or working on his high school degree?

The real problem is not children or extremists or short-term deficits, but journalists, television personalities, and Washington wise men just making it up.

************************** HAPPY THANKSGIVING *******************

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