Category Archives: Economy

Social Security Is Not An Entitlement. It’s A Safety Net.

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Shamed by scenes of the elderly living in abject poverty following the Great Depression, Congress passed the Social Security Act which was signed into law by President Franklin Roosevelt on August 14, 1935.  At the time, poverty rates among senior citizens exceeded 50 percent.

Since that time, millions of Americans confronted by old age, poverty, disability and unemployment have benefited from the act. 

Although Republicans, and more recently, the media have labeled Social Security with the perjorative term “entitlement” it is simply a form of insurance defined by actuaries as a government-sponsored insurance program funded by premiums paid by or on behalf of participants.  Indeed, the FICA withholding you see on your paycheck stands for “Federal Insurance Contributions Act”.  These contributions represent less than six percent of an individual’s annual income up to $106,000 per year.  Any income above $106,000 is exempt from withdrawals. 

Fact is, Republicans have been opposed to Social Security from the beginning, claiming that it would cause a loss of jobs.  Obviously it didn’t.  And the new deficit “crisis” has provided Republicans with arguments to dramatically change or end the program now.  Many want to replace it with individual investment accounts, feeling that they could better ensure their retirement by investing their FICA withdrawals themselves.  First, the benefit payments from an insurance program like Social Security should never be compared to the returns on investment accounts.  Moreover, replacing Social Security with individual investment accounts could be disastrous for many seniors in the event of another economic depression or a repeat of the Great Recession of 2008.  If the stock markets plummeted, the retirement incomes of most seniors would crash with them. 

So how about the solvency of Social Security?  Currently, the program has a $2.5 trillion surplus.  Remarkably, administrative costs of the program account for less than one percent of its total.  However, due to the impending retirement of Baby Boomers, it is estimated that the program will not be able to make full benefit payments in 25 or 30 years.   But the program is not “broke.”  Indeed, it can be fixed with relatively minor tweaking.  One option is to raise the cap on income as the Reagan Administration did in the 1980s.  Removing the cap altogether would definitely solve the problem as would limiting benefits to only those who actually need them – those retirees with annual household incomes of less than $50,000, for example.

Contrary to those who want to “end the entitlements”, the facts show that dramatically changing Social Security or ending the program entirely could be devastating for our nation.  The majority of beneficiaries have little significant income from other sources since options such as employer-provided pension plans are virtually non-existant today.  Additionally, the benefits from our Social Security program already lag behind most other advanced countries.  The Organisation for Economic Cooperation and Development (OECD) ranks the U.S. 26th out of 30 OECD nations.  On average, OECD nations replace 61 percent of a retiree’s earnings with pension plans.  In the U.S., the number is roughly 40 percent.

Now it’s the First Responders’ fault.

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First it was teachers who the Teapublicans blamed for our deficit woes. Now it’s firefighters and police.

In Republican budgets from the House of Representatives to the state houses, budgets for first responders are being slashed. Worse yet, thanks to an amendment by a Florida Republican, the 9/11 first responders are now being subjected to a test of patriotism before the government will accept claims for medical conditions acquired while digging through piles of rubble in search of bodies!

Apparently, some Republicans are concerned that some of these people are terrorists!!! So before voting for a bill that would pay for the medical claims of the 9/11 first responders, they attached an amendment that requires a search into the first responders’ past to make sure they weren’t complicit in the terrorist attacks.

Seriously! You can’t make this stuff up!

Congress is actually questioning the patriotism of the people they once hailed as heroes for rushing into the Twin Towers to help others escape. The very same people who were awarded for bravery by the Bush administration and the Republican-controlled Congress.

Who will they go after next? Grandma and Grandpa? Oh, no…they wouldn’t…would they? Well, who needs Medicare and Social Security anyway? Right?

Maybe the best way to fix the deficit is to do nothing.

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While the government and the media debate the pros and cons of President Obama’s and Congressman Ryan’s competing deficit reduction plans, Ezra Klein of the Washington Post suggests another possibility.  Do nothing.

That’s right.  Do nothing to address the deficit and growing national debt!

Using a graph based on the Congressional Budget Office’s September numbers, Klein shows what will happen if Congress fails to act.  Our national budget would begin to balance itself in two years.  And despite the so-called “crises” of Social Security, Medicaid and Medicare, the budget would remain balanced into the forseeable future.

Given the doom and gloom scenarios of the teabaggers and their Republican allies, how is this possible?

It’s the result of allowing the Bush tax cuts to expire at the end of their 2-year extension, implementing the program that changes the way doctor payments are handled in Medicare, and allowing the Affordable Care Act (so-called Obamacare) to be fully implemented.

That’s it!  No privatizing Social Security, no ending Medicaid and no changing Medicare to a voucher system that will likely drive up the cost of health care while dramatically adding to the insurance industry’s bottom line.  All we have to do is keep the politicians from further messing things up!  (Of course, it wouldn’t hurt if we could stop bleeding money and lives in Iraq and Afghanistan.  It’s estimated that those wars have already cost us as much as $3 trillion.  A number that’s increasing by the day.)

Remember this as the debate over the deficit escalates between now and the 2012 election.  The choice is likely to be between a Republican plan of pulling the safety nets out from under our most vulnerable citizens while lining the pockets of the wealthy.  Or enacting President Obama’s plan which will reduce the deficit while continuing to care for the poor, the sick and the elderly.  Or doing nothing and returning to Clinton-era tax rates.Personally, I vote for one of the last two options.  After all, unless my memory fails me, the decade of the 90s was prosperous for most everyone.  Not just the super-wealthy.

What will be the Boomers’ legacy?

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The generation that began with so much promise – helping to improve civil rights, volunteering for the Peace Corps, and forcing an end to the Vietnam war – is now at a crossroads.  As we reach retirement age, the Baby Boomer generation has to consider what our legacy will be.  Will we be remembered for the aforementioned accomplishments?  Or will we be remembered for unparalleled greed, selfishness and hate?

The answer depends on what we do next.

You see, I believe that Boomers have enjoyed advantages few other generations have.  Unlike our parents, Boomers have enjoyed relative peace and prosperity.  Most of our parents worked hard and scrimped to send us to college in record numbers.  Many of our parents passed along modest estates.  And, unlike our parents, we didn’t face great economic hardships until late in our careers when our retirement funds should have been nearly complete.

Our generation has enjoyed rising salaries, inexpensive food, and inexpensive energy.  Our taxes have been lower than previous generations, so we have had the opportunity to keep more of our earnings.  We have had more machines to help with our labor.  We have had more leisure time.  We have traveled more.  And we have had more options for entertainment.

The real question is, what have we accomplished as a result of all these advantages?

We have consumed a disproportionate amount of the world’s resources.  We have polluted the planet, resulting in dramatic climate change.  We have failed to address poverty and hunger in our own country, let alone around the world.  And though we contributed to the end of the Vietnam War and the Cold War, we have opened new battlefronts in the Middle East to protect our oil interests.

So now what?  As we reach retirement, will we display the greed and contempt for the poor as the Tea Party has done?  Or will we devote at least some of our retirement to charity?  Will we help end poverty in the U.S. and the world?  Will we make health care affordable for all – not just the wealthy and the connected?  Will we find ways to curb pollution?  Will we force our corporations to pay their fair share of taxes and create jobs in our own country?  Will we finally level the playing field for minorities and women?  Will we find ways to end homelessness in our own nation – find shelter for the approximately 2 million homeless children?  Will we contribute to the rebuilding of our crumbling infrastructure built at such sacrifice by our parents and grandparents?  And will we properly fund education, so our grandchildren and great-grandchildren will have many of the same advantages we enjoyed?

Our generation has the education, knowledge, experience and resources to accomplish great things and to achieve a legacy comparable to “The Greatest Generation.”

But, although I’m hopeful about our generation’s legacy.  I’m not optimistic.

A Culture of Blame.

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The recent standoff in Wisconsin raises some unpleasant questions about American society.  Why do we now blame union workers and their pensions for our economic troubles?  Certainly, public employees who make around $50,000/year aren’t getting rich off of taxpayer money.  And why blame foreclosed homeowners for the housing crisis?  Surely they didn’t benefit from purchasing a home for more than its current value and being forced to move.  And how can anyone logically blame the Obama Administration for an economic meltdown that occured before the President took office?

My point is that there is plenty of blame for our problems to go around starting with deregulation, two unfunded wars, unnecessary tax cuts for the wealthy and the greed of Wall Street bankers.  But why focus on blame?  Wouldn’t we all be better served by spending our time trying to find solutions to our current problems instead?

Of course, those who committed illegal acts, if any, should pay for them.  But we should let our legal system address those people.

As for our economy, our deficit can easily be reduced by rescinding tax cuts for the nation’s wealthiest Americans.  We could create high-paying jobs in the U.S. by ending tax incentives for the corporations that send jobs overseas, and by adding tariffs on goods made outside the U.S.  We could generate more revenue by lowering the tax rate on corporations while, at the same time, removing corporate tax loopholes.  We could generate revenue for our state and local governments by ending corporate welfare such as Tax Increment Financing.  We could cut costs by refusing to help the billionaire owners of professional sports franchises pay for palatial new arenas.  We could increase innovation by improving public education and providing small businesses with the same tax advantages as large corporations.

We could save businesses and individuals billions of dollars by creating Medicare for all and hiring enough regulators to eliminate fraudulent claims.  We could save billions by de-criminalizing drugs and ending the so-called “War on Drugs” which has put thousands of non-violent people in prison to learn new skills from hardened criminals.  We could save billions by using our prison system to educate and reform those who would benefit instead of merely warehousing inmates until we’re forced to release them.

We could finally end our dependence on oil by eliminating taxpayer subsidies to big oil companies and spending the same amount of money on alternative sources of energy.  Most important, we could reform our political campaigns by holding political ads to the same truth-in-advertising standards as ads for products and services.  If they don’t tell the truth, the politicians must be removed from office and new elections held as they are in Great Britain.

Of course, you could continue to assume that significant changes like these are impossible.  But if our nation continues to fall behind others in education, health care and innovation, don’t blame me.

The Deficit Scam.

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In a Tea Party-based stupor, Republicans are locked in a battle with President Obama and Senate Democrats over cuts to the sizeable deficit.  Of course, rather than look at the real causes of the deficit, they continue to attack Democratic-supported institutions such as labor unions, Public Broadcasting, the Department of Education, Planned Parenthood, the health care reform bill and the so-called “entitlements” of Social Security, Medicare and Medicaid.  And, of course, they place most of the blame for the deficit on President Obama.Once again, the Republicans are dead wrong.

According to a report by the non-partisan Center on Budget and Policy Priorities, “…the economic downturn, the Bush tax cuts and the wars in Afghanistan and Iraq explain virtually the entire deficit over the next ten years.”

Even the costs of the stimulus bill and financial rescues have had relatively little impact on the deficit.  Again, according to the CBPP, “those costs pale next to other policies enacted since 2001 that have swollen the defict.”  The CBPP report continues, “Just two policies dating from the Bush Administration – tax cuts and the wars in Iraq and Afghanistan – accounted for over $500 billion of the deficit in 2009 and will account for almost $7 trillion in deficits … through 2019, including the associated debt-service costs.”

The truth is that the current Republican initiatives to cut the deficit are a ruse.  They are merely driven by ideology in an attempt to strengthen their hold on public office.  There are only three ways to cut the deficit without harming the middle class and the most vulnerable people in our society:  Cut our bloated defense budget designed, not just to protect us, but to force our will on the rest of the world.  End corporate welfare such as the obscene subsidies for Big Oil.  And raise taxes on those who can most afford it, such as the 400 Americans who control 50 percent of the nation’s wealth.

If you’d like to read the entire CBPP report for yourself, follow this link: http://www.cbpp.org/files/12-16-09bud.pdf

The beginning of the end of Democracy in the U.S.

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Yes, I know that probably sounds alarmist.  But consider the following:

1- The Citizens United ruling by the Supreme Court gave corporations the free speech rights of individuals.  The effect is to make them super-citizens allowing them to inject tens of millions of dollars into our political campaigns with virtually no oversight.  This, of course, greatly benefits the Republican Party which represents the interests of large corporations.

2- Ohio, Wisconsin and other states which are now controlled by Republican governors and Republican-led legislatures have attacked labor unions in order to limit their bargaining rights.  Of course, it’s only coincidence that labor unions are the last remaining large contributors to Democratic Party election campaigns.

3- Republicans at all levels of government are pushing legislation that would de-fund Planned Parenthood, another traditional contributor to Democratic campaigns.

4- Republicans are pushing to de-fund Public Broadcasting which they see as liberal-leaning media that ask too many difficult questions.

5- Finally, many of the states controlled by Republican governors and Republican legislatures are now pushing legislation that would require state-issued IDs in order to vote.  While seemingly innocuous, these IDs would prevent many college students and minorities from voting in their states.  Again, it’s merely coincidence that college students and minorities most often vote for Democratic candidates.The impact of all of this is to greatly increase campaign funds for Republican candidates and to decrease available funding for Democratic candidates.  These tactics would also serve to disenfranchise Democratic-leaning voters and to quiet independent media that refuse to adhere to Republican talking points.

This is a serious threat, folks!  We can’t allow Republicans and their corporate masters to continue to stack the deck against working citizens.  Speak up!  Ask your Republican friends why, if their political ideas are so great, do they have to resort to trickery and bullying tactics in order to push them on ordinary people?

GOP Asks You To Sacrifice On Behalf Of The Wealthy.

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The new crop of Republican deficit hawks are seeking billions of dollars in cuts to education, health care, public broadcasting, environmental protection and pension funds.  “It’s necessary for everyone to sacrifice in order to reduce the deficit,” they say.

Funny that they’re not asking the wealthy or large corporations to do the same.

Indeed, $70 billion of the deficit consists of the Bush era tax cuts for the wealthy.  And large corporations?  In addition to their ever-lower taxes (Cutting taxes on corporations creates jobs, don’t you know?), they enjoy a raft of tax loopholes, tax incentives and outright subsidies.  For example, the world’s most profitable companies (Big Oil) are actually paid to search for oil.  And we provide grants to universities to create new and better pharamceuticals.  Then we allow the large pharamceutical companies to patent the new drugs and sell them to our population at obscene prices.

So when you hear Republicans talk about sacrifices, ask them what sacrifices they’re willing to make.  Are they going to opt out of their government paid health care?  Are they going to cut their salaries?  Are they going to raise taxes on the large corporations that contribute to their political campaigns?

You know the answer.

The Real Reagan Legacy.

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On the occasion of Ronald Reagan’s 100th birthday, Republicans and other conservatives simply could not contain their myopic admiration for “The Great Communicator.”  In reality, he should have been called “The Great Propagandist.”  Or, perhaps, “The Great Bullsh***er.”

For, I believe, the collapse of the middle class can be traced directly to the decisions made during his terms in office.  Take the assault on labor unions.  It was Reagan who decided that he could not be troubled with the PATCO strike.  So he fired most of the nation’s air traffic controllers and replaced them with new, more obedient controllers.

Or take “Reaganomics,” AKA “Voodoo Economics” and “Trickle-down Economics.”  Under Reagan, the administration began the biggest transfer of wealth in the nation’s history.  All upward.

He began by paving the way for interstate banking, which effectively did away with usuary laws that limited the interest rate banks could charge for loans.  And he ended tax deductions for the interest paid on loans.  (For those too young to remember, prior to Reagan, all of the interest paid on loans for education, cars, credit cards, etc. was tax deductible.)  The effect was to enact a huge tax increase on the poor and the middle class while, at the same time, cutting taxes for corporations and the wealthy.

Reagan’s economic disciples, such as George W. Bush, have not only further cut taxes for corporations and the wealthy, they have continued the assault on labor unions by providing tax incentives for corporations to ship jobs overseas.  They have dramatically cut the estate tax and capital gains taxes.  They have provided subsidies for some of the world’s most profitable corporations – oil and pharamceutical companies.  They have attacked Social Security, Medicaid, Medicare and even public education as “entitlements.”  And people like Wisconsin Governor Walker are trying to put an end to collective bargaining.

The result of the policies of all these Reaganophiles is that the 400 wealthiest people in the nation now control 50 percent of the nation’s wealth.  To be clear, that means 400 people now have as much money as the bottom 110,000,000 Americans combined!  Even Reagan’s own budget director now admits that “Reaganomics” was a disaster for the middle class.

So pardon me if I choose not to celebrate the Reagan legacy.  To me, that would be akin to celebrating the legacy of influenza.  Or measles.  Or polio!

Arizona Leads U.S.

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It’s true.  The state of Arizona is leading the nation.  Just not in a good way.

For example, we have one of the nation’s worst economies.  Our schools, home prices, and poverty rank among the nation’s worst.  Our gun shows lead the nation in exporting weapons to the Mexican drug cartels.  And, based on the actions of our state legislature, we must have more non-institutionalized lunatics than any other state in the union.  (Of course, if said legislators have their way, we may not be part of the union much longer.)

To elaborate, just consider the bills currently pending in a legislature that is overwhelmingly dominated by Republicans:

SB1433 would set up a committee of 12 lawmakers (of course, they would be mostly Republican) to review federal laws and regulations to determine which are “outside the scope of the powers delegated by the people to the federal government in the U.S. Constitution.”  If passed, the legislation would directly challenge federal supremacy as written in Article 1, Sections 8 & 10 of said Constitution.

SB1308 and HB2562 would limit federal authority setting up interstate compacts to honor each others’ birth certificates segregating children who are considered U.S. citizens from those who are not.

SB1309 and HB2561 would redefine Arizona citizenship in defiance of the 14th Amendment of the U.S. Constitution.

SB1328 would make it legal for Arizonans to defy any federal law or rule if federal employees or members of Congress do not have to comply.

SB1391 would create an interstate firearms freedoms act guaranteeing the right of citizens to bear arms free of federal regulation.

SB1393 declares that the state has the exclusive right to regulate carbon dioxide emissions within the state boundaries while SB1394 protects the right to emit carbon dioxide from human-caused activity.

SB 1545 would allow the production of nuclear fuel in Arizona free from federal regulation.  (It’s unknown if that also includes the production of nuclear weapons.)

SCR1016 would require the approval of the legislatures of half the states in order for Congress to increase the federal debt.

HB2077 requires any federal agency coming into an AZ county to first register with the county sheriff before conducting official business.

HB2471 would bar the appropriation of any state funds to comply with a federal mandate unless the federal government provides a report to show the mandate is constitutional.

HB2472 would allow the state to acquire federal property by eminent domain unless the federal government first receives permission of the state legislature.

HB2537 permits the AZ house speaker and senate president to defend last year’s SB1070 immigration law by lawsuit if necessary.

HB2544 requires U.S. presidential candidates to provide certain proof of citizenship before they can appear on the ballot in Arizona.

HCR2015 calls for a constitutional convention to adopt an amendment to require the consent of three-fourths of the states to increase federal debt.

HCR2022 proposes a constitutional convention to require a balanced federal budget.

On top of all this, the state attorney general has just announced that he is suing the federal government for not defending the border against illegal immigrants and drug smugglers.  (I guess more than 10 border agents per mile doesn’t qualify as a defense.)  Amazingly, it seems that Arizona Republicans are more interested in attacking the U.S. government than dealing with the very real problems in our own state!  Can’t you just picture Nero fiddling while Rome is burning?