Social Security

Obama’s Chained CPI Idea Is Bad

Obama, in attempting to show that he can "give" a little when it comes to cutting the deficits, is about to propose a thing called "chained CPI" when it comes to Social Security benefits.  Basically, it sets Social Security benefits to the inflation rate.

Bad. Bad. Bad.

For one thing, Social Security isn't in trouble.  It's well-funded for the next to decades.  It's not the problem when it comes to the debt.

Secondly, inflation for seniors is not the same as inflation for the country as a whole, and it is likely to be higher.  Why?  Because health care cost inflation is much larger than other areas of spending.  In other words, seniors have a different consumption basket than normal consumers.

But most importantly, it's not going to make the Republicans come to the table on tax increases.  These guys do no compromise, even when you make a compromising gesture to them.  In fact, I'll bet some Republicans are out there right now, preparing ads about how Obama wants to cut Social Security benefits to seniors.

Bad idea.

Facebook Changing Privacy Controls AGAIN

The announcement will be at 1 pm today (ET).  Apparently, the backlash has been too great, and Facebook is going to fix it for the better:

(CNN) — Facebook, in a rare move, is expected to reverse itself Wednesday on changes to privacy settings after sustained backlash from users worried about how their private information is being used.

The announcement, expected shortly after 1 p.m. ET, marks a rare double-back for Facebook, the nearly ubiquitous networking site that has made a habit of rolling out changes, then weathering user grumbling until it subsides.

"I can confirm that our new, simpler user controls will begin rolling out tomorrow. I can't say more yet," Facebook spokesman Andrew Noyes told CNN in an e-mail Tuesday.

Among other changes, the site implemented a new tool last month that spreads user preferences and data across the Web. The tool allows Facebook users to more easily share articles and other Web pages they like, but at the same time makes those picks easier for others to see.

Some Facebook members also have been vocally opposed to changes that switched default settings to public.

The Web information-sharing function requires users to sign up for it. And privacy settings can be reset. But the current setup of about 170 settings requires negotiating what The New York Times called "a bewildering tangle of options" to make the switch.

Wednesday's announcement presumably will address what Facebook founder and CEO Mark Zuckerberg has acknowledged have been missteps with the recent changes.

Another Economic Thought…

When George Bush and Republicans talked about privatizing social security a while back, they were talking about putting it in the hands of Merrill Lynch, Citibank, and the other financial geniuses behind the current economic crisis.

Aren’t we glad we didn’t do it?

United States Government Debunks Bush

Even as Bush is going out trying to sell gullible midwesterners about how grrrrreat it would be if Social Security were nothing but private accounts, the United States government’s social security website clearly indicates how ill-advised Bush’s scheme is:

Q: I think I could do better if you let me invest the Social Security I pay into an Individual Retirement Plan (IRA) or some other investment plan. What do you think?

A: Maybe you could, but then again, maybe your investments wouldn’t work out. Remember these facts:

-Your Social Security taxes pay for potential disability and survivors benefits as well as for retirement benefits;

-Social Security incorporates social goals – such as giving more protection to families and to low income workers – that are not part of private pension plans; and

-Social Security benefits are adjusted yearly for increases in the cost-of-living – a feature not present in many private plans.

You Go, Seniors!

The good news is that Bush’s social security privitization scheme hasn’t worked.  The better news is why it hasn’t worked.  Jon Chait explains:

The main reason is that the public is not quite as selfish as the conservatives thought.

The privatizers’ weakest assumption turned out to be their belief that the elderly would support privatization if they knew they wouldn’t be affected. For weeks, as polls have shown rising hostility to privatization, GOP pollsters and strategists have conceded that they need to do more to reassure seniors on this point. Bush has obligingly harped on it at every stop.

Yet senior citizens overwhelmingly oppose Bush’s approach. And it’s not because they think their benefits will be cut – polls show they overwhelmingly they buy his reassurances. As today’s Post reports:

By and large, the elderly do understand the president has promised not to touch their Social Security checks, according to polling.

But that is not relevant to their political opposition, Smorodin said, noting that older people also worry that pension benefit cuts will hurt their children and grandchildren.

At 69, Gene Wallace knows the White House’s proposal would have no impact on his Social Security check, but if Bush believes that will silence the Republican mayor of Coldwater, Mich., Wallace grumbled, "he’s all wet."

"I’m a parent as well as a grandparent. Somewhere along the line, they are going to be eligible for retirement assistance," he said, with all the energy he could muster three weeks after open-heart surgery. "It’s everybody’s concern what happens to this country."

I find this pretty heartwarming. Who wouldn’t?

Very heartwarming!

Worthless IOUs

From The American Street:

Next time you hear some trained Bush monkey echo Bush talking points and claim that the Social Security trustfund is stocked with nothing but a bunch of worthless “IOU’s,” pull out a $20 bill like this one:


A worthless IOU.

Explain to them that if the United States Bonds and Treasury Bills that make up the Social Security trust fund are “worthless IOU’s,” then so is this twenty dollar bill.

You see, Gvt. bonds, t-bills and this twenty are all inherently worthless pieces of paper with some printing on them. They have no real, intrinsic value.

Their only value comes from being backed by the “full faith and credit” of the United States.

So, in essence, what the Bush monkeys and Bush himself are saying is that you just can’t count on the “full faith and credit of the United States.”

A curious argument, and a dangerous one to make.

Dangerous because we are now running annual defecits in the neghborhood of $200 billion a year, based on Bush’s own questinable budget estimates. That means our Gvt does not have enough revenues from taxes, fees, etc to pay for all of its spending on an anual basis. We are $200 billion short…every year.

But, we still make our payments. We don’t print more money to do it. We BORROW that money. Yes, we borrow about $200 billion a year to pay for our Gvt spending habit.

But how, exactly do we borrow it? Do we go to a bank and say: “Hey bank, can you float the US Gvt a $200 billion loan this year?” And then repeat the process every single year for God know how long?

Of course not.

We borrow it by issuing Bonds and Treasury Bills that are bought by investors.

As it turns out, most of those who hold these “IOU’s,” happen to be foreign banks, and investors. Japan, China, Europe, Saudi Arabia…all invest in US Gvt Securities.

And we rely on their confidence in the “full faith and credit” of the United States to mainatin their habit of propping up our Goevrnment’s annual spending.

But what do you think these investors will do if Bush and his trained monkey minions keep saying that US Gvt. Securities are nothing but a bunch of worthless IOUs?

Yes. They will be much LESS likely to buy them because Bush is implying that we will default on them at some point. Thus, they will become more risky! So, in order to attrract buyers for these securities, we will have to RAISE THE RATE OF RETURN on them to make them more attractive. This will kill our economy because this will also raise longterm interest rates.

Or, we will have to massivley increase taxes by at least $200 billion to pay for our spending.

Or, we will have to cut our annual spending by at least $200 billion a year.

That means massive cuts in Medicare, Medicaid, defense and a whole host of other vital programs.

In other words, Bush and the GOP are willing to destroy the product of all the blood, moral authority, and hard work previous generations of Americans put into building up the “full faith and credit” of the United States in order to achieve a short-term short-sighted, cheap-ass propaganda victory on Social Security.

Who needs Al Qaeda when you have the Republican party?

UPDATE: It’s even worse than I thought!

Old Folks

Yglesius gives George Will the heel of his boot on social security:

George Will, like many other conservatives, is positively irate that old people won’t get behind the president’s plan even though the president has promised not to cut their benefits. In response, it’s worth noting first and foremost that senior citizens may have concerns about this subject other than naked self-interest. But on the subject of naked self-interest, it seems worth pointing out that Will and co. are almost certainly full of shit on this topic. If privatization is put in place, this will create a new, and large, financial gap in Social Security. It will also create a situation where younger voters — everyone under 55 on privatization’s Zero Hour — no longer have a stake in defending the generosity of older people’s Social Security benefits. Right now, if you’re my age, your future benefits depend, in part, on what today’s retirees get. Under privatization, that link will be broken. So when the shortfall starts getting big what, realistically, is going to get the ax?

I can’t say for sure that it will be benefits for current retirees, but it seems likely. At the same time, current retirees have nothing to gain from the creation of private accounts (it won’t apply to them), and nothing to lose from higher income taxes or higher payroll taxes (they’re retired). Privatization might not have a negative impact on older Americans, but from their perspective privatization is all downside risk with no upside reward. Some younger people certainly will wind up better off under privatization than they would be otherwise (and some will lose out), but absolutely no old people will benefit, while many stand a good chance of suffering.

I’m a Racist

… because I oppose Bush’s privatization of social security idea. 

Well, that’s what the President says.  Pretty amazing.  Here’s what he said yesterday:

And so there are guidelines as to what you can invest in. I was being somewhat facetious on the lottery — but really not. There’s a proper risk reward, a portfolio that will allow you as a younger worker to pick a mix of stocks and bonds. Oh, I know they say certain people aren’t capable of investing, you know, the investor class. It kind of sounds like to me, you know, a certain race of people living in a certain area. I believe everybody’s got the capability of being in the investor class.

This is surely a sign of desparation, when the opposition creates strawmen, i.e., "They say that if you support me, then you are a Nazi racist sexist blah blah blah.  But I say . . ."

Anyway, this all may be moot, because Bush’s so-called plan looks dead, dead, and dead.

If It Walks Like a Lame Duck…

From the Washington Post:

The Senate’s top Republican [Bill Frist] said yesterday that President Bush’s bid to restructure Social Security may have to wait until next year and might not involve the individual accounts the White House has been pushing hard.

…."In terms of whether it will be a week, a month, six months or a year, as to when we bring something to the floor, it’s just too early," Frist said.

….House leaders have said they want the Senate to go first in passing Social Security legislation. That is because they are pessimistic about picking up Democratic support, and they do not want to put GOP members in the position of passing a controversial bill that then dies in the Senate, leaving a ripe issue for Democrats in 2006.

Now, Bush won, right?  He had a "mandate", right?  His party has control of both houses of Congress, right?  And he can’t get his first major piece of legislation out of the gate?  LOL!  Loser.

Bush’s Social Security Reform Is Dying

And badly.  It seems the more he talks about "fixing" Social Security, the less convincing he is.  Some leader.  Some mandate.

And who is telling us that Bush is actually losing support on Social Security, the more he talks about it? Our friends at Gallup:

Only one in three Americans approve of President Bush’s handling of Social Security, his lowest rating on the issue since he took office.

A USA TODAY/CNN/Gallup Poll conducted Friday-Sunday found that 35% approved of Bush’s Social Security record, 56% disapproved and 9% had no opinion. That was down from three weeks ago, when 43% approved. In March 2001, just after he took office, 49% approved.

The poll showed that Democrats have made headway in their opposition to Bush. In early January, Americans divided evenly when asked whether Social Security needs major changes in the next year or two. Now 59% say it doesn’t need to be changed right away.

From the Producers of “The Swift Boat Veterans for *cough* Truth *cough*”…

… comes the latest in surreal conservative propaganda. And it is a doosy.

AARP: Anti-military. Pro Gay. Therefore, we should privatize social security.

This is a copy of the the ad being run by USANext, the conservative alternative to AARP (when you click the actual ad, you are taken to USANext‘s home page). 2

There’s no article or argument as to WHY the AARP is supposedly anti-military or pro-gay. They just . . . um . . . ARE . . . I guess.

Meanwhile get the scoop on USANext here.

I have no problem with there being an alternative to the AARP (although I’m not inclined to think of the AARP as anti-military, pro-gay), but really — a front for the pharma industry? How stupid do conservatives think our senior citizens are?

Rose Colored Glasses Beyond Belief

This is a true exchange. It happened in Omaha last Friday, when Bush was taking his dog-and-pony show on the road:

THE PRESIDENT: Good. Okay, Mary, tell us about yourself.

MS. MORNIN: Okay, I’m a divorced, single mother with three grown, adult children. I have one child, Robbie, who is mentally challenged, and I have two daughters.

THE PRESIDENT: Fantastic. First of all, you’ve got the hardest job in America, being a single mom.

MS. MORNIN: Thank you. (Applause.)

Yes. Harder, I would think, because one of her children is handicapped. This woman has one hell of a tough row to hoe.

Moments later, with the same woman . . .

THE PRESIDENT: Yes, but nevertheless, there’s a certain comfort to know that the promises made will be kept by the government.

MS. MORNIN: Yes.

THE PRESIDENT: And so thank you for asking that. You don’t have to worry.

MS. MORNIN: That’s good, because I work three jobs and I feel like I contribute.

THE PRESIDENT: You work three jobs?

MS. MORNIN: Three jobs, yes.

THE PRESIDENT: Uniquely American, isn’t it? I mean, that is fantastic that you’re doing that. (Applause.) Get any sleep? (Laughter.)

Only an elitist, Kennebunkport-raised, never-earned-a-decent-living-in-his-life snob would respond in such a way.

Here’s the thing, Mr. Preznit. When somebody has to work two or three jobs to make ends meet, it is not because we Americans have that yes-we-can spirit.

This woman is struggling — she has a handicapped child. It’s not "fantastic" that she has to work three jobs; it is tragic. Don’t wave a flag in her face — help her!

Never Tired Of Being Wrong

According to a July 28th, 2000 article in USA Today, back in 1978 when President Bush was running for congress in Texas, "he predicted Social Security would go broke in 10 years and said the system should give people ‘the chance to invest money the way they feel’ is best." (Source)

And back in 1999, he again said that Social Security would go broke in 10 years. (Link)

We should believe him now . . . . uh . . . . why?