Robert Reich "we should be cutting military spending & Corporate welfare" [View all]

[Ian62]

I agree.

http://www.huffingtonpost.com/robert-reich/cliff-hanger-the-president_b_2338483.html


From the article :-
"Hands off Social Security. If the Republicans are willing to raise tax rates on high earners but demand more spending cuts in return, the president should offer larger cuts in defense spending and corporate welfare."

The main point is that Obama is pandering to, and acting in, the interests of large Corporations and against the interests of the overwhelming majority of Americans.

The proposed cuts in Social Security and the linkage to chained cpi is just the latest in a long list of examples.

Yes, there should be cuts in military spending. It is easy to see how to save over $500bn annually.

Yes, there should be cuts to Corporate welfare. It is easy to see how to save over $500bn annually from these.

Yet Obama does not want to touch these items.

He wants to save about $12bn annually from Social Security.

This will have a trivial effect on the $1,100+ billion deficit. It will do significant harm to seniors, many of whom are already living on the breadline.

We are already increasingly seeing that people reaching retirement age, CANNOT AFFORD to retire.

The population group with the highest increase in the labor participation rate is the over 55's.

The percentage employed in all other age groups has declined significantly.

Corporate profits, particularly of large multinationals, are at record levels, but Obama does not want to touch these.

WHY?

Robert Reich's second main point which I also wholeheartedly agree with :-

"The median income of Americans over 65 is less than $20,000 a year. Nearly 70 percent of them depend on Social Security for more than half of this. The average Social Security benefit is less than $15,000 a year.

Even Social Security's current cost-of-living adjustment understates the true impact of inflation on elderly recipients, who spend far more on health care than anyone else -- including annual increases in Medicare premiums."

Barack Obama is proposing that the rate paid for Social Security benefits will be dependent on chained cpi, not cpi in the future.

It is another sellout of the poor and middle classes in favor of Corporations and the wealthy.


Investopedia explains 'Chain Weighted CPI'
The chain weighted CPI incorporates changes in both the quantities and prices of products.

The product has been changed from clothing to food to more clearly demonstrate the changes proposed.

10 years ago I bought steak 5 times a month and ground beef once a month (I felt well off).
Steak cost $5 and ground beef $2. Total cost per month $27

Now I am feeling hard up and I only buy steak once a month and I buy ground beef 5 times a month.
Steak now costs $10 and ground beef now costs $4. Total cost $30.

The price of food has doubled over the last 10 years - cpi would be 100% (cumultative over 10 years).

Chained cpi is just over 10% (over 10 years).

Read the original example at: http://www.investopedia.com/terms/c/chain-linked-cpi.asp#ixzz2FcERduQc

It would seem that both Barack Obama and Nancy Pelosi expect ordinary Americans to be impoverished for a very long time.

Chained cpi is higher than cpi when times are good as people are able to purchase more and better quality goods.

When times are hard the opposite is true.

Disposable incomes for all but the wealthy have been falling for many years.
The amount left after paying for basic necessities - food, shelter, warmth, basic clothes has been decreasing.

Chained cpi is a method of squeezing the poor and the middle classes still further. A great many people are struggling to cope now.

All sorts of things are affected by official government inflation statistics :-

Social security payouts
Unemployment benefits
Food Stamp payouts
Government employee wages
Private sector wage settlements are in large part determined by official inflation numbers
etc.

Real inflation (cpi) calculated using the methods employed in 1980 is 10%.

The official model of measuring cpi was changed in the early 1980's.

CPI using the models in place in 1990 is 6%. The official cpi calculations were again changed in the early 1990's.

The basic necessities of food, energy and housing are greatly understated for the overwhelming majority of people in current official cpi statistics.

Chained cpi is another back door method of reducing official government inflation.

1980 model cpi compared to current

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1990 model cpi compared to current



Above charts courtesy of http://www.shadowstats.com/

Update 12/21

Items that have had the highest rates of inflation in recent years include :-

Healthcare
Food
Gas and Energy
College Education

The first three have a dramatic impact on the living standards of the elderly.

The last three have a dramatic impact on the living standards of the young and parents.

None of them have much of an impact on the super wealthy, they are a relatively low percentage of their spending.
Corporations are making record profits from which the wealthy derive most of their income.

A minor point but worth making.
Why doesn't somebody propose that Congressional pay and benefits, including pensions, be linked to chained cpi and everybody else not?

Call it performance related pay.

If the average standard of living for Americans rises, Congress will get above inflation pay and pension increases.
Chained cpi will be higher than cpi.

If on the other hand living standards for Americans decline, chained cpi will be lower than cpi and Congress will not get much if any pay rise. They will take an effective pay cut, just like they are now trying to do to pensioners.

In a breathtaking display of cynicism, Barack Obama more or less proposes Mitt Romney's platform to resolve the Fiscal Cliff.

He has demonstrated with absolute clarity that he is on the side of large Corporations and not on the side of ordinary Americans.




WASHINGTON -- President Barack Obama, with his latest fiscal cliff offer, proposes extending the Bush tax cuts for everyone earning less than $400,000 a year, and paying for it by increasing taxes on the middle class and cutting Social Security and Medicare.
Obama's offer would allow the payroll tax holiday to expire, meaning middle class workers will see smaller paychecks in 2013. Economists have warned that the recovery is too fragile to risk a broad tax hike on workers. It would also gradually reduce Social Security, pension and disability benefits seniors are due to receive, taking a small bite up front, but building up to much larger cuts over time.
http://www.huffingtonpost.com/2012/12/18/obama-social-security-fiscal-cliff_n_2319850.html

Obama's latest proposals to resolve the so called "fiscal cliff" sound more like Mitt Romney's platform every day.
N.B. The tax rates for those making more than $400,000 is a red herring. It affects a trivial amount of revenue.



HSBC settlement - a slap on the wrist shareholder penalty of 5 weeks of revenues.

William K Black quite rightly asks on Huffington Post "Why did Obama save a criminal enterprise like HSBC?"
http://www.huffingtonpost.com/william-k-black/hsbc-settlement_b_2291859.html?utm_hp_ref=tw
Why didn't Obama take away HSBC's US banking license?
Why didn't he put some HSBC execs in jail?

Monsanto - why are about a dozen ex senior Monsanto employees are now in positions of influence in government?

Why is Monsanto getting carte blanche in the latest Agriculture Bill?
“The Farmers Assurance Provision” is the title of a rider, Section 733, inserted into the House of Representatives 2013 Agriculture Appropriations Bill. Somehow, as a farmer, I don’t feel the least bit assured. It allows carte blanche for Monsanto not to have to obtain FDA approval before planting."
http://www.counterpunch.org/2012/12/14/monsanto-gets-its-way-in-ag-bill/#.UM5m7goxJiA.twitter

Why aren't Joe Corzine and Jamie Dimon in jail over the MF Global theft from client segregated accounts and other frauds?

Why weren't Goldman Sachs executives prosecuted over the slam dunk case of lying to Congress?
Matt Taibi on the subject - plenty of evidence to prosecute Lloyd Blankfein CEO of Goldman
http://finance.yahoo.com/blogs/daily-ticker/matt-taibbi-goldman-sachs-executives-lied-customers-congress-175044553.html

Money laundering by the big banks is endemic, there have been several cases.
http://ian56.blogspot.co.uk/2012/12/money-laundering-by-large-banks-is.html
Obama has quite clearly told the big banks that they are above the law. When you encourage bad behavior you will get more of it.

Why isn't anyone talking about closing Corporation Tax loopholes? Like Google shipping $2bn of US generated profits to Bermuda?

Why isn't Obama proposing to cut the MASSIVE amounts of government waste and excess government largesse to large Corporations? It is VERY EASY to cut $1 TRILLION plus of annual PURE WASTE.
http://ian56.blogspot.co.uk/2012/11/it-is-very-easy-to-cut-1tn-from-federal.html

There are many many other questions that should be being asked, but are not receiving media attention.

There are too many Democrats blindly worshipping Obama just because he has a D after his name without stepping back and considering the evidence and the facts.

Corporations are posting RECORD profits.
The income of the top 1% is at levels not seen since the late 1920's on the back of these record Corporate profits.



Executive pay

http://3.bp.blogspot.com/-KXDjoGo-rjU/UCDyTMK9XJI/AAAAAAAAABU/RnD5ugenkYI/s1600/CEO+to+employee+pay.jpg


U6 unemployment is at 15%, poverty levels and the number of people on Food Stamps (now 47.7 million) is also setting records.

America today
http://ian56.blogspot.co.uk/2012/11/unemployment.html

All the evidence says that Obama is working for the large Corporations against the interests of ordinary Americans.

The solution to America's economic problems is simple.
The balance between record Corporate profits and declining living standards for the overwhelming majority of Americans needs to be addressed.

Why is Obama going the opposite way?