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In reply to the discussion: STOCK MARKET WATCH -- Monday, 24 December 2012 [View all]Demeter
(85,373 posts)16. A Web of Convenient Fictions Democrats, Social Security and the Fiscal Cliff by ROB URIE
http://www.counterpunch.org/2012/12/21/democrats-social-security-and-the-fiscal-cliff/
With democrats ecstatic that political dysfunction has postponed their cutting the social insurance programs that Americans have paid for and count on for a few weeks, discussion of the intricacies of chained CPI (Consumer Price Index) versus other measures of inflation used to adjust Social Security can now apparently wait for the New Year. Still, this probably isnt a bad time to ask: why? Why cut Social Security? The program is currently solvent, is expected to remain solvent for decades to come, and projected shortfalls in the future could be better addressed by raising the incomes of the people who pay into the program, not by cutting payments to those who depend on them. What is to be gained by solving a problem that isnt?
If cutting Social Security isnt necessary, why then is it being proposed? Barack Obama provided copious evidence in prior proposals, television interviews and speeches that doing so is his intent. Congressional democrats and labor leaders quickly acceded to his proposal to do so, with House Speaker Nancy Pelosi going so far as to actively lie that proposed cuts will strengthen the program. And given the cuts will eventually put tens of millions of Americans into dire poverty from a program they paid into for all of their working lives, what rationale could possibly justify doing so?
The reason I ask is a coalition of democrats, labor, liberals and progressives just re-elected Mr. Obama and democrats in Congress to whatcut Social Security? Mr. Obama created the fiscal cliff to first push his stacked (in favor of cutting social insurance programs) deficit commission to develop a plan to cut government spending and second, to force the issue to be revisited immediately after the election if no plan was agreed to. And Republican threats to refuse to raise the debt ceiling for leverage to force spending cuts are idioticGeorge W. Bush and congressional Republicans just led the largest increase in government spending in modern history. And that is not a difficult point to make. (And had it been on beneficial programs, it would have been laudable).
Ultimately the entire debate is nonsensethe U.S. doesnt fund spending directly from taxes. As the Federal Reserve is in the process of demonstrating with its QE (Quantitative Easing) programs, it can buy an unlimited quantity of government debt with money it creates the debt limit is an arbitrary misdirection. This isnt to argue that there is no relationship between economic production and money creation, but it is to point out that the Federal budget is a convenient fiction. So, given his repeated analogy of the Federal budget to a family budget, is Mr. Obama ignorant of government finances or does he understand them and is purposely using the misleading analogy to further unstated goals?
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With democrats ecstatic that political dysfunction has postponed their cutting the social insurance programs that Americans have paid for and count on for a few weeks, discussion of the intricacies of chained CPI (Consumer Price Index) versus other measures of inflation used to adjust Social Security can now apparently wait for the New Year. Still, this probably isnt a bad time to ask: why? Why cut Social Security? The program is currently solvent, is expected to remain solvent for decades to come, and projected shortfalls in the future could be better addressed by raising the incomes of the people who pay into the program, not by cutting payments to those who depend on them. What is to be gained by solving a problem that isnt?
If cutting Social Security isnt necessary, why then is it being proposed? Barack Obama provided copious evidence in prior proposals, television interviews and speeches that doing so is his intent. Congressional democrats and labor leaders quickly acceded to his proposal to do so, with House Speaker Nancy Pelosi going so far as to actively lie that proposed cuts will strengthen the program. And given the cuts will eventually put tens of millions of Americans into dire poverty from a program they paid into for all of their working lives, what rationale could possibly justify doing so?
The reason I ask is a coalition of democrats, labor, liberals and progressives just re-elected Mr. Obama and democrats in Congress to whatcut Social Security? Mr. Obama created the fiscal cliff to first push his stacked (in favor of cutting social insurance programs) deficit commission to develop a plan to cut government spending and second, to force the issue to be revisited immediately after the election if no plan was agreed to. And Republican threats to refuse to raise the debt ceiling for leverage to force spending cuts are idioticGeorge W. Bush and congressional Republicans just led the largest increase in government spending in modern history. And that is not a difficult point to make. (And had it been on beneficial programs, it would have been laudable).
Ultimately the entire debate is nonsensethe U.S. doesnt fund spending directly from taxes. As the Federal Reserve is in the process of demonstrating with its QE (Quantitative Easing) programs, it can buy an unlimited quantity of government debt with money it creates the debt limit is an arbitrary misdirection. This isnt to argue that there is no relationship between economic production and money creation, but it is to point out that the Federal budget is a convenient fiction. So, given his repeated analogy of the Federal budget to a family budget, is Mr. Obama ignorant of government finances or does he understand them and is purposely using the misleading analogy to further unstated goals?
MORE
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