Dean Baker Schools Alan Simpson on SS. Thing of beauty :-)

[chill_wind]

Senator Simpson's Quick Budget Quiz

By Dean Baker - August 31, 2010, 5:36PM

President Obama is apparently content to have an abrasive and abusive senator's son sit as co-chairman of his deficit commission. We can assume that these traits were a direct result of Sen. Alan Simpson's privileged upbringing and he is not going to change now that he is in his late 70s.

However, even if the senator is not prepared to embrace norms of civility, it is reasonable to expect that he will do his homework. In order to help him in this process, here is a quick list of study questions on Social Security for Simpson as he carries through his assignment to co-chair President Obama's deficit commission. Reporters and editors at major news outlets may also want to review these questions, since it seems that they could also use some additional background knowledge on the program.

1) How much higher are real wages projected to be in 2040 than today? In other words, how much richer do we expect the average worker to be 30 years from now?

2) How did the 2010 Trustees Report change the projections for 2040 wages compared with the 2009 report?

3) If we solve the projected shortfall in Social Security entirely by raising the payroll tax, what percent of the gain in real wages over the next 30 years would have to go to pay the tax?

4) What percent of real wage gains over the last 30 years was absorbed by the increase in Social Security payroll taxes?

5) What percent of the projected long-term budget shortfall is due to the inefficiencies of the US health care system?

6) How much wealth should we expect near retirees to have to support themselves in retirement?

7) What percent of older workers have jobs in which they can reasonably be expected to work at into their late 60s?

Certainly anyone on the deficit commission should be able to answer these questions off the top of their heads, as should any of the people reporting on Social Security or deficits in the media. But for those readers who do not fit these descriptions, here are the answers.

Read his answers and the rest of his commentary here: http://tpmcafe.talkingpointsmemo.com/2010/08/31/senator_simpsons_quick_budget_quiz/#more


Some back story here, if you missed it. (It appeared Simpson thought Dean Baker was a "reporter"):

But Simpson has not only been writing letters to OWL. He earlier penned a note to Dean Baker, economist and co-director of the Center for Economic and Policy Research. Simpson apparently has no idea that Baker is a leading economist, judging from his derisive letter.

"Simpson writes Dean Baker a (clueless) letter. What a horse's ass."
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x555792

[sabrina 1]

1. Excellent. But why is Dean Baker not on this commission?

Alan Simpson is a fool, and that's putting it mildly. An ignorant fool who believes in class privilege for the wealthy.

I really want to know what was Obama's thinking when he appointed him as co-chair of his Commission. Did Obama not already know Simpson's radical views on these issues?

And was it not inevitable that having appointed him Grover Norquist would be called upon to give us his advice? Another fool whose views we are very familiar with. Wasn't Obama?

Dean Baker, James Galbraith are two people who SHOULD have been on a Commission that is supposed to be making recommendations about the ECONOMY. This is their job.

Instead we have only one economist on this Commission the rest are people with political agendas. Republicans and DLCers can not be trusted with best interests of the American worker, we know that. Didn't President Obama know it?

[mopinko]

3. jan schakowsy and dick durbin are on the commission

their political agenda is to keep these fuckers hands off social security.

[sabrina 1]

12. The best way to keep their hands off Social Security

would have been to leave them in the political gutter where they thrown by the American. Isn't that why we voted for Democrats? Why distract people like Durbin with having to fight these people, we already did that for them. He should be focusing on the Fed. Budget, not on trying to save SS from the rabid right who are now back in a position to influence this government on matters of extreme importance. That is now what I was supporting when I worked to get Democrats elected.

[Zhade]

20. But then, SS is not even part of the deficit, so why is the commission even looking at it?

NT!

[chill_wind]

9. Because he would call them on their sh*t, is my guess, like he called the Bush WH on it.

The phony crisis.

[depakid]

15. The administration's shown a distinct aversion to economists with track records of getting it right

preferring instead Wall Street and political hacks whose poor judgment and miscalculations caused (or actively failed to prevent) many of the problems in the first place.

[Zhade]

19. Obama knows exactly who Simpson is. He know who he chose.

NT!

[indepat]

2. Don't sell Simpson short: he is exactly who and what was wanted to co-chair this rigged commission

pre-ordained to deliver what was wanted to be heard. :P

[Jim__]

4. Dean Baker always has great information on Social Security.

Information that the Obama Administration doesn't seem to have. I knew why the Bush Adminsitration didn't have this data. Why doesn't the Obama Admin have it?

[chill_wind]

8. Great point. Check it out:

Dean Baker's Presentations
Testimony

Testimony of Dean Baker Before the Senate Special Committee on Aging
February 25, 2009

Testimony of Dean Baker Before the House Committee on Education and Labor
February 24, 2009

Policies to Mitigate the Foreclosure Crisis
Dean Baker's testimony before the Domestic Policy Subcommittee of House of Representatives Oversight and Government Reform Committee Hearing May 21, 2008

Turmoil in U.S. Credit Markets
Dean Baker's testimony to the Senate Committee on Banking, Housing and Urban Affairs, April 10, 2008

The Causes of Economic Hardships for the Middle Class
Dean Baker's submitted testimony to the House Ways and Means Committee, January 31, 2007

Protecting and Strengthening Social Security
Dean Baker's testimony before the House Ways and Means Committee, Subcommittee on Social Security, June 16, 2005

President's Commission to Strengthen Social Security
Dean Baker's comments presented to the Social Security Commission, August 14, 2001


http://www.cepr.net/index.php/clips/dean-bakers-present... /

**************

(from my back link)

[BrklynLiberal]

5. Thank for this post!!! Simpson needs to be thrown off that Commission...

Putting Dean Baker on instead is a brilliant idea.

[hootinholler]

6. kick for later n/t

[NC_Nurse]

7. The fact that Simpson is still on this committee is just another of many

reasons I have a hard time feeling good about the Obama administration. Yes, they have accomplished some good things. The have also compromised beyond what I believed was necessary on many things. And on some issues - like this one - they seem to be doing the complete opposite of what I and many of the other people who busted their asses to get them elected would support.

Why are they even having this commission? If we got out of the wars and let the Bush tax cuts expire, our deficit would go WAY down! Social Security is solvent. Leave it alone.

[Carolina]

10. K&R K&R K&R K&R K&R!!!

Dean Baker ROCKS!

[chill_wind]

11. Yes he does :-) Here's what he said about Bush

in 2004:

(...)

Virtually everyone agrees that Social Security is a great system. It provides tens of millions of workers with a guaranteed, core retirement income. It also provides disability insurance to people during their working years. In addition, it provides survivors’ insurance to the children of workers who die at an early age.

It is also extremely efficient. The administrative costs of Social Security are just 0.6 cents of every dollar that gets paid out in benefits. By contrast, the administrative costs of systems of private accounts, like the one in England, eat up 15 cents of every dollar in benefits. Social Security also has a minimal amount of fraud and abuse, as numerous government audits have repeatedly documented.

Why would anyone want to change a system that works so well? The main reason is that President Bush and the financial industry have managed to convince people that Social Security is on the edge of bankruptcy. Millions of younger workers, and even many older workers, now believe that they will never see their Social Security checks.

Of course, President Bush has never felt constrained by the truth. Some may recall the fact that the administration concealed its estimates of the cost of its Medicare prescription drug plan as Congress narrowly approved the measure. Immediately afterwards, the administration told the public that the actual cost of the benefit would be more than $100 billion higher than the projections in front of Congress at the time of the vote. The administration’s conduct of foreign policy also provides some basis for questioning the truthfulness of its public statements.

For these reasons, it would be better to rely on the actual numbers than accept President Bush’s claims about Social Security. The official numbers tell a very different story. The Social Security trustees' report shows that the program can pay all scheduled benefits through the year 2042, with no changes whatsoever. Even after 2042, the program would always be able to pay a higher benefit (in today’s dollars) than what retirees currently receive, although less than the full scheduled benefit.

The non-partisan Congressional Budget Office did an independent investigation of Social Security’s finances and came up with an even brighter picture. They found that it could pay all benefits through the year 2052 with no changes whatsoever. Furthermore, according to both sets of projections, the changes required to keep the program solvent through its entire 75-year planning period are smaller than the changes made in any of the decades from the 1950s to the 1980s.



http://www.tompaine.com/articles/social_security_is_not_in_crisis.php

[csziggy]

13. I find his point about increased life span VERY interesting

"It is worth noting that the gains in life expectancy also have not been distributed evenly. Most of the gains went to those in the top two quintiles of the income distribution."

So the people whose lifespans have increased the most are NOT those who must depend on Social Security - they are the most wealthy sliver of society who can well afford to live longer. You know, the pricks who are accumulating an ever larger share of the wealth that is generated by the workers.

[sabrina 1]

17. Yes, that is an interesting point and it makes sense.

Look at Cheney, anyone else with his condition would have been dead long ago.

[csziggy]

18. And of course, it completely guts the call to increase the retirement age

Since the people with the increased lifespans are not the ones that will have to retire on SS.

[sabrina 1]

21. Yes, exactly ~

[Poboy]

14. K&R

[another saigon]

16. great article

lol! I love how he ended it.

-snip-

So, there you have it: seven key facts about Social Security, the budget and the well-being of workers and retirees. Senator Simpson should know this information inside out.

But does he? Try asking him. If he can restrain his curses and insults long enough, maybe we can find out if he is qualified for the position he holds. At this point, we only know that he has a poor understanding of the anatomy of barnyard animals.