In the previous blog, I looked at how Paul Ryan lost it during a meeting of Goopers with Obama on Wednesday and how he begged the President to cease "misdescribing" his plan and to "ease up on the demogoguery". Funny, but where were these speech-sensitive repukes when their hacks and lackeys were all out talking about "death panels" just 2 years ago? Hypocrites anyone? I also generally wrote of the economic deceptions and distortions employed to try and justify Medicare cuts. I focused on Robert Samuelson in the prior blog (mentioning Thomas Sowell in passing) but focus exclusively on Sowell's brand of codswallop today. In a recent column he blathered:
To listen to some of the defenders of entitlement programs, which are at the heart of the present financial crisis, you might think that anything the government fails to provide is something that people will be deprived of.
This is just outright exaggeration and nonsense. First, entitlement programs aren’t "at the heart of the financial crisis"! Tax cuts over 10 years (causing deficits totalling more than $3 trillion) and military spending which was increased from 2.4% of GDP to 4% of GDP in 2004, IS! Unknown to most Americans nearly one fourth of the existing deficit is due to military over-spending, most done to subsidize defense contractors. Another enormous swatch is awarded to various preferred regions with military bases or manufacturing plants (such as for the wasteful F-35) merely to keep JOBS in those districts. This is done compliments of U.S. taxpayers while many other areas suffer.
Also, no one says that people will be “deprived of anything the government fails to provide”. What we say (based on actual economic statistics) is that if government support is withdrawn for programs like Medicare, many millions will fall through the cracks because they’ll no longer be able to afford the costs of prescriptions, preventive care or treatments.
In other words, if you cut spending on school lunches, children will go hungry. If you fail to subsidize housing, people will be homeless. If you fail to subsidize prescription drugs, old people will have to eat dog food in order to be able to afford their meds.
Again, Sowell is disingenuous and dishonest. It isn’t a case of old people “eating dog food” if prescription drug support is cut (though that isn’t beyond the realm of possibility ) but that the elderly will simply cut back on needed drugs, or split them into halves –thereby risking their health and invite much more medically costly complications and interventions. People like Sowell here are simply averse or allergic to basic arithmetic. Obviously if an elderly couple only has a fixed income of $35,000 a year (about the median) and $6600 is going to Medicare special coverage (($19,000 under Ryan’s plan) and $2,000 for water and utilities, with $6,000 for groceries, that’s not going to leave a lot of room to buy Lipitor on their own (cost of $230 a month each) or pay for special medical AND dental costs! (Which may add an additional $5,000 each a year). Factoring in INFLATION, which Sowell and similar blowhards refuse to do, and there is no margin for error or major calamity. One medical calamity or one massive drug price increase can spell the end of the senior!
This is the vision promoted by many politicians and much of the media. But in the world of reality, it is not even true for most people who are living below the official poverty line.
In fact it IS true, except Uncle Tom Sowell doesn’t wish to believe it. He does believe he can play with facts and distort them as he sees fit to support his propaganda. He continues with his gibberish:
Most Americans living below the official poverty line own a car or truck -- and government entitlement programs seldom provide cars and trucks. Most people living below the official poverty line also have air conditioning, color television and a microwave oven -- and these too are not usually handed out by government entitlement programs.
Again, as noted in the prior blog, a car or truck is NOT a luxury today, but a necessity. It may mean the difference between getting or keeping a job or remaining unemployed. Whether government programs provide them is immaterial. Also, having air conditioning is not a luxury but a necessity for many people, including oldsters. People here fail to recall, or maybe don’t wish to, how more than 11,000 people perished in a massive heat wave in France in 2003. Nearly all were elderly with no air conditioning. The older person’s body doesn’t sweat like a younger person’s so can’t adjust to higher temperatures especially in confined surroundings. Dehydration is also much more likely and devastating because as people age they tend to lose the thirst reflex that induces them to drink more water. A/C thus is a life saver in more cases than not!
As for television, color or other, as I also noted in the last blog this isn’t a true luxury. In fact a TV is about the cheapest, most cost-effective form of entertainment there is! Short of playing cards or checkers five hours a day- which I doubt any reasonable person would expect. Most small (19”) color TVs can now be purchased for less than it costs to pay for one month of Lipitor (minus gov’t subsidy). The same goes for microwave ovens which in this say and age, aren’t luxuries. Given the difficulty the elderly or even working poor may have to taking time or effort to cook, a Microwave oven is a godsend. We aren’t talking about gilt-edged robotic ovens here!
Cell phones and other electronic devices are by no means unheard of in low-income neighborhoods, where children would supposedly go hungry if there were no school lunch programs. In reality, low-income people are overweight even more often than other Americans.
Again, Sowell is dishonest and deceptive. Cell phones are owned even by the poorest Barbadians, so why not American poor? They help families stay in touch, and are almost essential for elderly poor who (in a fall) may have to depend on that portable device for help. Sowell’s school lunch bunkum has also been roundly exposed by the Economic Policy Institute which has stats showing that 1 in 6 American kids remain malnourished, most in districts without school lunch programs providing meals at least twice a day. The situation is vastly magnified in regions where states have cut back on food pantry assistance, or food stamps have been halted.
Low income people are overweight, not because their fridges are so well stocked with good foods, but because their incomes are too low to afford the healthy foods, e.g. veggies, lean meats, items like almond milk rather than regular, that comprise the diets of the truly affluent. The difference in accommodating diets more abundant in fresh produce – lettuce, tomatoes, cabbage, asparagus, broccoli, etc compared to one with mainly franks, macaroni pies, or just eat at McDonalds is more than 40% or beyond the income ability ($14,000 /year) of most low income people. Thus, Sowell is again dishonest.
As for the elderly, 80 percent are homeowners whose monthly housing costs are less than $400, including property taxes, utilities, and maintenance.
Again, a dishonest portrayal, since Sowell isn’t making clear the huge proportion(~55%) of the current elderly “homeowners” are actually only so by dint of using reverse mortgages! For those who may be unaware, a reverse mortgage is one in which the elderly person with enough equity in his home essentially rescinds ownership on death in return for a small stream of income (contingent on the equity and value of the home). In most cases this is barely $550 a month, but enough to at least buy groceries or afford the cost of prescription drugs. The elderly who apply for reverse mortgages aren’t doing it out of enhancing their wealth, but desperation! Having exhausted all other avenues this is the only one left by which to obtain more money as their existing income runs low. They are “house rich” but cash poor.
Sowell also lowballs the utilities and maintenance costs. In even low cost areas, utilities can run $250 a month or more especially if the elderly use more heating and air conditioning, which they are more likely to do because their temperature regulation ability is not as good as younger folks. They are much more susceptible to colder temperatures and to much warmer ones. Maintenance costs themselves are often “low” simply because most (>80%) of fixed income poor elderly don’t keep up with them! Thus, many of their homes are falling into disrepair. As for property taxes, many communities (like mine) have had programs for poor elderly where – if they lived in homes at least ten years- they could take advantage of a program that allows them to pay only half the property taxes in a year. But those programs have been discontinued since the budgets of most states went into the crapper.
The desperately poor elderly conjured up in political and media rhetoric are -- in the world of reality -- the wealthiest segment of the American population. The average wealth of older households is nearly three times the wealth of households headed by people in the 35- to 44-year-old bracket, and more than 15 times the wealth of households headed by someone under 35 years of age.
Again, a blatant falsehood! And no politician depicts Medicare recipients as “desperately poor” – but that doesn’t mean they’re rich! Most of the factual distortion including by Sowell and Robert Samuelson, has occurred because the poverty line is lowballed. While the government cites $12,938 for an elderly couple, this is unrealistic given inflation hasn’t been factored in and the number has remained static since 1969. The actual poverty line for an elderly couple (given their higher medical expenses) is more like $38,000 a year. With this figure in mind, more than 65% of elderly are AT that level, only 35% above it.
As I also noted(prior blog)), the “average wealth” of elderly households is largely an illusion, a mirage. Subtract the home value from the net worth (which is how Sowell and Samuelson compute wealth) and for married couples it isn’t enough to survive a medical catastrophe or nursing home entry! This is because projected Medicare costs ($225,000) must ALSO be factored into future expenses! Indeed, most financial advisors are now telling seniors they can’t expect any comfortable existence in retirement unless they have at least $2.2 million saved (~ $72,000/yr. income for 30 years). This figure is at least EIGHT times HIGHER than the “elite” senior group Sowell cites! In other words, incredible as it seems, those elderly with “15 times the wealth of households headed by a 35-44 year old” are actually deficient or POOR in savings and will be for income in retirement! They are actually regarded as on a "warning list" by most financial experts!So how in the Hell can they be as wealthy as Croesus, to hear Sowell?
What does all this show? That the younger demographic is victimized by the greater wealth redistribution to the ACTUAL richest 1%, who have benefited most from the Bush tax cuts! THAT is the REAL inequality which those like Sowell refuse to address because...well...it's inconvenient to their 'prop up the rich' ideology. As Barbara Ehrenreich has shown (This Land Is Their Land, Chapter 3), the Bush tax policies actually amounted to the transfer of more than $0.5 trillion each year from middle or low income earners to the wealthiest 1%. No wonder the 35-44 working group can’t save and why their net worth is so low, even compared to humble seniors who saved over a lifetime! (Which is, in common sense terms, exactly WHY they have more net worth – because they saved for many more decades!)
If the wealthiest segment of the population cannot pay their own medical bills, who can? The country as a whole is not any richer because the government pays our medical bills -- with money that it takes from us.
Here, Sowell finally arrives at the crux of the problem but via a dishonest presentation. It’s not the ‘wealthiest segment” that cannot pay their medical bills, but a segment that is only RELATIVELY better off compared to a demographic (35-44 age group) that’s been totally screwed by the disproportionate benefits of the Bush tax cuts going to the REAL wealthiest elite! Further, that relatively better off group didn’t have it handed to them, they achieved their relatively better net worth by dint of decades of hard work and constant SAVING! By contrast, the younger category has chosen not to save that much (their saving rate is actually below 0.1% compared to seniors and older persons’ 5-6%). Thus, the younger group not only begins deeper in the hole (thanks to the inequity of the Bush tax cuts) but has dug itself deeper by using its credit cards to try to compensate for low pay-wages. Meanwhile, the actual wealthy – the uppercrust 1% who are now out buying Bentleys and diamonds – have benefits to the tune of $58,000 extra each year thanks to the Bush tax cuts. That number is more than four times what low income 35-44 year olds receive.
Thus Sowell answers his own question but based on exactly the wrong cause: the country isn’t "any richer" because the (Bush) government and his tax cuts have taken from the bulk of the population (95%) and awarded the benefits to the upper 5% with the top 1% gaining most.
Finally, Sowell finishes off his PR pop piece by writing:
We don't need to send the country into bankruptcy, in the name of the poor, by spending trillions of dollars on people who are not poor, and who could take care of themselves. The poor have been used as human shields behind which the expanding welfare state can advance.
The truth is more brutal here but has nothing to do with any “welfare states” but rather: a) out of control military-defense spending that now eats up nearly 60 cents of each dollar, and b) redistributive tax cuts since 2000 that have provided zero benefit for 95% of the people while transferring nearly two thirds of their wealth to the top 5% of the population. (Of whom barely 0.0001% are elderly!)
No country can survive long with such inimicable and inequitable economic forces in play, nor can it survive when liars like Sowell continue to mislead people on the real causes!
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