Sunday, August 7, 2011

More Ridiculous Lies from Robert Samuelson

WaPo nattering nabob Robert Samuelson is nothing if not an economics, fiscal policy gadfly. The problem is that he consistently gets so very much of it wrong, or deliberately distorts it, that he can't be trusted to impart anything objective. This, alas, applies to his latest bunch of recycled codswallop in The Real Budget Deal in which he claims "liberals weren't the real losers at all, it was rather the Pentagon"!

In this blog, I will reveal how and why this character is a liar and bloviating moron.

Samuelson, evidently with a straight face, claims that in this debt deal:

It's mostly a triumph of the welfare state over the Pentagon..defense spending would shrink to 15% of the budget by 2016. This would be the lowest share since before World War II.

Now, let's look at some facts, as revealed about this debt deal on the blog DailyKos today. The actual law states:

(B) The term ‘security category’ includes discretionary appropriations associated with agency budgets for the Department of Defense, the Depart- ment of Homeland Security, the Department of Veterans Affairs, the National Nuclear Security Administration, the intelligence community management account (95–0401–0–1–054), and all budget accounts in budget function 150 (international affairs)

In other words, this chump Samuelson isn't telling his readers that a sizeable chunk will NOT come from "retrenchment of aging weapons" (as he claims in his next paragraph). Rather the scoundrels who drafted this farce managed to insert remote secondary "defense" categories to putatively take hits well before actual weapons systems. Including the VA and foreign aid!

Further, DailyKos reports that the wording was adjusted to appease Boeing. Even before the deal, McClatchy News service's Nancy A. Youssef explained that even as the rest of the government was being put on the butcher's block, the Pentagon was being protected:

The last-minute deal that Congress is considering to raise the federal debt limit probably will mean trillions of dollars in government spending reductions for most agencies. But one department stands to gain: the Pentagon.

Rather than cutting $400 billion in defense spending through 2023, as President Barack Obama had proposed in April, the current debt proposal trims $350 billion through 2024, effectively giving the Pentagon $50 billion more than it had been expecting over the next decade.

Note that $350 billion through 2023, given an $800b yearly defense budget (and even assuming it doesn't change) means the alleged huge $350 billion is only about 3% of the total defense budget. But, factoring the ever present defense contractors cost overruns and inflation, the total defense budget by then (with minuscule erosion) will be nearly 25% of the federal budget, and 19% by 2016! Hence, Samuelson's claim that "defense spending would shrink to 15% of the budget by 2016" is total unadulterated BOLLOCKS! One wonders how this quisling for the Pentagon can even collect a paycheck. I mean, Woodward and Bernstein must be upchucking every day and night to see what passes muster under the Washington Post's banner today!

Moreover, with the wars in Iraq and Afghanistan winding down, experts reporting to DaolyKos said, the overall change in defense spending practices could be minimal: Instead of cuts, the Pentagon merely could face slower growth. Some cuts! Some blow to "conventional wisdom" in Samuelson's parlance!

McClatchy's Michael Doyle also had an update published on Daily Kos, quoting Winslow Wheeler, an analyst at the Center for Defense Information :

"They wanted some lambs in the cage with (the Pentagon) when it comes to cutting. They probably will be much more kind to defense than to foreign aid."

Bluntly put, the legislation throws warplane contracts into the same budget-cutting arena as aid to Armenia and Israel, agricultural border inspections and research at the Lawrence Livermore National Laboratory. While it's unlikely, even the nation's 152 VA hospitals could be dinged to protect a favored defense program.

And, House Armed Services Committee spokesman Claude Chafin said Wednesday:

"The chairman came around to support the deal after seeing the expanded defense and security category, and the possibility that we can retain our defense equities."

In other words, we can continue screwing the living hell out of American taxpayers and making them think there are genuine defense cuts, by leveraging non-defense related items into the planned cuts. Oh, and also let them believe that REAL defense cuts are being paired against real Medicare cuts. Ever played three card monte?

Samuelson claims:

Medicare rembursement rates might be cut 2% as part of a second round of reductions, but that's small potatoes

Really, jackass? And why didn't you inform the folks that in January they are also planning to repeal the usual "doc fixes" for Medicare, so all first line providers will see a 29.4% pay cut even if the second round automatic cuts aren't implemented? THAT IS A BIG DEAL! Anyone who disputes it may wish to check out this web page, about what Alaska's Medicare beneficiaries have already gone through because doctors there regarded the government's existing reimbursment rates as too low:

Even if the 2% pay cuts alone were enacted, we'd likely see numerous providers dropping out of Medicare. As noted on the above site, they are already compensated at too impecunious a level vis-a-vis what they get from private insurers, and the extra paperwork demanded by Medicare makes it even more of a disincentive. Does Samuelson process any of that? Nope, not one bit.

Then he goes on to this next bit of arrant whining:

We are penalizing the general government to protect all retirees, no matter how healthy or wealthy.

Which elicits the question: Is he an idiot or what? Just because a retiree may be healthy today does he believe that health will be kept indefinitely? Just because he's "wealthy" today, and that's a huge stretch as I showed earlier, does that mean he always will be? Not when aging is an ever more salient factor in respect of his well being each successive year! It's not like we're talking about a 25-year old wealthy guy here!

Recall in my earlier blog on Samuelson's foolishness, he began by referencing the government's defined "poverty line" of $12,968 for 2009 for an over-65 couple. I immediately lacerated that, since its been unchanged since ca. 1969 when the value of the dollar was at least 4 times greater. Hence the more plausible poverty line for a couple today would be around $48,000/year. However, I even agreed to go with the lower level of $38,000/yr. advanced by the Economic Policy Institute.

The point is, Samuelson's entire specious arguments rest upon an ab initio lowballed number, from which he can lowball all his thresholds of what defines an "affluent senior".

These he defined (again, in line with the government's lowballed stats), as having a "median net worth of $385,000".

But again this misses the point! All it really shows is that the average American of whatever age group is a terrible saver, and this is most likely based on wage scales that have declined absolutely since 1973, coupled with increased dollar value debasement.

To get a more realistic picture, recall net worth factors in the home as well, and we do know most over 65's own their homes. (Which is a move also heartily recommended by financial planners). Let's say the home is nominally worth $100,000 then subtract that to get the actual monetary net worth, which turns out to be $137,000 for the average over-65 household and $285,000 for married couples. But this is nothing!Given current over-65s are already advised to have on hand $225,000 to cover expenses and co-pays Medicare won't! (Not even counting possible nursing home expenses of $96,000/yr).

That already eats up the total net worth in real money terms of the average over-65'er and most of the net worth (79%) of the married couples! So WTF does Samuelson want? For our "affluent" or "higher income" seniors to live off cat food, along with no vacations ever, and no amenities, period? A life little better than a peon's with no frills, not even minor luxuries? What, is he fucking nuts?

Again, turning to the expert columnists in niche financial magazines, including Smart Money, Money as well as Forbes, the general advice is that for a senior couple to be able to live comfortably (and sustain a possible nursing home episode) they will need a net worth of at least $1 million, minus the home value! Along with Social Security, according to this lot, they should be able to arrive at an income of at least $75,000 a year! Once more, we see that Samuelson is being dishonest in how he portrays the conditions, but we can't be amazed because they are based on dishonest government definitions, first of the poverty line for couples, and then for the "high income" definition based on this spurious poverty line.

Contrary to Samuelson's deceitful spin, government isn't "protecting well off seniors" only ensuring the benefits they planned for when they worked out their retirement budgets will not be suddenly retrenched.

It is more important to cut the cancerous Pentagon budget, talking REAL defense cuts, than to renege on promises to seniors, who - if a calamity strikes (like Alzheimers) will have no place to go but down or, as one famous film actor did ten years ago - put a bullet through his head. Is this what Robert wants?

Anyway, to jog his memory, let's not forget that we still haven't turned up $1.1 TRILLION that the Pentagon "misplaced" around 1999-2000. This, of course, was well documented by former defense analyst Chuck Spinney in a memorable PBS interview with Bill Moyers in August, 2002.

Spinney also pointed out that if money is given via legislation but never accounted for (as to the GAO), then the Pentagon itself becomes an unaccountable and unelected agent that undermines democracy. Spinney is also known for a September 2000, Defense Weekly commentary, in which he called the move to increase the military budget from 2.9% to 4% of the GDP as "tantamount to a declaration of total war on Social Security and Medicare in the following decade." Well, he wasn't off on that one!

This debt deal, contrary to Samuelson's disgusting and perverse PR spin, actually formalizes that putative declaration of total war on Social Security and Medicare.

We had better wake up soon to these facts, or we may all regret it. Meanwhile, Samuelson would do well to understand there are bloggers who are tracking his lies, disinformation and spin.

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