Thursday, August 1, 2013

Time for Obama to Make Some Hard Economic Decisions!

The time for Obama to make some hard economic decisions has arrived. While most of the hard left has all but put his visage on their dart boards - so infuriated are they at his various choices- the latest to offer Medicare as part of a "Grand Bargain"- I remain somewhat optimistic he will do the right thing.

According to an email from the Daily Kos :

"According to The Wall Street Journal, White House Chief of Staff Denis McDonough is meeting with Sen. John McCain and other leading Republicans to discuss cutting Medicare benefits."

Via special Newsletter notices from the National Committee to Preserve Social Security and Medicare (NCPSSM) one of the options being considered is to expand means testing of Medicare to lower middle income seniors. According to the Newsletter:

"The proposal would shift billions of dollars in additional costs to beneficiaries by further expanding means testing for Medicare Parts B and D – until 25% of all beneficiaries are paying higher, income related premiums. A recent study found that this proposal would eventually impact individuals with annual incomes equivalent to $47,000 in today’s money.”

Of course, this would be disastrous, since seniors have a hard enough time as it is, with increasing health care costs as they age. This is also why the chained CPI is a lousy idea and Obama needs to kill it once and for all.

Re: the Medicare cuts, Let’s make it clear that $47,000 /yr. is not a princely sum for an annual income, especially for seniors who – unlike younger folks- are burdened by additional health care costs including more medications, as well as the possibility of having to enter a nursing home for everything from a broken hip, to Alzheimers. (Which prevalence is doubling every five years for people over 65) Note also the nursing homes are not cheap at $3,000 a month or more. Hence, this expanded means testing is nothing short of deplorable. The fact that the richest 1% will still make out like bandits while lower middle income seniors suffer is even more disgusting.

 The NCPSSM Newsletter went on to note that this expanded means testing along with a chained CPI for Social Security, and possibly higher eligibility age for Medicare would:

“generate a tsunami of seniors living in poverty”

This is why it will be regarded as a major betrayal by Obama if he forges any "grand" deals with the Repugs to cut either Social Security or Medicare. Unlike most of my hard left colleagues, i.e. in the Democratic Socialists, I don't regard Obama as an "evil" guy - just one who has possibly listened to too much bad advice from his economic advisors, aka peanut gallery. It's time now in his second term he stop listening to them and be a man on his own two feet, make his own decisions that actually reflect his professed concern for the middle class and indeed the rising inequality that affects everyone not lucky enough (by birth  - not hard work!)  to be amongst the silver spooned 1%. Don't just use the lesser-monied citizens as background props!

Another major decision concerns the choice of Federal Reserve Chairman after Bernanke departs. Many in Obama's circle and most of the Neoliberal elites are screaming that he will pick Larry Summers on account of he "already has a relationship with Larry and he's comfortable with him". Look here, Mr. Prez, you no more have to be "comfortable" with a prospective Fed chief than I have to think I need to be able to have a beer with a presidential candidate - else I can't vote for him!

This isn't a popularity contest, and the only person you ought to be considering is Janet Yellin, currently in the San Francisco Fed. If you pick Summers, you're going to be constantly reminded by the hard left (and doubtless Sen. Elizabeth Warren) that Summers was almost single handedly responsible for pushing the repeal of the Glass-Steagall Act in 1999 which opened the Pandora's Box to the sub-prime loans and the credit meltdown partly based on them. Glass-Steagall also formed a critical barrier between neighborhood unsexy checkbook banking and high powered gambler-speculator banking (with other people's money) using credit derivatives. Larry may be a nice guy at heart, but not a Fed chairman!

Lastly, extremely disturbing news arrived this a.m. on 'Morning Joe' of all places that your administration is actually considering a special "deal" that would keep U.S. troops in Afghanistan many more years beyond 2014. Pardon me, but this is freaking nuts! We don't have the money for such baloney and besides we have domestic security needs to attend to - like our crumbling bridges, water-sewer mains which the American Society of Civil Engineers now estimates will cost $3.6 trillion to repair at least to passable standard. You need to not opt for any such special deals, as we've been in the Afghan theater long enough. It is destroying our moral integrity after 13 years.

You know you have hard decisions to make, and they need to be YOUR decisions, not anyone else's. But you knew that, else you'd not have signed on a second term.

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