"Give In To The Irrational GOP?" In A Porker's Eye!

Columnist Michael Grunwald, in a recent TIME article (April 1, p. 18, 'Give In to the Irrational GOP') claims to have the best solution to our continued national kerfuffle over finances, spending and tax cuts. His recommendation to Obama? Give in to the GOP!  Insist on no further tax increases or even closing of tax loopholes for the richest, even though the Reepos will still maintain Social Security cuts be brought forth - despite the fact Social Security didn't contribute a dime to the deficit, and in fact, shameless congressional porkers and pirates have relentlessly raided it to hide the magnitude of the actual deficit!

According to Grunwald ( who concedes we "don't live in a rational world" - but nonetheless appears ready to mandate we all dive head first into an irrational one!):

"The only way Obama could fulfill the punditocracy's dreams of bipartisan agreement would be to drop his demand for new revenues and cave to the tax-phobic Republicans he thumped in November."

Oh really, sonny? Then one might call that November victory useless! Despite a clear choice of the majority of the people, who more than once in polls demanded higher taxes on the rich and NO meddling with Social Security, or Medicare, then Obama is justified in betraying them!

Grunwald goes on to add, disclosing he's a true pundit whore of the Neoliberal Elites:

"So he should cave- not to appease the chattering classes or show the country he's open to compromise. He should cave to ease pain, advance his agenda and improve the country in tangible ways."

Which, of course, is abject nonsense! Because if he caves, and bear in mind among true liberal circles he's already seen as a wuss, then it would mean even harsher social insurance cuts to make up for the lost revenue via taxes.

And we know the Neoliberal Enclave of Whores in D.C. is panting for "entitlement cuts"!  Or as salon.com Michael Lind recently put it:

"Calling for combining cuts in Social Security with more tax giveaways for savings, mostly to the rich, proves that politicians are Very Serious People to their Wall Street donors and to the mainstream media pundits who lionize the conservative deficit hawks Alan Simpson and Erskine Bowles."

Oh, and they also lionize the whore front groups like 'Fix the Debt' with their whore front men, such as Ed Rendell, Ernest Bowles and Alice Rivlin.  All of them under the puppet strings of billiionaire Peter G. Peterson, e.g. see www.petersonPyramid.org. As Lind notes about 'Fix the debt':

"FixtheDebt, is one of the “astroturf” (faux-grass roots) anti-entitlement front groups created by right-wing billionaire Pete Peterson and funded by corporations, many of them in the finance industry, is spending tens of millions of dollars in a short time to pressure the public and lawmakers into cutting Social Security and Medicare"

As Felix Salmon noted of the FixtheDebt manifesto (by the front group’s allied CEOs- e.g. see the peterson.org link) , “the letter basically just says ‘please cut our taxes, raise taxes on everybody else, and cut the benefits they get from Medicare, Medicaid, and Social Security"

Worse, of course, is how faux liberals aka  "progressives" are meekly playing into the paws of these rats. Lind again, portrays it to a pathetic tee:

"The conservatives and libertarians demand that Social Security be completely abolished. Progressives reply, “Please don’t abolish Social Security completely — would you please consider letting us help you cut it instead?” Playing the role of the wimpy progressive begging for mercy from the hard right, President Barack Obama reportedly may call for cutting Social Security for 80- and 90-year-olds by means of “chained CPI” in his forthcoming budget."

Of course, if Obama is so lame and strupid as to do that, he will forever undercut his profile (and legacy)  in the eyes of liberals who reluctantly went "all in" with him in the last election (somehow suspecting he might renege on promises made), while soiling Democratic election prospects for at least another generation. Indeed, as I already noted, the Democratic Party has paid a huge price just for talking about Social Security cuts. A Social Security Works poll   has shown that the party suffered a stunning 25-point plunge in public confidence between 2005 and 2010 on its ability to do a better job than its opposition to protect the program.


Are the Dems such weak, forlorn wusses that they really wish to go this route? And enrage most of their left base in perpetuity?  Or, do they think that base will always fall in line when the next presidential campaign arrives. Well, they better think again!

As Lind correctly observes:

"Cutting Social Security is backdoor privatization — and a bonanza for Wall Street money managers. Cuts in promised Social Security benefits, whether from chained CPI, a higher retirement age, or means-testing, will force middle-class and working-class Americans to try to save even more money in the tax-favored private savings accounts like 401Ks so beloved by the Wall Street financiers who fund both Democrats and Republicans."

Sadly, it is Neoliberal Business patronage that has contaminated and ruined the Democratic Party, as it has the other corporate (Reepo) party. The Dems have merely disguised it better, but every now and then - especially in the heat of a presidential campaign season - a network crew will bust into a lobby -funded "gala" and show our reps hob nobbing with their CEO -corporate paymasters.

As for Grunwald, he does get one thing right in his piece, noting the Reeps "have offered some flexibility to make cuts....hoping he will be blamed later for making the unpopular ones."

Well, HE will indeed be blamed, if he chooses to cut Social Security.

Anyway, Grunwald goes on to say:

"Fine! Obama can whack programs that don't promote his priorities, like fossil fuel subsidies and sprawl roads; and he can demand back-loaded cuts that won't kill jobs now."

This is okay as far as it goes - but he needs to bear in mind, despite the braying Neoliberal media - that Social Security and Medicare are part of his priorities. What he really ought to be cutting is the military, and ordering every last manjack out of Afghanistan NOW, as opposed to pissing another trillion down the toilet by the end of next year!

"Chained CPI"? Better Have a Million Saved for Retirement!

So this is the latest advice from the Money pundits (e.g. in MONEY magazine), and who am I to argue with them? They are, of course, looking at the worst case scenarios (which may not be that far off or improbable) of the Chained CPI kicking in with 3% decennial cuts to Social Security as inflation spikes back up to 5-7% per year and Medicare premiums spiking to maybe $200 a month. 

Then, do the math! You will need roughly $1m to reach age 88 if you should live so long. (Personally, you might be better dying of a heart attack first.)

Even now, minus the Chained CPI seniors are advised to have at least $280,000 saved just to cover what Medicare doesn't. That's if you retire this year. If it's in five years, you will need around $390,000 what with medical inflation and charge master billing running amuck. (See my blogs on TIME's expose of the medical gougers.)  Add in a possible nursing home stay at $85,000 (say for 6 months) and we're talking real money, and we haven't even factored in fuel prices.

Even "Malice" Rivlin admits now that the Chained CPI is a real cut. As she put it in a recent interview:

"One thing is the reform of the consumer price index which is really a technical adjustment, but it would mean slightly lower social security benefits and other benefits going forward. Now you could offset that with other changes in the law, but it is the right thing to do ......and he has certainly put Medicare adjustments, various sorts on the table."

But as the  'Political Liars' blog put it in a putative response:

"Why is cutting benefits to seniors the 'right thing' to do, Alice? Why do we have to pay for the Iraq and Afghanistan wars and not the rich? And why do we have to pay for the financial economic collapse and not the rich, Alice? And WTF are these mythical offsets to draconian cuts to Social Security that she speaks of? Is she talking about the proposed 'birthday bump? That's really a horseshit thing  to do."

My gripe with the Chained CPI is identical to most of those in the real Left, unlike the faux left, aka poseurs. That is, facing a twenty or more year time horizon which is sure to see major spikes in inflation, from rising oil prices if nothing else, seniors-  disabled folks on S.S. will be seeing their yearly benefits eroded year after year. This despite the fact Social Security never contributed one red cent to the deficit!

This "chained CPI" assumes that as prices increase, consumers will buy lower cost alternatives, reducing the amount of inflation they experience. (For example, if the price of stew beef or hamburger rises by 30 cents a pound, they'll opt for pork). BUT what these dingbats don't process is that this is fairyland, magical thinking! WHAT if  both pork and beef prices increase? THEN WHAT? Well, I guess it's cat food, or maybe sardines three times a day, but I notice even their price is going up - now to $1.35 a can. Hey, maybe hungry seniors can raid dumpsters for tossed out egg McMuffins!

The other aspect, as Sen. Bernie Sanders keeps mentioning, is that for seniors it isn't easy at all to find alternatives for high inflation products - since they're captives of the medical-industrial-pharmaceutical complex. Since our great government refuses to allow Medicare to bargain for the lowest cost drugs like the VA, those drug prices keep going up! Thus, it isn't like simply opting to buy a 33" LCD TV instead of a 55" flat screen HDTV! If you must have Lipitor, or some blood pressure meds, or others - say for depression - the total costs will ruin you if your total income is pared year after year by this "chained CPI" gimmick. (Which in the end is yet another evil product of the evil Pareto Distribution).


The Pareto is evil because as I showed in those two previous blogs on the Pareto and "Pareto efficiency", (e.g. http://brane-space.blogspot.com/2011/06/modern-economics-its-evil-basis-pareto.html)  it regards the dollars of the wealthy and affluent as having more "utility" than the dollars of fixed income seniors, or the poor. Thus, in considering any option of whether to give more relief to fixed income seniors (who get their S.S. monies by simply existing and breathing every day) or the wealthy- who may invest it to buy yachts, $2 million 'Billy the Kid' tintypes, 50 Lamborghinis or blood diamonds, it's always better to give the money to the latter while letting the former suck salt, or pound sand. (Or jump off a cliff?)

Since the "utility" of a senior dollar is only about one one thousandth of the utility of a buck from Jamie Dimon, it's much better to give Jamie big tax breaks (via tax cuts) than to preserve Social Security or a decent COLA for seniors!

What does this change in COLA mean then? Basically smaller annual increases in Social Security payments, government pensions and veterans' benefits. As the potential cuts are phased in, a typical 65 -year old who opts for taking Social Security at 62 will get an annual reduction of $130 in his first year. In his second year, it will be $144. In his third year it will be $172 and in his fourth year, $186, and his fifth year, $200. Also at the end of this fifth year, a cumulative total $886 (for 5 yrs.) will have been lost by attrition, or equal to one month of his benefits. By the time he's 85 the cut would be $984 a year and the total money lost by yearly attrition nearly $10,500.


'Political Liars' blog further observes that: "Some propose adopting the chained CPI with an added “birthday bump” – a 1 percent benefit increase for each of years 20 to 24 after initial retirement eligibility. But this supposed “sweetener” only affects those who live until becoming eligible for the birthday bump. Wealthier seniors live longer than their lower-income counterparts, so the “birthday bump” does not adequately protect those who need Social Security benefits the most. Even with it, the birthday bump does not fully compensate for the cut the chained CPI entails."

Further:

"The problem is that the Chained-CPI reduces the cost of living adjustment down by 0.3 percentage points annually. That translates into a cut in benefits of 3 percent for those who have been retired ten years, 6 percent after 20 years, and 9 percent after 30 years. The people who have been retired the longest and are, therefore, the poorest, will see the largest cuts. A 1% "bump" isn't going to make much of a difference. This is a cut. And it's substantial."

I agree, but even more noisome to me, but what you'd expect from the coddled Elites, is a pernicious belief in Washington circles that 70-year-olds who are living on $25k- 35k a year won't feel a cut in their incomes, which just goes to show how detached they are from the way people really live. You factor in ONE major medical energency or say a breast cancer requiring tamoxifen or long term chemo, and the affected senior is not merely reduced to cat food but out and out garbage!  Meanwhile, the rich bastards will continue to insist on the gold-plated toilets, special health spas, and trips to St. Kitts over the weekend for 18 holes. It's a god damned disgrace!


Needless to say, this abomination and perfidy must be fought with all the force and intensity that we also used against Bush's (2005) attempts to privatize Social Security!  Btw, next time Obama invites the Repuke turds to a special lunch, he needs to feed them cat food (or rancid sardines will do) , to see how they like it!

For those who need to get up to date on Neoliberalism, what it means, how it came to be, check out:

http://www.salon.com/2013/03/09/the_world_according_to_milton_friedman_partner/