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.

Has Bill Maher Bought into the “Entitlement Spending Crisis”?

A crowd in D.C. two years ago protests against possible Social Security cuts. Bill Maher somehow thinks that cutting "entitlements" like Social Security will free up more $$$ for those under 18. He's dreaming! What needs to be cut - pared down in HALF- is the Military-Industrial Complex and  Military Welfare State.

Bill Maher comes off as an intelligent host of HBO’s REAL TIME, and in most instances his intellect manages to side on the right side of issues. However, in a disturbing few moments last night one wondered if maybe he had too many tokes before his show. In one exchange, which included guest Sam Harris, Bill opined:


“Do we really want to be spending $4 on every adult over 65, to only $1 on every child under 18?”

Guest Sam Harris, a putative, proclaimed liberal, didn’t help matters by suggesting Social Security be “means tested”, so that no high earners could receive benefits.

First, let me hammer Bill before going on to Sam Harris. The issue again, isn’t “ entitlements” such as Social Security, but rather out of control “defense spending” which is really EMPIRE building! I mean, c’mon already! Do we REALLY need 702 military 'installations' in 63 foreign countries with 4,471 bases altogether? This, according to the Defense Department's 2012 annual budget statement.


Clearly, if you’re spending so much on this nonsense there will be little left for humane spending, including on social insurance. Nor will there be sufficient funding for education, teachers. Bill, before disengaging mouth, ought to have considered what spending $0.3b each on 2,335 F-35 bombers would have accomplished for schools, services, paying teachers. Instead, he became an instant Neoliberal moron by parroting their usual lines, almost right out of Bob Woodward’s playbook.


So what Bill actually did with his reckless comment, is disclose being hostage to the false choice paradigm – which he’s often accused others of promoting! Had he done a tad more research, such as into former defense analyst Chuck Spinney’s research, showing that the jump in military spending in 2004-05 by 2% of GDP would mean “war on social programs” – he might have been more temperate. He’d also then have recognized that spending on seniors – whether via Medicare or Social Security, is not counterpoised against spending on education and services for youth. Instead, it is bloated military spending which is gobbling up so much of the budget pie it leaves little for other needs. See also: http://brane-space.blogspot.com/2012/11/the-military-industrial-complex-still.html

Bill also appears oblivious to the fact that aging Boomers in their 50s -early 60s) have actually suffered the most in the past decade and hence need the social insurance lifeline the most. Studies have found that Americans in their 50s and early 60s — those near retirement age who do not yet have access to Medicare and Social Security — have lost the most earnings power of any age group. This according to Sentier Research, a data analysis company.  Their income fell 10% even as their retirement savings and home values fell sharply at the worst possible time: just before they needed to cash out. They are supporting both aged parents and unemployed young-adult children, earning them the inauspicious nickname “Generation Squeeze.”  Meanwhile, a recent study by economists at Wellesley College found that people who lost their jobs in the few years before becoming eligible for Social Security lost up to three years from their life expectancy, largely because they no longer had access to affordable health care.

Does Bill really want to cut the social insurance floor out from under them to save the military industrial complex and defense contractors?  These besieged Boomers – above all- NEED those “entitlements”!


Hence, if Bill had been even remotely with it, instead of Neoliberal grand standing, he’d have been able to offer a REAL solution: i.e. that closing 50% of all the overseas military bases, installations, would save $500 BILLION a year! (DoD estimates put the cost of sustaining all the bases at $1 trillion a year). THAT money would then be more than enough to help all the under 18 segment of the population, as opposed to pissing more good money after bad on useless bases – many of which are in WWII former opponent nations, like Japan and Germany.


Now, as for Sam Harris, while his “means testing” proposal sounds rational and reasonable at first blush, it also shows a disarming lapse in grasping political dynamics. The fact is that when social programs are means-tested, they instantly become altered to WELFARE in political perceptions. And we have already seen what happened to welfare in the 1996 ‘Welfare to Work’ act. Think it couldn’t happen with Social Security? Think again!


Think of this now: when all economic demographics pay in and can also obtain benefits, they will be more likely to see the program as worth preserving. On the other hand, when some of these, especially in the upper tiers, have their benefits cut off by a means –test, they will be less likely to offer further political support. After all, they’re not benefiting, so why should they? To them, Social Security becomes just another "welfare" program to be cut!

When enough economically powerful demographics or quintiles are sliced off, the voting interests also mutate and this will include the directions of money contributions. These political campaign contributions will then pitch toward those enclaves favoring “entitlement cuts” or maybe even balancing access to Social Security with work (The same way my own state of Colo. requires indigent seniors to work in exchange for receiving breaks on their property taxes. For example, if you get a $1500 break on your property taxes you can expect to work for 500 hrs. at $3.00 /hr)

The conclusion is that Sam Harris is just as wrong with his means testing proposal as Bill Maher is with his entitlement cuts to loosen funds for the under-18 year old set.

Hopefully both these guys will move away from their unwarranted Neoliberal enchantment in the near future.