Social Security/Moyers

[Hannah Bell]

February 15, 2008

Bill Moyers Goes off the Deep-End on the Deficit, Again

<<...the budget is projected to face serious problems but, as the
Congressional Budget Office has pointed out, this is primarily due
to the projected increase in health care costs...The moral of the
story to any serious analyst is that the United States must get its
health care costs under control; something that every other wealthy
country has managed to do.

Unfortunately, there is a whole army of deficit fear mongers who
have tried to use the projected explosion of health care costs as a
pretext for cutting important government programs like Social
Security. One of the generals in this army is Peter Peterson...when
he is not lobbying Congress to protect the tax break that has
allowed him and other very wealthy people to evade billions of
dollars of taxes, Mr. Peterson is lobbying Congress to cut Social
Security...Mr. Peterson started the Concord Coalition, which has
cutting Social Security as a top agenda item... His track record
earned him a solo appearance on Bill Moyers Journal a few years
back, in which he got the opportunity to go his tirade against
Social Security and other government programs without any correction
from experts who understood the issues. Moyers again opened his show
tonight to deficit fear mongers, again without any rebuttals from
experts with knowledge of the issues...>>

http://www.prospect.org/csnc/blogs/beat_the_press

In the comments that follow, you see that Baker & others
have tried to contact Moyers on this without success.

You have to ask yourself, if the Concord Coalition (far right
wing, privatize everything) gets 2 respectful hearings from Moyers,
a supposed bastion of the respectable left, but someone like Dean
Baker can't get a call-back, what's going on?

Why is the "official story" so dominant & so bi-partisanly promulgated?

[lumberjack_jeff]

1. The concord coalition is not far-right wing.

It was founded by Paul Tsongas.

Also, the biggest threat to social security is the federal budget deficit. So long as the government runs in the red, they will be unable to repay the money they've borrowed from me in the form of the social security "surplus".

http://www.concordcoalition.org/issues/socsec/doc/050203testimonyexecsummary.htm

While fixing Social Security's problems, reform must be careful to preserve what works. Social Security now fulfills a number of vital social objectives. Policymakers and the public need to ask the following questions to assess whether reform plans would continue to fulfill them:

* Does reform keep Social Security mandatory? The government has a legitimate interest in seeing that people do not under-save during their working lives and become reliant on the safety net in retirement. Moving toward personal ownership need not and should not mean “privatizing” Social Security. Any new personal accounts should be a mandatory part of the Social Security system. Choice is not important in a compulsory social insurance program whose primary function is to protect people against poor choices.
* Does reform preserve Social Security's full range of insurance protection? Social Security does more than write checks to retirees. It also pays benefits to disabled workers, widows, widowers, and surviving children. A reformed system should continue to provide insurance protection that is at least equal to what the current system offers.
* Does reform maintain Social Security's progressivity? While individual equity (“moneysworth”) is important, so too is social adequacy. Social Security's current benefit formula is designed so that benefits replace a higher share of wages for low-earning workers than for high-earning ones. Under any reform plan, total benefits, including benefits from personal accounts, should remain as progressive as they are today.
* Does reform protect participants against undue risk? Under the current system, workers face the risk that future Congresses will default on today's unfunded pay-as-you-go benefit promises. While reducing this “political risk,” personal account reforms should be careful to minimize other kinds of risk, such as investment risk, inflation risk, and longevity risk--that is, the risk of outliving ones assets.

If we reform Social Security today, the changes can be gradual and give everybody plenty of time to adjust and prepare. If we wait much longer, change will come anyway--but it is more likely to be sudden and arrive in the midst of economic and political crisis.

[Hannah Bell]

2. Founders...

Peter G. Peterson:

Founding President of The Concord Coalition.
The Concord Coalition is a bi-partisan citizen's group he organized in 1992 together with former Senators Warren Rudman and the late Paul Tsongas (who was succeeded by Senator Robert Kerrey).
The Concord Coalition is dedicated to building a constituency of fiscal responsibility.

Chairman and Co-Founder of The Blackstone Group.
Chairman of the Council on Foreign Relations
Founding Chairman of the Institute for International Economics
Co-Chair of The Conference Board Commission on Public Trust and Private Enterprises
Chairman of the Federal Reserve Bank of New York from 2000 to 2004.
Chairman and CEO of Lehman Brothers (1973–1977)
Chairman and CEO of Lehman Brothers, Kuhn, Loeb Inc. (1977–1984).
Chairman and CEO of Bell and Howell Corporation from 1963 to 1971.

We can quibble about the definition of "far right". No, they're not minutemen; but their mission is to hype crisis in order to force economic changes to the detriment of ordinary citizens & to the benefit of financial interests.

There in NO SS crisis. None.

[Hannah Bell]

3. more...

http://www.concordcoalition.org/board/bios/peterson.html

Under Nixon: Assistant to the President for International Economic Affairs, Secretary of Commerce, National Commission on Productivity, U.S. Chairman of the U.S.–Soviet Commercial Commission, which negotiated comprehensive trade, Ex-Im credit, arbitration, copyright and lend-lease agreements.

Under Clinton: Bi-Partisan Commission on Entitlement and Tax Reform co-chaired by Senators Kerrey and Danforth.

Director of Sony Corporation, Minnesota Mining and Manufacturing Company, Federated Department Stores, Black & Decker Manufacturing Company, General Foods Corporation, RCA, The Continental Group, and Cities Service.

Trustee of the Committee for Economic Development, the Japan Society and the Museum of Modern Art

Director of the National Bureau of Economic Research, the Public Agenda Foundation and The Nixon Center.

In 1982, he was a founding member of the Bi-Partisan Budget Appeal, an organization of 500 heads of major organizations, accounting, law and banking firms, university and former public officials.

[Hannah Bell]

6. Social Security's "problems"

<<While fixing Social Security's problems, reform must be careful to preserve what works.>>

The statement takes for granted that SS has "problems". On what is this assumption based?

Why, on the 75-year projections of the SS Trustees, first mandated in the bi-partisan, Greenspan-led Reagan-era (1982) "fix" that jacked up SS taxes
above what was needed to fund current retirees.

The extra collections produced 25+ years of ever-increasing surpluses, surpluses that were borrowed into the general fund (as mandated by 1936 law, all excess SS collections must be borrowed by the gen fund in exchange for securities).

The super-rich, during the same time, received several rounds of tax cuts.

The Trustees' reports in fairly short order began predicting future crisis.

How accurate have the reports been? Stunningly inaccurate. The date of the impending crisis has been steadily pushed into the future, keeping it always impending, but just about the same distance away.

Not only that. The Trustees make 3 projections. The intermediate projection is the one used in the media. This is where the estimates of projected shortfalls come from.

But reality has, on average over the last ten years, not only come in better than the intermediate projection, it's come in better than the so-called OPTIMISTIC projection, and in that projection, SS keeps chugging along paying out scheduled benefits & running a SURPLUS, with NO tax hikes, no benefit cuts, & no private or "extra" accounts.

One wonders why this story is never told, though it's hidden in plain sight if you study the Trustee's reports.

[lumberjack_jeff]

17. I don't disagree that the magnitude of the "SS crisis" is overstated.

That does not imply that the problems inherent in a $10t debt and a $400b deficit are overblown, nor does it imply that the Concord coalition are right wing libertarian shills for pointing it out.

[lumberjack_jeff]

4. The concord coalition was specifically formed to be as bipartisan as possible.

With a $9t debt, there is a budget crisis, and if left unsolved, it jeopardizes the ability of the government to repay its debt to SS beneficiaries.

The concord coalition is no more a singular manifestation of Peterson's politics than it is of Paul Tsongas' (or Bob Kerry's for that matter).

They do good work, and given what is being pushed as "social security reform" these days, they have some reasonable, principled solutions.

[Hannah Bell]

7. Yes,

it was designed to be bipartisan so the public would believe everyone agreed on "the problem", & the solutions it was proposing were honest.

The 1982 commission that "reformed" SS was also bipartisan.

The end result of that was: all working people making between $1 - $90K (about $30K in 1982) got to pay extra, unnecessary SS taxes to fund tax cuts for the super-rich.

Beware of bipartisan commissions bearing "reform".

[Kolesar]

5. Paul Krugman determined that tax-cuts are oversold.

We do need to do something about deficit spending.

[Hannah Bell]

8. US Debt (not deficit) as a % of gdp - chart

http://zfacts.com/p/318.html

Let's see, US debt as a percentage of gdp is currently about the same as it was under Ike. Under Clinton, it was about where it was under Kennedy. This is a crisis that necessitates - Social Security reform?

Nope. But that's the bull they want to sell you, in order to take from the (relatively) poor to give to the rich.

Look up the data for yourselves. There's no crisis, but the dominance of the crisis meme is astonishingly Orwellian.

[Kolesar]

9. Baby boomer retirement is going to mean the gov't has to borrow hugely

I like Bill Moyers work. He makes a point of bringing in people with a wide variety of opinions. He has a great staff for the show. I didn't see the show, so I cannot determine if this guest wants to wholly eviscerate Social Security as you are hinting.

[Hannah Bell]

10. No, the boomers retirement means nothing of the sort.

Why do you think the boomers retirement means the gov't will have to borrow massively?

[Hannah Bell]

11. Here's something, though...

Changes in the estate tax are estimated to give the Walton heirs an extra 30 billion/year.

17 tax returns like that pay the yearly bill for SS. For all recipients.

[Kolesar]

12. The fed will run deficits to "cover" the bond-obligations owed to tens of millions of SS pensioners

...whose social security funds were over paid since 1987 into the SS trust fund. Remember Al Gore's SS "lock box" from the 2000 presidential debates? We baby boomers have hundreds of billions of dollars "owed" to us by the US taxpayers who have been borrowing on the SS trust fund to pay for bush's profligate tax cuts, spending and borrowing.

[Hannah Bell]

13. You haven't read my previous posts on this.

I'm well aware we've been overpaying since 1983 (not 87), & of the surplus that's been built up & borrowed into the gen fund. That was enacted by an earlier "bipartisan committee".

But what makes you think the gov will have to borrow specifically to pay it back?

The current total TF balance is 2 Trillion. That's 4 years of SS payments.

The boomers aren't going to retire in one lump. They're going to retire year by year.

Rescinding Bush's tax cuts (about 2 T worth) covers the nut.

There are other possibilities as well; the only problem is that they're not favored by the powerful.

Not to mention, if reality keeps matching the SS Trustees' OPTIMISTIC projection, the issue goes away.

Don't be deceived; this "crisis" has nothing to do with real numbers; it has to do with certain interests' desire to restructure the economy.

[Kolesar]

15. you're assuming that I want some change to SS that you fear and is unnecessary

you are also both boring me and irritating me
stuff to do
:hi:

[Hannah Bell]

16. Nope, I didn't.

Sorry facts bore you, though.

[Kolesar]

19. It's obvious that you didn't read my posts...eom

[lumberjack_jeff]

14. Considering 1955 national debt to be tolerable...

presumes that we should consider it a normal state of affairs to be paying for the equivalent of a depression and WWII in perpetuity.

The debt we incurred in the '40's and paid off during the 50's, 60's and 70's was supposed to be an anomaly.

Trivia: Reagan ran for office on the scary threat of a $900 billion national debt. It is now 10x that, and that is a real problem if for no other reason than our government does not have adequate faith and credit to manage future crises of any magnitude.

[Hannah Bell]

18. "Tolerable" isn't the point.

The point is, it wasn't a "crisis" then. Why is everyone crying "crisis" now?

and why in particular are they linking it to a need to "reform" SS?

as for Reagan, he's the one who ran it up in the first place. Clinton pushed it down noticeably over 2 terms - mostly by tax changes. The same can be done again.

But my larger point is: If you look at the SS Trustees' Projections for yourself, you discover the numbers themselves don't support the idea that any SS crisis is impending.

Yet that's all we hear, in the media & from both sides of the aisle.

Why?

Why can't respectable economists like Baker get media time to make their case?

You're being manipulated (with the "crisis" meme) to buy the solution certain folks want.