Bizarre, Congress, Politics

Mc-Statesman And The “Deceivers”

Submitted by Mark Esposito, Guest Blogger

The battle over raising the debt ceiling has made some interesting bedfellows and even more intriguing and perplexing moments. At this instant, we are awaiting the vote on Speaker Boehner’s Plan which has been delayed to allow the mainline Republicans to scurry about coaxing tea partiers off their high horses named “No Taxes,” and “Cut Government.” For his part, Boehner has the distinct look of the bridegroom anxiously waiting at the legislative altar while the cavorting bride finishes up at the  ‘No, no Nanette” (you’ll recall that ditty, “Tea For Two.’) themed bachelorette party over at Michele Bachmann’s encounter group/ chapel/ballroom.

Boehner’s position is curious. Knowing full well his tea party friendly plan is DOA in Harry Reid’s Senate and faces a certain veto in the event of a Democratic Senate tram crash, he plods on, orange tan intact, but lubricated with enough sweat to float the barges building Palin’s “Bridge to Nowhere.”

Enter now that modern day Solon and runner-up Presidential candidate, John McCain, sounding almost, well, statemanesque. Decrying the newbies in the Congress flush with conservative street cred, our Senator from Cactus, is shocked–shocked — shocked that the Young Turks actually meant what they said about wanting to throw the federal government in a bathtub and choke the life out of it. And if there’s no porcelain around, a debt ceiling spiked with a balanced budget amendment will do nicely for the moral horde who took Washington by storm in the last election cycle, armed with a nose chain Grover Norquist pledge to oppose ANY new taxes — even closing loopholes for the Mark Cubans’/Richard Gates’ of the world. What do you mean  a seven year depreciation write off for my Gulfstream 5?  Anything more than five years is positively Marxian.  Next, you’ll be rescinding the cake donations for the poor charitable deduction!

The venerable Senate dinosaur was unimpressed by the kiddies’ hijinks that threaten to force the nation into default and lead to a downgrade of our credit rating even as we claw from the mire of the Bush-borne recession. “Bizarro” and “Deceivers,” he cried as he rose to speak in the great well of the Senate. “Too little, too late,” said we as we sat down in forlorn disgust in our upside down mortgaged homes. Here he is  sounding like a grownup even as we are all thinking  that this is the guy who almost put Sarah Palin a heartbeat away from the nuclear codes:

Source: Washington Post

~Mark Esposito, Guest Blogger

http://www.youtube.com/watch?v=2_LQtXytLTQ&feature=player_embedded

78 thoughts on “Mc-Statesman And The “Deceivers””

  1. Lotta

    “Can’t afford to buy food AND meds because all the money is in the boat? Do we push it and its aged occupant out to the middle of the lake, never to return, rather than subsidize ones needs or will one have the common decency to do so onesself so as not to burden society? ”

    Sure when you frame the question from a collective perspective, it seems cruel, but if you look at that same situation from the individual perspective of the man who must choose between devoting all his resources and time to fighting for a few more moments of life, or spending whatever moments he has left doing what he loves and accepting his fate. I see that as the epitome of a personal decision noone else should have any say in, with close family members being the exception. Besides, whats stopping him from selling the boat if he does choose to fight his disease?

    “That’s success and I don’t see any vehicle on the horizon that offers so much ‘social (actually economic) security’ for so many. It just doesn’t exist. Personally, I would like a vehicle so secure and guaranteeing a return on investment- my savings have been eroded over the last few years with interest rates that hover at .5%.”

    There is an institution directly responsible for that rate being exactly what it is. The federal reserve. It has always worked for business interests since its inception. They underwrite the massive expenditures of the government. The government gets to shower spending programs on their home districts and conduct foreign wars, The bankers get to stick taxpayers with the bill for money borrowed in their name. Its an incestuous symbiotic relationship and is precisely what is driving our economy off of a cliff. The government wants the rate that low so it can maintain low interest payments,. If that rate went up, yes your savings would be earning more, but the payments from the government to service the interest on their debt would skyrocket. Its lose/lose no matter how you look at it.

    http://mises.org/books/fed.pdf

    Finally here is the only financial advice i will ever give out.

  4. ekeyra: “SImply because I advocate letting people have their money to do what they will with it, does not mean I think they should be investing in stock with it. Thats not the only alternative. I mean, what if instead of all those SS deductions, or stock investments, suppose I take what I would have spent otherwise and use it to slowly purchase and construct a boat?

    Yes I could save up my whole life, build it, and drown within hours of its completion. There are plenty of unforeseen occurrences everyday. Should the basic unpredictability of life mean people aren’t afforded the freedom, and in my opinion respect, to plan for their future as they see fit to do so?”
    ——–

    When I am persuaded that there is another vehicle that can do what SS does more effectively I’ll consider it but that is going to be one tall hill to top.

    Well, if one builds a boat with ones life savings it will certainly be the nicest abode in which to spend ons declining years but what happens when one get sick and don’t have the money for needed treatment? Can’t afford to buy food AND meds because all the money is in the boat? Do we push it and its aged occupant out to the middle of the lake, never to return, rather than subsidize ones needs or will one have the common decency to do so onesself so as not to burden society?

    Respect for ones plans and freedom? Sure, everybody has plans for how it will go, how they want it go, but like the cliche says, ‘life is what happens while your making other plans.’ LOL, settle for a jon-boat, a fishing pole and keep paying that SS, if one live long enough and are a member of the working class one is going to need that monthly check. Man, if I had a dollar for every plan that ain’t happn’en, I wouldn’t miss that SS check I ain’t gett’n 🙂

  5. eyerka: “Which brings me to my third, and most important point. The distinction between voluntary action and government force. If i decide to shove money under my mattress or roll the dice in the stock market it is entirely an individual decision.”
    ———

    If there is a problem that is countrywide and systemic which has the potential to be divisive and expensive if not address then it is appropriate for the government to address it with programs and if necessary, taxes. America determined that elderly, handicapped, and minor children of deceased workers could not be left to fend for themselves. As a nation we did not want to have that as part of our signature. That was the question. Everything else was just the mechanics of how we insure, as best we can, that this situation be alleviated.

    The program was not founded with the founding of the country, it was a much later response to exactly what you present as a choice. The choice you advocate(?) was the reality and that reality did not work for reasons that were in the main, not in the control of the working class.

    BTW, I don’t get SS, I have 39 quarters, don’t qualify. I don’t have a personal ax to grind here, I’m looking from the outside in. My arguments are not based on personal gain.
    *********************************************

    eyerka: “That may or may not be true. It depends on who is making that decision. If it is individuals who believe that and are willing to put their resources on the line to divert production to this use, and are willing to accept gains and losses on the accuracy of their employment of those resources to meet consumer demand, then yes we will recover. If this is the decision of a massive bureaucracy that is incapable of making use of economic signals, ie prices, then even if they are correct, they will still not be able to allocate resources to true consumer demand as quickly and effectively as individuals competing in a free market”
    ———

    Government doesn’t produce consumer goods, it can and has though constructed an enormously favorable business climate and that has not worked to kick-start jobs or an economic recovery or end the unsound practices that had brought us t the brink of total economic collapse. That it does not change the climate dramatically, using other programs and means at its disposal, if only as an experiment, to see if other programs or policies will work is madness. And a fundamental corruption of the government’s role in having a business policy.

    You mentioned the Fed also, don’t get me started 🙂 That whole setup needs to be given a hard look and makeover. Our Fed system is unique and now works totally for the benefit of business. The conservator of business policy by the government needs to be under the control of the government. Having a private, independent body performing this core process for the government hasn’t worked well for so long it’s time to try another model IMO.
    **********************************************

  6. ekyera: “First of all, in no way am I choosing what actions other people take. Im not in charge of who gets what job at what rate and what percent of that income they put aside for their retirement. I wouldn’t want to be, why assume anyone can plan someone else’s retirement for them? Especially without any input from the supposed “benefactor” of your planning. ”
    ——-

    I’m making that assumption because we do have a system that does just that and does that well. Not perfectly by any means but well. When SS was constructed 50% of senior citizens were living in poverty and that number has fallen to 16% over 3 generations, maybe 4. That’s success and I don’t see any vehicle on the horizon that offers so much ‘social (actually economic) security’ for so many. It just doesn’t exist. Personally, I would like a vehicle so secure and guaranteeing a return on investment- my savings have been eroded over the last few years with interest rates that hover at .5%.
    *******************************

    ekeyra: “Second of all, there is no “garunteed payback”. Any money previously paid into the system was spent. Any current payments are immediately transfered to currently elligable recipients. This is the very essence of a ponzi scheme. Paying off old investors with new suckers.
    ——-

    The guaranteed payback is the IOU. I’m one of those people that actually believes that when the full faith and credit of my government is attached to a program, a debt, then it’s a solid bet. Government don’t go bankrupt and if they do then it is no longer needed in its current configuration. The government should fall and sooner rather than later. That’s one of the things I really like about a parliamentary system of government and would like to see here. I digress.

    What I don’t like about the system is that it is and has been subject to the whims of Congress. That incoming money to the government flies back out the door to someone else is not a matter of significance because it doesn’t matter what payments go to the government from what sources, they are all immediately turned into payments for something. This is how government finance works and has always worked throughout my entire lifetime. The challenge is in determining which programs to pursue (endless bullshit wars v green tech., universal healthcare, space program, etc) and how revenue is accrued.

    IMO the debate has been focused deliberately on some very few programs that work well in that they do what they were designed to do (way more so than less) while the larger and more damaging flaws in the budget and banking/investment system are really being ignored. The entire debate as it now stands is simply misdirection. That a program is expensive or ongoing in and of itself is not the most important aspect of the debate.
    **********************************

    “A new federal government analysis reports that 16 percent, that is one out of six, elderly Americans are living below the poverty line set by the government.

    That figure is double that of the estimate that is standard when referring to seniors living in poverty in the richest country in the world. The proportion of the senior demographic group living under the poverty line is higher than that of all Americans who live in poverty.”

    http://www.presstv.ir/usdetail/162953.html

  8. ekeyra, thank you for your postings. I have a sick cat,1 of 2 cats. I spent today taking one of them to the vet, talking here, doing chores, medicating the sick cat and rearranging a room so I could isolate him for a few days. His companion from birth is just going nuts and taking up any other free time because he is pissed off, freaked out, displaced from his favorite hiding place and will not be sleeping with his brother. He is also periodically hostile in the extreme to me and refuses to eat which means I can’t give him his insulin shot for Diabetes. I will respond later today but I’m just going to sleep now. Again, thanks for the response and I apologize for not answering properly tonight.

  10. I also have to comment, that whenever I say SS is a bad idea for a retirement plan, everyone immediately assumes that I must want people to invest in the stock market. I dont. You are right the stock market is a scam. You may be incorrect as to WHY it is a scam but that doesnt change the nature of the beast.

    SImply because I advocate letting people have their money to do what they will with it, does not mean I think they should be investing in stock with it. Thats not the only alternative. I mean, what if instead of all those SS deductions, or stock investments, suppose I take what I would have spent otherwise and use it to slowly purchase and contruct a boat?

    Yes I could save up my whole life, build it, and drown within hours of its completion. There are plenty of unforseen occurences everyday. Should the basic unpredictability of life mean people aren’t afforded the freedom, and in my opinion respect, to plan for their future as they see fit to do so?

  11. Lotta,

    “I also understand that unless one collectively chooses to let people that make little and can’t save effectively if at all, or invests badly and loses everything simply starve to death in their old age then the most broad based method of buy in (mandatory) with a guaranteed payback is the most effective way to do it.”

    First of all, in no way am I choosing what actions other people take. Im not in charge of who gets what job at what rate and what percent of that income they put aside for their retirement. I wouldnt want to be, why assume anyone can plan someone else’s retirement for them? Especially without any input from the supposed “benefactor” of your planning. Also, people on the verge of starving arent organizing wall street portfolios. They are living day to day.

    Second of all, there is no “garunteed payback”. Any money previously paid into the system was spent. Any current payments are immediately transfered to currently elligable recipients. This is the very essence of a ponzi scheme. Paying off old investors with new suckers.

    Which brings me to my third, and most important point. The distinction between voluntary action and government force. If i decide to shove money under my mattress or roll the dice in the stock market it is entirely an individual decision. If I dont like the risk, cost, rate of return, any of the criteria I listed before, I am free to take or leave the offer. On the other hand, should i view the government’s “investment” on my behalf as less beneficial as other courses of actions to be taken with my resources, I am pretty much shit out of luck because not only is it gone before i even see it, but its use is so far removed from my control, that to declare it “my money” is absurd.

    “I also know that the private investment markets and schemes are fixed, have always been fixed and aren’t being made honest any time in the future.”

    That may be entirely true, but i suspect we have different opinions on who is pulling the strings. Id put my money on the institution handing out trillions of dollars like someone landed on free parking in a monopoly game. The federal reserve.

    “If SS had been privatized during the Bush admin. it would have been looted to half of it’s worth or less during the feeding frenzy by the big investment firms and banks.”

    I wholeheartedly agree that privatizing SS was a monumentally bad idea, but SS is a bad idea in the first place. Steering all that capital to wall street would have created an even bigger bubble than what we saw in the 90s with dotcom tech stocks and our current housing metldown. Regardless of privatizion though, the banks have already destroyed the worth of any SS payments because they have diluted the real purchasing power of the dollars those payments are made in, through federal reserve quantitative easing and fractional reserve banking. Even WITHOUT privatization the politically connected financial firms on wall street still managed to get their hands on it.

    “We need to be a manufacturing and high tech jobs nation that puts discretionary income into the hands of its workers ”

    That may or may not be true. It depends on who is making that decision. If it is individuals who believe that and are willing to put their resources on the line to divert production to this use, and are willing to accept gains and losses on the accuracy of their employment of those resources to meet consumer demand, then yes we will recover. If this is the decision of a massive bereaucracy that is incapable of making use of economic signals, ie prices, then even if they are correct, they will still not be able to allocate resources to true consumer demand as quickly and effectively as individuals competing in a free market

  12. @LK, here’s an excerpt from a Thomas Sowell article that I believe answers your question.

    [W]here will the baby boomers’ pensions come from? From money that will arrive in Washington after they retire. It seems that the distinction between a trust fund and no trust fund is one of those “distinctions without a difference” that lawyers talk about.

    As a purely formal paper transaction there is a trust fund. Money comes in from the millions of paychecks from which there has been withholding under the Federal Insurance Contributions Act—the FICA listed on paycheck stubs. The Social Security system then uses this money to buy interest-bearing securities from the Treasury Department. When cash is needed to pay retirees, some of these securities are sold to get the money to pay them their Social Security pensions.

    Still looking at form, rather than substance, this system has the further political advantage that the securities held by the Social Security system are not counted as part of the national debt, because it is one government agency owing money to another. What that means is that, when the government spends more money than it receives in taxes, …it spends money from FICA to cover the difference and gives the Social Security trust fund an IOU that does not count as an IOU in figuring the annual deficit or the accumulated national debt.

    If only we could all make our debts disappear so conveniently!

    Turning from form to substance, what the government is doing is spending the Social Security money for current outlays, not only for pensions to retirees, but also for everything from congressional junkets to nuclear missiles. What is left in the trust fund for future retirees, including the large and much-feared baby boomer generation whose pensions are scheduled to cost trillions in the twenty-first century?

    What is left is a promise to pay them. That is precisely what would be left if there were no Social Security trust fund. Treasury securities are nothing more than claims against future revenues from general taxation. Social Security can of course also draw against the continuing inflow of FICA from workers, but everybody knows that this source will be completely inadequate to pay what will be owed to the baby boomers.

    The staggering amounts needed to make up the difference—greater than the costs of financing a major war—will have to come from somewhere. Either there will be huge increases in tax rates on those still working or some form of welshing on the promises made to retirees. No doubt there will be creative compromisers who will come up with some judicious blend of higher taxes and partial defaults, whether by inflation to reduce the real value of the pensions, an older retirement age, or higher taxes on Social Security income, in order to take back with one hand part of what was given to retirees with the other.

    No matter how it is done, it will always be possible to photograph the checks that Social Security recipients receive, thereby “proving” that there has been no default. The question is how much comfort and reassurance that will be to a generation that knows it has been cheated of what they were promised and paid for, even if they cannot follow the accounting sleight-of-hand by which it was done.

    No, Virginia, there really is no Social Security trust fund. Politicians have already spent it, behind their smoke and mirrors.

  13. ekeyra: “Do you even understand the difference between voluntary actions and government force or is it all just the same to you?”
    —

    Yes I do understand the difference and I also understand that for many forced saving (which is what SS deductions have historically been) is the only way to get those savings consistently and persistently. I also understand that unless one collectively chooses to let people that make little and can’t save effectively if at all, or invests badly and loses everything simply starve to death in their old age then the most broad based method of buy in (mandatory) with a guaranteed payback is the most effective way to do it.

    I also know that the private investment markets and schemes are fixed, have always been fixed and aren’t being made honest any time in the future. If SS had been privatized during the Bush admin. it would have been looted to half of it’s worth or less during the feeding frenzy by the big investment firms and banks. I like SS just the way it is, it’s the economy and the folks controlling it I’m hate’n on these days.
    *************
    ekeyra: “Jobs are a means to an end. That end being production for the sake of consumption or investment. Stuff makes the world a better place.”
    —

    I wasn’t as verbose as I usually am, sorry. We absolutely agree with your point. McJobs do not a thriving economy make. We need to be a manufacturing and high tech jobs nation that puts discretionary income into the hands of its workers and a ‘Made in America’, preferably a ‘Union Made in America’ label is ubiquitous and the hallmark of quality.

  14. Lotta, Blouise,

    “This is the basis of all investment is it not, you pay in now, you get something back later if it is a guaranteed investment. What’s the big deal with that? ”

    No. Not even close. Investment is determined by the individual, in excrutiating detail regarding, amount, rate of return, time preference, and risk. Having someone take your money out of your check before you even see it and vague promises to pay it back later, meanwhile retaining the authority to re-write any terms of the agreement (amount of return, the age requirement etc), or to re-write the entire agreement is in no way comparable to private investment. Do you even understand the difference between voluntary actions and government force or is it all just the same to you?

    “The only thing needed to keep the system healthy is jobs and the government being a nation that invests/loans its surplus money (wisely) instead of borrowing… oh, wait… never mind.”

    Considering that any incentives that guide government decisions are completely political, they have absolutely no criteria to make “wise” economic decisions. That is why government intervention is bad….

    http://en.wikipedia.org/wiki/Economic_calculation_problem

    Also jobs are not the desired goal. If jobs were all that were needed for a healthy economy the government could just draft everyone who was unemployed. Ask yourself if that would really make the world a better place though. Jobs are a means to an end. That end being production for the sake of consumption or investment. Stuff makes the world a better place. Computers, bikes, cars, tvs, furniture, food. The more of that we produce the better off we all are.

  16. K and others regarding the nature of SS:

    Does anyone here actually know how SS is supposed to work? It has never been my understanding or expectation, going all the way back to high school economics class, that SS was anything but a ‘loan’ system. You pay in, the government uses the money and guarantees a rate of return on the money invested in the government. At one time the money went into government securities that paid a guaranteed rate of return around 4%.

    This is the basis of all investment is it not, you pay in now, you get something back later if it is a guaranteed investment. What’s the big deal with that?

    The only thing needed to keep the system healthy is jobs and the government being a nation that invests/loans its surplus money (wisely) instead of borrowing… oh, wait… never mind.

    Srsly, I keep hearing about a ‘lock box’ but I have never understood that the SS fund was any more than a promissory note by the government based on a guaranteed return on loans made by taxpayers today. It was always a fund on paper only.

  17. Blouise,

    Washington doesn’t care to do anything right. It just does what its wealthy overlords want it to do.

    *****

    anon nurse,

    I hope Warren runs for the Senate in Massachusetts.

  18. anon nurse,

    Thanks for the Warren link … Washington can no longer do anything right

Comments are closed.