Respectfully submitted by Lawrence E. Rafferty (rafflaw)-Guest Blogger
Now that the infamous Sequestration cuts are likely to kick in next week, I find it both hilarious and scary, that Erskine Bowles and Alan Simpson, the co-chairmen of the deceased debt commission that failed to produce a plan that their own committee could accept, are back in the news calling for cuts to Medicare and Social Security and reduced taxes for the wealthy and corporations as our only way out of our so-called debt crisis! Where have I heard that song and dance before? The so-called Catfood Commission is now back at work trying to do a reverse Robin Hood on the poor and middle class. The only difference this time is that they have a new name, The Fix The Debt Coalition and they are funded by Billionaire Pete Peterson.
“One major contribution comes from the money and monomania of Pete Peterson, a Wall Street billionaire who has committed about half a billion bucks rousing hysteria about deficits and debt.” Common Dreams That is $500 Million dollars to my fellow mathematically challenged readers. First of all, whenever a Billionaire who made his money by taking advantage of the carried interest tax deduction, starts claiming that seniors and the disabled and the middle class must stop taking handouts from the government and accept massive cuts and reductions in Social Security and Medicare, I have to struggle to hold back my laugh.
“Peterson made his billions on Wall Street, taking the private equity firm Blackstone Group public, after benefiting from the obscene “carried interest tax deduction” that allows hedge fund billionaires to pay lower tax rates than their chauffeurs.” Common Dreams Isn’t it amazing how much money Billionaires will spend to try to make even more billions on the backs of the poor and middle class?
Let’s take a quick look at the people who are spokespersons for this latest Peterson progeny, Fix the Debt Coalition. “Bowles and Simpson serve as co-chairs and co-founders of Peterson’s latest front, the Fix the Debt Coalition, which rounded up 127 CEOs and a $60 million budget, retaining at least four major public relation firms, to drive the campaign for a “grand bargain.”’
Despite the consultants, “Fix” has exhibited a hilariously tin ear. They trotted out Goldman Sachs CEO Lloyd Blankfein to lecture Americans on “lowering their expectations” and accepting less in Social Security and Medicare. Who better to argue for “shared sacrifice” than the head of a Wall Street firm that helped blow up the economy and got bailed out by taxpayers while its leaders pocketed the millions they made along the way? Blankfein was followed by David Cote, the CEO of Honeywell, calling on Americans to be responsible about funding our public pension plan. Who more qualified, as the Institute for Policy Studies pointed out in a scathing report, than a CEO with $78 million dollar personal retirement plan tucked away, while his company’s employee pension plan is underfunded by $2.8 billion?” Common Dreams
I am almost surprised that Fix the Debt didn’t include Mr. 47%(Mitt Romney) himself to lecture the middle class on the importance of austerity! Just what is the Fix the Debt Coalition asking the American public to accept? “This plan called for even more deficit reduction over 10 years than the last plan the co-chairs promoted. (There was never a Simpson-Bowles commission plan, since the co-chairs’ draft was rejected by the commission.) Instead of a one-to-one ratio of new revenue to spending cuts, the co-chairs now call for three times as much in spending cuts than in increased revenue.
But they stayed true to the Peterson principles. They would raise the eligibility age for Medicare and the retirement age for Social Security, reducing that “paid vacation.” They’d cut Medicare and Social Security benefits. Tax reform would close loopholes – no doubt hitting employer-based health care plans – but use the money largely to lower top tax rates for individuals and corporations. And they call for deeper ceilings for cuts in domestic and military spending, ducking the question of what programs would take the hit.” Common Dreams
Paul Krugman has already called the hand of the Fix the Debt Coalition by striking down their claims on the alleged deficit crisis while he was discussing the looming sequester cuts. “America doesn’t face a deficit crisis, nor will it face such a crisis anytime soon. Meanwhile, we have a weak economy that is recovering far too slowly from the recession that began in 2007. And, as Janet Yellen, the vice chairwoman of the Federal Reserve, recently emphasized, one main reason for the sluggish recovery is that government spending has been far weaker in this business cycle than in the past. We should be spending more, not less, until we’re close to full employment; the sequester is exactly what the doctor didn’t order.” NY Times
Further evidence that the deficit is not a problem is noted by Investors.com. “Believe it or not, the federal deficit has fallen faster over the past three years than it has in any such stretch since demobilization from World War II.” Investors.com The New York Times has also reported that the slowing of the growth of health care costs has reduced the deficit. “In figures released last week, the Congressional Budget Office said it had erased hundreds of billions of dollars in projected spending on Medicare and Medicaid. The budget office now projects that spending on those two programs in 2020 will be about $200 billion, or 15 percent, less than it projected three years ago. New data also show overall health care spending growth continuing at the lowest rate in decades for a fourth consecutive year.” New York Times
Since this Fix the Debt Coalition has politicians of both stripes involved, I don’t intend to make this a political issue. However, wasn’t this “austerity first” issue already “litigated” at the polls in the last Presidential election? Why is it that politicians always seem to think that all of our economic problems will go away if we just convince the masses to accept less for their tax money and their employer’s Social Security and Medicare tax payments? The paternalistic pattern of trying to pat us on our collective heads and telling us that the economic boogeyman will go away if we just work until we are too old to enjoy a retirement is getting a little stale.
Corporations and Billionaires do not know what is best for the middle class and the poor. Baby boomers like myself have been working for 40-50 years under the social contract that if we pay our Social Security and Medicare taxes, the money will be there for a comfortable retirement and health care. We are not asking for a free handout. We are not takers. We have given all of our lives and we are now retired or will be in a few short years. If the Fix the Debt Coalition mob is allowed to get their way, many of us will no longer be able to retire or we will have to work even longer to get the benefits we have purchased all these years with our taxes. By the way, just how has this austerity theory worked for the Europeans?
Do you want Billionaires and corporations to decide what is best for you?? I know I don’t, but I want to hear your opinion!
Additional Sources: Nation of Change; Robert Reich;Catfood Commission.
rafflaw,
I’m glad you brought this subject to light again. So many members of the media seem to support the suggestions of Simpson and Bowles. Simpson & Bowles–sounds like a pair of vaudevillians!
Here are videos that I posted with my post about the Fix the Debt Campaign.
http://jonathanturley.org/2012/12/10/what-you-should-know-about-the-campaign-to-fix-the-debt-and-the-ceos-involved-in-deficit-talks/
http://www.youtube.com/watch?v=riKEBVd26Wo
http://www.youtube.com/watch?feature=player_embedded&v=zkBN4pWFJAU
Wealthy CEOs Want Tax Breaks, Cuts to Poor and Elderly
This is life in a plutocracy. You can complain all you want, but they rule. And they will get much, much worse. And you can’t do anything about it now, except find out through experience how really, really bad they are.
Justice,
I agree that it is a crime that there is complicity on both sides of the aisle as I mentioned in the article, but why are we still listening to Simpson and Bowles? No matter who is funding them!
kathleen,
I agree that the real reason for the austerity policies isn’t to help the government and therefore benefit all of us, but to make or save more money for the corporations and the wealthy.
Thanks Mike and ID.
Justice Holmes,
It’s not solely that it’s inconvenient to pay out promised benefits; the underlying intent is to create evermore desperate workers, people who will agree to work for less and less after the safety net (including ALL retirement benefits) has been ripped out from under them. Cheap, desperate, powerless labor is the root goal in all of this austerity yammering; any savings seen from not having to pay out benefits is merely a collateral benefit.
Im so sick of wealthy billionaires telling me what i have to give up and buying our Representatives i could vomit.
Rafflaw,
Rolling down from the blog intro……
Darn good choice Rafflaw! A very worthy choice. Near to my heart and to your pocketbooks.
To loan an example: The cost of an aircraft carrier would feed all the under-nourished in the whole world. What are we spending overseas today? One-sixth of a carrier. How much it could save in protecting people here in the States from cuts is even more horrible to contemplate. Basta***!
Good on ya’.
BFN Exhausted.
Raff,
A brilliant post skewering those with pretensions of being Nobility, when they are merely thieves and scoundrels preying upon the people.
Don’t forget who appointed Simpson Bowles, that socialist in the White House, Obama. The Commission was a way for him to do the bidding of the corporations by blaming it on a blue ribbon commission. How could he not have known that these two would come up with a way to the blame the workers the poor and the old for the deficit and a plan that would reward the very people who pushed us over the financial cliff. He sure is the people’s president? But the corporations are people too, right?
Social Security and Medicare did not cause the financial crisis in this country and they should not be destroyed to fix it. Both programs have been paid into by their beneficiaries and the contract on which the premiums have been paid over the years should be fulfilled. Of course corporations and those who support them don’t look at contracts with human beings as promises that must be kept rather they look at contracts as agreements that should be enforced against people but when the benefits to people come due they believe that the legal system should allow corporations to excuse performance because well it is just so inconvient to Pay those pensions. Corporations have been voiding pension contracts for years with the cooperation of the courts and the labor department. It is a crime.
Now comes S&B to tell is that the poor victims of the financial disaster –big corporations and billionaires–need relief in the form of lower corporate tax rates, which corporations almost never if ever pay, and tax breaks for the wealthy who already actually pay tax rates that most of us can only dream about. If this plan to force workers, the poor, the elderly and the middle class further and further into poverty is adopted the result won’t be a growing economy. It will be stagnation and possibly worse but then the workers have always been so greedy with their minimum wages and their insistence on sick days. Workers are Just really too greedy, after all CEOs cannot be expected to give up their jets, their park avenue apartments and their 100 million dollar salaries it would just be too harsh after all they have done to/for us.
I hope someone in Congress stands up to Obama and the rest of the CORPORATIONS FIRST gang and protects social security and Medicare. It is about time government and our elected representatives started working for the humans in this country,
Raff
A brilliant skewering of those who would see themselves as nobility, rather than the vicious thieves they really are. They are so disconnected from the reality of their loathsome natures via compartmentalization of their activities, that they think themselves “benefactor” of lesser beings such as we.
@rafflaw
I think the larger problem with the popular understanding of “austerity” is an economic misconception that, for one reason or another, nobody corrects in the discourse. One team profits from it, and the other, perhaps in the interest of appearing “impartial” just stands by and watches.
People who promote “austerity” think (if they’re middle-class voters) or act like (if they’re wealthy) money the government takes in in taxes is money taken out of the economy.
Actually, quite the opposite is the case. The government doesn’t have savings per se. All the money the government takes in as taxes, gets spent… in the economy.
Even money collected for Social Security gets spent, the idea being that there is a macro-economic benefit if retired people retain a larger portion of their previous purchasing power.
One could argue an exception to this principle resides with interest payments on debt. But there’s so much duplicity there it’s hard to disentangle.
Take higher education, for example. States have been cutting back funding to public institutions for many years, to the point where the typical state school currently receives only about 10% of their funding from public dollars. This gets called “smaller government” because one balance sheet gets smaller, but…. cutting funding to schools doesn’t make fewer students. It doesn’t make the institution any smaller. It just makes students take out more debt. In essence, every dollar cut from a public school is a dollar that goes right into some banker’s pocket, just skimming off the top. So, the anti-federal reserve crowd who wants smaller government ends up just greasing the wheels of the federal reserve system….
Steve wrote:
“Americans are going to have to tighten their belts (all of us – rich and poor alike).”
Why does anyone continue to take this assertion as reasonable in any way? Does Steve not see a distinction between a poor person forced to skip meals, and a rich person seeing a slightly lower balance on a spreadsheet? There is NO equivalence between the two, and that is the source of a profoundly disingenuous meme out there.
It is fruitless to argue when one side persists in spouting such senseless purported equivalencies.
Indigo,
I enjoyed the typo. You are right that the prize is not named the Nobel prize for Economics, but many sources refer to it in that matter. I did not see Pete Peterson’s name on the past winners list of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel”.
@rafflaw
Ha! Funny typo… Think I just tripped the robo-censor too
While I agree with Krugman more often than not, his award is not a Nobel, but “The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.”
Alfred Nobel’s estate actually objected to it. The economics prize was invented as a marketing gimmick for some Sweedish bank’s 300th anniversary.
But more to the point, when these billionaires go around telling us ordinary folk how to handle money, I can’t help but think that these folks don’t balance their checkbooks, have hired drivers who fill’er’up, have private jets and corporate credit cards… essentially, they’re so rich they don’t even have to touch money.
I wonder when was the last time this Pete Peterson guy saw actual money…
Indigo,
if the Austerity “policies” are allowed there will be a heavy “price” to pay for the middle class and the poor. 🙂
@rafflaw
>I will rest my case with the Nobel Prize winner in Economics, Paul Krugman
There is no Nobel Price in economics!!
Steve,
Trust me, I do not have many deductions to use. We are not talking about taking deductions here. We are talking about altering the method of taxation for retirement that has worked for generations. and is still working today. You may want to relook at the austerity that you are proposing. On an individual level, Americans do tighten their belts when necessary, in most cases. However, on a governmental level, we have already reduced teh deficit by $1.3 Trillion in the last 4 years. I will rest my case with the Nobel Prize winner in Economics, Paul Krugman. As he stated, we don’t have a deficit problem, we have a demand problem.
As to the snarkiness, I have to confess, these robber barons as Arthur called them, have no master other than making more money and their use of money to control the rest of us, does bring the hairs on the back of my neck to attention. They are welcome to their policies, but the Europeans are already into a second recession due to very similar policies.
The market will not and cannot solve a problem that does not exist. That was Greenspan’s belief before the crash. If there was such a market driven answer in the works, why is the stock market booming now? We will have to agree to disagree.
Rafflaw:
This was about the snarkiest column that you have written.
They may be rich; they may have taken advantage of every tax loophole available (that is smart – I know that I take every deduction and I bet that you do too); and they are advocating something that you don’t agree with.
But. Just because you don’t like them, doesn’t mean that there isn’t some value in what they propose.
Americans are going to have to tighten their belts (all of us – rich and poor alike). The only questions are what form that austerity will take, and who will impose it (our politicians, or the market).
We would all like the world to be a better place, but we have to face reality – our politicians have spent us into the poorhouse (wasted money on education (with no discernible benefit), unnecessary wars, pork, etc).
At some point, we will have to pay the financial piper for our past excesses.
Thanks Gene. And I love the phrase “mewling venal machinations of parasites”!
Arthur,
Robber barons is a good term for them, but I consider them just plain old thiefs.
I do so love a healthy dose of righteous indignation and outrage over the mewling venal machinations of parasites like Petersen and that unindicted sociopathic criminal Blankfein. Good job on calling them out, raff.
I have to laugh also at the Peterson crooks. They have produced nothing at all, yet they have become billionaires. So they believe in redistributing the wealth produced by others to themselves by using various tricks and means that are legal. What wonderful Americans who rank right up there with the robber barons of old, but with the difference that the robber barons at least built something with their efforts and schemes. Peterson did not.