Catfood Commission Part Two


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  “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.”  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.

55 thoughts on “Catfood Commission Part Two”

  1. “kathleen
    1, February 24, 2013 at 4:25 pm
    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.”
    (Well done Kathleen!)

    Re-posting from above because it bears repeating, and repeating and repeating.

    The wealth for the commoners generated in the aftermath of WWII was an aberration both here and in Europe. WWII wiped the slate clean and allowed a worker class distrustful of power and politicians to frame a new form of governance that divvied up the economic power differently. But it was an aberration, it was not the way the (Western)world worked historically and was not the desired model. The desired model was and is Aristocratic/Plutocratic and the names of the great families, banks, corporations that existed prewar-war and can be traced back (centuries) are still present and major players. They are supplemented with the nouveau riche but their desired model is unchanged from feudal times to now.

    Class warfare is the oldest warfare IMO. Before tribes fought for territory they fought for who would be the chief and the priest or shaman and how much each among the rest of the tribe would have to pay in tribute to that ruling class. It never ends. Elaine’s blawg posting clearly displays the fact that there are two systems of justice, one for the wealth class and one for the rest. Half a dozen blawg posts a week display the same truth, there are one set of rules for the haves (and their knights/enforcers or, more appropriately, their privateers) and one system for the rest. This is not new, here or elsewhere. This is the way it is historically.

    I think that what we are seeing today is the big leap backward, planned for decades and coming to fruition. I think that’s what gets talked about (in polite language) at the annual Bilderberg meetings and the G pick-a-number meetings and those conclaves of the uber-rich that we occasionally hear about.

    1. “I think that what we are seeing today is the big leap backward, planned for decades and coming to fruition.”

      Kathleen & LK,

      I agree Kathleen’s whole comment, of which the sentence above is just a part. It is elegant in its brevity because it completely sums up the system as it has been in both the past and the present, with only aberrations for short periods.

  2. Much Ado about Nothing bill? The idea that billionaires are trying to gut Social Security and Medicare, along with lowering their own taxes and the taxes of big corporations is nothing, all on the backs of the poor and middle class?

  3. “Shakespeare’s, Much Ado about Nothing is in my mind for some reason.”

    Rick read one of his ponderous sermonettes and was honest enough to
    admit what he was thinking.

  4. I never thought I would agree with Paul Krugman on any statement but I do believe we, as Amaricans, have a demand problem.

    We demand the unattainable with no glimps at the realities of life. As a country we cannot afford every special interest project that every individual feels the government should pay for. I’m not talking about SS or Medicare…these are programs that people pay for their entire working lives.

    I’m talking about…my child has this-the government needs to do something about it;…my mother suffers from that-the government needs to do something about it;…society needs to change the other thing-the government needs to do something about it. At some point in time we must realize that pockets are not bottomless and we need to put on our big boy pants and take care of it ourselves.

    It would be interesting to see all that lovely money that is wasted on elections and advocacy groups being spent on needs and not power…both Republican and Democrat.

  5. Let me try that again. Additional taxes would be raised if the minimum wage were raised to the 1968 level. Accounting for inflation, etc. the rate would be a bit more than $21/hr. Future increases should be tied to the rate of inflation.

  6. Additional taxes would be raised to the 1968 level accounting for inflation, to $21. All those folks now earning minimum wage would actually make enough to pay taxes. And tie future increases to te rate of inflation.

  7. The whole issue about whether or not to cut SS is fabricated.

    There’s an easy answer: raise the limit on taxable income.

    Right now, only incomes up to $110,000 are taxed for social security. Change that rule, and the problem goes away.

  8. Elaine,
    I am glad that you included the recession/depression because the stimulus was part of the temporary debt that was necessary because of the two wars off the budget and the financial and housing meltdowns.

  9. Social Security and Medicare didn’t cause the debt. Two “credit card” wars, the financial meltdown and subsequent bailout of big banks, and a bloated defense budget surely helped us dig ourselves into a deep debt hole.

  10. I sleep better every night, knowing that our President is a liberal who gets up every day and does everything in his power to make life better for the
    majority of people who voted for more wars for the only democracy in the M.E., and for the 1% here in the Homeland, who put him into power. Showing him the Zapruder film when he got elected-worked like a magic bullet – to keep him focused, and on the ranch.

  11. @feemeister

    The Fed isn’t really the issue, though I definitely agree that it should be audited.

    A lot of the calls to audit the Fed come from people who mistakenly suppose that the Fed or the Treasury create money, and that they’re “running the presses overtime.”

    There has been some of this with the “quantitative easing” policy, where the Fed now holds more value in Treasury bills than China…. but that’s public knowledge, even if most people don’t know about it.

    Individual banks create money every time they loan money. That’s not something that’s centrally-directed.

    Under the Articles of Confederation, paper money was seen as a useful way to regulate wealth. Part of the reason why the Founding Fathers agitated for the Constitution was because they didn’t like states having the power to cancel onerous debt.

    The alternative to our central banking system — a return to the gold standard, for example — would spell utter disaster for our country.

    If China asked for out debts to be repaid in gold, all our wealth would flow right out of the country in a hurry, and we’d be screwed.

    If some wealthy investors put their heads together, it would be really easy for them to manipulate the currency price simply by buying up gold, and we’d be screwed. The way things are now, to manipulate the currency, you need something on the scale of LIBOR.

    If we returned to the gold standard, there would be no reason for anybody to hold dollars as a reserve currency, and our economy would tank, the same as if OPEC decided to start pricing oil in gold.

    If we returned to the gold standard, we would be in the absurd position of valuing our currency in terms of numbers of molecules: all the gold ever mined in the history of the world would fit within two Olympic-size swimming pools. Such a valuation would be even more abstract to common intuitions than what exists today.

  12. I sense a revolution in the making, but not the one the “T” partiers (another billionaire invention) have in mind. Nope, holding down the working stiffs and denying them their social contract will surly result in Pete Peterson’s downfall along with the rest of us.

    It is not time to the barricades rather it is time to out such preposterous politicians and the “mewling venal machinations of parasites”! Time is now to increase the pressure on those in congress who are actively in the employ of the meters. 2014 is just around the corner folks.

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