For years we have been regaled with scary, scary numbers about how Medicare's projected unfunded liability was in the TENS OF TRILLIONS. And sure enough if you consulted the Medicare Report and examined the actuarial projections for Medicare Part A you would find that number. But a funny thing happened with the 2010 Report and is shown in the data table above: the 75 year number is down to $6.9 trillion, a big number but only 0.5% of projected GDP over that period, and the infinite future number is actually a $600 billion SURPLUS.
Oddly this multi-multi trillion dollar turnaround did not result in banner headlines in the NYT or the WaPo, nor did congratulatory telegrams pour into the offices of Nancy Pelosi, Harry Reid and dare I say it Barack Obama from the folk at Cato and Concord that have been weeping bitter, bitter tears about 'intergenerational inequity' and begging us to 'think about the grandchildren'. Because that is not how they roll nor was any of this what the kerfluffle has been about. The fundamental hostility to Medicare among the self-style deficit hawks is not because it is broken, but instead because it works. For them that infinite future $600 billion SURPLUS is terrible, terrible news. Which is why it never made it to the inboxes of Lori Montgomery and Perry Bacon at the WaPo, though you can bet big that any deterioration would have. Funny that.
Saturday, September 4, 2010
Lies Shouted, Truth Ignored
Funny thing about right wing politics in the US. They are more than willing to push lies and distortions so long as they fit their right wing agenda. But when a truth emerges that goes contrary to this preferred "story line", they go quiet and nobody hears about it. The blogger Angry Bear reports:
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6 comments:
RY;
I am caught by the line; "think of the grandchildren". My thought is: Think of the expenses incurred by the children (who are the parents of the grandchildren) trying to take care of their parents who don't have insurance or retirement if the right wing idiots had their way. Yes, think of the grandchildren..
I am amazed at the news that is reported by our "liberal" media. We don't seem to grasp the fact that the news is brought to us by multibillion dollar corporations..
I can only think of a few wealthy people who are even remotely concerned about the little people, and I am not sure about their motives.
Thomas: Yes, your point is good.
The right uses the club of "how dare Obama propose another simulus with the deficit is building a mountain of debt for our grandchildren!" That argument is wrong-headed. The short term debt of stimulus is to get the current generation back to work and alleviate their suffering (or in your terms, the parents of the parents of the grandchildren). If you do that, it magically solves the generational problem as well. Putting people back to work, grows the economy, creates more tax returns, and shrinks the deficit and thereby reduces the inter-generational debt burden.
The right ignores the negative spiral of austerity. If you cut back stimulative spending, things get tighter. People feel more fear and cut back spending. Business slows and more people are unemployed, and without more stimulus the cycle repeats again in a death spiral. Worse, as the economy contracts, debts get more burdensome. Just ask any unemployed home "owner" how their mortgage feels as the economy shrinks. This is negative feedback. You want to avoid negative feedback.
If you can kickstart recovery, you get the opposite: you get positive feedback. As things get better, companies hire and expand. People with more money spend more. And when companies see more spending, they get more excited about future growth and ratchet up plans for expansion, and you are off-to-the-races with positive feedback. What Keynes said was to tax a little more heavily during these positive feedback times to create a rainy day fund so that when you get into a negative feedback cycle, you can splurge on a big stimulus to nip the negative feedback in the bud.
So the right with their rhetoric about "fiscal discipline" ignore the consequences of their actions or misrepresent them. Their "cure" is worse than the disease.
Angry Bear was making a slightly argument about bad behaviour by the right. He was pointing out the media is playing a very odd role of cheerleader for the right. When the right attacks social security or medicare or any other social program, the media joins in. But when news comes along, like the CBO report that changes the storyline and shows that the social program isn't all gloom-and-doom, media goes quiet. How odd.
Just what role is media playing? Can a true "news" organization which claims to separate news from opinion play the game of cheerleader for the right but deaf mute for any good news on the left? Very odd.
So, Thomas, you are right to point out that the "think of the grandchildren" is to look at the wrong place. Looking there ignores negative feedback and the benefits of positive feedback. It lets the media play into the hands of the right that look for any excuse to cut social programs. Remember the mantra of the Republicans:
Downsize government!
Deregulate, deregulate, deregulate!
Starve the beast!
Cut taxes (for the rich)!
They have no interest in growing the pie so that everybody has a larger piece. They sell "trickle down" economics where the trickle never appears! They cut social programs because they want a pliant lower class desperate for work, with no unions, and no social benefits.
RY;
To add to your concluding point;
They greedily grasp for more and more of the wealth and many sing the song about taking from the rich is socialism, which I don't really know how I feel about demanding their money from them, but the point here is that as they take more of the wealth, they take from themselves because the nation cannot continue to thrive unless all of it's citizens are healthy. The downfall of nations who concentrate their wealth at the upper classes is well documented through out history and even the US has lived through a great depression and only recovered because of changes made by a democratic president and a little good timing, but this time we may not have the good timing on our side or a liberal president who is willing to face the right wing idiots and do what has to be done even if it means declaring an emergency. The ones holding the largest amount of wealth will not willingly put that wealth into our nation even as investment into business deals making products or building infrastructure. The right continues to claim that cutting taxes for the rich and deregulating benefits us all and the news continues to put them in front of the American people sitting in their homes trying to figure out how they are going to survive.
I appreciate your posts and for taking so much time to write a response to my little comment..
Thomas: My solution to that is to encourage the path that Bill Gates and Warren Buffett have started down (and which mushroomed during the last bulge in super-rich, the "Gilded Age" when Andrew Carnegie and Rockerfeller and other fat cats became competitive philanthropists.
In other words, I have no problem with people pursuing great wealth so long as they end their lives by returning the "monopoly money" to the table so the other players can continue the game. That means the rich need to decide that they put on a philanthropic extravaganza at the end of their lives and endow public works, do-good organizations, you-name-it. And I'm all for them competing to do the biggest and best give-away.
What I'm against is creating an "aristocracy of wealth" where the idiot sons and daughters are endowed to live a live of idle and useless wealth using their inherited wealth to buy an even bigger income stream by using the money to hire experts to invest their money and increase their pile of lucre.
So... I'm all for the American Dream. But I think the dream needs to stop at one generation. Sure, do like Buffett, endow your kids with enough so they don't have to work (a couple of million) but not with billions so that they can create an empire of wealth. All the rest of the billions needs to be given away (or taxes away) in one big spectacular. I prefer encouraging the sick to create their own "Howard Hughes Medical Institute" or Rockefeller Foundation. But each of these charitable foundations needs a sunset clause, something that forces them to give the money away within 30 or 40 years.
In Canada, we are allowed to build up a tax-free "retirement savings" account, but the tax laws ensure that we must expend all the money in the savings within 30 years so that it all ends up fully taxed. That's a similar idea. Just makes sure that the money gets recycled so that people can go on playing the "monopoly game" of life. (Think of the game: if one player gets all the money, the game is over. The whole point of the above is to prevent that. You kids and your kids' kids need to go on playing the game, so the money has to be recycled.)
I like your ideas.. I like the comparison to Monopoly and the end of the game.. I don't think the fat cats see that when they have collected too much money that the game is over; even for them. And, actually no one wins at the end of this game.
I do think a lot of Republicans like Rockefeller. I think to some degree they realized that life was more than money and that all that would be left of them when they are gone is memories or history.
The children need to earn their way as much as the vast wealth needs to be in the system being recycled. I guess we are all eventually recycled in one way or the other. But, it is a great disservice to the children to give them all of that wealth and power all at once. I don't think there is any value in that approach, so I like your idea for this situation, as well.
Its too bad that so many see taxation as taking from the wealthy when it really should be a privilege to be able to "pay" so much for the country that protects them and gives them the opportunity to be so successful. It just should not be thought of the way it is.. robbery or taking from the rich. It would not be so much of a problem if the leaders had not thought it such a light thing to layoff workers and close plants to make a little more money and to outsource or give jobs to machines (I know, some of this improved lives). There must come a time when bottom line profits are not worth selling your country out. This is only a part of the way that company leaders have sold our nation out to the bottom line.. Its the whole attitude toward accumulating more and more wealth no matter the cost (even if the building will collapse and destroy lives one day).
Thomas: You flatter me by saying you like my ideas. But they aren't mine. They are the ideas of lots of people. Most of what I know I learned from other people. Very few people discover great ideas by themselves.
It was Warren Buffett who helped me see that a rich person could be a responsible citizen. Many years ago I read something like this:
His children will not inherit a significant proportion of his wealth. These actions are consistent with statements he has made in the past indicating his opposition to the transfer of great fortunes from one generation to the next. Buffett once commented, "I want to give my kids just enough so that they would feel that they could do anything, but not so much that they would feel like doing nothing".
He has signed away the bulk of his wealth to the Gates Foundation to be given away. So he has done the right thing.
I think he is a good person, but I realize that I may not know enough to say he is a "great" person. I like his folksy style. I admire him. But I have read some stuff that says he isn't what he seems. So I won't go overboard in my praise of him. I only know what I've read and you certainly can't "truly know" a person only from reading press clippings, finance books, and the odd biography. But I can say that I admire what he has done in handling his wealth.
I'm more ambivalent about Rockerfeller. He was a very devout Christian, but I find that a puzzle. Jesus actually preached that "it is easier for a camel to get through the eye of a needle than a for a rich man to get into heaven" and he said "give away all that you have to the poor". Rockerfeller didn't really do that. But he was famous for attending church and even giving Sunday school lessons.
I have read biographies of Rockerfeller and he was famous for "sharp" business practices. That's the polite way of saying he cheated people.
I do remember reading in high school civics that he monopolized oil because he got a big enough share of the oil to do a deal with the railroads so that he got a cheaper rate to ship his oil and he got a kickback for every barrel of his competitor's oil that the railroad shipped. This "leverage" let him quickly monopolize oil in the US. Bottom line: not a nice guy and certainly not somebody you would want as a "friend". But I'm happy with his Rockerfeller Foundation.
I'm happy to have the rich busy competing to build up great piles of wealth. That energy, ingenuity, and entrepreneurship ultimately helps everyone if the money they amass is eventually recycled. So long as they don't monopolize and strangle the economy, we are all better off because the rich want to be rich. But we have to put laws in place to limit their greed and their "dirty tricks". And we need to make sure they don't "buy" the government.
Otherwise, I'm happy to see them compete to get on the Forbes List of The World's Richest People. I especially love to see them compete to endow universities and fund medical research and whatever. I loved the way the rich in Rome and Greece would build big public buildings for everyone to use. They did this so that everybody would see their name on the building an know they were big important and powerful men. Fine. Nothing wrong with that. But they can't be allowed to strangle the economy because they've figured out a way to eliminate competition. They can't be allowed to strangle the economy so they can freeze their current status as top dog. Instead, I encourage them to grow the pie so we all get bigger pieces!
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