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When You’re Cutting Social Security, ‘Wealthy’ Begins at $25K

By Jim Naureckas | FAIR | February 21, 2013

Here’s a proposal for Social Security that was on the New York Times op-ed page yesterday (2/20/13):

The top third of beneficiaries (by lifetime income) [would] receive no annual cost-of-living adjustment in retirement. The middle third would get half of today’s adjustment, and the bottom third would receive the same annual increase they do now. Such a reform…would reduce Social Security spending by more than a tenth over a decade and fix the program’s long-term financing.

This is part of Paul Ryan adviser Yuval Levin‘s attempt to find “common ground” on the entitlement issue: “Both sides should agree at least to spend less money on the wealthy.” So who are these “wealthy” people who would be getting a benefit cut equal to the rate of inflation every year? According to the  SSA, about 34 percent of people over 65 have family incomes of $50,000.

Now, you can argue about what “wealthy” is, but I think you would find pretty widespread agreement on what wealthy isn’t: $50,000 a year. If you sent the New York Times an op-ed outlining your plan to balance the budget by raising taxes on “wealthy” people who make 50k a year or more, it would be put in the same pile that gets the submissions about Elvis’s UFO diet. But when you’re talking about cutting entitlements, if you want to call those people “wealthy,” that’s perfectly reasonable.

But wait! Those aren’t the only people who are getting too much from the government and need to have their benefits cut–the middle third of the elderly are also “wealthy” and need their benefits cut–but by only half the rate of inflation per year. The ones making more than $50,000 must be the super-wealthy, the regular wealthy make…between $25,000 and $50,000, roughly.

For comparison purposes, the poverty line for a family of four is $23,350. Talk about a shrinking middle class!

This idea of “means testing” as a painless way to solve the supposed entitlement crisis is very popular among wealthy pundits. It’s not hard to understand why. One of the principles Levin suggests we should all be able to agree on is “give less to the wealthy rather than take more from them.”

OK, so let’s say you’re wealthy–not Levin’s pretend wealthy, but truly super-rich, in the top 0.01 percent of income.  Average income in this group is about $24 million a year. So you can easily afford to give up their whole Social Security paycheck. If you’ve paid in the maximum possible amount and retire at 66, that’s $2,513 a month–or $30,582 a year. You have sacrificed for your country.

But let’s say that instead of taking away your Social Security check, we tax your income–which comes entirely in the form of investment income, since you’re a wealthy retiree–at the rate for regular income rather than at the special lower fat-cat rate. So instead of paying (very roughly) $4.8 million in federal income tax, you’ll be paying about $9.5 million.

Now, you can surely afford to live on $14.5 million a year rather than $19.2 million–just as you can afford to give up your Social Security check. Somehow, though, making the latter sacrifice is probably going to seem more appealing.

And the thing is, there aren’t that many really wealthy people who won’t miss their Social Security checks–so in order to save any appreciable amount of money, you have to take a substantial chunk away from people who actually aren’t very wealthy at all. That’s a principle we can all agree on. All of us making $24 million a year, anyway.

February 22, 2013 Posted by | Deception, Mainstream Media, Warmongering | , , , , , | Leave a comment

Brennan’s Support for Torture Is Not an ‘Accusation’

By Jim Naureckas | FAIR | January 7, 2013

The New York Times’ Scott Shane (1/7/13), reporting on the news that President Barack Obama plans to nominate his terrorism adviser John Brennan to be head of the CIA, writes:

The president had considered naming Mr. Brennan to head the CIA when he took office in 2009. But some human rights advocates protested, claiming that as a top agency official under President George W. Bush, Mr. Brennan had supported, or at least had failed to stop, the use of interrogation techniques like waterboarding that are widely considered to be torture. Mr. Brennan denied those accusations but withdrew from consideration, and Mr. Obama gave him the advisory position, which did not require Senate confirmation.

That Brennan was a supporter of torture is not a claim or an accusation, though–it’s a matter of public record. As we pointed out after Brennan’s name was withdrawn in 2009, here’s what he had to say to CBS News in 2007 (Early Show, 11/2/07):

The CIA has acknowledged that it has detained about 100 terrorists since 9/11, and about a third of them have been subjected to what the CIA refers to as enhanced interrogation tactics, and only a small proportion of those have in fact been subjected to the most serious types of enhanced procedures…. There have been a lot of information that has come out from these interrogation procedures that the agency has in fact used against the real hard-core terrorists. It has saved lives. And let’s not forget, these are hardened terrorists who have been responsible for 9/11, who have shown no remorse at all for the deaths of 3,000 innocents.

If the words “support” and “torture” have any meaning, then Brennan is supporting torture there. This is another example of how in order to be an “objective” reporter, you have to deny that there’s any such thing as objective reality.

January 7, 2013 Posted by | Mainstream Media, Warmongering, War Crimes | , , , , , , , | Leave a comment

Don’t Call It ‘Raising the Retirement Age,’ Because That’s Not What They’re Doing

By Jim Naureckas | FAIR | September 7, 2012

As Dean Baker noted (Beat the Press, 9/7/12), corporate media mostly missed one of the major pieces of news in President Barack Obama’s speech to the Democratic National Convention.

Talking about the federal budget deficit, Obama said, “Now, I’m still eager to reach an agreement based on the principles of my bipartisan debt commission.” Then, as he talked about what he would and wouldn’t do to reduce the deficit, he included this line: “And we will keep the promise of Social Security by taking the responsible steps to strengthen it–not by turning it over to Wall Street.”

“Responsible steps to strengthen it”–what does that mean? Dean Baker helpfully paraphrases:

President Obama implicitly called for cutting Social Security by 3 percent and phasing in an increase in the normal retirement age to 69 when he again endorsed the deficit reduction plan put forward by Erskine Bowles and Alan Simpson, the co-chairs of his deficit commission.

This would be a good thing for voters to know about, wouldn’t it?

Baker’s blog post explains the 3 percent thing–the result of proposed games with the cost of living adjustment. As for raising the retirement age, that requires further discussion–because that’s one of the big lies of the Social Security discussion.

The thing is, nobody who proposes raising the retirement age is really proposing raising the retirement age. If you were just raising the retirement age, you’d have to wait until you were (say) 69 to stop working, but when you did, you get the same benefits that you would now if you retired at age 69.

But no one’s proposing that–because that would save hardly any money. The way Social Security works is that you can retire whenever you want starting at age 62–but the longer you wait, the more money you get. The government tries to calculate it based on life expectancy so that whatever date you pick, you end getting (on average) about the same amount of money.

So when they “raised the retirement age”–as they’ve been in the process of doing for decades now–they didn’t say that you couldn’t retire at 62 anymore. They said that if you retired at 62, you’d get less money. And you’d get less money if you retired at 63, or 64, or 65, or….

There’s a more accurate way than “raising the retirement age” to describe this policy of lowering the amount of money someone at any given age receives when they retire. It’s “cutting Social Security benefits.”

September 7, 2012 Posted by | "Hope and Change", Economics | , , , , | Leave a comment

For Washington Post, Promises to the Elderly Have ‘No Economic Significance’

By Jim Naureckas – FAIR – 04/30/2012

I gave my daughter a tip on being a media critic: “If you see a newspaper article with the words ‘Social Security’ in the title,” I told her, “it’s probably bad.”

Sure enough, the article we were looking at–”Fixing Social Security,” by Washington Post columnist Allan Sloan (4/29/12)–was pretty terrible.

Sloan’s argument is that cuts in Social Security benefits are “inevitable” because of “projections that Social Security’s cash expenses will exceed its cash income as far as the eye can see.” Note the important qualifier: “cash income.” That means excluding Social Security’s investment income. Including that income, Social Security is in the black for the next 21 years, according to the Social Security Trustees’ projections.

Why exclude that investment income? Sloan explains:

We will skip all that stuff about the Social Security trust fund (which has accounting and political significance but no economic significance) and go straight to the number that matters.

To wit: Last year, the Treasury had to borrow $160 billion to give to Social Security so that its checks (okay, its electronic deposits) wouldn’t bounce.

Let’s not skip the part about the Social Security trust fund–it’s important. It’s got $2.5 trillion in U.S. Treasury bonds in it–I’d say that’s rather significant, economically speaking.

Why does the Social Security trust fund have so many Treasury bonds? Because back in the 1980s, the federal government decided to “save” Social Security by raising the payroll tax (and cutting benefits as well). The idea was that Social Security would take in more than it needed in the late 20th and early 21st centuries, loan that money to the Treasury, and then in the mid-21st century, the Treasury would pay it back, thus helping to pay for the Baby Boomers’ retirement.

The loaning money to Treasury part worked as planned. Now that it’s time for the paying back part–suddenly the trust fund has “no economic significance.”

Look at the word game Sloan’s playing: “The Treasury had to borrow $160 billion to give to Social Security….” Paying one’s debts isn’t a gift–it’s a legal requirement.

It’s true that Congress could rewrite the laws so that Social Security would forgive those debts–but why should it do that? It would implicate Congress in the grandest of all larcenies–diverting money from the paychecks of working Americans with a promise that it will be used to help pay for their retirements, and then refusing to make good on that promise on the grounds that it has “no economic significance.”

April 30, 2012 Posted by | Deception, Economics, Timeless or most popular | , , , , , , | Leave a comment

The Japanese Nuclear Establishment vs. the Two-Thirds ‘Minority’

By Jim Naureckas | FAIR | January 26, 2012

There’s a news article in the Washington Post today that really captures that paper’s view of the way the world works, and how it ought to work. Headlined “After Earthquake, Japan Can’t Agree on the Future of Nuclear Power,” Chico Harlan’s piece begins:

The hulking system that once guided Japan’s pro-nuclear-power stance worked just fine when everybody moved in lockstep. But in the wake of a nuclear accident that changed the way this country thinks about energy, the system has proved ill-suited for resolving conflict. Its very size and complexity have become a problem.

And what exactly is that problem?

Nearly a year after the triple meltdown at the Fukushima Daiichi facility, Japanese decision-makers cannot agree on how to safeguard their reactors against future disasters, or even whether to operate them at all.

Some experts say this indecision reflects the Japanese tendency to search for, and sometimes depend on, consensus–even when none is likely to emerge. The nation’s system for nuclear decision-making requires the agreement of thousands of officials. Most bureaucrats and politicians in Tokyo want Japan to recommit to nuclear power, but they have been thwarted by a powerful minority–reformists and regional governors.

The obstruction by this “powerful minority,” the Post goes on to say, has “heavy consequences”: “record financial losses for major power companies and economy-stunting electricity shortages.” The story warns that “Japan, once the world’s third-largest nuclear consumer, could be nuclear-free, if it is unable to win approval from local communities to restart the idled units.”

Then, after musing about the “elaborate network of hand-holding” that used to govern Japan’s nuclear infrastructure, Harlan slips in a fact that changes everything:

Since the March 11 accident, just enough has changed to stall that cooperation. Two-thirds of Japanese oppose atomic power. Politicians in areas that host nuclear plants are rethinking the facilities; they hold veto power over any restart. A few vocal skeptics have emerged in the government, and in the aftermath of the accident, Japan has created at least a dozen commissions and task forces for energy-related issues.

So when the pro-nuclear goals of “most bureaucrats and politicians” are “thwarted by a powerful minority,” that’s a sign of the dysfunctional Japanese system, with its “tendency to search for, and sometimes depend on, consensus.” The fact that this “minority” actually represents the large majority of the Japanese public who oppose the technology that has rendered substantial parts of their country uninhabitable–well, that’s just another roadblock that the establishment is going to have to overcome.

January 26, 2012 Posted by | Mainstream Media, Warmongering, Nuclear Power | , , , | 1 Comment

   

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