Pay Crisis

[j_b]

Dean Baker

Co-director, Center for Economic and Policy Research :

 

Next week dozens of honchos around Washington are going to be gathering to try to devise ways to ensure that ordinary working people pay for their incompetent management of the economy. This effort will pass under the guise of "fiscal responsibility."

 

The basic story of course is quite simple. Geniuses like Ben Bernanke, Alan Greenspan and the rest of the country's top economists and policymakers somehow either could not see an $8 trillion housing bubble or just thought it was cute.

 

When it collapsed and brought down the economy, as every competent economist knew it would, it also created a serious budget problem. Now, these elites are convening special sessions devoted to fiscal responsibility in which they will devise schemes to take away the Social Security benefits that workers have already paid for and to cut Medicare. Invariably they will praise themselves for having the courage to take part in these Wall Street funded sessions to plot ways to take money from ordinary workers. And, they wonder why people hate Washington.

 

http://www.prospect.org/csnc/blogs/beat_the_press

[Fairweather]

Next week dozens of honchos around Washington are going to be gathering to try to devise ways to ensure that ordinary working people pay for their incompetent management of the economy. This effort will pass under the guise of "fiscal responsibility."

 

 

I agree! And since you're on the subject of Olympia, I think Gregoire should be recalled immediately.

[j_b]

Bush dead enders certainly don't want to talk about Americans having to pay for the plutocracy gambling on Wall Street, even though they have claimed to be anti-tax on the middle class all along (end result is of course the exact opposite of their claims: +25% increase in effective taxation [fees, sales taxes and whatnot] on median incomes since Reagan).

[JayB]

How to understand the housing bubble* in one line:

 

-Debts that can't be repaid, won't.

 

How to understand the Social Security/Medicare funding crisis in one line:

 

Obligations that can't be met, won't.

 

*Major metro areas in Canada, Australia, and NZ are next in line for the staggering cornholing.

[Hugh Conway]

Obligations that can't be met, won't.

 

*Major metro areas in Canada, Australia, and NZ are next in line for the staggering cornholing.

 

Australia? As resource provider of choice to the Chinese consumers dreams they aren't so bad off. The resource banana republic to the north isn't that screwed either.

 

Unlike America which produces nothign

[j_b]

How to understand the housing bubble* in one line:

 

-Debts that can't be repaid, won't.

 

How to understand the Social Security/Medicare funding crisis in one line:

 

Obligations that can't be met, won't.

 

*Major metro areas in Canada, Australia, and NZ are next in line for the staggering cornholing.

 

Social Security is solvent for at least another 30 years and doesn't need to be cut. People who pay SS taxes shouldn't pay for gambling by the plutocracy that is richer than ever. As for healthcare, single payer is by far the most "efficient" system out there just by virtue of "cutting out the middlemen" so I am not so sure what's the hang up.

 

What about the 5 millions unemployed who'll stop getting unemployment benefits between now and June? I guess you don't care since your rhetoric amounts to "burn, baby, burn"

[Fairweather]

Social Security is solvent for at least another 30 years and doesn't need to be cut.

 

Um, "lock box?" WTF? Obama's driving us toward the cliff at 4x the speed of GW and you're acting like everything's off the table? But, hey, I'm glad you're finally waking up re those ass clowns that been runnin' Oly for damn near 30 years...

Edited February 16, 2010 by Fairweather

[j_b]

You guys are lousy populists if you think cutting SS benefits is going to get you elected. Just make sure you own up to it between now and November.

[JayB]

Obligations that can't be met, won't.

 

*Major metro areas in Canada, Australia, and NZ are next in line for the staggering cornholing.

 

Australia? As resource provider of choice to the Chinese consumers dreams they aren't so bad off. The resource banana republic to the north isn't that screwed either.

 

Unlike America which produces nothign

 

When the average mortgage to income ratios for Bundaberg eclipse NY and SF it's time to start looking over your shoulder. The Rudd government has unleashed massive tax-payer financed incentives in order to lure the final round of first-time-buyers/knife-catchers into the game in order to keep things inflated for the time being, but they don't have enough firepower to keep the party going indefinitely.

 

35 year amortizations with little or nothing down and next to zero interest rates north of the border will have to be rolled over at some point since AFAIK most loans have the rates fixed for increments that are five years long at most. Even if rates stay flat out to infinity an average ratio mortgage debt to household income of 9:1 means that a shocking percentage of households with fresh mortgages are coughing up something north 50% of their gross income to cover the house note. That much cash going out the door every month before you make the first trip to the grocery store is double-plus ungood. Good time for anyone in that market with more debt than equity to sell. "You never go broke by taking profits."

 

 

[Fairweather]

You guys are lousy populists if you think cutting SS benefits is going to get you elected. Just make sure you own up to it between now and November.

 

I'm not saying it's a good idea--it isn't. But it's clear that entitlement spending isn't sustainable, and I think you'll see movements to stem the flow via means testing or other mechanisms. No doubt politicians will learn what the "third rail" is all about in the process. No matter; eventually the checks will bounce.

 

Besides; aren't you the one who agrees with Obama's plan to cut Medicare benefits by $500Bn?

[JayB]

How to understand the housing bubble* in one line:

 

-Debts that can't be repaid, won't.

 

How to understand the Social Security/Medicare funding crisis in one line:

 

Obligations that can't be met, won't.

 

*Major metro areas in Canada, Australia, and NZ are next in line for the staggering cornholing.

 

Social Security is solvent for at least another 30 years and doesn't need to be cut. People who pay SS taxes shouldn't pay for gambling by the plutocracy that is richer than ever. As for healthcare, single payer is by far the most "efficient" system out there just by virtue of "cutting out the middlemen" so I am not so sure what's the hang up.

 

What about the 5 millions unemployed who'll stop getting unemployment benefits between now and June? I guess you don't care since your rhetoric amounts to "burn, baby, burn"

 

My magic eight-ball says "voucherization" is in the future for medicare, perhaps along with some means-testing for Social Security.

 

Savvy politicians will be able to blame the bond market - with ample justification - for tipping their hands when the cost of financing the debt necessary to fund the said entitlements begins to look like it may well and truly exceed our capacity to pay it under all but the most fantastic scenarios.

[j_b]

Proposing the privatization of medicare and the cutting back of SS benefits, without even discussing taxing the plutocrats responsible for ruining the economy speaks about your respective nonexistent commitments to socio-economic justice. It's going to be fun watching you pretend that you represent the angry people between now and November.

 

Besides; aren't you the one who agrees with Obama's plan to cut Medicare benefits by $500Bn?

 

No absolutely not. It can't be a coincidence that you are always wrong in describing what I stand for. Are you trying to slander me again?

 

[Mtguide]

I still think the best description/explanation of the current political and fiscal situation in the country, and over the entire planet, for that matter, was stated about 10 years ago by Ralph Nader. I can't remember the quote verbatim, but in essence, he said that what the corporate powers and the wealthy really want, and are doing everything they can to ensure, is that they have ALL the money, ALL the power, influence, and control, ALL the resources, ALL the manpower, ALL the perks, privileges, pleasures, and protection of their personal safety, security, and assets, AND they don't want to have to pay ANYone, anyTHING, for ANY of it. And, they also feel that if they can't have 100% of it all, that it's NOT FAIR.

 

There are are few things, though, that they DON'T want; they want NONE of the responsibility or liability for pollution or any other environmental damage and destruction, or the degradation and destruction of human lives, cultures, social infrastructure, community integrity,or political/governmental structures, that may result from their heedless, callous, and grasping behavior.

 

Very nice bunch of people.

[billcoe]

I'd be reading what Jayb says fairly carefully and argueing a tad less with him, he called the last housing price decrease/crisis in this country.

[el jefe]

bill, even a stopped clock is right twice per day.

[j_b]

Huh? Reading JayB carefully won't convince me that letting the plutocracy loot Social Security and privatize medicare after they destroyed the economy and got bailed out is a good thing for Americans.

 

Anyway, many people were discussing the real estate bubble by the time JayB called it so I don't see what you're talking about. After years of shilling for corporocrats, "free market" charlatans and warmongers, JayB's batting average is in the shitter and it will remain there.

Edited February 16, 2010 by j_b

[j_b]

Meanwhile, the so-called "deficit hawks" work on yet another tax give-away for the wealthy:

 

Lincoln-Kyl Estate Tax Giveaway Now Has Matching House Counterpart

 

Sens. Blanche Lincoln (D-AR) and Jon Kyl (R-AZ) are leading a fight in the Senate to implement a cut in the estate tax that would lower the rate from 45 percent to 35 percent and bump the exemption (the amount to which the tax does not apply) from $3.5 million to $5 million ($10 million for a couple). Thanks to a Bush-era accounting gimmick, the estate tax is set to disappear in 2010, and come back with a much lower exemption and higher rate in 2011, thus necessitating Congressional action.

 

As we’ve noted here before, the Lincoln-Kyl plan constitutes a $250 billion giveaway to the rich. And not to be outdone in terms of bad bi-partisan proposals, the House now has it’s own version of the Lincoln-Kyl “compromise,” introduced by four members:

 

The stakes were raised today in the House, when Reps. Shelley Berkley, D-Nev., Artur Davis, D-Ala., Kevin Brady, R-Texas, and Devin Nunes, R-Calif., introduced legislation to set the rate at 35 percent going forward, with the exemption bumped up to $5 million from the current $3.5 million and indexed for inflation…Brady said it would exempt 99.8 percent of all estates from the “death tax,” calling it the “best option available today to preserve small businesses and family farms in America.”

 

As National Journal noted, the House measure “would be much more expensive than extending the 2009 rate.” For the record, under current law, 99.7 percent of households will be completely exempt from the tax. So by Brady’s own calculation, $250 billion will buy an exemption for .1 percent of households.

 

And as for looking to “preserve small businesses and family farms,” current law would only affect about 100 of them, and “all but a handful would have sufficient liquid assets on hand (such as bank accounts, stocks, and bonds) to pay the tax without having to touch the farm or business.” The House plan would drop that number to 40."

http://wonkroom.thinkprogress.org/2009/10/24/estate-tax-hous/

 

"

[prole]

What about the 5 millions unemployed who'll stop getting unemployment benefits between now and June? I guess you don't care since your rhetoric amounts to "burn, baby, burn"

 

"Duh, yeyah don't worry 'bout a thang. evrythang gon' be fine as long as duh market kin reach eqwalibrium."

 

[archenemy]

the corporate powers and the wealthy really want, and are doing everything they can to ensure, is that they have ALL the money, ALL the power, influence, and control, ALL the resources, ALL the manpower, ALL the perks, privileges, pleasures, and protection of their personal safety, security, and assets, AND they don't want to have to pay ANYone, anyTHING, for ANY of it. And, they also feel that if they can't have 100% of it all, that it's NOT FAIR.

 

I totally agree with this. And to think that politicians can fix this is comical. Politicians can't analyze and solve problems; they are trained to. For all I know, that is not even in their job descriptions. They pretty much just work on getting voters to see things a certain way so that the politician can get more money from big donors. Politicians who make their money as a politician is going to do whatever he has to in order to keep his job. Politicians who don't need money probably can't relate to the rest of us. I just don't see how any of this benefits us.

 

Occasionally I mention the book, "When Corporations Rule the World". It is a must read. It gives an excellent history of the corporation. It helps clarify and give depth to the issues going on today--such as the ruling that now allows corps to donate all the $ they want to politicians. Understanding the reinforcement of the corporation as an individual entity equal to that of a human is important. We live with the implications every day. Read it.

[prole]

How's everybody enjoying their productivity gains?

[prole]

Anybody remember what they did with that rebate check George Bush sent them? Man, that was a great idea.