Grumpy highly recommends you listen to last week's This American Life:
http://www.thisamericanlife.org/radio-archives/episode/405/inside-job
Sunday, April 18, 2010
Tuesday, April 13, 2010
Distorting the Budget Deficit
Since 2001 the perennial gap between the richest and poorest Americans has reached an all-time high. Income for the top 2 percent of the population has increased dramatically while income has stagnated for those in the middle and has actually decreased for workers at the lowest income levels.
As this shift of income from the poor to the rich occurred, the federal budget accumulated huge deficits which Fed Chairman Bernanke now calls "unsustainable". Voices in the media respond with a clamor for an end to "fiscal irresponsibility" which has led to "unsustainable" deficits.
Despite vast discrepancies in wealth between the richest and poorest people in America, voices in the corporate media, led by the Washington Post, relentlessly propose even greater sacrifices from our poorest citizens as the solution to "fiscal irresponsibility."
In an April 13, 2010 column by Walter Pincus the Washington Post presents its latest argument for balancing the budget on the backs of our poorest citizens. Pincus praises a study prepared for the Industrial College of the Armed Forces by military officers and civilians employed in the national security apparatus which - surprise, surprise - finds that the solution to our fiscal problems is to reduce the benefits of Social Security and Medicare without even a mention that defense spending could be a factor.
Of course some wealthy people receive Social Security and Medicare benefits, but it cannot be denied that the overwhelming majority of those benefiting from Social Security and Medicare are individuals who are being kept out of poverty and provided health care only because of those benefits. It is unconscionable to call spending for those benefits "irresponsible."
It is irresponsible to ignore the budget impacts of Bush tax cuts for the wealthy or to support waging trillion-dollar-plus unfunded wars in Afghanistan and Iraq or to support maintaining a defense structure designed to defeat a Soviet Union threat that ended twenty years ago, all of which the Post has done. Until those positions can be justified, the Post should stop its efforts to undermine Social Security and Medicare benefit levels. Current benefits are the least that should be provided by the richest country in the history of the world. Social Security and medicare benefits are not the causes of our overall budget deficit, which stems from tax cuts and wars, nor are they unaffordable. As even Pincus acknowledges, if all income earned and unearned were taxed without a cap - so that the highest incomes were taxed at the same rate as the lowest incomes - then current Social Security benefits would be fully funded. Medicare funding will be fixed when the overall health care system is fixed, when U.S. costs for health care are brought down to levels achieved by every other industrialized country in the world, levels at which they achieve better outcomes.
Finally, the distortions of the Pincus column in the Post are exposed by the clumsy and heavy-handed misrepresentation of Chairman Bernanke's quote on budget deficits. In small print, the Post gives the full quote: "to avoid large and unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs and Medicare, less spending on everything else from education to defense or some combination of the above." Somehow in the big-print version of the quote superimposed on a photo of Bernanke, the multiple options for cuts offered by the Chairman are quoted as only "more taxes or modifications to entitlements and Medicare." Cuts in defense spending disappear as an option in the big print.
It can only be hoped that some day the Post will treat this issue with the honesty it deserves.
As this shift of income from the poor to the rich occurred, the federal budget accumulated huge deficits which Fed Chairman Bernanke now calls "unsustainable". Voices in the media respond with a clamor for an end to "fiscal irresponsibility" which has led to "unsustainable" deficits.
Despite vast discrepancies in wealth between the richest and poorest people in America, voices in the corporate media, led by the Washington Post, relentlessly propose even greater sacrifices from our poorest citizens as the solution to "fiscal irresponsibility."
In an April 13, 2010 column by Walter Pincus the Washington Post presents its latest argument for balancing the budget on the backs of our poorest citizens. Pincus praises a study prepared for the Industrial College of the Armed Forces by military officers and civilians employed in the national security apparatus which - surprise, surprise - finds that the solution to our fiscal problems is to reduce the benefits of Social Security and Medicare without even a mention that defense spending could be a factor.
Of course some wealthy people receive Social Security and Medicare benefits, but it cannot be denied that the overwhelming majority of those benefiting from Social Security and Medicare are individuals who are being kept out of poverty and provided health care only because of those benefits. It is unconscionable to call spending for those benefits "irresponsible."
It is irresponsible to ignore the budget impacts of Bush tax cuts for the wealthy or to support waging trillion-dollar-plus unfunded wars in Afghanistan and Iraq or to support maintaining a defense structure designed to defeat a Soviet Union threat that ended twenty years ago, all of which the Post has done. Until those positions can be justified, the Post should stop its efforts to undermine Social Security and Medicare benefit levels. Current benefits are the least that should be provided by the richest country in the history of the world. Social Security and medicare benefits are not the causes of our overall budget deficit, which stems from tax cuts and wars, nor are they unaffordable. As even Pincus acknowledges, if all income earned and unearned were taxed without a cap - so that the highest incomes were taxed at the same rate as the lowest incomes - then current Social Security benefits would be fully funded. Medicare funding will be fixed when the overall health care system is fixed, when U.S. costs for health care are brought down to levels achieved by every other industrialized country in the world, levels at which they achieve better outcomes.
Finally, the distortions of the Pincus column in the Post are exposed by the clumsy and heavy-handed misrepresentation of Chairman Bernanke's quote on budget deficits. In small print, the Post gives the full quote: "to avoid large and unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs and Medicare, less spending on everything else from education to defense or some combination of the above." Somehow in the big-print version of the quote superimposed on a photo of Bernanke, the multiple options for cuts offered by the Chairman are quoted as only "more taxes or modifications to entitlements and Medicare." Cuts in defense spending disappear as an option in the big print.
It can only be hoped that some day the Post will treat this issue with the honesty it deserves.
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