Et Tu, Obama? Talk of Social Security Cuts Triggers Widespread Outrage - NewDeal2.0

[WillyT]

Et Tu, Obama? Talk of Social Security Cuts Triggers Widespread Outrage
Thursday, 07/7/2011 - 1:38 pm
by Lynn Parramore - NewDeal 2.0

Last night, rumors began flying that the president would offer cuts to Social Security as part of a deal to raise the debt ceiling. The administration is now trying to stem the tide of outrage, suggesting that the President merely wants to “strengthen” Social Security. Never mind that as Roosevelt Institute Senior Fellows Robert Johnson and Thomas Ferguson have clearly shown, the program is strong today and predictions about shortfalls decades down the road are wildly exaggerated. We asked Roosevelt fellows and friends to weigh in on the Social Security fracas.

I'll just post William Black's thoughts... for the rest, go to the link below.

<snip>

William K. Black, ND20 Contributor and Associate Professor of Economics and Law at the University of Missouri – Kansas City:

Tom Ferguson warned us — in person, unequivocally, forcefully, and repeatedly.

What I certainly did not understand was that at a time when the Republicans had locked themselves in a politically disastrous position and in light of the NY special election showing the political advantages of holding firm on this type of program (I put aside the fact that Social Security is an immense success on the merits because it is clear the administration does not care about the merits) — Obama would choose to seize defeat from victory. Geithner has proven to be the perfect Republican mole.

<snip>

More: http://www.newdeal20.org/2011/07/07/et-tu-obama-talk-of-social-security-cuts-triggers-widespread-outrage-50823/

:kick:

[N7Shepard]

1. Strengthen social security by near ending it? Yeah, that works

[CaliforniaPeggy]

2. Isn't it obvious?

Obama seems to be doing just what his corporate masters want him to do.

It looks like defeat from our perspective...but apparently not from his.

Recommended.

[damntexdem]

7. It looks like the near death knell for the Democratic Party.

Talk about snatching defeat from the jaws of victory.

[suffragette]

3. Deleted - posting hiccup

[suffragette]

4. I had thought they would use the phrase "save Social Security"

when proposing cuts.

Instead it's "strengthen Social Security."

Oh, well still a word starting with "s" to mask real intent to cut one of the most essential and successful programs this nation has ever had.

[girl gone mad]

5. Marshall Auerback makes an important point:

“Cutting Social Security is ‘Change you can believe in’ - if you’re a member of the GOP. If the rumors are true, then President Obama would be taking policy decisions in areas where even Reagan and Bush dared not to tread. Cutting Social Security and Medicare on the back of a debt ceiling which might well be unconstitutional would certainly take his party out of its comfort zone (as he phrased it the other day). But it would also effectively eviscerate one of the Democrats’ most substantive social welfare achievements of the 20th century. Social Security is not “broken.” It is not “going broke.” It will, as Robert Eisner told us more than a decade ago, “be there” as long as we protect it from its so-called saviors. The balance in the Social Security Trust Fund is absolutely irrelevant when it comes to the government’s ability to make payments, in full and on time - today, tomorrow and forever. Even Alan Greenspan has acknowledged that “A government cannot become insolvent with respect to obligations in its own currency.”

Doesn’t anyone remember 1983, the last time we saw ‘incremental reforms’ of the kind many ‘responsible politicians’ supported? As a result of those ‘reforms’, today’s workers are contributing more and retiring later. And for what? Those reforms were supposed to make the system solvent for 75 years. Now, here we are, less than three decades later and it’s still ‘broken’? And we’re supposed to believe that further incremental cuts will succeed”

Everyone should take it to heart. A sovereign government that issues debt in its own currency can only default by choice. The government would have to choose to not make SS bondholders whole because the money to pay back what it owes is always available. Of course, people immediately lash out with the "hyperinflation" canard. This is absolutely not a real concern. The SS debts are the savings of the American workers. Paying back SS bonds does not amount to flooding the system with new money any more than persons drawing from ordinary savings accounts are flooding the system with new money.

[roxiejules]

6. ‘Change you can believe in’ - if you’re a member of the GOP

“Cutting Social Security is ‘Change you can believe in’ - if you’re a member of the GOP. If the rumors are true, then President Obama would be taking policy decisions in areas where even Reagan and Bush dared not to tread. Cutting Social Security and Medicare on the back of a debt ceiling which might well be unconstitutional would certainly take his party out of its comfort zone (as he phrased it the other day). But it would also effectively eviscerate one of the Democrats’ most substantive social welfare achievements of the 20th century. Social Security is not “broken.” It is not “going broke.” It will, as Robert Eisner told us more than a decade ago, “be there” as long as we protect it from its so-called saviors."

- Marshall Auerback, Senior Fellow at the Roosevelt Institute