playing politics with people's lives and health....

[mike_c]

Obama and now Ben Bernanke have threatened to cease Social Security payments immediately after Aug 2 if Congress doesn't raise the debt ceiling. At the same time, they've said that payments to bondholders would continue, at least in the short term. Do I have that right?

OK, one can argue that this is a means of educating Americans about the likely real consequences of default and making them see the pain on the horizon instead of the 24-hour bread and circuses of cable news. And it's likely effective-- McConnell started the process of republican collapse within hours of Obama's announcement.

Two things bother me about this though. Call me cynical (who, ME?) but first, isn't this Obama telling us again that his loyalties lie with the oligarchs on Wall Street rather than with the elderly, sick, and poor in America? Paying bondholders before honoring the government's promise to people who paid into Social Security all their working lives in trust that it would be there for them when they retired? I think that's exactly backward. Obama's priorities tell us much about his loyalties and his assumptions.

Second though, and more disturbing-- why hold Social Security hostage at all in a budget deficit and debt crisis? Social security has not contributed one dime to that crisis, ever. In fact, it has run a surplus that has served as a general fund piggy bank for generations. Social security is one of the most successful federal programs ever, and it is not part of the debt crisis at all (except to the extent that something on the order of 30% of the actual debt is money that the government owes BACK to social security because it "borrows" from SS like a chump-ass junkie borrows from grandma's bingo money). Social security is the sole success story in all of this-- yet Obama targets it FIRST?! Given a choice between causing abstract pain to Wall Street bankers and real, physical deprivation to the poor, elderly, and sick, Obama chooses the later, presumably for political impact.

[Rex]

1. Good points that will fall on deaf ears.

The pro-Obama crowd doesn't care about any of that stuff...only that you are criticizing Obama. It is like the blind loyalty a dog gives his/her master. We could cut waste in the MIC that would be far more money then we would get from SS. Hell, we could cut waste in Washington DC but that would require getting rid of SIGs and lobbying empires. Never going to happen.

[Name removed]

2. Deleted message

Message removed by moderator. Click here to review the message board rules.

[mike_c]

4. I'd appreciate your posting the debunking instead...

...because I'm genuinely cynical about these matters, and would greatly appreciate being told that events are not as I described them in the OP. With reasoning, of course.

[KittyWampus]

5. Here's the link to Mediamatters.

http://mediamatters.org/research/201107130001

[damntexdem]

6. That has nothing to do with the criticisms.

The issue is that SS is itself a bondholder -- and should be paid when, or maybe before, other bondholders are.

I don't object to warning about paying SS if the debt ceiling is not raised. I DO very much object to suggesting that other bondholders will be paid first before "benefits" -- not only is that elevating other bondholders above SS, it is also suggesting that SS is in some other, less-important category.

[mike_c]

8. thank you for the link-- I don't find much "debunking" in there....

What MediaMatters debunks is the notion that Obama is "threatening" social security recipients unnecessarily. Perhaps that's what FOX news said but it's not what I said at all. Your link goes on to quote economists saying essentially what I noted in my OP-- if the debt ceiling isn't raised the U.S. will have to prioritize whom it pays in order to keep the payments going out as long as possible. If we can't pay bondholders AND the folks we've incurred other obligations to- "suppliers for paper clips that have already been bought, paying soldiers their wages for last month's service, sending social security recipients their checks, etc."-- then as Obama and now Bernanke have announced, we'll immediately move bondholders to the front of the queue and the old, sick, and poor to the end of it, cutting them off immediately. This is a matter of budget priorities, not threats.

[EFerrari]

17. You're right. MM is addressing another point altogether.

And that link does back up your OP, not the other way around.

[Enrique]

7. its a judgement

MM did not debunk it, they offered alternative judgements.

[Mojorabbit]

13. I thought it was against the rules to announce alerting like this. nt

[somone]

3. To the chess master, everyone is a pawn

fungible and disposable

[nadinbrzezinski]

9. Here is the thing... the US has never experienced this

I grew up in a country that did, TWICE... this is not a threat... it is a fact.

It is not just SS checks... it is your fire service that will be affected... it is subsidies... it will affect every area of the economy and not in a good way.

[mike_c]

11. yes, I understand that, but that's not what I'm wondering about....

Ultimately, if the U.S. defaults, the effects will reach every aspect of life here in one way or another. But initially, on Aug. 3, there will still be money in the pipeline. It will take time for it to dwindle-- maybe not a lot of time, who knows? But during that initial pressure drop, the federal government will need to prioritize the fires it turns the money hose on, and the White House has stated that investors who hold U.S. debt will be paid before working class citizens who have been bankrolling the whole scheme for generations through social security surpluses. Why target them FIRST? Especially since they aren't causing the problem?

[nadinbrzezinski]

14. The last time technically this happened under was Carter

the same thing was done... reason being, SAVING as much as they can the credit rating of the US...Short to medium term that going to hell, (further than it will) will affect all, yes those people on SS as well, since we will see inflationary pressures not seen since oh Carter... let alone what happened in Mexico.

That is why.

It does not make sense to the payees, but in the big picture that is why.

IMO we need a debt restructuring WORLD WIDE... but that is another story. World Wide debt is LARGER than the world economy and there is no way it can be paid.

[ProfessionalLeftist]

10. Why not write and and ask him to explain to the millions on SS

why he's doing that (if it is not as you've described)- just the way you wrote it above? It is legal to ask the President: "What the Hell?", is it not?

http://www.whitehouse.gov/contact

Can't hurt. You DO have a right to question him about it. As do we all.

[mike_c]

12. I've written numerous times about this and other policy issues...

...and you're right, maybe I should send the OP pretty much as written. Of course, all we ever get back is a brief form response thanking us for contacting the WH. I'm not sure what the benefit of THAT is, except possibly catharsis.

[nadinbrzezinski]

15. If enough people make noise

and add the threat of no donations and no vote...

[ProfessionalLeftist]

20. Exactly. It's not about getting a response so much as it's about millions

making a showing in their Inbox all saying the same thing about the same issue. But people have to realize that. That's what will get attention. If everyone just says: "Well it won't do any good. I won't get an answer" - then no one contacts them. They hear nothing and figure it's not that big a deal. But if they get 250,000 emails in one day about the same issue saying basically the same thing - that might have a staffer tallying up some numbers for the President in a briefing on an issue and letting him know what 'people' (as opposed to corporations) are saying. But a LOT of people have to say it at once. Loud and clear - to be heard over the din of corporate propaganda and arm-twisting in DC.

That's why I've been harping on people to write to the President and their reps. Don't let up!

[Liberalynn]

22. I've wrtitten and I've called

Gillibrand's office rep did say they had been receiving a lot of calls saying no cuts to Medicare or SS.

I'd like to believe that means she will vote no on same, but who knows! :shrug: She did vote no on the paryroll tax holiday which I applaud her for.

At any rate I did it for my own conscience as much as anything else.

[ProfessionalLeftist]

24. Yea there's that - just speaking for myself, I have to feel I've done what I could

to make my voice heard - calling, writing, etc. I'm that way too.

[Liberalynn]

21. That and a request for a campaign contribution

[The Magistrate]

16. Unfortunately, Sir, This Is Pretty Much the Usual Priorities Of Bankruptcy

Bond-holders are secured creditors; what is owed employees constitutes the lowest rung of settlement.

It is raw as can be, without question, but it is, shall we say, long established custom....

[mike_c]

18. which is why, I presume, Wall Street recovered quickly...

...while the rest of the country remains in economic doldrums. The "long established custom" is to serve the needs of the oligarchs first, and the people-- from whom the money is extracted in the first place-- last.

Note however that at least one president comes to mind who sometimes reversed that relationship-- FDR-- proving that presidents who WANT to put the needs of workers before those of bankers CAN do it. It seems to me that Obama has joined the cadre of oligarchs who have worked for generations to undo the new deal.

[The Magistrate]

19. Do Not Mistake My Comment for Disagreement With You Here, Sir

As a matter of moral right and equity, it is the bond-holders who should be the last to have their claims satisfied, and the employees the first to be made whole.

As a practical matter, though, stiffing the bond-holders would provoke a degree of financial retaliation, in terms of skyrocketing rates of interest and collapse of the value of the U.S. dollar, that would devastate persons dependent on Social Security particularly. While there are traditional remedies for this sort of thing, our Constitution forbids them --- one of many flaws in that grand old document....

[Brickbat]

23. K&R