Debt Madness Was Always About Killing Social Security

[Donnachaidh]

http://www.commondreams.org/view/2011/07/27-5

This phony debt crisis has now passed through the looking glass into the realm where madness reigns. What should have been an uneventful moment in which lawmakers make good on the nation’s contractual obligations has instead been seized upon by Republican hypocrites as a moment to settle ideological scores that have nothing to do with the debt.

Hypocrites, because their radical free market ideology, and the resulting total deregulation of the financial markets, is what caused the debt to spiral out of control this last decade. That and the wars George W. Bush launched but didn’t have the integrity to responsibly finance. The consequence was a banking bubble and crash leading to a 50 percent run-up of the debt that has nothing to do with the “entitlements” that those same Republicans have always wanted to destroy.

Even Barack Obama has put cuts in those programs into play, warning ominously that a failure to lift the debt ceiling could cause the government to stop sending out Social Security checks. Why, when the Social Security trust fund is fully funded for the next quarter-century and is owed money by the U.S. Treasury rather than the other way around? Why would we pay foreign creditors before American seniors? The answer, offered as conventional wisdom by leaders of both parties, is that we cannot endanger our credit by failing to back our bonds, even though the Republicans have aroused the alarm of the main U.S. credit rating agencies by their brinkmanship on the debt.

What a topsy-turvy world when the same credit rating agencies that gave the thumbs up to the bankers’ toxic mortgage-backed securities and credit default swaps now threaten the AAA rating of U.S. Treasury bonds. According to them, it will not be enough to merely lift the debt ceiling—what had been assumed by both Republican and Democratic presidents to be a routine act. In addition to that, as the credit agency Standard & Poor’s has insisted, more than $4 trillion has to be cut from programs that mostly benefit the victims of the banking meltdown. Otherwise the agencies will downgrade the U.S. credit rating, leading to higher interest rates that will destroy what remains of the U.S. housing market, dim the prospect for any improvement in employment and further enrich the Chinese government and other holders of U.S. debt.

More at the link --

[Jakes Progress]

1. Shock Doctrine politics to enact reagan era beliefs.

[Skink]

2. If we don't send out those checks what little consumer demand there is

in this country is going to come crashing down.

[dgibby]

3. I don't know about anyone else,

but as retired military and a senior citizen to boot, I'm not spending for anything except the bare essentials, and I'm sure the hundreds of thousands like me probably aren't either. That can't be helping the economy. I'd love to see some stats on this. No wonder how much this has cost us in revenue, jobs lost, etc.

[EFerrari]

9. I've seen zero economists that think cutting spending is a good idea. n/t

[indurancevile]

15. the perennial paul samuelson always thinks winger ideas are great.

[fivepennies]

4. Debt has been spiraling out of control

since very shortly after the founding of this country. People of every generation have been ruined and no one noticed.

--------------------------------------------------------------------------------

A study of American Colonial history will reveal that Benjamin Franklin went to England as a representative of the Colonies.

The English officials asked how it was the Colonies managed to collect enough taxes to build poor houses, and how they were able to handle the great burden of caring for the poor. Franklin's reply was most revealing: "We have no poor houses in the Colonies, and if we had, we would have no one to put in them, as in the Colonies there is not a single unemployed man, no poor and no vagabonds." Think long and hard about this. In the American colonies before the American Revolution, there was "not a single unemployed man, no poor and no vagabonds". -- no one on Welfare, no one on Social Security, no homeless, no income tax, no alphabet agencies, No IRS, BATF, FBI, DEA, CIA, HEW, OSHA, SBA, and on and on and on to provide for the "general welfare" of our villages, towns, cities and states. How did Benjamin Franklin explain this to the British officials of his day?
How would he explain it to today's lawyers, judges, politicians and other government officials? "It is because, in the Colonies, we issue our own paper money. We call it Colonial Script, and we issue only enough to move all goods freely from the producers to the Consumers; and as we create our money, we control the purchasing power of money, and have no interest to pay."
-Benjamin Franklin

This system guarantees HONEST MONEY. It was not controlled by a private corporation with a monopoly on the credit of the nation as it is today.

There was no inflation or deflation, as long as the MONEY SUPPLY WAS KEPT EQUAL TO THE VALUE OF GOODS AND SERVICES TO BE PRODUCED AND MOVED (distributed).

http://www.kamron.com/Liberty/colonial_script.htm

[Tuesday Afternoon]

5. interesting post. thanks for the link.

[fivepennies]

6. You're welcome.

Wherever there is promise and potential and independence you will soon find the bankers and speculators conniving to own it all or destroy it. As Andrew Jackson said, they are a den of vipers.

The disturbing part of that is that so many democrats are begging for the opportunity to do even more "business" with them.

[Enthusiast]

7. "Even Barack Obama"?

If Obama wouldn't have cut FICA contributions and extended the Bush tax cuts we wouldn't be having this discussion. He knew exactly what it would lead to.

[sad sally]

8. Amen - the 2% "payroll holiday tax" plan wasn't done without knowledge of its repercussions

He said it again last night: "Keep in mind...In fact, I want to extend the payroll tax cut for working families."

Go back and read what was said in December 2010 before the Bush/Obama/Congress tax deal was struck. The warning was that Republicans wouldn't want this tax extended, as it would be seen an evil tax increase. So, who's the champion pushing for an extension? The President.

The President likes to tout the idea of "average" Americans making $50,000 getting $1,000 more each year. Story is that that $1,000 was completely spent by April 2011 due to higher fuel and food costs.

Who has this "holiday tax" benefited most? Want to guess? For a family making $106,800, the current maximum for the FICA tax, they got $2,136 more. For a family making a million dollars, they got $2,136, and for a family making ten million it's $2,136

By providing this cut in the payroll taxes that fund Social Security, which the President now wants to extend, this deal is leading the nation down a slippery slope that could lead to permanent benefits cuts for the middle class and even more wealth for the rich.

Obama's "payroll tax holiday" may end up sending America's seniors on a permanent unpaid for vacation. This "holiday" is a way to undermine Social Security. Tax breaks can be done in so many ways, so why did the President choose this way - the only source of Social Security's funding - to become what looks like a long-term plan?

The President is planting the seed, and you can bet congress will take the bait that the 2% "holiday tax" can't expire in an election year. Meanwhile, the government debt has increased $120 billion (which hasn't been transferred from the general fund). Add another $120+ and viola, the debt has increased to the point where it can never be repaid.

"Never before in Social Security's 75-year history has it taken any funds from the overall Treasury. It's forbidden by law from adding to the deficit. That's why it has its own trust fund, which currently holds a surplus of $2.6 trillion. That's money the Federal government has borrowed, and which it's morally (and legally) obligated to pay back so we can receive our retirement benefits."

Why hasn't the President explained why this "holiday tax," which is killing the Social Security fund, is the only way to ease the tax burden? Is this the plan to destroy Social Security?

[Enthusiast]

13. This is the plan to destroy Social Security.

It's right in our face. Why won't people take their blinders off?

[Raksha]

11. He certainly did know exactly what it would lead to.

He knew it would lead to him being a one-term president once the word got out that he wanted these cuts all along. The only question is WHY? What does Wall Street get out of austerity, out of depressing demand even more than it's depressed now? What does Barack Obama get out of it?

[Enthusiast]

14. They get people full of anger and discontent.

They get puzzled Democrats that no longer know where to turn. They get a depressed electorate like in 2010. I wonder if this isn't the goal all along.

[Common Sense Party]

10. I didn't realize SS had been "killed." n/t

[zappaman]

12. K&R n/t