Billionaires Celebrate Their Own Social Security Freedom Day

Ninety-four percent of us pay into Social Security from every paycheck we receive. A few of us stop paying into Social Security in the first few working hours of the year.

The “Tax Freedom Day” Scam

Every year you hear a lot about Tax Freedom Day. This is the day the public supposedly has “earned enough money to pay its total tax bill for the year.”

According to the Tax Freedom Day website: “Americans will collectively spend more on taxes in 2016 than they will on food, clothing, and housing combined.”

The trick, of course, is the word “collectively.” As in “Bill Gates walks into a room full of homeless people. Collectively the room owns billions of dollars of wealth.” Non-billionaire Americans don’t pay nearly this much in taxes.

Tax Freedom Day is an anti-government propaganda gimmick where the billionaire class suggests that we stop “working for the government.” It’s a trick: most of us don’t pay that much in taxes and those who do are making so much money they hardly notice it.

Let’s see how this “Tax Freedom Day” formula can be applied to framing America’s retirement crisis.

“Social Security Freedom Day”

Almost all of us pay the 6.2 percent Social Security “payroll tax” on every dollar that we earn. Employers pay an additional 6.2 percent. If you are self-employed you pay the entire 12.4 percent. These taxes are paid until we reach a “cap” of $127,200 in a year so the maximum anyone pays is $7,886 (twice that if you are scam-classified as a “contractor.”) Ninety-four percent of us never reach that point.

Again, you pay 6.2 percent of your earnings, 12.4 percent if you are self-employed, until you make $127,200. So there is no “Social Security Freedom Day” — the day we stop paying this tax — if we are regular people who make less than $127,200.

Put another way, if you make more than $127,200 you reach a “Social Security Freedom Day” and stop paying this tax. You only pay $7,886 no matter how much more you make. The more you make the sooner your “Social Security Freedom Day” arrives.

“Social Security Freedom Day” never arrives for most of us. But how early does “Social Security Freedom Day” arrive for some of us? According to a post by Teresa Ghilarducci, an Economics professor at The New School for Social Research titled, Who Is Finished Paying Their 2017 Social Security Taxes? Probably Not You.,

For those at the upper end of the income distribution (the top 1 percent, or the 2 million people earning more than $250,000 per year and the 137,000 people earning more than $1 million per year), $127,200 is a trivial amount on which to pay Social Security tax.

Take, for example, the top 9,600 or so wage earners who earned over $10 million per year (2015 is the latest data available). New Year’s Day 2017 fell on a Sunday. By the time they finish their two weeks back at work, they will be done paying Social Security taxes for the entire year.

That is nothing. The 202 Americans who earned more than $50 million a year finished paying less than 5 hours after the ball dropped in Times Square. Another 773 people earning between $20-$50 million a year will finish paying the tax before you finish reading this blog on January 2nd.

“Social Security Freedom Day” arrived very early for those top 773. How early? Ghilarducci writes, “We can have fun with the calculations: who will finish paying by their first coffee break of the day? After brushing their teeth? After their hangover?”

The rest of us pay in all year, a 6.2 percent tax that the wealthy don’t pay. That’s 12.4% if you are a “contractor.” Straight off the top of your income.

The Retirement Crisis

America’s experiment in shifting retirement obligations away from employers and onto working people through IRAs and 401Ks has clearly failed. Most Americans do not have enough savings, pension and expected Social Security benefits to be able to get by when they retire — if they even can. One-third have nothing saved up. The median working-age couple has saved only $5000 and seventy percent of couples have less than $50,000 saved.

Even people who have earned pensions are seeing them being cut because corporations skimped on funding the plans.

This leaves far too many people dependent on Social Security. The average monthly retirement income from Social Security was $1,341, or $6,092 per year, and only $2,212 for couples, or $26,544 per year.

This is not enough for people to get by. But a few of us — the very same few who stop paying into Social Security so early in the year — are retiring in luxury.

The Retirement Divide

Not everyone is facing a retirement crisis. Not at all. There is a stark divide between most of us and a few of us when it comes to retirement. Those same few who get a nice, early “Social Security Freedom Day” and no longer pay into Social Security are the very people who do not face a retirement crisis.

Exxon CEO Rex Tillerson, for example, is retiring to join the Trump/Putin administration. He is receiving a $180 million retirement package including include a pension valued at $69 million.

How wide is this divide? A December, 2016 Institute for Policy Studies report titled, A Tale of Two Retirements, shows there is a huge retirement security divide between those at the top of corporate America and nearly all the rest of us.

From a summary of the report:

Just 100 CEOs have company retirement funds worth $4.7 billion — a sum equal to the entire retirement savings of the 41 percent of U.S. families with the smallest nest eggs.

This $4.7 billion total is also equal to the entire retirement savings of the bottom:

59 percent of African-American families
75 percent of Latino families
55 percent of female-headed households
44 percent of white working class households

Need To Increase Social Security

Obviously the first obligation of a government should be to its people. With the failure of “market solutions” that shifted responsibility for retirement from corporate pension plans to to IRAs ad 410ks something needs to be done. This shift boosted corporate profits, providing huge sums for payouts to executives and shareholders — again, the very same people who get their own “Social Security Freedom Day”. But it has impoverished huge percentages of resent and future retirees.

How do we pay for expanding Social Security? That’s simple. Social Security needs to get the money from where the money went. The well-to-do don’t need a “Social Security Freedom Day” because they are already well-to-do. Eliminate this “cap” and have everyone pay into the system so everyone can retire with some dignity. And what about a requirement for corporations to contribute to employee retirement pension funds?

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This post originally appeared at Campaign for America’s Future (CAF) at their OurFuture site. I am a Fellow with CAF, a project of People’s Action. Sign up here for the OurFuture daily summary and/or for People’s Action’s Progressive Breakfast.

Did You Know That AARP Is A Paying Member Of ALEC?

Here is a real shocker. AARP (formerly the American Association of Retired Persons) has been a paying member of the notorious right-wing, Koch-tied lobbying organization American Legislative Exchange Council (ALEC) since at least 2014.

Yes, that AARP, once known for protecting the interests of senior citizens and fighting to protect Social Security and Medicare. Yes, that ALEC — an organization dedicated to, among so many other things, privatizing Social Security and Medicare, and getting rid of public-employee pensions. AARP apparently joined ALEC even as many corporations were fleeing thanks to exposure of ALEC’s reprehensible actions.

Just wow.

Nick Surgey and Calvin Sloan exposed the story at the Center for Media and Democracy’s ALEC Exposed site, “REVEALED: AARP IS FUNDING ALEC”:

AARP, the non-profit seniors organization that exists to promote the financial security, pensions and healthcare of those over 50, is secretly funding the American Legislative Exchange Council (ALEC), an organization whose bills have acted against the interests of ordinary Americans, including retirees and their families.

The Center for Media and Democracy has learned that AARP has recently joined ALEC, and that it is a named sponsor of the ALEC annual meeting taking place in Indianapolis, Indiana from July 27-29, 2016.

Why does this matter?

Michael Hiltzik, Columnist at the LA Times, explains why this matters in “Why is AARP cozying up to the right-wing group ALEC while big corporations flee?”:

Among the policies that have been promoted by ALEC are several that arguably undermine the interests of seniors and retirees, AARP’s core constituency. ALEC has pushed for the repeal of the Affordable Care Act, which has saved Medicare enrollees millions of dollars by closing the Medicare drug benefit “donut hole.” It has opposed Medicaid expansion under Obamacare. It has targeted public pensions, pushing to cap benefits and shift workers toward defined contribution plans, which layer more market risk on individual workers’ shoulders.

ALEC’s right-wing, corporate agenda is all about privatizing Social Security, gutting pension plans, turning Medicare over to insurance companies and pushing laws that would make prescription drug prices even higher for seniors.

Talk about selling out your constituency. Just wow.

Many companies dropped ALEC after the organization’s right-wing ties were exposed by CMD. These companies include Coca-Cola, Pepsi, Kraft, Google, Facebook, Amazon and Microsoft. (Click here for a list.) And then AARP apparently decided this all sounded good, and joined up.

Is This Even Legal?

Hiltzik’s column contains a revealing statement from AARP,

AARP’s statement acknowledged that it paid a fee to ALEC in 2016 to provide “an opportunity to engage with state legislators and advance our members’ priorities from a position of strength at ALEC’s annual meeting. AARP added, “given that Republicans control one or more chambers in 39 of the nation’s 50 state legislatures, we believe having a seat at the table at the ALEC annual meeting was necessary to our mission of representing the interests and needs of people 50-plus and their families.”

AARP says it paid a fee to “engage” with legislators and get “a seat at the table.” Paying the fee gives them a “position of strength.” This statement reveals how ALEC is set up as a “pay-to-play” corruption operation; the organization charges companies a fee for access to legislators, companies pay a fee so they can influence legislators, conservative legislators show up so they can be influenced. The public loses out on every side of that pay-to-play triangle of corruption.

Really? Paying a fee for an opportunity to engage with legislators? Or the other side of that equation, charging a fee? If this blatant corruption is legal at all, it is what is known as “lobbying.” But ALEC is a tax-exempt 501(c)3 charity that is prohibited from lobbying or engaging in politics at all. (Never mind a license for corruption.) Various complaints have been filed with the IRS, but nothing happens… Just wow.

Get Active

CMD has a petition you can sign: Tell AARP to Dump ALEC!

For decades, ALEC has plied state legislators with disinformation about Social Security, climate change, and other issues along with bills and resolutions that undermine Americans’ financial security and our future.

Please sign the following letter (and if you are a member of AARP, please also contact the organization directly and ask that they DUMP ALEC).

Also, Social Security Works is an organization that “leads the fight every day to expand and protect our Social Security system.” They want you to click this: No organization that claims to represent retirees should be anywhere near ALEC, let alone funding them. Join us in calling on AARP to immediately end its financial support of ALEC and repudiate the group.

FYI: About CMD

The Center for Media and Democracy investigates and exposes corruption. You might know CMD for ALEC Exposed, which brought ALEC to public attention. You might know them for PR Watch, which keeps an eye on how corporations use “spin.” They also operate the SourceWatch wiki.
However you know them, they do great work. Check them out.

And click through to read the entire piece exposing AARP’s membership in ALEC as well as Michael Hiltzik’s column the LA Times. They both contain so much more in-depth information than is included here.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progressive Breakfast.

The Democrat/Republican Divide On Social Security

The differences between Democratic presidential candidates and most Republican candidates on Social Security — and retirement security in general — could emerge as a “sleeper issue” in the 2016 campaign.

Friday’s post, Martin O’Malley Offers Strong Plan To Expand Retirement Security, looked at the retirement crisis facing aging Americans and Democratic presidential candidates Martin O’Malley and Bernie Sanders’ plans to boost retirement security. (Hillary Clinton has not released plan beyond saying she would be open to raising the income cap on Social Security taxes to help shore up the program’s finance.)

These candidates want to expand retirement security because Democrats generally have a “we are all in this together” and “it takes a village” approach to taking care of each other, which includes the elderly. Republicans have a very different “each of us on our own” approach to society. This applies to retirement security with Republicans largely believing that retirement income and even to a large extent healthcare should be more, or even entirely, up to the individual.

Most current Republican presidential candidates, with the notable exception of Donald Trump and Mike Huckabee, follow this “on your own” philosophy, offering plans to raise the retirement age, raise the early retirement age, means-test benefits, cut benefits, partially privatize it with some of the money going into Wall Street-managed personal accounts or just privatize the program entirely with all of it going into Wall Street-managed personal accounts. (Note that God/Mother Turtle likes to weigh in with coincident stock-market drops when Republicans start discussing putting Social Security into stock. The stock market dropped 1000 points last week, and has fallen more than 10% recently.)

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Expand Social Security

Go to ExpandSocialSecurity.com

Corporations have largely eliminated pensions. Wall Street has been pushing the campaign to eliminate public-employee pensions. The 401K scam means that most of us have little or no savings for retirement, and Social Security is meager.

We need to EXPAND Social Security. INCREASE benefits so people have live on it. Lower the age to 55, opening up millions of jobs.

Were does the money come from?

It comes from our priorities.

Where did the money come from for the Iraq war? The Wall Street bailouts? Where does the money come from for the hiige military budget? The oil company subsidies? And mostly the huge tax cuts for corporations and the wealthy?

Will Social Security Cuts Be The Democratic Party’s “New Coke?”

All the smartest people in the executive suites just knew that the taste of Coca-Cola needed “reform.” Rival Pepsi was advertising to the “New Generation” and Coke’s executives came to believe their product wasn’t what the “cool” people wanted to drink. Everyone they talked to at the executive-level strategery seminars, and all the other executive-level geniuses they spoke with daily agreed. They were the elites, and they all knew better than their old-fashioned, uncool customers what the company needed. So they all drank the Kool-Aid and came up with “New Coke.” We all know what happened next. (Hint: it was bad.)

It couldn’t have gone better for Pepsi if Pepsi had placed those executives there themselves.

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The 1983 Strategy Behind Today’s Social Security Attacks

Suppose you’re in a bar and you overhear a couple of guys in the next booth talking about a plan to steal from people’s houses. As you eavesdrop the plan unfolds: one will come to the front door pretending to be from the gas company warning the homeowner about a gas leak down the street. While he distracts the homeowner at the front door, the other one will sneak in the back door and take stuff.

So the next day the doorbell rings, and there’s a guy saying he is from the gas company. He says he wants to talk a while to warn you about a gas leak down the street…

This is what is happening with this constant drumbeat of attacks on Social Security. The attack on Social Security never goes away, it only escalates. As we go into this next round of attacks — this time it is even coming from the President* — it is more than useful to understand the background of this campaign against the program.

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Adjust Social Security For Inflation That Hurts The Elderly

A number of the DC elites are talking about changing the way Social Security checks are adjusted for inflation. This is a great idea, as long as any such adjustment measures the things the elderly actually spend money on. Let’s do it! Let’s change the way we adjust Social Security for inflation because inflation hits older people much harder.

Washington’s elites are all Very Seriously concerned that even though Social Security currently has a huge trust fund, the program might “go broke” many, many years in the future. (Never mind what this says about our country’s priorities — do we ever hear that the military budget will “go broke?”) This discussion of Social Security is for some reason so important to these Very Serious People that it overrides discussion of the climate emergency, the national jobs emergency, the crumbling infrastructure, and almost every other national problem except that our wealthy and corporations are taxed far too much. (Please click the links in this paragraph.)

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Social Security Talk With Richard Eskow

This is a good time to remind people that I had a great Virtually Speaking talk with Richard Eskow, about Social Security that you should listen to.
I joined Campaign for America’s Future’s Richard Eskow to talk about the “fiscal cliff” scare, austerity, Social Security, Medicare and how we WON the election so we really should be talking about jobs instead.
This was a GREAT hour, and hold the information you need to arm yourself to win holiday-dinner conversations with your right-wing brother-in-law.
The conversation refers to my post, Fiscal Cliff Scare Talk Follows Shock Doctrine Script as well as several posts by Richard Eskow including,
Wall Street Finds a ‘Third Way’ to Plunder Our Wealth,
The “Fiscal Cliff” Is a Hoax … and a Mel Brooks Routine,
The Grand Swindle – Veterans on a Cliff,
After the Election, a New Mandate – and New “Fiscal Cliff” Math
Click here to listen, or listen using the widget below:

Social Security is Still the Third Rail (You’ve Been Warned)

We JUST had an election where the public (not to mention Every. Single. Poll.) overwhelmingly said no cuts to Social Security or Medicare, and raise taxes on income over $250K. That ought to mean something. But the “word” out of DC is that a deal is underway that cuts the Social Security COLA and increases the income level subject to a higher tax from $250K to $400K.

Senators and Representatives who are thinking of touching the “third rail:” How many constituents are calling your office today to say, “Yes, I want you to cut the Social Security COLA”?

Readers: Have YOU called YOUR senators and representative yet to let them know how you feel?

Also: Click here to tell the President: No Deal That Cuts Benefits.

Political Suicide

Cutting Social Security makes no sense, and is bad politics because it hurts people. Old people depend on this meager benefit and by law Social Security can not contribute to deficits. But never mind the numbers, look at the social and political effects of a deal that cuts the Social Security cost-of-living-adjustment (COLA) immediately after the public voted not to do this.

The social effect: Does our society care about people, or just about money? Cuts in Medicare, Medicaid and Social Security hurt PEOPLE. Raising tax rates on the wealthy is just money. What does it tell the public about our society if their government cuts Social Security benefits immediately after we have an election in which the public overwhelmingly votes against cuts in Social Security or Medicare, and to increase taxes on $250K and up? This reported deal raises that $250K to $400K, reduces military cuts, and ignores that the same amount of money could be raised in ways that actually help the country and economy, like a Financial Transaction Tax.

Bankers got huge bonuses with government bailout money, and now you are cutting the meager benefits old people get? What does this tell the public, to cut this when one after another Democratic leader, including Vice President Biden, has stepped up to insist that Social Security is off the table? It tells the public not to trust their leaders, because the big money will win every time.

Talk about undermining “certainty” and “confidence.” Wow.

The political effect: Suicide. Seniors pay attention to the yearly COLA increase. Every single year from now on when the COLA is announced it is more than likely that seniors will believe they are getting a lower increase because President Obama and the Democrats betrayed them. This is human nature, they will think they would have gotten more (and Republicans will tell them they would have gotten more).

It will become folklore — conventional wisdom — that they would have received a much higher increase, except Obama and the Dems betrayed seniors.

Alternatives

Need to raise some money? Here are a few things you can offer instead of cutting the Social Security COLA:

  • Financial Transaction Tax on speculative investments – a quarter of a penny per share.
  • A BIG surtax on incomes over $10 million until the debt is paid off.
  • Cut the military budget a lot more. Reagan doubled it and ‘W’ Bush doubled it again. The Soviet Union is gone.
  • Get rid of oil company subsidies.
  • Rebuild the nation’s infrastructure (with American-made materials) thereby employing millions who will then be paying taxes and won’t be getting assistance, and then our economy will be more efficient and competitive in the future.
  • Retrofit (with American-made materials) our buildings and homes to be energy efficient, thereby employing millions (etc) plus our economy will have to spend less on energy from now on.
  • Make companies bring home the money they are holding offshore, and pay the corporate tax on it.
  • A thousand other ways to cut the deficit without hitting old people with the bill.

Now Please Read Richard Eskow’s Post

It seems like everything I try to say Richard Eskow succeeds in saying, and does so better than I ever could. (Seriously, read what he wrote about the CT shootings.)

Richard explains why this COLA-cut offer is a bad idea, in This Is Not America’s Deal,

This deal would make voters very unhappy. It reflects neither their wishes, their needs, or their values. They’ve already said so – to pollsters like ours and in the voting booth on Election Day. Instead of responding, this looks like another “insider deal” – another agreement that suggests the public’s values and concerns vanish once you cross the Beltway.

… The Republicans lost the last election – by a landslide, in fact, in both the Presidential and Senate races. They even lost the House — by more than 1.6 million votes. Only their gerrymandering, vote suppression, and billionaire campaign cash allowed them to retain control of that body despite a popular-vote defeat.
And only their outrageous abuse of Senate rules like the filibuster has allowed them to tie up that body and prevent it from doing its work.

Republicans lost because their ideas are unpopular. But this deal would turn those ideas into policy. This undemocratic ”Loser Take All” strategy will further alienate voters, while encouraging extremists in Congress to keep abusing the system.

… This deal would send the wrong message: that successful programs and policies – Social Security, Medicare, and progressive taxation – are problems to be fixed, not solutions to be implemented and strengthened. These programs reflect our finest values: fairness, self-sufficiency, and mutual support. And they work.

A deal like this would also distract the nation from the real sources of our economic difficulties – like wealth inequity, a shortage of good middle-class jobs, and the misdeeds of under-regulated banks and corporations.
No deal is acceptable that undermines our social contract — our common agreement to work together and help each other — as this one would. They’ve made us strong and prosperous and they must be protected.

PS If you really want to change the COLA formula, use a measurement that looks at the things old people actually spend their money on, like the cost of prescriptions or dental care. “Chained-CPI” doesn’t look at these things, so it would lower the COLA. An honest look at how the cost of living changes for old people would mean a higher COLA than now, not a lower one.


This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
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Saying “Fiscal Cliff” Is Taking Sides

The term “fiscal cliff” is a one-sided propaganda phrase that misinforms and triggers public fear and anxiety. The fiscal cliff is not a “cliff” and the country isn’t going to fall off anything at the end of the year. Journalists: don’t help the misinformers — don’t say or write “fiscal cliff.” Congress: when people are scared and misinformed our Congress should pause, step back and help inform us instead of rushing to take advantage of the fear.

What The Fiscal Cliff Is

At the end of the year the Bush tax cuts expire and several budget cuts start to phase in (including military spending cuts.) This reduces the deficit, and some of those cuts will slow the economy if nothing is done to restore them in the next several months. That is the “fiscal cliff” that you are hearing so much about. Except it isn’t a cliff, it kicks in gradually, Congress has a lot of time to work it out and can fix anything that is a problem.
That’s right, if nothing is done in the next several months — there is no “cliff” at the end of the year — some of those cuts will slow the economy. All the screaming and hysteria are about putting pressure on the “lame duck” Congress to do something in a big hurry, outside of the accountability of democracy and before the President and progressives have more leverage.

What The Fiscal Cliff Is NOT

Most people I talked to over Thanksgiving apparently think the “fiscal cliff” is the government runs out of money on December 31 because the deficit is so big and all kinds of terrible things happen on January 1. This is sort of the opposite of what is going on. Even the few who didn’t think it was about the country running out of money were misinformed in one way or another, with most thinking something terrible happens January 1.
The “fiscal cliff” is about taxes going up and budget cuts, which reduce the deficit. And absolutely nothing in anyone’s life will change on January 1, or for some time (weeks, months) after.
That’s right, all the people who were hysterically screaming about the deficit are hysterically screaming now because of deficit cuts. Go figure. But the reason is that they have an agenda.

Journalists Should Not Help Misinform And Scare People

The very term “fiscal cliff” misinforms and scares people. Some media outlets, like FOX News, exist to misinform and scare people. But responsible media outlets should try to help the public understand complicated issues, not help scare and misinform.
Any journalist using the propaganda phrase “fiscal cliff” is taking the side of misinforming and scaring.

Settle Down, Beavis

Everyone should settle down. There is no “cliff.” No one is going to fall off of anything. And after the first of the year the President and progressives have much more leverage in this fight than they do now — hence all the pressure to act before then.
When people are this misinformed and scared the Congress owes it to the public to stop, take a break, work to inform the public and not act in a panic. Journalists, especially, owe it to the public to inform, not misinform and scare.
Update – I wrote this and went to bed. I wake up, and there is a perfect example in the Monday NY Times titled, Debt Reckoning, The Fiscal Deadline In Washington. The write-up in the morning NYTimes email is “The New York Times is beginning a new online feature that will chronicle the talks on the fiscal cliff between President Obama and Congressional leaders.”
The clear message of this headline and summary is that the country is in crisis because of debt. The public cannot help but get the impression that the country goes broke in a few weeks. As I explained above (and as Paul Krugman explains today’s in Fighting Fiscal Phantoms) this is really the opposite of what is happening.

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
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Jobs Are For We, The People. Budget Cuts Are For The Billionaires. Who Will Prevail?

We have millions unemployed with millions more underemployed or just gave up looking, our infrastructure is literally crumbling, our trade deficit is horrendous, our “safety net” has eroded below minimum acceptable standards, pensions are cut or gone, the climate is getting more and more unpredictable and dangerous, and how many other problems can you name? But the billionaires will tell you that our biggest problem is too much government — the very entity that exists to fix those problems. Will we get the jobs that We, the People want or the cuts in government that the billionaires are pushing for?

Deficit Hysteria Is About Cutting Government

Keep this in mind in the coming months — the deficit hysteria and the “fiscal cliff,” are all about cutting government and the things We, the People do for each other, so that the billionaires can have more. Who benefits if we cut government – Medicare, Social Security, the “safety net” programs, education, health and safety regulation and inspection, environmental controls, bank regulation, etc.? All of these help We, the People but are in the way of the billionaires.
How do we get to this bizarre point where DC elite, the corporate media, etc are all talking about cutting the safety net and the things we do for each other, when the obvious problem is jobs? Why isn’t this vast media machine writing and talking and showing videos about jobs and jobs and jobs?

Surplus To Deficit — What Changed?

Before Reagan the country did not have a big debt problem – and then we did. Reagan implemented changes that create huge yearly deficits that added up to big debt. When Clinton left office we had huge budget surpluses, and we were actually paying off the debt. Bush implemented some changes that immediately turned the surpluses into deficits, and left office with a $1.4 trillion deficit — in one year.
So … something changed under Reagan and then under ‘W’ Bush. Are the deficit cutters talking about reversing those changes? Are they talking about fixing the things that caused the deficits that added up to this huge debt?

Sacrifice

The deficit problem came from tax cuts for the rich, the size of the military budget (Reagan doubled it, ‘W’ Bush doubled it again), effects of the trade deficit, and the revenue loss and safety-net costs (due to lack of jobs) that fall out from the Wall Street financial crisis.
Instead of fixing what caused the deficits and debt, the elites say we should all make “sacrifices” to fix the problem. Except, of course, there are no “sacrifices” for the very ones who benefited from those changes Reagan and Bush made. They got huge, huge tax cuts and to pay for the results of those tax cuts We, the People are being pushed to accept “sacrifices.” No one is talking about putting the top tax rate back up to pre-Reagan levels — back when we took care of the infrastructure and funded our schools, etc. They are not talking about hiring millions to modernize our infrastructure and make our buildings energy-efficient.
Starting about the same time as Reagan cut taxes on the wealthy the wages of people who work for a living began to stagnate and the income and wealth inequality started to accelerate. In other words, almost all the benefits from gains in our economy started to go to a few at the top of the ladder. Some dramatic numbers illustrate this. For example, you may have read that in 2010 93% of the gains from the “recovery” went to the top 1%. Or you may have read recently that the wealth of the Forbes 400 went up by $200 billion last year.
But now that it is time to “sacrifice” who is supposed to do the sacrificing? We, the People, and programs like Medicare, Social Security, the “safety net,” health and safety regulations, environmental protections, etc.

Another Billionaire Weighs In

Ross Perot is in the news today whipping up deficit hysteria, with a huge-headline assist from the Drudge Report pointing to this Politico story, Ross Perot: No 2012 endorsement, saying we could “lose our country” or “be taken over.”

“We’re on the edge of the cliff, and we have got to start fixing it now. Otherwise, we’re leaving a disaster to our children’s and our grandchildren’s future,” he said.
… Perot talks about his fear of the United States being taken over.
“If we are that weak, just think of who wants to come here first and take us over, and the last thing I ever want to see is to see this country, our country taken over because we’re so financially weak we can’t do anything and we’re moving in that direct. … We could even lose our country if we don’t get this fixed and straightened out and nobody that’s running really talks about it, about what we have to do and why we have to do it. They would prefer not to have it discussed.

Krugman On Democracy

Today Paul Krugman, in The Real Referendum, points out that the public is turning against candidates who are exposed as wanting to cut the things We, the People do for each other,

Voters are, in effect, being asked to deliver a verdict on the legacy of the New Deal and the Great Society, on Social Security, Medicare and, yes, Obamacare, which represents an extension of that legacy. Will they vote for politicians who want to replace Medicare with Vouchercare, who denounce Social Security as “collectivist” (as Paul Ryan once did), who dismiss those who turn to social insurance programs as people unwilling to take responsibility for their lives?
If the polls are any indication, the result of that referendum will be a clear reassertion of support for the safety net, and a clear rejection of politicians who want to return us to the Gilded Age. But here’s the question: Will that election result be honored?

What he means is that the public’s wishes are clear, but there are indications that after the election the “Grand Bargainers” are going to try again to cut the things We, the People do for each other, so the billionaires can have it even better. This is what the Simpson-Bowles plan is, this is what the “fiscal cliff” hysteria is about.
Will the election results be honored? Will it be jobs (We, the People) or budget cuts (the billionaires).
This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
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