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Time to Retake Politics From the One Percent in Both Political Parties
The country is still celebrating the inability of the supercommittee to cut Social Security and Medicare, but it is important to move on from this victory to retake control of the political debate from the One Percent. As it stands, the One Percent are insisting that the country genuflect over the non-problem of the budget deficit, at a time when tens of millions of workers are unemployed or underemployed, millions of people are facing the loss of their homes and tens of millions of baby boomers are approaching retirement with little other than their Social Security to support them.
The deficit is the agenda of the One Percent. There is no reason that the rest of us should be concerned about budget deficits when the rest of the country is struggling with the economic disaster created by the greed and incompetence of the One Percent.
This is not a statement of morality; it is a statement based on economic reality. Budget deficits can be a problem when an economy is near full employment and the deficit can be pulling resources away from private investment, thereby slowing growth. However, it is not a problem with large numbers of unemployed workers and vast amounts of excess capacity.
This is what the financial markets are telling us every day as interest rates on long-term government bonds hover near 2.0 percent. If deficits were really crimping the economy, we would be seeing interest rates of 6 or 7 percent, or even higher. The deficit hawks do not have an economic case to support their argument, just money and influence.
In the longer term, the deficit hawks can point to projections of outsized deficits, which they invariably attribute to Social Security and Medicare. The first part of this story is completely untrue.
Under the law, Social Security is financed from its designated tax. It, therefore, cannot contribute to the deficit unless Congress changes the law. (The payroll tax credit in 2011, which was replaced with general revenue, is an exception to this rule.)
According to the most recent projections from the Congressional Budget Office, Social Security benefits will be fully funded through the year 2038. After that date, if Congress does nothing to increase revenue, then the program would pay a bit more than 80 percent of scheduled benefits. (This would still be about 10 percent more than current retirees receive since benefits are projected to rise by approximately 1 percent a year.)
The real story of the soaring long-term deficits is exploding Medicare costs, which are in turn driven by our broken health care system. We already pay more than twice as much per person for our health care as the average for other wealthy countries, with little to show in the way of outcomes. This gap is projected to continue to grow in the years ahead.
To anyone who looks at the facts, the obvious answer to our deficit problem is fixing the health care system. This is difficult to do given the enormous political power of the pharmaceutical industry, the insurance industry, highly paid medical specialists, and the other members of the One Percent who profit from the waste in the system as it exists now.
If we can't immediately change the system, then why not take advantage of the gains from trade? If we change rules to make it possible for Medicare beneficiaries to buy into the health care systems in other countries or make it easier for patients to have medical procedures done at far lower cost elsewhere, it should be an enormous win-win, offering gains that could be in the trillions of dollars. And what free-market fundamentalist can argue against the principle of giving people a choice?
In fact, conservatives and self-described free traders run screaming from the idea of opening medical care to trade. They want trade that will lower the wages of auto workers and textile workers by putting them in direct competition with low-paid workers in the developing world; they hate trade when it threatens to reduce the income of the pharmaceutical industry, the insurance industry, and others in the One Percent.
It's time to expose the lies for what they are. The One Percent have rigged the deck over the last three decades to accomplish the most massive upward redistribution in the history of the world. These are not people who care about budget deficits or free trade or free markets. They care about making themselves richer at the expense of everyone else.
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62 Comments so far
Show All"As it stands, the One Percent are insisting that the country genuflect over the non-problem of the budget deficit, at a time when tens of millions of workers are unemployed or underemployed, millions of people are facing the loss of their homes and tens of millions of baby boomers are approaching retirement with little other than their Social Security to support them."--Dean Baker
the talking heads report the stock market and tell us "this isn't a depression, look at the holidaze shoppers; we're in recovery mode!" the growing number of unemployed, homeless families living in cars, (the lucky ones), well, it'll take time
for the wealth to trickle down.
The "holidaze" shoppers accurately demonstrate the underlying despairation of even those who do have a little money to spend. They line up at midnight for their one chance at a break they feel they deserve, their one chance to get something back from a system which otherwise rips them off, and they are ready to pepper spray each other in good old american, every man for himself style, to defend the pitiful little entitlement they feel they have left. This is a percect simile for our politics--way too desperate and way too short sighted to see how things could be different.
From the article: The 2011 payroll tax credit is funded by general revenue. It is NOT nipping at the SS trust fund as so many hysterical posters here have claimed! Also, Dean Baker has an interesting article in Al Jazeera stating that the Fed should intervene in Europe to guarantee troubled nation's debts! And by golly, it appears to me to make sense. If the ECB insists on damaging the European economy and hurting the US with its policies, why should we merely accept such stupidity?
You may have missed the memo... WE'RE BROKE.
I have no idea if you are serious or not. If you are then with a little study you will find that we are not at all "broke." With reasonable historical tax rates and a better approach to health care spending our budget problems are easily solved. It's basically the 1% who make the "easily" part very difficult.
If "ifs and buts were candy and nuts" we'd all be one big fruit cake.
(-$26,000,0000,000,000) means that our children are also broke.
USDiz2, did you know that we are now nicely set up to finally have our finances in good long-term shape? All Congress has to do is...nothing. Nothing means 10% cuts in many expenditures. Nothing means an end to the Bush tax cuts. Nothing means some health care savings when Obamacare is fully implemented. We've managed to turn the corner in our long-term economic problem. But, can we leave good enough alone? (Personally, I think we could easily do even better).
USDiz2, did you know that we are now nicely set up to finally have our finances in good long-term shape? All Congress has to do is...nothing. Nothing means 10% cuts in many expenditures. Nothing means an end to the Bush tax cuts. Nothing means some health care savings when Obamacare is fully implemented. We've managed to turn the corner in our long-term economic problem. But, can we leave good enough alone? (Personally, I think we could easily do even better).
No we're not "broke." Broke means you have no money to buy your food or pay for housing. Since the US govt. continues to pay $1.2 trillion annually for the "defense" budget and 800+ military bases around the world, we are not broke at all. As to the 26 trillion debt, assuming that is an accurate figure, not all of it has to be repaid, because much of it was incurred via criminal means. Indeed, some have likened the govt. to a criminal racket. There is a principle in international law called "odious debt." Google it. It means that debts incurred by governments that are illegitimate, i.e. that do not represent their people, are not payable. We the People do not have to pay for the criminal bailouts of criminal organizations. We are not broke. What we are is in need of a representative government.
At noon on Tuesday, the former Massachusetts governor, Mr. Romney, will attend a lunch at the Naples Yacht Club, 700 14th Ave. S. No admittance for the 99%. It's also the 12th anniversary of the Battle in Seattle WTO protest against corporate globalization.
No uncomfortable questions will be asked. No inconvenient truths will be discussed. Just pass the collection basket, being certain to mention your name and your corporation's name on your donation. You will be blessed, as usual.
Shocking! democrats would never do such a thing. BHO got all that money with $10 donations from single mothers.
Bah... another establishment hack trying to steer the anger of the masses into something palatable for the 1%. The article's base assumption that American style politics and economic structure are good, just the current corruption of the system is the problem. A sort of "throw out the 1% and carry on" type thinking.
Pretty much.
"They want trade that will lower the wages of auto workers and textile workers by putting them in direct competition with low-paid workers in the developing world..."
This kind of "ethic" (or should I say "pathos?") is one of the many reasons we should not put up with anything that smells like "free trade."
While the statement is baseless. Note that the problem is clearly identified as corruption (Medicare spending out of control). The government is the means by which most of the 1% became super-rich. The pathos evolves from a progressive secular assumption that central planning is the answer.
Free trade has never been a problem, until the government decides to level the playing field. You must get out of the trees to see the forest.
Nearly all progressives are NOT big on government central planning. Of course we need some. Having the government develop the interstate highway system was a wonderful idea. I can think of few worse things for our nation than an endless system of only toll roads. "Free trade has never been a problem...", except when monopolies and near monopolies set prices that hurt individuals and small businesses, and when other governments erect trade barriers, and...
Monopolies are a problem. The courts should put an end to unfair monopolies. They are monopolies because they obtained an unfair advantage.
I also like interstates and aircraft carriers. That doesn't mean we need so many.
You can vote down toll roads, but you can't vote down imminent domain of the US government run amuk. WA$TE
Austerity is not the solution; it is the problem. Look at how well off Europe was before the banksters brought down their neoliberal economies. They used to be somewhat socialist. Then, they stuck a big foot in neoliberlism. Now, they are doing austerity bigtime, dipping the other foot into neoliberalism. Despite this, they still have single payer health care, more vacation time,etc. But with their austerity programs they're going (unless Republicans totally take over) in the wrong direction faster than the US is.
Capitalism creates oversupplies, which is why it imperialistically seeks new markets (like the opening of China long ago). What is lacking is demand. Austerity creates more people without $, thus less demand. This is not rocket science.
Of course, oversupply also creates hyper-advertising which seeks to sell things people don't need. But, that's a story for another time.
Maybe under a more socialized mixed economy, outlandish CEO salaries would vanish, employment would become fuller with shorter working days (wh/in the dreamy 60's was the promise of automation or increased productivity), and we'd still get by, with even more kindness to our Mother Earth, without which we'd freakin' die.
You must get very dizzy trying to spin socialist lies.
There is no demand... because there is no demand. Regulation of supply requires regulation of demand, which eventually requires regulation of everything. Those outlandish CEO salaries are coming directly out of the taxpayer's wallet, thanks to the progressive democrats under princess Pelosi. Thank TARP Dodd and Frank.
Capitalism here is in it's mature stage. Companies have consolidated everything, they've squeezed their workers into doing 3 peoples jobs, they have sent as much work as they can overseas. All to keep the shareholders happy. Now the 99% don't have money to spend so the circle of supply and demand is slowly but surely unraveling. New Chinese markets are just for the cheap labor, they cannot afford to buy most of what they produce. If Capitalism doesn't grow, it dies! Wouldn't it be funny if the whole thing came crashing down because the titans of industry were so greedy they won't pay their workers enough to purchase the products they make. The 1% can't buy enough. What happens when another 45 million can't afford health insurance? The industry has nowhere to go, no other country would have them.
Every time I read this passage by Mark Twain I think of academic jargon and especially economic jargon. Think of this before considering the words of Baker.
"As concerns this question, our inspired Founder instructs us that the fealty due from the Ultimate in connection with and subjection to the intermediate and the inferential, these being of necessity subordinate to the Auto-Isothermal, and limited subliminally by this contact, which is in all cases sporadic and incandescent, those that ascend to the Abode of the Blest are assimilated in thought and action by the objective influence of the truth which sets us free, otherwise they could not." ....
Twain was blessed with common sense and Baker is no Twain.
Nice joke. I think Twain has the last laugh, post-humus. I have an IQ of an ave. of 158 as per recent IQ incarnations, and this passage loses me before mid-sentence. Do you think Twain or anyone other than the seriously drunk or stuck up intellectual would or could understand this arcane piece of gibberish? You are talking to an American population whose IQ has decreased from 100 to 95 or less under the influence of electronic media dumbing down, water fluoridation and other environmental (metabolically-disturbing) chemicals...
Dean Baker, on the other hand, is a serious and well-grounded economic analyst who I would trust before anyone in the Obama Administration, Republic-con Party, Demo-Crashers Nonewithstanding!
The quoted material is clear to me. What part do you not understand?
I kind of get what he's saying here, but it's still confusing language at best. It is exactly the kind of language Orwell advised us against in his essay "Politics and the English Language." Keep it simple.
However, I wonder if Twain actually believed the manner in which he wrote this was acceptable, or if he was making a point about it?
This Twain quote is taken from "Three Thousand Years among the Microbes," a chapter out of "The Devil's Race-Track: Mark Twain's Great Dark Writings." He is having a religious conversation with the character "Catherine" in his writing. Simply put, their discussion is about whether or not our animals/pets go with us to heaven. She cannot put things together in her own words because her religious sect requires that they do not do this - so she uses the words of her religious Book. She then says the quote that was written by Stone in the comments after Dean Baker's article. After Catherine makes this statement, Twain says to her "Apparently I had wandered, and missed a cog somewhere, so I apologized and got her to say it again." In Twain's writing, he really doesn't understand her meaning and questions Catherine further. He asks several questions, but he is not able to get the true meaning out of her - she cannot answer his questions and she cannot question the divinely conceived and divinely framed "sacred" meaning of the text. What all of this has to do with an article about the state of our economy, Social Security, and Medicare, I am at a loss. Dean Baker is quite good. Maybe not Twain, but quite good. But then again, I'm originally from Elmira, NY, where Twain wrote many of his books and where he is buried.
This was the plan all along...letting the "automatic" cuts happen and thus denying responsibility for the cuts...the same cuts they put there when they created the Death Committee. NO INCUMBENTS is the cure. No politician in D.C. should be reelected. In Washington state, that means Jamie Herrera-Beutler (R) and Maria Cantwell (D), both millionaires that voted their own pocketbooks 100% of the time since they were elected, voting to cut S.S. rates so they could save a few bucks on their own taxes even when it kills people, people can't eat, pay for heating bills, etc. NO INCUMBENTS of either party, because it can't get any worse than it already is, and the Death Committee scam proves it.
It should.
Yes. Obama has sold out to Wall Street. He has 15 high level advisors from Goldman Sachs.
It might be more accurate to say those 15 high-level Goldman Sachs advisors decided a few years ago that they wanted mr. o to be their frontman, after they were finished with the bushbaby.
It's fun to use free market arguments against ostensibly people who are used to being on the other side of that argument. This article I would classify as a guilty pleasure :-D
Your statement makes absolutely no sense.
Sorry about that. "Ostensibly" shouldn't be there, it was a long day and I meant to say that the "free-market" bunch only think things are a good idea if people they approve of make the pitch.
The article is a guilty pleasure because it's fun to think about the shoe being on the other foot. The problem with it is that getting away from buying locally caused a lot of the trouble to begin with.
"The problem with it is that getting away from buying locally caused a lot of the trouble to begin with."
That's true, but it's only part of the problem...and not even close to the biggest part.
The AUTHOR proposed that we get even further away from buying locally by going global with our health care choices.
...and speaking of health care choices, I understand there is a nice selection of effective hemorrhoid creams to be had at your local pharmacy, perhaps you should try some of them!
Contrary to a few posters this is a good article on economics but alas very weak on politics. Title correctly states 1% owns both parties, even adding “The One Percent have rigged the deck over the last three decades..." but then says squat about what that lever of power for the 1% might be and by what lever of power the 99% can take back our democracy. The good news is, we the 99% can empower ourselves to do this. A manual democratic method is outlined at the following, though online methods could be adapted from the concept. Check out
http://www.eduardhiebert.com/ereform/v123p.htm
Re: The Populist Movement – A Short History of the Agararian Revolt in America by Lawrence Goodwyn
This extraordinary study of the Populist Movement by Lawrence Goodwyn derserves a careful read by all who support the Occupy Movement. See: http://www.ratical.org/corporations/PMSHAGAintro.html
The Occupy movements have succeeded in attaining the first two public power elements of a populist movement, as described by Lawrence Goodwyn:
"The sequential process of democratic movement-building will be seen to involve four stages: (1) the creation of an autonomous institution where new interpretations can materialize that run counter to those of prevailing authority -- a development which, for the sake of simplicity, we may describe as “the movement forming”; (2) the creation of a tactical means to attract masses of people -- “the movement recruiting”; (3) the achievement of a heretofore culturally unsanctioned level of social analysis -- “the movement educating”; and (4) the creation of an institutional means whereby the new ideas, shared now by the rank and file of the mass movement, can be expressed in an autonomous political way -- “the movement politicized.” "
The General Assembly discussions and the Occupy websites are working to achieve the third element: “movement education.” The fourth element and the only one which can effect change in our political-economic systems is to create a New Party, and distance it from the Republicratic Party which is controlled by the Corporate State of Amercia, a minion of the New World Order. See: http://thedragonsteeth.wetpaint.com/page/THE+NEW+PARTY
After reading the above short history, the very astute reviews found at the Amazon site are even more insightful. See:
http://www.amazon.com/Democratic-Promise-Populist-Movement-America/product-reviews/0195019962/ref=sr_1_3_cm_cr_acr_txt?ie=UTF8&showViewpoints=1
.Democratic Money: A Populist Perspective, with Lawrence Goodwyn and William Greider, 12/9/89
Who Were the Populists? - Richard Grossman on Bill Moyers Speech, 6/24/03
Creating the party still isn't enough. We'd have to replace the Empire's polling machines. Have any ideas on how to do that?
Mr. Baker, you kick it! I read everything of yours. I just posted this to facebook. You distill reams of discourse and analysis to the economically relevant bare truths. Thanks for your contributions!
So Dean wants to outsource the medical profession!!
Dean wants to "insource" medical care in competition to the medical insurance industry and the medical providers. Example: allow the old, the sick and the lame to import prescription drugs from Mexico and Canada.
Jim Miller
According to my doctor, we're being flooded with foreign doctors already, taking jobs away from our own up and coming doctors. Our prescription drugs come from god only knows where, and the insurance companies are privatized and probably scattered around the globe for cheap labor in their business department. What's left to outsource - us having to take ourselves to other countries for care?
"The country is still celebrating the inability of the supercommittee to cut Social Security and Medicare, but it is important to move on from this victory to retake control of the political debate from the One Percent."
Dean Baker surely wasn't fooled by that kabuki dance was he? Really? I thought it was bloody obvious, that both parties of the oligarchy decided upon that scam to sidestep responsibility for cutting the New Deal programs, by triggering "automatic cuts".
There are NO automatic cuts for SS and Medicare only gets a 2% cut directed only at payments to doctors and hospitals.
"Automatic?" Perhaps. But what's this:
http://www.nasi.org/press/releases/2011/06/press-release-new-study-finds-changes-already-enacted-wil?gclid=CMjm7_CQ0awCFYmK4Aodiye_xQ
Re: "To anyone who looks at the facts, the obvious answer to our deficit problem is fixing the health care system."
How about ending the warfare system? The interest payments on the money borrowed from the banksters to buy expensive exploding toys from the MIC are a huge burden on the annual budget. If the US decided to give peace a chance, they could balance the budget without cutting a single social program.
I thought the same thing. The obvious answer to our deficit problem is stopping the runaway "defense" costs, and that's as likely to happen as them letting us buy into a more rational healthcare system.
When did our politicians decide they were so powerful they no longer had to answer to us? After 9/11? I know there have always been politicians who have felt this way, but never have they decided as group to implement illegitimate policies and laws on the scale they do now. We have to go after the politicians, because they're more accessible than the mega-corporations.
This is my feeling too. I know the system has never been perfect; it has in fact been very oppressive for some groups, but I had hoped and believed it was flexible. The (admittedly mild to moderate) successes of the civil rights and anti-war movements of the sixties gave me this hope, along with the earlier suffrage movement, etc. This made me think that America had the potential to become and was gradually moving toward a true democracy. I don't feel that way anymore. The recent actions within the last decade have been increasingly blatant. They don't care, as they never have, and now they don't care if we know.
Yes. And how many billions would that cut out of the national health care bill?
Did you ever notice that when you stop threatening to punch people in the nose they are so much easier to get along with? Maybe that principal could translate to international politics too.
How about taxing the rich and recovering some of the money hoovered by the 1% from the 99%?
Gotta point out that the idea that deficits are somehow only the concern of the 1% is completely untrue. There's very little reason why wealthy people should be concerned with deficits and every reason why poor people should be.
Budget deficits require that money is borrowed to fill the gap. Usually borrowed funds mean foreign lenders, which means an increase in the amount of dollars in the system. That's inflation.
Inflation affects the price of goods with high elasticities of supply (like food and fuel) more than other goods. These, obviously, make up a bigger portion of the budget of poor people than of rich people (if you make a million dollars a year, you spend a smaller percentage of your income on gas and groceries than someone who makes $20K a year.)
Deficits, as well as any other inflationary policies, hurt the poorest people in the country the most and the richest people in the country the least.
Ben,
The deficits, per se, hurt only the holders of the debt, such as China. What hurts is the interest the Fed pays on the debt. That interest is borrowed money which inflates the deficit. What inflates the deficit the most is the trillions loaned/given to the banksters and the huge waste of money fighting wars. The net effect of printing money is inflation, which we have and will see increase. The Federal Reserve has the right to print money physically and electronically. If we want to cut the deficit, eliminate the Federal Reserve System and call all of the loans to the Banksters and the criminal elements of the Wall Street gang.
Bush and Cheney lied to us about WMD and drove a false war with Saddam Hussein in order to grab the world's third largest reserve of oil. We fought the Taliban at the request of the pharmaceutical industry worried about the competition from the herion trade. The CIA was used to create the "rebels" in order for the NATO countries to control the oil from Lybia.
The "spoils of war" are gathered by the oligarchs who control the Federal government, with none of the spoils going to pay for the wars. If we want to use wars to gain the spoils of war, the money ought to go to reduce the deficit which financed the wars, and not to the 2% (the Financiers and the Military-Industrial Complex).
Jim Millrt