Thursday, November 18, 2010

Krugman: The Highjacked Deficit Commission + A great movie

From: earthactionnetwork@earthlink.net
Sent: Sunday, November 14, 2010 6:15 PM

Movie recommendation: Fair Game (the story of Valerie Plame and Joe
Wilson)--A very well-crafted dramatization of the story which powerfully
illuminates the lying and deceipt around the invasion of Iraq and the
exposure of Valerie Plame's status as a CIA agent working to prevent nuclear
proliferation.

The headlines about what happened to former CIA operative Valerie Plame and
former ambassador Joe Wilson are well known. After Joe Wilson debunked the
key piece of evidence in the Bush administration's march to war in Iraq,
Dick Cheney and Karl Rove decided to mount a media attack that made Joe
Wilson's wife, Valerie Plame, "fair game." They outed Plame's undercover
status and jeopardized not only her life, but also the lives of her family
and contacts in the field.

"One of the best movies of the year. Naomi Watts gives one of the best
performances of her career. Very powerful."-Richard Roeper,
RichardRoeper.com1

".... globe-trotting and intelligent, serious and substantial, deliberately
paced yet filled with mounting suspense...It's the rare movie that's not
quite long enough."-Christy Lemire, Associated Press

"4 Stars...the most riveting Washington thriller since All The President's
Men."-Colin Covert, Minneapolis Star-Tribune

***

http://www.nytimes.com/2010/11/12/opinion/12krugman.html?_r=1&partner=rss&emc=rss

The Hijacked Commission

By Paul Krugman
NY Times Op-ed:November 11, 2010

Count me among those who always believed that President Obama made a big
mistake when he created the National Commission on Fiscal Responsibility and
Reform - a supposedly bipartisan panel charged with coming up with solutions
to the nation's long-run fiscal problems. It seemed obvious, as soon as the
commission's membership was announced, that "bipartisanship" would mean what
it so often does in Washington: a compromise between the center-right and
the hard-right.

My misgivings increased as we got a better feel for the views of the
commission's co-chairmen. It soon became clear that Erskine Bowles, the
Democratic co-chairman, had a very Republican-sounding small- government
agenda. Meanwhile, Alan Simpson, the Republican co- chairman, revealed the
kind of honest broker he is by sending an abusive e- mail to the executive
director of the National Older Women's League in which he described Social
Security as being "like a milk cow with 310 million tits."

We've known for a long time, then, that nothing good would come from the
commission. But on Wednesday, when the co-chairmen released a PowerPoint
outlining their proposal, it was even worse than the cynics expected.

Start with the declaration of "Our Guiding Principles and Values." Among
them is, "Cap revenue at or below 21% of G.D.P." This is a guiding
principle? And why is a commission charged with finding every possible route
to a balanced budget setting an upper (but not lower) limit on revenue?

Matters become clearer once you reach the section on tax reform. The goals
of reform, as Mr. Bowles and Mr. Simpson see them, are presented in the form
of seven bullet points. "Lower Rates" is the first point; "Reduce the
Deficit" is the seventh.

So how, exactly, did a deficit-cutting commission become a commission whose
first priority is cutting tax rates, with deficit reduction literally at the
bottom of the list?

Actually, though, what the co-chairmen are proposing is a mixture of tax
cuts and tax increases - tax cuts for the wealthy, tax increases for the
middle class. They suggest eliminating tax breaks that, whatever you think
of them, matter a lot to middle-class Americans - the deductibility of
health benefits and mortgage interest - and using much of the revenue gained
thereby, not to reduce the deficit, but to allow sharp reductions in both
the top marginal tax rate and in the corporate tax rate.

It will take time to crunch the numbers here, but this proposal clearly
represents a major transfer of income upward, from the middle class to a
small minority of wealthy Americans. And what does any of this have to do
with deficit reduction?

Let's turn next to Social Security. There were rumors beforehand that the
commission would recommend a rise in the retirement age, and sure enough,
that's what Mr. Bowles and Mr. Simpson do. They want the age at which Social
Security becomes available to rise along with average life expectancy. Is
that reasonable?

The answer is no, for a number of reasons - including the point that working
until you're 69, which may sound doable for people with desk jobs, is a lot
harder for the many Americans who still do physical labor.

But beyond that, the proposal seemingly ignores a crucial point: while
average life expectancy is indeed rising, it's doing so mainly for high
earners, precisely the people who need Social Security least. Life
expectancy in the bottom half of the income distribution has barely inched
up over the past three decades. So the Bowles-Simpson proposal is basically
saying that janitors should be forced to work longer because these days
corporate lawyers live to a ripe old age.

Still, can't we say that for all its flaws, the Bowles-Simpson proposal is a
serious effort to tackle the nation's long-run fiscal problem? No, we can't.

It's true that the PowerPoint contains nice-looking charts showing deficits
falling and debt levels stabilizing. But it becomes clear, once you spend a
little time trying to figure out what's going on, that the main driver of
those pretty charts is the assumption that the rate of growth in health-care
costs will slow dramatically. And how is this to be achieved? By
"establishing a process to regularly evaluate cost growth" and taking
"additional steps as needed." What does that mean? I have no idea.

It's no mystery what has happened on the deficit commission: as so often
happens in modern Washington, a process meant to deal with real problems has
been hijacked on behalf of an ideological agenda. Under the guise of facing
our fiscal problems, Mr. Bowles and Mr. Simpson are trying to smuggle in the
same old, same old - tax cuts for the rich and erosion of the social safety
net.

Can anything be salvaged from this wreck? I doubt it. The deficit commission
should be told to fold its tents and go away.

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

http://strengthensocialsecurity.org/Dead-On-Arrival

Ten Reasons the Social Security Proposal of the Fiscal Commission Co- Chairs
Should be DOA (Dead On Arrival)

The Fiscal Commission Co-Chairs' Social Security proposals are an equal
opportunity disaster. So soon after an angry electorate has expressed its
frustration with a Washington political class that does not appear to be
listening, it totally ignores the will of the people. Poll after poll has
shown that Democrats, Republicans, and Independents reject the punitive cuts
in America's economic security that the co-chairs have proposed. Their
proposal:

1.Deeply cuts the benefits of middle-class families. The proposal would cut
retirement benefits by as much as 36% for young people entering the
workforce today. Today's 20-year old workers who retire at age 65 would see
their benefits cut by 17% if their wages average $43,000 over their working
lives, by 30% if their wages average $69,000 over their working lives, and
by 36% if their wages average $107,000 over their working lives, according
to the Social Security Chief Actuary.1 The proposed cuts would apply to
retirees, disabled workers and their families, children who have lost
parents, and widows and widowers.

2.Closes Social Security's long-range funding gap primarily by cutting
already low benefits, rather than by raising taxes on those who can most
afford to pay. Ninety-two percent of Social Security's projected funding gap
is closed by cutting promised benefits, according to the proposal. The
benefit formula change eliminates 45% of the projected shortfall, raising
the retirement age eliminates 21%, and reducing the COLA eliminates 26%.2
Social Security's benefits are already inadequate - just $13,000 a year on
average3 - and should not be cut further. Instead, Social Security's long-
range funding gap could be closed, as most Americans want, by requiring
those employees (and their employers) who make more than $107,000 a year to
pay Social Security taxes on all their wages, as the rest of us do who earn
less.4


3.Raises the retirement age to 69. This is a 13% benefit cut on top of the
13% cut already made when the retirement age was increased from 65 to 67,
according to the Social Security Administration.5

4.Raises the early retirement age to 64. Most Americans claim Social
Security benefits at age 62 even though the benefits are currently reduced
by 25%, when they do so.6 Millions take early retirement because they work
in physically demanding jobs, have health problems, or can no longer find
work. Raising the early retirement age will shut them out of the system when
they are most vulnerable, potentially forcing them to seek disability
benefits or welfare.

5.Discriminates against lower-wage workers by raising the retirement age.
Over the last quarter century, life expectancy of lower-income men increased
by one year compared to five years for upper-income men. Lower-income women
have experienced declines in longevity.7 Yet, the higher retirement age
applies to rich and poor, healthy and sick, alike. In effect, the proposal
says to lower wage workers that they must work longer because the rich are
living longer!

6.Reduces the annual Cost of Living Adjustment (COLA) for Social Security
beneficiaries. The "chained CPI" proposal would reduce benefits by 0.3% a
year on average.8 This will result in a 3.7% cut in benefits after 10 years
in retirement beginning at age 65 and a 6.5% cut after 20 years, according
to the Social Security Chief Actuary.9 If anything, the COLA should be
increased because it does not adequately take account of skyrocketing
medical costs, which hit seniors and people with disabilities hardest.

7.Hurts current retirees, contrary to promises made by the Co-Chairs. The
change in the COLA calculation would begin in 2011 and affect all
beneficiaries, not just retirees.

8.Breaks faith with our nation's veterans and service members. Social
Security benefits are veterans' benefits - 43% of veterans receive Social
Security.10 Our men and women in uniform (and their families) will see their
Social Security disability benefits cut deeply if they are seriously injured
in combat. If they die in combat, their survivors' benefits will also be cut
substantially. And veterans' retirement benefits will be cut significantly
just like for all other Americans.

9.Harms our grandchildren the most. In the name of helping our
grandchildren, the proposal cuts their benefits the most. The younger a
person is the deeper the cuts because of the increase in the retirement age
and the changes in the benefit formula.11


10.Breaks Social Security's promise with hard-working Americans. Social
Security belongs to the people who have worked hard all their lives and
contributed to the program. It is based on a promise that if you pay in then
you earn the right to guaranteed benefits. The Co-Chairs' proposal would
break that promise.
--

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"To be hopeful in bad times is not just foolishly romantic. It is based on
the fact that human history is a history not only of cruelty, but also of
compassion, sacrifice, courage, kindness. What we choose to emphasize in
this complex history will determine our lives. If we see only the worst,
it destroys our capacity to do something. If we remember those times and
places (and there are so many) where people have behaved magnificently,
this gives us the energy to act, and at least the possibility of sending
this spinning top of a world in a different direction. And if we do act,
in however small a way, we don¹t have to wait for some grand utopian
future. The future is an infinite succession of presents, and to live now
as we think human beings should live, in defiance of all that is bad
around us, is itself a marvelous victory." ---Howard Zinn

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