Social Security

UPDATE AT END OF POST: Krugman tries to clarify what he said.

Although he was likely taking a swipe at former governor Sarah Palin with the reference, Paul Krugman on Sunday recommended "death panels" as a means of helping to balance the federal budget.

In a Roundtable discussion on ABC's "This Week," the New York Times columnist said of what recently came out of the President's deficit commission, "Some years down the pike, we're going to get the real solution, which is going to be a combination of death panels and sales taxes" (video follows with transcript and commentary):

Charles Krauthammer on Friday gave a much-needed education to Bloomberg's Margaret Carlson about why the age at which one can receive Social Security benefits must be raised.

His words on PBS's "Inside Washington" also refuted Paul Krugman's foolish claims on this matter published in Friday's New York Times (video follows with transcript and commentary):

There's little debate in America that with baby boomers retiring, Social Security and Medicare are on a collision course with bankruptcy.

Regardless of this inconvenient truth, powerful media figures like New York Times columnist Paul Krugman stand in the way of any meaningful reform to these programs that might lead to their long-term viability.

Krugman proved that once again in his article Friday:

The consumer price index is holding steady, so that means no “cost of living adjustment” upward in Social Security payments in 2011, prompting the Associated Press to distribute on Monday night a lengthy dispatch reciting complaints from seniors about the supposedly intolerable situation: “Senior citizens brace for Social Security freeze.” Without mentioning how recipients received a very generous 5.8 percent hike in 2009, Florida-based AP reporter Matt Sedensky ominously led:

Seniors prepared to cut back on everything from food to charitable donations to whiskey as word spread Monday that they will have to wait until at least 2012 to see their Social Security checks increase.

If no change means cutting back on food, imagine the media's hyperbole over victims if anyone ever suggests reducing payments in any federal program. That's what the Tea Party will be up against.

As for the threat to the ability of our nation's seniors to imbibe whisky, Sedensky stopped by “St. Andrews Estates North, a Boca Raton retirement community,” where “Bette Baldwin won't be able to travel or help her children as much. Dorcas Eppright will give less to charity. Jack Dawson will buy cheap whiskey instead of his beloved Canadian Club.” Another year without an increase in payments while costs hold even and Dawson will be forced to eat dog food!

New York Times correspondent Thomas Friedman is clearly unhappy about the Tea Party, so much so that he considers the movement "not that important."

Instead, he envisions another group, "which stretches from centrist Republicans to independents right through to centrist Democrats," sitting silently out there in America waiting for the right leader to emerge.

So wrote Friedman Wednesday in his "The Tea Kettle Movement":

For general discussion and debate. Possible talking point: Here's change you can believe in!

The number of people in the U.S. who are in poverty is on track for a record increase on President Barack Obama's watch, with the ranks of working-age poor approaching 1960s levels that led to the national war on poverty.

Census figures for 2009 - the recession-ravaged first year of the Democrat's presidency - are to be released in the coming week, and demographers expect grim findings. [...]

The anticipated poverty rate increase - from 13.2 percent to about 15 percent - would be another blow to Democrats struggling to persuade voters to keep them in power. [...] (more stats follow)

Looking for someone to investigate theft and questionable spending in government programs? Think twice about hiring Rachel Maddow. The earnest MSNBC polemicist has deemed such a thing impossible, at least when it comes to Social Security.

Reacting with the reptilian defensiveness of liberals whenever conservatives suggest Social Security is unsustainable, Maddow made this whopper of a claim on her show Sept. 1 in response to former senator Alan Simpson's pithy criticism of the FDR-created sacred cow --

MADDOW: Here's the broader context, what he said, it was in an email, what he wrote in that email, in which that quote, from which that quote was taken. This is what he said -- 'yes, I've made some plenty smart cracks about people on Social Security who milk it to the last degree. You know 'em too. It's the same with any system in America. We've reached a point now where it's like a milk cow with 310 million [tits]', thing that starts with T that rhymes with bits.

Chris Matthews on Friday blatantly misrepresented former President George W. Bush's plan to reform Social Security in 2005.

"If George W. Bush had gotten his way and privatized Social Security and tied it to the stock market, your constituents would be 100 percent Democrats now -- 100 percent! -- because they`d be looking at their Social Security checks shrivel to nothing because they`d be based on the Dow Jones," the "Hardball" host falsely told  Rep. Debbie Wasserman Schultz (D-Fla.).

As quotes directly from the actual reform plan Bush submitted in February 2005 will demonstrate, Matthews is either completely ignorant of the facts or intentionally lied to his audience.

You decide whether the following is just a foolish mistake or a willful misrepresentation of the truth by a so-called journalist on national television (video follows with transcript, commentary, and quotes from Bush's 2005 reform plan):

The New York Times on Tuesday declared what most conservatives knew would happen if Democrats took control of both Congress and the White House: "more Americans - and not just the rich - are going to have to pay more taxes."

In its editorial comically titled "A Real Debate on Taxes," the Times predictably argued for a total elimination of the Bush tax cuts, although it favored some partial delay to this given the precarious state of the economy.

That in itself was humorous as the Times clearly seems to get that raising taxes is indeed economically damaging.

Yet maybe more telling was how this "real debate" didn't once involve the spending side of the budget:

Children must be making the news programming decisions at NBC "Nightly News."

Aug. 14 was the 75th anniversary of Social Security, the largest government program and most troubled. Social Security is in the red this year - six years ahead of forecasts. The program faces a $41 billion shortfall this year alone.

The major anniversary of a program often nicknamed the "third-rail" of politics didn't even rate a mention on NBC "Nightly News." Instead, NBC celebrated an "iconic" children's cartoon: Dora the Explorer.

"If you've ever said the phrase: ‘Swiper, no swiping.' then you know the power of the little girl who made that phrase famous." Kate Snow enthusiastically teased. "Dora the Explorer will forever be a seven-year-old cartoon character, but this weekend marks the tenth anniversary of a ground-breaking show that has been almost inescapable for a generation of kids."

Don't they usually wait until after Labor Day to do this?

Ten days ago, I asserted that that the administration's cynical use of Andy Griffith for a patently political promo on behalf of Medicare ("This year, as always, we’ll have our guaranteed benefits, and with the new healthcare law, more good things are coming: free check-ups, lower prescription costs") was "the foundation for the biennial Democratic scare-the-seniors campaign."

Well, the Social Security portion of that scare campaign kicked in this morning.

President Obama used his weekly radio and Internet address to glorify Social Security's accomplishments (he "somehow" forgot to mention the program's $7.7 trillion unfunded liability) and to rip unnamed Republicans for proposing to privatize the program. The President, who has used so many straw-man arguments in the past 19 months that he ought to have a scarecrow sitting next to him every time he speaks, framed active GOP proposals as all-or-none privatization ("You shouldn't be worried that a sudden downturn in the stock market will put all you've worked hard for, all you've earned, at risk"), when they're not. For example, what President Bush proposed five years ago involved giving those who wished the opportunity to invest 2% of their pay -- out of the 12.4% of their pay that currently goes into the system -- in one or more of a limited number of investment funds.

But wait until you see how the Associated Press and Erica Werner fanned the flames even further. I found the headline that follows at both the AP's main site and at the same story at USA Today, so what you're about to see is clearly their preference:

Ed Schultz on Thursday blamed Republicans for all the unemployed people living in America today.

As he began the most recent installment of the "Ed Show" on MSNBC, the host said, "The Republican Party has been on a crusade against the middle class and the poor for the last 30 years. We're now seeing the wreckage of that race to the bottom line culture."

He disgracefully continued, "Today a government report showed weekly jobless claims at a five-month high. 484,000 new unemployment claims were filed in the week ending August 7th. And you know what folks, you can lay this right at the feet, right at the altar of the Republican Party."

Sadly, he wasn't close to done, claiming, "The people you see flooding the streets begging for help, begging for an opportunity are victims of the Republican agenda just to make sure that President Obama fails" (video follows with transcript and commentary): 

Comedian Jon Stewart on Wednesday joined the growing liberal chorus attacking Republicans for their concerns about rising taxes and exploding budget deficits.

The only thing different about the "Daily Show" host's approach was that he needed vulgarity to make his point.

Potentially even worse, Stewart in his opening segment Wednesday actually used CNN's Fareed Zakaria to support his view that letting the Bush tax cuts expire would be a good thing for the nation.

Ironically, that was the only thing remotely funny about this sketch (video follows with partial transcript and commentary, extreme vulgarity warning, see BMI's coverage as well):

This is a historic year for the largest government program: Social Security, which turns 75 in just a few days. The program is also running a deficit for the first time since 1983, and ahead of estimates.

Initially, Social Security was created to provide supplemental income to elderly and disabled people who could not work, and was signed into law by President Franklin D. Roosevelt Aug. 14, 1935.

Social Security is in the red six years earlier than forecasted, and for the first time since 1983 (the last time the program was "fixed"). Downplaying the significance of the problem, The New York Times reported March 24, that the program is facing a "small" $29 billion shortfall this year because the high 9.5 percent unemployment rate is cutting into payroll tax collections that fund the program's benefits. Oh, and because there isn't actually a trust fund with all the money previously collected by people paying into the system.

Problems are mounting for the Social Security program which essentially is a government-created "Ponzi scheme." It was a boon for the earliest entrants to the program like Ida May Fuller. She was the recipient of the first monthly retirement check, in 1940, and continued to collect until her death in 1975. Fuller worked only three years under the system: paying in $24.75 in taxes. By the time of her death she had collected a total of $22,888.92 according to the Social Security Administration.

Republican Congressman Paul Ryan of Wisconsin has struck back at Paul Krugman calling the New York Times columnist "intellectually lazy."

As NewsBusters reported Saturday, Krugman wrote an article the previous day castigating Ryan as "The Flimflam Man" calling the Congressman a "charlatan" and a "fraud" while claiming his "Roadmap" to balance the nation's budget was "drenched in flimflam sauce."

Krugman's criticisms of the Republican rising star were of course praised by all manner of media member from the shills at MSNBC to the sycophants in the liberal blogosphere.

Since then, Ryan has responded and responded well, first at the Milwaukee Journal Sentinel on Saturday:

As media predictably pound the table for Congress to allow the Bush tax cuts to expire, an interesting analysis by Washington Post contributor Robert J. Samuelson should raise a caution flag.

Higher taxes inhibit couples from having children which in other developed nations has led to longterm economic paralysis.

In a western civilization that got drunk on entitlement programs in the previous century, population growth is essential as all of these schemes have a Ponzi component to them: they only work if you continually have new people entering the system to pay for those collecting benefits.

As Samuelson outlined in the Post Monday, our federal income tax structure is quite at odds with our best interests as a nation:

Bad economic news just keeps piling up. Today, the news about jobless claims from the AP:

Initial requests for jobless benefits rose last week to their highest level since April, a sign that hiring remains weak and some companies are still cutting workers.

The Labor Department said Thursday that new claims for unemployment insurance rose by 19,000 to a seasonally adjusted 479,000. Analysts had expected a small drop. Claims have risen twice in the past three weeks.

Surprise!

And then, there's Gallup's small business indicator which would portend bad news in the next year:

Chris Matthews on Monday got a much-needed lesson from Rep. Paul Ryan (R-Wisc.) on how tax hikes impact the budget as well as the economy.

"Congressman Ryan, is there any tax role for reducing our $1.4 trillion to $1.7 trillion debt this year -- deficit this year?" Matthews asked during the 5PM installment of MSNBC's "Hardball." "Is there any role in tax increasing to help do that job?"

When Ryan gave an answer Matthews didn't like, the host arrogantly responded, "So, you won`t cut -- you won`t raise taxes and you won`t cut spending...All this bitching about the deficit doesn`t mean squat, because you won`t do either, raise taxes or reduce spending."

With the ball nicely teed up, Ryan unleashed a drive down the middle of the fairway that would make Tiger Woods proud (video follows with transcript and commentary, h/t Twitter's @LFRGary):  

Once again, it's clear that reading editorials and op-eds at publications like the Wall Street Journal and Investors Business Daily becomes a requirement to be truly informed when a Democratic administration in power.

On July 6, Peter Ferrara at IBD noted that the annual report from the trustees of the Social Security and Medicare system is long overdue, and wondered why:

Are Overdue Reports Concealing ObamaCare Impact On Medicare?

Every year, the Annual Report of the Social Security Board of Trustees comes out between mid-April and mid-May. Now it's July, and there's no sign of this year's report. What is the Obama administration hiding?

Jeanne Sahadi at CNNMoney.com has finally realized Social Security needs urgent reform - and by reform, she means going after the wealthy, of course.

On Monday, Sahadi reported on news from the Congressional Budget Office that Social Security is dipping into savings already this year and will not be able to meet its obligations by 2037. That's at least 15 years earlier than what the CBO had predicted during the last administration, and with 27 years to go it's entirely possible the deadline will move again, especially if the current recession persists.

But Sahadi wasn't worried. In fact, she began her piece by saying "it should be a snap" to rescue the program from bankruptcy.

After blissfully assuring readers that Social Security will be fine for another 27 years, Sahadi offered three easy-peasy steps that could be enacted over time to make the program solvent. Sadly, those three ideas were all too predictable:

A $787-billion stimulus. Liabilities of $356 billion for the TARP bailout on the federal government's balance sheet. And that's in addition to other unfunded liabilities from federal entitlements like ObamaCare, Medicare, and Social Security.

But that doesn't mean the U.S. is heading down the path toward socialism because they were one-time expenditures, according to CNBC senior economics reporter Steve Liesman.

On CNBC's "Squawk Box" April 29, as jobless claims for the week was being released on the floor of the CME Group in Chicago, co-host Joe Kernen asked for Liesman's opinion.

The Pentagon rescinded the invitation of evangelist Franklin Graham to speak at its May 6 National Day of Prayer event because of complaints about his previous comments about Islam.

The Military Religious Freedom Foundation expressed its concern over Graham's involvement with the event in an April 19 letter sent to Secretary of Defense Robert Gates. MRFF's complaint about Graham, the son of Rev. Billy Graham, focused on remarks he made after 9/11 in which he called Islam "wicked" and "evil" and his lack of apology for those words.

Col. Tom Collins, an Army spokesman, told ABC News on April 22, "This Army honors all faiths and tries to inculcate our soldiers and work force with an appreciation of all faiths and his past comments just were not appropriate for this venue."

The establishment press has for decades and almost without exception insisted that FDR's sacrosanct legacy of Social Security can go on and on with only minor tweaks, and that if trouble looms, it's way out there in 2040 or so when the "Trust Fund" is depleted. The problem is that during that time the federal government has raided the annual surpluses generated by "Trust Fund" which now consists almost entirely of IOUs from the rest of the government. Meanwhile, annual surpluses, where tax collections exceed benefits paid and which were well over $100 billion just a couple of years ago, have vanished, and aren't coming back to any significant degree.

Another mythology is under development: That the just-passed ObamaCare legislation has "saved" Medicare. The Social Security/Medicare Trustees report is being delayed until June 30 to incorporate the effects of the recently passed ObamaCare on the health of Medicare. It will supposedly tell us that the life of the Medicare "Trust Fund" has been magically extended by about a decade. (Raise your hand if you think the Trustees are under immense political pressure to issue a favorable verdict regardless of the facts.)

In his Tuesday coverage of a government official's leak to the Associated Press about the report's delay in advance of the official administration announcement, the AP's Martin Crutsinger spun these and other fairy tales in his stout defense for the fiscally destructive programs. But in doing so, he perhaps inadvertently revealed that Congress and the administration had no idea of the true future impact of ObamaCare.

Here are key paragraphs from Crutsinger's report (footnotes are mine, and are explained later):

Wondering how much faith the left has in your ability to run your own life? Chris Matthews was brutally honest today when he criticized that "idealistic notion" of self-reliance that ignorant conservatives insist on pushing.

Matthews apparently believes that without massive social welfare programs like Medicare and Social Security, there would be "poor people all over the place, old people lying in the streets," and the nation would look like "Calcutta."

He made these absurd claims -- and they are absurd -- on yesterday's Hardball, and went on to call for a more robust "social state," complaining that lefty bloggers had not done enough to make it seem more desirable to the American people (h/t Gateway Pundit).

PBS's Jim Lehrer on Tuesday wrongly accused Republicans of always being against major social legislation in this country including the Civil Rights Act, Social Security, and Medicare.

"[T]hrough history, recent history in particular, Republicans have opposed things like Social Security, Medicare, even civil rights legislation, but then, once they lost, they took some deep breaths and moved on, and then finally ended up embracing many of these major changes in -- in laws and in the way we do business here," the News Hour host amazingly said to his guest Sen. Jon Kyl (R-Ariz.).

Of course, nothing could be further from the truth, and Kyl quickly corrected Lehrer (video embedded below the fold with partial transcript and commentary, relevant section at 4:40, h/t Cubachi):

In David Leonhardt's latest "Economic Scene" column for the New York Times, "The Perils Of Pay Less, Get More," he reestablished his reputation as the paper's neo-liberal economic voice, admitting that at a certain point taxes hurt economic growth, but also urging Obama to break his pledge and raise taxes on everyone, not just people making over $250,000 a year, in order to cut the deficit.

Leonhardt has certainly changed his mind about Obama's tax pledge. In a huge August 2008 story for the New York Times Magazine, Leonhardt actually promoted Obama's popular campaign promise to reduce taxes for those making under $250,000, in the name of addressing "inequality":

Obama's agenda starts not with raising taxes to reduce the deficit, as Clinton's ended up doing, but with changing the tax code so that families making more than $250,000 a year pay more taxes and nearly everyone else pays less. That would begin to address inequality.

The Associated Press's timing couldn't have been better for those who still want to pretend that Social Security is really not in serious trouble. Stephen Ohlemacher's item ("Social Security to start cashing Uncle Sam's IOUs") originally appeared on Sunday, in the midst of most of the major college basketball conference tournament championships, then followed by the evening's announcement of the selections for the NCAA Division I Men's basketball tournament. (The AP has issued minor revisions several times since its original appearance, up to and including today.)

The wire service's timing, while convenient for the Washington establishment, as it minimizes the possibility of distractions from its statist health care obsession, couldn't have been worse for those of us who wish the American people would get a grip on the gravity of the situation -- which is why I saved this post for today.

What is about to occur is the event that as little as a year ago, according to the Social Security Trustees' 2009 Report, wasn't expected to arrive until 2016. Ohlemacher tells us that it's right here, right now, and gets the reporting right until his seventh paragraph (bolds are mine):

Social Security to start cashing Uncle Sam's IOUs

Imagine the audacity of wanting to dispose of your own money as you see fit? The idea is hateful to Bill Scher of the Huffington Post, who demanded in "Super Wealthy Deathly Afraid Estate Tax Would Reduce Deficit" on March 9 that the wealthy "pay their fair share."

Scher railed against the Bush tax cuts, and asserted that a 35-45 percent inheritance penalty (the estate tax or death tax) isn't punitive enough to stem the deficit crisis. 

"But those massive tax breaks to the superwealthy don't quite have the same juice they used to. Especially, the estate tax - levied on the inheritances of the wealthiest heirs in America," Scher wrote. "This year, because of the Bush tax plan from his first term to gradually phase out the estate tax altogether, the estate tax is literally wiped off the books."

Americans have been so bombarded with the word "crisis," it appears to have lost all meaning. But according to a distinguished scholar at the Cato Institute, there is a real, serious crisis pending in America's addiction to entitlement programs, government-dependence, and imaginary "rights" to live off future generations.

"You will have to look into the future, do the responsible thing, and begin moving toward a system of personal accounts. That is the only long-term solution," said Jose Pinera of America's social security and pension system.

Pinera knows what he's talking about - he's the architect of social security reform in Chile. Introducing a recent interview with Pinera, Fox Business Network's Brian Sullivan said, "Thirty years ago, the social security system of Chile was broke, flat-busted.  Entitlement reform was just destroying the nation's finances. In walks the Harvard-educated Jose Pinera. He pushed through by force of will a plan to privatize their entire entitlement system and social security - there is no government social security in Chile now - and everybody has a private account."