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Posts Tagged ‘Pete Peterson’

Memo To Social Security Scaremongers: Productivity Gains Trump Demographic Change

Posted by Phoenix Woman on December 24, 2012

Dean Baker chart showing productivity growth trumps demographic change

Oh, dear. Fareed Zakaria doesn’t understand (or is paid not to understand, in finest Upton Sinclair fashion) why we silly liberals don’t understand that Grandma must be put out on an ice floe so Pete Peterson can have a few more swimming pools:

The American left has trained its sights on a new enemy: Pete Peterson. The banker and private-equity billionaire is, at first glance, an obvious target—rich and Republican. He stands accused of being the evil genius behind all the forces urging Washington to do something about the national debt.


The facts are hard to dispute. In 1900, 1 in 25 Americans was over the age of 65. In 2030, just 18 years from now, 1 in 5 Americans will be over 65. We will be a nation that looks like Florida. Because we have a large array of programs that provide guaranteed benefits to the elderly, this has huge budgetary implications. In 1960 there were about five working Americans for every retiree. By 2025, there will be just over two workers per retiree. In 1975 Social Security, Medicare and Medicaid made up 25% of federal spending. Today they add up to a whopping 40%. And within a decade, these programs will take up over half of all federal outlays.

Too bad that Zakaria’s much-touted facts are irrelevant to the discussion at hand.

In the course of spanking Zakaria, the CEPR’s Dean Baker points out a key fact that is quite relevant, which is that even modest gains in productivity growth far outweight the impact of demographics:

Note that even in the most pessimistic productivity story, the slowest rate of productivity growth of the post-war era, the impact of productivity in raising living standards is more than three times as large as the impact of demographics in reducing them. Furthermore, this takes 2035 as an endpoint. After that year there is little projected change in demographics for the rest of the century whereas productivity will continue to grow.

See also the chart above, from his article. The calculations backing it up are here.

If anyone out there still reads Time magazine, feel free to send this to the editors thereof.

Posted in Uncategorized | Tagged: , , , , | 5 Comments »

Washington Post and Lori Montgomery Squarely on the Side of the 1%

Posted by Phoenix Woman on October 30, 2011

Just in case it wasn’t clear before.

The WaPo’s Lori Montgomery did another Pete Peterson Special Hit Job on Social Security today:

Last year, as a debate over the runaway national debt gathered steam in Washington, Social Security passed a treacherous milestone. It went “cash negative.”
For most of its 75-year history, the program had paid its own way through a dedicated stream of payroll taxes, even generating huge surpluses for the past two decades. But in 2010, under the strain of a recession that caused tax revenue to plummet, the cost of benefits outstripped tax collections for the first time since the early 1980s.

Here’s what Ms. Montgomery won’t tell you, courtesy of Dean Baker:

News outlets generally like to claim a separation between their editorial pages and their news pages. The Washington Post has long ignored this distinction in pursuing its agenda for cutting Social Security, however it took a big step further in tearing down this barrier with a lead front page story that would have been excluded from most opinion pages because of all the inaccuracies it contained.

The basic premise of the story, as expressed in the headline (“the debt fallout: how Social Security went ‘cash negative’ earlier than expected”) and the first paragraph (“Last year, as a debate over the runaway national debt gathered steam in Washington, Social Security passed a treacherous milestone. It went ‘cash negative.'”) is that Social Security faces some sort of crisis because it is paying out more in benefits than it collects in taxes. [The “runaway national debt” is also a Washington Post invention. The deficits have soared in recent years because of the economic downturn following the collapse of the housing bubble. No responsible newspaper would discuss this as problem of the budget as opposed to a problem with a horribly underemployed economy.]

This “treacherous milestone” is entirely the Post’s invention, it has absolutely nothing to do with the law that governs Social Security benefit payments. Under the law, as long as their is money in the trust fund, then Social Security is able to pay full benefiits. There is literally no other possible interpretation of the law.

As the article notes the trust fund currently holds $2.6 trillion in government bonds, so it is nowhere close to being unable to pay benefits. The whole point of building up the trust fund was to help cover costs at a future date when taxes would not be sufficient to cover full benefits. Rather than posing any sort of crisis, this is exactly what had been planned when Congress last made major changes to the program in 1983 based on the recommendations of the Greenspan commission.

The article makes great efforts to confuse readers about the status of the trust fund. It tells readers:

“The $2.6 trillion Social Security trust fund will provide little relief. The government has borrowed every cent and now must raise taxes, cut spending or borrow more heavily from outside investors to keep benefit checks flowing.”

This is the same situation the the government faces when Wall Street investment banker Peter Peterson or any other holder of government bonds decides to cash in their bonds when they become due. In such cases it “must raise taxes, cut spending or borrow more heavily from outside investors.” The Post’s reporters and editors should understand this fact.

Go read the whole of Baker’s takedown of Montgomery’s piece. It may save your retirement.

Posted in Uncategorized | Tagged: , , , , , | 3 Comments »

Krugman on Obama’s Planned Social Security Sellout

Posted by Phoenix Woman on July 9, 2011

There have been a lot of comments about President Obama’s plan to sell out Americans and make drastic cuts to both Medicare and Social Security and make catfood the staple of most elderly persons. But I think I’ll settle for citing Paul Krugman’s:

But let’s be frank. It’s getting harder and harder to trust Mr. Obama’s motives in the budget fight, given the way his economic rhetoric has veered to the right. In fact, if all you did was listen to his speeches, you might conclude that he basically shares the G.O.P.’s diagnosis of what ails our economy and what should be done to fix it. And maybe that’s not a false impression; maybe it’s the simple truth.

One striking example of this rightward shift came in last weekend’s presidential address, in which Mr. Obama had this to say about the economics of the budget: “Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.”

That’s three of the right’s favorite economic fallacies in just two sentences. No, the government shouldn’t budget the way families do; on the contrary, trying to balance the budget in times of economic distress is a recipe for deepening the slump. Spending cuts right now wouldn’t “put the economy on sounder footing.” They would reduce growth and raise unemployment. And last but not least, businesses aren’t holding back because they lack confidence in government policies; they’re holding back because they don’t have enough customers — a problem that would be made worse, not better, by short-term spending cuts.


Mr. Obama’s people will no doubt argue that their fellow party members should trust him, that whatever deal emerges was the best he could get. But it’s hard to see why a president who has gone out of his way to echo Republican rhetoric and endorse false conservative views deserves that kind of trust.


(Crossposted to Renaissance Post.)

Posted in 'starving the beast', (Rich) Taxpayers League | Tagged: , , , , , | 2 Comments »

Robert Samuelson Wants You to Starve, Unless You’re In His Tax Bracket

Posted by Phoenix Woman on June 30, 2011

Hard to draw any other conclusion when he absolutely refuses to consider raising taxes on the rich as a way to deal with the deficit and blatantly sides with the Republicans:

>> The truth is that most liberals have no stomach for cutting spending, especially on the Social Security and Medicare programs that dominate the nation’s long-term budget problems. There’s a legitimate argument over the size and timing of spending cuts. It may well be, as the letter [signed by 235 economists urging that the budget not be balanced by slashing social spending] contends, that too many cuts too soon would imperil a “fragile” economic recovery. But the letter doesn’t say one word about *ever* cutting spending; it doesn’t mention that huge long-term budget deficits might pose an economic threat (a position held by many economists); it doesn’t suggest that Social Security and Medicare benefits might have to be curbed.

Samuelson correctly mentions out that the 235 economists did not say certain things. What he doesn’t mention is that these things are are not true, even though he assumes they are true — or rather, wants these things to be true. Therefore, he concludes, the fact the 235 economists didn’t mention those untrue thngs is a sign of how irresponsible Democrats are on spending.

In other news, scientists are irresponsibly covering up the existence of a vast subterranean world full of barbaric mole men plotting to take over the surface world. I know this because none of them ever mention it — or so Samuelson would say.

Posted in Uncategorized | Tagged: , , , , , , , | 2 Comments »

Moneyed Interests: Better to Starve Your Grandma than Raise Our Taxes!

Posted by Phoenix Woman on April 18, 2011

The countless tens of millions Pete Peterson and many of his fellow billionaires and zillionaires have spent over the decades to promote the destruction of Social Security, combined with the effects of the Citizens United ruling causing Democrats to feel they must suck up to the same rich entities Republicans commonly do in order not to be swamped in all future elections, are giving us obscene spectacles like this:

Sen. Mark Warner (D-Va.) said on Sunday the “Gang of Six” senators is “very close” to a deal on deficit reduction, suggesting the plan would impact Social Security that most Democrats have said is off limits.


Asked by host Bob Schieffer to clarify that the group will take on Social Security, Warner said, “Part of this is just math: 16 workers for every one retiree 50 years ago, three workers for every retiree now.”

Senator Warner is spewing Pete-Peterson-promoted irrelevant nonsense. Here’s the truth:

Myth: Social Security is a victim of the aging baby boom, reflected in the ratio of workers to retirees, which used to be 16 to 1, is now 3 to 1, and in 2030, will be 2 to 1.

Reality: Today’s projected deficit has nothing to do with the size of the baby boom or worker to retiree ratios. The 16 to 1 ratio is a meaningless factoid, plucked from 1950, a year when Social Security was expanded to cover millions of new workers. The ratio never influenced policy in the slightest. It is the kind of ratio experienced by all pension plans, public and private at the start when few workers have yet qualified for benefits; the 2 to 1 ratio is meaningful and does translate into higher costs, but those costs were addressed decades ago. Congress has enacted ten significant Social Security bills since 1950. Every enactment has taken into account the baby boom, and each has left the program in long-run actuarial balance. The most recent enactment was in 1983, when the program was in balance through 2057 – the year the youngest boomers, those born in 1964, will turn 93. How social security went from a projected surplus through 2057, when most of the baby boom will be dead, to today’s projected deficit involves a number of factors, mainly related to changes in assumptions about wage growth, productivity and disability rates. The change from surplus to deficit is totally unrelated to the number of baby boomers, as one would surmise. After all, no new baby boomers have been born since 1983.

So why is Mark Warner, who should know better, spouting garbage like the Ratio Myth?

The only answer that makes sense is his desire to rake in the campaign cash from all the rich people and corporations that love the Bush tax cuts and want to keep them — as well as all the rich corporations like GE that through having bought off enough legislators to change the law, legally pay no or nearly no taxes whatsoever. Even for those rich people whose tax obligations haven’t been officially made to vanish, the IRS has been made so weak in their regard as to allow them to skip paying taxes with near impunity.

(Crossposted to Renaissance Post.)

Posted in 'starving the beast', (Rich) Taxpayers League | Tagged: , , , , | 2 Comments »

What Happens When a Billionaire Right-Winger Who Hates Social Security Spends Million$ to Undermine It?

Posted by Phoenix Woman on January 29, 2011

What happens when you have a billionaire right-winger (Pete Peterson) who along with other rich right-wingers has had a hate-on for Social Security for several decades and has spent tens of millions on various enterprises (his “Concord Coalition” and “Fiscal Times” come most quickly to mind) in order to destroy it by embedding lies about it into our mainstream media?

You get garbage like this from the AP’s Stephen Ohlemacher: “Sick and getting sicker, Social Security will run at a deficit this year and keep on running in the red until its trust funds are drained by about 2037, congressional budget experts said Wednesday in bleaker-than-previous estimates.”

As economic reporter Joshua Holland says, this is just flat-out wrong:

Is it “sick”? Social Security has $2.5 trillion in T-Bills sitting in a trust fund, is financed through 2037 and if nothing were to change it would still be able to pay out higher benefits than it does today, indefinitely.

Is it getting sicker? Well, the 2000 Social Security Trustees’s report (PDF) projected that the trust fund would run out in … 2037. But the 1997 report (PDF) expected the trust fund to be depleted by 2029 — 8 years earlier than currently projected. So in that sense, it’s “healthier” today than it was 13 years ago.

That’s not the end of the lies being spewed by Ohlemacher. Holland notes the following:

When he says the program is “in the red” what he’s talking about is that current tax revenues being paid into the system have fallen below current benefit payments. Which should be unsurprising with wages stagnating and an unemployment rate of 9.4 percent.

But what’s unsaid is that the Social Security’s revenues aren’t limited to current tax receipts, thanks to the interest earned on those T-Bills in the trust fund. They earned 5.1 percent in 2008, and 4.8 percent in 2009.

When you include that earned interest, as any honest reporter must do, the program has not “gone into the red,” and — if we define “going into the red” as total annual outlays exceeding total income, including interest income — it won’t until at least 2018, according to the Trustees’ latest report (PDF).

Yes, the Trust Fund grew last year, is growing this year, and will continue to grow for several more years, until it reaches a projected $4.2 trillion dollars.

Go read Holland’s entire piece — it’s worth it. And while you’re at it, check out my earlier debunking of the “Social Security must be destroyed in order to save it” myth pushed by the privatizers back when Bush was in office.

(Crossposted to Renaissance Post.)

Posted in Social Security | Tagged: , | 1 Comment »

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