Dean Baker: Manufacturing deficit fear to kill Social Security and Medicare

Manufacturing Deficit Fear: On Holding Economic Journalists to Account
Pursuing a plan to kill social security, politicians are relying on a credulous public and compliant media to ramp up debt panic
by Dean Baker
July 11, 2011

How about that $14.3 trillion figure for the debt ceiling? That's a really big number, really scary. So is just about every number connected with the United States budget. We are a huge country with a huge economy. Competent reporters would focus on this being about 90% of US GDP.

Is that big? Well, the debt to GDP ratio was over 110% after the second world war. The United Kingdom had debt to GDP ratios of more than 100% for much of the 19th century, as it was establishing itself as the world's pre-eminent industrial power. Japan has a debt to GDP ratio of more than 220% of GDP and can still borrow in financial markets long-term at interest rates of less than 1.5%.

So, what's the problem? The politicians who want to cut social security and Medicare obviously want the public to believe that there is a huge problem and – due to the incompetence of the media – they have managed to instill fear throughout the nation about this massive non-problem.

.... when a politician asserts that social security is going bankrupt and that there will not be anything left for her children or grandchildren, serious reporters would ridicule her for being ignorant of the social security trustees projections. These projections show that even if nothing is ever done to change the programme, future beneficiaries will always be able to collect a higher benefit than current retirees. The "nothing there for our children" would be treated as a serious gaffe, sort of like then Senator Obama's comment before the Pennsylvania primary about working-class people being bitter and clinging to guns and religion. The difference is that the social security comment has direct relevance for policies that affect people's lives.

Read the full article at:

http://www.guardian.co.uk/commentisfree/cifamerica/2011/jul/11/social-security-debt-ceiling-talks

Tax breaks should go to people who are doing something for this country.

White House, Democratic lawmakers cut deal on deficit commission

By Lori Montgomery
Washington Post Staff Writer
Wednesday, January 20, 2010

Faced with growing alarm over the nation's soaring debt, the White House and congressional Democrats tentatively agreed Tuesday to create an independent budget commission and to put its recommendations for fiscal solvency to a vote in Congress by the end of this year.

Under the agreement, President Obama would issue an executive order to create an 18-member panel that would be granted broad authority to propose changes in the tax code and in the massive federal entitlement programs -- including Medicare, Medicaid and Social Security -- that threaten to drive the nation's debt to levels not seen since World War II.

(...)

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=103&topic_id=569194&mesg_id=569205

Main thread: There Is No Economic Justification for Deficit Reduction
-James K. Galbraith
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=103&topic_id=569194&mesg_id=569194

K & R for Dean Baker.

I wish we had a true Progressive President in the WH. If we did, Galbraith and Dean Baker would on his economics team, rather than the Goldman Sachs boys who caused the problems in the first place.

http://www.newdeal20.org/2011/07/11/hawk-nation-a-guide-to-the-catastrophic-debt-ceiling-debate-51211/

by James K. Galbraith

note - have not read it yet.

I was just checking his own website today for recent or current reaction to the last few days. Didn't think to check NewDeal2.0

It's not pretty.


President Obama’s proposed debt ceiling deal is a disastrous solution to an imaginary fiscal crisis, but the pain it causes will be all too real.