The Truth Is . . .

Michael Hiltzik at the L.A. Times explains the push to reform Social Security:

The truth is that there are two separate tax programs at work here — the payroll tax and the income tax... The first pays for Social Security and the second for the rest of the federal budget. Most Americans pay more payroll tax than income tax. Not until you pull in $200,000 or more ... are you likely to pay more in income tax than payroll tax. ...
Since 1983, the money from all payroll taxpayers has been building up the Social Security surplus, swelling the trust fund. What's happened to the money? It's been borrowed by the federal government and spent on federal programs — housing, stimulus, war and a big income tax cut for the richest Americans, enacted under President George W. Bush in 2001. In other words, money from the taxpayers at the lower end of the income scale has been spent to help out those at the higher end. That transfer — that loan, to characterize it accurately — is represented by the Treasury bonds held by the trust fund.
The interest on those bonds, and the eventual redemption of the principal, should have to be paid for by income taxpayers, who reaped the direct benefits from borrowing the money. So all the whining you hear about how redeeming the trust fund will require a tax hike we can't afford is simply the sound of wealthy taxpayers trying to skip out on a bill about to come due. The next time someone tells you the trust fund is full of worthless IOUs, try to guess what tax bracket he's in. ...

Who to Blame, II?

Dean Baker:

". . . the economic crisis was entirely predictable and predicted by people who understand economics. The more obvious problem is the incentive structure within the economics profession. It provides economists with no incentive to break with conventional wisdom even when it is obviously wrong and provides no sanction against those whose failure to break with conventional wisdom led to disastrous consequences for the economy and the country.

Unless this incentive structure is changed, no improvements in methodology will make any difference at all."

Who to Blame? Who to Blame?

There really isn't adequate space to address the extraordinary drop in American prestige that accompanied a war of aggression fought for bogus reasons, the use of torture as official U.S. policy, massive increases in poverty and inequality, and the world-wide economic collapse largely brought about by irresponsible American financial institutions.

And the current Republican response to this record of shame is to say give us another shot to make it all happen again.

Again, I want to deal with the broader failings of a more bipartisan elite, but feel like this is the necessary pre-condition to understanding that Republicans generally and conservatives specifically, on a virtually across-the-board basis, have laid our country low in ways that are almost too numerous to quantify. Sadly, as I will demonstrate later, the people who should have provided some check on this gang that couldn't shoot straight failed almost as miserably, continue to fail us to this day, and in most instances, seem to have learned nothing by their failures.

Indeed, it continues to be remarkably difficult to figure out who is more responsible for America's failure: Neocons or Neoliberals, the Right or the Center, the Republicans or the Feckless Democrats or the Media, the complacent Elite or the ignorant and resentful People.

No one appears to have changed their minds about anything.

A Plan, a Project, an Ideology

bob mcmanus, commenting at Economist's View:

. . . this recession is not a mistake, not an error, nor a failure, not incompetence, not even complicated in motives or intent.

It is a plan, a project, an ideology.

I am getting very tired of "liberal" economists and pundits acting befuddled over why the PTB don't do X or do y;why the Fed won't loosen;why Congress won't enact fiscal stimulus; why Obama won't push mortgage cramdowns or why there was no public option or why Pete Peterson has such influence.

They know what they are doing and they are doing it very well indeed. I really don't see how they can be stopped, short of social unrest.

The gradually spreading recognition that the people, who run the country under the Democratic Party are pretty much the same people, who run the country under the Republican Party -- that we traded an Administration dominated by Big Oil and sympathetic to Big Finance for an Administration dominated by Big Finance and sympathetic to Big Oil -- will have an unexpected effects.