19 February 2010

more from our 'socialist' president

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Weekend Edition
19 - 21 February 2010

Wall Street Targets the Elderly

Looting Social Security

Hank Paulson, the Gold Sacks bankster/US Treasury Secretary, who deregulated the financial system, caused a world crisis that wrecked the prospects of foreign banks and governments, caused millions of Americans to lose retirement savings, homes, and jobs, and left taxpayers burdened with multi-trillions of dollars of new US debt, is still not in jail. He is writing in the New York Times urging that the mess he caused be fixed by taking away from working Americans the Social Security and Medicare for which they have paid in earmarked taxes all their working lives.

Wall Street's approach to the poor has always been to drive them deeper into the ground.

As there is no money to be made from the poor, Wall Street fleeces them by yanking away their entitlements. It has always been thus. During the Reagan administration, Wall Street decided to boost the values of its bond and stock portfolios by using Social Security revenues to lower budget deficits. Wall Street figured that lower deficits would mean lower interest rates and higher bond and stock prices.

Two Wall Street henchmen, Alan Greenspan and David Stockman, set up the Social Security raid in this way: The Carter administration had put Social Security in the black for the foreseeable future by establishing a schedule for future Social Security payroll tax increases. Greenspan and Stockman conspired to phase in the payroll tax increases earlier than was needed in order to gain surplus Social Security revenues that could be used to finance other government spending, thus reducing the budget deficit. They sold it to President Reagan as "putting Social Security on a sound basis."

Along the way Americans were told that the surplus revenues were going into a special Social Security trust fund at the U.S. Treasury. But what is in the fund is Treasury IOUs for the spent revenues. When the "trust funds" are needed to pay Social Security benefits, the Treasury will have to sell more debt in order to redeem the IOUs.

Social Security was mugged again during the Clinton administration when the Boskin Commission jimmied the Consumer Price Index in order to reduce the inflation adjustments that Social Security recipients receive, thus diverting money from Social Security retirees to other uses.

We constantly hear from Wall Street gangsters and from Republicans and an occasional Democrat that Social Security and Medicare are a form of welfare that we can't afford, an "unfunded liability." This is a lie. Social Security is funded with an earmarked tax. People pay for Social Security and Medicare all their working lives. It is a pay-as-you-go system in which the taxes paid by those working fund those who are retired.

Currently these systems are not in deficit. The problem is that government is using earmarked revenues for other purposes. Indeed, since the 1980s Social Security revenues have been used to fund general government. Today Social Security revenues are being used to fund trillion dollar bailouts for Wall Street and to fund the Bush/Obama wars of aggression against Muslims.

Having diverted Social Security revenues to war and Wall Street, Paulson says there is no alternative but to take the promised benefits away from those who have paid for them.

Republicans have extraordinary animosity toward the poor. In an effort to talk retirees out of their support systems, Republicans frequently describe Social Security as a Ponzi scheme and "unsustainable." They ought to know. The phony trust fund, which they set up to hide the fact that Wall Street and the Pentagon are running off with Social Security revenues, is a Ponzi scheme. Social Security itself has been with us since the 1930s and has yet to wreck our lives and budget. But it only took Hank Paulson's derivative Ponzi scheme and its bailout a few years to inflict irreparable damage on our lives and budget.

Years ago with stagflation defeated and a rising stock market, I favored privatizing Social Security as a way of creating a funded retirement system and producing greater savings and larger incomes for retirees. At that time Wall Street was interested, not for my reasons, but in order to collect the fees from managing the funds.

Had Social Security been privatized, I doubt that Wall Street would have been permitted to deregulate the financial system. Too much would have been at stake.

After the latest crisis brought on by Wall Street’s dishonesty and greed, trusting Wall Street to manage anyone's old age pension requires a leap of faith that no intelligent person can make.

Wall Street has got away with its raid on the public treasury. Now, pockets full, it wants to pay for the heist by curtailing Social Security and Medicare. Having deprived the working population of homes, jobs, and health care, Wall Street is now after the elderly's old age security.

Social Security, formerly an untouchable "third rail of politics," is now "unsustainable," while the real unsustainables—a pre-1929 unregulated financial system and open-ended multi-trillion dollar Global War Against Terror—are the new untouchables. This transformation signals the complete capture of American democracy by an oligarchy of special interests.

And, while we're at it, here's the punchline from an earlier piece:
Hapless Americans, unrepresented and betrayed, are in store for a greater crisis to come. President Bush’s war deficits were financed by America’s trade deficit. China, Japan, and OPEC, with whom the U.S. runs trade deficits, used their trade surpluses to purchase U.S. Treasury debt, thus financing the U.S. government budget deficit.

The problem now is that the U.S. budget deficits have suddenly grown immensely from wars, bankster bailouts, jobs stimulus programs, and lower tax revenues as a result of the serious recession. Budget deficits are now three times the size of the trade deficit. Thus, the surpluses of China, Japan, and OPEC are insufficient to take the newly issued U.S. government debt off the market.

If the Treasury’s bonds can’t be sold to investors, pension funds, banks, and foreign governments, the Federal Reserve will have to purchase them by creating new money. When the rest of the world realizes the inflationary implications, the US dollar will lose its reserve currency role. When that happens Americans will experience a large economic shock as their living standards take another big hit.

America is on its way to becoming a country of serfs ruled by oligarchs.


  1. Oh God!

    Here we go again...

    Rep. Conyers plans hearings on Bush torture lawyers


    I've heard so damn many hearings that I have gone deaf!

  2. Obama appoints panel to slash social programs

    So I guess I'll be working until I die!

  3. ...assuming they will even LET you. Right now they're doing their best to put yer boss outta business and if they fail, they will buy the business, and yer outta there either way. Fuck Off and Die is our motto.



    IT'S CRAP!


  6. Oh sheesh... the previous didn't finish posting - came back here 30 minutes later and it was still sitting there LOL

  7. Color in your headlines...

    Intentional, unintentional?

  8. Since I do all my code by hand, I haven't succumbed to my urge to do this regularly. So I just do it on Counterpunch pieces when I steal the code. Maybe now that I've quit Brad I will start doing it all the time. Sorta zings things up a bit, don't you think? I wanted to do this color for my links but a couple of regulars complained they had bad monitors and colorblindness so I did the underline thing instead.

    I dunno. It's a lot of work. I won't do the buttons because they mess up my format, and I have NO idea why or how, when the template is the damn template, but they DO and so I stick to typing in the code myself.

  9. I like the color.

    The problem I had with the links was that they looked the same as the rest of the fonts on most monitors I tried. If i squinted and looked really closely on my good home LED monitor I could pick them out.

  10. Well, if I change my links to THIS color, there'll suddenly be a lot of brick red here, that fights with the temperature theme. I was thinking of doing post template code to turn just the post links this color... but....

    I don't know. I changed my masthead to black and got rid of the notion of text color schemes... and find I rather like it... but now I'm thinking of doing maybe the larger font different color letter thing or something like that.

    But I'm also still trying to get the mental space to do my own site....

    Not sure I want to keep putting all this work into something Google can just rip out from under me at any moment.

    I don't know.

  11. the larger font different color letter thing or something like that.

    That's what like - The title block and first letter of the article.

  12. That's what I like...

    Sheesh - just waking up.


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