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November 15, 2007

More Obama On Social Security

From the New Yorker:

...on Social Security he proposes what is, in effect, a large tax hike. These issues all have one thing in common: Hillary Clinton’s positions are artfully vague—aimed at surviving the general election—while Obama insists that it is more important to be forthcoming.

On Social Security, Clinton has avoided a detailed approach to fixing the system, which is expected to run out of money by the twenty-forties; for now, she would appoint a trusty “bipartisan commission” to recommend solutions. Obama proposes raising the ceiling on income that is subject to the payroll tax. As a political strategy, this appears to be a terrible idea. A potential crisis in the Social Security system is a long way off. Why, then, would a new President spend political capital on yet another tax hike when he will almost certainly seek to undo the Bush tax cuts for more immediate demands, like universal health care? When I asked Obama about this, he smiled and leaned forward, as if eager to explain that my premise was precisely the politically calibrated approach that he wanted to challenge. “What I think you’re asserting is that it makes sense for us to continue hiding the ball,” Obama said, “and not tell the American people the truth—”

I interrupted: “Politically it makes sense—”

He finished the sentence: “—to not tell people what we really think?”

Horrible politics, horrible policy, all wrapped up in one. Impressive.

Also impressive is the New Yorker's inability to describe Social Security accurately. While the Social Security trust fund is projected to be exhausted in 35-40 years, Social Security would not and could not "run out of money." Even after the trust fund was all spent, payroll taxes alone would still be sufficient to pay recipients higher benefits than everyone gets today.

Posted at November 15, 2007 01:55 PM | TrackBack

sooo, Jonathan.
again, I feel I must pose my question:
since you seem to have no kind words for anyone who has even a shred of decency (when compared to the ilk of Clinton, Romney, Obama, Ghouliani)----WHO do YOU think should be prez?
What's your benchmark for deciding?
Not that I'm gonna take plays from you verbatim, but I'm curious.
Does this make you just a political operative? Are you banking on martial law before the next election?
most importantly: are you hoarding gold?

Posted by: are you just a gadfly? at November 15, 2007 03:28 PM
WHO do YOU think should be prez?

It doesn't matter that much who's president. What matters is the pressure that's exerted by the rest of society on whoever ends up in office, from the presidency on down. George Bush could have been the most progressive president America has ever had, if there was enough pressure on him. We should concentrate on creating this pressure, rather than worrying about whether individual candidates are especially nice.

That said, I think the better ones among the current crop are probably Kucinich and Edwards.

Posted by: Jonathan Schwarz at November 15, 2007 03:43 PM

- I'm the savior of Social Security!!
- No, you're a phony savior of Social Security, I am the real savior of Social Security!!!

Posted by: abb1 at November 15, 2007 04:17 PM

"We've got to protect our phony-baloney Savior of Social Security jobs!" fairness to Clinton, though, I don't think she's positioning herself as savior here. It's the one place where she actually is telling the truth.

Posted by: Jonathan Schwarz at November 15, 2007 04:37 PM

READ The Social Security Act, it is a TAX. (so as YOU can 'lend' money to Congress and they, in turn, can hand it to the President, for whatever--wars maybe) A long as the TAX IS COLLECTED, everything is wonderful and moving smoothly, according to plan(SS Act). YOUR benefits ARE determined by Congress. ( in their generosity and wisdom, so be glad for what you get after paying in ALL those years, it's all you get)(Much like the writers strike, it's ALL ABOUT CONTRACTS)

Posted by: Mike Meyer at November 15, 2007 05:22 PM

1-202-225-0100 it's YOUR REVOLUTION, participate.

Posted by: Mike Meyer at November 15, 2007 05:24 PM

What about Gravel? Where is Edwards on Iran?

Posted by: StO at November 15, 2007 06:29 PM

The problem, Jon, is therefore that most of society is NOT PROGRESSIVE ENOUGH to demand that their leaders follow their beliefs. Most people try damn too hard to get ahead, and so they necessarily BEGET leaders that try too damn hard to get ahead. How are progressives in general going to convince those other people that we're right and they're wrong then?

Posted by: En Ming Hee at November 15, 2007 08:37 PM

There will have to be modifications to both Social Security and Medicare; much greater modifications to Medicare than Social Security because the financing gap is multiple times greater.

Does instituting a single-payer national health care system count as a "modification" to Medicare? Because that would fix your problem right there.

Seriously, who thinks that we're going to still have this clusterfuck of a health care system in 2041?

Posted by: SteveB at November 15, 2007 10:32 PM

are you just a gadfly? asks a good question, and I'll add my own: must every criticism of candidate A be accompanied by, "And so you must therefore vote for candidate B instead!"

Of course not. Imagine it's October 2008, the race is between Clinton and Giuliani, and a new law prohibits voting for third-party candidates and also makes voting mandatory, so "none of the above" is not an option (hey, it could happen).

If that were the case, what would be the point of criticizing Clinton? Obviously, it's either her or Giuliani, and we all know he's the eviller of two evils, right?

Well, for starters, if she stands a good chance of becoming President, we all have an interest in clearly perceiving her faults, so we can get to work on correcting them. Jonathan's right in saying that "What matters is the pressure that's exerted by the rest of society on whoever ends up in office." But we can't exert the right pressure at the right points, if we can't see who the candidate really is, warts and all.

Back in 2004, it was clear to anyone not blinded by partisan loyalty that John Kerry had every intention of continuing the occupation of Iraq, more or less indefinitely. This, it seems to me, would have been useful information to anyone who wanted to organize an effective popular movement to get us out of Iraq. But many people I knew, who opposed the occupation but also had made their minds up to vote for Kerry, did the equivalent of sticking their fingers in their ears and saying, "La, La, La, I can't hear you!" when confronted with this fact. Because we all knew Bush was worse, right?

And what would they have done if Kerry had actually won? Would they have suddenly developed the ability to take a clear-eyed look at President Kerry, even though they had just spent the past nine months avoiding exactly that? Or would they have spent a year or two or four in denial, unable to admit that their guy wasn't everything they wanted in a President? "Just you wait," they'd say, "He's going to get us out any day now..."

I like Jonathan's approach better. Clear away all the bullshit and denial at the front end, so we can start effectively opposing these bastards right from the start.

Posted by: SteveB at November 15, 2007 11:18 PM
it was clear to anyone not blinded by partisan loyalty that John Kerry had every intention of continuing the occupation of Iraq, more or less indefinitely.

At one point Kerry committed against long term bases in Iraq, which was going much further than the establishment was comfortable with. During the national debates I only saw that once. It least he blurted THAT out. For me it was almost enough.

Seriously, who thinks that we're going to still have this clusterfuck of a health care system in 2041?

Which is why some people make a big deal over the influence of lobbyists and the candidates that are beholden to them. Health care in America is one significant way to routinely skim social assets and capital off the top and out of the treasury so that it can be redistributed it to the ruling class. Wars being the other mechanism.

So I find it absurd whenever people talk about wealth redistribution in the US. It happens daily, and is deeply ingrained in the operational aspects of the republic, but we're supposed to have the common courtesy not to notice unless it's directed downward.

Posted by: Ted at November 16, 2007 08:05 AM

which is expected to run out of money by the twenty-forties

It is important that we correct these false statements. Social Security is not expected "run out of money by the twenty-forties". Currently, Social Security is operating with an increasing surplus. That is, every year, Social Security takes in more money than it needs and the surplus is actually growing every year. In five or six years the surplus will begin to shrink, but it will still be receiving an annual surplus, i.e., more money that the system needs. Around 2042, the surplus is expected to become a deficit, at which time Social Security would either have to find additional funds or cut benefits. The amount of fiddling needed to keep the system operating with full benefits beyond 2042 is relatively minor; there have been a number of plans floated that would fix it and none of them call for anything drastic.

I can't see why that isn't better understood or more widely known. ( I think the reason there is a perception of crisis is that the mainstream media are lazy/deliberately misrepresenting the facts. We in Blogtopia (y!sctp!) ought to do better because we are better people than mainstream reporters; we're smarter, better looking, and we are kinder to animals and old people. We also wash more thoroughly and dress better.)

Posted by: DBK at November 16, 2007 09:31 AM

There is a great deal of misinformation floated about Social Security and my question was purely rhetorical (plus, I was taking a stab at Teh Funny, but I have no idea whether that part of it amused anyone but me).

The notion that there is some sort of account into which all the money collected for Social Security is deposited and then, at a later date, removed and used as needed is also a misconception. The money comes in; the money goes out. The surplus is not "raided" every year, as is sometimes implied by the fact that the Congress uses the surplus funds to fund other things. This isn't a retirement plan from a corporation where you take the money and invest it in financial instruments for future disbursements to your retirees. The money comes in; the money goes out. One reason it cannot and should not be withheld in a "locked box" (an image that is striking, but not especially useful) is that it would remove a lot of money from the money supply. Also, government as a financial investor is a bad idea; it favors particular businesses and creates an even greater temptation for corruption. So that, at least as I understand it (and I am no economist nor am I an accountant; I'm just a man, just an ordinary man, maybe a little coy, sometimes confused by the chaotic world in which we live, not noble, but infused as we all are with the potential for nobility, and cute as a button when my back is freshly shaved), is why we don't have Social Security cash reserves being held in a big safe in the floor of the Capitol.

My understanding, as I sort of said above, is that minor tweaks are all that are necessary to preserve the program for a long time to come.

Posted by: DBK at November 16, 2007 12:50 PM

DBK - like you, I am no economist or accountant. However, I think you need to re-read what Jonathan Schwarz has been writing here and try again to understand it. Your point that "social security reserves" does not mean "a safe stuffed full of dollar bills" is accurate, as far as it goes; but then you express opinions which seem to me to rest on fundamental misunderstandings. That is to say, and you are echoing the "Social Security is a fraud which is going to stop working pretty soon" line in this - you seem to think that a Social Security Reserve that consists ONLY of IOUs from the US Govt to the Social Security Fund is not "real." But hey, man, most of what happens in finance is not "real", but only abstractions. Someone's promise to pay for their house - their mortgage - is just as "real" and "unreal" as the US Govt's debt to the Social Security Fund. There is no money "there" - at the moment the mortgage is signed - but if a person fails to live up to their promise to pay, their house gets taken away from them. It's happened to a relative of mine recently. If the US Govt fails to live up to ITS promise to pay, other bad things happen. Some people would benefit from that - but most people would lose big.

Posted by: mistah charley, ph.d. at November 16, 2007 06:33 PM