Tag: Ponzi scheme

The Republicans’ intergalactic adventures

In the alternate universe where Republican candidates debated yesterday, tax breaks for the rich apparently create jobs while deregulation spurs economic growth and preserves natural resources.

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N.B.: Our world versus their’s! 

By John Wojcik, Peoples World

“In the alternate universe where Republican candidates debated yesterday, tax breaks for the rich apparently create jobs while deregulation spurs economic growth and preserves natural resources.

In our universe, those tax breaks have created no jobs, and deregulation has destroyed our economy, our rivers, our lakes,  our air quality and the Gulf of Mexico.

In Gov. Rick Perry‘s universe, Social Security is a Ponzi scheme.

In our universe, a Ponzi scheme is something done by criminals who trick investors into giving them money that they then pocket for themselves. Social Security, in our universe, is something  It ishard-working people pay into so they can stay out of poverty when they get old. I is one of the most successful programs ever devised and has so much money in its coffers that everyone can be paid everything they are owed until 2037. No other program, government-run or private, can say the same.

In Perry’s universe, “President Obama has proven once and for all that government spending will not create one job.”

In our universe, the president’s stimulus program created 3 million jobs, 300,000 in the state of Texas, alone.

In Perry’s universe, “Keynesian policy and Keynesian theory is now done and disproven.”

In our universe, it’s the GOP program of deregulation and tax cuts that has been disproven. In our universe, deregulation caused the financial crisis and destroyed millions of jobs.

Mitt Romney and his advisors, however, ventured into the reality-based universe , if only briefly.

Romney jumped for joy after Perry reiterated his ongoing attack on Social Security. “Perry has lost,” Romney adviser Stuart Stevens said in an e-mail. “No federal candidate has ever won on the Perry platform to kill Social Security. Never has. Never will.” (A CNN poll in August found 57 percent of Republicans opposed to major changes in both Social Security and Medicare.)

Romney’s declaration last night that the nominee of the GOP must be someone committed to “saving,” not “killing” Social Security rings hollow, however.  He, like Wall Street itself, is also committed to killing Social Security with a variety of schemes that would allow people to “save and invest” rather than pay into the plan. The Romney approach is, at best, a backdoor way of turning over to Wall Street investors the huge Social Security pot of gold they have been trying to grab for years.

Romney says that corporations, which he views as “people,” should get even bigger tax breaks than they have gotten thus far and that almost all regulations on their activity should be eliminated. He has called for zero taxes on companies that have shipped jobs overseas as a way of luring them back home. In our universe, that amounts to rewarding the people who destroyed American jobs, American livelihoods and American hopes.

The Republican candidates all agreed with what Sen. Tom Harkin, D-Iowa, calls a “mindless march to austerity.” He said the Republican approach of focusing on the deficit, rather than the jobs crisis, would put the nation on  “a course of radical disinvestment and decline.

“Smart countries do not just turn a chainsaw on themselves. Instead of the current slash-and-burn approach, which is being sold through fear and fatalism, we need an approach that reflects the hopes and aspirations of the American people.”

Harkin pointed to tens of millions of jobs created by visionary leadership and government investment in the nation’s highway system, space exploration and research. For example, he noted, the federal government’s investment of $3.8 billion in the human genome project, between 1988 and 2003, translated into $796 billion in economic output and, in 2010 alone, created 310,000 jobs.

Yesterday evening the Republican candidates, under the colors of our flag and the wings of Ronald Reagan’s jet, offered no solution to the jobs crisis. Instead, they proffered a free-market fairy tale straight from their alternate universe. They made it abundantly clear that their reality is not the reality of the vast majority of the American people.”

Emphasis Mine

see:http://peoplesworld.org/the-republicans-intergalactic-adventures/

Fact checking the GOP debate of 7.9.11

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From The Washington Post

By Glenn Kessler

“…

“It is a monstrous lie. It is a Ponzi scheme to tell our kids that are 25 or 30 years today you’re paying into a program that’s going to be there.”

— Gov. Perry

Perhaps the governor does not know the dictionary definition of a Ponzi scheme. Here’s what Merriam-Webster says: “An investment swindle in which some early investors are paid off with money put up by later ones in order to encourage more and bigger risks.”

This is a frequent mistake politicians make when talking about Social Security. It is not an investment vehicle; it is intended to provide income security as well disability and life insurance. Just more than 60 percent of the 54 million beneficiaries are retired workers; the rest are disabled workers, dependents or survivors.

Social Security is a pay-as-you-go system, which means that payments collected today are immediately used to pay benefits. Until recently, more payments were collected than were needed for benefits. So Social Security loaned the money to the U.S. government, which used it for other things. In exchange, Social Security received interest-bearing Treasury securities. The value of those bonds is now about $2.6 trillion. (We have written about this at length.)

In any case, Perry is wrong to label Social Security a Ponzi scheme. Ponzi schemes ultimately go bust and everyone (except possibly early investors) generally loses their money. Social Security faces a long-term funding issue, but one that most experts say is manageable. After all, the Social Security actuary says that Social Security’s shortfall is 0.7 percent of the gross domestic product over the next 75 years.

“Obamacare is killing jobs. We know that from the nonpartisan Congressional Budget Office.”

— Rep. Michele Bachmann (Minn.)

Bachmann won’t give up on this factoid, even though we debunked it seven months ago and said it was worth three Pinocchios. It’s just not correct, and remains a perfect example of how politicians twist the facts.

The Congressional Budget Office in August 2010 estimated that the new health care law over the next decade would reduce the number of overall workers in the United States by one-half of 1 percent, which translates into 800,000 people. But that’s not the same as saying it would “kill” that many jobs.

In dry economic language, the CBO essentially said that some people who are now in the workforce because they need health insurance would decide to stop working because the health care law guaranteed they would have access to health care. (As an example, think of someone who is 63, a couple of years before retirement, who is still in a job only because he or she is waiting to get on Medicare at age 65.)

These jobs would disappear, not to be replaced, so there is an intellectually defensible argument one could make that this is bad for the economy; others, however, might argue that this is a small price worth paying for universal health care.

But in any case, the CBO did not say the health law was killing jobs.

“We’ve had requested for years at the Health and Human Services agencies to have that type of flexibility, where we could have menus, where we could have co-pays. And the federal government refuses to give us that flexibility.”

— Perry

Perry gives a misleading account of this application for a waiver on Medicaid rules. The George W. Bush administration rejected the application in 2008, saying it was incomplete and riddled with problems. As far as we can tell, the state has not resubmitted the waiver.

“Obamacare took over one-sixth of the American economy… . If we fail to repeal Obamacare in 2012, it will be with us forever and it will be socialized medicine.”

— Bachmann

“In our state, our plan covered 8 percent of the people, the uninsured. His plan has taken over a 100 percent of the people.”

— Romney

It is simply not true, no matter how often candidates say that the Obama health care law represents socialized medicine or took over one-sixth of the economy. Socialized medicine is a single-payer system, in which the government pays the bills and controls costs (much like Medicare.)

Obama’s law was modeled closely on the law passed by Romney when he was governor of Massachusetts — an inconvenient fact that Romney tries hard to run away from. His comparison here is misleading, since both plans try to deal with the problem of the uninsured by requiring an individual mandate.

“For the president of the United States to go to El Paso, Texas, and say that the border is safer than its ever been, either he has some of the poorest intel of a president in the history of this country, or he was an abject liar to the American people. It is not safe on that border.”

— Perry

Perry is referring to a speech that Obama gave May 10, in which he did some boasting that earned the president a Pinocchio. Obama did not put it quite as bluntly as Perry suggests, and calling the president an “abject liar” seems over the top for the politically tinged comments Obama actually made.

“He only went along with the Libyan mission because the United Nations told him to.”

— Former Sen. Rick Santorum (Pa.)

Actually, Santorum has it backwards. The United States requested the U.N. resolution to gain international backing for the NATO-led intervention in the Libyan uprising.

“The idea that we would put Americans’ economy in jeopardy based on scientific theory that’s not settled yet to me is just — is nonsense. I mean, it — I mean, and I told somebody, I said, just because you have a group of scientists that have stood up and said, here is the fact — Galileo got outvoted for a spell.”

— Perry

(N.B.: Galileo?  Never ‘outvoted’ by scientists, only by the Roman Church)

We previously awarded Perry Four Pinocchios for his comments suggesting scientists were increasingly saying climate change was a fiction. We will note he repeatedly did not answer the question at the debate about whether he could name a scientists he thought was credible on the issue.

“As a matter of fact, what he’s done is, he’s said in fact to Israel that they need to shrink back to their indefensible 1967 borders.”

— Bachmann

Obama never said this. The president in May did give a controversial speech, in which he said the de facto border of 1967 should be a starting point for negotiations between the Israelis and Palestinians, with agreed swaps of territory. A few days later, he further clarified his comments to make clear he was not saying the lines should be Israel’s border, to the point that he was thanked by the Israeli prime minister in a speech to Congress.

We’ve given Bachmann Four Pinocchios for making a similar claim in the past.


Emphasis Mine

see:http://www.washingtonpost.com/blogs/fact-checker/post/fact-checking-the-gop-debate-at-the-reagan-library/2011/09/07/gIQAFrz5AK_blog.html?wpisrc=nl_politics

3 Reality-Based Charts Your Right-Wing Relatives Will Have a Hard Time Ignoring

Here are some reality-based charts to help knock down absurd right-wing propaganda about the economy

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From AlterNet, by RJ Eskow

Problem: Your right-wing brother-in-law is plugged into the FOX-Limbaugh lie machine, and keeps sending you emails about “Obama spending” and “Obama deficits” and how the “Stimulus” just made things worse.

Solution: Here are three “reality-based” charts to send to him. These charts show what actually happened.

Spending

Bush-Obama Spending Chart

Government spending increased dramatically under Bush. It has not increased much under Obama. Note that this chart does not reflect any spending cuts resulting from deficit-cutting deals.

Deficits

Bush-Obama Deficit Chart

Notes, this chart includes Clinton’s last budget year for comparison.

The numbers in these two charts come from Budget of the United States Government: Historical Tables Fiscal Year 2012. They are just the amounts that the government spent and borrowed, period, Anyone can go look then up. People who claim that Obama “tripled the deficit” are either misled or are trying to mislead.

The Stimulus and Jobs

Bush-Obama-Jobs-Chart

In this chart, the RED lines on the left side — the ones that keep doing DOWN — show what happened to jobs under the policies of Bush and the Republicans. We were losing lots and lots of jobs every month, and it was getting worse and worse.The BLUE lines — the ones that just go UP — show what happened to jobs when the stimulus was in effect. We stopped losing jobs and started gaining jobs, and it was getting better and better. The leveling off on the right side of the chart shows what happened as the stimulus started to wind down: job creation leveled off at too low a level.

It looks a lot like the stimulus reversed what was going on before the stimulus.

Conclusion: THE STIMULUS WORKED BUT WAS NOT ENOUGH!

More False Things

These are just three of the false things that everyone “knows.” Some others are (click through): Obama bailed out the banks, businesses will hire if they get tax cuts, health care reform cost $1 trillion, Social Security is a Ponzi Scheme or is “going broke”, government spending “takes money out of the economy.”

Why This Matters

These things really matter. We all want to fix the terrible problems the country has. But it is so important to know just what the problems are before you decide how to fix them. Otherwise the things you do to try to solve those problems might just make them worse. If you get tricked into thinking that Obama has made things worse and that we should go back to what we were doing before Obama — tax cuts for the rich, giving giant corporations and Wall Street everything they want — when those are the things that caused the problems in the first place, then we will be in real trouble.

Emphasis Mine

see:http://www.alternet.org/story/152201/3_reality-based_charts_your_right-wing_relatives_will_have_a_hard_time_ignoring?akid=7484.123424.OxQ7x8&rd=1&t=12

Understand the Right’s Attack on Social Security

The Social Security program is entirely self-funded, separate from the way that the government taxes and spends for other programs.Social Security does not contribute to the deficit in any way.

chasdarwin1 Comment

From Alternet, by: Dave Johnson, Campaign for America’s Future

“You hear over and over that Social Security is “in trouble” or that we “can’t afford it.” This is as far from true as can be, and the idea behind this is to convince people to just give up on defending the program and let the haters have their way. The people who hate Social Security the most are the ones who say they want to make these changes to “save” it.

Well Bernie Sanders loves the program and has introduced a bill that actually will save it.

The Haters

Conservatives have hated Social Security from the start, because it is a program that demonstrates once and for all the value of progressive governance. Social Security is as clear an example of We, the People watching out for and taking care of each other as there ever was. It has made a huge difference n the lives of older people, and their/our families. It works, is cost-effective and requires minimal overhead to keep it going. So they hate it.

A very recent example of conservative hatred for Social Security came from Senator Marco Rubio of Florida, who said, that We, the People helping each other makes us weak,

“These programs actually weakened us as a people. … All of a sudden, for an increasing number of people in our nation, it was no longer necessary to worry about saving for security because that was the government’s job.”

Substitute the words “We, the People” or “each other” for “government” in Rubio’s statement and you’ll get the point: people don’t have to worry so much because we’re taking care of each other. He says that makes us weak. Yikes!

Decades Of Attacks

For decades conservatives who hate Social Security have been using every trick in the book to turn people against the program. Over and over you hear, “It’s a Ponzi scheme.” “It won’t be there for you.” This latest attack is that it “makes us weak.” And of course the old classic: “Social Security is broke.”

The “it’s going broke” and “won’t be there for you” attack strategy goes back to a 1983 Cato Institute Journal document, “Achieving a Leninist Strategy” by Stuart Butler of Cato and Peter Germanis of the Heritage Foundation. The document is still available at Cato, and select quotes are available at Plotting Privatization? from Z Magazine. If you have time it is worth reading the entire document (in particular the section “Weakening the Opposition”) to more fully understand the strategy that has been unfolding in the years since. But if you can’t, the following quotes give you an idea:

“Lenin recognized that fundamental change is contingent upon … its success in isolating and weakening its opponents. … we would do well to draw a few lessons from the Leninist strategy.”

” construct … a coalition that will … reap benefits from the IRA-based private system … but also the banks, insurance companies, and other institutions that will gain from providing such plans to the public.”

“The first element consists of a campaign to achieve small legislative changes that embellish the present IRA system, making it in practice a small-scale private Social Security system.

“The second main element … involves what one might crudely call guerrilla warfare against both the current Social Security system and the coalition that supports it.”

“The banking industry and other business groups that can benefit from expanded IRAs …” “… the strategy must be to propose moving to a private Social Security system in such a way as to … neutralize … the coalition that supports the existing system.”

“The next Social Security crisis may be further away than many people believe. … it could be many years before the conditions are such that a radical reform of Social Security is possible. But then, as Lenin well knew, to be a successful revolutionary, one must also be patient and consistently plan for real reform.”

Here is what to take away from this: Every time you hear that “Social Security is going broke” you are hearing a manufactured propaganda point that is part of a decades-old strategy. Every time you hear that “Social Security is a Ponzi scheme” you are hearing that strategy in operation. Every time you hear that “Social Security won’t be there for me anyway” ” you are witnessing that strategy unfold.

The Problem

The Social Security program is entirely self-funded, separate from the way that the government taxes and spends for other programs. People set aside money in their working years, they get a monthly amount when they retire. (The program also has other benefits including disability benefits, survivors funds and others.) Social Security does not contribute to the deficit in any way.

You never hear that the huge, vast, bloated, enormous, mammoth military budget is “going broke” or “won’t be there for you.” But year after year you hear that Social Security is “in trouble.”

Currently the program has built up a huge trust fund — over $2.5 trillion. This is invested in US Treasury Bonds, and is earning interest. But there are projections that this trust fund will be depleted in approx. 2037, and if this happens the program will have to cut payouts by as much as 25%. (Hey. when does the military budget Trust Fund run down?)

One big reason for this shortfall is that the last time the programs was comprehensively adjusted (1983, Greenspan Commission) certain economic growth and income projections were used to decide how much “payroll tax” to take out of people’s paychecks. They increased the amount taken out of paychecks, and set up an increasing “cap” on the income that would be taxed. Right now 6.2% (temporarily reduced to 4.2%) is taken out of paychecks, and employers kick in another 6.2%, on income up to a “cap” of $106,800. There is no “payroll tax” on amounts above that “cap.”

But something changed between 1983 and now: almost all the income gains have gone to a few at the very top. Instead of people who mostly were under that “cap” getting raises, thereby increasing the amount they pay into the fund, the raises went to people who already pass that amount, so the increased income is not contributing to the program. So that money that was calculated would go into the Social Security Trust Fund instead went to the top few. As a result the program is no longer bringing in enough money to keep the trust fund fully-funded past 2037.

Sen. Sanders’ Solution

Senator Bernie Sanders is introducing a bill to the Senate to fix this, once and for all. In simple terms, this bill will start taxing income above $250,000 a year to cover this Social Security shortfall. So instead of just “raising the cap” it lets that cap stay, and then takes it off again on income above $250,000. In effect it means there will be a gap between the current top income that is taxed, and $250K.

Get the money from where the money went: So because much of the real Social Security problem is that so much income is now going to just a few at the top, this gets the money to fix the problem from those top-level incomes.

Here is Sanders, talking about his bill:

“When [Social Security] was developed, 50 percent of seniors lived in poverty. Today, poverty among seniors is too high, but that number is ten percent. Social Security has done exactly what it was designed to do!”


Emphasis Mine

see:http://www.truth-out.org/understand-rights-attack-social-security/1314537823