Paul Krugman Tries to Explain “Facts” to Ron Johnson and ABC “Powerhouse Roundtable”
Posted: March 10, 2013 Filed under: Affordable Care Act (ACA), Barack Obama, Medicare, open thread, Republican politics, Social Security, U.S. Economy, U.S. Politics | Tags: ABC's This Week, Paul Krugman, Senator Ron Johnson 23 Comments
Are there stupider Senators than Ron Johnson (D-WI)? Maybe, but he has to be in the top five. Via Think Progress, this morning on ABC’s This Week, Johnson pulled out an old Republican canard, claiming that the Social Security Trust Fund is “a myth.” Nobel Prize-winning economics Paul Krugman attempted to set him straight. You can watch the partial video down below, but I decided to read the whole transcript of the interaction. Here’s how it went down.
Johnson and Krugman participated in the “Powerhouse Roundtable” with George Will, Bloomberg News White House Correspondent Julianna Goldman, and DNC Chair Rep. Debbie Wasserman Schultz. The group began by discussing President Obama’s supposed charm offensive of the past few days. Johnson rambled on about how Obama is doing the right thing by “reaching out” to the GOP and maybe something can come of it. I have to hand it to Krugman, because he immediately steered the discussion toward the GOP and Obama’s hopes for cutting earned benefit programs.
KRUGMAN: I’m really skeptical, because I — I mean this is not — this is not about bad personal relations. People are perfectly capable of being polite to each other, being nice, having a nice dinner. This is about a fundamental difference in visions about what America should be…One party really wants to take down the — the — the safety net we have. One party really wants….to privatize Medicare, wants to, you know roll back, wanted to try to privatize Social Security back in 2005. The other party wants it somewhat extended, wants Obamacare to go into place, would do more if it could. That’s not something you’re going to resolve with a few dinners.
Corporate media shill Juliana Goldman chimes in to state the village consensus:
Look, both sides understand what a grand bargain is going to look like. You’re going — Republicans are going to have to give on revenues, Democrats are going to have to give on entitlements. And so there is some case for optimism now that if the president, in trying to build trust…if Republicans see the president moving forward, putting Medicare savings on the table that doesn’t just hit providers, but also hits beneficiaries as well, then — and also going out and selling it to give Republicans some cover, then there could be a sense that you could get some Senate Republicans to — to help bring the House along.
George Will brings up raising the Medicare age and asks Debbie Wasserman Schultz if there’s any chance all those old codgers in Florida will ever see the light so that Democrats could go along with this brilliant idea? No real response from Schultz, so Krugman (he was on fire today!) jumped in again. From here on, I’ll just focus on the interaction between Johnson and Krugman and leave out the few remarks by others.
KRUGMAN: Is it a condition of any Republican support that you have to go for really terrible policies? Because raising the Medicare age is a terrible policy. It raises medical costs, it does very little to improve the budget. It introduces a lot of hardship. Means testing in Medicare is a better policy. I don’t particularly like it, but it’s a better policy. There are other things you can do. There are other ways you can cut. Even — I don’t like the business about changing, you know the price index for Social Security, but that’s not as bad…
JOHNSON: To say that the Republicans haven’t done anything, is just false. The House has actually passed budgets. You know with — with proposals to — to try and save Medicare, bipartisan proposals, quite honestly. The Senate hasn’t passed a budget in over four years. Listen, unless we do something, these programs are going broke. It drives me nuts. When I — when I hear people say that Social Security is solvent to the year 2035, it’s not….
Listen, if you — if you’re taking a look at, in a entitlement reform package, in term — you know actually bringing in revenue for those entitlement reforms, I might look at that. But the fact of the matter is — the fact of the matter is, we already have a $1 trillion in middle income tax increases hitting us in Obamacare. They’re hidden, but it’s middle-class….it’s certainly true, as well as another $600 billion. So, you’ve already got $1.6 trillion worth of tax increases hitting us in the next 10 years….
KRUGMAN: Just a question, you say let’s start with the facts, but there — we’ve just — we’ve just run aground right there….JOHNSON: You’ve made my point — you’ve made my point, we have to agree on the facts….But the facts are false.
JOHNSON: No they are not….They are not false.
KRUGMAN: The Social Security thing, Social Security is — there — it has a dedicated revenue base. It has a trust fund based on that dedicated revenue base. You can’t change the rules midstream and say, oh suddenly….
JOHNSON: …here’s the problem with the trust fund, the federal government owns U.S. Treasury bonds, it’s the same thing as if you have $20.00, you spend it. And by the way, that money is spent, it’s gone. You write yourself a note for $20.00, stick it in your pocket and say, I got 20-bucks…No, you don’t. You — you have a note that you have to sell in the open market. The trust fund is a fiction, it doesn’t — it’s…
KRUGMAN: If you — if you want to think of Social Security as not just being part of the government, then there’s no such thing as a Social Security problem, it’s just part of the general budget. You — you cannot say on the one hand….on — on the other hand we’re going to — we’re going to restrict it to only operating off of…it’s important to realize that the facts that are being brought out here are in fact, non-facts.
Here’s the video from Think Progress:
From a piece Kevin Drum wrote last fall in response to WaPo columnist Charles Krauthammer spouting the “Social Security Trust Fund is a fiction” meme. Like Johnson, Krauthammer was arguing that because Social Security funds are invested in Treasury bonds which it cashes in when current funds aren’t sufficient for immediate needs, that the Trust Funds is just “a bunch of useless IOU’s,” to quote George W. Bush.
Here’s Drum:
What Krauthammer means is that as Social Security draws down its trust fund, it sells bonds back to the Treasury. The money it gets for those bonds comes from the general fund, which means that it does indeed have an effect on the deficit.
That much is true. But the idea that the trust fund is a “fiction” is absolutely wrong….Starting in 1983, the payroll tax was deliberately set higher than it needed to be to cover payments to retirees. For the next 30 years, this extra money was sent to the Treasury, and this windfall allowed income tax rates to be lower than they otherwise would have been. During this period, people who paid payroll taxes suffered from this arrangement, while people who paid income taxes benefited….
As the baby boomers have started to retire, payroll taxes are less than they need to be to cover payments to retirees. To make up this shortfall, the Treasury is paying back the money it got over the past 30 years, and this means that income taxes need to be higher than they otherwise would be. For the next few decades, people who pay payroll taxes will benefit from this arrangement, while people who pay income taxes will suffer.
If payroll taxpayers and income taxpayers were the same people, none of this would matter. The trust fund really would be a fiction. But they aren’t. Payroll taxpayers tend to be the poor and the middle class. Income taxpayers tend to be the upper middle class and the rich. Long story short, for the past 30 years, the poor and the middle class overpaid and the rich benefited. For the next 30 years or so, the rich will overpay and the poor and the middle class will benefit.
The trust fund is the physical embodiment of that deal. It’s no surprise that the rich, who didn’t object to this arrangement when it was first made, are now having second thoughts. But make no mistake. When wealthy pundits like Krauthammer claim that the trust fund is a fiction, they’re trying to renege on a deal halfway through because they don’t want to pay back the loans they got.
It’s disgusting that this has to be explained over and over again to the willfully obtuse Republicans and the media talking heads, but I have to say that I’m glad Krugman was there this morning to call attention to the stupidity of what the GOP–and Obama–are proposing.
Now, here’s a bonus for you that I found at Americablog this morning. Florida Rep. Alan Grayson is warning there will be “civil disobedience” if Social Security benefits are cut.
What are you hearing and seeing out there? This is an open thread.
Saturday Reads: Unpredictable Weather, Rand Paul, and Other Odd News
Posted: March 9, 2013 Filed under: morning reads, Republican politics, science, Senate, U.S. Economy, U.S. Politics, Women's Rights | Tags: archaeology, Bernie Sanders, coronavirus, drones, Filibuster, Rand Paul, SARS, sequestration cuts, snow, Stonehenge, The Girls of the Manhattan Project, weather 32 Comments
Good Morning!!
I got about a foot of snow dumped on me by the latest storm, when the prediction the day before had been for about 3-5 inches. Boy were the predictions wrong for this one! Last night the Boston Globe weather blogger tried to explain “Why was there so much more snow than predicted?”
Now that the big storm is over, I am looking at why this was such a poor forecast. The basic reason was a bit more cold air than expected, more moisture and it lasted longer. No one expected so much snow to fall from 4 AM this morning until mid-afternoon. Storms usually need to be at roughly 40 degrees latitude and 70 degrees west longitude to give us a major snow event. Meteorologists around here call this the benchmark. If a storm passes near the benchmark, and it’s cold enough, we are often in for a good snowstorm. This storm passed hundreds of miles further east than that typical spot for a major snowstorm. One of the reasons I was confident in not seeing this size snowstorm, was the predicted distance of the storm from our area. That prediction by the models turned out to be pretty good. Temperatures were also forecast to be about 4 degrees milder. As it turn out, it’s sort of a good thing it ended up being colder because heavy wet snow of these amounts would have been catastrophic to the power situation.
I see . . . well, not really. Anyway, the stuff is melting already which is a good thing, because I wasn’t able to shovel my driveway out completely yesterday. We’re supposed to get temperatures in the 40s and 50s for the next few days, so I guess that will rescue me. Now what’s in the news today?
I see that Kentucky Senator Rand Paul is really full of himself after his “talking filibuster” the other day.
He’s got an op-ed in the Washington Post bragging, “My filibuster was just the beginning.”
If I had planned to speak for 13 hours when I took the Senate floor Wednesday, I would’ve worn more comfortable shoes. I started my filibuster with the words, “I rise today to begin to filibuster John Brennan’s nomination for the CIA. I will speak until I can no longer speak” — and I meant it.
I wanted to sound an alarm bell from coast to coast. I wanted everybody to know that our Constitution is precious and that no American should be killed by a drone without first being charged with a crime. As Americans, we have fought long and hard for the Bill of Rights. The idea that no person shall be held without due process, and that no person shall be held for a capital offense without being indicted, is a founding American principle and a basic right.
I certainly agree that the president shouldn’t have the power to kill Americans without due process, but I’d be more impressed with Paul if he supported other constitutional rights like equal treatment under the law for minorities, women and LGBT people. I can’t take anyone seriously as a defender of the Constitution if he opposes civil rights and the right of a woman to control her own body.
According to Grace Wyler at Business Insider, Libertarians Believe Their Moment Has Finally Arrived. On the other hand, Chris Cillizza explains why Why the Rand Paul filibuster might not be such good news for the GOP.
Everyone seems to be calling Paul’s filibuster “historic,” and no one is even mentioning the (IMO) much more dramatic and impressive filibuster by Bernie Sanders just a couple of years ago.
Sequestration cuts, anyone?
While the Village media types focus on either fawning over or condemning Rand Paul’s performance, local journalists around the country are reporting on the damage being done by sequestration cuts.
The debate over sequestration this past week has come down to two questions: Was the administration exaggerating the impact of the spending cuts, and did they really need to shut down White House tours because of them?
It’s been the predominant theme at the White House briefings, a constant subject of discussion on cable news and a topic of fascination on Capitol Hill. House Speaker John Boehner (R-Ohio) even took up the cause at a press briefing this week, saying: “I think it’s silly that they have insisted on locking down the White House, which the American people actually own.”
Beneath that debate, however, is a different type of conversation about the impact of the $85 billion in cuts. While the national media has focused on those two questions, local coverage has been more directed at the tangible impact the budget restraints will have. The Huffington Post reviewed dozens of local television news broadcasts, using the service TVeyes.com, to survey coverage of sequestration outside of the Beltway.
Check out the many examples of real pain for localities at the link. And besides, according to Buzzfeed, Nobody Liked The White House Tours That Much Anyway. They’re only rated 3.5 on Yelp. Read the negative reviews at the link.
Interesting book review at The Daily Beast
The Girls of the Manhattan Project.
They were the employees of the gigantic uranium-enrichment plant at Oak Ridge, Tenn.—those who lived and toiled in this purpose-built secret city in the Appalachian Mountains, many of them young women, had only been told that their efforts would help bring home American soldiers. Then, when atomic power was deployed against an enemy nation for the first (and so far, last) time, Oak Ridge residents realized what they had been working toward, and why their every move had been monitored, their every utterance policed, and their every question stonewalled.
In The Girls of Atomic City: The Untold Story of the Women Who Helped Win World War II, Denise Kiernan recreates, with cinematic vividness and clarity, the surreal Orwell-meets-Margaret Atwood environment of Oak Ridge as experienced by the women who were there. They were secretaries, technicians, a nurse, a statistician, a leak pipe inspector, a chemist, and a janitor. “Site X” began construction in late 1942, and was also known as the Clinton Engineering Works (CEW) and the Reservation. Staff members were recruited from all over the U.S., but particularly from nearby Southern states, and were offered higher than average wages, on-site housing and cafeterias, and free buses.
More importantly, they were offered the chance to join the 400,000 or so American women performing non-combatant roles in the armed services, as well as those keeping vital industries afloat and helping the men on the front lines. But whereas a female Air Force pilot or munitions factory worker understood precisely her contributions to the war effort, the women at Oak Ridge were kept in the dark about the actual purpose of their workplace, a mystery heightened by the apparent lack of anything ever leaving the site. Provided with “just enough detail to do their job well, and not an infinitesimal scrap more,” workers at all levels were forbidden from taking the slightest interest in anyone else’s duties. “Stick to your knitting,” in the words of Lieutenant General Leslie Groves, head of the Project.
That sounds like a fascinating book!
ABC News reports on a scary new virus–the coronaviris.
Coronavirus
Health officials are warning of a new virus that has sickened at least 14 people worldwide, killing eight of them.
There are no known American cases of the coronavirus, known as hCoV-EMC, but the U.S. Centers for Disease Control is urging doctors with patients who have an unexplained respiratory illness after traveling to the Arabian peninsula or neighboring countries to report the cases to the CDC.
Doctors should also report patients with known diseases who don’t respond to appropriate treatment, the agency said its Morbidity and Mortality Weekly Report. Close contacts of a symptomatic patient should also be evaluated.
The novel virus, which is associated with severe respiratory illness with renal failure, was first recognized last September and caused alarm because it is genetically and clinically similar to the SARS virus, which caused hundreds of deaths worldwide.
Read more at the CDC website.
A new archaeological theory about Stonehenge
The Guardian: Stonehenge may have been burial site for Stone Age elite, say archaeologists.
Centuries before the first massive sarsen stone was hauled into place at Stonehenge, the world’s most famous prehistoric monument may have begun life as a giant burial ground, according to a theory disclosed on Saturday.
More than 50,000 cremated bone fragments, of 63 individuals buried at Stonehenge, have been excavated and studied for the first time by a team led by archaeologist Professor Mike Parker Pearson, who has been working at the site and on nearby monuments for decades. He now believes the earliest burials long predate the monument in its current form.
The first bluestones, the smaller standing stones, were brought from Wales and placed as grave markers around 3,000BC, and it remained a giant circular graveyard for at least 200 years, with sporadic burials after that, he claims.
It had been thought that almost all the Stonehenge burials, many originally excavated almost a century ago, but discarded as unimportant, were of adult men. However, new techniques have revealed for the first time that they include almost equal numbers of men and women, and children including a newborn baby.
I’ll end with this “chart of the day” from Business Insider:
“The Scariest Jobs Chart Ever”
I hope that’s enough to get you started on the day. Please share your recommended reads in the comments. I look forward to clicking on your links!
Have a great weekend!!
Senator Bernie Sanders Introduces Bill to Apply Payroll Tax to High Incomes
Posted: March 7, 2013 Filed under: Barack Obama, Medicare, Social Security, The Media SUCKS, U.S. Economy, U.S. Politics | Tags: payroll tax cap, Senator Bernie Sanders, Social Security 31 Comments
I’m sure most of the corporate media will ignore this, but Senator Bernie Sanders today introduced a bill to “strengthen Social Security” by applying payroll taxes to all income–including from self-empoyment–to people earning more than $250,000 annually. So far I’ve only seen this reported by one national media outlet.
Sanders and other liberals are concerned Obama may strike a deficit-reduction deal with Republicans that would reduce Social Security benefits by adopting a less generous way of adjusting benefits for inflation.
Sanders on Thursday introduced legislation co-sponsored by Senate Majority Leader Harry Reid (D-Nev.) to raise payroll taxes on the wealthy to extend the solvency of Social Security.
Democratic Sens. Barbara Boxer (Calif.), Amy Klobuchar (Minn.), Sheldon Whitehouse (R.I.), Al Franken (Minn.) and Richard Blumenthal (Conn.) have co-sponsored the bill as well.
Representative Peter De Fazio is introducing a companion bill in the House.
“Social Security is facing an unprecedented attack from those who either want to privatize it completely or who want to make substantial cuts,” said Sanders at a press conference. “The argument being used to cut Social Security is that because we have a significant deficit problem and a $16.6 trillion national debt, we just can’t afford to maintain Social Security benefits.
“This argument is false. Social Security, because it is funded by the payroll tax, not the U.S. Treasury, has not contributed one nickel to our deficit,” he said.
Sanders estimates switching to a chained-CPI formula for determining benefits for Social Security would result in the average 65 year old living on about $15,000 a year receiving $650 less each year when they turn 75 and $1,000 less a year when they turn 85.
The bill is supported by (PDF) “The Strengthen Social Security Campaign, comprised of more than 320 organization throughout the country representing more than 50 million Americans, including the National Committee to Preserve Social Security and Medicare; AFL-CIO; United Steelworkers; Alliance for Retired Americans; Social Security Work; Campaign for Community Change; The Arc.”
The AARP announced yesterday that it is going to be running ads
If you haven’t read the op-ed by Thomas Edsall (The War on Entitlements) in today’s New York Times, I hope you will take the time to do so now. Thanks to RalphB for posting the link on the morning thread! Here’s the introduction:
The debate over reform of Social Security and Medicare is taking place in a vacuum, without adequate consideration of fundamental facts.
These facts include the following: Two-thirds of Americans who are over the age of 65 depend on an average annual Social Security benefit of $15,168.36 for at least half of their income.
Currently, earned income in excess of $113,700 is entirely exempt from the 6.2 percent payroll tax that funds Social Security benefits (employers pay a matching 6.2 percent). 5.2 percent of working Americans make more than $113,700 a year. Simply by eliminating the payroll tax earnings cap — and thus ending this regressive exemption for the top 5.2 percent of earners — would, according to the Congressional Budget Office, solve the financial crisis facing the Social Security system.
So why don’t we talk about raising or eliminating the cap – a measure that has strong popular, though not elite, support?
I think we all know the answer to that question, don’t we?
Thursday Reads: Will Obama Pull off A Grand Betrayal? And Other News…
Posted: March 7, 2013 Filed under: Barack Obama, morning reads, Republican politics, U.S. Economy, U.S. Politics | Tags: Grand Betrayal, paranoia, sequestration 58 Comments
Good Morning?
We weren’t supposed to get any snow until late this afternoon, but it’s already coming down. The snow from the last two storms was just about gone and you could see the ground in places. Now they’re saying we may get up to a foot of snow. I’m hoping that’s not going to pan out.
Let’s see what’s happening out there in the world.
Call me paranoid, but I’m beginning to get the feeling that we’re being gamed by both Democrats and Republicans. Late last night, I was listening to a 24-hour politics station Sirius-XM radio, called POTUS radio.
Now I didn’t get the name of the man being interviewed, but he said that President Obama had asked Lindsey Graham to help him organize last night’s dinner with Republican Senators weeks ago! According to this guy, everything is coming together for Obama and for the Republicans–they are each getting what they wanted, which is serious austerity. Obama will get his “entitlement reforms” and the Republicans will get–what? Will there be any new revenue at all, or will the full burden for deficit cutting in the “grand bargain” fall on the social safety net?
From The New York Times Caucus blog:
For Washington-watchers looking for positive signs from President Obama’s unusual dinner with Republican senators on Wednesday night, there was this: Senators John McCain of Arizona and Tom Coburn of Oklahoma each gave waiting reporters a thumbs up as lawmakers exited the private dining room….
Besides Mr. McCain and Mr. Coburn, the diners were the Republican Senators Bob Corker of Tennessee, Lindsey Graham of South Carolina, Dan Coats of Indiana, Richard M. Burr of North Carolina, Mike Johanns of Nebraska, Patrick J. Toomey of Pennsylvania, Ron Johnson of Wisconsin, John Hoeven of North Dakota, Saxby Chambliss of Georgia and – the only woman – Kelly Ayotte of New Hampshire….
The president insists that any alternative package must combine a balance of spending cuts and new revenues, while Republicans generally oppose new taxes on the wealthy and corporations.
In the Senate…a number of Republicans are known to support higher tax revenues if Mr. Obama and Democrats agree to significant long-term reductions in future spending for the fast-growing entitlement programs, chiefly Medicare and Medicaid but also Social Security – just the trade-off Mr. Obama supports. Mr. Coburn and Mr. Chambliss, for example, are members of a bipartisan group that has supported a deficit-reduction plan with more additional revenues than the president has proposed.
I haven’t yet been able to find confirmation of the report I heard last night, but it would not surprise me. If Graham organized the dinner, it would also explain why the invitees included the three stooges, Graham and his pals John McCain, and Kelly Ayotte–who have been inseparable since they decided to raise hell over the attacks on the Benghzi consulate.
That the outcome described in the highlighted passage from the Caucus blog (see above) was either expected or deliberately planned would also explain why the latest meme in the media for the past week or so has been that Obama is suddenly weak and has no leverage and so much go hat in hand begging the Republicans for mercy.
Late Night: Guitarist Alvin Lee Has Gone Home
Posted: March 6, 2013 Filed under: just because | Tags: Alvin Lee, blues, British Invasion, Obituaries 4 Comments
Sad news today…
Alvin Lee, lead guitarist and vocalist for the 1960s group Ten Years After, died this morning of complications from routine surgery, according to his website. He was 68.
Lee’s blues-rock group Ten Years After already was big in England before rocketing to international fame with its wild show at Woodstock in 1969. The band’s 10-minute rendition of Lee’s “I’m Going Home” became a cornerstone of Michael Wadleigh’s film about the festival and its soundtrack album, which would spend four weeks at No. 1 in the U.S. in 1970.
Having grown up on his family’s jazz and blues records but inspired by ’50s rock ’n’ roll, Lee, born Dec. 19, 1944, formed the Jaybirds in his midteens in his hometown of Nottingham, England. The group had some success after following The Beatles to Hamburg, Germany, but took hold after changing its name and relocating to London.
The newly christened Ten Years After played a residency at Marquee Club, where The Rolling Stones had debuted a half-decade earlier. A gig at the 1967 Windsor Jazz & Blues Festival led to a record deal with Denam. The band’s 1967 self-titled debut album — an innovative mix of rock, blues and swing jazz that featured “I’m Going Home” — failed to chart but received some airplay in San Francisco’s burgeoning FM radio scene.
That led legendary promoter Bill Graham to bring the band across the pond for a U.S. tour — the first of more than two dozen American jaunts during the next seven years.
Woodstock propelled Ten Years After into the forefront of the second-wave British Invasion, whose emphasis often was on flashy guitar playing with extensive solos.
Lee told the BBC in 2012 that he still had the 335 he played at Woodstock, but that he didn’t use it much any more, “because it’s too valuable.”Lee also later said he was ambivalent about the band becoming headlining stars, saying it took away some of the intimacy he enjoyed playing for smaller audiences in closer quarters….Lee, like his friend John Mayall, always said he wanted to stay true to the blues, country, jazz and rock roots he heard in his youth, and he spent much of his musical time going back there.
Back to The Hollywood Reporter:
Ten Years After ultimately released 10 albums before splitting in 1973. Lee soon teamed with American gospel singer Mylon LeFevre for a country rock album, On the Road to Freedom, which featured such guests as George Harrison, Steve Winwood, Jim Capaldi, Mick Fleetwood and Ron Wood. Lee would spend the rest of the ’70s touring and making solo records. During the decade’s waning years, he formed Ten Years Later, which released a pair of albums, and he continued to play gigs in the U.S. and Europe.
During the ’80s, he teamed with Rare Bird vocalist Steve Gould and toured with ex-Stone Mick Taylor in his band, and his ”90s albums include Zoom and 1994 (I Hear You Rocking).
In 2004, he released the rootsy Alvin Lee in Tennessee, teaming with Scotty Moore and D.J. Fontana from Elvis Presley’s band. His most recent record, 2007’s Saguitar, flowed from hard rock to slow blues to a take on rap. His 14th solo album, Still on the Road to Freedom, was released in August. A new compilation album, Best of Alvin Lee, was issued in May.
Rest In Peace, Alvin. You’ve left us too soon.
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