This is really something. Check out David Corn on a week that John McCain would really like to forget. I’ve added the links so that you can watch the hilarity yourself. Enjoy!
John McCain’s Very Bad Week: A Cheat Sheet
I was asked to appear on Hardball on Friday to discuss John McCain’s week–that is, his very bad week. It’s been tough to keep track of all that’s gone wrong for him–all the self-inflicted wounds–in recent days. So I made a cheat sheet. Here it is.
* McCain adviser Phil Gramm remark: Americans who worry about the economy are “whiners” and there’s no problem with the economy, just a “mental recession.” McCain response: Gramm doesn’t speak for me. But, um, that day Gramm was speaking for McCain, explaining McCain’s economic policies to the Wall Street Journal editorial board [NB: might’ve been the Washington Times. Doesn’t really matter. -ed.].
* Called the fundamental funding mechanism of Social Security a “disgrace,” essentially attacking the whole program.
* Released list of 300 economists who supposedly support his economic plan. Guess what? Not all of them do.
* Became visibly uncomfortable when asked whether health plans that cover Viagara should also cover birth control for women (after McCain surrogate/adviser Carly Fiorina raised this issue). [If you watch only one video, it should be this one — priceless! -ed.]
* Joked about killing Iranians with cigarette imports.
* Attacked Obama for not voting for a bill designating the Iranian Revolutionary Guard a terrorist group. Whoops–McCain didn’t vote for the bill, either.
* His campaign accused Obama of flip-flopping on Iraq. Politifact.com said that’s not true.
* Denied ever saying he’s not an expert on the economy. Well, he said it. Memory problems?
* McCain wants to stay in Iraq for as long as it takes and routinely blasts Obama as a defeatist for proposing a timetable for withdrawal. Yet Iraqi leaders said they now want to set up a timetable. There goes that issue.
* Campaign accused of screening reporters allowed to ask questions on its conference calls for the media, and did not declare, we do not screen.
* Claimed to have a perfect voting record on veterans affairs. Veterans groups disagree. (Iraq and Afghanistan Veterans of America gave him a grade of D. [ed. note: Obama got a B+])
* Pledged to cut the deficit by end of his first term. Prominent experts said not possible.
* McCain campaign ad charged that Obama voted to raise taxes on people making as little as $32,000 a year. Factcheck.org said this is false.
* Pro-McCain RNC ad said Obama has no new energy solutions. But Obama proposes $150 billion in new tax credits for alternative energy.
I might have missed a few other McCain slip-ups of this week. But the Hardball segment was only scheduled for a few minutes. McCain supporters ought to hope the guy and his entire campaign take the weekend off.
He and his campaign are not very good at getting in news cycles. In this case, they’re very good at not getting in news cycles.
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p>So, if McCain has a bad week and nobody’s paying attention to his campaign, does it make a sound?
…was about Obama flip-flops and “gaffes”. One would think McCain is running a mistake-free campaign.
…as the second comings of MLKJFKAbe&Jesus, your flip-flops, gaffes & inconsistencies are likely to attract more attention.
(1) Questions about McCain’s, uh, interest in craps are beginning to surface. (Craps is a kind of gambling where the house has a built-in advantage. Kind of like playing the lottery but paying a lot more for the tickets — or like invading Iraq and hoping hoping hoping that it will all go OK even without a plan.)
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p>(2) An LA Times article indicates that McCain’s account of his divorce from his first wife and his (at that time) extramarital affair with Cindy was false on a number of key facts.
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p>(3) He’s still doing the “they like me! they like me!” grin in front of the cameras after he gets off one of his “clever” lines. I remember watching Tom Reilly do that at the 2006 Democratic convention: it’s an extremely ineffective speaking mannerism. It says, “I’m manipulating you and I’m succeeding. Hooray for me!”
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p>The July 4th weekend was also not so good for him. Obama was in Butte Montana, celebrating his lead in the polls there and his daughter’s tenth birthday to a warm welcome, while speculation swirled around reorganization of the McCain campaign.
The fundamental funding method of Social Security is a disgrace as it stands it is a legalized Ponzi Scheme. Really it is.
…really, it’s not.
It is a legalized Ponzi / Pyramid Scheme in which those at the bottom or base of the pyramid pay for those at the top, the current retirees. that is why when the Baby Boomers retire it will create utter chaos, because the Baby Boom generation stopped having large families and you needed those large families to keep the population growing at an exponential rate in order to pay for Social Security. YOur protestations don’t stop the fact that the funding methodology is a Ponzi Scheme. Sorry but thems the facts.
Sounds like somebody here shares a similar position as McCain.
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p>You’re welcome to help us publicize McCain’s Social Security position to the American people, if you like!
Can you tell me how the funding mechanism works? Here I’ll give you a head start from HowStuffWorks.com. I know you don’t want it to be true, but really it is. Social Security is a Ponzi Scheme.
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p>If it smells like a Ponzi Scheme, if it walks like a Ponzi Scheme, if it looks like a Ponzi Scheme, than chances are it’s a Ponzi Scheme.
From Wikipedia
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p>Now, your definition of Social Security from HowStuffWorks.com:
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p>So there may be a slight similarity, in that the money being paid out is not due to “any real business” other than the collection of money coming in, but that’s where the similarity ends. It’s not fraudulent – it’s designed that way, and everyone in America (except John McCain, apparently) understands that.
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p>Can the system continue to sustain itself, as it has for the past 73 years? Yes – as long as we do two things:
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p>1.) Stop spending the surplus and replacing it with T-bills
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p>2.) Raise the wage cap – currently, a wage earner who goes over $97,500 doesn’t have to pay any more Social Security taxes. Raise that to $200,000 and the system will self-fund past you great-grandkid’s retirement.
Adjusting the cap will add something like 6 months to the programs solvant lifespan. Maybe it should be done anyhow, simply on general principle but it will have negligable effect on the longevity of the program and to discuss it in other terms is to offer a plecebo for a very real ailment.
There are several possible fixes which noone seems to want to discuss in the open. Here are a few.
One “fix” involves exploding the base of working age population to adjust for the ballooning retirment age segment of society. This is an example of social engineering with an eye to BanglaDesh as a model.
One could achieve this “goal” through lax immigration policies, particulalry by slanting the appeal of emigration to a younger more procreant demographic. Of course this would prove to be only a temporary fix, but doesnt it sound familiar? Why not simply pass the buck.
Another “cure” could be to work to reduce the average lifespan to one that was more typical at the time of the programs inception. Not likely?
Well … Hmm .. Maybe you are right and we should get back to discussing mathematicaly unfeasable solutions as if they actualy could cure something.
The clock is running.
Get real – show a link to an actual economic study (not from the Cato Institute, either) that says lifting the cap will add six months. The studies I’ve seen show that it would add 75 years of benefits:
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p>Source: http://mrzine.monthlyreview.or…
For a moment lets not play “swap the links” …
Lets try using our own brains and our own intuition and gut feel and see where that gets us.
For starters, you are aware of demographic trends, right?
You have heard of the baby boom and the subsequent decade long trend towards smaller and smaller family sizes? You are awre of medical advances and spiraling lifespans? You are aware that in another ten years or so there will be close to one retired person drawing off of two or three peoples earnings, assuming they are earning anything at all?
Now seeing that all the money that has been collected to date, every last penny, has already been spent by our brilliant superiors, we have the priveledge of beginning with a clean slate.
These 2+ workers get to pay for that retirees benifits in full by themselves with no help at all from uncle sam. Sammy is a pennyless popper in hock up to his eyeballs to Chairman Mao. Hmm … sound suspicious yet? Lets not fool ourselves with projections that give any notation to the value of IOUs in the trust fund.
Sounds like a pretty big problem, doesnt it, especialy with a 14% contribution rate and a faltering economy and falling real dollar wages. Doesnt sound simple at all, aye?
But here is what you propose.
You tell me that by hunting down 5% of the workforce and having them pay into the system a somewhat larger fraction of their earnings (7% on the added 50grand= 3500$) … you can float the system for another 75 years?
How many of these high wage earners do you think are out there who dont shelter their income into other categories? Do you realy want me to look for links or cant you visualize the situation yourself?
We’ve been governed by “gut feel” over the past eight years and look where it’s gotten us.
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p>Since you’ve made the audacious claim, the answer is yes.
Oh Come On.
Hasn’t it been a whole lot longer than 8 years since your gut told you something was realy askew?
Imagine all the reputable reports disuading our fears that we have read in ALL that time.
…I’ll listen to it. So yes, I’d like a link, to a reputable study showing that all of your assumptions are true. After that, I’ll happily talk some more about this. My email is in my profile if you want to get in touch.
Fine. Pick Your Own Study.
The results vary by which special interest group produces the study and which pre-stated outcome they desired when it was commisioned.
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p>http://search.yahoo.com/search…
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p>The more generic reports conclude that the issue is too complex to make your simple assumptions and even those tend to err on assuming the government will “pay back” the money it “borrowed” from the trust fund.
NEWSFLASH … the only “paying back” they will ever do is by borrowing even more from elsewhere.
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p>Anyhow, even the most biased studies only toss around the 75 year figure when associating it with a COMPLETE cap removal (Ie: Bill agtes pays 7% of his billions every year) and does anyone actually propose that? Jolly Prince John Kerry? The Duke of Hyanisport? Nah …
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p>so again how far do you propose to row on your 3700$
He would pay 7% of his income, just like everyone else – any billions he made prior to his current tax year aren’t subject to Social Security tax.
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p>Raising the retirement age in response to higher life expectancies is another method of extending the system’s solvency – there are many tweaks that will need to be done, all of which are vastly less expensive than privatization.
So I can chalk you up into the camp that lobbies for COMPLETE INCOME CAP removal than.
Glad we could clear this up. I believe it was your original post upstream that was bandying the idea of simply raising the cap to 140K , which would do little to address the problem at hand.
So a complete removal of the cap it is than. Bravo!
But should that be merly on “earnings” or should this income subject to taxation also include all forms of passive income, investment gains, inheritances, lottery winnings ect.
If not, how would you sort out the garbage?
Isnt the trend of trying to report all income in the form that is least taxed an age old trick? Like, why do we see corporate fat cats clamor to forsake increased salary as long as they are rewarded hugely for their efforts in the form of stock option grants … and in this day and age of reduced capital gain taxes and all, now realy.
I have heard it speculated that Dick Raymond, CEO of Exxon Mobil, is likely in a lower overall tax bracket than Bob Corniski, that guy you see with the “will work for food” sign under the I-93 overpass every morning. Creative accounting leads to creative results.
Certainly capiatl gains will be excluded from SS taxes, wont they? And any idea how many new classes of capital gains will result from that exclusion?
And how does this address our dilema?
…as it is an anlytical question with a real answer…based on actuarial assumptions, etc…
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p>Of course scientific study is going to be better than gut feelings.
“Of course scientific study is going to be better than gut feelings”.
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p>Ah those were the days.
As I type this I am conveniently reminded by the smirking face of Algore (he’s not just a brillaint economist anymore) to the right hand side of the computer screen of how the line between science and propoganda has been so thoroughly obscured.
On a more serious note, anyway, the position you and McCain take on Social Security indicates a complete lack of understanding both of how Ponzi schemes work as well as the Social Security system.
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p>You fail to note that Social Security, unlike Ponzi schemes, has actually paid out critical retirement income to millions of elderly Americans, and continues to do so today (including to, one presumes, McCain himself). Additonally, any minor shortfalls in the system have been and can continue to be addressed with small tweaks, fully open and disclosed to the public. It has not, does not, and will not require exponential growth in the covered population. Exapnding Social Security’s reach to the remaining uncovered population is among the tweaks that can be looked at in future years, but it is hardly the only minor tweak that is an option.
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p>That’s all for now, but hopefully this inspires you to learn a little more about the history of Social Security and Ponzi schemes before you go around parroting the latest ridiculous blather from the Cato Institute.
It’s what I’ve felt for over 15 years when I took a look at how the Social Security system works. It relies on current employees to pay for retired employees, when you run out of more current employees than you have retired employees. The system implodes. It is going to do that by the time I retire. I hope this frank talk inspires you to get your head out of the sand and really look at the social security system. Unfortunately it is a third rail and a true hard look at it can’t be done in the current political environment.
Thanks for clearing that up!
From the most recent report of the actuary:
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p>In English, that means the program took in $200 billion more than it spent, and has reserves in form of treasury securities of 2.2 trillion.
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p>Now, I think the program would be more efficient if the trust fund was allowed to invest in a wide range of financial assets. But the statement that all of the current taxes are going to to pay current benefits is clearly wrong.
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p>McCain was correct. He does not know anything about economics.
From wikipedia:
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p>The Achilles heel in a ponzi scheme is the escalating return and dependence on future investors as the mechanism for funding. Given a stable source of income and stable benefits, no such escalation is present. In this way SS isn’t about “top” and “bottom” but “past” “present” and “future”. The income of a ponzi scheme is based on the requirement of a false assumption that an ever increasing (and eventually unsustainable) amount of participation from new investors can be made available as the funding mechanism for the return. By contrast the funding requirements for SS are based on the (not false) assumption that the country will maintain a reasonable labor pool to pay into the system. This demands of the pool will vary by population changes and benefit adjustments, but it is not, as a rule ‘ever escallating’ as in a true ponzi scheme. The classical ponzi principal would work if the assumptions were true, which of course they are not, nor could ever be. Indeed, were a hypothetical ponzi scheme to be developed with reasonable assumptions where the participation rate of investors could be reasonably assumed and where the return was stable as opposed to escalating, it could be stable too… but then it wouldn’t be a ponzi scheme.
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p>Dependence on future participation isn’t a guarantee that the mechanism will blow up. Dependence on participation that you can’t depend on is.
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p>The funding mechanism in a ponsi scheme is doomed to dry up. The funding mechanism in SS is doomed to require periodic adjustments. Granted that some adjustments may be harsher than others, but that’s different that saying its not viable.
See my post above…
is that all past monies contributed into the system have been spent, in great part (about $2T) outside of Social Security (like to fight the war in Iraq while providing substantial tax cuts to the rich).
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p>Although the “borrowed” funds are kept on the books as being in the Social Security Trust Fund, the reality is that as the difference between SS income and expenditures (recently about $200B per year) decrease, the general government will have less of these funds to borrow to offset the annual deficit. So whereas today the deficit of about $500B is being claimed to be $300B (using the SS surplus), the deficit of tomorrow will not have such an offset. Then comes the time when there is no SS surplus, and the entire federal deficit shows up where it should really be currently. So with no other changes we can expect $500B a year in federal debt, and when SS goes into an annual deficit, the “repayment” of Trust Fund debt by the federal government will push that annual deficit towards $1T.
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p>So the first action should be to stop running our federal government at such an extreme debt. If that happens, small adjustments in the Social Security parameters should be sufficient to keep that program in the black.
….them’s not the fact. Them’s your simple minded spin.
There are some serious matters that need to be attended to if the system is to remain viable indefinitely, or even for the next 100 years.
Really Eabo, that’s what you think? The most successful social program in the history of the world is a fraud? What would you replace it with?
It sure has been a succesful program. For over 70 years the government has collected 14% of people’s paychecks and spent it on other things and everyone has applauded.
Wonderful! Just Fabulous!
Unfortunatly within a few years, payouts will begion to exceed payments in … the government will no longer view this as a success … and than what?
Do you figure that your friendly neighborhood political hack will still care about your welfare when it isnt profitable to do so?
Guess again ….
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p>http://perotcharts.com/
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p> …. and the band played on …
federal employees participate in.
401k plans were available long before the Thrift Savings Plans. Both are voluntary and are not funded by government. The participant saves money out of income and gets a tax break. In the Federal program there are just a few options for savings investment.
Switching over to personal accounts would be hugely expensive.
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p>Given that what you’re proposing is so impractical, why are you proposing it?
The privatization of Social Security, the once and future goal of far right-wingers everywhere, is the truly fradulent scheme here, not Social Security itself. You point to this by noting the huge expense of switching over to private accounts.
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p>It never ceases to amaze me that you hear this nonsense about private (or “personal”) accounts from right-wingers yet nothing about how it would bankrupt the system such that current seniors would no longer receive payments without massive trillon-dollar transfers from the general fund. If you want to talk fraudulent schemes, that’s it right there.
It seems to me that the other side’s goal is to sabotage the system rather than to fix it. Hence wildly impractical “fixes” like switching everything to “private” accounts.
…what they want to do to public education. Create a system where schools in the most need get their funding cut. Where the communities most in need get nothing. Just seems to me that this is the path to the elimination of public schools.
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p>The right is very clever with their “fixes”.
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p>On this topic, some minor tweaks keep the system alive for decades longer. Raise the cap $20K or so keeps the system alive for 15-20 years longer. Then in 15-20 years we raise the cap again, more or less matching inflation. It’s pretty easy to fix, but the right wants us to believe we’re facing a debacle so we can just eliminate the entire thing, privatize, enrich Wall Street… and those poor shlubs who invest wrong, well, we’ll try to avert our eyes when we step over their sleeping bodies in ATM vestibules, or on park benches, or in the T. There but for the grace of god…
Let people participate their own retirement investing?
Gadzooks! Don’t you know how STUPID the people are?
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p>Best to let the gubmint take care of it. They know what’s best for you.
…to participate their own retirement investing.
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p>If you have a 401K plan at work, join it and contribute hte maximum. If not, then tou should open a Roth Ira and contribute the maximum. No one is suggesting that people should not take personal responsibility for their retirement income – but privatizing Social Security is the exactly wrong answer.
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p>As to how STUPID people are? Many of us see that every day, when our right-winged brethren post their latest (or even 15 year old) ridiculous blather…
Sorry for the typos!
…many of us would like to have a say in what happens to the 12.5 percent that is presently confiscated from us for the retirement of others.
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p>Were the average American allowed to invest even half that portion of their own income, then they wouldn’t have to face the prospect of retiring on a paltry maximum of $2185.00 per month.
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p>Additionally, I point out two statements;
…neither for which you provide any evidence. They are essentially gratuitous.
has a long history on the right. It doesn’t take that long to dig up the relevant historical record. The budgetary reasons against privatizing Social Security are self-evident. Even the Bush Administration, taking a break for reality denial, eventually admitted this.
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p>Mr 001 has hardly been gratuitous.
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p>Social security is primarily insurance. Generally, the goal of insurance is not to even out benefits; it is to even out risks.
… taking a break for from reality denial …
http://zfacts.com/p/784.html
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p>And turning your retirement assets over to Wall Street is only sure to make them rich, not you financially self-sufficent. The DJI first closed over 11,000 in May 1999, yet after nearly 8 years of George Bush it can barely keep that number, despite the erosion in what the dollar gets you over that time.
I’d start with Where Are The Customer’s Yachts. If the stock market were predictable or consistently profitable there wouldn’t be a market. The real money is in running the place and even that’s a hard slog these days.
I just hope that the people that run the Senator Obama’s campaign can keep from opening their mouths wide enough to insert their feet. My Mom always used to say, “You don’t get in trouble for what you didn’t say.” (Yeah, I’m a poor student.)
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p>All the Democrats have to do is leave Senator McCain alone with the microphone. Maybe a little spotlight on his economic advisor, “Enron Phil” Gramm will help, but it looks as though Senator McCain’s campaign should be on suicide watch.
Democratic and Republican Presidents have failed America. This along with the Democrats and Republicans in Congress and out of Congress now posturing.
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p>There is no cohesive energy policy and the expensive heating winter of 2008 is approaching for New England.
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p>Look at our country. We are going backwards with energy, food, housing, education, and medical costs going skyward each day.
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p>Time for a change beyond Obama and McCain of partisan mean spirited politics of all spectrums. The liberals, conservatives, and the center have failed to work together for the common good of the citizens and future generations.
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p>The Washington politicians out of tune and out of touch caused the economic destruction of our great nation.They caused this calamity and did not seek accountability or oversight to prevent our economic destruction. Can the battered citizens wake up these mean spirited partisan politicos of selfish partisanship to solve the country’s economic illness. Are the remedies too late and the country too far gone?
On many of the key issues of our times, it’s blazingly clear that the solution is not in the “center”: the Constitution, Iraq, global warming, tax policy, and regulation. No one has found the bipartisan pony in the middle.
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p>Sorry if you find differing opinions disagreeable. The melting of Greenland and a never ending occupation of Iraq are orders of magnitude more disagreeable.
Yet, I agree that both the Republicans or the Democratic Presidents have done little to nothing for the American people. It’s time to get beyond this situation and to get past the “we must vote for the lesser of two evils” policy that has dogged the American politican landscape for so long.
…at least from the point of view of the middle class:
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p>From: REPUBLICANS vs. DEMOCRATS ON THE ECONOMY
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p>The problem is that the public only remembers recent events, and they keep putting Republicans in charge every so often. Here’s a hard and fast rule – if you make less than $1 million per year and you vote Republican, you’re voting against your own self interest.
The current Democratic majority in the Congress hasn’t exactly been pushing the country on a vastly different course from the Republican leadership in the White House.
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p>In fact, based on the Congressional record over the past 18 months one might even be tempted to conclude there isn’t that much difference between the Democratic Party and the Republican Party.
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p>That may be why their popularity is so low.
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p>But hope springs eternal. Maybe with a bigger Democratic majority and a Democrat in the White House we’ll see some change.
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p>Time to put the blogosphere in charge! 😉
… suffers IMHO from accepting the definition of the ‘middle’ from the (so-called liberal) media pundits and the right.
This:
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p>articulates the point in a nutshell.
It’s because the Democratic party, for the most part, for nearly 40 years, have failed to really project a vision and because they lack the spine to really stand up for what’s right.