Robert Reich has put up a couple of posts recently on the wealth inequalities in the US and what they mean for the US budget. (An aside, the Mother Jones graphs are telling but nothing, to my mind, is a more bracing summary of the situation than the fact that the 400 richest Americans have nearly as much combined wealth as the cumulative wealth of the bottom 50%.)
The first post discusses the extent to which changes in income distribution have affected Social Security and how it's just untrue that Social Security contributes to the deficit. In 1983 a Greenspan commission tried to fix Social Security by implementing a plan whereby the ceiling, the point after which wages don't require a SS contribute, would continue to grow gradually, "the ceiling was set so the Social Security payroll tax would hit 90 percent of all wages covered by Social Security." However, the wage inequalities have been such that the current ceiling of 106,800 covers only 84% of all wages. To get it back up to the 90% level we'd have to increase it $180 000! That would be an easy fix for SS and seems a small price to pay for those benefiting from the wealth inequality, but as Reich notes, this is apparently unacceptable in the present climate.
The second post is a bit less wonkish, simply noting the BS that the Republicans are serving up with respect to our economic travails and the Democrats' collective lack of willingness to call them on it. The "Republican message is bloated government is responsible for the lousy economy that most people continue to experience. Cut the bloat and jobs and wages will return." Of course, the GOP assumptions are highly questionable, as Goldman Sachs notes. But the problem, Reich notes, is that the GOP is now allowed to get away with this stuff. We don't hear the Democrats or Obama talking about the obscene inequities in income distribution or dispelling the myth that government is responsible for the economic difficulties we're facing. Instead, Reich observes, the Democrats simply counter with "We agree but you’re going too far. Government employees should give up some more wages and benefits but don’t take away their bargaining rights. ... Non-defense discretionary spending should be cut but don’t cut so much." I admit that I've been pulled into this game too. It's yet another example of the GOP strategy to pull everything hard to the right and then make even conservative positions look left wing. They've played it marvellously in Wisconsin. Roll back union benefits? To hell with that, we'll take away their collective bargaining power too. Suddenly the left is fighting just to retain collective bargaining and we've sold the unions down the river on their compensation packages, unquestioningly buying into the myth that they're egregiously overcompensated, even while we blithely accept ludicrous executive compensation packages as a natural and even desirable part of capitalism.
The first post discusses the extent to which changes in income distribution have affected Social Security and how it's just untrue that Social Security contributes to the deficit. In 1983 a Greenspan commission tried to fix Social Security by implementing a plan whereby the ceiling, the point after which wages don't require a SS contribute, would continue to grow gradually, "the ceiling was set so the Social Security payroll tax would hit 90 percent of all wages covered by Social Security." However, the wage inequalities have been such that the current ceiling of 106,800 covers only 84% of all wages. To get it back up to the 90% level we'd have to increase it $180 000! That would be an easy fix for SS and seems a small price to pay for those benefiting from the wealth inequality, but as Reich notes, this is apparently unacceptable in the present climate.
The second post is a bit less wonkish, simply noting the BS that the Republicans are serving up with respect to our economic travails and the Democrats' collective lack of willingness to call them on it. The "Republican message is bloated government is responsible for the lousy economy that most people continue to experience. Cut the bloat and jobs and wages will return." Of course, the GOP assumptions are highly questionable, as Goldman Sachs notes. But the problem, Reich notes, is that the GOP is now allowed to get away with this stuff. We don't hear the Democrats or Obama talking about the obscene inequities in income distribution or dispelling the myth that government is responsible for the economic difficulties we're facing. Instead, Reich observes, the Democrats simply counter with "We agree but you’re going too far. Government employees should give up some more wages and benefits but don’t take away their bargaining rights. ... Non-defense discretionary spending should be cut but don’t cut so much." I admit that I've been pulled into this game too. It's yet another example of the GOP strategy to pull everything hard to the right and then make even conservative positions look left wing. They've played it marvellously in Wisconsin. Roll back union benefits? To hell with that, we'll take away their collective bargaining power too. Suddenly the left is fighting just to retain collective bargaining and we've sold the unions down the river on their compensation packages, unquestioningly buying into the myth that they're egregiously overcompensated, even while we blithely accept ludicrous executive compensation packages as a natural and even desirable part of capitalism.
What's interesting and alarming is the extent to which Reich's positions are now radical, far outside the extant political mainstream. Recall that it was only two administrations ago that Reich held a position in the Cabinet. We've come a long way, baby.
No comments:
Post a Comment