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proposal to do so, with House Speaker Nancy Pelosi going so far as to
actively lie that proposed cuts will ‘strengthen’ the program. And given the
cuts will eventually put tens of millions of Americans into dire poverty
from a program they paid into for all of their working lives, what rationale
could possibly justify doing so?
The reason I ask is a coalition of democrats, labor, liberals and
progressives just re-elected Mr. Obama and democrats in Congress to what
—cut Social Security? Mr. Obama created the ‘fiscal cliff’ to first push his
stacked (in favor of cutting social insurance programs) ‘deficit
commission’ to develop a plan to cut government spending and second, to
force the issue to be revisited immediately after the election if no plan was
agreed to. And Republican threats to refuse to raise the debt ceiling for
leverage to ‘force’ spending cuts are idiotic—George W. Bush and
congressional Republicans just led the largest increase in government
spending in modern history. And that is not a difficult point to make. (And
had it been on beneficial programs, it would have been laudable).
Ultimately the entire ‘debate’ is nonsense—the U.S. doesn’t fund
spending directly from taxes. As the Federal Reserve is in the process of
demonstrating with its QE (Quantitative Easing) programs, it can buy an
unlimited quantity of government debt with money it ‘creates’ –the ‘debt
limit’ is an arbitrary misdirection. This isn’t to argue that there is no
relationship between economic production and money creation, but it is to
point out that the ‘Federal budget’ is a convenient fiction. So, given his
repeated analogy of the Federal budget to a family budget, is Mr. Obama
ignorant of government finances or does he understand them and is
purposely using the misleading analogy to further unstated goals?
The ‘Fix the Debt’ committee of politicians, corporate executives and
connected financiers claiming to be concerned about the Federal deficit
isn’t discussing eliminating the ‘carried interest’ deduction that benefits
billionaire hedge fund managers, raising effective corporate tax rates that
are currently the lowest in modern history, materially cutting end-ofempire
levels of military spending and raising personal income tax rates
on the titans of finance who would be begging for change in the street
were it not for Federal government largesse in the (ongoing) bank bailouts.