The Great Betrayal

KyussBishop

An interesting set of articles I've read in the run up to the presidential elections, and afterwards, suggests that the Democrats are the only party that can successfully dismantle the long-standing progressive sacred-cow of social security, the social 'safety net'; that where the Republicans would meet too great an opposition in seeking to achieve this, the Democrats can succeed.

Now that Obama has won the presidential election, and the US government is soon to run into the artificial 'fiscal cliff' in 2013, where automatic limits upon national debt are reached, there is increased concern from some prominent writers that the Democrats are now about to commit the 'Great Betrayal', under guise of a great bargain, which will lead (through automatic spending cuts) to the decimation of social security benefits in the US (and the entrance of the US into the policies of austerity, producing a return to recession).

Some prominent writers that I follow, who have been warning of this:
http://www.nakedcapitalism.com/2012/11/bill-black-wall-street-urges-obama-to-commit-the-great-betrayal.html (Bill Black)
http://www.guardian.co.uk/commentisfree/2012/nov/07/obama-progressives-left-entitlements (Glenn Greenwald)

A quite good recent article on this from Bill Black:
http://www.nakedcapitalism.com/2012/11/bill-black-jobs-now-make-obamas-priority-reality-and-expose-the-lie-of-lazy-laborers.html

In the relief/euphoria surrounding the re-election of Obama as president, the significance of this seems to be mostly lost on people, and it doesn't appear to have made it very far onto anyones radar; what do people make of the likelihood for the occurance of this 'great betrayal', its potential consequences, and what do people make of the relative lack of attention surrounding it?

Black Swan

KyussBishop wrote: »

An interesting set of articles I've read in the run up to the presidential elections, and afterwards, suggests that the Democrats are the only party that can successfully dismantle the long-standing progressive sacred-cow of social security, the social 'safety net'; that where the Republicans would meet too great an opposition in seeking to achieve this, the Democrats can succeed.

One subtle austerity approach that the reelected administration may hide within the volumes of details in the new budgets they propose over the next 4 year term is to reduce Social Security expenditures by eliminating annual COLAs. With anticipated economic recovery and growth, this could result in a 2-3 percent reduction per year, compounded over the 4 years; i.e., this compounding resulting in a substantial reduction of Social Security accumulated expenditures by the end of the 4th year.

Of course, the retired seniors that are not rich, and rely on their monthly Social Security checks, would be impacted substantially with the resultant reduction in purchasing power against rising costs of living during this 4 year period. It may be anticipated that such senior citizen retirement lobbies as AARP would begin to rally support against the Democratic administration after the 3rd, going into the 4th year of such austerity measures, just in time for the 2016 general elections.

The Republican controlled US House would probably support a budget item that eliminated Social Security COLAs, and when the senior citizen lobbies started screaming about the impacts on the falling Social Security supported retirements, the GOP could lay the blame on the Democratic Administration for leading and implementing such an austerity measure affecting the great number of retired and retiring Baby Boom poor and middle income classes.

KyussBishop

Yes indeed, the whole 'grand bargain' (i.e. betrayal) would be a bipartisan one, where the GOP would be largely supportive of whatever cuts the administration is likely to make.

The possible cost of living adjustments (COLA) gradual reduction over 4 years is interesting; by the time the 2016 elections come around, I don't know how damaging that would be to the Democrats, seeing as the GOP would likely support the same and worse.
Once the cuts start happening in this area from the Democrats, I can't see much stopping further cuts from the GOP then if they had the potential to get in power, so there may not be any disadvantages in that from the Democrats.

The Republicans (from my own point of view) could easily have gained a lot of ground in this election by screaming more about the economy, but since their own policies are heavy on austerity and 'fiscal responsibility', this didn't leave them much room to leverage that; unless there's a big shakeup in their party between now and 2016 (in a way that goes almost entirely against their core economic ideology), they may not be able to leverage any political advantage out of such cuts from Democrats next time either, since a Democratic swing to austerity would already be well to the right.

Permabear

This post has been deleted.

KyussBishop

Heh, Greenwald is one of the more prominent liberal writers around at the moment; he certainly isn't 'mainstream', in that he has a particular disdain for the usual subservient beltway 'mainstream' journalism you find in the US, but he is very widely read by people.
He's also a particularly good critic of the US government in general, so Libertarians would probably be quite sympathetic to that aspect of his writing.

Bill Black is less well known, but is still a prominent enough voice from his past as a regulator during the S&L crisis in the US, and his writings on fraud.

I notice a general lack of actual argument in your post there; pouring cold water on the idea that these writers are well known, and appealing to the authority (of government no less) that 'most politicians' seek the slashing of social security.

What is wrong with a site being called Naked Capitalism by the way? That's one of the most read economic/financial blogs on the Internet.


The only reason the US is headed into trouble now, is the artificial 'fiscal cliff' coming up, which is going to have no useful purpose other than to push the country into austerity, i.e. engaging in needless damage to the economy and society, that will set them in lockstep with Europe.
Many claim that the US is already on the path to recovery now, but if this artificial fiscal cliff is allowed to stand, and it puts them into the position of slashing benefits and such (rather than more sane choices like slashing military spending), watch the country slide right back into a recession.

Since we're talking about fiscal stability (not general opposition to particular policies or programs), I take it you would prioritize slashing social security, over slashing the military budget first?

Amerika

If you can’t beat them join them. I think I’m changing my whole attitude towards things. America has transformed. We have now voted for free stuff rather than freedom. I too am thinking about taking care of number one, and the rest be dammed. They want higher taxes on the rich and small businesses… go for it! 50%, 60% 75% I’m with it. Higher taxes on capital gains, be my guest… who the hell cares about investments and how they create jobs. I’m looking into cashing out all my investments any over the next two years and paying the lower tax. Then I’ll buy gold and hoard it. Make Medicare and Social Security insolvent in a dozen years… yeah baby. I’ve paid over $250,000 into it, and I damn well will get as much from it while I can, so I figure I can get disability easily enough in about a year and earn about 65% of my current earnings and have health care covered by Medicare. Supplement that with my hoard of gold that I will convert to cash in increments, and I’ll be just fine. Stop everything that has to do with underground energy development, and impose cap and trade restrictions… why not! I won’t need to drive much, and can farm my land which I’ll barter and ignore paying taxes. Since I won’t need worry about work, there's no need to care about massive unemployment. $22Trillion in debt… Let the kids and grandkids worry about it. They’ll probably just make any and all obligations to foreign countries null and void. Might as well get illegal alien amnesty right off, it will happen anyway, and 15 million democrat voters will cement our future in ashes. Slash the military and stop all foreign aid… yeah just let them all kill each other and pay for their own security. And if all else fails over here, I’ll just head over to Europe, as any member of the EU must take me in. Gee, I’m starting to know what Chris Matthews meant by that tingling feeling up my leg.

poeticseraphim

Amerika wrote: »

If you can’t beat them join them. I think I’m changing my whole attitude towards things. America has transformed. We have now voted for free stuff rather than freedom. I too am thinking about taking care of number one, and the rest be dammed. They want higher taxes on the rich and small businesses… go for it! 50%, 60% 75% I’m with it. Higher taxes on capital gains, be my guest… who the hell cares about investments and how they create jobs. I’m looking into cashing out all my investments any over the next two years and paying the lower tax. Then I’ll buy gold and hoard it. Make Medicare and Social Security insolvent in a dozen years… yeah baby. I’ve paid over $250,000 into it, and I damn well will get as much from it while I can, so I figure I can get disability easily enough in about a year and earn about 65% of my current earnings and have health care covered by Medicare. Supplement that with my hoard of gold that I will convert to cash in increments, and I’ll be just fine. Stop everything that has to do with underground energy development, and impose cap and trade restrictions… why not! I won’t need to drive much, and can farm my land which I’ll barter and ignore paying taxes. Since I won’t need worry about work, there's no need to care about massive unemployment. $22Trillion in debt… Let the kids and grandkids worry about it. They’ll probably just make any and all obligations to foreign countries null and void. Might as well get illegal alien amnesty right off, it will happen anyway, and 15 million democrat voters will cement our future in ashes. Slash the military and stop all foreign aid… yeah just let them all kill each other and pay for their own security. And if all else fails over here, I’ll just head over to Europe, as any member of the EU must take me in. Gee, I’m starting to know what Chris Matthews meant by that tingling feeling up my leg.

That's the Spirit ..you will love it here....we're lovely once you get to know us:)

You can stay with me

And if you like BIG GOVERMENT ...just wait until you see the EU....the European parliament the Eu council and the EU commission...that moves from Brussels to Strasbourg for no reason at a cost of 200 million Euros each year.

We have 4 different presidents at any one time. The president of the council, the president of the commission and the president of the parliament.

Then a fourth president from which ever country has the ceremonial presidency in rotation.

Your parliament has like 430 members ours has over 750.... and whilst the population if the EU is over 500million and the population of the US is just over 350million it is still a huge difference.


When it comes to GOVT ....we do it bigger and netter than TEXANS:D

You should look online at the EU parliament debates..they are entertaining. Search Farage


Europe is a strange animal...and you are very welcome anytime..:)

joseph brand

Amerika wrote: »

$22Trillion in debt… Let the kids and grandkids worry about it. They’ll probably just make any and all obligations to foreign countries null and void.

Over half the US debt is money they owe themselves. I wish I could owe myself tens or hundreds of thousands of Euro. The US debt clock, although it looks ominous, isn't really a big deal. America can just lend itself more money. It's like magic, seriously.

Bernanke:"Where's the money you owe us?"
(Suddenly a wall of Secret Service men)

Obama:"What money?"
(Bernanke escorted into dark room by batton-wielding heavies for a 'meeting')

Debt solved. Any questions?

Amerika

poeticseraphim wrote: »

That's the Spirit ..you will love it here....we're lovely once you get to know us:)

You can stay with me

And if you like BIG GOVERMENT ...just wait until you see the EU....the European parliament the Eu council and the EU commission...that moves from Brussels to Strasbourg for no reason at a cost of 200 million Euros each year.

We have 4 different presidents at any one time. The president of the council, the president of the commission and the president of the parliament.

Then a fourth president from which ever country has the ceremonial presidency in rotation.

Your parliament has like 430 members ours has over 750.... and whilst the population if the EU is over 500million and the population of the US is just over 350million it is still a huge difference.


When it comes to GOVT ....we do it bigger and netter than TEXANS:D

You should look online at the EU parliament debates..they are entertaining. Search Farage


Europe is a strange animal...and you are very welcome anytime..:)

Thanks, but I’ll wait till the well runs dry to make my escape to the EU (but I should get on the paperwork with the Irish Register of Foreign Births). There’s just too much opportunity opening up over here to exploit at the current moment. With amnesty around the corner, which involves required tax filings, I see a huge opportunity to take advantage of the new citizens. With no push to have them learn English, improve their lot in life or educated to anything above the 8th grade level... along with a democratic effort of reliance on the government, can you imagine opportunities? I see Rosette Stone Spanish levels 1-5 can be obtained used on ebay for relatively cheap. I’ll take the H&R Block tax course and donate my first tax season to helping the large (illegal at the current moment) Mexican community in the area and become ingrained in their minds and hearts. Their taxes will be quite easy to complete as they don’t have much, but they’ll never know that. Then the following year open up a tax service under one of my kids names, and soak them for all they’ve got going forward, as most will be incapable to fill out the upcoming burdensome tax returns on their own. I’ll get what I can from them at around $500 an hour, all the time having them think I am providing them with a necessary service so they won’t be taken advantage of hehe, as government benefits will help to keep them poor, uneducated and in lowest tier of society. I’ll make donations to the Spanish community and Democrat politicians to insure acceptance and maintain the attitude that my services are necessary and vital. Heck, I’ll even provide them with instant cash refunds, for a nice percentage that is. Excellent money for a couple of months of work. This becoming a Democrat and having a big government is quite exciting… I feel so Anakin Skywalker.