Line of the Day

From Kevin Drum on the Speaker's reaction to Goldman Sachs' (notorious liberals they) report that the House spending cuts could reduce U.S. GDP by up to 2%.

"Boehner sure seems to have the traditional GOP mindset down pat: if inconvenient evidence is at hand, pretend it doesn't exist."

Social Security Is Not In Crisis

Just ask the White House Budget Director, Jack Lew. He points out in his USA Today Op-Ed,

"Social Security benefits are entirely self-financing. They are paid for with payroll taxes collected from workers and their employers throughout their careers. These taxes are placed in a trust fund dedicated to paying benefits owed to current and future beneficiaries.

When more taxes are collected than are needed to pay benefits, funds are converted to Treasury bonds — backed with the full faith and credit of the U.S. government — and are held in reserve for when revenue collected is not enough to pay the benefits due. We have just as much obligation to pay back those bonds with interest as we do to any other bondholders. The trust fund is the backbone of an important compact: that a lifetime of work will ensure dignity in retirement.

According to the most recent report of the independent Social Security Trustees, the trust fund is currently in surplus and growing. Even though Social Security began collecting less in taxes than it paid in benefits in 2010, the trust fund will continue to accrue interest and grow until 2025, and will have adequate resources to pay full benefits for the next 26 years."

FWIW, I tried to make this point in a discussion in the comments of a post at the Professor's blog, but didn't do it nearly as well (or with as much authority) as Mr. Lew. Of course, since Mr. Lew is a member of the Obama administration, my opponent in that discussion may not buy it coming from Mr. Lew either.
h/t TPM

Excerpt of the Day

Courtesy of Kevin Drum.

"Republicans, it turns out, actually spend a bit more money on social programs than Democrats, as the green bars in the chart below show (click for a larger image). The main difference? Democrats spend it on direct programs that largely serve "the elderly, the disabled, the unemployed, and the poor...ethnic minorities, racial minorities, and single mothers." Republicans spend it indirectly on programs that "are biased towards workers who are White, full-time, in large companies, and high-wage earners." But spend it they do."

Paul Krugman

On the same topic as the last post:

This brings me to the seventh word of my summary of the real fiscal issues: if you’re serious about the deficit, you should be willing to consider closing at least part of this gap with higher taxes. True, higher taxes aren’t popular, but neither are cuts in government programs. So we should add to the roster of fundamentally unserious people anyone who talks about the deficit — as most of our prominent deficit scolds do — as if it were purely a spending issue.

Another Example...

...of how so-called "deficit hawks" are really just "cut taxes for the rich hawks." From E.J. Dionne at the Washington Post -

"How do we know our difficulties stem primarily from a shortage of revenue? Consider what would happen if we allowed all the tax cuts scheduled to expire in 2012, including the ones enacted under Bush, to go away. That would produce nearly as much deficit reduction over the next decade - roughly $4 trillion - as all the maneuvers of the Bowles-Simpson commission put together. If you want to be serious about closing the deficit, ending the Bush tax cuts is a good place to start."

It's a good piece showing the hypocrisy of "deficit hawks" and also how the Democrats regularly get outflanked politically on issues such as this.

Is the Deficit a Crisis?

Kevin Drum gives the spot on answer for the Republicans.

Answer for Republicans: They don't think the deficit is a problem. If they did, they'd favor tax increases, Pentagon cuts, and Medicare cuts, since even the most dimwitted among them knows that cutting domestic discretionary spending won't make a dent in the deficit. But they favor none of these things.

Rather, they think federal spending on liberal social programs is a problem, and yammering about the deficit is a good way to force cuts to these programs. And there's nothing wrong with this. It's good politics. Why waste a crisis, after all? But anyone reporting on this issue really needs to be honest about what's going on. Republicans want to cut social spending. The deficit is just a handy cudgel to make this happen.

Another take on the Myth of the "Social Security Crisis"

According to Matthew Yglesias, it's got to do with how the Republicans favor policies that the rich like.

"For “you’re going to have to raise the retirement age for Social Security” to count as an “ugly truth” assumes that it’s true. And yet it’s not true. Closing the projected actuarial gap in Social Security requires some combination of more immigration, higher taxes, and lower benefits. Relative to higher taxes, lower benefits tend to be preferred by richer people. And of all the different ways to reduce benefits, raising the retirement age is the one that does the most to punish the poor and demands the least sacrifice from the rich. Christie, it’s true, isn’t saying “whatever the voters want to hear” but he’s not telling the truth either. What he’s doing is saying what rich people want middle class people to believe."