Seven Steps to Social Security cuts via Debt Commission
by Bruce Webb
I don’t visit the web-site EconomistMom much because Diane has hinted a while back that I was being rude, and like a good party guest does, took the hint and left. But my eye was caught by the caption and the very nice illustration to this post Yes Deficit Hawks Can Have Their Cake and Eat it Too, decided to drop in and found a conversation between olde acquaintances Bruce Bartlett, Jim Glass and commenter Brooks. I don’t want to copy Bartlett’s exact comment without his consent, so to see it and my reply, you may have to visit. Go ahead, I’ll wait below the fold.
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Back now? Good.
For those of you who didn’t go the short version of my comment is that the strategy to get major slashes to Social Security and Medicare takes an Seven Step and that this technique is not new and in fact mirrors the original plan for Bush’s Commission to Strengthen Social Security (CSSS) in 2001-2002.
Step one. Get consensus on ‘Crisis’. In this case that current debt growth levels are unsustainable.
Step two. Get consensus that there are only three possible paths out: revenue increases (A), cuts in military and other discretionary spending (B1 and B2), or cuts to non-discretionary spending, meaning Medicare and Social Security (C)
Step three: Having agreed that some combination of A, B, and C is needed set up a Commission with a mandate to propose an up or down vote.
Step four. Committee decides it is unwise to increase taxes during a recession and eliminates (A). Commission further decides that it is unwise to cut defense spending in the middle of two wars eliminating (B1) and that eliminating infrastructure spending or farm supports is both unwise or politically impossible in the current climate (B2)
Step five. Recommend a package of cuts to Medicare and Social Security-C on the basis of shared sacrifice, after all every CD and State has a share of the elderly population.
Step Six: Tell Congress that the statute doesn’t allow them to revisit A or B and then that NOT voting for a C based solution means denial of Steps one and two.
Seven: Either get a vote for C or run against opponents as ‘Do Nothing Deficit Deniers”
This was exactly the plan used by the Bush Administration in their Spring 2005 Social Security Tour. Rather than produce a Plan already in hand crafted to specifications, say like Model 2 of CSSS, and have people pick it to pieces, they held it back for a later stage. . So the proposed sequence there was:
Step A: Use Social Security Tour to get consensus on Social Security Crisis
Step B: Use tour to assure everyone that all options were on the table.
Step C: Having gotten consensus from Congress try to find some mechanism to assure a final up or down vote.
Step D: Having secured a vote indicate that any plan MUST comply with the seven existing guidelines of CSSS Guiding Principles to CSSS which bar any tax-based solution and mandate private accounts.
Step E: Remind Congress that they promised an up or down vote and that refusal just meant being in denial of what was conceded in step one and two.
Step F: Either get a vote to ‘reform’ Social Security or use a denial to go for a major victory in the 2006 mid-terms.
In 2005 Bush mostly got stopped at Step A. Since his proposal was narrowly focused on Social Security, a ‘There is No Crisis’ narrative WITHIN the Social Security context was able to get traction. This time we are on a very different track, instead of selling this as a proposal for an ‘Ownership Society’ (where the numbers were pretty easily debunked), it is being sold as a matter of ‘Intergenerational Equity’ and ‘Fiscal Responsibility’. And from that starting point Step one is pretty much in the bag and logic gets you mostly through Step two.
Leaving us where? Well we are within a week of a vote on Step three of the first list and if it passes steps four through seven pretty much follow automatically, they may not work but I would hate to have to bet on it. Meaning that we need to stop Step three by convincing people that Step four is already in the bag. So called ‘Deficit Hawks’ strongly overlap with ‘Tax Hawks’ and with ‘Military Hawks’. Moreover they are largely from farm states and not likely to vote for big cuts there. Which really leaves only one question in my mind, do they stop with proposing big slashes to Social Security, Medicare and Medicaid? Or make new runs at Urban Transit, Community Develpment, or (non-military) Foreign Aid?
I suspect they know better than to get too ambitious and will instead just strike at Entitlements as such.
A last note on Bartlett who revealed too much. In noting that while open to tax increases in principle history showed that while Congress couldn’t help cutting future tax increases back (as with AMT), both Congress and people allowed the benefit cuts in the 1983 Reform to occur on schedule. Since future wage working retirees actually decided to go along with that for the general good while the wealthy would predictably resist paying taxes for that same general welfare that we should just go with the benefit cuts. Because they were ‘doable’.
So workers are ‘doable’. Which puts us ‘working guys’ into a whole new category, except in this case we are paying the Johns.
(Original proposed title: The ABCs of BOHICA)
That people would even remotely fall again for SS reform after Bush’s failed attempt simply proves the profound stupidity of vast numbers of Americans. If Bush’s plan had gone through a lot of people now would be destitute who shifted their retirement funds into the stock market just before it collapsed. I guess lots have no idea how lucky they were to escape Bush’s tender mercies. Now the crowd is at it again. Make the masses impoverished serfs the better for the plutocracy to exploit them. You know, the kind who keep buying 40-50 million dollar homes in LA and New York and the Hamptons and Aspen, etc., and who usually buy several. We all know to be comfortable a proper family needs 100 million dollars worth of housing, right?
If you are unaware of what the plutocrats need to be comfortable, here is a useful example:
http://latimesblogs.latimes.com/money_co/2010/01/hot-property-megabuck-home-sales-off-to-a-big-start-in-beverly-hills.html
You got one of these, Cantab? Sammy? All your political friends probably do so what’s wrong with you?
Bruce
it’s probably worth pointing out that the workers went along with the benefit cuts in ’83 because they were mostly in the form of raising the retirement age which wouldn’t affect anyone much over 20 years old at the time.
up until recently people were retiring at 62 and taking the hit in monthly benefits.
we are about to see what working until age 67 really feels like. my guess is that after a few years of that they won’t get the votes to raise the retirement age again, which of course is “the obvious solution” to the Social Security Crisis ™.
This should be obvious to anyone paying attention which is why the whole bit about the committee needing a supermajority is just all part of the sales package. When you get such a “bipartisan” result it will be near impossible to slow the momentum down, especially say the committee gets its report out just after the Democrats suffer what looks to be huge losses in November.
It strikes me that the 1983 amendments were passed in the context of raging inflation. Now, however, we have had flat wage growth and for many an actual decline in real wages for at least 10 years. if it’s a bad idea to raise taxes in a recession, isn’t it a worse idea to lower benefits in the face of real structural unemployment likely to continue indefinitely on top of the worst recession since the 30’s? I don’t think that the prospect of lower retirement benefits at a higher retirement age is going to go over any better than when Bush tried it back in his first term. But, anything is possible. Deficits have a magical power over members of Congress and there is no sign that the “mainstream media” understand any of this stuff any better now than they did during the Bush administration.
http://economistsview.typepad.com/economistsview/2010/01/please-sir-may-we-have-some-justice.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+EconomistsView+%28Economist%27s+View+%28EconomistsView%29%29
Maxine, I fear, doesn’t entirely grasp the plutocratic mentality. It is one that says they have the right to sh*t on lesser beings and fart in their faces if that amuses them. When their stupidity is revealed of course they say nobody kodda node what was up. And of course Fama, their dupe and lackey at Booth, echoes their self serving arguments completely. What assh*les they are and what an ass Fama is. Pathetic American don’t get it at all.
With regards to SS, weren’t work deductions between the ages of 65 and 70 for high earners prior to 2000 a form of means testing? I know that’s a quibble–and possibly a semantic one–as beneficiaries did receive higher benefits as a result of their work. But it still seemed to operate as a form of means testing. (I realize that there are differences between the intentions behind SS and how it has been implemented in the past.)
Also, I don’t know if you covered it, but I just wanted to point out how dishonest Krasting’s negative COLA observation was. As the chart he edited clearly shows, the total amount of benefits paid out in December were inflated because the Automated Earnings process ran and recomputed benefit amounts based on earnings. This resulted in the payout of a bunch of retroactive benefits. Had he chosen to display that entire chart, it would have been clear.
I’d originally though that the “negative COLA” was a result of 2010 work suspensions taking effect in January. Had that been the case, it would have been an understandable, albeit ignorant, misinterpretation of the data on his part. Instead, the way he displayed that chart was intentionally misleading. I know this is yesterday’s battle & that someone probably has picked up on it somewhere. Just wanted to register my disgust with Krasting’s mendacity.
How much does it cost to kill a terrist?
How much is it costing to keep them from setting up training camps in Afghanistan?
How much will it cost to occupy the United Kingdom so they cannot be trained and plan their strikes for there?
What is the contribution to some strategic objective from killing one very hard to target, fix and strike terrist?
The GDP of the terrists is zero.
What about spending 6% of GDP to defend against nothing makes any sense?
Does the general welfare deserve any consideration?
To revisit the debate about entitlements versus corporate welfare (also known as discretionary spending):
Entitlements is about 67% of federal outlays. Corporate welfare is about 33% with the militarist part a bit over half of the corporate welfare state.
Before they touch medicare and social security there ought to be an accounting of cost overruns and the faulty planning that makes it impossible for the warfare state to be anything more than corrupt corporate welfare.
The laughable part is there is any bipartisanship to base this on. Everyone should just say no, there is no reason to work accommodate partisan hacks.
No. Not only did we not pick it up it is something I know nothing about.
If you could explain a little more how this works and how it affects month over month benefits I know I would appreciate it. Dale and I spent a lot of hours figuring out things that are probably blindingly obvious to people who actually get the internal mechanics.
Nancy has already been a huge help on this, another apparent vet would be great.
In 1983 the US faced a super hyped threat with no end from the Soviets, who had a supposed tactical ability in central Europe.
So, the good US worker took cuts in SS and their social safety net to defend Europe while European workers have much more safety net that the US worker sacrified for the profits of the US militarists.
Now the vaunted Soviets are gone in a wimper for over 20 years, and there is no threat but the US worker is providing huge pay (better margins and total revenues than during Vietnam) to a corrupt and inept militarism, that is off finding terrists to fear everywhere from Aden to London.
I refer to George Orwell, who predicted (1984; a year longer than it took for the US worker to fall for the Reagan/Friedman neoCON) that the wealth of US productivity would not be shared with the masses because the US has always been at war with itself, and the pillagers are the miliatrists taking the profits.
Every May and December, Social Security’s runs an automated system (AERO) to adjust benefit amounts for beneficiaries’ earnings.
Here’s how it works: Say a beneficiary’s 2009 monthly benefit amount is $1000. An AERO run occurs in December 2009 and sees that the beneficiary earned more money in 2008 than originally thought. As a result, the beneficiary’s January 2009 Personal Insurance Amount increases, which in turn increases the monthly benefit amount, say to $1030. When that happens, the computer automatically pays out the $330 difference (Jan through Nov. at $30/month).
If you look at his source chart:
http://www.ssa.gov/cgi-bin/payment.cgi
you’ll see that the “negative COLA” was due to more retro benefits being paid in Dec than in Jan. As you can see from column 6, most of that difference was the result of the Dec. AERO run. The relevant column on that chart–the one Krasting cut–was the one that keeps going up, Benefits in Current Pay.
I’m not a vet. I’m in the trenches now. If you have any questions at all, don’t hesitate to ask. Probably couldn’t be of too much assistance to a modeller, since I don’t have any access to demographic data. Still, if you need someone to calculate a Personal Insurance Amount or a monthly benefit amount or explain the hold harmless provision, I’m all over it.
Sorry, all those charts go to the same URL. Maybe he /was/ being sloppy instead of mendacious.
Go to http://www.ssa.gov/OACT/ProgData/payment.html & choose “benefit composition” & “both trust funds combined.” It’ll show that the benefits in current pay went up from Dec. to Jan and that the decrease in payout from Dec. to Jan. was due to more retroactive benefits being paid in Dec.
Just to be absolutely clear, just because an AERO increase is paid out in Dec. doesn’t mean it counts as a Dec. benefit. In fact, AERO can recalculate Personal Insurance Amounts years in the past & the payment while paid out all at once, is prorated both for accounting purposes on our end and tax purposes on their end.
Of course we wouldn’t have to fight “terrorists” if we were not trying to re-colonize the Muslim world, for dear darling Israel’s sake. If we simply GOT OUT (too simple a concept for Americans to understand) of their lands and their affairs they wouldn’t want to attack us. After all, we had no problems with the Muslim world before we shoved Israel onto them and supported its theft of their land. Fundamental facts most Americans either don’t know or don’t want to know.
Right, Some Guy! Good point. Now explain how the 850,000 hearings backlog is reducing the DI TF’s rate of exhaustion. And, how the OASI TF loaned money to the DI TF during a similar period of recession in the past. Continue to explain that ARF and AERO recomps happen every year. It’s the way the program works. The amount of money paid out and coming in changes each month and quarter. Payroll taxes are paid quarterly, so changes up and down would show up throughout the year.
The SSTF’s are not like a checking account and cannot be used based on current monthly expenditures/revenues to predict the end of the world in themselves. And of course, anyone who thinks it’s possible or even reasonable to project solvency on a 75 year basis has a deep-seated problem grasping the nature of prophecy. SomeGuy can explain in detail for you. I was in field management too long.
Point is–Krastig and others use small changes in pay outs or payroll tax collections to justify their desired goal. Just as Coberly said–THE SKY IS FALLING! When they taught us about a priori reasoning in school did everyone just look out the window and doodle? This is a perfect example of a priori reasoning run mad. Congress clearly wants to screw everybody out of hs/her Social Security. Well, Hell widdem. Show ’em the door. Whether they got this way from being rich or just stupid doesn’t matter. It’s about time we acted like real grown ups and stopped these idiots.
Note–I could swear this wasn’t here yesterday. Is there some other way to access AB that would insure I can always see what’s current? NMO
Bruce – I’m just in awe that you actually waded into that morass….
Nice article though!
Islam will change
some guy
i am not sure krasting was dishonest. if you could publish a post showing the numbers it would help make the case and help educate the rest of us. my take on krasting is that he does not think linearly (what i would call logically) but just grabs things off the shelf that suit his purposes. not dishonest, not really any different than ordinary people most of the time. just horribly misleading… misleading to himself most of all. what’s good about dialogue is that sometimes you can show people where they have fooled themselves. i have hope that krasting has learned something from us.
it wasn’t easy to untangle from the way he said it, but i think i learned something from him. not to agree with him but to see where he was coming from. there may be a post here shortly that covers this.
ilsm
the hard part here is that i agree with you. and i suspect most people who know about it agree with you. that makes what? ten of us? certainly does not include the congress.
the problem is how do you change them.
btw it’s not quite fair to compare “entitlements” to the rest of the budget. if the United States ran a grocery store in some region where there was no private company willing or able to run a grocery store, would you look at your food budget and call it ‘government spending’? would you be appalled to find out that your food budget was more than your taxes for military spending?
no (i hope). well social security and medicare are just like that. the government provides a framework to provide a safe way people can save for their retirement and their old age medical care. it is not “government spending” except the 1% or so it costs the government to administer the money that you pay to yourself.
There is only one chart with January 2010 data on the SSA’s benefit composition site and it was the one that Krasting used for his Negative COLA argument. It’s the one I’m attaching to this comment. Although it’s dangerous to underestimate the laziness and innumeracy of those willing to bloviate on subjects such as SS, it is pretty clear with even the slightest willingness to interpret its meaning. The fact that he only chose to show the first two columns implies either dishonest or a reckless disregard for the truth.
Islam will change=I don’t understand the world very well.
some guy:
That is interesting and thank you for the explanation. I hope you hang around
SomeGuy–Thanks for your comment regarding SSA’s recently published benefit data. Coberly is unwilling to attribute BK’s misinterpretation of the recent payment data to bad faith. But, I don’t see a lot of convincing evidence to persuade me he much cared why the numbers were the way they were as long as they supported his conclusions.
I would caution anyone wishing to draw sweeping conclusions from raw SS payment data that to do so is foolish. The federal government’s revenues and outlays vary from month to month and even within months. A lot depends on when you gather your data, what data you leave out, and the assumptions you make about what is before you. The federal budget and how it works is a very technical and complex subject. Certainly BK should have some knowledge of OMB’s accounting practices to venture an opinion on what current SS benefit levels show, if anything, about the solvency of the TF.
But, Krastig has no particular credentials in government finance and doesn’t appear to know much about how Social Security is actually run. Worse yet, he doesn’t appear to have tried to learn. I join Some Guy in thinking BK’s statements are indeed dishonest or pure bull put out to support his otherwise weak argument. Coberly is being charitably restrained in his judgement. But, BK’s articles are propaganda, nothing else. NMO
Subject of a future post.
People like Krasting follow a political and economic philosophy that holds that labor is simply a cost and as such should have no control over capital or the machinery of government that protects capital. This is not meant to be hyperboiic, as late as 1918 60% of the adult male British population was not able to vote, and much of the history of the 150 years before that was a struggle to keep politics within what Conservatives conceived as its proper sphere, protecting property and contracts. Something that would be at risk if labor had a say in distribution of productivity.
It is then natural for Krasting to suggest that the working class should sacrifice their interests for those of the bond market, for Bernanke to suggest slashing Medicare and Social Security because “that is where the money is”, for Bartlett while open minded about the theoretical value of tax increases, suggests that he would easier to just bend over workers and take it by force.
And most notably we have people like Prof Bryan Caplan who suggest that any worker who privileges his own position, by say asking for an increase in minimum wage, obviously doesn’t understand the proper role of government in protecting property and so should lose that right to vote. http://en.wikipedia.org/wiki/The_Myth_of_the_Rational_Voter
Krasting is not evil, nor Bartlett, nor perhaps Bernanke, and I would use other words to describe Caplan. But they start from a very old economic philosophy that never quite drew a line between cattle and laborers, between a shearing machine and a shearer, reducing cost increases ROI and if workers don’t like it they can recall the old adage “No poor man ever gave me a job”.
The concept that work and workers have inherent value that may deserve a reward not tightly controlled by marginal productivity (that is its contribution to capital accumulation), is so foreign to them that as with Caplan they consider it irrational, and people who push Utilitarianism to be soft headed or socialists or soft-headed communists.
“do not bind the mouths of the kine that tread the grain”
“greatest good for greatest number”
For these guys the first phrase is just gibberish, the second just another kind of communism.
Lets just say that we have pretty much agreed to disagree on Buff’s tag line. 🙂
On every other topic he is pretty easy to talk to. And on this one he is not going to change his mind. Going there just creates a lot more heat than light.
That son of a bitch.
I am going to have to agree with Nancy here, no one could look at a table that has three cells in a sequence 2 bn, 716 bn, 1 bn and conclude that the Dec to Jan drop in the first column HAD to be from zero COLA.
Thanks Some Guy, with your help we can kick a little numeric ass on the liars.
The warfare spending goes to line the pockets of politicians and war profiteers, that it has been spent in the order of 18% of federal outlays is a troublesome investment in nothingness.
If the money borrowed from SSTF for the war mongers contributed at all the the productive base of the US there might have been truth in the Laffer curve.
Instead borrowed money went down the militarist pits.
That is a legacy of monetarism and anti tax republicans which creates current and future deficit crises.
It is a plan.
See Orwell.
ah Bruce,
you just have less faith in the essential stupidity of man than i have.
Some Guy,
As you are aware, Bruce Krasting’s January 4 blog post stated, “There was a onetime negative COLA adjustment that kicked in January 1. Rather than the usual increase, beneficiaries are getting smaller checks. The difference between the December and January payments comes to $475 million. That re-base means a reduced outlay for the full year of $6 billion. In the scheme of things that is peanuts. But this is going to be felt most in the Sunbelt states where the bulk of the beneficiaries reside. I believe that a significant percentage of SS payments goes right into consumption. Given that fixed costs are actually rising for this group of consumers (the hell with COLA) the 65+ set might not be going to the Wal-Mart in Boca as much as they used to. A year ago we were talking of ‘green shoots’. This ‘shoot’ is decidedly brown.”
It was obvious in Bruce Krasting’s first sentence that he was ill informed of the SSA announcement regarding the 2010 COLA. Moreover, there is no U.S. Code statute that states that negative COLAs can be employed. He didn’t hide where he located the benefit payment data, so it was easy to find the table and note what he didn’t include. It was obvious that he only included the first numeric column in the table that he cited. You have covered that point quite well. But the alarm bell should have gone off with his first statement. He was DOA at that point. That’s when I started to shake my head.
I assumed that those reasonably well informed about SSA information updates would have noted the announcement regarding the 2010 COLA. Apparently that may not have been the case with some individuals.
Information About 2010 Social Security Cost-of-Living Adjustment
SSA, October 15, 2009
http://www.socialsecurity.gov/cola/
U.S. CODE > TITLE 42 > CHAPTER 7 > SUBCHAPTER II > § 415
http://www.law.cornell.edu/uscode/html/uscode42/usc_sec_42_00000415—-000-.html
Case For a Social Security Cost-of-Living Adjustment in 2010 Is Weak
CBPP, October 15, 2009
http://www.cbpp.org/cms/index.cfm?fa=view&id=2951
SS Trust Fund – 2009 Full Year Results – Ugh!
By Bruce Krasting, January 4, 2009
http://brucekrasting.blogspot.com/2010/01/social-security-trust-fund-issued-their.html
.
Some Guy,
As you are aware, Bruce Krasting’s January 4 blog post stated, “There was a onetime negative COLA adjustment that kicked in January 1. Rather than the usual increase, beneficiaries are getting smaller checks. The difference between the December and January payments comes to $475 million. That re-base means a reduced outlay for the full year of $6 billion. In the scheme of things that is peanuts. But this is going to be felt most in the Sunbelt states where the bulk of the beneficiaries reside. I believe that a significant percentage of SS payments goes right into consumption. Given that fixed costs are actually rising for this group of consumers (the hell with COLA) the 65+ set might not be going to the Wal-Mart in Boca as much as they used to. A year ago we were talking of ‘green shoots’. This ‘shoot’ is decidedly brown.”
It was obvious in Bruce Krasting’s first sentence that he was ill informed of the SSA announcement regarding the 2010 COLA. Moreover, there is no U.S. Code statute that states that negative COLAs can be employed. He didn’t hide where he located the benefit payment data, so it was easy to find the table and note what he didn’t include. It was obvious that he only included the first numeric column in the table that he cited. You have covered that point quite well. But the alarm bell should have gone off with his first statement. He was DOA at that point. That’s when I started to shake my head.
I assumed that those reasonably well informed about SSA information updates would have noted the announcement regarding the 2010 COLA. Apparently that may not have been the case with some individuals, including some of the AB readers and posters.
Information About 2010 Social Security Cost-of-Living Adjustment
SSA, October 15, 2009
http://www.socialsecurity.gov/cola/
U.S. CODE > TITLE 42 > CHAPTER 7 > SUBCHAPTER II > § 415
http://www.law.cornell.edu/uscode/html/uscode42/usc_sec_42_00000415—-000-.html
Case For a Social Security Cost-of-Living Adjustment in 2010 Is Weak
CBPP, October 15, 2009
http://www.cbpp.org/cms/index.cfm?fa=view&id=2951
SS Trust Fund – 2009 Full Year Results – Ugh!
By Bruce Krasting, January 4, 2009
http://brucekrasting.blogspot.com/2010/01/social-security-trust-fund-issued-their.html
Bruce:
Not the first time you have been fed erroneous info, let it go. We now know.
Some Guy,
As you are aware, Bruce Krasting’s January 4 blog post stated, “There was a onetime negative COLA adjustment that kicked in January 1. Rather than the usual increase, beneficiaries are getting smaller checks. The difference between the December and January payments comes to $475 million. That re-base means a reduced outlay for the full year of $6 billion. In the scheme of things that is peanuts. But this is going to be felt most in the Sunbelt states where the bulk of the beneficiaries reside. I believe that a significant percentage of SS payments goes right into consumption. Given that fixed costs are actually rising for this group of consumers (the hell with COLA) the 65+ set might not be going to the Wal-Mart in Boca as much as they used to. A year ago we were talking of ‘green shoots’. This ‘shoot’ is decidedly brown.”
It was obvious in Bruce Krasting’s first sentence that he was ill informed of the SSA announcement regarding the 2010 COLA. Moreover, there is no U.S. Code statute that states that negative COLAs can be employed. He didn’t hide where he located the benefit payment data, so it was easy to find the table and note what he didn’t include in his brief post reference. You have covered that point. But the alarm bell should have gone off with his first statement. He was DOA at that point. That’s when I started to shake my head.
I assumed that those reasonably well informed about SSA information updates would have noted the announcement regarding the 2010 COLA. Apparently that may not have been the case with all SSA followers including some at Angry Bear who have been lashing out at Bruce Krasting. It doesn’t appear that they knew that there could not be a negative COLA applied.
Information About 2010 Social Security Cost-of-Living Adjustment
SSA, October 15, 2009
http://www.socialsecurity.gov/cola/
U.S. CODE > TITLE 42 > CHAPTER 7 > SUBCHAPTER II > § 415
http://www.law.cornell.edu/uscode/html/uscode42/usc_sec_42_00000415—-000-.html
Case For a Social Security Cost-of-Living Adjustment in 2010 Is Weak
CBPP, October 15, 2009
http://www.cbpp.org/cms/index.cfm?fa=view&id=2951
SS Trust Fund – 2009 Full Year Results – Ugh!
By Bruce Krasting, January 4, 2009
http://brucekrasting.blogspot.com/2010/01/social-security-trust-fund-issued-their.html
.
Nancy,
Are you saying that you have read many of Bruce Krasting’s blog posts? If so, what are his main focus points?
Krasting has provided his blog readership with a number of SSA link references whereby they have been afforded the opportunity to draw their own conclusions.
I may not agree with some of his math and conclusions, but he has cited the right SSA references from which he settled on his recommended course of action. That appears to be lost on some individuals who are attacking Krasting here at Angry Bear.
Nancy,
Are you saying that you have read many of Bruce Krasting’s blog posts? If so, what are his main focus points?
Krasting has provided his blog readership with a number of SSA link references whereby they have been afforded the opportunity to draw their own conclusions.
I may not agree with some of his math and conclusions, but he cited the right SSA option list references after which he selected his recommended course of action. That point appears to be lost on some individuals at Angry Bear who are attacking Krasting. I wonder how many of these individuals have read his other blog posts or the SSA option list references he cited. I identified two of his SSA option references in the list of Bruce Krasting’s blog posts that I posted in comments under a previous AB post.
Nancy,
Are you saying that you have read many of Bruce Krasting’s blog posts? If so, what are his main focus points?
Krasting has provided his blog readership with a number of SSA link references whereby they have been afforded the opportunity to draw their own conclusions.
I may not agree with some of his math and conclusions, but he cited the right SSA option list references after which he selected his recommended course of action. That point appears to be lost on some individuals at Angry Bear who are attacking Krasting. I wonder how many of these individuals have read his other blog posts or the SSA option list references he cited. I identified two of his SSA option references in the list of Bruce Krasting’s blog posts that I provided in comments under a previous AB post. No one followed up and said a word about the SSA option lists.
I knew he was wrong. I didn’t know he was lying.
Nancy,
Are you saying that you have read many of Bruce Krasting’s blog posts? If so, what are his main focus points?
Krasting has provided his blog readership with a number of SSA link references whereby they have been afforded the opportunity to draw their own conclusions.
I may not agree with some of his math and conclusions, but he cited the right SSA option list references after which he selected his recommended course of action. That point appears to be lost on some individuals at Angry Bear who are attacking Krasting. I wonder how many of these individuals have read his other blog posts or the SSA option list references he cited. I identified two of his SSA option references in the list of Bruce Krasting’s blog posts that I provided in comments under a previous AB post. No one followed up and said a word about the SSA option lists. It is as though AB readers do not think that they exist.
Nancy,
Are you saying that you have read many of Bruce Krasting’s blog posts? If so, what are his main focus points?
Krasting has provided his blog readership with a number of SSA link references whereby they have been afforded the opportunity to draw their own conclusions. He encouraged such effort.
I may not agree with some of his math and conclusions, but he cited the right SSA option list references after which he selected his recommended course of action. That point appears to be lost on some individuals at Angry Bear who are attacking Krasting.
I wonder how many of the individuals attacking Bruce Krasting have read his other blog posts or the SSA option list references he cited including links. I identified two of his SSA option references in the list of Bruce Krasting’s blog posts that I provided in comments under a previous AB post. No one followed up and said a word about the SSA option lists. It is as though AB readers do not think that they exist. It’s always easier to lash out at a blogger’s recommendation than demonstrate any knowledge of other options that the SSA has reviewed.
MG what is your point?
On being directed to Krasting’s post I went and blasted his reading and then went back and put three more broadsides into the sinking hulk. I was not fooled for a second.
I knew there could be no negative COLA. Rather than tell Krasting he was ignorant I pointed out why his evidence didn’t support his conclusion, the alarm bell went out at his first post why do you think it didn’t?
Movie Guy
life is short. i know what i know about Social Security. I do not know what an option list is. If you think it is relevant, why don’t your write a coherent paragraph explaining why. I certainly don’t have time to track down every reference. I replied to Krastings statements which I knew to be false. And even Krasting has now admited them to be false. Or am I putting words into his mouth again?
I don’t hold Krastings mistakes against him because he seems to have learned something from the exchange, as have I. A rare thing in blogspace.
And I did mention in my original post on Krating that the negative COLA was “not.”
So, exactly what is it you are trying to say here? That AB readers are not all of them universal encyclopedias of all knowledge in detail. Or that Krasting was essentially right. Or that we didn’t attack what he said that was materially wrong?
If you are just defending his honesty, there is probably a way to do that without attacking, say, mine.
Bruce,
My comment was directed to Some Guy. I have no interest in tangling with you, but I will respond to your comment. It deserves a response.
Bruce Webb – “MG what is your point?”
My points were made in my comment post.
Bruce Webb – “On being directed to Krasting’s post I went and blasted his reading and then went back and put three more broadsides into the sinking hulk. I was not fooled for a second.”
You want to keep bragging about that? Just look at the trouble that you and Dale have caused Dan in his relationships with a few other major econ blogs with your attacks on Bruce Krasting. If you and Dale thought about the credibility, well being, and overall future success of Angry Bear first, Dan wouldn’t be facing the blog interrelationship problems created by your immature attacks. Instead, you’re still trying to play the hero warrior. You are not helping build a stronger blog with these chest beating comments. Outside interests are reading this blog and the comments in hopes of seeing a change in attitude prior to committing to long term interblog relationships. Apparently, you don’t get it.
Bruce Webb – “I knew there could be no negative COLA. Rather than tell Krasting he was ignorant I pointed out why his evidence didn’t support his conclusion, the alarm bell went out at his first post why do you think it didn’t?”
Here is the only statement you made about SSA COLA at Bruce Krasting’s blog under his main post:
Bruce Webb at Bruce Krasting’s blog, January 5, 2010 2:19 PM – “And I would have to see some actual documentation of a COLA decrease because a simple comparison of Dec to Jan doesn’t prove that, not since we see similar drops in May, July, Aug, Oct and Nov.”
That’s it. You cited plenty of other SSA link references in your comment posts at Krasting’s blog under that main post, but not the SSA COLA link cited upthread.
How many Angry Bear readers already knew that there could not be a negative SSA COLA? Who knows… How many knew that to be true from reading any main posts at Angry Bear? Zero. How many knew that prior to Monday night based on comment posts under Angry Bear main posts since Bruce Krasting’s main post at his blog? Zero.
Bruce Webb – “MG what is your point?”
My points were made in my comment post.
Bruce Webb – “On being directed to Krasting’s post I went and blasted his reading and then went back and put three more broadsides into the sinking hulk. I was not fooled for a second.”
You want to keep bragging about that? Just look at the trouble that you and Dale have caused Dan in his relationships with a few other major econ blogs with your attacks on Bruce Krasting. If you and Dale thought about the credibility, well being, and overall future success of Angry Bear first, Dan wouldn’t be facing the blog interrelationship problems created by your immature attacks. Instead, you’re still trying to play the hero warrior. You are not helping build a stronger blog with these chest beating comments. Outside interests are reading this blog and the comments in hopes of seeing a change in attitude prior to committing to long term interblog relationships. Apparently, you don’t get it.
Bruce Webb – “I knew there could be no negative COLA. Rather than tell Krasting he was ignorant I pointed out why his evidence didn’t support his conclusion, the alarm bell went out at his first post why do you think it didn’t?”
Here is the only statement you made about SSA COLA at Bruce Krasting’s blog under his main post:
Bruce Webb at Bruce Krasting’s blog, January 5, 2010 2:19 PM – “And I would have to see some actual documentation of a COLA decrease because a simple comparison of Dec to Jan doesn’t prove that, not since we see similar drops in May, July, Aug, Oct and Nov.”
That’s it. You cited plenty of other SSA link references in your comment posts at Krasting’s blog under that main post, but not the SSA COLA link cited upthread.
How many Angry Bear readers already knew that there could not be a negative SSA COLA? Who knows… How many knew that to be true from reading any main posts at Angry Bear? Zero. How many knew that prior to Monday night based on a read of comment posts under Angry Bear main posts since Bruce Krasting’s main post at his blog? Zero.
Movie Guy
I am inclined to think this sort of thing hurts us more than Bruces’s or my intemperate remarks. I don’t think I said anything intemperate. When I say a person doesn’t know what he is talking about, I don’t mean that he is ugly, I mean he doesn’t know what he is talking about. I realize you would never say that to a mental patient, but I have sat in rooms with very big deal PhD’s and they told each other: “you don’t know what you are talking about.” But I hear the devil is a very sensitive fellow. He insists on good manners all the time.
Whereas, here, you seem to be attacking “Angry Bear readers” and Bruce and me, for no good reason that I can see. Because we weren’t polite enough to Krasting? As polite, say, as you are being to Bruce?
This is Dan’s blog, and if he wants us to adhere to a standard of manners, we will either do it or go sulk in our tents. But I would recommend that any readers so thin skinned they can’t take the kind of abuse that I dish out probably shouldn’t venture out in the street, much less blogland. Most of the “oh you talked mean to me” that i hear comes from people who are pretending to be more honest or competent than they are, and they desperately need ground rules that say, “you can never point out that I lied or said something stupid” before they will agree to enter a “fair” debate.
Coberly,
You don’t get it. Dan has his work cut for him, unfortunately.
Coberly – “And I did mention in my original post on Krating that the negative COLA was “not.” So, exactly what is it you are trying to say here? That AB readers are not all of them universal encyclopedias of all knowledge in detail. Or that Krasting was essentially right. Or that we didn’t attack what he said that was materially wrong? If you are just defending his honesty, there is probably a way to do that without attacking, say, mine.”
My comment post is very clear.
I stand by my closing statement: “How many Angry Bear readers already knew that there could not be a negative SSA COLA? Who knows… How many knew that to be true from reading any main posts at Angry Bear? Zero. How many knew that prior to Monday night based on a read of comment posts under Angry Bear main posts since Bruce Krasting’s main post at his blog? Zero.”
You stated in your first main post after the exchange in comments at Bruce Krasting’s blog – “He claims that there was a negative COLA. There wasn’t. He seems to think the difference between the December and January total outlays represents a “decline in monthly checks.” It doesn’t.”
You never made a statement to the Angry Bear readers that said that a negative SSA COLA could not occur. You did not share this information if you actually knew it was a fact.
Coberly – “life is short. i know what i know about Social Security. I do not know what an option list is. If you think it is relevant, why don’t your write a coherent paragraph explaining why. I certainly don’t have time to track down every reference.”
You have proposed an option for SSA solvency. It would benefit you greatly to know what other options are on the table or have been reviewed at the SSA, whether developed inhouse or proposed by outside organizations to the SSA. The SSA has covered both situations in addition to their statements in annual reports.
I am not writing a meaningless summary paragraph when the reader needs to review what the SSA provides in clear language. Readers can draw their own conclusions after reading the information. There are many options available and the SSA does an excellent job of covering some of them. Moreover, the SSA has responded to external proposals from various organizations and requests from Members of Congress. These documents and the SSA responses are listed and sublinks are available for each proposal listed.
Bruce Krasting covered the subject of options for SSA solvency in two of his main posts at his blog. I posted both of these links on a previous AB comment thread along with two of the SSA option lists. He made mistakes with his math and others may disagree with his recommendations, but he did identify two of the three SSA source links for options in his main posts at his blog. I give him credit for that effort.
Thursday, April 30, 2009
Social Security – Trouble at Hand?
http://brucekrasting.blogspot.com/2009/04/mr.html
Sunday, September 13, 2009
SSTF – Their Proposals
http://brucekrasting.blogspot.com/2009/09/sstf-their-proposals.html
See my next comment post for the SSA source links.
Coberly,
Here are all three primary SSA links for the options available, excluding additional statements in annual reports:
Individual Changes Modifying Social Security
http://www.ssa.gov/OACT/solvency/provisions/index.html
Summary of Provisions That Would Change the Social Security Program
http://www.ssa.gov/OACT/solvency/provisions/summary.html
Proposals Addressing Trust Fund Solvency
http://www.ssa.gov/OACT/solvency/index.html
Here is the last proposal that I am aware of which hasn’t been added to proposals list:
January 13, 2010
To: Kenneth S. Apfel, Chair of the Social Security Work Group
John L. Palmer, Co-chair of the Committee
Rudolph G. Penner, Co-chair of the Committee
From: Stephen C. Goss, Chief Actuary
Alice H. Wade, Deputy Chief Actuary
Chris Chaplain, Supervisory Actuary
Subject: Estimated Financial Effects of Four Comprehensive Proposals to Restore Social Security to Sustainable Solvency for the Committee Report of the National Research Council and the National Academy of Public Administration on “Choosing the Nation’s Fiscal Future” – INFORMATION
Open this pdf to read it: (Click on download)
NRC-NAPA Actuarial Memorandum 2010 0113.pdf
http://cid-d684c4d8f513cf73.skydrive.live.com/self.aspx/Blog%20Files/NRC-NAPA%20Actuarial%20Memorandum%20%202010%200113.pdf
I would also read this:
Appendix C, Social Security Options
http://books.nap.edu/openbook.php?record_id=12808&page=247
Which is found here:
New Report Offers Options for Stabilizing National Debt
http://www.nas.edu/morenews/20100113.html
*Click on Full Report
Choosing the Nation’s Fiscal Future
http://www.nap.edu/catalog.php?record_id=12808
*Click on “Full Text” under “Read” (lower left)
*Then Click on Appendix C, Social Security Options
—–
As I recall, your proposal is included in this SSA response which is listed among the proposals:
Oct. 30, 2009 – Estimated Financial Effects of Several Social Security Reform Options Requested by the National Academy of Social Insurance
http://www.socialsecurity.gov/OACT/solvency/nasi_20091030.html
—–
The GAO also has a new report on SSA options:
GAO Report
Social Security: Options to Protect Benefits for Vulnerable Groups When Addressing Program Solvency
GAO Report GAO-10-101R
December 7, 2009
http://www.gao.gov/Products/GAO-10-101R
.
MG
It’s a good idea to step back from any discussion and look at the basic issue being addressed. One thing I notice here in recent exchanges is that Krastig has become a proxy for a battle between authorities. In this case, recent work published for the National Academy of Public Administration contains options for resolving the solvency issue. So does a NASI publication and of course, numerous other groups such as AEI, Cato and Heritage. Not a lot of agreement to be found in their competing views, but NASI’s recent publications (see link (http://www.nasi.org/sites/default/files/research/Fixing_Social_Security.pdf) summarize the bulk of commonly suggested approaches.
All the sources you cite are also under consideration by interested government and non-government groups. But, none specifically supports BK’s specific assertions in the article I read. My remarks were directed at the quality of analysis I found there, not in his other writings. But, I’ve been around long enough to recognize a partisan argument when I see one. From my perspective, Krastig is just another writer supporting the notion that SS is somehow inflating the national debt and must be treated as a problem. I reject that argument categorically.
Krastig can defend himself, I’m sure, and will undoubtedly do so. However, the impression I took away fromt the article I read and his responses to Bruce Webb and Coberly have confirmed my view that Krastig can be safely disregarded as anything but an adherent of the “Social Security Delenda Est” school of fresh water economics. So, I suggest we direct our attention to some of the basic sources you have listed with an eye to determining their validity. Or lack thereof.
Bruce,
Thanks again for the vote of confidence even if we do disagree…
You might want to avoid this nuts site in teh future – bad for your blood pressure…
MM – Considering your rants are so far off in lefty lunacy I considerit a compliment that you don’t think I understand your world very much. BTW what color is the sky there?
Plus I thought you were leaving?
Islam will change
Bruce
you are absolutely right about this. my scholarship is not up to yours, but there is plenty of evidence in literature, at least, (how would the rest of us know what the rich are like if we did not read the books written by their kids?) that the rich learn from an early age not to make eye contact with “the help.”
i guess one line i remember… i think it is from Kipling… is where a man has to ask a woman of the upper class to allow a porter to get by her on a narrow platform. “Respect the load, madam. Respect the load.”
Movie Guy
unlike you, I don’t know everything. I thought I knew that there was not a negative COLA. I even thought I knew there could not be one (by law). But I tend to not claim that I know things I don’t absolutely know, which is not much. Krasting was wrong in detail and in substance. We have no obligation to go beyond that, to read everything he ever wrote, or to fact check irrelevant details.
You cannot claim to be “clear.” No one knows whether he is clear or not. That’s something only the guy he is talking to can know.
MOvie Guy
Thank you for the references. Some of them may help. But I am far too old to have time left to check all of them. All I can do is defend the post where I have been stationed.
“Just look at the trouble that you and Dale have caused Dan in his relationships with a few other major econ blogs with your attacks on Bruce Krasting”
First of all it is one other econ blog and the site owner of that blog now understands and agrees that Krasting is not reliable on this topic. And frankly the idea that I should subsume truth and the chastising of liars to the interests of Angry Bear is a little odd. I want Angry Bear to succeed but I have spent a dozen years in every forum that would have me and in a number that would not defending Social Security using actual numbers and what I hope is logical argumentation. In 1997 I didn’t set out to be blogger of the year or hit top spot in the Gongol economics blog rating, they hardly had blogs back then. Let me break down your odd complaint.
“It was obvious in Bruce Krasting’s first sentence that he was ill informed of the SSA announcement regarding the 2010 COLA.”
Yes it was obvious. And I got that.
“But the alarm bell should have gone off with his first statement.”
They did. And I responded.
“I assumed that those reasonably well informed about SSA information updates would have noted the announcement regarding the 2010 COLA. “
You assumed correctly, this has been thoroughly discussed by me with policy experts in a different forum.
“Apparently that may not have been the case with all SSA followers including some at Angry Bear who have been lashing out at Bruce Krasting. It doesn’t appear that they knew that there could not be a negative COLA applied.”
Well you have given no reason why you would apply that judgement to me nor would it explain why “lashing” out at a man that was spreading misinformation, and based on new information deliberately so is any kind of problem. I knew there could not be a negative COLA. On the other hand that was not the major thrust of Krasting’s claims which instead were that Social Security surpluses would over the next two years disappear entirely and so move an event currently scheduled for 2016 up to 2009 and so argue for immediate movement on Social Security ‘reform’.
Which is why I asked what your point was. You are accusing me I guess of not knowing what I in fact know and then–. Well and then what? Not just ignoring Krasting? That I should have pointed out on the peripheral point of COLA he was wrong and here are 10 links showing why? What?
In my original reply to Krasting I posted under my own name with no reference that I can recall to Angry Bear. As such whatever tone I used was my own God damn business. Krasting chose to elevate this which resulted in an e-mail exchange that created some heat, and then Krasting chose to take the whole matter to a new forum in Zero Hedge and call out me and Dale by name. Which was totally unnecessary and in the end has resulted in some embarassment for Krasting.
Krasting made an inartful or dishonest post, got called for it in comments by a couple of blog commenters. He could have stopped there and NO ONE would have known, it was not like Dale and I came back to Angry Bear and did victory dances. The choice to escalate this was entirely his, he made the choice to reach out to a third party, he made the choice to approach the site owner of that ‘major economics blog’ that pointed us to his post to start with, he decided to pick a fight and got his clock cleaned. And yet what you took from that is that I need a civility lesson? Since when is standing up to bullies a sin?
“Are you saying that you have read many of Bruce Krasting’s blog posts? If so, what are his main focus points? “
Movie Guy prior to Dan e-mailing me and Dale a blind link to a particular post of Krasting, and that is all it was, a basic ‘check this out’, I had never heard of the guy (and frankly wish that was still true). I don’t know about your web surfing habits but I go to a lot of blogs and often enough click through. If the post I am directed to merits a comment I do. It does not seem to me that I have an obligation to back up and research what this particular blogger has posted on that same topic in the past, if the material presented in that particular post is wrong, and as you point out obviously wrong then I can comment and move on. Your question to Nancy implies a commenter has an obligation to retrospectively go back and evaluate the bloggers entire body of work.
Now if I was a regular follower of Krasting then ignoring his past work and seizing on an obvious error might be some sort of cheap shot, but absent that I have no obligation to know what his “focus points” are. As to this I have to shake my head.
“I wonder how many of the individuals attacking Bruce Krasting have read his other blog posts or the SSA option list references he cited including links.”
Well I guess you could ask me whether I know of those options, because I think I have a pretty good idea. For example in your first post you cite CBPP. Funny I was in e-mail correspondence with their ‘Senior Fellow’ in Federal Fiscal Policy yesterday and he gave me some background for my next post. And not only am I aware of the recent NASI report laying out alternatives, the NW Plan is footnoted in it on page 14.
http://www.nasi.org/usr_doc/Fixing_Social_Security.pdf
http://angrybear.blogspot.com/2009/11/bruce-webb-dale-coberly-arne-larson-and.html
I don’t want to pick a fight mainly because a lot of the other Bears seem to like you, but I remained baffled by your insistence of turning every discussion into a link-fest pissing match. It doesn’t bother me a lot that you think I am an under read, sloppy thinking fool, because after all that is what the scroll bar is for and it is a big fricking blogosphere, but why you have to drop in and make specious accusations to that effect baffles me.
I never met Krasting. I had never seen him referenced as any kind of authority of Social Security. I care nothing about the bond market or finance blogs in general. I got pointed to a post, corrected the factual errors and moved on. But apparently I had an obligation to review his CV and all of his past work on this topic PRIOR to commenting. How do you find the time to do all of this research in advance?
no movie guy
it is not incumbent on me to know what everyone else says about social security. most of what i have read is dishonest or hopelessly mis-framed. all i can do is point out the facts when i see the lies or the fallout from lies.
Here’s Mark Thoma on the commission:
The deficit hawks on the right have their sights set on Medicare and Social Security, and the administration seems far too willing to allow these programs to be used as bargaining chips in negotiations (and to give into the right’s insistence that spending cuts – except for the military – take precedence over tax increases). Unless the administration takes a turn away from the tendencies it has shown in the past, this seems to be headed in that direction.
Crazyamerica prefers to wage an unwinnable war for nothing at all and pay for things by cutting SS??!!!! The nation has lost its mind, if it ever really had one. And the leadership is quite worthless.
warprofiteers=warmongers
This post should get us all together what is rightfully ours. We should not allow other people to do the thinking for us so I am glad for this post. But what is the next step? Who will push this to the next level so we do not lose what we should have and let other people use our money?
Evelyn Guzman
http://www.debtchallenges.com (If you want to visit, just click but if it doesn’t work, copy and paste it onto your browser.)
Predatory Lending is a major contributor to the economic turmoil we are currently experiencing.
Here is an example of what I am talking about:
Scott Veerkamp / Predatory Lending (Franklin Township School Board Member.)
Please review this information from U.S. Senator Jeff Merkley regarding deceptive lending practices:
“Steering payments were made to brokers who enticed unsuspecting homeowners into deceptive and expensive mortgages. These secret bonus payments, often called Yield Spread Premiums, turned home mortgages into a SCAM.”
The Center for Responsible Lending says YSP “steals equity from struggling families.”
1. Scott collected nearly $10,000 on two separate mortgages using YSP and junk fees. 2. This is an average of $5,000 per loan. 3. The median value of the properties was $135,000. 4. Clearly, this type of lending represents a major ripoff for consumers.
http://merkley.senate.gov/newsroom/press/release/?id=A09C6A80-537A-4EB1-83C5-31925F046B6F
I don’t think the government pays that 1%. It is paid by Social Security.
The only thing the government has to do with Social Security is they were supposed to safe guard it.
FDR set it up so the only place we could put surpluses is in US Treasury bonds since they were the safest investment in the world.
HSRP
The Registration plate shall bear nine characters, laser branded into the reflective sheeting and would act as a permanent consecutive identification number. The hot stamping film shall bear a verification inscription.