Damon Silvers Smackdown of CNBCs Kelly Evans and Simon Hobbs on Social Security
Damon Silvers appears to have his wheels on correctly answering two CNN talking heads on their version of Social Security.
Kelly Evans: “Of course people want to make sure that our citizens are taken care of. But that’s almost not the point.” (It’s not?) Evans proceeds to assail Silvers and the AFL-CIO for refusing to “negotiate” over seniors’ well-being.”
Simon Hobbs: “Are you as clear on the reality that if you don’t cut entitlement benefits this country may well go bankrupt.”
Damon Silvers answers: “‘That’s frankly not true,’ he says. ‘That’s a lie put forward by billionaires who don’t want to pay higher taxes. The only people who believe what you just said,’ he added, ‘are people who are worried that their very large incomes will be taxed.'”
Damon Silvers promises: “We’re not embarrassed about that whatsoever,” he replies. “If you cut Social Security benefits or Medicare benefits to our seniors, to our most vulnerable people in the country, you are going to get no support on it.”
It is time for people to hold Democrats feet to the fire in a similar manner that Teabaggers held their representatives accountable.
Hat Tip to Crooks and Liars
NIce. And thanks Run. I was on this but didn’t have time to do as fine a job as you did here.
The AFL-CIO holding the line on this is huge.
Well, the tragedy here is that many people are afraid that you are going to hit them with very high taxes to pay for Social Security.
Instead of putting their minds at rest, and getting them on your side, “the left” reliably feeds Peterson his scare lines “tax the rich.”
In case anyone reading this doesn’t already know: the workers pay for their own social security. Roosevelt made sure of that “so no damn politician can take it away from them.” The workers polled have already said they are willing to pay for the increases in the tax that it would take to make Social Security “solvent,” and that is without even knowing it would only cost them about an extra dollar a week per year.
But by all means, “have no shame” about taxing the rich. God knows you are smarter than Roosevelt.
You could indeed tax the rich to pay for “the deficit” (nothing to do with Social Security), but you’d have to be a little bit subtle about it.
I suspect that the benefit formula for social security is a big part of the motivation. If you recall one takes the indexed average wage over 35 years and pays 90% for the first $791 then 32% up to 4768 and 15% up to the social security limit. Thus for a high income worker SS could be viewed as a bad deal. (between 4768 and the limit which is about 10k one gets only $748 a month). Of course they ignore the spousal benefit
issue as well as the survivors benefits.
Dale the rich hated Social Security even when FDR set it up in a way that made it clear they wouldn’t be taxed to pay for it. They have ALWAYS hated Social Security through the decades that nobody even THOUGHT of asking them to pay for it.
The thought that somehow you could “get them on your side” by “putting their minds at rest” just belies the whole history of the resistance to Social Security and just about every other form of social insurance/social welfare.
FDR did in fact say “so no damn politician can take it away from them”. He also said in relation to rich bankers that “I welcome their hatred”. And his reading on the latter was just as ‘smart’ as his take on the former.
Shoot you were the person who advised ME to read Nancy Altman’s book back in the day. Maybe you should take it down off the shelf and then maybe add Eric Laursen’s recent The People’s Pension to it.
Because while your policy solution might be right on and your judgement about the ill effects of the raise the cap/tax the rich strategy might also be perfectly on target your understanding of the underlying political dynamic seems off.
The Right hates Social Security not because they think it will lead to increased taxes. They hate it because they have been convinced since 1935 that it is going to put us firmly on Hayek’s Road to Serfdom. Sure greed plays a role, but you have devalued the fear of ‘creeping socialism’ to near zero in your formulation.
It is worth noting that the Bushies mounted their public campaign against Social Security at the precise point when it looked to self-fund, I mean in 2004 SSA put TF depletion at 2042 and CBO at 2048. If your take was correct at least some of the haters should have concluded “Man we dodged a bullet, maybe we won’t be called on to bail this out”. Instead they doubled down in clear fear that this was their last chance to “kill the beast”.
The worst fear of the Right is a solvent Social Security system funded by workers. Because that would show that their entire ‘Government is never the solution, government is always the problem’ philosophy had this huge gap in it. That is to say that if you wanted to strike a death blow at the near 80 year plan to roll back the New Deal you couldn’t do better than to implement the Northwest Plan.
Yet you seem to think that the rich will thank you for saving them a few bucks. Well that is not the way the dynamic has been playing out for the last seven decades or so. They don’t WANT to see Social Security ‘fixed’. Not in any non-veterinarial context. Now docile and tamed and subject to the direction of Wall Street, well that would be okay. But as a program ‘of the worker, by the worker, and for the worker’ they want no part of it. Even if it is ‘free’ to them.
Bruce, Dale, and Lyle:
I am not done yet and will come out on Friedman and Druckenmiller tomorrow. There are two phrases that just play against each from both sides of the political spectrum. Thanks Bruce, I like Crooks and Liars and Hullabaloo. They are good for some witty stuff.
Then it is back to Student Loans, Alan Collinge, etc. Jason Delisle from The New America Foundation owes him a response.
it is hard to tell from your comment whether you know what you are talking about.
each of those amounts is ADDED to the ones before it. So the better off worker is getting at least 2000 a month plus about 15% of his prior income over that 4768 or up to about 2700 per month benefit… this is about 30,000 per year.
Given that they might have paid up to about 12000 per year in SS taxes… for 40 years, or about 480,000 that 30000 per year for a life expectancy of about 20 years or about 600,000…. and this is all adjusted for inflation… that “rich” person is more than getting his money back, plus having had the benefit of insurance all those years.
He might, of course, have done better “on the market,” or then he might have done a whole lot worse. But even very rich people sometimes put part of their money in something very safe at low interest when they can’t afford to lose it.
I did the calculation in my head which is not what it used to be. So you need to check my arithmetic.
you are confusing “the rich” with “the right.” even “the insane right.”
I read Nancy’s book, and I was appalled that after carefully making the distinction between “insurance” that the worker pays for, and “the dole” paid for by “the rich,” that she would go on to call for “fixing” Social Security… which isn’t broken… by dedicating the estate tax to SS.
It’s fine to read a lot and all, but it helps if one actually understands the words.
You are correct about “the insane Right.” You are not correct about “the honest rich.” And it is the failure to make this distinction in our rhetoric that drives “the honest rich” into the hands of “the insane Right.”
I am unable to imagine where I proposed saving the rich a few bucks.
Unless you are referring to the 120,000 a year or so that someone earning about a million dollars a year would pay under “scrap the cap.”
“The rich” are not all evil, but they would notice an extra 100k of taxes per year, and they won’t like it. When the average worker could pay for his own SS needs for an extra 50 bucks per year, it does seem like “tax the rich” might be an idea “the insane left” should wait until after the revolution to bring out.
What we have is not good sense. It is not even good politics. It is just the haters on the Left versus the haters on the Right, and no one gives a damn about the workers, who would just like to be able to retire and not have to worry all the time.
I don’t think you folks even read what Druckenmiller is saying. He does not want to destroy SS for those who need it. He is advocating means testing so that rich people do not get benefits they don’t need. He is one of those rich guys who is soon to collect $3,500 a month. He thinks he should not get this money – I agree.
If we eliminated the payouts to Stan, then SS would become more solvent, why do you oppose that outcome??
Oh, by the way, this is CNBC not CNN….
What Druckenmiller actually said:
Thanks for the correction, I have been awfully busy as of late and have fired my editor as a result.
Druckenmiller advocates generational warfare in the attacks on Social Security Medicare, and Medicaid stealng from the futures of youth. Slightly does he make the distinction between himself (and others of the 1% ilk) not needing Social Security or potentially Medicare for that matter. The message he brings to students is not a clear distinction, it is a distinction of combining wealth and age as the impediment to their success. Many of the elderly are not wealthy in income and are just getting by.
Besides shifting the purpose of SS to that of becoming a welfare program as opposed to a retirement account funded by worker contributions, eliminating SS payments to Stan as well as others is backdooring closing the gap which may or may not occur in 2033 dependent on what the economy and employment does. I am sure Coberly and Webb will be around to expand on why not the change; however, why not expose Capital Gains before 65 to payroll wage taxes to fund Social Security and Medicare?
Druckenmiller as well as Friedman’s words mask the real threat to student going into the future.
Students face a far bigger risk from Student Loans detracting from their Wealth and Income going into the future. It takes away from their ability to purchase housing, durable goods, and greatly limits their ability to get credit. Futhermore, Student Loans are little more than a roach motel, you can sign in but you can never sign out unless you pay it off, become disabled, die, or go without income for 20-25 years. The increases in the $amount of Student Loans corresponds with the stagnation of income for the middle income brackets and the increase in college cost which was greater than healthcare cost increases and CPI. The inability to discharge student loans in bankruptcy and increased loans presents a greater challenge to students going into the future than Social Security or Medicare given the minor tweaks both need to adjust them. This is being masked by Druckenmiller’s message even if it is unintentional.
There is also the question of Elmendorf using Fair Market Valuation (as advocated by Delisle of The New America Foundation and Richwine of Heritage) to rate the impact of student loans in the budget. He has taken a partisan stance again and the same as he did with forecasting healthcare costs. What was a positive return now is a negative return as the result of utilizing commercial data rather than student loan historcial data. Historically, Student loans cost less than what is loaned out and is profitable when in default. So why change something which will in the end cost students more to go to college and impinge even more upon their incomes and acquired wealth once they leave college and go into the economy?
In 71, I was 22 and leaving the Marines as a Sergeant. Druckenmiller was 18 and Vietnam was winding down and ended in 73. In 1968 Johnson announced he would not run for the presidency again when Druckenmiller was 14-15. He drags the “we” word about babyboomers forcing a president out of office and not wanting to go to war. I have problems with his “we” when measured against what many of us did. I do not believe he had much to fear.
In making sense of the shutdown, the most likely outcome is to orchestrate and empower the Great Betrayal (Obama’s Grand Bargain), and it seems not unlikely that both sides in this play will converge right there. Medicare and Social Security being well-thought out and valued, extremely popular programs are undoubtedly the real targets. We know Obama has been aiming at them from Day 1. As for Obamacare, the program seems so poorly conceived and meanly designed, it will have trouble surviving long term.
President Obama does not own this as much as Republicans, Teabaggers, Norquist and ALEC, etc. and some well heeled individuals such as the Koch Bros funding their efforts to subvert governmental function. The PPACA will change over time the same as Social Security and Medicare did over time. It is still far better than nothing or waiting another decade. There is no possibility of such a change today and until the next census of changing the gerrymandering which placed a minority in control.
druckenmillers 3500 dollars isn’t going to save Social Security. And even druckenmiller paid for his 3500 dollars.
and paying “the rich” the money they earned with their SS contribution is one of the things that makes SS work. Druckenmiller gets his money back adjusted for inflation plus about 2%. A poor person gets his money back adjusted for inflation plus as much as 10%. This is how “insurance” works. Druckenmiller could have had a run of bad luck and needed that 10% so he wouldn’t starve when he was 65. Not having the fire does not entitle you to demand a refund of your insurance premium.
Druckenmiller knows that there are fools out there who will swallow his “I don’t need it.” But I guarantee you, that if someone raised his taxes by thirty thousand dollars a year (roughly his SS benefits) he’d be howling bloody murder.
you are not helping things by advocating raising the taxes of the rich to help pay for Social Security. Workers can pay for their own Social Security… forever… with an occasional raise in their own tax that amounts to about a dollar a week.
Roosevelt thought this was important enough that he overruled his own commission to make sure SS was “worker financed.”
If you want to “tax the rich,” fine… but use the money for something else. Use it for regular “welfare” if you want, but don’t help Peterson destroy Social Security by calling for what he says it already is or will be: a huge burden on the taxpayer… meaning his friends.
And it might be worth winning a few elections by not scaring the rich, and put some regulations in the law that keep the evil rich (not all the rich) from robbing the people and holding their wages down.
But don’t try to load up Social Security with your own program for cosmic justice and getting even with “the rich.” It can’t carry the whole burden.
“I don’t think you folks even read what Druckenmiller is saying. He does not want to destroy SS for those who need it. He is advocating means testing so that rich people do not get benefits they don’t need. He is one of those rich guys who is soon to collect $3,500 a month. He thinks he should not get this money – I agree. ”
Krasting that is what you get for reading and not understanding.
People who have done the math have shown that the only way that means testing actually makes any real diffrence is if you define “rich” to mean “$30,000 in retirement income per year”.
The U.S. doesn’t have that many retired billionaires that cutting their ENTIRE Social Security benefits would do a thing. Nor does it have that many retired folks earning even $100,000 a year that cutting their benefits by 50% ON TOP of the fact that they are already paying taxes on those benefits does a thing.
When it comes to things like marginal rates the Right doesn’t even admit that people earning $250,000 are rich, indeed in their formulation people earning those amounts are barely scraping by in NYC or West LA. But when it comes time to means testing for any kind of public benefit or insurance plan suddenly “doesn’t need the money” magically turns into “anyone who has a pension or retirement savings plan”.
All these billionaires have the same basic plan whether that is Fair Tax or Means Testing: use “fairness” and “means testing” to raise revenues and then turn around and use some or all of that money to “flatten” (i.e. lower) rates, and eliminate “distortions” (i.e. any kind of tax on capital).
When they want to sugarcoat it they mouth “rising tide” when they want to lay it out straight they say “greedy public union pensioners” but either way the math ALWAYS works out to raising taxes on middle class wage workers (or cutting benefits) while giving a tax break to capital. EVERY TIME. You might even do the math the next time you see one of those “fairness” and “means testing the ‘rich’ ” proposals come along.
Dale:” I am unable to imagine where I proposed saving the rich a few bucks ”
Well I am unable to draw any other conclusion from this:
“Well, the tragedy here is that many people are afraid that you are going to hit them with very high taxes to pay for Social Security.
Instead of putting their minds at rest, and getting them on your side, “the left” reliably feeds Peterson his scare lines “tax the rich.”
The pure facts are that very few of the ‘raise the cap’ people are proposing anything like “hit them with very high taxes”. That is your strawman. Instead you suggest that if they just drop ANY and ALL attempts to lift the cap (which in most cases would mean quite modest tax increases for almost anyone concerned) that it would in your words be “putting their minds at rest and getting them on your side”.
I suggest that that is fully equivalent to saying that if you promised most rich people that they wouldn’t even have a little extra hit on their taxes that they would go all kumbaya and be “getting” “on your side”.
I still think that is a horrible misread of the history here. I already said that your policy choice might be the right one. Don’t ask me to believe that the rich are just really, really looking for an excuse to do the right thing. Except of course when ‘right thing’ means endorsing a change that raises taxes on workers below the cap while giving them a free pass on all their investment earnings.
I understand a model where one would agree that not asking Squire Anthony to pay extra to add some retirement security to elderly Coachman Booth might make sense. Because we might need Squire Anthony’s tax dollars for some other purpose. But that doesn’t mean thanking him for not contributing to Booth. Or that he will somehow be more on your side when you ask him for money for something else. Because not having kicked into Booth.
Tax payers, and particularly rich taxpayers don’t think that way. Instead they regard any tax not levied as the same as escaping from the demands of the Highwayman robbing their coach and leaving Booth a disabled cripple. Maybe a couple will think of tossing some coppers into the poor box at Church next Sunday as thanks. But don’t count on it.
you are not responding to me. you are responding to a fantasy creation of your own: “unable to draw any other conclusion.”
The basic tragedy of all human “communication” is that people listen to their own inner voices and imagine that that is what the other guy is “really” saying.
Calling to “scrap the cap” is calling for a 12% tax on all of the money everyone makes on every dollar he makes over 100k. That is a huge tax. And the idea scares people.
I have heard from exactly ONE person that “raising the cap” need not mean “scrapping” the cap, and that done right, those who would find themselves paying more would also get more, and this “protected savings” might be worth it to them, even at the very low rate of “return on investment” that it would represent to their minds. I do not object to that. But I do suggest caution in how it is “sold.”
I do not object to their suggesting raising the cap. I do think “scrap the cap” is stupid politics. And I am very angry that these same people cannot bring themselves to inform the workers that they could pay for the whole thing themselves for less than a dollar a week. In my mind that makes them just as dishonest as the insane right, who lie by withholding information.
I don’t expect the rich to “go all kumbaya.” I do think we would have a chance of getting most of the rich… not the criminal rich… to not really give a damn about Social Security one way or the other if they can be made to understand that they are not going to have to pay for it.
The rich are a bit like you and me. Pretty stupid and uninformed and not interested in bothering about much except what interests them personally. You could fight the Peterson LIe Machine with Truth instead of running around shouting a goddam Leftist dream of “making the evil rich bastards pay.”
Is that clear enough that I am not asking you to believe that the rich are just looking for an excuse to do the right thing. I’d settle for letting them know why they don’t have to do the wrong thing. And leave it to their indifference to let the workers save their own money to pay for their own retirement… which is how Roosevelt designed SS. Not because he was a “rich lover.”
And I have always said the rich need to pay higher taxes….just not Social Security taxes… to pay for what they, through their Congress has already bought and will buy in the future until “the deficit” is no longer a screaming hysterical political issue. And I would particularly like to see a tax on “investment” earnings and stock trades. Because those people are pretty close to being the criminal rich. However, here I need to be careful, because by the time you, they, are done, investment earnings will mean selling your big house when you are ready to retire, and the smart boys… with the friends in congress… will have long since learned how to hide their ill gotten gains from the tax man.
I wasn’t planning on thanking them for not contributing. But I do understand why FDR insisted that SS be “worker paid.”
As for “straw man” what do you think you have created here?