The day could come when we could replace the New Deal with a better deal
According to Pence, Republicans will come up with a Better Deal to replace Social Security. Allow younger people to place their funds in private and commercial investment funds. Funds from which a portion will be taken to manage them and to which will be exposed to the ups and downs of the economy.
Abandoning Social Security is part of the Republican plan to resolve the national debt. Countering this pan would be to allow the trump tax cut of 2017 to expire with corporation returning to paying what they should in taxes. Did we see a similar increase in economic activity after the trump tax break when compared to the last two years? No . . .
February 3, 2023, Letters from an American, Prof. Heather Cox Richardson
Last night, former vice president Mike Pence came out and said it:
“I think the day could come when we could replace the New Deal with a better deal.”
Pence was talking about Social Security—a centerpiece of the New Deal—saying:
“Literally give younger Americans the ability to take a portion of their Social Security withholdings and put that into a private savings account.”
Privatizing Social Security is his plan to address the growing national debt by cutting expenditures, at least in domestic spending. “It’s absolutely essential that we generate leadership in this country that will be straight with the American people, that will take us off this trajectory of massive debt that we’re piling on the backs of those grandchildren,” Pence said at the National Association of Wholesaler-Distributors summit in Washington, D.C.
Another way to reduce the debt would be to raise taxes on corporations and the very wealthy, even to where they were before the massive tax cuts Republicans passed in 2017, but current-day Republicans oppose taxes, claiming they redistribute wealth from hardworking people to those who want a handout. They believe that cutting taxes to enable those at the top to accumulate wealth will enable them to invest their money in businesses, creating more jobs. Wealth will trickle down, and everyone will do better.
Republicans like Pence believe the federal government should stay out of economic affairs, letting individuals make their own decisions in free markets (although the concept of a “free market” has always been more theoretical than real). Any federal attempts to regulate business or provide a social safety net are “socialism,” they claim, although they have largely forgotten how that argument was established in the United States.
This argument is what gives us the story Kayode Crown reported yesterday for the Mississippi Free Press: thirty-eight of Mississippi’s rural hospitals, more than half of them, are in danger of collapsing because Governor Tate Reeves refuses to allow the state to accept an expansion of Medicaid. The hospitals are required to treat all patients who need care, but since many patients are uninsured, without the expansion of Medicaid the hospitals don’t get paid.
On Monday, Reeves warned Republican lawmakers not to “cave under the pressure of Democrats and their allies in the media who are pushing for the expansion of Obamacare, welfare, and socialized medicine.”
“Instead, seek innovative free-market solutions that disrupt traditional health-care delivery models, increase competition, and lead to better health outcomes for Mississippians.”
Last month, in a poll from Mississippi Today/Siena College, about 80% of Mississippi voters wanted Medicaid expansion.
This theory also says that the government should also stay out of the business of protecting civil rights, because state governments are the centerpiece of American democracy. That’s the idea behind yesterday’s decision by a panel of three judges of the right-wing Fifth Circuit. They ruled that a federal law prohibiting people who are under a domestic restraining order from owning a gun is unconstitutional.
In the 2022 New York State Rifle & Pistol Association v. Bruen decision, the Supreme Court said that the government must prove that any gun regulation is “consistent with this Nation’s historical tradition of firearm regulation,” and because the Constitution’s Framers didn’t stop domestic abusers from possessing guns, we can’t either. As Ian Millhiser points out in Vox, it was not until 1871 that a state court determined that “a husband has no right” to beat his wife.
Slate’s legal reporter Mark Joseph Stern notes,
“There is no real doubt that the 5th Circuit’s decision is going to lead to more abusers murdering their wives and girlfriends. It will also increase mass shootings. Domestic abuse[rs] are vastly more likely to commit heinous acts of gun violence.”
Millhiser says it is very likely the Supreme Court will take up the case.
Under the Republicans’ theory, the country has seen wealth move upward dramatically, hollowing out the middle class and leaving it vulnerable to leaders who have attracted voters by telling them that minorities and women who want “socialism” are to blame for their loss of power.
Today an audio file from November 5, 2020, just after the presidential election, was leaked that shows members of Trump’s campaign staff in Wisconsin acknowledging Trump’s defeat before Andrew Iverson, who led the Wisconsin team, said,
“Here’s the deal: Comms is going to continue to fan the flame and get the word out about Democrats trying to steal this election. We’ll do whatever they need. Just be on standby if there’s any stunts we need to pull.”
Iverson now runs operations in the Midwest region for the Republican National Committee.
In contrast to the Republican theory, President Joe Biden and the Democrats have revived the theory embraced by members of both parties between 1933 and 1981. That theory says that the federal government has a role to play in the economy, regulating business, providing a basic social safety net, investing in infrastructure, and protecting civil rights. Rather than freeing capital for those at the top, Democrats want to invest in ordinary Americans who will, they believe, spend their paychecks, thus building the economy as they move money directly into the hands of their neighbors.
Today at a Democratic National Committee finance event in Philadelphia, Pennsylvania, Biden explained that “when we build from the bottom up and the middle out, poor folks get a shot, the middle class does well, and the wealthy still do very well.” We have to invest in ourselves again, he said.
“How…can you be the most successful, powerful nation in the world and have third-rate infrastructure?… How can you attract business and commerce and keep things moving?”
“[W]e used to invest 2 percent of our G[ross] D[omestic] P[roduct] in research and development…. But about 25 years ago we stopped.” Investment dropped to 0.7 percent of GDP, he said, but now the CHIPS and Science Act will jump-start that research and development again. The administration is also bringing supply chains home and rebuilding foreign alliances. And Biden told the wealthiest people in the room today that they were paying an average of 3% in taxes and needed to pay their fair share. “I don’t want you to pay 90% again”—the top marginal income bracket in the Eisenhower years—but at least 15%, he said.
From the White House, Biden noted that the “strikingly good” new jobs report issued by the Bureau of Labor Statistics this morning proved that his vision of society works. It showed an astonishing 517,000 new jobs added in January, the twenty-fifth straight month of job growth. Unemployment fell slightly to 3.4%, a low last seen in May 1969 (not a typo).
Between 1933 and 1981, Americans of both parties shared the idea of using the federal government to level the social, economic, and political playing fields. The current Republicans are rejecting that vision, reclaiming that of the business-oriented Republicans in the 1920s. Under Biden, the Democrats are trying to rebuild that shared vision, returning the parties to fights over the kinds and limits of government policies, rather than fights over whether they should exist at all.
Biden told his audience that “once every three, four, or five generations, there’s a fundamental shift in world politics and national politics” and that we are in such a shift now.
“What will happen [in] the next three or four years [is] going to determine what this country looks like for the next four or five decades…. We’re laying down a foundation, because the world is changing—dramatically changing. And we have a choice.”
Yep. That’d be an extension of the 401k concept that I bought into so many years ago but making it involuntary. It probably won’t fly. It does seem like a con to get away with simply ending Soc Sec doesn’t it?
Funny thing about that 401 I bought into a long time ago: it disappeared …
In Wall Street we trust??? Nope.
Social Security and the US deficit: Separating fact from fiction
Reuters – Nov 2018
For decades, some of our most prominent U.S. politicians have been sounding the alarm that Social Security is an important driver of the federal budget deficit. But is that really true?
U.S. Senate Majority Leader Mitch McConnell, a Republican, recently pointed to “entitlements” as the key cause of rising federal deficits, and blamed Democrats for refusing to go along with proposals to cut spending by Medicare, Medicaid and Social Security.
McConnell was responding to a report from the U.S. Department of the Treasury last month that the budget deficit grew to $779 billion in fiscal 2018, the highest in six years. Treasury attributed the increase to the tax cuts contained in the Tax Cuts and Jobs Act (TCJA), higher spending and rising interest payments. (Full Story) (reut.rs/2CNjSBm).
The call for cuts to our very popular entitlement programs just before an election makes for surprising politics – and it is not selling well with the public; a poll this week by NPR, PBS NewsHour and Marist (bit.ly/2zewazj) found that 60 percent of Americans would prefer to reverse the tax cuts than cut spending on Social Security, Medicare and Medicaid.
But is there substance to McConnell’s argument?
You can make a case that rising spending on Medicare and Medicaid contribute to deficits, since both depend partially on federal general revenue. I would counter that the rising cost of these programs reflects a general problem with rising healthcare costs that affects not just government, but employers who insure workers and individuals buying their own insurance.
But it is quite a stretch to argue that Social Security drives deficits. …
You can make a case that rising spending on Medicare and Medicaid contribute to deficits, since both depend partially on federal general revenue. I would counter that the rising cost of these programs reflects a general problem with rising healthcare costs that affects not just government, but employers who insure workers and individuals buying their own insurance.
But it is quite a stretch to argue that Social Security drives deficits.
By law, Social Security cannot contribute to the federal deficit, because it is required to pay benefits only from its trust funds. Those, in turn, are funded through a dedicated payroll tax of 12.4 percent of income, split evenly between employees and employers, levied on income (this year) up to $128,400.
The program’s revenue and expenses are accounted for through two federal trust funds that have operated with large and growing surpluses in recent years, and they finished fiscal 2018 with an estimated $2.89 trillion. By law, Social Security must invest these surplus funds only in special-issue U.S. Treasury notes, which have the same full faith and credit guarantee as any other federal bond.
LONG-RANGE OUTLOOK
Going forward, the trust fund surplus will be drawn down as an aging population claims benefits, and as the U.S. fertility rate continues to decline, which means fewer workers are coming along to pay taxes into the system.
That already is starting to happen. In fiscal 2018, expenditures exceeded revenue (including interest on investments) for the first time since 1982. Social Security took in $912 billion in fiscal 2018 and spent $991 billion. The difference – $79 billion – came from repayment of interest on those Treasury notes. Some conservative policy analysts point to that payment as evidence that Social Security is a cause of deficits, since the $79 billion payment came from general revenue. …
(So, one gets the distinct impression that The Truth here depends on whether full faith & credit actually holds up going forward. The jury is out on that question it seems.)
Or, you can say it’s a Glass Half-full or Glass Half-empty situation.
(Not so hard to see that the Pete Peterson Foundation believes interest rates on the Nat’l Debt Spell Doom at some point only a few decades away.)
Higher Interest Rates Will Raise Interest Costs On The Nat’l Debt
Although deep down the GOP would apparently like to scuttle Soc Sec, Medicare & Medicaid, they suspect this would be political suicide, so they will probably settle for terminating other expensive social programs instead. To include various Executive Branch departments: Education, Labor, Housing & Urban Development.
It could be that the GOP will settle for shutting down the US Depr of Education.
Each year federal agencies receive funding from Congress, known as budgetary resources . In FY 2023, the Department of Education (ED) had $94.06 Billion distributed among its 10 sub-components. Agencies spend available budgetary resources by making financial promises called obligations …
(Spending at the) US Dept of Education