Tuesday, June 17, 2008

An answer for Hannity

As I mentioned several days ago, I made a mistake in my first response to Sean Hannity's question about we can expect universal healthcare to work. A mistake in the sense that I underestimated how stupid Hannity is.

Hannity had asked what happened to the Social Security "lockbox" that Democrats had promised. My answer basically went about explaining how regressive taxes meant to pay for Social Security were used in the 80s to fund tax cuts for the rich and could not be blamed exclusively on Democrats. If I had remembered this passage from Perfectly Legal, however, it would have demonstrated that Hannity's question is dumber than it already appears.

Fear that the excess Social Security taxes would be used to finance the tax cuts on which George W. Bush campaigned in 2000 prompted him to promise again and again on the campaign trail he would not touch that money. “In my economic plan, more than $2 trillion of the federal surplus is locked away for Social Security,” Bush said. “For years, politicians in both parties have dipped into the Trust Fund to pay for more spending. And I will stop it.” Two months after he was sworn in, Bush said that “another priority is retirement systems of Americans. And so the budget I set up says that payroll taxes are only going to be spent on one thing, and that’s Social Security. But the Congress won’t be using the payroll taxes for other programs. Lockbox, I think, is the terminology they like to use up here.”

By then the Wall Street Journal had already concluded that Bush intended to pick the lock on the Social Security box. Bush’s economic plan, the Journal reported, uses “all the Social Security surpluses … to fund the government for the next two years, and to spend well over $100 billion of Social Security funds in each of the following three years.
That's what happened to the lockbox. George W. Bush cracked it open to pay for tax cuts for the rich. So did Democrats in the 1980s ... to pay for Ronald Reagan's tax cuts for the rich. And funds from Social Security were used in the 90s to pay for the budget. Funny how Hannity forgets the part of the equation that has Republicans in it.

This is an outrage and needs to be stopped. It needs to be stopped because it is a form of subterfuge that amounts to backdoor regressive taxation where the middle class is taxed to subsidize tax cuts for the rich. Despite this, however, it still doesn't make the point Hannity intended it to make.

Recall again what Hannity asked. How can the government that bankrupted Social Security be expected to get a Universal Healthcare progam to work. Two loaded problems in Hannity's framing of the question.

1. Social Security is not bankrupt.
2. The problems with Social Security, to the extent that they exist, are a matter of policy, not of necessity.

It's important to consider what Hannity means by "bankrupt." He means that at some point 3o to 40 years from now there might be a shortfall in Social Security, depending on the projections that you look at. Even then Social Security would be able to pay out most of its benefits, so bankrupt is an odd way to describe the program.

As Paul Krugman has pointed out, the Social Security "crisis" is invented and we can choose to fix Social Security with relatively little difficulty if we choose to do so. In this regard, Hannity is correct: if we choose to elect a goverment of plutocrats that is determined to cut taxes for the rich and shift the tax burden while cutting spending that doesn't directly enrich corporations and the megawealthy then we will not be able to afford a universal health care program.

This is why (I surmise) folks like Hannity see Social Security in crisis. They do so for the same reason they see WMDs in Iraq or don't see global warming. Social Security - one of the most succesful and popular programs in U.S. history - is a living anti-proof of movement conservative ideology. They need for it to be a failure.* Which might explain some of the comical mental gymnastics that Hannity and others engage in to arrive at the conclusion that Social Security is in crisis which can only be solved by privatization.

Al Franken explored these cognitive contortions at length in The Truth (with jokes). The most humorous example offered by Franken being George W. Bush after visiting the Office of Public Debt Accounting declaring that "there is no 'trust fund' - just IOUs that I saw firsthand, that future generations will pay either in higher taxes, or reduced benefits, or cuts to other critical government programs." Three weeks later during a prime time press conference on Social Security Bush said that "Social Security will be bankrupt" several decades from now and that the trust fund is just "file cabinets full of IOUs." Bush offered a privatization solution: "I propose that one investment option consist entirely of treasury bonds, which are backed by the full faith and credit of the United States government."

Ok, can anyone guess what those IOUs Bush looked at were? That's right! U.S. treasury bonds.

In my first response I observed that Hannity would offer you Republican governance as a solution to problems that would in reality increase under (more or greater) Republican rule. I also offered the qualification that Democrats are not free from the sin of acting as plutocrats rather than democrats. Which is why it is important to counter the cynicism that is so vital to the cause of Hannity and the conservative movement. We can do this by being aware of what has happened to this country and by remembering that We the People have a say in the fate of the nation. It may take some time and effort, but we can vote out the goverment that has been killing the American dream for 3 decades now.

David Cay Johnston, in Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill), suggests a question we might ask as we head into the election.

Since 1980 it has become official policy to ensure that the rich receive the benefits of government. This is a shift from government policy in the years after World War II to grow the middle class, remaking America into a land of better-educated and healthier people, a land of suburbs and single-family homes where opportunity was based less on status and wealth than on hard work and merit.

So who is better off today than they were 30 years ago? [An allusion to Reagan famously asking in 1980 if you’re better off today than four years ago.] The middle-aged factory worker whose plant closed even though it earned a healthy profit or the Wall Street investment banker who brokered the deal to ship the machine tools overseas, where pay is three or four dollars per day? The billionaire CEO or the middle manager whose company health insurance has been cut yet again? The war contractor or the brain-injured veteran?
*President Bush planned on "saving" Social Security with a plan that would speed up the appearance of deficits while increasing their size; it would also have benefited money managers charging administrative fees.

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