Tag: debt ceiling

What a distraction, this military pension debate; pandering to a small entitled constituency and using misdirection to play to an emotional and uninformed public. The discussion is superficial. Always missing is the financial rationale for the military retirement system. This change is being called a cut. But is it really?

When you compare the retirement benefits of a Viet Nam era military retiree, even with the cost of living (COLA) adjustment reduction of a percent a year, at current pay scales very few future retirees would receive less compensation in real dollars than those who retired in 1970. In fact, the vast majority would receive significantly greater compensation, not only after the COLA is restored after age 62, but even during the years of the COLA adjustments. In real dollars, enlisted personnel start retirement at compensation amounts that are 12 to 19% higher (commissioned officers 5 to 6% greater) than their Viet Nam era contemporaries. And job prospects are significantly better for these retirees who are better educated and connected than their predecessors ever dreamt.

Fewer than 10% of all veterans are military retirees. Congress does little more than pay lip service to the remaining 90%, many of whom go unacknowledged beyond gratuitous platitudes during campaigns. With this approach, those whose service resulted in debilitating injury often end up relying upon the kindness of strangers.

Although politicians frame this as a veterans' issue, it isn't. Consider that not many military veterans are retired. Next, the pension program in place is a conscription era relic the Reagan administration tried to reform. The recent aborted attempt by Republicans to hold the debt ceiling hostage leveraging military retirements failed because members of Congress know that even "reduced," this retirement system is more than generous.  

Stanley B. Greenberg, head of an international polling company that works with center-left political parties around the world, had a very perceptive article in the New York Times on Sunday.  Greenberg says that all around the world, but especially in Europe, Canada, and the US, people are turning to right-wing, conservative political parties. Why is it that in the United States, "Barack Obama can't catch a break from the American public on the economy, even though he prevented a depression and saved global capitalism?" It's as though voters refuse to acknowledge that we have historically experienced rising incomes, lower unemployment, and less inequality under Democratic rule than under Republican, and somehow don't get it that it is Democratic policies they prefer--- they will not give credit where credit is due. Aha! I thought, it's that pesky Democratic messaging problem.

But, No, the problem, says Greenberg, is that voters have simply "tuned out" the Democrats: "they just don't trust the Democrats to carry out those promises" and policies, they are cynical about Democratic politicians. In his focus groups and in-depth polling he heard over and over phrases like "it's just words," or "we don't have a representative government anymore," and "there's just such a control of government by the wealthy that whatever happens, it's not working for all the people; it's working for a few of the people." Hmm, maybe these voters are paying attention, after all. On the other hand, wouldn't this apply to both political parties, not just the Democrats?  

No matter what Congress does now, the probability is that at least one credit rating agency is going to downgrade the credit rating of the USA, according to a majority of economists. The shameless spectacle of political wrangling has already done the damage. The cuts being proposed, says Zero Hedges would likely result in at least $100 billion in higher interest costs, which would offset any of the proposed spending cuts in the budget---- making it all an exercise in futility.

We are now at the point where various professionals say the only way we could avoid a wholesale disaster is to:  

The common-sense-challenged Republicans blocking any resolution to the debt ceiling debacle evidently do not have the ability to see the ramifications of not raising the debt ceiling. At the same time, whether fair or not, Standard & Poors is threatening to downgrade the U.S. credit rating for future bond sales. The credit rating agency evidently wants to see something along the lines of President Obama's $4 trillion debt reduction and revenue increase package as evidence of the seriousness of the nation in attacking future indebtedness.

Now, making comparisons between individual household budgets and the budget of a sovereign nation with a fiat currency - money issued solely on the full faith and credit of the nation - are not really realistic. However, such a comparison can occasionally clarify rather arcane matters. So, here goes.

If I find myself deeply in debt (over-leveraged) and have seen at the same time a steep drop in my income, I can pretty well be assured that my credit rating will decline and any additional money I borrow in the future will cost me lots more in interest. Plus, I just may find myself unable to get all the borrowed money I need to tide me over until my income gets back to normal. So, I could do several things. The best choices would be to cut my expenses in ways that are least harmful to me and get a second job in order to increase income.

At long last someone has made explicit the truth about the entire debt ceiling debate. As one might expect, it was a Republican who inadvertantly framed it. After once again walking out on negotiations with President Obama on Friday, Speaker Boehner wrote a letter to his Republican colleagues, quoted in Saturday's New York Times:

"A deal was never reached, and was never really close....In the end, we couldn't connect. Not because of different personalities, but because of different visions for our country."

There it is: because of different visions for our country. Since the time of Ronald Reagan's presidency, indeed, since the candidacy of Barry Goldwater, the Republican view of what America ought to be has been developing along a far different track from that of the Democrats, and the degrees of divergence have grown over time to such a wide angle they can, as the Speaker says, no longer connect. They have no points in common.  

Each has been convinced that only their vision reflects the true tradition of the American Revolution---- but only the Republicans have codified their developing vision, promoted and propagandized it, understanding exactly what they were doing. The Democrats appear to have wandered along in an inarticulate fog, assuming that the Grand Old Party shared with them the same traditions from the Age of Reason about the rights of man and self-government, wherein political parties might be a little to the right (more "conservative" and business-oriented) or a little to the left (more "populist" and labor-oriented) but willing to alternate as a result of free elections in the roles of leadership and of loyal opposition. They never noticed the gradual pulling away of the counter-party, and, beyond babbling occasionally about "Democratic values," they never promoted a clear vision, their alternative view of the world. They even avoided challenging the Republicans' relentless propaganda, supposing that this political courtesy would make it easier to get the opposite party to co-operate in governing.  

The machinations of right-wing destructos continues. No matter how much our president bends to GOP pressure, it will never be enough. The GOP is not operating in good faith. During this presidency, the GOP never has. Enough is enough! I personally thought it was enough quite some time ago. I thought the President should use the Fourteenth Amendment and lift the debt ceiling. Holding the nation hostage as the GOP has been doing is unAmerican. And they stepped up their subversion of America's economy today. There have been many low points in this unseemly train wreck.  But perhaps the lowest point came today.

John Boehner's behavior in the face of imminent default of the United States has been reprehensible. Today, he would not return the president's call(s). When the president finally caught up with him, what ensued, apparently, was (to put it mildly) not productive.  From what the President says here in this video, the failure to return calls was the least of it. Ultimately, Boehner, like Cantor before him, walked.

All of this is happening because GOP opportunists and predatory disaster capitalists want to use the need to raise the debt ceiling to impose their will on the majority in this country. They  want to circumvent the 2008 presidential election, the Senate election of 2008, and the will of the overwhelming majority of the American.

The majority says leave Social Security, Medicare and Medicaid alone. Give us jobs. President Obama said he has stopped listening to his base and the Republicans should do the same. Trouble is, long ago Obama dissed his base and he has not really ever listened to it. John Boehner and Eric Cantor, on the other hand are letting about 25% of the most extreme Republicans try to dictate that the two of them hold this nation hostage.

It's beyond me how anyone could possibly be a Republican after this toying with the economic security of our country.  As some of you well know, KathyinBlacksburg is pretty irritated with certain Dems, including one from Virginia. But even she recognizes that the President is right that he has met the other side in good faith. The GOP doesn't listen to Americans, so I have nothing to say to them.  

If it's true that Republicans on Capitol Hill are throwing around the idea espoused by Erick Erickson to refuse to compromise on the debt ceiling in order to turn the ensuing economic depression into "Obama's depression," then these individuals should be tried before a court of law and thrown in jail. For this reason and many others, it's time for Democrats at all levels of government to stop playing nice. The Republican Party has shown time and again that it is an irresponsible governing body that would rather destroy the country than concede "defeat," as if melting the U.S.'s economy were not defeat enough.

It's also time for reasonable citizens throughout Virginia and the U.S. to speak out against the crazy political schemes that the Republican Party hardliners are cooking up in the short and long term. Lest we forget, there was a reason "that evil" president FDR created an unheard of social welfare state in the 1930s and 40s. FDR's "New Deal" was a direct result of the kind of society which the Republican Party is attempting to piece back together today.

This truly is not wholly an issue of partisanship anymore; it's about keeping our country from folding into two completely opposite camps, the far-right extremists and the rest of us. The latter is not necessarily going to be merely the "leftists," but those who see themselves as moderate or even, conservative. The irony of calls for allowing the U.S. to default is that those who fall into this camp are also some of the very same individuals who argue implicitly or explicitly about intergenerational justice ("the deficit is not fair to future generations not yet able to vote"). But what exactly do these individuals think will happen to the U.S.'s economic standing and standard of living if the U.S. defaults? Future generations will also take the brunt of the criminal actions of a hard-line ideological minority who saw collective suicide better than admitting room for compromise.  

Dear Mr. President, Speaker Boehner, Senators, and Members of Congress:

I am retired, and I want to be sure I understand what is going on: According to news reports, you are all negotiating among yourselves to reduce the national budget deficit before you raise the so-called debt ceiling of the United States (in order to pay America's bills), and I heard that you have decided to put Social Security and Medicare "on the table" in order to reach a deal with each other. I guess this means that Uncle Sam is considering cutting what they refer to as my "benefits," and the President has said that, if you all do not get an agreement before August, he cannot guarantee that my next Social Security check will be sent to me.

I am dependent on my small monthly Social Security check to survive, because I lost almost all my other savings in the recent stock market crash---- I thought I was being prudent and responsible, when I invested what I could scrape together in Wall Street, but I was wrong, they squandered my money. I knew, though, I had a backup plan with Social Security because I paid into Social Security for over 40 years when I was working, with the understanding that these payments were like premiums, and that I had a contract with my government for an annuity in my old age. Social Security is my annuity contract, and you people cannot now just change the contract I paid for after all these years.

It is not my fault you people in Washington have been irresponsible, and thrown away my premiums just the way Wall Street did. The same goes for my Medicare. Social Security and Medicare cannot be "on the table." Uncle Sam owes me what I have been paying for, a contract is a contract, and my government cannot cheat me in my old age. This is a matter of life and death for people like me. Please help.

Sincerely,
Alpha Granny