MAYAN PROPHECY EXPLAINED

Why the Mayan calendar ends so suddenly ...

- Mark

SOCIAL SECURITY IS NOT GOING BANKRUPT

Posted below is a piece I wrote for the Bakersfield Californian, "The 'Social Security is going bankrupt' Lie."  It appeared yesterday. I've added pictures and graphs. Updates and links to rebuttals will follow. I'll be especially sure to link and respond to those that display a total lack of familiarity, or ignorance, with the topic. Enjoy ...
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The 'Social Security is going bankrupt' lie

Here we go again. The Republicans are using debt and tax negotiations as cover to push a dystopian market dream that includes erasing Social Security as we know it from our economic lives. To do so, the GOP is trying to convince America that Social Security contributes to our national debt and is, in the words of Paul Ryan, "going bankrupt."

Both are flat-out lies. Here's why.

Let's remember that Social Security is a self-funding program. It has contributed absolutely nothing to our debt load. In fact, over the years we've contributed so much to our nation's Social Security account a $2.7 trillion surplus now exists.

Congress has raided these surpluses every year. In return we get government security notes. According to the GOP, because these securities are "just IOUs" -- and we're running budget deficits -- we don't have to pay our nation's retirees back. 

Put another way, congressional Republicans are saying America no longer has a legal or moral responsibility to honor its financial obligations.

Anyone who's read the U.S. Constitution (specifically, Article VI) knows we have a constitutional duty to pay our bills. We've done it since the American Revolution. We did it during the Civil War, the Great Depression, and even through the world wars. Still, the GOP argues that since we don't have $2.7 trillion on hand we don't have to honor our Social Security deal, and should cut back on promised benefits.

Hey, I have an idea. Since we don't have $16.3 trillion on hand to pay our national debt, let's not pay our creditors either. Take that China -- and Saudi Arabia -- and Japan -- and everyone else who's lent us money. Or let's cut a deal and pay our creditors 75 cents on the dollar.

As silly as this sounds, it's essentially the argument congressional Republicans are making when it comes to the $2.7 trillion we borrowed from Social Security. And the silliness continues.

After the 2008 market collapse, Congress did virtually nothing as the Federal Reserve and the Treasury Department forked over more than $4 trillion to Wall Street and America's financial sector. But that's not all.

Via an alphabet soup of new loan, credit and guarantee programs (TALF, TSLF, PPIP, Legacy Assets, etc.), the American taxpayer is on the hook for an additional $13 trillion. That's right. More than $17 trillion has been made available to bailout, backstop and pay off the bad bets of the crony capitalists on Wall Street. 

Yet, congressional Republicans say we can't find $2.7 trillion to pay back the seniors who helped fund and build the American Century.

The irony here is that the GOP not only believes it's OK if we don't honor our financial obligations, but many argue we need to "privatize" Social Security if we want to fix it. Huh? 

In real simple terms, "privatization" is GOP-speak for sending the trillions of dollars now running through Social Security accounts to Wall Street (which makes privatization a backdoor bailout in perpetuity, on so many levels).

What gets lost in all the "cut back" and "privatization" double talk is one simple fact. There's no problem with Social Security if we simply honor the Constitution, and respect the contract we made with our nation's seniors.

Still, let's say the GOP gets its way. We become a banana republic, and pick and choose which debts we honor. At worst, our seniors get 75 cents on the dollar after 2033. 

However, as I argued more than six years ago, Social Security isn't in trouble if we:

* Rescind the Bush tax cuts. Rescinding all Bush-era tax cuts brings in around $4 trillion over the next 10 years. It's almost $1 trillion if we target just the top 2 percent. Projected Social Security shortfalls disappear under these scenarios.
* Remove the payroll tax cap. No one pays a dime into Social Security after they earn $110,100. Removing the cap keeps Social Security solvent into the 22nd century.

Rather than discuss these issues, congressional Republicans prefer to scare America about Social Security's future "insolvency" so they can cut back on senior benefits today. Not so coincidentally, they also get to argue that government programs, like Social Security, don't work, while maintaining tax cuts for the rich.

An added bonus for the GOP and its financial backers is how this story line lays the groundwork to sell America on a Wall Street Social Security privatization scheme -- a bailout in perpetuity.

Social Security isn't headed for bankruptcy. What's bankrupt is the moral code of congressional Republicans. It's why they're putting ideology and the interests of Wall Street above the Constitution, and our promise to America's seniors.

Mark A. Martinez, Ph.D., is the author of "The Myth of the Free Market" and a professor of political science at Cal State Bakersfield.

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- Mark

MICHIGAN'S "RIGHT TO WORK" VOTE

Michigan's "right to work" vote during a lame duck session is exposed by Rep. Brandon Dillon for what it is ... a national embarassment.

- Mark 

WORLD WAR II ON FACEBOOK

My daughter sent me this from ifunny. It's hilarious. World War II on Facebook ...

- Mark 

A WORD ON ENEMIES

Former Chief Justice Earl Warren (1891-1974) once said: "Everything I did in my life that was worthwhile I caught hell for." It surely fits with this ...

- Mark 

GOP FILIBUSTER TACTICS REACHES NEW LOW

Senator Mitch McConnell (R-KY) introduces, then stalls, objects to, and rejects his own bill (to raise the debt ceiling) with yet another filibuster.

Incredible.

- Mark 

HEALTH CARE COSTS & BRAND NAME DRUGS

There are many, many reasons why health care costs in America are so much higher than anywhere else in the world. In addition to regulatory subsidies, price fixing, and artificially high administrative costs (which Obamacare will help address) the price of brand name prescription drugs continues to contribute to higher health care costs in America ...

Graph Source: Barry Ritholtz.

- Mark 

WHY WE SHOULD TAX THE RICH (in animation)

You know this clip is good because one of Bakersfield's right wing radio personalities mocked it on their FB page, only to have their Tea Bagging and right wing followers go after it too. It explains in just over 7 minutes what's happened to the fiscal health of our country since the trickle down ideologues took over, and how the financialization of our economy came about.

It's a bit over generalized, but it gets the point across. Enjoy ...

At the end of the day I'm not sure if the Tea Baggers and right wing crazies don't like this clip because they don't understand it, or because they live in such a closed universe. It's probably a little of both. Connecting concepts with facts is difficult when Fox-Rushbo-Glenn-Levin etc. are the ones yanking your intellectual chains.

Either way, it's interesting to see right wing comments on stuff like this. What's really amusing is that many of them get so bent out of shape defending a sputtering paper economy created by Americas elite, but are completely clueless to the fact that America's financial aristocracy - people like the Romneys and the Kochs - look at them as a bunch of chumps.

Correction, that's "useful" chumps.

- Mark

THIS IS ONE OF THE WAYS EUROPE, UH, THE FED BAILED OUT WALL STREET

Over the past four years I've been pointing to a House committee hearing where Alan Grayson (D-FL) grilled Federal Reserve Chair Ben Bernanke on what happened to half a trillion dollars that the Federal Reserve sent to Europe. Chairman Bernanke's answer was classic. He claimed that he didn't know where half a trillion dollars went after he sent it to the European Central Bank. Nice.

Now you and I know that Europe didn't get access to hundreds of billions of dollars simply because they were stellar creditors in need of temporary operating funds. They got the money to help clean up the mess Wall Street created in Europe's financial centers. Plain and simple.

A classic example of how the Fed's taxpayer backed money made its way through Europe is the bailout case of Dexia bank. Here's the short and sweet of it.

Dexia was originally created in France in 1996 to help fund infrastructure and other municipal project needs (municipal bonds) throughout Europe. Over time Dexia expanded into North America and began purchasing and insuring mortgage-related bonds in the U.S. These markets, as we know, collapsed after 2008, which put a big financial bulls eye on firms like Dexia because they could not find the funds to back their commitments.

This is where the Fed's half a trillion dollars (plus) comes into play.

In a few words, because the banks and other private market players would not lend to Dexia the Federal Reserve began operating as the lender of last resort. The Fed initiated the policy of stuffing Europe's Central Bank with dollars through creative swap and credit programs that surpassed a trillions dollars long ago. Through ECB lending and bailout programs the Fed's money eventually found its way to troubled financial institutions throughout Europe, making it part of the larger bailout effort in the U.S.

The Fed's European bailout program was nothing new to the Federal Reserve.

The Federal Reserve had already created new operating desks to funnel money to troubled financial institutions in the United States, as I pointed out 6 months before the September 2008 market collapse. Creating new "teller windows" for troubled financial institutions picked up steam big time with the creation of the Maiden Lane bailout desks (for Bear Stearns and AIG toxic crap) after the market collapsed in September 2008.

So it really should come as no surprise that the Federal Reserve would continue picking up Wall Street's mess as it spilled over to Europe by making a trillion here, and hundreds of billions there (for short-term funding), available to European financial institutions.

Here's a list of recipients in Europe who had access to $350 billion in low interest short-term Federal Reserve loans ...

So who ultimately got the money that the Fed swapped and lent out? The people who created the financial mess on Wall Street got it, that's who.

- Mark 

CLIMATE CHANGE, ICE MELT & RISING SEAS ARE REAL

Guess what? NBC World News has a short and very readable story that shows how Antarctica and Greenland ice is definitely melting into the sea. Worse, in spite of what the delusional flat earthers at Fox News believe, the sea melts have added over half an inch to our ocean levels, and the process is speeding up.

What should be done? Among the many things that need to be done, at the top of the list that we need to stop treating the environment as an open sewer. This means we need a government that's willing to say to no to certain industries while taking another look at how we live our lives.

Bill Moyers has an interesting discussion on all of this with Naomi Klein on his November 16 program, "Hurricanes, Capitalism & Democracy."

- Mark

Hat tip to Gary for the links.