Bill Mitchell — Chained-CPI COLAs – another conservative smokescreen

The conservatives are always dreaming up new attacks on the most disadvantaged people in our societies. in the US, the front line of the war on the poor is the on-going attacks on the Social Security system. As I’ve noted in the past this entire debate is based upon the around the’s claim that the system can go broke. I dealt with that issue in these blogs –Social security insolvency 101 and The time has come to tell the American people the truth – among others, and I won’t repeat the points. They are clear – the US Social Security Trust Funds are just elaborate accounting smokescreens that ultimately mean nothing if one comprehends the financial capacity of the US government. They represent a case of a government creating a farcical structure to administer some program and then elevating the structure to a false level of importance that actually leads them to introduce policies which undermine the initial purpose of the program – and all without any basis. The determinants of future standards of living will be the availability of sufficient real goods and services of an acceptable quality. If they are available the US government will be able to purchase them with the stroke of a computer key. But because the conservatives have everyone thinking the funds will go broke, they can then force ridiculous time-wasting concepts into the public debate. One such attack is the proposal to use Chained-CPI measures as the Cost-of-Living-Adjustment (COLA) index in social security pensions....

Bill Mitchell – billy blog
Chained-CPI COLAs – another conservative smokescreen
William F. (Bill) Mitchell |Professor of Economics at Charles Darwin University, Professor of Economics at the University of Newcastle, and inaugural director of CofFEE

 Instead of "conservatives," I would say the fiscal conservatives, due to ignorance, and the neoliberals, due to perversity. The objective of neoliberalism as a political stance in order to undermine the welfare state and subvert it into the "market state," really the corporate state. 

It is not always clear who is in which camp, moronic or perverse. But ignorance is no excuse when it is culpable ignorance, and no economists can claim that they don't have the capacity to understand how the monetary and fiscal systems work. The bias is toward perversity due to normative ideology masquerading as positive science.

Christian Science Monitor — Obama's budget offends just about everybody. Is that compromise?

Obama's budget offends just about everybody. Is that compromise? (via The Christian Science Monitor)

Copyright ImageClick to View President Barack Obama speaks at the Police Academy in Denver Wednesday. Obama's proposed budget will call for reductions in in the growth of federal Social Security pensions and other benefit programs in an attempt to strike a compromise with congressional Republicans.(…

Yves Smith — Obama Wants to Be the President Who Rolled Back the New Deal

The president wants to cut Social Security and Medicare to protect the investor class.
There is no more pretense possible. As we’ve warned for some time, Obama is eager to put a notch on his belt by being the President that rolled back the New Deal programs that helped create broad-based middle-class prosperity and dignity. He’s cast himself as an adult inflicting discipline on profligate Americans....

We now have the absurd spectacle of Paul Ryan’s budget being to the left of Obama’s on the issue of Social Security and Medicare. If the Republicans have an iota of sense, they’ll take full advantage of the weapon Obama has handed them. Every poll ever done over the last 50 years shows substantial majorities favoring continuing and increasing Social Security and Medicare provisions, and either increasing taxes or cutting other spending to do so....

But Obama wants his legacy and the public be damned. And Bill Clinton proves that being a front person for neoliberalism is a very lucrative post-Presidential line of work....

...the battle to get Obama’s fondly-desired Social Security cuts passed means persuading legislators to take a memorable vote that their constituents are likely to hold against them....

This “have old people die faster” plan will be contested. The normally complacent public is unlikely to sit by quietly and have its ox gored. Even the Times is not trying to soft pedal what is going on; it’s not using the anodyne language of “chained CPI” but “cutback” and in the headline, no less. 

AlterNet
Obama Wants to Be the President Who Rolled Back the New Deal
Yves Smith

Ryan Grim — Chained CPI Only Acceptable As Part Of 'Balanced Package,' White House Says

OMG. What's the superlative of moronic?

The president's move makes him the first Democratic president to propose cutting Social Security.

House Speaker John Boehner (R-Ohio) responded to the president's offer on Friday by suggesting that if he wants to cut Social Security, he should just go ahead and do it. “If the president believes these modest entitlement savings are needed to help shore up these programs, there is no reason they should be held hostage for more tax hikes. That’s no way to lead and move the country forward," he said in a statement. 

There it is, folks. President Obama has just dropped a bomb on the Democratic Party. It will be interesting to watch the fall out. This is the moment of truth for Democratic politicians.

The president knows exactly what he is doing. This is a direct strike at the left in an effort to solidify the Democratic Party as the moderate Republican Party in the belief that American politics is center right, ending the Democratic coalition built by FDR in an effort to "capture the center."

Will the base roll over again to prevent the take over of the country by right-wing extremists? I would not be putting any money on that bet. There is already a firestorm rising. Obama Budget Proposal Cuts Are 'Unconscionable,' Says AFL-CIO. Make that moronic and unconscionable.

The Huffington Post
Chained CPI Only Acceptable As Part Of 'Balanced Package,' White House Says
Ryan Grim

Social Security benefits to go up by 1.7 percent

Mildly positive news out today on the fiscal front.  Story at Yahoo!.

Social Security payments for retired workers average $1,237 a month, or about $14,800 a year. A 1.7 percent increase will amount to about $21 a month, or $252 a year, on average. Social Security recipients received a 3.6 percent increase in benefits this year after getting none the previous two years. About 8 million people who receive Supplemental Security Income will also receive the cost-of-living adjustment, or COLA, meaning the announcement will affect about 1 in 5 U.S. residents.

I believe this flow adjustment will take place on January 1, 2013.  All of these balances WILL be spent in the economy.

Based on last FY's total Social Security withdrawals of $658B, this 1.7% increase will add just over $10B more in fiscal flows to the non-government sector next year.... like I said, mildly positive.  Perhaps the best we can expect from the morons who are unfortunately in policy making positions at this time.