Obama Signs Help for Manufacturers Into Law

If we are not manufacturing things here in the US, doesn’t it necessarily follow that the stimulus did not stimulate the US, it actually stimulated the economies where things are manufactured?
Isn’t that the logical explanation for the US GDP growth that will be revised to about 1% from the 2.4%, as a result of a larger than expected trade deficit that was caused by increased imports from China?
Who could have known that unemployment benefits would be used to purchase cheap goods from China? Pelosi claimed that the best way to solve the unemployment problem is to extend unemployment benefits. Does she think that increasing the US debt owed to China is conducive to higher employment in the US?

Andy Grove, co-founder of INTEL, agrees that manufacturing is vanishing in the US, and it MUST be reversed. American security and strength depends not just on our military, but also on a strong industrial base. For over a decade we’ve let it slip away.
Andy suggests the first task is to rebuild our industrial base with stronger financial incentives: Levy an extra tax on the product of off-shored labor. Then he proposes a broad public-private partnership to invest in the development of manufacturing. Use that money as a public bank and make the funds available for American businesses.
In this way, American opportunities become competitive with low wage, Asian government supported businesses overseas. And it creates those capital-intensive jobs “that have labor productivity levels consistent with advanced country incomes”. Family Wage taxpayers.
The idea of a public-private partnership will grate with the “just say NOers”. But Grove believes change is imperative and the choice is very simple. If America wants to remain a leading economy, we must change outdated “Free Market” ideas in a new global market, or China will continue to force change upon us.

“Andy Grove, co-founder of INTEL, agrees that manufacturing is vanishing in the US, and it MUST be reversed.”
Hmm…If Mr. Grove trulyu feels this way, I wonder why he didn’t lean on Intel to insist Intel place same emphasis on U.S.-based jobs when selecting sites for new facilities. To be fair, Intel does employ a lot of Americans but Intel also has assembly facilities in China, Costa Rica, Malaysia, Philippines, and Vietnam and fab (manufacturing) facilities in Ireland and Israel.
Given the high capital investment costs (and low operating costs) these jobs ain’t coming back anytime soon…
The federal government is a significant barrier to U.S. manufacturing growth (or even maintenance of status quo). Government needs to get out of the way and this (removal of tariffs) would appear to be a step in the right direction. If Barry is serious about goosing manufacturing growth he’ll get the free trade agreements with Colombia, S. Korea, etc. pushed through (but won’t happen since unions oppose this effort…and we all know the stranglehold unions have on this administration).

The President is using “voodoo math” again as he says the 183,000 jobs are “the strongest seven months of manufacturing job growth in more than a decade.” There has not been several million jobs lost in a previous year in the past decade!

Posted by: green.goddess | Aug 11, 2010 6:23:27 PM
Thanks for this tip, gg. It led me to Grove’s opinion piece at Bloomberg: “How to Make an American Job Before It’s Too Late: Andy Grove” (and other articles that comment on the piece such as” Why is the American Jobs Machine Broken?” by Tim Duy which in turn links to Yves’ Smith’s and Rajiv Sethi’s followups; see also”Andy Grove’s Take on Our Unemployment Woes Is Smart — and Leads Right to Industrial Policy)
Good stuff.

Maybe instead of fattening up the Public Union Coffers pretending it was Stimulus, he could have launched a real renewal, a singular industrial achievement. Many, including me, offered the idea of a Rail Revolution at all levels: from sexy high-speed to commuter light-rail, and especially an invigorated freight rail. We could be right now revitalizing our cities and country with the outpouring of good jobs from engineers to steel-workers.
But alas, Obama kept his sights low and petty, and even now just uses the subject of America’s Industrial might as just another photo op.

Maybe instead of fattening up the Public Union Coffers pretending it was Stimulus, he could have launched a real renewal, a singular industrial achievement….
Posted by: Carol |
Right there with you. They let a crisis go to waste. The triumph of politics.
America doesn’t do big things any more.

“I just may change my mind about you because that’s the change we all have been waiting for!”
Because right-wingers will always take a buck over somebody’s health and safety.

And in the end… it won’t matter… the tidal wave (tsunami) of public debt that is now cresting, obscuring the sun, will soon crash down on our economy…
No one will escape the consequences… not one… not me, not you…
Finally the Fed is recognizing the danger… other lone voices call out in the wilderness…
There is just simply no escape now, it is all spent… the total foreseeable income of all the future of the USA is not enough to pay our extended liabilities… Our children and Grandchildren will be left holding the bag for our excess… their only real choice will be default… the consequences will be devastating…
They will live in an austere world…
Sorry kids…

“These companies, the president touted today, will be able to grow and hire more workers. He noted that some say the decline in the manufacturing industry is inevitable.”
Obama, king of the strawman argument. He has perfected the creation of “some” or “there are those” who are opposed to his bill and etc. and is able to knock them down without challenge. When will the media start doing their job and challenge this showman.

Try not taxing and regulating industry to death.
Try not choking it out of resistance with union goons.

In related news from the Labor Dept. this weeek:
Company job openings fell for the second straight month in June, a sign that hiring isn’t likely to pick up in the coming months.
The data comes after a weak employment report Friday that showed businesses aren’t adding enough new workers to bring down the unemployment rate, currently 9.5 percent.
Wednesday’s report, known as the Job Openings and Labor Turnover survey, or JOLTS, suggests that won’t change anytime soon.
====================
Recovery Summer! Yes we can!
BTW – WHere has Sheriff Joe Biden been?

When this nation prospered was it the government that caused it, or did the government grow the regulation and taxes to stifle the growth.
I don’t think we need a double blind study to resolve this one.

Really bad job numbers this morning…
I wonder if Mr. Obama finally realizes that it was a lot easier to criticize George Bush than it is to actually be president…
Will there be an apology…?

Detroy from within.

What about small businesses, who create 50+% of new jobs? Maybe the best thing the administration can do is provide stability (given the impact of “change you can count on”.

green.goddess Aug 11, 2010 6:23:27 PM
….. “or China will continue to force change upon us.” ….What, by demadning repayment of our debt they are holding?

Cara | Aug 12, 2010 10:36:37 AM
…..I am not defending the Republicans, but they have plans to deal with the problems. How hard have you tried to find them? Or is it just more ideologically correct to bash?

How hard have you tried to find them? Or is it just more ideologically correct to bash?
Posted by: deanbob | Aug 12, 2010 10:42:19 AM
I watched Boehner, Pence, Cantor on talk shows. I read the GOP probably won’t pass Ryan’s roadmap.
So, what are their ideas and how do they differ from the same stuff that failed? Besides Ryan’s efforts all that seems to get play is repealing health care and going back to the good old 00′s which led us here.
Sources, specifics?

“The American public, per the bad polling numbers, disagrees. ”
There is only one poll that matters and that will happen on November 2. Big changes are coming. Fiscal conservatism is on the rise, be it through the tea party or new style Republicans. One thing’s for sure, the American public is through with the awful tidings of the past 4 years of this democrat controlled congress. And that’s a good thing.

It seems like George Bush tried to tackle the Social Security issue in 2005… the Democrats in congress cut him off at the knees and then handed him his head…
Like with Fannie and Feddie, they said there was no problem with Social Security…
Now a few years later, more money is being paid out than is brought in….
No problem, right? There is the “lock box”. But the “lock box” is just a filing cabinet, filled with IOUs from the Federal Government… all the surpluses were spent by Congress (both Democrat and Republican)… there is nothing left.
The real problem is that they were using the SS surplus to fund other programs. Now that there is no SS surplus, they have to come up with other money to fund those programs. And they have to come up with other money to fund the payout in Social Security benefits…
The house of cards is beginning to crumble…

Posted by: Quo Warranto? | Aug 12, 2010 11:50:45 AM
The annual Social Security trustees report– recently released– indicates a surplus is expected to continue ithrough 2025. If nothing at all is done to increase revenues, Social Security has enough money to pay full benefits until 2037, and after that 78% of benefits.
According to Nancy Altman, who wrote The Battle for Social Security, the undermining of confidence in Social Security’s future is central to the attack on the program. the theory is that if these kinds of attacks soften resistance to radical changes of a popular program.

Posted by: Cara | Aug 12, 2010 12:05:20 PM
In fact this year payouts exceed income from social security taxes. They say this is temporary, it will improve with an improved economy next year….
As for there being sufficient money to pay until 2037… that is simply not true… there is no money, just a bunch of IOUs from the Federal Government (treasury bonds)… In order to get money to pay the benefits, they have to cash in the treasury bonds… but there is no money in the treasury… it has all been spent, and then some…
So either taxes will have to be raised or more money will have to be borrowed to pay out the benefits…
And taxes will have to be raised to fund the programs previously funded with the now negative SS surplus.
The house of cards is beginning to collapse…

“Republicans lead in the Congressional Generic Ballot.”
Barely, and their favorability is lower. Interesting times ahead.
Posted by: Cara | Aug 12, 2010 12:06:44 PM
“Barely”? I’ve seen 5 point spreads.
BTW – Republicans rarely lead in Cong. Generic Ballot and lead is larger than ’94 Republican landslide. Democrats are in trouble, those who don’t see it are either willfully ignorant or drunk on BarackBerry Kool-Aid.

Posted by: tjp612 | Aug 12, 2010 12:35:22 PM
Actually, I think the government will just print the money they need to pay the benefits… the benefits will be the same dollar amount, but be worth a lot less…

Posted by: Quo Warranto? | Aug 12, 2010 12:16:25 PM
Do we have a unified budget or not? And when is the last time Treasury didn’t honor its bonds, again?

tjp612, since you seem to spend a lot of time with polls and put a lot of weight on them, how’s Reid doing against a “new style Republican” in the polls?

Do we have a unified budget or not? And when is the last time Treasury didn’t honor its bonds, again?
Posted by: Cara | Aug 12, 2010 12:54:10 PM
None in recent times… but that’s the rub… we are entering new territory with these enormous deficits and burgeoning debt…
The real question is how are they going to be able to honor their bonds in the future? There is simply no believable scenario except just printing money… and that is not a good thing.

We have are being lead by Politicians (Republicans and Democrats) who are stuck in the past. They look to politically acceptable patterns or history for advice. Some think we can re-energize jobs with government spending. Others believe with continued Tax Cuts the good times will come “roaring back”.
But NONE of these old solutions address the Brave New World we find ourselves in. Something more than “economic cycles” is dragging down the American jobs machine. Why? Manufacturing has almost disappeared from America.
During the Bush era, the economy kept humming by moving investment capital into housing and by ballooning consumer debt. This camouflaged how disastrous it was to massively borrow and spend on Iraq and Afghanistan. The unsustainability of that economy – cheap money, tax cuts, big debt, and war spending – is clear.
Otherwise that last decade should have built more than a measly 3 Million new jobs. In my view, Republicans whose ONLY ideas are “continuing tax cuts and small government” are either knuckle-dragging Luddites or Corporate puppets.
And, Democrats can’t perpetually prop up the economy with government spending. It’s seriously time to create an alternative future with a combination of innovative polices to actually create jobs.
For example, Warren Buffet has proposed a way to bring US trade into balance:
Exporters would be awarded import certificates in the dollar value of their exports. The certificates would be sold in a market to importers, who could import goods in the dollar amount of the certificates. This way imports cannot exceed exports. The certificates would be profit to exporters, so that in turn would encourage more exports.
This kind of intervention to the old school “Free Market” will make all the “Invisible Hand” believers hysterical. But why should America listen to people who think returning to unsustainable Bush era policies will magically rebuild jobs?

Posted by: Noz | Aug 12, 2010 12:55:20 AM
Please ignore previous post.
I just found out Obama didn’t do anything to outlaw unions, get rid of OSHA and disbar 90% of all “Slip and Fall Lawyers”.
No Kudos for you President NoBo.

Posted by: David | Aug 12, 2010 6:23:39 PM
And the Democrats in Congress had no blame? They controlled the Senate for 4 of Mr. Bushes 8 years, and the House during the final two years…
Doesn’t all spending and taxing authority rest in the Congress?
Really, you should get by your hatred for GWB so you can see the world clearly… both parties are to blame…

skip, spin much? lol Already getting the spin ready incase of a lose in Nov. I know, I know, it’s all Bush’s fault!

I meant a loss in Nov

Now quo, you know the left will never admit their side controled the purse strings during the last years of Bush’s term there for making them semi-responsible for the economic melt down. They can’t face the truth! Ever notice when you ask a question that makes their side look bad they NEVER acknowledge it or spin and deflect. That is just the way they do things. Little things like truth and facts don’t bother them and can’t stop them from their never ending defence of all things left!

They can’t face the truth! Ever notice when you ask a question that makes their side look bad they NEVER acknowledge it or spin and deflect. That is just the way they do things.
——
Odd that you seem to be noting this as something “the left” does while ignoring how skilled the Republicans are at doing this very thing. More skilled, actually.
Did you happen to catch Jon Stewart’s show about “Deductible Me.” Funny clip.

Economic spending in the Great Depression was a failure…
Was it? Can you expound on that, explain it to someone who doesn’t see it that way– or provide a few good sources– and can you address how a premature attempt to balance the budget in 1937 succeeded (or did it fail by plunging a recovering economy back into severe recession? hmmmm….)

The economy will bounce back. Government spending created many jobs in the Great Depression, Hoover Dam for example. Some view that as socialism, others as a wise public investment.
Posted by: Mike W | Aug 12, 2010 8:38:29 PM
As progressivemama often says, here’s an interestimg take:
Obama’s “big mistake was over-promising in a situation where it was very difficult for anyone to deliver,” says Gary Shillling, president of A. Gary Shilling & Co.
“They obviously didn’t understand the depth of the problem,” he said, referring to the administration’s promise in 2009 that unemployment would peak at 8% if the $787 billion stimulus package was passed.
The real problem, Shilling says, is the deleveraging process. Given the decades it took for the leverage to build up, it’s folly to think the deleveraging process can be quick and painless, he says. “It isn’t just that 2008 was a bad dream from which we’ve awoken and it’s back to business as usual.”
Indeed, Shilling says Americans are right to believe the economy hasn’t bottomed yet; in fact, he says we’re just at the beginning of a prolonged period of economic malaise.
Shilling’s forecast is that U.S. GDP growth will average just 2% for the next 10 years. That isn’t terrible but is a long way from the 3.3% growth he says is necessary to keep the unemployment rate steady. -Yahoo Finance

Skip,are you saying that WWII DIDN’T pullm us out of the Depression?

No, I should clarify, there is no consensus that Roosevelt’s programs worsened the depression. There is consensus that the war pulled us out of it.

“In the 1930s unemployment fluctuated, but recovery never occurred. In April 1939, toward the end of Roosevelt’s second term, unemployment was almost 21 percent. Treasury Secretary Henry Morgenthau complained, “We are spending more than we have ever spent before and it does not work.” Nonetheless, almost all of FDR’s programs continued—usually with annual budget increases.”
From a much longer article by Burton W. Folsom Jr. • June 2010 • Vol. 60/Issue 5, comparing the Great Recession to the Great Depression
You can easily find more along these lines with a bit of googling.

So despite the incumbent disadvantage, the populace still dislikes the Republicans more than the Democrats.
Posted by: David | Aug 12, 2010 11:01:24 PM
::::::::::::::::::::
Riiiiiight. That’s why Republicans are ahead on the generic ballot, because people like Democrats more. Interesting logic there.

“That’s why Republicans are ahead on the generic ballot, because people like Democrats more. Interesting logic there.”
Where are they ahead on the generic ballot? In the south only? And according to which poll besides Rasmussen? Not the most recent NBC News-WSJ poll (PM’s post @ 7:13:54 PM) or the most recent Pew poll (Pew: Dems, GOP Even on Generic Ballot)

In August 2010, the Trustees of Social Security and Medicare reported in their annual report that Social Security fell into the red this year, …
Posted by: Who Wants to Know |
Yes, and????
How does that change anything that I posted?
It doesn’t.
QW and I were talking about whether or notthe surplus is depleted. If you take the time to read the annual Social Security trustees report rather than just quoting the Washington Times, it indicates a surplus is expected to continue through 2025. If nothing at all is done to increase revenues, Social Security has enough money to pay full benefits until 2037, and after that 78% of benefits.
Although QW and I have different perspectives and don’t agree, his or her responses back to me were apples to apples and I appreciate that. He followed along and responded in a way that made sense.
Maybe you could explain what your actual point was? Did you not understand the conversation?
Fascinatingly, you aren’t the first one on here to mention that EXACT same article.

Rasmussen, Aug 9th: Eighty-four percent (84%) of Republicans back their party’s candidate, while 77% of Democrats support the candidate of their party.
Voters not affiliated with either party prefer the Republican candidate by a 46% to 28% margin.
Men prefer a Republican candidate by a 17-point margin, while women are closely divided.

Unfortunately, just changing from Democrat control to Republican control will not help anything…
The Republicans need to set out a consistent plan of action and bring forth a leader to show the way in resolving the terrible financial situation…
But it seems like they are not doing either… the are playing prevent ball, just running the clock out…
Too bad, the country is crying out for leadership and there is none on either side…

Although QW and I have different perspectives and don’t agree, his or her responses back to me were apples to apples and I appreciate that. He followed along and responded in a way that made sense.
Posted by: Cara | Aug 12, 2010 11:36:06 PM
Wow, a commenter AND a comment moderator all in one. Must be great to be you. Are you related to the HAUGHTY John Kerry?

The last nbc/wsj poll I’m finding was in june, primarily about Obama, and didn’t include ‘favorability’ ratings. When was the one that you are giving numbers from?

re: Posted by: Cara | Aug 12, 2010 11:31:02 PM
::::::::::::::
Uh, huh, Cara, so now you’re going to pretend it wasn’t implied that the particular skit was meaningful? That it had nothing to do with honestly representing how Republicans supposedly won’t face the truth, and we we’ve been discussing factual issues, not comedy? Of course, you’d have to ask PM to see just how far she does or doesn’t go with it, if she’d even answer honestly now that she’s been called on it. Meanwhile, Irma seems to think he’s truthful: “it is true that Stewart as well as Colbert are comediens, they are skilled at feeding truth mixed with humor/satire.
Posted by: irma | Aug 12, 2010 11:20:57 PM” I’ve known other liberals who felt the same way, good accurate news presented with humor so all the better. Sheesh.
Stewart can be funny at times, but unbiased or anything approaching honest or accurate? Sorry, no, and not even Stewart makes that claim, quite the contrary.

“QW had already addressed your point about the surplus, if you’ll recall. The point is that SS is in the red for the first time”
QW had already addressed your point as well which doesn’t change what I’d posted. You added nothing, and discounted nothing and sounded confused.
Repetition, I suppose is the ultimate aim, then.
Thanks for the insight.

“The last nbc/wsj poll I’m finding was in june, primarily about Obama, and didn’t include ‘favorability’ ratings. When was the one that you are giving numbers from?”
August 5-9, 2010

“To claim otherwise is pretty comedic in and of itself.”
Who claimed otherwise?

“I’ve got a newsflash for you, Cara: Social Security is a really big box of IOUs based on project tax revenue for the coming years plus whatever we think we can borrow from the rest of the world.”
Where’s the big box?
It appears the fear tactics and zombie lies are doing a number on you, hey? U.S. Treasury obligations are viewed worldwide to be an extremely safe investment, still. The federal government throughout its long history, including deep recessions and times of war, has always paid interest and principal on its debt.

Posted by: Cara | Aug 13, 2010 2:27:03 AM
::::::::::::::::::::::::
Thanks for the date Cara.
And the Tea Party beats both parties handily. 30% positive, 34% negative, for a -4, compared to a -11 for Dems, -22 for Repubs.
And they apparently interviewed 30% Not very to strong Dems to only 21% Repubs, which is really skewed, along with 48% male to 52% female, which I think is a little skewed. Both of these factors, but especially the skew in dem v repub interviewed probably explains why this poll came up quite a bit different than most of the others.

U.S. Treasury obligations are viewed worldwide to be an extremely safe investment, still. The federal government throughout its long history, including deep recessions and times of war, has always paid interest and principal on its debt.
Posted by: Cara | Aug 13, 2010 2:42:57 AM:::::::::::::::::::::::::
So far that’s been true – however now we are heading into uncharted territories. We’ve never had a debt load like we do now. We couldn’t even qualify for membership in the EU at our current levels (not that we’d want membership, just pointing out we don’t meet the requirements because of our debt). We’ve got the likes of China and France etc., lecturing us on the problem and on the necessity of reducing our deficit. When has THAT ever happened before? When have we ever had this much of our debt held in unfriendly foreign hands either? Our own most respected and non-partisan government agencies have declared this level of deficit to be unsustainable and a huge problem. There is significant concern around the world that we might be forced to reduce our debt by deflating the value of the dollar. There’s been lots of talk about moving off the dollar standard, and we’re on the cusp of having our national credit rating downgraded – which would mean tremendously higher interest payments to those foreign nations holding our debts.
None of this bodes well or even begins to match the confidence you show in our government’s ability to cover SS & Medicare & all our other debts.

Where is the big box?
Posted by: Cara | Aug 13, 2010 2:42:57 AM
“During 2010, the Trust Fund held $2.5 trillion in government account series bonds—essentially “IOUs” or claims on the government’s general fund or tax revenues. This amount is part of the total national debt of $13.3 trillion as of August 2010.[3] By 2015, the government is expected to have borrowed nearly $3.25 trillion against the Social Security Trust Fund.” -wikipedia
Where is the “zombie lie”?

Where is the “zombie lie”?
Where is the “big box” ??
And are all U.S. Treasury Bonds in your opinion? The truth is the Social Security Trust Fund isn’t full of IOUs, but rather it’s full of U.S. Treasury Bonds, backed by the full faith and credit of the United States. The reason Social Security holds only treasury bonds is the same reason many Americans do: The federal government has never missed a single interest payment on its debts.

“Thanks for the date Cara.”
You’re welcome. Interesting times ahead. Posturing aside, its hardly cut and dried. This started out by my commenting that Republicans “barely” hold an edge and you claiming I’m “badly” out of touch.
You were inaccurate.

“My favorite is Stephen Colbert’s. The Word, is usually the best segment in my opinion. It is true that Stewart as well as Colbert are comediens, they are skilled at feeding truth mixed with humor/satire.”
Irma, did you see Stephen Colbert’s segment “Bryan Fischer’s Right — NYC ‘Mosque’ Is ‘Weapon Of Mass Construction’
Hilarious. Colbert says he’d totally ban mosques but also barns and shacks since Timothy McVeigh used a barn and the Unabomber Ted Kaczynski used a shack .
:>)

You were inaccurate.
Posted by: Cara | Aug 13, 2010 11:08:58 AM
You can shoot straight when you choose.
Posted by: Cara | Aug 13, 2010 11:23:57 AM
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What a shame, it looks like you can’t.

And it appears, you’ll absolutely adore Joel Benenson’s take:
“[...]the Republican Party’s standing is at one of its lowest points ever and its competitive position vs. the Democrats looks much as it did in the summers of 1998 and 2002, neither of which were “wave” elections.”

from Gallop about a year ago:
Since Gallup regularly began using the generic ballot to measure registered voters’ preferences for the House of Representatives in 1950, it has been rare for Republicans to have an advantage over Democrats. …Most of the prior Republican registered-voter leads on the generic ballot in Gallup polling occurred in 1994 and 2002, two strong years for the GOP.
Bottom Line
Roughly a year before the 2010 midterm elections, Republicans seem well-positioned to win back some of their congressional losses in 2006 and 2008. Independents are increasingly coming to prefer the Republican candidate for Congress, and now favor the GOP by 22 points. …. a Republican lead on the generic ballot among registered voters has been a sign of a strong Republican showing at the polls in the coming election.

No, the most recent poll by NBC/Washington Post shows the Republicans are even less well thought of than Democrats – and people really don’t trust Congress all that much regardless.
Support for the Democrats is stronger everywhere but in the south.
Posted by: JohnK | Aug 13, 2010 5:11:09 PM
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Why don’tyou try reading your own source John? That poll was heavily weighted towards Dems relative to the population statistics. In that same poll they found that more people are planning to vote for Repubs than Dems. Further, they note that many of the seats that are in question in other parts of the nations are in areas that are more like the south than not, and so also likely to go Repub. in the midterm elections. Then there are multiple polls that have Repubs ahead on the generic ballot, which is quite unusual, last having occurred in 94 and I guess 2002, I posted those actual dates already, but in both cases there were significant gains by the Repubs. Regardless, your own source says Repubs stand to gain significantly based on their poll results. You people are just quoting small bits selectively because you like what those bits imply – when the overall poll results do NOT support what you are trying to claim.

he most recent poll by NBC/Washington Post shows the Republicans are even less well thought of than Democrats – and people really don’t trust Congress all that much regardless.
Support for the Democrats is stronger everywhere but in the south.
Posted by: JohnK | Aug 13, 2010 5:11:09 PM
Interesting, isn’t it? The regional results?

Interesting, isn’t it? The regional results?
Posted by: Cara | Aug 13, 2010 7:38:35 PM
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Repetitive, much?

How peculiar (/sarc.) that you can’t leave it at “people can read the thread and the polls and make their own determinations, as they should.”
That’s not spin, that’s letting people think for themselves.
But it was generous of you to expose a few weak spots.
Posted by: progressive mama | Aug 13, 2010 8:35:28 PM
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How peculiar (/sarc) that you would cherry pick the only the very last phrase, ignoring the entire rest of the paragraph I was replying to, then declare there was no spin, and state that its somehow peculiar that I didn’t leave it alone based on only that phrase. Gee, go figure!

” Wikipedia has a different opinion.”
In what regard?
Are you saying that according to Wikipedia, the Social Security trust fund is a big box of IOU’s? And it doesn’t consist of U.S. Treasury Bonds, backed by the full faith and credit of the United States? Gotta quote? I skimmed through it and didn’t see that. And I did see “it holds non-negotiable United States Treasury bonds and U.S. securities backed “by the full faith and credit of the government”.
Melltzler acknowledges also that “For Treasuries the risk of nonpayment is virtually zero.” The risks lie with inflation and the real rate,right?
Are all U.S. Treasury Bonds IOU’s in your opinion?

Are you saying that according to Wikipedia, the Social Security trust fund is a big box of IOU’s?
Posted by: Cara | Aug 13, 2010 10:06:31 PM
Uh, I guess you’re sayaing that wikipedia didn’t use the phrase “big box of IOUs” when they stated:
“During 2010, the Trust Fund held $2.5 trillion in government account series bonds—essentially “IOUs” or claims on the government’s general fund or tax revenues.”
Is that your issue? That there’s not actually a physical box with IOUs in it? This is your argument?
There probably aren’t actually zombies walking around telling lies either…

Cara, it sounds as if you are having a fundamental problem understanding what a bond is. By its very definition it is an IOU, nothing more, nothing less. Often, but not always, it’s an IOU bearing interest. From investorwords dot com, the definition of a bond:
“A debt instrument issued for a period of more than one year with the purpose of raising capital by borrowing. The Federal government, states, cities, corporations, and many other types of institutions sell bonds. Generally, a bond is a promise to repay the principal along with interest (coupons) on a specified date (maturity). Some bonds do not pay interest, but all bonds require a repayment of principal. When an investor buys a bond, he/she becomes a creditor of the issuer. However, the buyer does not gain any kind of ownership rights to the issuer, unlike in the case of equities. On the hand, a bond holder has a greater claim on an issuer’s income than a shareholder in the case of financial distress (this is true for all creditors).”
Its amazing that you don’t seem to get this considering your own repeated words “backed by the full faith and credit of the United States” and “For Treasuries the risk of nonpayment is virtually zero.” Both statements make it clear that you are talking about a promised debt, an owed debt. What do you think an IOU is?? Some IOU’s are riskier than others, so what – they’re still IOU’s and by the very definition that’s what bonds are.

Posted by: Cara | Aug 14, 2010 3:34:54 AM
We all get that you are smarter than we are. Really, we get that. You appear to be more interested in moderating the comments than anything else.
I am not really interested in the privatization of SS debate. I only tried to make the point earlier that contrary to popular opinion – especially among the elderly – SS is not some separate fund where the government is keeping their SS contributions tucked away for them to be distributed at a later date. Most don’t realize they get back much more than they put in, or they don’t want to think about it. Now that would make an interesting poll. The first lady to collect SS put in about $25 in three years. She live to be 100 and collected over $22,000. And she cashed every check! That was an omen. 
SS is now part of the general fund/budget. A BIG part. The govt issues treasury bonds for the difference between what they take in and what they distribute, which occurs every year. And since you projected out to 2037, I would point out that already bonds are in jeapordy of being downgraded so who knows what it will be like by 2037. Unfunded liabilities are tallied on a spreadsheet with no consideration of world events and circumstances in the future. The past few years have proven what an affect circumstances can have on financial predictions. This bothers me greatly for the well being of this great country.
So my original comment is really the point I wanted to make: SS is a box full of IOUs. Here is how I see it works: Joe Smith has retired and he is collecting. The money he put in is already used up because he refuses to die, so the govt is using money collected from Mary White plus they have to borrow a little (bonds). And down the road, we are faced with paying for Mary with money we have not yet collected instead of the money she put in (because we already gave it to Joe, plus we borrowed a little). This continues for years until we are using up all the SS revenue to pay for retirees and the amount of bonds we have to sell just keeps getting bigger. There is no longer any cash in the box. It goes right back out in payments to retirees. We are left with a big box of IOUs. 
Cara, some of us are just regular people relating our life experiences and what little knowledge we have gained over the years. If that isn’t good enough for you, I guess you should look elsewhere for a more challenging debate. Maybe Paul Krugman is available.

re: Cara | Aug 14, 2010 1:51:27 PM
Cara, ANY IOU is a real obligation. Some carry more risk than others, that’s all. Our gov will only be able to meet those obligation to the extent that the poulation is willing – and able – to continue paying. That doesn’t mean that it’s some simple free thing that a magical gov insures, it means that it comes out of EVERYONE’s hides. Look at what is happening in Greece, Portugal, Spain, etc… look what happened to Zimbabwe, or some S.Am. nations. I hate to break it to you, but its not impossible for that to occur here – and we are very much headed into uncharted territories for the US with regard to debt and deficit. And that makes the ability of our gov to pay bonds out in the future riskier than it used to be. Even Bernanke and the non-partisan CBO have said that our current debt/deficit levels and current policies are unsustainable.
Cara said “My argument is that the surplus isn’t depleted” Tell me please, just where does this ‘surplus’ reside? Where is that massive stash of money?
You also said: “Either you adopt the integrated-budget view or you adopt the view that social security is a government program supported by a dedicated tax, in which case the trust fund has to count too and be considered real and in fairly decent shape with financial challenges that are easily addressed. (for MM, there’s a nod to Krugman, as well as many others)”
Excuse me, but your logic is a bit off there. The payout is dedicated, but there is no separate fund, not unless you say that bonds are that fund – and that’s the entire point. Bonds are just a promise by the government to pay. So the funds coming into SS are just going into and being used in the general budget, with a promise by the gov to eventually make payments. A pot of “I promise” is NOT somehow equivalent to a dedicated fund containing money or investments.
You asked: “Its the political challenges that endanger social security rather than the financial ones, right?”
No, its BOTH. Both are quite tied together at this point, unfortunately.
The country is only “in crisis” to the extent that one defines a crisis. I wouldn’t say we’re in crisis, but we are clearly headed that way, even according to Bernanke and the CBO and a huge number of other reputable, non-partisan sources.
And yes, SS is more of a drag than Iraq & Afganistan have been, by far. There’s far more $$ involved, and our nation’s well being at stake. We could pull out of Iraq & Afghan. right now, and while it may not be the most prudent thing to do, it would stop those expenses – in which total expenses aren’t nearly as much as SS is to begin with. We can’t just pull out of SS.
You went on to say: “Social Security has been the most successful federal social program for three-quarters of a century.”
Interesting statement. How many other comparably sized social programs are there in the US to compare it to? What is the definition of successful? Will it still be looked at that way if it goes bankrupt, or if we have to all lower our standards of living to meet its unfunded obligations in the future, which is the tract its currently on?
The real third rail in American politics right now is not Social Security, but raising taxes on the wealthy.

“Will it still be looked at that way if it goes bankrupt”
—
Given your view, it can’t go bankrupt unless the entire country does.

Kevin Drum looks at one idea for a relatively easy fix for social security at “How Would You Fix Social Security?
Wow, he really put a lot of thought into that one. Could he write a shorter article?
I particularly like this idea: “gradually increase the retirement age to 68″ and labels it among other ideas as “barely noticeable for most people.”
Now Kevin is 52 years old, but I would guess if he has dug a ditch or laid tile or done anything really physical it has been a while. To do that until 68? That’s hard and very “noticeable.”
I work in an office and at 59 am really starting to see retiring at 62 as a long ways away. Getting up, commuting to work, working 8 hours, commuting home, trying to relax at night, running errands all weekend. Sorry, Kev – not getting any easier.
I make fun, but seriously, working until your 68 is hard especially with manual labor. We don’t all get to write articles for Mother Jones. I think you would see a big strain on other entitlement programs like disability, and others I can’t think of at the moment. People would be really willing to “work the system” to get out of working until 68.
Personally, I think the system is “set up” fine the way it is. People can retire from 62+ and then work part time if they wish to keep busy and supplement their SSI and pension (if they are lucky enough get get any). Obviously I have issues with it’s implementation – as I have already elaborated.

MM, I couldn’t agree with you more. Anyone doing physical labor or standing on their feet all day would have a hard time working past our current retirement age.
Japanese insurance companies did a long term study of retirement ages. If one retired before 65 or switched to part-time work, there was a really good chance of living until 82. But those who worked full-time after 65 had a much lower chance of reaching 80.
Scientists know older folks have a harder time dealing with stress, and most jobs are highly stressful, plus commuting is also.
With a shortage of good-paying jobs, encouraging older folks to not retire seems really stupid, as well as not healthy for them.

MM, my understanding is that the government has always repaid Social Security, with interest.
A couple of interesting pieces on the fearmongering over the years: “Ignore the fear-mongering on Social Security
Today’s Social Security critics use many of the same false arguments of those who tried to stop it 75 years ago. In fact, with only minor adjustments, the popular program will easily remain solvent.” (LA Times)
and
“Republicans Recycle Sludge From 1935″ (includes quotes from the 1935 Congressional Record)
Anyway, after reading that 77% of Americans, and 68% of Republicans don’t want Social Security dismantled or changed, I concede I’m likely incorrect about the third rail. Its the extremists who have caught my attention. On the political challenges, perhaps I ought to say Senate challenges– actually doing something effective for the long term.
Also, you and Lydia make good points on age, I hadn’t really thought of that (but I bet my dad would mention it, lol. He’s recently retired)
I read a good response to a recent Washington Post editorial at EPI which also mentions that while higher income workers have made gains in life expectancy, low-income workers have not. (Washington Post gets it wrong on Social Security, Lawrence Mishel )
Have a nice remainder of the weekend.

According to the non-partisan Congressional Budget Office, life expectancy has been clearly increasing across all income groups. Its just that the gap in life expectancy between high income, high education vs. low income and low education groups has widened slightly.
That’s totally different than saying low income groups haven’t gained in life expectancy – they clearly have across all socioeconomic groups.
google: Growing Disparities in Life Expectancy
and they discuss this and provide a chart showing the increase in life expectancy across all groups from 1950 to 2004, and then compare the changes across socioeconomic and educational level groups from 1980 to 2000.
They go on to discuss more details. Its notable that Britain is showing the same widening gap, where Canada isn’t. Both have national health care systems. They note that if the increasing gap were a function of our insurance system and medical care, you wouldn’t expect to see the same increase in gap in Britain, where they have a national health care system.
They wind up saying:
Possible factors contributing to the increase include the following:
■ Smoking. One study estimates that differential trends in smoking-related diseases explain at least 20 percent of the increasing gap in life expectancy between groups with different levels of education.12
■ Obesity. The nationwide increase in obesity began among the less educated and could now explain part of the widening socioeconomic gap in mortality rates.13
■ Self-Management of Disease. Adherence to medical treatments and therapies is higher among the more educated.14 The role of self-management, particularly in the case of chronic diseases, may have increased over time.
■ Healthy Lifestyles and Use of Health Care. A balanced diet, exercise, and other healthy behaviors may be less prevalent among groups with low income and less education, and some measures suggest that the disparity is increasing over time. In addition, since the mid-1990s, the gap in health insurance coverage between low- and high-wage workers has been growing and has been accompanied by a widening gap in access to health care services as well.
Complicating any analysis of income, education, health, and mortality is the fact that poor health itself has been shown to be a cause of lower income, either because it can inhibit educational attainment or because disabilities can limit work opportunities. If those effects have grown larger over time, that could help explain the observed relationships between socioeconomic status and mortality.

I agree on that i guess it will be true implement.

That’s really funny!! :D