President George W. Bush’s final federal budget can be viewed as a parting gift from an administration that has inflicted more damage on the nation than just about any other in the history of the republic.
The $3.1 trillion budget proposal calls for a $400 billion deficits in each of the next two budget years, created primarily by the tax rebates proposed as a tepid $146 billion economic stimulus and a plan and a boost in funding for defense (about $38.4 billion). The budget also calls for spending freezes and cuts in domestic programs, many of which are incredibly popular, especially among traditionally Democratic constituencies.
The budget also “calls for making permanent Bush’s 2001 and 2003 tax cuts, which have been widely criticized as skewed to the rich and which would begin expiring next year,” the LA Times said.
Doing so would cost Washington more than a half-trillion dollars in forgone revenue over the next five years and more than $2 trillion over the next decade, but the president has argued that they play an important role in stimulating economic growth.
USA Today put it this way:
Winners in the budget include the Pentagon, which would get nearly 8% more, and border security, up nearly 20%. Losers: Medicare and Medicaid, and domestic programs not related to national security.
And, as The Washington Post notes, the
plan omits several costly features, including tens of billions of dollars of the cost of the wars in Iraq and Afghanistan, that could drive the deficit even higher than the president’s estimates. That would effectively delay until 2009 decisions on how to cope with short- and long-term financial problems, lawmakers and others said.
The Washington Post quotes one economist, an adviser to Democratic presidential candidate Barack Obama:
“A whole bunch of things they were putting off and hiding under the rug all these years are starting to pop back up,” said Austan Goolsbee, an economist at the University of Chicago and chief economic adviser to Sen. Barack Obama (D-Ill.). “It’s clear they’re trying to shove as much of this as possible on to the next guy.”
President Bush is projecting a surplus, but as the Post points out in today’s editorial, but that projection is based on creative accounting.
Yesterday’s promise of a small surplus by 2012 is once again premised on omitting likely costs (zero is budgeted for operations in Iraq and Afghanistan) and by assuming cuts to domestic spending that are unachievable politically and, in large part, unwise as a matter of policy.
Budgets are itemized lists of priorities. The Bush budget — like all of his previous budgets — demonstrates the president’s antipathy toward the people who actually live in this country. His fealty is to the corporate order and the markets that that he and his cronies view with a religious ardor.
President Bush, as The New York Times points out in today’s editorial, has crafted a budget that is “a grim guided tour through his misplaced priorities, failed fiscal policies and the disastrous legacy that he will leave for the next president.”
Much of the budget plan is likely to be excised — the various dailies are reporting that even Republicans are a bit gunshy about moving ahead with a plan that exempts high earners from the kind of sacrifices the rest of us are being asked to make.
But the budget, as the Times points out, will have a lasting legacy:
What will definitely outlast Mr. Bush for years to come are big deficits, a military so battered by the Iraq war that it will take hundreds of billions of dollars to repair it and stunted social programs that have been squeezed to pay for Mr. Bush’s misguided military adventure and his misguided tax cuts for the wealthy.
This brings me back to the USA Today description of this budget as one of winners and lowers. The winners, to put it bluntly, are the people with the cash, the people who control the corporations, who have seen their portfolios increase in value and their peronal bottom lines grow.
The loser? Just about everyone else.
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Hank Kalet 
For decades the repubs have had a jihad against Social Security, Medicare and Medicaid. They hate and loathe these programs, they sneeringly refer to SS as a Ponzi Scheme. Now, with this latest crop of extreme right wing GOPers and Bushites, they have made real in-roads into the destruction of these programs. Grover Norquist must be cackling with delight. His goal was to so starve the government of funds that he could water board it to death in the bathtub. The sole aim of the GOP is to enrich the rich. They do not give a fig for the elderly, disabled or the poor. Bush creates the biggest deficits ever due, in no small part, to his tax cuts for the rich and so to balance the budget he takes a hatchet to SS, Medicare, Medicaid and S-Chip. His vile plan to privatize SS and hand it over to Wall Street got derailed but he is still working hard to screw up SS. He has cut the funding of the SS administration and he recess appointed SS hater Andrew Biggs as deputy commissioner of Social Security. Biggs comes from the right wing libertarian Cato Institute which is rabidly anti-Social Security. Too many Americans have been brain-washed into thinking that SS is in crisis and so they go along with all this right wing bilge. When will Americans wake up? Probably after SS, Medicare and Medicaid have been ruined and we have millions more homeless and destitute and more than 100 million uninsured. Maybe it will take another depression before we wake up. I sincerely hope a depression does not happen but a recession does appear likely.
According to the Securities and Exchange Commission:\”Ponzi schemes are a type of illegal pyramid scheme named for Charles Ponzi, who duped thousands of New England residents into investing in a postage stamp speculation scheme back in the 1920s. Ponzi thought he could take advantage of differences between U.S. and foreign currencies used to buy and sell international mail coupons. Ponzi told investors that he could provide a 40% return in just 90 days compared with 5% for bank savings accounts. Ponzi was deluged with funds from investors, taking in $1 million during one three—hour period—and this was 1921! Though a few early investors were paid off to make the scheme look legitimate, an investigation found that Ponzi had only purchased about $30 worth of the international mail coupons. Decades later, the Ponzi scheme continues to work on the \”rob—Peter—to—pay—Paul\” principle, as money from new investors is used to pay off earlier investors until the whole scheme collapses.\”Sound eerily familiar? Much as in the original Ponzi scheme, Social Security also paid huge returns to its first investors who, whether intentionally or not, led Americans to believe the plan worked marvelously, thereby engendering the support of an exceedingly grateful nation.For instance, the first American to ever receive a check from this new national savings plan was Ernest Ackerman, a streetcar motorman from Cleveland, Ohio who retired exactly one day after the program went into effect. For the five cents that was deducted from Mr. Ackerman\’s check the sole day he was a \’participant\’, he received a lump—sum payment of 17 cents. This was a 240% return, which annualizes out to 87,600%. Nice investing, Ernie.Then, in 1939, a series of changes were made to this new retirement system that included moving up the start of monthly payments by two years. As a result, the first monthly Social Security check went out on January 31, 1940 to Ida May Fuller, a retired legal secretary from Ludlow, Vermont. This maiden disbursement was $22.54, which, according to Social Security Online, after cost of living increases and 35 years of receipts until her death in 1975, totaled a startling $22,888.92 in payments from a system to which Mrs. Fuller contributed $24.75.Now, please bear in mind that Mr. Ponzi was only promising people a 40% return on their money in 90 days. By contrast, the first Social Security recipients received yields approaching 100,000 percent. Unfortunately, few participants in a Ponzi scheme ever achieve such spectacular returns, and the whole scam invariably implodes when the real investors have the nerve to ask for their money back. For instance, when regulators finally shut Mr. Ponzi\’s operation down in 1920, they were only able to recover $1.593 million. Sadly, this was a small pittance compared to the $15 million he owed his 40,000 investors, not including the interest he had promised them.This makes it quite logical that 70 years after our government implemented a Ponzi scheme of its own —— remarkably just fifteen years after the first one imploded —— the real investors (a.k.a., the baby boomers who have paid into this program since they received their first pay checks, while absorbing numerous increases to the required contributions) are concerned that there won\’t be enough money available to fund their own retirements. Naturally, irrespective of the protestations of those who seem able to attain high office in our nation without possessing even the most rudimentary arithmetic acumen, these fears are warranted. Yet, now that the flaws in this equation have finally been exposed, the debate is unconscionably focused on the machinations of extending this scheme rather than if and how we should unwind it. After all, as the best returns from this plan have already been realized by folks like Mrs. Fuller and Mr. Ackerman —— as well as millions of seniors in the past seventy years who received yields on their contributions that can\’t possibly be replicated —— shouldn\’t the rest of us who can add one plus one without difficulty be entitled to opt out of this investment nightmare?Such a question becomes even more appropriate considering the gags yet to be played in this inhumane comedy in the form of neatly disguised —— yet predictable —— Democratic solutions to avert the imminent crisis they maintain is neither imminent nor a crisis. To date, these options comprise increasing the Social Security tax cap above its current $90,000 threshold, and eliminating the 2003 tax cuts on the wealthiest wage earners.As a result, no matter how you slice it, their \’solution\’ is to once again demand that people pay additional funds into this failing system above and beyond what was originally dictated by statute. Isn\’t this despicably akin to regulators asking the folks who were defrauded by Mr. Ponzi to contribute more to his scheme in the hopes that this would avert insolvency and increase the likelihood that they\’d eventually get their money back? ~ Noel Sheppard, economist
\”Anyone who tells you Social Security is a Ponzi scheme either doesn\’t understand what a Ponzi scheme is or their mother’s didn’t teach them not to fib. This myth is a favorite of conservatives who just hate the idea of social insurance in general. The Social Security Administration has a good history describing why this is nonsense. But here’s my take on this myth. A Ponzi scheme is that e-mail you receive inviting you to send a fancy guest towel to the top three names on a list and instructing you to cross off the first name, add your name and send the same e-mail to three others. Whoever starts the list likely will receive the towels, but ultimately, there is no one left to continue the chain. The final entrants won’t receive anything. The original Ponzi played the game with dollars but the principle is the same. He borrowed money from his first investors and paid them back with money obtained from subsequent investors. He quickly ran out of sufficient investors to keep his scheme going.Social Security is not a Ponzi scheme. Social Security is a pay-as-you-go system with the contributions of today’s workers going to today’s retirees or into the reserve to pay benefits to future retirees. The ratio of workers to retirees has changed over time, but unless this nation allows the system to be abolished, there will never be a time of no workers paying into the system. The most recent report of the Social Security Board of Trustees forecasts that even with no changes in the system, reserves will last through 2041 and even after that, 75% of promised benefits could be paid with incoming payroll taxes.And don’t give any credence to the nonsensical comparison that in 1940 there were 40 workers to each retiree and today it is only three to one. Of course, there were fewer beneficiaries. 1940 was the first year a benefit was paid so millions of then-retired workers didn’t have the opportunity to contribute payroll taxes and earn benefits. Many of those ineligible for benefits in 1940 then relied on public assistance or their children to survive their retirement years. Hardly the “good old days” those who hate Social Security should be so eager for us to return to.\”Mary Jane Yarrington, Senior Policy Analyst
Mary Jane Yarrington?The same Mary Jane Yarrington, senior policy analyst for the National Committee to Preserve Social Security and Medicare, a Washington advocacy group?Hahaha!Stop the presses! Mary Jane Yarrington sez Social Security ain\’t a Ponzi scheme! In other news, water determined to be *wet* and bears deficate in wooded areas.
Noel Sheppard is just some run of the mill, mediocre right wing hack and shill for the rich, the financial elites and the big corporations. Nothing new here. He vomits up all the right wing goofertarian bilge.
Your fevered and colorful use of language (jihad, vile, rabid, brain-washed, hack, shill, vomit) suggests intellectual bankruptcy or a mental condition. Are you sure you\’re stable enough to make a fact-based argument?Truth to tell, I\’m equally guilty; arguing on the internet is like competing in the Special Olympics. Even if you win, you\’re still retarded.Good day, Sir/Madam.
I\’m supposed to be impressed with: \”Mary Jane Yarrington sez Social Security ain\’t a Ponzi scheme!\” Hahahaha! Sheppard belongs to an advocacy group funded by corporate shills.