Obama’s Flimflam ‘Chained CPI’ Is Pure Naked Class War…

---

From TRUTHDIG
Thanks to Todd Walton

The new cost-of-living index proposed in Obama’s latest budget is really a means to push lower living standards on people who need Social Security, University of Missouri economist Michael Hudson says.

The blandly named “Chained CPI” would require Social Security recipients to select cheaper goods and services, effectively diminishing—if not destroying—their quality of life by creating an official policy justification for the issuance of smaller pension checks.

Hudson explained the switch in detail Thursday on The Real News Network:

It’s not really a cost of living index. It’s a “cost of lower living standards” index. Yves Smith calls it the catfood index.

Here’s what it does: Suppose that you have to switch away from eating steak or eating meat or eating fish to eating canned tuna fish or canned beans. That’s considered a price reduction. If the chained index is done “properly,” anti-labor economists can cut Social Security by 50 percent. Here’s how. If people stop taking cabs and begin to take buses, that’s considered a lower cost of living. Well, what if they buy a bicycle? All Obama has to say is, “Look, folks! If you really want to save money, get a bike.” That’s what Margaret Thatcher said. That was one of her campaign slogans: “Get a bike!” So all of a sudden, the transportation in the cost of living goes down to zero.

People pay between 25 percent and 40 percent of their income on rent. Let them live out on the street. Let them live in a homeless shelter … About 15 percent of their income is spent on medical care. Let them do what George Bush said: Go to the emergency ward. That’s free. So the cost of living goes down!

Social Security going broke?

---

From MoveOn.org

Myth #1: Social Security is going broke.

Reality: There is no Social Security crisis.  By 2023, Social Security will have a $4.6 trillion surplus (yes, trillion with a ‘T’).  It can pay out all scheduled benefits for the next quarter-century with no changes whatsoever.1 After 2037, it’ll still be able to pay out 75% of scheduled benefits—and again, that’s without any changes. The program started preparing for the Baby Boomers’ retirement decades ago.2  Anyone who insists Social Security is broke probably wants to break it themselves.

Myth #2: We have to raise the retirement age because people are living longer.

Reality: This is a red-herring to trick you into agreeing to benefit cuts. Retirees are living about the same amount of time as they were in the 1930s. The reason average life expectancy is higher is mostly because many fewer people die as children than they did 70 years ago.3 What’s more, what gains there have been are distributed very unevenly—since 1972, life expectancy increased by 6.5 years for workers in the top half of the income brackets, but by less than 2 years for those in the bottom half.4 But those intent on cutting Social Security love this argument because raising the retirement age is the same as an across-the-board benefit cut.

Myth #3: Benefit cuts are the only way to fix Social Security.

Trusting The Fund: A Citizen’s Guide To Social Security’s Trust Fund…

---

From DOES IT HURT TO THINK?

Just as a smothering fog obscures the landscape, discussions of Social Security are inevitably enshrouded in impenetrable mythology, misunderstanding, and misinformation. Does anybody really know how the system works? Of course. And truth be told, it isn’t all that hard to grasp. It’s just that nobody ever bothered to properly explain it to the rest of us. The tropes you hear from time to time serve only to confuse, never to enlighten. Remember Al Gore’s “lock box?” What the heck was that?

Even worse, the topic is burdened with ideological baggage. How you prefer to think about it, and what you choose to believe, is likely influenced by your position on the left-right continuum, and by your place in the partisan political divide. (Wouldn’t it be nice if we relied instead on the facts?) Indeed, our politicians are as susceptible as anybody, maybe more so. Senator Tom Coburn from Oklahoma has no doubt about the severity of Social Security’s problem: “The fact is, is $2.8 trillion was stolen from Social Security. The money was spent. It’s broke. And we’re going to have to fund 2.8 trillion over the next 20 years just to make the payments that we’ve got. I think most people would think we ought to fix that.” And according to Rand Paul, Senator from Kentucky, “most young people acknowledge that it’s broken—it’s broken so badly that the only way we fix it, and the only way it can continue, is we have to look at the eligibility.”

Whatever they may “acknowledge,” I assure you that most young people know nothing factual about Social Security’s finances, or its future prospects. They’re not alone. The public at large is more or less clueless

Three Big Lies Perpetuated by the Rich…

---

From PAUL BUCHHEIT
Common Dreams

When it comes to the economy, too many Americans continue to be numbed by the soothing sounds of conservative spin in the media. Here are three of their more inventive claims:

1. Higher taxes on the rich will hurt small businesses and discourage job creators

A recent Treasury analysis found that only 2.5% of small businesses would face higher taxes from the expiration of the Bush tax cuts.

As for job creation, it’s not coming from the people with money. Over 90% of the assets owned by millionaires are held in a combination of low-risk investments (bonds and cash), the stock market, real estate, and personal business accounts. Angel investing (capital provided by affluent individuals for business start-ups) accounted for less than 1% of the investable assets of high net worth individuals in North America in 2011. The Mendelsohn Affluent Survey agreed that the very rich spend less than two percent of their money on new business startups.

The Wall Street Journal noted, in way of confirmation, that the extra wealth created by the Bush tax cuts led to the “worst track record for jobs in recorded history.”