*'s 'taxcut/SS reform' plan is Greenscam II: Trade guru Prof Ravi Batra's new book

*'s 'taxcut'/'SS reform' plan is Greenscam II: Trade guru Prof Ravi Batra's new book

"Instead of the general budget that actually faced a massive ($208 billion) deficit, the (Greenspan Social Security Commission appointed by Reagan in 1981) insisted that the Social Security Trust Fund faced a great shorfall, some 30 to 75 years into the future, when baby boomers would retire in large numbers. ... In fact, by the end of the year (1983), the Fund earned a small surplus. But the Greenspan commission relied on forecasts that showed a gargantual deficit looming in the Fund, not 5 to 10 years hence, but more than half a century later. ..."

Sound familiar? In a new book, long-time MIT economics professor Dr. Ravi Batra, now at Southern Methodist U, exposes the cunning fraud Alan Greenspan foisted on Tip O'Neill and Daniel Patrick Moynihan in the early 80s. Greenspan had been Reagan's campaign economic adviser and had masterminded Reagan's "tax cut", which reduced the top income tax rate from 70 percent to 28 percent. When record deficits ensued, Greespan and WH political adviser David Stockman came up with the idea of shifting INCOME taxes from the very rich onto the PAYROLL taxes of the poor and middle class using an exaggerated Social Security scare. The passage quoted above comes from pages 16 and 17.

From page 21: "Why then was the 1985 tax act a horrendous deception? Normally, tax revenues are used for their avowed purpose.... The Social Security system's surplus financed tax cuts of rich individuals and corporations... The desititute, the middle class, the self-employed, the needy saw a great rise in their tax bills."

In other words, don't listen to what Republicans are saying about Social Security. Instead, FOLLOW THE MONEY! If Batra is right, the ONLY thing Republicans care about is pushing back the date at which the annual Social Security surplus disappears, and a part of Social Security benefits starts to become a drain on the general budget, rather than a source of funds.

The publisher's webpage for Batra's new book is http://www.palgrave-usa.com/Catalog/product.aspx?isbn=1403968594

Our rep, skag Anne Northrup, even had the audacity (or would it be honesty) to write a piece in the local rag bemoaning the dry-up of the SS slush fund.

Greenspin and his ilk sure better hope there isn't a Hell!

this will be the 3rd time people have paid for the same SS benefit AND if they can continue to spend it like the last two times, it still will not be there at your retirement.

It's not just about whether to privatize. Our elected (?) reps need to repeal the * tax cuts, pay off the notes, then keep their scheming paws off the dough. It would be nice if the dems could articulate this.

This is a bipartisan mess our gov't has made and we will never get the Democrats to promise to do anything except collect more in taxes so they all have more to spend on their pet projects. The suckers, I mean people, have NO friends in this fight.

shot down by a Republican Congress, was to convert the Social Security Trust Fund into a REAL independently-managed entity with hard assets that could be spent for nothing except paying Social Security benefits. See http://www.clintonfoundation.org/legacy/012099-fact-sheet-on-saving-social-security-now.htm .

Clinton's unique fiscal responsibility accounted for the only two years since the Reagan changes when the Social Security surplus was not needed to help mask deficits in the general budget. As Batra notes on page 33, those years were 1999 and 2000.

to be spent by our Reps of both parties, it might have gone somewhere. I still say on SS, we have NO friends. We are the "fleece-ee's;" they are the "fleece-er's." As far as surpluses like '99 and '00, why we even had a surplus for our budget from the last quarter! Sure we did. With more money promised in future benefits than the size of the present economy, I BELIEVE. Sorry, but I didn't drink either parties' kool-aid. I vote Democrat because it is the way way lesser of two evils, but what they've done to ordinary citizens doesn't make them any better in my book on SS than the Repukes.

to Clinton's first term, you are quite correct. Whenever deficits are high, both Democrats and Republicans have great incentive to mask them by finding ways to increase Social Security surpluses.

There are two ways to end these incentives. One way, tried by Clinton during his second term, is to turn the Social Security Trust Fund into an independent entity managed for the benefit of workers.

But a second way, strongly advocated by Batra, is to forbid Soical Security from amassing surpluses. His immediate proposal is to exempt the first $10,000 of every worker's annual wages from FICA taxation. That course of action would return Social Security to its founding principle of "pay-as-you-go".

The reason Batra sees this as superior to Clinton's proposal is very persuasive. Because virtually every penny that the poor pay into the "Trust Fund" otherwise would have been spent, trying to fund Social Security years in advance mainly accomplishes destruction of jobs through reduced economic demand. The trillions that have gone into the Trust Fund since the Greenspan/Reagan "reforms" have destroyed MILLIONS of jobs.

Since these trillions of dollars from the paychecks of the poor and middle class all have gone to finance 60 percent marginal income tax cuts for the very wealthy, Republican "supply side" economics has been a complete scam from its very inception. Yet Democrats, with the exception of a few irrepressable populists like Ernest Hollings, have been silent on the fundamental fraud that led to the virtual canonization of Ronald Reagan.

it's the COUNTRY that Republicans have driven to the brink of banruptcy, in just four years!'

The Social Security Trust fund consists of solemn obligations on the full faith and credit of the US Treasury. 2018 is only the date at which the Social Security cash flow is expected to turn negative, with FICA receipts that year expected to fall below benefit payments currently promised to Baby Boomers. The negative cash flow that begins in 2018 is fully covered by Trust Fund bonds until sometime between 2041 and 75 years from now, depending on assumptions about the future path of economic parameters. Social Security CANNOT go broke unless the US Treasury goes into default FIRST!

By means of a 25 percent increase in FICA payroll tax rates between 1980 and 1990, trillions of working people's dollars already have been "loaned" to the US Treasury for the specific purpose of financing retirement pay during the Baby Boom demographic bulge. The only way there could be a Social Security "crisis" for DECADES is if elements of the US government are planning to default on Trust Fund bonds.

Think of the possibilities this situation offers for Democratic political attack ads directed at specific stakeholders in Social Security and in the economy:

Baby Boomers: "They say there's a crisis in Social Security? What happened to the TRILLIONS of dollars that were taken out of your hard-earned paychecks for the Trust Fund? You have FULLY FUNDED your own retirements, in advance. Support Democrats. We invented Social Security, and we plan to honor all its promises"

Wall Street and corporations: "Are Republican politicians plotting to destroy the risklessness of Treasury obligations? It's true that Trust Fund bonds are slightly different from publicly-held Treasury bonds and notes. Even if Congress refuses to redeem Trust Fund bonds in full when they come due, the Social Security Act requires that subsequent FICA revenues must continue to be invested in those instruments.

The Treasury bills and notes you and investors aroung the world currently hold and currently buy are different. Is there a nonzero risk of future default in obligations on the full faith and credit of the Treasury? If so, aren't interest rates headed for the skies, and aren't US debt instruments on the way to worthlessness? Support Democrats. Save your businesses and your assets."

See the very thorough archived forum where I first posted this idea, at http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=1686140&mesg_id=1688929&page=

Greenspan has impoverished the already-poor world-wide. Just think of the tens of billions of extra FICA dollars bled from the paychecks of minimum-wage workers during the last two decades, thanks to the deliberate deceptions of this man. Batra shows how this Greenspan policy has been even worse than it looks, in two ways. First, marginal tax rate declines of 60 percent for the wealthiest were the primary use of Greenspan's huge tax hike for the poor and middle class, in the name of "tax cuts". Second, since virtually every penny drained from paychecks into the "Social Security Trust Fund" otherwise would have been spent, Greenspan destroyed millions of jobs, in the name of "economic stimulus"!

my bowling average LOL. This is the same guy who wrote a book
about the coming economic collapse in late 80's. Instead, we had
the biggest economic expansion this country has ever seen until
Dubya took over.

and would be a GREAT Democratic choice to succeed Alan the far-right hack. Batra did pathbreaking work in the economics of International Trade decades ago. Greenspan, oh the other hand, never did any academic work that anybody ever had any reason to cite. As Batra points out in his first chapter, Greenspan gor where he got because, as Reagan's ultrarightist adviser, he was the "brains" behind Voodoo Supply Side Economics. If there's one thing Greenspan knows how to to, it's toadying and brown-nosing powerful people, such as his mentor Arthur Burns, corporate CEOs, and the first Dimwit Governor of California.

Batra has written two books focusing on long-term macro forecasts. Both were dead-on. His 1985 book, "The great depression of 1990", accurately forecast the deep recession that was the downfall of Poppy Bush. And his 1999 book, "The crash of the millennium", made billions of dollars for the investors that took it to heart and sold the last great stock market bubble. Here's an excerpt from the book, from the Library of Congress catalog, at http://www.loc.gov/catdir/samples/random041/99029467.html

"INTRODUCTION: A TORNADO ON THE HORIZON

Ever since the early 1980s, stock prices, with temporary hitches, have been sizzling in the United States, building the biggest speculative bubble in history. Some people call it the market of the millennium; others compare it with eating your cake and having it too. Whatever you call it, the bubble is about to burst. Millions of Americans, including some journalists and computer experts, are worried about the perils of the so-called millennium bug; I submit we have more to worry from the millennium bubble, whose explosion would be heard around the world, even where computers have yet to make a dent....

Free enterprise functions smoothly only if the twin forces of demand and supply operate without constraints; this means that high competition prevails among firms so that wages rise in sync with productivity. Wages are the main source of demand, and labor productivity the main source of supply. If salaries lag behind productivity, as they have all over the planet due to the prominence of monopolies, the supply-demand balance can be maintained only through artificial means; eventually, artificial props give in, and demand falls short of supply, leading to production cutbacks, layoffs, and a recession. As wages trail productivity, profits and hence share markets jump. When the demand gap comes to the surface, stock prices drop, business and consumer confidence wanes, and a recession becomes inevitable. At this point, nations may resort to deficit budgets, monetary expansion, or foreign loans, and the problem may be postponed without instituting fundamental reforms that free the
supply side from the constraints of monopoly capitalism. Eventually, bigger trouble follows, because share markets go into a frenzy, only to plummet when the demand gap returns with a vengeance. If a country has borrowed freely from abroad, its currency crashes, and both inflation and layoffs follow.

The long-term cure lies in restoring the balance between supply and demand rather than in short-term palliatives that create debt, strengthen the supply side, and relatively weaken demand....

Under crony or monopoly capitalism that today reigns the world, including the United States, when a country postpones its ills through massive loans from other countries there is first a giant speculative bubble; then the bubble bursts, the currency collapses, and a lethal combination of inflation and depression erupts. The evidence for this hypothesis comes from recent crises enveloping the Asian Tigers, Mexico, Russia, and Latin America. All these regions borrowed huge sums from abroad in the late eighties and the nineties to finance their prosperity and trade deficits. For a while they enjoyed lofty growth or a stock market binge or both, only to see their currencies plummet since July 1997, when the Thai baht collapsed."

WH shills like Larry Kudlow on CNBC continually allege "strong recovery" when every first Friday unemployment numbers show 100,000 or so new jobs created. What they fail to tell you is that it takes more than 150,000 new jobs a month just to keep up with a growing workforce, and that WH policies have DESTROYED 20 million jobs on top of the millions needed each year just for people entering the workforce. The brilliant passage from Batra's 1999 book cited in post #11 explains WHY Republican "supply side tax cuts" have led to "jobless recoveries".