Rep. Ryan discusses his budget plan. Image: economist.com
Republicans have been getting a lot of flack for not bringing ideas to the table at a time when our nation desperately needs them. But the recent budget proposal by Republican House Budget maven Paul Ryan is a sharp rebuke to the notion that Republicans bring nothing to the table and an outright rejection of the notion that Republicans are so ruled by ideology that they cannot propose ideas outside their narrow scope.
Among its many plans, the Ryan budget proposal calls for nationalizing the Stock Market.
It is true that, in discussing the topic of the Republican plan for Social Security, the phrase generally used is “privatizing Social Security.” But consider what the plan actually proposes. Just as the last proposal under George W. Bush did, the plan allows taxpayers to reroute a portion of their FICA taxes to “personal savings accounts.” So far, it almost seems private, except for the fact that the government isn’t giving your money back to you and they’re not ceasing to remove FICA taxes from your paycheck: you’re still paying taxes.
It is a “personal savings account,” which means according to the plan that it will allow you to pass on your balance to your children. But what do you invest in? Well, according to the plan, you invest in “a series of funds managed by the U.S. government.” Ok, got that? You don’t invest the money yourself, it gets taken out of your paycheck. And you don’t get to pick the funds, the government does. It’s private. Remember that.
So how will the money be disbursed? Do you get to dip into it like your 401k? Well, the plan doesn’t make any mention of that, directly. But after mentioning that they also want to “modernize” the age of retirement (three guesses: would that be “modernizing” it up? Or down?), they do say:
The modernization of the retirement age will not affect the ability of an individual who chooses the personal account system to retire early, as long as his or her account has accumulated enough funds to provide an annuity equivalent to 150 percent of poverty.
For those of you whom, like me, are less familiar with such financial jargon, that would be defined as, “income from capital investment paid in a series of regular payments.” That means that the government isn’t giving you your money back or ceasing FICA payments; it’s only allowing you to invest in the funds that they’ve setup; and apparently, they decide when and how much of “your” money you get back. Sounds pretty private, huh?
So far, this doesn’t seem very private at all. It sounds like the federal government doing with your FICA money something not unlike what the states do with your money by investing it in funds. Except, of course, with the veneer of privacy. But here’s a question: how much money do you think gets invested into the Social Security trust fund every year? How much of the taxes that we pay goes directly into the trust fund – and how much would therefore be invested into the stock market under the Republican plan?
Would you believe $700 billion annually? It is difficult to find the answer to the question “how much new capital is invested in the stock market every year.” After all, which market? The Dow? The NASDAQ? And what constitutes “new” money? But consider this: if one entity comes into the game with three quarters of a trillion dollars to spend every single year – not a fluctuating number like private investment, a stable number from taxation – whom do you think calls the shots in that marketplace? How long before the U.S. government owns a controlling interest in the entire market?
I’m guessing not more than ten years. And Republicans, fiscal hawks that they are, must surely be aware of that. Especially since the plan contains this very interesting chestnut:
Guarantee of Contributions. Individuals who choose to invest in personal accounts will be ensured every dollar they place into an account will be guaranteed, even after inflation. With the recent market downturn, individuals must be assured their retirement is secure. By guaranteeing the dollars put into an account, individuals can be assured that a large-scale market downturn will not cost them their Social Security personal accounts.
Pray tell, who is paying for that? Well, clearly if the government is required to insure every dollar you’ve invested into the stock market, they’re going to need to do everything in their considerable power to prevent that market downturn from ever happening.
Not sure if this is really the kind of thing he wants, but you push a guy like Eric Massa around, you’re bound to get some feisty words.
Eric Massa calls Senator Grassley’s “Pull the plug on grandma” line “treason.” Talking Points Memo is picking up the story, and I suspect the nationals won’t be far behind on this one. For a bit of a backgrounder on where the tensions are coming from, check out Keyless Piano. Jon Greenbaum also comments at DFE here.
I think Massa’s always got a great way to creatively spin his position in the most just-short-of hyperbolic way. Perhaps he’s stepped over the line this time, or else misplaced his ire. It’s not Chuck Grassley but rather the Hitler effigy-carrying, gun-toting nutbags he’s playing to that are in danger of crossing the line into treason or worse.
It’s a shame that a substantive discussion of health care reform is not possible. It would be nice to think that fiscal conservatives could voice objections and help us trim the bill into a lean, mean reform bill. But if opponents of health care reform are going to allow themselves to be defined by the most extreme whackjobs in their midst, we’re not going to get anywhere. Just remember that when you hear them bitch about this bill forty years after its passage like they bitch about Social Security.
You have one chance to be a positive force in history. The Republicans are bound and determined to lose theirs.
Dilan Ratigan is on MSNBC right now, puzzling over the recent developments in North Korea, where Bill Clinton has arrived to negotiate the release of the two journalists who have been trapped there. They’re trying to get to the motivation of the North Koreans; to decide what reason they have to talk to Bill Clinton about this issue where they will not speak with the State Department or any other branch of the current administration.
Former President Bill Clinton in North Korea to try to free U.S. journalists.
Allow me to point out the painfully obvious: Hillary Clinton declared that the North Korean government was acting like a spoiled child. In response, the North Korean government called her a “funny girl.” Now, the NKs have decided to bypass the Secretary of State to the United States of America for…. her husband.
Seriously? Is it really that diffiicult to ferret out the motivation? I would have thought it obvious..
Having said that, Bill Clinton is absolutely right to go. Sexist international slam-fests aside, if the North Koreans are willing to speak with him and get those poor women released from prison, it’s all worth it. To the North Koreans, this is a way to treat the Sec. State like a bitch; to the United States, this is an opportunity to save two lives simply by rolling through some pointlessly sexist and insulting game-playing. At the end of the day, North Korea is less two prisoners and Hillary Clinton is still… the Secretary of State to the United States of America.
I just got this message from the Student Loan Corporation, a division of Citi Corp. At the moment, I have no information one way or the other on the proposed budget changes that Citi is talking about here, but it reads like typical corporate anti-government crap. I’ll look into it some more and let you know:
May 7, 2009
Dear THOMAS BELKNAP,
Thank you for the opportunity to help you obtain the education of your choice. As a student loan provider for the past 50 years, Citi has provided financial aid assistance to millions of students and parents nationwide.
Given the challenging economy and continued increases in the cost of higher education, it is critical that the U.S. student lending system serves the best interests of students and their families. If you believe that competition and choice among student loan providers is valuable, you have an opportunity to make your voice heard.
Why Get Involved?
The government budget outline proposes offering federal student loans solely through the federal government’s Direct Lending Program starting July of next year. While this proposal will not impact a borrower’s ability to obtain a federal student loan, it will eliminate your ability to choose a student loan provider. It will also substantially increase the national debt since each and every federally-insured student loan will be funded by the Federal Treasury through the issuance of treasury securities. This proposal impacts you as a citizen – both as a taxpayer and as a borrower.
Why Does Competition And Choice Matter?
Without private lender involvement through the Federal Family Education Loan Program, students and their families will not enjoy the benefits that competition has made possible for more than 40 years. This competition has provided not only a choice of lenders, but also innovative products and services, such as:
* a variety of borrower benefits that lower your cost of borrowing
* financial literacy programs that educate you on how to borrow responsibly
* web-based tools and resources to advise you about your financing options
* default prevention services to help you pay back your loans
Competition also has driven increased customer satisfaction as a result of the responsiveness, personal attention and on-campus support that student loan lenders have provided to borrowers and schools nationwide.
Make Your Voice Heard
If you value the ability to shop for, evaluate and choose your student loan provider, make your voice heard by contacting your Members of Congress and by signing one of the online petitions that support borrower choice and competition in federal student lending.
Sincerely,
The Student Loan Corporation
National news media seems to forget who their biggest audience is. Decadence is exponential, it seems.
So just a reminder to be on your toes. This issue of quoting original sources (called a bibliography when I was in school, and a means to avoid copyright infringement) comes back every so often. Now with a down economy and newspapers becoming dinosaurs sinking in the tar, they’re kind of dangerous animals.
Once again, I find myself explaining concepts discussed in the media but rarely ever explained by the media. Today’s discussion is “nationalization” of the banking industry.
Or, how about “bankruptcy?” In a bankruptcy of a business, the debt and assets of the company are assumed by the government, who then restructures the company and if necessary, sells of the company’s debts to cover the liens against the company. Then the company is either released to continue or else is sold outright to some buyer who wants a good deal.
If this sounds at all familiar, that’s most likely because this is precisely the remedy proscribed by Dean Baker, Paul Krugman and almost every single other serious minded economist whose looked our current situation. To the extent that the federal government is involved in the day to day operations of businesses in bankruptcy, yes, it is nationalization. But this kind of thing happens all the time to all kinds of businesses without a peep of objection from the Republicans in Congress. In fact, it even happens to local banks all the time, which is one reason that we have a thing called the FDIC.
But it doesn’t happen to the big boys who have the money to pay off politicians and drive the conversation in the most objectionable direction possible.
Interesting side note: guess what the Republican, Dick Shelby proscription is for the Detroit automakers? If you guessed “nationalization,” you’re right!
It’s gone viral. An email sent out by one passionately enraged man has spread all over the Internet and there appears to be a gigantic protest scheduled, dumping garbage in the middle of Wall Street. The article doesn’t say when, though. . .
While we all wring our hands and wonder why it is so many of our young people are leaving the state, perhaps it would be instructive to consider the latest report on wages in New York:
Report says ‘anemic’ wages affect 5.7 million New Yorkers | Democrat and Chronicle
The report from a labor-backed think tank said that 5.7 million New Yorkers are part of families that face a “hardship gap” in which at least one person has a job but the earnings aren’t enough to cover all basic expenses, including food, rent, utilities, health insurance, transportation and child care.
The proportion of New York families who don’t make enough to pay for these services, 30 percent, is well above the national median of 22 percent and is the highest of any Northeast state, according to the Fiscal Policy Institute report.
The report also goes on to state that a wage of $17 an hour is required in order to keep a family of four afloat. That’s a tall order in many professions, and especially in unskilled labors. Keep in mind also that the national average of 22 percent includes states like Louisiana, Arkansas and West Virginia where grinding poverty exists in ways most of us in this state don’t even fully understand as “America.” That we are so far behind in providing our state citizens – to say nothing of national citizens – a decent living wage is an embarrassment to our name.
Nothing says “I’m really, really fucking old” quite like making campaign barbs out of presidents from thirty years ago, and trying to make them look like they’re really relevant:
Jonathan Martin’s Blog: Playing the Carter card – Politico.com
“Senator Obama says that I’m running for a Bush’s third term,” McCain said, picking up the central Democratic line of attack. “Seems to me he’s running for Jimmy Carter’s second.”
This is sad on a number of levels. Firstly, while the above quoted post tries charitably to come up with reasons why the Carter jab is a good one, the author points out things indicative of the Bush Administration such as gas prices and weak national security. But that’s probably too deep, anyway. The real problem is that, as I approach middle age, half the people my age and younger don’t really even know who Jimmy Carter was as a president, and know him rather as the Nobel Prize winning, charming old Southern guy who rocks out interviews on The Daily Show. That seems like a positive thing.
Maybe McCain aught to dig a bit deeper into our history, into something that isn’t half-assed taught in the last few weeks of June when there’s no air conditioning and no one’s even paying attention, anyway. Perhaps a Millard Fillmore crack, of some kind?
The New York Times finally decided to get off it’s dead ass and start talking about a subject this website has been following for a week, now, courtesy of Wired.com news:
Adviser Says McCain Backs Bush Wiretaps – NYTimes.com
In a letter posted online by National Review this week, the adviser, Douglas Holtz-Eakin, said Mr. McCain believed that the Constitution gave Mr. Bush the power to authorize the National Security Agency to monitor Americans’ international phone calls and e-mail without warrants, despite a 1978 federal statute that required court oversight of surveillance.
Wonder how quickly this one dies out? The rest of the article is primarily without substance, just a lot of quotations from people who are duty-bound to disagree with each other.
