Dear Mr. President, Social Security and Medicare are Not Grand Bargaining Chips

(2 pm. – promoted by ek hornbeck)

Yes, the grand bargain is coming up before the deadline by December 31st, 2012.

Social Security, Medicare, and Medicaid will be on the chopping block like it was last time. This is not a conspiracy theory, and it comes from solid sources involved in all of the deliberations if you read the source material provided. Sure, some can pretend it is CT. They can even cry it out loud from the rooftops while closing their eyes and plugging their ears, but the reality based community is all talking about this because this is confirmed reality, and the prospects are real like they were last time.

It’s really up to those that would deny this confirmed reality to prove the actual sources in the Senate are all liars in the WaPo peice. Either that or they have heads their heads in the sand for all of 2011 and this is just too much of a downer to acknowledge but it’s time to grow up. These are facts. Denying the factual historical record in 2011 disqualifies anyone writing about these matters at all. Yes, when the entirely self induced entirely avoidable fake fiscal cliff was made real through the stop go that was passed to raise the debt ceiling in Aug 5, 2011 it set this whole pathetic fiscal cliff debacle coming up.

Rick Pearlstein: Author of Nixonland details the Grand Bargain coming up as well.

America didn’t vote for a “grand bargain”

I heard Dick Durbin, the Illinois senator who is close to Obama, on the radio the next morning boasting that he was one of the Democrats on the Simpson-Bowles Commission to vote for its recommendations – recommendations that included, in addition to changes in the tax code meant to increase revenue (while also cutting tax rates), diminishing eligibility and benefits for Medicare and Social Security. Though the commission failed to reach consensus, making its proposals moot, it was aiming at just the sort of “grand bargain” that Obama has consistently and quietly spoken about as his sort of beau ideal for what a successful presidency would look like. Durbin went on to say he hoped a grand bargain might be wrapped up in the next calendar year, before congressmen and senators became preoccupied with reelection.

When you read statements like this from the likes of Senator Dick Durbin safely away from the constituents he secretly disdains, it makes you wonder whether this continuous flirtation with the destruction of the New Deal by the modern third way Democratic leadership wasn’t the goal all along. After this debt ceiling debacle and the fallout we will still be dealing with was something I predicted. It was rather easy to predict that once the Obama Bush tax cuts were extended the political game of hostage taking by the Republicans enabled by the Democrats failure on these issues would continue. How did I know that? It was quite simple: President Obama thought it would be a great idea to put the full faith and credit of the United States in John Boehner’s hands by taking his word instead of getting a raise of the debt ceiling in the Bush/Obama tax cut sellout in 2010 as part of the deal.

Transcript Of Obama’s Press Conference On Tax Cut Deal

THE PRESIDENT: Look, here’s my expectation – and I’ll take John Boehner at his word – that nobody, Democrat or Republican, is willing to see the full faith and credit of the United States government collapse, that that would not be a good thing to happen. And so I think that there will be significant discussions about the debt limit vote. That’s something that nobody ever likes to vote on. But once John Boehner is sworn in as Speaker, then he’s going to have responsibilities to govern. You can’t just stand on the sidelines and be a bomb thrower.

That political malfeasance and naivete on display is why we are still dealing with the fallout of this easily predictable and entirely avoidable debt ceiling debacle that this so called fiscal cliff spawned from. The only thing that seems destined to fall off the cliff is any intelligence whatsoever about fiscal issues and our monetary system. It would have been nice had more people not had deluded themselves into thinking the President had some brilliant plan, because after all, if he did, we wouldn’t be dealing with any of this by the end of this year in the first place.

Unless we are honest about what happened and put a stop to it, the second term for President Obama and the Democratic leadership in Congress is going to be an endless cycle of selling out and political failure in the name of budgetary and monetary fairy tales instead of the reality that is national accounting. The only deficit problem is the intelligent deficit on these accounting identities and the dynamics of a country that issues its own currency. This ignorance or corruption, take your pick, might be amusing if seniors’ lives weren’t at stake like the many other people whom will suffer because of these cuts to appease downright stupidity.

After all, most presidents have secured multiple raises in the debt ceiling from Congress. that’s probably because they didn’t trust or agree with their political enemies like President Obama did Speaker Boehner. The President is responsible for that and so are the people who made excuses for it. After all, we’ll be paying the political and economic price. The President was warned but maybe this was his plan all along.

The Constitution does state that our debt will not be in question. If only our constitutional scholar knew this or assuming he does, acted on it instead of continually dragging out this political disaster which will occur through every raise of the debt ceiling. Neo Chartalist economist James K. Galbraith was correct as usual; the right thing to do was challenging the constitutionality of the debt ceiling because it is frankly unconstitutional. We shouldn’t have to go through this or the fallout from it again and again.

“Dangerous Precedent” Being Set in Debt Ceiling Debate, Galbraith Says

I also think kossack Letsgetitdone's 60 trillion coin seigniorage idea has merit which is worth looking into once this never ending debacle rears its heads again. Once the tax cuts expire even for those making under $250,000 a year added to when the 1.2 trillion sequester(cuts across the board. The deal also includes mandatory spending reductions on top of the sequester by putting caps on non-entitlement discretionary spending that will reduce funding by $1 trillion by 2021) kicks in the CBO states it will likely send us back into a recession sometime in 2013. So just imagine if the President got the 4 trillion of cuts that he wanted?

That being said, there need not be any grand bargain for cuts that should not have been on the table in the first place and there is plenty of time to legislate away this stupid triggered sequester that should have never existed in the first place. What’s the lesson from all of this, anyway? Austerity is a failure. Look at the Eurozone and the UK double dipping back into recession. It’s simple: politicians who embrace austerity are also embracing failure. Therefore the contest on who was the best deficit terrorist during this Presidential and Congressional campaign was a losing proposition for the people.

Income inequality is worse now(93 cents out of every dollar to the 1%) than it was during the Bush administration(64 cents our of every dollar to the 1%), but we didn’t hear about it in this campaign, only deficits blah blah blah. Nothing about a private debt jubilee which would be another serious move towards full employment. Even on a practical  level, instead of replacing DeMarco(whom still is refusing to write underwater mortgages down) at the Federal Housing Finance Agency (holding roughly half of all these mortgages) during a recess appointment which the POTUS can and has failed to do in past recesses.

Instead we’re going to go through this predictable pathetic recurring debacle that will put our social safety net in danger once again because people in Washington don’t want to study national accounting or what government budget deficits really are and why we need them.

Oh No! Private sector surplus! This is what the players in the grand bargain are so scared of continuing. What will we do if there are more dollars in the private sector during a period of low demand and high income inequality? Shouldn’t we put more dollars into private pockets? The answer is yes. You see, this is reality unlike the bond vigilantes and confidence fairy fairy tales that were spun to us during this campaign.

But the Washington consensus either doesn’t get it or doesn’t want to get it. This grand bargain will hurt people especially seniors. It’s just a matter of degree because this entire fiscal cliff debate is over complete nonsense stemming from a failure of leadership and adhering to the principles of the New Deal and Great Society that define the Democratic party platform. Failing to live up to that is all Congress seems to get done anymore. No more.

No more grand bargains, fiscal cliffs, sequesters, gangs of six, eight, or twelve. Demanding that Congress recognizes the truth will stop the abuse and failure of leadership across the board we have seen since this whole debacle started in 2010, but will you? I know many of you will, but I sadly still many of you will follow the six steps. For instance, some of you can hate Glenn Greenwald all you want because of his “awful” concern for civil liberties instead of politicians’ personalities, but he has accurately outlined exactly how this is going to play out. He has outlined exactly the excuses many of you will give and I know this because I have already heard many of them already. Here are a few, but you should read them all because they are painfully accurate and prescient.

From Liberal Victory to Disempowerment in Six Easy Steps

STEP THREE: Many progressives – ones who are not persuaded that these cuts are less than draconian or defensible on the merits – will nonetheless begin to view them with resignation and acquiescence on pragmatic grounds. Obama has no real choice, they will insist, because he must reach a deal with the crazy, evil GOP to save the economy from crippling harm, and the only way he can do so is by agreeing to entitlement cuts. It is a pragmatic necessity, they will insist, and anyone who refuses to support it is being a purist, unreasonably blind to political realities, recklessly willing to blow up Obama’s second term before it even begins.

STEP FOUR: The few liberal holdouts, who continue to vehemently oppose any bill that cuts social security and Medicare, will be isolated and marginalized, excluded from the key meetings where these matters are being negotiated, confined to a few MSNBC appearances where they explain their inconsequential opposition.

STEP FIVE: Once a deal is announced, and everyone from Obama to Harry Reid and the DNC are behind it, any progressives still vocally angry about it and insisting on its defeat will be castigated as ideologues and purists, compared to the Tea Party for their refusal to compromise, and scorned (by compliant progressives) as fringe Far Left malcontents.

STEP SIX: Once the deal is enacted with bipartisan support and Obama signs it in a ceremony, standing in front of his new Treasury Secretary, the supreme corporatist Erskine Bowles, where he touts the virtues of bipartisanship and making “tough choices”, any progressives still complaining will be told that it is time to move on. Any who do not will be constantly reminded that there is an Extremely Important Election coming – the 2014 midterm – where it will be Absolutely Vital that Democrats hold onto the Senate and that they take over the House. Any progressive, still infuriated by cuts to social security and Medicare, who still refuses to get meekly in line behind the Party will be told that they are jeopardizing the Party’s chances for winning that Vital Election and – as a result of their opposition – are helping Mitch McConnell take over control of the Senate and John Boehner retain control of the House.

Now surely you will want to prove both of us wrong, won’t you? Or maybe you want to prove us right, right now. You should at least know that when politicians are fear mongering over a fake problem like the deficit terror and fiscal cliff they hope you don’t understand, they don’t have anything qualitatively good planned for your future. You should know that when you accept the unacceptable you are not being pragmatic. You are further lowering any Democratic standards you have left and any left you have left left in the party you blindly follow that is not the party you signed up for.

When you ignore sellouts like these you don’t matter and are fodder for a form letter in your email box; an endless cycle of election fundraising but nothing will truly get better. Many of you of course know this, but too many of you want to believe like the President and Harry Reid want to believe in sovereign non pegged currency defaults, bond vigilantes, and confidence faeries. Is this delusional? Very.

These are grim times. Not time for Grimm’s political fairy tales. Wake up.