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To berate, belittle, and besmirch Ben Bernanke
December 4, 2009 8:55 AM   Subscribe

In testimony before the Senate Banking Committee... where he’s seeking re-appointment as the Fed’s chairman, Bernanke called for cutbacks in Medicare and Social Security... “Willie Sutton robbed banks because that’s where the money is, as he put it,” Bernanke said. “The money in this case is in entitlements.”

Bernanke's bid to avoid joining the ranks of the unemployed is meeting resistance from both the right and the left.
posted by Joe Beese (91 comments total) 5 users marked this as a favorite

 
thank God. I was just thinking, "man, the conservatives keep talking about how medicare is all the socialised health care we need. I wish someone would get rid of that so we could create proper socialised health care in its place."
posted by shmegegge at 9:00 AM on December 4, 2009 [2 favorites]


When you say "entitlements" do you mean helping people who would otherwise die to just barely survive? Or do you mean millionaire CEOs?
posted by DU at 9:02 AM on December 4, 2009 [10 favorites]


"Bernanke reminded Congress that it has the power to repeal Social Security and Medicare."

I'm trying to think what 21st Century America would look like without SS and Medicare. I envision alot of elderly dying in their (unheated, empty) homes, and a few million more people aimlessly walking (or crawling, since they are likely disabled) the streets, hunting for scraps of food.

So is it an official Libertarian policy to make America resemble Mad Max or The Road as much as possible, or is it just a desirable side effect?
posted by Avenger at 9:03 AM on December 4, 2009 [11 favorites]


No, the money is not in Social Security and Medicare. It's in military spending. Cut the military budget by 50% and then we'll talk about everything else.
posted by vibrotronica at 9:04 AM on December 4, 2009 [49 favorites]


Good thing he's not Chairman of the Flattering Analogies Board.
posted by brain_drain at 9:05 AM on December 4, 2009 [2 favorites]


Seriously, comparing himself to a bank robber? Regardless of what you think of the policy, that's a terrible argument to make.
posted by echo target at 9:09 AM on December 4, 2009 [3 favorites]


You don't need to cut military spending by 50% to solve most of the country's budget woes. As I recall, a 10% cut would balance the budget- at least pre-stimulus.

It's so maddening that in politics it's more or less off limits to advocate any meaningful military cuts, but it's a-ok to propose cutting aid to poor people and de-funding Grandma's medical care. I mean, WTF?
posted by norm at 9:10 AM on December 4, 2009 [6 favorites]


Cut the military budget by 50% and then we'll talk about everything else.

Damn straight! Two unfunded wars are the real money sink.
posted by RussHy at 9:10 AM on December 4, 2009 [3 favorites]


It's nonsense, of course, but hypothetically, what would it do to the "fuck you, I got mine" mentality under which many non-wealthy conservatives operate?
posted by uncleozzy at 9:11 AM on December 4, 2009


I'm trying to think what 21st Century America would look like without SS and Medicare. I envision alot of elderly dying in their (unheated, empty) homes, and a few million more people aimlessly walking (or crawling, since they are likely disabled) the streets, hunting for scraps of food.

No, no, no! Obviously, without the restrictive yoke of socialist entitlements holding back their natural sense of self-worth and entrepreneurial vigor, Americans will bloom and blossom in an explosion of innovation and dynamic economic exceptionalism.

No. really!
posted by Thorzdad at 9:12 AM on December 4, 2009 [8 favorites]


Ben, if Soc Sec and Medicare is so great an entitlement, I'd like to see you try living on it for a year. My mom worked her whole life, made good money, and she still lost her house and had to move in with my brother when she got sick. Like lots and lots of old people, who either live with relatives or live in true poverty unless they are lucky enough to have pensions or investments, because their Social Security barely pays for anything.

As for Medicare, it's great, if you can find a doctor who will a) take you and b) see you in less than 4 months from now.
posted by emjaybee at 9:14 AM on December 4, 2009 [1 favorite]


But when asked if a tax increase for the wealthiest might be in order, he replied that was more properly the province of congress to determine. (It's only his job to recommend taking money from the poorest.)
posted by bowline at 9:14 AM on December 4, 2009 [18 favorites]


It's so maddening that in politics it's more or less off limits to advocate any meaningful military cuts, but it's a-ok to propose cutting aid to poor people and de-funding Grandma's medical care.

They used to call these programs the third rail of American politics, because if you touched it you were killed. So what does that make cuts in military spending, something no one has even attempted to touch? The infinity rail?

Step 1: Remove science funding from the Pentagon and put it directly into colleges and universities (in return for which, they accept all students for free).

Step 2: Cut the remaining Pentagon budget in half. Use proceeds for

Step 3: increasing all other education funding and "socialized" medicine.

With these steps, we may begin to see the rest of the civilized world up ahead of us somewhere, instead of nowhere in sight.
posted by DU at 9:19 AM on December 4, 2009 [8 favorites]


So is it an official Libertarian policy to make America resemble Mad Max or The Road as much as possible, or is it just a desirable side effect?

Uh, when I left the house this morning, Libertarians had no power in Washington.

But at the rate the Democrats are fucking up, I'm inching closer and closer to throwing my votes away on wackos with conviction (like Libertarians) in future federal elections.

-
posted by General Tonic at 9:21 AM on December 4, 2009 [1 favorite]


Along with Robert Gates, Bernanke is another Bush appointee who Obama seems to feel is doing a heckuva job.

With this sudden opening at the Department of Justice, maybe Obama would like to tap someone with experience there.
posted by Joe Beese at 9:22 AM on December 4, 2009 [1 favorite]


If they really want socialism - real socialism - to happen in this country, this is their best way to go about it.

Social programs are bribe that the rich hand to the poor to discourage them from killing them and taking their stuff.
posted by idiopath at 9:22 AM on December 4, 2009 [20 favorites]


Isn't attacking social security kinda a political flame out? lol

I'm sure employers and maybe working people would love seeing Social Security cuts, but this doesn't much help the federal deficit.

Yes, military spending could be cut substantially without effecting America's reputation. Why keep bases in Germany and Italy? Why build missile defense in Eastern Euorpe? etc.
posted by jeffburdges at 9:22 AM on December 4, 2009




I'm trying to think what 21st Century America would look like without SS and Medicare. I envision alot of elderly dying in their (unheated, empty) homes, and a few million more people aimlessly walking (or crawling, since they are likely disabled) the streets, hunting for scraps of food.

I just got my yearly statement from the SSA last year showing my current monthly estimate of $2600 in SS payments when I retire. If I don't get at least that then because of the stupidity now, I'm going to start robbing young investment bankers at gunpoint, assuming I can still handle a gun then.
posted by Burhanistan at 9:22 AM on December 4, 2009 [5 favorites]


Social Security is a joke.....ask anyone my age (middle 50's) if they are going to count on SS for anything. Fuck that, I'll work until I CANNOT anymore because I will HAVE TO. Social Security will barely defray my weed and beer consumption.
posted by gigbutt at 9:26 AM on December 4, 2009 [2 favorites]


I'm pretty sure there's several trillion in repealing the Bush tax cuts as well. Just saying...
posted by slapshot57 at 9:28 AM on December 4, 2009 [1 favorite]


Social Security will barely defray my weed and beer consumption.

Really? Lots of people do alright by if if they've been paying into it for a few decades. Once my house is paid for, and assuming my IRA continues on like I want it, and a few other streams, $3k will do me just great. You should get a vaporizer or something to use your weed more efficiently. But, I have a vested interest in keeping the "system" in place so what do I know.
posted by Burhanistan at 9:30 AM on December 4, 2009


No, the money is not in Social Security and Medicare. It's in military spending. Cut the military budget by 50% and then we'll talk about everything else.
posted by vibrotronica at 11:04 AM on December 4 [+] [!]

There actually is more money in entitlements than in military spending. So focusing on relative spending amounts is not the way to go.

But in absolute terms, there's still a hell of a lot of money in military spending.
posted by Jpfed at 9:32 AM on December 4, 2009 [2 favorites]


I'd support a bill legalizing the mugging of investment bankers by those 70 years or older who have suffered significant financial losses from our boom & bust economy.
posted by jeffburdges at 9:33 AM on December 4, 2009 [1 favorite]


Got no problem with cutting out SS and Medicare, as long as I get a final payout that matches the level of others' benefits I've been subsidizing for the last 30 years.
posted by troybob at 9:38 AM on December 4, 2009 [2 favorites]


Despite my father's best efforts to build a 401K and pay off the house, a combination of the Enron-adjacent market crash and a lingering, debilitating illness none of us expected him to get in his mid-60s combined to almost bankrupt him and my mother; the only things that stopped that from happening were his timely death just before a lien was put on their house to cover nursing home expenses, and my mother ignoring the bank's strong-arm advice to invest the insurance/remaining 401K money in the stock market literally a few weeks before the latest crash.

As late as his early 60s (before we realized how sick he was) he had taken all the "right" steps to ensure his and my mother's future, and ultimately it was luck and a wise decision from my mother that's left her with enough for the next ten years or so -- assuming she doesn't get sick in a way that medicare won't cover.

Frankly, I'm getting really irritated with how hard some people with money work to get even more money from people like my mother, and in return offer nothing except platitudes and accusations of laziness.
posted by davejay at 9:39 AM on December 4, 2009 [21 favorites]


"Fuck you, got mine" is not a philosophy of government.
posted by Pope Guilty at 9:40 AM on December 4, 2009 [14 favorites]


Got no problem with cutting out SS and Medicare, as long as I get a final payout that matches the level of others' benefits I've been subsidizing for the last 30 years.

I fear that there will be an election someday where this is the carrot offered in exchange for closing down social programs.

As vote-buying goes, Bush's pre-election rebate checks will pale in comparison.
posted by rokusan at 9:42 AM on December 4, 2009


"Fuck you, got mine" is not a philosophy of government.

It shouldn't be, but history says otherwise.
posted by rokusan at 9:43 AM on December 4, 2009


"Fuck you, got mine" is not a philosophy of government.

Worked for the Reagan Administration.
posted by Burhanistan at 9:46 AM on December 4, 2009 [1 favorite]


Vaporizer vs One Hitter....... you fail...dont even start with me....I've weighed it out and kept the weed log.....One Hitter wins hands down.

That's the key to the whole military budget too! Take away their vaporizers and issue them One Hitters!
posted by gigbutt at 9:47 AM on December 4, 2009


Ah, ok. The closest I've been to weed in nine years is smelling it on the delivery guy's jacket. One hitters will probably induce lung cancer more quickly than a vaporizer (filtered smoke and all) so there's the Medicare aspect in play.
posted by Burhanistan at 9:50 AM on December 4, 2009




"Fuck you, got mine" is not a philosophy of government.

The central tenet of Buddhism is NOT "Every man for himself."
posted by ROU_Xenophobe at 9:51 AM on December 4, 2009 [7 favorites]


So is it an official Libertarian policy to make America resemble Mad Max or The Road as much as possible, or is it just a desirable side effect?

There's no need to imagine; didn't you hear? All the Libertarians got tired of all the pesky government interference in this country and moved to Somalia, that shining new libertarian utopia. Oh, no wait, you didn't, because they're all full of shit.
posted by Rhomboid at 9:55 AM on December 4, 2009 [3 favorites]


In hortense's link, Sen. Jim Bunning (R) not only slammed Bernake, but Greenspan, and the Obama and Bush administrations too. I know he's not running for reelection, but I thought all he cared about was baseball.
posted by nowoutside at 10:00 AM on December 4, 2009 [1 favorite]


Senator Bunning to Bernanke "You are the definition of a moral hazard. Your Fed has become the Creature From Jekyll Island"

If ever I can deliver a verbal smackdown that is even half as amazing as that, I will die a happy person.
posted by Pope Guilty at 10:01 AM on December 4, 2009 [4 favorites]


Step 1: Remove science funding from the Pentagon and put it directly into colleges and universities (in return for which, they accept all students for free).

Step 2: Cut the remaining Pentagon budget in half. Use proceeds for

Step 3: increasing all other education funding and "socialized" medicine.


Step 4: See unemployment surge to 25-30% for about decade or so.


I mean sure. I'm with you conceptually. But it's just not that simple. We've got ourselves is a right little fix.

Even Krugeman writes about this. Essentially the system for defense spending is so entrenched that simply pulling the plug would throw the economy into a devistating tail spin from which all the "savings" we would net would go immediately into unemployment insurance and it would STILL not be enough due tot he massive drop in taxable income. You certainly not be able to operate any massive new programs for quite some time. Nobody sane, nobody asking for re-election, is willing to do that.

Pentagon spending has to but cut in little slices that allow the defense industries to transition to civilian oriented products. Many of those kinds of products with a matching scale, like high-speed trains or what have, take years to re-tool and prepare.
posted by tkchrist at 10:02 AM on December 4, 2009 [3 favorites]


Man. The typos in that paragraph are ridiculous. Sorry.
posted by tkchrist at 10:03 AM on December 4, 2009


How about we start cutting military spending by defunding the mercenaries and cracking down on waste and corruption, then?
posted by vibrotronica at 10:05 AM on December 4, 2009 [3 favorites]


So after we've all wrung our hands and shouted, who would be a better, qualified replacement? Otherwise this is just a case of taking the devil you know rather than a new god.
posted by GameDesignerBen at 10:06 AM on December 4, 2009


GameDesignerBen, the one I'd want would probably be Robert Reich. Former Clinton cabinet.

He's really really really lefty though. I mean, like, socialism for reals and stuff. But having him in charge, you'd see all kinds of weasels bailing on Wall Street. We might even end up with a system that works the way it should. Because they'd, you know, be having to deal with someone who, well, isn't their buddy.
posted by daq at 10:12 AM on December 4, 2009 [1 favorite]


"Fuck you, got mine" is not a philosophy of government.

Historically, "Fuck you, got yours (and not giving it back)" is, however.
posted by davejay at 10:13 AM on December 4, 2009 [2 favorites]


Whoa, whoa. Seriously, people.

What the hell is "the Creature from Jekyll Island"?
posted by Faint of Butt at 10:30 AM on December 4, 2009


oh for fuck's sake. here:

the creature from jekyll island.
posted by shmegegge at 10:32 AM on December 4, 2009 [5 favorites]


I'm kidding. I had no idea what the hell that was about, either, though I like the line.
posted by shmegegge at 10:32 AM on December 4, 2009 [1 favorite]


How about we start cutting military spending by defunding the mercenaries and cracking down on waste and corruption, then?

Obviously that's a good idea. And think there is a serious movement in that direction in the Pentagon itself right now. The mercenaries got in there becuase of chicken hawks like Rumsfeld claiming you can get war on the cheap. And let's just say he and that particular concept wasn't the most popular pair with the military.

Cutting down on waste is ongoing and very difficult. The Military requires things on deadlines that are political and arbitrary. So production is driven in ways you can't really prepare for with standard market-forces driven business. Also when you're only gonna build only 700 fighter jets instead of 200,000 SUV's the machining of the tools you use to make the fighter jets cost so much more per unit.

I think what we need to get rid of is Cost-Plus profit taking. Where the contractor simply guesses at how much profit they would make if the missile they were building was being sold as a civilian consumer product and that's what they charge the Government. I'm not opposed to them making a profit but it should be on a bonus system for beating expectations. As it is now they get paid more for fucking things up. Our non-functioning joke of a missile interceptor system is a case and point.
posted by tkchrist at 10:32 AM on December 4, 2009 [1 favorite]


What the hell is "the Creature from Jekyll Island"?

It might have something to do with the Loch Ness Wolfman.
posted by Dr-Baa at 10:43 AM on December 4, 2009


What the hell is "the Creature from Jekyll Island"?
this guy will tell you almost all about it.
posted by hortense at 10:50 AM on December 4, 2009


Why does Obama want this conservative in place? Clearly he believes as do the Republicans that anything from our govt is not right. By contrast such "entitlements" are assumed and given in European nations.
If you insist on cutting back on Social Security, then make a cap. I have a friend who has an incredible retirement monthly check, and yet he insists on getting his full SS because after all he "paid into it." He did, but SS was assumed to not go on much after one reached about 65. Now with folks living longer, it begins to cost much more. But if you have an income that is substantial, you don't need to ensure that tghe system breaks down.

Why bother with Medicaid? Folks can't afford health costs? let them die! Alas, as we see with rising health costs, job losses, and less and less being put in by employers, our health system is going soon to totally crash. It can of course be fixed by judicious planning and implementation but congress needs to have the guts to defy lobby groups.
posted by Postroad at 10:53 AM on December 4, 2009


There actually is a Jeckyll Island. Which seems stupid to me, like naming a place Alien Abduction Forest. Frankly, you're just inviting supernatural terror.
posted by Astro Zombie at 10:57 AM on December 4, 2009 [1 favorite]


[Unsurprisingly, I've been beaten to the punch on the salient points here, but I'm commenting anyway.]

Ladies and gentlemen of MetaFilter, I apologize, and I must give special thanks to shmegegge for setting me on the right path. I made a flippant joke based on the assumption that Sen. Bunning had somehow conflated "Creature from the Black Lagoon," The Strange Case of Dr. Jekyll and Mr. Hyde and The Island of Dr. Moreau, thus proving his ignorance of classic horror film and literature. The truth, it seems, is much stranger.

The Creature From Jekyll Island: A Second Look at the Federal Reserve is a 1994 book by G. Edward Griffin, titled after the 1910 meeting held on the very real Jekyll Island, Georgia, which some credit for the creation of the Federal Reserve System.

There are plenty of things to criticize about the Federal Reserve, but Griffin is, to put it mildly, a right-wing libertarian kook. According to his Wikipedia entry, "Griffin says that the United Nations, the Council on Foreign Relations, and the World Bank are working to destroy American sovereignty through a system of world military and financial control, and he advocates for United States withdrawal from the United Nations." He also spent much of the 1970s promoting laetrile as a cure for cancer, and in 1992 he wrote and produced a documentary about the "discovery" of Noah's Ark in Turkey. In 2002 he founded Freedom Force International, a libertarian activist network. It should not surprise anyone to learn that he's also been a significant influence on Ron Paul.

So to make a long story short, I think this was a dog whistle on Bunning's part. Although I'm no happier with Bernanke than he is, I'm pretty certain he and I are not on the same side.
posted by Faint of Butt at 10:59 AM on December 4, 2009 [12 favorites]


No, the money is not in Social Security and Medicare. It's in military spending.

The CBO's 2009 Long-Term Budget Outlook says that defense spending was 4.3% of GDP in 2008 and projected to be 3.4% of GDP in 2009 (p58). The chart on page 59 shows historical defense spending levels.

It also says that SS/Medicare/Medicaid spending will be 4.8%/3.5%/1.8% (respectively, totaling 10.1%) of GDP in 2009, rising to 5.3%/4.0%/2.1% (11.4% total) in 2020, and 5.7%/9.0%/3.2% (17.9% total) in 2050.

So it looks to me like there's quite a bit more money being spent on SS/Medicare/Medicaid than on defense already, and it's likely to become even more so in coming years. Is this misleading in some way?
posted by Perplexity at 11:31 AM on December 4, 2009


Oops, first 2009 should be 2019 (that's the future date they give a 3.4% of GDP estimate for defense spending). And the other spending estimates are on page 20.
posted by Perplexity at 11:33 AM on December 4, 2009


Actually, Jack Kingston (R-GA) is the Creature from Jekyll Island, if we're going to get technical.
posted by Bromius at 11:41 AM on December 4, 2009 [1 favorite]


Social Security is not welfare! It is insurance paid for in one's working years. It is most simply enforced savings. To deny it to those who paid into it is theft.
Sarah Palin got it wrong - we wouldn't kill grandma, we would take away her rent, food and Rx until the worthless old hulk got out of the way of current taxpayers.
posted by Cranberry at 11:46 AM on December 4, 2009 [2 favorites]


If the government just came out tomorrow and declared something along the lines of, "Social Security is dead. As of tomorrow nobody pays in. Everyone under 42, sorry... you're not getting anything. You have 20 years to save the equivalent. In exchange for your trouble, you are knocked down an income tax bracket for the next 20 years. Also, we are cutting the military budget by 60%. We finally realized that spending 2x China's budget was probably good enough." ... we would all be better off.
posted by fusinski at 11:50 AM on December 4, 2009


No, the money is not in Social Security and Medicare. It's in military spending. Cut the military budget by 50% and then we'll talk about everything else.
posted by vibrotronica at 12:04 PM on December 4


This is deranged. Focusing only on the economic aspects,defense spending is nearly 5% of our GDP. Increases in defense spending in 2003 kept the country out of a recession that year.

Unlike social security and medicare, the money spent on defense goes to jobs, the income from which pays not only federal, state and local taxes, but also medicare and SS taxes. If you cut defense spending in half, please tell me where all of those unemployed people are going.

Furthermore, as people have argued ad nauseum here, the healthcare system is woefully inefficient, so money spent there isn't returned to the economy the same was as in defense. So cutting spending there is economically more beneficial, whereas cutting defense spending is going to result in lost jobs from which no tax revenue will be collected and top which entitlement payments must flow.

Furthermore, entitlements are a massive part of the budget. And Medicare especially is growing at a much faster rate than defense spending. The reason you think defense spending is such a big problem is that most discussions of the federal budget focus on the budget after entitlements.

If you insist on cutting back on Social Security, then make a cap. I have a friend who has an incredible retirement monthly check, and yet he insists on getting his full SS because after all he "paid into it." He did, but SS was assumed to not go on much after one reached about 65.

This was the assumption because used to die people died shortly after 65. In other words, pay taxes your whole life so you'll get a meager payment for the few short years you're alive after you retire. A less deceitful solution would have been to just eliminate the concept of retirement.

The reason Bernanke is saying this is because the country cannot afford entitlements, interest on the debt, and defense. The reason we cannot afford this is not because defense is too high or taxes are too low, it's because we produce almost nothing that anyone else in the world wants to import. If we simply produced domestically all the vehicles, all the electronics, etc that we consume domestically, none of this would be an issue.

In other words, this fiscal problem is merely a symptom of a much larger catastrophe that has already befallen the country.
posted by Pastabagel at 12:11 PM on December 4, 2009 [2 favorites]


Once my house is paid for, and assuming my IRA continues on like I want it, and a few other streams, $3k will do me just great.

Wow. Given that my current lifestyle is already fairly swank on less than $3k per month, that plus IRA income plus "other streams" and I would be living like a king.
posted by adamdschneider at 12:13 PM on December 4, 2009


Go after Medicare and Social Security?

I got three words for you Ben: Eat The Rich.
posted by Relay at 12:16 PM on December 4, 2009


Social Security is not welfare! It is insurance paid for in one's working years. It is most simply enforced savings. To deny it to those who paid into it is theft.

Current Social Security drawers did not pay nearly enough into the system, though. There are two main reasons: first, the FICA rates weren't high enough in the early years and second, people are living far, far longer than expected. When Social Security began, the age at which you could draw benefits was actually older than the median life expectancy. As it stands right now, it's the current drawers that are 'stealing' from current taxpayers.

Of course, I don't have a problem with Social Security as a welfare program. Many people currently live considerably longer than they can be self-supporting workers, and many people cannot possibly save enough over their lifetimes to support themselves in retirement. Thus, Social Security is a necessity. Not everyone can be supported by their children or other relatives, and such a family-based system would be disproportionately burdensome on the poor.
posted by jedicus at 12:19 PM on December 4, 2009 [1 favorite]


This is deranged.

No, continuing to insist that we spend as much on defense as the rest of the world combined is deranged.
posted by vibrotronica at 12:44 PM on December 4, 2009 [5 favorites]


.
posted by jock@law at 12:47 PM on December 4, 2009 [1 favorite]


The United States certainly is a special place. We pay twice as much as any other developed country for our healthcare - crappy as it is. We spend as much as the rest of the world combined on our wonderful military machine, and yet we cannot force backwards foreigners to partake of our blessed governmental and economic systems.

Is it possible that our priorities are skewed? Is the answer to eliminate Social Security and Medicare, that we may better fund our military? Would that give us the capability to bend those heathens to our will, and fully employ our workforce? Some islanders seem to think so.

Obama, however stands in the way, protecting the slothful, decrepit senior citizens and slashing the sacred Defense Budget, while abruptly terminating our Holy Wars before their inevitable culmination.

At least I wish that's what he was doing.
posted by Kirth Gerson at 1:01 PM on December 4, 2009


No, continuing to insist that we spend as much on defense as the rest of the world combined is deranged.

It doesn't follow from this that cutting defense spending will solve the long-term fiscal problem. It's deranged to have such high military spending. It's also deranged to think that the long-term fiscal problem can be fixed by cutting military spending.
posted by Perplexity at 1:17 PM on December 4, 2009


I'm pretty sure the money is still in the banks.
posted by nestor_makhno at 1:22 PM on December 4, 2009 [1 favorite]


Unlike social security and medicare, the money spent on defense goes to jobs, the income from which pays not only federal, state and local taxes, but also medicare and SS taxes. If you cut defense spending in half, please tell me where all of those unemployed people are going.

Who provides all those medical goods and services that Medicare buys? Who manufactures, distributes, and sells everything that seniors spend their social security checks on?

Some economists argue that redistributive government spending is inherently parasitic because of the overhead incurred by the redistribution process, market distortions, as well the changes in the behavior that it causes make it less efficient than spending by those who are taxed to pay for it. I don't agree with this position in the general case, but there's nothing inherently special about military spending that makes it exempt from these rules. Carbon fiber production used in a F-22 is carbon fiber that isn't available to automobile manufacturers. Workers building F-22s are workers that aren't building cars. Money I spend on taxes is money I'm not spending or investing.

Additionally, shit rusting in Iraq has less tangible social utility than a bridge or a mass transit system (or even the infamous Bridges to Nowhere.) If you really want to put money into industry as a method of supporting jobs, build or rebuild bridges or roads or rails or the power grid or any of the infrastructure that has been neglected over the last thirty years.

I'm not anti-military spending, but the 'think of all the jobs it creates' arguments are specious. Buy jets because you need jets, not because they'll create jobs in your district.
posted by theclaw at 1:55 PM on December 4, 2009 [3 favorites]


Those of you who are convinced that Social Security must collapse would do well to remember that the Boomers have started to slowly die off, and the subsequent generations are smaller.
posted by Pope Guilty at 2:18 PM on December 4, 2009


it's because we produce almost nothing that anyone else in the world wants to import. If we simply produced domestically all the vehicles, all the electronics, etc that we consume domestically, none of this would be an issue.


BINGO.

Pastabael is 100% correct. At the root of all our problems is this simple fact: Globalism in the form of debt funded corporate consumerism with massive supply chains and off-shored social costs (pollution, political unrest, population pressures and war) is killing the world and our republic with it.

Cut SS. Cut defense. It won't make one tiny mouse shit of difference if we don't look at the fundamental cause.
posted by tkchrist at 2:44 PM on December 4, 2009


Additionally, shit rusting in Iraq has less tangible social utility than a bridge or a mass transit system (or even the infamous Bridges to Nowhere.) If you really want to put money into industry as a method of supporting jobs, build or rebuild bridges or roads or rails or the power grid or any of the infrastructure that has been neglected over the last thirty years.

Yes. This is true. The problem is this defense spending machine has so much momentum that simply pulling the plug on it will kill this system.

We need a political class with the foresight, the balls, and the power to re-engineer the system. But what we have are politicians with pork barrels and constituents that badly need jobs.

So in reality we have to de-fund defense and re-wire the spending into well managed infrastructure programs very carefully and slowly. Guess what? We were gonna do just that. The cold war was over. And...

And then there was Bill Clinton getting a blow job by the derivatives market, the Dot Com bubble bursting, George fucking Duhbya Bush, 9 god damned 11 and the Iraq War.

So much for a peace dividend, huh.
posted by tkchrist at 2:52 PM on December 4, 2009 [2 favorites]


Buy jets because you need jets, not because they'll create jobs in your district.

Well ideally the strategy is you need jets so you don't have use jets. Upside down. But that is Sun Tsu and The Art of War for you.
posted by tkchrist at 2:54 PM on December 4, 2009


People in hell, get your ice skates ready. I agree with Bunning.
posted by tizzie at 5:25 PM on December 4, 2009


Once again, Yglesias is on point:
I’m not sure I understand where these conventions come from about when you are and aren’t allowed to question the good faith of powerful Washington figures. Scheiber has a sound argument here that Bernanke is behaving more like a reflexive opponent of change to the status quo than like someone with a well-honed concern for creating appropriate institutional arrangements. That seems like a pretty good reason to make it our working hypothesis that he is in fact more of a reflexive opponent of change to the status quo than like someone with a well-honed concern for creating appropriate institutional arrangements.

You would expect a Bush administration economic policy appointee to be interested in reducing government spending, in creating a business-friendly regulatory environment, and in securing the interests of prosperous asset owners rather than poor unemployed people. And Bernanke is a Bush administration economic policy appointee, and those appear to be the things he’s interested in.
That said, look at the politics. Obama will be able to whip most of the democrats, but Bernie sanders has pledged to vote no. That means Bernanke needs to get at least one, possibly a handful of republican votes.

That means he needs to spew talking points that republicans will enjoy hearing, in order to wring some votes out of them. Regardless of what he believes, he has to say crap like this.

Not that I particularly want him to continue to be the fed cheif. I'd love to see Krugman in that role, but I doubt the rest of the Obama economic team would like that, and he would be a tough sell in congress. Beyond him and perhaps Elizabeth Warren, I don't really know of any alternatives.

Who would you rather see in the post?
posted by delmoi at 7:39 PM on December 4, 2009


Oh, and the reason I wouldn't want to see him reappointed is that he obviously did a terrible job.
posted by delmoi at 7:40 PM on December 4, 2009


Senator Bunning to Bernanke "You are the definition of a moral hazard. Your Fed has become the Creature From Jekyll Island"
That's a pretty bizzare statement. As far as I can tell the only Jekyll Island is a resort town off the coast of Georgia. Bunning needs to get his literary allusions straight.

Sounds like he mixed up "Dr. Jekyll and Mr. Hyde" and "The Island of Dr. Moreau". But Jeckyll was the 'good' side anyway.
posted by delmoi at 7:49 PM on December 4, 2009


Goddamn, delmoi.
posted by Burhanistan at 7:50 PM on December 4, 2009


Chill out, man.
posted by Pope Guilty at 8:05 PM on December 4, 2009


Hmm, yeah I really need to read the whole thread before posting :P

Anyway
Unlike social security and medicare, the money spent on defense goes to jobs, the income from which pays not only federal, state and local taxes, but also medicare and SS taxes. If you cut defense spending in half, please tell me where all of those unemployed people are going.
Yes, Medicare and SS money does not go to "jobs" or taxable income. Rather, old people cash the checks and then eat the cash. Normally with some salt and pepper, but sometimes they'll use a nice vinaigrette. No doctors are paid by Medicare either.
Focusing only on the economic aspects,defense spending is nearly 5% of our GDP. Increases in defense spending in 2003 kept the country out of a recession that year.
Obviously it would be impossible to spend that money on anything else.

(And, btw I recognize that it would cause a huge disruption to our economy to suddenly drop defense spending It would be helpful to give former military contractors civilian research jobs for some time. Focus on green tech, civilian aircraft, whatever)
The reason Bernanke is saying this is because the country cannot afford entitlements, interest on the debt, and defense.
Only if by "Can't afford" you mean, "Can't afford without raising taxes on rich people". The government takes in something like $6T in revenue, and spends about $7T. For someone paying 30% in taxes, a 5 percentage point increase would probably cover it. (i.e. a 15% increase in the amount of revenue).
it's because we produce almost nothing that anyone else in the world wants to import. If we simply produced domestically all the vehicles, all the electronics, etc that we consume domestically, none of this would be an issue.
Sure we do. We're just not allowed to sell it to them to very many countries because it's mostly crazy-ass space weapons. We do export a lot of military hardware, though.
posted by delmoi at 8:08 PM on December 4, 2009


We do export a lot of military hardware, though.

The technical term is a shit-ton of F-16s and missiles.
posted by Burhanistan at 8:13 PM on December 4, 2009


Who would you rather see in the post?

James K. Galbraith, especially for the great paper he wrote about how the Federal Reserve has worked to the partisan advantage of Republican presidents.
posted by jonp72 at 8:40 PM on December 4, 2009


This thread is rife with nonsense.

First,

it's because we produce almost nothing that anyone else in the world wants to import

This is simply not true.

US exports in 2008 were over $1.2 trillion. There is a trade imbalance (imports in 2008 were $2.1T) but it is false to claim the US is not a large exporter, it is in fact one of the largest exporters in the world (third or fourth overall).

Second, cutting defense to $0 would do nothing to solve the entitlement problem, it would merely offset it by a few years. Means testing and removing the cap is pretty much the only thing that can stave off disaster, whether defense is cut or not.
posted by rr at 9:08 PM on December 4, 2009 [1 favorite]


Buy jets because you need jets, not because they'll create jobs in your district.

Well ideally the strategy is you need jets so you don't have use jets. Upside down. But that is Sun Tsu and The Art of War for you.


Needing jets for deterrence is still needing jets. It is an argument based on military requirement rather than economic benefit. (Debates as to the efficacy of U.S. military spending as deterrence are best suited for another thread.)
posted by theclaw at 9:13 PM on December 4, 2009


Only if by "Can't afford" you mean, "Can't afford without raising taxes on rich people". The government takes in something like $6T in revenue, and spends about $7T. For someone paying 30% in taxes, a 5 percentage point increase would probably cover it. (i.e. a 15% increase in the amount of revenue).

Just curious, but at what point does it become unacceptable to simply say "tax the rich"?

If one excludes regressive fees and taxes [to focus on income taxes], the "rich" (defined quite loosely to include dual income families in expensive areas, such as the bay area, some of whom live in apartments due to the cost of housing -- let's raise their taxes, rah!) already are the source of the vast, vast majority of the receipts of the US and state governments.

Even if one includes the regressive cases, that is a tiny portion overall. The bottom 50% -- HALF, ONE IN TWO PEOPLE -- are the source, in total, of 3% of the federal tax receipts.

The current straight-progressive tax system prevents effective taxation of the top 5%, top 1% and top 0.1% of the wealth since it puts an undue burden on the artifically-labeled wealthy. Targeting the truly wealthy (like the top 1% who -- alone -- pay 37% of all taxes) is simply not done, instead the government acts in their favor by taxing the ranks below them such that the social order is maintained, which hurts everyone.

I'm all for lifting the cap on entitlements and means testing for social security, but people asserting that people paying 30% should have their tax rate boosted by another 5% are basically clueless.

If the goal is to tax wealth, then tax wealth, not income.
posted by rr at 9:22 PM on December 4, 2009


Take care of each other. That's what we need to do. We've been caught in the accounting frame for too long. Much innovation can happen, hasn't happened, because the double-bottom0line bean counters dominate our cognitive metaphors. Take care of each other. That's what we need to do. Keep saying that; keep insisting on that; don't compromise. Then, and only thing, will we see real change in America.
posted by Vibrissae at 4:18 AM on December 5, 2009


Anyone seen this?

Social Security, Medicare, Medicaid, and unemployment/welfare make up more than half of the federal budget. Throw in interest in debt and we're almost to two thirds. Unless you cut these items, control of the deficit is impossible. Completely eliminating the Department of Defense would not eliminate the deficit.

Say whatever you want about our responsibilities, we can no longer afford these programs as they are currently instantiated.
posted by valkyryn at 5:28 AM on December 5, 2009


I doubt our health care industry is any less efficient than our military industrial complex, Pastabagel. America is generally considered quite efficient, except for those two industries, which are paragons of inefficiency.

European socialized health care is undeniably far more efficient than American health care, largely through the absence of adverse selection, i.e. the insurance industry's 30% cut. Obama has greatly reduced adverse selection by outlawing the pre-existing condition exclusions, but our health care and insurance industries will remain highly inefficient.

Well maybe single payer health care and nationalizing defense contractors are the two best ways to reduce government spending. ;)
posted by jeffburdges at 5:42 AM on December 5, 2009


Just curious, but at what point does it become unacceptable to simply say "tax the rich"?

1980


posted by Kirth Gerson at 6:54 AM on December 5, 2009


1980

You have it backwards. We are reconverging.

(btw: just finished "The Book of Dreams.")
posted by rr at 8:33 AM on December 5, 2009


I've never understood why income redistribution was so important, i.e. tax the rich. Yes, inheritance tax is essential. But aren't monopolies generally the real threat?

Why not levy a "progressive" corporate income or sales tax? Rich people might not pay more than but corporations But regulation of mergers in invaluable.
posted by jeffburdges at 5:11 PM on December 5, 2009


In any exchange, the party with the greatest resources has the advantage in negotiating the terms. Barring massive stupidity on the part of a particular custodian or owner of a fortune, that fortune tends to grow over time, worsening the imbalance. Wealth concentration- which is what redistribution attempts to combat- distorts trade.
posted by Pope Guilty at 7:08 PM on December 5, 2009 [1 favorite]


it is in fact one of the largest exporters in the world

Of "intellectual property". Sure.

Of material goods? Well that's tricky to measure. Minus defense related products the labor base for material goods is still significantly based over-seas or in Mexico. As are the raw material we make nearly everything from.

That number is... well, it's just a number. There are whole lot of important detail missing.

Man. People need to read more Paul Krugman and less of that idiot Thomas Friedman.
posted by tkchrist at 1:08 PM on December 6, 2009


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