Was Nobel Prize Economist Paul Krugman Correct to Turn Around. In Defense of President Obama

Paul Krugman is a typical, and often correct, critic of President Barack Obama. He’s been right on policy decisions on a number of occasions, and most notably, when President Obama has been wrong.

In a new story in Rolling Stone, Krugman has done an about face on Obama and the president’s historical significance.

“When it comes to Barack Obama,” Krugman writes, “I’ve always been out of sync. Back in 2008, when many liberals were wildly enthusiastic about his candidacy and his press was strongly favorable, I was skeptical. I worried that he was naive, that his talk about transcending the political divide was a dangerous illusion given the unyielding extremism of the modern American right. Furthermore, it seemed clear to me that, far from being the transformational figure his supporters imagined, he was rather conventional-minded: Even before taking office, he showed signs of paying far too much attention to what some of us would later take to calling Very Serious People, people who regarded cutting budget deficits and a willingness to slash Social Security as the very essence of political virtue.”

“And I wasn’t wrong. Obama was indeed naive: He faced scorched-earth Republican opposition from Day One, and it took him years to start dealing with that opposition realistically. Furthermore, he came perilously close to doing terrible things to the U.S. safety net in pursuit of a budget Grand Bargain; we were saved from significant cuts to Social Security and a rise in the Medicare age only by Republican greed, the GOP’s unwillingness to make even token concessions.”

All of this is true, and everything Krugman writes in the Rolling Stone appears on surface to be true, but Krugman misses a major point.

Under President Obama, income and wealth equality has skyrocketed. 95 percent of all income growth in the USA over the last four years has gone into the pockets of the 1 percent. Record levels of income and wealth are now in the hands of the 1 percent, which accounts for much lower demand for goods and services, lower job and wage growth, and slower economic growth, all of which hurts the 99 percent, and all of which serves the 1 percent.

The policies the president has championed have played a major role in this.

Free trade treaties, for example, are negotiated with an eye toward shipping US jobs overseas with the difference between the old higher wages and the new lower wages going into the already fat wallets of the super rich via higher corporate earnings, rising share prices and soaring dividends. Right now, as we speak, the president is championing the Trans Pacific Partnership, the largest income redistribution scam of all time. It is a so-called free trade treaty that has been negotiated to jack up prices on goods and services, and lower wages, all of which redistributes income from the 99 to the 1 percent.

Under Obama, student loan interest doubled, and the payments of millions of student loans goes straight into the pockets of those who possess bonds backed by student loans: hedge funds and the rich. With a little work, the president might have stopped this madness.

Obama is not stupid, he knows precisely what he is doing. He’s redistributing income on behalf of his largest campaign contributors, the largest investment banks on Wall Street, hedge funds, and the largest investors of the 1 percent. This is precisely why the president refused to unleash his attorney general against the crimes of Wall Street that brought about the tanking of the world economy five years ago.

And these are just a few of the things Obama has done to redistribute income from the 99 to the 1 percent, something Krugman doesn’t want you to know about.

So while Krugman makes his points in his article, and with passion, his defense of Obama is in very narrow terms.

By the way, despite my critic of Obama, he hardly rates among the worst of presidents. That distinction goes to George W. Bush, the man who created the worst mess in US history. Warren Harding, as well as several others, would have to rate below our current president, as well.

rollingstone.com/politics/news/in-defense-of-obama

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President Obama, the Republicans, and the Proposed Unnecessary Cuts to Social Security, and the lies and myths about Social Security

The Social Security Trust Fund has grown every year since 1983, thanks to President Ronald Reagan and the adjustments to funding that he initiated. It even grew last year and the year before despite the cut in payroll taxes from 6 to 4 percent.

However, the corporate press will only let you know about about the Social Security Trust Fund deficit between the taxes it takes in and the money it pays out even though the system is sitting on a $2.7 trillion surplus that collects about $120 billion in interest per year. When you count the interest, there has always been a surplus, at least since 1983.

Take a look at part of the report from the trustees of the Social Security Trust Fund from 2012. Italics and bold are mine.

“Social Security’s expenditures exceeded non-interest income in 2010 and 2011, the first such occurrences since 1983, and the Trustees estimate that these expenditures will remain greater than non-interest income throughout the 75-year projection period. The deficit of non-interest income relative to expenditures was about $49 billion in 2010 and $45 billion in 2011, and the Trustees project that it will average about $66 billion between 2012 and 2018 before rising steeply as the economy slows after the recovery is complete and the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers. Redemption of trust fund assets from the General Fund of the Treasury will provide the resources needed to offset the annual cash-flow deficits. Since these redemption’s will be less than interest earnings through 2020, nominal trust fund balances will continue to grow. The trust fund ratio, which indicates the number of years of program cost that could be financed solely with current trust fund reserves, peaked in 2008, declined through 2011, and is expected to decline further in future years. After 2020, Treasury will redeem trust fund assets in amounts that exceed interest earnings until exhaustion of trust fund reserves in 2033, three years earlier than projected last year. Thereafter, tax income would be sufficient to pay only about three-quarters of scheduled benefits through 2086.

A temporary reduction in the Social Security payroll tax rate reduced payroll tax revenues by $103 billion in 2011 and by a projected $112 billion in 2012. The legislation establishing the payroll tax reduction also provided for transfers of revenues from the general fund to the trust funds in order to “replicate to the extent possible” payments that would have occurred if the payroll tax reduction had not been enacted. Those general fund reimbursements comprise about 15 percent of the program’s non-interest income in 2011 and 2012.”

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It makes no sense to reduce social security benefits. Here’s why.

Cuts in social security benefits are on the table in the fiscal cliff negotiations. Why cut social security benefits when it has a $2.5 trillion dollar surplus that collects $118 billion a year in interest?

The corporate news media, all Republicons and almost all Democrats go out of their way to ensure that you don’t know about that $118 billion in interest. In October 2012, the news media reported that, “With little notice in the run-up to tonight’s presidential debate in Colorado, the non-partisan Congressional Budget Office reported on Tuesday that for the second consecutive year, the Social Security trust fund took in less in tax revenue than it paid out in benefits in 2011.”

Notice the author doesn’t mention the interest collected by the social security trust fund, because then he couldn’t make you fearful if he said there was a budget surplus in 2011 because of the interest being collected by the Social Security Trust Fund.

We need to get the social security payroll tax back up to its old level. That’s one of the primary reasons why the trust fund paid out more in benefits than it received in taxes. That’s another point the corporate news media don’t want you to think about, but the interest that is being earned on the $2.5 trillion is the issue they want to make sure you don’t know about. We should also eliminate the social security cap on income.

The rich have benefited from massive amounts of government legislation they have purchased to redistribute income from the 99 to the 1 percent, such as free trade income redistribution treaties. The Federal Reserve can print and dole out trillions of dollars to save rich investors from their own stupidity, but somehow, and for some reason, the 99 percent have to be deceived into taking less social security benefits than they should have because of a projected shortfall that doesn’t exist. That’s how corrupt are government has become.

Read more at http://www.thefiscaltimes.com/Articles/2012/10/03/Social-Security-Deficit-Could-Mean-a-25-Benefit-Cut.aspx#fOSgOQrDyAgEwyOg.99

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The Federal Reserve Printed and Handed out Trillions to Save Incompetent and Stupid Investors and Bankers

Why Cut Social Security Benefits When it has a $2.5 trillion dollar surplus that collects $118 billion a year in interest? It makes no sense to reduce social security benefits.

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Republican Senator Mitch McConnell Wages War Against the Aged and the Infrimed with lies, and all on behalf of the one percent

The poster says almost everything. There is one important thing it doesn’t mention. That $2.5 trillion in the Social Security Trust Fund is invested in US Treasury bills and earn roughly $118 billion a year in interest. That means when the corporate news media reported that the Social Security Trust Fund paid out $42 billion more in benefits than it took in via tax receipts during 2010, they didn’t tell you the truth. That’s because if you took into consideration the interest paid on the $2.5 trillion, you would need only take $118 billion, then subtract $42 billion, to discover that the Social Security Trust Fund had a $76 billion surplus that year. A lot of Democrats are in on this “short change the public on information regarding social security conspiracy,” such as Wall Street Senator Ron Wyden.

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The Lie About Social Security

Social Security is fiscally sound. Nonetheless, members of the one percent continue to misinform the American public on this matter. Social Security has a $2.6 trillion surplus that earns roughly $118 billion in interest since the surplus is invested in U.S. treasury bills. Some of the one percent pretend these are “worthless I.O.U.s, but they know the US government has never failed to pay any part of its debt in its history. They keep repeating the lie.

click here for "The Great Misinformation Campaign About Social Security"

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Banks Earned Billions of Dollars From Taxpayer Bailouts

The Federal Reserve kept Congress in the dark about billions in profits generated by big Wall Street firms that used taxpayer dollars to take advantage of below-market interest rates, Bloomberg Markets reported this week.

Firms took advantage of the below-market interest rates offered by the Fed amid President George W. Bush’s bailout program, secretly leveraging $13 billion off taxpayer money, they found.

Click here for the rest of the story

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