Thursday Morning: Another “Accountability before Austerity” post.

Paul Krugman was one of the many people who looked at the details of the Deficit Reduction Commission’s proposals and called the writers “Unserious People”:

OK, let’s say goodbye to the deficit commission. If you’re sincerely worried about the US fiscal future — and there’s good reason to be — you don’t propose a plan that involves large cuts in income taxes. Even if those cuts are offset by supposed elimination of tax breaks elsewhere, balancing the budget is hard enough without giving out a lot of goodies — goodies that fairly obviously, even without having the details, would go largely to the very affluent.

I have to agree with Krugman that these proposals are crazy but I am under no illusion that the people who want to avoid paying their obligations to the rest of us are going to pretty much get what they want.  We’ve seen this act before.  It would be a mistake to not take them very, VERY seriously.

The Co-Chair’s proposals are draconian.  In fact, if they were enacted they would negatively affect every single person in my immediate family.

– My widowed mother gets her health insurance through Tricare.  She could see an increase in her co-pays and deductibles, if she isn’t thrown out of the program altogether.

-My brother is full time Army in a non-combat role.  His salary would be frozen.  Presumably, the Army relies on his services for actual combat operations in two unnecessary wars.  Too bad for his family that there will be no reward for being a good worker.

– No mortgage deduction?  Are you kidding me?  I live in frickin’ NJ.  Without the mortgage deduction, I’m paying even MORE ridiculous taxes.

– Now, I  and my sister will have to work until we are 69.  We will pay more for social security benefits for the poor and we will get less.  We will start to resent the waiters who bring us our orders and anyone else who can’t get their act together and get a real job.  (prophylactic: this is merely an illustration of the intended consequences)

– Because the payroll limit will be raised, a fate it looks like I will never excape, and because I will eventually get a lot less than I planned on, I will have to put away more money in my 401K or under my mattress, and cut back everywhere else.  I don’t know where I’m supposed to get this money and also pay college tuition, more in health care costs and food.  Meaningful wage increases to offset all these new costs are not on the horizon regardless of how hard or well most of us work.  I will be forced to gamble on my retirement, which I will have to hold out longer to enjoy. One of the things I don’t think people like Krugman understands is that there are plenty of jobs that require good educations and technical skills that some of us may not be able to do when we’re 69. You don’t have to be a janitor. It could be a matter of delicate hand-eye coordination. Those of us in these kinds of careers are already wondering how we’re supposed to do these things when our eyesight becomes unreliable and our hands start to shake.

The whole set of proposals is designed to force the middle class to pay for themselves and everyone else, to make the middle class resent the poor and, inevitably, to destroy Social Security. But it is the elimination of the mortgage deduction that will lead to a steep decline in housing prices that is the most troublesome aspect of these proposals. That proposal would be so painful and damaging that the other proposals don’t look nearly as bad in comparison. Whatever one may think about the wisdom of the government giving hard working people a break on the interest they pay to banks, it’s just about the only break middle class people can rely on. Take it away and the value of their nest eggs plummet significantly. After all, why would anyone bother to buy your old house if they can rent? Your potential buyers don’t benefit from those first decade of nothing but interest payments to the bank.

Notice who makes out in this proposal. The well off get a whopping decrease in taxes. That’s got to be made up somehow. Someone’s going to have to pay for the schools and bridges and roads and air traffic controllers and endless wars. By the way, no one is discussing the endless wars that are sucking up precious resources. I found this paragraph in the NYTimes editorial on the proposals to be particularly disconnected:

The most politically volatile suggestion may be to tackle military health care costs, which rose from $19 billion to an unsustainable $50 billion over the last decade. The commission blueprint would raise premiums and co-payments on military retirees who now pay no premiums and very low deductibles. Many of these retirees work in the private sector but opt for much cheaper government health insurance. Their employers would be required to reimburse the government for the employer share of the retiree’s health cost, eliminating what the chairmen say is a government subsidy for a normal business expense.

Excuse me but may a rube step in here for a sec and point out something obvious? If the cost of VA health benefits has been skyrocketing over the past decade when we have been engaged in two wars where people on both sides take great delight in blowing each other’s body parts to smithereens, shouldn’t we *expect* the cost of health care for our veterans to increase significantly during that very same period of time? Doctors have improved combat medicine so much that soldiers who might have died from their wounds in Vietnam are now being sent back to the states with broken bodies and years of health issues to look forward to. Then there are the things that can’t be seen, like traumatic brain injury and PTSD. So, to cut back, we are proposing to cut benefits for military retirees and their widowed spouses at a time in their lives when they have very few alternatives.  Let’s saddle the people we promised these benefits to who are least likely to be able to afford the increases. Yep, that ought to do it.  Stop the wars?  That would leave the troops high and dry!  Cut and Run!! Unthinkable.

The proposals are so unfair and so egregious that in comparison, the social security cuts look almost reasonable. And that’s where the danger lies. They put all this other mean spirited stuff out there as bait. People will start screaming about the mortgage deduction almost right away because that’s going to make their future April 15ths even more anxiety laden. But Social Security seems like a long way off for a lot of people and if they are lulled into the mistaken belief that the changes won’t affect the present set of seniors, they might give in. Then, when austerity sets in and wages refuse to rise to meet new tax liabilities and all of the other things that makes living in America meaningful, the average “taxed to the max” taxpayer is going to start resenting the people who get the Social Security insurance that they will never benefit from. Everyone’s security will be assured but the middle class. We’ll be forced to place more chips on the financial industry’s roulette wheel in their unstoppable and insatiable appetite for gambling with other people’s money.  And have we anything in these proposals that would make the financial industry more accountable to us?  I haven’t seen it.

Did this country learn nothing at all from The Great Depression?

This is what this set of proposals is telling me. That’s what the “Creative Class”, who is so pissed off at Bill Clinton over welfare reform and some DLC boogieman, has given us.

After the last 10 years, I am not naive enough to think that the people who want this desperately are going to get most of it. The NYTimes editorial board seem to think “All ideas well worth debating” and “A tax code that is easier to understand is also one that is more likely to be perceived as fair” and ” A value-added tax that doesn’t fall most heavily on lower-income Americans could be a significant spur to growth, because it doesn’t tax savings”. Gee, isn’t that generous. What about the rest of us middle income people who it will fall most heavily on, along with all of the other new responsibilities we will have?

This is the way the rich shrug off their obligations to the rest of us. They can’t make do with the billions they already have so they will get rid of their responsibilites to pay for the things that make their profits possible and dump them on to us. And the NYTimes editorial board thinks this is hunky dory because they have never had to live on an average salary in a northeast suburb where the cost of living is 40% higher than in the rest of the country.

I would recommend you call your congressperson but I think flooding the NYTimes with angry mail first would be a better start. I don’t ever want to read garbage like that in the Times again. These are the Unserious People Krugman was referring to, not the Commission itself. These proposals wouldn’t get a second glance if the wealthy who write editorials didn’t find them very appealing.  If the NYTimes Editorial board is so enthusiastic about “shared sacrifice”, let them be the first to chuck some in.  How about they voluntarily raise their own taxes instead of trying to convince us on more limited means to do it?  No,no, YOU go first.  I *insist*.

So, this is the way they’re going to finally cut us loose from each other. They will make Social Security a welfare program and make our lives harder and meaner. For this, we can thank the man who vowed to put everything on the table.

Barack Obama.

Accountability before Austerity