Obama Vindicates Rick Perry on Social Security

The major controversy right now in the GOP presidential primaries is over Rick Perry’s contention that Social Security is a Ponzi scheme that can’t deliver on its promises under its current structure. Mitt Romney doesn’t exactly dispute this – in fact, Romney himself said the same thing in his book, but then Romney always did like to attack other Republicans for things he himself has said or done – but Romney’s argument is that you can’t say these things out loud and win elections.
Well, President Obama last night handed Perry a huge gift, by providing a vivid illustration of how Perry is right about Social Security.
Here is what the President said:

[The American Jobs Act] will provide a tax break for companies who hire new workers, and it will cut payroll taxes in half for every working American and every small business. It will provide a jolt to an economy that has stalled, and give companies confidence that if they invest and hire, there will be customers for their products and services…
Pass this jobs bill, and starting tomorrow, small businesses will get a tax cut if they hire new workers or raise workers’ wages. Pass this jobs bill, and all small business owners will also see their payroll taxes cut in half next year. If you have 50 employees making an average salary, that’s an $80,000 tax cut. And all businesses will be able to continue writing off the investments they make in 2012.

This proposal is an extension of a prior temporary payroll tax cut that was part of the extension of the Bush tax cuts passed by the lame-duck session of the last Congress at the end of 2010:

The cut affects the 46 percent of all Americans who pay payroll taxes but do not qualify to pay federal income taxes. In the bipartisan deal last December to keep the Bush-era tax cuts in place for another two years, lawmakers signed off on a proposal to reduce the percentage of taxes that workers pay towards Social Security from 6.2 to 4.2 percent. That rate is set to go back up to previous levels on Jan. 1, unless Congress acts.

Now, as an initial matter, the problem with temporary cuts in the payroll tax is that they don’t provide much incentive to hire new permanent workers. This is a recurring issue with Obama’s proposals, like how he tried to use temporary stimulus payments to induce states to take on more permanent obligations under Medicaid, a deal a number of Governors rejected. If I’m a business owner, this sort of payroll tax cut may persuade me to hire more temporary or seasonal workers, but I’d be leery of creating new permanent positions knowing that the tax will pop back up as soon as we’re past the 2012 election. There’s certainly a good case to be made for slashing the payroll tax in the long haul – which would require fundamentally reworking how Social Security is funded – but as an economic matter a temporary payroll tax holiday is mostly a gimmick that will offer only a very limited bang for its buck.
Which brings us to the fiscal impact. If you take at face value the defenders of the Social Security status quo, their theory is that Social Security is not supposed to be a welfare program but a pension plan: workers pay into the system, which places their wages in a “trust fund” and later pays them back a defined benefit. As Perry – and Romney, in his book – notes, the system doesn’t actually run that way. The only “assets” in the trust fund are “I owe me” bonds reflecting that the taxpayers will be asked to come up with revenues in the future, the same kinds of “my own debts are my assets” accounting that got Enron in trouble; meanwhile, the government spends the money as soon as it comes in, and hopes that it will continue getting enough future payroll tax revenue to pay future benefits. This is the textbook definition of how a Ponzi scheme operates and precisely why such schemes – as we saw with Bernie Madoff – inevitably go bust when they can’t keep expanding.
Social Security already has that problem, as the most recent Trustees Report makes clear:

Social Security expenditures exceeded the program’s non-interest income in 2010 for the first time since 1983. The $49 billion deficit last year (excluding interest income) and $46 billion projected deficit in 2011 are in large part due to the weakened economy and to downward income adjustments that correct for excess payroll tax revenue credited to the trust funds in earlier years.

With retirees living longer and benefits having been expanded in various ways over the years, the number of current workers supporting each current retiree has plunged dramatically since the program was established, a problem that will only get worse with declining birthrates and the Baby Boom generation entering retirement age. In other words, the conditions for ever-widening Social Security deficits are upon us already and will, by design of the current system, only get worse. The bill for the longstanding pattern of both parties on Capitol Hill raiding the program’s surplus income to spend on other things has come due.
And with this crisis upon us and only designed to grow, what does President Obama propose? An even bigger bite out of the income of a program already in deficit:

Obama plans to cut revenues by $245 billion, or 36%, of the entire annual revenue (projected at $687 billion) of the so-called trust fund. Being that he will ostensibly slash half of payroll taxes, that number is surely too low…

This is the point in the storyline where a guy like Madoff gets led out in handcuffs. Let Obama make the argument that extending the temporary payroll tax cut is an economic necessity; we can have the argument about whether this is the best way to cut tax burdens on businesses and workers. But what he can’t do is pretend is that Social Security is sacrosanct when just last night he went before the nation and proposed gutting its only source of funding just as it’s plunged into the red. The next time Governor Perry lays out his case against the flim-flam accounting behind Social Security and its manifest inability to pay for its own promises, he will have fresh ammunition direct from the man he hopes to face in the general election.

45 thoughts on “Obama Vindicates Rick Perry on Social Security”

  1. I remember when Berto about a year ago asked me why I (little old left leaning middle of the roader moi) thought Social Security needed reform. Had I a politician’s ability with words (or better yet, a speechwriter) I would have also called Social Security a Ponzi scheme. Because it’s not a put your money in pay as you go plan, but a put your money in, the older generation takes it out, and will always depend upon more going in than going out (or at least a stabile equilibrium). Not going to happen. We Boomers are too big, and expect too much, our kids face a more uncertain future, with the almost equally large issue of medical care looming (Lipitor is a species game changer; ask any actuary). So I give Perry credit for calling it what I did in a far less direct fashion.
    I can tell you as a small employer, what hurts me most is NOT payroll taxes. Or even being the IRS’s accountant, not even fronting them no interest loans with withholding. It’s the medical insurance. Would it be worth it for all of us to have a shared single payer option, which would, in small business me sense, save money? Yes, it likely would. But the real truth is the only incentive for someone to hire more workers is to have more work. Not tax abatements, not freedom from regulations (trust me I have more than anyone), more work. You get busier you need more people. And if you have that, you are almost glad to pay more.

  2. Daryl,
    You face an uncertain future, will your home be there for you when you leave work today? Not if you allow arsonists to burn it to the ground.
    There is $2.3 in the SS Trust Fund. The only way SS won’t be there for your children is if you allow those who are hell-bent on destroying it (and the country) to do so.

  3. Crank,
    if you were a smart businessman, you would hire new employees only when you had demand for production. If you were a smart businessman, taxes would play little to no role in how you hired new employees.
    IOW, tax breaks give no incentive to hiring schemes. That Business 101 fact is only news to those who know nothing about business—like the group of know-nothings onstage Tuesday night at the Reagan (how perfect) Library.

  4. Just as “there are no atheists in foxholes,” there are no “get the governemnt out of our pockets” conservatives when disaster strikes:
    Why would Texas — such a storng and independent Republic — neeed such help? Because Perry and his GOP legislature slashes funds for the Texas agencies battling the fires.
    It must be nice to be a complete hypocrite who remains blindingly ignorant.

  5. Crank, proud member of the know-nothings.
    Crank, obviously businesses are concerned with costs, or they wouldn’t be pushing to socialize their costs while they keep their profits privatized.
    Tax breaks do not incentivize businesses to hire, as any smart businessman knows, or any sentient person saw with the Bush tax cuts.
    You’re just caught-up in your own bullshit, so you’re afraid to admit it. Here’s some free advice, stop taking your economic cues from Sean Hannity. Here’s another: just because it’s called “paying” attention, doesn’t mean there is a monetary charge to do so.
    Nice job calling out the hypocrisy, Magrooder.

  6. Interesting subject-changing gambit there by Magrooder, but it turns out that the math used to call this a cut in firefighting services is the same old bogus Democratic budgetary math by which a one-year expenditure on capital becomes the new baseline. It’s a hilariously inept talking point.
    Firefighting is a classic core government service, and beyond the Ron Paul faction there is not a whole lot of conservative push to eliminate the federal government’s ability to provide emergency funding to states and localities battling natural disasters. This is the sort of crisis response we should be using money for that is otherwise being spent on hiring bureaucrats to run sundry permanent national programs (hence, Perry’s insistence on keeping funds in the state’s Rainy Day Fund rather than raiding them the way Obama raids Social Security).
    On the other hand, if you examine Obama’s practices in declaring natural disasters, it’s obvious that there’s no plausible basis for his decision to shaft Texas other than partisan presidential politics. He’d rather protect blog comments like yours than people’s homes.

  7. Daryl, I’m with you. My business pays out close to $40K in health insurance costs and only about 55 percent of that in the payroll tax contribution of 7.65 percent of payroll. Ongoing health care reform would be a positive net gain for businesses here in this country. Monkeying with payroll taxes is gimmicky (and the current tax holiday only applies to employees, the employer is still on the hook for the whole amount). I’m also in a position where I don’t need to hire more people. My business is the size it is and it is not getting any bigger. So, since we’ve had 100 percent employment at my business we aren’t going to see any impact (or incredibly minimal impact) from these proposed actions. Doing something with healthcare that could save me a quarter million of 10 years? That’s what we should be looking at but the nutty right somehow thinks that it would be socialistic for insurance companies to have a smaller piece of the health care pie.
    It is unclear to me that Perry knows what a Ponzi scheme actually is. Just because something is underfunded does not make it a Ponzi scheme. Ponzi schemes have the willfull intent of defraduding the many for the enrichment of the very, very few (or one). Social security has its long-term funding issues but it is in no way set up to defraud people. It can be fixed with relatively minor and simple adjustments. Politically unpopular perhaps but not unreasonable or undoable. Perry thinks its flat out illegal (practically) to even have it so his point is nasty and totally idiotic. If you think he’s in the ballpark on this you should get a dictionary or read about any actual Ponzi scheme. Stuff like this that comes flying out of Perry’s pie-hole may serve him well with the loonies on the right that are against everything but it will burn his ass in the long-run. He would have to do a near 180 to even be in the position to be running on SS reform as opposed to his position that SS is bad and evil.

  8. Crank,
    You are forgetting something: Obama is asking the supercommittee to take his plan into account in addressing the long-term fiscal problems. So no, Obama is not necessarily making the Social Security problem worse unless the supercommittee does not take the payroll tax issue into account – an unlikely omission. And leaving it up to the supercommittee is not in any way pretending that Social Security is sacrosanct, and it’s no evidence that Obama does not realize the impact the payroll cut has on Social Security. This is not a “gotcha” moment for Obama with respect to Perry.
    Of course, you can argue that nothing will ever come of the supercommittee, but that’s an entirely different line of argument.

  9. “Ponzi schemes have the willfull intent of defraduding (sic) the many for the enrichment of the very, very few (or one).”
    When put this way, it’s not Social Security, it’s the GOP reform of SS along with the rest of their economic/ tax programs that are ponzi schemes.
    “Firefighting is a classic core government service…”
    Ahh, that pesky Constitution and it’s “provide for the general welfare of the citizenry” wording.

  10. Nice try at a shell game Crank.
    First, as is your wont, you misrepresent the facts. The “extra” money for capital expenditures in the previous budget does not mean that the need for capital expenditures is over; it merely made up for previous shortfalls that continue to exist. You also ignore the facts reported in the Reuters article that assistance grants to voulnter organizations are likely to take the biggest hit.
    Second, you conveninetly try to turn the argument about disaster assitance. If Perry and his minions are such principled small government conservatives, they would not seek federal disaster money. Just like they pretended to turn down stimulus money and then toook it in through the back door.
    Chicken Hawks. Get the government off my back unless I need something from it. It’s pokr unless it’s mine. The litany goes on and on. Same old GOP.

  11. Magrooder,
    Crank also hates re-distribution of wealth and any sort of socialistic programs…except when they run his way they are all justifiable and necessary programs/tax strategies that keep the fiber of America together and strong. Food stamps bad, child income credits good.

  12. I’ve also been amazed at how the Democrats and the media continue to insist that Social Security isn’t a Ponzi Scheme because it has a “trust fund” that will last for another 25 years. Do they all have amnesia? I remember about a month ago when we were having the debt ceiling debate that Obama told us that social security checks would be cut if there was no deal. What happened to that trust fund???
    A temporary reduction in the payroll tax is silly. If there’s one thing we’ve learned in fiscal policy it’s that one-time tax cuts or tax credits simply have no stimulative impact. I’m not going to hire somebody because I’ll save on their taxes for the next 6 months. Hirings are made thinking down the road, and unless employers see a shift in their tax rates long term they’re not going to care.

  13. It’s not a Ponzi scheme. Good lord. Social Security is not defrauding people out of their money. It needs to be adjusted to fit the actuarial realities of the times but it is not a Bernie Madoff-type scheme that is intentionally enriching one or a few people at the expense of everyone else. To say that it is simply ignores reality. It is hardly free from issues (but what isn’t in this day and age) but it is not a corrupt scheme that harms those that put in for the illegal enrichment of those that set it up. If you don’t like it, that’s fine but at least just say you don’t like it rather than calling something it clearly is not.

  14. Oh, and by the way, social security is “the text book definition of a ponzi scheme” only if you have no idea what a ponzi scheme is.
    Moreover, Crank’s claim that “as an initial matter, the problem with temporary cuts in the payroll tax is that they don’t provide much incentive to hire new permanent workers” fails to appreciate that, in the real world, there are no such things as “permanent” workers. You can fire someone for a good reason, a bad reason or no reason; you only cannot fire someone for an illegal reason.

  15. Your response consisted not of arguing that Social Security isn’t a Ponzi Scheme, but of just calling me names, which says a lot for the plausibility of your argument.
    The defense here is that while Social Security “looks like” a Ponzi Scheme, there are two differences. The two differences they claim are that the government is honest about social security and it’s more transparent than a mob-run or Madoff-run Ponzi scheme, and that the plan can sustain itself forever by just raising taxes more.
    Those two arguments are pretty weak, and I’ll take them in reverse order. First of all, you can’t always just raise more taxes. At some point you hit the right side of the Laffer Curve and you start having a negative return on tax rates, not to mention the fact that the government has plenty of other stuff to pay for. As we learned during the debt limit fight, the federal government can and will shut off social security payments in emergencies.
    The other argument is the only real difference, in my view, between a pure Ponzi Scheme in Social Security, although it’s a narrow difference. Yes, there’s more transparency with Social Security than a Madoff scheme, but the government lies about Social Security as well. They still claim that there’s a “trust fund”, and I’m constantly seeing Democrats go on tv and say that the IOUs in the “trust fund” are “the exact same thing as real money and just as safe”. Not to mention that the government tells us that they can keep Social Security going for the next 25 years without changing anything. They also claim that the money is being invested, when in fact all SS money immediately goes to general government spending and is immediately spent. And there is plenty more. While Social Security is more transparent than Madoff, it’s not exactly a paragon of honesty.
    In its most basic sense, Social Security is run exactly like a Ponzi Scheme. People are told that money is taken out of their paycheck and they’ll “get it back with interest” when they retire. yet their money is taken and given to older investors. People will get their money back “with interest” because by the time they get old the government will take money from the newer investors/taxpayers. The system breaks down if the population doesn’t keep growing at a rapid pace, just as a Ponzi Scheme breaks down if there aren’t constantly new investors.

  16. Um, no one called you names and both posts simply pointed out that it is not a Ponzi scheme. I can tell you a horse is not a monkey without really needing to defend it. Simply look up the definition of what a horse is and you will find out that it is not a monkey. As for name calling, since there wasn’t any the first time around how about we go with Mr. Over-Sensitive? Your arguments are all right wing talking points. It’s not a Ponzi scheme. It simply isn’t. Calling it so makes you look like you don’t know what real Ponzi schemes are. There are lots of ranklings to have about SS but this is not one of them.

  17. “A temporary reduction in the payroll tax is silly. If there’s one thing we’ve learned in fiscal policy it’s that one-time tax cuts or tax credits simply have no stimulative impact.”
    Well, you don’t want to say “no stimulative impact.” After all, even if businesses don’t hire more workers, they are still saving money in taxes for current employees. Since businesses are saving money, they can certainly use that extra money for spending on something else.
    I’m not completely disagreeing with you, though, as in my view, businesses aren’t going to hire given the big drop in demand, so cutting the payroll tax won’t help much anyway. Much of this is the classic Keynesian liquidity trap, even if conservatives loathe calling it that.

  18. And more name calling, and not one argument or fact.
    If you have any arguments that Social Security is not a Ponzi scheme please feel free to update the wiki page I linked. Unless you want to argue that wiki is just part of the right wing noise machine and that moderates and left wingers are having their posts censored?
    You could also make an argument here. Or you can keep telling me how stupid I am. Either way.

  19. MVH, I’m just pointing out the history of these temporary tax cuts and tax rebates. We did it under the Bush Administration. The state I live in did it a few years back. There are many other examples. There are never any tangible effects.
    Sure you can make some butterfly-flapping-its-wings argument that a little bit of savings now will maybe make a company slightly more likely to expand down the road, but whatever effect that is ends up being too small to be measured. It’s not going to have any tangible effect on the national economy.

  20. Sigh. There WASN’T any name calling the first time around so “more name calling” makes you look, well, over-sensitive.
    I have no idea who patrols the wikipedia page of “social security is a Ponzi scheme” but I’m guessing it is probably people who think it is one. Wikipedia is great for info but given that just about anyone can put info onto it (or remove it)–see anything related to Sarah Palin for instance–makes it sometimes a less than effective source for controversial topics. Just saying.
    Just as simple as possible. Calling it a Ponzi scheme a) assumes someone is on it b) assumes that the full faith and credit of the United States Government doesn’t mean anything (and I guess if you belong to the tail wagging the dog part of the GOP it either doesn’t or you would prefer that it didn’t) c) assumes that population growth in this country does not exist d) assumes GDP will go down as opposed to up e) assumes someone is on it f) assumes that United States Treasury Bonds are worthless g) assumes that underfunded things can never, ever be fixed and if they are the fix is bad h) assumes someone is in on it i) assumes the absolute worst for the future of the country j) assumes that actual Ponzi schemes somehow contribute to the overall welfare of the nation and, again, k) assumes that someone is in on it.
    Now if you want to say stuff like, “there is a big pot of money called Social Security and folks like Karl Rove and his band of bandits and folks like him would like to take that money and distribute it around to all their buddies and therefore Social Security is at risk for the long term,” then, yes, I would agree with you that there is a definite problem with Social Security. Short of that your arguments are tired, right wing talking points reinforced by right wingers.

  21. At least you tried this time. But your arguments are easily rebutted:
    a) Define “someone”. I’d say “the federal government” = “someone”. The federal government’s economists know SS is a scam, but they go along with it anyway.
    b) It doesn’t mean anything. It’s just a promise to tax people in the future, which they may or may not be able to fulfill. As we learned just one month ago, the government will not hesitate to stop social security payments if they can’t borrow enough money to pay for it.
    c & d) You’re agreeing with what I already said. Social Security, like a Ponzi scheme, relies on the new investors to be putting more money in than the older investors did. Without that the whole system collapses. We’re seeing the trends already – population and gdp are not growing fast enough to keep up with a rapidly growing retired population.
    e) You repeated (a). It’s not clever.
    f) I’m not sure what your point is here, since nobody in social security has a treasury bond with their name on it. The money you get out of Social Security is whatever the government chooses to pay you, if they have any money to pay you with. Your point would only be valid if the government was actually putting aside treasury bonds with the names on them of people who have paid into social security. Private accounts! What a concept!
    g) I didn’t say that – you’re fighting a strawman. Social Security, like a Ponzi Scheme, can continue forever if the conditions are right. But the conditions aren’t always right, and Ponzi schemes always fail after a while, just as Social Security will fail after a while.
    h) You again are repeating your point from (a). It’s even less clever than the last time.
    i) It actually assumes the current CBO forecasts. You may call those “the absolute worst for the future of the country”, but in fact those forecasts have tended to be overly rosy. Go look at CBO forecasts from 2000 or 2007.
    j) Define “welfare”. Ponzi schemes give out money to people who then use that money to purchase things. So some “welfare of the nation” comes out of it. But on net it’s a negative, generally. Just as Social Security does pay out money to some people in need, but overall is a negative because of the tremendous cost (the poor can be taken care of at less cost). The country would be better of with a reformed Social Security system. It would be hard to find a real economist that disagrees with that statement.
    k) You’re not clever. Get over yourself.
    I’m not a right winger or a Republican. If you noticed in my last post I criticized the Bush Administration for doing the same thing the Obama Administration is doing. And you have never seen me take an opinion on anything else, so you have no idea what my views are on abortion or foreign policy or anything else.
    Hyper-partisan hacks like you make this mistake all the time. Since you’re a dyed-in-the-wool Team Blue member, you assume that anybody who disagrees with you on anything is a dyed-in-the-wool Team Red member. But that’s not always true, and it’s certainly not true in this case.

  22. Oh by the way:
    … since we all know that arguments are strengthened if prefaced with some condescending snark.

  23. Jeff, you either don’t carefully read posts or you go into them with an agenda. The latter clearly seems to be the case. No one alled your thin-skinned self a name until it seemed appropriate to do so. No one called you a right winger yet you go off about being called one and proceed to label and name call the live long day. We get it. You hate the concept of social security and believe it cannot be fixed and funded despite massive testimony by innumerable qualified folks to the contrary. You calling it a Ponzi scheme seems to be important to you. You sound paranoid frankly. It’s not a Ponzi scheme. It simply isn’t. You may think it looks like one but that does not make it one. I don’t care if you want to call it something it is not and use talking points trotted out by right wing folks to back up your position. It doesn’t change the reality of the world however.

  24. Another post where you spend the entire time attacking me personally without even attempting to defend your argument….
    If you have any arguments left please use them. I’m not going to engage in a name-calling battle.

  25. Actually, I stand corrected. David Burge from Iowahawk Blog had a good point today – there IS a difference between Social Security and a Ponzi Scheme. You won’t be arrested for refusing to participate in a Ponzi Scheme.

  26. You’re hilarious. You’ve been called exactly one name (done, clearly in jest at your insistence you had been called names when in fact you hadn’t) yet you’ve thrown around the vitriol quite effortlessly. Again, believe what you want. You are, however, incorrect.

  27. This is the last time I’m going to ask you to respond with an actual argument. If that’s not what your next post is then you can forget it. Attack me personally all night; I won’t care.

  28. You do seem to care because you whine about stuff that never happened.
    Okay, here’s why. A Ponzi scheme, by definition, requires an exponentially increasing (or close to it) number of dupes to put money into the system to sustain the pyrmidical structure of the scam. That’s what a Ponzi scheme is. 100 investors, then 200, then 400 and so on. That’s what a Ponzi scheme is. Because you want to refer to a system where people pay in and revenues go to those who have previously paid in as a Ponzi scheme does not make it one. By the definition of a Ponzi scheme an ever increasing number of those putting into the system is required to sustain it. This is simply not the case with social security. Social security has a problem with actuarial realities not an inability to find an endless next layer of investors. This is why it is not a Ponzi scheme. You dislike the nature of the SS system but it is not a Ponzi scheme simply because a Ponzi scheme is something different. You just want to apply the name because of the negative nature of the term and so it suits your agenda. Again, you are simply labeling something when by the definition of the term what you are labeling it is inaccurate.

  29. A Ponzi scheme needs an ever increasing number of investors, yes.
    And of course, that’s the case with Social Security as well. If each new generation isn’t earning approximately double the nominal GDP of the previous generation, Social Security fails.
    I love this line from your post: “Social security has a problem with actuarial realities not an inability to find an endless next layer of investors. This is why it is not a Ponzi scheme.” That would be like saying, “She’s not fat, she’s weight challenged. That’s why she’s not overweight.” Social Security needs a rapidly increasing population and rapidly increasing GDP per capita to stay afloat. You can call that “a problem with actuarial realities”, but that’s just a political-speak euphemism.
    So do you have any other ideas of a difference between Social Security and a Ponzi Scheme? You haven’t found one yet…

  30. Jeff. You have your position. It’s not correct at a factual and you don’t seem to care. You have a huge bias and are cramming square pegs into round holes to satisfy your argument. It was interesting for a bit but the whining and the heels dug in position you have makes it less fun. I’m out. You win. Good on you.

  31. Jeff,
    No question that the whole jobs plan – never mind the payroll tax cut – is butterfly flapping given the enormous hole in the economy. Most of the estimates have the whole plan worth somewhere around 1-2% of GDP. I haven’t seen anyone argue that it was going to bring us back to full employment or anywhere near it.
    Given the situation in Europe and the continued weakness in US demand, the US should do something fiscally. I’d pick a different mix of things to do, but I wouldn’t call Obama’s plan a joke, as some have.

  32. MVH, Obama’s plan isn’t a joke. It’s just basically useless. $400 Billion of stimulus is never going to have much of an effect even if spent well, and most of this spending is pointless – things like temporary tax cuts and infrastructure spending, neither of which will have any impact on the economy.
    And Jim, I’ve officially given up on you. I gave you a final chance to have an adult discussion and you blew it. Good night.

  33. 1-2% of GDP sounds about right for its likely effect. I don’t call that useless, particularly if it prevents the economy grinding to a halt, which is what the short-term goal must be at this point.
    As I’ve said before, there is nothing much the gov’t can do to make a really big, short-term boost for the economy, which has structural problems that have little to do with gov’t policy. The rest is just political posturing.

  34. I love it when sponge, the most notorious crackpot here which is saying a lot, breaks out the insults. That is always a good day.

  35. The stock market is a game of Wonderball. Pass it (off) quickly, and don’t be the one to hold it last, because then the game is over and you are out (of luck and your $).

  36. I found a link that was too good to pass up. Among the Nobel Prize winning economists who have written that Social Security is a ponzi scheme is [drum roll]… Paul Krugman!:
    I understand that Team Blue goggles require an intentional ignorance of basic economic theory, but when even your hero Paul Krugman agrees it’s a Ponzi Scheme, surely that resonates with you.

  37. “I understand that Team Blue goggles require an intentional ignorance of basic economic theory…’
    Really now, Jeff W.?
    So the supply-siders are on Team Blue now?
    I’ll believe that when a Tea Partier (AKA GOP member) calls Reagan a Marxist, a Socialist, a Facist, or all 3.

  38. Berto, don’t you realize by now that the Reagan the GOP professes to adore would be cast aside now as not pure enough? You see, not only did he sometimes raise taxes, he did worse. He actually spoke to in a polite manner the Democrats. He and Tip O’Neill could actually discuss things without insults or childish tantrums.

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