http://www.truth-out.org/saving-social-security-stopping-obamas-next-bad-deal66099
Saving Social Security: Stopping Obama's Next Bad Deal by: Dean Baker, t r u t h o u t: 20 December 2010 President Obama insists that he is a really bad negotiator, therefore, the deal he got on the two-year extension of the Bush tax cuts and the one-year extension of unemployment insurance benefits was the best that he could do. This package also came with a one-year cut in the Social Security tax. This cut will seriously threaten the program's finances if, next year, the Republican Congress is no more willing to end a temporary tax cut than this year's Democratic Congress. The logic here is straightforward. Under the law, the Bush tax cuts were supposed to end in 2010. Tax rates returned to their pre-tax cut levels in 2011. However, the Republicans maintained a steady drumbeat about the evils of raising taxes in the middle of a downturn, even if the tax increase would just apply to the richest 2 percent of the population. As we saw, President Obama and the Democratic Congress could not muster the votes needed to overcome the Republicans and ended up extending the tax cuts for the richest 2 percent of the population. The Democrats will be faced with a similar situation at the end of 2011 when the Social Security tax cut is scheduled to expire, except that, this time, the tax cut in question will apply to an overwhelming majority of working people. Also, the House will be controlled by the Republicans and the Senate will be considerably less Democratic. This raises the possibility, if not the likelihood, that the tax cut will remain in place indefinitely, more than doubling the size of Social Security's projected long-term shortfall. Before we even get to this juncture, the Republicans will have another opportunity to impose a really bad deal on President Obama. Sometime in the spring, the government will run up against its debt ceiling. This will prevent the government from any further borrowing. Since the government has a substantial deficit, with spending exceeding revenue, hitting this limit would mean that the government would not have sufficient funds to pay for all its programs. It also would mean that the government could not pay interest or principal on debt that is coming due; in effect requiring it to default on its debt. The prospect of the US government defaulting on its debt creates the sort of end-of-the-world scenario in which Congress rushed to pass the TARP in 2008. Back then, President Bush, Fed Chairman Ben Bernanke, and all sorts of other luminaries told members of Congress and the public that we would have a second Great Depression if the Wall Street banks were not immediately bailed out, no questions asked. And the money flowed. The prospect of defaulting on the debt will create a similar outbreak of shrill warnings of disaster. This would likely to lead to scenario in which President Obama signs whatever debt ceiling package House Republicans hand him, even if it includes the privatization of Social Security and Medicare and major cuts and/or elimination of other important programs. The argument from the administration will be that they have no choice. In order to avoid this train wreck, supporters of Social Security and Medicare have to restructure the options. They have to push President Obama to announce in advance that he will never sign a debt ceiling bill that includes cuts to Social Security and Medicare, the country's two most important social programs. These programs are crucial to the financial security and health of tens of millions of people. If there are to be changes in these programs, then they should occur after a full public debate in the light of day, not as the result of Republican trickery and parliamentary game playing. This would be a hugely popular position since not only Democrats, but also independents and even Tea Party Republicans, overwhelming support Social Security and Medicare. Furthermore, the gun, in the form of a potential debt default, is actually pointed at the Wall Street banks, not the public. A debt default would be a very bad situation and one that we absolutely should try to avoid. But the day after the default, the country would still have the same capital stock and infrastructure, the same skilled labor force and the same technical knowledge as it did the day before the default. In other words, the ability of our economy to produce more than $15 trillion in goods and services each year will not have been affected. One thing that would not be around the day after a default is Wall Street. The default would wipe out the value of the assets of the Wall Street banks, sending Goldman Sachs, Citigroup, and the rest into bankruptcy. The recovery for the economy from such a situation will be difficult, but the shareholders of the Wall Street banks would be wiped out and their top executives unemployed. For this reason, the threat of a default is a gun pointed most directly at Wall Street. Given the power of Wall Street over Congress, it is inconceivable that they would ever let the Republicans pull the trigger. This means that, if President Obama is prepared to take the right and popular position of supporting Social Security and Medicare, he will win. This is both good policy and great politics. The public just has to force President Obama to stand up and show some leadership. *** http://www.informationclearinghouse.info/article27122.htm Cambodia Redux "Nixon adopted this tactic in Vietnam. It won't work any better now than it did then" By Patrick Cockburn December 23, 2010 "The Independent" - -Could US Special Forces make a lunge across the Pakistan border in pursuit of the Taliban just as American and South Vietnamese troops briefly invaded Cambodia in pursuit of the Vietcong and North Vietnamese forces in 1970? The precedent is not good. What US officers have in mind for the Pakistan border regions is much smaller in scale than President Nixon's venture, but is unlikely to be any more successful. Possible military gains are limited, while the danger of a political backlash is acute. American frustration is great, because so long as the 2,500km Afghan-Pakistan border remains open, the Taliban can retreat to relatively safe havens to rest, re-equip and re-supply. Their fighters can recover from every tactical setback. It was this open border that prevented the Soviet army from crushing the Afghan guerrillas in the 1980s. But would forays by US Special Forces or associated American-controlled Afghan militias really make much difference? Even if it wanted to, the Pakistan military could hardly police a frontier through mountainous terrain that is as long as the distance from London to Moscow. Moreover the hinterland, of which the Taliban takes advantage, is not confined to the Federally Administered Tribal Areas or the border of Baluchistan. It extends into a much wider area and includes the vast city of Karachi, with its population of 17 million and sizeable Pashtun minority. The purpose of the leaks may be to intimidate the Pakistan army into being more co-operative with the US in making a ground attack on North Waziristan, seen by the US as the main redoubt of al-Qa'ida and the Haqqani network. So far the Pakistan army has resisted this and there is no evidence it is going to change its mind. The US often focuses its criticism of Pakistan's security policy on the ISI, Pakistan's military security agency, or even pro-Taliban "rogue elements" in it, but in practice, covert support for the Taliban is the policy of Pakistan's 600,000-strong army. Most ISI personnel are regular officers on secondment to the agency. The White House under President Obama has long been aware that its main problem in the region is with Pakistan, but it has yet to find a way of dealing with it. Military aid - and the US pays a third of Pakistan's military budget - has produced a modicum of Pakistani compliance with US needs, though not enough to tip the balance against the Afghan Taliban. The army has been prepared to act against the Pakistan Taliban, which it sees as being entirely different. The main military action of the US in Pakistan is through CIA-controlled drones which take off from a base in Pakistan and have been effective. The CIA also has a 3,000-strong Afghan army of its own across the border in Afghanistan. The drones are only as effective as the intelligence on which their targeting is based and the CIA has built up an intelligence network in border areas. At the same time ISI officers claim privately that up-to-date information enabling the drones to attack the houses and vehicles of militants comes from them. ------------------------------------ --------------------------------------------------------------------------- LAAMN: Los Angeles Alternative Media Network --------------------------------------------------------------------------- Unsubscribe: <mailto:[email protected]> --------------------------------------------------------------------------- Subscribe: <mailto:[email protected]> --------------------------------------------------------------------------- Digest: <mailto:[email protected]> --------------------------------------------------------------------------- Help: <mailto:[email protected]?subject=laamn> --------------------------------------------------------------------------- Post: <mailto:[email protected]> --------------------------------------------------------------------------- Archive1: <http://www.egroups.com/messages/laamn> --------------------------------------------------------------------------- Archive2: <http://www.mail-archive.com/[email protected]> --------------------------------------------------------------------------- Yahoo! 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