Late last week, President Obama successfully incited new levels of fury from most of the same liberals who are generally infuriated with him in the first place by floating the truly stupid idea of linking Social Security cost-of-living-adjustments (COLAs) to something called “chained CPI” (chained consumer price index). And, frankly, he didn’t win any points with me either.

Briefly put, Social Security benefits are routinely hiked by a few percentage points each year based on inflation. Lately, those bumps have been scarce and more than a little weak, but adjustments based on chained CPI would be even weaker because the government would presume that as retail prices increase with inflation seniors will substitute lower-cost items. In other words, the government currently calculates benefits based on inflation, but with chained CPI, the government would calculate benefits based on an assumed consumer reaction to inflation (buying cheaper stuff). Consequently, Social Security benefits would be reduced to follow this assumption.

Yeah, it sucks. And the president, while attempting to play the role of the grown-up in the room and apparently taking responsible steps toward deficit reduction and Social Security salvation, is only managing to wrap his entire presidency around the big political third rail. It’s not as huge as George W. Bush’s second term embrace of Social Security tinkering, but it’s a bad move.

Not only is the idea a punitive one for seniors, but the president is also fueling a series of inside-DC myths. They are:

1) Social Security is broke! IEEE! This might, in fact, be biggest DC myth of all DC myths. It originated with Republican concern trolls who pretend to care about Social Security but, in reality, are trying to kill it. The strategy is to weaken it to the point of being unpopular and unsalvageable — ripe for a private takeover or total shutdown. And so we get this on-going panic-button freakout that echoes through the complacent false equivalence press corp, and is ultimately fueled by Democrats like the president. But according to the Social Security trustees, the program will be able to pay full benefits based on the current COLA formula for the next 20 years. Actually, the outlook is even better than that: the trustees also reported that Social Security will run a surplus until 2033. Can you imagine if any program in the federal government was projected to run a surplus for even half of that time? Budget hawks would crap their cages demanding immediate action to give back the taxpayers’ money by slashing the program to the line. Furthermore, once 2033 rolls around, Social Security will be capable of paying 75 to 80 percent of total benefits in 2033 money, which, accounting for inflation, is more than Social Security recipients receive today.

2) We have to tinker with Social Security because of the deficit. Whenever deficit hawks suffer from one of these routine fits of apoplexy, they always manage to loop Social Security, Medicare and Medicaid cuts into the mix, along with cuts to minor spending areas like foreign aid. Put another way, a gaggle of super-wealthy politicians and pundits who will never really need Social Security are always way, way, waaaay too eager to dump these programs onto the chopping block. In a budget crisis that’s ginned up by multi-millionaires, we should demand that they get in line first — cut programs and spending on areas that effect the wealthiest Americans, including corporations.

3) We have to cut the deficit or else! Total nonsense. The deficit has dropped by nearly 48 percent (as a percentage of GDP), but the economic recovery is still slow. Now isn’t the time to be making further drastic cuts in government spending, and by continuing to talk about deficit reduction, the president only amplifies the false perception that the deficit is growing — along with all of the usual idiotic conflation of the deficit and the national debt.

4) Raising the payroll tax rate or lifting the income cap is out of the question! The president is already seen as big tax-hiker by Republican opponents, so another two or three percent hike in the payroll tax probably wouldn’t make much of a difference on that front, nor would proposing that the income cap on the payroll tax rise from $113,000 to, say, $200,000 or higher. But I’m not sure I’ve ever heard anyone from the White House even hint at floating such a plan. Personally, I would entirely eliminate the income cap, which would allow Social Security to pay full benefits until 2087, but I’m clearly a tax-loving Euro-socialist. You know, like Ronald Reagan:

In 1983, for example, [Reagan] signed off on Social Security reform legislation that, among other things, accelerated an increase in the payroll tax rate, required that higher-income beneficiaries pay income tax on part of their benefits, and required the self-employed to pay the full payroll tax rate, rather than just the portion normally paid by employees.

Obviously in today’s political climate, Reagan would’ve failed.

But here’s the good news. Naturally we ought to keep a close eye on anyone who meddles with the program, but I seriously doubt the chained CPI plan will pass. Any real plan to reinforce the stability of Social Security will happen gradually, imperceptibly and in private without a lot of hoopla. That’s the reality of Social Security sausage-making. It’s the way it’s always been because the alternative is to commit political suicide — the most recent example was Bush’s disastrous privatization scheme in 2005.

So why not go for a plan like the one I outlined in item #4, or — shocker — the Reagan plan instead of floating this weird, jargony concept that’s already been tagged as a benefit cut — the worst of all solutions? It’s baffling, and it’s impossible to defend the president on this one. Sadly, and irrespective of any political chess gambit he’s setting up, he’s contributing to this nefarious Social Security “insolvency” panic-mongering: a total myth and perhaps the biggest lie being foisted upon the American people today.

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For most of the country, March means one thing: college basketball.  This year, in Washington, DC it means something completely

This may be from “Alice in Wonderland” but it could be Congress.

different.  The madness to which I refer is what’s happening with our federal budget.  If you are not troubled by the fact that we are facing this fabricated chaos, you should be.

What’s the deal?  Every year, Congress passes a budget.  This is supposed to happen through the appropriations process where the various committees in the House and the Senate decide how much money each agency should get to do their business. When they cannot agree on this, they basically punt and just extend the budget from the year before.  This is called a “continuing resolution” or “CR.”  They have been doing this — in increments as short as days.

This by itself is amazingly stupid and makes for an incredibly inefficient way to run anything and the federal government is just a huge example.  On Morning Joe last week one military expert said they would save millions of dollars by just doing their job and passing a real budget.  Something they have not done since 2008.  We have been operating under CR after CR since 2009.  That’s right.  No real budget has been passed since President Obama was inaugurated the first time.

Question: if you failed to do your job for four years, would you still have it? If you say yes, is your company hiring?  Well, Congress’ main job is to keep our government running and they do that by funding it.  They need a budget for that.  Punting doesn’t count.

Now, you may be asking yourself, “What about the sequester?”  Good question.  You see the CR keeps funding at last year’s level (or rather 2008’s level) but the sequester changed that so does the CR cancel the sequester?  Maybe.  Maybe not.  That is the madness Congress now faces.  Some CR proposals include provisions to keep the sequester but maintain funding for the programs and agencies not impacted by the sequester.  But that may not be legal or doable under the CR rules.

And Alice thought she had stepped into a strange world.  So Congress, who passed the sequester and CRs and President Obama, who has signed them have created a universe where no one really can tell how much money they will have and cannot plan for the coming year in any reasonable way.  Way to go!  I don’t mean to be cynical but this is not the change I could believe in.

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Welcome to this week’s edition of The Daily Banter Mailbag! Today, Bob, Ben and Chez discuss the fiscal cliff, the NRA and the end of the world!
The questions:

1) What do you think of the theory that President Obama may be making concessions on the “fiscal cliff” deal because it helps the White House if Boehner can rein in the crazies in his House (which he can’t)?
– Carl

Chez: I did hear that this week and I thought that while it makes a certain amount of sense — and Obama is pretty good at strategy in these things — it kind of feels a little too much like a reach. Like whoever came up with it is trying with all his might to look on the bright side and shield the president from criticism. That said, Boehner’s fucked. Like you said, he can’t rein in the lunatic caucus in the GOP-controlled House — which by the way comprises pretty much all Republican House-members.

Bob: It’s difficult to know whether he’s actually making concessions or whether the rumors are just trial balloons, so I don’t really know. But let me throw this out there: while I’m a supporter of Social Security at an almost chromosomal level and I strongly believe that the way to strengthen Social Security is to expand or eliminate the income cap on the payroll tax, there’s a side of me that’s a little annoyed with senior citizens. A supermajority of seniors voted for Mitt Romney this year, and they typically vote for the candidate who is more likely to cut Medicare and Social Security, so in a strange way, they’re kind of voting for cuts. That said, seniors (whichever way they voted) have seen few if any cost of living adjustments recently, so cutting those adjustments even more is a really bad idea.

Ben: I really couldn’t say how much water the theory holds, but it is in Obama’s nature to work for consensus and compromise. He’s already offered way too much to the Republicans, so I’m praying he doesn’t try to give them any more (which they won’t accept anyway). It’s going to suck, but I’m betting they go over the ‘fiscal cliff’ on January if Obama sticks to his guns – which he should. The fallout is far, far worse for the Republicans as tax cuts will automatically go back to Clinton era levels and they will be blamed for any stalling in the economy that happens due to spending cuts. It’s a lose lose situation for Boehner who simply cannot stop the crazies derailing negotiations. Obama is trying to extend an olive branch, but Boehner has virtually no wiggle room.

2) Do you think it’s really possible that the NRA will be willing to compromise and work toward meaningful gun safety regulations in the wake of the Connecticut shooting?
– Lisa

Bob: Not a chance in hell. The only thing they’ll perhaps try to do is to deflect the blame away from guns and onto video games, TV shows and the arts in general. They’ll also push for TSA style security measures in schools, the arming of teachers — an in-school arms race, basically — and more of the surveillance state that’s arisen since 9/11. That’s how they’ll “help.”

Ben: No. The NRA will offer silly, inconsequential suggestions for gun control that would have no impact on the gun related homicide rate. I’m guessing they will suggest something like stricter mental health background checks and more security at schools. To stop people being murdered by dangerous weapons, America needs to ban the guns that make killing easy (ie. assault rifles) and make it a retroactive law by buying back all existing guns owned by civilians. There’s no way the NRA is going to go for that, so anything they say will be a complete waste of time.

Chez: No, I don’t. As I’m writing this, Wayne LaPierre is preparing to go public with a news conference tomorrow and an appearance on Meet the Press on Sunday. He’s promised to offer a real contribution to stop shootings like the one at Sandy Hook Elementary — and let’s be honest, no other shooting has been like Sandy Hook and I can’t imagine one being worse — but I have a feeling that doesn’t denote some kind of change of heart. It probably just means he’ll look all distraught but won’t accept any responsibility for our obscene gun laws and horrific fetishization of firepower and supposedly inviolable right to wield it. If LaPierre really did have a Come to Jesus moment — and it’s possible given the reaction of some on the right who’ve been truly shaken by what happened — then I’m all ears. Doubt it, though. And it’s always important to watch what he says to the public versus what he says to his extremist NRA members.

3) So now that the world hasn’t ended (since if there’s a mailbag this Friday that means the Mayans were wrong) what are you all planning on doing with your lives?
– Jamie

Chez: I don’t know. I had really figured it would all end today so I got rid of everything I owned and holed up in a motel room in Barstow with a local prostitute I picked up in the parking lot of a Jack in the Box. Do they make a morning-after pill for syphilis?

Bob: I intend to do a lot of nice things for my soon-to-be wife. When I’m not doing that, I’ll be spending a considerable amount of time helping to make The Daily Banter a very successful source for news, opinion and entertainment.

Ben: It ain’t over till it’s over Jamie. I’m only going to plan ahead when the last time zone gets to the 22nd of December. All plans are futile in my opinion.

——

Got a question for the mailbag? Email us at TheDailyBanter@gmail.com!!!

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In response to President Obama’s offer last week to hike taxes by $1.6 trillion and to exempt Medicare and Social Security from cuts to beneficiaries, the Republicans have finally presented a counter offer. From Buzz Feed:

House Republicans put their criticisms of President Barack Obama’s fiscal cliff package to paper Monday with an offer of their own.

The $2.2 trillion Republican package includes $800 billion in revenue from tax reform and $600 billion in health care savings, among other proposals.

The plan, detailed in a letter that was sent from House Republicans to the White House on Monday, is based in principle on a proposal originally engineered by Erskine Bowles, the co-chair of the president’s deficit-reduction commission.

And of course, the counter offer does not include raising taxes on the wealthiest Americans and focuses almost entirely on spending cuts. Given Obama has stated explicitly that he will not accept a deal that doesn’t raise taxes on the wealthiest Americans, the counter proposal is completely pointless. You can read the offer in full here:

boehner offer

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The Daily Banter Headline Grab. From Huff Post:

House Speaker John Boehner says President Obama should drop his proposal to avoid automatic tax increases and spending cuts at the end of the year, and instead embrace a plan outlined by Erskine Bowles — co-chair of the White House’s commission on fiscal responsibility — at a congressional hearing last November.

“The new revenue in the Bowles plan would not be achieved through higher tax rates, which we continue to oppose and will not agree to in order to protect small businesses and our ailing economy,” Boehner writes in a letter (PDF) to Obama. “Instead, new revenue would be generated through pro-growth tax reform that closes special-interest loopholes and deductions while lowering rates. On the spending side, the Bowles recommendation would cut more than $900 billion in mandatory spending and another $300 billion in discretionary spending. These cuts would be over and above the spending reductions enacted in the Budget Control Act.”

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As most of our readers know, I’m squarely in the Obama camp for the Presidential election. This isn’t because I agree with everything he has done or pledges to do in office – far from it – Obama has disappointed me on many, many issues to the point where my defense of him has been difficult to justify. I’m supporting Obama because generally speaking I believe he is tilting the country in the right direction, particularly from an economic perspective, whereas the Republicans would do irreparable damage to the economy and gut vital social programs that are a lifeline to many Americans.

I believe it is important that Obama is reelected next week so that the country can continue it’s (painfully) slow path to economic recovery, pursue a more nuanced and thoughtful foreign policy, and preserve the function of government.

However, Obama has shown a history of extreme willingness to compromise with Republicans on sacred progressive issues that should be defended tooth and nail, and he needs to be watched carefully in his next term for backdoor deals with Republicans that do damage to programs like social security and welfare. Obama has long talked about a ‘Grand Bargain’ with Republicans – a tax increase on the rich in return for cuts across the board for social programs. In his own words the deal would be “$2.50 worth of cuts for every dollar in spending”. In an interesting discussion on The Real News, Professor William K. Black the former Executive Director of the Institute for Fraud Prevention warns the Left that it must hold Obama to account should he be reelected. Here’s Black discussing what the ‘Grand Bargain’ would actually mean:

This grand bargain is: we will weight this much more heavily towards killing social programs, or at least cutting them back significantly and raising taxes on the rich.Now, that’s got most of the attention from progressives, but note two other things that he was saying. One, he’s talking about austerity. He’s talking about following exactly the kind of model that Europe has followed that put them gratuitously back into recession, and indeed into a Great Depression……

You tell me what kind of grand bargain would put the economy back in recession, cost us jobs, increase the deficit, and begin the process of gutting Social Security. That’s not a grand bargain. That is a complete surrender. That is the great betrayal. And that is what Obama is telling us he intends to seek.

Obama is obviously betting that ensuring government has a more tax revenue coming in is better for him politically than funding social programs – and he is probably right. Raising revenues and cutting social programs could cut the deficit significantly, leading to a far safer political position for the Democrats. But cutting social programs in weak economic times and throwing the most vulnerable people into severe poverty is not only immoral, but economically counterproductive in the long run. The truth is that while the debt is an important issue, it takes second place to job creation and robust welfare system in times of economic uncertainty. Europe is deeply in debt and in the midst of a great depression, and it is cutting government spending as a solution. The results have been spectacularly bad with continued mass unemployment no end in sight.

Obama, in infuriating fashion, has already laid out the terms of the deal before negotiations have begun – and as always, he has started from a conservative position leaving him little room to maneuver. The Republicans won’t take the deal and they’ll force more an more concessions until it looks like a standard piece of Right wing social engineering; continued tax cuts for the rich and massive cuts to welfare programs for everyone else.

There’s no doubt a big bargain is needed over the next four years if the country is to pull itself out of the mess it’s in, but slashing the already underfunded welfare system shouldn’t even be on the table. You don’t negotiate from your opponents own perspective in the beginning if you want to achieve tangible results. It seems Obama hasn’t learned from the past, so it’s up to the Left to force him to.

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Paul Krugman on the deficit reduction plan that is widely regarded by serious economists as, well, frankly ridiculous:

So, a public service reminder: Simpson-Bowles is terrible. It mucks around with taxes, but is obsessed with lowering marginal rates despite a complete absence of evidence that this is important. It offers nothing on Medicare that isn’t already in the Affordable Care Act. And it raises the Social Security retirement age because life expectancy has risen — completely ignoring the fact that life expectancy has only gone up for the well-off and well-educated, while stagnating or even declining among the people who need the program most.

Yes, I know, inside the Beltway Simpson and Bowles have become sacred figures. But the people doing that elevation are the same people who told us that Paul Ryan was the answer to our fiscal prayers.

Deficits, deficits, deficits. It is literally all the Right can talk about, and their only solution to it is to take an axe to public services while cutting taxes. Again, it’s worth repeating (for the billionth time) that there is no evidence tax cuts and spending cuts during bad economic times results in anything other than more economic pain. Case study in point: The whole of Europe.

Case closed.

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The Wall Street Journal: “Stress Rises on Social Security”

The Los Angeles Times: “Social Security is slipping closer to insolvency”

The New York Times: “Social Security’s Financial Health Worsens”

And you know, come to think of it, it’s not just Republicans and the press. Senator Mark Warner (D-VA) tweeted yesterday: “SocSec to run dry in 2033 – Medicare by 2024. Trustees: ‘more options/time’ if Congress acts ‘sooner, not later.’”

All of these reactions would be acceptable if they even vaguely resembled what the Trustees reported.

They don’t.

Social Security does not “run dry” in 2033. It doesn’t. “Run dry” and “insolvency” mean dead. Out of money. Nothing left. The trustees, in fact, reported that Social Security will run a surplus until 2033. 21 years. I can’t emphasize this enough. Two decades! Can you imagine if any program in the federal government was projected to run a surplus for even half of that time? Budget hawks would crap their cages demanding immediate action to give back the taxpayers’ money by slashing the program to the line. (To be fair, the date was adjusted back in time due to the Great Recession. Other years, however, the Trustees move the date forward in time. Either way, 2033 is barely on the horizon.)

Are Republicans trying to kill social security?

And once 2033 rolls around, Social Security will be capable of paying 75 to 80 percent of total benefits in 2033 money, which, accounting for inflation, is more than Social Security recipients receive today. Furthermore, these are projections based on zero legislative action. In other words, if Congress does nothing by way of tweaking payroll taxes, Social Security will be perfect until 2033, then it’ll still be capable of paying benefits after that.

But, naturally, something will happen to tighten the loose ends. It always does. Preferably that “something” will be low-key and non-disruptive. For example, lost somewhere in the American memory hole, President Reagan raised the payroll tax.

In 1983, for example, he signed off on Social Security reform legislation that, among other things, accelerated an increase in the payroll tax rate, required that higher-income beneficiaries pay income tax on part of their benefits, and required the self-employed to pay the full payroll tax rate, rather than just the portion normally paid by employees.

Without touching benefits or raising payroll taxes, Congress could follow suit by entirely eliminating the income cap on the payroll tax (the FICA tax found on your paycheck stub), forcing everyone who earns more than $110,000 per year to pay into the system based on their full income. That’s around six percent of the population. According to experts, this would allow Social Security to pay full benefits until 2087. To put that date into perspective, in 2087, if they retire at age 65 and survive to their 100th birthdays, Tim Tebow, Bradley Manning, Hilary Duff, Ke$ha and every American born in 1987 could collect full Social Security benefits for 35 years each.

So why all the fuss and panic?

For starters, far-right Republicans have been trying to kill Social Security since it was established during the Depression. It’s socialistic commie pinko welfare, they say in private. And so they act like the world’s most duplicitous concern trolls by exploiting minor setbacks and lying about “bad news” in order to sell their unbelievably stupid privatization plan — a massive giveaway to corporate America. They twist logic and pretend to “rescue” Social Security by disbanding it — investing the trust fund in the totally safe and never unstable stock market.

They’ve been so good at framing and branding unmitigated fiction about this issue that they’ve successfully shoved the broader discussion well beyond reality into some kind of brutally dishonest phantom zone where “full benefits for 20 years, and much longer if we tweak the payroll tax” means, “OMFG! Social Security is DOOOOOMED! AAAAAAAHHH!” If they’re not pitching their awful privatization scam, they’re deliberately undermining the system by proposing things like raising the retirement age or cutting benefits. Both of these ideas only manage to hurt old people while simultaneously breeding disillusionment about the reliability of Social Security among younger people.

President Eisenhower once wrote:

“Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid.”

Modern far-right Republicans are aware of Eisenhower’s prediction and so instead of killing Social Security outright, they’re trying to kill it by a thousand cuts and even more lies. Sadly, it seems like the rest of the D.C. establishment is going along with their framing in spite of the reality from the Trustees themselves, making the “insolvency” panic-mongering the biggest lie being foisted upon the American people today.

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By Mark Ames: On Saturday, the tiny EU nation Slovakia held parliamentary elections, and the results surprised the “experts”: The center-left party Smer, derisively described as “populist” in the American media, won in a record landslide, the first time a single party will control the majority in parliament in Slovakia’s post-Communist history.

The “populist” Smer won on an unexpectedly large turnout of 60 percent –the so-called experts had been assuring readers there’d be a low turnout of 40 percent.

The high turnout reflects real suffering for the people of Slovakia that goes well beyond mere cynicism — they’re suffering from real, mass impoverishment, brought on by a decade of brutal free-market reforms, which hit the privatized pensions especially hard. That’s where we Americans come in, specifically the Cato Institute — but I’ll get to that in a moment.

Although there’s been almost no coverage of Slovakia’s mass protest movement, the country has seen the largest demonstrations since the Velvet Revolution. The protests were sparked in part by the “Gorilla” scandal, leaked recordings of Slovakia’s free-market politicians negotiating their bribes with bankers from a top hedge fund, Penta, in exchange for Penta’s lucrative privatization deals.

But what’s sustained the protests, and what brought people out to vote in droves for the “populists,” is the mass impoverishment that’s worsened life for most of Slovakia’s citizens — and first to suffer have been Slovakia’s pensioners, who are forced to subsist on roughly $400 per month.

Here’s where the Cato Institute, the libertarian think-tank founded by the Koch brothers, comes in — and where Slovakia’s problems become our problems.

In the early 2000’s, the co-chairman of the Cato Institute’s Project on Social Security Privatization, José Piñera, played a key role advising and overseeing Slovakia’s mass pension privatization, which passed in 2003 under the free-market government of Mikulas Dzurinda. Today, Slovakia’s retirees are groaning under the austerity pain administered to them by the Cato Institute.

José Piñera, who has led Cato’s Social Security Privatization Project since the 1990s, has a dark history of administering pain on a nationwide scale: Piñera served in the military junta under Chile’s Generalissimo Augusto Pinochet, first as Pinochet’s Minister for Labor, helping suppress unions in one of the most brutal dictatorships in the world; later, Piñera oversaw Pinochet’s radical privatization of Chile’s pension program.

Today, Chile suffers one of the worst wealth inequality problems in the developed world. And for the past two decades, José Piñera, working at the Cato Institute, has been trying to impose the same pension austerity on Americans.

It’s a match made in Hell: Cato and the Koch brothers have been pushing to dismantle Social Security since the Kochs up the Cato Institute in the late 1970s. Thanks to the Cato Institute’s tireless efforts, today dismantling Social Security is practically gospel in the Republican Party — and not far off the top of the “To Do” list for some “centrist” Democrats either.

Sacking Slovakia

Cato’s José Piñera was brought in to oversee Slovakia’s pension privatization only after the 2002 elections put in power the free-market rightwing Democratic and Christian Union Party, led by Prime Minister Mikulas Dzurinda. The pensions were privatized in 2003, along with a free-market program that lowered the top tax rate to a flat 19 percent, eliminated inheritance taxes, and generally shifted the burden down the economic scale.

The reforms were wildly unpopular with Slovaks, to the same degree that they were popular with Western bankers and banking institutions like the World Bank, which named Slovakia the world’s top economic reformer in 2004, and one of the top 20 business-friendly nations in the world.

In 2005, Bush’s ambassador to Slovakia co-authored a glowing article with Cato’s Marian Tupy, praising Dzurinda’s pension privatization, and noting Cato’s José Piñera’s role in making Slovakia’s pension reforms happen. In their article, they ominously compared Slovakia’s pre-reform pension “crisis” to America’s “crisis” in Social Security.

The timing of the joint Cato-Bush praise for Slovakia’s pension privatization was interesting for a couple of reasons:

First, because the same free-market government that Cato advised and Cato-Bush praised has now been implicated in cutting secret kickback deals with leading hedge fund to sell off Slovakia’s state assets in exchange for millions in bribes; and secondly, that year, 2005, was the year President Bush made his big push to privatize America’s Social Security program, with the Cato Institute as both the lead adviser and promoter.

The Bush-Cato plan to privatize Social Security began over dinner in 1997, when Bush was still governor of Texas. Ed Crane, the president of Cato, and José Piñera, Cato’s co-chair of the Social Security Privatization Project, flew to Austin to sell the future president on their plan to privatize Social Security.

According to the Washington Post: “Crane said that after Pinera’s presentation, Bush declared, ‘This is the most important policy issue facing the United States today.’”

As soon as Bush was elected President, he set up a commission to privatize Social Security, and staffed it with the Cato Institute’s free-market zealots. Unfortunately for them, the 9/11 attacks distracted the Administration. But in 2005, Bush made Social Security privatization his top priority for his second term — and once again, he put the Cato Institute in charge.

By the end of 2005, however, Bush’s presidency was practically in tatters as the country turned against his wars, and Hurricane Katrina made privatizing Social Security politically impossible. The project to do to America what Cato did to Slovakia was essentially abandoned, and the Cato Institute turned critic of Bush’s war on terror policies.

A Family Project

Lately, Cato’s José Piñera has seen his younger brother, billionaire Sebastian Piñera, making international news as Chile’s most unpopular president since democracy replaced the free-market military junta of Generalissimo Augusto Pinochet in 1990.

Thanks to younger brother Sebastian’s free-market privatization of Chile’s education system, the country has erupted in nationwide protests and violence on a level not seen since, well, Generalissimo Pinochet overthrew Chile’s democratically elected government in 1973, and installed a brutal regime that crushed dissent and murdered and tortured thousands — handing the economy over to free-market fanatics including Friedrich von Hayek, Milton Friedman, and Sebastian’s brother, José Piñera.

Neither age, nor time, nor working at the American-based Cato Institute, dining with future presidents and convincing them to gut the population’s Social Security, has mellowed this former Pinochet sidekick’s distaste for democracy. As Piñera wrote in 2003,

“To hand over a blank check to inherently unstable majorities concerning virtually all the major economic, social, and political issues of a society is to institutionalize instability, open the way to more serious abuses, and condemn a country to underdevelopment. How is anyone to make rational decisions about work, savings, and investment if key variables — such as taxes, labor legislation, and regulations — can be altered by 50.01 percent of the citizens through a vote that, in countries with low levels of education, can almost never be said to show the characteristics of an ‘informed vote’?”

On Saturday, the Slovaks voted overwhelmingly to reject the damage and plunder that the Cato Institute’s advisers wreaked on that tiny country’s citizens. Naturally, to free-market zealots like the Piñeras, the Kochs, the Cato Institute and the rest of the oligarchy’s minions, this only proves their point about why democracy must be “limited.”

The people can’t be relied on to vote the way oligarchs want them to — they can’t be relied on to react with cynicism and defeatism to all the news of political and corporate corruption.

The hope among the elites in Slovakia and elsewhere was that the voters’ mass impoverishment and anger would lead to a withdrawal from politics — but the high voter turnout turned out to be perhaps the greatest victory for the people of Slovakia. The politicians are to be expected to sell out and disappoint — but the more engaged in their democracy the people are, the more power they’ll have to eventually change their politics for the better, and finally bring an end to the rotten politics of oligarchy and plunder that mark our age.

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TPM provides the highlights of Obama’s new deficit reduction plan:

• A debt failsafe that will be triggered if the debt-to-GDP ratio hasn’t stabilized, and begun to decline by mid-decade. This will include automatic spending cuts, and reductions in tax subsidies, but no tax increases. Social Security, Medicare, and low-income programs will be exempted. It will not tie the government’s hands in the event that an economic downturn requires fiscal stimulus.
• Cuts to discretionary spending, compatible with those in the Bowles-Simpson recommendations.
• Defense spending cuts, contingent on a thorough review conducted by Secretary Robert Gates, the Joint Chiefs of Staff, and Obama himself, and savings generated by winding down operations in Iraq and Afghanistan.
• Strengthening the Independent Payment Advisory Board, created by the health care law to recommend and implement cost savings reforms to hold down the cost-per-Medicare-patient.
• Simplifying the formula for providing federal matching funds to states for Medicaid, which would automatically increase in the event of a recession
• This is a big one — Obama will propose using Medicare’s purchasing power to reduce prescription drug costs for seniors
• Reductions in agricultural subsidies
• Comprehensive tax reform, which reduces loopholes, simplifies the system, allows the Bush tax cuts for high-income earners to expire, and reduces the corporate tax rate.

The Republicans have already dismissed many of Obama’s proposals and will only consider the conservative elements of the package. This leads to the question why Obama even bothers to cater to GOP demands in the first place. Why not present a package that might actually work (ie. one with adequate job stimulus spending) and demand Republicans meet him half way? Instead, he has taken his traditional centrist route that will get thrown back in his face leaving him with Republican policies doomed to fail.

How depressing.

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