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How Washington Insiders Bar Economic Reality From Political Debate


US Politics & Gov't  (tags: abuse, americans, corruption, dishonesty, economy, Govtfearmongering, lies, media, politics, propaganda )

Kit
- 599 days ago - truth-out.org
Washington policy debates are primarily about being admitted to the club of participants rather than about logic and evidence.



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Kit B. (277)
Monday November 19, 2012, 4:09 pm
Former Federal Reserve Chairman Alan Greenspan. (Photo: Josť Goul„o)


Washington policy debates are primarily about being admitted to the club of participants rather than about logic and evidence. Until the public understands this fact, there is little chance that the vast majority of people will have much ability to influence the course of policy.

The budget deficit is the current obsession in Washington. You can get big bucks spinning scare stories of huge budget deficits that will bankrupt the government and sink the economy.

However, the indisputable reality is that the large budget deficits of recent years are due to the economic downturn following the collapse of the housing bubble.

But the people who make this point are not invited to take part in the discussion. Pointing out this fact makes one shrill; you have to say that the deficit is a huge problem to be a serious person in Washington.

This sort of defiance of reality is not new for the serious people in Washington. Back in the late 90s when the stock market bubble was reaching its peak, you could find folks like James Glassman, the co-author of Dow 36,000, presenting their wisdom on a weekly basis in The Washington Post.

In fact, at the peak of the stock bubble, serious people in both the Republican and Democratic parties insisted that the stock market could continue to provide historic rates of return, even though the price-to-trend earnings ratio was more than twice its historic level. In fact, they wanted to invest Social Security funds in the stock market.

Some of us did try to warn that this defied basic arithmetic. We argued that lower future rates of return would mean problems not only for Social Security if its funds were placed in the market, but also for pensions and individuals who had invested their retirement money. This view was not allowed into the debate at the time; such warnings were dismissed as "shrill."

Ironically, the argument that the stock market will not provide its historic rate of return going forward, even though the ratio of stock prices to trend earnings has returned to historic levels, is currently fashionable among the serious people. This argument receives great favor in the context of the argument for the need to cut workers' pension benefits, especially in the public sector. The arithmetically grounded counterargument, that when the price-to-earnings ratio is near its historic level, returns will be near their historic level, has been virtually excluded from the Washington policy debate.

Of course, it is not just around economic policy that the outcome of the debate is determined by who is allowed to take part in the discussion. We went to war with Iraq to keep Saddam Hussein from using his weapons of mass destruction on neighboring countries. All the serious people agreed that the invasion was necessary. There were certainly people, such as the Swedish politician Hans Blix, who disputed the evidence that Iraq had weapons of mass destruction or was close to developing them, but the Washington media largely excluded them from the debate or dismissed them as unserious types whose views should not be given credence.

Perhaps the best demonstration of the corruption of the Washington policy debate is that former Federal Reserve Board Chairman Alan Greenspan is still a member in good standing among the serious people. Last week, he told a conference organized by Wall Street investment banker Peter Peterson that a recession would be a price worth paying to get the cuts to Social Security and Medicare that he wants to see.

According to calculations by the financial reform group Better Markets, based on the Congressional Budget Office's projections, Greenspan's incredible mismanagement cost the economy more than $7 trillion in lost output, or more than $60,000 per household. But once you're admitted to the club of Washington's serious people, it takes more than a small mistake to get you thrown out.

The point here, as Greenspan put it so eloquently last week, is that the rich and powerful want to cut your Social Security and Medicare. They will say lots of things that are untrue about the debt and deficit to scare you. There will be few opportunities for correcting this nonsense, because hey, they control the news outlets.

So just remember, it's not even a bad movie. It's just the serious people trying to take money out of your pocket and put it into theirs.
***********links within body of article****

By Dean Baker, Truthout | News Analysis
 

JL A. (274)
Monday November 19, 2012, 4:37 pm
"The point here, as Greenspan put it so eloquently last week, is that the rich and powerful want to cut your Social Security and Medicare. They will say lots of things that are untrue about the debt and deficit to scare you. There will be few opportunities for correcting this nonsense, because hey, they control the news outlets." Such may be why unprecedented numbers of economists are speaking out with the factual realities and truth...and why some of us oppose Murdoch wanting a special change to the rules to let him own even more US mainstream media than he already does.

A timely reminder to fight such misrepresentation of what the current budget issues truly are and what will be best for the economy and all the people.
 

Mike M. (55)
Tuesday November 20, 2012, 6:09 am
The rich and powerful have controlled the people of America since conception. Now it is time to start rattling cages and get the truth out to the people so we can go forward as a nation not as lemmings.
 

Gloria picchetti (287)
Tuesday November 20, 2012, 6:33 am
This is the worst part of it, "Perhaps the best demonstration of the corruption of the Washington policy debate is that former Federal Reserve Board Chairman Alan Greenspan is still a member in good standing among the serious people. Last week, he told a conference organized by Wall Street investment banker Peter Peterson that a recession would be a price worth paying to get the cuts to Social Security and Medicare that he wants to see."
 

John Gregoire (257)
Tuesday November 20, 2012, 7:18 am
So true and worse the current Fed policy of keeping interest rates artificially low is decimating the retirement savings of most seniors who aren't among the rich and infamous. The only course I ever took in economics strongly emphasized supply and demand and were we to follow that I believe many problems would be solved and folks would have a better life.

After years in DC I came to detest these power brokers and their allies. Greenspan among the most vile.
 

Peter Palms (0)
Tuesday November 20, 2012, 10:36 am
Thanks for the educationyour comments provide. Unfortunately, that will not be enough. Education is important, but it makes little difference what we know if we don't do anything with that knowledge. It has been said that knowledge is power, but that is one of the greatest myths of all time. Men with great knowledge are easily enslaved if they do nothing to defend their freedom. Knowledge by itself is not power, but it holds the potential for power if we use it as a guide for action. Truth will always be defeated by tyranny unless people are willing to step forward and put their lives into the battle. The future belongs, not to ideas, but to people who act on those ideas.
 

Past Member (0)
Tuesday November 20, 2012, 12:28 pm
I get most of my economic news from,
http://rt.com/programs/keiser-report/

"Perhaps the best demonstration of the corruption of the Washington policy debate is that former Federal Reserve Board Chairman Alan Greenspan is still a member in good standing among the serious people. Last week, he told a conference organized by Wall Street investment banker Peter Peterson that a recession would be a price worth paying to get the cuts to Social Security and Medicare that he wants to see. "

The war against democracy is very real.

Karl rove is still the architect, even though mabus (Mr. Bush) is out of commission.
 

Lois Jordan (55)
Tuesday November 20, 2012, 3:09 pm
I've learned that Greenspan is not to be trusted, and Pete Peterson is one of the greedy rich. As I recall, he was involved with the Simpson-Bowles plan to continue the "trickle-up" of money to the wealthiest, and hang the rest of us out to dry. Why always the focus on cutting Medicare & Soc. Sec.? Why don't they focus on cutting Pentagon war spending, taxing the rich and a Financial Transaction Tax on Wall. St?
 

Robert Tomlinson (64)
Tuesday November 20, 2012, 4:23 pm
Kit, thanks for this important post.
Some in the republican party have equated with being "God's Party." Nothing could be further from the truth. While I am a democrat I am under no illusions about how the system works. It is all about the money and power.....in both parties. The difference is that most of those, in the GOP, are so deep in the pockets of the money changers that they ignore the plight of the poor and middle class.
 

Kit B. (277)
Tuesday November 20, 2012, 4:53 pm

Well said, Robert. Painfully true and the only alternative for the GOP is to continue as they are or rid themselves of the "pay back".
 

Mitchell D. (127)
Tuesday November 20, 2012, 7:00 pm
Another way debate is squelched, is via "The Pledge," as outlined in today's NY Times. This is a venture of Grover Norquist, a LOBBYIST,, not a member of congress,, who has had congresspeople signing this thing about "...never, ever" as the Times wrote, voting to raise taxes. This thing appears unethical to me, considering that congresspeople take an oath to uphold the constitution, and ought not to be expected, by "the good old boy" or any other network, to take any other pledge as congresspeople!
Somehow, I can't do it, but could somebody get a petition started abut this??
 

Wayne W. (12)
Tuesday November 20, 2012, 10:53 pm
A Tale of Two Economies: The Inequality Dragon Must Be Stopped

http://www.huffingtonpost.com/jared-bernstein/a-tale-of-two-economies-a_b_938584.html
 

june t. (62)
Tuesday November 20, 2012, 11:28 pm
Its all well and good to suggest we should do battle against all this, but many of us are working ourselves to the bone at 2 or more jobs, and barely scraping by at that. Too busy working and too tired to fight. And that is probably part of their plans, to keep us poor and too tired to do anything about it.
 

Stella Gamboni (17)
Tuesday November 20, 2012, 11:42 pm
Regardless of the cause, the budget deficit is a problem insofar as it contributes to the National Debt. If not for the debt, deficit spending is neither a threat to be averted nor a problem to be solved.
 

Sue Matheson (68)
Wednesday November 21, 2012, 6:35 am
thanks
 

Rita White (1)
Wednesday November 21, 2012, 8:26 am
thanks
 

Diane O. (149)
Wednesday November 21, 2012, 3:08 pm
Social security is a Ponzi scheme. We all know that. It's the worst investment any American can make. We pay in far more than we'll ever get back. Some Americans pay nothing into it and they get something back. However, for most Americans, it's the absolute worst investment you can make.
 

Diane O. (149)
Wednesday November 21, 2012, 3:09 pm
The majority of Americans could not live on a social security check. This is why they pay into 401k's, IRA's and annuities.
 

Diane O. (149)
Wednesday November 21, 2012, 3:16 pm
I'm having a Care 2 glitch on noting articles. I tried but am unable to do it.
 

Past Member (0)
Thursday November 22, 2012, 9:47 am
http://rt.com/programs/keiser-report/episode-370-system-keiser/

"Social security is a Ponzi scheme. We all know that. It's the worst investment any American can make"

There is $27 trillion in SS that the republicans desperately want. It is NOT a ponzi scheme at all. Not one bit, Diane.
Your head is so full of big lie, fascist sh*t.
401k's are wall streets casino. My Bro. inlaw lost it all. Now he lives on only SS. He's a republican!
 

Past Member (0)
Thursday November 22, 2012, 9:48 am
You cannot currently send a star to Kit because you have done so within the last week.
 

pam w. (191)
Thursday November 22, 2012, 9:53 am
Social security was NEVER designed to be a complete source of income. It's only recently that people began to think of it as anything other than what it was....a supplement. Certainly, some people don't get back what they pay into it. Many do.

It's like taxes...some people get the "benefit" of taxes they pay and some don't.

We need an "opt out" plan for people like you who can't see past their own selfish interest to understand the value of a SOCIAL SECURITY plan. Then, you could be happily on your own.
 

Past Member (0)
Thursday November 22, 2012, 10:39 am
Pam, wall street looted it all. Very few made it out to see the next republican fascist depression. Stay in your 401k and you will surely depend on SS.

Opt out would cause another need for socialism. We need to be smart. ;)

www.youtube.com/watch?v=1zqOYBabXmA
 

Diane O. (149)
Thursday November 22, 2012, 10:44 am
It's a PONZI scheme alright! Where Americans are beginning to get smart is how they allocate their investments. Smart people don't lose money in the stock market. Dumb people lose money in the stock market. Right now, most Americans have a significant amount of their investments in cash where it should be as long as Obama is president. The rest should be invested in products that are being sold in other countries and stocks that are paying dividends.

Obama wants to take over our 401k's and IRA's now. He believes that 401k's and IRA's favor the rich....he's such a socialist and you folks keep licking his boots.
 

pam w. (191)
Thursday November 22, 2012, 10:49 am
Diane...the election is over. I guess you don't realize how tiresome your mantras are.

In any nation where we believe in caring for one another, there will be times when we give more than we get. It's in our best interest to take care of those in need.....to provide the best possible services such as education and health care, so our economy can grow along with a strong middle class.

Obviously, Diane, you supported "I've got mine now SCREW the rest of you" Romney. It's over. He lost.

Time to release your bitterness, conspiracy theories and superficial cliches and get on with life.
 

Kit B. (277)
Thursday November 22, 2012, 10:54 am

The SEC does offer an explanation to those who do not understand: (apparently one commenter here)


What is a Ponzi scheme?

A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.
Why do Ponzi schemes collapse?

With little or no legitimate earnings, the schemes require a consistent flow of money from new investors to continue. Ponzi schemes tend to collapse when it becomes difficult to recruit new investors or when a large number of investors ask to cash out.
How did Ponzi schemes get their name?

The schemes are named after Charles Ponzi, who duped thousands of New England residents into investing in a postage stamp speculation scheme back in the 1920s. At a time when the annual interest rate for bank accounts was five percent, Ponzi promised investors that he could provide a 50% return in just 90 days. Ponzi initially bought a small number of international mail coupons in support of his scheme, but quickly switched to using incoming funds to pay off earlier investors.

Does the SEC investigate Ponzi schemes?

The SEC investigates and prosecutes many Ponzi scheme cases each year both to prevent new victims from being harmed and to maximize the recovery of assets to investors. The majority of such cases are brought as emergency actions, which often seek a temporary restraining order and an asset freeze.
 

Diane O. (149)
Thursday November 22, 2012, 10:59 am
Similarities: Social Security, like a Ponzi scheme, relies on the constant entry of new participants to pay off old ones. Both plans are better deals for earlier entrants. Both create no wealth. Both are unsustainable. Both involve some duplicity to keep them going: In Social Securityís case, the fiction is that beneficiaries are just getting back what they paid in.

Differences: Social Security, unlike a Ponzi scheme, is not run for the financial profit of the people who run it; in fact, the government is running it at a loss, and that loss is projected to increase. Participating in Social Security, unlike a Ponzi scheme, is involuntary. And Social Security, unlike a Ponzi scheme, can be reformed so that it becomes a sustainable program. How to do that is probably what we should be talking about, instead of the validity and limits of an analogy.
 

Diane O. (149)
Thursday November 22, 2012, 11:03 am
pam, of course I know that Obama won by a very slim margin with only 51% of the votes. That leaves 49% of Americans who aren't buying into his socialist ideas. Now do we understand each other?

I pay a lot of money in taxes so I'm no slackard. I don't have a bitter bone in my body. I'm going to continue to fight for my country.

Now Obama is pushing to confiscate our 401k's and IRA's. What's your opinion on that? Now he wants to take your savings and wants to share them among the masses who bought a shiny red truck every two years instead of saving for their own retirement.
 

Kit B. (277)
Thursday November 22, 2012, 11:11 am

Hey --- good news, Romney's final count just might get him to that desired status of 47%! And...that is just a nasty old FACT.
 

Diane O. (149)
Thursday November 22, 2012, 11:35 am
Not even a good try, Kit, because we all know by now exactly what Romney meant when he said that. And, no it isn't a fact at all. When you aren't copying and pasting what other people write, and you respond with your own comments it's like a different person shows up.
 

Kit B. (277)
Thursday November 22, 2012, 12:19 pm

Tell that to even your own Fox News, who was the first to report that Romney might win the total of 47%, and unlike you, I do give where the information was taken from. Above is readily available to any one who wishes to go to the SEC web-site.

It's okay, Diane we know who you are, and what you hope to represent.
 

rene davis (74)
Friday November 23, 2012, 9:59 pm
thank you!
 
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