WSJ uses lies to attack Grandma and Grandpa
- From: Kickin' Ass and Takin' Names <PopUlist349@xxxxxxxxxxx>
- Date: Fri, 13 May 2011 07:49:10 -0400
This article refers to two charts -- the charts are at this link,
where you find the original article.
http://www.alternet.org/module/feed/mobile/?storyID=150930&type=story
-- quote
America's Largest Newspaper Launches a Nasty Attack on Grandma and
Grandpa
Joshua Holland, AlterNet
May 12, 2011
The conservative playbook isn't difficult to decipher. They rely
heavily on the politics of resentment ? point to someone in our
society, claim they're a lucky-duck using unverifiable anecdotes or
cherry-picked data, and then urge people to ask, "Why does that person
have it so good when I'm busting my ass to make ends meet?"
It was apparent in Ronald Reagan's ?welfare queen? rhetoric, and also
in the ubiquitous references to ?young bucks? buying T-bone steaks
with their food-stamps. Now the Right's using the exact same play for
those greedy public employees supposedly living large on their fat
salaries.
This week, the Wall Street Journal featured an excellent example of
the genre by John Cogan, a fellow at the corporate-backed Hoover
Institution. The piece, titled, ?The Millionaire Retirees Next Door,?
is a shining testament to the dishonesty surrounding our discourse on
?entitlements.?
Cogan's pitch is this: ?The typical husband and wife who reach age 66
and qualify for Social Security ... will begin collecting a
combination of cash and health-care entitlement benefits that will
total $1 million over their remaining expected lifetime.? They'll get
an average of $1 million in cash and health-care bennies over the rest
of their lives, which makes them millionaires! Why aren't you?
What's more, ?The typical 66-year-old couple and their employers, on
their behalf, have contributed nearly $500,000 in payroll taxes.? In
other words, they're going to pull in a half-million more than they
paid! ?We cannot even remotely afford to make good on these promised
benefits ...[to] so many million-dollar couples,? he writes. ?The
benefactors will be a generation of younger workers who are trying to
support themselves and their families while paying taxes to finance
the rest of government spending.? Won't somebody think of the
children?
All of this, Cogan says, is according to his own calculations based on
government data. It's all wrong, however, and while it's often
difficult to say with any certainty whether someone is intentionally
lying to people or simply making an honest error, in this case it's
clear.
Cogan's sleight of hand is simple: when he gives the amount this
average couple paid into the two programs, he adjusts for inflation to
current dollars. On the benefits side, he doesn't ? he uses future
dollars, which results in a larger number. John Cogan is a professor
of public policy at Stanford University; every one of his students
knows that he or she would get an F comparing inflation adjusted
numbers on one side of the ledger to nominal dollars on the other ?
it's apples and oranges and it's about as mendacious as one can get.
He tries a similar trick with this grievance:
In 1978, Congress instituted automatic cost-of-living adjustments for
Social Security. That's reasonable. But Social Security's method of
automatically increasing benefits to successive cohorts of retirees by
more than inflation makes less sense. It means that the average worker
who retires this year receives a monthly benefit that is about 23%
higher after adjusting for inflation than the monthly benefit received
by the average worker who retired 20 years ago. The average worker who
retires 10 years from now is, in turn, promised an initial benefit at
retirement that is 14% higher after adjusting for inflation than the
average worker who retires today.
Congress passed an automatic cost-of-living increase in 1972, not
1978. COLA is based on the rate of inflation, so benefits aren't
?automatically? increased faster than the rate of inflation. The
reason retirees today will take home larger benefits than those who
left the workforce 20 years ago reflects the higher wages they earned.
The same is true of those who will retire 10 years from now.
Let's pause for a reality check. It's true that, according to the
Urban Institute (which adjusts for inflation), Cogan's average
two-earner couple will receive $882,000 in combined benefits over
their golden years. But we need to disaggregate that figure; the
average monthly Social Security benefit for retirees this year is
$1,179 per month. Multiply that by two, and you don't exactly end up
with Lifestyles of the Rich and Famous.
Of course, it doesn't matter what an ?average? two-earner household
pays in and takes out; lots of families aren't average, and the only
thing that matters is the system's overall solvency. And the Social
Security administration has taken in more than it's paid out for all
but two of the last 30 years. It's run significant surpluses, and
hasn't added a single penny to the deficit. This year's surplus is
projected to be $113 billion.
Cogan says we ?can't afford? these benefits. But in the United States,
while people who work until age 65 will see only 40 percent of their
incomes replaced by Social Security, the average replacement rate
among the 31 countries in the Organization for Economic Cooperation
and Development (OECD) ? the ?rich countries club? ? is 57 percent.
The U.S. ranks 27th out of 31 in that measure, and by 2030, the
average income replaced by Social Security will fall to 32 percent.
Cogan never bothers to explain why we ?can't afford? benefits that
are far stingier than those enjoyed by the citizens of Portugal, the
Slovak Republic or Poland ? all countries with significantly less
wealth than we have.
While Social Security's finances are sound and will remain so for the
foreseeable future (and possibly forever), Medicare is a different
story, which is why mendacious granny-bashers always conflate the two
programs.
Like every corporation in America that offers its employees private
health insurance, Medicare faces spiraling costs. But despite an aging
population adding a lot more beneficiaries, health-care costs have
grown significantly slower in the Medicare system than it has in the
private sector over the life of the program, as this data from the
Congressional Budget Office illustrates:
(click for larger version)
Cogan paints the rise in costs as a product of feckless politicians
bowing to their greedy and all-powerful constituents. He complains
that ?Medicare premiums paid by senior citizens once covered half of
the cost of physician and related services. They now cover one-fourth.
Copayments once covered nearly 40% of these services' costs. They now
cover only 20%.? Premiums haven't decreased; the smaller share
reflects the fact that a good portion of those rising costs haven't
been passed on to seniors.
Cogan wants to do something about that. Rather than offer suggestions
for getting health-care costs under control, he proposes shifting them
onto the backs of grandma and grandpa.
To fix Medicare, we must move away from the current system of
fee-for-services and low copayments. First and foremost, copayments
should be increased significantly. Medicare recipients need to have
more skin in the game if they are to become cost-conscious medical
consumers.
The proposal echoes the GOP's budget plan, under which the
Congressional Budget Office says seniors would end up paying almost
twice as much out of their own pockets even while the total cost of
insurance would end up being higher.
The idea is based on some old-fashioned right-wing boilerplate ? turn
patients into ?consumers,? and the free-market fairies will lower
health-care costs with their magic pixie dust. But as Paul Krugman
noted, the notion of the savvy consumer falls apart because making
health-care ?decisions intelligently requires a vast amount of
specialized knowledge.?
Furthermore, those decisions often must be made under conditions in
which the patient is incapacitated, under severe stress, or needs
action immediately, with no time for discussion, let alone comparison
shopping....
The idea that all this can be reduced to money ? that doctors are just
?providers? selling services to health care ?consumers? ? is, well,
sickening. And the prevalence of this kind of language is a sign that
something has gone very wrong not just with this discussion, but with
our society?s values.
Ultimately, these are just the details. The really big lie is a simple
bait-and-switch: we face high deficits, which Cogan and a legion of
his fellow conservatives desperately want you to believe is the result
of crazy politicians handing out fat checks to everyone and their
cousin. The reality, of course, is very different.
Here's a picture that tells a 1,000 words about the true causes of our
deficit ? please note the absence of Social Security or Medicare.
-- end quote
----------------------------------------------
The material posted here may or may not be factual.
The author is following the example set by
Senator Jon Kyl (R, AZ) who was caught citing
false statistics, after which his staff stated
that his comments were "not intended to be factual."
KATN
.
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