-- a "consensus package" to fix the problem by raising payroll taxes on incomes but exempting the rich beyond a maximum level taxed. Also a gradual increase in the retirement age and various other possible short and longer range options for consideration. The result today is low income earners pay more in payroll than income tax. For bottom level earners, the burden is especially onerous. They pay no income tax but aren't exempt from 6.2% of their wages going for Social Security and Medicare.
-- coverage under OASDI be extended on a mandatory, basis as of January 1, 1984, to all newly hired civilian employees of the federal government and all employees of nonprofit organizations;
-- state and local governments that elected coverage for their employees under the OASDI-HI program not be allowed to terminate it in the future;
-- the method of computing benefits be revised to exclude benefits that can accrue to individuals from non-covered OASDI employment and only be for the period when they became eligible - to eliminate "windfall" benefits;
-- 50% of OASDI benefits should henceforth be taxable as ordinary income for individuals earning $20,000 or more and married couples $25,000 or more;
-- in addition, other recommendations concerning cost of living adjustments, the law pertaining to surviving spouses who remarry after age 60, divorced spouses, disabled widows and widowers, and for scheduled payroll tax increases to move up to earlier years up to 1990 after which no further change be made with the wage base rising and is now at a level of $97,500 in 2007 at a tax rate of 6.2% matched by employers;
-- self-employed persons beginning in 1984 pay the combined employer-employee rates now at 12.4% with half considered a business expense;
-- in addition, a number of other changes recommended that in total would penalize the public to benefit the most well-off that was the whole idea of the scheme in the first place.
The public was told the Commission recommendations of 1983 were supposed to make Social Security fiscally sound for the next 75 years. They weren't told there was no problem to fix and the changes enacted were to transfer massive wealth from the public to the rich. It was one part of an overall Reagan administration scheme that included huge individual and corporate tax cuts that took place from 1981 to 1986. The rich benefitted most with top rates dropping from 70% in 1981 to 50% over three years and then to 28% in 1986 while the bottom rate actually rose from 11 to 15%.
It was the first time US income tax rates were ever reduced at the top and raised at the bottom simultaneously. But it was far worse than that. In only a few years, Reagan got enacted the largest ever US income tax cut (mostly for the rich) while instituting the greatest ever increase entirely against working Americans earning $30,000 or less.
Alan Greenspan engineered it for him by supporting income tax cuts and doubling the payroll tax to defray the revenue shortfall. He also recommended raiding the Social Security Trust Fund to offset the deficit, and who'd know the difference. His scheme helped make the US tax code hugely regressive as well as for the first time transform a pay-as-you-go retirement and disability benefits program into one where wage earner contributions subsidize the rich as well as support current beneficiaries.
As a consequence, the wealth gap widened, continued under Clinton but became unprecedented under George W. Bush with Greenspan at it again. He supported the administration's wealth transfer scheme to the rich and outsized corporate subsidies with the public getting stuck with out-of-control deficits, deep social service cuts, and a new Treasury Department report just out promising more of the same.
It claims Social Security faces a $13.6 trillion shortfall "over the indefinite future," "reforms" are needed, delaying them punishes younger workers, and the program "can be made permanently solvent only by reducing the present value of scheduled benefits and/or increasing the present value of scheduled tax increases." Translation: cut benefits deeply, raise payroll taxes, and privatize Social Security so more public wealth goes to Wall Street and big investors.
Already the top 1% owns 40% of global assets; the top 10% 85% of them; the top 1% in the US controls one-third of the nation's wealth; the bottom 80% just 15.3%; and the top 20% 84.7%. In contrast, the poorest 20% are in debt, owe more than they own, and it's getting worse.
A generation of financial manipulation devastated working Americans, but it's even worse than that. Added are the effects of globalization, automation, outsourcing, the shift from manufacturing to services, deregulation, other harmful economic factors plus weak unions just gotten far weaker in the wake of the UAW September membership sellout to General Motors. The tentative agreement reached (for members to vote on) amounted to an unconditional surrender by a corrupted leadership after a two day walkout that was likely orchestrated in advance to cause GM the least pain. If the package is approved as is likely, it will encourage other companies to offer similar deals, take it or leave it. Organized labor suffered another grievous blow, corporate giants gained, and are more empowered than ever to win out at the expense of workers' futures.
The whole scheme was kick-started under Ronald Reagan. Between his tax cuts for the rich and the Greenspan Commission's orchestrated Social Security heist, working Americans lost out in a generational wealth transfer shift now exceeding $1 trillion annually from 90 million working class households to for-profit corporations and the richest 1% of the population. It created an unprecedented wealth disparity that continues to grow, shames the nation and is destroying the bedrock middle class without which democracy can't survive.
I am a 72 year old, retired, progressive small businessman concerned about all the major national and world issues, committed to speak out and write about them.
Greenspan is the kingpin purveyor of federalism that worked for the Clinton administration in being the voice of a factual testimony to its accumulating assets that brought the country out of years of accumulated deficits; gaining surpluses never seen before since after WWII. That is until the change in guard to the Bush administration that totally reversed the good times toward the bad with the highest in accumulated debt in US history.
One could argue that 911 and the war in Iraq were beyond the control of economic forecasters, but anyone with a gene of common sense is keen to point out that Personalities do make a difference when it comes to leadership and the direction of a country. Could we say President Bush was just unlucky? The truth of the matter is no.
His father was involved in the first military action in Kuwait, with George Jr. having ties to the binLadin family, making them intimate players on the scene in concern to national security if Bush was elected.
We know binLadin was instrumental in military campaigns in Afghanistan, making the relationship to the Bush United States a duopoly to the Military Industrial Complex. Once you start recognizing the over-bearance of MIC in any administration it spells doomsday market pressures.
One could argue the stolen election was the cause to 911, because the dire poor in middle class societies outside of the US would suffer more under a Bush administration causing the disenfranchisement, but the story is not so clear really, when evidence shows clearly 911 was more than hijackers attacking the USA.
Specifically it was a plan to control Oil resources in a region that is quite volatile because there is no nuclear balance in the Middle East. Israel is the only country to have nuclear weapons and this is the threat to Arabs who have none, and can not have control over their own resources.
Yes Alan Greenspan should be ashamed of himself; but in reality the turn of events do prove and show the American people the contrasting realities. In fact Greenspan will come out of this when he admits this, and influences people toward the Democratic principles that led and kept the country out of debt and out of war, which has been their trademark ever since their success in ending the Vietnam War.
Even though a Republican ended the war in Vietnam his resignation proved the hard realities and forces vying on Nixon to uphold the MIC convictions, or support the greater ideology, The Parvenu Paroxysm Ambit.
Republicanism is a party for the minority who are rich supplanting the backbone of America who is really the middleclass. They are never concerned about the country or people, only themselves and how much more control they can have.
But the Democrats who managed to wipe out debt and gain surpluses never seen before; is a living testimony to the fact that working middle class are the folks who are responsible, can manage, have creditability, and are competent in concern to national financial systems. They go the extra mile to prevent the calamity of war. In hindsight it is an admirable characteristic.
I think Greenspan doesn't need the Bernake job to shift markets. His word is gold and wisdom when the time comes for him to compare the Clinton vs. Bush legacies. Anything that indicates helping the middleclass in the markets are winners and movers becoming the driving forces out of the Bush or Republican conundrum.
Greenspan although complicit in supporting the Bush administration after his Democratic term was stolen, his only choice was to try and hold on to slow the impending avalanche or immediately buckle into the pressures leaving an instantly failed Wall street at a time of launching the War. I am sure we remember the words you are either with us or against us. His book certainly tells another tale. But upcoming markets will prove the war was wrong, and is the reason to the downward slide.
Huge markets are developing for secure renewable energy resources, especially environmentally conscious groups. Oil is becoming more of a protected resource due to declining supplies, and Air Pollutional Global Warming Factors. Iraq oil will become conservative reserves, in an attempt to provide long term social stability. They have no other resources, except sand.
It will be worth Associating with Alan Greenspan because his name represents not only financial wisdom but an expansion toward environmental integrity. That is I hope. djermano@yahoo.com
by
Dom Jermano (20 articles, 0 quicklinks, 40 diaries, 934 comments)
on Monday, October 1, 2007 at 9:58:11 AM
everybody's blaming Greenspan. He's merely an economist. He knows about markets and some "rugged individual" called homo economicus but, like most economists, nothing about society, which is what you elect politicians for. Unless, of course, you elect someone like Reagan, who couldn't even spell the word society, and then turn him into a saint.
Face it, folks, you all fell for that Reaganesque BS about government (i.e., "we the people") being the problem, not the solution. Now, you're scapegoating Greenspan.
by
delia (0 articles, 1 quicklinks, 0 diaries, 111 comments)
on Monday, October 1, 2007 at 12:55:31 PM
The root problem is the private ownership of the "Federal" Reserve - the biggest, most expensive, scam in history. Their debt-based money and bond house privateers guarantee our ruin.
Kent Welton,
PublicCentralBank.com
by
Kent Welton (48 articles, 0 quicklinks, 0 diaries, 37 comments)
on Monday, October 1, 2007 at 2:21:25 PM
Indeed it is and I wrote about in under the above title. The privatized money creation and control was the bankers' dream and Woodrow Wilson and Congress obliged allow them to pull off the greatest financial heist in history. SS scam the 2nd greatest.
by
Stephen Lendman (219 articles, 0 quicklinks, 0 diaries, 76 comments)
on Monday, October 1, 2007 at 2:48:24 PM
