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Are you surprised that these programs are under attack? The same forces that went after the unions in the 1980s, that relentlessly pushed free-trade agreements while manufacturing jobs evaporated, and that destroyed housing values in the 2000s — they're on the prowl again. If Social Security and Medicare are cut, finance and insurance companies will skim the cream — the wealthier, healthier participants — while leaving everyone else to fend for themselves. Social Security and Medicare, they think, are easy prey, once we've been softened up by scare stories about how they're on the "brink of bankruptcy" and we "can't afford them."

It isn't true, of course. Social Security and Medicare can't go bankrupt, just as the Pentagon can't. They're not in some separate bank account or lockbox — they're government programs that we either choose to pay for or don't. And not only can we afford them, they're a bargain, providing modest comfort and decent care to people who would otherwise financially burden their families — or die.

The attack came right after the election, when the Bowles-Simpson commission on deficit reduction issued its report. It recommended deep cuts in Social Security, in the form of an increase in the retirement age from 67 to 69. This is a direct cut in benefits, targeted in an especially nasty way at minorities and all others who work harder, earn less, and live shorter lives after retirement than, say, college professors or senators.

The cochairman of that commission, former GOP senator Alan Simpson of Wyoming, has made his views clear. In an August e-mail to the head of OWL (née the Older Women's League), he called Social Security "a milk cow with 310 million tits." He wants you to think of Social Security as welfare, not something you've earned — a boondoggle, rather than a program that puts money into the economy every day.

The fact is, even if you were never an autoworker, were never in a union, never owned a house, even if you've never been sick and never got anything else from the New Deal — whoever you are, Social Security and Medicare help you right now. They support your business: spending by old folks is part of the income of small and large companies everywhere, an effective and stable support for the economy. Social Security provides survivors' benefits that raise children in your schools. It will keep your parents off your back. And when you do get older, Social Security and Medicare will protect you, and they will protect your children from bankrupting themselves over you. That is, if these programs are protected, now, from their assailants.

The Simpson-Bowles package didn't make its way to Congress in 2010. But it got surprisingly strong support on the panel. And it will surely be back. As Simpson said, "This cadaver will rise from the crypt."

Democrats took a hit in November. But they can still stand in the way. Will they hold the line? Or will they give in to this assault on the last bastion of the American middle class? ^

A version of this article first appeared in Mother Jones.

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3 Comments / Add Comment

Steve Rogers

This article goes to show that all the advanced degrees from all the best University's will not give you a single iota of common sense. If this continuing and worsening economic crisis has a silver lining it is that Economics as a science has been shown to come in just behind Voodoo and Astrology this is especially so when you adhere to a fundamentally flawed, barrel of hogwash like Keynesian theory.
Posted: January 06 2011 at 11:17 PM

Sefton Kincaid

I completely agree with the proposition that the middle class has been under attack for much of the last 40 years. However, with all due respect Mr. Galbraith, you lay a foundation of policy atop a multitude of economic fallacies and fail to support with any form of comprehensive logic your beliefs. This leads me to consider your editorial disturbingly harmful to America. And, I agree with your title!

First of all, you credit the UAW for providing jobs and pensions to workers of the middle class. Very well. It did support jobs for some time, but at what point do such professions become unsustainable? The automotive industry in America was over run by more innovative and lower cost manufacturers because of their ability to adapt to an ever changing business environment. All the UAW and a slowly dying auto industry did was promote the misallocation of resources from goods Americans are more productive at producing to goods Americans (supported by the bailouts from Congress in the late 70s and again in the last few years) “think” they should produce—GM as and icon of America comes to mind. Autoworkers suffered post-1979 bailout because they worked in a business that lacked economic vigor and was buoyed afloat by the interest groups lobbying on their behalf. I can go on, but suffice it to say, your facts are solely anecdotal and you provide no logical argument in your support of larger institutions, which I could realize was your intent after the second sentence.

Secondly, you lead the reader to a poignant discussion of employment. Unfortunately, your support of the lack of unionization and your promotion of a higher minimum wage can not only be viewed as economically unreasonable—this coming from a man who should know far more regarding economics than I—but downright obtuse. What do Americans need to boost their living standers? JOBS. By increasing the cost of labor—price floor, I learned it in ECON 101—you artificially reduce the demand for employment. Last time I checked, unemployment was still well above 9%, and that is not accounting for those who have totally given up searching for jobs and are now directly or indirectly supported by the extension of unemployment benefits. Government policies have unintended consequences. A dollar given to an individual, company, or program changes the environment for all and these consequences are too hard to accurately judge in their totality.

Finally, you delve into the socialist-minded crux of your editorial—more government and public money to support the public black hole that is social security. You maintain that Social Security and Medicare remains the only prop to a fading middle class in a time of need—who wouldn’t take free money when they can’t find work (see above on unemployment). But you fail to encompass your support for these programs with any justified logic. Instead, you state, “Social Security and Medicare can’t go bankrupt.” Unfortunately however, it can, and it will. Not insomuch as it will have to file for Chapter 7—municipalities can’t even do that!—but through a combination of uncontrolled fiscal spending and the support of Federal Reserve asset purchase programs, the government plays an illusive game of income redistribution to its populous. It uses taxpayer funds to bailout car companies and financial institutions—sometimes without any legislative authority i.e. Fannie and Freddy MBS purchases by the Fed—in exchange for punishing the future generations of taxpaying Americans.

So the government extends unemployment benefits and continues to pledge Social Security benefits through increased borrowing and furthering the supply of money. Over the past 40 odd years the dollar has lost 90% of its value while real wages have remained trailed. Yes, the middle class is getting borer. Those that work month-to-month and those with modest savings have both been exposed to a slow but meaningful deterioration in standard of living. But the corrosion of the middle class wage earner cannot be logically remedied through government programs. The political trend towards increased regulation, supervision and intrusion that has coincided with the promotion of powerful interest groups and drained America of its creativity, vision, ingenuity and wealth for far to long. At its core, the middle class has suffered from the debilitating drugs of big government, what we need is a straight talk and some discipline. Not an open bar and a shot of heroin
Posted: January 07 2011 at 12:02 AM


Sefton Kincade's reply really bugs me. Accordingly, anyone looking to collect Social Security, a program many of us have contributed to for decades, is looking for a handout. This isn't "free money." Let me see if I can figure out what Mr. Kincade is trying to tell us. Municipalities can't file for Chapter 7, but the conglomerates on Wall Street certainly can, but not before paying out obscene bonuses to their own that have shamelessly worked the system to their own benefit to the peril of the rest of who have to work for a living.

Unemployment is 9% but let's not blame big corporations for sending most of the manufacturing jobs overseas. And how dare poor workers making minimum wage have the audacity to ask for a living wage? Those in the Congress and Senate who abhor big government have no problem with huge corporations making huge profits on the backs of workers who have not a prayer of getting ahead let alone making ends meet.

It is almost laughable that social programs are seen as America's future downfall with no mention at all about two wars that are sucking our future from us now and for future generations. If we the estimates are correct that the wars are costing us ten billion a month, why is their not a bigger hue and cry from the far right to stop the madness? Why is the far right doing everything in their power to continue the deregulation practices that have in fact caused our current problems?

The tax payer money used to bail out the car companies has been paid back. Would you prefer the auto industry fail and have more people out of work? Agreed, the auto industry has made some huge mistakes, but if you punish them you punish the workers. Everyone loses and then you’ll blame the out-of-work for collecting unemployment.

America is a great country. Part of our greatness is taking care of our own.
Posted: January 07 2011 at 4:26 PM
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