Living It Up Without Taking a Dive in 2005
Well, I'm coming back from my holiday vacation down-time and slowly returning to my daily blog reading cycle. Mrs. Cracks and I spent a quiet New Years weekend on San Juan Island, where we slipped into our superhero alteregos of Nappy Pappy and Mammy Jammy for some serious resting at the Juniper Lane Guest House (which we highly recommend). We also had a great time with the former proprietor of the San Juan Inn (which, alas, is no more) and his wonderful guests from San Diego (Suzie, Kate, and Shelby, who has a great Harry Potter-themed blog full of insights into what it's like to be a teenager today).

(Note: The headline of this post is a suggestion by my pal Kari for this year's New Year's Theme; she's usually in charge of coming up with it, with her crowning achievement being Take Your Passion, Make It Happen back in '94 or '95.)

As I said, I'm still a bit groggy from my New Year's napping, so I'll be a bit scattershot today. First off is some interesting commentary from
the Baghdad Burning blog (written by a Baghdad resident) regarding the upcoming elections in Iraq

There are several problems. The first is the fact that, technically, we don't know the candidates. We know the principal heads of the lists but we don't know who exactly will be running. It really is confusing. They aren't making the lists public because they are afraid the candidates will be assassinated.

Another problem is the selling of ballots. We're getting our ballots through the people who give out the food rations in the varying areas. The whole family is registered with this person(s) and the ages of the varying family members are known. Many, many, many people are not going to vote. Some of those people are selling their voting cards for up to $400. The word on the street is that these ballots are being bought by people coming in from Iran. They will purchase the ballots, make false IDs (which is ridiculously easy these days) and vote for SCIRI or Daawa candidates. Sunnis are receiving their ballots although they don't intend to vote, just so that they won't be sold.

It's getting deadlier day by day as January 30 approaches, and it's only going to get uglier.

Josh Marshall has a couple of great posts about the battle over Social Security (here and here). First he breaks down what all this cry over the abolishment (privatization) of Social Security to its essence:

... it is not a Social Security problem, but an accumulated national debt problem.

He goes on to summarize where our total $7 trillion of owed national debt stems from, including:

But about $3 trillion of those dollars we needed to fund the 1980s and 1990s deficits we managed to borrow closer to home. We borrowed it from the Social Security (and a few other government) trust fund(s).

Almost the entirety of President Bush's Social Security phase-out plan comes down to a simple proposition: finding out how not to pay it back.

[...]

... (C)onsider a hypothetical. Let's say there'd not been a Social Security -- President Bush's dreamworld. We'd still have had the same deficits. The difference would be that we'd have had to borrow from private borrowers in the US and abroad.

Think we'd just be able to decide not to pay them back? Not likely. The Joneses and the Smiths with their 401ks probably wouldn't like that. And the Japanese and Saudis probably wouldn't like it much either. Of course, defaulting on our entire national debt would also certainly trigger a seismic international financial crisis. So you can probably figure that no one would be a huge fan of it.

So why does the president figure he can get away without making good on the debt to the folks who pay Social Security taxes, who are overwhelmingly low and middle-income wage earners (since no one pays Social Security tax on investment income or wage and salary income over about $85,000 a year)?

Isn't it obvious? Because he thinks they're an easy mark

Marshall also points to the main editorial in today's NYTimes, which describes how the pro-privatization privateers switched the timeframe measurement of projecting the solvency of Social Security from the typical 75-year timeframe to infinity to establish their point of view:

Starting last year, as the groundwork was being set for the emerging debate, the Social Security trustees took the liberty of projecting the system's solvency over infinity, rather than sticking to the traditional 75-year time horizon. That world-without-end assumption generates the scary $10 trillion estimate, and with it, Mr. Bush's putative rationale for dismantling Social Security in favor of a system centered on private savings accounts. The American Academy of Actuaries, the profession's premier trade association, objected to the change. In a letter to the trustees, the actuaries wrote that infinite projections provide "little if any useful information about the program's long-range finances and indeed are likely to mislead any [nonexpert] into believing that the program is in far worse financial condition than is actually indicated."

As it often does with dissenting professional opinion, the administration is ignoring the actuaries. But that doesn't alter the facts or common sense. If the $10 trillion figure is essentially bogus, so is the claim that Social Security is in crisis. The assertion that doing nothing would be costlier than enacting a privatization plan also turns out to be wrong, by the estimates of Congress's own budget agency.

Over a 75-year time frame, Social Security's shortfall is estimated by the Congressional Budget Office at $2 trillion and by the Social Security trustees at $3.7 trillion, a manageable sliver of the economy in each case. If the shortfall is on the low side, Social Security will be in the black until 2052, when it will be able to pay out 80 percent of the promised benefits. If it is on the high side, the system will pay full benefits until 2042, when it will cover 70 percent.

[...]

... (T)he administration wants workers to divert some of the payroll taxes that currently pay for Social Security into private investment accounts, in exchange for a much-reduced government benefit. To replace the taxes it would otherwise have collected - money it needs to pay benefits to current and near retirees - the government would borrow an estimated $2 trillion over the next 10 years or so and even more thereafter.

In effect, the administration's plan would get rid of the financial burden of Social Security by getting rid of Social Security. The plan shifts the financial risk of growing old onto each individual and off of the government - where it is dispersed among a very large population, as with any sensible insurance policy. In a privatized system, you may do fine, but your fellow retirees may not, or vice versa.

And here's a some more fuzzy math from our benevolent leader and his bean counters, via Mother Jones:

During his re-election campaign, George W. Bush promised to halve the federal deficit by 2009. A story published deep inside Sunday’s New York Times reveals how the administration is planning some remarkably "fuzzy math" to achieve that goal:

To make Mr. Bush's goal easier to reach, administration officials have decided to measure their progress against a $521 billion deficit they predicted last February rather than last year's actual shortfall of $413 billion.

By starting with the outdated projection, Mr. Bush can say he has already reduced the shortfall by about $100 billion and claim victory if the deficit falls to just $260 billion.

So Bush is claiming progress just by "misoverestimating" the original deficit. And, of course, cutting the administration’s annual deficit spending doesn’t decrease the accumulated budget deficit (presumably the one voters think of when the president talks about cutting the deficit in half), only adding to it by a smaller amount.

The administration is also keeping up its standby accounting tricks by keeping the costs of Iraq and Afghanistan out of its annual budget, and not including the billions in transition costs needed annually for Bush’s proposed Social Security privatization.

Guess I shouldn't have dropped accounting back at St. Olaf--it would have come in handy this year.