Editore"s Note
Tilting at Windmills

Email Newsletter icon, E-mail Newsletter icon, Email List icon, E-mail List icon Sign up for Free News & Updates

July 9, 2008
By: Kevin Drum

McCAIN ON ECONOMICS....Does John McCain really think Social Security is a disgrace? I guess not, but he sure seems to think its funding mechanism is a disgrace, and last night he repeated himself just so we'd all know that it wasn't a slip of the tongue the first time around:

So let's describe it for what it is. They [i.e., younger workers] pay their taxes and right now their taxes are going to pay the retirement of present-day retirees. That's why it's broken, that's why we can fix it.

This is nuts. McCain is talking as if he just figured out that this is how Social Security works and he's scandalized by it. Needless to say, though, this is the way virtually every retirement system in the world works, and it works fine. What's more, if Social Security really does turn out to have a shortfall in future years, it's easily fixed by a very modest combination of higher taxes and reduced benefits — exactly the bipartisan, reach-across-the-aisle solution forged in 1983 that McCain is constantly praising (and that he voted for as a freshman congressman).

But you want something even scarier? In the very same interview, McCain serves up the supply-side full monty to CNN's John Roberts: "You can't get over the fact that historically when you raise people's taxes, revenue goes down," he said. "Every time we cut capital gains taxes, there has been an increase in revenues." The second half of this statement is flat out wrong, and the first half is so wrong that we need a new name for it. This is Jonestown levels of Koolaid drinking.

UPDATE: I see that Hilzoy beat me to this. Click here for a more detailed take on McCain's Grandpa Simpson approach to economics.

Kevin Drum 12:38 PM Permalink | Trackbacks | Comments (33)

Bookmark and Share
 
Comments

. . . so wrong that we need a new name for it.

McWrong?

Posted by: C.S. on July 9, 2008 at 12:42 PM | PERMALINK

Everything McCain says makes sense, once you understand he is a war hero and a straight shooter with a bottom line, and look past what he actually says to what you know he meant to say.

Posted by: AJB on July 9, 2008 at 12:43 PM | PERMALINK

. . . so wrong that we need a new name for it.

Although there is a word for it already . . . it's called a 'lie'.

Posted by: C.S. on July 9, 2008 at 12:44 PM | PERMALINK

The problem, of course, isn't that McCain has absolutely no problem letting loose with a whopper. The problem is that the press, by refusing to challenge him on *anything*, encourages him to tell more, and larger, lies. Where have we seen this before?

Posted by: junebug on July 9, 2008 at 12:47 PM | PERMALINK

McCain could keep his mouth shut between now and November, and the MSM would still report favorably on all his wonderful ideas. It's that bad, and it probably means this frightening fool will be our next President.

Posted by: K on July 9, 2008 at 12:49 PM | PERMALINK

Josh Marshall and friends hypothesize that McCain is so bad because he just thinks he deserves to be President, so, get on with it, and elect him! He's just going through the motions.

Posted by: David in NY on July 9, 2008 at 12:51 PM | PERMALINK

The really ridiculous thing is if you took funding mechanism for SS out of the context of a retirement system and said to him, "Sen. McCain, my parents are retired and they're really struggling financially right now. Should I help them out or let them fend for themselves?" he'd almost certainly say I had a moral obligation to help them out. Yet put that into the framework of a government managed retirement system which can take advantage of all sorts of scales of efficiency that individuals can't and suddenly it's immoral.

Which just goes to show you what the Republican Party's real bottom line is -- every man for himself!

Posted by: AndrewBW on July 9, 2008 at 12:55 PM | PERMALINK

America's huge middle class did not come about because of America's huge GDP. America's huge middle class came about because of the small redistribution of wealth that the New Deal created. As the New Deal has been dismantled, the middle class' portion of economic growth has diminished.

The middle class itself is now being demolished, and McDodo wants to use its demise as a campaign talking point. Unfortunately, many believe what he says is true. Their attitudes are the result of decades of capitalist reeducation.

Posted by: Brojo on July 9, 2008 at 12:57 PM | PERMALINK

If only the Republicans hadn't refused to do anything about global warming! Then we'd have plenty of ice flows on which to abandon our unproductive elderly. As matters stand, with the polar ice caps rapidsly melting, however, it looks like we'll just have to buckle down and take care of them

Posted by: rea on July 9, 2008 at 1:03 PM | PERMALINK

This is really, really embarrassing and would almost certainly destroy any Democratic nominee for President (how often have we said that?). I mean, this is how Social Security has worked from day fucking one. It has never changed. Does McCain not know that, or is he merely talking to us like we are children the way Bush always does? Because I do not want four more fucking years of that shit.

Posted by: Joshua on July 9, 2008 at 1:05 PM | PERMALINK

Here's how McCain can fix social security: Don't have it pay out any benefits for the next twenty-five years. It will build up a large enough surplus that the workers of the future will be able to pay taxes which can be saved until their generation retires, while the retirees at that time will be able to live off of the surplus. It takes the disgraceful aspect out of the equation. I hope he proposes it soon.

Posted by: reino on July 9, 2008 at 1:06 PM | PERMALINK

Generally unreported fact about Social Security's financial situation: the Millenium Generation is BIGGER than the Baby Boom. So there will be more people paying in than taking out, and there will be no long-term problem with SSN.

Under reported fact about the SSN "crisis" -- it was based on worse-case scenarios. Unfortunately, the administration of the Little Idiot has facilitated those worst case scenarios.

Posted by: Cal Gal on July 9, 2008 at 1:06 PM | PERMALINK

Does John McCain really think Social Security is a disgrace?

Depends on who's paying this week.
.

Posted by: Grand Moff Texan on July 9, 2008 at 1:10 PM | PERMALINK

What got to me in the CNN interview was McCain's statement, "We've created 46 million new jobs since 1982, because of lower taxes..." Excuse me!!???!! 22 million of those jobs were created under Clinton's watch...after raising taxes. The man lies and lies and lies and the MSM eats it up with a spoon.

Posted by: majun on July 9, 2008 at 1:10 PM | PERMALINK

Our John has not looked at his own demographics. The only age group where he has sizable majorities are the 55 + crowd. If the video of him saying Social Security is a disgrace because it is a generational redistribution are widely shown to...well...us folks he's going to lose his only friends. We're a group that paid willingly to keep Social Security checks coming to the 'greatest generation' and thought that was the right thing to do. Sayonnara, John.

Posted by: JohnMcC on July 9, 2008 at 1:10 PM | PERMALINK

Maybe there's something going on behind the scenes that we don't know about. Maybe McCain's buddy John Kerry got on the phone and gave McCain a challenge: I'll donate $50,000 to the RNC if you can say something stupider than claiming not to care whether we stay in Iraq for 100 years.

It's the best explanation I can come up with.

Posted by: reino on July 9, 2008 at 1:16 PM | PERMALINK

Who is paying for the outrageous retirment benefits of military command and general staff officers? And does McDodo think that is a disgrace?

Posted by: Brojo on July 9, 2008 at 1:17 PM | PERMALINK

McCain sure seems nutty. But this AMs political news is all about missiles and Obama's children. So McSimpson gets another bye. At least the Iranian smoking comment is getting play. For what little that is worth.

Posted by: keith g on July 9, 2008 at 1:19 PM | PERMALINK

In general, the press is simply lazy and basically uninformed. It has a duty to report without bias, but it also has a duty to inform and clarify by providing relevant facts that are omitted by candidates. I suspect a shocking number of "journalists" really don't understand how retirement funds work.

The MSM regards a presidential election as something no different than a TV show like "American Idol." The fact that McCain's slap at Social Security was pitifully inaccurate is not newsworthy. The "news" is that McCain lobbed another charge at the Democrats. If Obama answered by leading a two-week hunger strike, prayer vigil and symposium to explain the basis of Social Security and retirement systems, the press would simply report "Obama Camp Disagrees with McCain on Social Security."

Posted by: alibubba on July 9, 2008 at 1:23 PM | PERMALINK

"McCain is talking as if he just figured out that this is how Social Security works and he's scandalized by it."

As if?

Posted by: Lanco Yokel on July 9, 2008 at 1:25 PM | PERMALINK

Don't kid yourself, obama will sell-out Social Security too. He has already said that it is in "crisis" (a lie).

Just like it took a democrat-in-name-only, bill clinton, to eliminate welfare, it will be a democrat that eliminates the most successful federal program of all time - Social Security.

And obama is just the corporate hack to do it. Slam mccain all you want, but obama doesn't stand for anything different in terms of action.

Posted by: on July 9, 2008 at 2:02 PM | PERMALINK

The anonymous Obama basher always leaves out two very important points in its posts:

1) McCain will kill many more civilians than Obama.

2) Vote for Cynthia McKinney.

Posted by: Brojo on July 9, 2008 at 2:12 PM | PERMALINK

Social Security works in similar fashion to how parenting works.

My grandparents paid for my parents upbringing.

My parents paid for my upbringing.

I'm paying for my daughter's upbringing.

Seems fair.

And all done with a ratio of parent to children that never is lower than two-to-one! Sometimes it even gets so crazy that the ratio gets inverted and you have one parent supporting 4 or more children! Obviously an unsupportable pyramid scheme!

Now I suppose if I channel my inner-Republican I'd whine about how I'm paying MORE now to raise my daughter than my parents paid for me. Outrageous! Unfair! After realizing how I've been screwed Republican-Me would then make things fair by refusing to pay one dime more for my daughter than was spent on me. Fair! Problem solved!


Posted by: Curt M on July 9, 2008 at 2:23 PM | PERMALINK

I'd sooner vote for Grandpa Simpson.

Posted by: ckelly on July 9, 2008 at 3:10 PM | PERMALINK

I wonder what other mis-conceptions John McCain has?
Banking system.
"It's disgraceful. The bank doesn't have the money to cover deposits"

Others?

Posted by: Tom_23 on July 9, 2008 at 4:01 PM | PERMALINK

McCain thinks it is a disgrace that the Social Security taxes of younger workers are funding the Social Security payments of current retirees, instead of going into the pockets of his ultra-rich cronies and financial backers on Wall Street where they belong.

Posted by: SecularAnimist on July 9, 2008 at 4:03 PM | PERMALINK

It's disgraceful. People are buying houses without enough cash on hand to pay for them.

Posted by: reino on July 9, 2008 at 4:13 PM | PERMALINK

Kevin wrote: this is the way virtually every retirement system in the world works, and it works fine.

Yes, most governmental retirement plans work this way, but

-- A private pension plan thqt worked this way would be an illegal Ponzi Scheme.

-- A few governments allow workers to put part of their governmental pension contribution into private investment funds. The partially privatized portion of a governmental pension is funded.

-- All Ponzi Schemes work well for a period of time. Trouble comes when the income to the Plan stops increasing fast enough to match the outgo. Most of Europe is burdened by expensive welfare promises that require high taxes. The high tax rates hold the European economies down. Europe has considerably higher unemployment than we do.

Posted by: David on July 9, 2008 at 4:16 PM | PERMALINK

Europe's social programs and our Social Security are different animals. Those much-ballyhooed onerous European taxes cover all sorts of things other than retirement: healthcare, childcare, college, unemployment, vacations for the unemployed, and subsidize public transportation and the arts. The US's Social Security is to European tax structures what a tire is to an entire truck.

Posted by: jon on July 9, 2008 at 4:45 PM | PERMALINK

Ah, it's refreshing to see "ex-liberal" abandon his feeble pretense as an honest commentator. Social Security is not a "Ponzi Scheme;" it's fully funded by Federal taxes -- with a surplus, yet, only Bush's transfer of wealth from working Americans to the rich has diminished it. It's just that generations of less dishonest conservative attacks have failed to dent the support for this popular program.

And that's the crux of it, people. Dishoenst conservatives -- but I repeat myself -- simply can't stand the popularity and success of the New Deal in general and Social Security in particular. There's no level to which they won't stoop to return America to their twisted version of Utopia, the Gilded Age.

Posted by: Gregory on July 9, 2008 at 5:26 PM | PERMALINK

*

Posted by: mhr on July 9, 2008 at 7:28 PM | PERMALINK

If anybody doesn't understand Social Security, send them to:

http://youtube.com/watch?v=Tts2uTWt6e8

If anybody doesn't understand Bush's Tax Cuts, send them to:

http://youtube.com/watch?v=SA1f2MefsMM

Posted by: Lee A. Arnold on July 9, 2008 at 11:37 PM | PERMALINK

Lol you guys - no wonder ppl who frequent sites like this are called J6P and "sheeple" by the financially literate.

Look at your current outstanding gov debt.

Look at the incoming housing bailout of FRE FMN who have liabilities in the trillion dollar range and capitalization only in the billions.

Look at your dying USD and the fact that the only thing holding up UST purchases are FCBs that are rapidly getting sick of buying toilet paper.

Social Security no problem ? ha ha ha

Posted by: lolcat on July 10, 2008 at 8:08 PM | PERMALINK




 

 

Read Jonathan Rowe remembrance and articles
Email Newsletter icon, E-mail Newsletter icon, Email List icon, E-mail List icon Sign up for Free News & Updates

Advertise in WM



buy from Amazon and
support the Monthly