Goldman, Other Welfare Queens Tell Us Forget Social Security-Medicare Until 70

Michael Collins

(Washington, DC 1/21)  A long standing  Money Party front, the Business Roundtable, wants you to wait until you’re 70 years old before you get Social Security and Medicare benefits.  This is just a reprise of the November 2012 dictate from the king of corporate cronyism, Goldman Sachs CEO Lloyd Blankfein.  (Image: DonkeyHotey)  (Greenspan statement)

The boss announced, “So there will be things that, you know, the retirement age has to be changed, maybe some of the benefits have to be affected, maybe some of the inflation adjustments have to be revised. But in general, entitlements have to be slowed down and contained.”  Lloyd Blankfein, CBS News, November 2012

That’s easy for Lloyd to say.  He makes tens of millions of dollars a year without so much as lifting a finger.  You can be sure that Blankfein has a deluxe health insurance and retirement plan.

Most seniors lack these necessities.  Half of those 65 or older make  $45,000 a year ($3,750 a month) or less.  If you have to wait until 70 for Medicare, you can either pay monthly health insurance premiums of $1,000 to $3,000 a month (if you can get it) or you can learn pain and suffering up close without coverage.  You can eat much less and downsize to substandard shelter to pay your health care costs (premiums and out-of-pocket expenses).  Perhaps the combination of restricted health care, substandard diet, and inadequate shelter may even kill you, in which case the problem is solved.

How would Lloyd react if he had to pay anywhere from 25% to 60% of his gross income for medical coverage?  Would he have a different opinion given the choice between food and shelter versus health insurance premiums?

The Money Party proposals for entitlements represent a looming disaster for millions of working people who struggle to make it to a retirement age of 65.  In fact, nearly 20% take the lower Social Security benefits that come with early retirement at 62.

Medicare eligibility is fixed at 65.  Let’s say it’s raised to 70.  Instead of waiting three years for medical coverage, the early retirees (often unfit to work or unemployed) would wait eight years for Medicare.  For those who take the full Social Security benefit at 66 (born from 1948-1954) or 67 (born after 1960), the wait for Medicare would be three to four years.   Imagine the possibilities for complications and tragedy while waiting for Medicare.

There’s a real genius to the Blankfein-Roundtable proposals that escapes public examination.   The longer benefits are delayed, the more people will die before claiming any of the benefits.  The longer benefits are delayed, the longer people will end up working.  That means greater stress on health with more people axed from the Social Security and Medicare rolls due to an earlier than expected demise.

It gets even worse.  The higher the retirement age for Social Security, the more seniors end up paying in Social Security taxes.  That creates an even larger poll of funds for the annual borrowing from Social Security surpluses (aka rake-off) by the government to cover a much of the pork-laden Federal budget.  All we get is a promise that our taxes and contributions will be repaid as we hear various executives, politicians, and commissions demand that those benefits be reduced.   Their scamming is without end.

The real money shot for the Money Party would be to leave Social Security retirement ages alone but insist on and get the 70 year old requirement for Medicare benefits.  Since most of the retired population likely can’t afford to buy private health insurance while they await Medicare, the death toll would rise exponentially.

Some of you may be wondering, Can’t people just keep working until the later eligibility age so they’re not reliant on either Social Security or Medicare?

The irrefutable answer to that question is no.  The real unemployment rate is 23%.  The jobs aren’t there for those challenged by increased eligibility ages.  This isn’t a controversial analysis.   Here’s how you get to the real unemployment rate of 23%?   Start with the Bureau of Labor Statistics U-6 unemployment rate of 15%  (which incorporates the official rate of around 8%)  then add all those unemployed for more than twelve months who want to work and you get 23% real unemployment (See the Shadow Government Statistics analysis).

You’d think Lloyd would hire an adviser to brief him before he shoots his mouth off.

Why should he?  Blankfein and his Wall Street pals got away with the biggest theft of all time – trillions of dollars in home equity value, retirements, etc.  as a result of the 2008 financial collapse.  Nothing happened then and certainly nothing will happen now to any of the financial elite for their nonstop, profoundly offensive and deadly proposals.

There is no justice when theft like this goes unchallenged.  The perps are still fat and happy with plenty of walking around money.

There is no civility and decency when monsters like Blankfein and the Business Roundtable feel that they have the license to make such outrageous proposals.

Who among those elected will challenge and rein in the Money Party?


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Michael Collins

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10 CommentsLeave a comment

  • Amen. Great post. Its about time someone called Blankfein and his ilk, “monsters “, because that is what they are. Selfish, egomaniacal degenerates who would shit on the least among us to enrich themselves.

  • Not much to add but a thanks. And a question.

    How do we fix this mess?

    PS. I should add that while so called conservatives and neo-cons cry about entitilements for the poor, they fail to recognize subsidies (energy, ag. etc.), defense contracts, etc as additional welfare programs for the wealthy.

    • Don is correct in pointing out that federal subsidies constitute a form of ‘corporate welfare’ which the owner class claims as an entitlement of wealth.

      There is also another form of ‘corporate welfare’: after 50+ years in the business world working with scores of companies, I can tell you that – at least in the white-collar world – 90% of the useful work is done by about 20% (or fewer) of the employees. To my mind the other 80% of the employees are on ‘welfare’.***

      The poor should at least be entitled to a decent level of food, housing, healthcare and education and it would actually require only a pittance of the funds that are currently lining the pockets of the ultra-rich.

      The Middle Class? See *** above.

      A small part of the earnings/wealth of the top .5% could virtually eliminate poverty and mitigate its terrible effects.
      A small part of the earnings/wealth of the top .5% could deal with climate change.
      The ultra-rich are unwilling to cede even that small part of their earnings/wealth/power. Need I say more?

    • There is a massive entitlement called the weapons budget of the Defense Department. Very little of that money goes to defend us. It’s just a corporate welfare program for useless weapons for the stated war on zealots.

      That’s part of the fix, downsize the Empire, close the 1,000 US facilities overseas. What the Hell are we doing with military presence in a 1,000 places?

      Another part is to get real about employing the 23% unemployed. An old economic law states, “The “gap version” states that for every 1% increase in the unemployment rate, a country’s GDP will be roughly an additional 2% lower than its potential GDP.” Well, even if it’s off by half, that’s still a huge drag on the economy. Nobody argues that increased employment equals increased GDP, which means more taxes.

      But to do something like that means the poo bahs would have to fess up to lying about unemloyment. Better they save face than deal with the problem.

      There are solutions related to medical care as well.

      Folks with congestive heart failure spend $41,000 a year on health care; with coronary artery disease $16,000; diabetes $12,000. About 60% of the country is overweight or obese. Combine overweight with any of the above and the costs are higher. If you focused on preventing the chronic diseases or reducing the impact, there are huge savings. If you push the weight issue, you cut across all disease entities. Nobody talks about this cost reduction or making these programs affordable.

      If you try to prevent any of this and can’t, no problem but if you deliberately make yourself sick, then why should anybody fund your lifestyle.

      Lots of options and I’m just a citizen thinkig about it.

    • Oh, I like that. Lord Blankfein. If the royal family will give Jimmy (the child molester) Savile a “Sir”, then why not lard it on Lloyd. I kind of like King Crony, the High Priest of Prevarication, or the Vicar of Vice;) (actually, the latter would be Prince Harry).

  • My gut instinct is that naked appeals to human decency will fail to win over much popular or any money party support. The problem is that such arguments are easily framed as a debate about how to spread the pain around: pain of those whose benefits are reduced vs. perceived pain caused directly and indirectly by taxes and large government expenditures relative to GDP. Popular but naive and vague understanding of macro-economics have it as plausible that the government’s help here is really “help” that (through magical market thinking) somehow does more harm than good. Outrage about the richies is limited in its political applicability (seems to be the empirical fact).

    I think this alternative might have some legs, though:

    1) Raising the retirement age is terrible public policy while unemployment is so high for young adults. Asking people to stay on the job longer when there is a shortage of jobs is plainly crazy. (I believe that there are factions of the financial elite who will strongly endorse this argument just as their are factions that would be thrilled to dump employer-provided health insurance entirely. Corporations don’t like being in the business of supplying individual pensions when that interferes with their flexibility to change who’s on payroll.)

    2) Similarly, the flexibility of the younger part of the workforce is obviously tied to the welfare of seniors. Further reducing and delaying benefits directly increases the financial and care giving burden on younger workers, harming their earning and saving potentials at a time when, to cope with the demographic bubble, we need to increase the earning and saving potentials of younger workers. (This part should have a lot of appeal to middle class and working poor younger workers who are currently fretting about what is to become of their baby boomer parents. At least I know that it’s on my mind.)

    3) This next bit is a little tricky. Put a progressive floor on payroll tax revenues as follows:

    Implement generous means testing and a raise on the earnings cap for payroll taxes. If the private sector isn’t producing enough employment to cover the programs’ costs, but is producing plenty of income, the tax burden needs to go up on higher incomes. If employment improves, the extra burden on high earners can be reduced. In this way, as a matter of policy, we can fairly keep payroll tax revenues stably in proportion to anticipated need for benefits.

    The law could actually be written that way: Variable payroll taxes on high incomes could be either or a mix of a variable ceiling on taxable income or progressive but variable rates. The level of the new progressive part of the payroll tax would be varied automatically to hold revenues to some constraint. So there would be an employment-related floor on payroll tax revenues.

    (The money party objection to this would be that it implies raising taxes (on high income earners) during contractions in employment so “job creaters durpdy durp” and arguments along those lines. As we saw in the election, though, there is pretty strong popular rejection of that argument. It is in any event a huge retreat from “OMG, the gov’t is going bankrupt!”)

    4) Reducing health care costs is the #1 biggest thing we can do to reduce projected benefits. This is fantastic news because other than the political barriers, it’s very easy and painless to make huge progress. The government is paying far too much for prescription drugs, thanks to lobbyists, for example. These are the kinds of hard choices we need to make to bring down cost projections going forward: choices that some of the wealthiest individuals and corporations may not like because where we anticipate excessive governmtent spending, they see themselves as the likely recipients, who will get that spending as windfall revenues and profits. If the government starts paying a fair price for prescription drugs, their profits will be smaller. Well, they can still make a decent profit even if the government is allowed to negotiate on price and now it’s very important to move in that direction.

    5) The government spends a lot to provide a safety net with the likes of unemployment insurance, housing assistance, foodstamps and WICs support, … And yet in the pockets of poverty in this country so much of that spending is inefficient because communities are under-served. Access is scarce, for many, to healthy, affordable food. Many of the nation’s poorest live in areas from which it is economically hard to escape and where the environment, even the housing in which people live, is unhealthy. These conditions drive up the nation’s health care costs and put huge obstacles in the way of kids who should be getting an education and preparing to join the workforce. We should create local citizen commissions to advise local housing authorities and authorize a process for administrating federal tax relief incentives to projects that improve the housing stock and food security in low-income neighborhoods in deep cooperation with the people living in these pockets of poverty, who have the greatest interest in the outcomes. (E.g.: Federal tax incentives to create cooperative groceries, urban farming, brownfield restoration projects, lead paint and other toxic substance removal from residences, installation of modern insulation in regions with cold winters, high-priority small business assistance, and community recreation facilities.)

    My intent (failed or not) here is to suggest a positive program that is easy to grok on a naive, intuitive level and that also seems plausibly realistic to a policy implementation wonk. I haven’t personally tried to quantify any of it, though (so that’s a big weakness, I admit, but then again the alleged quantifications of money-party policy platforms aren’t what carries them, I think.).

    • Regarding reducing healthcare costs: Since 2010, Ontario Premier Dalton McGuinty has been taking on the big pharmacies. As a result, the provincial government and Ontarians pay less for generic drugs. Also, enough savings were generated to raise social assistance (Ontario Works) and disability payments by 1 per cent each.

      Other Canadian provinces have followed suit.

      More details here

    • You thinking is the type of positive step that citizens need to take. The elite doesn’t want to pay for pensions or medical care. Unfortunately, they don’t want to pay a decent wage or keep jobs in this country, even thought the ability to consume is reliant, to large degree, on decent jobs. They can’t solve the problem due to bias and, if Blankfein is an exemplar, they’re pretty limited intellectually and socially. The guy should have been thoroughly investigate, is widely hated and he goes high profile with an anti-human proposal.

      I mentioned some options for Medicare fixes in my reply to Don up thread. One more is this – increase the size of medical school classes and increase medical schools. The competition for admissions in fierce. So many qualified candidates are rejected, candidates who would have just as good a chance at serving well as most of those admitted. Why should they go to medical school overseas? Increase doctors just as fast as possible and you will see medical cost go way down. Tie lots of scholarships to serving 4-5 years in low coverage areas and you deal with imbalance.

      The level of debate in Congress doesn’t approach the depth of that on this thread.

      Any overall solution requires policy goals and an engineering mentality.

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