Bill Moyers: The Corporate Plot That Obama and Corporate Lobbyists Don't Want You to Know About
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YVES SMITH: I think to put it more bluntly: no one is willing to talk about the fact that Social Security and Medicare cuts equal having old people die faster. And that the proposals to do that are indirect. And they've labeled them in technical language so that most people won't realize that's what happening. I mean, chained CPI, you know, that's a “my-eyes-glaze-over” term. And that's--
BILL MOYERS: Consumer Price Index?
YVES SMITH: Right, and so that's the mechanism by which the social security is going to be cut, is that the cuts will basically lag the inflation that seniors experience.
BILL MOYERS: And yet, I can just show you the headlines. President Obama said the other day the country has to address quote, "long-term obligations," that we have around things like Medicare and social security. The chair of the Senate Budget Committee, Patty Murray, Democrat from Washington State says, "All issues are on the negotiating table."
The number two Democrat in the Senate, Dick Durbin, told “FOX News on Sunday” that Social Security's going to run out of money in 20 years, Medicare may run out of money in ten years, let's fix it now. That's Dick Durbin, number two man in the Senate. I mean, it sounds like Democrats are in a bargaining mood.
DEAN BAKER: Absolutely. The one thing we have going for us is the vast majority of people across the country in both political parties are strongly opposed to these cuts. You know, so that is the thing they have to overcome. So you get 75 percent to 80 percent of Republicans, Tea Party Republicans that are opposed to cuts to these programs.
But just to take the specific points that, you know, Senator Durbin raised, if you look at Social Security, it's gone from being about four percent of our economy in 2000, to about five percent today. It's projected to be about six percent in 20 years. That's because we have an aging population, the baby boomers. We can handle that. That's not a big deal.
But when you talk about Medicare, it's a totally different story. That's being driven by our healthcare costs. We spend more than twice as much per person as the average for other wealthy countries, we have nothing to show for it in terms of outcomes. We have to fix our healthcare system. So talking about “we're going to take this from seniors” is totally wrongheaded.
Now we can go back to our trade deal and say, "Okay, let's get lower-cost drugs. Let's get lower-cost doctors." There are things we can do to fix healthcare. I've been on panels with a lot of these people that go, "Oh, but Dean, fixing healthcare's hard." I thought you were the tough guys.
YVES SMITH: There's a piece of this that's even uglier, which is that the statistics that everyone relies on, you know, all the people that you quoted, come from the Congressional Budget Office. They're the more skeptical economists who have looked at them, have actually found pretty serious problems with their forecast, that even though they are, quote, "nonpartisan" in terms of not being affiliated with either party, they have in fact taken a very deficit-hawkish approach to the way they put their numbers together. Two economists who are at the Federal Reserve, and they are probably the two most qualified economists in the country, they wrote a paper on the CBO's healthcare cost forecast, and they shredded them. So if you were to use these Fed economists' forecast, you wouldn't be anywhere near as concerned. You wouldn't have the drive to quote, "fix," end quote, these programs.