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Wall Street's Plan to Push Obama to Betray Those Who Elected Him

Through its lobbying group Third Way and media mouthpieces, Wall Street is determined to destroy the social safety net.

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9. In Reality, the Social Safety Net is Good for Economic Growth

Observe how Third Way talks about safety net payments and "investments" in a way that makes the makes the social safety net look harmful:

“[The Third Way study] examined two categories of federal spending over the past 50 years, representing two of government’s fundamental missions.  One was “investments,” … helping assure that our work force is educated to a high standard….  The other category was “entitlements,” a catchall word for the safety-net programs….”

Now observe how Keller adopts wholesale Third Way’s asserted dichotomy and its warning that the increase in safety net payments relative to “investments” harms our nation.

“By 2030, when the last of us boomers have surged onto the Social Security rolls, entitlements will consume 61 cents of every federal dollar, starving our already neglected investment and leaving us, in the words of the study, with ‘a less-skilled work force, lower rates of job creation, and an infrastructure unfit for a 21st-century economy.’”

While the numbers in the Third Way report are not accurate, note that Keller adopts the Wall Street (and Republican Party) assertion in the Third Way report that safety net expenditures “crowd out” “productive” “investments” in the public and private sectors.  The asserted dichotomy between “productive” “investments” and “unproductive” “safety-net” expenditures is false.  In reality, the safety net often produces some of the most economically productive results of any private or public sector expenditure, as George Romney’s career showed.  Health care expenditures often extend lives and “productive” work lives.  More fundamentally, the entire dichotomy and claimed “crowding out effect” is false.  Indeed, when we are below full employment (our most common condition), the safety net expenditures increase economic growth.  What Keller and Wall Street (via their Third Way mouthpiece) are pushing in these passages is a variant of Romney’s “47 percent” claim that people who receive payments under the safety net are drones who harm the productive class.

Keller ends with this proposal:  “We should make a sensible reform of entitlements our generation’s cause.” 

As a nation, we have immense needs because of how our working class and the poor have been hammered over the last three decades.  Keller, and Wall Street (via the Third Way), however, urge us to make “our generation’s cause” the reduction of the safety net that has reduced massively the agony of the suffering of the poor and the working class and was essential to the economic recovery we have experienced.  Keller and Wall Street claim that the “centrist” position is that the Democratic Party’s central mission is to lead an assault on the poor and the working class.

As extreme as Keller’s position is, Wall Street’s position (as expressed in the Third Way study) was more extreme.  The report claims that:  “Entitlements are a critical part of economic security, but without change, investments will all but dry up….”

Here is the Third Way’s summary of the report.

“Public investments and entitlements are on a collision course.

Since the 1960s, LBJ’s Great Society and JFK’s New Frontier have competed for federal dollars. And as the cost of entitlement programs like Medicare and Social Security has skyrocketed, we’ve spent less and less of our budget educating kids, building roads, and curing disease.

In this report, we argue that the only way for Democrats to save progressive priorities like NASA, highway funding, and clean energy research is to reform entitlements. The lame duck offers Congress a “Now or Never” chance to set the terms of a budget deal that saves money on entitlements, raises revenue, and protects investments. And the heart of the Democratic brand is depending on it.”