Monday, December 10, 2012

The “Fiscal Cliff” And The Dismantling Of Medicare

It is becoming increasingly clear that any deal reached in the negotiations in Washington over the “fiscal cliff” will include a major expansion of means testing for Medicare, the federal health insurance program for seniors and the disabled. The introduction of increased fees based on income will signify Medicare’s transformation from a universal health care program for the elderly into a poverty program, the first step in its being starved of funds and ultimately dismantled.

In the ongoing deficit-reduction talks, leading congressional Democrats have suggested that they are open to means testing, beginning with the raising of premiums for higher-income beneficiaries. Dick Durbin of Illinois, the senior senator from President Obama’s home state and the second most powerful Democrat in the Senate, said Thursday that means testing for Medicare is “certainly consistent with the Democratic message that those who are better off in our country should be willing to pay a little more.”

Senate Finance Committee chairman Max Baucus (Democrat of Montana) last week called the idea “somewhat attractive,” while Congressional Black Caucus chairman Emanuel Cleaver (Democrat of Missouri) suggested that means testing would be a good way to cut spending for Medicare, supposedly without reducing benefits.

President Obama has already given his stamp of approval. During the 2011 debt-ceiling negotiations, he proposed raising Medicare premiums for wealthy seniors. He commented in July 2011, “You can envision a situation where, for somebody in my position, having to pay a little bit more on premiums or co-pays or things like that would be appropriate.”

On its face, the proposal that higher-income seniors “pay a little more” for Medicare may seem reasonable. Some means testing has already been introduced into the program. Since 2007, higher income people on Medicare have paid higher premiums for outpatient doctor visits.

But there is nothing egalitarian about moves to make means testing an essential part of Medicare. A fundamental structural change, it is the thin edge of the wedge for undermining the program, which is why supporters of Medicare have opposed such proposals, previously the province of sections of the Republican right.

It is being promoted now by both parties as part of a frontal assault on all that remains of the social reforms enacted in the 1930s and 1960s. In the name of reducing the deficit and the national debt, and on the basis of the lie that “there is no money” for social programs, the American ruling class and both of its parties are carrying out a social counterrevolution.

The same Democratic hypocrites who are pushing for means testing for seniors, supposedly in the name of “fairness,” propose at most a token one or two percent rise in income tax rates for the richest 2 percent of Americans—under conditions of unprecedented and increasing social inequality. Even this pathetic measure is to be quickly reversed by a “comprehensive tax reform” that will slash rates for corporations and the rich.

Medicare was established in 1965 as an amendment to the Social Security Act of 1935, providing health insurance for people 65 and older, regardless of income or medical history. People pay into Medicare their entire working lives based on the assumption that they will have secure health coverage when they retire. The program is mostly funded through payroll taxes on employers and workers, levied equally.

Before Medicare, an estimated half of older adults had no health insurance, due to lower incomes and poverty among seniors and the higher premiums charged by private insurers for this age group. Medicare has sharply reduced the poverty rate and helped extend the life expectancy of retirees. This will now be reversed by a financial aristocracy that has no use for elderly people who cannot be directly exploited for profit.

Who is to set the parameters for determining who is sufficiently wealthy to pay more for health care? And once rates are raised for one section of the population, the way will be cleared not only to hike payments for more people, but also to gut their benefits.

The attack on Medicare is, moreover, a prelude to means testing for Social Security, the New Deal program that established universal retirement benefits.

In the fiscal cliff negotiations, Obama and politicians of both big business parties claim there is “no money” for Medicare and other social programs even as the bailout of the banks continues and trillions are spent on the military and war. Four years after the onset of the recession, the corporate-financial elite is amassing record profits and wealth while the vast majority of the population is growing poorer.

It is highly significant that the assault on Medicare and other core social programs is being carried out under a Democratic administration. This is the culmination of a decades-long process by which the Democrats—always a capitalist party—have repudiated their past social reform policy, which served as the basis of their working class support.

The Democratic Party today rests on major sections of the corporate and financial elite along with upper-middle class layers, including the most privileged sections of blacks and other minorities, the trade union bureaucracy, and the milieu of the ex-left. The Obama presidency is the end product of a process by which the Democratic Party, based on the politics of race and gender, has turned openly and viciously against the working class.

Social reforms such as Medicare and Social Security were not granted as gifts from on high. They were wrenched from the ruling class as a result of great working class struggles in which workers died at the hands of police and company thugs and faced off against federal troops.

These pivotal struggles included general strikes that paralyzed entire cities in 1934, the sit-down strikes that established the industrial unions later in the 1930s, and the mass strike wave that followed World War II. Together with the Civil Rights Act of 1964 and the Voting Rights Act of 1965, Medicare was enacted in the context of the tumult of the civil rights and anti-war struggles, militant labor battles and ghetto rebellions of the 1960s.

The great limitation of these earlier struggles was the failure to establish a mass, politically independent movement of the working class. The working class remained tied politically to the Democratic Party as a result of the right-wing perspective of the trade union bureaucracy and its political allies. Today, these conditions are breaking down as it becomes clearer to millions of people that both big-business parties represent the interests of the ruling elite.

The defense of Medicare and other social programs, and the securing of the basic social rights of the working class—the right to a good-paying job, health care, decent housing, education, a secure retirement—depends upon the building of a new political movement of the working class, independent of and opposed to the two-party system, to put an end to the stranglehold of the financial parasites over society and reorganize economic life on the basis of social need, not private profit.

The Employment Rate Has Been Under 59 Percent For 39 Months In A Row

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The mainstream media is heralding the decline of the official unemployment rate to 7.7 percent as evidence that the U.S. economy is improving.  But it is a giant lie.  The truth is that unemployment in America is not actually going down.  The percentage of working age Americans with a job actually dropped slightly in November.  During the last recession, the percentage of working age Americans with a job fell from about 63 percent to under 59 percent and it has stayed there for 39 months in a row.  In September 2009, during the depths of the last economic crisis, 58.7 percent of all working age Americans were employed.  In November 2012, 58.7 percent of all working age Americans were employed.  It is more then 3 years later, and we are in the exact same place!  So how in the world are they able to pretend that the "unemployment rate" is going down steadily?  Well, they get there by pretending that hundreds of thousands of unemployed workers "leave the labor force" each month.  According to the government, another 350,000 Americans left the labor force during November, and when you keep pretending that huge chunks of workers "disappear" each month it is easy to get the "unemployment rate" to go down.  But any idiot can see that there is something really funny about these numbers.  Barack Obama has been president for less than four years, and during that time the number of Americans "not in the labor force" has increased by nearly 8.5 million.  Something seems really "off" about that number, because during the entire decade of the 1980s the number of Americans "not in the labor force" only rose by about 2.5 million.  At this point the official unemployment rate is so manipulated that it is of very little value at all.
But the mainstream media is just eating up this "good news".  They are very excited that the "unemployment rate" has fallen from its peak of 10.0 percent in October 2009 to 7.7 percent now...
But if unemployment was actually going down, we should be seeing the percentage of Americans with a job go up.
Unfortunately, that is NOT happening.
As I mentioned above, the "employment rate" fell below 59 percent during the last economic crisis and it has stayed there for 39 consecutive months...
So all of that stuff about the employment situation getting better is just a load of nonsense.  The percentage of Americans with a job has stayed very, very steady since the end of 2009.  It is almost as if someone has hit a "pause button" and won't let unemployment get better or get worse.
This is the first time since the end of World War II that we have not seen the employment-population ratio bounce back in a significant way after a recession has ended.
To me, that is a very bad sign.
I also find it very interesting that the government revised the "job gains" for September and October downward in this recent report...
The government revised down job gains for September and October by a total 49,000. September's additions were revised from 148,000 to 132,000 and October's, from 171,000 to 138,000.
So it turns out that the glowing employment reports from those months that helped get Obama re-elected were really not that great after all.
The truth is that it takes somewhere between 100,000 and 150,000 new jobs a month just to keep up with the growth of the population.  So at best we are treading water.
And who is "creating" those new jobs?
According to an analysis performed by, 73 percent of the jobs "created" over the past 5 months have been "created" by government.
But government does not create real wealth.
Real wealth is only created by the private sector.
It would be very nice if I could report a major employment turnaround, but it simply is not happening.
Instead, we continue to see an increase in the number of Americans living in poverty.
If things are getting better, then why are organizations like the Salvation Army seeing record numbers of families coming to them for help this holiday season?
For much more on the continued growth of poverty in the United States, just see this article.
Sadly, an increasing number of Americans find themselves forced to turn to the government for assistance, and the cost of caring for all of them has become extremely expensive...
According to the Republican side of the Senate Budget Committee, welfare spending per day per household in poverty is $168, which is higher than the $137 median income per day. When broken down per hour, welfare spending per hour per household in poverty is $30.60, which is higher than the $25.03 median income per hour.
But if you think that things are bad now, you should brace yourself, because things are going to get even worse.
For example, how much worse will things get if a fiscal cliff deal is not reached and millions more Americans find themselves in desperate need of help?  According to ABC News, more than 3 million Americans will lose unemployment benefits by the beginning of April if Congress does not do something...
Millions of unemployed Americans have another reason to worry about "fiscal cliff" budget talks that seek to avoid looming tax increases and dire spending cuts come January.
About 2.1 million people will stop receiving jobless benefits immediately if Congress doesn't reauthorize federal unemployment insurance programs by year's end. Another 1 million will lose benefits over the first three months of 2013.
2013 is already shaping up to be a very tough year.
But the mainstream media is not really talking about how the middle class is systematically being destroyed or about how our once great manufacturing cities are being turned into desolate wastelands.
They just want us all to be happy, but the cold, hard reality of the matter is that the U.S. economy no longer produces enough jobs for everybody and it never will again.
Both of our major political parties have fully embraced the emerging one world economic system which puts average American workers into direct competition for jobs with workers in third world countries where it is legal to pay slave labor wages.
Millions of good paying American jobs have been shipped to countries where workers work very long hours in absolutely horrific conditions for as little as 45 dollars a month.
Are you willing to work for 45 dollars a month?
Meanwhile, Americans that still do have jobs are piling up more debt than ever before.  It appears that most people have not learned any lessons from the last major economic crisis.  It has just been reported that consumer borrowing in the United States has hit anew record high...
Americans swiped their credit cards more often in October and borrowed more to attend school and buy cars. The increases drove U.S. consumer debt to an all-time high.
The Federal Reserve said Friday that consumers increased their borrowing by $14.2 billion in October from September. Total borrowing rose to a record $2.75 trillion.
Isn't that lovely?
And of course the biggest offender of all is our federal government.  They just keep borrowing money as if there was no tomorrow.
During the first two months of fiscal year 2013, the U.S. government has run a deficit of $292 billion dollars ($57 billion worse than last year) and during that time it has borrowed an average of $4.8 billion dollars a day.
30 years ago, the U.S. national debt was about 1.1 trillion dollars.
Now it is more than 16.3 trillion dollars.
To get an idea how much money 16 trillion dollars is, just watch this 2 minute video.
How could we be so stupid?
Yes, much of America is still experiencing "prosperity" right now.  But it is a prosperity that has been fueled by the greatest debt bubble that the world has ever seen.
When that debt bubble bursts the pain is going to be unbelievable.
If you actually believe that America is going to prosper in the years to come, you are just fooling yourself.
Our economy is declining and has been declining for quite some time.  If you doubt this, just read this: "34 Signs That America Is In Decline".
So that is the bad news.
But the good news is that even though the entire nation is not going to prosper, there will be those that will have prepared and that will have gotten themselves into position to take advantage of what is coming.  During the coming crisis a massive amount of money and wealth will change hands.  Instead of living in fear and cowering under a blanket, now is the time to figure out how you and your family can thrive during the hard times that are on the horizon.
During the economic crisis of 2008 and 2009, there were some people that actually did amazingly well.  So don't lose hope just because the U.S. economy is headed for disaster.
Everything that can be shaken will be shaken.  But if you understand what is happening and you prepare for it, the times that are coming can actually be a great adventure and a great blessing for you and your family.
But if you just stick your head in the sand and have blind faith in the system and pretend that everything is going to be okay somehow, then you will be blindsided by the coming crisis and you will only have yourself to blame.