Obama Begins Push for New National Retirement System

National Seniors Council

A recent hearing sponsored by the Treasury and Labor Departments marked the beginning of the Obama Administration’s effort to nationalize the nation’s pension system and to eliminate private retirement accounts including IRA’s and 401k plans, NSC is warning.

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The hearing, held in the Labor Department’s main auditorium, was monitored by NSC staff and featured a line up of left-wing activists including one representative of the AFL-CIO who advocated for more government regulation over private retirement accounts and even the establishment of government-sponsored annuities that would take the place of 401k plans.

"This hearing was set up to explore why Americans are not saving as much for their retirement as they could," explains National Seniors Council National Director Robert Crone, "However, it is clear that this is the first step towards a government takeover. It feels just like the beginning of the debate over health care and we all know how that ended up."

A representative of the liberal Pension Rights Center, Rebecca Davis, testified that the government needs to get involved because 401k plans and IRAs are unfair to poor people. She demanded the Obama administration set up a "government-sponsored program administered by the PBGC (the governments’ Pension Benefit Guarantee Corporation)." She proclaimed that even "private annuities are problematic."

Such "reforms" would effectively end private retirement accounts in America, Crone warns. "These people want the government to require that ultimately all Americans buy these government annuities instead of saving or investing on their own. The Government could then take these trillions of dollars and redistribute it through this new national retirement system."

Deputy Treasury Secretary J. Mark Iwry, who presided over the hearing, is a long-time critic of 401k plans because he believes they benefit the rich. He also appears to be one of the Administration’s point man on this issue.

"This whole issue is moving forward very quickly," warns Crone. "Already there is a bill requiring all businesses to automatically enroll their employees in IRA plans in which part of every employee’s paycheck would be automatically deducted and deposited into this account. If this passes, the government will be just one step away from being able to confiscate all these retirement accounts."

NSC has taken the lead in warning the nation about this new government onslaught and is plotting ways to stop it.

"This effort ultimately is designed to grab the retirement nest eggs of America’s senior citizens. This new government annuity scheme, even if it is at first optional, will turn into a giant effort to redistribute the wealth of America’s older citizens," explains Crone. "This scheme mirrors what I expect the President will try to do with Social Security. He wants to turn that program into a welfare program, too."

NSC will likely unveil a new grassroots campaign effort later this year or early in January to coincide with the seating of the new Congress.

Republicans, Democrats attacking Americans in bipartisan push for savage austerity

PressTV
Webster Tarpley

By all indications, the US ruling class of Wall Street financiers is determined to follow Greece, Spain, Portugal, and Great Britain down the road to drastic austerity. The financiers of lower Manhattan are thus ignoring the evidence offered by these other countries showing that austerity policies reduce employment, lower production, cause severe mass privation, introduce powerful elements of chaos into society, and actually increase the government budget deficits in future years -- meaning that austerity fails even in its own terms.

Since the 1930s, it has been widely recognized that a policy of deflation with severe cuts in government spending and in expenditures for social services will plunge a country deeper into depression. Once the depression has hit, usually as the result of the collapse of a speculative bubble like the $2 quadrillion derivatives mania of 2000-2008, the private economy shrinks rapidly, leaving government spending as the principal form of economic activity. If the government budget is nevertheless cut, this lowers the overall rate of economic activity; working people paying taxes are turned into recipients of public assistance, and the budget deficit grows rapidly. The classic case is the German government of Chancellor Heinrich Brüning in 1930-32, whose brutal austerity policies shrank the national economy by about 25% over the course of two years, but still could not prevent the German budget deficit from growing.

Despite all this, there is today a consensus between Wall Street and Washington that draconian austerity must be imposed in the United States. This will be the case no matter whether Obama or Romney wins the upcoming election. Romney has been very open about his determination to rule in the name of the top 1% of financiers and oligarchs, while imposing hardships and sacrifices on the rest of the population. Obama is somewhat more discreet, but he also has clearly signaled his desire for a sweeping austerity program to be agreed on by the two major US parties as soon as possible, probably before the end of this year.

Observers have noted that Obama and Biden, in their three debates held so far with their Republican rivals, have never mentioned the traditional Democratic Party platform planks of raising the minimum wage; preserving the funding of the food stamp program (the Supplemental Nutrition Assistance Program of the US Department Of Agriculture) which keeps some 50 million Americans alive; maintaining and extending unemployment insurance payments to the jobless; or making it easier for trade unions to organize.

Obama and Biden ignore waitress moms

This failure by Obama and Biden to even mention these concerns of lower middle class working people and the working poor does not represent astute politics. On the one hand, it is true that the Democratic Party has almost entirely lost its earlier base of support among white male workers. But the Democratic Party still has a sizable constituency of working women, often single mothers, who have no college education. These are the so-called “waitress moms,” for whom the economic issues are very important. But the Democratic Party ignores them, since promises of this type might get in the way of delivering the austerity demanded by Wall Street.

Intelligent trade unionists have not forgotten that, when the entire state of Wisconsin was gripped by a de facto general strike against the fascist Governor Walker in February-March 2011, Obama refused to lift a finger to help them. Obama could have sent in Vice President Biden, who pretends to be a populist, to support the strikers. He could have sent Attorney General Eric Holder to frighten the Walker gang with the prospect of federal indictments. He could have sent Labor Secretary Hilda Solis to investigate violations of the labor law. Obama could even have gone to Wisconsin himself, something he had promised to do in his 2000 campaign. But Obama did nothing. Nor did he help unions and other residents in Ohio, who were able to fight off a union busting campaign by their own fascist Governor Kasich, or in Indiana, where a union busting plan largely succeeded, or in Michigan, where the fascist Governor Snyder has kicked out the democratically elected mayors and city councils and replaced them with austerity dictators in cities like Benton Harbor, Flint, Pontiac, and Ecorse, and in the Detroit public schools.

Obama needs the members of trade unions to mobilize in his support during the final phases of his reelection campaign, but he offers nothing in return but killer cuts. When Obama ran for president the first time, he promised to institute a reform known as Card Check, which is simply a way to facilitate the establishment of union representation in workplaces. But Obama never did anything to get this law through Congress, and he has not mentioned it for years.

The ideological atmosphere in Washington, DC is heavily in favor of severe austerity, reflecting the elite consensus. Many news commentators are demanding that Obama implement the recommendations of the so-called Simpson-Bowles Commission, which favored three dollars worth of cuts in entitlements and the social safety net compared to one dollar in increased revenue, with only a tiny fraction of the latter coming from taxes on the super-rich. Former Senator Alan Simpson, the Republican co-chair of this commission, is no humanitarian, but is on record saying he hates senior citizens and also that he hates his own grandchildren, among others. Simpson Bowles is often called the cat food commission, since the entitlement cuts it demands would reduce many elderly people to eating cat food because of their poverty. In the first presidential debate, Obama endorsed the murderous program of Simpson-Bowles.

In the United States Senate, an effort for savage austerity supported by an alliance of both major parties is being mounted by the Gang of Eight, sometimes called the Crapo Commission by its critics in honor of the reactionary Idaho Mormon Senator Mike Crapo who is one of its prominent members. Crapo is joined by Republicans Alexander, Coburn, and Chambliss, plus Democrats Bennett, Warner, Durbin, and Conrad in discussions over how to flay the American people alive.

The essential unifying ideology of the Democratic Party is the defense of the progressive economic reforms of the New Deal, New Frontier, and Great Society. Depending on the specific program, polls show that between 65% and 80% of the American people want these social programs preserved in their current form, with no cuts. But Obama and other leaders see the Democratic Party as a confederation of social groups, each of which wants to practice its own brand of identity politics. By pandering to each of these forms of particularism and parochialism, postmodern Democrats like Obama hope to sell out the traditional entitlements and still survive politically. But it is quite possible that a massive betrayal by Obama of his own base on these issues would lead to a permanent weakening of the Democratic Party, conceivably a fatal one.

During the current pre-election phase, Obama is pretending to take a principled position on the coming austerity deal, sometimes referred to as the “Grand Bargain.” According to the Washington Post of October 18, Obama is sending out word to the Congress that he will veto any December-January budget deal that does not contain some tax increase on the rich. This posturing is hollow, for at least three reasons. First, Obama would be more than willing to barter a tiny tax hike on the super-rich for massive cuts in Social Security and Medicare. These cuts would leave the luxuries of the superrich untouched, but would cut deeply into the amenities of the middle class and the necessities of the working poor. Secondly, the Obama White House refused to say whether this veto threat will apply in case Obama loses the election. The implication is that, if he becomes a one term president, Obama will want to secure his place in history - as an austerity enforcer, given his neoliberal mentality -- at the expense of the weakest, oldest, sickest, and most defenseless elements of US society. A third problem is that the cowardly Obama has surrendered so many times that few take his threats seriously now. “Some Republicans, noting that the president has backed off demands for higher taxes twice in the past, are skeptical that he will stand firm now,” commented theWashington Post.

Another group which Obama has sold out is the college students who did so much to put him into the White House in 2008. Two thirds of the US college graduates of 2011 were groaning under student loan debt, with an average of $26,000 per bachelor’s degree student, plus more for advanced degrees, and much more for degrees in law and medicine. The student loan burden has now topped $1 trillion, about as much as consumer and credit card debt. Student loan debt is interfering with the normal process of human life, since the indebted young people are less likely to find apartments of their own, less likely to get married, and less likely to have children.

Because the US government is operating under multiple states of emergency, a real president could easily use the existing provisions of the Defense Production Act to declare a five-year freeze on all payments of interest and principal on these crippling student loans. He could use the same law to impose a 10% ceiling on all interest rates in the United States, thus reviving the usury laws of the pre-Volker era. But Obama is determined to serve Wall Street to the bitter end, even if the financiers are now channeling significantly more money to Romney than to the current tenant of the White House.

Romney, Obama Plot Shredding of Social Safety Net; Fight Back with Wall Street Sales Tax to Make Zombie Bankers Pay for Their Depression

Webster Tarpley

Feds Are Cutting Social Security Benefits From Retirees Who Can't Pay Back Student Loans

Business Insider
Mandi Woodruff

While most attention in the ongoing student debt crisis narrative has focused on new graduates, it turns out the federal government has been quietly targeting a different group of debtors: retirees.

The Treasury Department has been withholding as much as 15 percent of Social Security benefits from "a rapidly growing number of Social Security recipients who have fallen behind on federal student loans," Smart Money's Annamaria Andriotis reports:

"From January through August 6, the government reduced the size of roughly 115,000 retirees' Social Security checks on those grounds. That's nearly double the pace of the department's enforcement in 2011; it's up from around 60,000 cases in all of 2007 and just 6 cases in 2000...

The amount that the government withholds varies widely, though it runs up to 15%. Assuming the average monthly Social Security benefit for a retired worker of $1,234, that could mean a monthly haircut of almost $190."

Since 2001, the number of retirees who've seen benefits garnished has ballooned from about 20,000 to nearly 100,000. The worst part? Some of these retirees are simply among the growing number of older consumers who've taken on loans to help their kids or grandchildren through college.

A recent report by the New York Federal Reserve found more than 17 percent of student loan borrowers are over the age of 50.

And while slates for credit and other forms of debt can be wiped clean in bankruptcy, lawmakers have yet to add student loan debt to the list.

Still, simply owning study loans in old age doesn't automatically put retiree's

 benefits on the fed's chopping block.

"It's when people aren't making any attempt whatsoever [to pay] that they start heading down that road," Treasury Department spokesman Justin Hamilton said.

The Western Welfare State: Its Rise and Demise and the Soviet Bloc

Global Research
James Petras

Introduction

One of the most striking socio-economic features of the past two decades is the reversal of the previous half-century of welfare legislation in Europe and North America . Unprecedented cuts in social services, severance pay, public employment, pensions, health programs, educational stipends, vacation time, and job security are matched by increases in tuition, regressive taxation, and the age of retirement as well as increased inequalities, job insecurity and workplace speed-up.

The demise of the ‘welfare state’ demolishes the idea put forth by orthodox economists, who argued that the ‘maturation’ of capitalism, its ‘advanced state’, high technology and sophisticated services, would be accompanied by greater welfare and higher income/standard of living. While it is true that ‘services and technology’ have multiplied, the economic sector has become even more polarized, between low paid retail clerks and super rich stock brokers and financiers. The computerization of the economy has led to electronic bookkeeping, cost controls and the rapid movements of speculative funds in search of maximum profit while at the same time ushering in brutal budgetary reductions for social programs.

The ‘Great Reversal’ appears to be a long-term, large-scale process centered in the dominant capitalist countries of Western Europe and North America and in the former Communist states of Eastern Europe . It behooves us to examine the systemic causes that transcend the particular idiosyncrasies of each nation.

The Origins of the Great Reversal

There are two lines of inquiry which need to be elucidated in order to come to terms with the demise of the welfare state and the massive decline of living standards. One line of analysis examines the profound change in the international environment: We have moved from a competitive bi-polar system, based on a rivalry between the collectivist – welfare states of the Eastern bloc and the capitalist states of Europe and North America to an international system monopolized by competing capitalist states.

A second line of inquiry directs us to examine the changes in the internal social relations of the capitalist states: namely the shift from intense class struggles to long-term class collaboration, as the organizing principle in the relation between labor and capital.

The main proposition informing this essay is that the emergence of the welfare state was a historical outcome of a period when there were high levels of competition between collectivist welfarism and capitalism and when class-struggle oriented trade unions and social movements had ascendancy over class-collaborationist organizations.

Clearly the two processes are inter-related: As the collectivist states implemented greater welfare provisions for their citizens, trade unions and social movements in the West had social incentives and positive examples to motivate their members and challenge capitalists to match the welfare legislation in the collectivist bloc.

The Origins and Development of the Western Welfare State

Immediately following the defeat of fascist-capitalist regimes with the defeat of Nazi Germany, the Soviet Union and its political allies in Eastern Europe embarked on a massive program of reconstruction, recovery, economic growth and the consolidation of power, based on far-reaching socio-economic welfare reforms. The great fear among Western capitalist regimes was that the working class in the West would “follow” the Soviet example or, at a minimum, support parties and actions which would undermine capitalist recovery. Given the political discredit of many Western capitalists because of their collaboration with the Nazis or their belated, weak opposition to the fascist version of capitalism, they could not resort to the highly repressive methods of the past. Instead, the Western capitalist classes applied a two-fold strategy to counter the Soviet collectivist-welfare reforms: Selective repression of the domestic Communist and radical Left and welfare concessions to secure the loyalty of the Social and Christian Democratic trade unions and parties.

With economic recovery and post-war growth, the political, ideological and economic competition intensified: The Soviet bloc introduced wide-ranging reforms, including full employment, guaranteed job security, universal health care, free higher education, one month paid vacation leave, full pay pensions, free summer camps and vacation resorts for worker families and prolonged paid maternity leave. They emphasized the importance of social welfare over individual consumption. The capitalist West was under pressure to approximate the welfare offerings from the East, while expanding individual consumption based on cheap credit and installment payments made possible by their more advanced economies. From the mid 1940’s to the mid 1970’s the West competed with the Soviet bloc with two goals in mind: To retain workers loyalties in the West while isolating the militant sectors of the trade unions and to entice the workers of the East with promises of comparable welfare programs and greater individual consumption.

Despite the advances in social welfare programs, East and West, there were major worker protests in East Europe : These focused on national independence, authoritarian paternalistic tutelage of trade unions and insufficient access to private consumer goods. In the West, there were major worker-student upheavals in France and Italy demanding an end of capitalist dominance in the workplace and social life. Popular opposition to imperialist wars ( Indo-China , Algeria , etc.), the authoritarian features of the capitalist state (racism) and the concentration of wealth was widespread.

In other words, the new struggles in the East and West were premised on the consolidation of the welfare state and the expansion of popular political and social power over the state and productive process.

The continuing competition between collectivist and capitalist welfare systems ensured that there would be no roll-back of the reforms thus far achieved. However, the defeats of the popular rebellions of the sixties and seventies ensured that no further advances in social welfare would take place. More importantly a social ‘deadlock’ developed between the ruling classes and the workers in both blocs leading to stagnation of the economies, bureaucratization of the trade unions and demands by the capitalist classes for a dynamic, new leadership, capable of challenging the collectivist bloc and systematically dismantling the welfare state.

The Process of Reversal: From Reagan-Thatcher to Gorbachev

The great illusion, which gripped the masses of the collectivist-welfare bloc, was the notion that the Western promise of mass consumerism could be combined with the advanced welfare programs that they had long taken for granted. The political signals from the West however were moving in the opposite direction. With the ascendancy of President Ronald Reagan in the US and Prime Minister Margaret Thatcher in Great Britain, the capitalists regained full control over the social agenda, dealing mortal blows to what remained of trade union militancy and launching a full scale arms race with the Soviet Union in order to bankrupt its economy. In addition, ‘welfarism’ in the East was thoroughly undermined by an emerging class of upwardly mobile, educated elites who teamed up with kleptocrats, neo-liberals, budding gangsters and anyone else who professed ‘Western values’. They received political and material support from Western foundations, Western intelligence agencies, the Vatican (especially in Poland ), European Social Democratic parties and the US AFL-CIO while, on the fringes, an ideological veneer was provided by the self-described ‘anti-Stalinist’ leftists in the West.

Social Security Garnished for Student Debts

DissidentVoice
Ellen Brown

Indentured Servitude for Seniors

The Social Security program…represents our commitment as a society to the belief that workers should not live in dread that a disability, death, or old age could leave them or their families destitute.
— President Jimmy Carter, December 20, 1977

[This law] assures the elderly that America will always keep the promises made in troubled times a half century ago…[The Social Security Amendments of 1983 are] a monument to the spirit of compassion and commitment that unites us as a people.

— President Ronald Reagan, April 20, 1983

So said Presidents Carter and Reagan, but that was before 1996, when Congress voted to allow federal agencies to offset portions of Social Security payments to collect debts owed to those agencies. (31 U.S.C. §3716).  Now we read of horror stories like this:

I’m a 68 year old grandma of 2 young grandchildren. I went to college to upgrade my employment status in 1998 or 1999. I finished in 2000 and at that time had a student loan balance of about 3500.00.

Could not find a job and had to request forbearance to carry me. Over the years I forgot about the loan, dealt with poor health, had brain surgery in 2006 and the collection agents decided to collect for the loan in 2008.

At no time during the 6-7 year gap did anyone remind me or let me know that I could make a minimum payment on the loan. Now that I am on Social Security (have been since I was 62), they have decided to garnishee my SS check to the tune of 15%.

I have not been employed since 2004 and have the two dependents ….  I don’t dispute that I owed them the $3500.00 but am wondering why they let it build up to somewhere around $17,000/20,000 before they attempted to collect.

Her debt went from $3500 to over $17,000 in 10 years?!  How could that be?

A Social Security shell game

The Examiner

William Heuisler

Because of our climate, Tucson Arizona has a higher percentage of elderly voters than most metro areas in the United States. Apparently the Feds think Tucson (and other) elderly cannot read or they have short attention spans.

In a press release the Feds announce they will give out money with one hand and take it back with the other, before they even send out all the checks. Why do they bother? The government wants our votes, of course. The Feds hope social security beneficiaries will not read the fine print... or are really stupid.

This week the Federal Government is making a big deal about increasing Social Security payments for the huge voting block of Americans over 62 who vote in higher percentages than any other group. But there is a big catch.

The Federal Social Security Agency announced yesterday that there will be a 3.6 % increase in benefit checks for 2012. This increase - for a higher cost of living - will be the first since 2009. This new 3.6 % cost-of-living adjustment supposedly will begin for 55 million Social Security beneficiaries with checks in January 2012. (Social Security, 2011)

Then they announce that Supplemental Security Income (SSI) benefits for more than 60 million Americans will also increase 3.6% in 2012. Also they say higher Social Security checks for another 8 million supplemental income beneficiaries will be arriving on December 30, 2011.

But the Feds might as well have saved their breath and paper and figuring. They will be taking back as much or more of our money at the same time.

A First Ever Default? Closing the Gold Window, Forty Years On

Triple Crisis
Gerald Epstein

During the recent “Debt Ceiling” debacle, many warned that the failure to lift the debt ceiling would lead to a “first ever” US default and to numerous financial catastrophes, including the demise of the U.S. dollar as the world’s reserve currency.

“First Ever Default?” Think again.

Forty years ago this month, on August 15, 1971, President Nixon “closed the gold window”, refusing to let foreign central banks redeem their dollars for gold, facilitating  the devaluation of the U.S dollar which had been fixed relative to gold for almost thirty years. While not strictly a default on a US debt obligation, by closing the gold window the US government abrogated a financial commitment it had made to the rest of the world  at the Bretton Woods Conference in 1944  that set up the post-war monetary system. At Bretton Woods, the United States had promised to redeem any and all U.S. dollars held by foreigners – later limited to just foreign central banks — for $35 dollars an ounce. This promise explains why the Bretton Woods monetary system was called a “gold exchange standard” and why many believed the US dollar to be “as good as gold”.  When Nixon refused to let foreign central banks turn in their dollars for gold, and encouraged the devaluation of the dollar which reduced the value of foreign central bank holdings of dollars, the Nixon administration effectively “defaulted” on the United States’ long-standing obligations ending once and for all the Bretton Woods System. (See the useful history by Benjamin Cohen and Fred Block’s masterful history of Bretton Woods, The International Economic Disorder published University of California, Berkley Press.)


The move by Nixon was designed to restore US competitiveness that had been harmed by the reconstruction of Europe and Japan in the decades following the Second World War, and to improve his re-election chances by increasing employment, profits and exports.  By the cunning of history, though, while the Nixon “default” was designed to restart the American manufacturing machine, instead it set into motion the forces that would lead to the dominance of finance, the hollowing out of American manufacturing, the massive destruction of decent employment — and eventually to the Crash of 2008.

The dominance of finance resulted from the dramatic political and economic changes engendered by, as Naomi Klein puts it, the rise of disaster capitalism, which took a very specific financial form. The oil “shocks” and stagflation of the 1970’s brought about the rise of Volckerism, Thatcherism and Reaganism, leading to the policies of sky high interest rates, which undermined the New Deal structures of finance.  The extraordinarily high and unstable interest rates created enormous need for new hedging instruments and opportunities for new speculative financial practices. They also imposed enormous losses on financial institutions and financial elites.  But the rentiers and financiers did not just sit there and take it: they fought back (see Gerald Epstein and Arjun Jayadev in Financialization and the World Economy) and  pushed for financial de-regulation to let them compete in the new environment. One financial crisis led to another, from the third world debt crisis to Long Term Capital Management. After each crisis, finance pushed for more bail-outs and more financial de-regulation and won.

As America's Economy Collapses, "New Normal" Police State Takes Shape

Global Research
Tom Burghardt

Antifascist Calling...

Forget your rights.

As corporate overlords position themselves to seize what little remains of a tattered social net (adieu Medicare and Medicaid! Social Security? Au revoir!), the Obama administration is moving at break-neck speed to expand police state programs first stood-up by the Bush government.

After all, with world share prices gyrating wildly, employment and wages in a death spiral, and retirement funds and publicly-owned assets swallowed whole by speculators and renter scum, the state better dust-off contingency plans lest the Greek, Spanish or British "contagion" spread beyond the fabled shores of "old Europe" and infect God-fearin' folk here in the heimat.

Fear not, they have and the lyrically-titled Civil Disturbances: Emergency Employment of Army and Other Resources, otherwise known as Army Regulation 500-50, spells out the "responsibilities, policy, and guidance for the Department of the Army in planning and operations involving the use of Army resources in the control of actual or anticipated civil disturbances." (emphasis added)

With British politicians demanding a clampdown on social media in the wake of London riots, and with the Bay Area Rapid Transit (BART) agency having done so last week in San Francisco, switching off underground cell phone service to help squelch a protest against police violence, authoritarian control tactics, aping those deployed in Egypt and Tunisia (that worked out well!) are becoming the norm in so-called "Western democracies."

Secret Law, Secret Programs

Meanwhile up on Capitol Hill, Congress did their part to defend us from that pesky Bill of Rights; that is, before 81 of them--nearly a fifth of "our" elected representatives--checked-out for AIPAC-funded junkets to Israel.

Secrecy News reported that the Senate Intelligence Committee "rejected an amendment that would have required the Attorney General and the Director of National Intelligence to confront the problem of 'secret law,' by which government agencies rely on legal authorities that are unknown or misunderstood by the public."

That amendment, proposed by Senators Ron Wyden (D-OR) and Mark Udall (D-CO) was rejected by voice vote, further entrenching unprecedented surveillance powers of Executive Branch agencies such as the FBI and NSA.

As Antifascist Calling previously reported, the Electronic Frontier Foundation filed a Freedom of Information Act lawsuit against the Justice Department "demanding the release of a secret legal memo used to justify FBI access to Americans' telephone records without any legal process or oversight."

The DOJ refused and it now appears that the Senate has affirmed that "secret law" should be guiding principles of our former republic.

Secrecy News also disclosed that the Committee rejected a second amendment to the authorization bill, one that would have required the Justice Department's Inspector General "to estimate the number of Americans who have had the contents of their communications reviewed in violation of the FISA Amendments Act of 2008 [FAA]."

As pointed out here many times, FAA is a pernicious piece of Bushist legislative detritus that legalized the previous administration's secret spy programs since embellished by our current "hope and change" president.

During the run-up to FAA's passage, congressional Democrats, including then-Senator Barack Obama and his Republican colleagues across the aisle, claimed that the law would "strike a balance" between Americans' privacy rights and the needs of security agencies to "stop terrorists" attacking the country.

If that's the case, then why can't the American people learn whether their rights have been compromised?

Perhaps, as recent reports in Truthout and other publications suggest, former U.S. counterterrorism "czar" Richard Clarke leveled "explosive allegations against three former top CIA officials--George Tenet, Cofer Black and Richard Blee--accusing them of knowingly withholding intelligence ... about two of the 9/11 hijackers who had entered the United States more than a year before the attacks."

Clarke's allegations follow closely on the heels of an investigation by Truthout journalists Jeffrey Kaye and Jason Leopold.

"Based on on documents obtained under the Freedom of Information Act and an interview with a former high-ranking counterterrorism official," Kaye and Leopold learned that "a little-known military intelligence unit, unbeknownst to the various investigative bodies probing the terrorist attacks, was ordered by senior government officials to stop tracking Osama bin Laden and al-Qaeda's movements prior to 9/11."

As readers are well aware, the 9/11 provocation was the pretext used by the capitalist state to wage aggressive resource wars abroad while ramming through repressive legislation like the USA Patriot Act and the FISA Amendments Act that targeted the democratic rights of the American people here at home.

But FAA did more then legitimate illegal programs. It also handed retroactive immunity and economic cover to giant telecoms like AT&T and Verizon who profited handily from government surveillance, shielding them from monetary damages which may have resulted from a spate of lawsuits such as Hepting v. AT&T.

This raises the question: are other U.S. firms similarly shielded from scrutiny by secret annexes in FAA or the privacy-killing USA Patriot Act?

Echelon Cubed

Last week, Softpedia revealed that "Google has admitted complying with requests from US intelligence agencies for data stored in its European data centers, most likely in violation of European Union data protection laws."

"At the center of this problem," reporter Lucian Constantin wrote, "is the USA PATRIOT ACT, which states that companies incorporated in the United States must hand over data administered by their foreign subsidiaries if requested."

"Not only that," the publication averred, "they can be forced to keep quiet about it in order to avoid exposing active investigations and alert those targeted by the probes."

In other words, despite strict privacy laws that require companies operating within the EU to protect the personal data of their citizens, reports suggest that U.S. firms, operating under an entirely different legal framework, U.S. spy laws with built-in secrecy clauses and gag orders, trump the laws and legal norms of other nations.

Given the widespread corporate espionage carried out by the National Security Agency's decades-long Echelon communications' intercept program, American firms such as Google, Microsoft, Apple or Amazon may very well have become witting accomplices of U.S. secret state agencies rummaging about for "actionable intelligence" on EU, or U.S., citizens.

Indeed, a decade ago the European Union issued its final report on the Echelon spying machine and concluded that the program was being used for corporate and industrial espionage and that data filched from EU firms was being turned over to American corporations.

In 2000, the BBC reported that according to European investigators "U.S. Department of Commerce 'success stories' could be attributed to the filtering powers of Echelon."

Duncan Campbell, a British journalist and intelligence expert, who along with New Zealand journalist Nicky Hager, helped blow the lid off Echelon, offered two instances of U.S. corporate spying in the 1990s when the newly-elected Clinton administration followed-up on promises of "aggressive advocacy" on behalf of U.S. firms "bidding for foreign contracts."

According to Campbell, NSA "lifted all the faxes and phone-calls between Airbus, the Saudi national airline and the Saudi Government" to gain this information. In a second case which came to light, Campbell documented how "Raytheon used information picked up from NSA snooping to secure a $1.4bn contract to supply a radar system to Brazil instead of France's Thomson-CSF."

As Softpedia reported, U.S.-based cloud computing services operating overseas have placed "European companies and government agencies that are using their services ... in a tough position."

With the advent of fiber optic communication platforms, programs like Echelon have a far greater, and more insidious, reach. AT&T whistleblower Mark Klein noted on the widespread deployment by NSA of fiber optic splitters and secret rooms at American telecommunications' firms:

What screams out at you when examining this physical arrangement is that the NSA was vacuuming up everything flowing in the Internet stream: e-mail, web browsing, Voice-Over-Internet phone calls, pictures, streaming video, you name it. The splitter has no intelligence at all, it just makes a blind copy. There could not possibly be a legal warrant for this, since according to the 4th Amendment warrants have to be specific, "particularly describing the place to be searched, and the persons or things to be seized." ...

This was a massive blind copying of the communications of millions of people, foreign and domestic, randomly mixed together. From a legal standpoint, it does not matter what they claim to throw away later in their secret rooms, the violation has already occurred at the splitter. (Mark Klein, Wiring Up the Big Brother Machine... And Fighting It, Charleston, South Carolina: BookSurge, 2009, pp. 38-39.)

What was Google's response?

In a statement to the German publication WirtschaftsWoche a Google corporate spokesperson said: "As a law abiding company, we comply with valid legal process, and that--as for any U.S. based company--means the data stored outside of the U.S. may be subject to lawful access by the U.S. government. That said, we are committed to protecting user privacy when faced with law enforcement requests. We have a long track record of advocating on behalf of user privacy in the face of such requests and we scrutinize requests carefully to ensure that they adhere to both the letter and the spirit of the law before complying." (translation courtesy of Public Intelligence)

Is the Senate Intelligence Committee's steadfast refusal to release documents and secret legal memos that most certainly target American citizens also another blatant example of American exceptionalism meant to protect U.S. firms operating abroad from exposure as corporate spies for the government?

It isn't as if NSA hasn't been busy doing just that here at home.

As The New York Times reported back in 2009, the "National Security Agency intercepted private e-mail messages and phone calls of Americans in recent months on a scale that went beyond the broad legal limits established by Congress last year."

Chalking up the problem to "overcollection" and "technical difficulties," unnamed intelligence officials and administration lawyers told journalists Eric Lichtblau and James Risen that although the practice was "significant and systemic ... it was believed to have been unintentional."

As "unintentional" as ginned-up intelligence that made the case for waging aggressive war against oil-rich Iraq!

In a follow-up piece, the Times revealed that NSA "appears to have tolerated significant collection and examination of domestic e-mail messages without warrants."

A former NSA analyst "read into" the illegal program told Lichtblau and Risen that he "and other analysts were trained to use a secret database, code-named Pinwale, in 2005 that archived foreign and domestic e-mail messages."

Email readily handed over by Google, Microsoft or other firms "subject to lawful access" by the Pentagon spy satrapy?

The Times' anonymous source said "Pinwale allowed N.S.A. analysts to read large volumes of e-mail messages to and from Americans as long as they fell within certain limits--no more than 30 percent of any database search, he recalled being told--and Americans were not explicitly singled out in the searches."

Hidden Agenda: The "Debt Crisis Plan" was to Strike a Blow at the National Social Safety Net

Global Research
Shamus Cooke

The debt crisis has been averted and people across the globe are breathing sighs of relief.

But in the back rooms of the US Congress, politicians are celebrating for a different reason. It's the kind of celebration that erupts when a group executes a complicated plan to perfection. The objective in this case was to strike the first blows against the national social safety net without encountering massive resistance. Mission half-accomplished thus far. 

Half accomplished because only half of the $2.5 billion in cuts have been decided on. The other half will be sent to a bi-partisan committee where, according to the White House Fact Sheet:

"... the committee will consider responsible entitlement [Social Security and Medicare] and tax reform [cuts to entitlement programs]. This means putting all the priorities of both parties on the table – including both entitlement reform [Social Security, Medicare and Medicaid] and revenue-raising tax reform.” 

If the committee fails to agree on the cuts, they would be automatically triggered, and Medicare would be the target: "...any cuts to Medicare would be capped and limited to the provider side." This means that fewer doctors would accept Medicare patients or they would provide fewer services to Medicare beneficiaries. 

When it comes to cutting Social Security and Medicare, the Democrats are Republicans are only trying to get their foot into the door. Nevertheless, the potential cuts will have a massive impact on the millions of Americans who depend on these vital services. And if these cuts are allowed to happen unopposed, the possibility of future, more dramatic cuts is certain. 

Equally bad is that the budget deal makes the unemployment situation even worse. In writing about the effect the cuts would have on employment, a Moody’s analyst predicted that:

"The deal announced last night calls for a yearly average of $240 billion in cuts over the next decade. Very roughly, that suggests the new plan would cost around 1.6 million jobs per year during that time. [!]" (August 1st, 2011).

This noxious level of contempt for working people was the product of a manufactured crisis, with Democrats and Republicans playing along. How did Obama and the Democrats essentially push through the long-term objectives of the Republican Party? Author Michael Hudson explains on Democracy Now: 

"... There has to be a crisis. Now, in reality, there is no crisis at all. In reality, raising the debt ceiling has been done for a hundred years automatically. There is no connection between raising the debt ceiling and arguing over tax policy. Tax policy takes many years to work out. All of a sudden, Mr. Obama is going along with the charade of saying, "Wait a minute, let’s create a crisis."... And Wall Street doesn’t like real crises, so there’s an artificial non-crisis that Obama is treating as a crisis so that he can put forth the recommendations of the Deficit Reduction Commission to get rid of Social Security that he has supported all along." (July 22nd, 2011). 

Thus, it's not true that Obama was "held hostage" by the Republicans. If he told the country only half of what Mr. Hudson explained on Democracy Now, the Republicans would have folded instantly. If Obama would have told the country that the Republicans wanted massive cuts to Social Security and Medicare, instead of purposely hiding these issues, Republican voters would have converged on Capitol Hill with torches and pitchforks. Instead, Obama went along with the charade; because in order for it to succeed, he was required to play a leading role in the drama. 

Liberal groups and the major labor federations -- AFL-CIO and Change to Win -- have given a left cover to Obama's far-right policies, wrongly blaming only the Republicans every step of the way. But this willful blindness has its limits. These groups intend to "get out the vote" for Obama in 2012 while ignoring all the damage he's done to working families, while they also ignore all the promises Obama made to them and didn't keep last time. 

The rank-and-file members of labor unions and liberal groups are among the million of Americans suffering under Obama's economic policies and will not follow their leaders like lemmings over the cliff for Obama's next presidential run. There will be a profound lack of rank-and-file volunteers to campaign for Obama, even as labor union leaders throw away their members’ dues money for the campaign. And because fewer members will campaign for Obama, he will feel less inclined to reward them after (or if) he wins. Instead, he'll again reward Wall Street, meaning, he'll continue to take from working people and give to the rich, further exacerbating the problem. 

Despite insurance, medical bills push family to bankruptcy

Orlando Sentinel
Kate Santich

The day their daughter was born should have been one of the happiest of Simon and Marsha Sutherland's lives. Both previously married, they were having their first child together, a 6-pound, 10-ounce, dark-haired girl they would name Ellie Marguerite.

The pregnancy had seemed perfectly healthy. But moments after Ellie made her entrance into the world, doctors ordered her rushed to Winnie Palmer's neonatal intensive-care unit, fearing she'd had a seizure. Marsha didn't even have a chance to hold her daughter in her arms.

Ellie's birth on Aug. 30, 2007, began a 25-day, $74,000 stay in one of the most expensive places in any hospital. More daunting, it would launch a four-year journey of fear, hope, devotion and grief — a journey made all the more difficult by financial devastation.

Ultimately, it led two middle-class parents with good jobs, two major health-insurance policies and a house in suburbia into foreclosure and bankruptcy.

"To this day," Simon said, "we still have creditors calling us, wanting to talk to Ellie. They'll say things like, 'We want to discuss how she's going to take care of this overdue bill.' I just lose it."
 
Ellie Sutherland died June 26. She was two months shy of her fourth birthday.

Though financial failures often have been blamed on careless consumer borrowing or the widespread layoffs of the recession, the Sutherlands' financial storyline is strikingly common.

Two years ago, researchers at Harvard and Ohio universities reported that 62 percent of all bankruptcies were related to medical debt. An American family, they said, filed for bankruptcy in the aftermath of illness every 90 seconds — and three-quarters of those families had health insurance.

Although the data used for the study is now 4 years old, most experts interviewed said the problem is likely only to have worsened, at least until this year, as out-of-pocket medical costs have continued to spiral.

In addition, widespread layoffs have contributed to the rapid rise in uninsured Americans, who now number more than 59 million. For most of them, any major medical expense threatens to overwhelm their resources, leading to further bankruptcies and driving up costs for those who can pay. According to Families USA — a nonprofit, nonpartisan consumer-advocacy group — the shifting of uncompensated care onto insured patients results in a "hidden health tax."

For an average family health-insurance policy, that means an additional $1,017 a year in deductibles, copays and other out-of-pocket expenses.

Pointing fingers

When Marsha Sutherland became pregnant with Ellie, she was a full-time reading teacher at Windy Ridge School in southwest Orange County. Husband Simon was a manager of a chain pizzeria. Together, they made about $100,000 a year. Each had insurance.

She had two children from a previous marriage; he had three. They had a nice three-bedroom home with plans for a swimming pool — plans they put on hold when they found out about the pregnancy, long before they knew Ellie would have extensive needs.

For most of their daughter's life, Marsha and Simon would have no diagnosis. Ellie was nearly deaf, couldn't sit up and was prone to dangerously high fevers. Half her face had almost no muscle tone, and in the second year, she began scratching at her eyes and cheeks and biting her lip until she bled profusely.

"I'd go to get her up, and she'd be a mess," Marsha said.

Eventually, doctors removed eight of her front teeth to protect her. But in her scratching, Ellie managed to damage one of her corneas.

There were two trips to The Johns Hopkins Hospital. There were extensive blood panels conducted to look for missing genes. And there were almost weekly visits to Central Florida specialists for Ellie's hearing, eyes, spine and gastrointestinal system.

With two insurance companies — Marsha's was the primary coverage — "we were thinking that what one didn't cover, the other would," Simon said. "Instead, they were both pointing the finger at each other, and neither wanted to pay anything. It was a royal battle."

Though Marsha tried to continue working part time, after only a few months it became clear that taking care of Ellie wasn't just full-time; it was virtually around the clock. Simon became the lone breadwinner.

Marsha tried to sign Ellie up for Social Security disability, and when that failed, for Medicaid. Even after the family was down to a single income, though, the couple made too much to qualify.

"I was very overwhelmed at first," Marsha said. "Now I know that the game is that they automatically deny you at least three times — any parent in our world knows that. But back then, I was naive, and I was exhausted trying to keep Ellie going and me going, and I just didn't have it in me at the time to keep up the fight."

Forget Compromise: The Debt Ceiling Is Unconstitutional

Web of Debt Blog
Ellen Brown

The debt ceiling crisis can be averted by enforcing the Fourteenth Amendment, which mandates the  government to pay its debts already incurred, including pensions.  That means Social Security, which IS an “entitlement,” in the original sense of the word.  We’re entitled to it because we’ve paid for it with taxes. 

The game of Russian roulette being played with the U.S. federal debt has been called a “grotesque political carnival” and political blackmail.  The uproar stems from a statute that is unique to the United States and never did make much sense.  First passed in 1917 and revised multiple times since, it imposes a dollar limit on the federal debt.  What doesn’t make sense is that the same Congress that voted on the statute votes on the budget, which periodically exceeds the limit, requiring the statute to be revised.  The debt ceiling has been raised 74 times since 1962, 10 of them since 2001.  The most recent increase, to $14.294 trillion by H.J.Res. 45, was  signed into law on February 12, 2010.
Taxes aren’t collected until after the annual budget is passed, so Congress can’t know in advance whether or how much additional borrowing will be required.  Inevitably, there will be some years that the budget pushes the debt over the limit, requiring new legislation.  And inevitably, now that this tactic has been discovered, there will be a costly battle over the increase, wasting congressional time, destabilizing markets, and rattling faith in the American financial and political systems.  There will be continual blackmail, arm-twisting and concessions.  The situation is untenable and cries out for a definitive resolution.

Fortunately, there is one.  A bevy of legal scholars are recommending that the issue be eliminated altogether by playing the Constitutional trump card.  The Fourteenth Amendment provides at Section 4:

“The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”

Where statute and the Constitution collide, the Constitution prevails.  Whether the government should pay the bills it has already incurred is not a matter of negotiation.  It is a Constitutional mandate.  And those are the bills we are talking about here, as President Obama stressed in his remarks on the issue last Friday.  He said:

“Raising the debt ceiling simply gives our country the ability to pay the bills that Congress has already racked up.  I want to emphasize that.  The debt ceiling does not determine how much more money we can spend, it simply authorizes us to pay the bills we already have racked up.  It gives the United States of America the ability to keep its word.”

Ignoring the debt ceiling on Constitutional grounds would not, as Michelle Bachmann declares, make President Obama a “dictator.”  It would simply mean he is complying with his Constitutional mandate to pay the government’s bills on time and in full.

Social Security Is Not Welfare.  It Is a Debt Due and Owing.

The President could have a clean resolution of the issue, but he is not jumping at the opportunity.  Rather, he appears to be ready to throw Granny under the bus by slashing Social Security, Medicare and Medicaid, all in the name of “compromise.”

The Fourteenth Amendment says debts already incurred shall not be questioned, “including debts incurred for payment of pensions.”  That includes Social Security, which is an “entitlement” in the true sense of the word: we’re entitled to it because we’ve already paid for it.  In fact, the Social Security Act was originally sold to Congress and the nation in 1935 not as a government benefit, but as a retirement savings program. Earlier this year, the Urban Institute published a study evaluating the program in this way, concluding that the average worker who retires today will withdraw from Social Security just about the same amount he put in over the years, with a modest 2% real interest rate (after inflation).

A deal is a deal.  We paid for it, we are owed it, and the U.S. government is good for it.  To change the terms of the deal ex post facto is both a breach of contract and a violation of the Constitution.

Where to Get the Money: Ron Paul’s Creative Plan

A sovereign nation can always find the money to pay debts owed in its own currency.  The U.S. could, if it wished, pay its bills using debt-free U.S. Notes or Greenbacks, just as President Lincoln did to avoid a crippling debt during the Civil War.  Alternatively, it could eliminate the deficit with Ron Paul’s plan, which amounts to the same thing.  As Stephen Gandel explains Paul’s solution in Time Magazine:

“In the last year or two the Fed has been buying up U.S. Treasury bonds in an effort to lower interest rates and boost the economy. The most recent round of that buying has been dubbed QE2, and has come under a good deal of criticism, though most economists agree that it was a generally helpful policy. The result is that the Fed now holds nearly $1.7 trillion in U.S. debt. But that is really phony debt. The Treasury pays the interest on the debt on behalf of the U.S. government to the Fed, which in turn returns 90 percent of the payments it gets back to the Treasury. Nonetheless, that $1.7 trillion in U.S. bonds that the Fed owns, despite the shell game of payments, is still counted in the debt ceiling number, which caps that amount of total federal debt at $14.3 trillion.

“Paul’s plan: Get the Fed and the Treasury to rip up that debt. It’s fake debt anyway. And the Fed is legally allowed to return the debt to the Treasury to be destroyed. A trillion and a half dollars is currently about what spending is expected to exceed tax revenue in 2011.”

The biggest drawback to the plan, says Gandel, is just that it “looks bad.”  It looks as if the government is paying off its debts by printing money.  But that is what government-issued money is: a note acknowledging a debt due and owed from the public, good for an equivalent value from the public, traded in the marketplace.  A U.S. Note or Greenback and a Federal Reserve Note or dollar bill are both forms of promissory notes.  The government can as easily issue a dollar bill as a dollar note or a dollar bond, as Thomas Edison pointed out in the 1920s.

Obama and Boener to Cut Social Security and Lower Taxes for Rich

Washington Post
Lori Montgomery
Paul Kane

President Obama and House Speaker John A. Boehner rushed Thursday to strike agreement on a far-reaching plan to reduce the national debt but faced a revolt from Democrats furious that the accord appeared to include no immediate provision to raise taxes.

With 12 days left until the Treasury begins to run short of cash, Obama and Boehner (R-Ohio) were still pursuing the most ambitious plan to restrain the national debt in at least 20 years. Talks focused on sharp cuts in agency spending and politically painful changes to cherished health and retirement programs aimed at saving roughly $3 trillion over the next decade.

More savings would be generated through an overhaul of the tax code that would lower personal and corporate income tax rates while eliminating or reducing an array of popular tax breaks, such as the deduction for home mortgage interest. But the talks envisioned no specific tax increases as part of legislation to lift the debt limit, and the tax rewrite would be postponed until next year.

Democrats reacted with outrage as word filtered to Capitol Hill, saying the emerging agreement appeared to violate their pledge not to cut Social Security and Medicare benefits as well as Obama’s promise not to make deep cuts in programs for the poor without extracting some tax concessions from the rich.

When “we heard these reports of these mega-trillion-dollar cuts with no revenues, it was like Mount Vesuvius. . . . Many of us were volcanic,” said Sen. Barbara A. Mikulski (D-Md.).

White House budget director Jacob J. Lew denied that a deal without taxes was in the works. “We’ve been clear revenues have to be part of any agreement,” he told reporters.

After a lunchtime meeting between Lew and Senate Democrats, Majority Leader Harry M. Reid (D-Nev.) made no attempt to hide his anger, telling reporters that his caucus would oppose the “potential agreement” because it appeared to include no clear guarantee of increased revenue.
“The president always talked about balance, that there had to be some fairness in this, that this can’t be all cuts. There has to be a balance. There has to be some revenue and cuts. My caucus agrees with that,” Reid said. “I hope that the president sticks with that. I’m confident that he will.”

Dennis Kucinich "Social Security Will be Able To Pay 100% Of It's Benefits Through 2037!"

Revolutionary Politics

Obama says he cannot guarantee Social Security checks will go out on August 3

CBS News



President Obama on Tuesday said he cannot guarantee that retirees will receive their Social Security checks August 3 if Democrats and Republicans in Washington do not reach an agreement on reducing the deficit in the coming weeks.

"I cannot guarantee that those checks go out on August 3rd if we haven't resolved this issue. Because there may simply not be the money in the coffers to do it," Mr. Obama said in an interview with CBS Evening News anchor Scott Pelley, according to excerpts released by CBS News.

The Obama administration and many economists have warned of economic catastrophe if the United States does not raise the amount it is legally allowed to borrow by August 2.

Number Of Deaths In The US Can Be Linked To Social Factors

Medical News Today

Published in the American Journal of Public Health, a new study calculates the number of deaths attributable to social factors in the United States, finding a broader way to conceptualize the causes of mortality.

Researchers estimated the number of deaths in the United States attributable to social factors, using a systematic review of the available literature combined with vital statistics data. They conducted a MEDLINE search for all English-language articles published between 1980 and 2007 with estimates of the relation between social factors and adult all-cause mortality. After calculating for the relative risk estimates of mortality, researchers obtained estimates for each social factor. Individual social factors included education, poverty, health insurance status, employment status and job stress, social support, racism or discrimination, housing conditions and early childhood stressors. Area-level social factors included area-level poverty, income inequality, deteriorating built environment, racial segregation, crime and violence, social capital and availability of open or green spaces.

They found that approximately 245,000 deaths in the United States in 2000 were attributable to low education, 176,000 to racial segregation, 162,000 to low social support, 133,000 to individual-level poverty, 119,000 to income inequality and 39,000 to area-level poverty.

The study's researchers suggest, "Social causes can be linked to death as readily as can pathophysiological and behavioral causes. All of these factors contribute substantially to the burden of disease in the United States, and all need focused research efforts and public health efforts to mitigate their consequences."

Source
American Journal of Public Health  

China Has Divested 97 Percent of Its Holdings in U.S. Treasury Bills

CNSNews
Terence P. Jeffrey

China Divests 97% of Treasury Holdings

China has dropped 97 percent of its holdings in U.S. Treasury bills, decreasing its ownership of the short-term U.S. government securities from a peak of $210.4 billion in May 2009 to $5.69 billion in March 2011, the most recent month reported by the U.S. Treasury.


Treasury bills are securities that mature in one year or less that are sold by the U.S. Treasury Department to fund the nation’s debt.

Mainland Chinese holdings of U.S. Treasury bills are reported in column 9 of the Treasury report linked here.

Until October, the Chinese were generally making up for their decreasing holdings in Treasury bills by increasing their holdings of longer-term U.S. Treasury securities. Thus, until October, China’s overall holdings of U.S. debt continued to increase.

Since October, however, China has also started to divest from longer-term U.S. Treasury securities. Thus, as reported by the Treasury Department, China’s ownership of the U.S. national debt has decreased in each of the last five months on record, including November, December, January, February and March. 

Prior to the fall of 2008, acccording to Treasury Department data, Chinese ownership of short-term Treasury bills was modest, standing at only $19.8 billion in August of that year. But when President George W. Bush signed legislation to authorize a $700-billion bailout of the U.S. financial industry in October 2008 and President Barack Obama signed a $787-billion economic stimulus law in February 2009, Chinese ownership of short-term U.S. Treasury bills skyrocketed.

By December 2008, China owned $165.2 billion in U.S. Treasury bills, according to the Treasury Department. By March 2009, Chinese Treasury bill holdings were at $191.1 billion. By May 2009, Chinese holdings of Treasury bills were peaking at $210.4 billion.

However, China’s overall appetite for U.S. debt increased over a longer span than did its appetite for short-term U.S. Treasury bills.

In August 2008, before the bank bailout and the stimulus law, overall Chinese holdings of U.S. debt stood at $573.7 billion. That number continued to escalate past May 2009-- when China started to reduce its holdings in short-term Treasury bills--and ultimately peaked at $1.1753 trillion last October.
As of March 2011, overall Chinese holdings of U.S. debt had decreased to 1.1449 trillion.

Most of the U.S. national debt is made up of publicly marketable securities sold by the Treasury Department and I.O.U.s called “intragovernmental” bonds that the Treasury has given to so-called government trust funds—such as the Social Security trust funds—when it has spent the trust funds’ money on other government expenses.

The publicly marketable segment of the national debt includes Treasury bills, which (as defined by the Treasury) mature in terms of one-year or less; Treasury notes, which mature in terms of 2 to 10 years; Treasury Inflation-Protected Securities (TIPS), which mature in terms of 5, 10 and 30 years; and Treasury bonds, which mature in terms of 30 years.

At the end of August 2008, before the financial bailout and the stimulus, the publicly marketable segment of the U.S. national debt was 4.88 trillion. Of that, $2.56 trillion was in the intermediate-term Treasury notes, $1.22 trillion was in short-term Treasury bills, $582.8 billion was in long-term Treasury bonds, and $521.3 billion was in TIPS.

At the end of March 2011, by which time the Chinese had dropped their Treasury bill holdings 97 percent from their peak, the publicly marketable segment of the U.S. national debt had almost doubled from August 2008, hitting $9.11 trillion. Of that $9.11 trillion, $5.8 trillion was in intermediate-term Treasury notes, $1.7 trillion was in short-term Treasury bills; $931.5 billion was in long-term Treasury bonds, and $640.7 billion was in TIPS.

Before the end of March 2012, the Treasury must redeem all of the $1.7 trillion in Treasury bills that were extant as of March 2011 and find new or old buyers who will continue to invest in U.S. debt. But, for now, the Chinese at least do not appear to be bullish customers of short-term U.S. debt.
Treasury bills carry lower interest rates than longer-term Treasury notes and bonds, but the longer term notes and bonds are exposed to a greater risk of losing their value to inflation. To the degree that the $1.7 trillion in short-term U.S. Treasury bills extant as of March must be converted into longer-term U.S. Treasury securities, the U.S. government will be forced to pay a higher annual interest rate on the national debt.\

As of the close of business on Thursday, the total U.S. debt was $14.34 trillion, according to the Daily Treasury Statement. Of that, approximately $9.74 trillion was debt held by the public and approximately $4.61 trillion was “intragovernmental” debt.

U.S. Loots Social Security to Wage Wars

By Sherwood Ross -  

BlacklistedNews.com

“As long as the $1.2-trillion annual budget for the military-security complex is off limits (to cutting), nothing can be done about the US budget deficit except to renege on obligations to the elderly, confiscate private assets or print enough money to inflate away all debts,” Paul Craig Roberts, former Assistant Treasury Secretary under President Reagan warns.

In an article titled “Stealing from Social Security to Pay for Wars and Bailouts,” published in the April issue of the “Rock Creek Free Press” of Washington, D.C., Roberts says that Republicans are calling Social Security and Medicare “entitlements”---making them sound like welfare---when, in fact, workers over their lifetimes have contributed 15 percent of all their earnings to the payroll tax that funds these benefits and have every right to them.

And far from Social Security being in the red, between 1984 and 2009, Roberts writes, “the American people contributed $2-trillion...more to Social Security and Medicare in payroll taxes than was paid out in benefits” but “the government stole” that sum to fund wars and pork-barrel projects!

What's more, under one realistic estimate, far from crashing into the red, “Social Security(OASDI) will have produced surplus revenues of $31.6-trillion by 2085, Roberts says.

Americans, apparently, are unaware of how the federal government's illegal, foreign wars sap the economy and rob every household. The Iraq war cost alone is 20 percent of the size of last year's entire U.S. economy. Instead of investing that sum at home, “which would have produced income and jobs growth and solvency for state and local governments, the US government wasted the equivalent of 20% of the economy in 2010 in blowing up infrastructure and people in foreign lands,” Roberts says.

“The US government spent a huge sum of money committing war crimes, while millions of Americans were thrown out of their jobs and foreclosed out of their homes,” he added. Viewed another way, the Pentagon continues to expand and put people to work to modernize its 700-800 bases abroad in order to dominate every corner of the globe while public works and public employment in America are going into the toilet.

“When short-term and long-term discouraged workers are added ...the US has an unemployment rate of 22%,” Robert says. A country with that large a percentage out of work “has a shrunken tax base and feeble consumer purchasing power.”

The U.S. media, he claims, is only reporting one-third of the real cost of the wars, leaving out the sums needed for “lifelong care for the wounded and maimed, the cost of lifelong military pensions of those who fought in the wars, the replacement costs of the destroyed equipment, the opportunity cost of the resources wasted in war, and other costs.”

President Obama's budget, if passed, doesn't reduce the deficit over the next 10 years by enough to cover the projected deficit in the fiscal year 2012 budget alone, the financial authority writes. “Indeed, the deficits are likely to be substantially larger than forecast,” as the military-industrial complex “is more powerful than ever and shows no inclination to halt the wars for US hegemony,” Roberts says.

In 2011 The Baby Boomers Start To Turn 65: 16 Statistics About The Coming Retirement Crisis That Will Drop Your Jaw

The End of the American Dream

Do you hear that rumble in the distance?  That is the Baby Boomers - they are getting ready to retire.  On January 1st, 2011 the very first Baby Boomers turn 65.  Millions upon millions of them are rushing towards retirement age and they have been promised that the rest of us are going to take care of them.  Only there is a huge problem.  We don't have the money.  It simply isn't there.  But the millions of Baby Boomers getting ready to retire are counting on that money to be there.  This all comes at a really bad time for a federal government that is already flat broke and for a national economy that is already teetering on the brink of disaster.


So just who are the Baby Boomers?  Well, they are the most famous generation in American history.  The U.S. Census Bureau defines the Baby Boomers as those born between January 1st, 1946 and December 31st, 1964.  You see, after U.S. troops returned from World War II, they quickly settled down and everyone started having lots and lots of babies.  This gigantic generation has transformed America as they have passed through every stage of life. Now they are getting ready to retire.  If you add 65 years to January 1st, 1946 you get January 1st, 2011.

The moment when the first Baby Boomers reach retirement age has arrived.  The day of reckoning that so many have talked about for so many years is here.  Today, America's elderly are living longer and the cost of health care is rising dramatically.  Those two factors are going to make it incredibly expensive to take care of all of these retiring Baby Boomers.  Meanwhile, the sad truth is that the vast majority of Baby Boomers have not adequately saved for retirement.  For many of them, their home equity was destroyed by the recent financial crisis.  For others, their 401ks were devastated when the stock market tanked.

Meanwhile, company pension plans across America are woefully underfunded.  Many state and local government pension programs are absolute disasters.  The federal government has already begun to pay out more in Social Security benefits than they are taking in, and the years ahead look downright apocalyptic for the Social Security program.

If we are not careful all of these Baby Boomers are going to push us into national bankruptcy.  We simply cannot afford all of the promises that we have made to them.  The following are 16 statistics about the coming retirement crisis that will drop your jaw.....

#1 Beginning January 1st, 2011 every single day more than 10,000 Baby Boomers will reach the age of 65.  That is going to keep happening every single day for the next 19 years.

#2 According to one recent survey, 36 percent of Americans say that they don't contribute anything at all to retirement savings.

#3 Most Baby Boomers do not have a traditional pension plan because they have been going out of style over the past 30 years.  Just consider the following quote from Time Magazine: The traditional pension plan is disappearing. In 1980, some 39 percent of private-sector workers had a pension that guaranteed a steady payout during retirement. Today that number stands closer to 15 percent, according to the Employee Benefit Research Institute in Washington, D.C.

#4 Over 30 percent of U.S. investors currently in their sixties have more than 80 percent of their 401k invested in equities.  So what happens if the stock market crashes again?

#5 35% of Americans already over the age of 65 rely almost entirely on Social Security payments alone.

#6 According to another recent survey, 24% of U.S. workers admit that they have postponed their planned retirement age at least once during the past year.

#7 Approximately 3 out of 4 Americans start claiming Social Security benefits the moment they are eligible at age 62.  Most are doing this out of necessity.  However, by claiming Social Security early they get locked in at a much lower amount than if they would have waited.

#8 Pension consultant Girard Miller recently told California's Little Hoover Commission that state and local government bodies in the state of California have $325 billion in combined unfunded pension liabilities.  When you break that down, it comes to $22,000 for every single working adult in California.

#9 According to a recent report from Stanford University, California's three biggest pension funds are as much as $500 billion short of meeting future retiree benefit obligations.

#10 It has been reported that the $33.7 billion Illinois Teachers Retirement System is 61% underfunded and is on the verge of complete collapse.

#11 Robert Novy-Marx of the University of Chicago and Joshua D. Rauh of Northwestern's Kellogg School of Management recently calculated the combined pension liability for all 50 U.S. states.  What they found was that the 50 states are collectively facing $5.17 trillion in pension obligations, but they only have $1.94 trillion set aside in state pension funds.  That is a difference of 3.2 trillion dollars.  So where in the world is all of that extra money going to come from?  Most of the states are already completely broke and on the verge of bankruptcy.

#12 According to the Congressional Budget Office, the Social Security system will pay out more in benefits than it receives in payroll taxes in 2010.  That was not supposed to happen until at least 2016.  Sadly, in the years ahead these "Social Security deficits" are scheduled to become absolutely horrific as hordes of Baby Boomers start to retire.

#13 In 1950, each retiree's Social Security benefit was paid for by 16 U.S. workers.  In 2010, each retiree's Social Security benefit is paid for by approximately 3.3 U.S. workers.  By 2025, it is projected that there will be approximately two U.S. workers for each retiree.  How in the world can the system possibly continue to function properly with numbers like that?

#14 According to a recent U.S. government report, soaring interest costs on the U.S. national debt plus rapidly escalating spending on entitlement programs such as Social Security and Medicare will absorb approximately 92 cents of every single dollar of federal revenue by the year 2019.  That is before a single dollar is spent on anything else.

#15 After analyzing Congressional Budget Office data, Boston University economics professor Laurence J. Kotlikoff concluded that the U.S. government is facing a "fiscal gap" of $202 trillion dollars.  A big chunk of that is made up of future obligations to Social Security and Medicare recipients.

#16 According to a recent AARP survey of Baby Boomers, 40 percent of them plan to work "until they drop".

Companies all over America have been dropping their pension plans in anticipation of the time when the Baby Boomers would retire.  401k programs were supposed to be part of the answer, but if the stock market crashes again, it is absolutely going to devastate the Baby Boomers.  State and local governments are scrambling to find ways to pay out all the benefits that they have been promising.  Many state and local governments will be forced into some very hard choices by the hordes of Baby Boomers that will now be retiring.

Of course whenever a big financial crisis comes along these days everyone looks to the federal government to fix the problem.  But the truth is that after fixing crisis after crisis the federal government is flat broke.

At our current pace, the Congressional Budget Office is projecting that U.S. government public debt will hit 716 percent of GDP by the year 2080.  But our politicians just keep spending money.  In order to pay the Baby Boomers what they are owed the federal government may indeed go into even more debt and have the Federal Reserve print up a bunch more money.

So in the end, Baby Boomers may get most of what they are owed.  Of course it may be with radically devalued dollars.  Already we are watching those on fixed incomes being devastated by the rising cost of food, gas, heat and health care.  What is going to happen one day when prices have risen so much that the checks that our seniors are getting are not enough to heat their homes?  What are we going to do when those on fixed incomes are buying dog food because it is all that they can afford?

We are rapidly reaching a tipping point.  As the first Baby Boomers retire the system is going to do okay.  But as millions start pouring into the system it is going to start breaking down.

No, there is not much that we can do about it now.  We should have been planning for all of this all along.  Americans should have been saving for retirement and governments should have been setting money aside.

But it didn't happen.

Now we pay the price.