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David Cay Johnston on transfer of SocSec tax increase to the uberwealthy/ Email to Obama!

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To the keyboards, ciitizens!

David Cay Johnston appeared on Lou Dobbs last year, January 25, 2008, to explain how the Greenspan Commission "pay ahead" increase in SocSec taxes did not go into paying off the deficit or into a SocSec 'lockbox," but into tax cuts for the uberwealthy.

John in Sacramento titled his diary: How Social Security “Reform” Was Used to Launder $1.7 TRILLION into Tax Cuts for the Wealthy. (Additional good links in comments.)

I think Obama and his cabinet, staff, our Congress Critters need to watch this. And then they should read Johnston's book, Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefitthe Super Rich - and Cheat Everybody Else. (As should we all.)

As Avedon wrote (second paragraph):

Baby-Boomers didn't just pay for their parents' retirement during their working lives, but also for their own, thanks to Ronald Reagan giving us the biggest tax hike in American history - on payroll taxes. (My emphasis)

Email, call, write LTE's, use Avedon's line.

Since Obama put fixing SocSec squarely on the table in his speech last night, I hope the A-Listers will begin to pay attention. (Josh? Maybe we need email Josh with this video and Avedon's great point.)

Check out this post and comments as well.

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CMike's picture
Submitted by CMike on

I want to correct something the great David Cay Johnston said in that Lou Dobbs interview. Before I do, though, I'll go off topic and mention a few things about the book Perfectly Legal which was first published in 2003. The book is a page after page collection of revelations which are both jaw dropping and infuriating. Therefore I found these passages in a February, 2004, Salon.com review quite curious:

Alas, "Perfectly Legal" is nothing like Johnston's measured, balanced newspaper reports. Instead, the book is a populist screed -- which, by itself, wouldn't kill the pleasure, except that this is a screed we've all heard more eloquently elsewhere. When it comes to writing on corporate and conservative efforts to harness the economic engine of America for their own ends, Paul Krugman, the Princeton economist and Times columnist, is pithier and less confounding than Johnston; for all his faults, Michael Moore's take on economic policy is at least (sometimes) funny. Johnston is erratic. "Perfectly Legal" is a puzzling book, at times serious and moralistic, at others sarcastic. Its main fault, though, is perhaps the most damning sin for any commercial book about the tax system -- it's just plain boring ...

Why have average Americans stood idly by while the rich got enormously richer? This question pops up throughout "Perfectly Legal," and Johnston provides only a throwaway answer. The news media, he says, haven't reported on how rich America's wealthy people really are, and how they use their power and influence to shape public policy. Now, Johnston, if you recall, is a reporter at the New York Times -- if the media's really partly at fault for rising inequality, is he willing to shoulder some of the blame?

To be fair, Johnston is probably right that the media has something to do with this, but I suspect he's got the link backward: The problem is not that the press lacks the hunger to go after the rich (as Johnston's work proves, the press does a pretty good job of reporting on rich people's excesses). The problem is the people; we lack the drive to go after the rich, and that accounts for the current media and political atmosphere.

Thanks Salon.

For anyone who won't get around to reading the book, a 2004 Democracy Now! program included an interview with Johnston wherein he discussed Perfectly Legal. Amy Goodman's lead-in begins at 47:05. A link to the audio and the transcript can be found here.

But back to the comment made on the Lou Dobbs Show. Johnston said:

Johnston: ... It seems to me what Daniel Patrick Moynihan predicted in 1983 has come true. He said this was thievery and that the middle class were going to have their pockets fixed by the rich.

Dobbs: Indeed with that analogy that is precisely what is happening

Actually Moynihan was a member of the 1983 Greenspan Commission and a big celebrant of its work. It wasn't until December, 1989 that Moynihan got his first whiff of the coffee that he had helped brew. The New York Senator then walked right into the trap of framing the discussion about the Social Security Trust Fund in a manner which has been highly detrimental to efforts to preserve it. Moynihan used a variation of that dangerous right-wing mantra, "the money is gone, it has all ready been spent."

Read the incomparable Bob Somerby on this here. Scroll down to "Moynihan's Legacy" and read the whole thing. Somerby makes this crucial point:

... [W]hen he used the word “thievery” in 1989, contradicting everything he had previously said, he established the idea that the government’s borrowing of the trust fund was a nefarious transaction. This had been a conservative talking-point in the past; now it became a mainstream notion, one that has lived on to this day ...

[Oh and the most important, popularly accessible book defending Social Security, since the Greenspan Commission did its thing, has been Dean Baker and Michael Weisbrot's Social Security; The Phony Crisis. Baker and a few others took Krugman to school on the subject of Social Security solvency in the 90s, back when PK had some wrong headed notions about the accounting issues involved. To Krugman's credit he later admitted that he had allowed himself to fall in the trap of repeating conventional wisdom without performing any due diligence of his own. Jawbone, Social Security: The Phony Crisis is a little dated now but you might want to get a hold of a copy and read it.]

Submitted by jawbone on

Just signed up for Baker/Weisbrot Social Security: The Phony Crisis and Johnston's newest book, Free lunch : how the wealthiest Americans enrich themselves at government expense (and stick you with the bill) at my local library. (FSM and/or Ceiling Cat protect and save our wonderful libraries.)

Nice of the the Salon reviewer to realize that writing newspaper reports will be less polemical than books with a strong point of view! Heh.

The Somerby point about Monahan is great.

splashy9's picture
Submitted by splashy9 on

To those that try to claim that Boomers are "spoiled." We have paid double, for our parents and ourselves! It's our money that will support us, not our children's money.

It's very frustrating that so many don't know that. If we don't get what we have paid in, then we have been stolen from in a huge way.