The Hollow Men – Peter G. Peterson And His Deficit Commission
With apologies to the two or three of you out there that give a fuck, I spent the last week vacationing at a friend’s summer home, drinking margaritas, working, and generally contemplating life. Ultimately, I determined that the path I was on was pretty much right – notwithstanding the (albeit mild – really mild!) slings and arrows from mydebtcomeback.blogspot.com/ about the relative virtues of paying “back” debt and telling the banks to go fuck themselves.
As is always the case when I take an extended leave from blogging, it was an embarrassment of riches in subject matter over the last week. But one piece of news seemed particularly telling Dwindling Retirement Savings ‘Undiscussed Explosive Bomb’ Of Recession:
After working in executive management for over ten years with a steadily increasing salary, Rick Stephens, 51, was laid off from his job in June 2008. Two years of steady unemployment later, he has sold his car, moved in with his 75-year-old father and blown through all his retirement savings to stay afloat.
“I pay my bills with what is left of the savings I accumulated by being frugal all my life, but I’m going through that pretty fast,” he said. “I have tapped my IRA, and the result of that is I will be heavily taxed on it next April. I honestly believe that there will be no recovery from this. If there is a recovery, it will be too late for me, as I will have exhausted my savings and my retirement that I had socked away by not living the high life.”
This is what happens when people have an obsession with paying bills. Retirement saving should be non-negotiable, but an unhealthy desire to appear solvent makes it one of the first things to go – before credit cards, before the mortgage, before all the things that should be cut. 401ks are (I believe) insulated in bankruptcy, and are the ultimate safety net. Draining an IRA or a 401k to make payments on credit cards and mortgages is probably the most self-destructive activity that anyone can engage in this side of snorting meth, but, as is our motto around here, desperate people do stupid shit, e.g. payday loans, student loans, teabagging, supporting Obama, etc., etc. etc.
“This is the undiscussed explosive bomb in all this, is all the pension benefits, all the 401(k) money that’s been drained out by workers trying to stay afloat until they find a job,” Rep. Jim McDermott (D-Wash.) told HuffPost. “There are a lot of people who, when this is over, are going to have nothing. They will have lost their house, they will have used all their pension money.”
Many Americans seem to be losing hope. Only 16 percent of respondents to the EBRI survey expressed confidence in their ability to retire comfortably, the second lowest point in the 20-year history of the survey.
Given what is happening to retirement savings, both on the asset value side and the voluntary draining to keep Jamie Dimon and Richard Fairbank living the lifestyle to which they have become accustomed, this strikes me as, to put it mildly, a particularly bad time to start fucking around with Social Security and Medicare. Raising the eligibility ages, for example, while there are huge numbers of people in their 40s and 50s who will never get back on their feet seems, well, cruel. In fact, if anything, this is when we should be expanding the social safety net.
But Peter G. Peterson is striving for his pound of flesh on the backs of the “lesser people,” so I tweeted the following:
I think that pretty fairly summarizes my feelings toward the founder of Blackrock and world-class asshole that is Peter Peterson, his Foundation, and his pet deficit commission.
Unfortunately, I did not tweet this to the right Pete Peterson (If anyone knows the Blackrock Pete Peterson’s twitter, please let me know!). It was just some struggling author. He could have been a much bigger dick about my error, so here’s his book if you want to buy it.
But the basic point stands. Here at AFEP, we’re not big fans of structural deficits of 10% of GDP, and we don’t just sit around and whine about stuff – We want to help! So here is AFEP’s strategy for eliminating the deficit:
- Print enough money for everyone to pay off their household debt;
- Give it to them;
- Watch the entrepreneurial revival in America swamp the Treasury with tax revenue!
Of course, that’s not the only solution. Here’s another way to eliminate the deficit:
- Make education free (eliminate student loans) – rationing will be required;
- Make healthcare free (single-payer baby!);
- Ration healthcare by letting people die with dignity (no ventilators for people 85+, no biopsies for 90-year olds), and if I’m a vegetable, pull the plug on me right quick!
- Legalize drugs (and a bunch of other stuff) and get rid of all the fucking prisons;
- Pull the military out of the vast majority of places we have them;
- No more bank bailouts!
- Raise taxes on the finance sector – a lot!
Optimally, we’d do some combination of the items from list 1 and list 2, but either list works. Note, that neither requires forcing people to eat cat food.
But this is America, and since Americasux, I’m sure we’ll go for door number 3:
Or, you know, instead of asking the well-off to contribute as much as everyone else does, we could maybe just not give people their Social Security until they are 70, instead of 65. That sounds like a fine and sensible idea if you are a currently old person whose work is easy and enjoyable and rewarding enough that you continue doing things like being on deficit commissions long after you could’ve retired.
Of course, most currently young Americans who aren’t on deficit commissions will be working minimum wage service jobs cleaning and shining the robots that feed and nurse the nation’s Aspen Ideas Festival panel participants, and those Americans might enjoy the opportunity to retire with their meager checks before the robot wax completely blinds them.
And since Peter G. Peterson lacks the conscience required to do the right thing and kill himself with a lit stick of dynamite, we’ll watch the middle class in America die – not with a bang, but a whimper:
Once upon a time this was called the American Dream. Nowadays it might be called America’s Fitful Reverie. Indeed, Mark spends large monthly sums renting a machine to treat his sleep apnea, which gives him insomnia. “If we lost our jobs, we would have about three weeks of savings to draw on before we hit the bone,” says Mark, who is sitting on his patio keeping an eye on the street and swigging from a bottle of Miller Lite. “We work day and night and try to save for our retirement. But we are never more than a pay check or two from the streets.”