An investment firm named KPCB (Kleiner Perkins Caufield & Byers) has posted a lengthy presentation on YouTube that addresses the current issue of U.S. government debt and provides an ostensibly impartial analysis of the situation and how it may be addressed. This article is offered as a review and commentary of the presentation’s content:
This is one very skewed take on the federal debt issue presented by a very large global investment company with a seriously vested interest, including a major presence in China. While the slideshow pretends to be non-partisan, in reality, it’s a propaganda tool that emphasizes all GOP talking points and glosses over any mention of opposing views.
If you agree with the KPCB take, then the main problem with the U.S. economy is entitlement spending. The slideshow emphasizes this point over and over, throughout the presentation. It also distorts the truth about tax revenue, demonizes government employees, minimizes the impact of defense spending, and makes a series of unfounded comparisons backed by equally illegitimate half-truths.
The following are some specific criticisms:
They assault the growth in government spending by charting the growth starting with the Great Depression: it’s up to 24% of GDP following a 3% trend line prior to 1930 — no shit it grew — there was no prior safety net and no future for anyone but the robber barons and banksters. That’s why we had the Great Depression! The New Deal paved the way and the ensuing period of time following WW2 was the greatest sustained economic expansion in our history — all under a system of shared prosperity brought about through government programs and regulation.
They use the GOP favorite, a family example, as comparison to show what the government should do. Of course it fails to illuminate any of the distinctions between the two very different groups. You know, like one can actually address trade rules, modify tax structures, and print freaking money — or that one is focused on its own wellbeing and the other is supposed to be focused on the wellbeing of ALL the people.
They claim that entitlement costs are rising “exponentially,” which is, of course, true, but still a means of somewhat overstating the issue. Even in today’s sad state of economic affairs, our GDP is presently growing “exponentially” — at a rate of 1.6%, which is pathetic. But the fact that few Americans understand exponential growth provides an open opportunity to exploit their ignorance and make the situation sound as bad as possible. FYI, even the Heritage Foundation estimates claim that entitlement spending will “double” by 2050. I guess “double” just doesn’t sound scary enough.
They label the growth in entitlement spending as a “runaway freight train,” comparing it to the increase in tax revenues, claiming that the former has grown at 2 times the rate of the latter over the past 10 years. Of course, they conveniently leave out anything about the Bush Tax Cuts and the fact that tax rates are at their lowest mark in more than 50 years. Are low taxes really evidence of “runaway” entitlement spending?
They emphasize how large our entitlement spending is by comparing it to the GDP of India, the “world’s 9th largest economy, but they never state that India’s GDP is only $1.38 trillion, or less than 1/10th the size of our own.
They attack the entitlements, but they completely glaze over defense spending. They list it as only 20% of the total and $656 billion. Of course, the truth is that when looking at all defense spending, not just the department of defense, the number is over $1 trillion, and is pushing 30% of overall spending.
They chart a picture where defense spending is actually below the statistical average since 1948 as a portion of GDP. Based on said chart, they assert that we’re actually not spending that much on defense. Of course, they chose a period of time that does include the spike for the Korean war and also the Viet Nam war years, but conveniently omits WW2, when spending peaked at 42% of GDP, and they made sure they stopped the chart in 2003 — eliminating the final $300 billion in Bush increases, not to mention Obama’s own.
They also never make any distinction in what might be considered appropriate defense spending between peacetime/wartime, nor do they address differences between wars of necessity versus wars of choice. They also fail to mention that defense spending has actually tripled since 1997, and they leave out entirely the true financial costs of war — those which echo through many facets of the economy and include a huge portion of federal interest payments and are in total estimated to be more than three times the direct costs.
They do mention defense cuts but only the most low hanging of fruit, like the extra engine for the F-35, and certainly nothing like actually ending the wars.
They show the future unfunded costs of Medicare, Medicaid and Social Security, $35, $23, and $8 trillion respectively, but fail to mention (except in the fine print) that this is over the next 75 years. They also give nothing for comparison, like the fact that at the present rate, defense costs of over $1 trillion each year, which are taken from general revenue, would amount to more than $75 trillion over the same period.
They talk about healthcare costs and results but give only lip service to any real reform that might be made. They make no mention of soaring insurer and pharmaceutical profits, or of the fact that Medicare is prohibited from negotiating drug prices, nor do they mention the 3-6% administrative costs for Medicare as compared to the 12-30% for private insurers. They even understate total healthcare costs at 8.2% of GDP when it’s actually running over 17%.
They present a terrible view of the increase in Medicaid recipients, showing that in 1965 only 1-in-50 people relied on the program compared to 1-in-6 in 2007. Of course they present this as if it were solely an issue associated with program rules and say nothing about the impact of increased cost of living and falling median income and loss of benefits.
They present the only choices to “fixing” Social Security as increasing the retirement age to 73, increasing payroll taxes to 14.3% or reducing benefits by 12%. This paints a pretty bleak picture. But it may not be so bleak when you consider that the tax increase could come largely from lifting the salary cap, or the benefit reduction could apply only to those who are wealthy — or a combination of the two. They also never mention that the program is 100% solvent through 2037, or that it will still be able to pay 78% of benefits beyond that period without any program changes —but then that wouldn’t serve their purpose.
They also make the argument that life expectancy has increased in the U.S. by 26% since the inception of Social Security while retirement age has only gone up by 3%. Now that doesn’t seem very balanced, but of course when you consider that those who actually perform physical work are barely living any longer at all, and that the real increase in expectancy applies mostly to the high income earners who need Social Security the least . . . well, I guess it depends for whom you’re advocating.
They make assertions in pursuit of the GOP agenda item to divert attention from the impact corporate profits and reduced taxation of the economic elite have had on the economy, and they attempt to place the blame on government workers and unions. They actually choose to paint a picture that blames GM’s economic problems chiefly on retiree benefits, and then claim that the company’s recovery was achieved by removing employee healthcare benefits and focusing on quality. Oddly, they never mention the government bailout.
They assert that if a corporation fails to balance its books, they are forced to go out of business, but they neglect to say a word about Too Big To Fail — the socialization of Wall St. debt , the $16 trillion in loans made by the Federal Reserve to the nations biggest banks and corporations at near-zero rates, the auto industry bailout, or any of the billions of dollars in corporate subsidies, which were estimated by the conservative Cato Institute at $92 billion in 2006 alone.
They depict the debt picture in the U.S. by comparing it to other nations and using our gross public debt number, which unlike other nations has the added factor of including inter-government and state-issued debt, neither of which is typical of most other countries. The combination of these two categories is about 30% of the total, which puts the 86% number in a considerably different light. And BTW, even though they chose to use government spending trends from 1930, they fail to mention that the debt to GDP ratio was 122% after WW2 — a number that we paid down with economic expansion and higher taxes on corporations and the wealthy.
They totally distort the tax picture by placing blame on the 51% of Americans who didn’t pay taxes and never mention that the number increased because Wall St. had literally stolen trillions in middle class wealth and crashed the economy in the process, sending 8 million people to the unemployment lines and creating a situation where it was necessary for the Obama administration to extend $288 billion in further tax cuts as part of the much maligned stimulus program.
They assert that the number of people paying 50% of taxes had dropped by 60% between 1965 and 2005. All true, but what they don’t say is that the slice of people making enough money on which to live has also been dropping — that the share of income gouged by the top 1% had grown from 8% in the mid-1970s to 23.% in 2007, and that the median wage fell for the first time in decades under G.W. Bush. They also fail to mention that the corporate share of taxes also dropped from 20% of the total in the 1960s to under 9% in 2010 — from 4% of GDP in 1965 to 1.3% in 2009, which is the lowest of all OECD nations except Iceland.
They present an absurd picture of addressing the debt with tax increases by isolating such measures as a single-solution response. In so doing, the picture they paint is that income tax rates would have to double. Of course, they conveniently ignore any combined solution of spending cuts and tax increases; they completely skim over the potential for eliminating tax loopholes and tax havens, instead offering only the possibility of either taxing healthcare benefits or eliminating the home mortgage deduction — both obviously targeted at raising alarm in working Americans. They also leave out any possibility of limiting the increased tax rates to millionaires and billionaires — you know, like the hedge fund managers, many of whom rake in over $1 billion in a single year and are able to treat their income as capital gains, paying only 15%, while a single person making $35K has to pay 25%.
They speak about government action where “nearly all” Americans will share in the sacrifice, but they don’t want you to consider that what they really mean — when the bottom 98% of us pay the entire price, that is “nearly all” Americans.
Image by Steve Snodgrass via Flickr
Is there any political issue upon which all Americans agree? If there is, it’s certainly not defense spending, social programs, taxation, campaign finance, healthcare, or abortion, nor is it energy, trade, marriage, foreign policy, guns, illegal immigration, unionization, or the national debt, the economy, the environment, education, civil rights, crime, or drugs . . . hell, we can’t even all agree on jobs and infrastructure!
Unanimous agreement on any of these issues is extremely rare, even on a historical scale. World War II may have brought us to statistical unanimity on defense spending, and back in 1789, there were few voices of dissent offered against the general provisions of the Second Amendment. Yes, true consensus seldom occurs, but the degree of division found today is equally uncommon.
Last year’s debate surrounding healthcare is an excellent example of not only how wide the chasm between liberal and conservative voter opinion, but also of the nature of the divide. From the onset, Republicans spared no effort to cast the healthcare bill in the most negative light possible; labeled “Obamacare,” it was a “government takeover” of healthcare; it was being “forced down the throats” of voters and would result in bringing “death panels” to destroy the “best healthcare system in the world.”
The result of this unrelenting slander campaign was to completely pollute public opinion amongst conservatives. Voters rallied against the bill, believing the hyperbole to be fact, and stood in stringent opposition. Conservative opinion became so stacked, that the repeal of “Obamacare” became a vital element of the Republican election campaign of 2010.
But then, as the din of election rhetoric started to subside, the campaign dust began to settle, and another dynamic soon emerged. Preposterous claims of “death panels” were replaced by a slow seeping of factual information regarding what the healthcare bill actually contained. This soon led to liberals and conservatives alike arriving at more well-developed positions, and public opinion on repeal quickly began to tilt.
Once the equation changed from “do you want to repeal the government takeover of healthcare” to “do you believe that insurance companies should be able to refuse coverage because of preexisting conditions,” people were suddenly empowered with real knowledge of the issues, and were soon to adopt a position that actually reflected their personal values.
Many voters previously in favor of repeal found that they actually supported certain aspects of the bill, like allowances to help Medicare recipients cover out-of-pocket prescription costs, parents being able to include children up to age 26 on their plans, and the prohibition on denial for preexisting conditions. Once armed with facts in place of manipulative hyperbole, support for complete repeal dropped to only one in four voters.
If this were an isolated story, it may be dismissible as an aberration in an otherwise healthy political process. But the sad truth is that this sort of deception and manipulation is the rule, not the exception, and the process in question is not only unhealthy but exceedingly destructive.
The real story about healthcare or jobs or the deficit, or whatever specific issue you choose, is that the Republican spin machine has become so expert at political theater that no matter what the underlying facts, they’re able to develop a script for each issue that portrays the conservative position as pro-American and patriotic. They’ve actually become so adept at this manipulation that conservative voters accept their contrived plots, and willingly suspend reality, without question, most often to their own demise.
Regardless of political views, any observer of this dynamic has to be in awe of its power. The spinmeister’s craft is dedicated to beguiling the unwitting victim by playing on emotions of fear, pride, and fairness. By evoking the emotional response, the skilled spinmeister obscures the facts, avoids troubling questions about substance and effectively uses distraction to open his victims to exploitation.
Who isn’t against “government takeovers” — of any kind? The government is supposed to represent the people, not rule over them. And “death panels” or having anything “rammed down your throat?” What American wouldn’t be repulsed by such imagery?
The truth is that these characterizations have nothing to do with the underlying issues. They’re offered for the sole purpose of poisoning the well in order to drive opinion without any real evaluation of substance.
In reality, when all the extraneous bullshit is stripped away, all Americans care about the same things: about the wellbeing of their family and friends, and about the values upon which they base their lives. These core values may vary from person to person in terms of what they might hold as most important in a given situation, but they are, at the same time, universal. All people care about fairness and reciprocity, and they also care about protecting others from harm, about loyalty and respect and the sanctity of life. These values form the moral foundation of our culture.
Sadly, the Republican spin machine has succeeded in co-opting this basic set of American values, casting them as unique unto itself, and has in the process managed to artificially split the nation. They’ve created an alternate reality where they alone are held to believe in hard work, where fairness is dictated by the market (instead of by people), and where corporations are entitled to more rights than the citizens of our nation. Amazing? Absolutely, but the truly inconceivable part is that something approaching half of all Americans buy into this nonsense.
The truth of the matter is that what divides Americans is much less about a split in values and much more about the split in valuables. If left to discuss and debate our values without self-serving provocation by manipulative elites, the vast majority of Americans would be able to find common ground on which to build consensus and develop workable solutions. But such interaction would not serve the goals of those who seek to keep us divided, so they do everything they can to drive the wedge as deep and often as possible.
We’ve allowed the politicians and media to cast the debate as “big government” versus “small government,” when we all know that what we really need is “effective government.” We argue over raising or cutting taxes without first discussing the services We the People deem appropriate and how best to fund them. We accept that we’re divided over energy and defense and abortion and all manner of social and economic issues, but instead of engaging in dialogue and attempting to find real solutions, we just accept the winner-take-all, zero sum game of American politics that’s been defined for us.
This is not the way our democracy was intended to work. The Founding Fathers established a republic designed to ensure that the interests of all citizens would be taken into account. But in spite of their sage efforts, our representative government increasingly represents only the interests of a very small, very wealthy, and very powerful minority.
The real division in America has nothing to do with left and right. This is an artificial construct designed to keep the masses in perpetual tension — to keep us divided. Today’s public is presented with one fraudulent dichotomy after another, all stemming from complex political positions built on heaping assumptions with questionable logic. It is this complexity that prevents solution, because it ensures that the public never engages in meaningful discourse at a level low enough to find our common ground — the level of our core values.
There is no issue on the social landscape upon which a majority of Americans cannot find a suitable compromise. All that’s needed is an earnest discussion at the most basic level. Americans are decent people with a true sense of fairness, who have proven time and again that they’re capable of working together for the common good. All they need is leadership willing to speak the truth and stop beating the drums of division long enough to foster real dialogue.
Unfortunately, politicians want us all to believe that our differences are irreconcilable, that the other side is the enemy, unpatriotic and incapable of coming together and agreeing upon workable solutions. This is a fallacy, but it’s kept alive by constantly reintroducing issues that are recirculated and debated over and again, whenever The People threaten to expose the truth — that the only real divide in America is top and bottom, between the haves and have-nots, and that divide is widening with every passing year.
It is up to We the People to reject yet another season of the Kabuki Theater that is left/right politics in America. We must demand an end to the deceptive practices of both major parties, equally to Republican fear-mongering and Democratic lip-service, for it is their dance that’s taken us to the edge of destruction. We must come together as a people and insist on a real conversation, or else continue to be exploited by our nation’s economic elite and their servants in public office.
The People only win when we unite.
If interested in a look at how your personal values fit with your politics, pay a visit to Your Morals.org.
- Image via Wikipedia
Article first published as Michele Bachmann’s State of the Union Tea Party Commercial on Technorati.
TeaPartyHD, the television and Internet network responsible for the unseen camera and teleprompter that Michele Bachmann looked toward while delivering her rebuttal to President Obama’s State of the Union address, finally posted their video of the congresswoman’s speech on Friday. And yes, she’s looking squarely at the camera.
So now, with a little luck, this will be the end of media coverage of the strange off-angle shot aired on CNN. In the big picture, who really cares what camera Michele Bachmann was looking at? The gaff made the speech a bit odd to watch, but it really could have happened to anyone. This aspect of the Bachmann story has been given far too much attention — so much that nobody’s talking about the insaniTea of her message.
First off, to call Bachmann’s speech a “response” or “rebuttal” to the State of the Union is to completely ignore everything she said. She didn’t deliver a response; it was nothing more than a rerun of the same fact-free Tea Party commercial we’ve all seen over and again, ad nauseam. It is on this inane content where criticism for the Bachmann slideshow should be focused.
Bachmann wants Americans to blame President Obama for unemployment, so she shows a nice red and blue chart depicting unemployment rates by year. According to Bachmann, the spike in 2009 is Obama’s fault. Of course, she failed to mention that we were hemorrhaging jobs at a rate of 600,000 per month when he took office, and that the economy was in a freefall stemming from the Bush orchestrated bank collapse, but what the heck . . . it’s all fair in politics.
The congresswoman then hit the tried-and-true “attack the Stimulus” chord. The “failed stimulus,” as she referred to it, gave America nothing more than “a bureaucracy that now tells us what light bulbs to buy.” This is a great tactic: just make up your own story, completely devoid of truth, throw in some exaggeration (the trillion dollar stimulus), play upon people’s emotions, ignore the facts, arrive at a hyperbolic conclusion, and BAM — the falsehood lives on. Keep repeating it, and you will gain believers.
This works well so long as the audience just buys the bullshit without checking any facts. But if people have even the slightest inclination to think for themselves, to actually understand the situation, the bald-faced nature of Bachmann’s nonsense shines through. It’s just too bad that so many people don’t care that the Stimulus actually staved off total collapse of the economy — that it added as much as 4.5% to the GDP, saved or created as many as 3.3 million jobs, kept unemployment from climbing to 11.5% or higher, and gave tax cuts to 94% of Americans. If they took the time to know the facts, they’d understand that the biggest problem with the Stimulus was that it was too small.
But the truth doesn’t always play well for the political goals of the speaker, so politicians and pundits are often forced to turn to propaganda — fact selection that results in lying by omission. According to Ms. Bachmann, while there had been “unacceptably high” deficits under the Bush administration, these “exploded” under Obama. She illustrates with a graph showing huge blue bars that tower above the short red Bush deficits, and she assigns all blame for the spending increases on President Obama.
Bachmann’s graph appears to be accurate, but like an iceberg, what’s seen on the surface doesn’t accurately reflect all that’s hiding below. And since the congresswoman doesn’t really want people to recall that her tallest blue bar, the one for 2009, actually reflects President Bush’s budget through October, or that it included much of the $700 billion “bailout” that was passed under Bush, she conveniently leaves these details out. And so what if she failed to mention that those little red bars didn’t include the spending for the two deficit-expanding wars that President Bush chose to keep off the budget. If President Obama didn’t want the billions in war expense reflected in his budget, he should have kept the costs hidden.
But as disingenuous as is Bachmann’s Tea Party spin on jobs and the deficit, there’s really nothing more egregious than the distorted fantasy of fear mongered hype she spewed regarding healthcare reform. In Bachmann’s words, “Unless we fully repeal Obamacare, a nation that currently enjoys the world’s finest healthcare might be forced to rely on government-run coverage that could have a devastating impact on our national debt for even generations to come.” What a crock!
Between Tea Party and more mainstream Republicans, there is no piece of legislation more illegitimately maligned than the Healthcare Reform. Their fallacy starts with erroneous claims about the quality of the American healthcare system, one that consistently produces outcomes inferior to other developed nations, and it always extends to outright lies about the nature of the legislation that was passed.
The truth of the matter is that “Obamacare” is not “government-run.” It’s actually an extension of the public/private system currently dominant in the U.S.. And as far as costs go, it’s designed to reduce them. In fact, according to the non-partisan Congressional Budget Office (CBO), it will reduce the deficit by $230 billion. And although that doesn’t solve the problem, at least it’s a step in reducing the costs of a system that now outspends the average of the developed world by more than two to one.
Bachmann is right about one thing regarding healthcare, it will bankrupt the country if allowed to continue on its present course. But the issues driving that dynamic are actually made better under “Obamacare,” although not to the extent needed — that would have required the “public option,” but the Republicans and Blue Dog Democrats made sure that didn’t happen. There was no way they were going to do anything to cut into the record profits of the medical insurers and Big Pharma.
Our nation faces serious problems, and President Obama’s State of the Union was light on specifics regarding how he will address them. But unless the American people want more poverty, more debt, more concentration of wealth, fewer jobs, lower wages, and a healthcare system that puts the insurers above the patients, they will do with Michele Bachmann’s “response” what they do with all fecal matter — flush it and forget about it.
