Former US Comptroller and Pete Peterson Austerity Pimp David Walker joined Andrea Mitchell's set on MSNBC to warn all of the peons that we'd better get ready to be paying more in taxes because heaven forbid we can't dare to ask the rich to do any more to reduce the deficit.
He also had some new snake oil to sell all of us with his description of privatizing Social Security; we need to make it "more savings oriented." I wonder if he's been talking to Frank Luntz? That just sounds so much nicer than saying let's turn it over to Wall Street, doesn't it? Maybe he's figured out that calling it "a cancer" like his fellow deficit hawk Erskine Bowles wasn't such a good idea. What Susie wrote in that post deserves repeating in response to David Walker here.
As I keep saying, Social Security is a pay-as-you-go program which funds itself. All Social Security needs to stay 100% funded through the next 50 years is to remove the cap on earnings placed there under Ronald Reagan as a perk for the well-to-do, and raise the rate by one percent.
To say that Social Security is part of a "cancer" as Erskine Bowles does, is the same as saying that the United States cannot meet its own bond obligations -- which is decidedly not true. But the Very Serious People, contrary to the facts spelled out by economists like James Galbraith and Paul Krugman, have decided that the best way to deal with their own gnawing sense of economic uneasiness is to grind the boot heel into the backs of the lower classes -- just to show us who's boss!
Here's more of the same nonsense from Walker. These people are determined to raid that trust fund and pretend that the United States can't meet out debt obligations if we don't.
Mitchell: Look the fiscal commission doesn’t even have anything mandatory. It’s all advisory and all the muscle from that commission was taken out because of the disagreements on the hill. Doesn’t that forecast that you’re not going to have the kind of results from this commission that is going to make a real difference in terms of the deficit or the tax climate?
Walker: Well Andrea we’re hopeful that it can make some recommendations based on the super-majority requirement. I believe it’s very possible to re-impose tough statutory budget controls next year that don’t have trillions of dollars worth of exemptions. I believe that it’s possible to reform Social Security to make it solvent, sustainable and more savings oriented.
Realistically, the two tough things that we’re going to have to do, which is comprehensive tax reform and really taking a hard look at health care costs that are out of control. Those are probably not going to be ripe until around 2013, but we need to start getting some points on the board, start doing some things sooner rather than later before our foreign lenders lose confidence in our ability to do so.
Mitchell: Mr. Walker in your recommendation that we extend the tax cuts for the middle class for all the top earners, the 2 or 3% of the top earners, would you do it even if they’re not paid for?
Walker: I think it’s highly preferable if we pay for them quite frankly but it’s important to keep in mind this. If anything is done in that regard, it should be temporary. We should not deceive the American people by letting them believe that their taxes are not going go up once the economy has recovered.
President Obama made a commitment that he wasn’t going to raise taxes on people making over $200,000 or more. That was an unrealistic commitment. Our problem is primarily a spending problem and the resolution to our fiscal challenge is primarily spending, but we’re going to need more revenues and it’s going to have to be more broadly shared than just those that are wealthy.