Writing at Naked Capitalism, Marshall Auerback puts forth a devastating critiques of how Democrats are creating the conditions which put Social Security at risk. A key part of this analysis is that the Deficit Commission was put together and appointed by President Obama (after the Democratic Congress refused to do so). There are a lot of different ideas leaking out of the commission, from austerity to cuts to Social Security and Medicare. But Auerback writes, “No mention of Republicans getting on board. This is self-immolation, plain and simple.”

Auerback goes on to question the basic validity of the Democratic Party continuing to identify with FDR, given the close relationship so many Democrats have with Wall Street. I don’t think this is a fair analysis, simply because as we saw yesterday there is a multitude within the Democratic Party. But I do think it’s fair to place blame on the corporatists with close ties to Wall Street, as well as the conservative Blue Dogs and New Dems who have continually pushed for cutting taxes on the wealthy and reducing benefits for working class Americans. Of course, Auerback notes the culpability of the present administration in driving both the conversation and putting people in charge who are known opponents of Social Security.

I also think Auerback’s description of the President’s Saturday radio address attacking Republicans for wanting to privatize Social Security (which is something of a non sequitor from the current conversation) as “cynical” is accurate. Obama could be leading on this and really strengthening Social Security, framing it around providing a promise for a safe and secure retirement to countless Americans who worked hard throughout their lives. Simply framing the debate around protecting from privatization is, as Auerback says, politics as usual.

There’s a lot of talk lately about Republican Representative Paul Ryan and his intellectual chops, especially when it comes to the deficit and entitlement spending. Bruce Webb gives a serious look at Ryan’s “Roadmap for America’s Future” (something it seems almost no media outlets have bothered to do) and basically tears it to shreds. Webb concludes:

Ryan Roadmap: Cut taxes on the rich, increase taxes on the poor. Now that is tax simplification we can all believe in! (Not).

Webb’s deconstruction is so thorough, a parenthetical “not” at the end isn’t sufficiently ironic.

James Galbraith, one of the staunchest defenders of  Social Security, has an op-ed in The Daily Beast that is definitely worth a read for those trying to contextualize arguments about the economic crisis, job creation, entitlements, and those hawking deficit concerns.  A key point Galbraith makes is that we are not in an ordinary recession, but “We’ve suffered a major collapse of the financial system.” Despite this, Galbraith points out ” There simply is no funding problem for the U.S. government, and in the real world of financial markets, none is foreseen.” The best way out of the current unemployment troubles, Galbraith convincingly argues, is not by cutting but expanding Social Security and Medicare. Lowering the retirement age would allow millions of older workers to retire, creating new jobs for young workers while giving older workers a reliable stream of income for the rest of their lives in Social Security. Similar benefits exist for expanding access to Medicare for younger workers. Galbraith concludes:

Care for the elderly, energy, climate change, the Gulf of Mexico catastrophe, our decayed infrastructure, public health—these are real issues. Let’s deal with them. The “long-term budget deficit” is a phony problem, ginned up by politicians, some economists, and the historic enemies of Social Security and Medicare on Wall Street. For God’s sake, let’s not sacrifice our most successful social programs to the hysteria we’re hearing from them.

This sort of message is critically important. Galbraith has been key in banging the Address Real Problems drum, as have people like Bob Herbert, Duncan Black and Paul Krugman. Moreover, as the deficit hawking heats up, having a sensible frame to talk about growing, not shrinking, entitlements is really important. Galbraith is a persuasive advocate and a voice who should be amplified.

This post at Economics of Contempt puts forth an interesting theory that the Fed isn’t taking more action, including trying something unorthodox, because they worry that politicians will harshly criticize them. Of course, as Economics of Contempt notes, if the Fed isn’t acting as they are able to as an independent body because of political fears, then the Fed really isn’t independent.

I’m not entirely comfortable with the version of history in the post which says the Fed was successful “bailing out AIG, establishing currency swap lines, supporting the money market funds.” Sure, they saved Wall Street, but unemployment has dramatically increased from 2008 to now — from 6.2% to 9.5%. If the economy has taken a massive hit in real terms, how well did the Fed succeed? Not well, as it created a depression.

Also, it’s a nice trick if it is the case that the Fed won’t act out of fear of being criticized of politicians. As we see with the deficit hawks, politicians must set policy out of fears of vengeful bond traders, while the Fed must avoid action for fear of what vengeful politicians might say.

Digby has posted an email from MoveOn wherein they bust up the top five myths conservatives are pushing about Social Security. Prometheus stealing fire is a myth. These are lies and should be treated as such.

Top 5 Social Security Myths

Rumors of Social Security’s demise are greatly exaggerated. But some powerful people keep spreading lies about the program to scare people into accepting benefit cuts. Can you check out this list of Social Security myths and share it with your friends, family and coworkers?

Myth: Social Security is going broke.

Reality: There is no Social Security crisis. By 2023, Social Security will have a $4.6 trillion surplus (yes, trillion with a ‘T’). It can pay out all scheduled benefits for the next quarter-century with no changes whatsoever.1 After 2037, it’ll still be able to pay out 75% of scheduled benefits–and again, that’s without any changes. The program started preparing for the Baby Boomers retirement decades ago. Anyone who insists Social Security is broke probably wants to break it themselves.

Myth: We have to raise the retirement age because people are living longer.

Reality: This is red-herring to trick you into agreeing to benefit cuts. Retirees are living about the same amount of time as they were in the 1930s. The reason average life expectancy is higher is mostly because many fewer people die as children than did 70 years ago.3 What’s more, what gains there have been are distributed very unevenly–since 1972, life expectancy increased by 6.5 years for workers in the top half of the income brackets, but by less than 2 years for those in the bottom half.4 But those intent on cutting Social Security love this argument because raising the retirement age is the same as an across-the-board benefit cut.

Myth: Benefit cuts are the only way to fix Social Security.

Reality: Social Security doesn’t need to be fixed. But if we want to strengthen it, here’s a better way: Make the rich pay their fair share. If the very rich paid taxes on all of their income, Social Security would be sustainable for decades to come. Right now, high earners only pay Social Security taxes on the first $106,000 of their income. But conservatives insist benefit cuts are the only way because they want to protect the super-rich from paying their fair share.

Myth: The Social Security Trust Fund has been raided and is full of IOUs

Reality: Not even close to true. The Social Security Trust Fund isn’t full of IOUs, it’s full of U.S. Treasury Bonds. And those bonds are backed by the full faith and credit of the United States. The reason Social Security holds only treasury bonds is the same reason many Americans do: The federal government has never missed a single interest payment on its debts. President Bush wanted to put Social Security funds in the stock market–which would have been disastrous–but luckily, he failed. So the trillions of dollars in the Social Security Trust Fund, which are separate from the regular budget, are as safe as can be.

Myth: Social Security adds to the deficit

Reality: It’s not just wrong — it’s impossible! By law, Social Security funds are separate from the budget, and it must pay its own way. That means that Social Security can’t add one penny to the deficit.

This is really good stuff, and important too. Good job, MoveOn.

This weekend, the New York Times published an editorial supporting Elizabeth Warren to run the newly-created Bureau of Consumer Financial Protection. This is a big step forward and sign that conventional wisdom is aligning behind much of the progressive online community to support Professor Warren. The Times makes very clear that Warren is simply the best for the job…and for good reason: the banks know she will be an effective protector of consumer interests. “The banks don’t oppose Ms. Warren because she doesn’t get it. They oppose her because she does.”

I would love to see Professor Warren nominated. I started reading her posts at TPM Cafe’s Warren Reports back shortly after the site launched. She provided advice to the Dodd campaign when we were building out a bankruptcy reform plan. And she has been a tireless advocate for the middle class. She is a real leader who can effectively explain complex financial machinations and use understanding and transparency against a financial system that is built to obfuscate real costs to working people.

As of now, I really don’t know how likely it is that the Obama administration will nominate Warren to run the CFPB. It’d be great if they did, as it would be a sign that they are truly committed to making this new agency as powerful and impactful as possible. Certainly there are others who could do the job, but Warren’s leadership on this issue deserves to be recognized not just by activists who share her views, but by those who can lend power to her views.