Obama came to office talking about taking on the difficult task of reforming entitlements. He didn't say much during the campaign, but he immediately started talking about it once elected. It seems that he has embraced the corporate Republican theme of dismantling Social Security because it's too expensive, which it isn't. Thus the theme of "shared sacrifice" mentioned by Robert Oak. As a Democratic Party President, Obama is aware that he's in the position to successfully lead the Republican charge to gut Social Security. How you achieve that is secondary, whether it's through the decimation of its funding base or through a Super Committee that is tasked with hollowing out benefits. The Republicans have been trying to do this for decades and now at last they're succeeding. Why Obama is so enamored of their militaristic feudalism is quite beyond me. He says that he's "for jobs" and he's concerned about unemployment and the working people of this country. But his woefully inadequate actions at every step of the way (vetoing essential health regulations on ozone was yet another job destroying decision) make it clear to me that woefully inadequate reflects either a fundamental lack of interest or it's a design feature (or he's a candidate to take the most idiotic Harvard graduate award away from GWB).

Robert Oak noted in his post that the benefits will be minimal in terms of impact on the economy, but what he didn't mention is that the knock-on effects could be significant, not the least of which is increased joblessness and reduced economic growth, the exact opposite of the plan's intent. How so? As people recognize that the money they were counting on for their retirement isn't there or will be greatly reduced, they will try to increase savings for retirement, cut back on spending (decreasing PCE) and stay in the workforce longer. That means fewer jobs and increased competition for jobs, which means increased unemployment. Young people are already having considerable difficulty landing jobs and I can guarantee you it will get worse once the effects of cutting social security benefits become apparent. More savings means increased money for the banks, which will be spent in whatever manner maximizes management bonuses. I can guarantee you that does not include lending into a declining economy. Speculating on commodities and derivatives is more probable/profitable. But that lack of investment means lower growth or declining GDP, leading to fewer jobs, etc.. Social Security was one of the most successful of many programs passed by Roosevelt during the Great Depression to alleviate the effects of that economic calamity. Now we're in the Greater Depression as some have called it or the Great Recession, and the Obama Administration is doing the exact reverse. Wonderful. Is there an exit to this madness?

Robert Oak uses the term "proved not to work" with the meaning that the policies proposed could not improve the unemployment-underemployment situation, even if they could be enacted. But I would broaden the meaning, as follows:

The President's "jobs" proposals will not even make it out of committee in the House, except as "trade adjustment assistance" in connection with enactment of the three pending FTA's, will not be enacted by Congress, except as "trade adjustment assistance" in connection with enactment of the three pending FTA's, and, if the FTAs and the related TAA is enacted, that will be haled by corporate media as a win-win for Republicans/Democrats as well as for workers/business.

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http://www.youtube.com/watch?v=WFJSSx-hjYs

As usual, I back up my claims with evidence --

Excerpted for review purposes from Reuters article (Wednesday, 7 September 2011)

(Reuters) - The Senate will not vote on three long-delayed trade deals with South Korea, Panama and Colombia until the House passes an expanded Trade Adjustment Assistance program to retrain workers who have lost their jobs, Senate Democratic leader Harry Reid said on Wednesday.

"Unless (TAA) passes the House, we're not going to take up any of the trade bills over here," [Senate Majority Leader] Reid told reporters.

And here's more citation, which in turn includes detailed citation to recent history of all this (back to origin with last Bush administration) --

Excerpt from Scott Lincicome's The TAA-FTA "Deal," Part 3: It's the Politics, Stupid

A year ago, Obama moved to resolve Democratic concerns with the deals. That accelerated after Republicans won the House of Representatives in November and demanded action on all three deals by July 1. -- Scott Lincicome, in 'It's the Politics, Stupid'

More exactly, I would describe the origins of "concerns" among Democrats as "concerns of progressive-populist Democrats and a few populist Republicans."

Excellent, 'Barbara Ann Jackson'!

Yes, exactly. Shady practices. Unethical behavior. Anti-market. Anti-freedom. Anti-people. Basically more steps toward Communist corporatism.

BUT, don't throw the baby out with the bathwater. That is, do not let the thieves, under the guise of "tort reform," eliminate the right of the people under the Constitution to hire attorneys on a contingency basis.

If attorneys are made unavailable by law to the people, only criminals will have attorneys. And the next step will be another "reform" to assure that courts will not entertain pro se motions!

The country needs REAL reform! Start with your local congress-crittur, check out votes in Congress, follow the money. When in doubt, throw them out!

I work for Bank of America. It's all true. A caller once told a collegaue, "The problem is Bank of America hires the same people that work at McDonalds to do modifications on a persons home." My colleague laughed at this and shared it with me. I looked at her with my head slightly tilted and said, "They do."

Unfortunately few know the economic history of the United States, but before social security, older people often died in abject poverty. Today, more than ever, traditional pensions were taken away, replaced with 401ks with massive losses due to stock market crashes and worse, corporations firing people right before they vested into their options. This happened a lot with startups in particular, but the large companies, not only committing age discrimination, but a side bonus means you lose stock options before vesting schedules.

Fixing social security is well known and an easy fix. They need to a. not let the funding be touched, this is Al Gore's infamous "lock box" which he was made fun of in 2000, and then, they need to graduate the scale based on income and make the contribution into the fund progressive. This was the removal of the cap on earnings subject to the 6.2% pay in to social security.

I think they could also look at totalization agreements and cancelling some of these to reduce costs as well.

So, bottom line here is this is a philosophy. Various groups have been out to destroy social security ever since it was enacted and especially for the last 30 years. It's either Wall Street, wanting retirement funds playing the gambling game in the markets, or it's a host of people who want more wealth, don't want social equality, believe America you should be on your own, a return to 1897.

So, it's easily fixed, unlike Medicare and Medicaid, which need massive cost reductions.

If you want to see a massive increase in abject poverty, suffering, despair, destroy social security.

Talk about a hidden stimulus, imagine those 54 million people, many 100% dependent upon this monthly meager amount....having zero income.

You want to watch consumer spending drop like a stone, that also would be it.

Today's 40's and 50's people have zero for retirement. Between getting fired all of the time, the infamous disposable worker syndrome, stock market crashes, housing implosions and shrinking paychecks which don't even cover rent...they have nothing.

No traditional pensions, unlike the current batch of retirees.
That entire "Ponzi scheme" rhetoric is just masking some philosophy, that again, probably never looked at a data table in their lives. It's not a ponzi scheme. In it's current form it's too regressive as a set up and because social security is under attack by powerful interests, they have been raiding it.

Since I think the GDP multiplier for the payroll tax is too small, to me, any multiplier that is less effective than simply using the same amount of money and hiring people to do something for a year just makes no sense, then how I interpret this is to mean they are out to destroy social security.

We've seen this time and time again and Obama from his time as candidate, has kept fairly hidden, but clearly also an agenda to destroy social security from many of his campaign economic advisers.

So, while the claim is they will take money from the general fund to replace the funding lost to social security, I don't think so.

Have you ever read something and had that horrible feeling that you know the end result will be loosing your home. We purchased our home in 2000 through Countrywide is was a 30 year Fixed/ARM 6.5% fixed for the first 2 years then it would switch to ARM. 21 months in we refinanced to a 30 year Fixed at 5.75%, In 2004 I got a promotion, and refinanced to a 5% fixed 15 year. Never at any time did I ever miss a payment. in 2010 Due to Medical bills, and my wifes BiPolar disorder we filed Bankruptcy. Somewhere along the way we got 2 months behind on payments, when I discovered it, I began making extra payments, and working a second job. But BOA doesn't put the extra amount directly on the past due, it let's it accumulate untill its a full payment, THEN applies it. I called them and let them know the next month would put the partail payment to a full payment and I would only be 1 month behind. They said ok. 2 weeks later here comes my most recent payment back, Shortly there after a notice of default, I contacted the Iowa mortgage help and started the process. Then I get served papers regarding foreclosure sale. Got help from Iowa Legal Aid filing the necessary paperwork. I am scared to death that even mediation and negotiation is going to cost me my little house.

It makes absolutely no sense to hear pundits/politicians/economists... preaching about how Social Security is underfunded, while at the same time CUTTING Social Security tax!

If Social Security is underfunded, obviously the LAST thing we should be doing is cutting taxes. Instead, the $106,800 wage base should be increased.

When it comes time to re-instate the 6.2% rate, Republicans will call this a "tax increase" just as they did with the Bush tax cuts.

Wage earners are getting accustomed to the 4.2% rate and working it into their budgets. It was only meant to be temporary and the longer it stays around the harder it is going to be to put it back to 6.2%.

It is becoming more obvious that the bait and switch is still operating at Bank of America. I'm sorry you have been put through this. Your attorney should read the Nevada complaint if she or he hasn't done so already. Also, talk to your state attorney general's office. Most of these AGs who are participating in the Tom Miller excuse for a settlement with the big banks are doing so passively, because their budgets have been cut and they don't have the resources to investigate fully the many complaints they have received about the banks. If more and more of these AGs can be pried free from the Tom Miller exercise, the whole thing will collapse.

I more and more suspect that the banks at some level, probably below the CEO, have decided that the foreclosure matters above all else. Even if it means deceiving the homeowner to get to the foreclosure, they will do so. Why this is probably has to do with the fact that the home mortgage is the largest percentage portfolio of assets that most banks own. The fundamental characteristic of the mortgage - other than the fact that the US government guaranties most of them - is that it is collateralized with the home. Take away the collateral, and you've got a 30 year loan that is unsecured, and should be priced at least at 30% interest rates, like credit cards. But credit cards are short term and for much smaller amounts, so we are really talking 80% - 100% to fully reflect the risks out that long.

Obviously, it is in all of our interests, banks and consumers, that the product remain collateralized. The problem is the banks have deeply compromised the legal integrity of their legal claim to the property, with MERS and the securitization process, where notes were never conveyed to the Trustee as required by the documentation. But the banks can't admit their culpability here, because their legal liability would overwhelm their capital and destroy them.

So, the game seems to be act as if there is no problem with the legal rights to the collateral. Foreclose at will and damn the consequences. On the origination side, notice that banks no longer securitize their mortgages. It is an admission that investors don't exist anymore who will buy paper filled with bad credit risk and uncertain legal ability to foreclose in default. That means no new mortgages get booked unless the bank is willing to keep them in house for 30 years, which they don't because they haven't the capital to support the loan. Hence the mortgage market has completely collapsed.

I'll be hunting for other credible economists analyzing this, but so far, I feel this is really about destroying social security. Anywho, any serious economic analysis, by someone who gets GDP multipliers and runs through the numbers, leave a reference link so I can include it in a round up.

This post conclusion was fairly shocking for me as well for Republicans are the ones who pointed out this is a bad idea and I just naturally blow off everything they say due to their "agendas" which usually do not make macro economic sense.