archived: 27 Mar - 2 Apr, 2005         Back                 Next

UPDATED:  March 27, 2005 

                        THE MORE YOU KNOW 

Pew has just released a fascinating poll on Social Security.   

First, support for Bush’s privatization continues to fall: 

Second, younger citizens, who heavily supported private accounts initially, are moving away from Bush’s plan: 

In February, people age 18-29 favored the idea of private accounts by a 66%-19% margin. Today, just 49% favor private accounts, while 25% are opposed, and nearly as many (26%) say they don't know how they feel about the issue. -- Pew  

Third, and perhaps most critically, the more that an individual has heard about Bush’s Social Security plan, the LESS likely they are to support the plan. 

In general, opposition to the plan to allow private accounts is much higher among people who have heard a lot about it than among those who are less familiar with it. Overall, people who have heard a lot about the plan oppose it by 52%-41%, while those who have heard little or nothing favor it by a 47% to 30% margin.

This pattern is significant even when age is taken into account. In particular, people under age 30 who have heard a lot about the proposal are more than twice as likely as their less engaged peers to oppose the idea (45% vs.19%). And among older age groups, where opposition is higher even among people who have not heard much about the private accounts proposal, those who have heard a lot express the most opposition. -- Pew (emphasis added)         

The message for Democrats is relatively simple – make the public aware of what Bush is advocating.  The Democratic Party, at the national and state levels, should be following the example of AARP – advertise.   

Scroll down to see the AARP ad that is currently running.  It is excellent and is playing nationally.  Democrats are missing a real opportunity here.

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                        CRUEL REPUBLICAN POLICY  

When the recession started, interest rates were dropped to promote consumer spending to keep the economy from an even deeper recession.  Consumers responded, spending in ever increasing amounts; much of the spending on credit. 

In fact, consumer debt has reached record levels: 

Borrowing on credit cards, auto loans and other types of consumer debt rose at an annual rate of 6.6 percent in January, the fastest pace in three months, the Federal Reserve said. Strong post-holiday sales at retail stores fueled the rise, which was double what many economists had expected. They predicted further gains in borrowing in the months ahead, bolstered by continued strength in hiring. Total consumer debt now stands at a record $2.12 trillion. – Washington Post         

At the same time that Americans are going deeper into debt, Bush’s policies have resulted in the largest federal deficits in history.  Add to the mix of historic consumer and federal debt a burgeoning balance of trade deficit.   

The conclusion; America is in hock.  Debt comes with a price. 

Now, interest rates are headed up.  The Federal Reserve increased interest rates by .25% last week for the eighth such increase.  The Federal Reserve issued a statement indicating that inflation was more pronounced than was thought; generally a signal that the Federal Reserve will continue to raise rates. – Star-Telegram  Home mortgage rates moved above 6%.  

As interest rates move up, the cost of paying back all of the debt on credit cards goes up.   

At the same time that consumers have to pay more to finance their debt, Bush’s policies are fueling inflation:   

[A] higher inflation rate - has arrived at the nation's doorstep.

At the moment, the price increases are just a hint of the early 1980s, a period when Americans developed a buy-today-before-it-goes-higher mentality. Still, it is a significant enough development that the Federal Reserve, in its latest interest rate hike on Tuesday, expressed sharper concerns that are causing angst in the financial markets.

"Inflationary pressures are rising," says Richard DeKaser, chief economist at National City Corp. "Are we back worrying about accelerating inflation? I think we are."

The latest numbers give cause for concern. Over the past three months, wholesale prices are up at a 4.5 percent annualized rate. In the past, many of those increases were not being passed through to consumers. But that's doesn't seem to be the case now. In February, the consumer price index (CPI) rose 0.4 percent, the fastest pace in four months. – Christian Science Monitor   

Bush’s inflation will take more of Americans’ hard earned wages to pay for goods and services; for example, gasoline.  Average Americans will be squeezed between higher prices for the goods they use every day and higher debt payments.  Some will no longer have the earnings to pay their debts. 

Those Americans could turn to the Federal Bankruptcy Court for protection and a fresh start.  However, the Republican Party is on the verge of enacting historic legislation making the bankruptcy “safety net” smaller.  As one commentator observed: 

THE REPUBLICANS just did it again. They pushed through Congress a bankruptcy ''reform" bill written by credit card companies. The bill makes it harder for ordinary people crushed by debt (often medical debt) to start anew. It leaves intact dodges used by wealthy people, such as asset-hiding trusts, and the corporate ability to use bankruptcy to slash wages, evade pension responsibilities, and stiff creditors. – Boston Globe   

It is a cruel irony.  Republican policy first promotes massive consumer spending.  Next, Bush’s federal deficits and failure to defend the falling US Dollar has started an inflationary period, driving interest rates higher.  Just when Americans need more income to pay their debts, Bush’s policies lead to inflation requiring more to pay for the basic necessities of life.  Now, Republicans are going to pull the bankruptcy safety net out from under millions of average Americans while leaving wealthy people an escape hatch.    

                        FRAMING BUSH 

AARP opposes Bush’s privatization of Social Security.  They are running advertisements across the United States that “frame” the issue well. 

Click on the photograph below to see the commercial (Real Player required)(some users may have to hold the Ctrl button and then click the photo)

If the photo hyperlink does not work, click here:  AARP TV Commercial or to go to the AARP website cache. – AARP Blog  

The AARP ad shows a plumber working at a woman's house with a clogged drain. The plumber tells the owner that the only way to fix the clogged drain is to tear her house down.  A demolition crew starts the job. As the house is being destroyed, the announcer makes the points that Bush’s privatization plan will run up massive debt and people’s retirement will depend on the performance of the stock market at the time of retirement.  The ad concludes that Social Security will become Social Insecurity. 

NEXT - THEM DEMS

Last Update: 03/27/2006