Exclusive: CBO predicts Social Security cash deficits in 2010-11; Update: Too much sunny optimism at CBO?

posted at 8:48 am on September 22, 2009 by Ed Morrissey

Four years ago, George W. Bush attempted to reform the entitlement program Social Security, warning that the system was accelerating into collapse and would soon run deficits.  Democrats scoffed and claimed the Social Security system was solid and wouldn’t have problems for at least 50 years, as Harry Reid told PBS’ Jim Lehrer in June 2005.  Just last year, the CBO — under the direction of Peter Orszag, now budget director in the Obama administration — claimed that the first cash deficits in Social Security would not come until 2019.

Now, however, the CBO has determined that Social Security will run cash deficits next year and in 2011, and by 2016 will be more or less in permanent deficit mode.  Hot Air has exclusively obtained the summer 2009 CBO report sent to legislators on Capitol Hill but not yet made public, which shows that outgo will exceed income for the first time since the 1983 fix on an annual basis in 2010:

OASDI Summer 2009 projections

OASDI Summer 2009 projections: click to enlarge in new window

The numbers need explaining.  The number to watch is the “Primary Surplus” number, which watches actual income and expenditures without the interest payments from the general fund.  The interest payments mask the fact that costs have begun to outstrip income on an annual basis (individual months have gone into deficit in the past).   One way to look at this, according to my sources, is to think of this as a mortgage, and in 2010-11, the income can’t make the payments, so the general fund has to cover them.  Since the interest obligation compounds, the debt grows.

As we can see, this trend reverses itself temporarily from 2012-15, but the surpluses are minimal.  By 2016, the deficits return, and begin to accelerate again.  By 2019, the primary surplus runs $63 billion in the red, almost triple the deficit in 2017, showing the rapid decline of the Social Security system.

This demonstrates nothing better than the poor and politically calculated analyses that came out of the CBO during Peter Orszag’s tenure at the Congressional agency.  Democrats wanted analyses that allowed them to ignore the problems in Social Security, and Orszag was happy to supply them.  Douglas Elmendorf has had to right the ship at CBO while Orszag continues to blow his predictions at OMB, most notably in overall deficit projections, which Orszag had to admit were off by more than 40% and $2.2 trillion over the next ten years.

Of course, they were helped along by a complacent media unwilling to do math, and a host of apologists for the Left.  Chuck Blahous at the Hudson Institute has a good rundown of those he calls the “mythmakers”.  It’s worth reading in its entirety, as is Robert Reich’s “All is well!” blogpost from four months ago, apparently working off of the Orszag numbers from last year.

The situation at Social Security is much worse than this administration and Democrats in Congress want to admit.  They want to continue busting the deficit and creating new entitlements while the existing ones careen towards collapse.  The new data shows that time has almost run out for reform.  Seniors will still get their checks, but those will increasingly rely on injections from the general fund and not revenues from Social Security payments.  At this point, one has to wonder when SSA becomes a flat-out Ponzi scheme, and who the suckers will be when it blows up.

Update: Fixed a couple of typos, and also recalled (thanks to a Hot Air reader) that SocSec briefly ran an annual cash deficit before the 1983 fix.

Update II: Steve at No Runny Eggs, who has been keeping a very close eye on SSA, says that the CBO numbers project some eye-popping payroll-revenue growth numbers to get back to surpluses (briefly) by 2012.  According to the numbers, CBO projects a 6.19% growth rate in 2012, and 5.69% in 2013, then dropping to 4.59% in 2014 and declining afterwards.  Assuming that they only peak at the 4.59% number for all three years — still a rather optimistic projection — Social Security never actually comes out of its deficits at all:

Be sure to read Steve’s post to get the full explanation of his projections.


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I wonder, at what point do American’s explode these problems? Most Americans actually do live within budgets and are fairly responsible… the numbers coming out of washington are insane, I find it hard to believe that at some point, people aren’t going to have enough of this

WashingtonsWake on September 22, 2009 at 12:45 PM

If we could end social security, I would give up my right to benefits as well – for the good of my children and grandchildren.

WashingtonsWake on September 22, 2009 at 12:47 PM

mandatory prison sentences for pension fund fraud.

bluegrass on September 22, 2009 at 12:48 PM

WashingtonsWake on September 22, 2009 at 12:47 PM

– - – - – - – - – - – - – - – - – - – - – - – - – -

how much more will you give up to share the wealth?

thats the bigger picture.

bluegrass on September 22, 2009 at 12:51 PM

Didn’t Ronnie and Tip work out the ‘83 fix so that Social Security woul dbe essentially self funded in perpetuity?

And wasn’t that ruined during the Clinton years when payroll tax was brought back into the general revenues?

Wasn’t that one of the phony ways that he was able to run such large surpluses? In addition to gutting the military?

Just sayin’; didn’t Reagan fix it only to have it ruined again by the big government types?

RocketmanBob on September 22, 2009 at 12:00 PM

Pure economic gold in 5 simple questions.

Blacksmith8 on September 22, 2009 at 12:55 PM

Why don’t we nationalize prostitution, and create legislation that contains individual mandates for utilizing the service?

On top of that, instead of Cap & Trade for carbon credits, we’ll create sex credits, which can be traded as a commodity on the open market. This way, if you don’t want to use the service because of personal reasons, you can still make a buck by selling your credits to the highest john bidder.

Talk about a money maker.

BobMbx on September 22, 2009 at 1:00 PM

Does anyone in the Hussein Admin understand what is going on? LMAO

I am certain that the Spin Media will some how blams Bush for this too?

The question is and real blame goes to: “Who removed SS from its own Trust Fund and put it into a General Fund?” Mr. Great Society LBJ(D)…If we need to play the Blame Game let’s play it!

Need a fix……..Put SS back into a Trust Fund and monitor it for illegal activities. (i.e. fraud, abuse, etc)
No More collecting checks or deceased people
No More illegal aliens collecting SS Benefits
No More squandering of SS monies

BigMike252 on September 22, 2009 at 1:01 PM

I’ve never considered myself a Boomer. I read an article 20 years ago about ‘Jonesers’. The birth years were like ’58 to ’64. But the best part was the comparison. My older siblings are totally Boomer. They speak and act like the Clintons. It was always rules for thee not for me. Hmmm were the Boomers an entire generation of dhimmicraps?

Blacksmith8 on September 22, 2009 at 1:02 PM

I’ve never considered myself a Boomer. I read an article 20 years ago about ‘Jonesers’. The birth years were like ‘58 to ‘64. But the best part was the comparison. My older siblings are totally Boomer. They speak and act like the Clintons. It was always rules for thee not for me. Hmmm were the Boomers an entire generation of dhimmicraps?

Blacksmith8 on September 22, 2009 at 1:02 PM

Yeah, there must have been some time-limited after-effect of the radiation released in nuclear explosions in the 1940s that modified the genes of people born between 1946 and 1957 that made them all Democrats. Lucky for you, the effect had worn off before you were conceived. Just a simple accident of birth that enables you to feel so superior to people a few years older than you.

It truly is an entire generation of democrats. There isn’t a single person born between 1946 and 1957 who ever voted for a Republican. Not even one. The only reason Reagan was able to win with such a landslide in 1983 was that the evil, mutant baby boomers stayed away from the polls that year.

ProfessorMiao on September 22, 2009 at 1:08 PM

You can’t have the choice, because too many people believed the government, and didn’t prepare for their own retirement. Now, they need or demand all of the money that you are currently paying in, plus more borrowed.

Really, not my problem whatsoever.

There is going to be pain for everyone to get out from under this.

Vashta.Nerada on September 22, 2009 at 12:36 PM

I’m sure that’s an understatement.

Esthier on September 22, 2009 at 1:11 PM

Of course, they were helped along by a complacent complicit media unwilling to do math

fixed it for you

in_awe on September 22, 2009 at 1:12 PM

He basically believes if you placed your money in a bank, and it was stolen, the bank doesn’t owe you anything.

right2bright on September 22, 2009 at 11:49 AM

You actually believe that paying taxes is the moral equivalent of putting money in a bank?

And you accuse me of arguing just to argue?

MarkTheGreat on September 22, 2009 at 1:16 PM

Why are you saying the money must be stolen from others to be paid back?
Esthier on September 22, 2009 at 11:52 AM

Where the heck do you think govt is going to get the money from? Do you actually believe there is a hidden vault somewhere that the govt shovels money out of when it wants to send it to someone one?

The money paid out by SS is taken from someone else. That’s the way it’s always been.

MarkTheGreat on September 22, 2009 at 1:19 PM

Didn’t Ronnie and Tip work out the ‘83 fix so that Social Security woul dbe essentially self funded in perpetuity?

And wasn’t that ruined during the Clinton years when payroll tax was brought back into the general revenues?

Wasn’t that one of the phony ways that he was able to run such large surpluses? In addition to gutting the military?

Just sayin’; dodn’t Reagan fix only to have it ruined again by the big government types?

RocketmanBob on September 22, 2009 at 12:00 PM

In order:

- It was supposedly fixed in 1983, but there has been a couple of additional “fixes” since because, like every government program, costs were greatly underestimated and revenues were overestimated.

- What Clinton did was greatly expand the tax on Social Security benefits to feed the beast. The Social Security “Trust Fund” has been raided for general-fund purposes since the mid-1960s.

- It was the combination of the two that allowed Clinton and the 105th/106th Congresses (as well as Bush in the early years) to claim an overall “surplus”. The general fund never ran a surplus without the addition of Social Security funds.

- See the answer to question 1.

steveegg on September 22, 2009 at 1:19 PM

wages are based upon supply and demand…

right4life on September 22, 2009 at 11:56 AM

Only in a brief temporary sense.
As I explained before, economic forces always push wages towards marginal utility, and very quickly.

MarkTheGreat on September 22, 2009 at 1:20 PM

TRUST ME, THE CHECK IS IN THE MAIL

bluegrass on September 22, 2009 at 1:21 PM

He has been discredited numerous times,

right2bright on September 22, 2009 at 11:57 AM

Who’s discredited me? You? I suspose you think that whining that the money was promised to you actually constitutes an argument?

MarkTheGreat on September 22, 2009 at 1:21 PM

You actually believe that paying taxes is the moral equivalent of putting money in a bank?

And you accuse me of arguing just to argue?

MarkTheGreat on September 22, 2009 at 1:16 PM

Social Security was never meant to be a tax.

Where the heck do you think govt is going to get the money from? Do you actually believe there is a hidden vault somewhere that the govt shovels money out of when it wants to send it to someone one?

MarkTheGreat on September 22, 2009 at 1:19 PM

Quit talking to me like I’m a child or just stop talking to me. I’ve treated you with basic respect and expect the same from you.

I’m under no delusions of hidden money, but you never answered my question. Do you treat tax rebates the same way?

The money paid out by SS is taken from someone else. That’s the way it’s always been.

Always? No, there was a time before that.

Esthier on September 22, 2009 at 1:22 PM

Only in a brief temporary sense.
As I explained before, economic forces always push wages towards marginal utility, and very quickly.

MarkTheGreat on September 22, 2009 at 1:20 PM

you’re not in the IT field and get to experience the ‘wonders’ of H1B visas…..

right4life on September 22, 2009 at 1:23 PM

Didn’t Ronnie and Tip work out the ‘83 fix so that Social Security woul dbe essentially self funded in perpetuity?

RocketmanBob on September 22, 2009 at 12:00 PM

Actually it was Tip and Jimmy, the final tax increase went into affect while Reagan was in office, but the changes were worked out earlier.

And no, they were never advertised as fixing SS in perpetuity, they just kicked the can down the road 50 years or so. (Or so they thought)

MarkTheGreat on September 22, 2009 at 1:23 PM

Just pass healthcare and everything else will fall in place.

Just like unemployment rate and the quick-fix stimulus

bluegrass on September 22, 2009 at 1:23 PM

you’re not in the IT field and get to experience the ‘wonders’ of H1B visas…..

right4life on September 22, 2009 at 1:23 PM

1) Irrelevant
2) Your first assumption is mistaken

MarkTheGreat on September 22, 2009 at 1:24 PM

No, he’s saying that baby boomers are responsible for robbing blind everyone younger than them.

ProfessorMiao on September 22, 2009 at 12:03 PM

I see your reading comprehension still fails.
I never said that baby boomers were solely responsible for the problems of SS. I did point out that they are partly responsible, and that they did nothing to fix the problem while whinning that they must get paid.

MarkTheGreat on September 22, 2009 at 1:26 PM

You can’t have the choice, because too many people believed the government, and didn’t prepare for their own retirement. Now, they need or demand all of the money that you are currently paying in, plus more borrowed.

Really, not my problem whatsoever.

Esthier on September 22, 2009 at 1:11 PM

It is your problem if you expect to get your money back, or that you won’t have to pay for current recipients.

Vashta.Nerada on September 22, 2009 at 1:26 PM

You implicitly claim that the boomers who will be shafted – who are majority of that generation, by the way – have no right to complain because you have accused them of everything from starting the entitlements, to expanding them, to failing to rein them in.

Too bad you can’t follow your own argument to its logical conclusions.

ProfessorMiao on September 22, 2009 at 12:06 PM

You really think that the last person to comment in a sequence actually said everything in the sequence.

I strongly suggest you reread all previous posts, and note who said what.

But I doubt you are man enough to try.

MarkTheGreat on September 22, 2009 at 1:27 PM

Who’s discredited me? You? I suspose you think that whining that the money was promised to you actually constitutes an argument?

MarkTheGreat on September 22, 2009 at 1:21 PM

Or that whining that baby boomers failed to rein in SS entitlements is a response to pointing out that you falsely blamed baby boomers for expanding SS entitlements?

ProfessorMiao on September 22, 2009 at 1:27 PM

1) Irrelevant
2) Your first assumption is mistaken

MarkTheGreat on September 22, 2009 at 1:24 PM

oh please…you’re full of it. having a lot of workers ALWAYS drives DOWN WAGES…its called ‘supply and demand’

get a clue.

tihs is as idiotic as your whole ‘lincoln was a tyrant’ BS.

right4life on September 22, 2009 at 1:27 PM

Miao,

Not that you are interested in playing to anything but your wounded pride, I’m a boomer myself.

MarkTheGreat on September 22, 2009 at 1:29 PM

for those who dont think SS is needed, in the Depression the NYC sanitation dept had a division that just picked up dead old people off the streets
ginaswo on September 22, 2009 at 10:19 AM

Do you have a citation to support this myth???

MarkTheGreat on September 22, 2009 at 11:32 AM

Such ignorance! Clearly you never saw Monty Python and the Holy Grail!

calbear on September 22, 2009 at 1:30 PM

oh please…you’re full of it. having a lot of workers ALWAYS drives DOWN WAGES…its called ’supply and demand’

get a clue.

tihs is as idiotic as your whole ‘lincoln was a tyrant’ BS.

right4life on September 22, 2009 at 1:27 PM

I’ve explained the forces that over ride supply and demand several times. To bad your brain is so ossified that you can’t learn anything new.

MarkTheGreat on September 22, 2009 at 1:30 PM

Too bad you can’t follow your own argument to its logical conclusions.

ProfessorMiao on September 22, 2009 at 12:06 PM

You really think that the last person to comment in a sequence actually said everything in the sequence.

I strongly suggest you reread all previous posts, and note who said what.

But I doubt you are man enough to try.

MarkTheGreat on September 22, 2009 at 1:27 PM

I read every post you wrote in response to me, and my summation is based on that. If you can prove that I’ve misrepresented the gist of your argument, why don’t you do that instead of childishly impugning the masculinity of a poster whose sex you are only guessing at like some kind of teenage bully?

ProfessorMiao on September 22, 2009 at 1:30 PM

Miao,

Not that you are interested in playing to anything but your wounded pride, I’m a boomer myself.

MarkTheGreat on September 22, 2009 at 1:29 PM

Every generation has its share of idjits.

ProfessorMiao on September 22, 2009 at 1:32 PM

I’ve explained the forces that over ride supply and demand several times. To bad your brain is so ossified that you can’t learn anything new.

MarkTheGreat on September 22, 2009 at 1:30 PM

nothing overrides supply and demand…sorry…get a clue, moron.

right4life on September 22, 2009 at 1:32 PM

Social Security was never meant to be a tax.

Social Security has always been a tax.

MarkTheGreat on September 22, 2009 at 1:33 PM

nothing overrides supply and demand…sorry…get a clue, moron.

right4life on September 22, 2009 at 1:32 PM

I’m willing to bet that you are actually stupid enough to believe that.

MarkTheGreat on September 22, 2009 at 1:34 PM

I read every post you wrote in response to me,

ProfessorMiao on September 22, 2009 at 1:30 PM

And you entered the conversation half way through.

MarkTheGreat on September 22, 2009 at 1:34 PM

I’ve never considered myself a Boomer. I read an article 20 years ago about ‘Jonesers’. The birth years were like ‘58 to ‘64. But the best part was the comparison. My older siblings are totally Boomer. They speak and act like the Clintons. It was always rules for thee not for me. Hmmm were the Boomers an entire generation of dhimmicraps?

Blacksmith8 on September 22, 2009 at 1:02 PM

No, not all of them – but any of them raised under the “scientific” guidelines from one Dr. Spock, well…

(And need I point out that Spock’s book became a fad, right about the point where the Greatests were having Boomers at record pace?)

Blacksmith on September 22, 2009 at 1:35 PM

I’m willing to bet that you are actually stupid enough to believe that.

MarkTheGreat on September 22, 2009 at 1:34 PM

oh yeah if 100 people are going for 1 job…do ya think the company offering the job is going to take the person they can pay the least to, and still do a good job???

duhhhhhhhhhhh

right4life on September 22, 2009 at 1:35 PM

Do you treat tax rebates the same way?

Do you honestly think over paying a tax is the moral equivalent of SS?

When you ask stupid questions …

MarkTheGreat on September 22, 2009 at 1:36 PM

The census bureau projects that the U.S. population will be less than 50% non-Hispanic white by 2050. Sometime before that a majority of those paying in will be minorities while the majority of those receiving Social Security will be be white. What happens to support of Social Security then?

agmartin on September 22, 2009 at 1:36 PM

conversely, if a company has problems finding a person to do said job, whatever it may be, they are going to offer more money???

again DUHHHHHHHHHHH

right4life on September 22, 2009 at 1:37 PM

oh yeah if 100 people are going for 1 job…do ya think the company offering the job is going to take the person they can pay the least to, and still do a good job???

duhhhhhhhhhhh

right4life on September 22, 2009 at 1:35 PM

I see you still haven’t responded to my point that when a company is paying below marginal utility for a job, they always hire more.

Instead you continue to pretend that only one factor matters. I understand that you aren’t able to handle complex subjects, so I understand why you get confused so easily.

MarkTheGreat on September 22, 2009 at 1:38 PM

conversely, if a company has problems finding a person to do said job, whatever it may be, they are going to offer more money???

again DUHHHHHHHHHHH

right4life on September 22, 2009 at 1:37 PM

Only up to the point whereby the value of the job exceeds the wage offered. They will never offer more than the marginal utility of the job.

As I said before basic econ. Try learning some.

MarkTheGreat on September 22, 2009 at 1:39 PM

I read every post you wrote in response to me,

ProfessorMiao on September 22, 2009 at 1:30 PM
And you entered the conversation half way through.

MarkTheGreat on September 22, 2009 at 1:34 PM

And that doesn’t alter the cumulative impact of your responses to me.

BTW, since you’re a boomer who is reponsible for the implementation and expansion of SS entitles, did you vote for FDR and JFK/LBJ?

ProfessorMiao on September 22, 2009 at 1:39 PM

I see you still haven’t responded to my point that when a company is paying below marginal utility for a job, they always hire more.

Instead you continue to pretend that only one factor matters. I understand that you aren’t able to handle complex subjects, so I understand why you get confused so easily.

MarkTheGreat on September 22, 2009 at 1:38 PM

hate to tell you, that doesn’t matter in the least.

all that matters is the supply and demand for said job. a company is not going to pay you more, no matter how much money you make them, if they can replace you easily.

do you even work??

right4life on September 22, 2009 at 1:41 PM

BTW, since you’re a boomer who is reponsible for the implementation and expansion of SS entitles, did you vote for FDR and JFK/LBJ?

ProfessorMiao on September 22, 2009 at 1:39 PM

Never said all of them did. You are the one who specializes in binary thinking.

MarkTheGreat on September 22, 2009 at 1:41 PM

Only up to the point whereby the value of the job exceeds the wage offered. They will never offer more than the marginal utility of the job.

As I said before basic econ. Try learning some.

MarkTheGreat on September 22, 2009 at 1:39 PM

the value of the job is very often subjective….duhhhhhh

right4life on September 22, 2009 at 1:42 PM

hate to tell you, that doesn’t matter in the least.

all that matters is the supply and demand for said job. a company is not going to pay you more, no matter how much money you make them, if they can replace you easily.

do you even work??

right4life on September 22, 2009 at 1:41 PM

It’s so sad when people stop thinking. Reality doesn’t fit into a neat little package. Just because you can’t handle more than one simple concept at a time, doesn’t mean that reality has to fit your model.

MarkTheGreat on September 22, 2009 at 1:42 PM

but that doesn’t matter….why would a company pay anyone 100k, when they can get a large number people at 50k???

if a company can’t find anyone at 50k…then they have to offer more to find someone…

moron.

right4life on September 22, 2009 at 1:43 PM

It’s so sad when people stop thinking. Reality doesn’t fit into a neat little package. Just because you can’t handle more than one simple concept at a time, doesn’t mean that reality has to fit your model.

MarkTheGreat on September 22, 2009 at 1:42 PM

you must be on welfare, its rather obvious you don’t have a job…and haven’t looked for one in a long time…

right4life on September 22, 2009 at 1:44 PM

I’m curious: can you opt out of paying SS at all?
My husband is the self-employed rancher: he doesn’t pay anything into SS with his ranch income, but he does pay it when working off ranch like driving truck & at the sale barn a few times a month.
I pay as a teacher, but of course there’s the public pension I’m promised that I & my school pay into for my retiremet.
So I wonder what gives for my future as a 40yo now?

Badger40 on September 22, 2009 at 1:44 PM

Maybe Obama could pull this stunt again and claim savings from “waste” in Social Security: Obama Performs “Stupid Human Trick” on Letterman http://optoons.blogspot.com/2009/09/obama-performs-stupid-human-trick-on.html

Mervis Winter on September 22, 2009 at 1:45 PM

oh and markthemoron, if you’ve ever looked for a job, you’ll notice that all the companies in an area pay about the same rate for the same skill set…why is that??

its because companies don’t set wages…the MARKET sets the wages…and how does the market do that????

supply and demand….its how markets set the price of EVERYTHING…

duhhhhhhh pathetic and laughable.

right4life on September 22, 2009 at 1:50 PM

conversely, if a company has problems finding a person to do said job, whatever it may be, they are going to offer more money???

again DUHHHHHHHHHHH

right4life on September 22, 2009 at 1:37 PM

Heh. Not if you’re a teacher. Some districts offer more pay for hard to find positions-like they should i.e. science, math, special ed., etc.
My school does not.
There were only 2 applicants for my job: me & my sister-in-law.
I got the job bcs I’m way more qualified.
If I were to leave now, it’d be hard to find a replacement for me.
However, my school pays ~93% of a medical family policy: unheard of.
So my base salary may be under what many schools are, but I’m satisfied bcs of the medical policy offering.
I only work 180 days/yr: how much should I really get to earn after 7 yrs of college?
This is why public education should be privatized.
My skills should be worth $$, even here.
But they’re not.
We all get paid the same.
Public education: you don’t get what you pay for bcs the $$ is squandered.
SIGH

Badger40 on September 22, 2009 at 1:50 PM

you’re not in the IT field and get to experience the ‘wonders’ of H1B visas…..

right4life on September 22, 2009 at 1:23 PM

I experienced that wonderful phenomena and was forced out the door because of that. I would have loved to work another 5 years and built up my savings for retirement.

Mirimichi on September 22, 2009 at 1:51 PM

I’m willing to bet that in 20 years, right4life will be whinning that nobody can eliminate govt paid health care because he was promised free health care.

MarkTheGreat on September 22, 2009 at 1:52 PM

YAWN.

Another day, another impending catastrophe from the Federal Gov’t. Swine Flu, Climate Change, new FCC regs, Auto bailouts, Banks loaning money to the Feds, etc.

When looking at news from the Administration just ask yourself which rule is this?

RULE 1: “Power is not only what you have, but what the enemy thinks you have.” Power is derived from 2 main sources – money and people. “Have-Nots” must build power from flesh and blood. (These are two things of which there is a plentiful supply. Government and corporations always have a difficult time appealing to people, and usually do so almost exclusively with economic arguments.)

RULE 2: “Never go outside the expertise of your people.” It results in confusion, fear and retreat. Feeling secure adds to the backbone of anyone. (Organizations under attack wonder why radicals don’t address the “real” issues. This is why. They avoid things with which they have no knowledge.)

RULE 3: “Whenever possible, go outside the expertise of the enemy.” Look for ways to increase insecurity, anxiety and uncertainty. (This happens all the time. Watch how many organizations under attack are blind-sided by seemingly irrelevant arguments that they are then forced to address.)

RULE 4: “Make the enemy live up to its own book of rules.” If the rule is that every letter gets a reply, send 30,000 letters. You can kill them with this because no one can possibly obey all of their own rules. (This is a serious rule. The besieged entity’s very credibility and reputation is at stake, because if activists catch it lying or not living up to its commitments, they can continue to chip away at the damage.)

RULE 5: “Ridicule is man’s most potent weapon.” There is no defense. It’s irrational. It’s infuriating. It also works as a key pressure point to force the enemy into concessions. (Pretty crude, rude and mean, huh? They want to create anger and fear.)

RULE 6: “A good tactic is one your people enjoy.” They’ll keep doing it without urging and come back to do more. They’re doing their thing, and will even suggest better ones. (Radical activists, in this sense, are no different that any other human being. We all avoid “un-fun” activities, and but we revel at and enjoy the ones that work and bring results.)

RULE 7: “A tactic that drags on too long becomes a drag.” Don’t become old news. (Even radical activists get bored. So to keep them excited and involved, organizers are constantly coming up with new tactics.)

RULE 8: “Keep the pressure on. Never let up.” Keep trying new things to keep the opposition off balance. As the opposition masters one approach, hit them from the flank with something new. (Attack, attack, attack from all sides, never giving the reeling organization a chance to rest, regroup, recover and re-strategize.)

RULE 9: “The threat is usually more terrifying than the thing itself.” Imagination and ego can dream up many more consequences than any activist. (Perception is reality. Large organizations always prepare a worst-case scenario, something that may be furthest from the activists’ minds. The upshot is that the organization will expend enormous time and energy, creating in its own collective mind the direst of conclusions. The possibilities can easily poison the mind and result in demoralization.)

RULE 10: “If you push a negative hard enough, it will push through and become a positive.” Violence from the other side can win the public to your side because the public sympathizes with the underdog. (Unions used this tactic. Peaceful [albeit loud] demonstrations during the heyday of unions in the early to mid-20th Century incurred management’s wrath, often in the form of violence that eventually brought public sympathy to their side.)

RULE 11: “The price of a successful attack is a constructive alternative.” Never let the enemy score points because you’re caught without a solution to the problem. (Old saw: If you’re not part of the solution, you’re part of the problem. Activist organizations have an agenda, and their strategy is to hold a place at the table, to be given a forum to wield their power. So, they have to have a compromise solution.)

RULE 12: Pick the target, freeze it, personalize it, and polarize it.” Cut off the support network and isolate the target from sympathy. Go after people and not institutions; people hurt faster than institutions. (This is cruel, but very effective. Direct, personalized criticism and ridicule works.)

http://www.geocities.com/WallStreet/8925/alinsky.htm

PappyD61 on September 22, 2009 at 1:52 PM

supply and demand….its how markets set the price of EVERYTHING…

duhhhhhhh pathetic and laughable.

right4life on September 22, 2009 at 1:50 PM

Too bad the markets don’t all work that way.
It’s not always supply & demand.
Check out farm to table prices.
See where $$ go-producers-to consumers.
It’s not what you think.

Badger40 on September 22, 2009 at 1:53 PM

BTW, since you’re a boomer who is reponsible for the implementation and expansion of SS entitles, did you vote for FDR and JFK/LBJ?

ProfessorMiao on September 22, 2009 at 1:39 PM
Never said all of them did. You are the one who specializes in binary thinking.

MarkTheGreat on September 22, 2009 at 1:41 PM

Well here’s some more of my binary thinking for you. Are you a troll or an idiot? I don’t see any other options.

Social Security became law initially in 1935, a decade before the first baby boomers were conceived. JFK/LBJ were elected in 1960 when the oldest baby boomers were 14 years old. LBJ was elected in 1964 when they had reached the great age of 18. Even if the voting age was 18 in in 1964 (I don’t know whether it was), and even if they all voted, they would account for fewer than 3.5 million votes in 1964.

In other words, baby boomers didn’t exist when SS was first enacted, and certainly did not account for a majority of voters during LBJ’s Great Society expansions of entitlements.

If you can’t master the basic facts behind your argument, you really don’t have anything worthwhile to say.

ProfessorMiao on September 22, 2009 at 1:53 PM

but that doesn’t matter….why would a company pay anyone 100k, when they can get a large number people at 50k???

if a company can’t find anyone at 50k…then they have to offer more to find someone…

moron.

right4life on September 22, 2009 at 1:43 PM

You are stumbling, step by baby step closer to the truth.

The more people the company hires, the more they will have to pay.

I never said that supply and demand had no role, just that it wasn’t the only determiner of price.

MarkTheGreat on September 22, 2009 at 1:53 PM

the value of the job is very often subjective….duhhhhhh

right4life on September 22, 2009 at 1:42 PM

You’ve never been in management, have you.

MarkTheGreat on September 22, 2009 at 1:54 PM

Badger40 on September 22, 2009 at 1:50 PM

yeah unions distort the market.

I experienced that wonderful phenomena and was forced out the door because of that. I would have loved to work another 5 years and built up my savings for retirement.

Mirimichi on September 22, 2009 at 1:51 PM

yeah its no fun…its held down wages for everyone in IT..and caused a lot of people to leave the field…I’m lucky enough to still be in it….I’m sorry, I hope you didn’t have to train your replacement…

at a previous company I had an indian (not native american) ask me idiotic compiler questions…and of course they got to look at my code and copy what I was doing…its more than annoying…

right4life on September 22, 2009 at 1:54 PM

I never said that supply and demand had no role, just that it wasn’t the only determiner of price.

MarkTheGreat on September 22, 2009 at 1:53 PM

it obviously is.

right4life on September 22, 2009 at 1:55 PM

You’ve never been in management, have you.

MarkTheGreat on September 22, 2009 at 1:54 PM

yeah I was for about 10 years…got sick of it.

right4life on September 22, 2009 at 1:58 PM

I’m willing to bet that in 20 years, right4life will be whinning that nobody can eliminate govt paid health care because he was promised free health care.

MarkTheGreat on September 22, 2009 at 1:52 PM

yeah since I paid into all these years…with the promise that I would get the same…

but I know they’ll uh ‘take care’ of older people….

just pay me my money back from social security and medicare, with interest, and I’ll not say a word.

right4life on September 22, 2009 at 2:00 PM

ProfessorMiao on September 22, 2009 at 1:53 PM

Why are you so determined to get others to agree that boomers have no responsibility for the SS disaster?

Guilty conscience perhaps?

MarkTheGreat on September 22, 2009 at 2:00 PM

yeah I was for about 10 years…got sick of it.

right4life on September 22, 2009 at 1:58 PM

Probably because you weren’t any good at it.
One of the responsibilities of management is to figure out what each job classification is worth.

MarkTheGreat on September 22, 2009 at 2:01 PM

it obviously is.

right4life on September 22, 2009 at 1:55 PM

I’ve explained why it isn’t.
The best you can do is continue to scream that it must be.

MarkTheGreat on September 22, 2009 at 2:02 PM

I’ve explained why it isn’t.
The best you can do is continue to scream that it must be.

MarkTheGreat on September 22, 2009 at 2:02 PM

the only problem is your explanations are BS…markets set the remuneration of jobs…not individual companies…get a clue.

right4life on September 22, 2009 at 2:04 PM

Probably because you weren’t any good at it.
One of the responsibilities of management is to figure out what each job classification is worth.

MarkTheGreat on September 22, 2009 at 2:01 PM

doesn’t matter…the markets set the wage rate…if you think a job is worth X, and the market says you pay Y…if you want someone..you pay Y.

duhhhhhhhh

right4life on September 22, 2009 at 2:04 PM

ProfessorMiao on September 22, 2009 at 1:53 PM

Why are you so determined to get others to agree that boomers have no responsibility for the SS disaster?

Guilty conscience perhaps?

MarkTheGreat on September 22, 2009 at 2:00 PM

Bait and switch again. You blame boomers for things they couldn’t have done, and when I point to that absurdity of your accusations, you try to change the subject by falsely accusing me of arguing that boomers have no responsibility for the SS disaster.

I’d say nice try but it’s pathetically transparent.

ProfessorMiao on September 22, 2009 at 2:05 PM

yeah unions distort the market.

right4life on September 22, 2009 at 1:54 PM

Well er, not really concerning food prices.
For instance, beef:
As I raise it, I understand it a little more than maybe clothing prices.
Producers of feedlot beef receive whatever the feeder pays. The feeders receive whatever the packers pay.
Packers cannot own cattle, but they do control prices by putting out forward contracts (like in the chicken & hog industry). This is essentially a captive supply.
Bcs there are only a handful of packers, there is no competition for prices.
Forward contracts also get rid of auctions.
Are forward contract bad? Not really, but bcs there are only a handful of true buyers at the end of the line, there is little competition no matter how you slice it.
I receive top price for our cattle-our genetics are in the top 5% & we always top the market when we sell calves in the fall.
But when you buy a T-bone in the store at, what, $8/lb, I get a very small amount of that in return.
I get on average for 550lb steers $1.20/lbs over the last few years.
That is not enough. We are losing $$. I am losing $$ in part bcs of increased govt regs, taxes, high fuel,etc.
But I also lose bcs there is little competition.
So if I want to make $$, I have to be so incredibly huge that I am now working for a big Agribiz company & not myself anymore-which is why the world is being Walmarticized.
Vertical integration is not all it’s cracked up to be.

Badger40 on September 22, 2009 at 2:06 PM

Well er, not really concerning food prices.
For instance, beef:

government distorts that market with all sorts of price supports.

right4life on September 22, 2009 at 2:07 PM

yeah I was for about 10 years…got sick of it.

right4life on September 22, 2009 at 1:58 PM
Probably because you weren’t any good at it.
One of the responsibilities of management is to figure out what each job classification is worth.

MarkTheGreat on September 22, 2009 at 2:01 PM

Now kids…. play nice!

Badger40 on September 22, 2009 at 2:07 PM

markets set the remuneration of jobs…not individual companies…get a clue.

right4life on September 22, 2009 at 2:04 PM

Patently untrue. BP and Exxon pay different rates for the same job in the same town, so do most other companies.

Vashta.Nerada on September 22, 2009 at 2:09 PM

Patently untrue. BP and Exxon pay different rates for the same job in the same town, so do most other companies.

Vashta.Nerada on September 22, 2009 at 2:09 PM

BS, post your proof. I’ve been a consultant…and all the offers fall within a range…please no one goes way high, or way low….

right4life on September 22, 2009 at 2:10 PM

right4life on September 22, 2009 at 2:07 PM

I agree with part of that.
The govt has so many price controls in agriculture. It’s how they keep your food cheap.
Milk’s $5/gallon (at least here in ND).
So why are dairy farmers getting so little & going out of business?
I’ve looked at beef prices in the store-it’s crazy: I can’t afford to buy what I produce.
The US cow herd is shrinking & we’re importing more beef.
The US has the ability to produce more, but won’t.
Simply, I cannot compete with big agribiz. They get breaks we don’t & have way more buying power than we do.
You can’t family farm here anymore.
So I guess we’ll let China feed us. They don’t have to play by our rules AND they get to sell their product here with no problem.

Badger40 on September 22, 2009 at 2:11 PM

Vashta.Nerada on September 22, 2009 at 2:09 PM

so you’re telling me Exxon will pay 200k for a secretary, when they could pay 40k….right.

right4life on September 22, 2009 at 2:11 PM

The govt has so many price controls in agriculture. It’s how they keep your food cheap.

and the sugar prices higher…but no you’re right…unless you’re a business you can’t farm anymore..

right4life on September 22, 2009 at 2:12 PM

BS, post your proof. I’ve been a consultant…and all the offers fall within a range…please no one goes way high, or way low….

right4life on September 22, 2009 at 2:10 PM

I can’t legally post them. Ask any HR person, they will agree that wages vary across employers. Why else would people switch jobs in the same field?

Vashta.Nerada on September 22, 2009 at 2:13 PM

at a previous company I had an indian (not native american) ask me idiotic compiler questions…and of course they got to look at my code and copy what I was doing…its more than annoying…

right4life on September 22, 2009 at 1:54 PM

This is the way it worked where I was. The ones from India that could speak English were here, on site. Whatever programs needed to be written or modified was sent (electronically) to India and was worked on /developed over there and when it was compiler error free shipped back. Then the ones here would take over and do the unit testing and system testing.

Probably didn’t need to say all of this, but……

Mirimichi on September 22, 2009 at 2:15 PM

so you’re telling me Exxon will pay 200k for a secretary, when they could pay 40k….right.

right4life on September 22, 2009 at 2:11 PM

I didn’t say anything remotely like that. I will say that a graduate engineer can make $50K or $70K starting salary, depending upon which company he chooses.

Vashta.Nerada on September 22, 2009 at 2:16 PM

unless you’re a business you can’t farm anymore..

right4life on September 22, 2009 at 2:12 PM

Well farms & ranches are businesses. But bcs of meddling in the markets & govt regs imposing restrictions upon land use etc we cannot make $$. And I understand many other types of small businesses are also under the same pressures.
So we are essentially all leaning toward a handful of gigantic monoplistic companies that own everything.
Something has to be done about this.

Badger40 on September 22, 2009 at 2:17 PM

I can’t legally post them. Ask any HR person, they will agree that wages vary across employers. Why else would people switch jobs in the same field?

Vashta.Nerada on September 22, 2009 at 2:13 PM

they don’t vary that much.

there are a lot of reason, other than monetary, to switch jobs…but yes some companies pay better than others…but its all within a certain range..which is set by supply and demand.

but if you are flooded with workers…and can pay less…why would a company pay more??

some companies have better benefits than others…and pay less…its all part of the mix.

right4life on September 22, 2009 at 2:18 PM

I didn’t say anything remotely like that. I will say that a graduate engineer can make $50K or $70K starting salary, depending upon which company he chooses.

Vashta.Nerada on September 22, 2009 at 2:16 PM

and where he goes to work at…you can make more in NYC, for example, than in smalltown USA…but of course the cost of living is much higher…

right4life on September 22, 2009 at 2:19 PM

This is the way it worked where I was. The ones from India that could speak English were here, on site. Whatever programs needed to be written or modified was sent (electronically) to India and was worked on /developed over there and when it was compiler error free shipped back. Then the ones here would take over and do the unit testing and system testing.

Probably didn’t need to say all of this, but……

Mirimichi on September 22, 2009 at 2:15 PM

its like the whole SAP field…you basically have to be indian to get a job working with it….

right4life on September 22, 2009 at 2:21 PM

Badger40 on September 22, 2009 at 2:06 PM

Farming / ranching is one of very few, if not the only one, where self-employed individuals do not set their prices on the products that they produce. The people they are selling to sets their prices.

Mirimichi on September 22, 2009 at 2:21 PM

I didn’t say anything remotely like that. I will say that a graduate engineer can make $50K or $70K starting salary, depending upon which company he chooses.

Vashta.Nerada on September 22, 2009 at 2:16 PM

and where he goes to work at…you can make more in NYC, for example, than in smalltown USA…but of course the cost of living is much higher…

right4life on September 22, 2009 at 2:19 PM

Those salaries are for the same town, a > 30% variation.

Vashta.Nerada on September 22, 2009 at 2:22 PM

its like the whole SAP field…you basically have to be indian to get a job working with it….

right4life on September 22, 2009 at 2:21 PM

When I was still working, SAP was just a dream. Everyone was working on putting it in, but not one, not one, had it up and running. It sounded like a good product.

Mirimichi on September 22, 2009 at 2:24 PM

Vashta.Nerada on September 22, 2009 at 2:22 PM

then the people that pay 50k are going to have a much harder time filling those jobs…

right4life on September 22, 2009 at 2:24 PM

Vashta.Nerada on September 22, 2009 at 2:22 PM

and how about the benefits? those have to be part of the picture too…

right4life on September 22, 2009 at 2:26 PM

Vashta.Nerada on September 22, 2009 at 2:22 PM

why would anyone work for 50k, when you could for 70k, given comparable benefits?

right4life on September 22, 2009 at 2:26 PM

could it be that the people making 70k have qualifications/experience that those making 50k do not?

right4life on September 22, 2009 at 2:27 PM

why would anyone work for 50k, when you could for 70k, given comparable benefits?

right4life on September 22, 2009 at 2:26 PM

1. imperfect knowledge means that some candidates don’t interview at all firms.

2. many things can impact a job decision besides money and benefits. For example, the workplace itself, the percieved promotion route at one firm vs another, the status of working for a certain firm, etc.

Vashta.Nerada on September 22, 2009 at 2:32 PM

1. imperfect knowledge means that some candidates don’t interview at all firms.

2. many things can impact a job decision besides money and benefits. For example, the workplace itself, the percieved promotion route at one firm vs another, the status of working for a certain firm, etc.

Vashta.Nerada on September 22, 2009 at 2:32 PM

ok then, why would a company pay 70k, when they could hire the same people at 50k?

right4life on September 22, 2009 at 2:33 PM

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