Exclusively in the new print issue of CounterPunch

HOLLYWOOD AND THE CIA — Film historian Ed Rampell details Hollywood’s entangled relationship with the CIA and the Pentagon; HOUSES OF THE DEAD: Nancy Kurshan exposes the cruel human rights offenses taking place inside America’s vast gulag of Control Unit Prisons; BROTHERHOOD OF SUMMER: David Macaray charts the history of the most powerful union in the US: the Baseball Players Association; TAR SANDS COME TO AMERICA: Steve Horn explains how the Keystone Pipeline debates have diverted attention from Big Oil’s other plans to transport Alberta’s oil into the US. PLUS: Jeffrey St. Clair on CONSTITUTIONAL ENTROPY; Mike Whitney on HOW THE BANKS TARGETED BLACKS; Chris Floyd on THE RISE OF BRITAIN’S TEA PARTY; Kristin Kolb on THE NEEDLE AND THE DAMAGE DONE; Kim Nicolini on the FILMS OF WILLIAM FRIEDKIN; and Lee Ballinger on POETS VS. THE ONE PERCENT.

May 25, 2010

Cutting the Safety Net

Something’s Gotta Give

by LAURA FLANDERS

At the very time when the social safety net is most needed, investors the world over are calling it a drag on the world economy.

Here in the U.S., wages are stuck, income is down, unemployment remains around 10 percent, with almost half of those out of work for six months, consumption trends are flat, and Main Street is hurting.

In Europe, where the safety net is a proud tradition, cries for cuts are even louder. "The current system," wrote the New York Times of Europe over the weekend, "is unsustainable."

According to the European Commission, in the 1950s there were seven workers for every retiree in advanced economies. By 2050, Europe’s ratio will flip, with less workers supporting more pensioners.

With the retirement of the baby boomers, the number of pensioners will rise 47 percent in France between now and 2050. The French state pension system today is running a deficit of 11 billion euros.

French state pensions, Social Security in the U.S.–investors are pushing hard to cut these programs, unwilling to entertain higher taxes.

But people who sound alarms about fiscal demise rarely point out that stagnant wages leave little room for enhanced savings and putting a lid on retirement income — here and in Europe — drives down consumption. There are alternatives but low consumption means low growth.

Something’s gotta give.

LAURA FLANDERS is the host of GRITtv, which broadcasts weekdays on satellite TV on cable, public television and online at GRITtv.org and TheNation.com. Follow GRITtv or GritLaura on Twitter.com.

WORDS THAT STICK