Sarah Palin – President Not Serious About Fixing Economy

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– via Hyscience

Sarah Palin blasts Obama for defending the QE2 in her new post titled “Obama’s Clever Way to Punt the Tough Calls: Driving the Dollar Down”:

In his press conference on Monday, President Obama responded to critics of the Federal Reserve’s decision to start a new round of quantitative easing – a fancy term for printing money out of thin air. He claimed this move would drive up U.S. growth rates. He also warned that “the worst thing that could happen to the world economy, not just ours but the entire world’s economy is if we end up being stuck with no growth or very limited growth.”

The latter is certainly true. It would be a global disaster if the U.S. economy remained permanently stuck in the mud. But the same cannot be said of his claim that the Fed’s experiment in pump priming would automatically lead to increased economic growth. By the time this experiment is over, QE will make us queasy.

Will driving the dollar down in this way do anything to boost U.S. exports? The short answer is not really. A weaker dollar will temporarily boost exports by making our goods cheaper to sell; but inevitably other countries will respond in kind, triggering the kind of currency wars economists are warning us about. It’s precisely to prevent this scenario that World Bank President Robert Zoellick recently came out in favor of some new type of gold standard or “international reference point.”

Will QE2 then at least boost domestic investment? No, again. As I explained in my speech in Phoenix, the reason banks aren’t lending and businesses aren’t investing isn’t because of insufficient access to credit. There’s plenty of money around, it’s just that no one’s willing to spend it. Big businesses especially have been hoarding cash. They’re not expanding or adding to their workforce because there’s just too much uncertainty created by a lot of big government experiments that aren’t working. It’s the President’s own policies that are creating this uncertainty.

And Peter Schiff notes that Palin is right in his video blog yesterday. Take note of the rising numbers for staples…as Glenn Beck predicted:

Oil this morning hit a two year high before closing negative on the day but some commodities managed to hold their gains, the CRB did hit a new high today, it is making, again, a string of successive new highs, new all time high for cotton, sugar hit a contract high, soy beans…soy beans were up over 50 cents a bushel closing at 13.29 a bushel. We actually have beans in the teens. I’ve never even seen this in my adult life, I think it was the rallying cry in the 1970’s bull market. It’s back and I think today was just a reversal Tuesday. Look at the bond market tho, look at the yield on the 30 year bond rising to 4.25 this is the highest yield on 30 year treasuries in six months. And as I mentioned before I think the bond market is slowly eroding, certainly at the longer end of the curve. The 10 year was weak today but I think all our longer term interest rates are moving up as Quantitative Easing is already backfiring on the federal reserve. It is producing higher, not lower, interest rates.

~~~

The world is throwing a lot of criticism on the fed now for QE2. I think the harshest criticism is coming from Germany. Germany, which understands inflation quite well, called Ben Bernanke clueless. I’ve used that word too so maybe the Germans are paying attention to some of my writings. The Russian central bank was critical.

Obama was in India, I think he’s still there, and he made a speech in which he’s trying to defend the fed. And this is really kinda funny because first of all he said that he doesn’t want to comment on fed policy because he doesn’t want to compromise the independence of the fed, well, there isn’t any independence left to compromise. The irony of it is that normally when its the fed acting tough, you know removing the punch bowl, unpopular, raising interest rates, that’s when you don’t want to bash your central bank because you don’t want to create the impression that the government is putting pressure on the central bank to be too easy. Or to be easier. To not be be tougher. But when you have people asking Obama to criticize the central bank for being to easy! I mean that’s when he should be criticizing them because the federal reserve is acting really in concert with the government to facilitate government debt, to monetize government debt, that’s exactly when it should be criticized. I mean the whole thing is ridiculous.

But also Obama basically said that the fed has a mandate to grow the economy.

Well…where do you figure that out? Where did you get that mandate?

I mean there’s a dual mandate now for price stability and maximizing employment. But where is growing the economy? It’s not part of the mandate. And the fact is the fed can’t grow the economy. You don’t grow the economy by printing money but the fact that Obama A – thinks the fed has a mandate to grow the economy and B thinks they can grow the economy shows how clueless he really is. That the Germans were right.

He goes on to completely tear Bernanke a new one for his reasoning behind QE2…creating another stock market bubble. Plus he sends praise Ron Paul’s way. Paul is a nut, that’s for sure, but I can’t fault ALL of his idea’s and critique of the fed.

Instead of putting money into the economy more directly by cutting taxes our government is using the fed to print money out of thin air and making a bad situation worse.

It’s going to get pretty damn bad.

Let the ponzi scheming begin.

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JVerive: hi, ON your 50, I just look on all 3 of your links and they came up fast and clear,
BYE

openid.aol.com/runnswim: hi, THAT was good humor link. we are discovering
this side of you, humor is very CONSERVATIVE. bye

@Greg: #3

“I’m curious to find out what Sarah Palin will have to say about the Debt Commission’s recommendations.”

All that needs to be said is that Obama appointed it. Those with open minds would have known ahead of time what the suggestions would have been.

@ Smorgasbord, #54:

All that needs to be said is that Obama appointed it. Those with open minds would have known ahead of time what the suggestions would have been.

Obama set the process up. The commissioners weren’t appointed by him. The republican commissioners were selected by John Boehner and Mitch McConnell.

There have been negative partisan reactions to the co-chairs’ draft recommendations from both establishment republicans and democrats–the very people who always let their partisan ideologies get in the way of common sense solutions.

If nothing else, their reflexive partisan reactions to a list of logical proposals that would actually work highlight the reason why nothing truly meaningful ever gets done.

As soon as the actual Commission comes up with a report upon which 14 of the 18 can agree (thus forcing Congressional debate) then this issue will be worth paying attention to.

Until then, it’s just another episode of Kabuki theater.

This co-chair draft trial balloon bull crap that was released last week is just that…a trial balloon filled with bull crap.

The whole thing is designed to lure people into taking the first offer that is laid upon the table.

Anyone with any negotiation skillz knows that you never, ever, ever take the first offer.

Ever.

Back to the drawing board boys…your first attempt was not nearly good enough.

While I don’t usually listen to Rush, he nails it on the phony reduction plan the commission threw out.

http://www.rushlimbaugh.com/home/daily/site_111110/content/01125106.guest.html

http://ricochet.com/main-feed/What-Am-I-Missing

Seeing as how it is bogus, I’m not surprised the lefties are all for it.

Oh and larry, thanks for proving me right yet again. Between your response to my post and Mata’s all you did is prove that no matter what proof is offered, you are incapable of seeing the truth. You claim you can be persuaded with proof, but I have NEVER, EVER seen you change your mind or admit you are wrong. Like I said, you are definitely a liberal.

@ Hard Right, #57:

I just read through the entire transcript of Rush Limbaugh’s Debt Commission rant.

“This thing is a blueprint for the expansion of government and codifying it as law, at 22%…”

Bullsh-t, Rush. Capping federal spending and revenue at specified percentages of the GDP is not a round about authorization for spending and revenue to go that high. It’s setting upper limits that must not be exceeded, where no upper limits currently exist.

His argument that we’ve seldom exceed the proposed limits in the past is an exercise in deliberate misdirection. We have in fact reached those limits before and have frequently come close. We’re exceeding them at present. More importantly, it has been projected that if spending isn’t curtailed and revenue isn’t raised, in only ten years we’ll reach the point where deficits will represent 68% of the GDP. That’s why making a clear commitment to upper limits is both central and essential to any meaningful and effective deficit reduction plan.

Limbaugh repeatedly says the plan should be ignored. “Don’t get caught up in debating any of the minutia or the aspects of this thing,” he advises. Better not to read it or think about it or listen to anyone who’s talking about it.

Why the hell not? The minutia and the aspects of any serious proposal are the only things that actually matter. They’re exactly what you’ve got to consider to decide if something truly addresses a problem and might actually work, or is just another bogus, totally ineffectual smokescreen.

His argument that we’ve seldom exceed the proposed limits in the past is an exercise in deliberate misdirection. We have in fact reached those limits before. We’re exceeding them at present

You really need to proof read what you type. He said “seldom.” That means it has happened and he understands that. Do you?

Rush, like I do feels we need to keep the tax cuts in place, cut some other other taxes, and slash govt. spending to take care of the debt lefties like you stuck us with in spite of us telling you not to. That takes care of revenue and helps reduce the deficit.

I also take his “minutia” comment to mean that overall it’s just a CRAP proposal that won’t help solve the problem. Like obamacare, the whole thing needs to be tossed out, not tweaked.

You have some gall talking about thinking for ones self when you often fail to do so yourself. Your posts on that video the other day made it clear you are beyond reaching. As Dr. Sanity would say, you sufer from deep pathological denial of reality. When reality doesn’t fit your world view, you bend reality and not your view.

@ hard Right, #59:

Rush, like I do feels we need to keep the tax cuts in place, cut some other other taxes, and slash govt. spending to take care of the debt lefties like you stuck us with in spite of us telling you not to. That takes care of revenue and helps reduce the deficit.

Ignore Rush’s warnings. Read the proposals. Spending cuts are a big part of the plan. The proposals include government pay freezes; a 10% reduction in federal employees; a progressive reduction in discretionary spending; phased-in cost containment measures addressing Social Security and Medicare; rational cuts in defense spending… Many such things that actually save predictable amounts of money. And yes, some tax increases. Because without both, the problem can’t be fixed. That’s where the compromise comes in. Everybody has to bear part of the burden or nobody will agree–in which case we keep digging ourselves a deeper hole until the walls finally cave in on us.

What are the details of the alternative plan to slash government spending? Thusfar, none. Republicans have had trouble even coming to a firm commitment to forego earmarking–which, even if totally eliminated, would have a negligable effect on the overall deficit. (In 2008, earmarks accounted for around $18.3 billion–down from the $23.6 billion record set in 2005.)

Until an equally detailed alternate set of deficit-controlling proposals is put forward, attacking something that could actually work gives me reason to doubt the attackers’ sincerity about fiscal responsibility. It’s not enough just to blow a lot of hot air before an election. Do they actually want to get to the problem or not?

The problem with setting statutory maximums for government spending is that government seems to have a problem with underestimating anticipated expenditures and overestimating projected revenues. Very few government programs of appreciable magnitude come in “under budget.” Then someone laments on how the “government experts” were wrong. Again. Unexpectedly. How many times have we heard our government’s experts being “surprised” over the last two years?

The Deficit Commission’s proposal is big on generalities and small on particulars, but given the make-up of the commission, could we expect anything else?

Spending is easy for politicians to do, and it’s a helluva lot more rewarding. If BigPharma is one of your Party’s biggest contributors and they send a lot of perks your way, are you not going to write or approve legislation that emphasizes drug treatment over invasive surgery? If you so much as threaten to do anything that someone in the AARP lobby thinks is going to reduce benefits for seniors, are you going to want to deal with their harassing phone calls, or are you going to take their lobbyists’ advice and say you’re not going to throw seniors out in the streets, even if you believe means testing (for example) is the fiscally responsible thing to do?

It’s not so much that everyone wants someone else’s benefits to be cut, but it’s the special interest groups that put undue pressure on our legislators – because the power is really in the hands of the lobbyists. The squeaky wheel gets the grease. Yes, by and large, we Americans have become less frugal than our grandparents, and we have come to expect our state politicians to bring home the bacon. A lot of this is because we feel that the federal government has taken more than it needs to operate efficiently, and seeing our state officials get as much as possible back is the only solace many of us see.

We MUST return to a much smaller federal government, with a budget of MUCH less than 22% of GDP. Instead, we should be requiring our government to work more efficiently every year, cutting spending by, say, 5% of the previous year’s budget (or 2 – 5% less than the previous year’s revenues) until spending is cut to a more reasonable 15% of GDP (these are just pulled out of thin air, but I think a reasonable starting point.) There’s no doubt that we can’t possibly pay off debt until we stop increasing deficit spending.

If we stripped our federal government down to its smallest possible size and returned to the states the power to deal with much more at the state level, think of the budgetary savings we’d realize by not sending money to the feds just to redistribute it back to the states, with the administrative “skimming” that occurs as it changes hands in both directions. Additional savings could be realized by eliminating many of the grants and subsidies that artificially distort markets and contribute to huge amounts of waste at the hands of individuals, corporations, and special interest groups who have figured out how to game the system. The smaller the system and the fewer dollars available to be scammed, there will be an attendant reduction in gains to be made through corruption and manipulation. This should be reason enough to let people control as much of their own money as possible. We will always have people who will cheat the system for their own illegitimate gains, so why make it easier by adding layers of obfuscation? If I am in control of the vast majority of my earnings, I will strive to make the best decisions I can. If I believe that the government is always going to have a safety net for me, no matter how unlucky or foolish I have been, it’s human nature for me to be less careful.

I don’t need a nanny, I don’t want a nanny, and I especially don’t want government telling me that I have to pay for a nanny that I neither want nor need.

Jeff

@JV (#62):

I don’t need a nanny, I don’t want a nanny, and I especially don’t want government telling me that I have to pay for a nanny that I neither want nor need.

Finland used to have the world’s largest incidence of cardiovascular disease.

Not anymore.

When I moved to Southern California in 1979, there was a virtually omnipresent thick brown haze, covering the entire LA basin. Not anymore.

The waters around Manhattan used to be filthy. Now there are regularly held swimming races around the entire island.

Airplanes and bars used to be hazardous to employees and obnoxious to the smoke averse.

In the 1950s, 80% of males smoked and virtually no one used seat belts. As a boy, I used to take naps on the back window ledges of my family’s autos, often while my mom was smoking a cigarette with all the car windows rolled up.

Many people drove without auto insurance.

On and on.

I hope that New York’s Bloomberg and Farley succeed with their banning of salt in prepared meals. Restaurant food (and packaged food in general) has enormous amounts of salt. It is the easiest thing in the world to add salt to anything (for those who like it). It’s impossible to take salt out of food, once in.

I can’t think of a single “nanny state” regulation which presents an unreasonable burden on anyone’s liberties, motorcycle helmets included. Seat belts included. Complaining about such things trivializes the sacred meaning of “liberty.” It conjures up images of someone willing to die to preserve his/her inalienable right to be stupid.

– Larry Weisenthal/Huntington Beach

@Greg: #60

Please name one liberal program that turned out the way they “promised.” Do you actually believe that they will give you a tax cut?! They even have a habit of naming their bills the opposite of what they will actually do.

Obama is on a hiring binge in Washington DC. If you want a job, move to DC and work for the Federal government. Plus, the number of Federal employees earning over $150,000 per year has doubled since he took office. Only liberals can go on a mass hiring binge at absurdly high wages, then reduce it by 10%, and call it a reduction.

http://www.usatoday.com/news/nation/2010-11-10-1Afedpay10_ST_N.htm

Remember how the liberals said George Bush wanted to cut either Medicare or Social Security benefits (I don’t remember which one) because his INCREASE was less than their increase. That is a case of an INCREASE being a DECREASE in the liberal mind.

HardRight: hi, YES, that is the way to go, THEY are responsible for much of the spendings,
CARELUSLY, so IT’s for them to be cut off drastickly, not the AMERICANS again;
NOBODY but them, has to pay for their spending,
IT’S not right to impose to AMERICANS such a BURDEN, on top of what they have because of again, their mistaken short VIEWS of how to run an AMERICA WHICH is the best of the WORLD.
bye

@ JVerive, Excellent post! Thank You!

@smorgasboard (#64): You left out something important, with your reporting that Obama has doubled the number of Federal workers earning over $150K per year.

From your link:

The number of federal workers earning $150,000 or more a year has soared tenfold in the past five years and doubled since President Obama took office, a USA TODAY analysis f

I calculate that George W Bush increased the number 5 fold in 3 years, while Obama only increased it 2 fold in 2 years. This means that Obama has actually slowed the rate of growth of the high end of the federal bureaucracy, even during the period of maximum stimulus to save the country from the Bush economic disaster.

– Larry Weisenthal/Huntington Beach, CA

Are you basing that solely on who was in office, Larry? Curious as to what numbers you are making calculations with.

@Hard Right: I’m just making the old point about lies, damn lies, and statistics (regarding the misuse of the latter). The reason for the increase in the money civil servants make is that promotions and pay increases track with seniority. We have an aging work force in all sectors, including the federal government. The Big Recession presented, serendipitously, a golden opportunity to jettison older, more expensive workers in the private sector. The public sector (being less efficient in many ways — no argument with this), did not have a similar opportunity. The biggest reason that so many of the private sector jobs aren’t coming back is that the private sector has increased efficiency and has no need to rehire the expensive, older, laid off workers. The job market will improve shortly for the newly graduated, young workers, but not for the oldsters.

Anyway, look at those numbers: 10-fold increase in the last 5 years, including a two-fold increase in the last 2 years. This is not to say that the civil service payroll went up ten-fold in 5 years, including 2 fold in the last two years, but simply, in recent years, the number of workers crossing the $150,000 per year pay threshold went up 10 fold in 5 years, including 2 fold in the last 2 years.

Let’s say that there are 1,000 federal workers currently making $150,000 per year (to make the math easy). This means that, two years ago, there were 500 (if it doubled in two years). But we know it went up ten fold in the past 5 years, or since 2005. So, in 2005, there were only 100 workers above $150K. So this means that the number increased from 100 to 500 under Bush (went up 5 fold in 3 years) but went from 500 to 1000 under Obama (went up two fold in 2 years). 5-fold in 3 years is a considerably more rapid rate of growth then two-fold in two years.

Anyway, it’s 100% obvious that these increases had nothing at all to do with fiscal policies of either Bush or Obama. This particular little piece of statistics was just an attempt to make statistics lie to create a political gotcha.

Both Republicans and Democrats do this sort of thing, with depressing regularity.

– Larry Weisenthal/Huntington Beach, CA

I figured that is what you were saying after I looked at the info.
I did notice that the biggest increase was among those that had been employed for 15-24 years (as you also noted). That would mean they predated either admin.

@ Smorgasbord, #64:

Please name one liberal program that turned out the way they “promised.” Do you actually believe that they will give you a tax cut?! They even have a habit of naming their bills the opposite of what they will actually do.

The most obvious would be Social Security and Medicare, which have provided successive generations of American workers with financial security in their old age, and have extended their lives by providing access to medical care that they most often wouldn’t otherwise have. Both programs have been resounding successes, and will continue to be so long as a commitment to our collective social responsibilities remains.

People who complain about those programs often ignore the fact that without them, they’d be directly and personally responsible for providing for most of their parents’ and grandparents’ old age needs, while simultaneously putting back enough to take care of themselves in their own later years. For the vast majority, sharing the predictable risks and burdens through social insurance programs produces far more security and a far better outcome.

Medicare and foodstamps have also been successful, assuming we don’t believe disadvantaged people should die because they can’t afford medical treatment, and don’t believe that disadvantaged adults and their children should starve.

These core programs have accomplished and continue to accomplish what was promised. No one ever promised that they wouldn’t have to be paid for. The fundamental problem is that some people resent the fact that they’re expected to help pay.

@openid.aol.com/runnswim: #67

The first time George Bush 2 ran for office I voted FOR him. The second time I voted AGAINT the other guy. Bush is one reason I don’t belong to any political party. He only vetoed one bill. The rest of the time he gave the liberals every spending bill they asked for. We all have been paying for them ever since. A huge part of the extra spending came from the democrats, Bush only approved them.

Either way you look at it, Obama is being irresponsible to keep hiring Federal workers, taking all the expensive trips, printing billions of extra dollars, and throwing all of the parties he does while we are in a recession and inflation is predicted.

@ Greg, neither are solvent. Just because you can write checks that does not mean that you have money.

You still just don’t get it. With 600 Billion Dollars in next to worthless currency printed, those are checks. Still the bank account is empty. Can you say Overdraft? Or do you have some Confederate Money stuffed in your mattress?

The Interest on the Debt is staggering as well. You get an F in Econ 101. The Current Regime is paying Credit Card bills with Credit Cards!

: You blame Dems for spending legislation that Bush signed. No. The GOP controlled Congress for the first 6 years of the Bush administration and the Dems did not have close to a filibuster proof Senate majority for the last two. The President prepares the budget. The budget prepared by President Bush was pretty much what ended up getting passed, for his entire Presidency.

@Trooper: Medicare was on the verge of being insolvent, before Obamacare was passed. Why was it having solvency problems? Because it’s more expensive and less efficient than private health insurance? No; Medicare is the best health insurance system in the world. It delivers the best outcomes and the best consumer satisfaction for the least money. Why isn’t private health insurance insolvent? Well, health insurance premiums more than doubled under Bush. Medicare payroll taxes went up much, much LESS. Blue Cross proposed a rate hike of 39% at a time (last January, after Scott Brown’s election) that Obamacare was looking dead in the water. Can you imagine the outcry were Medicare payroll taxes to be increased 39% in one year?

Before Social Security, the majority of the nation’s elderly lived in poverty. Social Security gave the Greatest Generation, who not only WON WWII but who PAID FOR WWII (91%, then 70% marginal tax rate; 48% capital gains tax rate), the, well, security they so richly deserved. As for the rest of us, we weren’t burdened by paying for either health care or retirement of our parents. We could focus all our efforts on our careers and on growing our own personal economies, which meant growing the nation’s economy.

There are very easy fixes for Social Security. Increase retirement age. Means test. Keep Social Security trust fund in a true lock box, as proposed in 2000 by Al Gore. Don’t cap out payroll tax in the current regressive fashion. For Medicare, move away from a system which rewards doctors and hospitals for performing procedures to a system which rewards clinical outcomes, and, therefore, serve as a model for reforming the rest of the health care system (as will be done under Obamacare).

Bottom line. Both Social Security and Medicare did exactly what they were designed to do. They have worked brilliantly and, with some economic tweaks, they’ll go on doing so for the next century.

– Larry Weisenthal/Huntington Beach CA

@ Old Trooper 2, #73:

The account is overdrawn simply because we’ve chronically collected less money in taxes than the government has spent, creating annual deficits. The cumulative result over 30 years is a national debt that’s now pushing $14 trillion.

Had taxes been higher all along, there would be no problem. Had spending been lower all along, there would be no problem. Had both been adjusted through rational compromise, there would be no problem.

A solution can be achieved only through one of those same three approaches. Only one of the three is actually politically possible.

@ Greg, Wrong. We have Foolishly overspent and placed the Currency and the US Bond Rating at Risks. Do you understand any of that or am I wasting my time here? Obama got Punked at the G-20 and the Current Regime does not get it either. Come January or February the Dollar may be replaced as a premier currency in the World Market. The Chinese will keep the Dollar just stable enough to keep some of their Bonds at some value.

Have you been overseas lately? The Currency Exchange rate for the Dollar has dropped. Is this something that troubles you? You probably are looking at this like a Cow watching a passing train. Do you produce a US made Product that is Marketed Overseas, from a Business that You Own? I do. My product is not sold to Third World Clients. They can’t afford it. It is sold to Folks that have money and can afford it.

Until you have an investment in the Nation’s Success, have Your Own Enterprise that You took risks to build, quite frankly you do not understand how a strong Economy functions. Taxing me more does not raise your boat. It could make me hold onto my assets, not hire, raise my prices and clowns like you will wring their hands and wonder WTH happened. Killing the Goose that lays Golden Eggs is your style, not mine. You just don’t get it and most likely won’t until bread is $50.00 a loaf and you only get electric power or running water for 12 hours a day and wonder why.

@ openid.aol.com/runnswim, If you believe that business about SS and Medicare surviving without cuts or ever becoming solvent without additional taxation, I don’t know what to say. No COLA for the past two years on SS. Medicare costs will threaten some State Budgets that are in peril right now. Continuing to discuss this without a respect for reality is patently absurd for me.

@trooper:

You are talking in slogans, and paying no attention to numbers.

You said:

Taxing me more does not raise your boat. It could make me hold onto my assets, not hire, raise my prices and clowns like you will wring their hands and wonder WTH happened. Killing the Goose that lays Golden Eggs is your style, not mine. You just don’t get it and most likely won’t until bread is $50.00 a loaf and you only get electric power or running water for 12 hours a day

The marginal tax rates were 91% under Eisenhower and then 70% from Kennedy through Carter. Capital gains taxes were 48%. This resulted in decreasing the debt ratio from 150% down to 33%, while the economy grew brilliantly. Then Reagan massively cut taxes and nearly doubled the debt ratio. Then Clinton raised taxes and the debt ratio went down. Then Bush cut taxes and the debt ratio went up. I’ve provided links for these data many times.

The reason we are turning into a banana republic is because of our debt. The reason we have most of this debt is because Reagan and Bush borrowed massively to finance tax cuts (including during war time!) to spare us the necessity of paying for our own government with our own money — cutting our taxes while massively burdening our children with the debt to finance these tax cuts.

Our parents successfully coped with dramatically higher tax rates than it would take to restore financial solvency for all necessary government functions, including Social Security and Medicare. We would be penny wise but pound foolish to eliminate these brilliantly successful programs to take care of the nation’s elderly, who can’t work any longer, owing to advanced age.

Practically speaking, what we need is precisely what the co-chairs of the debt commission have proposed. Shared sacrifice. Spending cuts/tax hikes (to levels far below those which existed in the non-socialist past).

– Larry Weisenthal/Huntington Beach, CA

@trooper (#77):

The reason that Social Security is NOT a Ponzi scheme is that beneficiaries die and no longer need to be paid. Many people have studied this problem. It’s pure numbers. The debt commission offered simple, tolerable suggestions to ensure the solvency of the program. These were very gentle suggestions, at that. Means test (don’t give checks to rich people who don’t need the money). Raise retirement age (not reaching 69 until the year 2075!). Raise or eliminate the limit beyond which workers are exempt from payroll taxes (or self employed taxes). Don’t put any social security surpluses into the “general government fund,” as it has been done for decades.

– Larry Weisenthal/Huntington Beach, CA

@Greg: #71

Galveston County TX has the best idea for retirement. More about that after this:

You picked two of the worst examples.

SOCIAL SECURITY
(1) There are illegals getting a higher SS check each month than I am, and I paid into it all of they life, they paid nothing.
(2) Certain people, including children, can get SS payments.
(3) The SSA is paying out more than they are taking in.
(4) There is no SS account. It was kept in the general fund so the politicians could “borrow” from it to fund their pet projects. Neither party has made any effort to put SS in a separate account and only go to the ones who paid into it. It was supposed to be a RETIREMENT account.

MEDICARE
(1) ObamaCare will cut funding by $500,000,000,000 over 10 years. I just got on Medicare and I am concerned about this.
(2) There will be an estimated additional 43,000,000 people on ObamaCare because everybody will be covered. Less funding and more patients means RATIONING any way you look at it. How do you add 43M people, reduce spending by $500B and be able to treat everybody as they are needed?
(3) Some doctors are refusing to take on new Medicare patients. Medicare pays only 90% of the cost. ObamaCare will pay less, so doctors are not taking on new patients. Good luck finding a doctor that will treat you. I am concerned about this too.

Galveston County TX opted out of SS and there retirees are getting from 50% to 300% more in retirement than they would have with SS:

• Workers making $17,000 a year are expected to receive about 50 percent more per month on our alternative plan than on Social Security – $1,036 instead of $683. [See the Figure.]
• Workers making $26,000 a year will make almost double Social Security’s return – $1,500 instead of $853.
• Workers making $51,000 a year will get $3,103 instead of $1,368.
• Workers making $75,000 or more will nearly triple Social Security – $4,540 instead of $1,645.
• Galveston County’s survivorship benefits pay four times a worker’s annual salary – a minimum of $75,000 to a maximum $215,000 – versus Social Security, which forces widows to wait until age 60 to qualify for benefits, or provides 75 percent of a worker’s salary for school-age children.
• In Galveston, if the worker dies before retirement, the survivors receive not only the full survivorship but get generous accidental death benefits, too. Galveston County’s disability benefit also pays more: 60 percent of an individual’s salary, better than Social Security’s.

:

Relax about your Medicare. It’s going to do just fine by you.

http://blogs.forbes.com/rickungar/2010/09/25/does-obamacare-really-cut-medicare-benefits-to-senior-citizens/

As far as Social Security goes, as I wrote, it’s been a brilliant success and did exactly what it was supposed to do. For every “illegal” who fraudulently collects SS benefits, there are probably three illegals who pay into social security but who will never collect a dime. Anyway, any huge program will always have fraud and abuse. The whole US tax code is riddled with loopholes providing hundreds of billions of dollars annually in money lost to fraud and abuse.

The Galveston model is very useful; it’s a government mandate, though, with the government garnishing your wages, not giving you access to your money until you retire, and the government making the investment decisions.

The biggest difference between the Galveston model and Social Security is that Social Security was never allowed to invest the surplus which it had every year. This money all went into the government general fund.

Remember Al Gore’s “lock box” proposal in 2000? This is essentially the guts of the Galveston model. Lock up social security’s surplus and put it in some sort of investment.

– Larry Weisenthal/Huntington Beach CA

@Larry,

Some government regulations are necessary, and most of those you cite are examples of government protecting citizens (and/or the environment) from damages caused by others who don’t care about the health of others or the environment. Government’s duties should revolve around protecting the lives and civil liberties of the citizenry.

Seat belt laws have helped save lives without imposing undue restrictions on personal liberties, though I support the laws because they improve a driver’s control of his vehicle, thereby protecting the lives and civil liberties of that driver’s passengers and the occupants of other vehicles. We don’t have laws that make it illegal to jump in the deep end of a pool if you can’t swim, it’s not illegal to use a knife to get a slice of bread out of an electic toaster while the toaster is plugged in, etc. Laws that are designed to prevent me from my own stupidity are never going to keep me from doing something stupid. If the government is always going to step in and provide a safety net, no matter how lazy and stupid I am, what’s my inventive to provide my own safety net?

The government isn’t doing all of this just to save us from ourselves either, in my opinion. When was the last time you heard government or even the media stressing the importance of saving? For at least the last decade, our government officials have promoted the consumption model as a way to keep bubbles inflated. They’ve tacitly urged us to live beyond our means, stressing competition with the Joneses and promising that Social Security will never go away. A huge portion of the population sees Social Security (along with Medicare) as its retirement account, despite many of them knowing that it’s not enough. By keeping these safety nets available to those who would otherwise have the means to save for retirement if they were to make better decisions, the safety nets have lulled many into believing they are entitled to these benefits regardless of their moral responsibility to be more frugal.

Excessive government handouts reward laziness. This is the law of unintended consequences in action. Necessity is not just the mother of invention; it is also gives birth to the incentive to get one’s lazy ass off the couch and get a frickin’ job! We stop spoon-feeding children when they start learning how to feed themselves, not when they’ve mastered the eye-hand coordination of a Ninja.

We could just seize everybody’s assets and wealth, and then redistribute them equally so that absolutely nobody lives in poverty. Eliminating or reducing poverty cannot be the sole rationale for redistributing wealth, can it?

Jeff

@ Smorgasbord, #80:

SOCIAL SECURITY

(1) There are illegals getting a higher SS check each month than I am, and I paid into it all of they life, they paid nothing.

If so, they’re doing it by way of fraud. Applicants are required by law to establish their citizenship or legal resident status when they file for benefits. The Social Security Administration verifies the authenticity of the documents submitted as evidence with record custodians. That sort of fraud isn’t easy.

(2) Certain people, including children, can get SS payments.

Yep. If a young worker dies, his or her minor dependent children can qualify for survivors benefits. Orphaned children being left without a means of support is one of the things a young worker’s FICA tax is insuring against. FICA taxes are actually an insurance premium. Social Security is an insurance system.

(3) The SSA is paying out more than they are taking in.

That sometimes happens with social insurance programs. It’s a predictable matter of demographics. Everyone has known for years this would be a result of the post-WW2 baby boom. The effect is transient, as we are all mortal. Program adjustments must be made as we go along to compensate for such things.

(4) There is no SS account. It was kept in the general fund so the politicians could “borrow” from it to fund their pet projects. Neither party has made any effort to put SS in a separate account and only go to the ones who paid into it. It was supposed to be a RETIREMENT account.

Does it make sense to remove trust fund dollars from the active economy? If anyone suggested any private pension system should lock their dollars up in a safe and leave them untouched until the retiree is 62 or 67 or whatever, they’d be laughed out of the room. That said, I completely agree that trust fund holdings should not be used as an accounting gimmick to make deficits appear to be less. That is in fact a deception. Both parties are guilty of using it.

MEDICARE

(1) ObamaCare will cut funding by $500,000,000,000 over 10 years. I just got on Medicare and I am concerned about this.

The cost cutting is necessary, if we want a balanced budget. We should be concerned to make sure the cuts are achieved responsibly–through increased efficiency of the entire system, through cost controls on things like prescription drugs, through tort reform to lower provider costs, and through preventive measures to make the population healthier. The Obama adminstration has been ridiculed for trying to figure out how to take on the obesity epidemic, how to reduce sodium intake, for targeting tobacco, etc. There are very sound reasons why they’re doing that. The things being targeted are inflating national health care costs enormously.

(2) There will be an estimated additional 43,000,000 people on ObamaCare because everybody will be covered. Less funding and more patients means RATIONING any way you look at it. How do you add 43M people, reduce spending by $500B and be able to treat everybody as they are needed?

In addition to attempting to reduce the service demand through preventive approaches and by increasing overall system efficiency, there are provisions intended to increase the number of health care providers.

Achieving better health care availibilty for some by denying 43 million people access to the system doesn’t sound like a good system to me. What that actually describes is our current rationing system. Surely we can do better by everyone.

(3) Some doctors are refusing to take on new Medicare patients. Medicare pays only 90% of the cost. ObamaCare will pay less, so doctors are not taking on new patients. Good luck finding a doctor that will treat you. I am concerned about this too.

This situtation already existed for Medicare patients. It has been very common all along with Medicaid patients. There are doctors who are selective about what private insurance they will accept.

No one has suggested that the health care reform bill was perfect. It’s a start, but provisions will need to be modified and fine tuned as problems come to light. Reform is an ungoing process, not something that can be accomplished all at once.

@JV (#82):

You say:

We don’t have laws that make it illegal to jump in the deep end of a pool if you can’t swim, it’s not illegal to use a knife to get a slice of bread out of an electic toaster while the toaster is plugged in, etc. Laws that are designed to prevent me from my own stupidity are never going to keep me from doing something stupid. If the government is always going to step in and provide a safety net, no matter how lazy and stupid I am, what’s my inventive to provide my own safety net?

Precisely. We don’t have laws about using toasters and jumping into pools and you agree that seat belt laws are a good thing. So why not give me an example of a nanny state law with which you don’t agree and maybe we could discuss that.

Excessive government handouts reward laziness.

This is a straw man argument. I am not in favor of excessive government handouts. What is the example of an excessive government handout, in your opinion? We can then discuss that.

We could just seize everybody’s assets and wealth, and then redistribute them equally so that absolutely nobody lives in poverty. Eliminating or reducing poverty cannot be the sole rationale for redistributing wealth, can it?

This is another straw man. Give me an example. Obama was crucified as being a socialist for saying something which has been outrageously misinterpreted. During the 2008 campaign, he made an offhanded remark about “spreading it [meaning prosperity] around.” What he was referring to was the following:

In 1980, before the “Reagan Revolution,” the top 1% of people held 9% of the wealth. Today, the top 1% holds 24% of the wealth. There were few, if any, gains for the average American during this period of time. The debt ratio increased from 33% at the end of the Carter administration to about 76% at the end of the Bush administration. This was after being reduced from 150% to 33% because of the fact that my parents’ generation were sufficiently responsible to tax themselves at a sufficiently high rate to pay the nation’s bills (91%, then 70% marginal tax rate!).

http://www.neurosoftware.ro/finance/wp-content/plugins/wp-o-matic/cache/d7d83_National-Debt-GDP.gif

So we borrowed a generation’s worth of wealth to greatly improve the lot of the very top of the food chain, while handing the tab for this to the nation’s children.

What Obama is proposing is not a “handout,” but a very slight adjustment to the tax code, to bring it back to the levels of the Clinton administration, which is still less than half the tax rates which existed before Reagan.

You, like Trooper, are offering slogans with which neither I nor Obama would disagree. You are preaching to the choir. Free enterprise is good. Socialism is bad. But even Adam Smith recognized the benefits (and fairness) of progressive taxation.

If you want to argue that we should get rid of social security and Medicare, then I wish that you’d convince McConnell and Boehner of this. Let’s have the GOP try to do this and the great political blood bath of November 2010 will be totally reversed in 2012 and will be two-fold worse for the losing party.

But let’s remember to keep this real. We aren’t talking about a return to a 70% marginal tax rate and a 48% capital gains rate. At these levels, which existed until Reagan, the nation paid off its massive WWII debt and grew the economy dynamically. Everyone’s boat was floating, right up until the time when we went tax cut crazy and borrowed massive amounts of money to redistribute wealth UPWARD!

P.S. Just one last comment — about doctors leaving Medicare. Medicare is a very well managed program. It is administered not by bureaucrats but by private regional contractors (insurance companies) who bid to become the Medicare contractor, for example for California/Nevada or Pennsylvania. Reimbursement rates are locally determined. Doctors in New York City get paid more than doctors in Laramie, Wyoming. Any doctor has the right to opt out, if he/she isn’t making enough money. The vast majority of doctors don’t opt out and Medicare patients have, by far, the greatest choice of doctors and hospitals for any major insurance plan. Plus, the patient can go straight to a subspecialist and doesn’t have to go through a primary care gatekeeper. Doctors and hospitals who don’t opt out remain in Medicare because they can and do make money on Medicare. If too many opt out, then reimbursement is increased. If no one opted out, Medicare would be overpaying. It’s just supply and demand management. Medicare (through its contractors) tries to get services for the best price and, by any objective measure, has succeeded very well in this.

– Larry Weisenthal/Huntington Beach, CA

JVerive: hi, I think that, the money that has been spent liberaly at the expanse of peoples,
who paid in it all there working years, should have been kept for those payers,
that was a busisness deal made by GOVERNMENT,who did not provide their end by spending it.
I’m sure that they fraud the payers, doing that, what else you want to call that action.
IF the workers would have kept that money ore invest it themself they would have get it back when the time arrive, and further more IT was done to redistribute the people’s money,
that is SOCIALIST in a CAPITALIST COUNTRY.
no wonder the people cant trust the GOVERNMENT anymore. and the blame is on the ACTIONS
of spending what is not their own,

@openid.aol.com/runnswim: #81

I don’t know anything about Forbes magazine, so I don’t know if it is liberal or not. It seems that all of the media are liberal and go along with what Obama says, even lying.

George Bush wanted to slowly switch over to private investment where the individual would decide how to invest it, but the democrats said no. Remember how they condemned bush for wanting to privatize SS?

If we could have invested our retirement money the way we wanted, there would be no fraud because it would go into OUR account. Our beneficiaries would get the money if we died, but the politicians, republican and democrat, have gotten to the point that they feel it is THEIR money to do with as they please and they don’t want to give it up.

SS was just another way for the politicians to get more of your money. If a person could keep track of how much they pay into SS and compare how much they would be getting by investing the money in a retirement account, there would be a huge difference between them.

Clark Howard said that if your 15 year old would put $2,000 per year in a Roth IRA for only 7 years and never put any in again, they would have about $1,000,000 in the account at age 65. This assumes a 9.4% average gain annually, which has been the average return on the stock market since 1926. If parents teach their kids to invest like that instead of spending it on fancy cars and other stuff, the kid would be set up for retirement at age 22.

http://clarkhoward.com/liveweb/shownotes/2010/10/12/19493/

@Greg: #83

It’s almost like you are trying to be appointed to King Obama’s court. I am going to activate my “wrestling with a pig in the mud” rule and not comment on this subject any more.

(#86): The Dems will ALWAYS oppose privatizing social security, and so will I.

Let’s look at the Galveston model, trumpeted by you, above. You said that the people did better on the Galvestion model than they would have, under Social Security. This was true for the average worker, but not for everyone. People who withdrew money along the way did worse than they would have, under SS. So Galveston County changed the law and the people no longer had access to their money, until retirement. The only difference between the Galveston model and social security is that Galveston county invested the yearly surpluses on behalf of the citizens and this investment income made a profit. Social security couldn’t invest the surpluses that it ran for decades, because, every year, the so-called Social Security trust fund was raided by the bureaucrats to spend on other things.

The best thing about social security is that it is secure. It’s as secure as treasury bonds, which are considered to be the most secure investment in the world. When you allow people to manage their own money, it’s not secure (as the Galveston County experience shows).

Assumes a 9.4% return annually? Show me where I can get that in a secure investment and I’ll put everything I have into it. So would most people. But there are a ton of baby boomers out there who’s 401Ks have taken a tumble, just as they were gearing up to retire. There are many experts who claim that there is still a stock market bubble and that it’s going to go down again.

I’m old enough that, every year, I get a statement from the government telling me every last nickel I’ve put into Social Security and also telling me the monthly payout that I’ll be entitled to, upon retirement. I can easily calculate what sort of a return I could have gotten on the money I put in since my first FICA-paying job, in 1963 (started out as a theater usher at 70 cents an hour, after 4 years as a newspaper boy, where I didn’t pay into SS). There’s no way I’d have ended up with as much as I’m likely to collect from SS, considering the various and sundry financial challenges I had along the way. My Dad retired at age 65 and he just celebrated his 97th birthday. He’s hale and hearty and he could live for another 10 years, perhaps, and his social security benefits will always outlast him. That’s not necessarily the case with a private investment portfolio.

But what’s the problem with just letting everyone take care of themselves?

Because all too many people WON’T take care of themselves. That’s the situation which existed before SS, when the majority of the nation’s elderly lived in poverty.

But if the GOP wants to privatize the situation, more power to them. Just don’t plan on winning too many future national elections.

– Larry Weisenthal/Huntington Beach, CA

Okay Larry, how much wealth distribution is enough? Do we raise everyone out of poverty, and if not, who gets to choose the beneficiaries? It’s not a straw man to take something to a logical conclusion, even if you don’t agree with the conclusion.

The problem with wealth distribution is that it’s never enough, and it can’t possibly meet everyone’s definition of “fair,” because the word means different things to different people. What do you think is the best way to elevate people out of poverty? Remember that you’re going to have to satisfy people who life in high cost-of-living areas as well as people who prefer to live in less expensive areas. Do you give more to the people who want to live in high cost areas and less to those in other areas? How do you control costs if people in the low cost areas then decide they want to live in the more expensive areas?

You can’t just give people a way of life. Didn’t you ever hear people say that you appreciate something more if you’ve earned it rather than had it given to you? Surely not everyone is going to agree with that moral principle, so do you discriminate based on moral principles? It’s so easy to say you want to bring people out of poverty, but it’s not always easiest – or best – to do the work for them.

Excess government handouts DO encourage laziness. Ask anyone who works in personnel how many times they’ve heard “I’m not going to settle for less than my ideal job as long as I can get by on extended unemployment benefits” or other things to that effect. It’s a real phenomenon, and because you don’t want to acknowledge it, you call it a straw man. That’s not going to wash, Larry. There’s an entitlement mentality that has ruined much of the work ethic in this country.

Jeff

@ JVerive, Every Liberal/Progressive wants to redistribute wealth as long as it is not Theirs.
Class Warfare garners votes amongst those that have few achievements or want the Free Lunch.

That is why I discount the credence and validity of some posts here. If it is Other Peoples Money, full speed ahead, but if it is Yours…different tune…different drummer and no juice there.

@OT2,

Of course, but sometimes you have to go to painstaking details to explain it, and even then it doesn’t resonate in the minds of those who want “fairness.” All of the politicians advocating wealth redistribution are wealthier than the average Joe Blow, and they have a distorted sense of reality and purpose. So many are of the “social engineering” school that teaches that the concepts of “fairness” and “equality” can be enacted through legislature as long as the right people are doing the legislating. Of course, they believe themselves to be the right people, disregarding all the other self-appointed “right people” who have tried and failed at the same task. These legislators also expect to be revered and treated as nobility because they have somehow divined the right way to redistribute everyone else’s money!

There will always be those who will work, and those who will not work. There will be those who take other peoples’ “excesses” and claim that everyone deserves a “fair share” of the fruits of other peoples’ labor.

Commune-ism can work on a moderate scale if everyone is willing to work to the best of their abilities. The morals that lead people to want to work hard are, I believe, related to the morals that drive people to help the less-fortunate than themselves. The obvious problem is that there are enough people wanting to take short-cuts while others do the majority of the work, and so many of these are the first to cry that they don’t have as much as everyone else.

In a free society, you cannot force people to work to their full potential (it may not even be reasonable in other, less-free societies,) and there will always be those who are not willing to do their “fair share” of the work. Wealth re-distribution that takes from those who produce and gives to those who refuse to produce is hardly “fair.” Oddly enough, those who complain the loudest about “leveling the playing field” and “fair-share distribution” are looking to game the system in their own favor at the expense of others. How can that possibly be fair? Trying to create a system that hundreds of millions of people will all agree is “fair” is a losing proposition. Because of that, it seems most reasonable to encourage people to succeed on their own merits, prosecute those who actively engage in practices that prohibit others from succeeding on their own merits, ensure that all people have access to the education and training of their own choosing to pursue their own dreams, and let the people decide how best to care for their less-fortunate neighbors. When government gets involved in determining which charitable causes people must contribute to, there are always the crooks who game the system to direct a disproportionate amount of resources away from those who need them the most.

Jeff

OLD TROOPER 2, I want to also mention that anyone working or having a busyness, always encounter those times of uncertainty along the monetary road to some improvement done or for another reason: BUT the only one who never see those anxious moments are the
one who know the check is coming for their welfare, they know when and where it will come like a clock: AND this is where the unfairness of the 2 societies: THE ones who earn their money
are never sure of the certainty of their job same as the busyness owners who even more live at some times the same anxiety of the future.
just a thought. bye

Wealth Redistribution was a rallying slogan for Lenin and Mao. When you promise the homeless, factory workers, and criminal parasites that they can all share in the land homes and gold of the farmers, land owners, and people who have accumulated even a minor measure of wealth, the lazy, stupid, and indigent will flock to you and why not, you have promised them a life of comfort when they have nothing. Forget the fact that they could gather up nothing on their own; their lot in life is to take the property of others through theft and then liquidate or kill all those with ability. Then sit around in a Dystopia and watch culture and society devolve into chaos and mayhem. That is Marxism my friends, this is the promise of Obama and his Marxist czars.

@ilovebeeswarzone: #92

The Fair Tax takes care of the poor. I thought this was stupid when I read it, but it is fair for everybody. The creators of the Fair Tax came up with the idea to take the poverty level, divide it by 12, and give that amount to every legal citizen. The poor will get enough money to survive, plus, they can now earn any amount of money they want without it affecting their government checks because they only pay taxes on new things they buy. A tax system that is fair for everyone. No wonder the politicians don’t like it.

To me, the ones who created the Fair Tax are brilliant.

@ JVerive, #91:

There will always be those who will work, and those who will not work. There will be those who take other peoples’ “excesses” and claim that everyone deserves a “fair share” of the fruits of other peoples’ labor.

Are you suggesting that the distribution of wealth in America is a direct reflection of the willingness or unwillingness of people to work?

Consider this chart.

It tells us that the bottom one-half of American households collectively own only 2.5% of the nation’s total wealth. Is this because one-half won’t work?

The distribution chart makes me wonder why the rich feel they need more tax cuts. Why do they feel they’re being treated so unfairly, when they haven’t had effective tax rates this low since 1950?

The Bush tax cuts were, plain and simple, a mechanism for the redistribution of America’s wealth. UPWARD.

Looking through all 15 of the charts on the Business Insider page is a real eye-opener.

@ Greg, You get “Ownership of Wealth” through hard work, prudence, wise investment and not spending more than you make, not Gummint Programs or Class Warfare. Successful Businesses Hire Employees that are willing to work, intelligent and ambitious. They are promoted on merit.

You just continue to astound me. Get off the Kool Aid, the Stupid Pills and start from there. Charity is Voluntary, Not Mandatory. Read the posts that you comment on. Stop posting Socialist talking points. You are obviously living in the Never Never Land that consumes more that it produces and part of the problem, not part of any solution. There is no Free Lunch unless you stole it from someone.

@Greg,

You didn’t read my whole response, or if you did, you chose to ignore what I said about people taking care of those who are less-fortunate (unable to work.) The concentration of wealth is far from being a simple matter of who is willing to work and who is not, but it is clear that the more industrious an individual is, the more likely that individual is to amass his/her own piece of the wealth pie.

Many of the ultra-wealthy have acquired their wealth through corruption and connections, especially the connections that are simply unavailable to those in lower- and middle-class. I don’t need to be wealthy, and I don’t particularly disdain those who have acquired wealth, particularly if they have inherited wealth that was acquired through less-than-legitimate means. There is still plenty of currency circulating in the markets for anyone who is industrial enough to work for it.

I tire of hearing the same old canard from the left of the wealthy keeping everyone else from having their fair share. The loudest voices come from the unions, and I’ve had enough personal contact with unions to know that the vast majority of union workers receive pay that far exceeds non-union pay for the same jobs. I don’t disagree that unions had their place in America, and may still have their place in certain areas. But they have become the largest private interest groups in American politics, and their influence is at the behest of the few union execs who push for policies that distort free markets. Some of the union leaders are so out of touch with the desires of the rank-and-file members that we almost need intermediate unions to protect the rand-and-file members from corrupt union bosses.

I’ll say it again. Social Security may have helped those who would not have been able to help themselves, but it has grown beyond a simple safety net for the truly needy into an entitlement system that has induced people to forgo frugal living and careful retirement planning. The BEST thing the government can do is to announce that they will be phasing out Social Security and allowing individual workers to plan for their own retirements, passing on the savings to individual workers by not raiding their paychecks. When people have control over the greatest possible amount of their incomes and consume what they need (and a little more for fun and life enhancement,) the demand for goods will drive the market to supply goods at reasonable prices. Subsidies for producers and consumers alike are detrimental to a free-market system, plus they make savings and retirement planning more difficult by hiding the real costs of goods. More often than not, when the government tries to fiddle with the economy with subsidies and other manipulations, they almost always end up favoring one aspect of the economy at the expense of others. This is NOT how a free market system should operate.

Jeff

,

I’m not following you. When you said

The creators of the Fair Tax came up with the idea to take the poverty level, divide it by 12, and give that amount to every legal citizen. The poor will get enough money to survive, plus, they can now earn any amount of money they want without it affecting their government checks because they only pay taxes on new things they buy.

Why are you dividing the “poverty level” by twelve? Is that supposed to be a monthly income? Where does the money come to pay for this? Besides, the actualpoverty level is highly influenced by the cost of living, which is higher in upscale (generally densely populated urban) areas and lower in more rural areas. No matter how you slice it, it sounds like you still want to take money from those who were industrious and give it out to others without regard for their needs or contributions.

Socialism works fine for very small groups, such as your average family. The parents work to earn salaries, and the kids are expected to pitch in to the extent that they can. Assuming that the parents don’t play favorites, they are likely to hand out allowances and other “goods” to their children based on need. Of course, many parents also reward their children for good grades, good behavior, etc. (and punish for bad behavior and poor grades earned by children who weren’t working to their abilities.) So even in a family setting where redistribution of wealth occurs, the incentives typical of capitalistic societies often produce the best results. There’s no doubt that as the populations of any group grow, the economic models may require tweaking, so that very few successful societies are truly strictly socialistic or strictly capitalistic. It seems to me to use the components of both models that are the least intrusive upon civil liberties and allow the greatest freedoms for individuals to enjoy the maximum amount of the fruits of their labors.

Jeff

@JVerive: #98

I forgot to add “…each month.” The idea is to take the minimum amount it would cost in one year to survive (the poverty level), divide that by 12 months, then give every legal citizen in the USA that amount each month. It will be adjust as needed. The Fair Tax doesn’t make any allowances for the different area’s cost of living. I thought of that too when I read it.

The easy solution would be to figure it on the highest cost of living area and give that amount to each legal citizen. Since EVERYONE still gets the same amount it would still be fair.

@ JVerive, #97:

The concentration of wealth is far from being a simple matter of who is willing to work and who is not, but it is clear that the more industrious an individual is, the more likely that individual is to amass his/her own piece of the wealth pie.

I agree with all of the above. I’ve observed, however, that many of that bottom one-half can work all of their lives, live within their means, save as much as they can, and still find a Social Security check the only thing that’s standing between themselves and poverty in their old age. I figure the productivity and wealth of the nation result at least as much from the efforts of those people as anyone else’s, so they’ve got at least that coming to them. It offends me when those higher up on the pyramid suggest that those lower down are predominantly deadbeats, moochers, and a useless drag on the entire system–as if the top of the pyramid somehow floated in the air entirely by its own virtue.

I think the accelerating upward concentration of wealth over the past three decades is symptomatic of some sort of systemic dysfunction–particularly in light of the fact that the national debt has grown apace. When real wages and personal wealth have been moving in reverse for the middle and working class for a decade, and when some are actually talking about the dismantling of progressive social programs that most of them at some point must rely upon, I think we’re obviously headed for trouble. It never ceases to amaze me that some don’t or won’t see that.

Take my word for it: The top of the pyramid will not float if the base gives way.

@JV: You are still arguing with slogans and not numbers or examples. The only concrete government program or policy which you have offered by way of example is social security. Look again at the chart linked by Greg. The bottom 50% of Americans hold 2.5% of the nation’s wealth. We previously had the experiment of just leaving Americans on their own, with respect to retirement, and the majority lived in poverty, a burden not only on themselves but on their children, who were not free to focus on building their own nest eggs.

@trooper: You say:,

Every Liberal/Progressive wants to redistribute wealth as long as it is not theirs.

That’s not true and it’s personally insulting. For the majority of my working life, I’ve easily surpassed by Payroll/Self Employment tax “cap” and I advocate removing this “cap” as part of the formula for assuring the actuarial solvency of social security. The greatest advocates of the inheritance tax include some of the richest people in the world, such as Bill Gates. So your statement (above) is simply not correct.

Progressive taxation is not the same thing as socialism. The idea of the “self made man” is a myth. I’ve been self employed for 23 years. I owe my career to tens of billions of Federal medical research dollars, to billions of California state education dollars (which paid for the educations, through university, of my employees), to the Federal air transport system and the interstate highway system (which makes it possible for FedEx — which delivers tumor biopsy tissues from the patients I serve — to operate its business) and on and on. Mark Zuckerberg and all the other dot com success stories owe their careers to the Federally-initiated Internet, as do many of the tech hardware and software entrepreneurs. Big Pharma owes as much of its success to Federally financed basic research as to their own R&D. And on and on. People at the top of the food chain should pay more not only because they have more but because they OWE more of their success to the government.

I don’t understand how a minimal safety net is a “handout” but all other government investments and services are not “handouts,” especially when we, ourselves, are not paying for these “handouts,” but, instead, are borrowing money which we will never ourselves pay back to finance these handouts.

– Larry Weisenthal/Huntington Beach, CA