The Social Security Deception

I have seen a lot of people sharing “memes” about how Social Security is not an entitlement (in the political sense), how they paid into Social Security, that it’s their money they should be getting back as part of their retirement, and how any attempt to cut/reduce social security is stealing their money.

Unfortunately, nothing could be further from the truth.  Yes, Social security was sold first as a way to insure that poor old people wouldn’t starve once they became too old to work in a society which, at the time, still relied quite a bit on manual labor.  Then it was sold as old-age insurance; your money is set aside and used to fund a retirement once you are too old to work.

Both of these sales pitches were lies.

The thing about preventing poor people too old to work from starving?  I am generally not a fan of the federal government being responsible for public charity, preferring instead that being handled locally and ideally privately.   Still, that is a subject on which reasonable people can disagree and if one does accept a governmental responsibility for aid to the poor then some program to assist those rendered destitute due to age has a certain logic to it.  Only Social Security has never worked that way.  Being destitute has never been a requirement for receiving Social Security.  And, if it’s really to help poor people, why are “poor and out of work due to age” any more worthy of that help than “poor and out of work due to other reasons”?  No, the “starving grandmothers” sales pitch was nothing more than an attempt to gin up emotional support for a program that was supposed to work otherwise.

The second pitch, that the government is putting aside your money to provide for your retirement, that it’s in a “trust” to be returned to you when you retire, is equally false.  First off, the “trust” is, and has been, held in government bonds–which basically means it provides funds for the rest of government to do with as it will.  But the big thing is that Social Security has never just set aside the money (even in the “trust”) to pay individuals back what they have put in.  The first person to receive Social Security is illustrative.  Ida May Fuller, after paying into Social Security for 3 years after paying a total of $24.75 (from 1937 through 1939) began receiving monthly checks of $22.54 in January of 1940.  She lived to the age of 100 drawing a total over that time of $22,888.92, more than 900 times as much as she paid into it.  That money wasn’t from “investing” her contribution.  That money, like all the Social Security payments to follow, was from current workers “contributions” being used to pay current retirees.

In the private sector a “business model” in which the investments of new investors are used to pay off earlier investors is called a Ponzi scheme and it’s a crime.  Such schemes usually fail quite quickly as the supply of new investors dries up.  The only real difference in Social Security is that the legal mandate to pay into it ensures a supply of new “investors” as people are born and grow into the work force.  Older “investors” are removes as they die.  Currently changing demographics–people living longer so more Social Security is being paid combined with falling birthrates after the end of the Baby Boom–are straining a system which is inherently unsustainable in the first place.

The upshot of this is that Social Security is not money being taken and set aside for your retirement.  It’s money being taken from you and given to someone else for their retirement.  And it always has been.  The “theft” isn’t in any possible future failure to pay you.  The “theft” has already taken place.

Look, if someone breaks into your house and robs you, that does not give you license to break into your neighbor’s house and rob him.  I think most people would agree with that.  Likewise, that you have had your money taken via the Social Security tax to pay for people currently retired does not give you the right to insist that future workers’ money be taken to pay for your retirement.

It sucks, I know.  Believe me.  I’ve had plenty of money taken from me too, but that still doesn’t make “turnabout” right.  It’s not even punishing the folk responsible for taking your money.  If anything it’s rewarding them and punishing people who had nothing to do with it.  There is no justice, no “right”, in continuing the taking from one generation to pay for a previous one.  It would be one thing to take back from the ones who took from you.  Even that may not be “right” in some larger sense, but there is a certain logic to it.  But taking from innocent third parties simply because others took from you?  There is no moral or ethical justification for it.  The old saw about “two wrongs” and all that.

Peter being robbed to pay Paul does not give Peter the right to rob John in turn.  It just doesn’t work that way.

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Election day

Short one today.

Another election day has rolled around.  Yes, I did my civic duty and voted.

And yet, on my news feed in another forum I have been seeing a number of posts on the topic of how useless voting is.  One has this stock picture with text about how the person doesn’t vote because voting is choosing who will be master over ones neighbor and nobody has the legitimate authority to do that.  Another has a picture of the scene from Charlie Brown where Lucy is holding the football and Charlie Brown is getting ready to kick it (or not, as this generally goes) with “Go ahead.  It will be different this time.  And, of course, there’s the late George Carlin’s comedy routine on not voting.

Then there’s the old standby of insanity being defined as doing the same thing over and over expecting a different result. (Funny thing is, I’ve never seen an actual definition of insanity–which is a legal, not a medical, term–that said that.)

A lot of people, particularly among the conservative to libertarian folk, are very dismissive of the idea of voting.

I just have one question:  How is not voting supposed to help?  I mean, aside from giving the person taking that position a sense of smug self-righteousness?

Seriously, how is not voting supposed to help?  Are the candidates who win (candidates who don’t are a non-issue since they have no power, not being in office) supposed to look at low voter turnout and say “well, we need to change to appeal to all those people who couldn’t bother to vote”? Do you actually think that’s even a remote possibility?

Or perhaps you think that staying away will let things collapse that much faster and we can have a civil war and….  Um.  Whatever fantasies you might tell yourself, if you actually look at history, revolutions and civil wars have a very bad record when it comes to producing anything good.  The American revolution was very nearly unique in that regard and relied on a widespread popular support for the ideals of freedom (however poorly implemented at the time) that, if we actually have here would mean that we wouldn’t actually need a civil war to implement pro-liberty policies.  And if we don’t, what naive self-delusion makes you think a civil war followed by a Consititutional Convention–with delegates chosen by the same people who send representatives to Washington now–will produce any better results than voting does now.  And that’s assuming that other powers don’t use the idea of such civil unrest in the US as an opportunity to put their own thumb on the scales to their advantage rather than ours.

The best I reason I can come up with, really, is folk are denigrating voting simply to make themselves feel good, not to accomplish anything in the larger world.  If that’s what you want, then more power to you.

Just close the door and wash your hands afterward.

The Handmaid’s Tale: A Blast from the Past

People are still making this argument about the Republican party so this is worth repeating:

It’s apparently a thing where people are panicking over The Handmaid’s Tale and saying how “relevant” it is and “we’re living it now.”

What an utter piece of crap.

The whole thing is based on two, and exactly two points:

  • Some folk think abortion is morally wrong and should, at best, only be allowed in extreme circumstances (with considerable disagreement on what extreme circumstances would qualify)
  • People should not be forced to pay for other people’s birth control.

Really.  That’s it.

Nobody is suggesting that women should not be allowed to work.  Nobody is suggesting that women should not be allowed to own property.  Nobody is suggesting that women should not be allowed to read (a feature of The Handmaid’s Tale).

You might find a few fanatics who would want to actually prohibit birth control or criminalize sex outside of very narrow bounds (and, again, quite a bit of variation where those bounds are, usually “within marriage” but sometimes with further strictures within).  You’ll find more people who think those things are wrong but few of those people actually want to criminalize them.  I know.  I know.  It’s a strange idea to disagree with something, to think it’s morally wrong, and yet be willing to let other people do it anyway if that’s their choice.

It’s called “Freedom”.  It’s a provocative concept, I know.

But there’s a flip side.  It’s called “Responsibility.” It’s up to you to take care of your own wishes in that side.  If you want to have sex without risking pregnancy, then it’s up to you to provide your own birth control.  It’s up to you to ensure that you’re not bringing children into the world that you cannot provide for.  It’s not like birth control is expensive.  Even the expensive birth control pills are on the order of two McDonald’s meals per week in price or less than one daily Cafe Latte (Tall) at Starbucks.  The cheap ones are like one McDonald’s meal a month.  Then there are plenty of places that hand out free condoms. (Hint:  unless you’re in a committed monogamous relationship and can trust that your partner is also monogamous, then use a condom.  It’s safer that way.) And they do it with private money.

You’re not going to lose your birth control.  You may have to make some choices if you want it, but you’re not going to lose it.  Those choices?  That’s part of that “responsibility” thing.

But if you must worry about something, consider the following scenario:

  • All women must have a male guardian and they need the guardian’s permission for
    • Marriage and divorce
    • Travel (if under 45)
    • Education
    • Employment
    • Opening a bank account
    • Elective surgery
  • Special police to ensure that women are properly covered (everything except hands and eyes)
  • Women forbidden to drive cars
  • Women must have a man to swear for them in a court of law
  • Must have guardian’s explicit permission to work outside the home.

Sound like what you think Conservatives want for women in the US?  Well, actually, it’s what women face today in Saudi Arabia. And yet, the UN just elected Saudi Arabia to the Women’s Rights Council.

If you’re worried about The Handmaid’s Tale becoming reality, then rather than building illusionary fantasies about the Republican Party, you might want to take a look there.  It would seem a more productive approach.

Why Economics?

A lot of my posts of late have been on economics and related topics.  One might ask why I spend so much time on it.  It’s a technical field with a lot of complexity and a lot of disagreement even among professionals in the field (try to get Paul Krugman and the late Milton Friedman–both Nobel laureates in the field of economics–to agree on pretty much anything regarding economic policy).  Yet despite that, people in the US are asked on a regular basis–through the mechanism of election of representatives–to make decisions on economic policy affecting the nation and the world.

People don’t, as a general rule, decide which candidate to vote for based on their positions on topics in electronics, on neurosurgery, on aerospace engineering (what most people actually mean when they say “rocket science”).  Nope.  They do, however, make such decisions based on those candidates’ positions on economic policy.  This despite the fact that most people really don’t understand even basic economics and so are easily swayed by economic fallacies that sound good but all too often have the exact opposite results of those predicted. (This is my reason for calling economics “the dismal science.”)

And so, here I am, trying in my small way to help correct that.  A voice of one crying in the wilderness. (And, hopefully, I’ll get to keep my head.)

That said, let me go into a couple of real basics here.  The first is what is economics.  People often think it has something to do with money and, while money is part of it, it’s only a small part.  A definition that does a reasonably good job of describing economics is:

Economics is the study of cause and effect relationships in the allocation of scarce resources that have alternate uses.

And to that I would add “and for which there are substitutes.”

Let’s look at that.  First scarcity.  That, really, is the first law of economics.  Indeed, without scarcity you don’t have economics.  So what is scarcity?  Scarcity simply means that there’s never enough of anything for everyone who wants it.  Consider what that means.  Middle class Americans (of which I am one) are among the most affluent people in all of history.  Even poverty in the modern United States would be the wealth of Midas in the past of living memory. And yet people complain about how much they don’t have, about what a struggle it is to get by (with those two cars, and that central air conditioning and heat, and the smart phone individually having more computing power than even existed in the world not all that long ago, and their internet connections and…).  Because what they want is more than what they have.

Alternative uses is another important factor.  Iron can be used to produce automobiles, the frames of skyscrapers, butter knives, and paper clips.  A tree can be left as is or turned into paper, the frame of a house, cabinetry, or toothpicks.  Petroleum can be refined into gasoline for cars, fuel oil for producing electricity or heating homes, plastics, or fertilizer and medicines.  Even human resources.  A person can be occupied digging ditches, growing crops, assembling cars, or performing neurosurgery.

And any one use of a particular resource renders that resource no longer immediately available for the other uses.  So any economic system has to determine how much of each of the vast number of resources exist:  how much steel is used to make cars, how much to make paper clips; how many people performing neurosurgery, how many digging ditches.  And so on.

I can illustrate substitution in a simple way.  When I’m hungry I can eat a steak.  I like steak.  One of my favorite things to eat, steak.  But if, for whatever reason, I can’t eat steak this time, I can eat chicken or pork or rattlesnake for that matter (I have got to try rattlesnake).  Or, if I must, vegetables.  These other items are substitutes for steak.  In industry, I might use steel as a structural material, or I might use aluminum.  The choice is driven by a number of things, including cost.

There are literally billions of decisions being made every day on how scarce resources with alternative uses and substitutes will be allocated:  how much steel here, how much wood there, how much aluminum over there; how many people employed in this mill, how many in that factory, how many in the hospital over there.

But through all of that, one thing remains constant:  what people (as a group) want is always more than what is available.  Sure, some individuals might be entirely content with what they have and cannot even imagine wanting more, those individuals are rare birds indeed.  As a group wants exceeding resources is very much a law of nature.  And when you increase the resources and make more available?  Wants simply grow to fill and exceed the new level of resources.  Few people a hundred years ago might have thought that the wealth of the wealthiest man in the world could fail to satisfy any possible cupidity and yet, we’re there now and have been for a long time and still people’s wants exceed their grasp.  And there show no signs that will change in the foreseeable future, or ever.

This law of scarcity is, thus, as firmly fixed and unbreakable a law of economics as are the laws of thermodynamics in physics.

Thus, anyone saying that they can grant you everything you want is either dishonest or deluded.  Take your pick.  And that a system fails to provide everything everyone wants, that people want things they can’t get, does not mean it’s a failure.

What you need to look at is what systems do the best job of providing the wants that people have–what systems are most efficient at allocating scarce resources with alternative uses and substitutes toward providing the wants of the whole of the people.

As I have pointed out on this blog elsewhere, and no doubt will again, the reigning champion in that respect remains a system of voluntary exchanges controlled by prices determined by market forces as opposed to dictation by some central planners.

In short, free market capitalism.

New book release:

2.99 on Kindle.  $19.99 on paperback. As always, free to read on Kindle Unlimited.
No sane person believes in vampires.

And that’s exactly the way the vampires want it. For centuries vampires have existed among us, hiding solitary in the shadows, preying on an unsuspecting humanity. Secrecy is their weapon and their security. In times past when humanity discovered them, vampires relied on their other weapon—fear—keeping humans too terrified to use their superior numbers and ability to walk the day to exterminate the vampires.

Dani Herzeg is a dhampyre, born to a vampire mother for the express purpose of serving as an aid and daytime guard. Instead, she hunts vampires. Only now some vampires are no longer hunting alone. Combining into gangs and going on bloody killing sprees, almost uncaring of keeping the secret of their existence from the larger world.With Indianapolis police detective James Ware her only ally, Dani must try to stop the bloodshed before humanity learns the Secret and vampires launch a campaign of terror against the human world.

Or is it already too late?

Not Just Any Huddled Masses by Bill Reader

People citing that poem are quick to say “huddled masses” but they forget that “yearning to breathe free” is not the same as “yearning to re-create the same hellhole they came from while expecting, somehow, to keep the economic advantage of the United States.”

The thing is, that “breathe free” portion is pretty important.

According To Hoyt

united-states-1524261

I’ve discussed already the liberal perspective on the immigrant horde. Now I’d like to talk about the other side of the equation, and help crystallize my own thoughts—and argue from at least one school of conservative thought—as to the flaws with the migrant horde, the philosophical and practical rationale for keeping them out, and the conservative perspective on immigration in general.

The Left plays up that these people come from desperate conditions, as it does in all scenarios like this. As I mentioned in my prior article, the Left tends to blame the United States first for these impoverished conditions and it does so in part because they’ve got end-stage Marxism. As I noted there, the United States is not responsible for the floundering of countries with a long history of socialism and the typically dysfunctional Latin American culture, which runs heavily to corruption of officialdom at every level and…

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Herron High School

Short one today.

My daughter has developed a great desire to transfer from her current school to Herron High School.  Herron is a college prep charter school.  Tuition free for students from anywhere in Indiana.  It’s located such that it wouldn’t be horribly inconvenient for me to drop her off on the way to work, and I can take a late lunch to pick her up at the end of the day, then just take her to the office until I go home.  It’s got a “liberal arts curriculum” which means 4 years of Latin.  4 years of English.  4 Years of Math.  4 Years of Science.  4 years of history/”social studies”.  Plus electives.  All with lots of AP possibilities.  They’re not connected to the Herron School of Art and Design except historically (the campus for the high school used to be the art school’s building) but they do have a very deep art track.

Herron is the top-rated High School in the city and the #2 rated High School in the State.

I could have really wished for that kind of opportunity back when I was in school.  Best I could do is just basically live at the public library.

Not too long ago she had a “shadow” day where she attended Herron and followed a student around for the day.  Tonight we went to an open house (just got home, which is why this is a little late), took a tour, and got registered so that when they begin accepting applications for transfer, we’ll get an email and I can apply immediately because applications are “first come, first served.”  We want to be at the head of that line so that Athena can get in.

So, wish us luck.