Why Rick Perry is wrong - Social Security is not a Ponzi Scheme

For years, I've mistakenly thought of Social Security as a Ponzi Scheme.  I was wrong.   
What's a Ponzi Scheme, you ask? 

Here's the U.S. Securities And Exchange Commission's answer:

A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.

During the recent Republican debate, Texas Governor Rick Perry made a stir by declaring that Social Security was a Ponzi scheme.  Lamestream Media outrage immediately blanketed the earth.  Animal shelters were working overtime because of the MSNBC Talking Heads having multiple litters of kittens all over their desks.  If I remember correctly, Rachel Maddow and Chris Matthews stood and ceremonially tore their garments and dipped their foreheads in hot vats of black ashes.  (I've got it Tivo'd at home, and will correct the names if necessary.)  Mitt Romney, in a white heat to look like the responsible adult in the room, rushed to the program's defense.  New York Timesians have gathered to reconcile their faith with the inconvenient evidence of Ponzi-ism. 

I laughed and laughed.  I shouldn't have. 

According to Reason magazine, my current source of infallible doctrine, Social Security isn't a Ponzi scheme.  Here's why:

1)  Ponzi schemes take money from new suckers and use it to pay older suckers.  Social Security collects money from new victims, uses some of it to pay previous victims, and spends the rest on stimulus packages, Cash For Clunkers, TARP, wars, prisons, slop, slush, and kickbacks to supporters and government drones.  Trillions of dollars from the Social Security Lockbox have been looted in this manner. 

2) Ponzi schemes attract their money through fraud and lies.  Social Security funds are collected at gunpoint.  If you disagree with that statement, try not paying for Social Security. 

3) When Ponzi schemes run out of suckers, they collapse.  When Social Security starts running low on suckers?  The men with guns simply raise your rates.  Here's the Cato Institute:

In fact, Social Security taxes have been raised some 40 times since the program began. The initial Social Security tax was 2 percent (split between the employer and employee), capped at $3,000 of earnings. That made for a maximum tax of $60. Today, the tax is 12.4 percent, capped at $106,800, for a maximum tax of $13,234. Even adjusting for inflation, that represents more than an 800 percent increase.

In 1950, every retiree had sixteen Social Security victims working to support him.  We now have only three suckers working to support every retired sucker.  In 2030, it'll be only two suckerw working to support every retired sucker.  Look for the men with guns to increase your rates. 

So.... according to Reason magazine, Social Security is not a Ponzi scheme (in the Bernie Madoff sense of the word). 

It is something much, much worse. 

I regret my previous error. 

The vintage poster came from here. 

A reaction to the Jobs Speech

I didn't get to listen to Obama read his Jobs Speech.  I've read most of the transcript. 

Libertarians generally believe that the purpose of the Democrat and Republican parties is to ladle massive amounts of pork to their supporters. 

They've done it for so long that our debt level is killing the economy.  Entrepreneurs are worried about starting anything new, not in this climate of debt and inevitably higher taxes.  Nobody from anywhere else on the planet is very interested in starting a business here. 

The purpose of the Democrat and Republican parties is to ladle massive amounts of pork to their supporters.  They'll always find a good reason to do so. 

Judged by that standard, Barack Obama, because of Porkulus, Cash For Clunkers, multiple wars, spending levels that make Imelda Marcos look like a medieval hermit, and this latest appeal for more slop to be dumped into the communal troughs, I'm preparted to say that....

BARACK OBAMA IS THE GREATEST PRESIDENT EVER. 

We will never see another one like him, and we should enjoy this while it lasts.  We are like beginning musicians getting to watch Beethoven compose symphonies, or amateur artists watching Van Gogh paint.  Because you are lucky enough to be alive at this moment, you can tell your grandchildren that you got to watch Barack Obama hand out money. 

A reminder for all Human Resource and Personnel Managers

Are you prepared to hire millions of people tomorrow?  Barack Obama's Jobs Speech will be read live from the teleprompter tonight, and millions of new workers are going to be required at your companies to meet the pent-up customer demand for your goods and services following this essay by a community organizer. 

Or it could be that consumers are going to be scared shitless again by the prospect of having to come up with, say, another 300 billion dollars to finance these boondoggles.  In that case, never mind. 

 The "Are You Ready" poster came from here. 

LateBlogging the Republican Debate. September 7, 2011 - total failure at pretending to be interested

If it weren't for Ron Paul, I wouldn't be doing this. 
I usually liveblog interesting debates.  This one won't be interesting.  I didn't even get home in time to liveblog the thing.  Thank you, Tivo. 

Ok, here we go. 

Mitt Romney and Rick Perry just finished a little argument over who created the most jobs as governor.  Perry claims that Michael Freakin' Dukakis created more jobs as Massachusetts governor than Romney did.  Romney claims that George W. Bush created more jobs as Texas governor than Perry did. 

Who gives a rip?  You know who isn't here at this debate?  Former New Mexico governor Gary Johnson.  He's wasn't invited to this thing because he's a libertarian-ish sort.  Johnson claims (truthfully) that he didn't create a single job as New Mexico governor.  He just got the government out of the way and let the private sector take care of it.  Can you imagine anyone at MSNBC letting that cat out of the bag to run around on this stage, making a mockery of the proceedings? 

The MSNBC moderators (and the rest of the lamestream media) ought to show how many government employees were on the payroll before and after the Romney and Perry administrations.  That's what matters. 

Michele Bachmann just ripped ObamaCare a new one. 

Brian Williams just asked Ron Paul how the world would survive without government regulations.  Ron Paul just gave a somewhat rambling answer, but got to the point.... we don't need the government to do it.  "But who would keep the airplanes from dropping out of the sky?"  Paul shoulda said "follow the Canadian model and privatize it.  Canadian Air Traffic Controllers don't fall asleep on the job."  But he just said, essentially, let the Free Market handle it. 

Why is there an airplane hanging over the audience? 

MSNBC, like most left-wing organizations, is having a hard time making things work properly.  They can't coordinate their video clips with the debate moderators' questions. 

The debate moderators are trying to hang the Massachusetts RomneyCare model on Mitt Romney (where it belongs).  Romney is dodging the question, and talking about what he would do in the future. 

These people are talking about jobs as if they're the goal of a business.  Jobs are not the goal.  They are a by-product.  Lordy. 

Michele Bachmann is claiming that she's the only person with the legislative experience to repeal ObamaCare. 

Gingrich is trying to get some party unity going, claiming that all of his brothers in pork are against ObamaCare, and he's not going to put up with MSDNC trying to get Republicans fighting with each other. 

Herman Cain, after multiple appearances on Stossel, Freedomwatch, and debates that I've seen, finally cut loose a rip on ObamaCare that I could agree with. 

God help me.  Rick Santorum just answered a trick question on welfare, using words that I could have possibly written.  I think the entire world, after the last 3 years, is now leaning Libertarian. 

Bachmann says that "energy" is one of the greatest opportunities for job creation that we have.  Bullshit.  Outlawing "energy" and digging ditches with spoons would create the most jobs.  But that's not the point.  We'll have good job creation when we allow entrepreneurs to get filthy stinkin' rich.  Jobs are merely a by-product of that process. Deal with it.  Thank you. 

They just asked Ron Paul if eliminating the minimum wage would create more jobs.  He answered that it would.  Didn't even think about it.  Why?  Because it would. 

Ron Paul just scared the shit out of me.  I thought he'd lost it.  He said he could create a gallon of gas for a dime.  Yes, for a dime.  But yes, if you have an old-school silver dime, it's now worth $3.50. 

Brilliant.  Freakin' brilliant. 

Now Perry is attacking Paul for quitting the party, and writing an anti-Reagan letter.  Paul says Reagan taxed too much and spent too much.  Yep.  Until Obama came along, more debt was rung up under presidents named Reagan and Bush than all other presidents combined.  Look it up.  Hit the Ronald Reagan label at the bottom of this post. 

Ok, the airplane hanging over the audience is Reagan's Air Force One plane.

Shortly after hitting Ron Paul with an anti-Reagan question, they're acknowledging Nancy Reagan in the audience and giving her a round of applause.  Nice. 

Rick Perry is saying good stuff about Social Security being as broke as The Ten Commandments, and that anyone who promises money to today's young workers is lying. 

Mitt Romney, bless his Mormon heart, is defending Social Security.  Let's see two workers support one retiree.  That's where we're headed. 

Rick Perry, bless his perfect hair, is calling Social Security a Ponzi scheme.  Because that's what it is. 

Herman Cain, bless his thick crust, just suggested that we go to the Chilean system for retirement plans.  Go here for info. 

The moderators have now taken us off into inoculations.  I bet fluoride in the water supply will be next. 

Ron Paul just hit a home run on a TSA question.  Now Brian Williams is going after him on FEMA.  Paul asks him back "What happened before 1979 when we didn't have FEMA?"  Let the states handle it.  Doh. 

Herman Cain wants to fix FEMA and fix Homeland Security.  Good luck, Herm. 

Jon Huntsman is bleating about what he did for job creation. 

I can't watch any more of this.  With the possible exception of Ron Paul, I can't drink enough beer to imagine any of these people being willing to cut out a single cabinet-level department.  I can't imagine MSDNC asking the question. 

If something happens that's remotely interesting, I might expand on this thing.  Dull, dull, dull.  Talking points, talking points, talking points.

Good night !!

If you're disappointed in this blog post, I apologize. Here's a fun video:

Some clarification on the remarks of Jimmy Hoffa, Jr.

Jimmy Hoffa Jr., made a big fuss during an Obamessiah campaign event.  (That's Jimmy Hoffa the current Teamsters Union president, not the elder Jimmy Hoffa who was convicted of fraud, jury tampering, and bribery.)

He told his union audience:

That’s what we are going to tell America…..When he sees what we are doing here, he will be inspired, but he needs help. And you know what? Everybody here has got a vote. If we go back, we keep the eye on the prize, lets take these sons-of-bitches out and give America back to America where we belong.


There was an earlier reference in his speech to The Tea Party, and if you're willing to skip about 4 paragraphs of other stuff, Jimmy Jr can be interpreted as saying that it's time to take The Tea Party sons-of-bitches out. 

(You can already buy T-shirts.)

I believe Hoffa meant that it is time to take generic sons-of-bitches out, not necessarily Tea Party sons-of-bitches.  And who are these generic sons-of-bitches?  Anyone who opposes Hoffa, the unions, or The Teleprompter Jesus, perhaps.  Here's some clarification:

Hoffa describes the combatants in his “war” as “workers” on the one hand and “the Tea Party” on the other. But of course he isn’t interested in workers in general, only those who belong to unions–a group that, after decades of private-sector union decline, largely consists of employees of government, government contractors and government bailout beneficiaries such as General Motors and Chrysler. “The Tea Party,” meanwhile, is a dysphemism for taxpayers.


A dysphemism, in case you're wondering, is a substitution of a more offensive or disparaging word or phrase for one considered less offensive.  For instance, my preferred phrase "Fascist Union Thug" instead of "Teamsters President" is a dysphemism. 

Hoffa was not calling Tea Party members "sons-of-bitches" as far as I can tell.  He was calling taxpayers "sons-of-bitches". 

I hope this clears up the matter, and that we can all move forward. 

BTW, for everyone who works in shipping, freight, warehousing and logistics....  Did you know that UPS is a Teamsters Union outfit and that FedEx is not?  And that part of every dollar you spend with UPS goes to Jimmy Hoffa, and part of that money goes to support The Teleprompter Jesus and all his works? 

Remember, you have choices.  Money spent with FedEx doesn't go to Jimmy Hoffa, Jr.  Let your UPS sales rep know what you think about being called a son-of-a-bitch.   

Why Herman Cain should not be elected president

....because if he didn't throw himself between us and this abortion of a campaign ad, he's not fit to do the job of president.   
Lord have mercy.

Somebody please tell Maureen Dowd that Maureen Dowd is the Maureen Dowd that Maureen Dowd has been waiting for

Maureen Dowd, disappointed and feeling jilted, is surprised that Barack Obama is still the same guy with the exact same faults that she wrote about here. These blurbs are from a 2007 editorial about Obama's debate performances:

But often he reverts to Obambi, tentative about commanding the stage and consistently channeling the excitement he engenders....

In the South Carolina debate, Senator Obama was — absurdly — taken by surprise when Brian Williams asked the requisite Dukakis question designed to elicit manly passion: How would he respond if Al Qaeda hit two American cities?

In the New Hampshire debate Sunday night, Mr. Obama again missed his chances. Hillary is the one he needs to unseat, but he treads gingerly around her....

Mr. Obama let the opportunity for a sharp comment pass....

He missed another chance when Hillary said at the beginning of the debate that she believed “we are safer than we were” before 9/11, even though the Democrats won Congress with the opposite argument last fall, and even though the Iraq war has clearly made the world more dangerous than ever.....

And now, to prove that leopards don't change their spots, here's M. Dowd's editorial from earlier this week:

The leader who was once a luminescent, inspirational force is now just a guy in a really bad spot....


 As James Carville acerbically noted, given a choice between watching an Obama speech and a G.O.P. debate, “I’d watch the debate, and I’m not even a Republican.”


The White House caved, of course, and moved to Thursday, because there’s nothing the Republicans say that he won’t eagerly meet halfway.

No. 2 on David Letterman’s Top Ten List of the president’s plans for Labor Day: “Pretty much whatever the Republicans tell him he can do.”


MSNBC’s Matt Miller offered “a public service” to journalists talking about Obama — a list of synonyms for cave: “Buckle, fold, concede, bend, defer, submit, give in, knuckle under, kowtow, surrender, yield, comply, capitulate.”


And it wasn’t exactly Morning in America when Obama sent out a mass e-mail to supporters Wednesday under the heading “Frustrated.”


It unfortunately echoed a November 2010 parody in The Onion with the headline, “Frustrated Obama Sends Nation Rambling 75,000-Word E-Mail.”


“Throughout,” The Onion teased, “the president expressed his aggravation on subjects as disparate as the war in Afghanistan, the sluggish economic recovery, his live-in mother-in-law, China’s undervalued currency, Boston’s Logan Airport, and tort reform.”


You know you’re in trouble when Harry Reid says you should be more aggressive.


If the languid Obama had not done his usual irritating fourth-quarter play, if he had presented a jobs plan a year ago and fought for it, he wouldn’t have needed to elevate the setting. How will he up the ante next time? A speech from the space station?


Republicans who are worried about being political props have a point. The president is using the power of the incumbency and a sacred occasion for a political speech.


Obama is still suffering from the Speech Illusion, the idea that he can come down from the mountain, read from a Teleprompter, cast a magic spell with his words and climb back up the mountain, while we scurry around and do what he proclaimed.


The days of spinning illusions in a Greek temple in a football stadium are done. The One is dancing on the edge of one term.


The White House team is flailing — reacting, regrouping, retrenching. It’s repugnant.


After pushing and shoving and caving to get on TV, the president’s advisers immediately began warning that the long-yearned-for jobs speech wasn’t going to be that awe-inspiring.


“The issue isn’t the size or the newness of the ideas,” one said. “It’s less the substance than how he says it, whether he seizes the moment.”


The arc of justice is stuck at the top of a mountain. Maybe Obama was not even the person he was waiting for.

Hey, folks, we're Americans.  We're not sheep.  We're not supposed to be waiting on anybody.  We need political "leaders" like we need testicular cancer.  You are the one you're waiting for.  I'm the one I'm waiting for.  Maureen Dowd may have been waiting on Obama to lead her to some New York Holy Timesian Promised Land, but she should be the exception.  We have a great system of government, but The Founders didn't put enough safeguards in place to save us from people who want to save us. 

 Hell, can you imagine Thomas Jefferson rolling out proposals for economic growth?  John Adams worrying about saving or creating jobs? 

Heck, Libertarians think a lot of Ron Paul, but we generally don't think refer to him as He Who The Prophets Foretold, or the One Who Will Bring Balance To The Force (except in jest).  We simply believe that he really would take a chainsaw to government.  Nothing too special about it. 

(Actual Campaign Poster)

The Libertarian Party awaits your support.  We want to march on Washington and demand nothing.  We envision a system of government so small, so inconsequential, that the major TV networks would never dream of televising our debates about Afghanistan, or our speeches on the economy.  

Afghanistan and the economy are none of our business.  Or Barack Obama's. 

Becker, Krugman, and spending other people's money

Nobel Prize winning economist Gary Becker has some more to say about Warren Buffett's assertion that Warren Buffett is undertaxed.... (Buffett is currently in a dispute with the IRS about how much he owes in back taxes, BTW.) 

Warren Buffett has persuaded 68 other billionaires to follow his example and promise to give at least half their wealth to charities. But why hasn’t Buffett proposed also that the very rich make large gifts to the federal government to offset what he considers ridiculously low taxes on their incomes and wealth? My guess is that he and the others who pledged to give away their wealth to charity would have little confidence in how the government would spend such gifts. Buffett, for example, is giving most of his wealth to the Gates Foundation, not to the federal government, and is relying on how this foundation will spend his vast gift. Given this reluctance to make large gifts to the federal government, why should anyone have confidence that the federal government will spend additional tax revenue in a sensible way?

Go here to read Nobel Prize winning economist Paul Krugman's assertion that we need to either print, borrow, or steal enough money to give the government so they can't crank out another stimulus package. 

Can anyone out there name a single instance of wisely spent stimulus money?  Anybody?  Anybody at all? 

Here's a highlight from Krugman's editorial:

Although you’d never know it listening to the ranters, the past year has actually been a pretty good test of the theory that slashing government spending actually creates jobs. The deficit obsession has blocked a much-needed second round of federal stimulus, and with stimulus spending, such as it was, fading out, we’re experiencing de facto fiscal austerity. State and local governments, in particular, faced with the loss of federal aid, have been sharply cutting many programs and have been laying off a lot of workers, mostly schoolteachers.

And somehow the private sector hasn’t responded to these layoffs by rejoicing at the sight of a shrinking government and embarking on a hiring spree.

O.K., I know what the usual suspects will say — namely, that fears of regulation and higher taxes are holding businesses back. But this is just a right-wing fantasy. Multiple surveys have shown that lack of demand — a lack that is being exacerbated by government cutbacks — is the overwhelming problem businesses face, with regulation and taxes barely even in the picture.

No, no, no, no, no.   The United States government is going to spend more this year than it did last year.  They're going to spend more in 2012 than in 2011.  They're going to print or borrow the money to do this. 

ObamaCare is not yet repealed. 

Card Check is not yet dead and buried. 

Our government has not yet taken the suggestions of The Libertarian Party, and gotten the hell out of the economy.  And our government is really, really crappy at intervening in the economy. 

That's enough to make the U.S. a crappy place to do business, or hire people. 

I'm betting that Paul Krugman has made some good investments in his day.  If Congress passes another stimulus package, someone should challenge Krugman to "invest" in the same companies that Pelosi/Boehner/Reid pick for stimulus spending. 

Seriously, can you imagine someone saying "My broker is Barack Obama...and when Barack Obama talks, people listen !"  (This is a 1980's reference.  Sorry for the obscurity.) 

The Little Pink House, Kelo v. New London, stealing stuff, and government incompetence

In 2005, the Supreme Court handed down its decision in Kelo v. New London, using the powers of eminent domain to seize property from one private owner and hand it over to another private owner -- a developer who promised more than 3,000 new jobs and $1.2 million in tax revenue.

In other words, someone's campaign contributor wanted some land, but didn't want to sell at the price the contributor wanted to pay.  Favors were called in.  Strings were pulled.  Stuff was stolen.  Nothing more to it than that. 

This is from the Gideon's Trumpet blog:

As regular readers of this blog know, the redevelopment project that gave rise to the wretched U.S. Supreme Court decision in Kelo v. New London, never came about. In spite of the city’s boasting about the quality of its plans, nothing was ever built on the Fort Trumbull site from which the city displaced an entire unoffending, well maintained lower middle-class neighborhood. Though the formal taking took place in 2000 and the U.S. Supreme Court gave its approval to it in 2005, the city’s project has been a failure, with 91 acres of waterfront property sitting there empty and overgrown by weeds.

Now, we learn from the local newspaper, The Day, that following the hurricane Irene, the city has designated the Fort Trumbull redevelopment site as a place to dump vegetation debris. For a video of locals dumping that stuff on the site, click here.

Connecticut taxpayers have thus been soaked tens of millions of dollars, not just for nothing, but for making things worse — for transforming a nice local neighborhood into a dump.

Here's a video of citizens hauling their post-storm crap to what was once a nice little neighborhood:

The best book on the Kelo vs. New London case is Little Pink House. 

Here's a summary, from Amazon.com:

Suzette Kelo was just trying to rebuild her life when she purchased a broken-down Victorian house perched on the waterfront in New London, CT. The house wasn't particularly fancy, but with lots of hard work Suzette was able to turn it into a home that was important to her, a home that represented her new found independence.

Little did she know that the City of New London, desperate to revive its flailing economy, wanted to raze her house and the others like it that sat along the waterfront in order to win a lucrative Pfizer pharmaceutical contract that would bring new business into the city. Kelo and fourteen neighbors flat out refused to sell, so the city decided to exercise its power of eminent domain to condemn their homes, launching one of the most extraordinary legal cases of our time, a case that ultimately reached the United States Supreme Court.

In Little Pink House, award-winning investigative journalist Jeff Benedict takes us behind the scenes of this case -- indeed, Suzette Kelo speaks for the first time about all the details of this inspirational true story as one woman led the charge to take on corporate America to save her home.

I'll never understand what makes voters believe that their city councils, governors, state reps, congressmen, or presidents have a clue about economic development.  Why?  Because they don't have a clue. 

And even if they did, it wouldn't justify theft.  Here's some John Mellencamp, on the joy of owning a Little Pink House, and not having to worry about Fascists stealing it. 

This means you, Jerry Jones. 

Dr Ralph has thrown in the towel. But that doesn't change anything.

My friend Dr. Ralph has apparently given up on The Teleprompter Jesus.  We're sitting at my favorite bar, The Corporate Image, having finished an acoustic guitar jam.  The good Doctor was kind enough and gracious enough to direct me to this post. 

It doesn't say anything about the failure of Obama's Keynesian economic policies, just the defeats and failures on the topics nearest and dearest to Dr. Ralph's heart. 

Be sure to read the Doctor's last sentence.  It can be summed up as follows: 

Dr. Ralph has approved this message.  He now wants the world to know (now) that he was a Hillary delegate in 2008. 

I can't quite swing him over to the Ron Paul camp. Dr. Paul is too dang honest for Dr. Ralph's taste.  Dr. Ralph respects the fact that "Dr. Paul has removed the filter from his mouth and brain".  That's a direct quote from Dr. Ralph.

Dr. Ralph has approved this message.