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Contraception: Controversial Health Care Mandate
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The U.S. Health and Human Services department (HHS) recently announced a controversial ruling that would compel most religious organizations to offer contraceptive services as part of their basic health care package. Churches themselves would be granted the “religious exemption.”
Sometimes it may seem hard to defend organizations which in many cases push intrusive meddling upon the rights and private lives of American citizens. Here we have a case where the exact same wrong is being perpetrated upon some of those religious groups. The danger in each case is that the wrongs are perpetrated through the offices of the United States government.
What was HHS thinking? Who would be beneficiaries of this new ruling? PBS reports that while churches themselves are exempt from the new rules, Catholic hospitals and universities must comply. Continue reading
“Occupy:” Say What?
We all dimly remember when some targets of the Occupy movement’s scorn struck some resonant chord with most of us. The popular spotlight on the vast 99%-1% gap was launched by Occupy. Public resentment against the unholy bank/investment bank consortiums who brought the economy to its knees in 2008 was brought into sharp focus by Occupy.
The cities of Oakland and Washington, D.C. are current newsworthy Occupy targets (among many others), further straining the resources of already financially beleaguered cities and their residents. And why Oakland, indeed? We don’t just have cities to house large law enforcement repositories. Believe it or not, ordinary citizens also try to live in cities, raise kids, and, if possible, earn a living.
Besides discovering that some police departments have learned nothing at all about police brutality vs. effective and humane crowd control in half a century, we don’t hear as much about Occupy these days because the question “how’s your poison oak” is only interesting to most of us for about the first week of the infection.
But they’re still here. What the hell do they really want?
To inspect the horse’s mouth – that part of the equine anatomy presented to those inspecting its teeth – I checked out an actual Occupy web site, OccupyWallStreet.
That site issues a disclaimer on the posted list of demands, “This content is user submitted and not an official statement,” but alas, I could not locate an “official” list. Here’s a smattering of the wackier zany demands I did find:
- Repeal the Taft-Hartley Act. Unionize ALL workers immediately. [Return of the 1923 "Wobblies?"]
- Open the borders to all immigrants, legal or illegal. Offer immediate, unconditional amnesty, to all undocumented residents of the US. [Oh, sure]
- Lower the retirement age to 55. Increase Social Security benefits. [Pie in the sky, a chicken in every pot]
- Ban the private ownership of land [Nyet, komrade]
- Make homeschooling illegal. Religious fanatics use it to feed their children propaganda. [Regular parents use it to give their kids real educations, too. Even Hippie parents couldn't have sanctioned this proposal.]
So much for the notion “Occupy” is for increased freedom.
Looking up “Wobblie” in Wikipedia, I find the following wording in their preamble to the “current IWW Constitution:”
The working class and the employing class have nothing in common. There can be no peace so long as hunger and want are found among millions of the working people and the few, who make up the employing class, have all the good things of life. Between these two classes a struggle must go on until the workers of the world organize as a class, take possession of the means of production, abolish the wage system, and live in harmony with the Earth.
Sound familiar? Occupy needs to re-focus or disband. I believe union and popular social movements that address social problems by hurling walls of human bodies into the maw are short-selling the potential of the 99% to conceptualize and debate real issues. “Let’s protest police brutality by seeing if we can provoke it” is not a solution. It’s a shopworn, coldly calculated gambit to manufacture martyrs for a cause that often doesn’t bear up well under closer scrutiny. Rather than performing public-service educational functions, why do these movements invariably send their supporters into the failed strategic equivalent of World War I trench warfare?
Occupy can jolly well get out of the cities and try a 21st-century communications solution, like the Internet.
Occupying Oakland makes about as much sense as picketing “Elmo & Oscar’s Kiddie Daycare Center” to force Assad to democratize Syria, or to induce North Korea to enthusiastically embrace free speech and elected government.
Ron Paul, Libertarianism and 2012 Issues
by Alex Forbes
“The time has come,” the Walrus said,
“To talk of many things:
Of shoes–and ships–and sealing-wax–
Of cabbages–and kings–
And why the sea is boiling hot–
And whether pigs have wings.”– The Walrus and The Carpenter, Lewis Carroll
How long will our existing two-party system last? What do the parties really stand for? When will elected officials stop governing on the one-way, top-down model? Everybody wants to know, and no one has the answers. All we can do here is look at the one party that continues to change and surprise, even if those come as unpleasant surprises to so many of us. What’s going on?
Republicans are scrambling to find someone articulate enough to stand up to Barack Obama in debate, yet look good wearing the party’s ultraconservative new clothes. Gingrich has a tarnished past and is viewed as somewhat volatile and unpredictable, but he can certainly handle debate. Ron Paul by all accounts would have been viewed as a crackpot only a few short years ago, and the more you look at his platform and ask the question “so how would this work?” the more dubious it looks.
But Ron Paul has an unaccountably strong following. Why? Ron Paul is articulate; he can explain things all of the other candidates fumble, even though they are generally all sipping from the same slipper. Why is only Ron Paul giving answers that seem to make sense to the Republican base, even if they only make sense when we don’t ask what would happen next?
Ron Paul has been called the “godfather of libertarianism.” How did we get from a fringe backwater political philosophy to a serious national candidacy?
This isn’t the forum to discuss libertarianism, a generalized political philosophy with 18th century roots which anchors the individual (not governments) as the unit of all social transactions, advocates minimization of government, prohibits the use of force in settling disputes, and usually has a strong platform on individual rights. A “free market” is viewed not just as an adjunct to those principles, but as indispensably rooted in them. In the U.S., libertarianism is more apt to affiliate with “right wing” policy, where in Europe one may still see variants such as “libertarian socialism.”
The old-time U.S. Libertarian Party never expected to win popular acceptance, so they didn’t have any identifiable next-step plan in the event that should ever happen. What seems odd is that, under the present success of the Paul candidacy, which may properly be regarded as a huge and unexpected popularity boost for the libertarian philosophy, they still don’t.
Over the years I’ve come to see how nations succeed by creating a culture and environment that brings all their citizenry into the participatory fold. Nations that leave their children under-educated, create exclusionary castes, shelter their elite classes, and cut loose their middle classes are, historically, nations on their way out. As corporations use to spout, “people are our most important asset.” What conservatives have forgotten in the past 50 years is that squandering people is not like squandering money. You cannot simply go out and get more. The just society is also the most efficient when everybody is a player. And efficiency is exactly what capitalism was supposed to be all about, was it not?
2012 is the first election year in memory when we the electorate could actually really use a primer to better understand some of the libertarian political tenets. First, we’ll survey some snippets of libertarian ideology. Afterwards, we’ll sample some of what Paul would like to do to implement them.
1. The Theoreticians
In 2012 we’ll face another contest between the two main US political parties. The Democratic Party seems to be the last safe haven for the moderate, leaving the old-school liberal in a kerfuffle. The Republican Party is the new, mean, aggressive soldier force for corporate America and the wealthy. Many people who are neither corporate not wealthy still believe this is a good cause that will trickle down for the rest of us.
Ron Paul breaks the mold.
This means, uh-oh doodie, talking about the last vestiges of capitalism’s theoretical underpinnings, as preserved through the dark ages of participatory democracy by the high priests of old Ayn Rand style libertarianism. That would be Ron Paul if it were anyone. Paul is the one candidate who most closely explains most platform positions of all the others, because he appears to be the only one who understands the theory, and he’s the only one advocating it. Continue reading
The Fallacy of False Equivalence
I was reading a convoluted article in The Nation entitled ‘The Proud Liar Mitt Romney Claimed Today‘ when I came across the phrase ‘the time-honored MSM tactic of false equivalence.’
I never did figure out author Eric Alterman’s reference to ‘MSM.’ Clearly not Methylsulfonylmethane, probably not Manhattan School of Music, even more clearly not Men Who Have Sex With Men. Ironically, Alterman is profiled as ‘a Distinguished Professor of English, Brooklyn College, City University of New York, and Professor of Journalism at the CUNY Graduate School of Journalism.”
But I did think I knew what the Fallacy of False Equivalence means. Or should mean … I looked it up too, of course. I fancy myself a student of rhetoric. I once even wrote a series of articles on rhetoric and persuasive writing. I found no really solid definition.
I think the fallacy of false equivalence is a modern composite re-invention of several older classical fallacies. It also seems to be endemic to political journalism. In my day we were trained to just call these non sequiturs (Latin, “doesn’t follow”).
The general structure of the false equivalence fallacy (and its variants) would have a structure similar to the following:
Deadly nightshade is a member of the potato family. Paprika and chili peppers are members of the same family. We must regard paprika and chili peppers as poisonous.
Or, one of the more family-friendly examples found in a blog by a gentleman named Wally who wrote a 2005 post called Generalized definition of ‘false equivalence’
I didn’t pay you back once when you lent me a dollar, you stole a dollar from my wallet, therefore we’re even.”
What statement actually got The Nation contributor Eric Alterman’s goat?
The most recent punditocracy kerfuffle involves Mitt Romney’s first paid presidential television advertisement. Ironically titled keep talking about the economy, we’re going to lose.” Deliberately left out of the ad were the preceding words: “Senator McCain’s campaign actually said, and I quote…”
I bring this topic up because we’re going to see a lot more real-life examples. For more information (and some examples that use cuss words) see the article The fallacy of false equivalence by Furry Brown Dog. He does an interesting analysis of the Bush v. Kerry campaign misuse of the Swift Boat furor, about which I happen to agree with the author: Bush’s stance boiled down to the claim Kerry’s Department of Defense documentation lied, whereas Bush’s anecdotal version was the contextually more accurate if you happened to be serious about voting Republican.
No, it’s not just Republicans. We need to watch election statements more critically, rather than blindly applauding anything which makes our side look better, no matter how egregious the misrepresentation. Non sequitur arguments are so embedded in the political culture that the discerning reader should have no trouble spotting them in either camp. But, as Guardian writer Michael Tomasky posts in his blog Can you play False Equivalency!?:
And no, people, I’m not saying liberals never do anything bad. I am saying (read slowly now): this. is. a. constant. habit. of. conservatives. in. a. way. it. is. not. quite. with. liberals.
BAD JOKE
The joke below has lain dormant on my Humor page for well over a decade now. No one knows who wrote it. No one remembers who sent it. There’ve always been several things wrong with it.
1) It’s too close to the truth.
2) There are too many variants of the joke, all kludged together by others trying to get more mileage out of a self-evident fact.
3) These days it seems more appropriate than ever.
Boat Race
The Americans and the Japanese decided to engage in a boat race. Both Teams
practiced hard and long to reach their peak performance levels. On the big
day they felt ready. The Japanese won by a mile.The American team was discouraged by the loss. Morale sagged. Corporate
management decided that the reason for the crushing defeat had to be found,
so a consulting firm was hired to investigate the problem and recommend
corrective action.The consultant’s finding: The Japanese team had eight people rowing and one
person steering; the American team had one person rowing and eight people
steering.After a year of study and millions spent analyzing the problem, the
consultant firm concluded that too many people were steering and not enough
were rowing on the American team.So as race day neared again the following year, the American team’s
Management structure was completely reorganized. The new structure: four
steering managers, three area steering managers, and a new performance
review system for the person rowing the boat to provide work incentive.The next year, the Japanese won by TWO miles!!!
Humiliated, the American corporation laid off the rower for poor performance
and gave the managers a bonus for discovering the problem.
Three Off-Focus News Items
It’s not that we’d like to see these news headlines go away entirely. We’d just like to see them addressed appropriately.
PERRY: Rick Perry’s brain-freeze debate debacle even went viral on YouTube. In truth everybody has “senior moments” like forgetting a word we know we should know, or walking into a room and forgetting why we went there. Fortunately most of us don’t have an opportunity to forget one of our three pet political platforms in front of millions of TV viewers. Even Perry’s admission that “he stepped in it” is symptomatic of the problem here. I’m not a Perry fan and never will be, but Perry inarticulateness isn’t the reason. If the GOP didn’t like the self-mortification of promoting embarrassing public speakers, it wouldn’t have backed Bush Jr. for two full terms. But if you want confirmation of how common this sort of brain freeze is, check out the interesting New York Times article on Rick Perry’s Brain Freeze.
CAIN: Charges of sexual harassment look bad for Herman Cain, but it’s far from clear whether Cain, his accusers or both sides have the credibility gap. I’ll wait until the facts are aired and sorted out. On a recent road trip I heard most of an LA talk show on this topic. All callers had already arm-chaired the scandal without benefit of the facts, which are still not known, and their “opinions” seemed to depend on whether or not they liked Cain. I don’t like Cain either, but whatever happened to due process and an impartial hearing?
PATERNO: Sacked Penn State coach Joe Paterno, 84, was accused of failing to act on molestation testimony against a formerly respected and long-serving coaching assistant, Jerry Sandusky. University President Graham Spanier was also just fired. Penn State students rioted against the loss of their coach, and presumably out of loyalty to their team. This misplaced at-any-cost “loyalty” is exactly what compounded the scandal in 2002 when college officials suppressed it. I think most of us would prefer to see a serious national inquiry into prevention of institutional child abuse and subsequent cover-up. As for Paterno and Spanier, it happened on their watch and they sandbagged it. The sackings were appropriate. Treating trusted college officials as the victims instead of the kids they betrayed is what’s offensively inappropriate.
‘Occupy Wall Street’ Protests
BBC News
Looking at the mock US flag displayed by protesters on Wall Street (click thumbnail for BBC graphic), we can see a field of thirty corporate logos in place of the familiar fifty stars. Most of us could come up with a list of fifty “bad” companies, couldn’t we? I can identify most of the thirty: Nike, Coca Cola, AT&T, Wal-Mart, Lilly, GM, Citi, Apple, Google, Fox, Verizon, Warner Brothers, Exxon, Visa, McDonalds, Disney, Pepsi, Ford, NBC, Intel, Master Card, GE, and Microsoft.
In my own humble microcosm of Americana, I don’t find many of the companies I’d personally fancy seeing there. We can all recall consumer protests against Nike, Wal-Mart, Exxon, and McDonalds. But, “do no evil” Google? Apple? These choices leave me baffled. In some political circles there must still be plenty of antipathy for any large US corporation: sized-based discrimination is sometimes still politically correct.
On one score I do sympathize with these protestors’ frustrations. Wall Street screwed the entire country in the events leading up to the global crash of 2008. But it’s never as simple as that, is it? The collapse having been orchestrated with the full oversight and blessing of the SEC, Fed, Moody’s, S&P and most of the Bush Administration, targeting “Wall Street” isn’t precisely accurate. It was the “too big to fail” bankers themselves that provided the mighty engine for a catastrophic recession that went viral across the globe. What the hell were they thinking? Citi certainly deserves its place on the infamy list, but I feel the sterling reputations of Bank of America, Wells Fargo and many others were tarnished by omission.
As I wrote a friend the other day,
In Europe, countries like Greece ruined the banks, but in the US, the banks ruined the country!In a somewhat personal aside, my best buddy’s dad was a VP in the “old” BofA (think green visor accountant types), and he is probably rolling over in his grave. None of us should be too surprised at the irresponsible greed of the usual Wall Street perps, but what the banks did was criminally insane.
Obama Says Texas Wildfires Linked to Climate Change
PolitiFact analyzed President Obama’s September 26 comment at a fundraising event, in which he said, “I mean, has anybody been watching the debates lately? You’ve got a governor whose state is on fire denying climate change.”
If you’re not familiar with PolitiFact, you can check out political claims at PolitiFact.com the same way and for the same reason we check out viral online rumors at Snopes.com. If you have an interest in the subject matter you should read the full PolitiFact article. It’s a good read and not that dense.
I found PolitiFact did a good job on their in-depth analysis of the President’s remark, which some White House aides dismissed as a tongue in cheek wise crack. After all, Perry is on record of being a climate-change denier, even as his state was ravaged by some of the worst fires on record – 3.8 million acres, to be exact.
PolitiFact rated the Obama statement “Half-True.” Cutting to the chase, scientists do not think it is good science to attribute a single event to a long-range phenomenon:
However, climate-change experts have also long urged caution in assuming that particular weather events are caused or influenced by climate change.Consider a June 2011 paper published by the Pew Center on Global Climate Change, an independent research organization. In the paper — titled “Extreme Weather and Climate Change Understanding the Link, Managing the Risk” — co-authors Daniel G. Huber and Jay Gulledge write that “when we ask whether climate change ‘caused’ a particular event, we pose a fundamentally unanswerable question.” In fact, they say it is “nonsense” to debate a direct climatological link between a single event and the long-term rise in the global average surface temperature.
The reason, Huber and Gulledge write, is the distinction between “climate” — a long-term pattern that averages many weather events over the years — and a particular weather event.
So we cannot say that any one specific forest fire, wildfire or hurricane is directly caused by climate change. What we CAN do is observe the long-range pattern of those events, and compare that to regional historical data. We can even say that increasing average temperatures may be expected to increase the incidence and severity of the events.
What no one can prove is that any one specific Texas fire was caused by global warming. Anyone can claim that it could have occurred anyway.
What they cannot say is that a long-range increasing trend in such events cannot be related to climate change. As long-range temperatures rise, average humidity goes down, long-range rainfall decreases, and any firefighter or forest ranger can guarantee us there will be more fires. Do the math.
Fine, but is there any evidence this incendiary uptrend is already occurring? The Pew study cited by PolitiFact addresses a fact of life already well known to residents of Texas, California, Arizona and New Mexico, for example:
“There is a well-documented link between the earlier start of spring, higher summer temperatures, and drier conditions during summer and fall — that is, climate change — and a dramatic increase in wildfire activity in the western U.S. since the late 1980s,” he said. “These observations reveal an increase in fire risk due to climate change.”
So climate-change deniers aren’t off the hook. Are there are other phenomenon which ARE directly related to climate change? Yes. Rising sea levels, for example, are already the cumulative global result of many individual events as snowpack, glaciers and icecaps melt in the mountains, on the fjords, and at Earth’s poles.
The Globally Disenfranchised Vote
Arab Spring. US corporations who buy elections. Hanging chads and disproportionately disenfranchised minorities throwing presidential elections. The packing of the US Supreme Court. The congressional budget meltdown. Unsubstantiable personal attacks on TV driven by political parties and leaders gone completely out of control. Campaign charges you can’t believe even in those rare cases you’d like to. Nations of sheep who are manipulated and stampeded into predefined niches at the polling place. In our new Information Age, a deficit of trustworthy information and news resources.
According to many young, representing the arriving new generations, the whole election process has become so corrupt it can no longer be trusted to represent the people.
Here’s current New York Times reporting on the phenomenon, “As Scorn for Vote Grows, Protests Surge Around Globe” by Nicholas Kulish (September 27, 2011):
But from South Asia to the heartland of Europe and now even to Wall Street, these protesters share something else: wariness, even contempt, toward traditional politicians and the democratic political process they preside over.They are taking to the streets, in part, because they have little faith in the ballot box.
‘Our parents are grateful because they’re voting,’ said Marta Solanas, 27, referring to older Spaniards’ decades spent under the Franco dictatorship. ‘We’re the first generation to say that voting is worthless.’
Economics have been one driving force, with growing income inequality, high unemployment and recession-driven cuts in social spending breeding widespread malaise. Alienation runs especially deep in Europe, with boycotts and strikes that, in London and Athens, erupted into violence.
But even in India and Israel, where growth remains robust, protesters say they so distrust their country’s political class and its pandering to established interest groups that they feel only an assault on the system itself can bring about real change. ”
Democracy is always a flawed, messy, disorganized process, but if we don’t clean up the processes designed to serve it, we’ll end up with something infinitely worse.
Taking a Second Look at Social Security
Recently Cousin Ron Lamont re-posted a Facebook “Like” quote by someone alleging that as early as 1967, liberal economists were calling Social Security a “Ponzi scheme.” This irritated me enough that I removed it with the “hide this post” tool. I’m still considering whether Facebook, a family-friendly safe space, is even the proper forum for hard-core political commentary and opinion.
So to be honest, It’s fair to say I started it all when I re-posted my personal website article “Social Security Not a Ponzi Scheme” on Facebook. Even though PolitiFact [1] rates Perry’s 2011 “Ponzi” statement as “False,” I’d have to rate the 1967 “Ponzi” allegation, far from being a “Pants On Fire” item, as “Half True.”
My cousin’s post was a fair turnaround. Now then, what’s the story about Social Security?
In 1967 Newsweek reportedly ran a column by noted liberal economist Paul Samuelson (of college Economics textbook fame). Samuelson in fact did compare Social Security to a Ponzi scheme [2]. This source cites numerous other early references to the same opinion, including the Wall Street Journal. The source notes that Samuelson was “actually drawing on the Ponzi analogy to defend Social Security”, a back-handed way for an academic to illustrate a point if ever I heard one. There’s a long history of groups that tried to pin Social Security to the mat before. You should read the PolitiFact assessment [1] of the whole issue.
In my first article I showed that Social Security is NOT a Ponzi scheme by definition, but an account that is actually but not physically held in each contributor’s name. Despite all the rhetoric about what Congress is doing or has done with those funds, the account is still due and payable according to the terms of the social contract. The obvious cause for concern is: how long will the Social Security trust fund remain solvent and be able to pay out on its obligations?
Over the years a major defense of Social Security has been that it is deemed “actuarially sound,” meaning that a statistical analysis of FICA and Employer Contributions, charting pay-in and pay-out amounts against actuarial table life expectancies shows that Social Security is paying its own way, or is at least solvent. Well, it probably would be solvent if its funds were securely invested at going interest rates like any other form of pension fund.
I recently read a cynical charge somewhere that when FDR and the New Deal Congress inaugurated Social Security in 1935, the actuarial life expectancy of the current generation of retirees was about three years. I couldn’t verify that. Social Security Online [3] presents a quite different accounting: “men attaining 65 in 1990 can expect to live for 15.3 years compared to 12.7 years for men attaining 65 back in 1940.” 1940 was the first year Americans could collect Social Security.
One study I can and did do is an analysis of my own SSI account. I started drawing on it at age 65 in 2009. Raw data includes all of my contributions from 1960 to 2009 (49 years), matching Employer contributions in like amounts, and even a withholding rate adjustment recalculation for a five-year period where I was mostly self-employed. Given the taxable income data posted to everyone’s annual SSA statements, and the withholding rate for each year [4], it is a simple matter to calculate annual withholding amounts without trying to locate 49 years of W2′s or Form 1040′s. My 49-year figures came within $186 of the government-reported withholdings. And I know exactly what my SSI income is.
I assumed those funds must be adjusted or amortized for the value of interest they should earn in any interest-bearing account, making no assumption about what the Congress and Treasury may actually be doing with our money. I chose a 5% APR. Some may object that the government doesn’t credit interest accruals to our account. I am calculating the value of the account, not just the portion allocated to us.
But what is the difference between the principal and principle plus accruals? My own contribution’s cash flow plus assumed accrual worked out to 148.47% of principal. (That’s so low because the early years contributed the least). I calculated what the future value [6] of each year’s total adjusted contribution would be by year 2009. Adding the sum of those payments plus interest equaled just under 12% of my lifetime earnings.
Obviously I won’t be publishing personal financial data out of privacy concerns, but you could run the same calculations on your own account using the source links I’ve provided in “References” below. If you do not yet have a retirement year and estimated SSI monthly income, use your SSA annual statements to make some assumptions. You need to know the effect of different retirement ages on SSI income anyway.
My own work experience may not be entirely representative. I probably worked somewhat longer than the average of all wage-earners. On the one hand, my wages include three years in the military, part-time income in college, and five years of exquisitely marginal self-employment income. On the other, I finally “capped out” on SSI contributions in my last years in the workforce. The difference is what those early years might have contributed to personal savings growth had my income curve been more even. That makes a big difference to my old age, but doesn’t materially affect the amount of my monthly social security payment.
We noted how low my wages were in those early years (even if adjusted for inflation, which we should not do here). My experience would be different from someone who went straight from college into a lifelong professional career. Those earners would “cap out” early, and the Social Security Administration fund would probably never “go into the red” for individuals least likely to depend on it. Conversely, my contributions would be proportionally greater than those of someone who, for example, left the workplace to raise a family, or on account of illness or disability. All I can conclude is that it sounds reasonable that a substantial proportion of the workforce probably survives to receive social security payments well in excess of that ever put into the fund. Perhaps people who complain that is not fair forget that’s the security benefit of a social security insurance plan. Private insurance plans of all types depend on the very same mathematical certainty of pooling of risk.
The reason we can’t add an inflation factor to our calculations is off-topic but worth examining. Savings and other interest-bearing accounts don’t take inflation into account either. There, a dollar is only a dollar whether deposited in 1960 or 2009. I ran the “Inflation Calculator” [5] on my yearly payments anyway, even though I could not fairly use them for my bottom-line calculations. It’s instructive to note that the same $36.13 worth of groceries in 1962 (my FICA contribution for that year) would cost $256.66 in 2009 dollars. Younger readers would not remember the late 1970′s, when so many of us consumed with plastic credit cards bearing an 18.99% APR, since we could more cheaply repay later with devalued dollars. It isn’t just the stodgy classic University of Chicago economic conservatives who call inflation the “hidden tax.” It is. Today we call it “Quantitative Easement.”
In my early years I argued that I would probably live to regret paying into the Social Security fund (as if I had a choice). My spreadsheet proves me wrong. Actuarially speaking, in my case, I should expect to get out of it almost exactly the value of what I put into it. The spreadsheet calculations revealed that my own account will hit “break-even” when I turn age 80.25, and my statistical life expectancy right now in 2011 is age 82.77 years.
Unfortunately, even considering my low-earning early years, the purchasing power of my Social Security “nest egg” would have been worth 91% more (almost double the real purchasing power) if we did not live in an inflation-addicted economy. Our “hidden tax” benefits the government in the short run, because it repays debt with cheaper dollars just like we did with the plastic 1970 credit cards. As you can see, in the long run inflation hurts all of us, including our government.
Unsurprisingly, conservatives and upper-income wage earners will argue that Social Security is inefficient and of limited value. Liberals, seniors and lower-income workers will argue that the vast majority of Americans need a safety net. Despite all the rhetoric on both sides, I’d like to know what is going to be done to save a program that has worked for generations of American retirees so far.
If Congress can’t or won’t fix the program we have now, it would be foolhardy to put our faith and trust in a poor substitute that takes the “insurance” out of Social Security insurance, or, even worse, in some scheme that’ll be shunted off to the same private sector that brought us toxic assets, job offshoring and an imperiled middle class. That’s just my opinion, but whether the polls prove that to be in the 51% majority or 49% minority, it can’t and won’t be ignored.
©Alex Forbes 2011
References
[1] PolitiFact, “Shacking up: Social Security & Ponzi schemes“
[2] Liberally Conservative, “Perry Wasn’t the First“
[3] Life Expectancy for Social Security, SSA
[4] Social Security Administration Trust Fund Data
[5] Bureau of Labor Statistics CPI Inflation Calculator
[6] Future Value: I couldn’t get the built-in Excel function to work properly in my spreadsheet. Just use the formula FV = PV ( 1 + i )^ t (see NetMBA Future Value) which, in the Excel cell, would look like this: =D5*1.05^G5 if cell D5 contains the principal and G5 contains the number of periods. 1.05 is the assumed interest factor compounded annually.
