13. May 2012 by admin.

Many years ago, before I entered the workforce, I understood that Social Security is not a retirement program.  It is a tax, whose proceeds are used to pay retirement and other benefits.  The difference is subtle but important.

In a real retirement plan, the money collected from you and/or your employer is invested over time.  In a defined-benefit plan, there is a commitment to pay you in the future at a specified rate.  In a defined-contribution retirement plan, the money is held in your name and invested.  But in either case, the money is invested in a productive enterprise, so that it will grow, and the amount paid in at the beginning is driven by the amount to be collected at the end.

Under Social Security, the money that you and your employer pay is lent to the rest of the government and spent.  The money that you ultimately receive in benefits is paid by current workers.  The vaunted ‘trust fund’ is an accounting fiction.  And the politicians who vote for new goodies can just as easily vote to take them away.

I didn’t know about defined-benefit and defined-contribution plans in 1979, when I was finishing high school.  But the rest of it, I knew back then.

And it wasn’t a deep dark secret: I read about it in books from the library and bookstores.

The government wants us to believe that Social Security is a pension plan.  They even send out statements every year with the benefits that we might receive, if the politicians don’t change their minds.  But it isn’t so.

Now, I’m roughly halfway through my working life.  With the recent discussions over the Social Security tax, it’s really clear that it’s fake.  (The employee share of Social Security tax was cut by a third a couple of years ago, as a temporary measure.  The cut was continued after raucous debate, as it was the only tax cut that reached the majority of ordinary Americans.  A real pension plan, driven by the need to pay people in the future, would never do that.)

Yet people still believe that Social Security represents a commitment for their retirement.

Now that I’m halfway through my working life, I would have liked to believe that Social Security would be there for me.

But now I’m sure that I will ultimately retire in a coffin.

Posted in Politics, Dysfunctional Government, Money | 3 Comments »

12. May 2012 by admin.

This week, President Obama, our Non-Leader, came off the fence and indicated that he was in favor of marriage between two people of the same gender.

On one level, it seems eminently reasonable.  Civil marriage gives a couple a passel of legal rights with respect to each other: inheritance, joint tax returns, access to medical data, etc.  If two men or two women are in a committed relationship, and want to avail themselves of these rights, they should be able to.

But outside of the legal definition, and the couple themselves, is such a couple really married?

Marriage has existed for eons as a basis for family and children.  It’s true that not every married couple has children, but if you have a man and a woman who presumably like each other’s company sleeping together, you have to at least admit the possibility.

Today, heterosexual marriage is not the ‘basis’ that it used to be: some 40% of the births in the United States are to unmarried women.   Admitting marriage between two men or two women would further erode the status of marriage as a benchmark for families.

And this is what many people worry about: not so much the rights of gay couples, but the impact of redefining ‘marriage’ so that it is no longer exclusively heterosexual.

Unfortunately, railing against it won’t help.  The societal forces that led us to consider gay marriage won’t go away if we pretend they don’t exist.  The Rick Santorum solution–if we legislate the morality of the 1950s, we’ll all be happy and prosperous again–won’t work.

While I acknowledge that gay marriage is an idea whose time has come, I don’t have to like it.

Posted in Popular Discontent, Politics | 9 Comments »

20. April 2012 by admin.

My parents were lifelong Democrats, and I’ve always been a registered Democrat.  While I’ve been bitterly disappointed with the party of late, and considered the alternative, I can’t bring myself to change to the other side.

Yesterday, I received an e-mail from the Democrats, offering me a bumper sticker:

Is the Democratic party totally incapable of identifying one positive characteristic about the party, its platform, or its candidate that people would want to post for the world?

In 2004, Bush’s campaign promise, in a nutshell, was ‘I will keep you safe.’   Kerry’s was, ‘I am not Bush.’  Kerry lost.

The Democrats will have to do better, or else they’re toast.

Posted in Politics, George Bush (43) | 1 Comment »

25. March 2012 by admin.

Last week, I was having a chat with a conservative friend.  He was my boss, years ago, and since retired.

“The conservatives say that one of the reasons we’re not doing so well is excessive government regulation,” I said.  ”Supposedly, if we ditch all these rules, we’ll unleash growth and create jobs.”

“Right.”

“But there are vast enterprises, with billions of dollars and tens of thousands of workers, associated with these regulations.  Not just the government bureaucrats, but private-sector consultants and others, all associated with the maintenance of and compliance with these regulations.  What happens to them?”

“That’s not my concern.  They’ll just have to find work for themselves in the new environment.  Did you expect the government to help them?”

No, I really didn’t expect the government to help them.  In fact, however onerous and pointless they may seem, most government regulations have a political constituency behind them, which will make them hard to get rid of.

But as much as I’d like to believe otherwise, it seems more likely that cutting government regulations will destroy more jobs than it creates.

Oh, bother.

Posted in Politics, Dysfunctional Government, Things Falling Apart | 1 Comment »

19. March 2012 by admin.

When Barack Obama was running for President, he had the entirely reasonable idea of letting the Bush tax cuts expire for those making over $200k/year.  In December 2010, he caved and signed on to an extension of the tax cuts for two more years, even though the government was (and still is) running huge deficits.

What happened?

Allow me a somewhat fanciful explanation:

Sometime after he was elected but before he was inaugurated, President-elect Obama was briefed on the realities of our world and the Presidency.  He was told the truth about terrorists and UFOs, the proper way to order an ICBM launch, and the location of the secret White House Coke machine.

I’ll speculate further that he was also given a briefing rather like the ‘primal forces of nature’ speech from the movie Network about how the US was doomed, and how he couldn’t raise taxes on the rich, or tweak entitlements, or do any of the practical things that one might think of to actually address the problems we face.  He was also informed in grisly detail of the consequences for proposing such heresies, or telling the American public the truth about what we are facing.

And so Barack Obama, apostle of Hope and Change, became yet another politician.

But we didn’t get that briefing.  We’re outside the corridors of power, watching our country crumble around us, wondering, if not about our next meal, where our meals will come from two years from now.

If we set aside, for a moment, our notions of what is politically correct or feasible, how could we restore productivity and prosperity?  Or is it really a lost cause?

Posted in Politics, Dysfunctional Government, Money, Barack Obama | 1 Comment »

30. January 2012 by admin.

In recent weeks, Congress has at least temporarily dropped efforts at preparing a law to address intellectual property (IP) and trade piracy: the Stop Online Piracy Act (SOPA) and Protect Intellectual Property Act (PIPA) have been dropped in response to widespread online protests.

That isn’t to say that IP piracy isn’t a  serious problem: it is.  But SOPA and PIPA were the wrong way of dealing with it.  Essentially they gave the government the power to subvert the normal operation of the Internet by making Web sites unavailable, to require Internet service providers (ISPs) to support such efforts, and the ability to do so without due process.

Now we find out that, a few months ago, the President signed the Anti-Counterfeiting Trade Agreement (ACTA), that supposedly requires all these things.  It requires ISPs to be the copyright police, interferes with efforts to import generic drugs, and all other manner of evil.

Well, maybe.

I’ve read the actual ACTA, as it was agreed to by various countries of the world, twice.  (It’s not terribly long: about 30 pages.)  I didn’t find any reference to ISPs having to be the police, or of any of the other evils that I had read about.  All it says is that member countries shall have laws in place to deal with trade and IP piracy.  The requirements for these laws are eerily similar to current US law.

Earlier versions had more troublesome requirements, but they didn’t make it into the final version.  Our leadership may go and enact more Draconian restrictions, but they could do that anyway.

So, yes, Internet freedom is under attack, as a long-term trend.  SOPA and PIPA may return in some form later this year, and there may be future versions of ACTA that will require ISPs to function as police.

But the current ACTA, not so much.

Posted in Politics, Networking (computer) | No Comments »

22. August 2011 by admin.

The Republicans, who consider the entire concept of taxation to be evil, have found a tax increase that they actually like.

Last December, in an effort to stimulate the economy, Congress passed a one-year reduction in the payroll tax.  The actual rules are a bit complicated, but basically, the roughly 8% Social Security/Medicare tax that every working American pays (including the nearly half that don’t earn enough to pay Federal income tax) was reduced to about 6%, a little more than a 25% reduction.

Now we’re looking for ways to cut spending, and the Republicans are proposing not to extend this tax break for another year.  If this were a package deal, together with ditching the Bush tax cuts, I’d be OK with it.

To be fair, the Republicans have a point: putting a few hundred extra dollars into the pockets of ordinary Americans (who don’t create jobs) won’t do much to pull the economy out of its slump.  On the other hand, putting thousands of extra dollars into the pockets of the richest Americans hasn’t helped much, either.

For my part, I’m not sure that tax cuts do that much to stimulate the economy, and I get annoyed with politicians of either stripe who push for tax cuts just to score votes.  But the underlying argument of the Republicans is mean-spirited: rich people’s money is valuable to the economy and not to be taxed, while poor people’s money ‘doesn’t create jobs,’ and therefore fair game.

Posted in Politics, Money, Barack Obama | No Comments »

17. July 2011 by admin.

Before 2000, when politics were less polarized, I used to observe that given two candidates, one Republican and one Democrat, who were about evenly matched on the issues, I would vote for the Democrat.  I noted that while the Republican was a little closer to my views on the principles, the Democrat seemed more like the person I’d prefer to see in office: a little more humble, a little more trustworthy.

Some time after 2001 I read the thought somewhere that Republicans view power primarily as an opportunity, while Democrats see it more as a responsibility.

In our current debt-ceiling brouhaha, the Republicans like to point out that now-President Obama voted against a debt-ceiling increase while a Senator during the Bush administration.  But the Democrats relented then, at least partially because they saw maintaining a functioning government as part of their responsibility, even if a President they didn’t agree with was spending too much.

Since I last wrote, not much has changed in the current debt-ceiling drama, except that both sides have hardened their positions, and our President has gone out on a limb and suggested raising the retirement age for Social Security and making other entitlement tweaks.  But he isn’t supported by Democratic Congressional leadership, while the Republicans absolutely insist that there be no new taxes, because that kills jobs.

(There is a cogent rebuttal to that: the economy has become fractured, which portions doing really well, and most of us having trouble.  In that case, it is reasonable for the government to seek to fund itself by taxing the part doing really well more heavily.  Note that we’re not doing this to set up new programs, but to keep the promises we’ve already made.)

Some radicals on the right have suggested that we should ’starve the beast’ and relentlessly cut taxes until government can no longer function.  The Republicans have the opportunity to do that now.  They can remake government in their own image, if they can just tough it out for…

16 days.

Posted in Politics, Dysfunctional Government, Money | No Comments »

30. April 2011 by admin.

The other day, President Barack Obama released his long-form birth certificate, supposedly ending the controversy over whether or not he was actually born in Hawaii.  While I find myself opposed to his policies (even after I voted for him!), the whole ‘birther’ exercise seems pointless and stupid.  (And it isn’t over: some are asserting that the long-form birth certificate is itself a forgery, and 70% of the respondents in a poll in the Daily News assert that the release of the certificate does not close the issue.)

For my part, if competent authority saw fit to issue Obama a US passport–that indicates his place of birth as Hawaii–well before he became President, then he’s a US citizen, born in Hawaii.  He spent most of his youth and adolescence outside the US, and was therefore not steeped in American culture, but that doesn’t disqualify him to be President, and nevertheless, we voted for him.

In other news this week, both AlterNet.org and Glenn Beck (weird combination!) came forward with the a draft form proposed by the Department of State for new passport applicants.   The form asks for your immediate relatives (parents, siblings, children), every address you’ve lived at since birth, and every job you’ve held, including your supervisor’s name.

Once upon a time, I was a New York subway conductor.  Every day, I was assigned to a different route.  I guess my ’supervisor’ would have been the Crew Dispatcher, but I never met him and don’t remember his name.

If you weren’t born at a ‘medical facility,’ there is an additional series of questions, including your mother’s address one year before and after your birth, medical care she received, and other records of your birth.  (But if you were born at a medical facility, I guess you get the short-form birth certificate from your local Department of Vital records and you’re good to go.)

The reports don’t indicate the context in which the form will be used: whether it’s for all applicants, or just those who can’t otherwise document themselves.  The one context where the form would genuinely seem to be useful is for a child of illegal immigrants who is born in the US in someone’s house.  (As much as some may resent it, it’s still the law of the land, and even if the Constitution is changed, those already born here will still be citizens.)

But it will be genuinely be chilling if this form is required for all new passports, and freakish if it is required for renewals.

I guess I’ll find out when my passport runs out in two years.

If I have to fill out the form, I’ll have to find our who the Crew Dispatcher was.

Or can I just dig up a copy of my long-form birth certificate?

Posted in Politics, Dysfunctional Government, Barack Obama | No Comments »

24. April 2011 by admin.

When I was in my early twenties, one of my aunts recommended the Ayn Rand novel Atlas Shrugged to me.  It illuminated my life: it clarified my place in the world, and the power of one’s mind and of productive energy.

On 15 April. a movie version of the first part of the novel was released.  I finally got around to seeing it today.  It’s a little strange: it’s playing at a regular theatre, not an art house, but there is very little publicity about it: no newspaper ads, no TV commercials, not even a poster in the lobby.  In fact, if I hadn’t been for some random Web surfing a couple of weeks ago, I would have missed it.

It’s not spectacular: the production is clearly constrained by its budget, and in the interest of not making it too ‘talky,’ some of the wit in the original dialogues was dropped.  But it’s a good telling of the story, with solid performances.  I went today with my son, and will take my wife to see it next weekend, if it’s still open.

The popular perception of the movie is heavily politicized, but both sides are wrong.  Liberals see Ayn Rand as vaguely evil, with her warnings against altruism.  But it’s not that she didn’t believe in charity: it’s that she didn’t believe that it was the government’s job to subsidize people out of poverty.  And conservatives praise her as an apostle of free-market economics, which is true, but she was a champion of free enterprise without government help, which is very different from what passes for capitalism today.

In any case, it’s a good picture.  I enjoyed it, and look forward to Part II.

Posted in Ayn Rand, Politics, Movies | 1 Comment »

14. February 2011 by admin.

In my recent readings, I’ve come across something that seems extraordinary in our time, but really wasn’t.

For most of our history, we didn’t worry about Federal budget deficits.  The government went into debt at its inception, for the Civil War, and for World War I.  In between those events, the government ran a surplus, and paid down its debt.  It was only when we started trying to use deficit spending to get us out of the Depression that we got into trouble.

The Founding Fathers regarded public debt as dangerous, and for about 150 years, we believed them.  To be sure, it wasn’t always smooth sailing.  There was boom and bust, but generally we recovered more quickly from the busts than the present situation.  And taxes went up and down, depending on the vision of the party in power.  But the idea that the national debt was something to ultimately pay off was accepted by just about everyone.

In 2000, when we had been running a surplus for a couple of years, Bush, the candidate, said that the surplus belonged to the American people, and he would give it back through tax cuts.  And, indeed, once elected, he did just that.  The surplus was not meant for us to rebuild, and prepare for the next crisis: it was a big fat cookie jar waiting to be raided.  So much for the dangers of public debt.

So why can’t we return to our roots?

Because trying to pay back our debts would mean both higher taxes and lower spending, and both of these are politically unacceptable.

It was a charming thought, though….

Posted in Politics, Money | No Comments »

12. February 2011 by admin.

Yesterday, Hosni Mubarak stepped down as President of Egypt, after three weeks of demonstrations.  Egyptians at home and all around the world rejoiced at the prospect of freedom, as the army took over.

No, that last part was not meant as a joke.  The people were happy because the army took over.  That part seems a little strange to me as an American, who considers the military as an agency of the government, but I understand that other parts of the world do things differently.

For our part, the American leadership was all over the place in responding to the events in Egypt, because, in brief, we’re not sure what to do about it.  On the one hand, we’re pleased that the Egyptian people are striving for political freedom.  On the other hand, President Mubarak was a strategic ally, and Egypt is the one Arab nation that is undeniably at peace with Israel.  In a practical sense, we were sorry to see him go, but we couldn’t say that too loud.

But what happens next?

The immediate cause of the demonstrations in Egypt was increased food prices and poor economic opportunity.  But I don’t see how replacing the President as leader with a general, or even the transition to greater political freedom, is going to change that.

From our perspective as Americans, we worry that some Islamic group will take power, ditch the peace with Israel, and generally give us trouble.  But not knowing the facts on the ground, there is not much we can practically do.

Except pray and hope for the best….

Posted in Egypt, Politics, Barack Obama | No Comments »

11. February 2011 by admin.

As I read from both the right and the left side in our current economic troubles, it strikes me that each side has inconvenient truths that it ignores.

The left likes to say that we spend too much on defense, and the world will be a better place when schools have all they need and the Air Force has to hold a bake sale to buy a bomber.  But that’s not quite true: in the 2010 Federal budget, 18.74% of expenditures went for defense, while over 56% went for Social Security, Medicare, Medicaid, unemployment, and welfare.  And our leadership is contemplating drastic defense cuts to help address the deficit: the bomber bake sale is not far off.

The right believes that tax cuts are the answer to everything, as they will unleash a flood of productive activity.  But the best returns on investment do not come from productive activity in this country.  They come from productive activity elsewhere, and trading in third-hand, second-rate mortgages.

Both sides believe that a little deficit spending is a good idea to help spark a stalled economy.   But Keynesian stimulus, as we’re finding out the hard way, only works when applied intermittently.  If you indulge in deficit spending all the time, it loses its impact.

Posted in Politics | No Comments »