Privatizing our Social Welfare

Privatizing Social Security, Medicare, and Medicaid

First of all, what does privatization entail? The privatization of these welfare programs would be completed through the use of a personal account, where your “taxes” would go. Instead of the government charging you taxes for Medicare or Social Security, any money that you would have contributed would be redirected towards an account that will invest the money for you. Like pension plans or state employee plans, investment is the only way to keep welfare programs solvent.

The problem with Medicare and Social Security today is that these are all programs that do not invest proceeds. Any money that you pay as Medicare or Social Security tax is sent to pay out current beneficiaries and any surplus is redistributed to pay off other government deficits. Rick Perry, the frontrunner in the GOP primaries, called Social Security a “Ponzi Scheme” and, frankly, I can do naught but agree with him. Merriam Webster defines a Ponzi Scheme as “an investment swindle in which some early investors are paid off with money put up by later ones in order to encourage more and bigger risks.” Let’s look at how Social Security works today. The early investors (those who are currently receiving benefits) are being paid off with money put up by later ones (that would be the people paying taxes now) in order to ensure more and bigger risks (this would be a growing beneficiary list). How is Social Security, in any way, different from a Ponzi Scheme? Medicare is the exact same thing. The surpluses that the program ran in the past was redistributed to cover for our deficits, and the only thing left in the Medicare trust fund were a bunch of IOUs from the American government. In addition, there’s no way that Medicare/Social Security/Medicaid can afford to continue paying out the amount that it’s been promising. When Social Security was established in 1935, and Medicare in 1965, nobody expected very many people to live on it for a long time. When Medicare was established and the eligibility boundary set at 65 years, the average life expectancy for an American was also about 65 years. Today, it’s 78.7 years. The creators of our social programs never expected people to live for 14 years on welfare and Social Security. They expected most people to die off. To the contrary, we now have retirees who are now on these programs for twenty, thirty, even forty years. Because of this, the number of taxpayers per beneficiary is also decreasing. We no longer have twenty taxpayers for every person taking Medicare. Now, it’s 1.9. The rates that were created in 1965 are no longer sustainable, and the surpluses that these programs have enjoyed for nigh on forty years have also expired. The Ponzi Scheme is about to collapse.

The only way we can fix this is through privitazation and public options. What this means is that people should no longer be forced to pay taxes to Social Security and Medicare that do not earn interest and are unsustainable over the long-term. Instead, we have to give people the option of diverting their Medicare taxes to a personal account that will be invested in the major index funds and bonds. Even with this conservative form of investment, workers can expect to achieve 4% gains annually, far more than the nothing we earn with our money in the hands of the government. In addition, as our money compounds, we earn more and more, with the end result being enough money to purchase private health insurance. People who retire at age 65 with personal accounts will then fund their insurance with money from their personal account. This is incredibly important because it once again puts power back into the hands of the consumer. By giving the consumer a choice, competition between insurance companies will naturally drop prices and allow for the consumer to purchase the best product, at the best price. Similarly, those who chose the personal account option for Social Security will have their money paid back to them in a reverse mortgage like fashion for forty years. Any money that is left over when the beneficiary dies will be passed on to the personal account of family members or heirs. In this way, we’re making it so that we can have a sustainable method of healthcare and Social Security that completely empowers the worker himself, not the government.

In addition, doing so would also cut deficits and reduce the federal debt. The problem with Medicare and Social Security today is that they no longer run surpluses, but rather run deficits. Any deficit that they run only adds on to our debt burden, and their deficit is certain to increase in the future as more and more people retire and fewer die. By creating a personal account or a public option, we allow these people to transition away from Medicare and Social Security, taking off the debt burden of these programs.

In conclusion, the privatization of Social Security is a necessary and essential component to whatever road America decides to take. By privatizing these social welfare programs, we empower the consumer, give them more flexibility, and also reduce the debt burden on our government. 

Letter to Mr. Kessler 2 - Benevolent Despotism vs True Democracy

Mr. Kessler,

     You were talking about how government, like religion, rules by keeping its people ignorant and keeping them afraid. And, as members of the people, we can agree that this is obviously something that we should strive to change. However, from the perspective of the government, is this not the best way to rule? Dissenting opinion creates gridlock. Unanimous opinion creates reform. The easiest example of this is the current gridlock in Congress. In an era of new technology, it has suddenly become much easier to learn about our government's policies and their effect on us. This ability to "free think" also means that we arrive at different conclusions. While previously most people agreed that gay marriage is anti-religious, we have only to think for a few more minutes before we begin to question that assertion. This questioning creates disparate groups that have different ideas. For gay marriage, we have a side that wants to pass legislation legalizing it, a side that wants the government to take no action, and another side that wants the government to ban gay marriage. This "free thinking" split our people in three. Before, everybody wanted a ban on same-sex marriage (SSM), but now, there are three groups that are each pressing to have their opinion legalized. This creates immense problems for a government that relies on a majority vote to determine what passes and what doesn't. Because we have three groups, it has now become nearly impossible for any legislation whatsoever to be passed. For something to pass, it would require the unanimous support of one group and the majority support of another. When the stances are so far-ranging and the similarities so few, such a result would be highly unlikely. And so the government's use of fear and ignorance to pass legislation is a justifiable one. If we adhered to our radical right-wing, superreligious views, we would be able to pass a bill that bans gay marriage. While some people may not agree with this, most will, because they are too ignorant and too stupid to think about the consequences. Are all people happy? No. Are most people happy? Yes. Ignorance is bliss for many. My point is this: ignorance/fear allows the creation of a majority. Free thinking only allows for the creation of permanent minorities and dissent. 

     In addition, people who are afraid or stupid are malleable. A person who thinks is not. Malleability is key to an electorate because it allows for rules and order. If, for whatever reason, I thought about drunk driving and reached the conclusion that I disagreed with the drunk driving law and chose not to obey it I would cause chaos for many people. Similarly, a minority that takes action based on their opinion can create havoc. If I were, however, malleable enough to agree with whatever explanation the government offered, it would serve society. Malleable also means more porous. If we believe that the information that we get from our government is always true, we are more likely to believe it and to absorb it. If we continuously question, however, we will likely form independent thoughts and "conspiracy theories." My point here can be summed up with the phrase: People who think are hard to govern. The more a constituency thinks, the harder is is for the government to institute change. The less a constituency thinks, the easier it is to institute change. 

     Perhaps it would be easier for you to see this from a parenting standpoint. Do you teach your kids about the reproduction cycle as kids? I would venture to say no, because you feel either that "they don't need to know yet" or that
"they're not mature enough yet," or some other argument that follows that logic. But it's for their good, right? It's always for their good. And so it is the same with government. Following this analogy, I would associate free thought with puberty. This is literally the time where children begin to think for themselves and begin to question the decisions of their parents. You may have a different idea of what's best for your child than your child does. And, just like government gridlock, we now have parents that panic and are unable to "parent" their children. It is also in this period that many children experiment with drugs, alcohol, and tobacco. Think about it as a parent. would you want your kids to follow your instructions or to question them? I realize that you are likely going to say that "I want my kids to be able to think by themselves," but you will probably get to a point where you would just wish that they would do as you say. 

     Ironically, it seems to me that you're arguing a form of libertarianism. Your goal, through free thought, is to maximize political freedom and to allow for individual opinions (minority opinions) to count in the how our government works and runs. I believe you're arguing for free thought as a form of individual liberties. Not important, just wanted to point that out. 

Sensationalist Media and Private Education

While large corporations do their best to create false impressions for their products, the emergence of sensationalist media neutralizes it well. Media is based around news - something new or unexpected. Because of this, it has a tendency to sensationalize what it's reporting in order to gain viewers or followers. This sensationalist approach to media means that all companies must tread carefully with their advertising campaigns, for a single misstep would cause large ramifications. The easiest example of this would be The Jungle, by Upton Sinclair. His book created huge changes in the meatpacking industry, and also caused an increase in regulation. However, this regulation was unnecessary because the consumers were already aware of potential infractions. The media makes it so that consumers are more aware of what they're purchasing and what they're eating. On a more general basis, corruption and fraud are also easily reportable, and serve to have very large effects on a company's reputation. Even if a media organization was "sleeping with Corporate America," the development of social media and "viral videos" means that no major news organization can ignore potential problems. Social media has made it so that a single misstep by a corporation that is detected will be broadcast to the world. The stakes for any and all companies have increased, and this increased risk will prevent unfair advertising. In the past, regulation was necessary because the companies and the consumers were not equals. Today, however, the development of social media and the growing sensationalism of regular news organizations mean that companies will be far more wary of attempting to take advantage of their customers.

Charter schools are preferable to public education because charter (private) schools allow for increased competition and efficiency. The basis behind increasing state and federal funding to charter schools is clear - it is merely the natural transition from a socialist-esque education system to one that is more capitalistic. Private schools are better for several reasons. First, without district boundaries, parents can choose which school to send their children to. This is the basis for competition. By putting the decision in the hands of the consumer (parents,) we allow for competition between schools to attract students. Secondly, private schools have fewer unionized teachers and can pay their teachers in an unregulated fashion. The current union system that many public school teachers participate in fails to adequately serve our students. Instead of paying teaches based on effective teaching, we pay them based on seniority. In addition, it is almost impossible to pay the best teachers the salaries they deserve, because we are overpaying the inadequate teachers. This means that fewer and fewer intelligent people are becoming educators. At a private charter school, teachers can be paid based on how well they teach. An easy metric for this would be test scores. Which teachers allow for the greatest increase in test scores? Now, the easy argument against this would be that this would create teachers who "teach to the test" and teachers to promote cheating. However, a student satisfaction survey would help to alleviate these fears. Most students are relatively smart. The difference between a good teacher and a bad one is light and day. By factoring student opinion into teacher pay, we can also prevent some of the cheating or "teaching to the test." Teachers who teach to the test are generally inadequate at answering questions. Anything not on their syllabus is generally an unknown. This would naturally decrease student satisfaction. Cheating is also a very risky proposition for teachers. Not only do some students have morals, the survey only requires a single student to report cheating to penalize a teacher. With class sizes ranging from thirty to forty kids, it is highly unlikely that a teacher would be able to pull off this feat. Charter schools are therefore an ultimate solution to these problems. The only problem that they face - affordability, can be ameliorated with government subsidies to families who need support. Just like college, the current public education fund can be diverted to a "High School Pell Grant" fund, or the like. Our tertiary education system is the best in the world. It is based on a purely capitalistic system, where the school gets little money from the government, but much from the students. By reforming our secondary education to more closely mirror the tertiary, we may also be able to replicate the success that we have there. 

Letter to Mr. Kessler

Mr. Kessler,

Never got a chance to talk with you about the topics brought up in class today, so I figured I might as well send an email. I don't know if this email even works, as the staff directory certainly doesn't any more, but it's not hard to put the first letter of your first name and your last name together.

If we approach this problem from a different angle, it's easy to see the answers to a lot of your questions. I'm also disagree with some church's method of collecting new churchgoers, but religion as a whole is relatively sound. No person is ever religious or non religious. Technically, we are all agnostic. Who can prove the existence of God? Not you, and most definitely not me. But our beliefs differ because of what we think are the PROBABILITIES of God existing. True agnosticism is the belief that the chances of God existing are 50/50. Maybe it's this, maybe it's that. And no one can argue with agnosticism. But it's only gained mainstream acceptance because of the liberalization of society. As our country continues to become more educated, and as more and more of our people feel like they are being trampled by the middle class, our society has begun to lean to the left. Acceptance for gay marriage and abortion has now become the majority instead of the minority. There are posters on our school doors that say "This is a safe and secure environment for all LGBT peoples." Strikes are featured prominently in our media, and it's generally portrayed as a big corporation stomping on the little guy. We're all leaning left. and it's not a bad thing. Times change. Opinions change. Right now, religion may seem like a big joke. But as we become more disgruntled with the Democratic leadership we have now, people may just start to lean right. This is because voters care more about fiscal and economical issues than they do about social issues. The number one question posed to presidential candidates is "How are you going to fix the economy?" While abortion, gun rights, same sex marriage, and immigration reform are still as polarizing as they were four years ago, our priorities have since changed. As we begin to lean left on fiscal issues, we also find ourselves leaning left on social issues. This is because voters generally go down their list of importance when looking at potential candidates. Because Bush tanked our economy so royally with his tax cuts and wars, most people turned to the opposite party to govern differently. This meant that voters went down their list, looked down at #1, saw, "Fix the economy," looked up, saw a Democrat, and said, "Yeah, let's vote for him." Voting for a democrat for fiscal issues means also having to adopt his stance on social issues. What this long and verbose aside was meant to say was that the ideas presented today seem so rational because they line up so well with our society's beliefs. Frankly, one of the results of having an unpopular Republican president is that the Republican Party gets a bad rep. And as Republican denials of perfectly logical plans increase in number, so does their unpopularity. Your commentary sums up the frustration with the "No" party quite well. Religious fanatics? Check. Stupid and illogical? Check. Bailing out Wall Street and taxing Main Street? Check. 

I feel, however, that the Republican's fiscal policy is sound. The ideology behind their ideas were the basis of today's America. Our country was founded on the foundations of equality and opportunity. Equality meant that everybody was taxed and represented equally. Opportunity meant that every man had the chance to go out, win it big, and keep what he earned. The Golden Age of American industrialism continued on the backs of the rich. Rockefeller, Carnegie were rich, and rightfully so. They had WORKED for their money. But our tax policy today - the belief that we should tax the rich and feed the poor, is exactly what keeps us from having sustainable growth. Growth always comes from the pockets of the rich. Taxes always come from the pockets of the rich. But now, an ever increasing amount of money is flowing from the upper middle class and true upper class into the bottomless pit that is the poor. Social Darwinism stated that it was not possible for everybody to be rich. You always have to make your money from somebody else. However, our current tax policy is highly detrimental to growth because it taxes growth so heavily. Why invest a million dollars into a company and hope to get three million out of it when you know that the government is going to take half of it? We're feeding a vicious cycle. The rich earn money from the poor - big corporations earn money from selling consumer products. The profit earned from this, rather than being invest and recycled into more R&D or more advanced technologies, is being taken back by the government. And what for? To pay out the welfare checks for the poor, who go out there and help corporations make more money from their purchasing of consumer goods. Generally, the cycle rotates upwards. As R&D develops new technologies, companies can earn more money, consumers have to pay less, and we are all better for it. But instead of this winning formula, our current leadership chooses to instead fuel this vicious cycle of stagnancy, where they take money away from the people who can do the most with it and put it in the hands of the people who can do the least with it. When you earn 25K, what are the chances that you're going to be the guy to come up with penicillin? But when you leave that money with the corporations, they can take millions, if not billions of dollars to fund new projects. But no. They take money away from the companies that will make something NEW, and give it to people who can only purchase something OLD. And in the midst of this, graft, corruption and inefficiency mean that it's a cycle that will only continue to become more vicious. As the government runs out of money to give out, they choose to take even more away from the corporations. And guess what? Corporations choose not to fund new projects, not to create new consumer goods because they know any profits they do make will be stolen to put a band-aid over a gaping fiscal deficit. So much for better leadership. The Republican ideology, therefore, offers a pleasant alternative. Tax cuts are meant to stimulate growth. Growth means increase in tax revenues, which offset the lower percentage of taxes. Growth means more employment, which means more tax revenue. Growth means less spending of stimulus that doesn't work, and more money spent to take care of the red ink on the bottom of our budget where it says projected results. Are tax cuts the only way to do this? No. But it has become quite obvious that the Democrat's choice for increased spending and increased stimulus isn't working. 

The remarks of right-wing commentators and candidates for political office - Their remarks are meant to do one thing: inspire the demographic that the Republicans target. Republicans do not target young, Latino, non-religious voters. They target the old white man, as you would probably put it. The demographic that these candidates are aiming for in the primary are a highly religious, fiscally and socially conservative group. These candidates know they cannot hope to win the primary offering up moderate views on hot-button topics. The Republican party wants a Republican candidate, not a middle of the road candidate. The Republican voters care little about the chances of a potential GOP candidate. They care about how he represents their views and their ideas. A far right-winger like Perry or Bachmann is much more endearing to the American Republicans because he offers everything that the demographic wants, and more. Candidates like Huntsman and Romney, on the other hand, are far less likely to commit to radical stances on hot-button issues. Romney's refusal to sign the abortion pledge is an easy example to remember. Everything that these candidates or commentators say is meant to do something for their position in the Republican party. It's like going to a plastic surgery conference and talking about the best way to perform plastic surgery on the world. While the idea that you can change your physical appearance is very appealing to these surgeons, the society as a whole does not really accept it as "mainstream." Celebrities are roundly criticized for their eagerness to undergo these operations, and plastic surgeons are also under the gun for offering them. In the end, the proclamations of Republican candidates is only outrageous to you because they weren't designed to target you. They were designed to inspire the average, religious Republican. From our perspective, it seems to be nothing but religious BS. But from their perspective, it's a legitimate statement that can fire the hearts of millions of potential voters. 

Do Something New for Once

Here's a challenge for you: Every day for the next week, go outside and introduce yourself to a stranger. Then, friend the stranger on Facebook and post the name here. Have fun!

Clarification and Response

Apparently, there have been some misconceptions about my previous post. When I mention equal taxes, we must realize that equal taxes merely means an equal percentage tax. America's tax system is tiered, which means that if A earns more than $175,000, A pays 33% income tax, while B, who earns $82,400, pays only 25%. This is, of course, assuming that A and B are both single. If we look even further down the line, the people who earn $30,000 pay only 15%. Of course, because the taxes paid in the highest bracket is seperate from the others (JUST LIKE YOUR WATER BILL) the true tax percentage for all is slightly lower. However, this does not change the fact that the person who earns $100,000 is paying more taxes, and at a higher percentage, than a person who earns only $50,000.

Look. The whole point of this post - equal taxes means equal percentage. Using your math equation, A is the guy who has a million dollars and B is the guy who has 50,000. Assuming an equal tax of 20%, A would have .8(1000000) and B .8(50,000) after a year. After ten years, .8^10*A and the same for B. The point is, nobody's going onto the street faster than the other guy. They'll both hit a point where they've got no money at a similar time, B a little faster, but that just more incentive for him to get off his lazy ass and start working.

Your random Indian thing - that's why Guism is better.

As for your China stuff, since you're saying A -> B -> C -> D and I just disproved A; B, C, and D, are also disproved.

I would write more, but I've got another stomachache. Fricking Carnival and wanting to earn money from bottled water. At least give me clean tap water.-_-

The Virtues of Capitalism and Being a Republican

If you're a true Guist and have read Ayn Rand's The Fountainhead, then this will all seem like old news to you. If you haven't, you should, but I'll try to describe why Capitalism and low taxes/small government is the best choice for Washington.

Taxes take from the rich and give to the poor. Now, all of you are probably wondering why this is such a bad thing. The truth is, we all want to help the poor. But we must learn that helping the poor may not be the best choice for America. The poor people are poor for a reason. A huge number of them are unproductive people with no jobs. Others take low-paying jobs as migrant farmers or McDonald's workers. These people do not contribute to society. Sure, they'll take your order for a Big Mac and fries, but they are not the entrepreneurs, they are not the inventors, they are not the engineers that will create tomorrow. They are people who leech off the rich and earn tax refunds and tax breaks from the government. The rich, on the other hand, are the people who are actively looking to create a new America. They are the entrepreneurs and the creators. But the tax system that we have today only punishes these "Prime Movers." Our tax system fails to tax the poor but excessively taxes the rich. With this kind of system, where is the incentive for our creators to keep creating? Why should the CEO of Apple keep creating new products if he knows that he is only going to be taxed more and more on his income? Why should Bill Gates create new software if he knows that America's government is just going to take all the money that he earns? There is no reason for these people to continue to be the leaders of society. There is no reason for these people to create products that appeal to the masses. It is true that we have not yet reached the stage where the government is taking away all your profits. But we are coming dangerously close. We have a huge federal deficit, and, instead of cutting spending, Obama is proposing tax increases. America needs a small government that has low income taxes. Sure, this will mean that the worker from McDonald's won't be able to take food from a food bank, but why should he? Why should our precious tax dollars continue to be used to fund programs that are feeding people who don't give back? With low taxes, there will be no reason not to invent. There will be no reason not to create. With low taxes, it will be as if Uncle Sam is saying, "Go on! Make! Create! Be Productive!" instead of "Go on! Make and be productive so that I can take all your profits and leave you just like everyone else." It's like the story of the boss who says, "Work harder, and then maybe I'll be the richest man in the world." What's the point of working if some IRS agent is just going to collect all of it? Low taxes and small government. It's the only way to get America working again.

Capitalism. It was the foundation on which America was born. And it is a foundation that we are drilling through and destroying now. During the recent financial downturn, what happened? Again, the government interfered. It used our tax money to prop up AIG, Bank of America, and countless other companies while the American people struggled to make ends meet. We didn't pay taxes so that the lousy second-handers would just get a free paycheck. We paid taxes for the good of us all, for the stimulation of the economy and the support of small businesses. We paid taxes so that America could be the power that it once was. But that hasn't been what the lawmakers on Capitol Hill have been using our money for. They've been handing out money by the boatloads to the bankers and the carmakers. And these people don't deserve the money. There is a difference between rewarding those who create and rewarding those who destroy. The leaders of GM, Chrysler, and Ford took steps to ensure that their companies would go down during a recession. They consolidated funding to pickups and large SUVs. They refused to fund smaller, greener cars. And it bit them in their tiny tushes. They made mistakes that would tank the US economy. And what did the government do? It rewarded them for those mistakes. It gave them money to continue their flawed enterprises. That money could have been diverted to small businesses. Capitalism allows the consumer to decide which companies are the best. We decided that GM and Chrysler were flawed and unreliable, but what did the government say? They said, "Here! Here are billions of taxpayer dollars that you can borrow for almost no interest so that you can keep your sinking ship afloat. Here is the lifeblood of the American economy. Do whatever you want with it." And they did. They still kept paying bonuses to executives. They still created large cars that wouldn't sell. They still made the same damn mistakes that doomed them the first time. And they were rewarded for it. Capitalism was the basis of the American superpower. We have strayed from it, but it's not too late. If the lawmakers in Washington take action, they can get America back to normal. 

Capitalism and small government. That's all that it will take to get small businesses running again. The incentive to do so and the ability to succeed. That's all that those businesses need. It's up to Uncle Sam, however, to decide if he wants to allow that to happen.