Archive for the ‘social security’ category

Is Socialism A Real Fear?

January 20, 2019

Recently I got into a discussion with friends over what danger some of the new Democrat Congress members posed.  “Why that woman from New York wants free college education for everyone” one friend said.  “How is the country going to pay for it?”  The person added, “that woman wants to tax the rich to pay for it and that means we are going to have to pay more in taxes”.  Hmmm.

Where does one begin?

The friend making that statement probably lives in the 90th% income bracket which is about $150,000 in yearly income.  The couple probably have a pension, social security, and some income from investments.  They own a home and a vacation house.  They live comfortably but certainly not extravagantly.  Compared to average household income of $61,000, they are doing well.  So why the fear of free college?

My friend did not stop at having to pay higher taxes.  My friend quickly added, free college education would take the US to socialism.  And another friend said, “from socialism, communism was next.  And just look at Russia, Venezuela, and Cuba”  (I guess they had never visited China.)  Hmmm.

These two friends are both educated, well spoken, and otherwise reasonably charitable people.  From where could this disconnect from logic and reality come?  That’s a “foxy” question I think.

I wonder whether my two friends have thought why someone would advocate for free college education in the first place?  I wonder whether they realize that educated people are a resource just like rivers, roads, and electricity.  An educated work force drives prosperity.  In the US, unemployment, average income, and home ownership are all correlated to whether one has a college education or not.

Of course the likely reply would be, “I had to pay for my college education, so should the kids today”.  Hmmm.  I would quickly agree to that if there were options for kids to borrow at no interest the money to pay for their college education and depending upon what profession they chose or where they applied their college education, there were “forgiveness” provisions.  

In many respects, the free college education argument is a red herring with respect to the risks posed by socialistic regulations and laws.  And the connections between socialism and communism are faint if at all.  Socialism arises invariably to counter the excesses of capitalism.     Hmmm.

Most people are surprised to see how much in our daily lives is a form of socialism.  Public roads, libraries, and utilities are starters.  Social Security, the VA hospital system, and the host of consumer protection agencies are socialistic in nature.  All our discrimination laws, rent protection, and FHA loans in some way overcome excesses of unfettered capitalism and are a bit socialistic.

The question of why unfettered capitalism is not dangerous is deceptively difficult to answer.  Unfettered capitalism opens a world of possibilities for those who seek to succeed in business and accumulate wealth.   But given time, the entrepreneur becomes very wealthy and for most everyone else, life can become a little (or a lot) less good.  

In a wealthy country, like the US with abundant natural resources and protection from enemies by the Atlantic and Pacific Oceans, great wealth can be amassed though hard work and intelligence. Question… if all it took was hard work and intelligence, why would these entrepreneurs not go to the Sahara Desert or the North Pole and put their skills to work?  Capitalism’s success has a lot to do with the inherent natural resources, which in some way belong to everyone, and how these natural resources are harvested by the risk taking capitalist.  A hard working, risk taking socialist should be just as successful under similar circumstances, I would think.

But, one might ask, why aren’t socialist Venezuela and communist Cuba successful countries?

Does anyone think that if Venezuela or Cuba simply said “unfettered capitalism” is the way of the future, that life would change?  IMO, history has shown that all that would change is who the rich people were.  The poor would remain poor.  

There is no simple formula for accumulating national wealth.  Clearly abundant raw materials play a big role.  So does motivated entrepreneurs and an educated and skilled work force.  And, don’t forget “guns and butter”.  A country consumed with defending itself militarily will not have the time or ability to concentrate on economic development if it is preoccupied defending its borders.

With Venezuela and Cuba there is another factor which IMO outweigh all the others.  These countries lost their way when they cast aside “democracy”, rule of law, and free speech/free press.  Graft, corruption, and incompetent leader escape the natural consequences of their decisions when free speech and free press are suppressed.

One last observation.   Countries like Japan, Germany, France, the Netherlands, Denmark, or Canada all utilize more socialistic laws and regulations than the US.  None of these countries are teetering on the edge of communism.  And all these countries offer their citizens healthcare costs roughly 1/2 or less that the US with healthcare outcomes uniformly better.  Hmmm. 

Ready, Set, Fire, Aim

January 16, 2017

With only a few days left before President-elect Trump becomes President Trump, the feeling is like the calm before the storm. On Friday, January 20th, 2017, the Republican Party gets a full house and a friendly President to boot. The GOP wish is to undo the last 8 years and make the future like the past, the distant past. The public has been advised “to fasten their seat belts” and watch our elected leaders make things happen beginning on the very first day.


We can remove some mystery about any consequences from GOP actions. There will be massive reductions in taxes paid by the top 1%. Even the irresponsible repeal of Obamacare is at its core a tax cut for the wealthy.

Corporate tax rate reduction unless accompanied with elimination of business tax deductions, exemptions, and loopholes will accrue more money for the wealthy. And eliminating the myriad of regulations which we are told are hamstringing our economy, will put even more money in the wealthiest’s pockets.

So for at least some Americans, January 20th should be a red letter day.

Every action has a reaction too. Repeal of Obamacare will immediately beg the question what happens to those insured by the Affordable Care Act? The GOP will attempt to keep enough of current Obamacare recipients covered that they can look the camera in the eye and say, “see we replace Obamacare with patient centered, not Washington centered healthcare”.

But two facts will emerge. (1) The GOP will have to find money to cover whatever parts of the ACA it puts forward as “patient centered care” and will most likely hide their healthcare subsidies. With no new taxes, the healthcare costs will go straight to the national debt.  The GOP will adamantly deny this with a look of sincerity.

And, (2) The number of people covered will shrink as will the quality of their coverage.  The “free” market will offer reduced coverage to those unable to pay the going price for standard coverage. Those impacted the most will be the most vulnerable and, not surprisingly, those least able to garner public sympathy.

This is a pretty sad commentary on the Grand Old Party.

But there’s more.    IMO, Trump will support juicing the economy with tax cuts and government spending so that his prediction of greater economic growth can materialize. Trump, however, will run into opposition from fiscal conservatives who want to see the debt decreased, not increased. Trump, the deal maker, will step forward offering to trade his support for much of the GOP agenda, despite his own preferences, in return for support of new spending.  You scratch my back, I will scratch yours. Hmmm.

With “Ready, Set, Fire, Aim”, Republicans will run unnecessary risks. Unintended consequences and collateral damage are almost assured with current GOP plans. As the first 100 days domestic casualties begin to mount up, voters view of President Trump will become tarnished.  At that point, President Trump will make sure everyone knows he favored this or that, and instead those in Congress, much over rated, all talk and no action did not follow his advise and are to blame. Hmmm.

Most of the Republican game plan will hurt small groups… initially. For example, the 20 million ACA subscribers pale in comparison to the greater 340 million US population. Increasing the Federal Debt won’t impact anyone at first. The subsequent risk, however, is the building pressure to reduce other Government spending… like Medicare, Medicaid, Social Security, and a myriad of social safety network programs. And as these messy regulations are revoked, freeing up America’s great capitalist engine and creating jobs on every corner, conditions for another financial meltdown, run away inflation, and renewed disillusionment with Washington will gratuitously appear.

President Trump has an initial White House lease for 1461 days. It would be a shame for the Trump Administration to let hubris in the first 100 days help destroy the next 1361.

Misplaced Criticism?

October 23, 2016

Republican leaders are wringing their wrists over the prospect that Donald Trump is, has, or will bring about the Party’s ruin. Well here’s a news flash. Stop worrying, the GOP is already, has been for some time, and will continue to become more dysfunctional and unequipped to govern unless there are significant changes.

While Donald Trump is a poor choice for the Party’s standard bearer, the Republican Party, itself, reflects a Party, which for the sake of retaining their elected seats and the perks that go with them, has opted to cobble together under the GOP banner desperate factions which have little to offer the average American. In doing so, the GOP, despite what they claim, has drifted out of the American mainstream. Following the Republican loss in 2012, a blueprint, to make the GOP more relevant and for regaining the White House was defined. Nothing changed.

Think about some of the other candidates Donald Trump beat to get the nomination.  Ted Cruz?  Mean, nasty, and self centered.  Marco Rubio, young, inexperienced, and desperate to become wealthy.  Ben Carson, a good doctor but out of his league in politics.  And so on.

The main GOP stumbling block is the collection of policies it has cobbled together in an attempt to appeal to as many supporters and special interests as possible.  What results is a platform which says everything and nothing at the same time.

Here are some obvious out of touch policies.

First, tax policy. Republicans seemed set on offering tax breaks for the wealthy in every tax proposal they put forth.  Republicans claim lower income taxes will unleash entrepreneurial spirit and jobs will grow like apples. History (remember the Bush tax cuts) reveal a different out come. The wealthy simply keep any tax savings for themselves rather than investing. Republicans also promise to lower corporate taxes.  Lowering corporate taxes to levels more in line with global competitors makes sense but corporate tax deductions and loopholes would need to be harmonized too.  You don’t hear much about that from the GOP.

So the promise of jobs and economic growth, as good as they sound, are myths. The Republican plan leads to what is a more likely outcome, either an increase in Federal debt or severe pressure upon Federal spending (read Medicare, Medicaid, and social security cuts).

Why not a tax policy proposal to simplify the entire tax code, remain revenue neutral, and progressive in nature?

Second, repeal and replace Obamacare. There is no Republican healthcare plan other than what preceded the Affordable Care Act. Consequently, repeal and replace means millions less Americans with healthcare coverage, healthcare insurance companies free to deny coverage for pre-existing conditions, and American yearly healthcare spending (currently the highest in the world) no less than now and quite possibly greater.

Why not proposing basic healthcare for all Americans while lowering healthcare spending in total?

Third, second Amendment adoration. In modern society and in comparison to the rest of the modern world, Americans possession (and misuse) of fire arms is unprecedented. The unhealthy alliance between the Republican Party and the NRA has detoured any discussions of reasonable gun controls into a litmus reelection test.

Why not depoliticize the 2nd Amendment and in a bipartisan manner seek reasonable controls?

Fourth, women’s reproductive health choices. The Republican Party has not only been against “choice”, it has been committed to reversing the Supreme Court’s Roe v Wade decision. With the majority of women in favor of choice, and assuming many Republicans sincerely oppose abortion, one would think there was fertile ground to champion ways to prevent unwanted pregnancies. With no effort in this vein, one is easily lead to believe the anti-choice views stem from an “authoritative” mind set (my way or the highway).

Why not support a woman’s right to choose but seek policies which lead to much fewer unwanted pregnancies?

Fifth, immigration stalemate. The Republican Party’s inability to deal with comprehensive immigration reform underscores their inability to deal with reality. There are an estimated 11 million undocumented Mexicans living in American. Republican leaders have said there can be no pathway to citizenship apparently out of fear that these new citizens would vote Democrat. If that is true, the Republican Party has only itself to blame for not offering more to Mexican Americans. Worse, Republican policy flies in the face of facts such as America needs agricultural workers, Mexicans are good workers in many other fields too, and Mexicans are religious, family oriented people (just like what Republicans say of themselves).

Why not pledge to undertake bipartisan immigration reform?

And sixth, fiscal conservatism. Under the umbrella of balanced budgets and eliminating the debt, the Republican “fiscal hawk faction’s” capacity to deal with other pressing national problems is severely limited. At the extreme, these Republicans blindly support measures which would “shut down” normal government operations and offer no options to those dependent upon entitlements.

Why not adopt a more comprehensive policy of growing the economy, with more equitable sharing the wealth, while reducing the debt over a business cycle?

Republicans must come to recognize that their policies are internally inconsistent and work to the disadvantage of average Americans. Trump is simply a symptom, not the cause of their plight.

Should Anyone Be Surprised?

March 13, 2016

GOP pundits, political operatives, and big money donors are all aghast about Donald Trumps potential to steal the Republican Presidential nomination. These authorities claim Americans are angry and say Trump is just feeding voters someone or someplace to target their fears. Mexico, Muslims, or anyone who is not us allow Trump supporters to accept Trump’s promise to fix it.


Listening to the GOP “establishment” Trump must be some type of low life to conduct his campaign by appealing to voters’ fears. So, what does the establishment think voters want to hear? How about defunding Planned Parenthood, repealing Obamacare, and tax code reform featuring lower marginal rates. The GOP is also keen on increasing defense spending while reducing entitlements (Social Security, Medicare, and Medicaid). Rounding out the GOP’s list includes applying religious freedom interpretations to discriminate against gays and same sex couples. Are any of the GOP’s “must do” list designed to deal with Trump supporters’ fears?

Consider, in addition, what if many voters are victims of income inequality? What if many believe the American Dream either no longer exists or at least is not within their grasp? What if globalization just hasn’t worked well for many Americans and they haven’t figured out how overcome this global change? Does the mainstream Republican pitch deal in any way with this view of reality?

Here’s a bulletin. Neither the GOP establishment nor Donald Trump appears to have a clue. Income inequality is linked to globalization to be sure, but it is also connected to workers’ skill base and the ethical behavior of business leaders.

At this time, too many Americans lack the skills necessary for higher paying jobs, and too many corporations simply see their workers as throw away commodities. Corporate leaders are more concerned about stock price and personal bonuses.

As a consequence, corporate leaders have lost sight that their employees are also in some way their corporation’s customers. A customer with no money cannot buy the corporation’s products or services. Hmmm.

So which policies might lead to increased jobs, salaries, and wages?

Attempting to deal with globalization by imposing tariffs and duties, while often popular, only leads to equal and opposite trade restrictions from our trading partners. Some workers might get old jobs back while others employed in export related work lose theirs.

Retraining workers and developing more competitive skills with new workers are positive steps, but who will pay?

Simply paying workers more or sharing productivity gains with all workers would help but why would a capitalist pay more for labor than he must?

Here’s the conundrum. The GOP and Donald Trump have no policies which will deal with globalization or to unilaterally improve the wages of average people. GOP policies either do nothing or aggravate income inequality. Trump promises much, for example “to make America great again”, but how?

It should be clear that making globalization work better (more and better jobs) and reducing income inequality would be a worthwhile focus for both political parties.  But focusing upon Planned Parenthood or Obamacare has nothing to do with globalization/jobs or income inequality. If the mainstream GOP continues on its same path, the unproven case Trump is making sounds a better alternative.

Should anyone be surprised?

2016 Great Issue?

June 6, 2015

As the 2016 Presidential Election approaches, what do you think the average American will be thinking and wanting to hear his/her favorite candidate speak to? Will it be healthcare, national security, jobs, or what?

The economy has been narrowly the decider in the last two Presidential elections.  There were several key secondary issues which swung the election to the Democrats. For example, thanks to the GOP’s platform (and primary rhetoric), Democrats could appeal to Hispanics (immigration), African Americans (voting rights), women (personal health choices), and gays (equal protection) and promise to do better. Foreign policy and its cousin national security were not deciders in people’s voting decisions (except for no votes over Iraq). What about this time.

If the GOP has learned anything from 2008 and 2012, they will tone down their “base” issues (those notions which appeal to their religious and strongly conservative members). If this is accomplished, then they can appeal to Americans to favor the GOP’s economic ideas, their national security positions, and potentially paint some glowing picture of the future. Democrats will try to talk about income inequality but will have a tougher time speaking positively about national security since recent events took place on their watch.

Adding to Democrats worries there are some indicators that the economy is slowing down. In one sense this should be expected as a normal characteristic of a free economy (x years of growth, y years of contraction, then growth again). If Democrats have managed the economy well, the slow down should be slight and relatively brief. The problem, however, is that a shrinking economy at election time will favor the GOP and its recovery will likely happen under a GOP President.

With respect to national security and foreign policy, world events have caused the Obama Administration to adjust to external stimuli rather than cause them. It is, however, difficult to think how the US could have altered Russia, China, or Iran’s behavior in a direct and decisive way. Voters can expect the GOP to say world events would be different if we were in power.

Voters don’t remember well and even fewer can grasp the connection of invading Iraq with the formation of ISIS.

At this point, Democrats had better be praying that the GOP goes off reservation again. With close to 20 GOP hopefuls, this is not a wild impossibility. in such an event the 2016 election may tip back towards Democrats.

Regrettably, neither party seems willing or able to step up to these more serious problems:

  • Campaign financing which has lead directly to a special interest bound Congress and gridlock.
  • Affordable Universal Healthcare which is as good as Europe’s and at half our current cost.
  • Paying now for Government Services (Social Security, Medicare, Medicaid, the Military).
  • Forming a multi-pole foreign policy (recognizing we must deal with Russia, China, Europe, and certain other countries as sovereign States).

Get It?

April 15, 2015

Yesterday, New Jersey Governor Chris Christie opened his unofficial run for the GOP Presidential nomination with speeches in New Hampshire. It is well accepted that Governor Christie needed to do something especially noteworthy to gain the public’s attention. And he did.

Most everyone recognizes that Medicare, Medicaid, and the overall Federal Budget are spending more than they are receiving in tax revenues. Social Security while technically solvent is projected to produce a huge deficit in the years ahead. Christie chose to speak about these entitlement programs and proposed some steps to reign in their future costs. Was that bold? Was that wise?

The ideas of means testing Social Security or increasing the age when one qualifies for entitlement benefits is not new but for a politician seriously running for a major office, it is extremely noteworthy.

It will take a few weeks to know whether Christie’s proposals have any measurable impact upon his candidacy. In the meantime, however, it is worthwhile to recognize how unfair and unbalanced Christie’s proposals are.

To be clear, I do not mean that “means” testing is unfair or that increasing the age of the onset of benefits is out of hand a bad idea.

What I mean is that these measure done by themselves transfer the burden of balancing the US budget to many of those who can least afford the costs, and in effect shield the very wealthy from paying for the services that enable them to accumulate so much wealth.

Further, similar changes to Medicare simply display ignorance of the fundamental underlying healthcare problem, US healthcare costs are the highest in the world (two times) and deliver no better outcomes.

If Governor Christie wants to be America’s President and if he interprets that to be all Americans’ President, he will need to broaden his domestic economic views. Tax reform where loop holes and exemptions are eliminated, increased marginal rates will apply to the highest income levels, Federal expenditure reductions will include both Defense and Entitlements and are proportionally, and a determination that Government services exist for the benefits they provide citizens and not as an employment vehicle are worthy additions.

With Governor Christie’s words, the GOP candidates all sighed in relief that someone else had said what they wanted to say.

I wonder whether the other candidate “get it” and will add to these proposals cuts in Defense, tax reform and an overall attack on healthcare costs?