The 2% (non) Solution: Part Two
Had a long day of Social Security related blogginess so will just put up this to spark some discussion:
In Part One of this post I discussed the danger that the 2% ‘temporary’ payroll tax cut might be a Trojan Horse destined never to expire in full or at all only to have any continuing backfill from the General Fund (by then surely to be described as a ‘subsidy’) subject to an ongoing series of ‘compromises’ that gradually phase in benefit cuts rather than take the whole thing at one gulp.
In Part Two I want to discuss a quite different threat. In this scenario the employee share of the payroll tax is allowed to reset to it 6.2% but as a seeming sweetener taxpayers will be allowed or perhaps required to divert it into a Personal Savings Account with the explanation that it really wasn’t a tax increase at all! Nope the money is still ‘yours’, just tucked away for your own future use rather than being co-mingled in the Trust Funds where you don’t have an ownership interest at all, why the Supreme Court said so in Flemming .v. Nestor. Well a visit to the link shows that this doesn’t mean what opponents often take it to mean, but the idea that the PRAs would be in any fundamental sense different is illusory, but before getting to that I want to point out a curious coincidence (or not). The 2% payroll tax holiday is the same amount of diversion proposed in most straight PRA proposals out there. Cynical people might suggest that this number was not just plucked out of the air, or back computed to approximate the typical effect of the expiring Make Work Pay tax credit which it is replacing, but instead to put in place elements of say Obama advisor Jeff Liebman’s Liebman-MacGuineas-Samwick Non-Partisan Social Security Reform Plan or even the more recent Galston-MacGuineas Plan which has a mandatory diversion of exactly this amount.
As I have said in other contexts, I don’t much believe in coincidences. This 2% cut is somewhat under-motivated in policy terms, there were other, simpler, and more targetted ways of putting dollars in workers’ pockets. But as part of a co-ordinated plan to sell some sort of PRA carve out as part of a larger Social Security ‘reform’ it makes all too much sense.
Got it, Bruce. Can’t comment now because it’s time for me to check out over here on the Right Coast. But, see the point of what you’re saying. More tomorrow. NancyO
well, of course Bruce is right. But even without all the complicated possible future scenarios, the point is
that Social Security was designed to be worker funded. Now they have gutted it. It is now just another bone in the budget to be played politically and destroyed utterly when convenient.
and the people appear to be taking it quietly.
Coberly,
It is now just another bone in the budget to be played politically and destroyed utterly when convenient.
Alas, it was always so. They told you right there on Page 2 of your Statement: “*Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time.”
All those commenters that tried to point this out to you over the years, you belittled. It is turning out they were right and you were wrong. You never want to be the counterparty to a one-party contract.
You are surprised Big, Benevolent Government is screwing you over? Really?
Yes, coberly, there is no Santa Claus.
Coberly,
It is now just another bone in the budget to be played politically and destroyed utterly when convenient.
Alas, it was always so. They told you right there on Page 2 of your Statement: “*Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time.”
All those commenters that tried to point this out to you over the years, you belittled. It is turning out they were right and you were wrong. You never want to be the counterparty to a one-party contract.
You are surprised Big, Benevolent Government is screwing you over? Really?
Yes, coberly, there is no Santa Claus.
I share some concerns about the 2% temporary payroll tax cut.
First, there doesn’t appear to be any benefit to employers as the payroll reduction only applies to the workers’ share of FICA taxes, which is different from some previous proposals. There should be no reason to expect that additional hiring will occur based on this consideration unless new hires are counting on the lower payroll tax as a consideration for accepting lower wages in order to be hired. Second, workers may not be particularly pleased to see their payroll taxes increase once the temporary cut expires. I see this consideration as potential cause for alarm, aligned similarly with the general population attitudes about the Bush II era tax cuts. Third, there were better alternatives to providing cash to workers and families.
I view the Galston-MacGuineas plan differently than some may with regard to their recommended Social Security program changes. The plan’s 2% is stated as an add-on cost to workers, not a substitution of where 2% of the existing FICA taxes go. The substitution comes into play with their recommendation to substitute a percentage of the FICA tax with a carbon tax. The percentage isn’t identified in the plan.
Where is that extra 2% coming from – is this money to be provided by employers or workers? And there no good justification that I can see to replacing some percentage FICA taxes with carbon taxes.
The Galston and MacGuineas plan:
EXCERPT:
“Add-on accounts. We also recommend establishing mandatory retirement savings accounts, financed by 2% of wages for every worker, which the federal government would match on a progressive basis for low and moderate earners. These matches would be financed by additional funds that would flow to Social Security as a result of some of the other tax changes we recommend. For example, broadening the tax base through tax expenditure reform would increase the proceeds from payroll taxes.”
“Payroll tax. Finally we recommend making revenue-neutral changes to the revenue side of Social Security, which would include enacting a carbon tax and dedicating some of the revenues to replace a portion of the payroll tax while making the remaining Social Security tax more progressive, by creating an exclusion at the bottom and increasing the cap. (The remainder of the carbon tax would be devoted to deficit reduction, as we spell out in the revenue section of this report.)”
In summary, the Galston-MacGuineas plan rolls out in this fashion:
Social Security Savings – % improvement needed to achieve solvency
Raise the retirement age 25%
Reduce higher-income benefits 50%
Fix the cost of living adjustment 25%
Include state and local workers 10%
New benefits -10%
Add on accounts N/A
Payroll tax reform (replace part of tax with carbon tax
and make the remaining tax more progressive) N/A
I share some concerns about the 2% temporary payroll tax cut.
First, there doesn’t appear to be any benefit to employers as the payroll reduction applies only to the workers’ share of FICA taxes, which is different from some previous proposals. There should be no reason to expect that additional hiring will occur based on this consideration unless new hires are counting on the lower payroll tax as a consideration for accepting lower wages in order to be hired. Second, workers may not be particularly pleased to see their payroll taxes increase once the temporary cut expires. I see this consideration as potential cause for alarm, aligned similarly with the general population attitudes about the Bush II era tax cuts. Third, there were better alternatives to providing cash to workers and families.
I view the Galston-MacGuineas plan differently than some may with regard to their recommended Social Security program changes. The plan’s 2% is stated as an add-on cost to workers, not a substitution of where 2% of the existing FICA taxes go. The substitution comes into play with their recommendation to substitute a percentage of the FICA tax with a carbon tax. The percentage isn’t identified in the plan.
Where is that extra 2% coming from – is this money to be provided by employers or workers? And there no good justification that I can see to replacing some percentage FICA taxes with carbon taxes.
The Galston-MacGuineas plan:
EXCERPT – Social Security:
“Add-on accounts. We also recommend establishing mandatory retirement savings accounts, financed by 2% of wages for every worker, which the federal government would match on a progressive basis for low and moderate earners. These matches would be financed by additional funds that would flow to Social Security as a result of some of the other tax changes we recommend. For example, broadening the tax base through tax expenditure reform would increase the proceeds from payroll taxes.”
“Payroll tax. Finally we recommend making revenue-neutral changes to the revenue side of Social Security, which would include enacting a carbon tax and dedicating some of the revenues to replace a portion of the payroll tax while making the remaining Social Security tax more progressive, by creating an exclusion at the bottom and increasing the cap. (The remainder of the carbon tax would be devoted to deficit reduction, as we spell out in the revenue section of this report.)”
I share some concerns about the 2% temporary payroll tax cut.
First, there doesn’t appear to be any benefit to employers as the payroll reduction applies only to the workers’ share of FICA taxes, which is different from some previous proposals. There should be no reason to expect that additional hiring will occur based on this consideration unless new hires are counting on the lower payroll tax as a consideration for accepting lower wages in order to be hired. Second, workers may not be particularly pleased to see their payroll taxes increase once the temporary cut expires. I see this consideration as potential cause for alarm, aligned similarly with the general population attitudes about the Bush II era tax cuts. Third, there were better alternatives to providing cash to workers and families.
I view the Galston-MacGuineas plan differently than some may with regard to their recommended Social Security program changes. The plan’s 2% is stated as an add-on cost to workers, not a substitution of where 2% of the existing FICA taxes go. The substitution comes into play with their recommendation to substitute a percentage of the FICA tax with a carbon tax. The percentage isn’t identified in the plan.
Where is that extra 2% coming from – is this money to be provided by employers or workers? And there no good justification that I can see to replacing some percentage of FICA taxes with carbon taxes.
The Galston-MacGuineas plan:
EXCERPT – Social Security:
“Add-on accounts. We also recommend establishing mandatory retirement savings accounts, financed by 2% of wages for every worker, which the federal government would match on a progressive basis for low and moderate earners. These matches would be financed by additional funds that would flow to Social Security as a result of some of the other tax changes we recommend. For example, broadening the tax base through tax expenditure reform would increase the proceeds from payroll taxes.”
“Payroll tax. Finally we recommend making revenue-neutral changes to the revenue side of Social Security, which would include enacting a carbon tax and dedicating some of the revenues to replace a portion of the payroll tax while making the remaining Social Security tax more progressive, by creating an exclusion at the bottom and increasing the cap. (The remainder of the carbon tax would be devoted to deficit reduction, as we spell out in the revenue section of this report.)”
I share some concerns about the 2% temporary payroll tax cut.
First, there doesn’t appear to be any benefit to employers as the payroll reduction applies only to the workers’ share of FICA taxes, which is different from some previous proposals. There should be no reason to expect that additional hiring will occur based on this consideration unless new hires are counting on the lower payroll tax as a consideration for accepting lower wages in order to be hired. Second, workers may not be particularly pleased to see their payroll taxes increase once the temporary cut expires. I see this consideration as potential cause for alarm, aligned similarly with the general population attitudes about the Bush II era tax cuts. Third, there were better alternatives to providing cash to workers and families.
I view the Galston-MacGuineas plan differently than some may with regard to their recommended Social Security program changes. The plan’s 2% is stated as an add-on cost to workers, not a substitution of where 2% of the existing FICA taxes go. The substitution comes into play with their recommendation to substitute a percentage of the FICA taxes with a carbon tax. The percentage isn’t identified in the plan.
Where is that extra 2% coming from – is this money to be provided by employers or workers? And there no good justification that I can see to replacing some percentage of FICA taxes with carbon taxes.
The Galston-MacGuineas plan:
EXCERPT – Social Security:
“Add-on accounts. We also recommend establishing mandatory retirement savings accounts, financed by 2% of wages for every worker, which the federal government would match on a progressive basis for low and moderate earners. These matches would be financed by additional funds that would flow to Social Security as a result of some of the other tax changes we recommend. For example, broadening the tax base through tax expenditure reform would increase the proceeds from payroll taxes.”
“Payroll tax. Finally we recommend making revenue-neutral changes to the revenue side of Social Security, which would include enacting a carbon tax and dedicating some of the revenues to replace a portion of the payroll tax while making the remaining Social Security tax more progressive, by creating an exclusion at the bottom and increasing the cap. (The remainder of the carbon tax would be devoted to deficit reduction, as we spell out in the revenue section of this report.)”
MG–good point about the dubious value to employers of the 2% employee FICA reduction. No demand equals no hiring anyhow, so presumably the merit of the 2% whack is to boost employee take home. However, as Bruce as previously explained, the unrenewed “making work pay” tax breaks did better and some people will actually end up worse off with this supposedly generous “tax break.” Meanwhile, the rest of the Ralson-Macguineas plan calls for gutting Social Security in the familiar manner recommended by Simpson and Bowles. Link here: http://imarketnews.com/?q=node/20255 Quote below:
“The plan envisions about $75 billion in savings from Social Security by gradually increasing the retirement age, switching to the Chained CPI for calculating benefits, and using progressive indexation for indexing the benefits of wealthier earners.” (Italics mine.)
First, when we have poured trillions into the banks and our two current wars, $75 billion in savings is peanuts. You can aren’t going to impress anyone with puny numbers like that. Also, the notion of a guaranteed govt match for the new supplemental accounts depends on the availability of general revenues, doesn’t it? So, again, messing with the revenue stream in this manner weakens SS unique source of funding as the workers themselves. So, nutz to that. And, the TF still has $2.6 Trillion in it. Even being depleted by 2% every year, it’s completely funded under current law. So, here’s the trick: let the payroll tax reduction expire. Or better yet, send it to a President who will veto any extension. Nope, MG. The particular devil lurking in the details of Ralson-MacGuineas is unattractive indeed. NancyO
Sammy notwithstanding, it is a fundamental break of the relationship between the government and the citizens of this country. That it was orchestrated by a fraud who was elected while running as a Democrat is particularly disheartening. I surely do not need to pay a sixth less in social security taxes and frankly would have been just fine with letting all of Dumbya’s tax cuts expire. As its stands, I will simply increase my 401K contributions by the 2%. The money will not get spent and the government will lose a bit more current tax revenue. Thinking Americans will recognize the threat to social security and will cut back on spending even more as they try to put money away for retirement. Unemployment will likely increase because of the deal and business could not be happier as it can continue to get whatever concessions it wants from employees. And just wait until the new Congress is sworn in!
Sammy
Congress has always been able to change the law. That’s what the fight was bout. It’s too bad you never understood that.
The government is only as benevolent as we make it. You won’t like being screwed over by the new government: you see, you can’t do away with government, you can only work to make it more or less benevolent. The bad guys can always get fools to work for them by promising them lower taxes.
MG
first, the employers share of the payroll tax was never the employers money. it was the employees money… as “most economists agree” when they were trying to convince the employees they could get a better “return on investment” in the stock market.
second.. the MacGuineas “replace a portion of the payroll tax” is exactly ‘cutting the payroll tax’ in order to, it says here, fund Social Security with general taxes. In other words, to destroy Social SEcurity and replace it with a welfare program.
What if, instead of savaging the funding of SS by diverting funding to PRAs we instead required 2% investment in IRAs?
The Greeks gave Troy a Horse because frontal attack didn’t work. The 2% temporary cut in FICA is being accused of being a Trojan Horse. What if a frontal attack is still in the works?:
http://www.politico.com/news/stories/1210/46430.html#ixzz18l0dOPG9
What you have described is the mirror image of what US and other western policy makers are urging on China. If, the notion goes, China had a social safety net, then households would feel less need to save and freer to spend. Assuming the period of blind provision of credit to households in the US is over, then by the same theory US policy makers are arguing in China’s case, a cut in the US social safety net would lead to slower US consumption.
This would only be a problem for people that see an accountability problem with a revenue stream that looks like this:
carbon tax->FICA->general fund
And a spending stream that looks like this:
general fund-> discretionary spending-> Afghanistan (or substitute anything else here)
One would think this would be repulsive to proponents of the simplicity and accountability of privatizing SS and keeping Big, Bad Government from screwing us. But no. These two separate book keeping concepts co-exist in the same minds.
Then there are some Orwellian Double Speak problems with using the terms “revenue neutral” and “deficit reduction” in the same congressional filibuster, er, I mean debate (which Obama promises is coming next year, and has also promised will be “instructional” to us voters).
Then there is the conceptual oddity of using an inherently regressive tax to enhance revenue, in this case a carbon tax, then make offsetting progressive tax moves to exempt low income polluters from a carbon tax, which uses the price mechanism to reduce demand, and use high income polluters to make changes to SS revenue “revenue neutral”. But at least proponents of the carbon tax can cheer the fact we have made illusionary progress towards fixing global warming. And high income people can be pissed about funding “welfare”.
Similar problems exist with other revenue enhancing plans in the Halls of DC. The VAT or National Sales Tax lurk in the background there too. These are regressive as well, so naturally we will probably need to exclude lower income people, say below $250K since that has been a popular number to kick around lately, otherwise it would surely be bad for our consumption based economy and negate all the “good” the FICA cuts are doing for us.
So Obama promises us “instructive debates” next year over these pressing issues. There is also the issue of whether corporate tax rates should go up or down, so I’m sure I’ve only touched on the tip of the iceberg here. I’m hoping they show us flowcharts on how it all works because I’m sure that words will be inadequate to explain it, nor will anyone be able to decipher any resulting earmark legislation used to implement any conclusions resulting from all the instructive debate.
But stay tuned anyway, and have your thinking cap handy!
Oh, and did anyone mention we need to do something about housing?
Then somehow we were to work in a moment or two for tax simplification. Hope that doesn’t get shunted off to the side.
kharris The frontal attack is when the President goes all Simpson-Bowles on us. This is predicted on several lefty blogs but source notwithstanding, probably has some truth to it. Meanwhile, as Bruce points out, the 2% figure is uncomfortably like the 2% nick you “give” the govt out of your FICA contrib that will go into a PRA. If the government has it, then in all likelihood it isn’t yours at all. How would you get it out? Oh, at retirement as an annuity.
Hmm. And this is different from SS how? Well, it’s yours and you can will it to your heirs! Really, but your heirs might be a wife whose benefit on your SS account is greatly reduced because your total lifetime earnings will be lower than it would be otherwise. And, they’re gonna raise the retirement age, and change the wage indexing formula to produce a lower benefit as well, and change the COLA formula to provide one once every other millenium. But, the government has the money right? And, this is BETTER than SS because the money will be guaranteed by the government, which is going broke right?
If SS was bankrupting the Treasury, how can an additional PRA not do the same thing? Carbon tax, schmarbon tax. If we won’t collect income taxes on higher earners now, why would be we able to collect a carbon tax later? And, why would it necessarily provide benefits on par with the existing system.
As Bruce and Coberly have repeatedly said, the second best plan to fix Social Security is DO NOTHING. NancyO
MG–Thanks for giving us the reference for the Ralson-MacGuineas plan. Very helpful especially because this sight also provides a chart summarizing all existing SS/deficit reduction plans out there. 🙂 NancyO
I saw a poll done in Japan where they asked non-economist Japanese why they save so much. They said its because they think the government is going broke and will cut back big on their national pension plan.
But these opinions have already been disproven by econ models in the US, which is why we haven’t seen this poll cited often in the US as it clearly has no credibility.
With the current make up of the Supreme Court the individul mandate is dead. You can’t, constitutionally, pay taxes or “forced premiums” to a third party, non-governmental entity. But maybe the Court will get another so-called liberal who will say you can. Then the Democratic Party rape of SS can proceed.
Jim–And this is better than SS how? NancyO
CR,
The Japanese government runs large deficits, all the time, goobling up the savings rate.
Seems to me the Japoanese saver needs to worry about who he is lending to: the US and Japanese governments.
And savers are always lending to borrowers.
Some borrowers are not so good.
Goes for US citizens who think excess SS collections are some kind of savings……….
Well, first of all, until we fix this human aging problem and we can all effortlessly work forever, savings are a fact of life. By law, the SS surplus must buy special treasuries, so that is why we are required to think the surplus IS savings.
I’ll put the definition here that econ people give us.
National Savings = Private Savings + Government Savings
Government savings is always negative, called dis-savings, in the modern world.
Private savers can also buy stock, MBS, corporate debt, income real estate, commodities, tulip bulbs, gold and silver. Whatever sounds good at the time.
In a perfect world, savers can buy government debt, generally regarded as the lowest risk kind of investment, and this would be invested wisely by goverments in tangeble and intangeble wealth and quality of life producing assets within the counrty.
It is NOT a perfect world, but we shouldn’t really fault savers for doing what they must do.
Was it the Who or Crosby stills and Nash that insisited “We Won’t Be Foolwed Again?” Hate to say it but you can fool most of the people most of the time.
What are “savings”?
Why should a saver, Chinese, Japanese, or US citizens, expect the money to be worth the same or more, in terms of buying power when the saver lends it whether to a bank or a government?
Savings I suspect must be turned into investments. The investments increase productivity, or at least increase production.
The issue I have with the government doing so much borrowing is the government is not investing the money wisely, not improvingthe country’s stock of productive assets.
My constant complaint is military spending, I worked in the investment and support side of the US military for many years. I have read and agree with Bastiat that there are always better things to do with the resources spent on the military unless they deliver the value of dislodging a dictator or an aggressor with will do more harm than the harm done by the investment in things that blow up rather than invest in things that produce things that savers might buy when they cash the savings.
The US has more than 20% of government outlays about 4% of GDP spent on war.
Has the security from that $700B a year provided benefit to offset the diverting those resources from future productivity?
Ike observed and it is worse today that undue influence denies a true answer to the worth of military spending in the US.
I have always said no, in part from expereince in the waste and undue influence, but also because the need does not justify that level of diversion (I sometimes call it plunder) of the nation’s savings.
Savings should be investments, the deficits and how much of it going to unproductive war are not investing.
And a dollar paid to a war fare worker is not the same as a dollar paid to a an entitlement recipeint. Military keynesianism is what Bastiat denied.
It was The Who. But they were an English band and later retracted the song when they came out with Pinball Wizard.
Americans are behind. Crosby, Stills, Nash and Young did Southern Man, but then were disproven later by Leonard Skynard.
I’m still trying to figure out Rap. I’ll let everyone know once I have something to report there.
Saving are what is left over from our income after taxes and consumption. The reason we do it is so we don’t have to retire and drop dead at exactly the same time. We might have some of our savings invested in treasury bonds. We may do it personally, or the SS trust fund, a government pension fund, a private pension fund or an insurance company annuity may do it on our behalf.
The USG then takes that money and spends or invests it as they see fit. They are doing a crappy job of it, unless anyone here believes the USG must represent 90% of the military spending of the entire planet, and is providing value from that investment which somehow will generate wealth in the US along with the associated ability to pay returns back to the original investor-savers. This implies a ability and willingness to tax. (This point is generally carefully watched by foreign investors)
Also, there are two reasons money retains value. One is you can buy something with it. The other is you get paid interest for it’s use, or can buy assets denominated in it that provide a real return on investment. We have been chipping away at these reasons lately, but hey, it’s a reserve and trade currency, so it does have considerable staying power.
CR
That’s Lynyrd Skynard, and I wouldn’t go so far as to say that they “disproved” Southern Man. That song is more a reference to the roots of redneck mentality. And while Pin Ball Wizard was more whimsical, if you take the whole of the Tommy “opera” you have a strong anti war stance. BTW, might Free Bird be LS’s attempt at describing the need to break loose of the past?
Cedric ilsm
it is not necessary that savings earn interest or retain their full purchasing power. you save so that you will have Something later. of course it’s nice if you can double your money. but that is not “saving.” that is either investing or gambling.
Well, I try and explain these things to employees of the government and academia, but I realize it will take time for the concepts to sink in, since many have never heard about them or thought about it before. Why waste precious bandwidth when you live in the pension and COLA universe.
i could be wrong, but didn’t that Who song end “Meet the new Boss. Same as the old boss.”
little john
you are right about the Democrats raping SS, and maybe that needs to be focussed on. But I think you’d be wrong if you are using this as a way of saying Dems bad Reps good. They are all bad.
in case anyone here doesn’t know, the first best plan is to do nothing now… except write into the law a provision to raise the payroll tax one tenth of one percent if and when the Trustees project short term insolvency. That would “fund” Social Security forever and take away the liars screaming points.
and it would “do nothing” unless something really needed to be done. and that something would be to pay the necessary expenses of the people paying the tax. kind of an old fashioned idea.
i’ve been meaning to write this up as a post, but i never get the time any more:
for those who don’t understand how you can pay in advance for something you will need later, and don’t understand what happens to the money while it is waiting for you to need it… in other words, don’t understand ordinary business and money and banking…
the tax increase you pay today would indeed go to pay some already retired person’s benefit, or it would be put in the “bank” at interest. if the former, it would mean essentially that the average life expectancy had reached the point where the old tax rate could not cover the expenses of the greater number of people collecting benefits (on account of so many of them living longer,you see).
but since that increase in life expectancy will keep on increasing, by the time you… the person paying the tax… retire, you will be part of a cohort with an even greater life expectancy, and you will get the full benefit of the extra taxes you paid in. and the following generation, paying a larger tax, will in turn get a larger benefit… or at least a longer benefit… and again get full value for the extra tax.
pay as you go is a simple, elegant, idea, but it is apparently beyond the understanding of people who don’t want to understand it. and the people who don’t want you to understand it.
please note that “pay as you go with wage indexing” accomplishes the same thing as “interest on money in the bank.”
and “interest on money lent to the government.” all of those depend on growth in the economy in order to pay you back more, in real terms, than you paid in.
and the taxes needed to pay back the loan with interest are no different than the job income or business income that a borrower in the private markets has to have in order to repay his loan.
the idea is that the borrower… the taxpayer ultimately… has gotten something of value for the money he borrowed… something that is worth more to him at the time he repays the money plus interest than the money was worth to the person who lent it to him at the time he borrowed it.
it is amazing to me that the people who presumably borrow and spend all the time in their own personal business experience complete brain failure when it comes time to understand exactly the same thing when the government is doing it.
their problem is that the government involves “taxes” and they hate taxes so much they can no longer see straight. well, i hate taxes too, but it is still necessary to see straight.
and this is the wrong thread, but it continues my point
it is amazing to me that the people can listen to a government official lie, and their response is not to throw the liar out, but to turn and say, “we warned you this would happen.” you see, because there are politicians who will steal your money… and your life… they take that as a reason to reject all government programs… except the ones they like.
it never occurs to them that there will always be a government, and the government will always be subject to liars and worse. the answer is not to pretend that you can do away with government, but to be alert and work to keep government honest.
these poor fools are deluded. they think they can weaken government, and ignore the country’s problems, and that somehow the magic of the marketplace will keep their rulers honest.
Pinball Wizard had the refrain ” That deaf, dumb and blind kid….sure can play pinball!”
Yeah mr. cob…good point. That’s not what I am trying to say.
If consumption was what was left after taxes and saving, then people would be better off.
.
http://img.slate.com/media/1/123125/2265681/2266033/100902_GD_Part1_PikettySaez-fig1.gif