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Title: The Road From Serfdom
Source:
AS.org
URL Source: http://spectator.org/archives/2012/04/26/the-road-from-serfdom
Published: Apr 27, 2012
Author: Stephen Moore & Peter Ferrara
Post Date: 2012-04-27 17:59:07 by CZ82
Keywords: None
Views: 14393
Comments: 49
The Road From Serfdom By Stephen Moore & Peter Ferrara Let workers choose: the New Deal, or a better deal? Conservative leaders—from Ronald Reagan and Newt Gingrich, to Tea Party Republicans who stormed the House in 2010—have been trying to reform and transform failed government programs for nearly two generations now, with only limited and frustrating progress. Republicans argue that the recipients of social spending will be better off under a conservative approach, but the public remains skeptical. Medicaid, Medicare, Social Security, public schools, and welfare programs might be run poorly, but they are a security blanket nonetheless. Voters don't want to trade a devil they know for a devil they don't. Perhaps compulsion is the problem. The argument conservatives too often make seems to be: "Trust us; we know what's best for you." Yet when was the last time that voters trusted politicians of either party to make wise decisions on their behalf? With congressional approval now hovering in the teens, there is little likelihood the public will back fundamental reform of the $1 trillion entitlement system. But there is another way: Give individual citizens the freedom to either stick with the government-run plan, or choose a market-based option. Those who like Social Security and Medicare could keep them as they are. Those who think otherwise would have alternatives. Just look at what happened when House Republicans proposed to fundamentally change Medicare and give seniors private insurance instead. Democrats ran TV ads—the campaign was dubbed "Mediscare"—telling seniors the GOP was trying to destroy Medicare. One commercial shows a man in a suit pushing the wheelchair of an elderly woman. The man leads her to the edge of a cliff and throws her off, while "America the Beautiful" plays in the background. Scary stuff. But if Republicans gave seniors the choice, between the new Medicare and the old, could Democrats block that approach? Ultimately, we don't think so. And political benefits are just the hors d'oeuvre. We also believe that choice-driven programs would achieve social-welfare goals more effectively, serve seniors and the poor far better, and cost just a fraction of what taxpayers pay for current programs. Let's examine how this model might apply. Baby boomers are now beginning to retire; eventually more than 75 million boomers will move onto Social Security and Medicare. For decades, the federal government's own reports have shown that Social Security will be unable to pay boomers all promised benefits without dramatic, unsustainable tax increases. Medicare's prospects are even worse. Last year, Social Security ran an annual deficit for the first time since President Reagan and Congress raised the payroll tax back in 1983. Under government actuaries' middling projections for economic and demographic growth, those deficits will continue until the Social Security trust funds run dry by 2037. After that, paying all the promised Social Security and Medicare benefits that are financed by the payroll tax will require almost doubling the tax from 15.3 percent today to nearly 30 percent. Under more pessimistic growth projections, the Social Security trust funds will run out of money by 2029. In that case, paying all promised benefits to today's young workers would eventually require a total payroll tax rate of 44 percent, three times current levels. Social Security operates as a pure tax-and-spend system, so it has no real savings or investments anywhere. Even when it was running annual surpluses, close to 90 percent of the revenue that came in was paid out within the year. Remaining annual surpluses were lent to the federal government and spent on other programs, from foreign aid to bridges to nowhere. The Social Security trust funds received only internal federal IOUs, which promise the money will be paid back when it is needed for benefits. But those federal IOUs represent not savings, but actual additional liabilities for federal taxpayers. Such a tax and redistribution scheme does not earn real market returns, as a fully-funded savings and investment system would. Consequently, over the long run the "trust fund" can pay only low, below-market benefits. Studies show that for most young workers today, even if Social Security does somehow pay all it has promised, those benefits would represent a real rate of return of around 1 to 1.5 percent, or less. For many, the effective return might even be negative. That's like putting your money in a savings account, but instead of earning interest on it, you end up paying the bank for the pleasure of keeping your deposit there. There is a better way. Workers could be empowered to save and invest the money they and their employers would otherwise pay into Social Security. Studies show that an average-income, two-earner couple would, over the course of their careers, accumulate close to a million dollars or more, given standard, long-term, market returns, and depending on what fraction of their Social Security contributions they are allowed to invest. Lower-income workers could regularly accumulate half a million dollars over their careers. Those accumulated funds would pay all workers of all income levels and family combinations much higher benefits than Social Security even promises, let alone what it might pay. That includes one-earner couples with stay-at-home moms caring for the children. Retirees would be free to leave any portion of these funds to their children at death, further strengthening the family. Under Social Security, if you die, your heirs get a small death benefit, and Uncle Sam keeps the rest. In retirement, benefits payable from a worker's personal account would substitute for a portion of his regular Social Security benefits, based on the degree to which he exercised the account option over his career. This results in enormous reductions in government spending over time. The personal accounts wouldn't just reduce the growth of government spending. They would shift vast realms of such spending from public sector taxes to private sector savings, investment, and insurance. Workers could also freely choose what age to retire, since they finance their own benefits. The longer they wait, the more money the accounts accumulate, and the higher benefits those accounts can pay. Millions of workers with less physically taxing jobs could choose on their own to delay their retirements well into their 70s, a result that could never be imposed politically. Other workers whose jobs require heavy physical labor could choose to retire in their early 60s. With stocks or bonds in their portfolios, workers would also look at the world differently. As capitalists and owners of American companies through their investments, workers would become advocates of pro-growth, free-market policies that make U.S. companies more profitable. The traditional friction between owners of capital and laborers would be diminished, because workers would have a stake in growth. Personal accounts aren't just a theory, either. About 30 years ago, workers in Chile won just such freedom for their pension contributions. In the first month, 25 percent of workers chose to switch to the new personal account system. After 18 months, 93 percent of workers had switched. Within a few years, annual economic growth soared to 7 percent, double the country's historic rate, while unemployment fell to 5 percent. After 20 years, the enormous savings in the personal accounts totaled 70 percent of GDP. Today, workers pay into the personal accounts half the taxes required under the old system, yet they earn twice the benefits. Chile's reform has been recognized as such a success, that seven other nations in Latin America have adopted similar plans. Other such reforms have now flowered in Great Britain, Australia, Hungary, and Poland. But we don't have to travel the world to find models for personal accounts. In 1981, local government workers in and around Galveston, Texas, voted to opt out of Social Security and into a private savings and investment plan. The Thrift Savings Plan for federal employees has also been popular and successful. In 2005, Congressman Paul Ryan (R-WI) and Senator John Sununu (R-NH) introduced comprehensive model legislation to provide a personal account option for each American. The chief actuary of Social Security officially scored this legislation as achieving full solvency for the program, completely eliminating its deficits over time without any benefit cuts or tax hikes. In fact, the chief actuary recognized that future retirees with personal accounts would earn higher benefits than under Social Security. He concluded that 100 percent of American workers would choose the personal accounts. It's true that George W. Bush fought to reform Social Security in just such a manner, and was blown out of the water politically. But that Bush plan was poorly formulated and executed. Further, one of the talking points that sunk his proposal—the idea that stock market volatility makes personal accounts unsafe—has now been contradicted by real-world evidence. The 2008 financial meltdown was about the worst imaginable scenario for those worried about market volatility. But workers who retired in its immediate aftermath still would have done much better with personal portfolios than with Social Security. Even with the stock market crash, workers of all income levels and all races would have gained financially from private accounts and 40 years of compound interest, according to a study by Michael Tanner of the Cato Institute. Of course, that doesn't mean the left will oppose this plan with any less ferocity. After all, what we propose is a frontal assault against the modern-day entitlement system. Retired Americans would no longer be wards of the state, waiting eagerly for their checks each month, but would be instead financially self-sufficient. The political hurdle is to convince seniors and those near retirement that their benefits will not be cut, and that reform will offer young workers a better deal and keep the retirement system solvent for generations. We suspect that over time, most workers would freely choose to own their retirement income and remove it from the clutches of government control. What better way to break the back of the modern welfare state?
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Begin Trace Mode for Comment # 46.
#1. To: CZ82 (#0)
The GOP is trying to destroy Medicare just like they're trying to destroy public education.
You despicable libTURD whore/TOOL. It's the demonRATS aka obama regime that is removing 500 BILLION dollars from Medicare RIGHT NOW, AND IS currently trying to destroy the entire Medicare system with obammy care. You tyrannical filth just always have to LIE don't you TOOL? YOU libTURDS are TRYING to destroy Medicare, just like YOU have destroyed "public education". You libTURDS are almost as pitiful as you are despicable.
Parasites don't like it when the host threatens to shake them off. She wants to suck on that government tit for as long as she can... and how dare you question her "right" to do so!!!!!!!!
She wants to suck on that government tit for as long as she can... and how dare you question her "right" to do so!!!!!!!! Medicare is insurance as is Social Security. I have been working and paying for insurance since I was 17 and now it's my turn to collect. Do you have a problem with people collecting from private, for profit insurance companies?
You participated in a ponzi scheme, and my kids don't owe you squat.
STONE: You participated in a ponzi scheme, and my kids don't owe you squat. Oh, that's *exactly* what she thinks. YOUR kids, MY kids, everyone is on the hook so that she can "collect" what was "promised" to her by lying politicians. She doesn't give a FUCK if our kids are enslaved or killed- as long as she gets what's coming to her... She'll happily stand by, while the rest of the country burns to the ground, as long as SHE is fat and happy... Were she to accept the fact that she (like millions of others) was the victim of a Ponzi scheme... Were she to accept the fact that nothing is coming to her... Were she to accept the fact that there IS no money for her, than she would be forced to accept some measure of responsibility. She simply refuses to accept this. It really IS that simple.
I bet that's exactly how you felt when Bush pushed through his tax cuts rather than put the country on a sound financial footing, and now you're projecting again.
Interesting. Attempting to put your odious agenda onto me, eh? LOL. Nice. Of course, you didn't deny my point, or attempt to refute it in any way. After all, how could you, when you made your attitudes very clear over a YEAR ago...? Your post (#5 I believe) simply reiterates what you've said over and over... you want yours, and you don't give a FUCK about anything, or anybody else. Oh, yes... You attempt to talk obliquely (often ending up just being obtuse), but even so, your message and your demands come through loud and crystal-clear. To your demands, my answer is quite simple: Eat shit and DIE, you selfish old bitch. Is what I said in any way unclear?
Loonybitch: I bet that's exactly how you felt when Bush pushed through his tax cuts rather than put the country on a sound financial footing, and now you're projecting again. Interesting. Attempting to put your odious agenda onto me, eh? LOL. Nice. Eric, the agenda to which you refer came straight out of your fevered, twisted imagination. Take ownership of your creation like a good conservative man. I am not responsible for what you make up, YOU are.
Hardly. It was written by YOU, post #6, where you said "it's my turn to collect." Indeed. It's not my imagination, it's your words, which you've stated repeatedly. And to the point where you don't give a fuck about anyone else... well, you can't deny it, now, CAN you?
Indeed. It's not my imagination, it's your words, which you've stated repeatedly. And to the point where you don't give a fuck about anyone else... well, you can't deny it, now, CAN you? Aren't you the guy who claims to have a strong math background? If so, it should be clear to you exactly what is wrong with the conclusion you draw from my statement. I'm guessing you know, but don't expect others do.
There is no flaw. Your attempts to hide your agenda have failed. But I must admit, I find your efforts to dress your greed in more sophisticated clothes amusing. In a nutshell, you want to be the fat guy on top: Again, to your demands, my answer is quite simple: Eat shit and DIE, you selfish old bitch. Is what I said in any way unclear?
So then you buy insurance, but never use it for the purpose it was intended because to do so would be greedy? Again, Eric did you support the Bush tax cuts, or did you support paying down the debt when we had the chance?
I have medical insurance, which I pay for out of my own pocket. I have never used it, nor needed it. But if I did, the bill would not be sent to others to pay, should the cost exceed the coverage of my policy. When it comes to retirement, I am not in any government-sponsored programs, except the "Social Security" TAX. [And considering I've got another 20-30 years left of working time, I'll never see a penny of the money that the government has confiscated, to hand over to parasites like you.] Indeed, my retirement plans, are those that I've been working on for ~15 years. These plans also actively avoid government-subsidized programs like the Roth IRA, 401k, etc. They're invisible to the government radar and unable to be easily confiscated, like broke (and desperate) governments invariably do, when their backs are against the wall. My savings, my assets and my future are my responsibility, not soemone else to pay for. Unlike you, I have accepted the responsibility for my own destiny, and am loathe to become a ward of the state- which is exactly what you intend to do. The total NPV of existing government debts are $211 Trillion dollars. You could confiscate every cent of wealth and assets in this country- plus- you could raise the tax rates to 100% (confiscating all salaries, wages, bonuses, etc.), and still the government will be utterly bankrupt. Thus, your question in moot. But that's not a real surprise- your question wasn't about whether I "support" this or that, it was merely to distract. Again, you failed. The point of this article still remains: Strangely, you prefer to be a ward of the state. It'seasier to be a lazy parasite, than to take responsibility for your own well-being. Where I come from, we call that cowardice. You're a dying breed, Loony... and your failure to take responsibility for yourself, will only hasten the end result. Your life doesn't mean anything to me; what matters is that you won't put my kids into indentured servitude, because you want what's coming to you. Forced to make the choice between some hag like you, and my kids...? You'll lose. COUNT ON IT.
In the same way, my living expenses exceed my SS payment, and I pay what is not covered out of my own pocket. I'll never see a penny of the money that the government has confiscated...] Certainly not if you get your way and dismantle the program. The total NPV of existing government debts are $211 Trillion dollars. You could confiscate every cent of wealth and assets in this country- plus- you could raise the tax rates to 100% (confiscating all salaries, wages, bonuses, etc.), and still the government will be utterly bankrupt. Most people with a mortgage and car loan would be bankrupt too if they were asked to pay the balance of their loans in one lump sum. Strangely, you prefer to be a ward of the state. It'seasier to be a lazy parasite, than to take responsibility for your own well-being. If I purchased an annuity, would I be a ward of the institution I purchased it from? You're a dying breed, Loony... Indeed, that's why I collect SS. Where I come from, we call that cowardice. I guess where you come from being brave and independent is calling old ladies rude names on internet forums. Your life doesn't mean anything to me; what matters is that you won't put my kids into indentured servitude, because you want what's coming to you. You've let me know in many way that my life means nothing to you, so holding that mind set, why would you think your children would mean anything to anyone other than yourself and their mother?
Hey, loonyming, that's not a "SS payment," it's STOLEN MONEY. Get that through your skull. It's not YOUR money. What part of the word BANKRUPT do you NOT understand? If the institution was solvent, the answer would be "no." If the institution becomes insolvent, than you get nothing. That's the risk you take, when you purchase an annuity. You expect interest to account for inflation, as well as a risk-premium, as part of the return. And while governments world-over pretend their bonds are risk-free, the truth is that there is no such animal. EVERYTHING has risk. The smart investor recognizes the risks and takes appropriate measures. The foolish investor (commonly referred to as a "mark" or a "sucker") believes the hype, and doesn't perform due-dligence... and then gets wiped out when the system collapses. The "mark" in this case, loony, is you. Not the way I see it, mind you, but that's how the banksters and their pawns see it... the fact is, they're sucking my wallet down, too, while they continue the Ponzi scheme, and there's nothing I can do about that... except divert my after-tax money to other investments where I will have greater returns, and not have to pay someone else to gamble with my money (401k, mutual funds, Roth IRA, et. al.). You would guess wrong. I've said it before, and I'll say it again; I treat everyone with a certain level of respect when I meet them... whether it's the garbage-man, a homeless person or someone of great wealth and power. I treat everyone the same. How I treat them after that, is strictly related to who they are, as a person. You've demonstrated: Have I missed anything? My kids have the right to explore their potential, without the shackles of some old bitch like you, demanding they pay for your stupidity. They haven't had the opportunity to live, and I will give them that chance. You had your chance, and you blew it. Not my problem. I won't allow it to be theirs.
You're the dude that thinks bankruptcy occurs when debt exceeds income so don't try to school me on the topic. If the institution becomes insolvent, than you get nothing. Do you mean like AIG? You've demonstrated: 1. you believe ignorance is strength- straight out of Orwell's 1984. Tell me more, oh clueless one.
You should listen to Eric. He is like 1000 times smarter then you are.
#48. To: A K A Stone (#46)
At least he thinks he is.
Top • Page Up • Full Thread • Page Down • Bottom/LatestJust look at what happened when House Republicans proposed to fundamentally change Medicare and give seniors private insurance instead. Democrats ran TV ads—the campaign was dubbed "Mediscare"—telling seniors the GOP was trying to destroy Medicare. One commercial shows a man in a suit pushing the wheelchair of an elderly woman. The man leads her to the edge of a cliff and throws her off, while "America the Beautiful" plays in the background. Scary stuff.
#2. To: lucysmom, CZ82 (#1)
The GOP is trying to destroy Medicare just like they're trying to destroy public education.
#3. To: Mad Dog, lucysmom, CZ82 (#2)
lucysmom: The GOP is trying to destroy Medicare just like they're trying to destroy public education.
#6. To: Capitalist Eric (#3)
Parasites don't like it when the host threatens to shake them off.
#14. To: lucysmom (#6)
Medicare is insurance as is Social Security. I have been working and paying for insurance since I was 17 and now it's my turn to collect.
#28. To: A K A Stone, Lucysmom (#14)
LoonyMing: Medicare is insurance as is Social Security. I have been working and paying for insurance since I was 17 and now it's my turn to collect.
#29. To: Capitalist Eric (#28)
She doesn't give a FUCK if our kids are enslaved or killed- as long as she gets what's coming to her... She'll happily stand by, while the rest of the country burns to the ground, as long as SHE is fat and happy...
#31. To: lucysmom, A K A Stone (#29)
Capitalist Eric: She doesn't give a FUCK if our kids are enslaved or killed- as long as she gets what's coming to her... She'll happily stand by, while the rest of the country burns to the ground, as long as SHE is fat and happy...
Loonybitch: I bet that's exactly how you felt when Bush pushed through his tax cuts rather than put the country on a sound financial footing, and now you're projecting again.
#32. To: Capitalist Eric (#31)
Capitalist Eric: She doesn't give a FUCK if our kids are enslaved or killed- as long as she gets what's coming to her... She'll happily stand by, while the rest of the country burns to the ground, as long as SHE is fat and happy...
#33. To: lucysmom (#32)
Eric, the agenda to which you refer came straight out of your fevered, twisted imagination.
#35. To: Capitalist Eric (#33)
"it's my turn to collect."
#36. To: lucysmom (#35)
(Edited)
If so, it should be clear to you exactly what is wrong with the conclusion you draw from my statement.
#37. To: Capitalist Eric (#36)
But I must admit, I find your efforts to dress your greed in more sophisticated clothes amusing.
#39. To: lucysmom (#37)
So then you buy insurance, but never use it for the purpose it was intended because to do so would be greedy?
Again, Eric did you support the Bush tax cuts, or did you support paying down the debt when we had the chance?
what we propose is a frontal assault against the modern-day entitlement system. Retired Americans would no longer be wards of the state, waiting eagerly for their checks each month, but would be instead financially self-sufficient. The political hurdle is to convince seniors and those near retirement that their benefits will not be cut, and that reform will offer young workers a better deal and keep the retirement system solvent for generations. We suspect that over time, most workers would freely choose to own their retirement income and remove it from the clutches of government control. What better way to break the back of the modern welfare state?
#41. To: Capitalist Eric (#39)
I have never used it, nor needed it. But if I did, the bill would not be sent to others to pay, should the cost exceed the coverage of my policy.
#44. To: lucysmom (#41)
In the same way, my living expenses exceed my SS payment, and I pay what is not covered out of my own pocket.
CE: I'll never see a penny of the money that the government has confiscated...]
LoonyMing: Certainly not if you get your way and dismantle the program. If I purchased an annuity, would I be a ward of the institution I purchased it from?
I guess where you come from being brave and independent is calling old ladies rude names on internet forums.
1. you believe ignorance is strength- straight out of Orwell's 1984.
2. you're not interested in the truth.
3. You want what was promised to you decades ago by corrupt politicians, even though they've stolen the money, and there's nothing left.
4. Though there's no money, you deman that someone pay you, because you've learned nothing from your mistakes.
5. you'd enslave an entire generation- including my kids- to get paid the money that no longer exists.
6. Your totally selfish nature is disgusting. You deserve neither sympathy nor respect. You've let me know in many way that my life means nothing to you, so holding that mind set, why would you think your children would mean anything to anyone other than yourself and their mother?
#45. To: Capitalist Eric (#44)
What part of the word BANKRUPT do you NOT understand?
2. you're not interested in the truth.
3. You want what was promised to you decades ago by corrupt politicians, even though they've stolen the money, and there's nothing left.
4. Though there's no money, you deman that someone pay you, because you've learned nothing from your mistakes.
5. you'd enslave an entire generation- including my kids- to get paid the money that no longer exists.
6. Your totally selfish nature is disgusting. You deserve neither sympathy nor respect.
#46. To: lucysmom (#45)
Tell me more, oh clueless one.
Replies to Comment # 46. He is like 1000 times smarter then you are.
End Trace Mode for Comment # 46.
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