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Adam
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http://www.smartmoney.com/tradecraft/index.cfm?story=20080331-stock-investing
FROM WELFARE TO food stamps to Medicare, Medicaid and Social Security, our country now marshals a massive network of trillion-dollar entitlement programs colloquially known as the "social safety net." Many Americans, including a few of those running for president, see these bureaucracies as defining achievements of a nation where "nobody is left behind."
Forget the fact that the entitlements, many of which began with the goal of providing "basic minimum benefits" have grown into a gargantuan burden costing over $1.5 trillion a year and careening toward total collapse. For example, payouts will begin to exceed the revenues into Social Security in just nine years and current estimates have the entire system going belly up in 2041.
The fundamental problem with the social safety net, however, isn't bankrupt economics but bad philosophy.
A government can only provide a safety net insofar as the wealth that net consists of — food, clothing, shelter, medical services — has been created by productive individuals. The freebies government is so eager to expropriate don't grow from the ground, but must be produced by entrepreneurial individuals who create corporations, raise cattle, invest in financial markets, run restaurants, develop pharmaceuticals, and so on. From the creation of kidney dialysis to the transportation of affordable food, it's the reasoning mind that produces the wealth that makes our lives secure, not a bloated government bureaucracy.
As I've written before, it is America's historical commitment to capitalism and individual rights that has differentiated our prosperous economy from the socialist basket cases of North Korea, China and communist Cuba. When economic freedom is protected, societies see vast increases in productivity that result in higher-quality, lower-cost products.
One only need look at the least-regulated sectors of our economy — electronics, computers and food, all of which have declined in price — to see that phenomenon occur. Yesterday's luxuries, like huge flat-panel TVs from Best Buy (BBY: 44.12, +0.65, +1.49%), become affordable mass-market items in just a few years.
This is true even in health care, which proponents of the entitlement safety net argue is uniquely vital enough to require governmental interference. Procedures like laser eye surgery that are not part of the government safety net have dropped in price and improved in quality in a short period of time. This is precisely what would happen if our entitlements were eliminated: Less-wealthy individuals would not go without care, but would become the eager focus of entrepreneurial businessmen competing to offer them cheap, quality health care...or education...or anything else.
In reality, skyrocketing health-care costs are a government-created phenomenon, where someone besides the patient (usually the government) pays the bills and insurance is assumed to be infinite. So there's no need for the producers of advanced medical devices to cut costs because such treatments quickly become a "right" under government-regulated health plans. If an innovative chemotherapy or AIDS treatment immediately has a huge, state-provided market, why focus on cutting costs? You'll note that the producers of notebook computers or hamburgers have no such disincentive.
Most disturbing is the reality that the "security" promised by the safety net is anything but secure. Unlike a mutual fund or checking account, there's no actual investment or savings when it comes to Social Security. It is, at its core, a Ponzi scheme in which the government loots your money today for the benefit of retirees and promises to do the same to future generations on your behalf.
So there is no real account with your name on it. In fact, the Supreme Court has ruled that the government does not owe us Social Security benefits by law, meaning that Congress is perfectly able to modify or cut benefits, which it has already done well over a dozen times since the program began.
At the heart of the social safety net is the moral belief that the government is responsible for our lives, and that, as Barack Obama has often said, "We are our brothers' keeper." Under this altruist sensibility, we are duty-bound to serve the needs of others, meaning that anyone needy has an inherent claim on anyone better off. The wealthy aren't merely able to deal charitably with those in need, but are legally obligated to sacrifice their earnings for the benefit of those they might not voluntarily wish to support.
As entitlements grow, so does regulatory authority. As I wrote a few weeks back, the Federal Reserve is now getting explicitly in the business of being the de facto risk manager of the nation's largest banks. Treasury Secretary Henry Paulson's new mandate to overhaul oversight of U.S. financial markets moves us more toward a controlled society where individual choice is subordinate to "the public good," whatever the ruling class believes that to be at the time.
Moral bankruptcy eventually leads to financial collapse as well, and the evidence is growing more obvious with each passing day. As noted in Barron's over the weekend, the future obligations of Medicare are now so staggering that liquidating all the residential real estate in the country — a sum of almost $12 trillion dollars — wouldn't even cover the costs. The Social Security tax rate, which began at 2% in 1935, has been raised consistently since, with the system's trustees suggesting the payroll tax will need to be increased to 16% by 2041 in order to maintain benefits — higher if life expectancy rates continue to climb. The same suffocating scenario will inevitably play out for insurance, health care, housing or any other government-controlled efforts to redistribute wealth from those who've earned it to those who haven't.
It's more than evident that a government "safety net" is anything but safe. Instead of the altruist philosophy that only the needy matter, our country desperately needs to return to the notion of rugged individualism under which we are each responsible for and capable of achieving our own security without the immoral coercion of publicity-seeking politicians. Any alternative leads to dependency, stagnation and economic despair. |
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Wed Apr 02, 2008 1:19 pm |
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Demeralda
F L I N T O I D
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This is asinine. The absolute *WORST* entitlement attitude is on display by the oil companies! Hello, did you listen to the hearings yesterday? Waaaah, don't take our 18 billion in tax breaks! Waaaah we NEED it, just in case SOME DAY we aren't making millions for our shareholder friends!
Tell me then, why can every other "civilized" country on earth manage to afford it, and have a healthy economy AND a good quality of life? Easy answer: their populace aren't a bunch of whores being pimped by their corporate/government overseers. |
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Wed Apr 02, 2008 2:09 pm |
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Adam
F L I N T O I D
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Oil costs us far less than the entitlements and the military industrial complex. We could nationalize the oil companies and move more towards communism but I think free market capitalism works best. We would probably already have electric cars and hydrogen cars in the U.S with a free market economy.
http://www.whokilledtheelectriccar.com/ |
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Wed Apr 02, 2008 2:31 pm |
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Dave Starr
F L I N T O I D
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| I've been hearing that it's possible the Japanese government may have subsidized, at least in part, the development of the Prius, something that's not allowed here. |
_________________
I used to care, but I take a pill for that now.
Pushing buttons sure can be fun.
When a lion wants to go somewhere, he doesn’t worry about how many hyenas are in the way.
Paddle faster, I hear banjos. |
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Wed Apr 02, 2008 2:55 pm |
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Dave Starr
F L I N T O I D
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quote:
Demeralda schreef:
This is asinine. The absolute *WORST* entitlement attitude is on display by the oil companies! Hello, did you listen to the hearings yesterday? Waaaah, don't take our 18 billion in tax breaks! Waaaah we NEED it, just in case SOME DAY we aren't making millions for our shareholder friends!
Tell me then, why can every other "civilized" country on earth manage to afford it, and have a healthy economy AND a good quality of life? Easy answer: their populace aren't a bunch of whores being pimped by their corporate/government overseers.
Some of those other countries also have a tax burden of over 50%. France, Germany & England are beginning to have problems with their entitlement economy; not enough people working to support those that don't, or won't work. what happens when the government can't afford to continue paying all the entitlements? What happens when taxpayers decide it's easier to live off the government handouts instead of working and paying taxes? What happens when businesses are taxed so high that they either close their doors or move out of the Country?
yes, we have huge problems here, but I don't think socialism is the right way to solve them.
In the entire history of the world, there have always been rich people and poor, and it'll always be that way. Do we solve that by lowering everyone's standard of living so we're all equally poor? I agree that corporate CEO's are vastly overpaid, and their bonuses are obscene. American Axle workers are on strike because the company wants to cut their pay in half, claiming they can't afford to pay them like they are now. Yet, the head of the company gets his big bonus as usual. But, what do we do? Do we mandate that a person is only allowed to make a certain amount every year, and anything over that will be confiscated? And, what will that amount be? |
_________________
I used to care, but I take a pill for that now.
Pushing buttons sure can be fun.
When a lion wants to go somewhere, he doesn’t worry about how many hyenas are in the way.
Paddle faster, I hear banjos. |
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Wed Apr 02, 2008 3:10 pm |
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Demeralda
F L I N T O I D
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Thank you, very sensibly put.
If the model didn't work, i.e. encouraged/rewarded people for NOT working, those countries would have already failed. They haven't.
You call that bringing DOWN everyone. I just can't see it that way... you're taking OBSCENELY rich people and bringing down their income SOME. I'm not suggesting they be poor all of a sudden, but let's face it -- they're not even paying what you or I pay in taxes now. I direct your attention to Warren Buffet's comments on how he paid less in taxes than his own secretary.
The oil comment is just one example. There is no one more certain (and assured) of their entitlements than corporate America, that was my point. The whiny oil execs just personify exactly what I'm talking about.
As for the military industrial complex, RIGHT ON man. That's our biggest damn hole.
Look, I do believe in as many entitlements as possible, personally. I don't care about the tax burden -- at least I'd be getting something in exchange! Like... A LIFE!! Guaranteed vacation, treatment for my health issues, paid college and graduate school. So yes, that tax is heavy, but you do get something invaluable for it. And not only that, but I know that EVERYONE is entitled to those same things! No more excuses!
However! If you cannot possibly find any way to see it the way I do, I can accept your premise, but only IF you acknowledge that we, the citizenry, are NOT the biggest problem in this country. Corporate America is. |
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Wed Apr 02, 2008 3:56 pm |
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Public D
F L I N T O I D
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quote:
Demeralda schreef:
Look, I do believe in as many entitlements as possible, personally. I don't care about the tax burden -- at least I'd be getting something in exchange! Like... A LIFE!! Guaranteed vacation, treatment for my health issues, paid college and graduate school. So yes, that tax is heavy, but you do get something invaluable for it. And not only that, but I know that EVERYONE is entitled to those same things! No more excuses!
Right on, Demeralda. I'm sick and tired of the attitude that hungry, hurt, homeless or helpless Americans are to blame for an economy that produces more hungry, hurt, homeless or helpless Americans. Life, liberty and the pursuit of happiness are not entitlements, Adam. They are rights.
http://jbs.sagepub.com/cgi/reprint/34/4/562
http://www.inmotionmagazine.com/pkivel3.html |
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Wed Apr 02, 2008 4:23 pm |
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Adam
F L I N T O I D
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quote:
Public D schreef:
Right on, Demeralda. I'm sick and tired of the attitude that hungry, hurt, homeless or helpless Americans are to blame for an economy that produces more hungry, hurt, homeless or helpless Americans. Life, liberty and the pursuit of happiness are not entitlements, Adam. They are rights.
http://jbs.sagepub.com/cgi/reprint/34/4/562
http://www.inmotionmagazine.com/pkivel3.html
I think the federal government is the main source of blame and not the poor Americans. I am pro life, I don't think high taxation = high liberty and I'm not sure how happy I will be in a severe economic depression caused in part by some short sided government programs that are not funded responsibly.
The first article requires a subscription. I disagree with the sentiment that rich white guys are the main ones to blame for poverty and black on black crimes. Who do you think pays for welfare and foodstamps?
I do think white male politicians are a main cause of the problems for black and white america though but I think the women and African american politicians also go along with things like the war on blacks (drug war) and the certain gang recruitment tools in public housing legislation and ecomic marginalization laws which black people overwhelmingly support. |
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Wed Apr 02, 2008 7:51 pm |
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Ted Jankowski
F L I N T O I D
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There were so many whole in this article I will try to only respond to one or two.
quote:
As I've written before, it is America's historical commitment to capitalism and individual rights that has differentiated our prosperous economy from the socialist basket cases of North Korea, China and communist Cuba. When economic freedom is protected, societies see vast increases in productivity that result in higher-quality, lower-cost products.
Government has destroyed economic freedom. Under the Guise of capitalism when all's it is, is pure greed. These countries mentioned. Some are failing while China is thriving. China has no Environmenatal laws that we make our companies follow. You know those absurb laws that won't let compaines dump cancer causing agents intot our water supply. Then we have those pesky OSHA Rules. That Mandate business provide safe working environments. We make them lock out robots, and cut power to machines before you work on them. That hurts production. We don't have to worry about that in china. People working in substandard conditions, without breaks, having their kids work next to them. Hmmm, That just makes the product less costly and more profitable for americans to afford. The Problem is. No one can compete wen the work force your competing agianst doesn't follow the same rules. Then our government loses it's tax base and has to find new ways to get money. They just raise our taxes and fees. Encouraging people not to continue to work. After all. Welfare at least sustains if you play it right. Why work 60 hours a week to just get by. You can get by on Welfare and not work. Goernment actually encourages it. |
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Wed Apr 02, 2008 8:56 pm |
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Dave Starr
F L I N T O I D
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| keep working; millions on welfare are depending on you. |
_________________
I used to care, but I take a pill for that now.
Pushing buttons sure can be fun.
When a lion wants to go somewhere, he doesn’t worry about how many hyenas are in the way.
Paddle faster, I hear banjos. |
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Thu Apr 03, 2008 7:18 am |
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Ryan Eashoo
F L I N T O I D
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AMEN!
quote:
Public D schreef:
quote:
Demeralda schreef:
Look, I do believe in as many entitlements as possible, personally. I don't care about the tax burden -- at least I'd be getting something in exchange! Like... A LIFE!! Guaranteed vacation, treatment for my health issues, paid college and graduate school. So yes, that tax is heavy, but you do get something invaluable for it. And not only that, but I know that EVERYONE is entitled to those same things! No more excuses!
Right on, Demeralda. I'm sick and tired of the attitude that hungry, hurt, homeless or helpless Americans are to blame for an economy that produces more hungry, hurt, homeless or helpless Americans. Life, liberty and the pursuit of happiness are not entitlements, Adam. They are rights.
http://jbs.sagepub.com/cgi/reprint/34/4/562
http://www.inmotionmagazine.com/pkivel3.html
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_________________
Flint Michigan Resident, Tax Payer, Flint Nutt - Local REALTOR - Activist. www.FlintTown.com |
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Thu Apr 03, 2008 7:47 am |
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Dave Starr
F L I N T O I D
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quote:
Demeralda schreef:
Thank you, very sensibly put.
If the model didn't work, i.e. encouraged/rewarded people for NOT working, those countries would have already failed. They haven't.
DS - Yet. Why are so many European countries full of immigrants "To do the jobs the locals won't do"? Because welfare pays more than working. The same thing is starting to happen here.
You call that bringing DOWN everyone. I just can't see it that way... you're taking OBSCENELY rich people and bringing down their income SOME. I'm not suggesting they be poor all of a sudden, but let's face it -- they're not even paying what you or I pay in taxes now. I direct your attention to Warren Buffet's comments on how he paid less in taxes than his own secretary.
DS - How far do you "bring them down"? Who decides?
The oil comment is just one example. There is no one more certain (and assured) of their entitlements than corporate America, that was my point. The whiny oil execs just personify exactly what I'm talking about.
DS - The oil companies profit margin is around 8%. is 8 cents on the dollar too much? Oil is a commodity. The price per barrel is determined by brokers & speculators, not the oil companies. Do we penalize them for government regulations mandating different gasoline formulas for different parts of the country and different seasons? Do we penalize them for regulations that effectively stop them from building new, more efficient refineries, and from drilling in our country & along our shorelines?
As for the military industrial complex, RIGHT ON man. That's our biggest damn hole.
DS - So, we should eliminate the military? Military equipment is expensive. Do you want the people defending us equipped by the lowest bidder, putting their lives even more at risk?
Look, I do believe in as many entitlements as possible, personally. I don't care about the tax burden -- at least I'd be getting something in exchange! Like... A LIFE!! Guaranteed vacation, treatment for my health issues, paid college and graduate school. So yes, that tax is heavy, but you do get something invaluable for it. And not only that, but I know that EVERYONE is entitled to those same things! No more excuses!
DS - If I understand correctly, you want government paid vacations, "free' health care, and "free" education through grad school. Then, when you start working, you'll gladly donate a minimum of 1/2 your income to the government to pay for all that.
However! If you cannot possibly find any way to see it the way I do, I can accept your premise, but only IF you acknowledge that we, the citizenry, are NOT the biggest problem in this country. Corporate America is.
DS - Profits are evil? We should tax all businesses out of existence? Government controlled economy worked really well in Russia, didn't it? The political elites, rather than the corporate elites still had theirs, while the general population had nothing. Same situation, just different people at the top.
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_________________
I used to care, but I take a pill for that now.
Pushing buttons sure can be fun.
When a lion wants to go somewhere, he doesn’t worry about how many hyenas are in the way.
Paddle faster, I hear banjos. |
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Thu Apr 03, 2008 9:19 am |
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Demeralda
F L I N T O I D
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And what's changed in Russia? Same deal.
How much down? To within 1,000 the average income. How's that? That's asking too much? They can't live on what, 35 million? The people decide -- let's vote on it, by all means.
OIL COMPANIES ARE MAKING RECORD PROFITS. Why don't they take some of that profit money and invest it in refineries? Why are we paying 18 billion for them to lie to us? I'd be thrilled if oil was government owned.
As for the military industrial thing, STOP WASTING money on projects that are a waste!!
http://www.csmonitor.com/2008/0403/p99s01-duts.html
This is what I'm talking about. Paying for stuff that's off schedule, failing, and I don't even want to comment on missile defense. But the easiest way to eliminate the majority of the problem RIGHT NOW is to get out of IRAQ!!
I am talking about what we all deserve, not just what *I* want. Let's catch up to some bare minimum standard of human rights, shall we?
Profits are evil when they come at the cost of our humanity, a la Wal-Mart trying to bilk a paralyzed woman for insurance money they had to pay. YES THAT IS EVIL. |
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Thu Apr 03, 2008 10:23 am |
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Adam Ford
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I think the U.S. could get by with only a quarter of the world's military budget. There would should still be enough money to defend our borders have a missile defense shield and spy on every country in the world. Technically I think we could get by with only U.S. bases but I think we could definately downsize dramaticaly from 700+ overseas bases in 130 countries. I also do not understand why we are still at war in Korea. http://www.sentienttimes.com/04/feb_mar_04/empire_bases.htm
http://en.wikipedia.org/wiki/Military_budget_of_the_United_States
"The 2005 U.S. military budget was larger than that of the next 168 biggest spenders combined, and over eight times larger than the official military budget of China. The United States and its close allies are responsible for about two-thirds of the world's military spending (of which, in turn, the US is responsible for the majority). Military discretionary spending accounts for more than half of the U.S. federal discretionary spending, which is all of the U.S. federal government budget that is not appropriated for mandatory spending."
With the entitlement nightmare we are heading towards the choice is almost down to starve our seniors or withdrawl to our borders. If we do withdrawl our military we could easily station them at the Mexican border and defend the U.S. |
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Thu Apr 03, 2008 11:50 am |
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Dave Starr
F L I N T O I D
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quote:
Demeralda schreef:
And what's changed in Russia? Same deal.
How much down? To within 1,000 the average income. How's that? That's asking too much? They can't live on what, 35 million? The people decide -- let's vote on it, by all means.
DS - OK, anyone that makes more than my Social Security check is obscenely rich.
OIL COMPANIES ARE MAKING RECORD PROFITS. Why don't they take some of that profit money and invest it in refineries? Why are we paying 18 billion for them to lie to us? I'd be thrilled if oil was government owned.
DS - keep an eye on Venezuela. Chavez is busy nationalizing the oil industry there. Let's see how well that works.
As for the military industrial thing, STOP WASTING money on projects that are a waste!!
http://www.csmonitor.com/2008/0403/p99s01-duts.html
This is what I'm talking about. Paying for stuff that's off schedule, failing, and I don't even want to comment on missile defense. But the easiest way to eliminate the majority of the problem RIGHT NOW is to get out of IRAQ!!
DS - OK, lets pull ALL our troops out of every country they're stationed in and close all bases overseas. Tell all countries to defend themselves; we're done. We can use the troops to guard our borders. Unless, of course, we should just disband the military. While we're at it, lets tell the UN to get out of Dodge. That'll raise everyone's opinion of us.
I am talking about what we all deserve, not just what *I* want. Let's catch up to some bare minimum standard of human rights, shall we?
DS - does that "bare minimum of human rights" include government mandated vacations, "free" health care, and free college through grad school you mentioned in a previous post?]/b]
Profits are evil when they come at the cost of our humanity, a la Wal-Mart trying to bilk a paralyzed woman for insurance money they had to pay. YES THAT IS EVIL.
[b]DS - Ypu must have missed the announcement that Wal-mart decided not to demand repayment of that lady's insurance costs.
From previous posts, I get the impression that my having good health insurance somehow makes me a bad person. Well, when I turned 65, I was automatically enrolled in Medicare. I had no choice in the matter. And, my former employer automatically, without any choice on my part, moved my insurance coverage to a plan that doesn't cover nearly as much as it did, with much higher copays. I went to the Doctor for a routine checkup 2 weeks ago. Before they drew blood for a Cholesterol check, I had to sign a statement saying that under Medicare & my new insurance, the blood work may not be covered & I would be liable for the cost. If I had no insurance, I could go to Hurley, get it done free, and when the bills came just ignore them like a lot of people do. |
_________________
I used to care, but I take a pill for that now.
Pushing buttons sure can be fun.
When a lion wants to go somewhere, he doesn’t worry about how many hyenas are in the way.
Paddle faster, I hear banjos. |
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Thu Apr 03, 2008 2:28 pm |
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