Unbelievable? – maybe not (updated 17aug2010)

George Rebane

Progressives and their ambiguous cousins, the liberals, cannot be this ignorant.  Tonight on Fox News Neil Cavuto interviewed James Roosevelt Jr, FDR’s grandson and former associate commissioner of Social Security.  Junior, sober as a judge, claimed in front of a national audience that SS was completely solvent due to the Treasury bonds worth trillions squirreled away in its vaunted “lock box” – the one shown on PBS as a stack of computer printouts in a file cabinet.

It is remarkable that this individual is still walking the streets on his own recognizance.  Cavuto was careful in showing him deference while successfully fighting back giggles that tend to loosen and explosively expel all the phlegm accumulated in the back cavities of your nose.  Nevertheless, it was an extraordinary interview that maintained all previously established dignities.  But the ignorance displayed does require a bit more consideration – maybe we can look under the hood and see what is there.

Almost all people well read on the national fisc know that the SS “lock box” is full of unfunded liabilities in the form of national debt denominated in Treasury bills.  There is currently no known way to pay off this debt short of monetizing it (print new money).  In fact, now with trillion plus dollar deficits stretching beyond the foreseeable future, there is less known today about paying off this debt with newly created wealth than we knew yesterday.  Everyone, including the Chinese, is betting that they can find a chair before the music stops playing.  SS is among those guaranteed to remain standing with the bag.

Daniel B. Klein, professor of economics at George Mason, recently wrote a piece ('Are You Smarter Than a Fifth Grader', 8jun10 WSJ) that summarized a Zogby International survey on which he had participated with Zelijka Buturovic.  From this the indelible conclusion was that “self-identified liberals and Democrats do badly on questions of basic economics.”  In more succinct and “unequivocal” terms – “The left flunks Econ 101.”

No one has made a name accusing FDR of being stupid.  The best we can attribute his abysmally bad economic policies to is, perhaps, an unexamined love affair with Stalin’s programs inflicted on the USSR during the 20s and 30s, which for our progressives became the beloved templates hyped by what then passed for journalism, and, of course, Hollywood (see a reprise in ‘Reds’).  No matter how the final attribution of that may settle, James Jr was the inheritor and bears the full burden of his double helix.

More illumination comes from Klein reporting the results of the eight question survey for the six self-identified ideological groups.  The average number of incorrect responses for each group were –

Very conservative   1.30
Libertarian   1.38
Conservative   1.67
Moderate   3.67
Liberal 4.69
Progressive/very liberal 5.26

And according to party affiliation the results were –

Republicans  1.61
Democrats  4.59

It is hard to elaborate on such robust and self-explanatory results other than to give those of the left the benefit of doubt on the ignorant-to-evil spectrum.  Evil requires a more determined and studied background.  And we let the reader judge the merits of the double helix that in such cases must be brought to bear.

[17aug2010]  As if we needed more proof to underline the above results.  Please take a look at the 9aug10 Nevada County Democratic Central Committee newsletter that can be downloaded here.  The last segment contains a piece on the 'five myths of Social Security' that makes clear the kind of parallel (and insane) universe these socialists live in.  They actually believe that the Treasuries in the "lock box" that "fully fund" SS are 1) not part of the national debt, 2) their interest payments to SS recipients are not contributing to ongoing deficits, and 3) because the US has never defaulted on a Treasury issue before, SS recipients will, into the far future, continue receiving the full value of their promised retirement payments from these Treasuries.  Beyond amazing! but it does explain why they talk and vote the way they do.

Comments

[Todd Juvinall]

The democrats and their liberal bent are being exposed for what they are and it isn't pretty. They lie abot everything. SS is solvent? The stimuli created millions of jobs? Obamacare has no death panels? On and on. Now they have a strategy to be quiet on their bills they've passed and just attack R's personally. No wonder the people of this country are so disgusted with liberals and democrats.

[Nuff said]

Quick question, Todd, as you brought up the "death panels" again.

If a medicare patient in his 90s needs a liver transplant who should pay for it?

[Todd Juvinall]

So let me get your drift. If I am required to have Obamacare and I have paid my required money and then at age ninety I need a transplant the panel will decide whether I get one? I would say if thy don't that would be aaaah, a death panel.

[Nuff said]

The question doesn't concern "Obamacare." It's straight forward, as things are today, before Obamacare goes into effect. If a medicare patient needs a transplant, who pays for it?

[Todd Juvinall]

You are not using a logical argument.

[Mikey McD]

George, the 'intelligence' matrix discussed above is confirmed by reading our local Democratic cmmtee newsletter (luke warm kool-aid at best): http://www.nevadacountydemocrats.com/news.php

Here are some statements from the newsletter void of fact, reason and economic principals:

"The most honest, caring, and actualized people I know are Democrats. I’m
confident there’s a scientific reason. I trust them to run the country."(Why Is a Democrat?)

"There is no Social Security crisis...Social Security doesn't need to be
fixed...The Social Security Trust Fund isn't full of IOUs, it's full of U.S.
Treasury Bonds."

"If business is the salvation of our economy why did the banks mess up so badly? Why are they hoarding cash instead of lending?...why should those of us who have some trouble breathing, including the children of Nevada County who get more than average cases of asthma ... why should we have more lung disease because she also wants to suspend AB32?" (other voices- referring to capitalism and Meg's stance on AB32 which the author got wrong)

No wonder only 8 Nevada County democrats marched in the 4th of July parade!

[RL Crabb]

Yes...yes! Let's eliminate Medicare, MediCal, bar this useless scum from the emergency room so that Good Republicans won't have to wait in line the next time they get a migrane headache. There's a drug that might save your life, but it costs $5000 a month. No insurance? Too bad. Crawl off in the woods and die with some dignity. There won't be any death panels, only death.

[George Rebane]

Bob, I'm puzzled, which of the above comments (or was it something in my post that) triggered the laudable attempt at a new record for hyperbole?

[Mikey McD]

Was it government programs that brought us the cures, treatments, surgeons, prostheses, remedies... or were such luxuries the byproduct of liberty rich free market capitalism?

Would we have 5% of such luxuries if government ran health care (r/d etc) 'from the start'? Do you trust a government drowning in SS and Medicare debt to design and implement a system to keep its dependents alive longer?

[RL Crabb]

It's not the government program that's broken, it's the crooks who raided the kitty. My rant is directed at the notion that you can do better without it. I'm no fan of Obamacare, but Social Security and Medicare has saved millions from a life of utter destitution. If that money had been invested in the market, the end result would have as bare a cupboard as the so-called trust fund.

I'm for smaller, efficient government, but I'm not for throwing the baby out with the bathwater. There will always be poor people, and there will always be the need for some safety nets. To think otherwise is as delusional as anything the socialists can devise.

[RL Crabb]

George, you ought to know me well enough by now to know that I don't buy into conservative voodoo any more than I subscribe to liberal poppycock. Guess it's just in my nature to be "snarky".

[George Rebane]

Well said and on the mark Bob - snarky away! But I would offer an interesting alternative the results of which never fail to surprise even the staunchest supporters of the historical management of SS contributions. What if, instead of having operated the 'broken SS program' and stealing the money into the Treasury's general fund (replacing it with Treasury IOUs), we had invested, say, half the monies in the American, European, and Asian stock markets after WW2? This would have allowed the American worker to participate in the galloping growth of the entire world? Today would be a different world, we would never have missed a payment, even given the usual ups and downs along the way.

[RL Crabb]

Even if the money had been allowed to gain interest in a bank account, things would be better than they are. My skepticism of letting the market get their grubby paws on it is that capitalists aren't known to be any more honest than the politicians we love to bash. We found that out the hard way two years ago.

Have you ever noticed in those "one hundred years ago today" columns that there are always two or three items about elderly down and outers committing suicide? There was much despair before the advent of Social Security, mostly among those who had no families or ties to the church. While there are those who will take a handout anywhere they can get it, there are many others who would die alone, as a matter of pride, or depression because of their circumstances. Social Security is an earned income, shared among those who pay into it. It's not the same as charity.

[Mikey McD]

One could easily argue that SS and Medicare has enabled Americans to be 'irresponsible' or at the very least 'lazy'... when the definition of 'rights' is expanded to the few, the many pay for it in spades. Personally, I think SS and medicare should be optional and not forced (I think the same about income taxes). Is the income I earn mine or 'my' governments/politicians?

[RL Crabb]

I really wish the world would work the way you think it should, Mikey. It would be great if everyone was personally responsible for themselves, but you're a smart guy and I think you know that human nature doesn't work that way. The libertarian concept is just as utopian as the socialist paradise. That's why I think that there must be something in between that is practical in the real world. It ain't ever gonna be perfect.

[George Rebane]

For your consideration, I again humbly re-offer the non-profit public service corporation concept from the piece I wrote excoriating the Republicans. SS satisfies all the formal and legal definitions of a ponzi scheme. It is practiced by the biggest criminal organization in the land - you can't touch them.

http://rebaneruminations.typepad.com/rebanes_ruminations/2009/09/workers-and-work---the-coming-crisis.html#more

[RL Crabb]

Your proposal has merit, George, but you're right in saying it might not be the perfect solution. While private service providers may be more accountable than our omnipotent government, I'm sure someone will find a way to game the system. It seems to be something we humans excell at.

As to your assessment of our shrinking job base, I remember when I first heard of the concept of a "service economy." Maybe it's just my cartoonist mentality, but the first thing that came to mind was, we'll become a nation of waiters.

"Ya want fries with that?"

[George Rebane]

Agreed Bob. But we must always remember that the Rebane Rule (expanded) also applies to government as the biggest gamer of all since the feedback loop from its 'customers' is faulty to broken.

Rebane Rule of Capitalism - The good thing about capitalism is that it games whatever system it inhabits, the bad thing about capitalism is that it games whatever system it inhabits. Ergo, it is up to government to define the system so as to allow capitalism to be a salutary economic order for creating wealth in a society.