‘A Teachable Moment’

"Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery..." -- Winston Churchill

George Rebane

Having already posted an update to 'Unlimited Debt Musical Chairs', I woke up this morning to a WSJ editorial that succinctly summarizes the big progressive lie continually drummed into voters for at least the last decade - the lie that Social Security was solvent, and would be for some years to come.  The lie was deeply embedded by politicians like Al Gore and liberal outlets like PBS doing specials on the solid funding of America’s retirement account.  Therefore it’s no surprise that local yokels all over the country repeated it to their friends and neighbors.  But it has been an ongoing surprise, at least to me, that these same people were so dense as not to snap out of it when told what that SS Trust Fund contained.  Their standard parrot-like response was, ‘But that’s just your opinion.’

And this universal response came even on top of one of their own leaders, Bill Clinton’s budget director Jack Lew, who told the country in 1999 that the they shouldn’t trust the Trust Fund – it was empty, it had in it only a growing stack of IOUs that the government had no plan for redeeming other than borrowing more from the future.

This should be a teaching moment for all out there who are depending on redistribution of wealth for their quality of life.  But it is not likely that anyone out there or nearby will learn.

Peggy Noonan delivers a sobering and adult admonition about the current doings in Washington; it’s worth a read.

Comments

[Greg Goodknight]

It's a shame that the Noonan op-ed is behind the wsj paywall but I'm guessing it didn't say anything Milton Friedman didn't cover decades ago.

In a sad way, it's all arguably Friedman's fault. Without payroll withholding, modern Federalism could never have been attained, but he did apologize, and chances are good someone else would have championed it eventually.

[Greg, I googled this cached version of the Noonan piece. Can you access it?
http://webcache.googleusercontent.com/search?q=cache:vRyJ9rRDnsUJ:online.wsj.com/article/declarations.html+peggy+noonan&cd=1&hl=en&ct=clnk&gl=us&source=www.google.com

gjr]

[Todd Juvinall]

I remember when Gore was put in charge of the "lockbox" by Clinton. The solder joint on the bottom came loose and it fell through to the general fund. Our retirement money is now paying to educate illegal immigrants.

[Mikey McD]

Goodnight, payroll withholding by employers is evil. Imagine our world today if each citizen manually wrote a check each month for SS, one for Medicare, one for federal income tax and lastly one for state income tax (CA).

What about allowing folks who already paid into SS and medicare the option of opting out in all future years, forfeiting 100% of what they paid in... I have contributed approx $200k that I am willing to forfeit if I never have to pay into the SS or medicare system again.

[Greg Goodknight]

Todd, you've fallen into the trap that there ever was anything that could be conceivably be a "lockbox". It was a cruel joke to begin with.

No Social Security taxes were ever "saved", and neither FDR or anyone else expected the taxes to be "saved". The program always was an intergenerational checking account, with the young making deposits and the old writing the checks.

[Greg Goodknight]

McD, why you took my statements as being approving of withholding is beyond my ken.

[Douglas Keachie]

Suppose I gave you a couple of Trillion dollars and ask you to hold them for the American people. What do you do with them? You could put them in your mattress (if you had a really BIG mattress) and see inflation eat them up. You could invest in uranium stocks or gold and watch them flucuate to zero. Or you could invest them in the safest investment known to man, namely US Treasury bonds which is what has been done. These bonds have the full faith and credit of the US behind them. Now you may feel that US bonds are not safe, but if so, that would be a much larger problem than Social Security, and please do not tell the Chinese. BTW, a number of times in the past (11? 16?), the income of the SSA has been smaller than its payments. They sold some bonds–no problem.

This is borrowed information,that I happen to agree with. Greg will tell you where it came from, just be patient.

[Greg Goodknight]

Much of it came from where you get most of your ideas, Keach. It's a shame sunlight can't shine there.

[Greg Goodknight]

George, I remember seeing the tax rate projections made towards the end of the Clinton presidency that would keep SS "solvent" through the end of my expected lifetime. Virtual indentured servitude of my son's generation in order to pay for the facade of *their* social security contributions, and a huge sum to pay off the "bonds" that were my 'excess contributions' and used to paper over deficit spending of the past.

[Douglas Keachie]

Those that contributed were not those who stole to pay for unneeded wars.

I wouldn't be able to read my screen if the sunlight shone directly on it. You ain't any kin to that dude who just murdered somebody over a solar light theft, would you?

http://www.plumasnews.com/home/8425-mcondon.html

[RL Crabb]

A good number of my friends with 401K's saw half their retirement funds wiped out in '08. So you got the government or WallSt...Are you going to invest in the skunks or the weasels?

[Dixon Cruickshank]

That Gold stuff sounds pretty good Keach - 0 you maybe need to read a paper or something. Even the ad guy on Beck says gold has never been 0. Close at an all time high 1597 I think Fri

[Dixon Cruickshank]

I will give you this, T Bills used to be the safe haven, now - not so much. They can't give them away, except to each other - Fed - Tres.
That was 4 yrs and Pelosi ago

[Mikey McD]

Greg, I was agreeing with you.

"McD, why you took my statements as being approving of withholding is beyond my ken.

Posted by: Greg Goodknight | 16 July 2011 at 03:59 PM "

[Mikey McD]

Don't even try to explain to progressives what happens to the value of the "i.o.u's" when interest rates rise, US dollar value declines, population of younger generations decrease or foreign debt holders decide to sell... at best such facts will fall on deaf ears.

[George Rebane]

Dixon, you ol' sumbich, welcome back to RR. Glad to see that you finally got the best of TypePad.

DougK, your assessment of the SS funding alternatives are precious. Don't change a jot or tittle in arguing that Treasuries are the way to go. The only thing that might stick in your craw is why no one can go into that Trust Fund and pull out a few bucks to make the 3aug11 payment. Our President knows when he said, 'Our coffers are empty' unless we can borrow more. There's no there there.

[Paul Emery]

Peggy Noonan, a former speechwriter for Reagan and Busn1 might be worth listning to. She sure got it right about Sarah Palin's VP run when she wrote:
"But we have seen Mrs. Palin on the national stage for seven weeks now, and there is little sign that she has the tools, the equipment, the knowledge or the philosophical grounding one hopes for, and expects, in a holder of high office......She was a dope and unqualified from the start........ In the end the Palin candidacy is a symptom and expression of a new vulgarization in American politics. It's no good, not for conservatism and not for the country. And yes, it is a mark against John McCain, against his judgment and idealism."

http://online.wsj.com/article/SB122419210832542317.html

[Douglas Keachie]

Just think, without welfare the world might have been free of Harry Potter, and the author would have been walking the streets to support her family.

[Douglas Keachie]

Did not Bush start a war(s) that he then stuck the IOU to Obama and Social Security? Conservatives have robbed the national piggy bank every bit as much as liberals.

So let their favorite form of socialism, the defense of overseas bidness, take a hit as well, and cut the defense budget, dollar for dollar, everything taken from the social programs. Leave the nuke missile subs fully funded. They are the only thing that actually keeps us safe. The rest of the military abroad just is a subsidy to USA doing bidness overseas, especially the oil bidness.

[Bonnie M]

Interesting comments...but...Many years ago I received Social Security state of the state information from a Representative who wanted my opinion. The information stated that the SS Fund was rich and earning $ trillions in interest. Because it was so rich our Reps were thinking of taxing working Americans less, or even eliminating the tax altogether, because of the tremendous amount of interest it was earning on its own for future generations. Wish I'd kept a copy of the letter. Years later we learned all that changed because the Lyndon Johnson administration took Social Security from the Independent 'Trust Fund' and put it into the General Fund so that Congress could spend it. One huge aspect of taxation without representation, and the beginning of our financial problems. Taxation without representation is like flushing money down the toilet. There will never be enough money to satisfy the appetite of big government spenders giving themselves bigger and more lavish benefits. Unfortunately, throughout history, this same behavior eventually gets the attention of the over-taxed masses who began to notice who their rich oppressors really are...hence the quote..."their money testifys against them." The simple, timeless story of Robinhood explains the condition very well so that even children can understand see where we're headed. If you know history you don't have to be a prophet to see where we're headed.