Monthly Archives: October 2013

As Painful As Possible, For As Many As Possible

I haven’t blogged about the shutdown, because, well, I haven’t blogged much about anything. Mea culpa.

I haven’t had time because I’m, quite frankly, not personally or professionally affected. Warren Meyer of Coyote Blog, however, is very personally AND professionally affected. Warren operates private concession operations that handle all on-site activities at parks, with a good portion of his business based upon federal parks.

These parks use no federal employees. They don’t require any federal dollars to operate. In fact, they pay rent to the federal government as part of the terms of their lease. So of all things, you’d think that the Feds would want them to remain open. In fact, in all previous shutdowns (including 1995 & 1996), they have remained open.

Not this time. They’ve been ordered to close.

I can’t do justice to all the coverage that already exists for this. While I assume many of my readers are also daily readers at Coyote Blog (and Popehat), I can’t be sure.

All of Warren’s post on this topic can be found here. Check them out, please. You will not be disappointed.

As it pertains to the shutdown, I have little patience for the Republicans here. The Republicans are playing a gambit they can’t win. The Dems are NOT going to defund or delay Obamacare. This is stupid on strategic and tactical levels. You can’t win and you’re going to damage your brand in the process. WTF are you thinking?!

But what I see from the Obama administration is wrong on many more levels. It seems that the administration’s tactic here is to screw as many people as possible, to make this as painful as possible, and then hope the blame rests only on the Republicans for what the administration has done. There is no reason to close these privately-operated parks. There’s no reason to throw people out of their homes because they rest on federal land. There’s no reason to close open-air memorials that don’t require human workers to operate. While I’m not sympathetic to Republican partisans, I have to say that naming the barriers that closed the World War II memorial “Barrycades” is quite smart.

I’m still filled with nothing but disgust for everyone in Washington. Both sides are angling for a “win”. I want to see both sides lose, dammit!

Unfortunately, I know that in Nov. 2014, lawmakers from both parties will probably enjoy >90% re-election rates. And people wonder why I say that democracy doesn’t work?

Bye Bye 4th and 5th amendment: Obamacare info may be used for Law Enforcement and Audit activities

Well… we knew that the 4th and 5th amendment meant nothing to them… never mind HIPAA… but really?

 

Obamacare Marketplace: Personal Data Can Be Used For ‘Law Enforcement and Audit Activities’

Maryland’s Health Connection, the state’s Obamacare marketplace, has been plagued by delays in the first days of open enrollment. If users are able to endure long page-loading delays, they are presented with the website’s privacy policy, a ubiquitous fine-print feature on websites that often go unread. Nevertheless, users are asked to check off a box that they agree to the terms.

The policy contains many standard statements about information automatically collected regarding Internet browsers and IP addresses, temporary “cookies” used by the site, and website accessibility. However, at least two conditions may give some users pause before proceeding.

The first is regarding personal information submitted with an application for those users who follow through on the sign up process all the way to the end. The policy states that all information to help in applying for coverage and even for making a payment will be kept strictly confidential and only be used to carry out the function of the marketplace. There is, however, an exception: “[W]e may share information provided in your application with the appropriate authorities for law enforcement and audit activities.” Here is the entire paragraph from the policy the includes the exception [emphasis added]:

Should you decide to apply for health coverage through Maryland Health Connection, the information you supply in your application will be used to determine whether you are eligible for health and dental coverage offered through Maryland Health Connection and for insurance affordability programs. It also may be used to assist you in making a payment for the insurance plan you select, and for related automated reminders or other activities permitted by law. We will preserve the privacy of personal records and protect confidential or privileged information in full accordance with federal and State law. We will not sell your information to others. Any information that you provide to us in your application will be used only to carry out the functions of Maryland Health Connection. The only exception to this policy is that we may share information provided in your application with the appropriate authorities for law enforcement and audit activities.

The site does not specify if “appropriate authorities” refers only to state authorities or if it could include the federal government, as well. Neither is there any detail on what type of law enforcement and/or audit activities would justify the release of the personal information, or who exactly is authorized to make such a determination. An email to the Maryland Health Connection’s media contact seeking clarification has not yet been answered

The second privacy term that may prompt caution by users relates to email communications. The policy reads:

If you send us an e-mail, we use the information you send us to respond to your inquiry. E-mail correspondence may become a public record. As a public record, your correspondence could be disclosed to other parties upon their request in accordance with Maryland’s Public Information Act.

Since emails to the marketplace could conceivably involve private matters regarding finances, health history, and other sensitive issues, the fact that such information could be made part of the “public record” could prevent users from being as free with their information than they might otherwise be. However, as noted, any requests for such emails would still be subject to Maryland’s Public Information Act which contains certain exceptions to the disclosure rules.

Read the fine print eh?

 These are such clear 4th and 5th amendment violations I can’t believe anyone didn’t immediately say “uh guys… we cant actually do this”…

… but as I said, we know that our elected and selected “lords and masters” don’t give a damn about the 4th or 5th amendments (or really any of the others ones any time they become inconvenient).

So while I’m sure they were told they couldn’t do it, I’m sure they said “ahh well the disclaimer and release is enough, we’ll be fine”.

 Yeah no.

 And as far as HIPAA goes… In reality these terms of use are not anywhere near an adequate HIPAA disclosure release, so using any of this data in any manner other than for healthcare purposes would be a federal offense.

I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

Don’t you wish YOUR job had raises like this?

This whole government “shutdown” thing has brought out a lot of talk about federal pay.

A liberal of my acquaintance posted something on facebook a couple days ago:

“A Republican I know said, ‘If you got furloughed because of the shut down, maybe you should get a real job.’
Yeah… about that…”

‘pon which he linked to a story about the cops, border patrol agents, etc… who were not being paid while protecting congress, and our country.

It’s a good point. There are plenty of people doing real, important jobs, who are not being paid… Some of them have gone home, but a LOT of them… actually about 2/3 of the federal non-military workforce, hasn’t. They’re still doing their jobs, they just aren’t getting paid for them.

I don’t have a problem with good people doing as best they can at their job…

The problem I have is… there’s too damn many of them… And they are doing too many things, that they don’t need to be, or shouldn’t be doing.

So, I said something which I think is fairly well known in libertarian circles:

“A good friend of mine is a border guard with ICE… yeah, he’s got a real job.

That said, there IS a point when the most liberal liberal in America has to think ‘why in the hell do we have 50% more federal government payroll than 1998… we’re not getting more than we got then… at least not more good useful stuff….’ That’s just non-military federal staff payroll by the by, not any other spending…”

His commenters didn’t believe me, or just said inflation or homeland security etc…

I clarified, no, federal non-military payroll; meaning the total compensation (wages/ salaries, non-cash compensation and benefits) of full time permanent non-military federal workers, has increased, by at least 50%, in constant dollar terms, from 1998 to today.

Oh and homeland security is only a fairly small portion of that increase (Only 9% of the federal workforce, though it is the single largest federal agency – excluding the civilian employees of the military and veterans affairs – in terms of manpower).

To which he said, quite reasonably Would you care to source that?.

Gladly sir….

Congressional Reporting Service report on trends in the federal workforce:

http://assets.opencrs.com/rpts/RL34685_20110419.pdf

Congressional Reporting Service report on average wages etc… in the federal workforce:

http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1702&context=key_workplace

Several other primary sources in the footnotes of this article, notably from the Bureau of Economic Analysis:

http://www.downsizinggovernment.org/overpaid-federal-workers

So… let’s break it down shall we?

The CRS reports there was a 17%… actually 16.7% increase in the federal workforce between 2000 and 2010.

I don’t have the numbers from 1998, 1999, 2011, 2012, or 2013, but other sources indicate that it’s probably not much, because there were hiring freezes and reductions that make it pretty much a wash. 17% is probably good for 1998 to 2013.

So, a 17% increase in non-military federal staff from appx. 1.8 million to appx. 2.1 million (excluding the civilian employees of the Army, Navy, Air Force, and Veterans Affairs; currently about 900,000).

Oh and it’s important to note that these numbers do not include contractors. Contractors compensation does not count against federal payroll, and they are not counted as federal workers… which is one of the major reasons there are so many of them…

How many?

In 1998 there were approximately 1.8 million federal workers, and only 6.5 million contractors.

Well, as of 2013, there are appx 2.1 or million federal non-military workers… and appx 17 million contractors.

Contractor compensation DWARFS the federal payroll. It’s well over 20 times federal payroll in fact… though we really have no exact idea how much, because it’s buried in hundreds… or possibly thousands… of different budgets, and literally millions of line items (many of which are gray, or black).

So, let’s talk money…

First, let’s talk about total compensation.

Total compensation includes both wages and other cash compensation, and non-cash compensation such as benefits.

Bureau of Economic Analysis reported average total compensation for federal employees went from appx. $67k in 2000 to appx. $115k in 2012.

In constant dollar (that is, adjusted for inflation) terms that is a 29% raise.

Oh but that’s just from 2000-2012 I don’t have the exact numbers here from BEA for ’98,’99, and 2013…

Purely from a trendline analysis, you see a 2.15% annual average constant dollar compensation increase. Extend the trendline from 1998 to 2013, and instead of 29% it’s about 38%.

A 17% workforce increase and a 38% raise, is a 60% increase in total payroll…

Now… even if you just take cash compensation, BEA reports an increase from $56k to $82k; a constant dollar increase of 16%.

That’s much lower than the increase in total compensation, but still quite respectable… And remember, this is in constant dollar terms, so that’s over and above inflation and cost of living increases.

Again, thats 2000-2012. Extending the trendline from 1998 to 2013 and you get 21%.

21% raise times a 17% workforce increase, is a 41% total increase in constant dollar terms; for just cash compensation.

Now… those are BEA numbers, what about CRS numbers?

Hmm… I don’t have the exact numbers on total comp increases from those years… But I do have their percentages… in fact I have every percentage increase, and the inflation percentage, for every year since 1969…

Federal Average salary and wage increases year over year, 1999-2013 (1998 would reflect increases from 1997):

1999: 3.4% over inflation
2000: 2% over inflation
2001: 0.3% under inflation
2002: 0.4% under inflation
2003: 0.2% over inflation
2004: 2.0% over inflation
2005: 0.2% over inflation
2006: 1.4% over inflation
2007: 1.6% over inflation
2008: 1.8% under inflation
2009: 1.6% over inflation
2010: 1.9% over inflation
2011: 1.8% over inflation
2012: 1.8% over inflation
2013: 1.8% over inflation

Official numbers have not been released for 2011, 2012, and 2013; the 1.8% is from news reports and other websites stating that though federal salaries have been in a base rate freeze, the average salary has increased 1.8% over inflation in each of the last 3 years. This is consistent with previous increases.

So, from purely federal internal sources, we have an average wage/salary only, increase of 24.8%. Times a workforce increase of 16.7% (also from the CRS), we have a 45.6% increase.

So… there’s the CRS’s own estimate, of average wage and salary alone.

Unfortunately, the CRS doesn’t estimate total compensation, but if we assume the BEA numbers are reliable, non-cash compensation has increased from appx 22% of cash compensation in 1998 to approximately 40% of cash compensation in 2012.

This estimate is not out of line with other trends and percentages well known in HR (noncash compensation, particularly benefit costs, have doubled or more in the last 15 years)… so I think it’s a good and reasonable approximation.

Oh… might be useful to summarize here.

I’ve got two different sets of numbers, which are different enough to be noticeable, but not enough to completely contradict each other.

Note: The difference between the BEA and CRS may include slight differences in the way they calculate compensation; and they definitely include differences in the way inflation is calculated. The BEA numbers used BLS inflation adjustment. CRS uses CPI based inflation adjustment (CPI is a component of the BLS inflation adjustment, but there are other elements included as well).

Workforce increase 16.7%

BEA: cash compensation increase 21% total comp increase 38%
CRS: cash compensation increase 24.8% total comp increase 42.8%

Total payroll increase cash/comp

BEA: 41%/61%
CRS: 46%/66%

So… no matter which numbers you believe, total comp increase is WELL over 50% in 15 years, and according to the CRS cash comp is up nearly 50%; and the lowest estimate is 41%…

Over and above inflation…

Yeah… don’t you wish your job had raises like that?

Oh and one more thing…

From the late 1960s, through the 80s and into the early 90s, federal workers as a whole were actually paid quite poorly, as compared to comparable private sector jobs. Their wage scales were originally set at bottom of market to begin with (generally though of as a tradeoff for their better job security and benefits), and the unusually high inflation from 1968 to 1984 had private sector wages rapidly increasing, while federal cost of living adjustments were significantly under the rate of inflation.

This left a population of workers who were dramatically underpaid in comparison to the private sector, all the way through the early 1990s.

Many still are. Those in the bottom 2/3 of the federal pay scale are generally still significantly UNDERPAID, not overpaid as compared to private sector; sometimes dramatically so (permanent non-contractor federal IT staff make less than half industry comparable salary for example).

Those in the top 1/3 though make quite a lot more than comparable private sector jobs.

…Well, that is, until you get to the “senior executive” level, where, once again, they make 1/2 or less what they would in the private sector ($190k a year is the top out. Private sector workers at those levels of education, experience, responsibility etc… typically make anywhere from $200k to over a million, with $400k+ not uncommon).

It is only from the mid 90s that the federal payroll, and specifically average pay (skewed by the top 1/3), began to dramatically outpace private sector pay.

The bottom 2/3 of the federal workforce didn’t get very much of that increase.

The top 1/3 of the federal workforce got much larger increases.

Also, there are far more workers in the top 1/3 of the pay scale than there were in 1998. Far more making more than $100k a year, and far more making more than $150k a year.

The middle 1/3 shrank significantly.

So there’s more low end, more high end, and less middle…

Not exactly shocking…

I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

The scope and scale of the fraud… and the misconception that allows it to continue and worsen

So, once again, telling people the truth about Social Security produces indignation, and the expression of common misconceptions… to wit:

“Hey wait a second. I paid into Social Security for 47 years. I’m just getting out that I paid in, and the return on my investment. It’s not my fault congress didn’t do what it was supposed to, and raided the trust fund”.

Actually, no, you’re not. Not even close.

The first thing is, as noted in the pieces “The Greatest Fraud in the History of the Human Race“, and “It isn’t, wasn’t, aint ever gonna be…“; there is no investment, no insurance, no pension, no annuity, and no “trust fund”.

The payments to current retirees are entirely and exclusively paid out of the taxes of current productive workers. Nothing else.

Further, retirees actually get far more out than they put in.

As of 2010, the average retired worker received $1180 per month, or $14,160 per year. This is, in theory properly inflation adjusted etc… So can be dealt with in constant dollar terms.

In constant dollars, the average individual salary has almost doubled over the working life of the current retiree, from somewhere around $13,000 (constant dollars remember) in 1963 to around $25,000 in 2010.

The FICA tax rate is currently 12.4%, currently split equally between the worker, and the employer. Meaning that the average annual FICA contribution is currently about $3100, $1550 by the employer, $1550 by the employee

That’s about 1/5th the amount paid out to the average retiree…

If we assume a 47 year working life (actually, the average is 39 years for women who work, and 44 years for men who work, with a national average of 37 years – including non-workers – but we’ll be generous), that would, presuming constant wages in constant dollars, mean a total contribution of about $146,000.

Against an 11 year average retirement, that would be about $13,200 a year… Only the average is actually $14,160, a difference of about $1000, or about 7%.

However, because constant dollar wages have actually almost doubled over the life of the average retiree (meaning that their FICA taxes were much lower for much of their working life; particularly prior to 1984) and because the average working life is approximately 44 years, not 47 years (for men who work… we’ll exclude women, as they didn’t make up a major percentage of the full time workforce until the 1980s), the actual numbers are much worse…

In constant dollar terms, given inflation (particularly the inflation that occurred from 1968-1984), and the current average lifespan after taking retirement of 11 years; the average social security recipient actually receives 2.7 times in benefits as they paid in (this is the SSA’s estimate).

This is primarily the result of inflation, and dramatically increased lifespan. Unfortunately, as no actual return earning investments have been made, it takes the increasing contributions from new and more productive workers, to keep paying down the current payments.

This tells the tale:

Total benefits paid, by year
Year – Beneficiaries – Dollars

1937 – 53,236 – $1,278,000
1938 – 213,670 – $10,478,000
1939 – 174,839 – $13,896,000
1940 – 222,488 – $35,000,000
1950 – 3,477,243 – $961,000,000
1960 – 14,844,589 – $11,245,000,000
1970 – 26,228,629 – $31,863,000,000
1980 – 35,584,955 – $120,511,000,000
1990 – 39,832,125 – $247,796,000,000
1995 – 43,387,259 – $332,553,000,000
1996 – 43,736,836 – $347,088,000,000
1997 – 43,971,086 – $361,970,000,000
1998 – 44,245,731 – $374,990,000,000
1999 – 44,595,624 – $385,768,000,000
2000 – 45,414,794 – $407,644,000,000
2001 – 45,877,506 – $431,949,000,000
2002 – 46,444,317 – $453,746,000,000
2003 – 47,038,486 – $470,778,000,000
2004 – 47,687,693 – $493,263,000,000
2005 – 48,434,436 – $520,748,000,000
2006 – 49,122,624 – $546,238,000,000
2007 – 49,864,838 – $584,939,000,000
2008 – 50,898,244 – $615,344,000,000

You can see that:

from 1950 to 1960, beneficiaries increased by a factor of 4.5, payments increased by a factor of 12
from 1960 to 1970, beneficiaries doubled, payments tripled
from 1970 to 1980, beneficiaries only increased by 30%, while payments increased by 400%
from 1980 to 1990, beneficiaries only increased by 11% while payments more than doubled.
from 1990 to 2000, beneficiaries increased by about 11%, payments increased by about 50%
from 2000 to 2010, beneficiaries increased by about 11%, payments increased by about 50%

These are reflective of the huge jump in expected lifespan between 1950 and 1990, and the massive inflation from 1968 to 1984.

We are about to hit another inflection point however. Or rather, we already have, it’s just not reflected in the numbers yet. In the 2000s, beneficiary growth slowed down, because the 1940s were a relatively low birth rate period for the U.S.

In 2007, the baby boomers started hitting minimum retirement age of 62. In 2010, they started hitting 65. The peak of the baby boom was from 1946 to 1959, where we maintained, on average, more than double our previous normal population growth year over year. This is combined with an expected increase in lifespan over previous generational co-horts of 3-7 years; and an increase in real income of almost 30% to 50% over previous cohorts.

So, the REAL fun, is the 10 years from 2010 to 2020… when instead of the typical 1 million or so additional beneficiaries, and 30 billion additional dollars in payments per year, we are expecting 2.5 million additional beneficiaries, and over 100 billion additional dollars in payments per year.

Then from 2020 to 2025, the increased slow down, to just 1.75 million additional beneficiaries… but still over 100 billion additional payouts.

Basically, we’re looking at increasing the beneficiary population by about 50%, and about tripling the annual payments, in the next 12 years.

This is happening, just as the earners in peak earning years fall off precipitously. From 1964 to 1975 the birth rate dropped by 30%, and has pretty stayed there ever since.

By 2025, we’re looking something like 75 million beneficiaries, and 2 trillion a year in payouts; against probably 125 million productive workers (this is accounting for population growth, as well as retirement growth).

That’s $16,000 per year, per productive worker.

Presuming todays average salary per productive worker of appx $25k with a real dollar increase of 3% annualized (the average over the past 100 years) over 12 years, you get appx $37k.

It would require a 45% payroll tax rate to cover that… Which is about 4 times what it currently is.

That’s JUST for social security, never mind all other taxes… and that’s a fairly optimistic growth rate for both worker population, and worker wages.

… and its obviously completely impossible.

We literally cannot tax our way out of this… We’d have to increase taxes to 100% of income… and then expect to actually get it (which we won’t. We’ve never been able to extract more than 22% of gdp for more than a few years even in WW2, and never more than 19% average over any rolling 10 year period); and it isn’t going to fixed by “modest reform”.

We are going to have to cut social security dramatically AND raise taxes dramatically… there is literally no other possibility.

Oh… and it gets worse for the following 11 years… well, that’s based on todays average survival after retirement… it’s estimated that average goes up by 4 years over the same time period… before it starts to get any better… and it’s not for 15 years after that, that retirements actually slow below the rate of worker increase…

… and then another 15… or given increasing lifespans probably 20 years at that point… before wages actually increase at a rate higher than retirement payouts.

Oh and the “trust fund”? Yeah, even if it actually existed, it would only be about 2.7 trillion… which is only about 4 years payments at current levels, and 2 years payments at expected future levels. So, even if the “trust fund’ hadn’t ever been raided, we’d STILL be in this situation.

So… it’s 2013… We’re already below zero, and if we don’t do anything to fix it, we’re basically hosed until about 2070.

And it isn’t because “you’re getting your fair share of what you put in”… You’re actually getting 2-3 times what you put in.

Well… for now anyway…

We’ve already run out of money… The question now is, what happens when we run out of debt, and excuses.

I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

It isn’t, wasn’t, aint ever gonna be…

I mentioned Social Security as an entitlement payment in my post on the government shutdown, and it raised a fairly common objection in several who read it:

They don’t think of Social Security as an entitlement, or a welfare payment; they view it as their right, by virtue of having contributed to the system for their entire working life.

So, time to correct a very major, and unfortunately common, misconception.

Social Security, is NOT a pension, nor is it insurance.

Now, I realize that the majority of the American public believe this is so, because they have been deliberately defrauded by our government…

First read this to understand the scope and scale of the fraud, and the problem it (now only vestigially) masks:

The Greatest Fraud in the History of the Human Race

Ok… so, by now, most people understand that Social Security, as it is, is essentially a legal Ponzi scheme (whether they accept that, or admit it… if they can do basic match, they at least understand it).

What I really didn’t fully appreciate until recently, is that often, even people who understand this is true, don’t understand why or how it got that way.

There is a very common misconception, even among otherwise economically, historically, and legally well informed and educated people, that the current state of Social Security is somehow a twisting of what it was intended to be, or taking advantage of loopholes etc…

Many people believe that Social Security was set up to be an annuity based insurance and pension plan. That paying FICA contributions was supposed to buy you into a long term annuity, or investment plan, and that your Social Security payments were intended to be the product of that investment.

They think that the “trust fund” exists, and was set up to collect and invest the contributions of the workers who paid into it, so that the investments would fund the workers retirements.

They believe that the problem with Social Security is that congress has been raiding the trust fund since 1958 (most don’t know it was since ’58, but they are sure that’s why Social Security is broke).

Unfortunately, every bit of this idea is entirely incorrect… and people who hold that idea generally do so, because they were deliberately misled.

I’s simply not true… though many… perhaps most… people believe it is; but in fact, Social Security was always nothing more than a pyramid scheme, and an entitlement.

They misunderstand entirely… Because they have been deliberately deceived; as has been the majority of the population.

Social Security was NEVER, EVER, an annuity, pension, or insurance.

Actual insurance, annuities, pensions etc… were not part of the legislation that created it, or anything thereafter.

Also, there never was an actual “trust fund” as such… simply an accounting of surplus contributions which were, in theory, to be placed into low yield “no risk” treasury bonds.

Note, I said “surplus contributions”… this means contributions in excess of payouts to existing recipients. Because benefit payments are not made from the proceeds of investment, they are made using the payroll taxes of those currently paying in today (this is why we call Social Security a ponzi scheme… When Bernie Madoff does it, it’s fraud and he goes to jail. When the government does it, it’s… well it’s still fraud, even worse fraud… but no-one goes to jail sadly).

The sham of it, particularly the sham of the accounting trick they called the “trust fund” was publicly proclaimed as early as 1936 (by Alf Landon in his presidential campaign).

Social Security is, and always has been, a tax and entitlement distribution scheme.

The government lied, and called it insurance, but in fact it has never been anything other than a payments and distributions pool, funded by taxes.

You can look it up, in 42usc (the section of U.S. code defining the various programs known as Social Security).

The programs collectively known as Social Security are referred to as insurance several times, but in fact they very clearly are not. The legal definitions and descriptions make this very clear. Social Security is a tax and entitlement disbursement scheme, by act of congress.

There is no individual ownership, no accrued value, no capital gain, it cannot be transferred, and it can be changed (or removed), at will, by congress; without being construed as a taking without due process.

It is NOT INSURANCE.

Perhaps I am not explaining this properly…

It’s not that congress went against the intent, or written provisions of the law, and changed Social Security from what it was supposed to be, to what it is…

It’s that in fact, the law was NEVER what they told the American people it was.

In fact, if the law HAD been what they sold it as, then that law would have been declared unconstitutional by the supreme court (as had the earlier railroad pensions act, which actually DID created a property based pension scheme). It was specifically because it WAS a tax and distribution, that congress had the power to do it; and was argued thus before the court in 1937.

Helvering v. Davis clearly defines Social Security “Contributions” as a tax, and social security “benefits” as welfare payments. This is the basis for it’s constitutionality.

Fleming v. Nestor in 1960, reaffirmed that FICA is a tax, and that the “contributions” are government property, to be done with as the government sees fit; and that “contribution” through FICA did not cause one to accrue a property right to any asset, pension, or insurance scheme, nor did it create a contract consideration, right, or obligation on the part of the government. Further, it affirmed that “benefits” were NOT insurance or pension disbursements, but entitlements by act of congress, and that congress could change them at any time in any way they chose, without being construed as a taking under the 5th amendment (though they did say that they must have cause and due process to do so… but any legitimate cause within their purview would do).

Justices Black and Reich, specifically dissented from the majority opinion, explicitly and expressly addressing the issue of property rights. They believed that such contributions, to such a program, SHOULD as a matter of moral and public good, be considered property, and have property rights attached. They acknowledged however that the law as written did not, and that by strict interpretation the majority was correct… They just thought it was better to make it property anyway.

Unfortunately, it’s not… It is neither a pension or insurance, and never has been, from the very beginning.

However, almost every explanation ever given the public, and in most documentation, it is referred to as insurance, or even a pension.

All as part of the greatest fraud in the history of the human race.

I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

A Simple Question About Motive

The Feds just arrested the owner of Silk Road, a black market web drug marketplace, and seized the domain name.

Now, there are obviously a lot of reasons why they’d want to catch this guy. But I was struck by the headline at the above linked article:

Feds arrest the alleged founder of Bitcoin’s largest drug market

It makes you wonder…

Is this about drugs, or is this about fighting Bitcoin?

Defunding and Debt Limits and Shutdowns Oh My!

Welcome to the sideshow folks…

Step right up and enjoy the posturing, rhetoric, and antics of our congressional clown crew…

Over to your right you’ll see the amazing vocal endurance of Republican Senator from Texas Ted Cruz as he tosses red meat to the base…

… To be serious, there are a large group of people, who don’t understand why the rest of us consider what Ted Cruz did (a 21 hour “filibuster” of a motion in relation to items within a continuing resolution for funding the federal government for the next six months), both harmful to the country, and nothing more than grandstanding.

For them, it looks like Cruz was (in the composite words of many Americans on the right):

“Taking a brave and principled stand against the funding of a bad law that will harm our country.”

In reality, he was doing no such thing.

Cruz is being maligned by his own party because he was being a clown. This “filibuster” was nothing but a clown show.

It may be viscerally satisfying, but it’s idiotic. It will do absolutely NOTHING for the Republicans, of for those against Obamacare, except throw red meat to the stupider side of the base.

This is underpants gnomes strategy.

Step one: “Non-filibuster a piece of already passed legislation that I can’t stop by doing this… but that’s OK I wasn’t really trying to, really I was just trying to get media attention and attract donations from the less intelligent and aware side of my political base”.

Step two: … uh….

Step three: Electoral Victory?

“But, one brave man, standing up for what he believes in, can do amazing things. A small group of patriots can change the world, just look at the American revolution.”

No, they can’t. No guns involved in this one. No big foreign war distracting the occupying power. No actual fight going on among the actual fighters… just a series of bargaining and trading; while the rhetorical fight goes on among the spectators.

It may be emotionally satisfying rhetoric, but that’s all it is, rhetoric.

You are not a member of the patriotic few, bravely standing up against the despotic elite, risking all for freedom.

In fact, unless you support drug legalization, getting the state out of marriage…and almost everything else… giving up legislating morality and goodness entirely… You AREN’T EVEN ON THE GOOD GUYS SIDE.

You’re just another guy on the badguys side, who wants the badguys to tax the tea a little differently.

Oh and as “just another guy”, you actually aren’t on their side at all…

You’re a spectator rooting for your team from… not even the stands… from the comfort of your own home; with the game streamed lived via satellite into your living room.

“But what would you have us do? Just give up, let the Democrats run the country into the ground”

Nope… Not at all…

I’d have you stop assuming the rhetorical mantle of revolutionary patriot because it makes you feel good; and stop supporting things which reinforce that feeling, without actually DOING anything.

If you buy Ted Cruz’s stunt, you are perpetuating this crap.

If you want to actually do something… ACTUALLY DO SOMETHING. Get involved with your political party on a local level. Get onto policy committees. Become a subject matter expert for the party on something you know, and use that position to help steer the party, and the politicians in the party, in the right direction.

That’s actually doing something. This thing with Cruz? It’s just something you can say you supported so you can feel morally vindicated while not actually doing anything.

“You’ll see… Cruz was right, this is bad law and we must stop it. Cruz will be vindicated, time will tell”

Well of COURSE he’s RIGHT, we all know that… it’s AWFUL law… even Jon Stewart thinks it’s bad law… but that doesn’t mean he was doing any good… or even try to for that matter.

Vindicated how?

Sure he’s increasing his own fundraising, and certainly he’s right about Obama care… but to be vindicated you have to have done or said something substantive, and then been proven right later.

How has he done that?

He’s hurt the Republican party badly with the center, and provided yet another target for mockery and ridicule… and to scare those who think this sort of thing is either stupid or crazy…

Yes, he’s increased his own fundraising… and tripled that of everyone on the left.

This is not some brave heroic last stand. This was a foregone conclusion. Obamacare would never, under any circumstances, be defunded. This wasn’t a filibuster. This wasn’t moral courage.

If it was a serious attempt to stop Obamacare, fine, that would be great. Even if it were a futile attempt, if it were even structurally capable of stopping it, sure… it wasn’t and isn’t.

It wasn’t really even a symbolic gesture.

It was pandering, to the lowest common denominator. It was Ted Cruz setting himself up to be the poster boy for the low information voters of the right.

And he knew EXACTLY what he was doing… By all accounts Cruz is a brilliant man.

“It doesn’t matter if he was doomed to fail, it was the right thing to do anyway. Standing up for what’s right is never wrong”

If that’s what he was actually doing, I wouldn’t be so irritated by this.

I’m irritated because this is what they do instead of something useful. “I supported Ted Cruz’s filibuster but those nasty democrats and RINOs passed it anyway”

The people who believe this, don’t seem to understand that what Cruz did actually hurt us. Us being those of us who really fight against government overreach, and bad law.

It gave cover to the people who wanted to do nothing anyway, it encouraged a few whackjobs to make spectacles of themselves, and it INCREASED the morale and assumed moral authority of the other side.

Do you not realize how stupid and ridiculous this makes anti-obamacare people to the middle? How hysterical it makes them appear to the other sides donors? How this is a permanent harmful soundbite/video clip?

It’s idiots like this that made them able to paint Mitt Romney as an ultraconservative ultra right damn near American Taliban…

When in fact, he wasn’t conservative enough for a lot of people to bother even coming out, and they just stayed home rather than vote.

This is NOT a dedicated small group of principled people fighting against government overreach… That would be excellent.

This is the Republican equivalent of a college student “sticking it to the man” by wearing Che Guevara t-shirt an shouting about oppression and justice, out in front of the admin building.

“You don’t understand… Cruz is different… he’s the only one of the Republicans with the guts and the principle to stand up and do something”.

If he had actually done that, I would more than agree… I’d be cheering him on too.

But he didn’t.

If he were actually different… I’d be 100% behind him… Hell, I think he’s a good man, and in general he will probably be a good senator, though it’s a bit early to tell. If nothing else, he’s a LOT smarter than most Senators.

But really… other than that… he’s not much different than any other professional politician.

I’ve read the mans bio, read some of his speeches, hell I was even on a conference call with him and Marco Rubio at some party event during the campaign last year.

Yeah, he’s accomplished, and he’s got a hell of a back story (great family tale), but… what is it you think makes him so special?

He’s a smart guy, apparently a great legal mind, clerked for Rehnquist, editor of the Harvard law review… which are great things sure… but but I don’t see what you seem to see that makes him particularly exceptional among senators. He’s been a politician basically since law school; either full or part time.

He spent less than a year in private practice before going into an administration job, then less than 4 years out of the fedgov, where he ran for office twice, before going back to the fedgov.

He’s a professional politician.

I think he’s probably going to be a good senator (kinda hard to tell 9 months in), but I don’t see anything there that says anything other than professional politician… He’s a smart man and seemingly a good man… and those are great things… but he’s still a professional politician, and has never been anything but a professional politician.

I mean… he actually voted… in fact the senate voted unanimously 100-0… for the motion he was supposedly filibustering…

How can you even call it a filibuster if you’re going to vote for it?

So… In the next show, we have the “Government Shutdown”.

As of right now, the Republicans in congress have refused to sign any continuing appropriations bills that require the raising of the U.S. federal debt ceiling, and which fund Obamacare.

Therefore, the Republicans are trying to pull a repeat of 1996 and “shut down the government”; again to foster the illusion that they are taking a principled stand against excess spending and government waste etc… etc…

They aren’t.

“Why can’t they just balance the budget, instead of raising the debt ceiling again… That’s not a solution, that’s just making the problem worse?”

That’s the question of a well meaning, intelligent person, looking at this problem from a rational perspective…

So it’s completely irrelevant to anything they do in Washington of course.

First thing, the whole “Defund Obamacare” spiel is, and always has been, a sham. It’s more redmeat for the base. It’s not going to stop Obamacare, never was going to, never could; and even if it could, the republicans couldn’t get it past the senate, or a presidential veto, or an override etc… etc…

It’s just PR.

The Republicans saw what happened to Mitt Romney. They know that a large portion of the electorate doesn’t think they’re conservative enough and so won’t bother to vote for them… This is how they’re trying to address that issue. Nothing more substantive than that.

This still leaves the debt ceiling issue… and of course, incurring yet more federal debt is a bad thing. We are already at more than 105% of GDP (of course, that’s far lower than most other nations, but it’s still quite bad).

However, since it is quite literally impossible for any continuing appropriation to be passed that doesn’t require increasing the debt ceiling… In fact, even without a continuing appropriation the debt ceiling will need to be increased (because of credit payments, entitlements, and other already legislated spending); the debt ceiling is GOING to be raised.

Either that, or an accounting trick will be used to do the same thing.

It’s not a solution. It’s a requirement of the circumstances.

Balancing the budget… that’s a joke; given that we haven’t actually PASSED a budget or OPERATED under a budget , since 1997. From 1998, the government hasn’t been funded with a passed budget, it’s been funded with omnibus spending and special appropropriation bills, and continuing resolutions.

In fact, since Obama was elected, we haven’t even managed to pass an omnibus spending bill, and have exclusively funded the government with special appropriations and continuing resolutions.

The reality of the “debt ceiling” is, the U.S. is NOT going to default on its credit payments, under any circumstances.

In the first place, a U.S. credit default would trigger a world wide economic collapse and long term depression the likes of which have not been dreamed of outside of dystopian fiction.

So yeah… that’s bad… let’s not do that.

Even if that weren’t true, the politicians in this country are not going to let people miss entitlement payments… which is the whole reason why we don’t have a budget in the first place…

Every politician in America knows that if they get blamed for their constituents missing a social security check, they are done… dead… never to be elected to anything, even dog catcher, again.

So, any threat not to raise the debt ceiling, or to have a true and complete government shutdown, really is just grandstanding.

Until we make serious cuts to entitlements, we are not going to have anything close to a balanced budget. No politician in this country who has actually managed to get elected and wants to be re-elected is going to EVER under any circumstances, vote to cut entitlements. Therefore we are never going to have a balanced budget again… or at least not until there is a real unavoidable crisis, where they can cover themselves by saying “we had to do it to save the country”, and their opponents can only look like irresponsible liars if they try to say otherwise…

Of course, if this country weren’t filled with economically and politically ignorant “citizens”, then perhaps the electorate as a whole would understand that we’ve long past the point at which such a crisis could be avoided, and that something really needs to be done right now…

Unfortunately, what looked like it was going to be the first major group of voters working for entitlement cuts in this country, the “tea party”; was quickly overrun by a huge number of these idiots who, completely un-self aware were saying, with complete sincerity “get the government out of healthcare and welfare… but don’t touch my social security and medicare”.

The politicians noticed this… Particularly the smart ones… Like, say, Ted Cruz.

I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

Open Thread Question of the Day: Now that ObamaCare is Here, What Are You Going to Do About Your Own Healthcare?

Like it or not, ObamaCare is here. Much has been written about the overall chaos this law will have on employment, the cost of healthcare, and the economy overall. What I am interested in, however; is what are you as an individual going to do regarding your own healthcare choices? Are you going to stay on your employer’s plan, sign up for the exchanges, pay the fine or do something else? Also, I’m interested in finding out if any readers have already had experiences, good or bad regarding ObamaCare.