Category Archives: Fiscal Policy

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?

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

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

Congress: Replace 1 Year Of Modest Cuts With 10 Years Of Miniscule Cuts And We’ll Call It Even

This is absurd.

Brad Plumer at WaPo recounts the 4 plans in play to stop the sequester. And it’s astounding. It’s made ever more clear to me that nobody in Washington is serious about cutting spending. Right now we’re 15 days away from the implementation of $85.3B in 2013 spending cuts. Oh, for the record, that’s roughly in the realm of 2 fucking percent of this year’s budget.

First, there are three Democrat plans; the Senate plan, the House plan, and the President’s plan. So what are the Democrats proposing? Small spending cuts and modest tax increases. Exactly what you’d expect. Both plans seem to take spending cuts out of farm subsidies, which tells me one thing: they know farm states are red states and they’re gonna punish them for it.

But what’s notable about those plans? They replace $85.3B of cuts this year with spending and taxation over 10 years. Talk about playing kick the can! In fact, both Congressional Democrat plans really do almost nothing to affect the 2013 deficit. They’ll gladly pay you Tuesday for a hamburger today.

Second, we’ve got the Republicans. They know they can’t touch entitlements. They absolutely refuse to take a penny out of defense. So what’s left? Cuts to a whole host of social programs that they know they can’t actually pass, so they get red meat for the base without actually having to cut a single thing.

And the President? Well, if we can’t solve the sequester, he’s not even talking about kicking the can out to next year, he’s talking about kicking it merely a few months:

“If Congress can’t act immediately on a bigger package, if they can’t get a bigger package done by the time the sequester is scheduled to go into effect,” Obama said in the White House briefing room, “then I believe that they should at least pass a smaller package of spending cuts and tax reforms that would delay the economically damaging effects of the sequester for a few more months.”

As I said last fall, maybe the best answer is to just let the sequester happen.

Dr. Ben Carson Speaks Truth to Power

Until yesterday, if someone asked me what I thought about Dr. Ben Cason, I would have had no idea who you were talking about. After listening to his speech (below) from the National Prayer Breakfast from a few days ago with President Obama just a few feet away, I thought this speech was too good not to share.

As an atheist, there were obviously some points I disagreed with. Theological disagreement notwithstanding, overall there was a great deal of wisdom in what he had to say about history, political correctness, personal responsibility, morality, education, healthcare, the national debt, and the tax code. There was easily more intelligent ideas being spoken here than last night’s State of the Union.

If you don’t watch any other part of this speech, start watching around the 18 minute mark where Dr. Carson talks about the immorality of class warfare the progressive tax code and watch the president’s face (spoiler alert: he doesn’t seem too amused). I honestly don’t know how this guy got in the room, much less had the opportunity to speak!

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