I’m
trying to check out the following as I write.
So
far, I have no confirming or denying information. The report, as written, contains some errors
or misconceptions.
“This scheme
mirrors what I expect the President will try to do with Social Security. He wants to turn that program into a welfare
program, too.” National Seniors Council
National Director Robert Crone
Crone’s statement
errs in that Social Security is already a welfare program. As nearly everyone knows, that is its
fundamental problem: S/S never was a savings program; it always depended on the
donations of dependents to support the aging.
Payouts are only loosely tied to, and never funded by the deposits of
the same generation. However, at its
inception S/S was 1% and relatively harmless.[1] In 1990, that number grew to 6.2% plus an
additional 1.45% for health insurance.
Matching numbers
were paid by employers from the inception of the program. However, this is patently deceptive. OASDI and HI paid by employers are costs of
doing business. No businessperson in his
right mind is going to pay these fees without recovering them. The obvious methods of recovering them are to
suppress salaries or to increase cost of sales.
Since increases in cost of sales are limited by the market, and are
reflected immediately as cost of living, all of these costs are reflected to
the wage earner. The real cost to the
wage earner ranged from 2% in 1937 (still harmless) to 15.3% in 1990. This is now clearly a toxic load.[2]
According to SSA the rates for 2012 are:[3]
· S/S 4.2% for employees
· S/S 6.2% for employers
· Medicare 1.45% for both employees and
employers
This is a net
drop of 2% to 13.3% overall which is still a toxic load. Evidently, the 2% drop took place in 2011.[4]
Individuals
making $24,000 a year or less (no wife, no children, no other dependents)
cannot afford to forfeit 13.3% of budget, pay taxes, and survive. Even after mortgage-free home ownership is
achieved in retirement, a married couple cannot survive on less than $36,000 a
year.[5]
To add insult to injury, Medicare victims
are taxed an additional:[6]
· $1,156 annual hospital deductable
· $99.90 monthly Part B
· $145 annual Part B deductable
· 20% Part B coinsurance
· 1990 Medicaid was introduced, which is a
purely welfare program[7]
As the NNRS[8] overture
is explained, it basically turns extant retirement programs into S/S
programs. That these can be juggled into
increased-welfare emphasis is no mystery.
That this proposal is going in the wrong direction is also fairly
obvious: it supposes that money grows on trees and that those who refuse to
work have a right to eat. The answer to
both of these questions is obviously, NO!
The real question
is, "Will it happen?" Yes, of
course it will happen, perhaps not in this form, but it will happen in some
form. It does not make any difference
which party is in power, it will still happen.
Here’s the math. The government,
along with nearly everybody else, has overspent its income. All levels of government, business, and
private individuals are seriously in debt.
One way or another, the debt must be served. The federal government will eventually come
after any money or appearance of money that exists anywhere including your
savings. If and when these funds are
exhausted, and taxes cannot be increased anymore, more money will be printed
(inflation). In any case it is fairly
obvious that the citizenry will be bled to death and the system will
collapse. It’s inevitable. No one will have a dime left, and we will be
in Greece’s shoes, total default. It’s
inevitable.
The illusion is
that there is a way out of this box. People want to believe that some politician or
other offers a way out. There is no way
out. The damage was done years ago. The only recovery plan that makes any sense
is to wipe out the whole system today, start over from scratch, and do it right
this time. Instead, everybody is
jockeying for power, and everybody will lose.
There are names
for this sort of statistical game. This
is more complicated than 2 x 2 games, but the idea is the same. In 2 x 2 games, these are called
coordination, battle of sexes, chicken, and prisoner’s dilemma.[9]
We are now
obviously playing the chicken game; you know how that’s played: the only way to
win is to face a head on collision, but winning results in obvious death. The only way to live is not to play, but that
is not a Nash equilibrium,[10] so
nobody is willing to do that. Either
side can find a better position by playing the game (more prestige, more power,
more money). As a result, given the
present value system, both sides will play, and both sides will die: because, jumping
in the ditch represents an enormous loss of prestige, power, money, and
face. Nobody will be willing to go in
the ditch and yield victory to the other side.
A Schelling point[11] must be
found and/or the game must be changed.
As the level of
crime (federal theft) increases this could transition into the prisoner’s
dilemma. Each prisoner improves his
position by ratting the other guy out.
Consequently, both prisoners turn rat, and both lose.
As far as I know,
there is only one solution, which is Moses' solution. Kill off all the debt and never let it happen
again. All loans are 0% interest loans
and short-term payback (7 years). A strict
division is drawn between lending and business risk investing. Business risk investing may share its
predetermined proportion of profits of any magnitude for any time, but must
also accept total loss as a risk (no bailouts under any circumstances). Job loss is not a real consideration; it is a
smokescreen that covers up the problem.
The reality is that all jobs are lost as soon as the business becomes
unprofitable; we just want to live in denial of the facts.
The objection is
frequently raised that this is nothing more than defaulting on loans, which is
a vicious social evil. I would agree
except for the fact the the loans were established under fraudulent conditions
to begin with. This always was a Dutch
book.[12] We have always played with loaded dice. High risks were always sheltered, but jobs were
never ever really sheltered.[13] The system was dishonest from square one.
To get out of the
box we are going to have to obey Moses and Christ, and write off all the
debts. We need to do this in an orderly
fashion if at all possible. Otherwise it
will be done to us, as it is being done to Greece right now. Controlled or uncontrolled, orderly or
disorderly, the game always ends the same way.
Is the federal government coming after your
savings? Yer darn tootin, they are. It’s just a matter of when and how.
Yours in Christ,
Herb aka Augie
[5] my estimates of survival
living
[6] http://en.wikipedia.org/wiki/Medicare_(United_States
[8] New National Retirement System
[9] Stevens,
Scott P., Games People Play: Game
Theory in Life, Business, and Beyond (The Teaching Company, Chantilly,
Virginia, 2008) 219 pages, 2 CDs
[10] http://en.wikipedia.org/wiki/Nash_equilibrium John Forbes Nash, Jr. (http://en.wikipedia.org/wiki/John_Forbes_Nash,_Jr.)
[11] http://en.wikipedia.org/wiki/Focal_point_(game_theory) It would be folly to believe that anyone is
communicating or is even able to communicate in the current game. The current game tends to render communication
impossible.
[12] http://en.wikipedia.org/wiki/Dutch_book
[13] When your boss goes broke,
your job is gone, and a bailout doesn’t really solve the problem; it simply
redefines who went broke. In this case
instead of mega-companies going broke the debt is transferred to the backs of
the populace, and the populace goes broke.
Since the populace is also the workers, jobs no longer exist.
