Why the Government Lies About Social Security
by Ron Paul
Perhaps the biggest media story of 2010 was the influence of Tea Party voters on the Congressional landscape. The new Congress comes to Capitol Hill with a mandate to end profligate spending and restore fiscal sanity in Washington, we are told. But when the House and Senate convene in January the newly elected members will face tremendous pressure to maintain spending levels for entitlement programs. Even the most modest proposals to trim Social Security or Medicare spending will be met with howls of indignation and threats of voter revolt. Legislators who propose any kind of means testing or increased retirement ages can expect angry visits from senior citizens and lobbyists ready to fund a candidate back home who supports the status quo.
But millions of Americans now realize that the status quo is an illusion that will not last even another 10 or 20 years. The federal government cannot continue to spend a trillion dollars more than it collects in revenue each year because we are running out of creditors. Fiscal reality is setting in and the consequences may be grim, even if Congress finds the courage to take decisive action now.
Courage begins with a commitment to see things as they are, rather than how we wish they were. When it comes to Social Security we must understand that the system does not represent an old age pension, an insurance program or even a forced savings program. It simply represents an enormous transfer of payment with younger workers paying taxes to benefit the other beneficiaries. There is no Social Security trust fund and you don’t have an account. Whether you win or lose the Social Security lottery is a function of when you happen to be born and how long you live to collect benefits. Of course young people today have every reason to believe they will never collect those benefits.
Notice that neither political party proposes letting people opt out of Social Security, which exposes the lie that your contributions are set aside and saved. After all, if your contributions are really set aside for your retirement, the money is there earning interest, right? If your money is in your account, what difference would it make if your neighbor chooses not to participate in the program?
The truth of course is that your contributions are not put aside. Social Security is a simple tax. Like all taxes, the money collected is spent immediately as general revenue to fund the federal government. But no administration will admit that Social Security is nothing more than an accounting ledger with no money. You will collect benefits only if future tax revenues remain high. The money you paid into the system is long gone.
My hope is that at least some members of the new Congress will cut through the distortions to see Social Security as it really is. The best way to fix the impending Social Security crisis is also the simplest: Allow younger individuals to opt out of the program and use their tax savings to invest privately as they see fit. This is the true private solution. Your money has never been safe in the government’s hands and it never will be.
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Dowwnload the audio from this tune at thetunify doht cohm.
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They are actually requiring for “NATIVE BORN”! but knowing their ignorance they will be facing LAWSUITS. You know what the constitution says….”natural born”.
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Rep. Ron Paul tell your ppl to STOP posting job requirements for “natural-born” workers before there is flood of LAWSUITS. Well, not sure if they are your ppl but surely there are in the same political party or political persuasion! Remember,…LAWSUITS especially when there is unemployment because many CITIZENS would love to get FREE MONEY!
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Ha Ha what happens when the same goverment/banks shut the market down and claim bankrupt, they work together. Your money is safe nowherer. two years more
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I have always that I should be able to put into a savings account that I would not be able to take any monies out of until I reached my retirement age. I would have to put into this account at least the amount that the government takes out each paycheck. That way as Ron Paul states, I would be earning interest on my monies. The government would not be able to use it to help illegals, handicapped, drug users, etc that claim they cannot work. I do not think I should take care of everyone in the world and not be able to take care of myself. I would not allow the government to put any Social Security money into one of their stock or bonds as was proposed a few years ago. Thank goodness we voted against that, otherwise, we would have lost out, as many people did with their 401k savings. I also think that the banks and other stock brokers that lost peoples savings because of their own greed should have to repay everyone that lost money. Not give losers bonuses.
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Soc Sec funds are NOT government money. Those funds belong to we American workers who contributed for OUR retirement. See the attached video for documentation. Also, President Reagan left a report stating that the IRS pays zero bills. The URL is ” youtube.com/watch?v=SFAAsCRonlg” . The search title is 3Statements-IRS.m4v . There is no space after the 3. My research and documentation are extensive.
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get obama out of office now…. obama is killing America… get rid of obama now
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Real straight talk. in texas.
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Citizen, TJ, Tom Beebe, Others
I’ve enjoyed exchanging thoughts and I appreciate your time. I feel we’ve reached a point where we are each simply restating our positions using different examples, metaphors, or analogies, or veering off on different tangents, or the discussion hinges upon a debate about the proper definition of a term or phrase. Therefore, this will be my final comment. I will stay tuned for your final thoughts. I can’t infer gender from user names, so I’m likely to use the masculine pronoun simply because that is the rule I was taught in elementary school.
I have more respect for Ron Paul than most politicians because I feel is more consistent and credible. However, I’ve been disappointed lately because he seems to be making more provocative statements that I don’t think he can defend and doing so damages his credibility and the case he is trying to make.
The original article was about social security, and most specifically, the old age retirement portion of it. My original comment was intended to express an objection to some of terms used in the article and to express my concerns about the proposed solutions. The article states that social security was a lie because an account is not being created for each contributor. I think we can differing opinions regarding the wisdom or value or legality of social security, but I don’t think a “lie” has occurred. I’ll change my mind just as soon as someone offers credible evidence of a government official stating that social security is implemented by creating separate accounts for each contributor. Thus far, nobody has. The article further makes the contradictory claim that the trust fund doesn’t exist (which is false) and that it is simply a ledger (which is essentially true). I’m quite certain the comment from bobthecat is a more accurate description than is the artice. My motivation for commenting is although I agree in its current form, social security is on an unsustainable path, but making false statements about it is counterproductive.
I expressed two concerns regarding the proposed solution of allowing people to opt out of social security. First, this will most likely have a negative impact on the cash flow, meaning it won’t prevent social security from defaulting, it will make it happen sooner. This concern remains unaddressed or even acknowledged. My second concern is it will result in a larger number of people unable to support themselves in their old age.
I offered an alternate solution which involved periodically raising the retirement age until it reached life expectancy (which I think was the case when it was implemented), means testing benefits (because I think social security is and should be an insurance program). If this is insufficient to restore sustainability, change the cost of living adjustments to be based on changes in wages as opposed to prices (because wages are the source of the funds), and finally, if necessary, increase or eliminate the income cap on the employee portion of the payroll tax.
It would be helpful to me if others expressed an opinion as to whether or not my concerns are valid/accurate. For example, one might say I agree with your assessment of the impact of the proposed solutions, but Rep Paul solutions is still superior because X. Or something like my concern about cash flow is not valid because everyone under age 50 will opt out and there is a enough of a current surplus handle every one who remains. Or my concern about increased number of people unable to support themselves is valid or not valid, but in any case, people should work until they die or are able to support themselves. Someone did offer the latter response, but I still wondered about how to handle the people who were not yet dead and didn’t have any skills for which the labor market was willingly to pay them a wage at all or even a sufficient wage to support themselves.
I think a collective democratic (“republic” in our case) government is a perfectly sensible means for a society to govern itself. The notion of opting out of government seems unrealistic to me for a variety of reasons including practicality and moral hazard.
I don’t think the question is freedom versus not freedom or liberty versus not liberty. I agree with Libertarian777, it is a trade off. I agree 100% with TJ, there is no free lunch, it is always a trade off. Every rule or law we make sacrifices one freedom in an effort to protect another. Exactly which trade offs we should make must be evaluated on a case by case basis. I value freedom and liberty and opportunity and a variety of other things. In our free education example, the taxpayer’s freedom to spend was diminished but opportunity was increased for Little Susie and her friends. Society can debate and vote whether to endorse this trade off. So far, the United States endorses this trade off for education and I neither support nor fear the US doing the same for big screen televisions.
Assuming we have some form of government (is anyone really proposing we shouldn’t?), I think it is perfectly reasonable that the government is paid for the collection services it provides. This reasoning and the simple fact that US constitution grants government the power to tax clearly illustrate why taxes are not coercion. The precise collection of services which should be provided and the price charged for those service is a matter of debate.
I appreciate Tom Beebe offering a plan and regret that I didn’t offer it a sufficient review. I support the idea that marriage should neither be encouraged or discouraged by the tax code or government in general. I support the idea of reducing the number of deductions and the recognition that everyone shouldn’t necessarily pay taxes. I do not support the idea of a single tax rate because I think progressive taxes are brilliant.
Citizen fails to realize that the money he pays in taxes might be redistributed to one of his customers. The government doesn’t eat the money, it just transfers it to someone else, who in turn spends it in the market or invests it. I’m not at all convinced Citizen understands how progressive income taxes are actually calculated because he keeps talking as though he pays 35% of his income in federal income taxes. It simply doesn’t happen. If Citizen is paying 35% of his income in federal income taxes, he needs someone else to prepare his income taxes. Citizen further talks like capital expenditures aren’t deductible expenses. Citizen also invokes the “suffering/punishment” argument. This, in my view, is easily one the lamest arguments I have ever heard. A person is never, and again, I do mean never worse off after taxes by moving into a higher tax bracket. In any case, even if it were punishment/suffering, it is completely Citizen’s choice whether or not to bear it. To avoid the suffering, Citizen could charge his customers less, pay his employees more, or give more money to charity. Citizen could work/produce less (society as a whole will not be adversely affected because someone else will pick up the slack). Citizen could completely close up shop and get a minimum wage job where there would apparently be less suffering. But of course Citizen won’t do any of these things because the suffering argument is nonsense. And Citizen, it sounds like your business relies on the public transportation system. How much are these highways worth to you then? Where would your business be without them?
TJ must have a different definition of “own” than I do. Humans own everything and the rest of the animal kingdom own nothing because humans impose their will over the other animals, which would be a violation of their natural rights. My neighbor’s dog may urinate in my yard, but neither I, nor my dog, nor the neighbor’s dog are under any illusion that the neighbor’s dog suddenly owns my property. If my dog and the neighbor’s were in a property dispute, they would use force to settle it as opposed to enlisting a neutral dog to settle the matter through evidence and reason. Air isn’t owned. I can’t sell it and the air above my property today is different from the air that was their yesterday. If I polluted “my” air yesterday and it became TJ’s air today, I haven’t violated any natural rights because I didn’t use any force or coercion to cause the transfer.
In my final analysis, I feel I’m willing to judge the public sector by the same criteria as I do the private sector because there exists a “market” of places to live. In neither case am I entitled to decide what the price of something should be. In neither case am I entitled to insist that the precise combination of services I prefer is available. In each case, I can determine value and choose. The private sector has many more choices whereas the public sector is more like a few levels (local, state, federal) of package deals. If what I desire isn’t available, I can garner my resources and if necessary in partnership with other like minded people to turn my desire into a reality. If you decide the US doesn’t meet your expectations, look around, does any other existing country? No? Well, perhaps an island is for sale where you can control everything (or nothing?). I’d love to hear how the experiment turns out.
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GB – I agree with your thought processes on these matters.
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GB,
We all are collectively affected by our government’s far reaching powers. Much of the government’s laws and rules that are an arrogant attempt to counteract some social wrong or balance an some perceived inequity, but the reality is that many of these laws fly in the face of Natural Laws and (almost always) create Unintended Consequences.
I loved your paragraph about me, especially the “suffering/punishment” lament.
And you point out that I can, cut back, disperse my income to eliminate the taxes or I can quit altogether. And that’s the law of Unintended Consequences, when people believe that higher taxation has little or no effect on business growth.
My complaint is that most people believe that government forced wealth transfers, for whatever the reason, is the ultimate social solution.
Using your reasoning, I should just close shop and quit… and stop whining.
NO I won’t.
I believe creating 55 jobs and making a weekly payroll is a sacred trust, something America needs more of, but when government penalizes that effort and taxes away workers hard earned wages (15% SS retirement) under the pretense of future “security”, the LIE is very apparent. Its a sad testimony that our government is engaged in a Bernie Madoff / Charles Ponzi scheme of bilking our citizens of their rightful savings, under the LIE of false security.
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GB,
Your ideas are fine from your perspective, but, in order to become just law, they must fall within the confines of the Constitution. Most of yours don’t. The most basic element of a good law is that it applies to EVERY citizen equally. There is no form of wealth redistribution that can be characterized as anything remotely resembling fair or equal.
Income taxes aren’t so much coercion, they are, by definition, extortion. If I have to pay for a road I will never drive on, that is extortion. A clear violation of property rights. The Supreme Court struck down income taxes in 1895, after Congress adopted them. It wasn’t until the corruption of Woodrow Wilson and his gang that income taxes came to be in 1913, and this was for the equally corrupt purpose of providing collateral to the Federal Reserve so that politicians could borrow to their heart’s content. The Constitution is abundantly clear that the federal government is granted only explicit enumerated powers and that it may tax only by the methods specified and in order to fund the purposes enumerated.
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Just commenting on your response to my plan re: “Progressive taxation”. If you look at both the personal exemption based on the minimum wage and then the flat tax on the balance, you’ll see my plan is very “progressive”, perhaps too mush so. The tax on a family of four making $46,000, and disregarding other exemptions mentioned (health care, education and savings) is ZERO!
Appreciate your comments. email me sometime. Unlike most, I’ll stand behind my blog contributions, using my real name and offring freely my email address, tbeebe6535@yahoo.com.
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Ron, you left out that it was started in a time with high population growth, with an increasing number of working people. Now there is no growth in population.anymore.
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Mike breaks down a 60 minute interview will Ben Bernanke word for word exposing the lies and deception of banking.
Mike also breaks down Ron Paul’s reply to that 60 minute interview with Ben Bernanke word for word also.
And finally mike exposes Dennis Kucinich’s Plagiarisation of MPE and the world mandate in Dennis’s latest reform bill.
http://www.youtube.com/user/chelonia1663?feature=mhum#p/f/18/FB12kKfUsn0
Mike Montagne 1/18 (MPE) 60 minutes Lie of Economy 01.01.11
1/18 to 18/18
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Hello Jake,
I watched the Michael Montange Youtube post and find it boring and nothing more than a whining monologue of what we already know.
Is Michael a real person? We see this dark static picture of a guy with a baseball cap sitting in a bunker. Seriously? This video is meant to inspire conscripts to MPE because of what????
Either MPE finds a better lead spokesperson or call it quits.
Der Fuhrer from the Bunker voice is hardly a motivational message.
Good Luck Marxist Progressive Eugenics
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I usually agree with all of Ron Paul’s opinions; however, I disagree with his statement on Social Security. While it is true that the government has spent the money, it spends the revenue from Treasuries that it sells. The money is owed to the purchaser.
The following is a quote from the 2009 year end report by Timothy Geithner –
“The trust fund balances as of the valuation date for the respective programs, including interest earned, are in the table shown below. Substantially all of the Social Security (OASDI) and Medicare Hospital Insurance (HI), and Supplementary Medical Insurance (SMI) trust fund balances consist of investments in special non-marketable U.S. Treasury securities that are backed by the full faith and credit of the U.S. Government.”
At the end of 2009 there was 2.419 trillions dollar surplus in Social Security. If the government takes Ron Paul’s view and says we spent the money too bad, they are defaulting on a loan. This tells the world that our government has and will default on obligations. Is that what is being proposed?
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Earlier I wrote that blogging is much like masturbation. Those who participate do both in private, the former doing theirs behind aliases or web names, the latter in their bedrooms. Both get gratification without results.
Now its time for all of you whiners to get your hnds out of your pants and do something about the situation we’re in. The consensus is, to o one’s suprise, that Ron Paul is the smartest gut in the room. Unlike the Enron gang, he’s also the most honest. You may not agree with all he says, but he’s way ahead of the clowns we’ve elected recently, both GOP and Dems.
To find fault with all of RP’s stands is irrelevant; like Obama he won’t get everything he stands for (and say a prayer of thanks that BHO was thwarted in some things). But tell me who you’d rather see start the reform process, the cleanup, the real change.
Speak up in person, laying your lives, your fortunes, your sacred honor on the line for your country. Start a barrage of mail to all your friends, acquaintenances, your co-workers and above all to those elected clowns. Demand the reforms. Now. Else shut-up and go back to your closet. I’m tired of hearing this crap.
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No, I haven’t seen the mini-series John Adams. But, I suspect the founding fathers intended for the legislature to move slowly so that laws would be more reason based and less emotion based. I support this strategy. Unfortunately, this didn’t prevent some unfortunate (in my view) decisions in the wake of 9/11.
I like your definition of natural rights and it would be wonderful if everyone respected those rights. I contend history tells us they won’t.
I have a few challenges for you to consider. I figured you’d be disappoint if I didn’t
. More seriously, I suspect we all hold contradictory beliefs and considering I wish I didn’t, I’m irritated but ultimately grateful when others point out the contradictions. In other words, I hope you don’t feel I’m in this simply to be argumentative. I genuinely believe I’m posing legitimate arguments or exposing possible contradictions.
I thought one of our few points of agreement was that a person does not have a right to pollute. But, by your definition, I have a “natural” right to pollute because I can do so without coercion or force. Correct?
You said the natural rights are in nature and every living thing asserts them. But, other than humans, how do other creatures in the animal kingdom “own” property and thereby assert their property rights? I don’t think they do. If they don’t, is it fair to conclude that property rights aren’t natural rights because every living thing doesn’t assert them?
Lastly, help me through this scenario. The government offers to enforce your property rights in exchange for a price, otherwise known as a tax. You wisely accept the offer and pay the government because your neighbor, Mr. Blackbeard is capable of taking your property and doesn’t have any respect for your “natural” rights. The government, being under no obligation to charge you the exact amount it costs to provide the service, collects enough from you to provide the service and also to pay me to teach Little Susie and her friends. Little Susie and her friends get a free education without violating anyone’s property rights, correct?
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Hi GB, One of these times want to read something from you that says you agree 100% with me and that you have seen the light of freedom lol…oh well, until then, I will simply reply…
Coercion is simply violating another person’s natural rights of life, liberty, and property. I already suggested that the air on my property is owned by me. If you pollute it, you have violated my rights and the government must “arbitrate” a solution to this “dispute”. Now, this is where government must act in accordance with the wishes of their constituencies. If I “pollute” your air by lighting a cigarette in my own home and a trickle of smoke carries out the window and into your air, the government can unwisely prosecute me and give me the death penalty. Or I can burn leaves and other garbage and use a fan to funnel all the smoke onto your property, the same unwise government might fine me 50 cents. A violation has occurred in both instances. It takes common sense to have the ‘punishment” fit the “crime”. But, to answer your question, my liberty does not allow me to violate your property…your air.
You must not know animals if you do not know that they claim property. Have you ever seen a dog mark his territory? Or have you seen a dog fight for his toy? And, dont even disturb a nest…hornets, bees, or birds. You just might die. They own property and they do not need a government to defend it.
OK… I understand that you are not being argumentative…in most cases. You are bringing up some good questions. HOwever, the last scenario you described is baffling. You are suggesting that the government can tax a person for their protection and then with the change use the extra to provide other rights for people. You have a big screen TV. You pay taxes so that TV can be protected. The government decides all citizens have the right to a big screen TV and so they slip in a little extra tax to provide it? And you do not see how that extra tax violates a person’s property rights? Two plus two is four. NO debate is necessary. I do not know how to discuss this one.
Reality is reality….there is no such thing as a free lunch…education, health care cannot be wished for…they must be paid for…from the property of others. These others are literally slaves because the fruits of their labor go to serve another master……from each according to their ability, to each according to their need. The needy become the masters, the ABLE become the slaves…Have a good night…tj
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tj, you’re referring to the ‘free-rider’ and ‘public goods’ arguments well documented by economists.
To add to your comments, what people don’t seem to realise is, if the government has the power to tax you at will, to provide someone else’s ‘right’ (entitlement), it is overriding YOUR rights (however that is never spoken about in the media).
One thing that worries me greatly is that I work, and save, to provide for my retirement. In 30-40 years time, when I am ready to retire, and have a sizeable nest egg, the government will look at this large nest egg and say “hey he’s rich, he has so many assets, that’s wrong, we must redistribute to the poor homeless people”. It’s the ant and the grasshopper story.
No one even seems to remember that gold was illegal to own until about 1974. Why is it illegal to own a benign object? What the government called ‘hoarding’, we use to call ‘SAVING’. Between presidential decree and eminent domain, our private property rights are always in danger.
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Don’t cooperate with banks, corporations! Don’t give them anything! Organize! Tell your friends!
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Good Afternoon Citizen,
This comment is in response to your comments on January 2, 2011 at 11:51 am. I was unable to reply directly to that comment due to the absence of a “reply” link.
I agree with your first three paragraphs.
In your “Bottom Line” segment:
You stated “Our Government “consumes” upwards of 60% of our material wealth and converts it into non-producing capital goods, war hardware.” I agree the US spends too much on war hardware, but I’m curious, how was 60% calculated?
In the end, I think most commenters are stating/implying the government is making poor decisions, behaving badly, whatever. But, why is this so? On any particular issue, if our view is the minority view, then in a republic such as ours, we shouldn’t necessarily expect the majority to adopt our view, should we? If we feel strongly, we must persist in expressing our view hoping to persuade fellow citizens until our view becomes the majority view. At that point, the theory of representative democracy implies the government will adopt our view. It may take some time, but if necessary, the citizens will vote to replace the political incumbents until the majority view is realized. All is well, correct? I foresee some skepticism. So, why don’t seemingly sensible views become realized?
1) The view isn’t actually sensible and therefore never reaches sufficient majority status and is never realized.
2) The view is sensible, but fails to persuade enough fellow citizens due to poor communication or because the opposing view uses greater resources to combat the sensible view through some form of propaganda and/or appealing to emotions such as fear and greed.
3) The view is sensible and garners majority support, but the minority view has greater influence over our political process and therefore prevents the view from being realized.
4) Other?
In my opinion, items 2 and 3 explain why concentrations of influence are problematic for a society and it is therefore, perfectly rational for society to actively prevent it. More directly in response to other commenters, it is why I do not support the “if the free market concentrates wealth to a relative few, then so be it” position, unless I could be convinced that concentrations of wealth do not lead to undue influence over the governing process.
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GB,
Further explanation of “Bottom Line” comment…
TAXES: Federal Income tax rate is 22% – 37% + State Income Tax rates are 8% – 14%, Cities and Counties Collect anywhere between 5% – 10%
Cumulative this Country CONFISCATES between 40% – 60% of EVERYONES earnings. Government calls the 15% FICA it withholds a contribution. But there is no money, they spend that money and leave IOU’s (aka Treasury Bonds)
But worse is that our tax rates pile on top of ever higher (uncompetitive) Union sponsored wage rates.
Finally – we Ron Paul supporters are really just debating the arrangement of the Deck Chairs on the Titanic. We’ve built a massive socialist entitlement Sacred Cows which consume 60% of the Federal Budget and those are on auto-pilot, untouchable and increasing annually far beyond our tax collections.
Debating all these other ideas is interesting, but its really just an exercise in futility.
Unless We the People return to Constitutional fundamentals, there is little prospect of salvaging the American Economy.
I predict that the USD will collapse and our Political Elite will push us into the use of the New World Order currency., an IMF issued World Dollar currency and claim that its backed by gold. And we fools will believe them!
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Citizen,
I appreciate your sharing your calculation. Perhaps you won’t be surprised that I have a slightly different view to offer.
First, nobody, and I mean nobody, pays 37% of their income in income taxes to the federal government. I’m certain you will agree. The primary reasons for this are: deductions/credits and the nature of progressive tax rates (of which I am an avid supporter). I imagine deductions and credits don’t require elaboration. The nature of progressive tax rates means a single person in 2010 would pay the top rate (which I think is actually 35%) only on income above $373,650. You, me, Bill Gates, and every other taxpayer all pay the 10% tax rate on the first $8,375 of our income. According to the CBO, the effective income tax rate for 2005 for all households was 9% and for the top one percent was 19.4%. However, income taxes aren’t the only taxes citizens pay to the federal government. Again, according to the CBO, in 2005, the effective total tax rate for all households was 20.5% and for the top 1% is 31.2%.
Secondly, you originally stated the government “consumes” up to 60%, but I remain unconvinced that the government is “consuming” it, certainly not all of it. Particularly with social security, which is a pure transfer, not consumption.
I recently heard Obama claims to support a move to reduce or eliminate deductions in conjunction with lower income tax rates. I support a move in this direction and imagine there should be some consensus among our legislators. Your thoughts?
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GB,
I am one of those top marginal tax bracket payers and have “suffered” for being a successful “small business” in America.
Many would say that 35% is reasonable INCOME tax and I shouldn’t complain, but I don’t “consume” the income for Personal use, but it’s taxed that way. I leave 95% in the business to replace equipment, new hiring and to keeping my 55 employees FULLY employed.
Add to that my paying 15% on SS, (I pay the employer’s matching too) [[money that I will never see again]], so I’m paying 50% out. NOW add to that gas taxes at the pump, highway use taxes of $40K for my equipment ANNUALLY, local sales taxes and guess what, 60%++ !
You Said: “Particularly with social security, which is a pure transfer, not consumption.”
I like the “pure transfer”, really its much more a quasi-transfer that is paying out more inflated dollars than the recipients ever paid in.
Now these “pure transfers” are FULLY consumed when the retired recipients receives them. Our government has not been “saving” the FICA withholding tax, its spent and gone. The problem is really called “unfunded mandates” aka a Socialists Ponzi Scheme that’s quickly running out of money.
As for “move to reduce or eliminate deductions in conjunction with lower income tax rates”
Tax policy has always been a tool the Liberals love to manipulate.
Ergo Obama says he’ll reduce taxes maybe 1%-3% but will eliminate the mortgage interest deduction a gross revenue gain for the Government, and a major hit against Home Ownership.
But again, these News sound bites are simple DISTRACTIONS
to make it appear that the Government is really attempting to be fiscally responsible. Again… debating about how the deck chairs should be arranged, when we should be lowering the life boats.
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Obama 2012
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Hi GB,
Again, from my libertarian education and perspective, you have it almost right. However, first of all, the government does not “collect” taxes, it seizes wealth at the point of a gun. (Try not paying your taxes; bad men with guns will come to your home.) And, government does not create anything of value, therefore it does not create wealth. Here is an example. When GM (Government Motors) seizes wealth from others (gets a subsidy) to make an electric car that no one wanted in the first place, but now because its price might be “artificially” low (because of the subsidy), it might be purchased, THIS IS NOT WEALTH CREATION. It is still a transfer of wealthfrom the WINNERS in the marketplace to the LOSERS. ANd, that is wealth destruction.
Ask those that lived behind the IRON CURTAIN if they felt the car they were driving was wealth? It was a piece of junk forced on them…they had few choices, nor did they have quality to choose from. Their government destroyed wealth.
As for all government being voluntary? Try to think outside of the box. Please, name the only thing that 99.99% of people would agree the role of government would be? Protect life, liberty, and property, right? I would join this government. However, there would still be some who do not even want this. Perhaps, those that live on ranches and want to protect their own life and property. Yes, these people should be FREE to do so. And, live with the consequences of their choice. They would have no claims in our courts. They would be vulnerable to any type of aggression. Yet, it would be their choice.
Murray N.Rothbard, whom Ron Paul has learned much from, would suggest that government — in its purest form — should act like insurance. Insurance is not mandated…oooppps, I guess it is.
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TJ,
You can be provocative by claiming the government doesn’t collect taxes but “seizes wealth at the point of gun” all day long, but it doesn’t change the facts. The government legitimately collects taxes because a sufficient majority of citizens approved it. If you strongly feel paying taxes should be optional and you feel a sufficient number of citizens agree with you, then feel free to author a constitutional amendment repealing the government’s power to tax. I’m guessing you won’t do so because while the former may true (you really hate paying taxes), the latter is unlikely to be true (sufficient number of people agree with you). Further, I suspect you won’t garner sufficient support because too many citizens will realize the impracticality of trying to provide an “optional” common defense.
The electric car may well turn out to be an example of poorly allocated capital. The point I’m trying to make is the whether the capital is poorly allocated depends on the strength of the idea, not the source of the funds. The public sector and the private sector each at times allocate capital poorly and at time allocate capital well.
We’ve strayed quite a bit from the original topic of this article, which was social security. To summarize my position, I think we have a few points of disagreement.
1) I questioned the notion of allowing people to opt out of social security. My two main concerns remain unaddressed. My concerns are: people opting out will increase the cash flow imbalance; and I contend there an increase in the number of people opting out will increase the number of people unable to support themselves in retirement.
2) I am disputing exaggerated and provocative claims that the government cannot create wealth or that it can only destroy wealth. I do not dispute the private sector may be better at allocating capital than is the public sector. The free market is not infallible and the government isn’t entirely fallible.
3) I do not share a disdain for paying taxes or the feeling that I am a victim upon which the “government” keeps imposing. In either the private sector or the public sector, I can weigh the total costs and benefits and make a choice. If I prefer Pepsi to Coke, I pay for Pepsi. If I prefer living in the United States to Canada, I pay to live in the United States. When the United States poorly allocates the money I’ve traded to it, I’m no more annoyed than when Pepsi poorly allocates the money I’ve traded to it. If I invest money with Pepsi and I’m unhappy with the direction of the company, I express my concerns, I vote for others to serve on the board of directors, and ultimately may need to move my money elsewhere to a company more closely aligned with my preferences. If I’m unhappy with the direction of the United States, I express my concerns, I vote for representatives who share my concerns, and ultimately may need to move elsewhere to a country more closely aligned with my preferences.
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GB,
I hope I am not too much of an annoyance. However, I did want to clarify a misconception you might have about me and other Ayn Rand Objectivists. We are the ones who accept reality. We do not try to persuade others; we do not try to “fight the establishment”. It might serve you well to read Atlas Shrugged — if you wanted to understand us. In this masterpiece, Ayn Rand’s heroes (John Galt and others) did not try to fight society. They did not try to convince society that they were headed for destruction. And, in the story, the USA did eventually crumble. The heroes did what you suggested. They simply left. The smartest, most productive members of society simply disappeared; theywent on strike. They formed their own community. And, in the end, when society collapsed at the hands of “the looters” — government wealth destroyers — the heroes returned.
The USA is headed this way. So many things Ayn Rand wrote about in this book (1957) have come to be — health care, the Community Reinvestment Act, the collapse of the dollar and the banking industry. Social Security is next.
I do not intend to convince you of anything. Reality is reality. Insufficient funds, pal. Not enough to pay the social security debt. So, “ALLOWING” people to opt out is only relevant when you consider your attitude.
Liberals, progressives, law and order government proponents actually believe one adult should have the power to ALLOW another adult to do something or not. I simply cannot comprehend this. But, since you won’t ALLOW me to opt out, I guess I won’t.
oh, and one other thing please. “The free market is not infallible,” you claim. It depends on what your definition of infallible is. The free market is…..It is an absolute. It is completely and perfectly rational and reasonable. It is nature. It cannot be altered. People will ALWAYS act in their own self-interest — even if their self-interest is altruism. So, when oyu say the free market is not infallible, I believe you are placing a judgment on its results. And, you are correct. Businesses will fail in the free market. Is this what you mean by being infallible? Because of course, businesses that fail must be a bad thing. But, the wonderful “invisible hand” of free market capitalism is INFALLIBLE in its merciless treatment of poorly allocated spending and investing. Thank goodness we have a less than fallible government to step in and save us from the consequences of poorly invested capital by investing more capital in the poorly invested investment. TOO BIG TO FAIL? Not when liberals like Bush and Obama are running things.
Trust freedom, before it is too late — otherwise, accept your consequences….
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TJ,
I appreciate your concern, but no, you aren’t too much of an annoyance. I imagine if I were being too much of an annoyance, you would simply ignore me. On the other hand, I’ll apologize in advance for my relatively lengthy posts. I appreciate your time.
I’ll take your advice and read Atlas Shrugged. Perhaps you will acknowledge the irony of stating that Ayn Rand Objectivists are the realists and then suggest it might serve me well to read a fiction novel
I don’t view these kinds of discussions (or even arguments generally) as being adversarial. On a range of topics, I’m interested in views of others, more so if different from mine. With any luck, at the end of the discussion, each participant will have improved his understanding of the topic, and perhaps with a great deal of luck, one or more participants will detect a flaw in their own reasoning and adjust accordingly.
As I’ve said, I don’t find it particularly difficult to restore social security to a sustainable, self-sufficient program. But, if the broader point is the level of government debt, I agree, it is a bit disconcerting. But doesn’t it make you wonder why people continue to voluntarily lend money to the government?
Your notion of some segment of the population opting out of being governed is interesting, but unrealistic and impractical in my view. I think the reality is populations throughout history have gravitated toward some form of collective government. I suspect there must be a reason. Regarding a collective defense, I’m wondering what portion of the population would, in their own self-interest, opt-out knowing full well if the government is protecting my neighbors, the government is almost certainly implicitly protecting me. In other words of course, one gets the benefits without paying the costs. Pollution is another issue where I don’t feel strict individualism is practical. Do you feel individuals should have the freedom to pollute the air and groundwater, and if so, why? Nobody owns the air. There isn’t a “market” for air.
No, I don’t mean businesses will fail when I contend the free market is fallible. As wonderful as the free market system can be, I contend that a pure free market system without any government interference will produce the same result as socialism and for the same reason: concentration of influence over the means of production and allocation of resources.
You mentioned the “invisible hand” is infallible. Of course, you could be right, but my experience as an independent consultant at a variety of large corporations tells me wasted resources and poorly allocated capital is far from scarce in the private sector. And some of these companies have been around for more than one hundred years. Again, in my view, there is waste and malinvestment in the public sector and in the private sector. Neither surprises or bothers me very much. In reality, that is just the way it is and always will be.
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Hello again,
I’ve been thinking about your question: “Please, name the only thing that 99.99% of people would agree the role of government would be? Protect life, liberty, and property, right?” I’ll respond slightly out of order.
Life. I contend the significant percentage supporting the death penalty implies that life cannot be on the list. I contend any rebuttal which suggests we, the collective, must destroy some life in order to preserve a net increase in life is neither more or less defensible that an assertion the we, the collective, must destroy some principles of the free market in order to save the net benefit of the free market.
Property. More specifically, private ownership of property. Government enforcement of your right to property is nothing more than government infringing “at the end of the barrel of a gun” upon my right to take it from you if I can. Nonetheless, we could very well reach an overwhelming consensus on this one.
Liberty. I contend supporting private property rights implies that we are willing to make tradeoffs concerning liberties. In other words, the question of protecting “liberty” is much too broad. In reality, the questions are some form of tradeoff between liberties. People are either at liberty to do as they please, i.e. steal, or they are not. Who decides which liberties we have or don’t have? You? Me? Should we vote on it? Other? Please don’t tell me about “natural” rights which will simply beg the question of who decides which rights are “natural” rights. Well, voting seems rational, but that sound like the system we already have. Perhaps the structure of the system is fine, but you would prefer we raise the threshold for passing laws. Rather than the 50%-60% percent necessary to pass a law, we should raise it to what? 99%? Well, 99% seems extreme to me. but I’m wondering what you think?
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Hi GB,
Well I will comment on your first note by identifying 6 issues. First, social security is unsustainable and only drastic masures will save it. In 2011, more people than ever will file for first time benefits at the time when unemployment is 10 per cent. And that number will rise for the next 30 years.
Second, you asked why so many still loan to the government. Ask the Chinese if they are still investing in US Treasuries…the answer is now GOLD for them.
Hird, the American tradition of free markets is NEW. Societies have not trended towards centralization…they always were centralized…always under tyrants like kings. The trending towards centralization in the US is due to a lack of vigilance by freedom loving people.
Fourth, the opt out theory is just a theory. Ow many would opt out…only those that live o those ranches and want to form their own society. Most people (99.99%?) would certainly CHOOSE to pay for protection in our courts just like most people pay for insurance on their homes.
Fifth, air is owned and you are not allowed to pollute mine. IF you do, you will pay whatever penalties our government leaders have determined. This is the basic function of government … to protect property. Libertarians are not anti environment.
Finally, you contend that capitalism like socialism will result in too much concentration of power. You have bought into the fallacy perpetrated by Progressives over 100 years ago. Do you realize that since 1890 Sherman AntiTrust Act it has literally been illegal to be in business in the USA. The Justice Department has PERSECUTED at their whim companies for charging more than their competitor …they must be a monopoly if the can do this…less than their competitor…they are trying to become a monopoly…and the same as their competitor…collusion. If this POWER existed…like you say it does…a company like GM would never have needed a bailout. They certainly fit your description of a high concentration of wealth. Yet, they probably were similar to some of those wasteful 100 yr old companies that you consulted for. Everyday, several times a day, everyone votes in the marketplace. Winners and losers come and go in free markets. It takes every two to four years to vote for fewer choices to impact government. Yet, you fear corporate wealth as much as government?
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1.) We are unable to find any common ground here. Social security is not a difficult problem to solve. Medicare is a difficult problem to solve. To return social security to fiscal stability we just need to raise the retirement age and means test benefits. I’ll add another, the cost of living benefit adjustments should be tied to wage growth, not price inflation, because wages are the source of the funds. If that is still insufficient, then raise or eliminate the wage cap on the individual portion for paying social security payroll taxes.
2) I agree the trend is bad news for the US. Some of our most prolific creditors are diversifying away from the US dollar.
3) Perhaps I’m thinking back a bit farther back than you. I’m thinking hunters and gathers. Formed groups generally for specialization and protection from other groups. When size of group becomes unwieldy, the group chooses a subset to represent the group. If your point is that far too often, once appointed, this subset abused their power, I agree with you.
4) What happens if the .01% of people opting out of being governed, for example, pollute the air?
5) I’m not sure why you think air is owned (unless you mean collectively), but I’m glad we agree individuals are not entitled to pollute it. Therefore, it is perfectly rational for the collective to prevent it. I contend this is an issue regulation will solve more effectively than will the free markets, largely because there isn’t a market for air.
6) You have inferred my position correctly. I fear concentrations of private wealth as much (or as little) as I fear government for mainly two reasons:
6.1) If you’ll accept a voting metaphor in the free market, that is to say, people “vote” with their dollars, then I agree people get to vote much more frequently in the marketplace which is good, but those with concentrations of wealth have considerably more votes, which is very bad.
6.2) If I were to judge government to be failing, I think it is considerably more likely that politicians were disproportionately influenced by a minority with the most wealth.
Your example of GM doesn’t persuade me because GM was owned by thousands of shareholders. BUT, here’s what could sway me. I believe what economists call mobility. If I were to see let’s say an annual list of the top 5% of wealth owners. I can’t say exactly where I would draw the line, but if the list changes significantly over the years (other than deaths of course), I would alter my view and adopt your view that winners and losers come and go.
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GB, Did you ever see the miniseries JOhn Adams? He chastised some colleagues and suggested that if someone said 2 plus 2 was 5, they would have to debate on it for hours and then take a vote on it.
The natural rights are not up for debate…they are in nature and every living thing asserts them. By living, you are asserting your right to life; by owning, you are asserting your property rights; and by doing or thinking as you please, you are asserting your liberty.
The way you can tell the difference between natural rights and other rights is if coercion or force is necessary to claim a right. YOu see, no other rights can exist without violating one of these three rhts. The right to a free education must be secured by violating someone s property rights…and so on.
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Having just read “When money Dies”, it almost seems as though we are already experiencing many things Germany (1918-1926) went through but without actually printing the dollars, but we’re experienceing it over a much longer period of time. We’ve had the huge price acceleration in capital assets (housing bubble); a credit squeeze precipitated by central government intervention; massive unemplyment (and still growing); and though we rarely hear about it, widespread loss of purchasing power.
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mikelunz hit the nail on the head: “super rich” is a horrible term for what you’re referring to as the term leads on to believe you’re also referring to legitimate businessmen.
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I think the issue is what is wealth? It is properly defined as anything that has value to the free, non-coerced individual. So, when a big, bad corporation engages in economic activity, it is CREATING wealth because individuals voluntarily purchase their goods or SERVICES. When the government is the CUSTOMER, it can only be a CUSTOMER by FORCEFULLY seizing someone else’s wealth.
The government seizes wealth…a corporation must CREATE wealth in order to survive. This big, bad corporation (like Walmart) only became “big and bad” because they did something right — they created value for consumers. They did not TAKE anything from them. Walmart’s customers “love” Walmart or else they would go someplace else.
Nevertheless, I feel I might be preaching to the choir. We probably all agree that the government spends too much, regulates too much, and taxes too much.
Have a nice evening, tj
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How’d somebody get to use my name?
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dont agree with him 100% of the time, but at least he shoots straight from the hip. no BS with this guy.
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What are you going to do America when reality hits home,and your money is not worth the paper that it is printed on? For within two years our Currency will not be worth a damn thanks to the Creed,Corruption,and or Lies that our own Government has lead us to believe through the years like sheep to the slaughterhouse We The People were lead to believe their evil lies within the bailing out of banks,and or corporations,and the rich,and or powerful, who purchased our corrupt congress for a price to betray The American People,and or kill the American dream.Ron Paul is one of the very few within congress that is not corrupt by the donations of the rich to buy a vote within congress,for his vote could never ever be purchase to benefit the rich,and or powerful, and their agenda,for within Ron Paul eyes The American People,and or Our Constitution Of The United States Of America is not for sale for any price! Respectfully Steve Peterson Rommel, Arkansaw,Wisconsin
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Happy New Year Steve,
What, surely you know that American has the best politicians that “money can buy!”
Keep in mind that “We the People” are complicit in the entitlement conspiracy and we’ve gotten what we’ve ask for, that is Freebie Social Entitlements without payment obligation.
Well…. the obligations have finally caught up with us and now we have a slew of politicians who are both economic ignoramuses and spineless wimps, a terrible combination.
It’s time we have an emergency Constitutional Convention to put the brakes on this runaway train before it leaves the tracks.
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Joseph Stalin once said about his Communism reforms that
“you must break some eggs (people) to make an omelet”
Winston Churchill, replied…
“Where’s the omelet?”
Socialism is forever consuming other peoples wealth until it has ALL been consumed
And
Then they DEMAND that the Producers produce more wealth AFTER their wealth has been taken and wholly consumed.
Social Security is the perfect example of this Socialist lie.
The Progressive Socialists have promised a benefit, taxed the citizens for decades, and are now in default of delivering the promised benefits, because they consumed the wealth in other Social spending schemes!!!
again….
WHERE IS THE OMELET?
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Citizen,
I’m enjoying our conversations, but of your postings, this is my least favorite. I know you care deeply about my opinion.
Precisely, what is the lie about social security? The article suggests the lie is that the government doesn’t really set aside the money you paid in in a separate account just for you. I certainly agree the money isn’t set aside in an account just for you, but I’m not aware of any government official stating that is social security works. Can you provide a link to a video or transcript of this alleged lie?
And can you describe precisely how social security is “now in default of delivering the promised benefits.” Social security has not “defaulted” in any sense of the term with which I am familiar.
The “omelet” is fewer old people being unable to support themselves.
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With all due respect, cannot believe the number of Rogressive fools that come on a site like this. They want to present their PLAN for “society”. And, they discuss wealth as if it is fixed and influential. Wealth is NEVER fixed and one person’s wealth accumulation has NEVER diminished another person’s wealth potential. If one person in a society owned everything, the moment this person desired a service (and by the way, a service is wealth), this person would no longer have all the wealth…and so on. Wealth was CREATED it was not redistributed. Wash someone’s car for 5 bucks and wealth was created nott redistributed. Find a piece of wood and carve it into a piece of art or a handy tool and wealth is created…not shared.
Wealth creation is UNLIMITED. However, when it is redistributed for consumption and nothing of value created, wealth is destroyed. Government does not create wealth; it only destroys it.
Won’t anyone please read Atlas Shrugged?
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TJ,
With all due respect, I fail to understand your claim that Government does not create wealth, it only destroys it.
You said washing someone’s car for $5 constitutes wealth creation. If the government pays me $5 to wash a government vehicle, has wealth been created, redistributed, or destroyed? In this case, the government is the consumer of a service.
Similarly, if I offer to guard your house from intruders and you pay me $5, I imagine you consider this wealth creation. When the government employs police officers and military personnel, has wealth been created, redistributed, or destroyed? In this case, the government is the provider of a service.
Therefore, if the government cannot create wealth by being either the provider or the consumer of a service, the only plausible argument I foresee is to claim only individuals can create wealth. With this reasoning, wouldn’t it be equally valid to claim that corporations cannot create wealth? Further, if only individuals can create wealth, wouldn’t it also be true to claim only individuals can destroy wealth?
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TJ,
Many economists would argue that “real” wealth is created ONLY when raw materials are converted into useful material assets that generate time savings or durable long lasting creature comforts, housing, food, clothing, transportation etc.
Services do not create wealth since they are consumption of existing wealth supplementing what individuals would normally do for themselves. Thus “Services” create jobs but NO wealth, other than Leisure for the owner of the wealth who is consuming it by paying for those services.
Thus a “Service Economy” (like the USA) does not really create any wealth. The “gray area” exception might be when Hotels, Cruise Ships or other Leisure Assets are built as a means of capturing those consumption dollars.
Bottom Line…
- Government CONSUMES wealth, by providing “Constitutional mandated” essential “services”,
1. Border protection (their doing a marginal job there),
2. Common Defense (now actually OFFENSE in pursuit of world dominance)
3. Rule of Law, maintaining the law and order
AND FINALLY
4. Wealth Transfers >>> NOT Constitutionally mandated but spending that is simply Social CONSUMPTION, transferring from wealth producers to wealth consumers.
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Citizen, I still do not understand how, using your examples, paying for border protection, common defense, and maintenance of law and order (all valuable services) is consuming wealth. Each of these examples is a wealth transfer. The government collects money from citizens and uses the money to pay the salaries of border patrol officers, military personnel, police officers, politicians and so on.
Much like the private sector, the government plays a role in creating wealth, redistributing wealth, and destroying wealth. When government uses the money it collects to:
a.) fund projects which improve productivity, it is creating wealth;
b.) pay salaries of government employees, it is redistributing wealth;
c.) pay money to citizens for programs like social security and welfare, it is redistributing wealth;
d.) fund projects which fail to maintain or improve productivity, it is destroying wealth.
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Morning GB,
Wealth is both created and consumed. Consumption can be either Personal and Public, as such it is not a “bad thing” but when Consumption far exceeds Production (wealth creation) then we are in perpetual deficit living, spending what we don’t have.
As a Nation, the US of A has gone well beyond its economic ability to produce and replace its material goods (wealth). We have a become mostly Consumers of Wealth with little regard for replenishing that which we consume. Other nations are producing for us, thus we’ve delegated our wealth creation to others and have sold our souls in the economic marketplace.
Essentially we are depleting our storehouse of wealth and we putting our very material survival in the hands of others… Not Good.
Bottom Line:
Our Government “consumes” upwards of 60% of our material wealth and converts it into non-producing capital goods, war hardware. The private sector is not producing material goods to replenish our Private Wealth, we can not compete in the world market and we are consuming our Private Capital savings/wealth.
Our military industrial complex IS wealth, ships, plans, tanks etc., but this wealth NO Private utility use. Thus Mal-Investment has occurred, we’ve put too much into bullets and neglected the butter.
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I suggest you read the writings of Murray N. Rothbard who suggested that all government should be voluntary.
Government does not create wealth; it only confiscates it at the end of the barrel of a gun (taxation is coercion). I had a feeling someone would challenge me on this. That government car you are referring to, was confiscated from the wealth producers.
Wealth, by definition, must have value. And, for value to be assessed, INDIVIDUALS must be free. The government can spend $50 million to study the mating habits of earthworms. No wealth is created because free individuals did not voluntary exchange goods and services in the marketplace. The government can pay someone to move a pile of dirt from point A to point B and back again — no wealth is created.
I get a kick out of progressives who claim that giving loans to corporations who pay them back was a good “business” decision for the government. It created revenue. What is never understood is that if these corporations could not get a loan in the market place, they were subsidized at the expense of good, strong, wealth producing companies. These companies — the winners in the market place, the real wealth producers — were harmed by this government imposition in the market place.
(In other words, building an electric car that people do not want, is not creating wealth, now is it?)
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TJ, what do you mean all of government should be voluntary. Are you or Mr. Rothbard suggesting that following the laws passed by government should be voluntary? The enforcement of private property rights should be voluntary? Doesn’t capitalism rely on government enforced private property rights?
Why do you feel taxation is coercion? American citizens granted government the power to tax via the constitution.
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Consider taxation, income tax rate should be based on wealth, not on actual income. It is hard to get blood from a stone. The goal is to create more people having wealth. People with wealth can afford taxation. Someone with zero wealth, would pay zero taxes on income. Someone with a million dollars of assets, would pay 50% tax on income. The goal is to create wealth which makes it possible to pay taxes.
SS, only a fix % can be taking money, ratio of payers to receivers.
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“the status quo is an illusion ”
Very true. Even if most of the rich guys main aim exactly this: to maintain the status quo.
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Hello,
I just stumbled across this great blog that has been created. I am starting my own Ron Paul Revolution Blog.
http://thehardrightedge.com
I was wondering if you would like to try to arrange some affiliation network, among Ron Paul Blogs to create an aggregate blog system.
You can email me at
hardrightedge@gmail.com
-
Keep Up the good work, I am going to make a feature post linking to this article. Great Transcipt.
–
Scott J
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I’m gratified, personally, that my “Plan” got this many comments. Sadly, I feel most did not read it through. Anyone who’s really interested can email me at tbeebe6535@yahoo.com for an Excel spreadsheet to figure their household’s taxes at whatever tax rate and minimum wage-based personal exemotion they choose. For those who are concerned about how they’d fare with this IN LIEU OF SOCIAL SECURITY (I agree with all who say its a broke Ponzi scheme), I suggest they figure their tax as a household of one. Note that with a minimum wage of $8.00, their personal exemption would be $8.00/hour X 2000 hours/year X 2 (the 2 from the rate for age 70 and older). That’s a $32,000 exemption. If the tax rate was 40% (not far from what you pay now, if most of it was not concealed from view, and you had NO income, you’d get 40% of that exemption or $12,800 ($1,066 per month). I suggest that’s comparable to many Social Security payments. To those who want “means testing”, aren’t you going back to the Obama method of “spreading the wealth around”? Actually, this plan addresses that concern by taxing everybody’s DISPOSABLE INCOME equally, and taxing their basic needs not at all. Who’s got a problem with that? I hope you’ll reread my plan, posted 12/29 ar 12:20PM and print it out, if possible. As I keep saying, its about a lot more than tacrs.
Keep the comments coming.
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Tom, unfortunately, I don’t at the moment have any feedback on your plan. But, being someone who suggested means testing social security, I felt compelled to respond to a portion of your comment.
First, I think social security (old age benefits) is (or at least should be) an insurance program. In my view, paying into social security is similar to paying for other insurance programs (house, auto, etc..). In each of these cases, a number of people contribute while only a subset of the contributers, who demonstrate a need, receive benefit.
Second, if my choices are either “spreading the wealth around” or “concentrating the wealth within a small group”, I definitely prefer the former.
Cheers!
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I prefer letting wealth find its own way. A person’s income should be commensurant with their productivity. As I heard Milton Friedman once ask Phil Donahue: “who are the angels who possess the wisdom to allocate wealth better than does the market?” Should he market concentrate wealth among a few, so be it. However, a re-reading of the plan will indicate that I propose taxation which exempts the basic necessities (non-disposable income) from taxation. Thus I neither spread wealth around nor concentrate it among a small group. Instead I let wealth accrue to those who produce it, as determined by market forces, but exempt that part of wealth (income) necessary for a decent standard of living from taxation. Is this fair in your mind? I’m really iterested in your point of view.
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Tom, I’m enjoying the civilized and thoughtful tone of your comments.
I contend item 8 of your plan constitutes “spreading the wealth” around, about which of course, I don’t necessarily have any qualms.
On one extreme the total wealth of a society is owned precisely equally by each member, and the other extreme, the total wealth is owned by a single member. I don’t think we should desire to be at either extreme, which means the question isn’t “whether” the wealth should be spread around, but to what degree it should be spread around. Similar to you, I think the “market” should be allowed considerable discretion in this regard. But, I think the market is fallible and society is intelligent enough to realize it and compensate for it.
More specifically, I contend societies should actively avoid concentrations of influence. In a socialist society, the central planners represent a unhealthy concentration of influence and therefore socialism is destined to fail. In a capitalistic society, I think wealth equates to influence. Therefore, when wealth becomes overly concentrated, influence is overly concentrated, and capitalism will fail just as surely as socialism fails.
My answer to the question ““who are the angels who possess the wisdom to allocate wealth better than does the market?” is “the very same angels who constitute the market”. Members of society make up this economic entity we refer to as the “market”, and those same members of society elect the representatives of a rule making entity we call the “government”.
You asked if I thought it is fair of your plan to exempt income necessary for a decent standard of living. My answer is mostly yes, but when I find some more time, I’ll reply directly to your comment describing your plan.
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I believe we uderstand the angels of “fairness” do not exist in our government; politics too often corrupts mere mortals before they become angelic.
My plan states that the indisposable income, represented by the minimum wage, set each year by congress, should not be taxed and a flat rate applied to the shortfall of a household below that income would be remanded by governments to address the needs unmet by the market, while the same rate applied to that above the indisposable income would represent a combination of two factors: that from which the above supplement is drawn and that necessary for the maintenance of legitimate government services. Nothing perfect about this except for what I consider its most important factor, it represents no favor to any special interest.
That lack of favoritism is the most important principle upon which the plan is based. I recall seeing a congressman red-faced in his vegemence about the sancity of home ownership. Promotion of that special interest is what brought us the mortgage bubble. Similarly, the gay community has been adamant about gaining equal status, particularly with married hetrosexuals. This is the reason for the creation of the “households” as the taxed unit. It treats all equally. Marriage to me is a religous institution (sacrement?). Basing government policy on such a religous institution, however noble and however much it has served humanity, is a violation of “Equal Justice Under Law”. I’ll leave it to others to decide the same sex marriage issue; perhaps it should not even be decided in the political realm.
Finally, in my experience, these threads get broken when a website abandons them, so along with my feeling that any belief worth consideration should not be posted anonymously, I freely give my email for all to address. It is: tbeebe6535@yahoo.com
What’s yours?
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Wealth, in my definition, is anything possessed by one person (or economic entity such as a corporation or government) that is of value to another. Given this, ideas of domination of wealth by one, or even by a few, is unlikely, even impossible. The wealthiest among us has need for and, absent means of coercion, will exchange some portion of his wealth for the wealth (material possessions, labor, etc) of another. What creates wealth? I have suggested a workforce that is healthy, educated and equipped (provided with tools) to produce that which is desired. Thus I have excluded the income that is employed to provide these three things from taxation. After all, it is in the government’s interest that such wealth be created, for its possession or exchange represents property or income upon which taxes may be levied.
I prefer income tax over property tax as the former rests upon and thus encourages economic activity which benefits all, while the latter rests upon the possession of wealth which can too easily be concealed from the dreadful fellow, the tax man.
I would stop at a plan based on taxation of all income, less that accorded to these three activities, but for a concept most recently described by the SCOTUS in their “Citizens United” case, wherein they postulate that some form of relief must be given to our lowest class (least productive) lest civil unrest ensue.
Then, if we are to reduce the income of the productive by some rate (tax) does it not also follow that this asssistence would be similarly reduced? My plan (for those who haven’t seen it in here, email tbeebe6535@yahoo.com for a copy) imposes a flat rate on all “disposable” income. I hate taxes for each penny collected diminishes the reward to those who have produced wealth of any sort. Yet it has been said that there is nothing sure but taxes and one alternative, and only the alternative is less desireable.
Looking for and appreciative of your comments and suggestions.
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Tom and Others,
Back in 1982 I read Irwin Schiff’s book “The Big Con” which was essentially an expose’ of our Government’s SSN ponzi scheme and other fraudulent taxations.
Irwin has spent several years in prison for his tax rebellion, something few American’s are willing to do. Peter Schiff is Irwin’s son and has his own respectable investment business Euro Pacific Capital http://www.europac.net/
He specializes in inflation hedges to protect your savings, that’s if you still have any.
I blog on this site because I’ve been following Ron Paul since the early 80′s when everyone dismissed him as a fringe Libertarian kook. But all of a sudden there is a great awakening in the college campuses and Paul has seen a serious resurgence in followers. Several, including Judge Napolitano, Glen Beck, John Stossel, Rush L. and many others defending our Constitution as Ron Paul is doing.
SSN is only the tip of the entitlement iceberg, that we’ve hit, we’re sinking fast and now were arguing over the arrangements of the deck chairs. Short of drastic cuts (1/2 or more) of the entitlement budgets must go, there is little chance the system will recover.
MY HOPE is that the Tea Party will build its momentum and that Congress will grow a spine and reverse the trend of the Executive branch take-0ver via Czars and Executive Order etc.
Ron Paul is a heroic true patriot but he’s not likely to gain any traction in the Republican party. Both the Republicans and Democrats are hell bent on maintaining the Tyranny against the Citizens of this great nation.
Keep up your efforts, people are listening
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I share your admiration for Dr. Paul. Perhaps the wiser elements of the tea Party will recognize his limited government crusade as central to their beliefs. Certainly they would share his aversion to special interest spending. And, in time, those among them who value individual responsibility will rally behind his quest for a Fed-free stable currency. Speak to them, as have I, to rally them to Dr. Paul’s quest.
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The government and so called main stream media not only lied about security, Federal Reserver but also about science.
Einstein postulates have been tested as complete false by numerous experiments and observations. However, publics and scientists have to accpet Einsteit as a God just like the Federal Reserve System no matter how worse they are.
I would like Ron Paul to set up a commitee to hear Top scientists and Top editors about their treatment on scientific theories and experiemnts that disappove Einsteint’s Postulates.
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He pretty much nailed it.
Ron paul 2012!!
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vote in my poll please: http://www.sodahead.com/united-states/if-the-2012-republican-presidential-primaries-were-held-today-who-would-you-vote-for/question-1415965/
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This title an one statement in the article imply the government lies about Social Security. Who, representing the government, has ever said Social Security works by setting aside your money in an account for just for you? Or are these allegations simply intended to be provocative?
I have at least two concerns about allowing young workers to opt out of Social Security:
1.) As Rep Paul states, the money from young workers is being paid to benefit recipients. If young workers stop contributing, from where will the money come to pay the benefit recipients?
2.) Some of these people will end up old and destitute and then what? Are these people are on their own? Are we hoping they die quickly and quietly without becoming a nuisance? Will charitable organizations help?
I propose the following social security reform:
a.) Raise the retirement age one year every three years until the retirement age equals the average life expectancy.
b.) Apply means testing for benefits.
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1. Do away with Social Security.
2. Save a minimum of 10% of your gross pay every payday (and don’t touch it for years and years; let it build up).
3. When you save enough to retire, then retire on your own.
4. Don’t have enough to retire? Then work until you die.
A simple solution. Not complicated. Get some backbone and take care of yourself. “There’s no free lunch”.
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Dry Creek, I strongly endorse items 2 and 3. However, there will be a number of people who for a variety of reasons are unable to support themselves in retirement. How shall we handle this? Item 4 suggests people should simply work until they die, but this implies all people have sufficient skill and opportunity to earn enough money to support themselves. I seriously doubt this is the case.
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DryCreek,
That’s why we should allow savings in gold or silver competing currencies “Legal Tender” to escape the government’s incessant thievery via currency dilution.
I can imagine having saved 10 ounces of gold a year since the mid seventies and now having 350 ounces or about $490,000 in retirement savings!
But we keep paying the 15% into the Government “Black Hole” and we’ll get nothing in return….
Happy New Year
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Would you consider adding another item…Contribute 10% of your gross pay to charity?
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Did Jesus (to name one well-known advocate of charity) say that Rome (government) should give to the poor? Did he not say this was the path for a rich man to find his way to heaven?
Or, from another prophet:
There are eight levels of charity, each greater than the next.
[1] The greatest level, above which there is no greater, is to support a fellow Person by endowing him with a gift or loan, or entering into a partnership with him, or finding employment for him, in order to strengthen his hand until he need no longer be dependent upon others…
[2] A lesser level of charity than this is to give to the poor without knowing to whom one gives, and without the recipient knowing from whom he received the gift. For this is performing a good deed solely for the sake of Heaven. This is like the “anonymous fund” that was in the Holy Temple [in Jerusalem]. There the righteous gave in secret, and the good poor profited in secret. Giving to a charity fund is similar to this mode of charity, though one should not contribute to a charity fund unless one knows that the person appointed over the fund is trustworthy and wise and a proper administrator
[3] A lesser level of charity than this is when one knows to whom one gives, but the recipient does not know his benefactor. The greatest sages used to walk about in secret and put coins in the doors of the poor. It is worthy and truly good to do this if those who are responsible for distributing charity are not trustworthy (like Gov Bureaucrats).
[4] A lesser level of charity than this is when one does not know to whom one gives, but the poor person does know his benefactor. The greatest sages used to tie coins into their robes and throw them behind their backs, and the poor would come up and pick the coins out of their robes so that they would not be ashamed.
[5] A lesser level than this is when one gives to the poor person directly into his hand, but gives before being asked.
[6] A lesser level than this is when one gives to the poor person after being asked.
[7] A lesser level than this is when one gives inadequately, but gives gladly and with a smile.
[8] A lesser level than this is when one gives unwillingly. (like taxes which are not really charity at all)
8 levels of Charity by Moses Maimonides
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The age of Guns and Butter is over. It’s time to tighten our belts, adhere to the limits of the Constitution, and get this country back on track to true prosperity and INDIVIDUAL freedom. Collectivism MUST end or we’re headed for a dictatorship the likes of Hitler’s Germany. All the signs point to more legislation to restrict individual freedoms and centralize all power in the executive branch. Freedom loving Americans MUST stand up and be counted or we will lose this fight.
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It’s almost hard to believe people slam Ron Paul for his views on Social Security, and yet if you actually LISTEN to the man, really listen, he’s telling the unabashed truth about it; Social Security is NOT savings but another hidden tax, much like the inflation caused when the Federal Reserve creates new money. Americans need to collectively pull their heads out of the sand and revisit formerly ‘taboo’ topics like Social Security reform and Military Spending or we’re in for worse times.
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It is so sad that most politicians will not even remotely consider substantial Social Security reform to reduce spending deficits. Well done, Dr. Paul.
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Our largest military weapon is the thread to defaulting on our loans from whatever nation we target.
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Finally, get rid of that crap!
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He’s got my vote, again.
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What does this have to do with the “super rich”? It’s about government and disguised taxation.
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I would be interested if all tax proposals were vetted before giving them any credance. For example – Tom Beebe, if you ran the numbers on your tax plan – what is the size of the deficit? And then of course we’re back to “What Gets Cut?”.
I have a great tax plan. The Govt doesn’t spend any more than it collects in taxes. Once that happens, Americans can decide if they want less tax and less services, or more tax and more services. Can Americans and Politicians face reality? I doubt it.
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See item 6, which requires the budget to equal the tax rates applied to the PREVIOUS year’s reported income. This would create a surplus in times of economic expansion and a deficit in times of economic contraction. While I have a great distaste for Keynesian economics, I believe this limited dose would serve to stabilize the economy. It’s also compatible with Dr. Paul’s plan to eliminate the fed by putting the issue of spending vs. Revenues strictly under the congressional budget process where it belongs. Ok?
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I sometimes feel that commenting on a blog is a form of mental masturbation, done in secret (behind aliases) and alone, with no exchange of views, only self gratification.
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I wonder if Dr. Paul, or any of his staff, read this blog? HELOOOOO out there !
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Here’s a suggestion for replacing Social (In)security and making our tax code fair to all. Note the exemption for savings (in lieu of SS), for health care (in lieu of Obamacare), for education (in lieu of massive debt through the student loan program), and higher level of personal exemption (in lieu of multiple rates), and a negative tax (in lieu of welfare). This is a lot more than taxation, friends, it redefines our government. Send your comments to tbeebe6535@yahoo.com
1. All persons residing in the U.S. shall come together in households for the purpose of reporting all income from any source, each item to be identified by payer’s and payee’s tax number. Members of a household need not be related, need not reside together, and a household may consist of as few as one person.
2. Each year congress shall set by legislation a “minimum wage” and a “tax rate”.
3. The following income shall not be subject to taxation:
• An amount equal to a year’s earnings at the minimum wage rate, for each adult (age 20-65) member of the household, decreasing 10% per year to 50% at age 15 and increasing 10% per year to 150% at age 70. All payments for what is classified as necessary health care for all members of the household including medical care, any pharmaceuticals prescribed by a recognized health care professional, vision and hearing aids, and membership fees for health-enhancing entities such as gyms or other exercise facilities. Health care insurance premiums may be deducted but not health care expense paid for by such insurance.
• All educational expenses including day care for young children or legally incompetent persons, that portion of state and local taxes identified as spent on education, that portion of parochial school tuition, fees and other expenses identified as going for non-sectarian education, tuition, fees and educational materials for private school education at any level, and a per-diem allowance for students traveling more than 50 miles from primary residence for education.
• All income saved into an identified account from which investments may be made. Any withdrawels for the benefit of a member of the household shall be considered (taxable) income to the household.
4. The “tax rate” shall be applied to any income over and above the deductions listed above, regardless of amount.
5. There shall be no federal tax on corporations or other business entities.
6. The Office of Management and Budget shall compute revenues to be expected using the newly set tax rate and minimum wage, applied to the previous year’s reported incomes. No expenses in excess of that amount may be authorized or made by the federal government without approval by 75% of each house of Congress.
7. At the request, by legislation duly enacted by a municipality having greater than 100,000 inhabitants or a state, a surtax may be imposed on citizens of that municipality or state which shall be applied in a manner exactly as applied for the Federal tax.
8. For households whose deductions exceed total income, the Federal Government shall make payment equal to the tax rate multiplied by the shortfall in income, as shall municipalities and states.
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I do not think your plan is what I would want. Nice try though. Thanks for your input; at least you have a plan.
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Thanks for any comment, Dry Creek.
May I ask for your thoughts on specific parts of the plan?
One principle uopn which it is based is, to use a current buzzword, “transparency”. For instance, only you, as a consumer, are the source of money to corporations. So guess who is really paying corporate taxes? Or, if you belueve in “Equal justice under law”, shouldn’t all be equal regardless of theri marital status, hence the “household” concept for free associations to pool incomes and exemptions for taxes. These are but a couple of the ideas upon which this plan is based, and why its about much more than taxes.
What would you like to see included?
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Tom Beebe, you are intending on replacing a government plan with another government plan.
The idea is to get rid of a centralised mandate who specifies what you may earn, what you may keep from what you earn, what you may or may not eat, how much health insurance you should buy, what you should study, what you should wear etc.
Ideally taxation should be on the basis of ‘use’. I.e. if I drive a car and use the road, tax me to pay for that road by how much I drive. Don’t tax me to build a stadium in the middle of a forest because some sports team wants it. This way you can judge through the free market what the true demand and supply (cost) is (not one thing being subsidised by a tax on another).
Some of the problems of your proposals still reflects the bureaucracy and arbitrariness of government. e.g. “7. At the request, by legislation duly enacted by a municipality having greater than 100,000 inhabitants “. So if they have 99,999 they are exempt from a surtax, but because 1 extra person is born, magically they are all now liable. It’s like the current Congress saying $250,000 is ‘rich’… but $249,999 isn’t?
At least under a ‘use’ basis you can calculate, e.g. 1mile of road costs $1m to construct, lasts for 10 years carrying 10,000 cars a day at an average tare of 3,000lb. You can then factor an actual ‘cost’ of using that road and apply such tax (so a 6,000lb SUV will pay more than a 3,000lb compact). It’s not arbitrary, but arrived in a scientific statistical manner.
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My 5:43 PM reply was intended fror you.
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Tom,
I like your thinking, good comments and a reasonable solution to remedy the problem. Sadly the statuesque is not something they have the guts to change.
I believe that our Government does NOT want a solution, they’ve been engaged in this ponzi-fraud for so long it’s become a comfortable old hat, they’ll keep wearing it until someone takes it forcibly away..
The system is headed for total collapse, so the question becomes how do we personally protect ourselves from the calamity to come.
Happy New Year and Good Luck
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“not something THEY have the guts to change? “True, now let’s change who “they” are… throw the bums (both parties) out.
We cannot personally protect ourselves. Long before the advent of man, the beasts of the wild came together to protect themselves, in packs, herds, coveys, prides, by whatever name we’ve given such associstions. Then man gathered in families, clans, tribes, all for the same purpose. But he crossed a line when he formed governments. The associastions were no longer voluntary; freedom had been compromised in the name of security. So let us form up in and strengthen voluntary associations for our common protection, our common security, to address our common needs, but without the sacrifice of our individual freedoms. This is why charities must replace welfare programs. Why a “well armed militia” is more compatible to liberty than endless increases in law enforcement spending (and the cost of housing the miscreants the law puts away). I do not advocate a complete rejection of government, as do anarchists, but a new line of thought that emphasizes the individual, and free associations of individuals, rather than government, as the means to address our ever evolving challenges. Agree anyone?
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Tom,
I agree, but perhaps I’ve become too callous and no longer have faith in our government.
We have come to a major fork in our political history in America. The progressives liberals “sincerely” believe that MORE government is the solution. They’ve promised redistribution of wealth and entitlements and now 1/3rd of the voting electorate BELIEVES they are entitled to your and my wealth. They vote to continue the transfers of wealth, thus the system perpetuates.
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We’re not far apart. You express a loss of confidence in our government. I note the advantages of “a well armed militia”. This is but one way to at least threaten an overbearing government.
I also agree in principle with use taxes such as you propose for building highways. Toll roads are an example. Some would suggest a highway trust fund paid for by gasoline taxes. But in truth I don’t hold much hope for elimination of an income tax. As you can see I pursue simplification, with elimination of all deductions which are a product of special interest favors. The four I retained, not including basic living (personal exemption), are education, health care and saving (investment) contribute to the creation if wealth. It is upon such creation, not it’s distribution, that government economic policy must center. Some would call this “trickle down” economics. Perhaps. When tried before it was half-baked. The idea was that the wealthy would invest more if their taxes were moderated. I suggest that investment be directly exempted.
As I hope is evident, I’ve put a lot of thought into the plan I suggested. It’s been developed over years. But as you may note from my expression of dismay over lack of responses, I’ve searched too often in vain for comments like yours. Thank you. At least someone out theta cares enough to comment.
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Today I can file for Social Security. Should I do it? Or should I keep on working? Let me know your thoughts. Thanks.
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I applied for SS at the age that provided full benefits, AND kept working (or intend to) as long as I can. When one is no longer able to contribute, the “market” will let him/her know. Beats sitting around.
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Do we really no longer have common sense in America. We all want freebies and are not willing to sacrifice things knowing they will ruin our country.
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Exactly!
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Thie ex-GOP Libertarian remembers the comment of a Democrat president: “ask not what your country can do for you; ask what you can do for your country.” How many of our elected today asks the righe question?
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info wars .com and ron paul
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the right hand of government takes what the left hand says…
hisholychurch DAHT org FORWARD SLASH sermon FORWARD SLASH ucc DAHT php
If you (and I) had paid attention: it was all there 2000 years ago.
NO KING BUT JESUS!
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The indulgent hard-line extremist’s “Right Turn” of relationships which will permit us to maintain this “Roll Back”position of human disparity in a Historical Perspective! Less we are hampered by idealistic Corporate Political campaign slogans and false prommisses.A system of state and private power that are idealistic will be the fall of what’s left of our consitutional rights.
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