Take The Quiz: Is The Nation and Your Family Better Or Worse Off Since 2008? 2004?2000?

As the immaturity, demagoguery, and childish behavior continues to grow within the political class in Washington, I thought it might be worthwhile to take the following short quiz and ask ourselves the following questions before deciding who you want to be your next President:

1. Is our nation’s economy better or worse than in 2008?
2. Is our nation’s unemployment situation better or worse off than in 2008?
3. Is your job security and job satisfaction better or worse than in 2008?
4. Is our nation’s foreign affairs position better or worse off than in 2008?
5. Is our national unity and civility better or worse than in 2008?
6. Are gasoline prices better or worse off than in 2008?
7. Is our level of freedom better or worse off than in 2008?
8. Is the influence in our politics from the obscene amount of union, corporate, lobbyists, and PAC money better or worse off than in 2008?
9. Is Social Security's fiscal solvency better or worse off than in 2008?
10. Is Medicare and Medicaid’s fiscal solvency better or worse off than in 2008?
11. Is the fairness and effectiveness of our nation’s tax system better or worse than in 2008?
12. Is the nation’s national debt situation better or worse than in 2008?
13. Are college costs better or worse than in 2008?
14. Is government incompetence and waste better or worse than in 2008?
15. Is your home worth more or less since 2008?
16. Is the ability to get a home mortgage better of worse than in 2008?
17. Is the country any closer to solving the major issues of our times such as failing public schools, a lost war on drugs, the lack of a nation energy strategy, leaky borders, and ever escalating health care costs than in 2008?
18. Is the nation’s leadership any better or worse than in 2008?
19. Is the nation’s ability to handle disasters, e.g. Gulf oil spill, any better or worse than in 2008?
20. Is the nation's foreign military entanglements and associated costs any better or worse than in 2008?
21. Is the nuclear threat from rogues states like Iran and North Korea any better or worse than in 2008?

I would bet most Americans would answer negatively to the above questions if recent opinion polls are any indication. Now repeat the above questions and change 2008 to 2004 or 2000. I would bet your answers are basically the same, regardless of who is in the White House and what party controls Congress.


If you answered negatively to most of the quiz questions, you are not alone:

• The results of a CBS News poll, that was summarized in the July 15, 2011 issue of The Week magazine, found that 39% of Americans say the U.S. economy is in permanent decline, which is up almost 40% from the 28% who felt that way last October.
• The same poll found that 57% of those surveyed felt the economy would eventually recover, which is down 16% from 68% who felt that way last October.
• A recent Reuters/Ipsos opinion poll found that 63% of those American surveyed believe the country is on the wrong track, up from 60% who felt that way last October. Not only is the number getting worse going forward but it is distressing high even at 60%.
• A recent Harris poll among small business owners found that 84% of them feel that the U.S. economy is on the wrong track.

Nasty stuff. A major problem with this kind of pessimism is that at some point it probably becomes a self fulfilling prophecy. As people get more and more depressed about economic prospects they tend to hunker down, spend less, invest less, and before you know it things are even worse than they would have been.

 And this is not just a rant at the current Presidential administration, although they certainly have contributed to the pessimism. No Presidential administration has made much headway against the issues listed above either. The war on drugs is over forty years old, the lack of a national energy policy is over thirty five years old, our public schools have been failing for decades, Social Security, Medicare, and Medicaid have been heading for insolvency for decades. The list goes on and on, regardless of who is running the show in the White House and in Congress.

 Which is what always puzzled me. If we were treated this poorly by a car salesman, our dentist, our retail store, would we put up with this nonsense and nonperformance? Absolutely not. We would either return the product or service we purchased for a refund and/or never use that car dealer, dentist, or store again. But in politics, we continue to hire the same types of people for the job even though we are constantly disappointed by their performance and waste.

 The only explanation is that those people in office and in politics that constantly disappoint us have rigged the political process so that we really never have a choice to opt for competence over incompetence, we are only given two different flavors of incompetence.

Consider some insights from Franklin Delano Roosevelt: "The country cannot get a firm sense of direction if it has two or more national parties which merely have different names but are as alike in their principles and aims as two peas in a pod." I would slightly adjust his quote to say we are stuck with two parties that have very few principles between them both and it seems their only aim is to get and to stay elected, regardless of the damage they do to the country.

Several steps from "Love my Country, Loathe My Government" need to be implemented to start breaking this monopoly of incompetence we currently suffer through with the political class:

• Step 6 - allow only individual American citizens to contribute to political campaigns, removing the obscene amount of organizational money from corporations, unions, PACs, and lobbyists that overwhelm our votes and our voices when we vote.
• Step 7 - do not allow any one to contribute to any election campaign that does not impact their lives, e.g. do not allow a resident of New Jersey to contribute to a Congressional campaign in Kansas. Only Kansas residents living in that Congressional district should be able to contribute to their district's campaigns.
• Step 15 - any Presidential candidate from ANY political party that has a mathematical chance of winning the election, from an Electoral College perspective, must be included in he Presidential debates.
• Step 17 - eliminate the Democratic party's politburo-like "super delegate" process so that the chance that the votes of millions of Americans would be overruled by a handful of politicians would never happen.
• Step 29 - institute term limits for all Federal elected posts so that elected officials vote for the best interests of the country and not their re-election campaign which would no longer be an option.

Until we fix our election processes via some of the steps listed above, we will continue to be blessed with the defective political class we currently suffer through. Wasteful, selfish, and ineffective, a losing hand if ever there was one. We have to find a way to start electing dedicated Americans to office who will act in the interest of the country and not just their own political careers, people who offer real, concrete plans and not just fluff, wishful thinking and empty hope.

 Remember the words of Dr. Julie Gerberding: “Hope is not a strategy. We have to plan.” Current and past Presidential administrations only had hope, and no matter how audacious that hope is, hope is not a strategy, it is simply nonproductive, wishful thinking. Hope does not pass quizzes like the one listed above. Hope does not solve the major issues of our times.


Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at http://www.loathemygovernment.com/. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
Please visit the following sites for freedom:
http://www.loathemygovernment.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.com/

The Stupidity Of Social Security Myths - The Five Legged Dog Riddle

It never ceases to amaze me how well the American political class has bamboozled the American public on many different issues. However, their best piece of work was to be the stupidity and myths they have sold us all when it comes to Social Security.

The latest proof of Social Security myth is summarized in an article written by James Roosevelt , Jr., the grandson of Franklin Delano Roosevelt, the President who created the Social Security system. The article, "Social Security's Enduring Truths,"  which appeared in the current issue of the AARP magazine, is rife with stupid Social Security myths. However, to fully understand the myths, one must understand how the system works:

• A citizen pays money into the system from their current wages.
• This money, better defined as wealth, is taken into the system and paid out to current Social Security recipients, with the excess wealth beyond current payouts being given to the Treasury Department.
• In turn, the Treasury Department gives the Social Security Administration the equivalent of a paper government IOU for the money/wealth that the Treasury Department took in excess of what benefits were paid out.
• The political class then uses this excess Social Security wealth/money to run the government, for better or worst, as if the money from Social Security was collected as general taxes/revenues.

Now, let's review the stupid myths that Mr. Roosevelt tries to push as "enduring truths:"

- Mr. Roosevelt says: "But this is also a generation [baby boomers] that has been paying into the [Social Security] system since they started working in the early 1960s. Much of the money that boomers are and will be drawing from Social Security is and will be their own."

This is totally incorrect. The money that baby boomers have paid into the system via their pay check deductions over the past years has been spent long ago. As the money from younger Americans is paid into the Social Security system, that money and wealth is immediately sent right back out as payments to retired, older Americans.

The money that each baby boomer paid in did not get placed into some mythical type of individual bank account. Thus, Mr. Roosevelt's assertion that baby boomers will be drawing down "their own" money is a fallacy, their money was spent long ago either as benefits or it was spent, or likely wasted, by politicians.

- Mr. Roosevelt tries to paint Social Security as a great retirement option, stating that "The administrative cost is .09%. It returns more than 99 cents to beneficiaries on every dollar collected. I dare you to find a private retirement plan that can claim that."

I do not disagree with his numbers, just his somewhat shallow conclusions that these are great numbers. First of all, this is a lousy retirement and investment plan in that for every $1.00 that goes in, less than a dollar comes out. While the difference is not great, it is still a negative return. I could place my Social Security payments in a low yielding bank savings account and still get a better return than the negative return Mr. Roosevelt claims is a good thing.

Second, in previous posts I have already discussed a more extensive analysis that explodes Mr. Roosevelt's conclusions that this is a good plan. I assumed that the money that was actually paid into the Social Security system on my behalf, beginning with my first high school job, was instead placed into a tax deferred retirement fund, like an IRA account. That money was then invested solely in an S&P 500 index investment fund. That account was allowed to grow, or shrink over the next forty years or so, based on the changes in the S&P 500 index fund.

The results show that if I had maintained control of my Social Security wealth and deductions, I could retire with about twice as much in monthly payments than I will get via Social Security. If I had been more conservative in my investing and invested only in long term Treasury bills, then I could have retired with about 33% more than what I will get from Social Security.

Thus, Mr. Roosevelt is wrong, I can easily show him a retirement plan that blows Social Security returns out of the water since I would have generated substantial positive returns. The government operation of Social Security generates a negative return.

- The article claims that at the end of 2010, the Social Security trust fund had a positive balance of $2.6 TRILLION. However, what he calls a trust fund is nothing more than $2.6 TRILLION worth of Treasury Department IOUs. Remember, from the above discussion, the political class stripped Social Security of excess funds/wealth and left behind basically worthless IOU paper over time.

In fact, in 2011, due to the bad economic times, the Social Security Administration had a negative cash flow. In other words, the Social Security Administration paid out more money, cash, and wealth than it collected in Social Security wage deductions. How did it manage this? It went to the Treasury Department, who floated bonds to start paying back Social Security IOUs.

There is no pile of money laying around in the Social Security vaults. Trust funds , IOUs, etc. do not matter, the only thing that matters is cash. Thus, the Social Security now needs Americans to pay more in taxes to pay out current Social Security benefits. There is no trust fund pot of money that will last until 2036 and be able to pay out full benefits until then, as Mr. Roosevelt asserts.

His conclusions shows a basic ignorance when it comes to cash flow and real wealth. An IOU is not wealth, it is a promise to pay. That promise has to be fulfilled by the government going out and confiscating more money form the American public today in order to pay out benefits to the levels promised by short sighted politicians from the past.

_
- The final point of discussion is briefly mentioned by Mr. Roosevelt and is then ignored: "The purveyors of fear want you to believe that boomers are retiring on the backs of their children and grandchildren. If you buy that, they have statistics showing fewer contributors supporting more beneficiaries' proof that the program is unsustainable."

He then goes onto other topics without addressing the very real problem of the growing number of Social Security recipients and the relative dwindling number of those paying into the system. Ignoring this reality does not make the problem go away.

According to the Social Security website, way back in 1940, there were 159 payers into the system for every retired worker receiving a Social Security check. Back then, this seemed like a good deal. Small sacrifices by 159 workers to support one older American in retirement. 

However, this ratio started to quickly shrink so that just ten years later, the number of payers per retiree was down to 16. Today, that ratio is only three payers to one beneficiary and within twenty years that ratio will be down to about two to one. How Mr. Roosevelt can ignore this reality is unconscionable. Consider what this reality really means:

• According to the Social Security website, the overall average annual Social Security payout is about $12,924 a year.
• If the number of workers supporting the system is down to only three to one, then each of those three Americans is basically paying the one retired American $4,308 a year for their retirement.
• Since the average American household has about $60,000 a year in income, then the average working family pays more than 7% of its gross income each year to support one retired American.
• In twenty years, all other things being equal, that average American family will be paying $6,462 to support one retiree which will be more than 10% of the family's gross income and much more than the family's net income after income taxes, sales taxes, gas taxes, etc. are considered.
• In 1940, all other things being kept relative, the average American family, along with 158 other Americans, would only be paying about .1% of their family income. 

What more proof does Mr. Roosevelt need? More and more baby boomers retiring, relatively fewer and fewer working people paying into the system has to put a burden on future generations, our kids and our grandkids.

I believe Abe Lincoln is responsible for the following riddle: if you called a tail a leg, how many legs would a dog have? Answer: four, calling a tail a leg does not make a leg:

• Calling Social Security a great retirement plan does not make it so. We proved that above, Social Security pays out less than it takes in and far less than if that money had been privately invested.
• Calling Social Security a non-burden on our kids and grandkids does not make it so, there are too many baby boomers entering retirement.
• Saying that the money people paid into the Social Security system is waiting for them is a lie, their contributions were spent long ago.
• Pretending that Social Security has trillions of dollars in its trust funds does not mean that real wealth and real money is there.

Pretending a tail is a leg does not fix the problem. However, the following steps from "Love My Country, Loathe My Government" could fix the system:

1. The retirement age needs to be raised to 70 since people are living much longer today than when the Social Security was implemented, invalidating one of the original premises and assumptions supporting the system. A hardship exception would be available for those that cannot afford to wait until they are 70 years old.
2. Wealthy older Americans would not receive a Social Security check at retirement age in order to have enough funds for those that really need the money for life and death purposes. People like Warren Buffet, Bill Gates, Donald Trump, etc. have more than enough money to make this sacrifice, freeing up money for much needier Americans.
3. The tax rate for Social Security needs to be lowered significantly but the maximum amount taxed uncapped and to include all forms of income, not just wages. This would level the percentage of each American's contribution to Social Security which is currently negatively skewed towards lower earning Americans.

Details on these three steps can be found in the book.

The only enduring truth about Social Security is that it is in serious financial trouble and needs bold actions to fix it. Unfortunately, our political class keeps trying to make this tail into a leg, something that Abe Lincoln knew could not be done.





Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at http://www.loathemygovernment.com/. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.



Please visit the following sites for freedom:

http://www.loathemygovernment.com/
http://www.cato.org/
http://www.robertringer.com
http://realpolichick.blogspot.com
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.com

Retro #6: Historical Politica Quotes, Contemporary Political Crises

Due to massive family obligations in the short term, time will be at a premium for the next few days. Thus, rather than rush through new posts, I am taking the opportunity to do a "best of" series of past posts. These "retro posts" have been the most popular posts in this blog from the past year or so. All of them have been viewed hundreds of times and seem to have made a connection to our readers vs. other posts and topics. Please enjoy them again or for the first time.


A little quiz on quotes relating to politics in America, try to figure out who said it and when they said it:


1) In reference to why political parties have lost the confidence of the public: "Their machinery of intrigue, their shuffling evasions, the dodges. the chicanery, and the deception of their leaders have excited universal disgust, and have created a general readiness in the public mind for any new organization that shall promise to shun their vices."

2) Also in reference to why political parties have lost the confidence of the public: people "saw parties without any...difference contending for power, for the sake of power. They saw politics made a profession, and public plunder an employment. They beheld our public works the plaything of a rotten dynasty, enriching gamblers, and purchasing power at our expense."

3) "It could probably be shown by facts and figures that there is no distinctly native American criminal class except for Congress."

4) "The government, which was designed for the people, has got into the hands of the bosses and their employees, the special interests. An invisible empire has been set up above the forms of democracy."

5) "Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly, and applying the wrong remedies."

6) "An election cannot give the country a firm sense of direction if it has two or more national parties which merely have different names but are as alike in their principles and aims as two peas in a pod."

Great quotes, all of them. Unfortunately, it seems as if we are living everyone one of them today. The interesting thing is that these quotes are quite historical, not contemporary:

1) According to the Real Politics website, this quote was from the book, "The Origins of the Republican Party" by William E. Gienapp and the quote is dated from 1855. The New York Times called it "dodges", today we call it "spin doctoring." The Times called it "universal disgust," we call it having Congressional approval ratings around only 20%. The Times called it "chicanery", we call it a variety of names including earmarks and outright corruption. It is remarkable how closely a quote from 155 years ago captures the nightmare we are living through today with our political class.

2) This quote is also from Gienapp, also from 1855, and it appeared in the New York Evening Post. This also captures our current state of political affairs. We also see most of our politicians vying only for power, not for the opportunity to make the country better. With their high salaries, great benefits, many, many perks, our current day politicians fit the Post's description that politicians "saw politics made a profession, and public plunder an employment."

Without term limits, our politicians see being elected not as a service to the nation but as a life time job. And their gerrymandering Congressional districts, rigging campaign finance laws, and handing out taxpayer dollars as earmarks allows them to ensure perpetual re-election, regardless of the quality of their work.

3) This third quote is from Mark Twain and is obviously well over a hundred years old. However, even back then he realized that the power allocated to politicians many times results in outright criminal behavior. Congressmen Traficant, Jefferson, Cunningham and other Congressional politicians have served time due to their corrupt and unlawful behavior while in office. How many former Illinois governors have either served prison time, are currently serving time, or are aggressively trying not to serve prison time?

Charles Rangel and Maxine Walters, two current members of Congress, are likely to face a House Of Representatives trial within the next few months on ethics and corruption charges. The House ethics office has investigated or is currently investigating potential crimes by other members of Congress. The more you list out what has happened to our contemporary politicians, you marvel at how right Mark Twain may have been way back when.

4) This quote is from Woodrow Wiilson who said it early in the last century. At that time, he realized the influence that non-voting entities can and do have on government functions and corruption. Wilson called them "special interests," we call them lobbyists.

5) My source attributed this quote to Groucho Marx and is likely more than fifty years old also. Back then, even comedians like Groucho recognized that politicians were not any good at identifying the root causes of problems, if a problem even existed, and then putting together a coherent, efficient and cost effective plan to solve that problem. Our politicians are no different:

- Nixon declared War On Drugs in the 1960s and we are no closer today to having a coherent national drug strategy and policy than the day he declared war.

- Carter muddled through the oil crises in the 1970s and we are no closer to having a coherent, national energy strategy and policy than we were when we waited in long lines at gas stations.

- Reagan identified the problems with public education with a Presidential Commission in 1983 and 27 years later, U.S. public schools badly trail many, many other nations in the education of their children.

- Clinton presided through numerous terrorist attacks including the first World Trade Center bombing and the African embassy bombings and never came up with a coherent terror defense policy and strategy, resulting in the death of almost 3,000 Americans on 9-11.

- Over the years over 10 million illegal aliens have come across our borders with no politician able to come up with a coherent immigration strategy and plan.

Unfortunately, Groucho was right back then and he would be right today if he saw the incompetence of today's politicians.

6) This last quote is from Franklin Delano Roosevelt and is at least 65 years old. When you really come down to it, are the Republican politicians much different from the Democrats? Sure they pick their friends and identify their enemies, e.g. Republicans are generally pro-life and pro-guns while Democrats are generally pro-choice and anti-guns. But when you look at their records, neither party has accomplished much of anything positive over the past fifty years. Just look at what we listed above under Groucho's quote: no solutions to the drug, immigration, terrorist, public school and energy problems. The only reason they pick their friends is to get money to finance their constant re-election, not to solve any meaningful problems.

While Obama the candidate promised change you can believe in, Obama the President is hardly any different than Bush. Obama drew down U.S. forces in Iraq but it was on the timetable Bush established. Bush set up the terrorist prison in Guantanamo and so far, Obama has kept it open. Our border still leaks illegal immigrants and we still have no new policy or plan for energy or public schooling. Bush enacted the Patriot Act and Obama basically rubber stamped its renewal.

Gay rights are no further along under Obama than under Bush and the amount of earmarks in our national budget is as high under Obama as under Bush. The only significant difference between Bush and Obama is that the Obama administration has run up spending deficits orders of magnitude higher than Bush.

This is why the whole area of U.S. politics can get so depressing. the incompetence and corruption we face today appears to have been going on for a long, long time. The only difference may be is that government is so much larger, wasteful, and intrusive then it was in 1855 or when Twain, Roosevelt, Marx, and Wilson spoke their quotes above. That is why we need to find a way to start shrinking the size of government immediately in order to start cutting back on the corruption and waste that apparently is inherent in the genes of all politicians:

- Step 1 from "Love My Country, Loathe My Government" would start the government shrinkage process by reducing all government functions and budgets by 10% a year for the next five years.

- Step 5 would step up fraud and corruption activities in all government areas, hopefully including the investigation of fraud and corruption form our elected officials.

- Step 39 would implement term limits for all politicians in order to avoid the problem discussed in the Post quote above, i.e. politics should not be a profession, it should be a temporary calling and service calling.

- Steps 23 to 29 provide a process for systematically attacking and solving the problems that politicians have been unable to solve with their own capabilities and intelligence including drugs, energy, schooling, and immigration.










Our new book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respectfreedom for both yourselves and others everyday.

Please visit the following sites for freedom:

www.cato.org
www.reason.com
www.robertringer.com
www.flipcongress2010.com
www.realpolichick.blogspot.com