California Dreaming Becoming The California Nightmare, Financially Speaking

Let’s get away from Federal government political class insanity and wasteful government spending for a little while. Today, let’s revisit one of our most dysfunctional states, California. We have already covered the dire state of California’s economic status in the following posts:

http://loathemygovernment.blogspot.com/2012/10/why-californias-distressed-economy-is.html

http://loathemygovernment.blogspot.com/2012/07/why-california-is-failing-while.html

http://loathemygovernment.blogspot.com/2012/07/state-level-economic-musings-california.html

These posts talked about the bad financial management skills of California politicians, most notably how they have allowed state government employees’ salaries, benefits, and pensions to escalate out of control. In an attempt to get the state financially solvent, late last year the state voters approved a flawed economic recovery plan which raised many state taxes to record setting levels.

The plan is flawed for two simple reasons:

1. California state government, like the Federal government, has a spending and cost problem, a problem that can only be solved by reducing spending and costs.
2. It cannot fix its problems by raising taxes. The amount of taxes raised is never enough to cover the ever escalating spending. Also, ever rising taxes start to force high producing individuals and businesses to leave the state for better financial conditions, further depressing tax revenue without fixing the underlying spending problem.

We have seen this happen in other states. Maryland once raised tax rates on millionaires in its state only to find that overall tax revenue from millionaires actually decreased even though the tax rates were higher:

http://loathemygovernment.blogspot.com/2012/12/day-7-eight-days-of-logic-and-sanity.html

Illinois also recently raised tax rates rather than slashing spending. It ended up giving businesses massive tax breaks to keep those businesses located in the state, putting more pressure on individual taxpayers without reducing spending or solving the deficit spending:

http://loathemygovernment.blogspot.com/2011/12/illinois-case-study-why-raising-taxes.html

Let’s take a look at what is happening with those tax increases five months after they were approved relative to education spending, based on the following facts from a March 23, 2013 Bloomberg article:

• As we discussed above, late last year California politicians persuaded voters to support a seven-year, $50 billion tax increase, promising that the money would all go to public education.
• This promise was enshrined in the first five words of the initiative’s title. “Temporary Taxes to Fund Education.”
• However, just four months after the election, the state’s Legislative Analyst’s Office has found that the California State Teachers’ Retirement System will need an extra $4.5 billion a year for 30 years , a grand total of $135 billion, or about $30 billion over the next seven years, to cover its unfunded liability for teacher pensions.
• Thus, while the original tax increase plan was to raise $50 billion for actually educating California kids, now about 60% of that will be needed not to educate kids but to shore up the teachers’ union pension plan, a classic example of bait and switch.
• The article points out that this financial mess should not be a surprise since a number of people had already pointed out the disastrous financial course the state’s financials and pension funding were on, including the article’s author, a report called the Volcker-Ravitch report, and a report/analysis done by Bill Gates.
• Unfortunately, the $4.5 billion-a-year shortfall is based on the retirement fund’s self-reported unfunded liability estimate, a shortfall which assumes that its investments in the stock market will double every ten years, a highly unlikely assumption since to attain this growth rate, the Dow Jones Industrial Average would have to be around 30,000, more than double its current level.
• Any stock market performance less than that assumption will increase the pension fund shortfall, making the $4.5 billion a year way too low.
• The article reports that economists working for the Volcker- Ravitch analysis estimated last year that under a more reasonable stock market investment earnings assumption, the cost to meet the retirement fund’s unfunded liability is closer to $7 billion a year.
• This $7 billion a year shortfall estimate would be about equal to the seven year, $50 billion tax increase that was passed in November, wiping out any education funding for the kids since $7 billion more a year would be needed just to fund the teachers’ pension liabilities.

The article goes on to point out why this happened, including intentional repression of facts, but that story is for another post.

Another ill fated attempt to fix a government spending problem by not attacking excessive spending but by ignoring the underlying cause and trying to fix it with tax increases. It seems that this approach never works since the expenses grow faster than the tax revenue needed to pay for the ever rising expense stream. The article concludes by putting the blame for this California bait and switch right where it belongs, with the California political class:

Teachers, who don’t receive outlandish wages or pensions, didn’t cause this problem, and the good news for them is that they will get their pensions because the state is legally required to back up school districts if they can’t meet their commitments.

Likewise, this problem wasn’t caused by defined-benefit pension systems, which can work perfectly fine so long as promises are funded properly when they are made.

But many politicians don’t want to fund pension promises properly. Most want to keep doing the opposite so they can keep making promises that can’t be kept, except at great expense to innocent people down the road.

There’s no free lunch here. To the extent that school districts pick up the cost, kids in school today will be hurt because more dollars will go to pension costs and fewer dollars will go to classrooms. To the extent that the state picks up the cost, residents will receive fewer services. Either way, voters will get little for the tax increase they approved in November.

No free lunch, truer words regarding politicians have never been more appropriate and have never been more ignored. Better to enrich themselves and buy votes today and not worry about fewer services and financial burdens to imposed on citizens down the road. Classic politician bait and switch, promise today, reneg tomorrow.

But this is just one financial problem facing California today. A new financial report by the California State Auditor and the Bureau of State Audits shows that California is heading quickly down the financial road of disaster:

• California now has a negative net worth of $127.2 billion.
• Which actually gets worse since although the report estimated the state's total long-term obligations at $167.9 billion, that number did not count unfunded liabilities for state employees' future pensions or the $60 billion in unfunded liabilities for retiree health benefits (see the $135 billion liability identified above by the Bloomberg article).
• These costs have been identified by the Government Accounting Standards Board and Moody's as costs that state and local governments should include in their budgetary assessments.
• If those costs were included in California’s budget sheet, the state’s net worth would decline hundreds of billions of dollars more.
• The report states that California spent $1.7 billion more in the 2011-12 fiscal year than it took in, leaving the state in arrears almost $23 billion.
• Of the $127.2 billion spent by the state that fiscal year, roughly half of it resulted from the state issuing general obligation bonds which were then distributed to local governments and school districts for public works projects. Those assets were listed on the balance sheets of the localities involved, while the state accrued the bonded debt.

Nasty reality coming home to roost in California. Politicians have been spending way beyond their state’s ability to pay. And rather than cut spending to be in line with their ability to pay, they keep raising taxes, which are now never going to be able to pay for the extravagant and probably wasteful spending.

Tax increases, at best, slightly postpone the facing of reality. The tax increases from last November, for example, did not make life better for state residents, it just went to paying off a small portion of the out-of-control spending.

To give you an idea of how bad the state’s debt is, let’s do a little math. If we take the $167.9 billion shortfall and add in the $135 billion of unfunded liabilities for the teacher pensions, and divide by the number of U.S. households, we see that if the rest of the country wanted to bailout California, each household would have to write a check for about $2,600. This would be more than 5% of every U.S. household’s gross household income. Outrageous.

We review the California situation as a forewarning of what is happening at the Federal government level. At some point, and we may have already passed that point, the exponential growth in expenses, especially interest payments on existing debt obligations, can never be overcome by raising taxes. As in California, raising taxes only slows down the march into unrecoverable debt levels, only reducing spending can solve the problem. Just ask California, Maryland, and Illinois.

Raising taxes without fixing the underlying spending problem eventually results in fewer government services for its citizens, a collapsing economy, and dire hardships for the most unfortunate in our society. But at least at the Federal level, there is a way to solve the spending problem without raising taxes and with minimal harm to most citizens. This plan would take an amazing $9 TRILLION out of the Federal government debt and spending stream without raising taxes. The details are in the following link:

http://loathemygovernment.blogspot.com/2012/12/part-8-eight-days-of-logic-and-sanity.html

The question is whether the Federal political class will follow this common sense advice or the rest of the country will be subjected to the California bait and switch fallacy of just a little more taxation will fix everything.

Note: for an insightful view of how this California spending problem is unfolding in a major California city, Stockton, take a few minutes to view the following video:

http://www.youtube.com/watch?v=dUv77v4qyrw

Stockton is the largest American city to ever declare municpal bankruptcy. It will probably not be the last or the largest when the whole financial deck of cards collpases in California and elsewhere across the country.

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:

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.reason.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com
http://www.youtube.com/watch?v=08j0sYUOb5w 

Why Medicare and Social Security Are Doomed - The $222 TRILLION Dollar Conversation Romney and Obama Should Be Having

We are still in the middle of what I call "silly season" when it comes to politics and elections. Politicians and their respective advocates in the media talk about trivia, inane issues and other silly stuff that really will have no impact on the lives of most Americans as we go forward.

The Washington Post two weeks ago did a 700 word article on the clothes that Paul Ryan wore at some campaign appearances that week and how well those clothes fit him. Joe Biden was put in political "time out" for a few weeks because he continues to have foot in mouth disease. The Obama camp insists that Romney release his tax returns while the President's school records continue to be a secret and the tax returns of most members of Congress are also a mystery.

Trivial matters in a time of dire national issues. Let's do a quick review of the country's economic straits that adults should be talking about vs. the relatively minor issues that our politicians talk about, issues that we have covered extensively in past posts:

• Our national debt is about to hit $16 TRILLION. If spread out equally across all U.S. households, every American household would have to pay about $140,000 each to cover the debt nut. And under Obama, this debt is growing over a TRILLION dollars a year relative to a year's worth of government tax and fee collection.
• Social Security is currently in a negative cash flow situation and will continue in that situation for decades to come as the Baby Boomers retire. A negative cash flow situation means that the Social Security process is now, and will continue, to pay out more in benefits than it collects in tax revenue.
• The Social Security trust fund still does not exist as a source of wealth. It only exists as a cruel accounting hoax, a set of financial IOUs that the Treasury says it owes the Social Security Administration with no tangible assets of wealth to back up those IOUs.
• For the first time in the history of the Social Security program, and going forward, an average American will pay more into the Social Security process than he or she can expect to get back in benefits, making it one of the worst retirement programs imaginable.
• Medicare is quickly eating up more and more of the country's tax wealth and Obama Care will hasten the fiscal collapse of the program since it plans to arbitrarily reduce future Medicare budgets by over $700 billion, without resolving the underlying causes of our high health care costs as a nation.
• According to Forbes magazine, the total wealth of the 400 wealthiest Americans is just over $2 TRILLION, which means that confiscating the TOTAL wealth of the richest Americans will come nowhere close to significantly reducing the ever rising national debt or Social Security and Medicare shortfalls.
• According to the latest available IRS tax summary data, if the government taxed millionaire earners at 100% of their annual adjusted gross income, i.e. confiscating everything they earned, it would not come close to covering one year's worth of Obama's deficit spending budget.
• Of course, you could only do this confiscation once since no one in the country would ever work hard again if they knew the Federal government was going to confiscate everything they earned.

The country is in this dire fiscal situation and the Washington Post is worried about a politician's wardrobe. But we are really not in this dire situation listed above....it is far worst, as described by the latest long range estimates from the Congressional Budget Office (CBO), as analyzed by Boston University Professor Lawrence Kotlikoff. His analysis, summarized in a simple to understand, detailed, and horrifying essay by Gary North, can be read at:

 http://lewrockwell.com/north/north1186.html

The following points from the analysis highlight our dangerous plight:

• Professor Lawrence Kotlikoff of Boston University used data and statistics from the Congressional Budget Office relative to the financials of Social Security, Medicare, and our national debt in his analysis.
• Early this month, Kotlikoff and financial writer Scott Burns published their analysis of the unfunded liabilities of the Federal government.
• According to the figures issued by the Congressional Budget Office and Kotlikoff's analysis, he came to the conclusion that there had been a year over year increase in unfunded Federal liabilities of $11 trillion over the preceding twelve months.
• This is about ten times larger than the "official" Federal deficit in the past year, an official deficit that only measures the short term, annual shortfall of government revenue vs. government spending.
• Kotlikoff estimates the total liability of the Federal government to Americans that is not funded at the present time is now $222 trillion for the next 75 years, the official Medicare timeline for long term planning.
• Again, this is an increase of about $11 trillion in just the past year, according to Kotlikoff's analyses.
• His analysis means that the Federal government would have to set aside $222 trillion today, invest this money in projects that will pay a positive rate of return to cover the financing of this $222 trillion liability debt for the next 75 years.
• Thus, consider this dilemma: the Federal government is currently incurring annual deficits of about $1.2 trillion, it annually spends about $3.7 trillion but it needs to have $222 trillion immediately to invest in private markets to cover Social Security, Medicare, and other government debt.
• The math is not looking good, especially when you throw in the fact that the TOTAL production of wealth every year in the U.S. is only about $15 trillion.
• Consider this other dilemma: our political class was incapable of closing an annual operating deficit of just over a trillion dollars. How in the world can we expect them to close a $222 trillion liability shortfall?
• Another dilemma: If the Federal government actually wanted to set aside $222 trillion today to cover the promises it has made to every American, every American household would have to put up, on average, $1.9 million each. Not going to happen.
• Even if this analysis is off by half, that the unfunded liabilities are only $111 trillion, there is still no way, even with the size of our economy, that this country can fulfill the promises that past politicians have made.

We could go on doing math based on his analysis forever but those scenarios are never going to happen since the Federal government, the dollar, and our democracy will crash long before those liabilities all come due since our economy cannot possibly pay for all entitlement promises the political class has made over the past few decades.

Consider some other factors that will contribute to our doom and gloom scenario:

- According to an article in the May 25, 2012 issue of The Week magazine, even with Obama Care in effect, a married couple on average can expect to pay $240,000 in their retirement years to pay for Medicare premiums, co-pays, deductibles and other health care expenses. This is a 4% increase over the previous year. Thus, it will be difficult to ask American households to cough up $1.9 million each to cover the $222 TRILLION in unfunded liabilities if they have to put up almost a quarter million dollars for their own health care.

- Still do not believe we are in the midst of gloom and doom regarding Social Security? Consider an article in the June 4, 2012 issue of Business Week, "A Massive Program On The Verge Of Collapse." Social Security also has a disability program in addition to its retirement fund. According to the article, the Social Security disability fund will go cash flow negative by 2016, at which time taxes collected will only cover about 79% of the need.

The article clearly points out that both major political parties have done nothing to much acknowledge the problem never mind resolving the issue. The article also points out that the government is so dysfunctional that it has been unable to clear a backlog of over 1 million potential fraud cases.

- A Moneynews article from August 16, 2012 reported on the most recent Treasury Department analysis which showed the following profile of our debt relative to international entities:

• The amount of national debt owned by foreign entities was just over $5 TRILLION, about a 66% increase in just three years.
• The Chinese now hold $1.1643 trillion in U.S. government debt, which is down from $1.3149 trillion in just the past year.
• The Japanese ownership of our national debt is $1.1193 trillion.

While these two countries currently hold a lot of our debt, we probably cannot rely on them to continue financing our insane deficit spending. First, China has reduced its holdings more than 11% in just twelve months. Second, both of these countries have rapidly aging populations and will have massive spending needs of their own to handle their domestic increases in the cost of supporting their elderly populations. Thus, they are unlikely to be a source of funding for the $222 trillion needed to fund our liabilities.

So, American households will have their own expenses to cover and cannot be relied on to raise $222 trillion of wealth. Our two biggest foreign bankrollers, China and Japan, will likely turn inward to service their aging populations and not continue funding our spending addiction. Our own wealthy cannot come close to funding these unfunded liabilities even if the Federal government confiscated all of their wealth and all of their earnings.

Our political class and media worry about ill fitting clothes, personal college records, personal income tax returns, and other extremely trivial issues. Real leaders would step forward and level with the America people: "The U.S. Federal government has made promises to you that are impossible to meet. Thus, as a nation, these are the steps that need to be taken, the sacrifices that need to be made to guarantee that those most in need of help get what we can afford to give them while the rest of America will have to do with less."

What are the odds that anyone in the current political class has the courage to stand up and make that statement and back it up with a cogent, fair, logical, and financially sound plan to get us through this dilemma? In my view, the odds of that not happening might actually exceed the size of the national debt these same people have created. Despicable from a leadership perspective.

But there might be a way to get through the gloom and doom. We would recommend starting with four steps from "Love My Country, Loathe My Government:"

1. Step 10 would reduce the Social Security tax rate but uncap the maximum amount taxed and apply the tax to all forms of income in order to make the application of the tax fairer across all income levels.
2. Step 11 would raise the retirement age to 70, with a hardship exception, to delay payments to Americans who can afford to wait a little while for their Social Security payments.
3. Step 12 would block all Americans from receiving a Social Security check if their net worth, not income, exceeded $3 million. People like Trump, Gates, Buffet, etc. can afford to live comfortably without a Social Security check, enabling the system to better serve the truly needy.
4. Step 1 would reduce government spending 10% a year for five straight years to finally get us to a balanced budget. You cannot start paying down your debt until you get to a balanced budget. We have discussed many, many ways and analyses that have already been put forth to accomplish this relatively easy task, assuming some courage on behalf of our politicians.

Other necessary steps would include the following:

• Implement the National Bounty System as outlined in the following post:
• http://loathemygovernment.blogspot.com/2012/05/national-bounty-system-fixing.html, finally start tracking down and prosecuting the criminal elements that defraud Social Security, Medicare, and Medicaid of over  $200 billion every year. 
• Repeal Obama Care and start over, putting forth a rational, cost efficient plan that actually looks at the true root causes of our ever escalating health care costs rather than just creating another massive, expensive, and ineffective  government bureaucracy like Obama Care.
• Find a way to overhaul Medicare that reduces costs and puts the health care decisions of individuals back into their own hands rather than the hands of unelected bureaucrats. A good starting point for an adult discussion would be with Paul Ryan's plan to overhaul Medicare.

If we do not have the needed adult discussion, we will continue to live with the gloom and doom disaster of Social Security and Medicare collapsing followed by our currency cratering and then the end of our democracy.

Oh, yes, there is another way to avoid the gloom and doom. Do not get old and do not get sick. Have a nice day!

Please visit our Presidential website, "The United States Of Purple," at:

http://www.unitedstatesofpurple.com/

The United States of Purple is a new grass roots approach to filling the office of President of The United States by focusing on the restoration of freedom in the United States, focusing on problem solving skills and results vs. personal political enrichment, and imposing term limits on all future Federal politicians. No more red states, no more blue states, just one United States Of America under the banner of Purple.

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

When It Comes To Social Security, Are Politicians Really That Ignorant?

I got a kick out of an Associated Press article today that described the latest political sniping about the Social Security system. It makes me wonder, listening to the positions and statements of our political class, if our current politicians could really be that ignorant about the system and its finances? If they are, then the chance of ever fixing this failing system is nothing more than random since those in charge do not understand the root causes of the current problem.

Consider some direct statements from the article:

• Obama contended in the article that Republicans would tie Social Security "benefits to the whims of Wall Street traders and the ups and downs of the stock market." But we have already proven in this blog that this would be a good thing. Without going into great detail, I proved in the July 13, 2010 post that if I had been allowed to keep all of my Social Security contributions in a tax free account, that invested only in an S&P 500 index stock mutual fund, rather than handing it over to the government, my monthly retirement check from the fund would have been twice what the Social Security Administration tells me I am going to get from them. Of course, my S&P investment would run dry once I hit 102 years old but that is the risk I would have been willing to take.
• Another Obama quote stated that "we have an obligation to keep that promise, to safeguard Social Security for our seniors, people with disabilities and all Americans - today, tomorrow and forever." Now, what he does not say is how he proposes to do that. It is nothing more than rhetoric. Rather than confronting a major funding problem, he just spins out nice sounding sound bites. He cannot safeguard anything without a plan, something he does not appear to have. One reason for that is he either does not understand reality or he does not have the courage to face the reality: the system is broken and will not safeguard anything unless solid quantitative analysis is done and some financial pain inflicted in order to save the system.
• "Many Democrats adamantly oppose any cut in benefits to reduce costs." Let's see how ignorant this statement is. The Social Security system is now hemorrhaging money, i.e. in 2010 it is likely to take in less money in Social Security taxes than it pays out in benefits. Given the dire straits, shouldn't somebody consider cutting payouts for the very rich? Given the great wealth of Bill Gates, Warren Buffet, Bill and Hilary Clinton, Senator John Kerry, etc., why would we not ask that these people forego their Social Security checks for the good of the country? Would it not be better to direct limited funding to those that most need it to survive rather than pay it to multi-millionaires and billionaires where it would be a fly speck on their balance sheets? Granted, they paid into the system expecting to get some return. However, given how poorly the government has run the system, if the trade off is cutting benefits for the wealthy in order to save the system for the poor, is the above quote and position really something the Democrats want to defend?
• "Some [Democrats] will not accept a gradual increase in the retirement age." Another position in conflict with reality. When the Social Security System was out in place in the 1930s, Americans lived much shorter lives than they do today. That is what allowed the system to work for so long. People died off before they reaped too much reward and there were enough younger workers to pay the freight for those seniors that lived longer than average. The reality today is a two fold bomb: people are living longer and the base of younger workers to support the system is shrinking. That is reality and it is driving the coming insolvency of the system. To flatly state they do not want to raise the retirement age is just ignorance of reality. The retirement age needs to be raised with provisions for allowing someone to draw early benefits based on financial need. Again, do the Democrats really want to the system to crash because people who do not need the money draw it, endangering payments to the truly needy?
• The Republicans are no better, saying "an increase in Social Security taxes is out of the question, even for the wealthy." Although I am never an advocate for increasing taxes since the political class almost always squanders it away, the current taxation method of Social Security is the most oppressive form of tax in the country. In 2010, Social Security taxes the first $106,800 in wages at 6.2%, which translates into $6,621. Now consider two Americans. The first one makes $106,800 in wages and the second earns ten times that much or $1,068,000. They would both pay $6,621 in Social Security taxes even though one earned ten times as much. Consider a third person who earned $10,680,000, or a hundred times as much as the person earning $106,800. Guess what: they both would pay $6,621 in taxes. Hardly seems fair but that is the way it is. This tax structure is a leftover from the original planning where most people did not earn more than the maximum amount taxed. Thus, the wealthy in this country could not really complain if they no longer were able to receive a Social Security check, they have been getting a huge tax break under the current system for decades.
• "Social Security's combined retirement and disability trust funds are expected to run out of money in 2037." This is the biggest fallacy of all. Over the past decades, as we have all been paying into Social Security, once the Social Security Administration paid out is current obligations, any excess money was sent over to the Treasury where it was usually wasted by the politicians. In exchange for receiving the excess Social Security money, the Treasury Department basically gave the Social Security Administration an IOU for the funds. If you add up these IOUs, they will cover the Social Security expenses up until 2037. But this is only an accounting trick, nobody has taken the money you were forced to pay in Social Security taxes and put that in a little bank account for you to draw down when you retire. That money has been spent by Congress long ago. Those IOUs are what is called "unfunded liabilities." In other words, The Treasury knows it owes the money but does not have the assets to back them up. Thus, in order to pay for those IOUs, the Treasury Department needs to either 1) issue more debt, further expanding the obscene level of our national debt or 2) raise taxes. to pay for the IOUs. therefore, Social Security does not run out of cash in 2037, it is already in a negative cash flow position.

Thus, as with all issues, American politicians are just being politicians. They do not want to do any long term planning since it might upset some voters short term and endanger their real agenda: getting elected over and over and staying elected. In the meantime, issues like Social Security continue careening out of control and shortly, out of money. It is obvious from the AP article and Obama's comments, that he does not have a grasp of reality and a plan to fix the root causes of the Social Security system's problems. Other wise, I am assuming ti would have put them forth. The article says as much with the quote: regarding fixing the system, "he proposed no ideas for doing that."

The other issue that no one wants to discuss is freedom. By controlling our retirement plans, we lose some freedom and politicians gain a continual election sound bite opportunity. Americans should have a choice of where and how they save for retirement, it is called personal responsibility and freedom of choice. From our July 13, 2010 post, we know that we would likely be better off financially if we had been allowed to control our retirement fate and wealth. But that would diminish the power of politicians over our lives, something they find unacceptable.

However, the more immediate need, rather than the long term debate of whether Americans should be able to keep their retirement fate in their own hands, is how to fix the currently broken system. "Love My Country, Loathe My Government" proposes three simple fixes that are in tune with reality and would save the system for those Americans that really need the retirement support:

• Step 10 would basically change the Social Security tax structure so that multi millionaires would pay a fairer share of taxes, i.e. this step would eliminate the situations discussed above where someone making $10 million a year pays about the same amount in Social Security taxes as someone making just over $100,000 a year.
• Step 11 would not allow Social Security to pay out their limited funds to the very rich in this country, saving these limited funds for those that really need the help in retirement.
• Step 12 would start raising the retirement age over time, with provisions for someone to apply for early benefits based on dire financial needs.

It is about time that we dealt with Social Security's reality. Otherwise, ignorance will continue to prevail and no one will have a happy retirement, regardless of who is in office and regardless of how ignorant they are.

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 respect freedom for both yourselves and others everyday.

Also visit the following sites for freedom:

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