You did spend that!? More economics.

By: Stephen Marsh
August 24, 2012

As we get into the campaign season, I thought I’d reprise some more basic economics and accounting.  Just so you know what you spent (through your tax dollars) …

63% or so of the budget, about 2/3rds, goes out the door without any voting at all by congress.  Social Security, Medicare, Medicaid, Food Stamps, Farm Subsidies — all on autopilot.  That means that in 2009, every dollar of tax money had already been spent before Congress did anything.  They needed debt for everything they wanted to spend.  The tax revenue only covered the autopilot expenses.

For most American families, the share of income they pay in income taxes has been dropping for more than three decades.  In 1981, the very middle of the middle class paid 19.2% of their income before deductions.  In 2007, that number was 14.3%.  As of 2011, it was 12.4%.  46% of Americans do not pay any income tax at all.

Those numbers, of course, misrepresent the tax bite of payroll and other federal taxes for Social Security and Medicare. (After all, if you want to count that spending in the spending column, the taxes used to collect money for them should be included in the tax column).

Federal payroll, including the military, runs about $435 billion a year. 64% of the 4.4 million employees are either military or civilians working in the military.  $2.3 trillion went to benefits (Social Security, Medicare,, Medicaid).  $230 billion in grants to state governments (schools, sewage treatment).  At least we get a lot of bang for the buck, so to speak, in that we spend as much on our military as the next 17 largest spenders combined.  20% of the budget on military, with about 5% of the budget (about 20% of the military budget) on foreign wars.  $700 billion a  year.

United States Joint Service Color Guard on parade at Fort Myer

25% of the budget goes to health care — which is why health care is such a tempting political target.  In 1981 it was 9.5%.  By 2011 it was about 25%.  By 2021 it is expected to reach 32%.  About half of that is for treatment of non-compliant diabetics and “frequent fliers” (people who end up in the ER about once or twice a month with health problems caused by failure to comply with medical advice).  Non-compliant patients consume about 10% of your tax money at work.  It is soon to become 20% (it is a large part of the growth part of federal medical expense).

Oh, and both President Obama and Mr. Ryan proposed taking about 700 billion from Medicare.  The President for his health care plan, Mr. Ryan for spending that money instead by rebating it to Medicare recipients to use on their own health care insurance.  Both claim that they were just trying to improve the delivery of health care services and both claim that they weren’t really taking money away from Medicare, or trying to, just improving delivery.

So.  Where does that lead us?

Well, before I get there, here are two more interesting observations.

On social security, which was generally 15% of your income, if you averaged $30K per year over your working life, that’s close to $180,000 invested in Social Security.   If you calculate the future value of your monthly investment in social security ($375/month, including both your and your employer’s contributions) atr 1% interest rate compounded monthly, after 40 years of working you’d have more than $1.3+ million dollars saved. Upon retirement, if you took out only 3% per year, you’d receive $39,318 per year, or $3,277 per month.  That’s almost three times more than today’s average Social Security benefit of $1,230 per month, according to the Social Security Administration.

Why don’t I share in any of the outrage those numbers are supposed to generate?  Because the money was spent in efforts to expand the economy — stimulus plans.

Though that does lead me to the second observation.

Most stimulus plans are net negative.

To quote an excerpt from an analysis of the last stimulus plan.

The CBO estimated that an increase in the GDP of between 1.4 percent and 3.8 percent by the end of 2009, between 1.1 percent and 3.3 percent by the end of 2010, between 0.4 percent and 1.3 percent by the end of 2011, and a decrease of between zero and 0.2 percent beyond 2014 . (As an aside, that number was eventually revised to a net negative 2014 and beyond).

What a stimulus plan does is create benefits now at the expense of losses in the future.  Much like going out to dinner on a credit card, creates fun now at future expense (when you have to pay the card off).  Much of what is going on now is political effort to avoid having to experience the “pain later” part of prior and current administrations stimulus and other efforts.

Ok, where does that lead us?

  1. Everyone is trying to change Medicare.  They have to, otherwise it eventually swallows the budget.
  2. Eisenhower’s warnings about the Military-Industrial Complex, how it would lead to an overlarge military, and related spending, and George Washington’s warnings about how too much military would lead to the desire to use it and entanglement in foreign wars?  Those remain valid concerns.
  3. In many ways the federal government has become a vehicle for administering retirement benefits.  Social Security and Medicare payments (and the related taxes) are the core of what the government is doing — that 63% of the budget — as other programs (such as farm subsidies) continue to shrink.

But that is how you are spending your money, your tax dollars.

So, how do you think you would budget things?

48 Responses to You did spend that!? More economics.

  1. Stephen Marsh on August 24, 2012 at 7:31 AM

    Oh, and of course, point 4 — at some point we have to pay for all the prior stimulus plans. That is why all the talk of running out of money for social security, etc.

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  2. Bonnie on August 24, 2012 at 7:57 AM

    We can’t get out of debt. It’s a fact. We want our cake and to eat it too; in fact, we demand that. As long as we insist that taxes must be low and that we must provide all the safety nets we are, we will grow ever more deeply in debt. The key is what bite each one of us is willing to take. For some the biggest bites are keeping programs that are doing a certain good, for others it’s the military, for others its certain tax breaks, and we could go on. If we cut government jobs and keep our welfare net, we’ve simply shifted the spending somewhere else because people self-organize in the chaos. Everything must be on the chopping block together.

    Americans aren’t accustomed to austerity in their private lives and they won’t accept it in government. Besides, austerity economics throws the system into worse shape. Snowball debt payment, using what we have to pay debts down, is as good a government philosophy as it is a private philosophy. But it won’t happen. So we will have to knock down the house of cards and start over. Government isn’t distinguishable from the people; their culture is its culture.

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  3. prometheus on August 24, 2012 at 8:20 AM

    “So we will have to knock down the house of cards and start over.”

    This, pretty much. Trash it all, grandfather nothing, and start over. There’s my radical suggestion for the day. :D

    It is interesting how those who insist on massive budget cuts also refuse to accept any increase in taxes, when the combination would be far more effective than either alone.

    Honestly, though, 63% of the largest budget on the planet is a huge chunk of change. For that kind of buck, the bang should be utterly spectacular, but it isn’t even a bang at all, more of a whimper. Why is there such a poor return on investment there, and more importantly, where is all that money going? The government might be spending it, but who is getting it?

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  4. Stephen M (Ethesis) on August 24, 2012 at 9:50 AM

    Health care and monthly stipends for those 65+ consume most of that money.

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  5. Stephen M (Ethesis) on August 24, 2012 at 9:52 AM

    By “stipends” I mean social security payments.

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  6. Will on August 24, 2012 at 10:24 AM

    Bonnie is absolutely spot on – we are going to continue to kick the can down the road until it collapses. It goes back to my post when Wheat and Tares originally started and I quoted President Benson’s talk “watchmen warn the wicked” where he compared the United States to the Roman Empire. He made this comparison in 1973 and he said five things will lead to our downfall:

    1. The undermining of the dignity and sanctity of the home, which is the basis of human society.
    2. Higher and higher taxes and the spending of public monies for free bread and circuses for the populace.
    3. The mad craze for pleasure, sports becoming every year more and more exciting and brutal.
    4. The building of gigantic armaments when the real enemy was within the decadence of the people.
    5. The decay of religion—faith fading into mere form, losing touch with life, and becoming impotent to warn and guide the people.

    If this is not a perfect description of our current state I don’t know what is.

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  7. Sean on August 24, 2012 at 10:44 AM

    I agree with Will, but most people would simply like to blame the “other party” for all of the nation’s failings. Then they point to people that are trying to be objective about the two party duopoly and call them hipsters. We’re screwed. Or we’ll simply change like the the Roman Republic did when it was faced with an extremely similar situation, for better or for worse.

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  8. jj on August 24, 2012 at 10:54 AM

    Last week I saw one of our regional GA’s drive out of a Bentley dealership in a new Bentley. Evidently somebody is doing well.

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  9. Stephen M (Ethesis) on August 24, 2012 at 11:39 AM

    Jj — not sure how that relates to taxes. Regional authorities usually are self supporting, thoughaybe this one got a car through taxes instead of paying for it from his day job?

    Details?

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  10. prometheus on August 24, 2012 at 2:11 PM

    I should clarify what I mean by who is getting it. Who is making a profit off all those taxes?

    Pharmaceutical companies? Insurance companies? Does it make sense that it actually costs that much for health care? Surely the raw materials and man hours of care shouldn’t cost that much.

    “If you calculate the future value of your monthly investment in social security ($375/month, including both your and your employer’s contributions) atr 1% interest rate compounded monthly, after 40 years of working you’d have more than $1.3+ million dollars saved. Upon retirement, if you took out only 3% per year, you’d receive $39,318 per year, or $3,277 per month. That’s almost three times more than today’s average Social Security benefit of $1,230 per month, according to the Social Security Administration”

    Senior’s checks are being docked by 60% or so, as you point out here, Stephen. This money went into stimulating the economy – who got it, large corporations? Auto industry? Small business?

    It would be very interesting to follow all the money trails to see where they lead. I would bet that it ends up, in the end, in very few hands.

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  11. Stephen M (Ethesis) on August 24, 2012 at 4:24 PM

    Prometheus — ahh. An excellent question. The fun part is that everyone who was paid will tell you they did not get enough. Even Ross Perot who made his money computerizing it all claimed he had not been paid enough.

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  12. Jon on August 25, 2012 at 1:11 AM

    This is the consequence of giving up ethical behavior to get to an end. Eventually we must recognize that the means to the end is just as important as the end is itself.

    All those who partake in SS are literally stealing from their children/grandchildren/great grandchildren (assuming that the US doesn’t default before then) since no taxes were saved and all SS is paid for through current taxes or debt.

    One day, it would be nice if we chose love instead of aggression.

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  13. Robert Rundquist on August 25, 2012 at 2:46 AM

    #12:Jon,
    “All those who partake in SS are literally stealing…”.
    Jon, I’m stealing from anyone. I paid my money for 45 years. My children a HAPPY I am getting SS__because I am not living with them. My children are HAPPY I am getting SS because they now have my old job.
    If SS is short of money, them GMs robots can start putting in their share!

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  14. Will on August 25, 2012 at 7:59 AM

    Robert,

    SS is a broken system. The reality is most people collect every dime they paid into the system within a few years after retirement. Everything has been fine with the baby boomers paying into the system, but now that they are near retirement, the system will break for sure unless we extend the retirement age (for those not 55 and under) to 80 to 85. It is a basic math problem.

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  15. Henry on August 25, 2012 at 8:12 AM

    Andrew S
    Page is looking weird again. I thought you said last time this was the mobile look.

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  16. Stephen M (Ethesis) on August 25, 2012 at 8:19 AM

    SSI is an interesting discussion since the simple calculations are not accurate. Tax rates have changed and the strong sense of entitlement is interesting.

    A good analysis would be a separate post, but I am glad people have recognized that the issues are more complex than the opinion I quoted from above.

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  17. Jon on August 25, 2012 at 8:19 AM

    @Robert Rundquist,

    Jon, I’m [not] stealing from anyone. I paid my money for 45 years. My children a HAPPY I am getting SS__because I am not living with them. My children are HAPPY I am getting SS because they now have my old job.
    If SS is short of money, them GMs robots can start putting in their share!

    I’m assuming that is what you meant (with not).

    You paid your 45 years but you refused to safeguard it by letting the politicians squander it, therefore, the money does not exist anymore. You let the robbers, or politicians, steal from you. Just because others have stolen from you does not make it OK to steal from others. It was your responsibility to safeguard your money from the politicians, you failed in such capacity. So stop stealing from your children/grandchildren/great grandchildren.

    If a child ever steals from you I hope you don’t prosecute him, because than you are truly hypocritical. You cannot ask others to stop stealing from others when you are doing the same.

    SS is in the red. There is no money left.

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  18. Bob (not Robert) on August 25, 2012 at 9:19 AM

    #14,17: Jon & Will,
    SS is not broke or broken. I still get a check every month as do millions of others. The checks have been going out, on times, for decades. This will continue.
    My parents were told they were stealing my SS future__ it never happened.
    If the system needs more money because of fewer workers, it can get it from other places. Don’t let the big guys blame the working class___ when they are stealing the money.

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  19. Will on August 25, 2012 at 12:05 PM

    Bob,

    Your logic is tantamount to saying I have checks in my check book so everything is fine. You are in complete denial. Complete denial. It is bankrupt. It is simple math. It we do not make significant changes, those checks will stop.

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  20. Jon on August 25, 2012 at 12:15 PM

    Social Security will pay out more this year than it gets in payroll taxes, marking the first time since the program will be in the red since it was overhauled in 1983, according to the annual authoritative report released Thursday by the program’s actuary.

    Read more: Social Security in the red this year – Washington Times

    Washington Times – Thursday, August 5, 2010

    Just like Stockton something will have to happen eventually. A slow long decline or a swift and fast bankruptcy? I don’t know. All I know is that it is not OK to steal.

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  21. Bob (not Robert) on August 25, 2012 at 1:15 PM

    #20:Jon,
    That means since 1983 we have taken in more than we have paid out. We must have a lot of extra SS money somewhere?

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  22. Jon on August 25, 2012 at 1:54 PM

    @Bob,

    The government loaned to other parts of the government who spent it all. So, no, there is not SS money anywhere. The US government is akin to Stockton. It is just a matter of time. It might not happen all at once, it could take another 100 years, but eventually the piper must be paid.

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  23. Bob (not Robert) on August 25, 2012 at 2:41 PM

    #22: Jon,
    Well__at lease take back I stole :).

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  24. Bob (not Robert) on August 25, 2012 at 2:45 PM

    #23 ” I stole It..”

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  25. Jon on August 25, 2012 at 4:07 PM

    Each of us steal when we partake of government largess. It is up to each one of us to decide what we will do to lessen our burden of theft of one another. When I drive on the road system I am driving on the fruits of stolen money. So, we are all really part of the system that steals from one another. So I can’t take back what reality is. I can say it is up to you to decide how you will use the stolen money. Will you invest it in freedom institutions or use it on yourself, use it on your kids? That is I up to you. I don’t judge you for what you decide to do, but I also recognize what it is in reality, just because society chooses to use flowering words when they take, by force and coercion, doesn’t change what it actually is.

    I know that things cost quite a bit more than what they should because of this aggression, so, when someone steals (through government) to get medical care, I don’t have a hard lined position, but I will recognize it for what it is, i.e., theft. I am not entirely innocent either, but I will make sacrifices so I will have less of an effect on this thievery.

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  26. prometheus on August 25, 2012 at 6:02 PM

    Heh, shall we go the rounds on stealing versus sharing again, Jon?

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  27. Stephen R. Marsh on August 25, 2012 at 10:25 PM

    Sharing is when you give to others.

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  28. Jon on August 25, 2012 at 10:27 PM

    Sharing is great. I’m glad when I can share with others and when others share with me. Stealing is bad, I don’t like it when people steal from me nor do I like it when I am forced to steal from others.

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  29. LBK on August 26, 2012 at 1:00 AM

    The Social Security Reform Act of 1983 was designed to create a surplus for a number of years and then when income equaled outgo the previous surpls would be used to fund the deficit for over twenty years.

    People are not stealing. They have put their money in and deserve what they receive.
    Even when the Trust Fund runs out of money, that year’s and future years SSI income would still fund a 75% entitlement. But there are a number of steps that can be taken to maintain the existing benefit schedule.

    I am, of course, in favor of raising income. Specifically by a combination of raising payment rates and raising the maximum income for the payroll tax. However, I realize with the clamor on the right to throw grandma under the bus, I do not see it happening.

    After reading some of the comments I was reminded that have often thought some enterprising Mormon entrepeneur would publish a little blue book, Quotations from Chairman Ron Paul. It would be a sure fire best seller for the back to the 17h century crowd. Like the Red Guard of 1960′s China, it would give them something to wave at political meetings as well as providing a good source for slogans to chant.

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  30. Jon on August 26, 2012 at 8:37 AM

    @LBK,

    “They have put their money in and deserve what they receive.”

    Yeah, like nothing because there is no money left that they put in. Is that what you just said?

    “However, I realize with the clamor on the right to throw grandma under the bus, I do not see it happening.”

    Throw grandma under the bus? Who advocates for that?

    From the right? Who is from the “right?” I’m not.

    “the back to the 17h century crowd.”

    Who’s for going back to the 1700s? I’m looking towards the future and I’m looking to end modern day slavery by the state. I’m looking at the great work of Murray Rothbard and many other great modern day thinkers. I’ll I want is people to base the means of their actions on love rather than hatred and distrust.

    LBK, it appears you make many false assumptions.

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  31. Glenn Thigpen on August 26, 2012 at 8:45 AM

    One partial solution would be to not allow drawing Social Security before the full retirement age, then euthanizing everyone when they each that magic number. Except for me of course.

    Glenn

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  32. Stephen M (Ethesis) on August 26, 2012 at 4:27 PM

    Guess I need to write next about what you are going to spend going forward.

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  33. Bob (not Robert) on August 26, 2012 at 6:27 PM

    #32:Stephen M (Ethesis),
    Both my wife and I started SS at 62. We put those 3 years of checks in the bank until 65. Now we spend the money we get over 65. The money in the 62 account will go to our children if we don’t need it.

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  34. LBK on August 26, 2012 at 10:55 PM

    Jon,

    1. Instead of borrowing from China the government borrowed from SSI. I’m sorry but we do owe the trust fund. You might want to complain about the Government deficit spending that required it to get loans. That was not the fault of SSI.

    Are you suggesting that the Federal Government should welch on its debts? If so, why not do it to the Chinese also? The Americans that bout government bonds?

    2. “Grandma under the bus” is an apt phrase. The proposed draconian changes in social security hit women the hardest. See Daniel Marans’ “Social Security COLA Cuts Will Drive Single, Senior and African American Women into Poverty” in the July 11, 2011 Huffington Post to get an idea of the “effect” of so called reforms. Yes, gaining your freedom has its costs.

    3. Calling the adoption of the Hettie Green school of Social Responsibility and the reccomendations of Gordon Gekko Economic Institute modern thinking seems a bit strange. Mathew 19:24 has been around a long time and certainly warns us of the consequences of such “new” ideas.

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  35. Jon on August 27, 2012 at 7:29 AM

    @LBK,

    1. I’m suggesting that the government doesn’t have money and will eventually default just like anyone who borrows to much.

    2. I’m not familiar with COLA. All I’m saying is that using violence as a means to an end is bad and that we should not do that. I don’t suggest, like you do, that it is OK to put a gun to someone’s head so they will give money to Grandma, while, in the process, skimming off 80% of the money to fund bureaucrats. Yes, it wouldn’t be wise to do it all at once and other programs would be better to end all at once. I’m not proposing any method to get from A to B, I’m just recognizing that violence is not good. Christ didn’t teach that we should use violence to help grandma and neither do I.

    3. I’m not familiar with those school of thoughts. So what are you saying about Abraham? He was a rich man. Besides I have said nothing about the rich or poor. I’ve only said that using unjustified violence is bad and unethical.

    LBK, I don’t understand why you keep making all these assumptions. My argument is simple. Using unjustified violence as a means to an end is un-Christlike. I’m just proposing that the non-aggression principle has merit.

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  36. LBK on August 28, 2012 at 1:51 AM

    Jon,

    1.As strange as it may seem the SSI has the money in existing Federal Government Debt. Now there are four possible ways to deal with this debt. The Government can welch on its debt instruments and “steal” from the
    the fund and the people who put their money in. The governmet can slow down payment of the debt by cutting benefits. In essence stealing from the beneficiaries as they would get less returned to them in their lifetimes. The third option is to have the Government pay its debts and seek ways to gain income to keep the fund going 100% payments after 2033 and not just 75%. Finally, it could punt and leave it to future Congreses to deal with.

    Very few have proposed the first, most seem to look at some version or versions of the econd, numerous people on the left,like me, prefer the third, political gridlock seems to have a yen for the last.

    2. COLA stands for Cost of Living Adjustment. There are lots of different COLAS. While working with school finance in California I had to deal with one called “The Implicit Price Deflator for the Cost of Governmental Goods and Services.” The one used for SSI is named the COLA for Urban Wage Earners and Clerical Workers.

    Currently, each year SSI applies that years COLA to the previous years entitlement. Many reforms play with redefining the COLA and/or how it is applied. In California, my pension is based on a flat 2% COLAno matter if the real COLA is 1% or 4%. Last year’s “reform” involved a “chained consumer price index (CPI).” The CPI is based on a market basket of goods and services a family would buy. By widening the Law of Substitution it would lower the COLA (e.g. the price of steak goes up don’t just consider hamburger as a substitute but also much cheap chicken nuggets).

    When this proposed reform was scored it would reduce the COLA .9% the first year and ca. .3% each year thereafter (2.3% after 5, 3.7% after 10, 5.7% after 15 and 6.4% after 20).

    3.There was a reason for throw grandma under the bus. Such changes are much more harmful to women. The National Womans Law Center has a great analysis of the effect of the deform, oops i mean reform at cuttingsocseccola.org at nwlc.org.

    4. In regards to Matthew 19:24 I would suggest you seek out why Abraham is ok and so many rich people have a problem? I am really sad that many feel the freedom to gain more wealth is much more important than a poor grandmother having enough money to eke out a meager existance. As Marie Antoinette might say today “let tem eat cat food!”

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  37. Bob on August 28, 2012 at 4:03 AM

    #36:LBK,
    You forgot the most common way: Heavy Inflation. Cut the value of the dollar to $.50, and pay it off with $.50 Dollars.

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  38. Jon on August 28, 2012 at 8:11 AM

    LBK,

    “The Government can welch on its debt instruments and “steal” from the
    the fund and the people who put their money in.”

    The government is “us” or rather, the government doesn’t produce anything, so it would have to steal from others to get back the money to those who put their money in the first place. So it is better to let it fold rather than continue with the violent circle. Eventually the abuser needs to stop abusing. Two wrongs don’t make a right.

    In regards to Matthew 19:24 I would suggest you seek out why Abraham is ok and so many rich people have a problem? I am really sad that many feel the freedom to gain more wealth is much more important than a poor grandmother having enough money to eke out a meager existance. As Marie Antoinette might say today “let tem eat cat food!”

    The scriptures talk of people being able to gain wealth and that it is OK to do so. But, those that do righteously will want to help grandma. I’m not for throwing grandma under the bus, I’m for doing what Christ taught, i.e., help the poor, widows, fatherless, etc. What we differ on is how we help these people. You propose to put a gun to people’s head and make them help. I propose to teach the word of God and get people to help voluntarily. We need to look at the scriptures as a whole and not cherry pick them by believing that it is OK to help the poor by using violence and coercion to do what Christ taught. That is why the crusades were evil, they used God’s name in vain by saying the wars were holy when they truly weren’t. Let us give up using God’s name in vain.

    I agree with Bob, the most likely way is through inflation. To be technically correct. We would take are $0.02 current dollar (compared to how much it would be worth without the current fiat system) and turn it into a $0.01 dollar to pay off the debt.

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  39. LBK on August 28, 2012 at 3:48 PM

    Jon

    I live in the real world. Remember Jamestown? Conservatives and Libertrians like to point to the failure of voluntary communalism during the first year there. That people are willing to take but not give in terms of labor and goods.

    While grandma is under the bus, you can preach all you want. Both of us should know that voluntary giving is not going to replace medicare and social security. And if you read that analysis by the National Womens Law Center there are lots of real people, especially women who need it.

    One can feel righteous as they follow your logic and entreaty others to donate as those huge bus tires do their work.

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  40. Bob on August 28, 2012 at 5:34 PM

    #39:LBK,
    I am with you___I have just seen too many helped by medicare and social security to call them bad. Abused?__yes. But more important__they are useful.

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  41. Jon on August 28, 2012 at 7:12 PM

    LBK,

    First, Jamestown wasn’t voluntary, via Rothbard

    And this was a communism not voluntarily contracted by the colonists themselves, but imposed upon them by their master, the Virginia Company, the receiver of the arbitrary land grant for the territory.

    Second, you accuse me of preaching after you quoted scripture? Then, according to you, we live in the “real world” so it is good for men to get large sums of money?

    Thirdly, do you feel righteous by proposing that it is OK to put a gun to someone’s head so they will get money from them to go to your pet projects? Lot’s of money has been stolen from people already and the war on poverty continues unabated. Are there less in poverty now since this war started?

    This is the broken window fallacy. The seen vs the unseen. You see the people “helped” by the theft of people’s property but you do not see how much better off they would be if the theft never happened to begin with. There used to be many charitable organizations that accomplished much more than the government ever could, but the government has managed to get rid of a large portion of them.

    Love is the answer, the ideal is not only ideal but practical. I suggest you read “Healing Our World in an Age of Aggression” if you are interested in how love can truly heal our world and if you want to see how putting guns to people’s heads isn’t all that you think it’s cracked up to be.

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  42. prometheus on August 29, 2012 at 3:13 PM

    “There used to be many charitable organizations that accomplished much more than the government ever could,”

    Private firefighting crews that only put out insured buildings, school curricula being driven by religious sentiment to the detriment of science, private police forces (just a bad, bad idea), hospital care for the wealthy only, railroad barons and so on. All of these things are avoided by simple legislation. And if we are talking charities taking care of people – look around the world at the beggars, the poorhouses, the prisons built to accomodate people who happen to be born into bad circumstances, or end there because of bad luck. Dickensian England is a pretty good picture of what you would get.

    We’ve been at this before, Jon, :D and I know we disagree, but if you have a specific reference for this claim, I really would be curious to read it.

    (Yes, I know the thread is over, but ….)

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  43. Jon on August 29, 2012 at 3:27 PM

    @prometheus,

    I’ll work on it, it will take me some time though, probably get to it tomorrow morning.

    Just a quick note. Firefighters don’t put out fires here in AZ if they are outside of the district. I know of 2 or 3 just in my little community.

    Also, when comparing we need to keep in mind how prosperous the countries are. The more prosperous the more they will be able to afford these things, like not having your kids work to feed the family, etc. But I’ll get you some specific examples.

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  44. Jon on August 30, 2012 at 8:58 AM

    Since the state needs to show that its services will be better I will only show that the free market (or as close as we can get to it) is the same or better.

    1.

    Private firefighting crews that only put out insured buildings.

    -This was addressed in my previous comment (43).

    -Also, see chapter 8 in “Healing Our World”

    Public services on the average cost twice as much as the same service provided by the private sector…. Savings have also been realized in various locales by contracting out fire protection.

    2.

    school curricula being driven by religious sentiment to the detriment of science

    -Or school curricula being driven to the detriment of moral values/religious sentiment. The is a value judgement. In a private market you can get schools that help with moral values/religious sentiment and that values science. Case in point, I will be home educating my children using the neo-classical education curricula (based off of “The Well Trained Mind”) along with aspects of Charlotte Mason.

    via Chapter 10 in “Healing Our World”

    The cost of doing things the same old way, however, has skyrocketed. Only national defense consumes more of our taxes than the public school system. (1) In spite of this great expenditure, a survey on education finds the United States “A Nation at Risk.” (2) Almost 25% of our high school students do not graduate, and another 25% have too few academic qualifications to be placed in a job or college program. (3) Even those in the top 50% of their graduating class frequently find themselves classified as unskilled labor. After a 25-year decline in scholastic aptitude tests (SATs), (4) our best and brightest compare unfavorably to students from other nations. (5)

    You also assume that science is truly taught well in government schools. Via “The Lost Tools of Learning” by Dorothy Sayers we learn that children do not learn how to think critically in government schools.

    …To be continued (tomorrow)…

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  45. Jon on August 31, 2012 at 9:35 AM

    Charity:

    I couldn’t find the old article that talked about charity in the past. I’ll keep looking. In the mean time here are a couple things that talk about current government welfare and its problems (how it really doesn’t help the poor).

    First, government welfare programs eat up about 66% of the money on bureaucrats.

    Second, welfare by the government typically destroys families and keeps people in poverty.

    …To be continued (tomorrow)…

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  46. Jon on August 31, 2012 at 5:52 PM

    @prometheus,

    school curricula being driven by religious sentiment to the detriment of science

    Reminded me of the Amish children that had to run from the armed police. Thank goodness that doesn’t happen anymore. As much as we don’t like how others parent we need to give them quite a bit of latitude to parent. There are some atheists that believe that teaching religion is abusive, should the atheists be able to take your children away, or make it so expensive that by default you need to so you don’t educate your children with religion? Oh wait, that is pretty much already happening with government schools. With kids staying in school all day long, even at young ages (AZ does all day kindergarten).

    http://www.pbs.org/wgbh/americanexperience/features/general-article/amish-ncarf/?flavour=mobile

    Oh, why can’t we just choose love!

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  47. prometheus on September 4, 2012 at 7:11 PM

    Sorry I have not responded earlier, Jon. I do intend to get to reading what you posted and I may have more thoughts to share after, but since school started up again today, I will be pretty well tapped out, at least until the kids are back into routines and stuff. :D

    Just two comments, then. As far as I am aware currently, health care and social security are the largest portions of the US budget, followed by defense with education not even being in the top six.

    http://www.usdebtclock.org/index.html

    And as far as schools go, my current line is that we are all doing it wrong. Finland has, hands down, the best education system in the world at the moment and we could learn a lot from them.

    Their schools have the autonomy to create programs to meet the needs of their students, teachers are required to have a Masters degree in a subject area before even applying for an Ed program, 2 teachers in classrooms, to meet the learning needs of every student, kids don’t start school until age 7, among other things.

    They spend less money per capita, less time in school, both daily and in aggregate, and come in at the top on pretty much every international standard there is.

    (My poor colleagues are sick to death of me going on about Finland. :D)

    Anyway, thanks for the links. Will get to them soon, I hope. :)

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  48. Jon on September 18, 2012 at 8:22 AM

    I never did find the original article that I based my claim that private sector charity does a better job than government coercive redistribution.

    This was an OK paper written on the topic that gives a historical analysis.

    http://mises.org/journals/scholar/hodgkins.pdf

    I converted mine to epub, which made it far easier to read. Let me know if you want a copy.

    That’s all I will write on the topics until you have a chance to look into it yourself.

    As for schooling that you wrote about. I question if having a master’s degree really makes one that much more capable to teach children. There are home educating parents that do a phenomenal job teaching their children with just a high school degree. Once you get into niche subjects it might be useful, but by that time the student will be in the junior high/high school age when they can seek out mentors on subjects they are interested in that have actual experience in the field, which is far more valuable than sitting in school at a desk – I have a master’s degree, so I know from experience how much hands on teaches oneself. I agree that there is value in learning the theoretical components of ones profession but this can be learned while doing the actual work.

    I agree also, we send our kids to school at an age that is way to young. In AZ they have all day kindergarten, it seems to be more of a babysitting job rather than for the children themselves. Just read the introduction to “A Well Trained Mind” for home education and you can see how parents are often discouraged from teaching their children to read and learn before school. Government schools by necessity must teach by a regression to the mean.

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