Retire, collect $500,000 in pension, go back to work

Taxpayers in Philadelphia are stuck with hefty bills because of sky-high pension benefits for people who retire for a weekend, then come right back to work.  City Councilwoman Marian Tasco retired Friday, collected almost a half a million dollars in pension benefits and returns to work today, when she will be sworn in to serve a seventh term.  She will be joined by  Ronald Donatucci, who will collect $366,797 when he returns to work after a week-long retirement and they both join colleagues who have previously done the same thing.

The city offers a “Deferred Retirement Option Plan” that allows workers to collect a salary AND build up pension money during the last four years of their employment. Touted as revenue-neutral when it originally passed, Philly’s DROP program has cost the city a quarter of a billion dollars in just 10 years. Mayor Nutter has vowed to “work tirelessly” to abolish the program but right now, just shy of 400 people have signed up for it, declaring they are within their last 4 years of work.

This fall, the Philadelphia city council voted to override the mayor’s veto of a bill that preserves the program – a bill sponsored by none other than Marian Tasco. The city council has also raised taxes two years in a row and now the best solution they appear to have come up with is simply stall for time while more and more people move through the system, collect 6-figure payouts and go right back to work.

Citizens are starting to catch on. Four retiring council members are DROP participants while one incumbent lost his re-election bid in part because of his participation in this giant albatross of a program.   What were they thinking?!

Comments

  1. Craig Erickson says:

    So what you are saying is that retirement programs are bad and evil? Your one sided and politically motivated blog post would suggest it. I see it as politicians failing in doing their job to properly plan and prepare for their expenditures. Don’t blame the employee’s for getting what is rightfully theirs. I’m sure those in the private sector with fat stock options, bonuses and other perks are going to pointing the finger and complaining that a public employee is going to collect a satisfying retirement. How dare a middle class person do that.

  2. Craig, I have no idea what you’re talking about when you say “those in the private sector with fat stock options, bonuses and other perks”. My friends who worked in government and are now retired don’t exactly covet my situation, which is that I see no prospect of retiring any time soon because my private-sector employers did away with pension plans many years ago. I guess I don’t deserve a decent retirement because I didn’t work for government – I made the mistake of spending my career producing something useful in the marketplace.

    I do get your statement, “I see it as politicians failing in doing their job to properly plan and prepare for their expenditures.” They failed when they assessed the program as revenue-neutral and didn’t raise taxes significantly to cover the cost of the program. But that’s what some politicians do, so not much surprise there.

  3. The Pension Bomb is, in fact, a partisan political issue. Big government liberals developed and control the labor policy and pensions of almost all of America’s big cities?

    How is that working out for America’s cities…

    “Philadelphia will run out of money by 2015 to pay pension obligations with existing assets, and Chicago and Boston by 2019, a study by economists at Northwestern University and the University of Rochester forecasts.

    The report, “The Crisis in Local Government Pensions in the United States,” warns that mounting liabilities threaten “the ability of state and local governments to operate.”

    “The fact that there is such a large burden of public employee pensions concentrated in urban metropolitan areas threatens the long-run economic viability of these cities, as residents can potentially move elsewhere to escape the situation,” wrote Rauh and Novy-Marx.

    The average household obligation for unfunded state and local pension debt is $41,165, the study said.

    Source: http://www.bloomberg.com/news/2010-10-12/philadelphia-chicago-and-boston-are-university-study-s-worst-off-pensions.html

  4. Ronald D. Hunt says:

    “The average household obligation for unfunded state and local pension debt is $41,165, the study said.”

    This is a long term projection that both assumes nothing is done to backfill the difference and that the difference is paid entirely with debt and also includes all interest costs of that debt.

    And how good those numbers are very questionable as well, what was the assumed year to year rate of return. Dan Lindquist used a return rate of 3% to 6% to overstate the loses in the Utah State pension fund to push his “reform”, The pension fund had a 13.4% return in 2010 FYI.

    And its important to understand the difference between 3%, 6% and 13.4%. If we look at those rates of return as doubling times they are much easier to understand. In this case 3% being a doubling time of 23 years, 6% being a doubling time of 11 years, and 13.4% being a doubling time of 5 years.

    The easiest way to see the potential for manipulation here is comparing how much difference between 2 different rates over the same period of time. In a 23 year period 1 dollar earning 3% interest will be 2 dollars, where as 1 dollar earning 13.4% interest will be around 24 dollars.

    To the issue at hand, the Utah “reform” won’t work, it does nothing for liabilities the state has already accrued, pushes people into junk 401K accounts, and puts less into those 401k accounts then would have been put into the pension fund(aka its a way to cut benefit costs at the expense of a viable retirement option for workers).

    Not to say that pension plans don’t have their warts, they do carry liability for the employer, and are an easy place to attack when the state needs a piggy bank to avoid facing real problems. And their is an ideoligical driven minority that despise them based on the pensioner not being exposed to the market due to the insurance model of a pension fund.

  5. So, Ron, what you seem to be saying is that nothing will work. Is that it?

  6. I believe the word you are looking for is “graft”.

  7. Ronald D. Hunt says:

    No, their are solutions. But that doesn’t matter yet, We are at the stage where not enough people see that their is a problem or those who do see it plan on using it to push an agenda(Not necessarily a political or ideological one either could be simple corruption).

    Really we likely need action from the Federal government on this, a pension or retirement insurance account that is transportable between employers, partly insured benefit rate via some sort of federally ran insurance, remove the tax benefit for junk retirement plans(401K and friends)(and hey this reduces the deficit to boot), and a path to convert existing retirement accounts/pension plans.

  8. Yeah, I really hate the “freedom” agenda, too. I wish the American Revolution had never happened. If we would just turn everything over to the federal government, our worries would be over.

    sarcasm

  9. Ronald D. Hunt says:

    freedom?, legalized theft in garbage private accounts that employees don’t get a choice in picking, where the junkyer accounts are know for giving kick backs to the employer for the investment of employee retirement savings is where we are right now. 401K’s are a disaster, they are expensive for the government to boot, $107 billion dollars of cost in 2007 for the related deductions that make them possible.

    The government already runs insurance programs for pensions, via the Pension Benefit Guarantee Corporation, to say nothing of SS, and all of the tax system related nonsense involved with the different IRA’s, ROTH accounts and 401K related nonsense.

    Their is going to be a government ran insurance pool somewhere in a functional system, it is a necessary component at least until such a time as every person knows his/her exact date of death. And transportable accounts that are separated from the employer would be an increase of “freedom”, and the removal of tax deductions would be less government interference in the market(that means more of that “freedom” juice you like yes?).

    A workable retirement system and “freedom” are not mutually exclusive things Pops, we can in fact actually have both!!!! Mind you, I expected your reaction which is the purpose of the first paragraph of my second post!!!!!

  10. Ron,

    401Ks are a byproduct of Federal tax code, as are IRAs of all flavors. How is it that government, having created the current disaster (your description), can be seen as capable of cleaning up their own mess?

    Freedom would consist of people managing their own financial affairs in whatever manner they see fit without government interference. The proper role of government is to provide a stable environment in which the free market can flourish. We have instead an unstable environment in which financial planning is an oxymoron.

    A large part of the motivation for the American Revolution and creation of our Constitution was a recognition that too much power concentrated in too few people has disastrous consequences for the common man. The problem, and the first fatal defect in the socialist enterprise, as articulated by Lord Acton, is that power tends to corrupt, and absolute power corrupts absolutely.

    The second fatal defect of the socialist solution to every economic problem, as meticulously described by von Mises, is that it lacks sufficient feedback mechanisms to result in efficient or proper allocation of resources.

    [You ought to at least try to master the intricacies of written English. Perhaps you could start by looking up "their", "there", and "they're", and use them correctly in future comments. Frequent grammatical errors unfortunately suggest an inability or unwillingness to learn fundamentals before attempting to address weightier problems.]

  11. Ronald D. Hunt says:

    Your having objectivist delusions of grandeur. I refer you to paragraph 1 of my second post. Your so hyper concerned with micro economic idea’s that the whole of macro economics escapes you.

    The unpredictable quantity problem persists here, the unknown number of years that will be lived after retirement, the unknown year to year return rates of any savings in the years after retirement, the unknown amount of cost in medical care and drugs.

    Most Americans well over 95% could never save enough for the 20%-40% worst cases of cost, even the most upper crust of the upper crust of the well off could never save enough. And the real thinker is that the distribution of risk is unknown, yes we can predict the outcomes of the group as whole very nicely(its why insurance works so nicely) and for any particular individual their is simply no way to know.

    The paragraph of my second post relates directly to this, until enough people understand these basic mathematical truths, likely by continuing to lose their shorts in the individual savings methods that are failing us soo utterly.

  12. Pops, your attitude toward government workers pensions and retirement plans is nothing but sour grapes. If you had the opportunity to join a union (which you and your ilk eschew) in your place of business, you might very well have a decent retirement coming to you right now.

    Civil servants like myself in the state of Utah have earned every penny of our retirement for our years of hard work and dedication in underfunded schools with large classrooms and meager salaries.

    Just because you got screwed in private enterprise without the strength in numbers a union provides does not mean the rest of us do not deserve the benefits we have earned.

  13. So where do you think wealth comes from, JBT?!? If everyone got a plush guaranteed retirement, who would pay for it? The tooth fairy?

    I suppose this is where you chime in and say, “Take it from the rich!”. Unfortunately, if the total wealth of all the rich folks in America were confiscated, it wouldn’t last a year. And then what?

  14. Ron,

    You’re just making stuff up. Why don’t you look up “your” and “you’re” in addition to “there”, “their”, and “they’re”, and then maybe “its” and “it’s”.

  15. Ronald D. Hunt says:

    “You’re just making stuff up.”

    Very well, what date have you scheduled your death for? What will be the cause, old age?, cancer?, diabetes?, alzheimer’s? And how about your kids?, I am assuming you scheduled there expire dates at birth(I mean really how the hell else are they going to know how much they need to save for their retirement)!!!!!

    “If everyone got a plush guaranteed retirement, who would pay for it? The tooth fairy?”

    Pensioners pay into their pensions double what 401K accounts holders generally pay into theirs.

    That is a pensioner on average will pay 8% into the fund with a 6-8% employer match, or 14-16% of their pay into the fund. Where as a 401K generally is paid 4% with a 2-3% employer match or 6-7% into there fund.

    Then the employer is on the hook for loses so they generally pick a good fund as opposed to the minimum possible to achieve their tax benefit. This generally means better picked investments that are generally safer.

    Then pension funds use an insurance model for payments, meaning that each persons benefit will vary based on how long they live. Those who win the long life lotto can be sure they will have an income when they hit 95 years of age.

    No tooth fairies involved Pops. Just people paying more of their own income into a better form of retirement investment(aka insurance).

    And their is nothing “Plush” about a pension, its just what a properly funded retirement account looks like. Really the problem isn’t that pensions are to good, its that non-pension retirement accounts are really bad!!!!!

  16. @POPS

    Many people work for wages and other compensation. Those in industry get part of their remuneration in the form of retirement benefits. They are helping to create the profits from which the management pays their salaries and benefits.

    It is nonsense to think of retirement benefits as getting something for nothing. It is not taking anything away from anyone else. It is not welfare, nor is it a handout. Folks in both the government and private industry EARN their wages and benefits. It is not that hard to understand.

    Perhaps if you had made better choices in your life you would not be grousing about the benefits those around you are getting that you are not. But hey, you still have those socialist programs like Social Security and Medicare—unless the people you keep electing take those away from you.

  17. Ron,

    The magic trick is living off the interest, not the principal. But then you knew that.

    Is what you’re proposing to take away people’s private 401(k) accounts and put it into a government-controlled account? Of course, if we did that the government would spend the money and replace it with IOUs. Like Social Security. Oh, wait, we already tried that.

    BTW, I pay 8% into my 401(k) with 4% employer match. You’re making stuff up again.

    “…employers on the hook for loses [sic]” – you’re kidding, right? That’s really funny. And when a company goes down because of overblown pensions (think General Motors), then what?

  18. JBT,

    How do people in government “earn” a retirement benefit? Who decides how much it should be?

  19. Ronald D. Hunt says:

    “The magic trick is living off the interest, not the principal. But then you knew that.”

    Middle class individuals, even upper middle class individuals can’t do this. This being an option is a lie sold by the same people that sell the 401K get rich quick scheme. Nobody I know has recovered their 401K from the 2007 crash.

    All savings modeled retirement accounts are a sinking fund at retirement, and that is a fact. 401K would be entirely nonfunctional without social security and even less functional without medicare.

    “I pay 8% into my 401(k) with 4% employer match.”

    On average its 4% with a 2-3% match, you have a slightly better deal that most people. Does your employer provide you some index options or is it all managed funds that can crap out at any time, I have yet to see an employer myself that offers such a thing?

    “Like Social Security. Oh, wait, we already tried that.”

    SS is the only retirement model ever that has never missed a payment, that has never provided less then what is promised, and is backed by the full faith and credit of the united states of America.

    “That’s really funny. And when a company goes down because of overblown pensions (think General Motors), then what?”

    You love picking examples that hurt your position don’t you?, GM illegally used the pension fund to purchase GM issued bonds at below market rates. in the early 2000′s the Union got whiff of this and forced GM to transfer control of the pension to them. At this point the bankruptcy was inevitable. The Union now owns 24% of the company, The union holds positions on the GM board of directors, and they are a big reason that GM is finely turning around. The Union benefits from a long term perspective and not short term pump and dump schemes that the now fired and clipped of their golden parachute GM management was involved in.

    Also Pensions are required to be members of the Pension benefit guarantee corporation(government owned company), which will pay a potion of a bankrupt pensions promised benefits. So their is never a total lose of value. They generally will cover 30%+ remaining value of the bankrupt fund. This worked really well until the 1980′s when Reagan changed bankruptcy loans to be a super priority over pensions and bondholders as companies would purposely take out loans that where larger then the value of their pension funds and use the worst case total lose scenario as a financial WMD against their workers.

  20. Ron,

    I have no problem with trying different approaches to retirement planning and investment. Where we disagree is on the role of government. We have the 401(k)s and IRAs you hate because of government intervention in the marketplace. The original post was about how a government-created system in Philadelphia is being gamed by corrupt politicians who are essentially voting themselves large chunks of other people’s property. Social Security is failing because it was gamed by the politicians in Washington who spent the trust fund and are now paying benefits from our grandchildren’s future earnings instead of from money that was already taken from our paychecks for that purpose.

    Government cannot be the solution to the retirement problem for the two reasons you have not yet addressed: the corruptibility of humans, and the inability of non-market solutions to respond to market forces.

    [I also wish you would stop characterizing everything as "us vs. them". We're in this together. It makes you sound like you're here on assignment from the DNC or something.]

  21. Ronald D. Hunt says:

    The thing in Philadelphia was badly thought out, but its the story about it is mostly hyperbole. The real cost is exaggerated well beyond what it actually is. The idea that people collecting their pension at retirement age and working at the same time having an increased cost to the to the tax payer is a sick lie. Now letting people access their pension early without a penalty likely would(again tho this depends on how well the pension is funded, their are pensions out their that are overfunded well enough todo this).

    IRA’s really are not that bad as a savings modeled investment, their not attached to an employer, almost any type of fund can be used as one, and their are some tax prepayment options(roth) that are available.

    That doesn’t absolve them from the fundamental problems that savings modeled retirement plans have related to a list of unknown variables. Things such as the planned draw down rate, large sudden expenses, inflation(this is actually a huge problem), etc.

    “Government cannot be the solution to the retirement problem for the two reasons you have not yet addressed: the corruptibility of humans, and the inability of non-market solutions to respond to market forces.”

    Insert the word, Corporation, private enterprise, banks, moon people, whatever. Its not just government people that are corruptible. And the market has never responded to market forces very well, otherwise the 2007 crash and great depression would have never happened. The last 40 years have had a repeated deregulate then pump and dump then crash cycle and now 40% of our GDP is represented by financial corporations playing Russian roulette with every form of home mortgage not backed by the government(fixed rate fixed term loans ain’t fun to gamble with), 401K’s, and as much leverage they can get away with(thank god Frank Dodd puts limits on this).

    We need an overall system that works, So far the only system that has worked without flaw are the SS modeled plans. An insurance pool that is invested in safe government bonds and has a large enough risk pool that it is easy to project future costs. Small private risk pools haven’t done as well as SS as their is to much noise in the trendline, Which is primarily the reason such a risk pool needs to be a national program, it can be modeled a number of ways, an insurance on qualifying private accounts(transportable pensions), SS like direct insurance, a hybrid system(SS+savings modeled account). mind you the hybrid modeled system we currently have doesn’t put enough of the investment into the SS side, the SS payouts are simply to low. Or it is possible to have a combination of systems ran side by side so long as they all have an insurance component backed by a sufficiently large pool, tho their are problems with this as well.

  22. I will assert that private entities are far less susceptible to corruption because they can only provide voluntary services, whereas government places a gun to your head. If you don’t like e.g. Social Security, you’re out of luck. If you don’t like services provided by a private entity, you can go elsewhere, or create your own solution.

    To say that Social Security invested in “safe government bonds” is a smoke screen that obscures what really happened. Politicians spent the money that should have been in the trust fund; the wealth the money represented was consumed. It no longer exists. It was not invested in capital equipment, for example. It is simply gone. It was largely spent on salaries for government workers in expanding the scope of government. Recovering the principal, to say nothing of the interest, requires that government tax our children and grandchildren for our retirement as well as their own. How is that fair to them?

    You might want to look into mutual aid societies from the 19th century. There was no need for government programs because people formed these voluntary organizations to take care of each other when personal and family resources ran out.

    To say that “We need an overall [retirement] system that works…” is like saying we need an overall phone system that works. We tried that and it didn’t work because any compulsory system with centralized control cannot respond to market forces and has no incentive to do so.

  23. Ronald D. Hunt says:

    “I will assert that private entities are far less susceptible to corruption”

    On a whole maybe, but their are industries such as banking or resource extraction, or any of the nature monopoly’s are vastly more corrupt then government. This likely due to the built-in nature of the industries conflicts of interest and extreme drive for producing quarterly results. And deregulation only makes these problems worse.

    Yes the government spends bond revenue, their is nothing shocking here, they do the same thing with bond revenue from China, American banks, and individual purchasers. The government needs to payback social security as much as it needs to pay back China.

    Japan’s retirement system is similar to the mutual aid society model, mind you they have a government insurance program covering these societies. Of course Japanese social insurance covers almost everything and has sense well before WW2.

    As to the silliness of the libertarian force argument, I will let my favorite socialist speak the truth.

    “The remissness of our people in paying taxes is highly blamable; the unwillingness to pay them is still more so. All the property that is necessary to a man for the conservation of the individual and the propagation of the species is his natural right, which none can justly deprive him of; but all property superfluous to such purposes is the property of the public, who by their laws have created it, and who may therefore by other laws dispose of it whenever the welfare of the public shall demand such disposition. He that does not like civil society on these terms, let him retire and live among the savages.”–Benjamin Franklin

  24. …vastly more corrupt then government…

    You need to back that one up.

    Yes the government spends bond revenue, their [sic] is nothing shocking here…

    Well, yes, in fact, it is shocking. It is spending the trust fund now and requiring future generations to pay it back. How is that not shocking?

    You could have found a better Benjamin Franklin quote. How about this one: “When the people find they can vote themselves money, that will herald the end of the republic.” That’s us!

  25. Ronald D. Hunt says:

    “Well, yes, in fact, it is shocking. It is spending the trust fund now and requiring future generations to pay it back. How is that not shocking?”

    All forms of investment, savings, and lending depend on some entity returning at a future date that which is borrowed, saved or invested. Why is it somehow fanciful when SS loans the Federal government general fund money but isn’t when China does? Should China be worried they we already spent the money they loaned the US Federal government? how about American banks or individual investors? You shouldn’t be complaining about the Fed borrowing money from SS, SS gets interest revenue from those Tbills. An argument that their is to much deficit spending would make sense, but that has nothing todo with SS.

    “…vastly more corrupt then government…

    You need to back that one up.”

    Really?!?!?, After the 2007 crashed caused by banking institutions playing games outside the prevue of government regulation, Or the murder of mine workers and oil rig workers by intentional management decisions. The intentional efforts of health insurance corporations to cut people out of their legally due and paid for benefits when they need them. The international price transferring game to avoid paying taxes on US earned income.

    Yea their is a problem with government, but its not in fact to much of it. Its the moneyed interests and political manipulation by business interests to control legislation and regulatory capture of Fed/State agencies. Corporations pushing their influence deeper and deeper into government creating a situation where government and private business are indistinguishable from one another. This is all done riding on the back of “small government” and “free enterprise”, And seeks to move all things regulated by an elected and accountable government to an unregulated unelected unaccountable cabal of select private interests who through natural monopoly, implicit market trusts, and control of the financial institutions form a much larger hidden government.

    This isn’t a conspiracy or something like that, their are not people attempting to do this intentionally. In fact this a group of people trying to hyper optimize their portfolio and the for mentioned outcome is merely the nature consequence.

    Their are a few blistering sores from the past as well, I always find it funny when republicans pay so much homage to the Koch brothers, two individuals who inherited their money from daddy who made his money off of Armenian slave labor helping to build the USSR’s oil industry under Stalin.

    Yea their are a few industries that set the bar of corruption beyond the penitence of bribery in electing congress, or the BLM oil regulator agent that was caught sniffing cocaine off the backside of a underage prostitute bought for him by BP.

    And good lord when the hell do I get to see Rick Perry execute a corporation, A can think of several that would be guilty of the bare minimum of manslaughter if not 10′s of accounts of 1st degree murder.

    It isn’t that government is necessarily to large or to small. Its that government is misallocated. And fundamentally this is because of the influence of money on politics. We need election reform, a multiparty system, public financing of campaigns, reimplementation of some journalistic standards in the media, abolition of the idea that money is speech and the abolition of corporation spending in elections.

  26. All forms of investment, savings, and lending depend on some entity returning at a future date that which is borrowed, saved or invested.

    In the private sector, investment occurs in the form of capital equipment and intellectual property that will produce real return on the investment. Investment in government debt instruments relies entirely on the ability of the future taxpayer to pay it back.

    Should China be worried they we already spent the money they loaned the US Federal government?

    Absolutely. When the borrowing exceeds the ability of the American taxpayer to ever pay it back, that would be a good time to stop buying US debt instruments.

    …when SS loans the Federal government general fund money…

    The only problem here is that SS is the Federal government. If the Orlando branch of my company borrowed some money from the Portland branch and then claimed it to be a corporate asset, how do you think auditors would treat that?

    After the 2007 crashed caused by banking institutions playing games outside the prevue of government regulation…

    You mean trying to figure out what to do with toxic assets created when government regulators forced lenders to make home loans to people who couldn’t afford to buy a home?

    …the murder of mine workers and oil rig workers by intentional management decisions…

    You’re relying on hindsight to presume management decisions were calculated to kill workers. I suppose management decisions at General Motors are intended to kill thousands of motorists, too, using that type of logic.

    The intentional efforts of health insurance corporations to cut people out of their legally due and paid for benefits when they need them…

    In order to stay in business, health insurance corporations (which are, incidentally, a result of government intervention in the marketplace) have to walk a fine line to eliminate fraud and waste. After you’ve walked a mile in their shoes, come back and report.

    The international price transferring game to avoid paying taxes on US earned income.

    Those who run corporations have a fiduciary responsibility to their shareholders to reduce costs. When taxes and regulations in this country make the corporations noncompetitive in the global marketplace, they have no choice but to find avenues to avoid paying those taxes.

    Yea their is a problem with government, but its not in fact to much of it. Its the moneyed interests and political manipulation by business interests to control legislation and regulatory capture of Fed/State agencies.

    You just contradicted yourself. If government had nothing to sell to corporations, they wouldn’t be buying it. The problem is exactly that there is too much government. If corporations couldn’t buy marketplace advantage in Washington, DC, they would have to gain advantage the old-fashioned way, but competing for it in the marketplace.

    This isn’t a conspiracy or something like that, their [sic] are not people attempting to do this intentionally. In fact this a group of people trying to hyper [a bit of an exaggeration here] optimize their portfolio and the for mentioned outcome is merely the nature consequence.

    Exactly. The federal government set the rules and the corporations have no choice but to play the game or go out of business.

    I always find it funny when republicans…

    That’s out of bounds. We’re not talking about Republicans vs. Democrats, we’re talking about how to solve the problems we face.

    You provide a few additional anecdotal instances of corruption which are just that – anecdotal. If you want to see a pattern of corruption, look into the behavior that is resulting in government “investment” into “green” energy. The list is long and growing: Solyndra, Fisker, Deepwater Wind, Open Range, Beacon Power, Light Squared, BrightSouce, MF Global.

    And good lord when the hell do I get to see Rick Perry execute a corporation…

    I suppose that depends on what you mean by “execute a corporation”. Are you expecting people to die or a business to shut down? The latter happens all the time as a result of excessive taxation and regulation. But it’s usually some branch of the Federal government doing the deed.

    It isn’t that government is necessarily to large or to small. Its that government is misallocated.

    Truer words were never spoken. When government no longer has something of value to sell to corporations, corporations will stop buying it.

  27. Sorry about the typos. See if you can find them.

  28. Ronald D. Hunt says:

    “You mean trying to figure out what to do with toxic assets created when government regulators forced lenders to make home loans to people who couldn’t afford to buy a home?”

    Actually the types of loans that went up in flames where not the government originated or backed kind. They where the types that existed outside the requirements of the CRA or any of the quasi-private government corporations(Fannie or Freddy or FHA). The types of loans that caused the disaster where the option arm, adjustable, interest only, jumbo, ballon loans, etc. Even after the crash the types of lending that was done by the government had little problem with defaults, The fixed rate 15 and 30 year loans with either 20% down or customer bought mortgage insurance simply had nothing todo with the mess that crashed the economy.

    Shortly after Clinton signed the worst bill in history(the Gramm Beach Billey act) the old firewall between consumer and investment banking and insurance companies no longer existed. The old conflicts of interest that had been removed from the system following the great depression returned. Banks making bad loans on purpose because very profitable for the banks as they could package them into derivative products and sell them to Euro…. I mean chumps. Not only that but by using the then unregulated ratings industry to mark this garbage as AAA they could take out insurance on it in case it failed, even as they no longer had any financial risk in it from its failure.

    This was all made much much worse in 2003 when the Fed dropped the rate to low. Because the 1999 deregulation removed the leverage limit from banks the low rate made it possible for these banks to leverage themselves higher then ever. This amplified the means by which the banks could use derivatives against there own originated loans that where sold to others.

    That is to say they had a cake, they want to sell you their cake, and then they want to eat both cakes!!!!!

    The government had nothing todo with the crash, It was not caused by to much or to little regulation, but rather the total abdication of regulation!!!! That is to say there was nothing left for the government to “sell”!!!!

    “You’re relying on hindsight to presume management decisions were calculated to kill workers.”

    No Massey Mines management intentionally halted safety projects, Where warned by miners who where threatened with being fired for bringing it up, and internally exchanged emails on the subject. They knew exactly what they where doing at from the investigation it was known all the way to the top to the chief executive officer.

    No criminal charges where never filed, The executive staff should have been charged with at the bare minimum criminally negligent homicide. And the corporation itself should have had their business license revoked and their assets and property seized and sold off and a trust using that money setup to care for the families of the lost miners and then pay for all of the liabilities left behind in the order of pension, bond holders, and last and least stock holders.

    And BP, wow where to begin their, BP was well warned ahead of time they had a contractor pull out warning them that their actions would cause exactly what they did cause. Employees had warned them, the inspector was kept well how shale we say… busy(caught sniffing cocaine off the backside of an underage prostitute). We have plenty of records via the investigation showing that BP execs well knew the situation and pressed on regardless.

    And in the BP case again no Criminal charges have yet been filed. At the very minimum give the level of knowledge they had before hand, the fact that a contractor pulled at refusing to continue work explicitly due to the reason that the rig later exploded tells me they knew something was wrong. That is not just criminally negligent, that is premeditated. Again nothing less then criminal charges against the executive staff and the corporation, which the seizure of all assets and property to be sold off to create a trust to pay for their misdeeds.

    And in both cases sited this just isn’t a one off situation, they is a long record of criminal conduct to skirt regulation, endanger their workers, manipulate or intimidate anyone who gets in their way.

    Massey mines was even known for coordinating with the other mine companies in WV to file all of their complaint appeals on the same day every 90 days to overload the courts and get most of them dropped.

    “In order to stay in business, health insurance corporations (which are, incidentally, a result of government intervention in the marketplace) have to walk a fine line to eliminate fraud and waste. After you’ve walked a mile in their shoes, come back and report.”

    There is no excuse for their behavior, its inhuman and evil. If they can’t provide the service that people have paid for then they should be replaced with a system that can(i suggest all payer or single payer).

    “Those who run corporations have a fiduciary responsibility to their shareholders to reduce costs.”

    Also have a responsibility to obey the law, not violate the sovereignty of our or any other nation in which they do business.

    “You just contradicted yourself. If government had nothing to sell to corporations, they wouldn’t be buying it.”

    Ridiculous, this is an issue elections being “sold” not the government itself. Getting the money out of politics isn’t that hard, plenty of other Nations have done it no reason we can’t.

    Sweden has an awesome election system, 7 different parties in their Parliament. and money doesn’t control it the people doing the electing do. And hell republicans would love the gun laws their, (tank ownership is Legal!!!!!). They have all payer style health care system, a nationalized pension plan, and lots of cute red head girls!!!!

    “The latter happens all the time as a result of excessive taxation and regulation.”

    Without roads, national defense, law enforcement, standard weights and measures, an educated workforce, a healthy workforce, railways, all of the supporting infrastructure for these things, a common currency, property rights, land management, common markets, ports of trade, means for the exchange of knowledge and idea’s. etc and so forth. Without these things there really wouldn’t be much business to be had, and they aint free and are mostly outside the ability of the free market to provide. They create plenty of collateral growth but not enough to the entity that does them to pay for them using only the revenue from them. Or alternatively they simple wouldn’t exist without the force of law behind them. roads and railways and most public utilities would be impossible without eminent domain.

    “When government no longer has something of value to sell to corporations, corporations will stop buying it.”

    No when the government no longer has anything of value for the corrupt to steal then this Nation will no longer be the united states of America but something gross and perverted instead. We have to keep the eternal vigilance to keep the corrupt away from the things we as a people that we as the public own via the government or we will no longer be free.

    Remove from our government the corrupting influence of the corporations via election reform, public financing of elections, abolition of corporate money from elections, multi party reform and we will finely be in a position to actually confront the problems laid before us.

  29. OK, I’ll humor you: let’s hypothetically assume that all corporations are corrupt and should be “executed”. Now what? Do you really want to live in North Korea? Or perhaps you favor National Socialism? Maybe we should be more like Europe – well, except for whole economic collapse bit.

    Maybe you’re arguing that we need another layer of government regulation to regulate the regulators. And then another layer to regulate that layer, and so on ad infinitum. At least we would get to full employment, although we wouldn’t have food to eat, clothes to wear, or homes to live in.

    No when the government no longer has anything of value for the corrupt to steal then this Nation will no longer be the united states of America but something gross and perverted instead.

    I have no idea what that means.What is it that is being stolen? (I mean, besides what government is doing to my paycheck :-) .)

    Remove from our government the corrupting influence of the corporations via election reform, public financing of elections, abolition of corporate money from elections, multi party reform and we will finely be in a position to actually confront the problems laid before us.

    The thing you’re missing here is that it takes two to tango. When a corporation buys a Senator, there are two parties to the transaction. Government is, by definition, equally as corrupt as corporations to the degree that corruption exists. Passing a law saying you can’t buy Senators 1) has already been done, and 2) doesn’t prevent the buying of Senators. Corporations will stop buying political influence only when there is no influence to be bought.

    Why do corporations care about politics? Because government can make or break a business by tilting the playing field. When companies can eliminate the competition more cheaply by schmoozing politicians than by competing in the marketplace, they will schmooze politicians.

    The only way to fix the problem, rather than to just move it around, is to eliminate the ability of government to tilt the playing field. We need to get government back to its original role, which largely consists of the infrastructure items you listed in your last comment. (You almost started sounding like a conservative!)

  30. Ronald D. Hunt says:

    “OK, I’ll humor you: let’s hypothetically assume that all corporations are corrupt and should be “executed”. Now what?”

    Assume all?, I don’t play silly games of absolutes. “Reducto Ad Absurdium” is a logical fallacy. Merely enforce the law against corporations in the same way its enforced against people and the share holders of the corporations will demand lawful operation.

    “Maybe you’re arguing that we need another layer of government regulation to regulate the regulators.”

    No, We just need to fix the regulators at the top of the list (congress), All we need to do is make the American public he who watches the watchers. Remove money from the political system and reform how elections are done.

    “Maybe we should be more like Europe – well, except for whole economic collapse bit.”

    We ain’t doing so hot ourselves, And generalizing hides the fact that there are several Euro Nations doing swimmingly. France, Germany, Sweden, Norway etc are doing wonderfully. Hell Norway is doing so good that there government is to busy arguing about what to do about their massive surplus and even more massive sovereign wealth fund to notice the problems in the rest of Europe, Norway has their Nationalized resource extraction industries to thank for this problem to =p!!!!!

    “I have no idea what that means.What is it that is being stolen? (I mean, besides what government is doing to my paycheck :-) .)”

    Government through their laws creates things like “property” and patents, regulates publicly own lands, regulates mineral rights, etc and so forth. When all there is left is empty drill holes, and polluted rivers, when workers are broken down into slaves, and property is merely the function of the force of arms to keep it that is when the government no longer has anything to “sell”.

    “Passing a law saying you can’t buy Senators 1) has already been done, and 2) doesn’t prevent the buying of Senators.”

    1. It has never been done, limited a bit yes but never banned or in fact limited in a way that was limiting!!!!

    2. There are plenty of Nations that would disagree, England, Sweden, Norway, etc have no money in their elections. Of course money is only half the problem, The other half is having an election system that allows new idea’s in, There are any number of multiparty systems that would be a good example of this. Sweden for example has 7 parties in their parliament including a recently created party the “pirate party”. The “big” parties are being forced to take their issues seriously because of the rapid rise of this party, The broken copyright and patent system from America won’t be making it their anytime soon if ever because the ideas of the pirate party simply can’t be ignored. And hell they get to use the jolly roger flag ain’t that awesome =p.

    “The only way to fix the problem, rather than to just move it around, is to eliminate the ability of government to tilt the playing field. We need to get government back to its original role, which largely consists of the infrastructure items you listed in your last comment. (You almost started sounding like a conservative!)”

    I consider health care, retirement, protection of the environment, unions, safety laws, grass steagall, banking regulation, resource extraction, etc to be “infrastructure” as well.

    Ohh and,
    http://www.forbes.com/sites/rickungar/2011/01/17/congress-passes-socialized-medicine-and-mandates-health-insurance-in-1798/

    Plenty of founding fathers where egalitarians(founding father for socialist).

  31. “Reducto Ad Absurdium” is a logical fallacy.

    Reductio ad absurdum is a form of argument in which a proposition is disproven by following its implications logically to an absurd consequence. It is not a fallacy.

    We just need to fix the regulators…

    How? I’m not aware of any law they’re not willing to break if the stakes are sufficiently high.

    …make the American public he who watches…

    How? We seem to be stuck on American Idol

    We ain’t doing so hot ourselves…

    Right. And the majority of the spending that is killing us is on “entitlements” – or “infrastructure”, as you would call it.

    Norway is doing so good that there [sic] government is to [sic] busy arguing about what to do about their massive surplus…

    They definitely have some things going for them. One is the homogeneous society – it will be interesting to see how they cope with the new influx of immigrants that is creating a worker class. The other is that they use their natural resources instead of putting them off limits.

    When all there is left is empty drill holes, and polluted rivers, when workers are broken down into slaves, and property is merely the function of the force of arms to keep it that is when the government no longer has anything to “sell”.

    You clearly view all private enterprise as corrupt, despite your protestations to the contrary. Rivers are now the cleanest they have been in my lifetime. Air is now the cleanest it has been for several lifetimes. Curiously, one of the biggest obstacles to progress in some areas has been the federal government, or the air and rivers would be even cleaner.

    The other half is having an election system that allows new idea’s [sic] in…

    I hear you. Our two-party system is polarizing and destroying us. For example, why are we arguing? We have a lot in common. We both seek to fix the problems we face. But we can’t seem to go more than one or two sentences until someone someone starts flinging around labels and demonizing the other. “It’s all the fault of !”, we scream. I suspect the main reason you post comments on Holly’s blog is to attempt to disrupt what you view as “evil right-wing propaganda”.

    Plenty of founding fathers where [sic] egalitarians…

    Right, except they believed the role of government was to ensure equality of opportunity rather than equality of outcome. Try this link.

    They were also pragmatists, which is for me a reason to like some politicians more than others. Strict idealists don’t seem to understand that the first objective of government is, well, to govern.

  32. Ronald D. Hunt says:

    “proposition is disproven by following its implications logically to an absurd consequence”

    Any position taken to an absolute is illogical as few things are absolute.

    “How? I’m not aware of any law they’re not willing to break if the stakes are sufficiently high.”

    In the case of political spending it is very easy. Donations require several participants, the donor, the receiver, and the spender. Making all campaigns publicly funded is where you start, making it so the amount each campaign has to spend is known before hand can create the transparency required to start. Next something like the DISCLOSE act(only a version that applies to everything) requires that all spending records be filled with the FEC to verify legal behavior.

    Corporate political spending should be outright banned and made illegal, receiving money from corporations for the use in political ads or other spending should also be illegal, facilitating either should be illegal.

    The great thing about much of the corporate political spending is that a great number of entities are involved in each particular transaction. That being the corporation, the pac, the ad company, the ad distribution company(tv station, newspaper, telephone center, etc). Banning corporate political spending would actually be very easy from a function enforcement perspective. The liability subjected to each link in the chain magnifies the risk and cost involved in any attempts to violate the law. Simply put the cost burden would become to great on any attempt to jerry rig the political system that the entire political jerry rigging industry would collapse under the weight.

    This is what the corrupt fear, their position of control over the politics of our Nation depends on a very expensive, complicated, heavily interconnected web of organizations.

    “it will be interesting to see how they cope with the new influx of immigrants that is creating a worker class.”

    You mean like their growing Arab population?, Most of Europe deals with heavy immigration from the middle east.

    “Rivers are now the cleanest they have been in my lifetime. Air is now the cleanest it has been for several lifetimes. Curiously, one of the biggest obstacles to progress in some areas has been the federal government”

    The Federal government is the very reason these rivers and streams and the air is better. The Clear Air act, The Clean Water act, The creation of the EPA etc. Its the government that required catalytic converters, smog pumps, emission standards, etc. Just as it was the government that forced coal plants to scrub their emissions and other industries stop the dumping of many waste products into the rivers as used to be common practice. Before the EPA river fires were common. And your dreaming if you think industry would have done any of this if they were not forced to.

    “You clearly view all private enterprise as corrupt”

    I view any private enterprise that can only exist by legalized externalization of costs, Or that can only exist based on “extra legal” constructs, are natural monopolies, or through unable to fulfill a stable market ecosystem fulfilling the general needs of the market.

    Their are plenty of things that need an extra legal construct to be practical, Telephone service for example requires that the company have the power of eminent domain. These situations are almost always grossly corrupt ran under the model of a corporation.

    And no this doesn’t cover all corporations, It does however cover area’s such as health care, and retirement.

    “I suspect the main reason you post comments on Holly’s blog is to attempt to disrupt what you view as “evil right-wing propaganda”.”

    People on the internet tend to find their “group” and preach to the choir, they lose the benefit of being exposed to new idea’s and alternative view points.

    I don’t wish to lose the benefit of being exposed to other idea’s and view points, albeit that doesn’t necessarily mean I will agree with any of them.

  33. Any position taken to an absolute is illogical…

    I beg to differ. You need better positions if they all become illogical.

    In the case of political spending it is very easy.

    Well, yes, as long as you’re willing to give up the First Amendment.

    Most of Europe deals with heavy immigration from the middle east

    And they aren’t coping very well, unless rioting and burning cars are good things.

    The Federal government is the very reason these rivers and streams and the air is better.

    Don’t forget that none of this could happen without the wealth to pay for it. Where did that wealth come from? Did government create it? Didn’t think so.

    Their [sic] are plenty of things that need an extra legal construct to be practical, Telephone service for example requires that the company have the power of eminent domain. These situations are almost always grossly corrupt ran under the model of a corporation.

    That’s the principle embodied in the Constitution with its provisions for the postal service and post roads, which are physical infrastructure, and intellectual property protections.

    It does however cover area’s such as health care, and retirement.

    Here’s where we differ. When responsibility for health care is taken from the individual, demand for services skyrockets, leading to escalating prices and/or rationing of services. We’ve left free enterprise behind in health care and are toying with the private third-party insurer. Since they’re not in a position to ration health care, they have no choice but to raise prices. If / when government takes over, it will have the ability to ration health care, and will absolutely have to ration it. This opens the door to other types of corruption- ageism, sexism, discrimination on the basis of religion, or even favoritism based on politics. In my view, it creates far more and far worse problems than we would have if we were to return to free enterprise in health care. I should be free to decide how little or how much health care I receive. It should not be dictated by government.

    Retirement is a similar thing. Based on how well our FICA taxes have been taken care of in the past, I can’t say I trust government to run any kind of retirement program.

    I don’t wish to lose the benefit of being exposed to other idea’s [sic] and view points, albeit that doesn’t necessarily mean I will agree with any of them.

    I don’t get the impression that either of us is here to learn anything. My excuse is that I’ve spent decades learning precisely why free enterprise has far greater potential than a command economy. But you’ve got “great” company – Mahmoud Ahmadinejad spoke Wednesday about how capitalism lacks logic and is in decay. I’m not sure I’d want to be on his side on this one.

    How about a grammar lesson. Don’t use apostrophes when writing the plural form of a noun. Write “ideas”, not “idea’s”. The apostrophe denotes possession.

  34. Ronald D. Hunt says:

    “I beg to differ. You need better positions if they all become illogical.”

    All positions become illogical when taken to absolutes. Glenn beck style “Reducto Ad Absurdium” are a poor way to make an argument.

    “Well, yes, as long as you’re willing to give up the First Amendment. “

    Corporations are not people, and money is not speech.

    “Don’t forget that none of this could happen without the wealth to pay for it. Where did that wealth come from? Did government create it? Didn’t think so.”

    Government acts as a wealth multiplier, See the economic benefits of the Eisenhower Interstate Freeway system.

    “Here’s where we differ. When responsibility for health care is taken from the individual, demand for services skyrockets, leading to escalating prices and/or rationing of services.”

    See French health care system,…. No one is going to get sick just because they have affordable health care, Low cost or free doctor visits don’t increase the cancer rate. Really this is about the most absurd argument i have heard. The disease and accident rate is not effected by access to health care.

    What is effect by a more “socialized” system is over costs go down as administrative costs become marginal(Medicare or France less then 3% administrative costs in their system, US private care 30%+). Increased access to primary care physicians leads to lower hospital costs as diseases tend to be caught earlier when they are cheaper to treat(the difference in cost between stage 1 breast cancer and stage 3-4 is several $100,000 dollars).

    “If / when government takes over, it will have the ability to ration health care, This opens the door to other types of corruption- ageism, sexism, discrimination on the basis of religion, or even favoritism based on politic”

    I just haven’t seen that this has ever been the case in a first world democracy. And “All payer” style systems are not a government takeover, In fact in the German system their isn’t even a public option insurance. Their is a tax used to pay for a basic plan which has is required to be provided in a non profit manner which everyone has access to, But anyone can pick their company of choice and purchase any level of service that fancies them. It’s heavily regulated, The German government does run an “adverse risk” insurance pool for the basic plan to that prices are the same from everyone for at the basic plan. Ohh and they average around a 2.5% administrative overhead. But it works, and to their grand economic advantage.

    “Retirement is a similar thing. Based on how well our FICA taxes have been taken care of in the past, I can’t say I trust government to run any kind of retirement program.”

    SS has never missed a payment, or had the fund go bankrupt depending on the wall street casino. TBills are a good way to go, And SS isn’t leveraged like a bank, even at the peak of the boomer generation give the most extreme worst case scenario(which in of itself requires incredible dishonestly with the numbers) SS will pay 78% of promised benefits which is what tax revenue without the trust fund can cover. Mind you that figure requires a heavily shrunken work force with no immigration and continued wage shrink, However in reality a decreased workforce size would have an upward effect on wages, and any immigration would have the effect of increasing the size of the workforce and therefor paid SS taxes.

    SS is just fine, Every 5-10 years they seem to push their trust fund exhaustion date out 5-10 years and use ever more extreme manipulation of the numbers to make it continue to look bad.

    “But you’ve got “great” company – Mahmoud Ahmadinejad spoke Wednesday about how capitalism lacks logic and is in decay”

    No I believe that capitalism is a tool much like a brunt instrument or a hammer, And like a Hammer when you wield it everything begins to look like a nail and that all problems can be solved by hitting them with it.

    I take the position that one must give unto the devil what the devil is due so to speak. Really it all comes down to a balance, and right now the interests of money have unduly pressed on the scales tilting things unevenly to their advantage to the grand disadvantage of all other interests.

  35. …money is not speech…

    You’re saying the only protected speech is that speech which costs nothing? Good luck with that position. I guess we can close down all the newspapers, radio and TV stations, and web servers.

    No one is going to get sick just because they have affordable health care…

    Maybe you should work a few economics classes into your schedule, along with some English classes…

    Government acts as a wealth multiplier…

    Yes, every time I drive on a freeway my wallet overflows. So, you’re saying that if I sent $10 to Washington, DC, I’ll get back more? Then what happened to all the FICA $ they took from me? They got turned into a pile of nothing.

    And “All payer” style systems are not a government takeover…

    The typo obscures the meaning of the sentence. “Any all payer style system”? “An all payer style system”? How about this: people pay for whatever level of health care they desire? What’s wrong with that? Basic economics teaches that any time a third party pays for (desirable) services, demand for those services skyrockets. It’s human nature. So let’s pass lots of laws and regulations create perverse incentives and then try to counter those incentives. Or maybe we could try free markets, which align incentives with the laws of economics.

    SS has never missed a payment, or had the fund go bankrupt..

    So what’s in the fund? Debt instruments. How will they be redeemed? Even if borrowing is used in the short term, eventually tax revenues will have to pay again for something we already paid for. How does that constitute anything but fraud?

    … right now the interests of money have unduly pressed on the scales tilting things unevenly to their advantage to the grand disadvantage of all other interests.

    So, the solution is to get rid of money. I guess the Obama administration is on track with that one!

    You forget one thing: capitalism = freedom. There’s a reason that Ahmedinejad, Chavez, Castro, Mao, Stalin, Kim Jong Il, and fellow travelers didn’t / don’t like capitalism: it’s because they don’t like freedom.

    We agree that it is proper for government to provide infrastructure. Retirement and health care aren’t infrastructure – if they were, then food, housing, clothing, jobs, and entertainment would be infrastructure as well. I guess that’s why you don’t like reductio ad absurdum.

  36. Sorry, cheap shot there. Congress is doing its best to bankrupt the nation, not just the Obama administration. As did the Bush administration.

  37. Ronald D. Hunt says:

    Capitalism is merely an economic model, Of course using “reductio ad absurdum” we can project that Capitalism will merely result in either Oligarchy, or Fascism. Being the fundamentally unstable state that it exists in it will never reach a politically stable state that allows the long term maintenance of the ideal that it represents. On the political end its failures will always be blamed on some disliked politically convenient minority(Immigrants, the other political party, Jews, Muslims, The French, public employees, teachers etc), who will then be the targets of legislative activity and persecution(The enabling act, sb1070, etc). All the while a small group of large business interests will take on all the functions of government as all things of the public good are sold to the highest bidder(including their rights) under the guise of “free-market”.

    reductio ad absurdum is an idiotic argument method. Best left to fools like Glenn Beck.

    “Basic economics teaches that any time a third party pays for (desirable) services, demand for those services skyrockets.”

    Changes in the cost of health care does not change the disease rate or the rate at which accidents occur. Health care is an atypical market is this regard.

    Their is plenty of empirical data to back this up to, Health care reform around the world has universally lead to lower costs by cutting the administrative costs inherent in the system, lead to better health out comes, and increases the rates of early detection of diseases which leads to lower costs and better outcomes. The next closest Nation in costs is France and their system costs them half what ours does.

    When Canada move to their system health care they had no health care cost inflation for nearly 10 years.

    “So what’s in the fund? Debt instruments. How will they be redeemed? Even if borrowing is used in the short term, eventually tax revenues will have to pay again for something we already paid for. How does that constitute anything but fraud?”

    1. our government owns the money printing press.
    2. SS is just another purchaser of our debt, no different then any other purchaser.
    3. Our government’s debts where incurred outside of anything having todo with social security, and would have these debts without regard for the existence of social security.
    4. Eventually tax revenue will have to be used to pay back China, US banks, American investors, etc. the bonds SS hold are no different.
    5. SS earns interest revenue from these bonds, just like all holders of government bonds do.
    6. Simply sitting on the money would reduces its value over time due to inflation, putting into Tbills and spending it on keeping people employed building roads/infrastructure to allow growth of future businesses benefits tax receipts over time which is also good for SS completely outside of the interest revenue of the bonds themselves.

    “Then what happened to all the FICA $ they took from me? They got turned into a pile of nothing.”

    So your going to decline receiving SS security and medicare? Your only source of income after your 401k is drained, and medical service that the private industry isn’t able to provide.

    “Yes, every time I drive on a freeway my wallet overflows.”

    No but all of the trucking companies that can only exist due to the freeway being their, or all of the interstate traffic that exists solely due to the interstate, the tourism, exchange of goods and raw materials used in manufacturing, the businesses that exist to maintain it, the movement of farm goods to market, easy access to most of the nation.

    Yes, we all benefit from the highways. Our rail infrastructure is getting long in the tooth and widely out of date and out of repair we should get that back upto snuff.

  38. …using “reductio ad absurdum” we can project that Capitalism will merely result in either Oligarchy, or Fascism…reductio ad absurdum is an idiotic argument method. Best left to fools like Glenn Beck.

    I see.

    Capitalism is merely an economic model…

    Sort of. It involves allowing people to make voluntary economic transactions rather than being coerced by some guy with a gun to your head.

    Being the fundamentally unstable state that it exists in it will never reach a politically stable state that allows the long term maintenance of the ideal that it represents.

    There are only two stable states. One is freedom and the other is tyranny. You’re trying to slide us toward tyranny.

    When Canada move to their system health care they had no health care cost inflation for nearly 10 years.

    That’s fairly easy to achieve. All you have to do is ration health care – basic economics.

    Changes in the cost of health care does not change the disease rate or the rate at which accidents occur.

    Huh? How does that relate? Changes in the cost of health care result when natural incentives to keep costs in check are removed, the natural incentive being free individuals asking themselves, “Do I want to pay for this procedure? Do I perceive that the personal benefit will justify the personal cost?” When natural incentives are removed, the only way to keep costs in check is to implement artificial incentives, such as rationing.

    Eventually tax revenue will have to be used to pay back China, US banks, American investors, etc. the bonds SS hold are no different.

    Ah, but they are different. It’s requiring Americans to pay twice for the same thing. When Congress initially raided the trust fund they did it because spending the trust fund was considered off-budget and didn’t raise the debt ceiling. If they had been required to raise the debt ceiling before they could expand the scope of government they never could have gotten the spending approved. It was, at the time, perceived to be a freebie. What you’re arguing is like saying, “Yes, I robbed the bank, but I spent the money on good stuff so it’s okay.” (Reductio ad absurdum strikes again.)

    No but all of the trucking companies that can only exist…

    I know that. You know that I know that. I was poking fun at your wording (“wealth multiplier”). You made it sound like some kind of magic wealth-creating machine. Wealth is created when we labor to use our natural resources for our benefit, while at the same time consuming less than we create and applying that excess toward improving the efficiency of our labor. One way that we do that is by building and improving infrastructure.

    The problem with giving government too much of the excess (assuming there is any excess) is that politicians tend to spend it to buy votes, which almost always results in consumption rather than investment. When we consume more than we create, the standard of living (pool of accumulated wealth) goes down.

    President Obama just requested an increase in the debt ceiling of $1.2T, or $4,000 per man, woman and child in America. Can you afford that? Will it be consumed or invested? Given the current allocation of government spending, most of it will be sent to retirees and used to pay for medical services and other forms of welfare. That’s consumption. Most of what’s left will be blown up in Afghanistan. Will those who have to pay it back be better off? Will their standard of living go up or down as a result?

  39. What you’re arguing is like saying, “Yes, I robbed the bank, but I spent the money on good stuff so it’s okay.” (Reductio ad absurdum strikes again.)

    No, that was a crappy argument. What you’re saying is more like, “Yes, I embezzled the money from my employer, but if I hadn’t I would have earned it later, and anyway I spent it on good stuff.”

  40. Ronald D. Hunt says:

    “There are only two stable states. One is freedom and the other is tyranny. You’re trying to slide us toward tyranny.”

    Even under the folded over political spectrum model that libertarians use, the two ends are referred to as control and anarchy. Freedom is not a state that exists at one of the ends, actually Freedom by the definition is somewhere between the two extremes.

    The Constitution party likes to use this model, I never agreed with this idea. I find that politics is are complicated then the simplicity in that model and that it over simplifies more complex motivations and ideals by lumping all extremes together assuming their all the same.

    “That’s fairly easy to achieve. All you have to do is ration health care – basic economics.”

    France doesn’t have such a concept, nor does any “All-Payer” based system. As well its questionable rather or not that can be applied to Canada or Briton as you can buy supplemental insurance from a private provider for faster access to services.

    “Ah, but they are different. It’s requiring Americans to pay twice for the same thing. When Congress initially raided the trust fund they did it because spending the trust fund was considered off-budget and didn’t raise the debt ceiling.”

    Regardless of the syntax of the bill congress would have still spent the money. In a money driven election system its encumbered on congress to keep the funders of their campaigns happy. Sadly the reasoned people are never able to get their name recognized enough to even be a valid option on the ballot, and the moneyed interests need only drop a couple million worth of ads to kill any attempt by an outsider to gain entry to the political system.

    “I know that. You know that I know that. I was poking fun at your wording (“wealth multiplier”).”

    Acknowledging the wealth multiplier effect, how Keynesian of you!!!!

    “The problem with giving government too much of the excess (assuming there is any excess) is that politicians tend to spend it to buy votes, which almost always results in consumption rather than investment. When we consume more than we create, the standard of living (pool of accumulated wealth) goes down.”

    Their is no shortage of invest-able money in the United States, close to $2 trillion dollars worth. Our current problem only relates to the government indirectly, as it is due to “Free-trade” with slave labor nations(China, etc), and also relates to uneven distribution of productivity increases in our industries that has lop-side the cost structures within industries in markets of atypical function.

    In fact a creeping concern that their may be a point where the total productivity of man will exceed any possible level of demand by man. I almost wonder if Friedrich Hayek, and Milton Friedman saw this as a possible outcome when they supported the concept of a BIG(basic income Guarantee) within the constructs of their economic theory.

    It is worry some that increases in productivity over the last 40 years have lead to wage declines as opposed to increases. This is a large contributor to the uneven distribution of wealth in this Nation right now.

    And relates heavily to the lack of investment, as the middle class no longer has sufficient wages to create the upwards pressure in demand that would lead to the desire to invest to meet increases in demand.

    Reining in on speculation activity in the markets, and increasing the top rates on personal income taxes would help greatly here. If matched up with “free-trade” reforms, and stronger health care reforms we could really get this economy going again. And if the “free-trade” reforms are designed right it could be used as a means to create upward pressure in demand in our trade partner nations and improve their economies as well which would lead to a better distribution of trade.

  41. I really think that most of what’s going on is due to a decline in character of Americans in general. We see corruption in corporations as well as corruption in government. I don’t buy into the notion that giving more power to government is a solution, because government is like a really big corporation with guns. The only way to solve the problem of corruption is to strike at the source. We need to raise children who are incorruptible.

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