thoughts on politics

April 15, 2010

Back once again

Filed under: Uncategorized — Matt @ 6:32 am
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I am going to resume posting on here again.  As a brief update on my life, I now live in Brooklyn, work as a math tutor, and had the great joy of paying $374 today in federal taxes.  Specifically, since I am classified as an “independent contractor,” Social Security taxes are not withheld from my paychecks, so I pay it in a lump sum at the end of each year.

This is perhaps the most galling use of my tax dollars that there could be.  True, Social Security is not used to regulate or restrict businesses or to shoot rockets into buses of civilians in Afghanistan, so I guess welfare programs as a class are better than warfare because at least the money is given to people to spend on food and the like.  However, Social Security is nonetheless an extremely harmful program that, as I see it, only truly “benefits” you if you are already rich and will never be dependent on it in your life.  I wrote about this several years ago in the Red & Black; perhaps I’ll give this a fuller examination on this blog one day.

However, as it pertains to me, this program is nothing but a fraud and a joke.  I sent that check in the mail today knowing that I would never be getting any of it back.  Even if the other many economic problems facing the country now stabilized, there would be no realistic way for Social Security to last until my retirement.  I am sending my money off now to be given to some retiree somewhere.  No actual investment or anything at work, no guarantee that someone will be there for me in 50 years to pay to me what I have already given to others.

One of the most illuminating statements I have heard about Social Security came from an economics professor I had at UGA back in the nascent days of my libertarianism.  I asked him outside of class what he thought of Social Security, and he said, “My problem with it is that if someone tried to run an operation like that privately, they would be thrown in jail.  It is only legal because the government is doing it.”  Unlike a legitimate investment house, the Social Security system is funded by nothing the new payees.  The money paid out to recipients is not coming from anything but someone else’s paycheck contribution.  Unlike a legitimate investment house, the Social Security system operates like Bernie Madoff’s scheme.  It cannot last.

But what is especially pernicious about it is that everybody seems to accept it as an unmitigatedly good program.  I remember two particular responses to my Social Security column in the Red & Black.  One came from a very liberal acquaintance of mine, Andy.  He posited, I think in a comment on the column, that Social Security had “lifted millions of seniors out of the horrid poverty to which they were condemned” (paraphrasing from memory).  Another was from a very conservative friend, who wrote a letter to the editor saying that Ron Paul’s advocacy of ending Social Security was “untenable” (I do remember that word for sure).  Both of these people are up-and-ups within their respective party organizations.

It seems there is no willingness in the political class to even call into question the value of Social Security.  This program, which (in my understanding, of course) only serves to hurt the poor of this country, endures in the public mind as a purely beneficial program.  This misconception, this falsity about it, makes this use of tax dollars all the more pernicious.

Of course, there are much much greater financial problems facing our country now.

Finally, in what has been the main impetus for this post (that brief life update ended up being the main body of the post, I guess), I would like to register a prediction.  It is pretty late now (as in, after 6 am) so I won’t get heavily into this now, but with regards to the “healthcare reform” measure that has recently passed into law, even though this law does not now contain any “public option” health insurance plan, I think it will in time lead directly to the creation of such a plan.  As the stipulations of the bill come into effect (which will happen over the next few years), the market will get more and more distorted.  Private insurance costs will only grow, as none of the roots of the problems (ridiculous rules barring such things as buying insurance across state lines) have been fixed, but new ones have been added (such as barring companies from refusing coverage or dropping customers and mandating coverage).  Within a few years, the situation will appear so bad that the government will say (and I doubt conservatives will put up as much of a fight as they did this time around) that the market is completely out of control, and what needs to happen is a public option enters the market to “compete” with private companies and drive down costs.  As soon as this happens, within a year, most people will have migrated to this plan for their health insurance.  It’s possible, I suppose, that private insurance providers will be eliminated entirely by law at some point.  I believe this is how some other western countries with national health insurance work, though not all (and I’m not about to start researching that right now).  I think probably it will end up looking more like the educational system in this country.  Even though public schools greatly dominate the primary education world, there are still private alternatives “in competition” with the government.  However, since the public schools are basically “free,” they become the default for most people, while only people who can afford to send their kids to very expensive and supposedly better schools.  The result is a tremendously unequal system that works less and less all the time for everyone, public and private.  Furthermore, even within the public schools, there is tremendous inequality.  Everyone knows which local high schools are the good ones and which are the bad ones.  I imagine this is what healthcare is going to start to look like in the future, and it won’t take too long.  I haven’t really given the full explanation here; I’ll discuss this analogy more later.  For now, I just want to record these thoughts on the issue.

Finally, I started reading Atlas Shrugged this past week.  I have never read anything else by Ayn Rand, however I have heard about this book all my life.  220 pages in, it makes for a pretty sad story so far — perhaps saddest because it looks so much like what is happening today.


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