Social Security is a Ponzi scheme (Part 8)

IOUSA Solutions: Part 1 of 5

Uploaded by on Jan 8, 2009

Professor Williams explains what’s ahead for Social Security

Governor Rick Perry got in trouble for calling Social Security a Ponzi scheme and I totally agree with that. This is a series of articles that look at this issue.

The Case for (Carve-Out) Personal Accounts

by Jagadeesh Gokhale

The article originally appeared on Techcentralstation.com on July 5, 2005

Republican leaders in Congress have been struggling to come up with Social Security legislation that will attract the broadest possible support. That’s apparently proving difficult because of lawmakers’ wide range of preferences on retirement policy, private pensions, tax-favored saving plans, taxes and so on. The latest buzz is about restricting personal accounts to just save Social Security’s surplus payroll taxes — by crediting only that amount each year to personal accounts. After the dust settles, we may get a bill that’s extremely complicated and broad, but with very small accounts.

Two things are worth reiterating: First, postponing reforms that fix the system’s financial shortfall would be a mistake. Second, addressing solvency by hiking taxes under the current set of Social Security institutions would be an even a bigger mistake: Those institutions won’t save any additional resources devoted to Social Security. The value of a properly crafted personal accounts system would be in its ability to genuinely save and invest funds meant for Social Security.

The resistance to adopting personal accounts is not just political. Lawmakers appear to believe that the decision to adopt personal accounts is completely separable from the choice about how to fix the system’s insolvency. Some economists argue that carve-out personal accounts — as championed by President Bush — do not contribute at all toward fixing the system’s insolvency. They claim that carve-out personal accounts generate no new savings. That impression, unfortunately, is the result of an inappropriate comparison of the alternatives. Here’s why:

Jagadeesh Gokhaleis a senior fellow at the Cato Institute

More by Jagadeesh Gokhale

To begin, suppose that mandatory “add-on” personal accounts were introduced to fund that part of scheduled Social Security benefits that are unfunded — that is, benefits promised but not covered by present law payroll taxes. Because workers would own personal accounts, their “add-on” contributions would not appear as additional incentive-reducing taxes and would not reduce labor supply. If borrowing against personal accounts were prohibited, as would be appropriate, they will likely lead to higher national saving and investment. As a result, future output, incomes, and the payroll tax base would all be larger. Therefore, present law payroll taxes would fund a higher level of future Social Security benefits.

This higher level of benefits, funded out of present law payroll taxes under “add-on” accounts, would not be available were we to adopt the “status-quo” alternative of simply hiking payroll taxes to finance presently scheduled but unfunded Social Security benefits. That’s because, today, payroll tax surpluses are turned over to the Treasury and are consumed by the government rather than saved and invested.

Recent studies show that government consumption expenditures increase more than dollar-for-dollar as Social Security surpluses accrue in the government’s coffers. If true, the lower saving and reduced work incentives from higher payroll taxes would shrink national output, incomes, and the payroll tax base, and present law payroll taxes would fund smaller future Social Security benefits.

The difference between the two projections of future benefit levels funded out of present law payroll taxes — higher ones under “add-on” personal accounts versus lower ones under a “status-quo” hike in payroll taxes — constitutes the basic case for “carve-out” personal accounts. How come? If “add-on” accounts to pay for benefits that are promised but unpayable under present law effectively increases saving and investment and preserves work incentives, the (lower) level of payable benefits under a “status quo” payroll tax hike could be financed with a less than 12.4 percent payroll tax rate under the “add-on” policy. That implies room for a “carve out” — that is, for diverting a part of present law payroll taxes into personal accounts.

How large would be the size of a feasible carve out? Would it ultimately completely do away with the need for “add-on” contributions? These are difficult questions to answer. Two considerations suggest, however, that the scope for carve-outs could be large. First, several studies report that payroll taxes add significantly to marginal tax rates — especially for households’ secondary earners — and that labor supply is quite sensitive to higher taxes. Noteworthy here is a recent study by economics Nobel laureate Edward Prescott that attributes the significant decline in European labor supply relative to the United States since the 1970s to higher European social insurance taxes.

Second, loss in annual output because of the savings-reducing impact of the current Social Security system’s pay-as-you-go financing structure is estimated to be of the same size as total current outlays on Social Security. That is, were the existing system based entirely on “add-on” personal accounts, the gain in annual output due to higher saving and capital formation would have been about as large as total current outlays on Social Security.

Introducing personal accounts (“add-on”, or “carve-out”) involves an institutional change in the way Social Security funds are allocated compared to the current system. If conferring asset ownership to individuals rather than to the government can effectively increase national saving and investment without reducing work-incentives, the future benefits funded by present law payroll taxes could be higher or those taxes could be reduced. Hence, separating the issue of fixing Social Security’s insolvency from that of introducing personal accounts is inappropriate. Ownership and management of retirement assets by the government has been shown to be ineffective. It’s time to adopt a new approach.

October 11, 2011 – 10:51 am Categories: Social Security | Post a comment

Federal Revenues Have More Than Tripled Since 1965

Federal Revenues Have More Than Tripled Since 1965

Overall tax revenues have risen despite a recent decline due to the recession. Congress cut income taxes and the death tax in 2001 and capital gains taxes and dividends in 2003, yet revenues continued to surge even after the tax cuts were passed.

INFLATION-ADJUSTED DOLLARS (2010)

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Federal Revenues Have More Than Tripled Since 1965

Source: White House Office of Management and Budget.

Chart 14 of 42

In Depth

  • Policy Papers for Researchers

  • Technical Notes

    The charts in this book are based primarily on data available as of March 2011 from the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO). The charts using OMB data display the historical growth of the federal government to 2010 while the charts using CBO data display both historical and projected growth from as early as 1940 to 2084. Projections based on OMB data are taken from the White House Fiscal Year 2012 budget. The charts provide data on an annual basis except… Read More

  • Authors

    Emily GoffResearch Assistant
    Thomas A. Roe Institute for Economic Policy StudiesKathryn NixPolicy Analyst
    Center for Health Policy StudiesJohn FlemingSenior Data Graphics Edito

October 11, 2011 – 10:36 am Categories: spending out of control, Taxes | Post a comment

Big Bad Wall St Corporations

I found this article interesting from the Wall Street Journal:

  • OCTOBER 10, 2011

The Corporate Exec: Hollywood Demon

Nazis are getting old, moviemakers don’t want to offend foreign audiences, so corporate types top the list of evil stereotypes

By EDWARD JAY EPSTEIN

It is not surprising that pop-culture protesters are now intent on occupying Wall Street. For the past decade, Hollywood has been casting financiers as the demonic villains of society. In the multiplexes, businessmen have replaced even terrorists as villains.

In the Warner Bros. political thriller “Syriana,” for example, the villain is not al Qaeda, an enemy state, the mafia, or even a psychotic serial killer. Rather, it’s the big oil companies who manipulate terrorism, wars and social unrest to drive up oil prices.

Tracks of the root-of-evil corporate villain are everywhere in post-Cold War Hollywood. Consider Paramount’s 2004 remake of the 1962 classic, “The Manchurian Candidate.” In John Frankenheimer’s original film, the villain-behind-the-villain is the Soviet Union, whose nefarious agents, with the help of Chinese Communists, abduct an American soldier in Korea and turn him into a sleeper assassin. In the new version, the venue is transposed from Korea in 1950 to Kuwait in 1991, and the defunct Soviet Union is replaced as the resident evil. The new villain is—you guessed it—the Manchurian Global Corporation, an American company loosely modeled on the Halliburton Corporation.

As the director, Jonathan Demme, explains in his DVD commentary, he avoided making the Iraqi forces of Saddam Hussein the replacement villain, because he did not want to “negatively stereotype” Muslims. Not only was neither Saddam Hussein nor Iraq mentioned in a film about the Iraq-Kuwait war, but the Manchurian corporation’s technicians rewire the brains of abducted U.S. soldiers with false memories of al Qaeda-type jihadists so that they will lay the blame for terrorist acts committed by American businessmen on an innocent Muslim jihadist. So Hollywood lays a new rap on greedy corporations: deluding the public about terrorism.

Why don’t the movies have plausible, real-world villains anymore? One reason is that stereotype-sensitive advocacy groups, representing everyone from hyphenated ethnic minorities and physically handicapped people to Army and CIA veterans, now maintain a liaison in Hollywood to protect their image. The studios themselves often have an “outreach program” in which executives are assigned to review scripts and characters with representatives from these groups, evaluate their complaints, and attempt to avoid potential brouhahas.

Finding evil villains is not as easy as it was in the days when a director could choose among Nazis, communists, the KGB and Mafiosi, though they have served in a pinch. The 2002 apocalyptic thriller, “Sum of All Fears,” was based on the Tom Clancy novel in which Muslim extremists explode a nuclear bomb in Baltimore. But Paramount decided to change the villains to Nazi businessmen residing in South Africa to avoid offending Arab-American and Islamic groups. “The list of non-offensive villains narrows quickly once you get past the tired clichés of Nazis,” a top talent agency executive pointed out to me in an email. “You’d be surprised at how short the list is.” And even Nazis have now aged out of contemporary-movie contention.

Since international markets provide Hollywood with 70% of its action-movie revenue, studios are finding it risky to use villains from potentially valuable markets such as China. When MGM set out to remake John Milius’s 1984 classic about Soviet invaders in America, “Red Dawn,” the new invaders were Chinese. Yet the version MGM plans to release in 2012 has been digitally altered and re-edited to make the primary villains North Koreans. North Korea is one of the few countries in which Hollywood does not distribute its movies.

For sci-fi and horror movies, there are always invaders from alien universes and zombies from another dimension, but even here it doesn’t hurt if they are in the greed business. In the 2009 movie “Avatar,” an avaricious mining corporation is behind the use of avatars to destroy the environment, culture and natives of the planet Pandora. This proved a lucrative decision since the movie earned a large share of its revenue in foreign countries, such as Brazil and China, where there is concern about corporate exploitation of their resources and environment.

Yet for reality-based politico-thrillers, the safest remaining characters are lily-white, impeccably dressed American corporate executives. They are especially useful as evildoers in films set abroad since their demonization does not risk gratuitously offending officials in countries either hosting the filming or supplying tax or production subsidies. “Mission Impossible 2” thus replaced the Russian and Chinese heavies that populated the old TV series with a Wall Street-type financier who controlled a pharmaceutical company that aimed to make a fortune by unleashing a horrific virus on the world. How? It owned the antidote. Here, as in other thrillers, businessmen’s crimes and killings are not just figurative.

Unlike other stereotype-challenged groups, CEOs and financiers have no connection with the studios’ outreach programs. Unprotected and unfeared—even as they finance movies—they’ve become an essential part of Hollywood’s casting. They are the new all-purpose money demons.

Mr. Epstein is author of “The Hollywood Economist” (Melville House, 2010).

October 11, 2011 – 8:51 am Categories: Current Events | Post a comment

Bono has the wrong answer for the poor of the world (Part 4)

Bono has the wrong answer for the poor of the world (Part 4)

Bono praises the election of President Obama!!!

_________________________

This is a series of posts that show that Bono (who I have been listening to since 1983) has the wrong solution to the problem of worldwide hunger.

Max Brantley wrote on the Arkansas Times Blog:

Politico reports here that a group of celebrities, including former Baptist pastor Mike Huckabee, shouted a four-letter obscenity for cameras in a promotion to speak up against famine. Bleeps and labels to cover mouths obscure the actual word.

ONE, the Bono-founded organization, says: 

In the PSA, our celebrity supporters shout out one four letter word that the majority of viewers will find offensive, in order to shine a light on something only a minority seems to be offended by. I know the tone is a bit rough for ONE — that’s no accident. If it feels like a punch in the face, then good — mission accomplished. It’s time for a wakeup call and here’s the alarm. Love it? Great. Hate it? OK. Just don’t ignore it.

 I’m not sure I believe Huck did precisely as described.

Economic freedom and free trade need to be major pieces of the puzzle to solve this problem but President Obama and Bono do not get that.

Here is a link to a great article on Africa and the problem of hunger by Greg Mills. The article appeared on April 23, 2009 in the NY Times and it mentions Bono and below is a portion of an article about Greg Mills and what he had to say to the Cato Institute.

Why Africa Is Poor and What Africans Can Do about It

Published October 15, 2010 Africa , Foreign Aid 2 Comments
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Cato recently held a book launch for South African development expert Greg Mills (you can pre-order at Amazon). This is a very smart book by a man who has spent his professional life in the thick of the problem (bad governments making bad policy choices).

Economic growth does not require a secret formula. While countries from Asia to Latin America have emerged from poverty, Africa has failed to realize its potential in the 50 years since independence. Greg Mills, the former director of the South African Institute of International Affairs and one of South Africa’s most respected commentators, confronts the myths surrounding African development. He shows that African poverty was not caused by poor infrastructure, lack of market access or insufficient financial resources. Instead, the main reason Africans are poor is because their leaders have made bad policy choices. Please join us to hear why a growing number of African opinion makers and ordinary citizens believe that to emerge from poverty, Africa must embrace a far greater degree of political and economic freedom.

I recommend the podcast of the event (download MP3). Excellent comments by Marian L. Tupy, a policy analyst with the Center for Global Liberty and Prosperity.

One of my favorite development economists wrote the lead blurb

“Poverty is now optional” is Greg Mills’ invigorating message’, Paul Collier, Oxford University, Author of The Bottom Billion and The Plundered Planet

African poverty has been optional for fifty years — just keep in mind that the African elites do just fine under the status quo. And so do the NGOs, who effectively get a commission cut of the western aid budgets (as does the consulting industry housed around the DC beltway).

Good job Cato! Now, if we can just inject some sanity into the NGOs and OECD aid agencies. The billowing aid continues to insulate the African leaders from the consequences of their policies (and of course insulates them from their own populations).

On aid, I was pleased to hear Greg Mills respond to questions, with, paraphrasing:

Obama said his Africa policy was to “double the aid”. In fact that is a clear signal that there is no Africa policy. An effective, Africa policy is far more nuanced and complex than “double the aid”. What is the point of aid if you do not have tools for measuring the effectiveness of that aid?

While we are at it, let’s measure the effective of NGOs! I would be perfectly happy to have the organization that I run measured. Also, measure the effectiveness of consultants.

(…) The average age of African leaders is 75. The average age of Africans is 25. The numbers for Europe are about 55, 45. I am stupified by how passive African electorates are. How long would Robert Mugabe have lasted in Serbia?

October 11, 2011 – 8:50 am Categories: Cato Institute, Current Events, Mike Huckabee, President Obama | Post a comment

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Mutemath in Little Rock tonight at Revolution Music Room

I am going to see Mutemath tonight at 8:30pm tonight at the Revolution Music Room in downtown Little Rock.

Here is an old review I dug up on them:

2004 saw the debut of one of the most promising new acts in the Christian music scene. The demise of rock band Earthsuit gave birth to Mute Math, a then-three piece alternative act that brilliantly blended electronic and ambient elements with pop hooks and meaningful lyrics. Their debut project, Reset EP, was a slim but tight collection of seven tracks (with two being instrumental), seizing the attention of thousands of new fans and helping create an underground buzz that would soon prove itself to be a force to be reckoned with.In 2005, the much anticipated and promised full-length follow up never made its Summer release and fans only became hungrier for a debut LP. What most didn’t know was the band’s discontent for the way things were going. Mute Math’s intentions for the Reset EPwere different, with hopes for greater mainstream distribution. Instead, the Christian market moved faster on the EP than the mainstream, and before they knew it, Mute Math was, against their desire, tagged a “Christian band.” Frustrated, the band has finally had the LP pressed, but is only making it available at live shows, with no intentions of releasing it to the Christian market. So, Christian music listeners in large numbers are still wondering, and rightfully so, what is the band’s debut LP like anyway? Keeping in mind that Mute Math, which remains made up of members who share our faith, does not want to be labeled a “Christian band” so to speak, how does their self-titled full length album compare to the EP? Mute Mathopens with a signature drum-driven intro entitled “Collapse,” before breaking into the U2-esque “Typical.” From the album’s start, a more raw sound is noticeable. The production is a little less polished and bears a little more of a “live” feel. In fact, at times, it almost sounds like a different band entirely. More U2 and even Police influences can be drawn throughout the album’s duration, with a distinct absence for the ambience the EP introduced. A harmonic interlude entitled “After We Have Left Our Homes,” precedes the stellar “Chaos,” a song that could be heard live about as long as the band has been around but hadn’t been available in recorded form until now. Melodic pop follows in the form of the ambiguously spiritual “Noticed,” and the anti-worldly anthem “Without It.” Another highlight, the synth-kissed “Stare At The Sun” is sandwiched between two modest instrumental tracks, “Polite” and “Obsolete,” with the latter being the more memorable of the two. The EP contained the incredible techno-fueled title track that remains a live show highlight for the band’s set, and each instrumental offering on Mute Mathpales in comparison. 

“Break The Same” is a synth-heavy rock track that fairs better live, being somewhat tainted by distracting background effects, but is a nice addition to the album’s track list. The album winds down with the soft “You Are Mine,” which is somewhat reminiscent to the EP’s “OK,” and the synth-driven love song “Picture,” before coming to a strong finish with the serenading declaration “Stall Out.” Comparing Reset with Mute Math is tricky. Reset is a leaner offering with each track adding to the diverse and impressive abbreviated package, while the band may seemingly bite off a bit more than they can chew for some of Mute Math. On its own, however, Mute Mathis still an impressive alt rock album with a lot to offer. Too bad the only way any fan can get it right now is at the band’s live show or online at Zambooie. And even if the band intends to leave the Christian market behind, their beliefs shine through their music, if even just subtly, making Mute Math still a relevant and redeeming mainstream listen.

— Review date: 2/21/06, written by John DiBiase

Related posts:

Mutemath in Little Rock tonight at Revolution Music Room

I am going to see Mutemath tonight at 8:30pm tonight at the Revolution Music Room in downtown Little Rock. Here is an old review I dug up on them: 2004 saw the debut of one of the most promising new acts in the Christian music scene. The demise of rock band Earthsuit gave birth to […]

Mutemath a Christian band?

I have loved the music of Mutemath since the first time I heard them. I wanted to pass on a great review of their band. Mute Math: Is It Christian Music? posted by Patton Dodd | 11:50am Thursday August 2, 2007 A Burn or Burn profile of Mute Math almost writes itself. This is a band […]

 

“Music Monday”:Coldplay’s best songs of all time (Part 5)

“Music Monday”:Coldplay’s best songs of all time (Part 5) This is “Music Monday” and I always look at a band with some of their best music. I am currently looking at Coldplay’s best songs. Here are a few followed by another person’s preference: Hunter picked “Don’t Panic,” as his number 16 pick of Coldplay’s best […]

Former Weezer band member Mickey Welsh dead

CHICAGO (AP) — Former Weezer bass player Mikey Welsh, who also found success in his second career as an artist, died in aChicago hotel room, police said Sunday. Chicago police spokeswoman Laura Kubiak said Welsh was supposed to check out of the Raffaello Hotel at 1 p.m. Saturday. When he didn’t, hotel staff went to his room, entered it and […]

 

“Music Monday”:Coldplay’s best songs of all time (Part 4)

Dave Hogan/ Getty Images This is “Music Monday” and I always look at a band with some of their best music. I am currently looking at Coldplay’s best songs. Here are a few followed by another person’s preference: For the 17th best Coldplay song of all-time, Hunter picks “42.” He notes, “You thought you might […]

Documentary on Coldplay (Part 2)

The best band in the world. Below I have linked some articles I have earlier about the search for meaning in life the band seems to involved in. Chris Martin, Jonny Buckland, Guy Berryman, and Will Champion formed Coldplay in 1996 while going to University in London. The young band quickly established themselves in the […]

 

October 11, 2011 – 8:38 am Categories: Current Events | Post a comment

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Mutemath a Christian band?

I have loved the music of Mutemath since the first time I heard them. I wanted to pass on a great review of their band.

Mute Math: Is It Christian Music?

posted by Patton Dodd | 11:50am Thursday August 2, 2007

A Burn or Burn profile of Mute Math almost writes itself. This is a band whose lead singer once fronted Earthsuit, a band with crystal clear Christian credentials. This is also a band who sued its label, Warner, when the label’s Christian division marketed their music. And this is a band who–to their credit–has talked openly about the problem of being a bunch of Christian pop musicians who want to sing for audiences more diverse than your neighborhood Baptist youth group.
mutemath_idol.jpgThis is also a band with a hit song and a MTV video that is becoming a cult favorite. The lyrics to “Typical” could be about a thousand situations, but to my Burn-or-Burn-ing ears, they sound like the story of a Christian band wanting to become a regular band:

Come on, can I dream for one day?
There’s nothing that can’t be done

But how long should it take somebody

Before they can be someone?
Cuz I know there’s got to be another level
Somewhere closer to the other side
And I’m feelin’ like it’s now or never
Can I break the spell of the typical?

For Mute Math, CCM equals “typical” and mainstream music equals “the other side”–and being “someone” means being someone more than a Christian rock star.
Then there’s that Michel Gondry-esque video for “Typical”, where the song is delivered forward but everything happens backward. It’s artfully done–check it out–and it’s a fabulous metaphor for a band who wants to push themselves along creatively and professionally, but also feels pulled back by their Christian industrial pasts. The video is as disorienting as the experience of being Mute Math, or, for that matter, the experience of being a Mute Math fan. Do we listen to the music, or do we watch what’s happening to the band? It’s almost impossible to do both at the same time.
Mute Math has, inevitably, been knocked by sources Christian and non as they’ve finagled their way out of the Christian music industry. But they seem to have pulled it off. Last week, they rocked David Letterman (John Mayer called it the Letterman “appearance of the year”) and their fan base is clearly growing.
As for me, I’m won over by Mute Math’s openness in talking about the struggles of being Christians who want to make music for more than just their fellow Christians. They haven’t shed the faith; just the faith industry. That distinction makes all the difference.
So, I say–burn ‘em: Download the album and add “Typical” to that “Summer ’07″ mix CD.

Related posts:

Mutemath in Little Rock tonight at Revolution Music Room

I am going to see Mutemath tonight at 8:30pm tonight at the Revolution Music Room in downtown Little Rock. Here is an old review I dug up on them: 2004 saw the debut of one of the most promising new acts in the Christian music scene. The demise of rock band Earthsuit gave birth to […]

Mutemath a Christian band?

I have loved the music of Mutemath since the first time I heard them. I wanted to pass on a great review of their band. Mute Math: Is It Christian Music? posted by Patton Dodd | 11:50am Thursday August 2, 2007 A Burn or Burn profile of Mute Math almost writes itself. This is a band […]

 

“Music Monday”:Coldplay’s best songs of all time (Part 5)

“Music Monday”:Coldplay’s best songs of all time (Part 5) This is “Music Monday” and I always look at a band with some of their best music. I am currently looking at Coldplay’s best songs. Here are a few followed by another person’s preference: Hunter picked “Don’t Panic,” as his number 16 pick of Coldplay’s best […]

Former Weezer band member Mickey Welsh dead

CHICAGO (AP) — Former Weezer bass player Mikey Welsh, who also found success in his second career as an artist, died in aChicago hotel room, police said Sunday. Chicago police spokeswoman Laura Kubiak said Welsh was supposed to check out of the Raffaello Hotel at 1 p.m. Saturday. When he didn’t, hotel staff went to his room, entered it and […]

 

“Music Monday”:Coldplay’s best songs of all time (Part 4)

Dave Hogan/ Getty Images This is “Music Monday” and I always look at a band with some of their best music. I am currently looking at Coldplay’s best songs. Here are a few followed by another person’s preference: For the 17th best Coldplay song of all-time, Hunter picks “42.” He notes, “You thought you might […]

Documentary on Coldplay (Part 2)

The best band in the world. Below I have linked some articles I have earlier about the search for meaning in life the band seems to involved in. Chris Martin, Jonny Buckland, Guy Berryman, and Will Champion formed Coldplay in 1996 while going to University in London. The young band quickly established themselves in the […]

October 11, 2011 – 8:36 am Categories: Current Events | Post a comment

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The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 12)

This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but from a liberal.

Rep. Emanuel Clever (D-Mo.) called the newly agreed-upon bipartisan compromise deal to raise the  debt limit “a sugar-coated satan sandwich.”

“This deal is a sugar-coated satan sandwich. If you lift the bun, you will not like what you see,” Clever tweeted on August 1, 2011.

Posey: Last Minute Plan Falls Short of What is Needed to Curb Debt
 

 
 

Washington, Aug 1 – Congressman Bill Posey (R-Rockledge) released the following statement regarding his vote against the debt limit deal:

“Our nation is deep in debt and plummeting deeper in the red every day. The Federal government is spending way beyond its means. The credit ratings agencies have warned that the U.S. will lose its AAA credit rating unless Washington enacts a credible, long-term plan to control spending and reduce the national debt. That is what is required.

“The last minute bill put forward today does not achieve this goal. Regardless of its enactment, the U.S. will still be at serious risk of losing its AAA credit rating. To date, the only plan introduced that passes muster for the credit rating agencies is the Cut, Cap and Balance legislation which passed the House with bipartisan support last week and is purposefully being blocked in the Senate.

“Today’s legislation includes a weakened Balanced Budget Amendment option. In my view, it makes no serious effort in bringing us closer to passing-on such a popular and necessary provision to the States for consideration. A Balanced Budget Amendment is needed to ensure that Washington’s addiction to spending is broken. Washington must begin to live within its means. Somehow that principle had to be tossed-out to get the Senate and Administration on board with this deal.

“This bill grows the debt to $16.7 trillion without implementing a long-term plan to control spending. The real crisis is not the Administration’s impending arbitrary deadline to raise the limit, but the lack of a plan to ever repay this money and reverse this terrible trend of deficit spending and debt accumulation.

“Again, I thank the Speaker for his efforts in filling the leadership void and for putting ideas out on the table.”

 
October 11, 2011 – 8:08 am Categories: spending out of control | Post a comment

Herman Cain tells Wall St marchers where to march

OCCUPY_2.jpg

The Arkansas Times Blog reported today:

Around 100 were on hand for tonight’s Occupy Little Rock planning meeting, the second since the group formed in Little Rock earlier this month. Organizers and attendees struggled with a somewhat complicated voting-by-hand-signals process, but the assembly did get some key points ironed out, including the start time and place for this Saturday’s march, and locations the group plans to picket.

Protestors with Occupy Little Rock will assemble this Saturday morning at 9 a.m. at Riverfest Amphitheater near the River Market. The march will begin at 10 a.m., with the group proceeding to the headquarters of Stephens Inc., the Little Rock branch of Bank of America, the U.S. Federal Building and the Arkansas State Capitol.

I heard Herman Cain’s speech and I noticed that re-directed the Wall St marchers where they should be marching.

Below is a great article on what the difference between the Tea Party and the Wall Street Marchers:

Tea Party, Meet Occupy Wall Street. OWS, Tea Party.

Posted by Jim Harper

Broad political movements are going to have none of the coherence that we demand of ourselves in ideological movements like libertarianism. The Tea Party has some people with views that libertarians and reject and many we embrace. Occupy Wall Street has a lot of people with views that libertarians reject and some that libertarians embrace—freedom from police abuse being one. (Such a favor the NYPD officer who pepper-sprayed female protesters did to OWS by driving attention and sympathy its way.)

That’s all caveat to sharing an image that’s making waves on the Facebook. It makes a hopeful statement, I think, about the Occupy Wall Street movement and its potential or actual kinship with Tea Partyism. There’s something wrong in the country, and this image suggests that there might be consensus on the framing of what’s wrong: the unity of government and corporate power against people’s freedom and prosperity.

There are plenty of reasons to reject the possibility of alliance between Tea Partyism and OWS, but not necessarily good ones. The easiest out is to pour this new wine into old bottles and characterize OWS as dirty hippies using retrograde protest tactics. Many are kinda like that. But that stuff was a couple of decades ago. No, wait—four decades ago. These kids have no direct knowledge or experience of, say, Kent State, and older observers might be too prone to fitting them into a pattern that doesn’t exist for them.

To the extent the substance of their grievance is, or can be turned to, corporations’ use of government power to win unjust power and profits for themselves, that’s a grievance I can sit in a drum circle for.

October 11, 2011 – 8:06 am Categories: Cato Institute, Current Events | Post a comment

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Republicans are no longer a rarity in Arkansas

John Brummett talks about how state lawmakers get paid today. It is problem that the Democrats created 20 years ago and the Republicans will have to correct in 2013.

In the Arkansas Democrat-Gazette is an excellent article . The Republicans are going to take over soon and the Blue Arkansas Blog can rant and rave about it all they want but the good ole days for Democrats in Arkansas are over :

How to scare a governor

Show him a two-party system in Arkansas

By The Arkansas Democrat-Gazette

LITTLE ROCK — SOME OF us are old enough to remember when Arkansas, like the rest of the South, had only one party (Democratic), one crop (cotton), and one issue always lurking behind all the others.

But the times, they’re not only changing, they done changed. (Linguistic note: The insertion of the auxiliary “done” in a verb form means it’s in the tense known as the Southern Emphatic.)

Cotton long since has been challenged by rice, soybeans and even corn in the old Cotton Kingdom.

Even the race issue ain’t what she used to be, having lost much of its power. The days when an Orval Faubus could pull it out of his sleeve whenever he wanted another term in the Governor’s Mansion seem as far behind us as George Wallace’s time in Alabama, or Lester Maddox’s in Georgia.

These days the demagogues have to settle for unsatisfactory substitutes for the race issue like fear of Hispanic immigrants. The race card itself may be played only rarely, as when a white candidate dares run for office in a largely black constituency. People just don’t seem as scared of the Other as they used to be.

Most upsetting of all, Republicans are no longer a rarity. They could show up anywhere these days. One could be living next door. Some even inhabit state constitutional offices (land commissioner, secretary of state, even lieutenant governor), and comprise most of the state’s congressional delegation. The two-party system has even raised its heads in the state legislature, where Republicans seem to occupy more seats every year. The impertinence of it. Don’t these people know their place?

It’s alarming. Mike Beebe, who’s still governor and still a Democrat, certainly sounds alarmed. “It scares me a little bit . . .” he told a Lions Club at Conway the other day—twice. For he also noted that the state’s House of Representatives was dividing more along party lines than the Senate, “and it scares me.” And it’s not even Halloween yet.

If this state keeps getting more Americanized, the two-party system could become as much a fixture of state politics as it is in Congress. And the benefits of competition might be as widely recognized in politics as they are in business.

How alarming. The governor certainly sounded alarmed. And has reason to be. For where will it all end? At this rate, some of these uppity Republicans in the Ledge might even object when a governor chooses a good ol’ boy as director of higher education whether or not he’s legally qualified. They might even go so far as to ask the state’s attorney general for an opinion that reveals how little the governor really cares about the law he’s supposed to follow.

Now that’s scary.

This article was published today at 4:30 a.m.Editorial, Pages 14 on 10/11/2011

Editorial 14

October 11, 2011 – 7:55 am Categories: Current Events, Jason Tolbert | Post a comment

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Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 3 of transcript and video)

Free to Choose by Milton Friedman: Episode “What is wrong with our schools?” (Part 3 of transcript and video)

Here is the video clip and transcript of the film series FREE TO CHOOSE episode “What is wrong with our schools?” Part 3 of 6.

 
Volume 6 – What’s Wrong with our Schools
Transcript:
If it doesn’t, they can simply pick up and go elsewhere. For the students, they want to get their money’s worth. They are customers, and like every customer everywhere, they want to get full value for the money they are paying. And so much of the success here comes from the fact that students understand precisely the cost involved and they are determined to get their money’s worth.
Regina Barreca, Student:. . .they send you sheets saying how much everything costs all the time, so that you know exactly, you can break it down per lecture. And when you see each lectures costing $35, and you think of the other things you could be doing with the $35, you’re making very sure you’re going to that lecture.
Friedman: Many of the buildings and facilities at Dartmouth have been donated by private individuals and foundations. Like other private universities, Dartmouth has combined the selling of monuments with the provision of education and the one activity reinforces the other.
The students, in effect, earn part of their keep by helping to solicit alumni for contributions, knowing full well that they will be solicited in their turn. It is another way in which the real value of education is brought home. This may not be the usual idea of an economic market, but it is nonetheless a marketplace where buyers can choose and sellers must compete for customers.
What happens when the educational market is distorted? Look at state colleges and universities. Their fees are generally very low, paying for only a small part of the cost of schooling. They attract serious students just as interested in their education as the students at Dartmouth or other private schools, but they also attract a great many others. Students who come because fees are low, residential housing is good, food is good, and above all there are lots of their peers, it’s a pleasant interlude for them.
The University of California at Los Angeles __ for those students who are here as a pleasant interlude, going to class is a price they pay to be here, not the product they are buying. Darrell Dearmone,
Lecturer: We frequently wind up with people who cannot compete favorably with even the average person here. There is a magnet here for everything. We have the best weather practically speaking, in the country. Hollywood is here, Beverly Hills is here, the social scene, the television industry in this country is centered here.
Friedman: The justification for using tax money to support institutions like this is supposed to be so that every youngster, regardless of the income or wealth of his parents, can go to college. A few youngsters from poor families are here, but not very many. Most of these students are from middle and upper-income families, yet everybody, whatever his income, pays taxes to help support these institutions. That is a disgraceful situation. It is hardly what public education was all about. These students are being subsidized by people who will never go to college. That means that on the average people who will end up with higher income are being subsidized by people who will end up with lower income. And in addition, the quality of undergraduate education is poor. Undergraduate teaching is not what UCLA is famous for. Besides from its athletic team, UCLA’s reputation is for graduate work and research.
Faculty members have every incentive to do research, that’s the way to advance in their profession. They have much less to gain by good teaching.
Only about half of those who enroll in UCLA complete the undergraduate course. Compare that with the 95% at Dartmouth who finish the work for their degrees. What a waste of student time and what a waste of taxpayers’ money.
What should we do about this disgraceful situation? We must not deny any young man or woman whose desires formal education. Everyone who has the capacity and the desire to have a higher education should be able to do so, provided they are willing to undertake the obligation to pay the cost of their schooling either currently or in later years out of the higher income that their education will make possible. We now have a governmental program of loans which is supposedly directed to this objective but it’s a loan program in name only. The interest rate charged is well below the market rate. Many of these loans are never paid back. We must have a system under which those who are not able or do not go to college are not forced to pay for those who do.
As we have seen the market works in education. When people pay for what they get, they value what they get. The market works in higher education. It can also work at the level of primary and secondary education. Until we change the way we run our public schools, far too many children will end up without being able to read, write, or do arithmetic. That is not what any of us wants.
The system is not working and it is not working because it lacks a vital ingredient. The experts mean well, but a centralized system cannot possibly have that degree of personal concern for each individual child that we have as parents. The centralization produces deadening uniformity, it destroys the experimentation that is the fundamental source of progress. What we need to do is to enable parents, by vouchers or other means, to have more say about the school which their child goes to, a public school or a private school, whichever meets the need of the child best. That will inevitably give them also more say about what their children are taught, and how they are taught. Market competition is the surest way to improve the quality and promote innovation in education as in every other field.
DISCUSSION
Participants: Robert McKenzie, Moderator; Milton Friedman; Albert Shanker, President, American Federation of Teachers; Professor John Coons, Initiative for Family Choice in Education, California; Thomas A. Shannon, Executive Director, National School Boards Association; Gregory Anrig, Commissioner of Dept. of Education in Commonwealth of Massachusetts
McKENZIE: The distinguished guests tonight are all intimately concerned with the world of education; so lets find out how they react to Friedman’s analysis.
SHANKER: I think it’s very foolish to throw out something that you’ve got and that has some shortcomings, but is very, very good in order to try out someone’s pet ideas.
McKENZIE: Well, before we ask Milton to reply to that, lets get other views on the same quotation, “Market competition is the surest way to improve the quality and promote innovation in education.” John Coons.
COONS: Well, of course, there’s enormous evidence that that is exactly right and we see it in the case in California that I observe every day of low income children whose families are making great sacrifices to go to schools that operate at a third of the cost of public education and are turning out kids who are performing and are learning and achieving at very high levels. On the other hand, I wouldn’t want to suggest that unlimited competition is the answer to every problem. And, indeed, the whole definition of competition is very ambiguous. It seems to me that if one is truly interested in liberty, which I think is the ultimate value that Milton Friedman talks about, one has to be very careful how he structures the kinds of subsidies…
October 11, 2011 – 7:31 am Categories: Milton Friedman, Vouchers | Post a comment

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