Showing posts with label Social Security. Show all posts
Showing posts with label Social Security. Show all posts

Thursday, December 19, 2024

The Welfare-State Paradox

"Whether ... a system of social security is a good or a bad policy is essentially a political problem. One may try to justify it by declaring that the wage earners lack the insight and the moral strength to provide spontaneously for their own future. But then it is not easy to silence the voices of those who ask whether it is not paradoxical to entrust the nation’s welfare to the decisions of voters whom the law itself considers incapable of managing their own affairs; whether it is not absurd to make those people supreme in the conduct of government who are manifestly in need of a guardian to prevent them from spending their own income foolishly. Is it reasonable to assign to wards the right to elect their guardians? It is no accident that Germany, the country that inaugurated the social security system, was the cradle of both varieties of modern disparagement of democracy, the Marxian as well as the non-Marxian."

—Ludwig von Mises, Human Action

Friday, September 09, 2011

It Makes One's Head Spin

President Obama’s jobs program calls for cuts in both sides of the payroll tax. That tax finances Social Security and Medicare. Social Security and Medicare are already taking in less money than they need to pay retirees. So they will have to cash in more of the Treasury IOUs left behind when previous surpluses were used to finance general expenditures. But the Treasury is also already running a trillion-dollar-plus deficit. So it will have to borrow more in the capital markets in order to pay back the Social Security and Medicare funds. Unless Obama makes up the lost revenue by changing the tax code. But then money will be withdrawn from the economy in the form of higher taxes so it can be put back into the economy through the payroll-tax cut. Somehow that’s supposed to stimulate the economy.

Got all that? There’ll be a quiz later.

Monday, September 05, 2011

TGIF: Ponzi Unmasked

Social Security: Ponzi scheme or not? I think we have to say it once was, but is no more, because Social Security was unmasked as a coercive transfer scheme long ago and critics remind us of that fact constantly. If everyone knows (or can easily find out) something is a Ponzi scheme, it’s no longer a Ponzi scheme. Anyone who thinks Social Security is insurance just isn’t paying attention.

Caveat adsiduus. Taxpayer beware.

Read the full TGIF: Ponzi Unmasked.