Social Security ..... Again

I am glad I got my wish from several months ago. I believed it was time for America to have a debate about social security. Unfortunately, the only debate we have is partisan bomb throwing. Frankly, commentators are simply lying.

To set the record straight, the Social Security system currently receives approximately $200 billion per year more than it sends out. This "surplus" is spent by Congress on various programs and bonds are issued to pay this money back, plus interest, years from now. However, the money is still being spent. Between now and 2017 (when more money will begin coming out of the SS system than what goes in), the annual surplus will shrink.

So unless Congress is planning on spending $200 billion (and greater each successive year)less, there are only three other ways to "fix" social security. One way is to print dollar bills. This will greatly reduce the purchasing power of ordinary Americans, not just abroad, but at home as well. The second way is to raise taxes to close this gap. You can parse this many ways, but at the end of the day, taxes must go up. Or, you can reduce benefits to social security beneficiaries. This is obviously not popular. Nobody wants to to be guaranteed to receive a pay cut.

These are the only answers. Private accounts are benefit cuts. It is less money that the government is responsible for (it is also a cut in government spending as Congress will not have this extra money to spend). Raising the retirement age is a benefit cut. Increasing the maximum social security income level is a tax increase.

The scary thing is that Social Security is not even the most pressing looming unfunded liability; Medicare is. And unfortunately, the situation just got much worse with the prescription drug benefit.

Start saving now folks!

Farm Subsidies

Yahoo recently ran an article which contained the following quote from a farmer in Minnesota, "What do they want from us? Do they really want us to succeed out here and support our local communities? Or do they want us to quietly go away and sell out to an investor?"

I found this line to be classic. This woman was complaining that the new Bush budget suggested pretty hefty cuts to classic farm programs. I can compare it to a welfare mother complain about how, after 70 years, her payments were being cut, leading her to not be successful. Does that make sense? Then why are we paying farmers tens of billions of dollars per year?

It is probably helpful to start from the beginning. Farm subsidies began around the Great Depression and the Dust Bowl, when farms were closing up shop. The were being bankrupted by failing banks and natural disasters. They have continued to receive payments because small states (farming states) have just as many senators as large states.

Now, farmers are paid billions to produce more, less, and sometimes no crops at all. All of these factors, of course, affecting the prices of the items they farm. In fact, 10% of all farms out there receive nearly 3/4 of all of the subsidies. This generally means agribusinesses, like Archer Daniels and Corn Products. So next time you wonder about how we can lower taxes, think about all of the subsidies we pay to the largest agricultural corporations.

NY Times

Tom Friedman came out in the Times today declazring that the US should decrease the reward on bin-Laden and Zarqawi to 1 penny and an autographed picture of GW Bush. I think this is a great idea. As he says, the only thing increasing the reward serves to do is to increase the value of bin-Laden in the eyes of the crazies. If $25 million isn't enough, then nothing is.

Additiomally, Friedman met with Russert this weekend. He sounded pretty optimistic regarding Iraq's elections. Even France and Germany are finally siding with the Americans. Is this good? Hopefully this will allow others to risk their lives, rather than just our brave soldiers. Maybe even the chickenshit French and Germans will decide that fighting is in thier best interests.