“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Sunday, October 28, 2007

In 2004, the Democrats Opposed Putting Social Security Funds in Stocks. Since then, SP500 Goes from 1040-1500. Up 44%.

The big thing today, that sends shivers down the spines of Democrats, are sovereign funds. These are mostly US currency and US treasury bonds held by the Arabs, Chinese, Russian and other Asian government central banks. The sovereign funds exceed two trillion dollars. The Communists, wisely, have decided to do something useful with their piles. They are going to invest them, hopefully in the US market.

We had a chance to get in on the action but our Democratic rulers and masters in Washington are counter-intuitive. They unlike, the Chinese, do not trust the market, except of course for their own private equities. The Democrats scared our Republicans poopless over the surplus social security funds. Privately, Hillary Clinton, Al Gore, John Edwards and Democratic money man George Soros, have piles of money, and the piles gets bigger and bigger, because they are invested in US stocks and bonds. They denied that benefit to American pensioners.

That was easy for them to do in America because of one persistent American surplus, economic illiteracy. We have that by the bazillions.

No one can beat us in mass stupidity when it comes to to misunderstanding our own economic and capitalist system, courtesy of the trillions spent on US public education.

Maybe we will catch on when the surpluses in social security run out. Here is what the Republicans should be reminding the American public about what the leftist Democrats said in 2004:

Twelve Reasons Why Privatizing Social Security is a Bad Idea
Greg Anrig, Jr., Bernard Wasow, The Century Foundation, 12/14/2004

Addressing Social Security’s potential long-term financing challenges by taking the dramatic step of diverting its payroll taxes to create new personal accounts will have drastic consequences for federal finances, future retirees, and those who rely on the system the most. Learn more about twelve major reasons why less costly and less painful reforms should be considered instead.

Reason #1: Today's insurance to protect workers and their families against death and disability would be threatened.

Reason #2: Creating private accounts would make Social Security's financing problem worse, not better.

Reason #3: Creating private accounts could dampen economic growth, which would further weaken Social Security's future finances.

Reason #4: Privatization has been a disappointment elsewhere.

Reason #5: The odds are against individuals investing successfully.

Reason #6: What you get will depend on whether you retire when the market is up or down.

Reason #7: Wall Street would reap windfalls from your taxes.

Reason #8: Private accounts would require a new government bureaucracy.

Reason #9: Young people would be worse off.

Reason # 10: Women stand to lose the most.

Reason #11: African Americans and Latin Americans also would become more vulnerable under privatization.

Reason #12: Retirees will not be protected against inflation.


  1. Do us a favor and spread this link to other blogs, so that some of the Republicans that still have a spine can remind the American people about what the Democrats really cost them.

  2. My wife and I got the news from the Social Security Administration as to what we can look forward to receiving, in a few years. If we didn't have a little nest egg, we
    'd die of hunger or cold, or both, in our golden years.

  3. The Avista bill alone would eat up a third of it. brrrr....

  4. Albert Brooks stresses the importance of the

    "Concept of the Nest Egg"
    "Lost in America"
    (shortly after his wife had gambled their entire egg away in Vegas.)

    Ever the ad man, Al tries to convince a Vegas suit of the brilliance of an advertising campaign based on them compassionately returning the lost egg-funds to the deserving young couple.

    Sadly, the Vegas Suit is not buying:
    "We're through talking now."

  5. Thankfully, my wife can't stand Vegas. She would kill me if I started hanging around there. And I don't want to die yet.....

  6. "hate-free world."

    Public Ed, circa 2001, Northern Mexifornia:

    "Sex and Stuff" was a play presented by the San Marin High School Peer Counselors. According to parents who attended, the play depicted all the ills and sadness a high school student could ever experience, from sexual molestation to rape to unwanted pregnancy, HIV infection, anorexia, deaths from drunken driving, fights, and even suicide.

    "Still worse," according to parent Orlean Koehle, "were the vulgar, inappropriate sex scenes, beginning with a very suggestive dance followed by a scene where a bra, undies and nylons are thrown from behind a sheet. Another scene, by virtue of sound effects, was suggestive of sexual intercourse taking place behind the sheet."

  7. Marxism, Inc.
    Fourteen classes addressed gender, homophobia, and AIDS issues, all in support of the gay, lesbian, bisexual, and transgender ideology that these lifestyles are not a choice, but genetic, and that they are healthy and normal. The weeklong agenda included more than 20 hours of pro-homosexual indoctrination and only one 50-minute presentation in opposition to the gay agenda.

    Eleven classes espoused radical leftist ideology and causes. These included support for Communist Cuba, for guerrilla forces in Colombia and for stopping "American imperialism" imposed by greedy capitalist corporations. One class offered support for social change to make America like Cuba "where the government owns everything and gives it out equally to the people so there are no rich and no poor."

    Seventeen classes supported leftist environmental causes, animal rights or vegetarianism. Speakers from Amnesty International and the Sierra Club encouraged students to change their diets and become environmental activists.

    Five classes were devoted to police bashing, including a video depicting police brutality and tales of alleged atrocities committed by the Santa Rosa Police Department. Students were encouraged to support a group called the Purple Berets and the ACLU in setting up a Citizens Review Board to monitor the police.

    One class was conducted by militants representing the Midnight Special Law Firm. Students were given a three-page handout that warned, "Never trust the police," and included tips on how to engage in civil disobedience.

  8. To top it off, few of these diversity-indoctrinated little heads full of mush leave high school with the ability to read or write.

    I've seen it with recent college grads hired by my employer. They are unable to write an intelligible sentence, but they can spout the various "diversity is good" mantras in their sleep.
    Yet another incident that shows just what the agenda is of the "public education department".

    This shouldn't surprise anyone.
    The public education in this country has been moving toward this for many years.
    Public schools are looking more and more like "re-education camps" than institutions meant to "educate" ANY children.

  9. Recently, I read a letter to the editor of a California paper which was written by an elementary-aged child.

    The young writer blasted everyone who didn't like people who were of different ethnic groups, describing them as "racist."
    After all, according to the writer,
    "we are all the same."

    Teaching that we're all the same and yet glorying over the differences?
    Explains one reason why kids are coming out with no understanding of the truth.

  10. "In 2004, the Democrats Opposed Putting Social Security Funds in Stocks. Since then SP500 Goes from 1040-1500. Up 44%."

    In 2004 the Republicans controlled the House, the Senate, and the White House. So the title of this post should be "In 2004, the Republicans Opposed Putting Social Security Funds in Stocks" just as we can say "In 2007, the Democrats Supported Funding the War with No Strings Attached".

  11. This comment has been removed by the author.

  12. It falls to the proponents of change to make their case.
    There will be no ground swell of support to change the status que before they do.

    To do something so radical.

    15.3% of individual's income, up to $100,000. Paid to the General Fund.

    Keep it coming, I'm about to start collecting, instead of paying, only ten years to go, until that first check.
    An expensive piece of cheese.

    $13 Trillion USD in unfunded Social Security & Medicare liabilitiy, that's the number I recall being batted about.

    Not really that big a deal.
    13 Iraq Wars

    For the Seniors.

  13. bloggle, I did say,"The Democrats scared our Republicans poopless over the surplus social security funds.". I should have said the "spineless republicans."
    Thanks for reminding me.

  14. Frankly, a good compromise would be to increase the ceiling on eligible earnings with the entire collected increase going into a US sovereign fund. That fund could be privatized and the extra taxation would be immediately recycled into the US and world economy, which would further economic expansion. Since all economic activity eventually passes through as ordinary income, it will increase government revenues and increase money into the social security fund and build real capital. It would be too much to expect any reduction in spending, so let's accept the next best thing.

  15. On a previous post, and many others we discussed the moral equivalency argument to multiculturalism. Some of our friends on the left love to balance Islamic terrorism with Israeli aggression. I offer them a little fact:

    This year Islam's and Judaism's holiest holidays overlapped for 10 days. Muslims racked up 397 dead bodies in 94 terror attacks across 10 countries.

    The Jews worked on their 159th Nobel Prize.

  16. Then we'd have have Mr Rangel and Mr Waxman sitting upon an investment funds of untold size ...

    To direct those investments into industries "approved" by them.

    I think, that if a portion of SS funds were to be invested in equities, the investments should be directed by the account holder, the individual, from a field of preapproved opportunities.

  17. You could do that DR by privatizing sector funds and setting up an independent agency such as the Federal Reserve. Have nine directors, two selected by the president, two by congress and five directly elected by working citizen Americans who pay into the system.

  18. Lots of vialble options, for weaning a society from it's ponzi scheme.
    None painless for eveyone.

    Much like the "carry".

    As we discussed some weeks ago. Seems to me that this "carry" is often ordinary income, taxed at captital gains rates. Which would also indicate that it's excempt from SS earning, also.

    Though I could well be wrong about that, doubt it, though.

    This is in the WaPo, a Democrats view of Social Security

    Social Security has never been more important to more Americans than it is now. Private pension plans continue to dwindle -- currently covering only about 20 percent of private-sector employees -- and the national rate of savings hovers around zero. We just can't afford to cut Social Security benefits further. There's no way to make up for the loss.

    Social Security benefits are vital to nearly all recipients. About a third of the elderly rely on Social Security for 90 percent or more of their income; two-thirds count on it to supply at least half of their income. The program lifts 13 million elderly beneficiaries above poverty.

    Without Social Security, 55 percent of the disabled -- and a million children -- would live in poverty. The program is particularly important to women and minorities. It provides 90 percent or more of the incomes of almost half of all unmarried women age 65 and older (including those who are widowed, are divorced or never married), and it is the sole source of income for 40 percent of elderly African Americans and Hispanic Americans.
    We can shore up Social Security for the future without cutting benefits -- or raising contribution rates. The program can be brought into close actuarial balance over the long run with just three revenue-enhancing changes that are desirable in any case:

    Gradually increase the maximum amount of earnings covered by Social Security so that the traditional goal -- covering 90 percent of all earnings -- is once again achieved. This change would affect only the 6 percent of earners who make more than the maximum covered amount (now just under $100,000), and implementing the change gradually over the next 20 to 30 years would have only a minimal impact on them.

    Allow Social Security to improve earnings by investing some of its assets -- up to 20 percent, say -- in equities, as just about all other public and private pension plans do.

    Provide a new source of income by retaining a residual estate tax and dedicating it to Social Security. By 2010, the estate tax will affect only individuals with estates worth more than $3.5 million ($7 million for couples). Dedicating the income from the tax to Social Security would considerably improve the progressivity of Social Security financing as well as increasing revenue.

    Presidential candidates should be expected to discuss Social Security financing. But in 2008 they shouldn't be held to a 1983 formula. We're in a different time, with different needs -- and there are much better options available than benefit cuts.

  19. I also would not oppose a flat tax on charitable trusts that would go to a social security fund that is privatized. Why should one have to pay taxes on money subsidizing an elderly parent and the Ford Foundation pay no taxes supporting foreign and left wing political causes?

  20. Done. I put it up over at Kudlow's.

  21. Totally off topic, but we have a really big law suit going on here about funding of the school districts. One of our local dentists finally got fed up, and sued over the last three bond issues. Says the school district isn't educating the students that don't make it to college. Says we need more offerings for the average guy and girl. He tried to start his own school, and got in a big fight with the zoning authorities. He has won in district court, which will be appealed of course. He will fight it out. Says the education system has become a self perpetuating group, that doesn't really serve the needs of 'the guy on the street.' Says what it really does is serve the needs of the people that work for the school district. Interesting case, for sure.

  22. Rufus, it sounds like it is time to go into farming, just when I got out of farming!:(

  23. Or, Bob, we could find us a shade-tree mechanic that can "optimise" older gasoline-engined tractors to run on E85 (usually just a matter of changing out the pistons, or shaving the heads, etc.)

    A farmer could save between $10.00 and $15.00/acre over running diesel.

  24. Oil is "Exploding," all of a sudden. UP $1.70 to $93.55!


  25. The oil price appears more stable if you are buying in a currency other then US dollars. The value of the greenback seems to be falling about as fast as oil is rising.

  26. We don't do conservation. It's "biofuels," here we come.

    It looks to me like it takes about a Four, or Five Percent Oil rise to drag the Dollar up One Percent.

  27. Should have been: Drag the Dollar DOWN 1%.

  28. Sounds like a dumb idea rufus:
    Bio Diesel Deeres
    Gotta be the way!

  29. Education is ON Topic, Albob:
    Economic illiteracy, illiteracy in general, leads to servitude of the Socially Secure Kind.

    My college bud Paul will be heading off to DC if Hill is elected and chooses Richardson.
    The better to give our sovereignty to the Mexicans/Native Injuns.

    Another DC Product by way of UCB and UCSB.

  30. The WaPo leaves out the rise of 401k's ?

  31. I would suggest that the dollar is dropping for reasons other then the price of oil. The falling dollar magnifies the oil price rise for the US.

  32. "This Govt Plan will cost only."

    Fill in amount, then multiply by factor equal to that of W's Drug Bennie.

  33. I think the dollar suffers from a lack of universal Beach Access, Ash!

    March for
    "Bucks on the Beach!"

  34. I don't know, Doug. $1.70 gal. vs $3.40 gal. Take your pick.

  35. It's a straw in the wind until it's commercial, in my book:
    Til then, better to invest in Windmills.
    Electric Deere!

  36. Why would biodiesel made from home grown safflower be $3.40/gal?

  37. Better to tilt at windmills, than invest in them, doug.

    80 gal or 2 barrels per ton
    500,000 tons within 20 miles
    One million barrels per year
    One days worth of Venezuelan imports.
    Four hundred or so such disterilleries, to equal Venezuelan oil exports to the US

  38. What I know about the dollar is my dollar seems to be buying less and less. Therefore I have turned into a real 'power shopper' and clip coupons with the best of them.

  39. Good point, Doug. The answer is, "Biodiesel, in any quantity, from safflower is in the Future. E85 is Now."

  40. Like I say 'Rat,
    when you can buy it on the open market, free of subsidies, I'll buy it.
    Til then, I've seen more miracles that didn't happen than did.

  41. The question, Rat, is "why not 4,000 such distilleries, and replace 10 Venezuelas?"

  42. We need nuclear energy. Write your Congressperson.

  43. What about all those subsidized steaks you've been eating? What about all that "subsidized" oil you've been using?

  44. Why do you enjoy paying taxes to pay farmers to keep 39 Million Acres out of Production?

  45. On October 29, 1946, bob was born. One of the first of the batch of the baby boomers. I'm not celebrating, just trying to figure out how to 'grow old gracefully'.

    And understand the international money market....

  46. A wonderful tutorial on understanding the dollar, and trade. Bob McTeer, former head of the the Dallas Fed, and the only member of the Federal Reserve that I thought had a clue.

  47. Gold hits $800. Wheat nearly $10/bushel. It's a new world.

  48. jeeze, now I read the article more closely, gold was at $850 in 1980.

  49. Europe held 10% of their wheat-land out of production, Argentina hit with a drought, Australia lost 30% of their wheat to drought, and, China (the world's second largest corn producer) has had a Disastrous harvest, down AT LEAST 30%.

    Talk about your "perfect storms!"

  50. Nice link on the dollar rufus. One thing he doesn't talk about is the role of interest rates. I've been told that the amount of speculative cash floating about looking for return dwarfs the amount used for trade these days and the speculation that the Fed will cut rates again didn't help the dollar today.

  51. That's because interest rates are of limited importance as regards currency value, Ash.

    Europe has lower interest rates than us, but they use/import less oil per capita. This helps them maintain a positive "trade balance;" thus, the Euro rises against the currency of the Massively oil-importing country with the negative trade balance.

  52. If China has a real bad year, as they have sometimes in the past, crop prices are going through the roof. They have money now, they can pay.

  53. Bets On A Rate Cut Drag Dollar Lower
    Parmy Olson, 10.29.07, 2:20 PM ET

    LONDON - The dollar fell to new depths Monday as more currency investors started betting that the United States Federal Reserve would cut interest rates again this week.

  54. You'll read all sorts of stuff of limited veracity, or utility, Ash. Interest rate moves will cause little "wiggles," but are unimportant in the longer run.

    Bob, this is the year. Their corn crop is, evidently, a Disaster.

    Demand for shipping is so high that it costs almost as much to ship the corn to China as it costs to buy it.

  55. rufus,

    I asked a buddy of mine, a former currency trader, who's wife heads up the currency desk at a large bank about how much of the money flowing through the capital markets was speculative vs trade driven. I figured that trade would be the vast majority of it but he said "maybe 10 to 15 years ago it was but not now" When then asked what kind of ratio did he think he said about 90% of it was fluid, speculative money, simply searching for return. Of course return is more then just determined by the Central Bank rate but interest rates are an important component of return.

  56. Confederate Yankee up next on Hewitt click listen now

    New Republic Slander

  57. Ah, Ash, fast money moves in and out, admittedly, in great volume; but, it's the long-term money, that moves in, and stays, that sets the ultimate value.

    Take a world that's consuming more oil than it's producing; the speculators can make the price jump around, but you know which way it's going to go in the long run.

  58. This comment has been removed by the author.

  59. Maui Bio Rentals
    Rufus, why do you consider bio from oil crops to be a future deal?
    Been making it here from French Fries for years, COMMERCIALLY!
    17.9 years to pay for Prius over Corrolla! (@ $2.79)

  60. Iow, since they aready make oils from crops, wouldn't it pay a large crop oil producer to run his tractors on it?

  61. Indeed,
    May you lateral off the old maid of Death 13 times!

  62. Doug, we don't have AT THE PRESENT TIME a good biodiesel crop in the U.S. Soybeans is a dog as regards gallons/acre. Palm Oil, Coconut Oil, Jatropha (which we might start growing in Texas) are all very good biodiesel crops. Unfortunately, it's presently impractical to build a big domestic industry from Domestically produced oil. This could change; but not "tomorrow."

    We have the Ethanol capability, Now. Within a few years we could be producing scads of ethanol; and, in the proper engine it performs just as well as diesel.

    That's all. They will both contribute, greatly; it's just that we can get there quicker in the U.S. with Ethanol.

    Oh, that was a Hell of a play. My wife, who knows nothing about football, laughed her head off. Especially at the announcer. :)

  63. You can download it here,
    then you can make it whatever size you want.
    HD would be nice, so you could always see the ball in those tight spots!

  64. Cutler, I knew you would come through for me!

    I don't know if I am just a declining republican rube, or if Michael Savage was really making some sense tonight, when he said our country is in great danger.


  65. Bobal: jeeze, now I read the article more closely, gold was at $850 in 1980.

    That was back when $850 was worth $2000 in 2005 dollars. Even more now. You kids these days don't know how good you have it.

  66. rube-n : not very intelligent or interested in culture [syn: yokel,
    hick, yahoo, hayseed, bumpkin, chawbacon]----


  67. Happy Birthday, Bob. G'nite.

  68. I have no idea how this thought--if a thought it is--came to my head, but I thought I would pass it along--from Edward Abby, great American writer--

    "When you are pokin' the fire--
    You're not looking at the mantel."

    G'night for sure.

  69. Dear Hosts,
    How bout making a post out of this one, like Wretch did, so I can read the comments of our esteemed analysts of the bar?
    Iraqi troops free tribal leaders kidnapped by Mahdi Army commander

  70. Read THIS without getting teary, if you can.

  71. Doug, it looks like we're catching a FEW breaks, doesn't it?

  72. "$13 Trillion USD in unfunded Social Security & Medicare liabilitiy, that's the number I recall being batted about."

    According to Bruce Bartlett: "Interesting, the Social Security actuaries estimated in 2005 that the unfunded obligation for that program in perpetuity was just $11 trillion (present value)...For Medicare, however, according to the 2005 estimate by the actuaries, the unfounded liability (present value in perpetuity) for Part A was $24.1 trillion and another $25.8 trillion for Part B, for a grand total of $68.1 trillion for the entire Medicare program, equivalent to 7.1 percent of GDP forever - about the same as the entire individual income tax."

  73. Be interesting to see what happens when my [previously apathetic] generation realizes that they're going to be whored out for life because prior generations voted themselves endless benefits out of their future earnings. Best case scenario, we suddenly find out that "manditory" spending isn't quite so manditory. Worst case scenario, we go Eskimo and start pushing the elderly on icebergs (I'll do my best to save what's left of the Bar in that case).

  74. I suspect it is hard to get health care when you're drifting through the Artic Circle.

  75. This comment has been removed by the author.

  76. Cutler,
    Remember it was the GD LIBERALS (in both parties) NOT the conservatives that voted part of your generation's future away!

    That is an amazing tale.
    Over and over in the pacific, our bacon was saved by nothing less than the incredible bravery and genius of those GI's.
    I sure have lots of holes in my WWII history.
    Be interesting to find out when we got our torpedoes together, I didn't realize they were THAT Bad!
    Also didn't think about the Japs not yet having radar.
    But still, over and over, it was the bravery.
    Unfortunately, that was written in 2000, so GI Joe is most likely no longer with us.
    I forgot where your uncle was killed?

  77. Pearl Harbor:

    He went down on the West Virginia.