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Milton J. Madison - An American Refugee Now Living in China, Where Liberty is Ascending

Federalism, Free Markets and the Liberty To Let One's Mind Wander. I Am Very Worried About the Fate of Liberty in the USA, Where Government is Taking people's Lives ____________________________________________________________________________________________ "Extremism in defense of liberty is no vice. Tolerance in the face of tyranny is no virtue." -Barry Goldwater-

Friday, October 03, 2008

Another Great passage.......

The 19th century British politician Andrew Tytler was supposed to have said, “a democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship.” ‘Always’ is a very strong term; and it presupposes that information has no cautionary effect on the public.
Politicians think that they are doing us favors by handing out money to people. One of the biggest fallacies that exist in the US is that thing called Social Security. There is no Social Security Trust Fund. The only asset that Social Security holds are US Government bonds that exist since Social Security taxes were spent on other things and the government issued debt back to itself. The bulk of the outstanding US Government debt of $10 trillion is held by such agencies. The only way to pay out these benefits that we have been promised is therefore by collecting immense amounts of new taxes.

It just will not happen. There will be no Social Security when I get old enough to collect. The government has promised to give you something that is already yours. It makes absolutely no sense. They take social security taxes and then just give it back to you, as if the are actually doing something. Its insane.

So, as the quote above postulates, voters have voted to give themselves something that they did not earn. At the end of the day, there is no way to create additional value for people other than that which they already have. So government is taking money out of one pocket and putting it into another. Wow, how wonderful.

So I think that governments need to stay out the business of such idiotic things as Social Security. And furthermore, there is a gigantic downside to government promising such huge benefits and its not just the risk that the money just won't be there for people that have paid into the system. The greatest problem is that people have not been compelled to save on their own. With the opiate of Social Security being there when we age, people have gone a binge of spending. This is showing up in such areas as the large trade deficit that WILL fall when Americans go back to saving again.

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