Looking back on the 20th century, we can clearly understand that Marxism was a failure. Yet, still today many find themselves advocating for the same Marxist systems that caused the deaths of millions. Is it leaps of logic that allows for such justifications, or is Marx’s prophetic utopia of the proletariat truly right around the corner?
Nickolas Roberson | United States
“NOTICE: Due to a lapse in federal funding this website is not being updated.” That’s the large, menacingly red statement that one reads as they access portions of the websites for the United States Census Bureau (USCB) or Bureau of Economic Analysis (BEA). Investors, entrepreneurs, and economists all rely on government data to make market decisions. Yet with the government shutdown, this data is unavailable.
By Joshua D. Glawson | United States
What is a Ponzi scheme?
According to Investopedia, “A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns for older investors by acquiring new investors. This is similar to a pyramid scheme in that both are based on using new investors’ funds to pay the earlier backers. For both Ponzi schemes and pyramid schemes, eventually there isn’t enough money to go around, and the schemes unravel.” In order for the Ponzi to continue, the crook requires more money and/or more people investing into it; without these, the scheme will go bust, which means no more income from this steady stream for the company conducting the Ponzi, and of course no money for those that have already invested.
How does Social Security work?
The Social Security and Medicare program is also known as the Old-Age, Survivors and Disability Insurance Program (OASDI). A total of 12.4% tax is taken from every check split between the employer and the employee. This money is put into US Treasury bonds and cycled through to pay out those that are claiming benefits while annual surplus can be used to pay for other government programs and spending. When Social Security was first made for the vast majority of people to opt-in, the ratio of workers per persons receiving benefits, as of 1940, was 159.4 workers per person receiving. By 2013 that ratio was 2.8 to 1. So, in order to maintain the program, an increase in taxes will be necessary, and/or fewer benefits received depending on the number of people they get to pay into the program.
This could have a major impact on immigration, as well. If Americans are having fewer children, in order to keep the OASDI program alive, it is quite probable that by allowing more immigrants into the country, Social Security will have more funding. If not, it is predicted Social Security will exhaust somewhere between 2027 and 2034. Start investing and saving at a higher rate if you are thinking of retiring during or after that time, just to be sure.
Who is benefiting while Social Security exists?
For one, there has always been some reason to believe that the US government is borrowing funds from OASDI. For example, in 2011, Obama’s budget director, Jack Lew, said within the month of August, they may not have had the funds to payout although the Social Security account was to have $2.6 Trillion USD in it. This is not the first time, nor last, of evidence that suggests the government is siphoning from the reserves.
Equally, the program employs many different people and helps to fund other programs and industries. It also directly benefits the elderly who are continuously more apt to vote than any other demographic. In short, Social Security is plundering from one group of people, i.e. those working, and paying another group, i.e. the retired and disabled. As all Socialist and Communist programs, they are destined to fail from their onset, while robbing from one group to give to another.
Surely, people can opt out-out then, right?
As researched by investment author Troy Segal, “Certain religious groups, students, U.S. citizens who decide to forfeit their national citizenship, employees of foreign governments and self-employed workers who make less than $400 annually are all examples of taxpayers who are not responsible for paying Social Security taxes.” So, it is very difficult to get approval to opt-out of Social Security and Medicare. Perhaps you can pay into it, but choose not to receive the funds and benefits.
Social Security is “good,” though, right?
This is key to what makes Social Security and Medicare, along with many other tax-funded programs, so bad. Nearly everyone that works is coerced into paying into the destined-to-fail program with no guarantee of receiving the money back or the expected benefits. A typical Ponzi is voluntarily coordinated, while the Social Security Ponzi is by force, all in the name of “what is for your own good,” and “to help the elderly, retired, and disabled, because without this program they have nothing.” Never mind that an individual should be making the best determination for what is best for themselves; and if someone is forced to do what is “good,” whatever “good” they are doing is only out of coercion and no longer a good deed done. ‘Good’ must be voluntary.
Well, at least Social Security is a ‘right,’ correct?
According to a 1936 US Social Security pamphlet issued by the government, on the first page it stipulates, “The checks will come to you as a right.” Yet, in 1960, the Supreme Court determined in the case of Flemming v Nestor that Social Security benefits were not a right, even though Mr. Nestor had paid into the program for 19 years and was already receiving benefits. He was denied benefits because he was a member of the Communist Party, and according to a law passed in 1954, Social Security benefits were to be denied to persons deported for, among other things, having been a member of the Communist Party. Quite ironic that a Socialist program would be denied for Communists. Of course, today, one’s political affiliation would not be grounds for denying Social Security benefits although the Communist Control Act of 1954 was never officially repealed, but the Nestor case proved that the US government can change their side of the contract at any point with a simple vote or court case affecting everyone else.
Social Security is a sound investment because the US government has top-level economists that say so, right?
Well, let’s take a look at what the Social Security Trustees Report says, specifically:
- “As indicated in the 2009 Trustees Report, the 75-year shortfall projected under intermediate assumptions for the OASDI program could be met with benefit reductions equivalent in value to a 13 percent immediate reduction in all benefits, an increase in revenue equivalent to an immediate increase in the combined (employee and employer) payroll tax rate from 12.4 percent to 14.4 percent, or a combination of these two approaches.”
- “Projections of cost and income for the OASDI program are inherently uncertain. This uncertainty is thought to increase for more extended periods into the future.”
- “With the average worker benefit currently at about $1,000 per month, 3.3 workers would need to contribute about $300 each per month to provide a $1,000 benefit. But after the population age distribution has shifted to have just two workers per beneficiary, each worker would need to contribute $500 to provide the same $1,000 benefit.”
- “Thus, in order to meet increased Social Security costs, substantial change will be needed. The intermediate projections of the 2009 Trustees Report indicate that if we wait to take action until the combined OASDI trust fund becomes exhausted in 2037, benefit reductions of around 25 percent or payroll tax increases of around one-third (a 4 percent increase in addition to the current 12.4 percent rate) will be required. Past legislative changes for Social Security suggest that the next reform is likely to include a combination of benefit reductions and payroll tax increases.”
- “Social Security’s total cost is projected to exceed its total income (including interest) in 2018 for the first time since 1982 and to remain higher throughout the projection period. Social Security’s cost will be financed with a combination of non-interest income, interest income, and net redemptions of trust fund asset reserves from the General Fund of the Treasury until 2034 when the OASDI reserves will be depleted. Thereafter, scheduled tax income is projected to be sufficient to pay about three-quarters of scheduled benefits through the end of the projection period in 2092.”
Are there any solutions to the problem besides adding more people or taxes to Social Security?
Most financial advisers have noted that the average return on investment in the stock market is around 8% annually. The best bet is to not only vote for ways of completely ending Social Security through a transition period allowing those already on it or about to be on it to receive their benefits, but also simply investing in the stock market, although I am not a financial adviser and you may invest at your own risk. The Cato Institute proposed allowing people to roll over the money they already put into it towards a private investment fund such as a traditional IRA that would be tax-free.
Once Social Security is ended, it will strengthen communities because people will be more conscientious of their spending, saving, and investing, while families and friends will see the positive impact of voluntarily helping those in need. The more we put between ourselves and those in need, such as through government programs, other people, etc. the less we are concerned with those in need. In the end, the best solution comprises of personal responsibility and allowing those that wish to voluntarily give and help to do so without imposition.
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By FritzCast | United States
Over the course of the past two weeks (and if we want to get technical, even longer than that), two major subjects have taken the national spotlight, both of which are heavily involved in the marketplace.
One was a Supreme Court Decision in a case of one man and his bakery refusing to bake a cake for a same-sex couple for their wedding; the other was regarding the end of Net Neutrality regulations of the President Obama era.
It was odd, to me, that both subjects take on such heated, passionate debate. Many were upset over the Supreme Court’s narrow 7-2 decision in favor of Masterpiece Cakeshop; some will even argue that the court essentially voted that it is ok to discriminate against the LGBTQIA community, but there are ways I humbly disagree with such a sentiment.
First, and foremost, it should be noted that this case, in particular, went to the Supreme Court in a battle against not the same-sex couple, but the Colorado Civil Rights Commission. Masterpiece Cakeshop owner Jack Phillips felt as though that Commission was inappropriately hostile toward him, his first amendment freedom of expression and his freedom of religious practice; including statements from a representative of the commission who stated that freedom of religion was often used as a basis for discrimination and also directly stated “it is one of the most despicable pieces of rhetoric that people can use” (See this good Op-Ed considering Justice Kennedy on the matter).
Regardless of the statements and the situation as a whole, I always wondered what was wrong with the free market approach to the problem. In this case, let me present my argument:
I do not believe Jack Phillips or Masterpiece Cakeshop discriminated against a same-sex couple solely on the basis of them being a same-sex couple; on the contrary, as I argued in my latest FritzCast Podcast episode “Survey Says,” that the same-sex couple could probably frequent the cake shop on a regular basis buying deserts all the time, like delicious blueberry muffins, for example. Masterpiece Cakeshop only refused the service when the same-sex couple requested a cake for a same-sex marriage ceremony (meaning that if a straight person had wanted to come in and solicit Masterpiece Cakeshop to bake a cake for a same-sex marriage ceremony, they too would have been declined).
That being said, that does not mean I agree with Mr. Phillips reasoning, nor would I be willing to support his business with my dollars. I merely mean to say I would not, at Government Gunpoint more or less, make him bake a cake for a ceremony that he did not wish to participate in. I imagine the same-sex couple, even if they had frequented Mr. Phillips shop and bought delicious desserts every day, probably would wish to no longer support him either (there is, however, a distinct possibility that same-sex couple may just love the blueberry muffins so much, they keep going for them). Mr. Phillips then faces the market force, and if you want a highlight of that, just Google Masterpiece Cakeshop…their overall rating has plummeted from consumer response, some of which are strictly reviews from people who have never even been to the shop and experienced the product. And that is fine.
I would probably feel differently, for example, if Mr. Phillips refused to serve any LGBTQIA people solely on the basis that they are LGBTQIA people, however the same concept applies: A private establishment can make a set of rules it states it will follow, and the market force, in turn, can respond to whether or not they support that establishment. I once heard Austin Petersen, former Libertarian Presidential Candidate and current Missouri Senate Candidate, say in the Libertarian Debate “let the bigots out themselves. Who wants to buy a cake from someone who hates them?”
Now, for Net Neutrality, first we must look at the fact that the subject itself is not a simplistic topic. Net Neutrality, though first initially spoken of and declared in 2005, is heavily an Obama-Era regulation of the internet (our most prized commodity), which generally seemed to argue that there needs to be some amount of Government Regulation to ensure the Internet remains open, and that all data be treated the same so that a service provider (such as Comcast, or Verizon) couldn’t block, filter, or “throttle” internet speeds and services.
On the surface, the intentions seem vital and noble, and arguably they are. We all love the internet, most all of us even have mobile devices that remain linked to the World Wide Web. Is access really that equal though? Geographically speaking, some of us are stuck with a sole provider, one-speed options, while others may have multiple companies they could solicit. Back when I lived in my Apartment circa 2012, I had Verizon FiOS, a nice bundled package with really fast upload/download speed on a fiber optic network.
The neighborhood where I bought my house? Verizon isn’t there. No, there is only one internet provider outside of satellite service from DISH, and that is Comcast. Even the higher data plan that I have purchased doesn’t really scratch at what I used to have with Verizon, and the price definitely is skewed, paying a lot more for less than I had with Verizon.
By free market standards, as there is no legitimate other option, the only thing I can do (and often do), is solicit Verizon and those in my neighborhood to make the endeavor worthwhile for Verizon to speed up their process, set up the hardware in my neighborhood and buy services from them.
We can take it a step further, however. Let us say Verizon was in my neighborhood, and they could directly compete with Comcast. Maybe Verizon packages a “streamers internet deal” for people who stream video games, use Netflix and Hulu, and that was some bundle thrown together for $30/mo. So they broke down some of the internet services…maybe that is all I want? Maybe they have an “all-inclusive” package that encompasses every last bit of internet access. Is it THAT horrible an idea?
I’m not suggesting it is the best idea, but I am suggesting that the free market and competition can often bring desired results, and the consumer in both of these cases yield a lot more power than the masses seem willing to admit. In the 21st century, it isn’t the consumer that buckles to “big business,” it’s big business that has to justify to the consumer why its the best product or best provider.
That is the free market: it’s a lot less of a gamble than you think it is.
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By Clint Sharp | United States
According to new federal data released Friday by the U.S Department of Commerce, the state of California is now the fifth largest economy in the world. With a GDP of $2.747 trillion, they surpassed the United Kingdom’s GDP, which is $2.625 trillion. What is even more outstanding is the massive population difference between the two, with the Golden State only having a population of 40 million to the UK’s 66 million. So how did a single state become fifth among a list of much larger countries? Two words: free market.
Although many see California as a sort of haven for liberal thinkers and progressive ideals (i.e UC Berkley), the economy of the state tells a much different story. California has seen the development of some of the most profitable and innovative companies and products the the world has ever seen. Among these are Apple, Intel, Chevron, Disney, Tesla, and Wells Fargo. These grand corporations and businesses were founded by entrepreneurial individuals and grown by the consumers to become some of the most recognizable brands in the world. They are surely the main constituents of California’s economic success.
The U.K on the other hand, has fallen from the economic graces. The productivity of the U.K, or the output the UK workforce per hour of work, has dropped drastically. This results in wage cuts, income cuts, and severely limiting the growth of the nation. Although the economy has shifted backwards, the foremost priority of the nation is to increase the number of social programs and the amount of public spending using money that the country simply doesn’t have, creating an ever-deepening deficit in their economy.
So what has caused the staunch dichotomy between these two economies? The simple answer is the free market. Now boasting its status as one of the most liberal minded countries in the world, the U.K has shifted itself into an increasingly socialized economy where social programs and “equality” are the primary focus. In fact, during the most recent general elections held in the U.K, the “Conservative” party, led by Theresa May, vowed to return to what they considered to be “true conservative economics”. However, May stated, “We do not believe in untrammeled free markets. We reject the cult of selfish individualism.” (read the full manifesto here). It is this rejection of laissez faire, free market capitalism that has cause them to forfeit their previous spot on the list and be replaced with the state of California.
Although California still rests under the mixed economy umbrella of the United States, it still remains one of the more free economies in the world and its future only looks brighter. Not only is California the top agricultural state in the country, but they are also the starting grounds for the legal cannabis industry in the U.S; a multi-billion dollar industry that has nowhere to go but up in the next few years. This, and its innumerable number of industries, businesses, and individual opportunities is what has made California’s economy soar above that of nations of greater size and will continue to carry them up the GDP chart.
The success of California over Britain proves one thing: the freer the market, the better the economy. The free market is the most tried and true way to economic growth. When the market is free, the people have the power to spend their money the way they want to and look out for themselves, preventing others from having to provide for them. It is this idea of economic freedom and individualism that the greatest innovations are birthed, the best standards of living are created, and the overall happiness of the people are improved. It would be wise for any nation to employ deregulation tactics and privatize everything in order to see mass growth, but until that happens, the parasitic ideal of collectivism will remain present in the minds of the people and governments everywhere.