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Thursday, September 15, 2011

What is Social Security?

Those campaigning against Rick Perry―the other Republican Presidential Candidates and the Main Stream Media―are making the case that Rick Perry made a huge blunder by calling Social Security a Ponzi scheme. You had to notice the blizzard of editorials disguised as headline news snarkily scoffing at the stupid hick from Texas who called Social Security a Ponzi Scheme and the incessant drum beat from economists, politicians, and media figures demanding that Rick Perry must admit he was wrong when he called it that.

If Social Security is not a Ponzi scheme, what is it?

Some might claim that Social Security is essentially an insurance program, but they must answer this question: Is Social Security a financially sound business model based on rational principles that allow private sector insurance companies to make a profit? The answer is of course a resounding and scornful: "Hell No!"

Insurance companies generate profits in two ways, through underwriting―receiving more money in premiums than they pay out in claims―and through investment income. The difficulty inherent in underwriting is simply that while it is easy to estimate income derived through premium payments, it is very difficult to predict expenses paid out as claims. Insurance companies are essentially casinos. They make predictions of estimated loss through claims based on actuarial science, and these predictions in general have proven reasonably accurate over the years. I.E. in general the house wins.

In contrast, Social Security―including Medicare―is not based on actuarial science. Its premiums are not based on the actuarial science of risk, but on populist notions of the public welfare and the common good. All the Social Security income generated over the years has already been spent and there is not enough revenue coming in to pay the claims going out. If this program were a private sector company, it would have already had to file bankruptcy. Right now it is propped up solely by borrowing money from an entire world of starry-eyed investors foolishly enchanted by the full faith and credit of this ancient and decaying Republic.

If Social Security is not an insurance program, what is it?

Some might claim that Social Security is essentially a pension fund. Those who do would be hard pressed to answer this question: If Social Security is a pension fund, then where is the fund? A pension fund typically uses member payments to invest in a wide variety of income generating investment vehicles in order to ensure against market downturns. In contrast, Social Security has already spent all the investment capital it ever received, so there is nothing left to invest with. This is a fund without a fund, also known as nothing at all.

If Social Security is not a pension fund, then what is it?

Rick Perry is not the only one claiming that Social Security is a Ponzi scheme, just the most famous. To those who are outraged at this appellation I must ask this question: What is a Ponzi scheme?
A Ponzi scheme is a fraudulent investment operation because it pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going. The system is destined to collapse because the earnings, if any, are less than the payments to investors.
  1. Pays Social Security recipients with the money of subsequent workers and their employers...check
  2. Forces workers and their employers to invest and promises returns that are unusually consistent...check
  3. Requires an ever-increasing flow of money from workers and their employers to keep the scheme going...check
  4. The system is destined to collapse because the earnings, if any, are less than the payments to retirees...check

Thursday, September 8, 2011

Proof the President is no Genius

My first read through opinion on Breaking the war mentality, by Barack Hussein Obama, 1983:

Honestly, I have a already formed a depressingly low opinion of this President's intellectual capacity. He is in my opinion an Affirmative Action President. If you are able to continue reading past my openly dismissive and patronizing bias, then I believe you will discover that you and I share similar grave apprehensions concerning this wholly unqualified executive.

This odd and disjointed article truly is the genuine article. Later works attributed to be solely the creative genius of our President must inevitably fall victim to the infinitely rational disbelief of a discerning reader who cannot reconcile "Dreams of My Father" with the lost rambling and discursive jumble of malapropisms and bizarre thesaurus choices that the young Obama tossed helter-skelter into this litany of unintelligible idiocy. I held my nose and read through the entire disjointed linguistic morass to the bitter end. Frankly, on a one-time read through I got the impression that it was mostly about the student groups on the Columbia University Campus who were at the time politically active in protesting the USA's nuclear weapons program, but the wandering topic kept changing, altering, skipping, and time-traveling until at the end I'm not at all sure what is was that Barack Hussein Obama was trying to tell me.
Most students at Columbia do not have first hand knowledge of war. Military violence has been a vicarious experience, channeled into our minds through television, film, and print.
The opening paragraph is clumsy and inaccurate. I'm no Shakespeare mind you, but vicarious? really? Another odd choice is the word "knowledge." Knowledge is knowledge. If it weren't knowledge it would be myth or fallacy or some other word that meant something other than knowledge. Do you suppose he meant experience? Armchair quarterbacking suggests simplifying it, yet at the same time spending a few moments trying to empathize with the warrior on his battlefield. The same humdrum thought process in unbroken English might sound slightly more interesting had the author spent only a few minutes empathizing with the soldiers he writes about:
How very few students at Columbia University have experienced the soul-draining terror of crouching in a muddy trench while the mindnumbing thunder of artillery explodes everywhere around them. The typical Columbia University student is completely unable to comprehend the horror and loneliness soldiers face when the friends they relied on, trusted to guard their back, and finally grew to love as brothers, fell, one by one by one. At some impossibly indefinable point these soldiers lost the common and mundane threads that tied them together with the rest of humanity. How can some young petted and groomed college puppy with no connection at all to this unique brotherhood forged in the hell-fire of the battlefield have any understanding of what the word "war" even means? The outrageous audacity of some little college boy even expressing his sophomoric opinion threatens to draw the deadly raptor's gaze. It's unwise in the extreme for foolish children to run their mouths, lest they unthinkingly invite the unremitting savagery of killers born in the furious crucible of war.
The first sentence of Obama's essay was the best one. It just gets worse from there. He has no idea himself what he's trying to say. Paragraph after paragraph of pointless rambling about nothing. I could almost accept this sorry excuse of an essay from a lackluster highschool sophomore, but this is supposed to be our President. The LSM is calling this guy the smartest president we've ever had. I disrespectfully and thoroughly disagree!

Monday, September 5, 2011

Fisking Talibah Chikwendu on her Rick Perry Hit Piece

At the top of the Google news page I read a hit piece against Rick Perry by an unabashedly biased Talibah Chikwendu. The title of this editorial: Texas Blacks Advise Looking at Rick Perry

Now you may think me shallow, but the name of the author "Talibah Chikwendu," reminds me of an Islamic terrorist armed with a Lightsaber. So starting from my admittedly less-than-objective perspective, I read a dishonest and biased sampling of simple-minded anecdotes by a linguistically challenged cross-section of Texas. There were quite a few so I decided to bullet point them for ease of reading.
  1. "I just want America to wake up and look at the true picture, He's [Rick Perry] talking out both sides of his neck."
    So the "true picture" according to Karen Hasan, a black Texas postal worker, is that Rick Perry has two holes in the sides of his neck that he can talk out of. There has been non-stop media coverage of Governor Perry since he threw his hat in the ring; you'd think we'd all have seen evidence of this astonishing physiological anomaly by now.
  2. "I haven't seen him try to create any jobs for people or anything, I don't think he's done anything that's worked out well for Texas." The kind of plum jobs Regina Holley wants Governor Perry to create, are the kind that are mostly handed out to unqualified affirmative action bureaucrats who themselves create nothing but reams of paperwork and more hurdles designed to strangle the private sector and redistribute wealth from the hard-working to the hardly-working. So, thank you governor Perry for not "creating" more government jobs.
  3. "Texas has the lowest average hourly income of any state in the United States other than Mississippi. I think people need to understand the type of jobs being created." Charles Dorsey seems certain of his facts. Nevertheless, I looked it up myself. I checked average hourly wage at the Bureau of Labor Statistics. I didn't check every state, just enough to know that Charles Dorsey is talking out of both sides of his neck.
    TX $20.30/hour
    TN $18.43/hour
    NV $19.82/hour
    UT $19.29/hour
    ID $18.56/hour
    MS $16.31.hour
  4. Ronni Bowman, student at the Thurgood Marshall School of Law, complained about the large number of Texas residents without health insurance.
    Hmmm, isn't there someone running for president with a state run health insurance albatross hanging obscenely around their neck? Wait, isn't there some national health insurance program by some incumbent President that everyone who already has health insurance absolutely loathes?
  5. "Unfortunately, the people of Texas cannot even get his calendar for last month or months before. One of the things that really bothers me is that the guy is so secretive about what he's doing that every seven days all of his emails are purged. So people don't really know what he is doing and what he has done. He is one of the biggest phonies I have ever seen." Hey, Charles Dorsey, since your hourly wage averages by state were so completely off-target, I wonder how much belief we should give to you concerning Rick Perry's transparency?
  6. "He has a reputation for being all fluff. Everything is ceremonial." George Powell, fifteen year black Texas resident also said this about Governor Perry's day of prayer and fasting: "Clearly it was just to jumpstart his campaign." Clearly George Powell also has two loud talk holes in his neck, since on the basis of absolutely no evidence at all about somebody he doesn't even know, he proclaims his disbelief that Governor Perry believes in any religion and only held the Prayer day for political reasons.
  7. "That's why I'm saying he's a phony. Up until recently, Rick Perry has not been a very religious person. In fact, if you ask his church, he's only tithed like $98 for the whole year. But now, all of a sudden, he's become this religious person." More unverified claims from the Energizer Bunny of neck talking, Charles Dorsey, who now claims to know the exact amount of money Rick Perry has donated to his church, and this while nonetheless also claiming that Rick Perry is "so secretive that his emails are purged every seven days." Charles Dorsey sure talks like he knows the score. Who is this "in-the-know" Texan? It sure doesn't look like Miss Taliban Macewindu is going to tell us. I'm amazed that Taliban has spent one half of her hit piece quoting this [one] guy Charles Dorsey from Texas, and she hasn't even told us how he knows so very much.

Thursday, September 1, 2011

Obama's Obsessive Focus on Jobs Ignores Grim Reality

The unemployment rate is one tiny little data point in the monstrously complex system we call the Economy. You want the truth? I'll spell it out for you. The problem is not just that too many people are unemployed. It's important for people looking for work to have a job―yes there are too many people without jobs―but even if you gave all fourteen million unemployed people who are actively looking for work a job, you'd still see an economy languishing and sputtering like a truck fueled by sub-prime gasoline that is too watered-down by quantitative easing to drive our economic pistons very forcefully.

The problem is not just that too many people with jobs are living paycheck to paycheck because of inflation. The cost of oil has affected the cost of everything. It directly affects the cost of electricity and natural gas. It has inflated the cost of farming, shipping, building, manufacturing, and the cost of every little thing that we have to purchase in the day-to-day process of living as Americans want to live: with heating for cold times and air-conditioning for hot times, with lights, refrigerators and Mobile Phone service, cable TV service and Internet. It even increases the price we pay for all that insurance. We need home and renter's insurance, health insurance, dental insurance, car insurance, and life insurance, to name a few. Insurance companies are affected by inflationary pressure just like we are, and they raise our rates accordingly.

The problem is mostly lack of confidence; it is lack of trust in a leader who doesn't lead but instead follows a populist chimera of impossible to achieve wealth and prosperity for everyone. This heat-mirage in the distance that our bewildered leader stumbles towards is a complex gestalt. It is illusion crafted from inane and misleading polls which are then interpreted by shallow and dishonest pollsters. It is magnified through the warped lens of mainstream media coverage and agenda driven kid-glove wearing journalists who carefully guide our leader with light-weight gently leading questions. This beguiling will-o'-the-wisp beckoning Obama on into an economic quagmire is speckled with lies and misunderstanding and ignorance. It sparkles with affirmative action policies and wealth redistribution schemes and the occasional ugly gleam of racism on full display by such demagogic figures as Al Sharpton, Jesse Jackson and Jeremiah Wright. It is a cacophony of complaining voices demanding a bigger share of other people's money.
It is a tale, told by an idiot, full of sound and fury, signifying nothing.

So, is it any wonder that investors won't invest? Should there be surprise that factories neglect to retool or wait to upgrade or expand? Are we supposed to be shocked that new start-ups just aren't starting up? Obama's focus on jobs is not enough to solve the economic problem. Lowering taxes is not enough to solve the problem. From the richest corporation like Exxon-Mobile down to the tiniest one-man show, they are all sitting this dance out. They are all waiting to see what Obama and his cronies are going to do next. They aren't going to make any risky moves until they have a clear indication that the economy is on the mend. And so, a monstrous pile of cash just sits on the sidelines. There is no confidence. It's too bad the President of the United States can't be recalled by the People. How's that's for a Constitutional amendment?

Some of us pay taxes. Not many of us; less than one in three. The population of the USA right now is 312,119,976. Only two-hundred-forty million of those are old enough to be considered part of the work force. As of July 2011, only one-hundred-thirty-nine million were actively employed. Of that number only about 53% will actually end up paying taxes. That's seventy-nine million or just 25% of the population. The rest of America just bitches and whines about how unfairly the government treats them, and how they can't live high on the hog when they're living on the government's dime.