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    Means-Testing Entitlements Will Extend Corrupt Government

    02/24/2013
    A Predictable and Stable Legal Order

    A government with moral and legal authority promulgates written rules and universally, impartially and uniformly enforces the rules, which provides a predictable and stable legal order on which to base economic and personal decisions. The law prevails, not the proclamation or arbitrary decision of a ruler, government bureaucrat, the enforcer (e.g., policeman) or judge.

    Means-Testing Entitlements Will Extend Corrupt Government

    Academics and concerned Americans have known for 20 plus years that Social Security, Medicare and Medicaid would bankrupt the federal government.  During these 20 years, government has done virtually nothing to avert the enormous debt of these programs.  Worse, Bush II eagerly extended prescription drugs burdens on America, and former Speaker of the House Pelosi brags on her homepage in scuttling of plans to convert Social Security to personal ownership and solvency.  [Read: Social Security Structurally Violates Freedom]

    Thus, Social Security, Medicare and Medicaid continue to promise benefits, and continue to increase our debt.  In general, most Democrats want no changes in benefits and continue to seek tax increases.  Overtly, Democrats only talk about taxing the rich.  However, as Paul Krugman explained:

    "We won't be able to pay for the kind of society we want without some increases in taxes," he said, "and surely in the end it will require some middle-class taxes as well, maybe a value added tax."

    A value added tax (VAT) is a form of sales tax, which taxes everyone.  With the VAT, Democrats are seeking additional taxes, the same as those currently burdening Europe.  Copying Europe's tax system is a terrible idea.  It will plummet America's decline to the likes of France and eventually Greece.

    Within the last few months, organizations and people with strong conservative credentials, including the Heritage Foundation,  have become advocates for “means-testing.” Government would pay less than the promised benefits to wealthier Americans.   Seeking a compromise, major Democrats are openly discussing means-testing Social Security and Medicare.  As stated in The Hill:

    Sens. Dick Durbin (D-Ill.), Max Baucus (D-Mont.) and Claire McCaskill (D-Mo.) have all expressed a recent openness to expand means testing for the sake of deficit reduction.

    And in the lower chamber, Rep. Emanuel Cleaver (D-Mo.), the chairman of the Congressional Black Caucus, sounded a similar note this month.“I think most rational people, including Democrats, agree we have to make some cuts and deal with Medicare,” Cleaver said Dec. 7 on MSNBC.

    “Let’s have some means-testing, because I don’t think that cutting benefits at this time is going to go over well. We can do means-testing and reduce the payments [to the wealthy].”

    No, no, no.  This is politics as usual. Politicians always find the easiest solution to get past the next election.  There are several reasons means-testing is bad policy – like creating a disincentive to save.  For a thorough discussion, see Andrew Biggs article in AEI.  For sure, the means-testing fix will continue the miss-allocation of capital and prolong  government manipulations long associated with Social Security and Medicare.

    A Principled Solution: Rule of Law

    Only adhering to core progenitors of freedom will break the ongoing corruptions and resulting economic stagnation.  The means-testing scheme violates two tenants of governance for freedom – the rule of law and property right. 

    A paramount duty of government is to provide a predictable and stable legal order on which every American can base economic and personal decisions. 

    Social Security has been misused and manipulated by Presidents and Congresses for their political benefit – always at the expense of the use and enjoyment of the American worker.  Notable examples: 

    President Johnson used the Social Security revenues to hide the cost of the Vietnam War. 

    President Nixon increased the benefits by 20% and directly told the recipient seniors just before the 1972 election. 

    President Obama and Congress lowered the worker's Social Security tax by 2% for two years prior to the 2012 election, and then quietly let it be raised. 

    Theoretically, means-testing will only impact wealthy seniors. Wrong, the history of Social Security proves the opposite.  Here is what  the means-testing scheme declares to the impacted Americans:

    We – GOVERNMENT  - confiscated the fruits of your labor and impliedly promised you would receive benefits.  However, GOVERNMENT implicitly and stealthy lied to you.  GOVERNMENT used your money for all the other functions of government – wars, roads, welfare, windmills and more.  Now, GOVERNMENT is in a predicament.  GOVERNMENT needs more money to pay for past GOVERNMENT  lies and broken promises.  Thus, as an act of citizenship and because you were prudent and responsible, GOVERNMENT has decreed that you do not get paid.

    Even if it is only a one time event, this scheme is a violation of the rule of law, which destroys the moral credibility of government.  Of course, this scenario will not stop with just the rich.  Just as government recently manipulated the payroll tax, there will definitely be attempts at a VAT tax as well as other taxes and nefarious connives. 

    Property Rights:

    The latest schemes – means-testing and a VAT -  not only violate the rule of law, but wrongfully and harmfully are taking property from the our workers.  By coercion, government is taking the fruits of workers labor and intellect. 

    Again, government takes a worker's money and uses the money for wars, roads, welfare, windmills and more.  Nothing has been saved to pay for the government promises.  Just as a stable legal order is essential for freedom and prosperity, a worker's property (money) allows the worker to spend, save and invest in the worker's best interest.  Morally and economically every worker should spend, save and invest the fruits of their labor as they deem in their best interest.  This is how a free society prospers.  Not by GOVERNMENT edicts.  When government takes more than is necessary to protect the worker and all Americans from the force and fraud of others, the worker's power and freedom is reduced.

    A Moral Proposal:  The Freedom IRA

    To end GOVERMENT'S deceit and theft, young Americans must make a grand bargain.  Young Americans must be allowed to put their entire payroll tax into an IRA; 7.65% of their income. 

    In exchange for investing in their IRA, the worker forgoes any and all claims to Social Security, and contracts not to take withdrawals from their IRA until age 72.  We'll call this the Freedom IRA, which is would be in addition to all other forms of retirement accounts – 401k, Roth, private accounts and others.
    Additionally, this contract should be offered to every American.  Any worker that wishes to forgo Social Security – young, middle-aged and older – shall be allowed to opt-out of Social Security.  In order to greatly increase the opt-out rate, there would never be a tax on the money invested in the Freedom IRA if the benefits are withdrawn after age 72.  To be clear, everyone opting-out  would never be taxed – not prior to deposit or when withdrawn.

    Included in the Freedom Contract would be enticements for people currently 50 years and older to voluntarily delay receiving Social Security benefits until they reach age 72.  Again, the incentive would be no taxation on their Social Security benefits.

    The combination of young people opting out and seniors voluntarily delaying benefits would greatly reduce the cost of transition.  Most importantly, the Freedom IRA  will stop political deceit and manipulation.  
     
    To restore freedom and prosperity, America must know and embrace the elements of  the Rule of Law:

    A government with moral and legal authority promulgates written rules and universally, impartially and uniformly enforces the rules, which provides a predictable and stable legal order on which to base economic and personal decisions. The law prevails, not the proclamation or arbitrary decision of a ruler, government bureaucrat, the enforcer (e.g., policeman) or judge.

    The rule of law and property rights are absolutely essential for freedom and prosperity, and are necessary to stop government from deceit, confiscation and misfeasance.  


    8 comments
    D Williams
    02/25/2013

    I don't think Joy ever reads the articles, just spouts her lib view so everyone will see how smart she is. Fact, I believe it said over the last 20 years and there were Dems and Repub Presidents are ALL to blame period! Fact, it also stated that Bush pushed prescriptions on the tax payer. FACT a VAT tax taxes everything at every level increasing products to everyone. Next time read the damn article before spouting you Missing Facts theories.

    Joy Radford
    02/26/2013

    $100.00 each ,$200.00 monthly is deducted for Medicare, PLUS over $100.00 for prescription drug with Humana. Are you under the false impression that
    your 'gument' is giving something to its citizens????????????????
    What about the billions of dollars sent to other countries, thrown away to the Military, and NO accountability for where the money is. But, it seems to really ' 'p___' your people off for our own people to have anything. Why? Why do you
    hate your fellow citizens?

    Joy Radford
    02/26/2013

    Your slogan 'taxation without representation' does sound like pre-revolutionary war
    rhetoric. We have plenty of 'representation' , what are you talking about? We have too much representation. The country is being destroyed by the Congressman who do nothing,,,except for their own interests and pocketbook. To Hell with everybody else.

    Joy Radford
    02/26/2013

    Fine with me if those people you are referring to : Moved out and stayed out...They are putting their money 'out' of this country...Why do you hate Social Security so much? Where does that attitude come from? Are you rich? Perhaps...
    I am not rich,,,senior citizen, white female, 71 yrs. of age. MY husband and I would not be able to pay our bills without our Social Security checks, WHICH the money was taken out of payroll checks for many years. IT is not a give-a-way
    program. Noone receives SS without paying into it for years.
    Also, Medicare, $100.00 a month is deducted from my /husbands SS check
    each every month to cover Medicare. It is NOT a 'freebie'

    Why don't you get so mad and angry at the real waste in 'gov't.???

    D Williams
    02/25/2013

    At the rate we are going especially with BO at the helm there won't be a country left. "taxation without representation" is what we have now and you keep buying the idea of "Tax the Rich" theory force fed from your favorite Gument and more Gument. Soon there won't be any Rich left as they will have moved out of this country OR quit spending all together and since they employ millions of people, they will be out of a job also. Then everyone INCLUDING you won't have to worry about this wonderful Social Security as it will have vanished also and people making less that 50K a year will become the new rich. What a grand scheme = no thanks.

    Joy Radford
    02/25/2013

    I have no idea how anyone would benefit from the above proposals. A good portion of the population do not even live to 72. Do your want to see all these sick, old people having to work til their dying day?
    The rule of law and property rights???what the h_.__ is that about? This sounds like the first Puritans that got off the boat. The rule of law and property rights are very well established. Of course, the R's are trying to undo laws, such as the
    voting rights law. I can't believe that people such as this inhabit the same planet with decent people. Glenn Beck, that says it all. Even Fox fired him!!

    Joy Radford
    02/24/2013

    Social Security, Medicare, Medicaid are not the problem!! As the first decade of the twenty-first century ended, the American empire was on the decline. Wars being fought after years of sacrifice, without clear purpose or victory, had sapped the country's finances and global standing.
    As the Bush administration drew to a close, Congress, scared into action, allocated $700 billion for a financial rescue program to be shaped by the Treasury, with few guidelines and little oversight. The country slipped into the most serious recession in over three-quarters of a century. The 2008 crisis had been a long time in the making.
    The Bush-era borrowing spree was possible because foreigners were willing to lend massive amounts of money to the government and consumers.
    Even before the collapse, between 2000 and 2007 the United States lost three and a half
    million manufacturing jobs.
    So......let us be realistic and honest.....How about stating the 'facts' ,,,instead of old, tired-out talking points from the republicans..

    Ruger50
    02/27/2013

    Joy, please stay on topic & stop with propaganda blaming Bush. Not helping matters. Going forward, figuring out solutions are a whole lot better than the blame game. This isn't about tired-out talking points from the Rupublicans.

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