Friday, November 09, 2007

A Living Constitution?

Recently there has been several letters to The Wall Street Journal concerning the notion of a 'Living Constitution'. The idea is that times change and the founders didn't expect us to be tied down to concepts from the past. The 9th amendment was mentioned as explicit proof that the founders intended the Constitution to be a living document.

On one level I agree with the argument. Certainly the 9th amendment allows for the people to retain rights which weren't explicitly mentioned in the Constitution. In fact, that was the primary purpose of this amendment. However, whenever I hear people talking about a 'living' Constitution, most of the arguments seem to be in favor of expanding government power, not individual freedom. New interpretations are given on specific limitations on government set forth in the various articles. We've seen government expand as the courts give unique interpretations to the commerce clause, the 'general welfare' clause, etc.

The key thing that most people seem to ignore is that the only reason the Constitution exists is to create a government and grant it certain powers. The founders knew that governments have been the greatest impediment to freedom throughout history and they sought to create a document which would strictly limit the power of the government. The last thing they would have wanted to create was some sort of 'living' document where new interpretations could expand the power of government without the explicit will of the people. The only way government power was to be expanded (or contracted, for that matter) was through the amendment process, which they made difficult for a reason.

It's vitally important to remember why the Constitution exists. It's not to grant rights to the people. It's to grant power to the government. As such, it needs to be as tightly focused as possible. For freedom to reign, we must continue, as Jefferson wrote, to bind the government to the chains of the Constitution. What point are chains if they are made out of bungy cord?

Friday, October 19, 2007

I'm a Masonomist

Great column by Arnold Kling on the type of economics taught at George Mason University. If I were looking for a place to get an economics education today, I would attend George Mason.

Thursday, October 11, 2007

Government is Good?

Government is Good is a web project by Douglas J. Amy, a Professor of Politics at Mount Holyoke College. The site describes itself as providing "An Unapologetic Defense of a Vital Institution". However it's more unthinking than unapologetic. A perfect example is provided by the author's writing on "A Day in Your Life".

The article starts with the claim that "Though we usually fail to notice it, government programs and policies improve our daily lives in innumerable ways." and then proceeds to document all the nice things that government does for us. The problem with this tome is that the author presents things as if only the government could provide the services he mentions. For example, he mentions getting weather information from the National Weather Service, completely ignoring the fact that there are numerous private companies in existence which provide weather information, some of it more accurate than the NWS. He talks about how wonderful and cheap our postal service is, as if private companies would somehow not fill the gap should the postal service not exist. Item after item are things which could (or have been in the past) provided by private firms. TJIC provides a better, point by point dissection.

In addition to overlooking the fact that private companies can and do provide the same sort of services, he makes a big omission by failing to address costs. It's easy to say that government is providing all these great services, but a what cost? When free people want to make use of a service, they evaluate the cost and benefit of the service. They look for a good value. Are the services government provides a good value? Nowhere does he talk about this. Not surprising, since he is a professor of politics and not economics.

It's not that I'm anti-government (although David D. Friedman's book The Machinery of Freedom makes a compelling case for why government isn't really necessary) but I believe that government's only legitimate purpose is to protect individual freedom. As George Washington stated so eloquently:

Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.

Supporters of big government who ignore this simple fact ignore history. They think that past governments have done bad things because bad people were in a position of power. The feel that government will work if we put good people in charge. History has not shown this to be the case, however. What has been shown time and time again is that government in only good at one thing, and that's to kill people.

Another take here

Interesting Federal Tax Reform Proposal

I just read about a new tax reform proposal offered up by a couple of House Republicans that sounds interesting. It's called the "Simplified Tax" system and it comes close to being a flat tax. It has two rates, 10 and 25 percent, with a large standard deduction of $25,000 for married filers and $12,500 for singles. It supposedly would eliminate all other deductions and credits. Dividend and capital gains would be set to 15%.

Overall this is a drastic improvement over what we have now. Simplification would reduce costs of compliance. Less need for tax accounts and lawyers, for example. Reducing taxes on dividends and capital gains would also free investment capital to move to better uses, helping the economy as a whole. Of course tax accountants and lawyers would stand to lose, as well as other groups who benefit from tax favoritism which is why I wouldn't expect this bill to pass, at least not without adding back some key deductions. Still, it's nice to see something positive coming out of Republicans for a change.

Wednesday, October 10, 2007

Best quote from the Michigan Republican Presidential debate

In response to Mitt Romney's comment that he would have to consult attorneys before going to war, presidential candidate Ron Paul quipped:
Why don't we just open up the Constitution and read it?

Buying Votes

I see that Hillary Clinton is once again attempting to buy votes. On Wednesday, Clinton proposed tax cuts up to $1,000 per year to encourage millions of working-age families to open 401(k) accounts. If she had stopped right there I wouldn't have much of a problem. I'm always in favor of ways for people to keep more of their own money and to give the government less. However, as always, there is a catch. To 'pay' for the cuts, Clinton advocates higher estate taxes. Simply a case of taking money from some people and giving it to someone else. Perhaps Clinton should just come clean and announce a program to take everyone's money and give it back to people in the portion she feels is fair. It would be more honest.

(h/t Cato@Liberty)

Friday, October 05, 2007

Helpful Lawmakers

In today's Detroit Free Press there is an article with the headline Tax Deal Blasted as mere quick fix - Closer look shows trouble on the way. No kidding. One of the things the article points out is the fact that most of the new revenue from this tax will come from taxing business services. Guess who is a heavy user of business services? Automakers. Now, one reason Michigan is in such trouble is because of the ailing U.S. auto industry. I'm sure increased costs are just what the doctor ordered. Another way to make automakers less competitive, another reason for companies to avoid locating in Michigan. Kudos all around.

Thursday, October 04, 2007

More on the new Michigan Services Tax

It's a well established fact that when you tax something, you get less of it. It's one of the main reasons why people say we should raise gas taxes, or raise the cigarette tax. Raising the tax will supposedly reduce demand and help people stop smoking or driving too much. For some reason, however, people (politicians in particular) seem to forget or ignore this little fact of life. Granted, the amount of reduction is based on the price elasticity of demand, but in general you will see a reduction in the amount of something purchased if you raise its price. Adding a services tax will raise the price of most services and therefore less of it will be purchased

Pro tax editorials and commentary seem to be focusing on services purchased by individuals and they remark that the cost to an average household may only go up a couple hundred dollars. What they ignore is the cost the new services tax imposes on businesses which purchase services. For example, many companies have started outsourcing janitorial services. This allows the business to focus on its core competency, which probably isn't in providing janitorial services, and it allows janitorial service companies to form and benefit from economics of scale. The net effect is that businesses save money on services, and the services company is able to provide employment. Now, when the services tax kicks in, some companies may find ways to cut back on the janitorial services they use. When they do, janitorial service companies will have to cut back on their employment. Who suffers the most, the worker for the janitorial company.

You may argue that the company purchasing the service can just pass their extra costs on to their customers. Quite possible. However, it puts this business at a competitive disadvantage over companies in other states which aren't subject to these additional costs. One of the arguments put forth by our politicians to support this tax is that it will strengthen Michigan and make it more attractive. However, by increasing business costs, they are making Michigan companies less competitive. In addition, companies which may be thinking about relocating to Michigan will have to take these increased costs into account in deciding whether to come here or not. Companies already here have reasons to consider moving elsewhere. Anyway you look at it, the new tax will be harmful to the Michigan economy.

More details here

Wednesday, October 03, 2007

Economic Stupidity

Recently the State of Michigan Legislature passed a new budget which called not only for an increase in the state income tax, but also an expansion of the state's 6% sales tax to include services. All of this to fix a $1.75 billion dollar shortfall in the current budget. This $1.75 billion amounts to about 5% of the annual budget. There were some cuts and other changes which will supposedly save some money, but the bulk of the $1.75 billion will supposedly come from the new taxes.

Now, if you don't know this, Michigan is currently undergoing it's own private recession. It's unemployment rate, at 7.4%, makes it the worst of any state in the Union. The next worse is Alaska at 6.3%. Michigan is also losing residents to other states as our economy continues to falter. So what do our leaders think will solve our economic woes? More taxes. They seem to think that we can tax our way to prosperity. What is more likely to happen is that it will further retard the economy and lengthen the period of any recovery.

The biggest mistake made by the legislature is the new tax on services. Of course, the tax is only going to be applied to 'discretionary' services, where 'discretionary' is simply defined as businesses which didn't have lobbying clout. For example, landscaping is taxed whereas golf isn't. Golf, of course, is a necessity of life so we couldn't tax that. Landscaping, however is obviously something that only wealthy people can afford. Possibly true, but the people who work for landscapers typically aren't

What our elected officials don't seem to grasp is that when you tax something, you get less of it. If landscaping costs more because of the tax, people won't do as much. The people who will feel this the most will be the people who work for landscape companies. This is all very similar to what happened a few years ago when Congress passed a luxury tax on yachts. It was supposed to hit the wealthy. Unfortunately the wealthy decided they didn't need to spend the extra money on a new yacht if they were going to have to pay a big tax. So, fewer yachts were purchased. Of course, this had bad effects on companies that made yachts, ultimately resulting in layoffs of workers. A similar thing is likely to happen in Michigan.

One of the services which is to be taxed is skiing. Michigan may not be a skiers nirvana, but we do get some people to travel here to go skiing. Also, people who live in the state will often times visit resorts here. Now, with an additional services tax, people may think twice. I know that I will go fewer times. In addition, ski instruction will be taxed and again people will likely not purchase as many lessons as before. This will result in less revenue for ski areas, thereby reducing other tax collections. Fewer tourists also results in less money coming to the state. Ski instructors may decide to leave for greener pastures. All things which hurt, not help, the state economy.

Our state already has a reputation as being a poor place to do business, we don't need to make things worse. Supporters of the tax increase say that we will be better off because we can use the money to provide needed state services. Roads and education, for example. Of course, roads have a funding source called the gas tax. It's close to a use tax and is paid by the people who use the roads. If roads need additional funding, it should come from places like that. With education, much of the state budget is spent on teacher retirements, not on improving the classrooms. If we really wanted to improve education, we should simply privatize the entire thing.

5 years ago when Jennifer Granholm was running for Governor, she promised people that in 5 years we would be "blown away" by the Michigan economy. I guess we now know what she meant.

Way to go Ron!

I just read the news that Ron Paul has collected $5,080,000 in campaign contributions in the third quarter of fundraising. He managed to raise $1,200,000 of that in just 11 days. Pretty impressive for a lesser known candidate.

Monday, October 01, 2007

Great Quote

I love this quote from this post at Coyote Blog
A government that adjusts itself to the citizens is a Democracy. A government that demands citizens adjust themselves to the government is fascism.
I think that sums things up nicely.

Sunday, September 30, 2007

Ron Paul for President

It's nice to see that Ron Paul is at least getting some press. There was a nice column in today's Detroit Free Press about his campaign. I've also seen articles or columns talking about his candidacy in The Wall Street Journal, CNN and other places. With the exception of his thoughts on immigration, I agree with almost everything he says. I know he won't win, but I think it's a good thing that his ideas are at least being heard, even if in small quantities.

Earthquake in the Pacific

I just read about a series of earthquakes in a remote area of the Pacific Ocean. Officials said the quake was in an isolated part of the Pacific Ocean where they seldom occur. It seems that climate change is being blamed for just about every natural catastrophe these days, so how long will it be before someone claims that climate change is responsible for this?

Thursday, September 27, 2007

I feel so much safer!

In today's Ann Arbor News there is a front page story about how the people of Ann Arbor were saved from unwrapped bread being sold at the Ann Arbor Farmers Market. A vendor from Chelsea (a city near Ann Arbor) had brought some bread to sell at the market. A State of Michigan food inspector from the Department of Agriculture cited the vendor for keeping his bread in the open air. She ordered him to pour dish soap on the bread so it could not be sold.

This whole incident just seems like a complete waste of time and money. The vendor is selling unwrapped bread. Customers can clearly see that the bread is unwrapped. If a customer chooses to purchase the bread they do so with full knowledge of the circumstances. A similar situation arose a few months ago at a local food speciality store. The store sold unprocessed milk from a local organic dairy. The customers who purchased the product knew exactly what they were getting, yet inspectors told the store that it couldn't sell the product to willing customers.

The State of Michigan is currently undergoing a budget crises. Perhaps they could start saving money by cutting back on these sorts of inspections.

Tuesday, September 25, 2007

Creative Destruction

Sheldon Richman has a great Perspective piece in the current issue of The Freeman - Ideas on Liberty, the monthly publication of The Foundation for Economic Education. In it, Richman has some great quotes from Sudha Shenoy, an economist at the University of Newcastle, Australia. The piece is about how economic nationalism is senseless. For example he quotes Shenoy as saying:
When you read a label which says 'Made in China,' it is not made in China. It is made by the world economy as a whole.... It is impossible to make anything in one country.
However my favorite quote is one which answers the question about how we are going to compete with all these other countries, particularly ones with low wages:
You say, how are we going to compete with all these other countries? The answer is, of course, you compete by producing goods that were not produced before.
Americans have always been great at inventing new things and we should continue to do so. We shouldn't dwell on maintaining mature industries. We can take advantage of the cost savings afforded us by cheaper manufacturing elsewhere to invest in developing and building new things. That's the way to make the entire world richer.

Monday, September 24, 2007

Purchasing Health Care in a Market System

In today's Wall Street Journal there is a letter from a gentleman who was responding to a column by Karl Rove concerning market based health care. The writer's complaint was that purchasing health care isn't the same as purchasing something like a car. Patients, he states, are 'incapable' of making reasoned decisions when purchasing health care, they just want to be cured.

To some extent he is right, however he overlooks several things. First of all, how is it that people know what car to purchase? It might strictly be price, but quality enters the picture as well. How do we evaluate quality? My guess is that most people who purchase a car do so by relying on brand reputation, recommendation from other people or by reading the countless magazines (or web sites) which evaluate cars. The point is, most people don't know how to evaluate a car, they rely on those people who do know how to evaluate a car. The same would be true for health care if the system operated in a more transparent fashion.

There will always be people who will do the research necessary to determine the best places to buy a particular item, and the same will be true for medicine. Health care providers will try to attract these people. In addition, private organizations will form to do evaluations for their membership. Think something like Consumer Reports. Unions could provide this service to their members. The beauty of this is that people don't have to belong to a Union, or subscribe to Consumer Reports to benefit from their services. As care providers work to attract the knowledgeable patient (or those who have been advised), a shakeout of sorts will occur. There will likely be health care 'brands' that form. People will only need to look for the brand, compare prices with other branded providers and decide which they prefer. We already see this sort of thing with laser eye surgery, for example.

Medical providers like to think that they are somehow above the commercialism of other goods and services. What they don't realize (or maybe they do) is that the commercialism (i.e. marketing, branding, etc.) serves a very important function. This sort of commercialism promotes knowledge in a way that no longer requires people to be experts in order to buy a particular product. If lack of expertise is a problem in a market based health care economy, you can bet that entrepreneurs will find ways to fill the gap, earning income for themselves, but also providing a useful service at the same time. Adam Smith's invisible hand at work.

Saturday, September 22, 2007

Hillary for Benevolent Dictator '08

In speaking with the Associated Press about her health care proposals, Hillary Clinton said:
I wish it were possible to just wave a magic wand and say from the White House, 'Here's what I want.' But that's not the way it works.
To me, this quote speaks volumes. Hillary (like most other politicians) believe that they know what's best for "the country". They believe that if they pull the right levers, pass the right laws, they will be able to fix all problems. Of course, this approach has been tried many times in the past, and the result is always tyranny. But a well meaning tyranny.

Thursday, September 20, 2007

From the Big Surprise File

This morning I read in the Wall Street Journal that French President Nicolas Sarkozy has proposed sweeping labor reforms and social security system. Needless to say I wasn't surprised to see that French labor unions are planning strikes to protest these changes.

Wednesday, September 19, 2007

Giving Back to the Community?

Much has been written about the 'social responsibility' of corporations and how they should 'give back' to the community. The company I work for is working on just such a plan. I don't have a problem with a company offering to do things which aid the 'community' but I do have a problem with the phrase 'Giving back to the community'. The phrase makes it sound as if companies improperly 'take' things from the community and therefore need to 'give back'. It perpetuates the notion that corporations are somehow evil. I believe this to be a false perception.

Companies typically sell goods and services to willing customers. Presumably if someone pays money for a good or service it's because they feel that they will be better off with the good or service than if they had the cash. The company benefits by receiving cash and customers benefit by receiving goods and services. Nothing is taken. The 'community' is not harmed. It could be argued that companies that pollute or engage in illegal or unethical activities are harming the community, but the reality is that most successful companies don't operate this way. Instead, by their very existence, they benefit the community by providing employment, purchasing goods and services from others, etc.

The simple truth is that for the vast majority of companies that operate on an ethical basis, there is no need to 'give back' to the community. It doesn't mean that companies can't do some additional good things for the community, but this should simply be thought of as 'Giving to the community' and not 'Giving back to the community'. It's only a one word change, but the change in meaning is enormous.

Tuesday, September 04, 2007

Honesty in a Presidential Candidate

At least John Edwards has the honesty to let people know that the government will own your body once single payer health insurance is inacted.  At a campaign stop in Iowa, Edwards said
'It requires that everybody be covered. It requires that everybody get preventive care [...] If you are going to be in the system, you can't choose not to go to the doctor for 20 years. You have to go in and be checked and make sure that you are OK.'

Somehow I'm not comforted by the notion that the government is going to require me to get preventative care.  I'm sure that's just the tip of the iceberg.  It follows that I will be required to take appropriate medications and to get appropriate treatment as recommended by my government paid physician.  No thanks.

HT to the Cato Institute

Friday, August 24, 2007

Single Payer Insurance?

I'm continually amazed at the number of people who are clamoring for a 'single payer' health system in the United States.   I'm shocked that people would voluntarily want to give up control over their bodies to a bunch of politicians and bureaucrats.   Why on Earth would you want to cede control over your body to a single, monolithic insurance entity which only responds to lobbying and vote buying?  If you are in an HMO, you may have trouble getting certain health care options treated, but at least you have the possibility to switch insurance providers.  If we move to a single payer system, we will effectively have one very large HMO, run by the federal government.   If you are dissatisfied with what's covered by that HMO, what are you going to do?  Are you going to move to a new country?  Hope that in the next election 'your' people get elected and change the rules?  HMOs may be bad, but a single government monopoly HMO would be much worse.

The smarter choice is to go in the opposite direction, with more payers, not fewer.  Most people should pay for simple things out of pocket and use privately purchased insurance for big and unexpected expenses.  You, not your employer or government, would choose the insurance that best fits your family.  Insurance portability is a non-issue because you own your policy.   For those people who truly can't afford health care, there could be assistance programs, ideally through private charity, that could be established to help out.  Think about it, we have people who can't afford housing, but we don't require everyone to move into public housing.  We have people who can't afford food, yet we don't require everyone to go on food stamps.  Similarly, just because a segment of the population can't afford simple health care expenses doesn't mean we should throw everybody into one giant public system.  Certainly private health insurance is a mess right now because of years of government meddling, often at the behest of the insurance industry itself.  Cross-state purchasing restrictions and government mandates only reduce variety and drive up costs unnecessarily.  If you remove these restrictions, increased competition will bring new innovation, better service and lower prices.

Those who think single payer would be a good thing are living in a fools paradise.  Medicare, a smaller scale single-payer system, is facing financial difficulties.  Other countries are recognizing that their systems also have problems.   Really sick people are dying from being on wait lists.  There are quality of care issues as well.  However, in my mind, the biggest problem with single payer is the threat posed to individual freedom.  This aspect of the system is never mentioned by supporters.   The simple fact is that once taxpayers start paying the bills for health care, taxpayers are going to want to make sure their money is being well spent.  As such, there will be increased pressure to pass new nanny state laws to 'promote' good health and to control costs.  You can expect all sorts of new 'sin' taxes.  You can also bet that there will be increased pressure to ban or reduce controversial procedures such as abortion.  After all, a reasonable argument can be made that the government shouldn't be paying to kill unborn children.   The important thing here is that once taxpayers are responsible for paying the bills, taxpayers have a large amount of control over what you do with your body.

Friday, May 11, 2007

Why should the wealthy subsidize middle class retirement benefits?

One of the ongoing arguments over Social Security is the notion that the 'wealthy' should pay more taxes to help make sure that the system has adequate funding. The most common suggestion is that the income limit subject to FICA taxes should be raised or eliminated. Doing so would naturally bring in more revenue and would help maintain solvency. Of course, this suggestion is generally made by people who would also argue that Social Security isn't, or shouldn't be turned into a welfare program. I've got news for these people, Social Security already is a welfare program, and raising the income limit would just make it more of one.

To understand why this is so, you have to think about how Social Security benefits are determined. The benefit is based on what you pay in over your working career, particularly your later years, but the payback is bottom weighted. This means that lower income workers see a larger return on the amount they paid in than do higher income workers. For example, a worker born in the mid '40s whose earnings are in the bottom 20% might see a return of 5% on their FICA 'investment based on current law. The middle 20% of workers born that year might see %2 and for someone in the upper 20% the return might be %1. Clearly lower income workers are being subsidized by higher income workers, or to put it more clearly, money paid in by higher income workers is being transferred to retirees who earned lower incomes during their career.

So we are faced with a situation where higher income workers born in the mid 40's can only expect maybe a 1% return on their FICA. However, the situation is even more grim for younger workers. A higher income work born in 1970 can be expected to earn a return of 0% on their 'investment'. Lower income workers can expect %4 and middle income workers can still expect %2.

Let's now implement the 'solution' of raising the income limit on FICA taxes. This will mean that higher income workers will pay even more into the system, but will not see an increase in benefits. Now, instead of just earning a paltry 0% on their investment, they can expect to receive a negative return on their investment. All of this in an effort to keep paying benefits to middle and lower income retirees. If this doesn't constitute middle class welfare, I don't know what does.

The truth of the matter is that Social Security has always been a welfare program. Raising income subject to FICA tax just makes it more so.

Monday, May 07, 2007

What constitutes a 'safe' drug?

Recently, Dr. David Graham of the FDA's Center for Drug Evaluation and Research spoke at a roundtable on drug safety at the University of Michigan Medical Center in Ann Arbor. Dr. Graham stated that the FDA remains a "culture of denial" more focused on whether drugs are effective than whether those drugs are safe for patients.

This is all well and good, however, what constitutes a 'safe' drug? All drugs have side effects, some worse than others. If the drug is effective at treating a problem, who decides the level of side effects which constitute 'safe'? It's a typical cost/benefit problem. Does a patient incur the cost of the side effects for the benefit of treating a medical problem? If I'm given a drug to cure toenail fungus and the side effect is my arm will fall off, I'll probably choose to live with the toenail fungus. If, however, I'm given a drug which will likely kill my cancer, but might cause me to have a secondary cancer 10-20 years later, I'd be willing to take that drug, even though it is clearly not 'safe'.

The key thing is that evaluation of drug safety cannot be made by a government agency. It can only be made by the patient in consultation with their physician. It is certainly important for drug manufacturers to publish full details on their drugs so that consumers and physicians can make intelligent decisions, but the decision on whether a drug is 'safe' or not ultimately has to belong to the patient.

Dr. Graham likes to say that 60,000 people died from taking Vioxx due to cardiovascular problems. The danger in overly focusing on drug safety is that you will end up killing hundreds of thousands more people because key drugs aren't made available because some government agency determined that the drug wasn't safe enough. The problem is that deaths attributed to Vioxx are visible, the deaths attributable to drugs which aren't made available are not. I would prefer to know that there is a drug which might help my medical condition even if it had side effects, than to not know that a drug existed at all.

Thursday, May 03, 2007

Raising the income limit is no solution so Social Security woes

Recently The Ann Arbor News ran an editorial in in favor of raising the income limit on which Social Security wages are taxed as a way to help the financial stability of Social Security. The editorial didn't indicate whether or not they also supported raising the benefit level paid to higher income workers, but I would have to ask if not, why not?

The current Social Security benefit structure is somewhat progressive, in that workers who pay in less over their career get a bit more of a return on the taxes they paid in than those who paid more. If the income limit is raised, or eliminated, those with higher incomes would be paying substantially more in taxes, and would see little or no increase in their benefit level. This would greatly increase the progressivity of the system and will even likely result in a negative return for those workers who have higher incomes for much of their career. Somehow people have it in their head that high income workers are somehow not paying their fair share. This is patently false. A high income worker gets less of a return on his/her 'investment' than those who earn less. To increase the level of income which is subject to tax doesn't make the system fairer, it does quite the opposite.

Wednesday, May 02, 2007

It's not your money

Discussion of adding 'private' accounts to Social Security invariably result in people complaining about how any privatization, no matter how small, will spell doom for Social Security. There is a fear that benefits will be cut, benefits that people 'earned' by paying into the system.

I'm sorry to burst anyone's bubble, but the money you pay in FICA is a tax plain and simple. Once you pay it, it no longer belongs to you, it is property of the U.S. Government to be spent as Congress sees fit. As was made clear in the Flemming vs. Nestor court case decided by the U.S. Supreme Court, no person who has paid into the Social Security system has any entitlement to receive anything back on their 'investment'.

Social Security is a Congressional 'social' program and Congress can decide who gets benefits and how much. There is no 'guaranteed' benefit at all. Those little statements you receive annually from the Social Security Administration are nothing more than government propaganda designed to continue the illusion that there is some sort of guaranteed benefit.

It's clear that many people believe that they are entitled to some return on the taxes they've paid over their working careers. What people don't realize is that the only way to make that a certainty is if they actually own the investment. The best way to accomplish this would be to fold Social Security into the general fund and means test benefit payments. Workers would then be free to take the money which would have been taxed away and invest it as they see fit. Certainly there are concerns about whether people would save enough, or whether people would invest wisely. This is where private organizations should step in to help. Unions, Churches and other private institutions could easily offer investment advice to their members. AARP, instead of spending money lobbying for the status quo, could provide real value to their members in the form of investment advice.

It's time to stop the myths and lies about Social Security. Your tax money is gone. There are no guaranteed benefits. Let's end the charade and let people make their own decisions about retirement.