On Scalia’s replacement, Senate R’s should follow Obama’s lead

Yes, you read that headline correctly. In the wake of the extremely untimely death of Justice Antonin Scalia, I believe that Senate Republicans should follow Barack Obama’s lead when it comes to the next Supreme Court nomination. Specifically they should follow the path laid out by then Senator Obama in a 2005 speech explaining his decision to vote against the nomination of John Roberts. Specifically, Obama said that:

…while adherence to legal precedent and rules of statutory or constitutional construction will dispose of 95 percent of the cases that come before a court, so that both a Scalia and a Ginsburg will arrive at the same place most of the time on those 95 percent of the cases — what matters on the Supreme Court is those 5 percent of cases that are truly difficult. In those cases, adherence to precedent and rules of construction and interpretation will only get you through the 25th mile of the marathon. That last mile can only be determined on the basis of one’s deepest values, one’s core concerns, one’s broader perspectives on how the world works, and the depth and breadth of one’s empathy.

Republicans in the Senate should take that standard to heart and both act and vote accordingly whenever Scalia’s replacement is finally nominated.

To be honest, Obama’s standard for evaluating a judicial nominee has almost nothing to recommend it. It has no basis in the Constitution, nor in historical tradition, nor in the oath that Judges take, nor in any common sense understanding of the role the judiciary can legitimately play in a democracy. Although calling it “Obama’s standard” is not entirely fair. In his speech Obama merely made explicit what had been implicit long before Obama came along, at least since 1987 and the defeat of the nomination of Robert Bork to the Court, and that is that the judiciary is a political branch of the government that makes decisions based on not on the law or the constitution, but rather on the personal values and political philosophy of individual judges.

Again, there is almost nothing to recommend Obama’s approach to nominating and confirming judges. Almost. The only thing that does recommend it is that it is already a reality for roughly half of those involved in the process, including half of those already on the court. Given that reality, R’s have virtually no choice but to play by the same rules. To be sure, embracing those rules is destined to alter the nature of our political system beyond recognition, but R’s must face the fact that it has already started to happen without them, and will continue to happen with or without them. The best they can hope to do is embrace this new system in the hopes of influencing the system towards their own values. The idea of objective law being applied objectively by judges seeking to understand the law on its own terms regardless of personal values is, we must admit, a failed experiment.

A baseball team facing an opponent that not only routinely ignores the written rules of the game but has bought off half of the umpires in its effort to do so has no choice but to follow suit. Republican Senators must establish explicit political litmus tests for potential nominees to the court, and must apply those tests ruthlessly, using all possible political machinations to impose their will. They must, as Senator Obama did, vote only for those nominees to the court which reflect their own “deepest values”, their own “core concerns”, their own world philosophy, their own notion of who deserves “empathy”.

The days of allowing well qualified judges of any political stripe to sit on the court are over. We may lament that fact, but we must accept it nonetheless. The Court is now a political branch of the government, and to treat it as something different is to deny reality. The politics of nominees to the court explicitly matter. R’s must do everything they can to understand the politics of future nominees, and reject any nominee that does not reflect their own conservative values and a conservative understanding of the constitution. In other words, they must take Obama at his word and do exactly what he would have them do. The Democrats asked for this kind of process. R’s should give it to them.

Super Bowl Rant and Open Thread

I’m watching the pre-game show and naturally CBS cuts to an interview with the Obamas. Sigh. Is there no occasion in this country that can pass without the precious thoughts of a fucking politician being foisted on us?

Newsflash: The president (any president) is a mere politician, not a monarch anointed by the hand of God. We have no need to hear him pontificate on every event, big or small, that takes place in the nation. The guest list for his party is completely unimportant to me. I don’t give a rat’s ass what kind of food he is serving. I couldn’t care less which team he is rooting for. Doubly so for the First Lady, for goodness sake. And I think anyone who does care is a moron.

It is actually quite baffling. The opinion of the ordinary person towards politicians in general is usually one of overwhelming contempt, and rightly so. Yet when a politician is so “good” at all the vile things that politicians do and are that they rise to the highest political office in the country, suddenly we are supposed to wait with bated breath for his sage thoughts on all things big and small. What does he think of the Super Bowl? What does his March Madness bracket look like? What is he saying about the latest tragedy in a small town in the middle of nowhere?

Someone stop the madness, please.

Rant over…open thread.

Refuse to Go Red for Women

According to the American Heart Association, the prevalence of heart disease among men is greater than among women in every age demographic. In the 60-79 age bracket, the prevalence among men is more than twice what it is among women. More than 1.4 times as many men as women have had a diagnosed heart attack or fatal coronary disease across all age groups.

In light of those statistics, it makes perfect sense, of course, that this Friday is Go Red For Women Day, during which the American Heart Association encourages people to wear red in order to “help support educational programs to increase women’s awareness and critical research to discover scientific knowledge about cardiovascular health.”

According to the AHA:

In 2003, the American Heart Association and the National Heart, Lung and Blood Institute took action against a disease that was claiming the lives of nearly 500,000 American women each year – a disease that women weren’t paying attention to. A disease they truly believed, and many still believe to this day, affects more men than women.

Um…it does affect more men than women. It is rather unbelievable that the AHA is attempting to disabuse women of a plain and simple fact.

This is all of a piece with our increasingly female-centric culture which attempts to instruct us that whatever problems exist, they are inevitably worse for women. (Climate change to hit women hardest!) It is bad enough we have to suffer through sports seasons in which players, coaches and officials are pressured to where pink in order to “raise awareness” for breast cancer several times a year. At least women do in fact suffer from breast cancer more than men do, even if the “awareness” of the disease far outweighs its dangers relative to other women-killers. But this is just taking things to an absurd level.

Whatever this says about the AHA in particular or our screwed up society more generally, I highly encourage everyone to refuse to wear red this Friday, to protest this sexist denial of reality. Don’t believe it and don’t accept it. And keep your eye out….if, on Friday, you see more people without red on than with it, know we are winning the battle!

(BTW, I found out about this Red Day foolishness because my HR department, in that cloying way that only HR departments can achieve, sent around a circular encouraging all employees to wear red on Friday. When I presented them with the statistics on heart disease and wondered if they had ever promoted to employees a “men’s awareness” movement of any kind whatsoever, they replied, again in typical HR manner, “We are always looking for volunteers to promote important causes across a wide range of missions.” I’m taking that as a firm “No”.)

Blizzard Saturday Open Thread 1/23/16

Starting to snow and blow pretty hard here in the northeast.  Not too much on the ground yet, but it is coming down.  Feel free to add any pictures if you want.

 

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This was the back deck at 8 am.

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This is the back deck at 4pm.

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Only 10 inches at 6:15.  Looks like the mid-Atlantic got it worse.  See yello’s photos below.

 

My (yellokt) photos:

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My dog Sushi loves running through the snow.

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And chasing snow plows.

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We had about ten plows come down our road in about a half hour. We must be on a route.

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No telling there is a sidewalk under there. Judging from shoveling half my driveway, we had about 18 inches overnight and it is still falling.

Michi’s pics

From left to right, Snowzilla at 1000, 1600, and my (covered) front porch at 1600

The Morning After: I couldn’t open the screen door to take a picture any more. My street–at least the plow had been through! I was the first person out there. The view of the front of my house and my car before I started digging.

Revisited: Is Social Security Promising Too Much?

A few years ago I wrote a post asking Is Social Security Promising Too Much?, in which I attempted to demonstrate that the average retiree in 2011 could expect to receive a lot more in Social Security benefits than they ever paid in as FICA taxes. This was a retrospective look, so I used annual historical income levels, tax rates and treasury yields going back 53 years in order to calculate how much would have been paid in, how much compounded interest might have been earned, and how much benefit would be paid out based on those contributions. But because current SS tax rates have changed so much since the inception of the program, it recently occurred to me that it might make more sense to look at the question on a prospective rather than a retrospective basis, in order to see if changes to the program have made it any more viable. That is, rather than looking at a current retiree, I decided to look at a newcomer to the labor market, and calculate for various income levels how much the government would collect from them (at current rates) in FICA taxes over a lifetime of working, and compare it to what the SS benefits calculator says they can expect to receive in benefits when they retire, to see if the deal is a net gain or loss to the government.

The calculator actually makes this very easy, since it reports benefits in constant, 2016 dollars, and it assumes a constant income, also in 2016 dollars, from today until retirement day. So we can easily eliminate the complicating effects of inflation and assume a lifetime of constant dollars and no inflation. The last complicating factor is the issue of discounting future cash flows. $100 today is, generally speaking, worth more than $100 at some point in the future, so one would usually use a current interest rate curve to discount all future cash flows back to today in order to get a net present value (NPV) of all the cash flows. While not strictly correct, for the sake of simplicity I used a single discount factor for all cash flows, but I did look at each scenario under different interest rate assumptions.

So, I looked at a single, 22 year old in 2016, just entering the workforce, and assumed a constant income level for his entire working life, until he was 65. Then I ran the numbers on all income levels, in $10k increments, between $10K and $120k (since both taxes and benefits are capped at $118k of income), assuming current tax rates and benefits levels remain unchanged, and assuming 17 years of total benefit payouts (since the expected lifespan of a current 22 year old is roughly 82 years old). Then I discounted all future tax and benefit payments under various interest rate assumptions, to see if the entirety of the transaction from start to finish is a net positive or negative from the government’s perspective.

Below is a table of various income levels, along with both the annual tax receipts and annual benefit payouts associated with those income levels.

Income         Annual Tax @12.4%            Annual payout at age 65
10,000                     1,240                                           8,988
20,000                    2,480                                          12,348
30,000                    3,720                                          15,552
40,000                    4,960                                          18,756
50,000                    6,200                                          21,948
60,000                    7,440                                          25,152
70,000                    8,680                                          26,976
80,000                    9,920                                          28,476
90,000                   11,160                                          29,976
100,000                 12,400                                          31,476
110,000                  13,640                                          32,976
120,000                  14,880                                         34,248

And here is a table of the net present value (NPV) of all tax receipts and benefits paid for each income level at various discount rate assumptions.

Income      1%               2%           3%
10,000    (46,871)    (18,535)     (2,867)
20,000    (37,277)      (3,084)     14,820
30,000    (26,117)     13,309       33,076
40,000    (14,958)     29,702       51,333
50,000      (3,679)      46,167      69,633
60,000       7,480       62,560       87,889
70,000     32,485       87,286     111,185
80,000     60,740      113,968    135,665
90,000     88,995      140,651    160,144
100,000  117,250     167,333    184,623
110,000  145,505     194,016    209,103
120,000  176,048     222,075    234,415

So at first glance this doesn’t look too bad. With interest rates even at just 1%, only those people in the lower half of the income scale would be expected to produce a net lifetime deficit for the government, while those in the upper half would produce a lifetime surplus. And with median income in the US at $52k we can assume a relatively normal distribution both above and below that income level, which means that, again at 1% interest rate levels, the surplus created by the upper income levels should be enough to cover (and even surpass) the deficit created by those at the lower income levels. Yes, this shows that SS is still essentially a wealth transfer program, not only from the young to the old, but also from the well paid to the less well paid. But at least it appears to be financially sound, and a higher interest rate environment only helps matters. With rates at 3% all but the very lowest income levels represent a positive NPV to the government, meaning that most people will be net contributors to, not takers from, the SS pool of benefits.

There is, however, one problem with this analysis. The only reason we discount future cash flows assuming an interest rate is that, generally speaking, a dollar today is worth more than a dollar a year from now because you can take a dollar today and invest it, producing more than a dollar next year. So, for example, at 3% interest rates, I can turn $1 today into $1.03 next year, meaning that $1 next year, discounted at 3%, is worth only (approximately) 97 cents today. An outflow of 97 cents today added to an inflow of $1 next year would produce a NPV of zero.

That being the case the problem with my above analysis is that the government doesn’t invest its revenues. The government simply spends the money that it gets.  From the government’s perspective, a dollar today is worth the same as a dollar one year from now, because the government can’t take $1 today and turn into anything more than $1 next year.  One might argue that the Social Security Trust Fund does invest its excess funds in government securities, but that is an accounting fiction. The “investment” is not made into any wealth generating venture. The only place to do that is in the private market. There is no growth, no new wealth creation, and as a result this “investment” produces zero real growth. So the proper discount factor to use when analyzing SS cash flows from the government’s perspective is, in fact, zero.

That puts the analysis in an entirely new light. At zero interest rates, which again is the real return produced by SS revenues, SS is a huge loser to the government at almost every income level.

Income          0% DF
10,000          (96,572)
20,000          (99,358)
30,000          (99,545)
40,000          (99,732)
50,000          (99,719)
60,000          (99,905)
70,000          (77,096)
80,000          (48,887)
90,000          (20,678)
100,000            7,531
110,000           35,740
120,000           67,748

Only the very top income earners ($100k+) produce a positive NPV for the government, and everyone at every income level up to $60k (ie more than half of the population) produces a negative NPV of nearly $100k per person. Social Security is a horrible deal for the government, and specifically for future taxpayers as they are the ones who will have to cover the ever widening hole that the SS model produces. If I did deals like this for my company, I would be fired in fairly quick order.

That being said, if SS is a bad deal for the government, it must be a good deal for individuals who are on the other side, right? After all, if the government is losing money on the deal, individuals must be making money.  However, unlike the government, individuals could invest their contributions elsewhere if they weren’t forced to pay them into the SS trust fund, so it makes sense from their perspective to discount future cash flows at current interest rates rather than zero. It is true that, a very low interest rate environment, ie one close to zero, it actually is a pretty good deal for medium to low income earners. The NPV of the expected benefits vs expected contributions for incomes of $60k or less is nearly $100k for them. However, as rates rise, the deal quickly sours. With rates of 1%, nearly half of all income earners are under water on their SS deal, and by the time rates hit 2% only the lowest of income earners, those at $20k or less, have a positive NPV. By the time rates top 3%, pretty much everyone is getting less than they could otherwise have gotten.

So it turns out that SS is not only a bad economic deal for the government (ie future taxpayers), it’s even a bad economic deal for most individual recipients in most interest rate environments. So the question lingers: If SS is not viable program from the government’s perspective, and is a bad economic deal from the individual’s perspective, why in the world do we perpetuate this program?

A Must Read: The Righteous Mind by Jonathan Haidt

I just finished reading The Righteous Mind: Why Good People are Divided by Politics and Religion, by Jonathon Haidt, a social psychologist formerly at UVA and now at NYU. I highly recommend it. It touches on a boatload of topics that we have talked about here, including that perennial issue of the source and nature of morality. It is written by a self-proclaimed very liberal academic, but he does a pretty good job of setting that aside and except in a couple of places it happily does not approach things within the confines of liberal premises. In fact much of it is aimed at explaining why premises differ so much from person to person.

I’ve discovered (after already purchasing and reading it) that it is actually out there on the internet for free, here.

To entice you to read it, I’ll leave you with one of the concluding passages, which hopefully shows that my recommendation doesn’t derive simply out of confirmation bias.

If you take home one souvenir from this part of the tour, may I suggest that it be a suspicion of moral monists. Beware of anyone who insists that there is one true morality for all people, times, and places—particularly if that morality is founded upon a single moral foundation. Human societies are complex; their needs and challenges are variable. Our minds contain a toolbox of psychological systems, including the six moral foundations, which can be used to meet those challenges and construct effective moral communities. You don’t need to use all six, and there may be certain organizations or subcultures that can thrive with just one. But anyone who tells you that all societies, in all eras, should be using one particular moral matrix, resting on one particular configuration of moral foundations, is a fundamentalist of one sort or another.

The philosopher Isaiah Berlin wrestled throughout his career with the problem of the world’s moral diversity and what to make of it. He firmly rejected moral relativism:

I am not a relativist; I do not say “I like my coffee with milk and you like it without; I am in favor of kindness and you prefer concentration camps”—each of us with his own values, which cannot be overcome or integrated. This I believe to be false.

He endorsed pluralism instead, and justified it in this way:

I came to the conclusion that there is a plurality of ideals, as there is a plurality of cultures and of temperaments.… There is not an infinity of [values]: the number of human values, of values which I can pursue while maintaining my human semblance, my human character, is finite—let us say 74, or perhaps 122, or 27, but finite, whatever it may be. And the difference this makes is that if a man pursues one of these values, I, who do not, am able to understand why he pursues it or what it would be like, in his circumstances, for me to be induced to pursue it. Hence the possibility of human understanding.”

Happy Thanksgiving

Happy Thanksgiving everyone. Don’t eat too much.  That is all.

It Is Your Birthday, ATiM.

I’ve noted the first 3, so figured I should note the 4th. At this point this scene from The Office seems appropriate:

The long, slow death of a Republic 7/4/15

Three years ago I contributed several pieces to a 4th of July series here at ATiM celebrating American independence. I had hoped they would provide some sense of the way I feel about the birth of America, and perhaps spark those feelings in others, especially about the Founding Fathers who made that birth not only possible at all but an actual reality. Usually when I contemplate the birth of the US on Independence Day, I am genuinely filled with a mixture of gratitude, responsibility, and pride. Gratitude to both the people who risked, and sometimes gave, their lives to make it all happen, and to Providence (to use the lingo of the Founders) for landing me in this, a singular nation with an identity grounded not just in history but in unique philosophical ideals. Responsibility to help protect the legacy that has been given to us. And pride in knowing just what it is that has made this a nation of such promise. This year, however, I feel quite different.

When Ben Franklin left Independence Hall at the end of the Constitutional Convention in 1787, he was asked by a woman outside “Well, Doctor, what have we got? A monarchy or a republic?” Franklin replied “A republic. If you can keep it.” The implication of Franklin’s response was prophetic.

A republic is defined as “a state or nation in which the supreme power rests in all the citizens entitled to vote and is exercised by representatives elected, directly or indirectly, by them and responsible to them.” And it is certainly true that we retain the forms, the institutional manifestations, of the Republic that Franklin and his fellow delegates created. We still have a legislative branch comprised of two elected houses of congress. We still have an executive branch headed by an elected president. We still have a judicial branch headed by a Supreme Court comprised of 9 judges, appointed by the president and approved by congress. We still have the several states, with their own constitutions and forms of government. But we no longer operate under true republican rule, nor are the people any longer committed to protecting against the things that the structure of our government was supposed to protect against. Hence while we retain the forms of a republic, we have forfeited the substance of what it means to be a republic, and have become a nation of the ruled.

In 1887 congress, in its infinite wisdom, decided to create the Interstate Commerce Commission, the first regulatory agency in the nation. Nearly 130 years later we now have countless federal agencies. And I mean literally countless. Any attempt to identify exactly how many federal agencies now exist proves fruitless. Some lists will be qualified as “major” regulatory agencies, so as to be able to provide a definitive list. (14 regulatory agencies on that one.) Others, such as Wikipedia, settle for providing “examples” (28 of them) of “independent” agencies – not to be confused with independent regulatory agencies, it reminds us – a comprehensive list, apparently, being impossible to provide. A totally different Wikipedia entry on federal agencies explains the problem:

Legislative definitions of a federal agency are varied, and even contradictory, and the official United States Government Manual offers no definition. While the Administrative Procedure Act definition of “agency” applies to most executive branch agencies, Congress may define an agency however it chooses in enabling legislation, and subsequent litigation, often involving the Freedom of Information Act and the Government in the Sunshine Act, further cloud attempts to enumerate a list of agencies.

And these agencies, however many there actually are, are not populated with elected representatives. They are comprised of both career bureaucrats and political appointees. They are not us.

It is certainly the case that many of these agencies don’t really exercise any real power. For example the US Women’s Bureau, enabled by Public Law 66-259; 29 U.S.C. 11-16.29, doesn’t seem to do much of anything noteworthy except provide a living for its employees. But many others exercise nearly unchecked power to make laws which are never voted on by congress. The people, us, have virtually no say over these laws. The administrative state rules us. We do not rule it.

Defenders of the administrative state will say that is bunk. They will say that we have authorized these agencies through congress, and that they are merely enforcing laws that congress has written. They will also say that the agencies are not making law, but rather establishing “rules” that define their enforcement policies. That is indeed how the administrative state justifies its existence under a constitution that neither contemplates nor authorizes the existence of a law-making bureaucracy. But reality on the ground shows that it is that justification that is bunk.

An example. The Environmental Protection Agency is right now promulgating “rules” regulating carbon dioxide emissions. It does so ostensibly under the authority of the Clean Air Act which requires regulation of “air pollutants”. The Clean Air Act was written and passed in 1963. For over 40 years no one, not the original authors of the act, not any subsequent congress, not “the people”, not even the EPA itself thought of carbon dioxide as an “air pollutant”. Which is not a surprise at all. Pollution is defined as “the introduction of contaminants into the natural environment that cause adverse change.” But carbon dioxide is a naturally occurring gas the presence of which is vital to life on earth. It is naturally produced by all living beings that have lungs, through the simple act of breathing. It is absorbed by plants during photosynthesis. It is, again, essential to the existence of life on earth.

But due to the rise of “climate change” alarmism, carbon dioxide has now been classified by he EPA as an “air pollutant”. There was no vote. No congressional law. No popular referendum. In fact it wasn’t even the EPA itself that originally designated it as a air pollutant under its authority. It was sued by 11 states which claimed the the Clean Air Act required the EPA to regulate carbon emissions, and despite losing in the lower courts, by a 5-4 vote the Supreme Court ruled in favor of the plaintiffs, forcing the EPA into regulation. Of course, under a new administration that promotes climate alarmism, the EPA has embraced its newfound ability to write legislation regulating carbon. But it is perfectly clear that it is, in fact, writing legislation, not simply enforcing existing law. President Obama essentially ended any pretense to the contrary when he demanded that congress either pass carbon related climate change legislation or face the threat of him doing it unilaterally via the EPA. Which he has now done. One doesn’t ask for new legislation to enforce if one thinks that it already exists and needs to be enforced. The notion that Obama is just enforcing existing law is an obvious ruse.

That is just one particularly infamous example, but this is how the administrative state routinely operates, on big issues and small, constantly writing and re-writing the “rules” to impose whatever desires it currently might have, regardless of whether or not the law itself has changed, and often precisely because the law hasn’t been changed. There are so many regulatory actions that it is impossible for the average citizen to have any idea what his government is doing. The Federal Register publishes between 2,500 and 4,500 new “rules” every single year. The effects of these regulations, laws really, permeates every area of American life. There is not an industry in existence that is left untouched by the federal bureaucracy. Even the most basic and simple of our daily actions are governed by regulatory “rules”.

In Federalist 62 James Madison wrote:

It will be of little avail to the people that the laws are made by men of their own choice if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood.

The federal bureaucracy fails on both fronts. Not only is it making laws so voluminous and incoherent that they cannot be read or understood (or even known, to be honest) by the people, but they aren’t even made by men of their own choice. It would be easy to blame this on the institutions of government itself, and certainly there is blame to be laid there. Presidents have routinely expanded executive power through the creative use of the federal bureaucracy. Congress could stop it if wanted to by simply passing laws eliminating the agencies, but instead it does the opposite, not only creating more agencies but writing deliberately vague legislation that invites regulatory agencies to fill in the blanks with its own will. And the Supreme Court has long since ceased apply the law or constitution, choosing instead to rule based on political preferences.

But the real fault lies in we the people. It was the people that elected Franklin Roosevelt 4 times despite his expansive and unconstitutional use and abuse of the federal regulatory bureaucracy to do things that congress would not do. It is the people that elected Barack Obama twice, despite his open contempt for congress’ role as the voice of the people, proclaiming “We’re not just going to be waiting for legislation in order to make sure that we’re providing Americans the kind of help they need. I’ve got a pen and I’ve got a phone.” It is the people that elected a congress that thinks that knowing what is in legislation is what comes after having passed it. Franklin’s cynicism about the people was well founded. He gave us a Republic and we have frittered it away.

On this Fourth of July, our Independence Day, it might be useful to read through the Declaration of Independence, and remember what its purpose was. It was not merely a declaration of America’s independence from Britain, but it was also a justification for the Declaration itself. While the first few lines are the most remembered from grade school civics lessons, the body of the document is comprised largely of a list of transgressions that King George III was said to have rained down upon the colonists, compelling them to revolt. It is worth noting one of them in particular.

He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.

A better description of the modern regulatory state has never been written. It is high time we took Jefferson’s lead and declare our independence from it.

Social Security: Did you know….? 5/17/15

The first Payroll Tax (employee plus employer contributions combined) for old age, survivors, and disability insurance (Social Security) was assessed in 1937 at a rate of 2%. Today’s OASDI tax is more than 600% higher at 12.4%.

In 1966 an additional .7% tax was added to the Payroll Tax for hospital insurance (Medicare). By 2015 that added-on rate had grown by more than 400%, to 2.9%, bringing the full Payroll Tax up to 15.3%, or more than 750% of the original rate.

The maximum income on which the Payroll Tax applied in 1937 was $3,000. In inflation adjusted dollars that would be the equivalent of $49,000 in 2015. The actual maximum income in 2015 is more than twice as high at $118,500.

Doing the math, the maximum annual Payroll Tax amount that anyone in the country would have made in 1937 was $60, or $978 in 2015 dollars. The maximum annual Payroll Tax that anyone in the country actually makes in 2015 is over $18,000.

The expected age at death of a 20 year old in 1937 was less than 70, meaning that the expected SS cost of 20 year old beginning work in 1937 was less than 5 years of payouts. By the time that person actually turned 65 in 2002, his expected age of death had risen to over 80, meaning that the expected number of years of SS payouts had more than tripled to over 15 years.

In 1940 there were nearly 160 workers paying the Payroll Tax for every 1 beneficiary of Social Security. By 1960 that ratio had dropped to 5 workers per beneficiary. By 2010 it was 2.9.