Is Social Security a Ponzi scheme?
by Daryl Dominic Tan
Following the GOP debates closely, I’ve come to realize that the view on one very contentious issue has been of extreme importance to the GOP candidates running for presidency - Social Security. Governor of Texas and 2012 presidential candidate, Rick Perry, has been adamant on his stance that Social Security is a Ponzi scheme. However, Perry isn’t the first to make such an inflammatory remark. Many comparisons have been made over the past, and countless are still scratching their heads as to whether the Social Security program is even constitutional in the first place. Bumbling left-leaning liberals are quick to dispute by proclaiming that since the administrators of the Social Security do not gain any profit nor do elderly people(at the top), it can't possibly be likened to a Ponzi scheme. Other liberals argue that it is indeed constitutional, and till today, that same argument remains wide open to inference and no conclusion has ever been drawn from it.
So, is Social Security a Ponzi scheme?
First off, a Ponzi scheme is a fraudulent act that offers returns to investors not through actual profits earned by the organization, but through money paid by other subsequent investors. The need for new investors is necessary in order for a Ponzi scheme to work. The quasi “profits” gained by the first few investors are supposed to entice others to join the scheme, and the cycle carries on. The scheme is only exposed and the cycle finally ends when there is a mass withdrawal or lack of investors.
Now let’s look at Social Security - a social insurance program designed to protect people against poverty, old-age, disability, unemployment and others. It is funded through payroll tax and is mandatory as soon as you start working. A chunk of your income will have to go in to Social Security supposedly to aid you with retirement benefits when you grow old.
Of course, this all sounds like a great deal, up till the point where we realize that a realistic crisis might occur in the near future. How the current system works, is that retirees are being paid their benefits through the mandatory investments of younger Americans. What is happening though is that the ratio of retirees to young Americans, is according to statistics, becoming increasingly unbalanced. Americans are living longer while the birth rate is declining. What happens then, if there are not enough young Americans to pay off their babyboomer seniors?
THE GOVERNMENT RIGHT??? As they are always supposed to intrude in every single affair and help? Well, the government has been indeed helping out, thus actually worsening their deficit problem. Above that, the government also issues out IOUs ( documents that acknowledges debt) when they become too insolvent to pay their recipients, and they have been already doing as we speak. The government uses the chunks of money deposited into Social Security for their own purposes such as funding of federal programs, and in turn, pay their recipients their surpluses through subsequent investors (the young Americans). This sounds very much like a Ponzi scheme to me. Plus with the looming crisis predicted by many analysts, can the Social Security program even be sustainable in the long run?
Pullitzer-prize winning columnist and political commentator Charles Krauthammer thinks that the only difference between Social Security and a Ponzi scheme is that a Ponzi scheme isn’t a FORCED program.
My conclusion? I would say that Social Security is unconstitutional and coercive, but it has good intentions theoretically speaking, I'll give it that. So no, I wouldn't liken Social Security to a Ponzi Scheme per sebecause there is no criminal intent whatsoever in the idea of such a program - though practically speaking, and being run the way it is, especially with severe mismanagement of government funding - it sure as hell looks and works like one.
Friday, September 16, 2011
Monday, September 12, 2011
True Liberty
by Daryl Dominic Tan
What is true liberty? The meaning of the word ‘liberty’ has been misconstrued effortlessly time and time again to the point that no proper or correct definition serves to exist anymore. Modern liberals claim that liberty should serve to establish happiness and equality among its people through a single centralized federal government. This includes central planning of economy and installation of programs designed to help the poor. Is this really liberty? Are these programs really serving to assist the disenfranchised sectors of society? The answer is no. The only thing these programs do is create long-term fiscal problems and ultimately end up hurting the very group of people it was supposedly intended to help.
Part of these federal programs consists of higher taxes imposed and minimum wage being raised. What truly happens is that when taxes are raised, so do prices, the poor are then taxed by social security, medicare, income, property, sales taxes and so forth. Raising the minimum wage keeps hard-working individuals beneath the poverty line as options and opportunities are limited to the minimum wage and individual progress is severely hindered as a result. If this is the kind of liberty you really believe in just because your civics textbooks says so, you are tragically misinformed. This isn’t liberty, this is sole dependence on a federal government with unprecedented power, which by the way, according to the U.S constitution, has no authority to exercise and wield this much power over its people.
In this modern day “liberal” society as we speak, private property rights are being violated, the Patriot Act is still in place, the Federal Reserve continues to create paper money out of thin air that are not backed by any form of value whatsoever, government expenditure is at an all-time high, foreign occupation and intervention drags on coupled with mindless wars. This is not liberty. These are absurd displays of exorbitant power. The U.S. Government thinks it has the right to defy and amend the constitution when it sees fit. Yet, the American people still elect the same kind of candidate every four years who will carry on these same policies.
One particular policy that is an absolute travesty to mankind is the United States government's firm belief that the world can be kept safe and made a better place by installing western-style democracies in foreign countries. However, by occupying foreign territory, the United States is in fact posturing itself as having Imperialistic ambitions. Still, a large majority of the American people short-sightedly believe these efforts to be effective in bolstering national security. Any person in the right frame of mind would know that forceful coercion of a sovereign nation to adopt political positions of a different cultural background ends up sowing seeds of discontent.
A person who believes in true liberty is one who concludes that freedom and happiness should be achieved not at the expense of thy neighbor, but through thy own hard work and merits. A true liberal, or rather, a classical liberal, believes in individual freedom and personal responsibility. This same Classical liberal model that I’m talking about is known today as Libertarianism, the last vestige of any true patriotic constitutional set of beliefs that promote the principles of true liberty as the founding fathers of the United States had done.
Libertarianism advocates maximization of individual liberty and political freedom coupled with minimization of state measures. Libertarians staunchly believe that people are in charge of their own lives and that they have every right to run it according to how they see fit as long as their actions do not harm others, and also without any regulating body (like the government) leering over or stonewalling their actions and activities. Violation of privacy or rights whatsoever is completely unacceptable under Libertarian standards. After all, the moral principle of free will present in Libertarianism was what attracted me to the ideology in the first place.
One man whom I see as the guiding light for America and who understands these important principles of true liberty more than anyone else is 2012 presidential candidate, Ron Paul. His solution to the crisis? Personal freedom as well as adherence to the Austrian school of economics; a laissez-faire free-market approach to the economy. Just like Ron Paul and other stalwart proponents of Libertarianism, I now believe that a government-regulated economy would eventually choke out the fiscal system of the U.S ultimately dooming the entire American economy to the fiery depths of debt, economic chaos and ensuing poverty (I like to dramatize).
One of the biggest culprits in this entire debacle is the Federal Reserve - yet another establishment that undermines the constitution and the right for people to be informed of their activities. The fed, like the government, possesses extraordinary unconstitutional powers and can create money in a blink of an eye without approval from anyone. This is the ultimate cause of inflation with the American dollar continuing to be devalued as we speak.
But why must a federal reserve exist in the first place? Why not a free-market economy - the most logical and suitable alternative that is undoubtedly the solution to all the problems that the United States is facing right now. Why bother to bail out financial institutions that are inept at managing their own funds? It only increases further government expenditure and the unconstitutional creation of money out of thin air to fund and recover these companies. Liquidation must occur and nature must take its full course without interference. It is not the responsibility of the already debt-laden government to involve itself in the mismanagement of greedy banks and financial institutions. The preposterous notion that the government should intervene and interfere with almost every aspect of life is one that is narrow and must be written off if Americans want to gain any impetus in moving towards prosperity and freedom. It is time for people to wake up. The United States government can no longer play god. It can’t decide what is good for its own people, as well as what is good for the people of other sovereign nations.
Unfortunately though, many people prefer to be enslaved to the government as long as they are entertained and well-fed. If this is your idea of true liberty, so be it. I know what mine is.
by Daryl Dominic Tan
What is true liberty? The meaning of the word ‘liberty’ has been misconstrued effortlessly time and time again to the point that no proper or correct definition serves to exist anymore. Modern liberals claim that liberty should serve to establish happiness and equality among its people through a single centralized federal government. This includes central planning of economy and installation of programs designed to help the poor. Is this really liberty? Are these programs really serving to assist the disenfranchised sectors of society? The answer is no. The only thing these programs do is create long-term fiscal problems and ultimately end up hurting the very group of people it was supposedly intended to help.
Part of these federal programs consists of higher taxes imposed and minimum wage being raised. What truly happens is that when taxes are raised, so do prices, the poor are then taxed by social security, medicare, income, property, sales taxes and so forth. Raising the minimum wage keeps hard-working individuals beneath the poverty line as options and opportunities are limited to the minimum wage and individual progress is severely hindered as a result. If this is the kind of liberty you really believe in just because your civics textbooks says so, you are tragically misinformed. This isn’t liberty, this is sole dependence on a federal government with unprecedented power, which by the way, according to the U.S constitution, has no authority to exercise and wield this much power over its people.
In this modern day “liberal” society as we speak, private property rights are being violated, the Patriot Act is still in place, the Federal Reserve continues to create paper money out of thin air that are not backed by any form of value whatsoever, government expenditure is at an all-time high, foreign occupation and intervention drags on coupled with mindless wars. This is not liberty. These are absurd displays of exorbitant power. The U.S. Government thinks it has the right to defy and amend the constitution when it sees fit. Yet, the American people still elect the same kind of candidate every four years who will carry on these same policies.
One particular policy that is an absolute travesty to mankind is the United States government's firm belief that the world can be kept safe and made a better place by installing western-style democracies in foreign countries. However, by occupying foreign territory, the United States is in fact posturing itself as having Imperialistic ambitions. Still, a large majority of the American people short-sightedly believe these efforts to be effective in bolstering national security. Any person in the right frame of mind would know that forceful coercion of a sovereign nation to adopt political positions of a different cultural background ends up sowing seeds of discontent.
A person who believes in true liberty is one who concludes that freedom and happiness should be achieved not at the expense of thy neighbor, but through thy own hard work and merits. A true liberal, or rather, a classical liberal, believes in individual freedom and personal responsibility. This same Classical liberal model that I’m talking about is known today as Libertarianism, the last vestige of any true patriotic constitutional set of beliefs that promote the principles of true liberty as the founding fathers of the United States had done.
Libertarianism advocates maximization of individual liberty and political freedom coupled with minimization of state measures. Libertarians staunchly believe that people are in charge of their own lives and that they have every right to run it according to how they see fit as long as their actions do not harm others, and also without any regulating body (like the government) leering over or stonewalling their actions and activities. Violation of privacy or rights whatsoever is completely unacceptable under Libertarian standards. After all, the moral principle of free will present in Libertarianism was what attracted me to the ideology in the first place.
One man whom I see as the guiding light for America and who understands these important principles of true liberty more than anyone else is 2012 presidential candidate, Ron Paul. His solution to the crisis? Personal freedom as well as adherence to the Austrian school of economics; a laissez-faire free-market approach to the economy. Just like Ron Paul and other stalwart proponents of Libertarianism, I now believe that a government-regulated economy would eventually choke out the fiscal system of the U.S ultimately dooming the entire American economy to the fiery depths of debt, economic chaos and ensuing poverty (I like to dramatize).
One of the biggest culprits in this entire debacle is the Federal Reserve - yet another establishment that undermines the constitution and the right for people to be informed of their activities. The fed, like the government, possesses extraordinary unconstitutional powers and can create money in a blink of an eye without approval from anyone. This is the ultimate cause of inflation with the American dollar continuing to be devalued as we speak.
But why must a federal reserve exist in the first place? Why not a free-market economy - the most logical and suitable alternative that is undoubtedly the solution to all the problems that the United States is facing right now. Why bother to bail out financial institutions that are inept at managing their own funds? It only increases further government expenditure and the unconstitutional creation of money out of thin air to fund and recover these companies. Liquidation must occur and nature must take its full course without interference. It is not the responsibility of the already debt-laden government to involve itself in the mismanagement of greedy banks and financial institutions. The preposterous notion that the government should intervene and interfere with almost every aspect of life is one that is narrow and must be written off if Americans want to gain any impetus in moving towards prosperity and freedom. It is time for people to wake up. The United States government can no longer play god. It can’t decide what is good for its own people, as well as what is good for the people of other sovereign nations.
Unfortunately though, many people prefer to be enslaved to the government as long as they are entertained and well-fed. If this is your idea of true liberty, so be it. I know what mine is.
Tuesday, September 06, 2011
The Rise of China
by Daryl Dominic Tan
People have been talking about it for decades; that the People’s Republic of China would overtake the United States someday as superpower of the world, that a dynamic shift would take place in the global economy - a shift of economic prosperity from the West to the East. We look at Japan as a prime example, a nation that had built itself up over the course of a few decades and morphed itself into a technological powerhouse. But was that enough to reach the celestial altitudes it has always been striving to achieve? As we can see from today’s news, Japan is currently undergoing a governmental crisis with prime ministers having been transposed on an almost annual basis, but what about their rivals and next-door neighbors, China, how are they doing? I’d say pretty amazing. All that talk about China becoming the next big thing is finally taking shape and becoming a gradual reality and I, for one, agree for a myriad of reasons.
Firstly, China has been tacitly destroying the United States dollar reserve status by increasing their own Gold reserves. It is a well known fact that the U.S. has been curbing the price of gold in order to maintain the U.S Dollar as the international reserve currency. Assisting the U.S. in this conquest is Europe, both the U.S and Europe collectively wish to weaken gold’s function in order for other countries to rely on them instead of Gold Reserves. China, however, is not perturbed by this fact and has been constantly acquiring as much gold as possible in hopes to drive up the price and ultimately thwart the plans of the western world. What’s going to culminate in the next few years will definitely be interesting to watch.
The second important factor we have to consider is China's very own accumulating collection of rare earth materials. China holds 95% of the world’s rare earth deposits. These compounds are used in many devices that we use every minute: computer storage memory, DVDs, rechargeable batteries, cell phones, car catalytic converters, magnets, fluorescent lighting and a lot more. Because China owns 95% of these compounds, the world is practically at China’s beck and call as China has occasionally shown its strength and willingness to hold the world at ransom.
This was evident in September 2010, when Japan detained a Chinese fishing boat skipper whose trawler had collided with two Japanese Coast Guard ships in waters that both China and Japan make claims to. China reacted by immediately cutting off export of Rare Earth materials to Japan until Japan was finally forced to released the prisoner.
That being said, is the dramatic shift from the West to the East really happening as we speak? Is China going to dominate the world economy by 2016 (the predicted year)? With large industries booming in countries like India and even Indonesia, this theory is definitely a plausible one. Many believe the East will rise with none other than China leading in the front line.
by Daryl Dominic Tan
People have been talking about it for decades; that the People’s Republic of China would overtake the United States someday as superpower of the world, that a dynamic shift would take place in the global economy - a shift of economic prosperity from the West to the East. We look at Japan as a prime example, a nation that had built itself up over the course of a few decades and morphed itself into a technological powerhouse. But was that enough to reach the celestial altitudes it has always been striving to achieve? As we can see from today’s news, Japan is currently undergoing a governmental crisis with prime ministers having been transposed on an almost annual basis, but what about their rivals and next-door neighbors, China, how are they doing? I’d say pretty amazing. All that talk about China becoming the next big thing is finally taking shape and becoming a gradual reality and I, for one, agree for a myriad of reasons.
Firstly, China has been tacitly destroying the United States dollar reserve status by increasing their own Gold reserves. It is a well known fact that the U.S. has been curbing the price of gold in order to maintain the U.S Dollar as the international reserve currency. Assisting the U.S. in this conquest is Europe, both the U.S and Europe collectively wish to weaken gold’s function in order for other countries to rely on them instead of Gold Reserves. China, however, is not perturbed by this fact and has been constantly acquiring as much gold as possible in hopes to drive up the price and ultimately thwart the plans of the western world. What’s going to culminate in the next few years will definitely be interesting to watch.
The second important factor we have to consider is China's very own accumulating collection of rare earth materials. China holds 95% of the world’s rare earth deposits. These compounds are used in many devices that we use every minute: computer storage memory, DVDs, rechargeable batteries, cell phones, car catalytic converters, magnets, fluorescent lighting and a lot more. Because China owns 95% of these compounds, the world is practically at China’s beck and call as China has occasionally shown its strength and willingness to hold the world at ransom.
This was evident in September 2010, when Japan detained a Chinese fishing boat skipper whose trawler had collided with two Japanese Coast Guard ships in waters that both China and Japan make claims to. China reacted by immediately cutting off export of Rare Earth materials to Japan until Japan was finally forced to released the prisoner.
That being said, is the dramatic shift from the West to the East really happening as we speak? Is China going to dominate the world economy by 2016 (the predicted year)? With large industries booming in countries like India and even Indonesia, this theory is definitely a plausible one. Many believe the East will rise with none other than China leading in the front line.
Subscribe to:
Comments (Atom)