No Social Security is not a ponzi scheme....

It has become de rigueur, of late amongst Republicans to attack Social Security as a ponzi scheme. Gov. Rick Perry has been the most vocal recently. Of course this completely incorrect! And to help us illustrate that....a venn diagram!


Via Ezra Klein:

As he explains, a Ponzi scheme is a fraud that relies on new investors being unaware of the program’s financing mechanism. Social Security is a fully transparent system of age-based redistribution that releases regular actuarial reports explaining, in great detail, how it is financed now, and what it will need to be fully financed into the future. Or, as Russell Long (apparently) put it, “Social Security is nothing more than a promise to a group of people that their children will be taxed for that group’s benefit.” You may like that structure or you may hate it, but it’s not a Ponzi scheme.

Yeah...I know government is evil...

-Cheers

What the Stimulus did...and didn't do....

Dylan Matthews over at Ezra Klein's blog has been doing serious work. He has gone and compiled the most recent studies looking at whether the ARRA was a net positive or not. I would go into the details of it, but it is definitely worth the read.

I have been hugely critical of the size of the stimulus, mainly that it was not big enough. But that was never to imply that it should not have been done.

But enough of my babbling, I will let Mr. Matthews take over:

Each approach runs into its own set of problems. The econometric studies have to deal with what social scientists call “endogeneity”: that is, the variable whose effect we’re trying to determine (the stimulus) could itself be affected by what we’re trying to study its effect on (the state of the economy). In this specific case, this means that econometric studies sometimes have to correct for the fact that harder-hit areas tend to get more stimulus spending. This says nothing about the stimulus’ effectiveness, but it can confuse attempts to evaluate that effectiveness statistically.

All of these studies have their own methods of overcoming the endogeneity problem, some of which are more effective than others. Whichever corrections one uses, however, one cannot run a perfect experiment with messy, real-world data, which necessarily limits what these studies can say. Of the five econometric studies detailed here, three conclude the stimulus had a significant positive effect, and two conclude it did not have much of an effect at all.

I know this will not really change anyone's mind, but having data always makes me feel a little better on the subject.

-Cheers

Taxes and the Poor...

It has been circulating for some time with mounting rage that there are some lucky duckies who are getting a free ride, because they do not pay income tax. You hear it a lot, "Everyone needs to pay in to have some skin in the game!". It has become near ubiquitous in conservative circles that it would be better to increase the tax burden on the middle class and working poor, then to raise even a dime on high wage earners.


Ezra Klein does the work on this issue showing why exactly the poor are not savaged by income tax by design. It is endlessly pointed out that payroll taxes (SS, Medicare, Medicaid) fall disproportionately on the poor:

A new report (pdf) from the Tax Policy Center breaks it down. In 2011, about 46 percent of households won’t pay income taxes. For about half of them, the standard provisions of the income tax wiped out their liability. If you don’t make any money but you take a standard deduction and have a few dependents, you’re not going to pay any income tax. Roberton Williams, one of the report’s authors, gives the example of “a couple with two children earning less than $26,400. They get an $11,600 standard deduction and four exemptions of $3,700, and that takes their liability to zero. As he says, “the basic structure of the income tax simply exempts subsistence levels of income from tax.”

So to reiterate, the reason the poor do not "pay" income tax, is because of credits that wipe out their tax liability. Or better yet, because they are fucking poor.

-Cheers

Both sides do it....

No they don't.

I need to find something to drink.

-Cheers

If you repeat it, it makes it true.....

I have a problem with the modern version of the Republican party it can be summarized with this clip of Gov. Rick Perry (R-TX) talking about funding abstinence education in Texas and its consistent dismal record on teen pregnancy.



The repetition, and the lack of an demonstrable facts to support his assertions. This is a prime function of movement Conservative thought. Steve Benen adds this point:

In a case like education and lessons on sexual health, the left tends to look at this in terms of results: what works in preventing teen pregnancies and the spread of sexually-transmitted diseases? For the right, the question is philosophical: what’s consistent with their morality.

I will go further, then that. It is a feature, not a bug, of this day and age to disregard relevant statistical data in favor of ideology. If it does not comport with your philosophy it is simply not true.

The stupid...it burns....

-Cheers

Lucky Ducky

(Scott Meyer's website)

Momma always said......

This is something that just gets under my skin.

Socialism and Communism are political philosophies. The merits of each can be argued for eternity. What they are not however, is synonyms for "things I do not like".

This is something that happens all to often. Even if a policy is socialistic in nature that does not make it bad policy. We have a mixed economy for a reason.

-Cheers

Those evil unions....

I have been off my game for the last couple of months. I blame Facebook and the arguments I have there diluting my desire to post long form entries. Be that as it may, this is an issue I have taken up a few times. The subject being the importance of unions in our economy.
I have often said that unions perform a vital role in our society. Whether you are in one or not, as a worker, they are the may body that works for workers' interest. That should not be underestimated. Of course business does not like them, the very goal of unions is to provide workers with leverage they do not have. As is the case in most things, individuals have very little negotiating strength.

I would like to say something positive here, but unions have been successfully demonized. They lazy union worker is as much a part of the collective psyche as the greedy banker, or the sleazy lawyer. Whether that is the case or not.

In a system where increasingly, power and focus are aligned with the most moneyed interests in society some sort of corrective is necessary.

-Cheers