Ron Paul and the Libertarians

I have been intrigued by the Ron Paul candidacy. For those of you not familiar with him, Ron Paul is running for the Republican Party nomination for President. He seems to draw most of his limited support from the Libertarian (I prefer the descriptor Libertine) branch of the Republican Party.

Anyway I came across a comment from a Ron Paul supporter who stated that Mr Paul had a plan to deal with the Social Security crisis that is looming. The crisis that will be caused by the large number of members of the Baby Boom Generation reaching retirement age. I wondered what kind of plan a Libertine would come up with so I went to the Ron Paul campaign website to take a look at the plan the Ron Paul supporter was so proud of.

(See here) where I found Mr Paul's plan. Please note you will not have to read a detailed, multi-volume manifesto or anything, it is fairly short.

The plan description opens with:
Our nation’s promise to its seniors, once considered a sacred trust, has become little more than a tool for politicians to scare retirees while robbing them of their promised benefits. Today, the Social Security system is broke and broken.

OK, this is a reasonable opening statement. Nothing really controversial here. Who could reasonably disagree that the system is "broken"? I guess one could point out the system is not yet "broke" if Mr Paul, by using the word, meant to convey that the system "already" has run out of money. However that would be quibbling since, even though right now the system has yet to run out of money, it IS headed towards such an outcome before much longer if changes are not enacted... so... it's a pretty good opening statement. It conveys that Ron Paul recognizes that there is a problem and that he is concerned about finding a solution to the problem.

So how would Ron Paul "fix" the problem. Well first we have to listen as he describes what he stands against before he gets to what his proposals would be to solve the problem. In the third paragraph you can read:
The proposed solutions, ranging from lower benefits to higher taxes to increasing the age of eligibility, are NOT solutions; they are betrayals.

I find this interesting. Seems to me that the only way to fix the Social Security train wreck is to either increase income or reduce outgo, however with just one short sentence Ron Paul has seemed to almost completely empty his toolbox of most of the tools he could use to fix the problem. Well, how then does he propose to fix it? (There might be one almost logical solution.) Let's get into the specifics.

First proposal:
Imposing any tax on Social Security benefits is unfair and illogical. In Congress, I have introduced the Senior Citizens Tax Elimination Act (H.R. 191), which repeals ALL taxes on Social Security benefits, to eliminate political theft of our seniors’ income and raise their standard of living.

How in the heck did this one get into a list of proposed solutions to the Social Security crisis, I wondered. It is mostly irrelevant. If one wants to keep the Social Security side of the budget completely separate from the general fiscal federal budget (like Ron Paul seems to want to do, as will be shown later) then this proposal does not belong here. Receipts from taxes on Social Security benefits end up on the general budget side of the ledger and do not impact the solvency of the Social Security side of things one iota. Perhaps one could reasonably make a fair argument that taxing these benefits indeed are unfair (and an also reasonable argument could be made for the opposite) however that debate does not belong in a list of solutions to the Social Security system crisis. My own belief is that Mr Paul included it because it would have some appeal to those most interested in the subject and that would be those who are retired or who are approaching retirement. I would point out to seniors that anyone who is completely dependant on Social Security income when they retire does not currently pay any tax on benefits. Those who are taxed on Social Security benefits have significant sources of retirement income from other sources.

Second proposal:
Solvency is the key to keeping our promise to our seniors, and I have introduced the Social Security Preservation Act (H.R. 219) to ensure that money paid into the system is only used for Social Security.

I have two points to make on this. First point: If there is, as there has been for awhile, an excess amount of Social Security taxes taken in, what is the harm in the Social Security side of the ledger "loaning" the money to the general budget side of the ledger as long as the money will eventually be repaid? What is the government supposed to do with the money? Build a mountain of greenbacks in some vault until the day the money is needed? Now I do think such loans should be "official" such as in the form of interest paying treasury bills, but it is my understanding that is how this so called "accounting trick" is done anyway. It sure seems like there are conservative investors who prefer the sure and certain return of interest and repayment of principal that is available from treasury bills. Perhaps a higher rate of return is potentially available in the stock market, however that return is not guaranteed. Second point: If nothing is done about the looming Social Security crisis, the amount of Social Security excess receipts is going to quickly dwindle, the system will start to draw down on the amount of money loaned to the general side of the ledger, and then will actually go into the red itself. I do not see how this proposal is, at least this late in the stage of the game, going to have any real impact in avoiding the crisis.

Third proposal:
It is fundamentally unfair to give benefits to anyone who has not paid into the system. The Social Security for Americans Only Act (H.R. 190) ends the drain on Social Security caused by illegal aliens seeking the fruits of your labor.

I guess I have not been listening to enough right wing radio or something because I am not familiar with how illegal immigrants qualify for Social Security benefits if they have not been paying into the system. Seems to me that in order to qualify for a Social Security retirement payment, one must first qualify by having paid in for a certain number of quarters or you get zilch. But perhaps they qualify for disability payments or something so maybe some minor improvement to the looming Social Security deficit could be realized through this proposal. However I am wondering if there is more to this proposal then meets the eye. Would it deny Social Security payments to those who indeed have worked and paid into the system the minimum number of qualifying quarters? You see, I do not look at the "wave" of Latino immigrants as necessarily being part of the problem to the Social Security system and foresee that exploitation of this "wave" could be part of the solution to the problem. The looming Social Security crisis is going to be caused by the population bulge of Baby Boomers retiring. There will not be enough youngsters left paying into the system as the Baby Boom generation retires to support all their elders in retirement. But what happens if numerous young immigrants pay into the system? Wouldn't some of the variables in the equation then be impacted? Now I do not think that this avenue offers any major potential towards resolving the problem. However I do not see how the "Latino tide" makes the problem any worse. It is my opinion that this proposal by Mr Paul is just an attempt to throw red meat to his base. I strongly doubt it is going to contribute in any meaningful way towards solving the problem.

Fourth proposal:
We must also address the desire of younger workers to save and invest on their own. We should cut payroll taxes and give workers the opportunity to seek better returns in the private market.

Now we're getting to some real meat. Ron Paul just threw red meat to this dog. Mr Paul wants to save Social Security by destroying it. He thinks that by making the problem worse (reducing income) he can solve the problem. The man has exposed himself as either a blathering idiot, or a blatant liar. He can not have it both ways. He has to come out for saving the system or abandoning it. This proposal would eliminate any chance of avoiding the Social Security train wreck, and in fact cause the calamity to occur that much earlier. I can understand that there are some who hate the Social Security system when they look through their prism of disliking anything that hints of socialism (it is Social Security as in socialism) but it grates my nerves raw when someone couches proposals that would lay waste to the Social Security system behind words of concern for the welfare of the system. Ron Paul does this.

It is my opinion that adoption of the complete menu of Ron Paul proposals would lead to the rapid insolvency of the system. He voices sentiments of concern for the system, but plans for its destruction. As I stated previously, these proposals expose him as either a blathering idiot, or a blatant liar. But what else would you expect from a Libertine?


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