Thursday, May 29, 2014

Do We Own Our Social Security Accounts?, III: The Solution


The whole issue of Social Security that we’ve been looking at and the “unbooked” liability that, combined with projected Medicare and the prescription drug liabilities, is upwards of $129 trillion (yes, trillion, or nearly ten times total U.S. annual GDP) per the “National Debt Clock” would be a non-issue if the U.S. would adopt a Capital Homestead Act along the lines recommended in Capital Homesteading for Every Citizen: A Just Free Market Approach for Saving Social Security (2004).

As explained in “The Blind Leading the Blind: Dangers in the Present Tax, Banking and Income Systems” (Social Justice Review, March/April 2012, 39-42), conservative projections suggest that a Capital Homesteading program would completely eliminate the national debt in 65 years without confiscatory taxation, redistribution, repudiation of the debt, or depriving anyone of promised benefits.

Are “senior citizens” the “greediest generation”?  No — but they may be the most misled generation.  Since the New Deal, the U.S. government has been making increasingly lavish promises without, evidently, considering how those promises are going to be kept.  With increasingly fewer exceptions, today's “seniors” were mostly born after the 1929 Crash and the inception of the New Deal, being raised in an atmosphere in which the belief was that all good comes from the State; that the State is, to all intents and purposes, the “Mortall God” described by totalitarian philosopher Thomas Hobbes in Leviathan.

Senator Simpson evidently realizes that the government has simply gotten in too deep, and that there is no way offered by any of the three mainstream schools of economics or their offshoots to get out of the hole.  He unfairly blames “seniors” for being “greedy” for believing the promises made by previous generations of politicians.  Ms. Myers is, frankly, similarly unfair in her assessment of Senator Simpson.

Simpson feels betrayed by the citizens who, in his eyes, are making unreasonable demands on government.  Myers feels betrayed by the politicians who are being unreasonable in not keeping the promises she and others relied on.  Within the current system, there is no solution, and each side in this debate will continue to see the other as traitors and enemies.

They are not, however, traitors or enemies.  They are just proceeding on bad assumptions regarding property, money and credit, banking, finance, and the role of the State.  Honest examination of the Just Third Way would go a long way, both in reducing the acrimony and accusations, and in implementing a sound and sustainable solution.

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That being said, the comments by Norman G. Kurland, president of CESJ, add some context to CESJ’s concern in this area:

This is one of the best pieces written on this subject.  I was working as a lawyer in the Department of Health, Education and Welfare when Flemming v. Nestor was decided, five years before I learned of the ideas of Louis O. Kelso and the Aristotelian scholar Mortimer J. Adler.  Our proposed Capital Homestead Act, based on the fundamental reforms to our overall tax system, Federal Reserve policy, payroll taxes, inheritance laws and other reforms advocated in the two books by Kelso and Adler, would unite Americans clear across today's ideological spectrum.  It would add (1) unifying principles of economic justice consistent with the social encyclicals since Pope Leo XIII in 1891, to (2)  restoration of competitive and non-monopolistic free markets, (3) protection of private property rights and (4) limited economic power of government as pillars for future policy guidelines for our political leadership.

Norm

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