You are using logic to overcome politics. As long as we give control of our money, in the form of SS or otherwise, they will do whatever is politically convenient at the time. After all, T-bills purchased by Social Security is exactly how Clinton claimed to have balanced the budget in 1999. Would he conceivably turn against what was considered his only administrative success?
Politics does trump logic in most instances. Still, had we insisted that the feds do right by SS, that program would be far better than it is. Contrast SS with California's State Teacher's Retirement, with which I am intimately familiar for obvious reasons. For 38 years, I paid 8% in to STRS, matched by my employer. At one point, the state wanted to put that trust fund into the black hole they call the "general fund", just like the feds did with SS. That horrible, evil, socialistic, union we hear so much about put a stop to that. As a result, STRS payments are orders of magnitude better than SS. It doesn't hurt that STRS doesn't make welfare payments to those who haven't contributed, as SS does, either.
The point is, government programs can be well run, but it takes some vigilance on the part of the electorate.
Remember, politicians are more interested in short term praise, than long term solutions. Yes, purchasing good growth mutual funds with SS money, would undoubtedly be more stable and provide more money. If you didn't know this, they already tried this in the 80s. A district in Texas was allowed to opt-out of social security, and put their money into private mutual funds of their choice. Not only did the mutual funds operate on a surplus instead of SS going broke, but the payout at retirement was anywhere from double to triple that of SS.
However, does this matter to Washington? Of course not. How can they balance their budget, will increasing social spending, if they can't take all the money from SS? Of course they can't, which is why they will never let Social Security to be privately invested. Remember, Bush proposed to allow people to invest just a portion of their SS into a private firm, and only by their own choice. Look how Washington responded. He was tarred and feathered as a pawn of 'big corporations'... why? Because he dared to give people choice. How awful.
That's how it is, and how it will always be unless there are enough powerful voices to make them do the right thing.
Someone (maybe AARP?) should have made certain that the SS funds not go into the general fund. Evidently, no one was powerful enough or interested enough, so the government did just what you described: Looked at the short term only.
BTW, there's no such thing as an "unconstitutional war". You should either drop that red herring, or register as a democrat.
The war in Vietnam was unconstitutional, which is why it was not called a "war" at the time. Allowing the CIC to go to war without a formal declaration by Congress is an unconstitutional expansion of the power of the executive branch. If a Libertarian can see that, why can't a conservative who still likes (or at least doesn't dislike intensely) the modern Republican Party?
Yet that's exactly what happens when you allow government to cut the military instead of social programs. Worse yet, as soon as hostilities break out somewhere, military spending goes right back up, but social spending does not go down. This is why conservatives are against military cuts. It never balances the budget, it gives excuse to increase spending, and ultimately whatever cuts are made have to be fixed later.
Which is why we shouldn't allow it to cut the military instead of social programs, but cut it along with social programs. The entire federal bureaucracy has become too big, too powerful, too expensive.
Which, of course, is an academic question, as no one is seriously going to try to cut it back anyway.
Yes I've already seen this. Like I said before there are many factors not shown in those figures. For example, it doesn't show how much that amount of money can buy. Personnel in the is expensive. Personnel in China is cheap.
The Chinese have nearly double the number of enlisted personnel that we do, but their cost is a fraction of ours. Remember, 66% of the population of China was under the poverty level of $2/day just a mere 30 years ago. Although wages have climbed due to capitalism, wages are very very low.
So not only are they paying a tiny fraction what we do per enlisted soldier, but they also pay a fraction what we do for tanks, aircraft and weaponry. We pay far more than China, but they get more for every dollar spent than we do.
Another example would be the European Union. In the US, the health care for military personnel is included in the military budget. But in Europe where most have a socialized system, all military related health care falls under the socialized system budget. I wager if you add in military health care to the military budget, like the US does, the outcomes would be much closer.
I hadn't thought of that. How could it be that those socialistic surrender monkeys in the EU actually have a military budget that rivals that of the US? Could it be that they really do believe in a strong defense?
Sort of. Russia, of all nations, has extensive experience in propaganda and espionage / counter-intelligence. They have been spreading false information and keeping secrets for a long time, and they do it well. The current estimated man power of the Russian military is greater than our own. Thankfully, as Georgia showed, they're military is in bad need of updating. Sadly they have some amazing weaponry, but luckily not the money to upgrade everything yet.
The bad part is, we're not upgrading our military either. We have production tanks and aircraft we are not manufacturing, while older and less advanced aircraft remain our mainstay. At this rate it's just a matter of time before we end up in a fight and need newer weaponry. Another reason to cut social spending now.
So, let's cut it, and while we're at it, lets examine just how all of that military money is spent. If more of it needs to go to R and D, then so be it, but then, let's cut somewhere else. If the EU, for example, really has such a strong military, why do we need to have our troops stationed there? Let them protect themselves. We don't have European soldiers stationed in the US, do we?
That's kind of my point. Do you think, back in the late 80s, that if the USSR, the only other super power on the planet, was only spending $40 Billion dollars, that this would wipe out the entire USSR budget?
They were doubtless spending a good deal more than that. Further, they must have been spending a lot more than the US as a percentage of GDP, or they wouldn't have lost the cold war. We simply had a better economy, which caused them to go bankrupt first.
My point wasn't really that we should sell weapons to them, but rather that in trying to recoup R&D cost, we'd simply send buyers elsewhere. Israel would be purchasing from China and Russia if we did that. Simple supply and demand economics. Increase cost, and capital moves elsewhere.
Like everything else, the price has to be competitive.
But what will happen is they will only cut the military and increase social spending, and then we'll need the military again, so spending will go right back up, but social spending won't go down. The end result is, nothing will get cut.
Which is why we can't have a government of the people as long as the people allow the government to spend money that they don't have.
If the American people don't wake up pretty soon, they're going to find that the great experiment in self governance was a failure, not due to despotism, but to economics.
Inflation is not caused by deficit spending, or trade deficits. As I said, if trade deficit were to have any effect, it would be to cause deflation, by drawing money away from the economy. Supply of dollars goes down, demand remains the same, value is increased.
Greenbacks are just like anything else: If t he supply of them goes up, then the value goes down. If other nations have a bigger supply of dollars due to trade deficits propped up by printing more money, then the value of the dollar will go down. That is simple supply and demand.
Deficit spending does not inherently create inflation. I *can* cause inflation indirectly, via the government not being able to borrow more money, and instead starts simply printing money. In which case the printing of money always causes inflation.
Which seems to be what is happening right now.
Well it's odd that in the past month, I've heard this theory of trade deficits causing inflation, yet can't ever remember hearing it prior.
I'm not sure just why that might be. It is not a new idea.
