Definitions of Freedom

What is freedom anyway? Looking it like through FPL colored eyes what is the (co)algebraic laws that define freedom. Just saying freedom to do such and such isn’t exactly freedom, otherwise we end up with a useless definition of freedom. As you want freedom from fear of economic collapse I could argue for freedom from fear of terrorism and get where we are today, with all this patriot act nice governamental powers.

Also why all the freedoms you talk about aren’t gratis. If the government would have to provide or regulate those it would require more taxation, even for those who don’t require it. Why should I subside your health, if I directly pay for my health costs? Why should I subside the regulators to keep your workplace safe if I work in my farm? I could just retort and ask the freedom to not pay for bills other than mine (e.g. freedom from taxes).

Other side of this discussion is about choice, risks and benefit. If you want to work for a startup the possible profits can be huge, usually much more than the risks: if the risk/benefit analisys indicated otherwise (money smart) people wouldn’t work for or fund startups. So why should you reap the benefits (e.g. IPO cash) and we subside part of your risks? If you get rich you can argue that the future taxes you’ll pay will cover for today’s health costs, but if the startup fails you’ll never pay for the bill. Ditto for going to a good college: it’s your choice to go into debt, you could go to a less expensive college our be a drop-out like many more (including myself) and try your chances. Let’s not even talk about the parents who don’t save for their kids college: a 100 bucks every month in an indexed fund and your kid can pick his choices after high school (go to a good college and be debt less or pick a better one and assume the difference). If you start earlier (I’m saving for my kids future since I started working and I don’t even have kids yet eight years later) you can cover the best colleges. So your freedom to be unindentured will be paid by whom? If college debt is subsided why should a drop out pay for it?

Freedom is a semantic meaningless word if we don’t know what it costs. We can’t attach a freedom label to any thing we want and expect it to make sense. We are free to make our own choices, but we have to face the consequences because not all choices are equivalent. Of course there are inequalities in the system and things aren’t as good as they could, but most of our problems are artificial. For example, health care is expensive because it’s highly regulated (e.g. becoming a doctor is quite expensive, insurance for doctors against civil suits cost a lot, the patent system give way too much power to drug companies these days), because we live unhealthy lifestyles eating crap and living in polluted environments, because we want to live much longer than our ancestors with the same limited biological machine (i.e. it’s expensive to live longer because our bodies are programmed to senescence and death). Once we make our choices (e.g. better health care) we have to account for its costs and I want freedom from the costs of other people choices that don’t benefit me.

The health care argument is simply highlighting that we need to end corporate sponsorship of health insurance. If all people had to pay the cost of health insurance, you would see many more reasonable plans, and a lot of the excesses of the system go away because nobody’s willing to fund them anymore. Of course, the big health insurance companies will oppose any reform, as you say.

What I’d like to see is a hybrid system where major emergency care is subsidized heavily or totally, but routine and minor trips to the hospital are a person’s responsibility. As well, under a certain income, all health care needs to be free. We spend a great deal of money subsidizing people who don’t get routine problems fixed until they’re emergencies because they can’t afford primary care.

Also! We need to lower the barriers to getting into Medicare. Many people who are eligible for Medicare don’t have it, because the paperwork and identification requirements are onerous and we don’t help them complete them until they’re in the hospital without insurance.

(Disclaimer: my fiancee’s an emergency and internal medicine doctor)

Hey, what about my freedom to show off my distro and browser of choice? Don’t oppress me man :D

Daniel Y: First of all, you’d have to convince me that the Patriot Act actually does protect me from terrorists in any meaningfull way. Most of the crap spawned after 9-11 isn’t security, it’s security theater.

True story: I work in a building with all sorts of anti-terrorist protections. I’ve never seen less than six gaurds in the front lobby, guests need to have their bags x-rayed before entering (no kidding- they’ve got two airport-style xray machines down in the lobby just for that purpose). You have to scan your ID card to get in. And yet, a couple of weeks ago, a coworker of mine found a homeless man sleeping in our back hallway, up on the 33rd floor. How the hell did he get past all of the security downstairs? The answer is that it’s not security, it’s security theater. It’s there to make the PHBs feel better. Also, I’ve become convinced, as a status symbol- “look, we’re important enough to need all this elaborate security!”

As for your comment “why should I pay for your health care when I’m healthy?”, that this is why I call Libertarianism the “I’ve got mine- fuck you” party. Which is effectively what your argument is. “Why should I pay for freedoms for other people that don’t directly affect me?” The problem with “Enlightened Self-Interest” is that most people forget the “Enlightened” part. There is a benefit, to society as a whole, to encourage people to get college degrees, start companies, work at small or startup companies, trust the banking system, trust the home lending system, trust their food and toys and workplaces to be safe, etc.

The first freedom is the freedom to work where I will- including at small companies or even starting my own company, without risking my life or health.

So the government should be giving venture capital to anyone who can put together a business plan? The government should pay their rent, give them food, and pay for their marriage counseling when the 80-hour weeks catch up with them? If the business fails, should the government maintain your quality of life until you find another job? If the answer to any of these are “no”, what’s the difference? All of those are just as legitimate blocks as health insurance. Where do you draw a line at the “freedoms” the government has to guaranty?

Right now, you have the freedom to work where you will. But where you work is going to change the quality of your life in many ways — megacorps can get you safety and security which you simply don’t have as an entrepreneur.

How about more basic things- like the freedom to know that the whole banking system isn’t about to collapse? That the investments you made in the hope of retiring to that golf course in Florida aren’t going to just up and evaporate. Or that the money in your bank account isn’t going to just up and evaporate.

On this point, Ron Paul’s actually your man, since he’s the only one advocating an economic policy which addresses the inflation tax. Take a look at the various Ron Paul vs. Bernanke videos out on YouTube.

Oh and I nearly forgot.

Why would the government have to declare bankruptcy any time soon? The interest payments on the national debt as a share of tax revenues have been decreasing for the last 16 years in a row. The debt costs less to maintain now than it has in a long time. Since a government never dies (like a person would), there is no deadline in the future when it has to pay that all back. The only thing that would ever cause anything resembling a bankruptcy would be if the interest grew to greater than tax receipts, which frankly will not happen as long as our economy grows. Currently interest costs about 10% of the federal budget, down from 16% in the mid-90s.

Debt is also only about 65% of GDP, and has been fairly steady since WW2. During the Depression and WW2, when the federal government really WAS broke, it was running at about 120% of GDP… or about like Italy today. Our debt to GDP ratio, which is the only number that really matters, is much lower than that of France or Japan… if you ask me, they are in much worse shape than we are.

The bonds held by the SSA are like any other bonds. My nitpicking was about the idea of paying them back. Fundamentally all the income the government has comes from it’s taxpayers, no matter what the tax is called. If you want to pay back the SSA bonds, you have to do it with tax dollars or funds from new bonds issued to a third party. So, you are left with three scenarios.

First, the SSA has all these bonds and they start redeeming them when SS payments start to exceed FICA tax intake. The rest of the government, to pay back the SSA, must raise tax money to pay.

Second situation, the SSA has no bonds at all. SS payments start to exceed FICA tax intake, and the government must raise tax money to keep paying out SS benefits.

Third situation, the SSA has bonds, starts to sell them to keep paying out SS benefits, and the treasury sells new bonds to a third party (most likely the American public) to cover them.

No matter what, our future SS shortfall will be covered out of taxes or new debt, not some mythical pile of cash stored away. Of course you can always cut benefits or grow the economy (and hence the tax base) faster, but neither of those have to do with the SSA’s bonds at all.

I’ll bite on your nits about debt vs GDP, while I still consider the 40-75% band it has stayed in for the last 50 years ‘fairly steady’ … it was definitely Reagan-Bush that ran it up again recently. And I didn’t mean to attack the New Deal (or involvement in WW2)… both of those programs/actions paid off splendidly, and I think represent the entire point of running a deficit… as in investment in the future. The trick is to only make smart investments!

First point: I wouldn’t debate that, but I don’t think that having debt is necessarily bad if you are responsible in managing it. I think a lot of people have forgot what a debt crisis is (I certainly am too young to know), and hubris took over. Now they get to learn their lesson.

Second point: You can refer to this pie chart of who holds our National Debt.

http://www.optimist123.com/photos/uncategorized/2007/08/23/piechart200706.png

The big red slice is the SSA and other intragovernment lending. Notice that domestic owners are about even with foreign owners. Of the foreign owners, everyone frets over China. Last I checked, China held about $400 billion worth of dollar instruments. This is about 4.5% of our total debt, or about 8.2% of our public debt (which is a much more useful number to think about anyway). The thing is, China would be stupid to try and use this debt against us. With a little politicking, I’m absolutely sure the American public would buy ‘China Bonds’ willingly, like they did during WW2, and just eat up everything China tried to sell. $400 billion is only about $1300 for every man, woman, and child. Throw in a bunch of rich people to be realistic, and China dumping it’s bonds would have very little effect. China, on the other hand, would be screwed. With no foreign reserves to draw on to stabilize its own currency, it’s economy would overheat from inflation very quickly.

Third point: I totally agree about being responsible and the New Deal and WW2 were both very responsible uses of debt financing. While I don’t really agree with their politics at all, I would say that Reagan/Bush (but mostly Reagan) bought us Global Military Superiority with all that debt they racked up. I think time will tell whether that is a good investment or not, but that seems to be what it was spent on.

I think the SSA was smart to buy bonds with it’s excess money. At least that way they earn interest on the ‘balance’ … Of course it’s not their fault. The fault lies in FICA taxes that were higher than they need to be for so long… and likewise soon to be lower than they need to be. If FICA taxes had been lower, there would be no bonds to argue over, and likewise no ‘surplus’ of money for our politicians to waste on stupid shit.

I’m not sure where I ever acted shocked or amazed that the SSA would want its surplus back. What does kind of shock or amaze me is the whole idea that the SSA actually has a pile of funds to draw on. Like I said before, the only way to pay the SSA back is through tax revenue or new debt. I’m not saying it will never be paid back, I’m saying the point is moot. The whole problem is that the government has been using the FICA surplus to overspend instead of (more honestly) raising income taxes. I think we both agree on that point. It’s very regressive, since it’s a flat rate on only the first $90k of income, as you pointed out.

You can call it paying back the SSA or you can call it devoting more tax revenue to SS benefits… you can call it selling bonds to China and using the money to pay back the SSA. You can call it whatever you want… no matter what, those bonds that represent the ‘balance’ in the SS ‘account’ can only be turned into cash that old people can spend if the taxpayer or some third party loans the government the money to pay back the SSA.

I’m really not sure how else to make my point. Bonds are a promise to pay back a principle value plus interest in the future. The only way for the government to meet that promise is to pay them back out of current tax revenue, or roll over the debt to a third party. So all those bonds the SSA holds are really just a promise by the people of the US that they will eventually pay more taxes towards SS.

That is what is so mindbending about the whole deal. It’s like current workers paid too much FICA taxes so they could inflate this huge pile of bonds that the SSA owns, then future workers have to pay extra FICA taxes just to pay back the SSA. Who benefits? The rest of the government, which got by spending all this surplus money without any plan to pay it back.

I think Al Gore was right to claim the ‘SS Trust Fund’ was being ‘raided’ … but his solution was moronic (to somehow create a big bank account for SS that the rest of the government couldn’t touch… a lock box). It just doesn’t work that way. The better solution would be to lower FICA taxes to neutral rate, no deficit or surplus, then raise/lower them over time as needed. This would prevent the rest of the government from dishonestly spending money that wasn’t theirs. That is the root of this problem… through convoluted accounting no one realizes that the government is basically borrowing against our future.

I’m not even sure how we got on this whole tangent, because I was originally agreeing with you anyway. Our point of contention seems to be about these bonds the SSA possesses. If you really want my take (like I haven’t babbled enough already), then I think they are less than useless. The mechanism they represent allows our government to spend money that it later swears up and down is safely held for future needs. It’s not. If the SSA had been forced to refund any surplus it had, rather than loan it to the general fund via purchase of treasury bonds, then the entire situation would be better off.