Privatize Social Security…Before It’s Too Late

The overwhelming majority of Americans believes that the Social Security Trust Fund has the cash it needs to pay its obligations to current and future retirees. They also think that they are legally entitled to it. Nothing could be further from the truth.


In a recent report, the Trustees for the Social Security Trust Fund—a Trust Fund in name only—calculated the present value of the System’s unfunded future obligations for both an infinite horizon and a 75-year horizon as of 2015. They found that over a 75 year horizon the System is underfunded by $10.7 trillion; over an infinite horizon the shortfall is $25.8 trillion, all in constant dollars. And that number is not included in standard budget deficit figures. It is “off-budget”.


To put this in perspective, U.S. GDP for 2015 amounted to $17.9 trillion; federal tax receipts were about $3.25 trillion (a record) and total federal spending clocked in at $3.8 trillion (also a record). Which means that the present value of unfunded Social Security obligations is about 60% of the entirety of U.S. GDP. It is 2.82 times all federal spending for 2015, and 3.29 times all federal tax receipts. In short, not only is the system grossly underfunded, there is no conceivable way that the System can be re-structured so that it can meet its obligations under current law.


In short, the Social Security System is barreling ahead toward default. The money is just not there. Promised obligations will be cut and the retirement age at which benefits can be collected will be raised. In the parlance of the bond market, prospective beneficiaries (de facto bond holders) will have to take a “haircut” and the maturity of the debt (the retirement age) will be extended. There is no way around it; the Social System as currently structured is not sustainable.


Social Security beneficiaries (and potential beneficiaries) would be the equivalent of bondholders if they had a contractual right to the promised payment stream of retirement benefits. But they don’t. The Social Security Administration’s website clearly says that Congress had no intention of creating a legal contractual entitlement when it crafted the law establishing Social Security. Moreover, the Supreme Court ruled in 1960 in the case of Fleming v. Nestor that workers have no legally binding contractual rights to Social Security benefits.


No matter. Barrack Obama, (see video below), Hillary Clinton and Bernie Sanders want to expand Social Security benefits. So for that matter does Senator Elizabeth Warren. To no one’s surprise, Donald Trump has joined in a variation of this gravity-defying act of financial fraud. At last count, he claims he will maintain Social Security without cutting benefits; he has not yet gotten around to promising increased benefits. Give him time.



When the matter of financing comes up President Obama just dusts off his 3-card Monty skills and claims that he will finance his latest foray into financial never-never land by simply “asking” the “rich” to pay a little more. That is deliberate obfuscation. When President Obama’s words are translated into English, ask becomes demand, and rich refers to anyone making over $250, 000 in a given year. But there isn’t even close to enough money there (or anywhere for that matter) to pay for existing promises, much less an expansion of them.


Consider the latest year (2014) for which figures are available. Individuals filing the 2.7% of returns with incomes of $250,000 or more paid 51.6% of all U.S. federal income taxes. Which is another way of saying that the most productive members of society paid (and continues to pay) the majority of income taxes. And President Obama wants to further tax this small minority that drives growth, innovation and investment in order to purchase more votes from low information voters. In so doing he would guaranty slower economic growth and a worsening of public finances, which seems to be a specialty of his.


What’s worse is that Social Security disadvantages the less well to do. It is well established that life expectancy, income and education are highly correlated. Granted, there are many confounding influences, including behavioral ones. For example, highly educated people are likely to have higher incomes and they also are much less likely to smoke compared to poorly educated people. And the fact remains that a high school graduate will likely begin working and contributing payroll taxes many years before a college graduate. But retirement eligibility for both the high school graduate and the college graduate remains the same. Which means that that the high school graduate with the lower life expectancy will likely pay into the system earlier, work longer and collect fewer benefits. Which implies that lower-income blue-collar workers will be taxed to support middle class white-collar workers.


On top of that, Social Security transfers money to the relatively well off (retired people with assets) at the expense of people who are less well off (young workers with few assets). In so doing, it discourages savings and investment by young people, setting the stage for an even more pressing retirement crisis in the years ahead.


Because Social Security is structured as a pay-as-you-go system where beneficiaries have no legal claim on their promised benefits, the system will never be on a sound financial footing. Politicians will always respond to political rather than economic incentives, and will resist anything remotely close to true reform. Champions of paternalistic command-and-control (Obama, Clinton, Sanders, Trump and Warren among others) will resist change that transfers power from the mighty Administrative State (and themselves) to individuals.


The only way to truly reform the system is to establish the legal right of beneficiaries to control the funds that have been taxed from them for the express purpose of financing retirement. The effect would be to free up massive amounts of money for productive investment by putting those funds back into private hands where they belong. And it would force transparency on a source of public finance that is no more than a Ponzi scheme that would make Bernie Maddoff blush.


Libertarian think tanks like CATO have been making the reform case for years. They should be heeded before it’s too late.



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Donald Trump: Legal Philosopher

Senator Mitch McConnell, Senate Majority Leader, appears to be trying to make the best of a bad situation. The Washington Post reports that he says he is supporting Trump because “…[He] doesn’t want four more years just like the last eight”. In another interview published by The Hill, he says that Trump will not fundamentally change the Republican Party. He says that the Republican Party “…is America’s right-of-center party. If he brings in new followers, that’s great, and well worth the effort, but he will not change the Republican Party”. He says that it is much more likely that the Republican Party will change Trump than vice versa.

We shall see about that.

Meanwhile in an interview with NPR McConnell says that people voting for Trump should take comfort in his list of “right-of-center, well qualified” potential nominees to the Supreme Court, although in a separate interview McConnell that he would like “to see a more thoughtful Trump”.

Well it would be hard to get a less thoughtful Trump, but it’s still wishful thinking. Consider that not too long after he released his list of potential Supreme Court nominees—a bad idea all by itself—Trump went on to attack a sitting judge. And Trump was not using the judge to make some abstract point about judicial philosophy. He launched a personal attack against a judge who is currently presiding over a case in which Trump is a defendant.

Among Trump’s more subtle complaints is that the Judge, appointed by President Obama, is hostile and biased, and has treated Trump unfairly because the judge is “a Trump hater”. Trump’s evidence of bias: The judge has ruled against him. And to cap it off, Trump attacked the judge over his ethnicity. Said Trump (sic) “The judge, who happens to be, we believe, Mexican, which is great, I think that’s fine,” Trump said according to the LA Times. “You know what? I think the Mexicans are going to end up loving Donald Trump when I give all these jobs, OK?”

By the way, the judge, who is of Mexican extraction, was born in Indiana.

Trump supporters like to think that their guy “Tells it like it is”. Leaving that absurdity aside, they should ponder this: If any one else personally, publicly and repeatedly attacked a sitting judge before whom they had a case, they would likely find themselves held in contempt, which is where Trump deserves to be held by all.


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Hillary’s Tangled Web

Is there anyone this side of sanity who truly, seriously believes a word that escapes from Hillary Clinton’s lips? Of course not. And that is a very big problem. The reason is that Mrs. Clinton’s lies have a special character that reach well beyond the usual “all politicians lie” sort of thing. Those politicians essentially try to hoodwink the public about what they are going to do.

Mrs. Clinton’s lies go well beyond that, which is not to deny that she too routinely makes promises that she has no intention of keeping. Mrs. Clinton lies about what she has already done and invites the public to pretend to believe her. That is what is so special about Mrs. Clinton’s lies. Their principal purpose is not really to deceive so much as it is designed to invite the public in on the game by making the lies acceptable. In so doing she further degrades both popular culture and political discourse from the already parlous state they are in.

A case in point is the ongoing e-mail saga. Virtually everything Mrs. Clinton has said about what she did (and why) is demonstrably untrue. For example she still insists on calling the FBI investigation a “security review” despite the fact that the FBI doesn’t do “security reviews”. They do criminal investigations.

When the e-mail story first broke she insisted that she never sent nor received classified information. When turned out to be untrue, the story quickly morphed into the idea that she didn’t send or receive emails that were “marked classified at the time”. When that was exposed as being untrue, she argued that the documents were needlessly “over classified”. When it turned out that some of the documents were correctly classified at the highest level, she then insisted that she didn’t intend to send or receive classified material.

All the while she insisted that she would cooperate with the investigation. As recently as May 9, 2016 on “Face the Nation” Clinton referenced the e-mail situation when she said “…I made it clear I’m more than ready to talk to anybody anytime. And I have encouraged all of my assistants to be very forthcoming and I hope this is close to being wrapped up”.

Well, not so fast. As it turns out, Mrs. Clinton refused to speak to investigators from the State Department’s Investigator General. For that matter so did at least 3 of her top aides, namely Cheryl Mills, Jake Sullivan and Huma Abedin. In effect they asserted their 5th amendment rights.

As the video below shows, in an interview, CNN’s Wolf Blitzer pressed Clinton Spokesman Brian Fallon on Clinton’s refusal to testify saying that “it really looks as if she has something to hide.” Which of course she does. And everyone knows it. Everyone. But no one who is anyone in Democratic politics will say a word about it, other than to say that it’s all a partisan witch hunt, despite the fact that President Obama appointed the Inspector General.

And so we have a conspiracy of silence from Progressives and Party officials who hope to make this a non-issue by throwing ink in the water with claims of bias and partisanship, all designed to allow people to fool themselves into believing, or excuse themselves for pretending to believe, the pack of lies that is the Clinton campaign

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On Not Casting a Vote for President

Soon we will be hearing the quadrennial chorus solemnly informing us that it is a citizen’s sacred obligation to vote. This mythical obligation is often cast in terms of the soldiers who died to protect our right to vote. Except they didn’t. They died protecting our freedom, which is not the same thing by a long shot.

And so I for one am having none of it. I have no intention of casting a ballot in the Presidential election. At least if the major candidates are named Trump and Clinton and there is no sensible alternative.

On January 20, 2017 the winner of the Presidential contest will raise his (or her) right hand and take the Oath of Office as mandated by Article 2, Section 1 of the Constitution. It reads in full, “I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States”.

That Constitution includes Article 2 Section 3, which says that, the “[The President] shall take Care that the Laws be faithfully executed….” That language should give room for pause because it is readily apparent to roughly everybody that neither Mr. Trump nor Mrs. Clinton has the slightest intention of honoring the oath or of seeing to it that the laws are faithfully executed. Instead should either Trump or Clinton ascend to the White House, the winning contestant intends to ignore, avoid, and sometimes subvert, laws—and the rule of law—in service of political expediency.

Make no mistake; neither candidate has shown even a hint of restraint when it comes to the exercise of power. Nor has either candidate displayed the slightest concern for the protection of natural rights that are at the heart of the Constitutional order. (For that matter neither candidate has displayed a willingness to abide by Constitutional norms). Instead each candidate has demonstrated a willingness, if not eagerness, to trample on citizen’s rights for the purpose of self-aggrandizement.

How do we know this? The candidates themselves have all but said so. Consider just a small but telling sample of the record.

First we have Donald trump. He has specifically promised to deport approximately 11 million or so people in the U.S. that are here illegally by means of a specially created “Deportation Force”. And he would accomplish this in a mere 18 months to 2 years by “good management”. Mind you this is going to be accomplished by a government that takes 3 hours to get a few hundred people onto an airplane.


So let’s cut to the chase: forcibly deporting 11 million people in 2 years (all of whom are entitled to a hearing) would require hiring massive numbers of deportation police, prosecutors, judges and defense attorneys, not to mention kicking in doors and executing mass arrests without probable cause. Leaving aside the utter impossibility not to mention absurdity of all this, the 4th amendment would lie in tatters. And so would the rest of the Bill of Rights including the right to counsel, the prohibition against self-incrimination, the right of free-association and assorted privacy rights not expressly enumerated. In short, implementing Trump’s scheme would necessitate that the U.S. become a police state, perhaps modeled on the work of Vladimir Putin, a man for whom Trump has expressed  admiration.

Not to be outdone, there is Mrs. Clinton. That is the same Mrs. Clinton who used to bemoan “litmus tests” in the selection of nominees to the Supreme Court. But now Mrs. Clinton freely admits that she has come up with a litmus test of her own. That litmus test has to do with the Citizens United decision. In that case, Citizen’s United sought an injunction against the Federal Elections Commission (FEC) to prevent the application of the Bipartisan Campaign Finance Act. Specifically, the FEC rule in question prevented corporations or labor unions from funding “electioneering communications” from their general treasuries. In striking down the FEC rule, a 5-4 majority of the Court held that the First Amendment does not permit the limiting of corporate funding of independent political broadcasts. The majority went on to say that political speech is indispensable in a democracy notwithstanding the fact that the funding of such speech comes from a corporation.

Mrs. Clinton disagrees or professes to disagree although she routinely hoovers up huge amounts of corporate cash. And she acknowledges that she now supports a litmus test for the purpose of overturning Citizens United. Having said that, Mrs. Clinton as usual, incorrectly frames the issues at stake, miscasting it as a contest between “a person’s right to vote and a billionaire’s right to buy an election”. There is no small irony in this since Mrs. Clinton has been in the access and policy selling business for years, now on an industrial scale through the Clinton Foundation, which is currently under investigation by the FBI. Not only that, but as Mrs. Clinton well knows, there is no right to buy any election, and never has been.

Mere corruption is not the issue however. It is Clinton’s willingness to trample on speech rights that is at the heart of the issue. It should also be noted that subsequent to the Citizen’s United case in September of 2014 Senator Charles Schumer (D, NY) proposed, an amendment to the First Amendment, which was co-sponsored by every single one of the Senate’s 48 Democratic Senators. The amendment was designed to grant legislatures the power to restrict political speech through rules regarding “contributions and expenditures intended to effect elections”.

Note that the Schumer amendment specifically identifies the target as political speech, which should leave no doubt that the purpose of the amendment is to erect a protective barrier to political competition by making it difficult for issue advocates to challenge incumbents on their policy choices. Note too that the Citizen’s United decision left in place the ban on corporate contributions to candidates. It held that citizens do not lose their speech rights when they band together through corporations (including non-profit ones like the Sierra Club) to advocate for policy positions. Thus the Clinton claim that the decision allows corporations to “buy” elections is thus exposed as yet another falsehood.


To sum up: neither Trump nor Clinton intends to honor the oath of office. We know this because they have told us so in their own words, over and over again. And so when January 20, 2017 rolls around the first official act of the probable next President will be to knowingly, willingly and deliberately lie under oath on TV for the entire world to see. And the people who voted for either Trump or Clinton will have acted as enablers.

I will not be one of them.




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Is Hillary Clinton the Adult in the Room?

Bernie Sanders and Donald Trump seem to have achieved the impossible: together they have made Mrs. Clinton appear to be responsible–at least in relative terms. That is no mean feat. After all, she has been an unabashed opportunist in her policy pronouncements, including those involving national security.   For example, Robert Gates writes that “Hillary told the president that her opposition to the [2007] surge in Iraq had been political because she was facing him in the Iowa primary…”. Moreover, she is an inveterate liar. The rapidly dwindling minority of people in the world who still resist that description should read Washington Post columnist Kathleen Parker on the subject in which she references a new You Tube video. Then watch the video (below).

So it must be said that Hillary Clinton is drenched in sleaze and has almost certainly engaged in criminal behavior (for instance with her e-mail set up while at the State Department). But when it comes to policy idiocy, both Trump and Sanders leave Clinton in the dust. Consider a few examples (and there are many, many more). Both Trump and Sanders are outspoken opponents of NAFTA and free trade generally, which have not only been instrumental in raising billions of people around the world out of dire poverty, but they have also raised American living standards to boot. Both Trump and Sanders promise to maintain Social Security in its current form even though it is insolvent. For instance, the most conservative estimates of the present value of unfunded Social Security liabilities are in the neighborhood of $10 trillion under current law. That is on top of the $19 trillion or so in outstanding publicly held debt we already owe.

For his part, Senator Sanders has actually proposed additional massive increases in spending (on the order of $18 trillion) and taxes (the number is hotly disputed), despite the ongoing build-up of the existing debt. To almost nobody’s surprise the Senator’s numbers don’t add up, as the NY Times has reported. See for instance, “Uncovering the Bad Math…” published by the Times on February 26 of this year. Sanders demonstrates his utter cluelessness by asserting that he will pay for all this by taxing “the rich” (who already pay the lion’s share of taxes) and by taxing Wall Street “speculation”.

Naturally enough this attempt would result in massive capital flight from the U.S. worthy of Venezuela where Sanders style economic policies have created shortages of food and medicine.

Not to be outdone, Donald Trump, who has plenty of experience in bankruptcy courts, has suggested asking our current creditors to accept “ a little less…”. Incredibly enough, among other things he said, “I would borrow, knowing that if the economy crashed, you could make a deal”. It apparently has not occurred to Donald Trump that creditors do not take kindly to debtors hinting at default. Nor does it seem to have occurred to him that “crashing” the world’s biggest economy is not exactly like one his many trips to the bankruptcy courts. It would be a global catastrophe.

And so by default, so to speak, Hillary Clinton looks vaguely responsible, which is a sad commentary on the current state of affairs. And as yet we have hardly even touched on foreign policy.


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Dump Trump

Winston Churchill once observed that the best argument against democracy is a 5-minute conversation with the man on the street. That conversation is no longer metaphorical. Now it is there for all to see in the person of Donald Trump.

Mr. Trump is not merely an oaf, although he is surely that. And it is perhaps overstating the obvious, at least to the apparently shrinking community of the sane, that Trump lacks even a basic understanding of Constitutional checks and balances, and that he is utterly clueless in both domestic and foreign policy. And then there is the temperament of the speaker to consider.

All of which leads to an inescapable conclusion. The nuclear codes of the United States should not be turned over to a man with the temperament of a 15-year old schoolboy. Especially someone who aspires to be Commander-in-Chief but doesn’t know what the nuclear triad is.

Perhaps what is, or ought to be, most disturbing to libertarians and libertarian leaning conservatives is the immense structural damage Trump has wrought. That damage grows daily. There now exists the possibility, if not probability, that Trump will remake the Republican Party into an empty vessel as devoid of principle as he is. As a result, the party of Lincoln will no longer be in a position to credibly promote limiting government power and expanding individual freedom.

Consider what Trump has already proposed. For example, he would weaken the first amendment by making it easier for politicians to sue news organizations. And his declared intention of tilting of policy against Muslims certainly runs astray of the free exercise clause. His whole-hearted support of Kelo v. City of London (2005) eviscerates the Fifth Amendment’s takings clause, which proscribes the taking of private property for public use without just compensation. Note that in the Kelo decision the Supreme Court justified the state’s transfer of private property from one private owner to another for the purpose of economic development. Trump, the real estate operator, thinks this is just fine. No surprise there.

Trump makes little attempt to mask his authoritarian tendencies, as when he implicitly encourages his supporters’ use of violence against political opponents. Even worse, he has explicitly promoted the use of torture in pursuit of enemies, and he has advocated “going after” the families of terrorists. How is that for due process? And not to put too fine a point on it, deporting 12 million illegal residents would require turning America into a police state.

Trump’s willingness to attack the natural rights of individuals even though they are clearly protected by the Constitution is not an accident. We are not talking about a latter day Edmund Burke here. The trash-talking Trump does not understand that manners are small morals, and that demeaning opponents is antithetical to the government’s main task of securing unalienable rights endowed on men by the Creator.

Trump, who complains that the system is rigged, brags about having bought off politicians to do his bidding for years. Trump, who routinely accuses the media of lying about him, also said according to George Will that “it doesn’t matter doesn’t really matter what [the media] write as long as you’ve got a young and beautiful piece of ass”. Not to mention implying that Ted Cruz’s father had something to do with the Kennedy assassination. Or that Trump’s appreciation for nuance and subtlety is about on par with that of Brittany Spears.

As of this writing Trump appears to have locked up the support of what we euphemistically call low-information voters. We can only hope that chunk of the electorate is relatively small or that it loses interest by Election Day. Regardless of the election outcome, there is a flashing warning signal that libertarians should take note of here.


The warning signal is this: Donald Trump is not the cause of our political woes—he is an effect of a seriously degraded civic culture. The basic institutions that protect freedom (property rights, rule of law, the nuclear family, free speech and civility to name a few) have been under unrelenting attack for years by the left. The weakening of these and related institutions has paved the way for an authoritarian ignoramus like Trump. It is not sufficient to merely stop Trump. There will always be more like him waiting in the wings. The civic culture has to be rebuilt. Libertarians and conservatives should be able to make common cause here. Before it’s too late.


Joe Benning

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Trump versus Conservative Intellectuals

“Against Trump”, the title of National Review’s most recent edition, says it all. National Review, a leading voice of conservatism, produced by a longstanding group of conservative intellectuals has made it clear that Trump and conservatism, cannot be reconciled. Trump, they say, “…is a philosophically unmoored political opportunist who would trash the broad conservative ideological consensus within the GOP.” A copy of the article is available at this link. Also note that columnist George Will, a National Review alum, has made a similar critique of Trump.

It should be noted that conservative intellectuals are for the most part appalled by the emergence of Trump on the political scene and have made their opinions clear from the very beginning. Given the threat that Trump poses to conservatism (broadly defined to include its libertarian strains) we should expect to see conservatives and libertarians converge to back a third party candidate to ensure Trump’s demise in a general election.

Compare that to the activity on the left. As it stands now there are two leading contenders for the Democratic nomination. One, Bernie Sanders, is the unhinged 73-year old Senator from Vermont who is a self-declared socialist. The other, Hillary Rodham Clinton, is the 68 year-old ex-Senator from New York who as Secretary of State engineered the ongoing disaster in Libya. The main difference between the two candidates is that Senator Sanders is unlikely to be indicted.

So it is certainly worth noting that while conservative and libertarian intellectuals continue to make a principled case against Donald Trump, intellectuals of the left have voiced little in the way of principled or practical objections to the obvious absurdities of the policy prescriptions of Bernie Sanders, among them a suggestion that Iran and Saudi Arabia team up to defeat ISIS. Nor is there any apparent principled objection to what appears to be the criminally negligent behavior of Hillary Rodham Clinton with respect to handling classified data, even as the evidence against her mounts. Nor does the stench of corruption around the Clinton Foundation appear to bother them one iota.

Let’s not forget that while the campaigns heat up and the various factions claim moral superiority.




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The Mission of the On Liberty Watch Blog

Welcome to the On Liberty Watch Blog. The purpose of this blog is to provide commentary and analysis of politics, culture and current events from a mostly libertarian perspective. Among other things that means that we believe what it says in the Declaration of Independence: that all men are created equal with certain unalienable rights endowed by their Creator, among them Life, Liberty and the Pursuit of Happiness. That these rights exist independent of government; in that sense they are pre-political. The proper role of government then is to secure these inherent human rights. That is its only proper role. Government ought not, and indeed lacks the authority to use its police power to impose its view of the good society on its citizens.


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