This actually shows me how susceptible even enquiring minds are to numbers games.

This guy thinks he pays no taxes. Huh.

I don't get Mickey Kaus. He wrote one book, The End of Equality, back in the early 90's which was very well written and well received and quite influential and nothing since, except blog posts. Why has he never written another book since? There's plenty for an iconoclastic liberal like him to write about. And maybe he'd have an AGI>0.

Books don't pay tons and they're hard to sell these days.

Writers I've known who've had book contracts have had them cancelled (divisions of publishers closing) and have found it hard to get another agent, etc.

In 1998, I made $1 a word for my Rambler story in the LA Times magazine. Maybe that was 3,000 words. Now, people make $200 for 3,000 words, including reported stories. Or people ask them to write for free, and I'm not talking about writers just starting out.

I dont buy Mickey's theory here.

Having done several hundred tax returns over the last ten years, my observation is that at least seventy percent of the population is incapable of doing the intermediate math required to even know if they are a net tax payer, or tax receiver.

Many people are thrilled to get a refund, and whether it is a result of overholding of the tax payers own money, or because of (too) generous low income tax credits, the tax payer can rarely discern the difference.

On a side note. People have been brainwashed into thinking they have a "right" to Social Security, even when they have received far more in payments than their own contributions plus a reasonable rate of return.

It will become means tested within the next five years, and after that, just another welfare program.

@Amy

The End of Equality was one of the most important books of the 90's. It was highly influential in the welfare reform debate, and ultimately welfare reform adopted much of Kaus' recommendations. He wasn't some person trying to make a name for himself, he already had. This is something about him that's actually puzzled me for a while, since I'm a frequent reader of his blog. I understand the problems facing writers today, my wife is a book author and my son a newspaper journalist.

Sorry to go OT like this, BTW.

"On a side note. People have been brainwashed into thinking they have a "right" to Social Security, even when they have received far more in payments than their own contributions plus a reasonable rate of return. "

This goes along with the long-propagated myth that Social Security is/was an investment program. Of course, it was never any such, but it's hard to convince people of that, and it's especially hard when they were counting on those "investment returns" to fund their retirement.

Will write more later... don't have time right now, but Kaus has an interesting theory. However, the well-known principle that people tend to under-value anything that they get for free seems to be in opposition to it. And then there's the corrosive effects of the Earned Income Tax Credit, aka Uncle Sam Jackpot.

Oh, you're damn right I have a right to Social Security. To this DAY I still remember getting my first paycheck. (I was 11 years old.)

I hadn't been properly briefed.

"Okay - Federal Income Tax. I was expecting that. It pays for the Army. I LIKE the Army. It keeps the Communists over THERE instead of over HERE."

"State Income Tax. They told me about that, too. I like roads. Roads are good." (Yes, I know - the roads are actually paid for from DIFFERENT taxes. Give me a break, I was 11.)

"But who is this FICA bastard and who said he could have a FIFTH of MY MONEY?!?"

Of course, it wasn't a fifth, it just felt like it at the time.

And it's been dipping into my paycheck for thirty nine years now. Every election I write my Congresscritters and remind them that I will FIRE the son of a bitch that even suggests either putting off or reducing my benefits.

"Our Darwinian minds aren't good at rationalizing getting something for nothing, "

What if you have a certain segment of the population constantly told they deserve reparations fro things from their great-great-great grandparents time.
Or those constantly told that the only reason they are poor is evil rich people are doing it to them.

Oh, you're damn right I have a right to Social Security.

Right up until Congress passes a law that says you don't.

It's an employment tax. No more, no less. If you're lucky, you'll get some. If you're not, well, you won't.

SSA is already selling its treasury notes to make up for the shortfall from employment taxes. At some point, they'll run out of treasury notes, and then they'll either means-test social security, or they'll increase the payroll taxes, or raise the retirement ages, or reduce the benefits, or some combination thereof.

At some point, young people will revolt against the tax because it will be unbearable. Assuming they can find actual work to be taxed on. To coin a phrase, you can argue with math, but you will lose.

And it's been dipping into my paycheck for thirty nine years now. Every election I write my Congresscritters and remind them that I will FIRE the son of a bitch that even suggests either putting off or reducing my benefits.

Posted by: Lamont Cranston at October 3, 2013 7:38 AM

They have already reduced those benefits, by about 60 percent. The government stole it with a fiat currency system, and a real rate of inflation of about twelve percent over the last six years.

This is what happens when governments print money to pay their debts. Sad that probably only five percent of the US population can identify the Weimar Republic, and the fallout from that same scheme ninety years ago.

Every election I write my Congresscritters and remind them that I will FIRE the son of a bitch that even suggests either putting off or reducing my benefits.

That's so cute.

You'll get your benefits. As Alan Greenspan famously said, the government can guarantee your Social Security payment in any amount you would like, as far into the future as the eye can see. What they cannot guarantee is its purchasing power. So, good luck with that.

After means testing, Social Security will "become" just another welfare program?

My dear, it has ALWAYS been a welfare program. It's always been a welfare program that took money from young, working people and transferred it to old, non-working people. When it becomes means-tested, and I agree it will, it will become a welfare program that takes money from young, working people and transfers it to POOR, old, non-working people.

When I listen to Boomers stamp their angry little feet and wave their tiny little fists, complaining about all the money they've paid into Social Security, I wonder if they realize how stupid they sound to Generations X and Y. Gens X and Y have always been stuck paying into Social Security and have always known we wouldn't see a dime of it. Welcome to our world. It did not take a genius to see this coming.

The government promised me this, and the government promised me that .... oh for chrissake. Really? Okay, so the government sucks! And it lies! This would be a very good reason not to have programs like Social Security in the first place!

"After means testing, Social Security will "become" just another welfare program?"

I remember attending a debate in Denver back in 1988 between Dick Lamb, and Bill Buckley.

Fabulous evening, and the eventual collapse of Social Security was one of the topics of the evening. All the economists knew it was a Ponzi scheme. It has always been just a matter of how quickly it would fail, if it was not ratcheted way back, and we passed that point years ago.

It was quasi legit, until I believe it got rolled into the regular budget, and gamed like everything else.

I'm a boomer, within four years of an age where I could theoretically collect.

You wont see me waving my hands, and stomping my feet, as I am resigned to the very ugly collapse of the entire stinking pile of shit.

I admit my canned food supply could use some work, but my ammo supply is pretty solid.

Oh, you're damn right I have a right to Social Security. To this DAY I still remember getting my first paycheck. (I was 11 years old.)

When I was 11 years old, I had a lovely teacher of the sixth grade explain to our class that none of us would ever see any social security benefits, and that we should bear that in mind as we planned for our own retirements once we started working. That was 15 years ago.

Personally, as much as it sucks knowing I will never see that money again, or any benefits from it, I would rather have the retirement age raised, or social security become means tested, or have it end altogether, than to have the money from my IRA devalued to the point of worthlessness because of people who demand that they keep said entitlements exactly the same as they've always been.

Isab, I believe when Social Security was first started, the average lifespan was 62 for men and 63 for women. With the benefit payout set at the age of 65, it was only the far, minority side of the distribution curve that ever received a payment.

If you wanted to quit working some number of years before you died, you were expected to save the money yourself or be supported by your kids. You weren't getting a government check unless you lived 2-3 years PAST the average lifespan.

It wasn't a retirement plan, it was old age insurance. As to why the government ever had to involve itself in the old age insurance business, when people can purchase an annuity that will provide the same thing, is quite beyond me.

But the FICA tax was teeny tiny, as was the pool of recipients. If they had written into the legislatio that the payout age would rise with increasing life expectancies, the payout age would be around 80 now.

Boomers have paid about $4 trillion into Social Security. They have been promised about ten times that much in benefits. You can argue with math, but you will lose. This was never a workable system, even if the "trust fund" hadn't been raided and spent on other things.

This is why, when you hear people insist that the government must do something to take care of the elderly, the poor, and the disabled, they are wrong. Well-intentioned, but wrong. The government will never do anything but RIP OFF the poor, the elderly, and the disabled. It's not that those groups are unworthy of being taken care of - it's just that you can't trust the government to do it.

You know, back when SS was first implimented you had to survive 3 years PAST the average death age. Hardly a retirment investment

Social Security is really less of a problem than Medicare and impending increase in interest expense. Social Security in and out flows can be adjusted with a bit of actuarial math.

There should be no government subsidized medical care except for the indigent. Medicare should be abolished. Medicaid should continue to exist, but only for the borderline homeless.

It's not nice to have to sell your house to pay for heart surgery, or to choose between leaving an inheritance for your children and cancer treatment, but what's the alternative? Getting the government to tax (rob) your neighbors to pay for your treatment? Not only that, but life-extending treatment is the BEST use of your money, as it has the greatest possible marginal utility. It seems very UN-fair to have to lose your house to keep living, but it's actually PERFECTLY fair that you spend your own money on the thing that has the greatest value for you.

It seems very UN-fair to have to lose your house to keep living, but it's actually PERFECTLY fair that you spend your own money on the thing that has the greatest value for you.

It seems more fair than me having to lose my house to pay for your treatment

"Isab, I believe when Social Security was first started, the average lifespan was 62 for men and 63 for women. With the benefit payout set at the age of 65, it was only the far, minority side of the distribution curve that ever received a payment. "

In the first decade or so of SS, the ratio of workers paying in to beneficiaries was about 40:1. This was in spite of the fact that SS disability went into effect on day 1 and there were lots of people at that time who collected benefits, some for decades, without ever paying in. But now the ratio is about 1.7:1, and it continues to decline. If FICA was raised enough to pay all of the future benefits, the combined marginal rate of FICA+Medicare+income tax would exceed 100% for at least some brackets.

"Boomers have paid about $4 trillion into Social Security. They have been promised about ten times that much in benefits. You can argue with math, but you will lose. This was never a workable system, even if the "trust fund" hadn't been raided and spent on other things."

All very true. And of course, the trust fund has indeed been raided, and Congress is now having to (effectively) transfer revenue from the general fund into SS to pay current benefits. I wrote in a thread last week that about 20 years from now, when a lot of the Boomer voters have died off, the Millennials will repudiate the debt. I don't blame them, but it will be GenX, and the very tail end of the Boomers, who will wind up getting screwed. We spent the most productive years of our lives paying high taxes to keep the system afloat, which reduced the amount we were able to save for ourselves, and in return for that we will get nothing.

@CousinDave,

I will make a side bet with you Dave. If inflation continues at the current real rate of ten percent or more a year, there will be no need to repudiate the debt.
The dollar will be as worthless, as the Mark in 1923.

http://wiki.mises.org/wiki/Inflation_in_the_Weimar_Republic#Inflation_in_numbers