"The Poor" have very little to surrender. Direct payments to people who are broke - cash, housing and food stamps - are about 1% of the unified local, state and Federal budgets. The debate is about "jobs" - i.e. working for the government and doing work that only government regulations require to be done. The argument over Medicaid - the largest single expenditure for "the poor" - is about the medical paperwork and other make-work that program supports far more than it is about the medical care actually being provided to the poor.

As a friend of mine once said about the Peace Corps (he had himself been a volunteer), "if they had taken all the money they spent on me, my plane ticket and the support and divided it up among those people I was "helping" (sic), they could have bought enough decent farmland to become rich in their own country." When I wrote to him recently to ask if he had changed his mind, he wrote back with this:

"Hell, no. If anything, I was being soft-headed; I still thought that people really intended to help the poor, but they just didn't understand how to go about it. That was a childish illusion. Changing the world" by official decree and government action is and always has been first and foremost about having conferences and meetings and policy discussions and their own pensions. That is why everyone who rants for social justice is so quick to accuse others of selfishness; they are worried sick that somebody else might get their hands on the public purse."

Tyler McClellan comments: 

I have never met a person who I felt truly understood social security. Let me point the way forward in all humility. The money could never have done anything but be spent immediately upon receipt. The goal of social security was two fold, a transference of net wealth to the old in the first generations as an inducement for other things and more importantly, the creation of an indefinite means of savings. Savings that would be repaid based upon whatever happened in the future with no need for action in the present to make any reference to that specific future which would square the circle: a perpetual and confident solvency with only the extent of the future burden left to calculation.

It was a great leap to realize that all savings is contingent, and that which is most contingent is that which is most valuable. No trust fund ever existed, nor ever will, but by this great leap we have been able as a society to save without any commitment to the form our means of saving must take. If we spent the money poorly, no matter, so long as some in the future acquired income wisely that we might tax.

Of course the program has worked brilliantly because it is the only one to deal honestly with a contingent world (aided no doubt by the twist of phrase that we all earned it by paying in, an infantile but successful appeal to merit).

Certain people have never liked social security but that is related to the fanatical obsession with Say's law that is a great undergirding shibboleth to a whole caste of mind. The caste of false rectitude.

If all Americans gave 90 percent of their income to the poor in Africa and Africans bought nothing from Americans, 90 percent of the income in America would cease to exist and our per capita income would become African.

I'll leave it as an exercise to the reader to prove that it is impossible to transfer cash from one group to another in any large sense if they don't bank or trade with each other.

I didn't want to embarrass my friend by allowing Vic to publish this, but he said OK– anything for the one guy I have ever known you, Stefan, to voluntarily address as the Chair. So, publish away. 

Victor Niederhoffer responds: 

You are much more of a chair than I. The chair has a connotation of derision in it which I like which my former employees gave to me because I was somewhat immobile in my positions when they went against me, and in my seat unless I was playing tennis because of my old hip problems. They used to call me vicious vic when I played squash but I changed that to relentless vic or some such which my opponents were quick to adopt because they were afraid that if they didn't, I wouldn't let them maneuver to get on the other side of the draw from me so they woudn't have to meet me until the finals. I do not have that mojo with my trading as of yet, but I am hopeful that instead of being known as the blow up artist that some day they will call me the Phoenix or some such.

Stefan Jovanovich replies: 

No question. My friend's suggestion presumed that the owners of the better farm land already traded with America since they were the very politicians who cut the ribbons in the photo ops with the visiting Peace Corps' senior officials. If the poor farmers had the U.S. legal tender with which to buy the land, the politicians would be willing to sell because they couldn't put the soil in their foreign bank accounts. It would be another form of graft (less complicated than the grand tradition of stealing and selling the U.S. food aid), but this form of graft would actually benefit the poor. My friend says it would have been another form of "honest graft" - just like the old days when your cousin (my friend's name uses its y's for vowels) got a job working in the sewers and actually worked in the sewers. The only net losers would be the Peace Corps' officials who, given their respectable backgrounds, could surely find other work.

Ralph Vince writes:

What certainly won't happen in our lifetime (and, sadly, our forefathers had big balls and small brains, and never had the vision to bite this bullet) is to create a pension to sink ALL future government liabilities. The scourge of taxation should have been eliminated by now, and we have yet to even start down that necessary path.

Look, if we could pay down the national debt, even to a small degree, then, feasibly, the entire thing could be retired. And, if that were the case, then a cache of 50 trillion to the positive, at thirty year domestic rates, produces the (quite obscene) 4.5 trillion budget.

But we never got to that point — and we never will until we see that it can be done, must be done, resolve to it, and then start down that long road. It will take generations — and although a pity no previous generations had the vision or will to do this, doesn't excuse ours.





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