Different River

”You can never step in the same river twice.” –Heraclitus

January 5, 2005

Social Security — whose money is it?

Filed under: — Different River @ 5:51 pm

Over at Cafe Hayek, GMU economics professor Don Boudreaux quotes and refutes Swarthmore psychology professor Barry Schwartz‘s op-ed in the New York Times, in which Schwartz makes this extraordinary claim:

This brings me to the final defense of privatization: the payroll taxes you pay are your money, and you ought to be able to do what you like with your money. This, I suspect, is the real justification behind the move to privatize, and it is the worst reason of all. The payroll tax is not “your” money; it’s our money.

Unlike most folks defending social security, at least Schwartz is honest about believing that. But Boudreaux takes him to task for thinking it’s not only true but obvious:

Schwartz passes off a very controversial piece of political philosophy as if its validity is plain for all fair-minded people to see.

Old McDonald makes his living as a tomato farmer. McDonald earns $50,000 this year from his efforts. Congress will take about $7,500 of these earnings, calling it McDonald’s “contribution” to Social Security. According to Schwartz, simply because Congress levies this tax, the $7,500 was never McDonald’s. It was ours, collectively. (Question: Were the tomotoes that he grew and sold to get the $7,500 paid to Social Security never really “his,” but “ours”? How about the time and effort that he put into growing, marketing, and selling these tomatoes?)

Boudreaux then asks:

Addendum: Thinking further about Schwartz’s astonishing claim, I wonder if he would say that the money that he pays for a new car or a pair of jeans was never really his, but, instead, the property of the automobile dealership or the department store. I suspect not. So why does he not extend this same sensible conclusion to monies that people pay to government?

Without claiming to speak for Schwartz — and certainly without adopting his point of view — I think I can answer that.

The difference is, the money he pays for a new car or a pair of jeans is handed over voluntarily to the seller. The money he pays in taxes is handed over to the government under (implied) threat of force. If he doesn’t buy the car or the jeans, he can save the money for retirement, or buy whatever else he wants now. If he doesn’t pay the social security taxes (and is caught), the government takes the money anyway and he goes to jail. Of course, with payroll withholding, he probably doesn’t even have the option to choose jail!

The question really depends on what you mean when you say the money is “your” money. If you earn the money, it’s morally yours, since you earned it. But when the government levies a tax on those earnings, the amount they take is “not yours” in the sense that you do not have the right to decide how to spend it. You may have the moral rights to that money, but you don’t have the property rights since the tax laws say you don’t.

I suspect that when advocates of limited government say, “We earned it, so it’s our money, not the government’s” they mean to say that since “we” earned it, we have have a moral right to decide how to spend it (presumably within some limits of course; we can’t use it to hire a hit man). However, when government intervention say “No, it’s the government’s money” they aren’t speaking of the property right to spend the money, but rather of the government’s moral right (in their opinion) to take it.


Footnote: This all started with an economics op-ed written by a psychologist and published in the New York Times. Without questioning the NYT’s right to print economics articles by psychologists, can someone tell me how often they print psychology articles by economists? Just wondering.

UPDATE: Don now thinks he misunderstood Barry Schwartz’s original statement; it could be that he meant that once you’ve paid your social security taxes the money is no longer yours. That is, there is no “account” at the Social Security Administration with your name on it and a balance consisting of the taxes you’ve paid. That’s obviously true. Once you pay your taxes, the money is paid to current beneficiaries, and any excess by law must be “loaned” to the U.S. Treasury. And the Supreme Court has ruled that paying social security taxes does not give you a right to receive benefits; those benefits may be revoked at any time.

Drug dealers for legalization?

Filed under: — Different River @ 5:05 pm

The convention wisdom is that drug dealers would oppose drug legalization because it would cut the price of drugs and thus their profits. Clayton Cramer has some powerful evidence that this isn’t true.

Mars Rover One Year Old

Filed under: — Different River @ 4:10 pm

The NASA/JPL Mars Rover Spirit has now been roving on Mars for a full year. Which is pretty amazing, since it was only designed to last 90 days, and previous missions had often failed to last as long as planned.

Several months ago, I got a chance to visit the rover’s control room at JPL, and take a look at the third rover they kept on earth to practice maneuvers. So I feel a little warm glow about his achievement, even though I really had nothing to do with it. (Unless paying taxes counts.)

God and The Wave

Filed under: — Different River @ 2:28 pm

In this article, “The Tsunami and the Circle-maker,” Rabbi Yonason Goldson tries to find meaning in the disaster.

The Intifada Comes to Duke

Filed under: — Different River @ 10:56 am

The Intifada Comes to Duke [University], by Eric Adler and Jack Langer.

One scheduled speaker, Charles Carlson, had openly called for lethal attacks against Israeli youth, declaring that “every young Israeli is military–they are all proper war targets,” and that “each wedding, Passover celebration, or bar mitzvah [in Israel] is a potential military target.”

This stuff doesn’t surprise me anymore, but it still disgusts me.

Money, Sex and Happiness

Filed under: — Different River @ 3:28 am

Jim Lindgren has some comments on the latest version of David Blanchflower and Andrew Oswald’s paper “Money, Sex and Happiness: An Empirical Study” in the Scandinavian Journal of Economics.

Yes, we economists believe you can actually study these things. Here’s the bottom line (i.e., the abstract):

The links between income, sexual behavior and reported happiness are studied using recent data on a sample of 16,000 adult Americans. The paper finds that sexual activity enters strongly positively in happiness equations. Higher income does not buy more sex or more sexual partners. Married people have more sex than those who are single, divorced, widowed or separated. The happiness-maximizing number of sexual partners in the previous year is calculated to be 1. Highly educated females tend to have fewer sexual partners. Homosexuality has no statistically significant effect on happiness.

Who said economics was the dismal science?

Parental consent?

Filed under: — Different River @ 2:01 am

In California, children no longer have the right to control their own bodies.

In 2004, the California legislature passed AB 2193, making it illegal for a anyone under 18 to get a tan at a tanning salon without a parental consent, and those under 14 are completely prohibited from “using a tanning device,” even with parental consent. (Hat tip: Jeff Ballabon via Kathryn Lopez via the Modesto Bee, which didn’t get the details quite right.)

And of course (of course?), students are prohibited from having drugs in school, even if those drugs are medications prescribed by a licensed physician for that student. Possessing drugs in school — with a doctor’s prescription — could get you expelled, or at least suspended. All drugs have to be kept in the school office, in case — well, in case a school administrator wants to steal them!

So we see, children are not in control of their own bodies, or their own medical care. They can’t alter their bodies without parental permission, and they can’t get medical care in school, even with a doctor’s order.

Unless there’s an abotion involved.
If there’s an abortion involved, someone who’s not even related, never mind a parent, can take a 13-year-old girl out of school, without her parent’s knowledge but with the school’s knowledge, to get an abortion. And when the abortion goes wrong and the girl starts
hemorrhaging in school, the school will call, but will claim they “don’t know” why she is bleeding. And when they finally tell the girl’s mother that the girl was taken to Planned Parenthood, that wonderful organization will treat said mother’s “parenthood” as a very bad reason to be there, and will say that it is illegal to tell the parent anything about her 13-year-old daughter’s condition, since it’s “confidential.” When she gets upset about this, they then threaten to arrest her for having the temerity to inquire about her daughter’s condition.

Of course, if they were dentists extracting a wisdom tooth, it would be illegal to do so without this same parent’s written consent. And if they were a tanning salon in California, it would be completely illegal, even with the consent of both the parent and the doctor.

This comes to us from Whole Wheat Blogger, who comments that the fact that this involves a school just deepens the irony (or hypocrisy):

I see stories about kids being suspended for being in possession of medicine, but it’s perfectly ok to let a stranger remove a child from school to have an abortion. I saw a story about a young boy who got in trouble for patting a girl on the butt to get her attention, but it’s perfectly ok to let a stranger remove a child from school to have an abortion. Kids get in trouble if they bring a GI Joe figure to school and it has a small plastic pistol, but it’s perfectly ok to let a stranger remove a child from school to have an abortion.

Of course, one has to wonder why these two thirteen-year olds were having sex. Good sex education classes, I guess.

Remember when abortion advocates used to argue that “abortion should be treated the same as any other medical procedure”?

Nowadays, that kind of argument can get you labeled as a dangerous pro-life extremist, or even get you arrested!

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