Summary:

* Still waiting for evidence or argument that those who fear government
"imperialism" or "fascism" can be convinced to join us even though most of
them are Green-ish in their fear of corporate "imperialism" or "fascism".

* Social Security has been pay-as-you-go since its creation in 1935. The SS
Trust Fund has not been "looted". No alternative investment vehicle for the
SSTF's $1.5T in assets would change the nature of SS as a pyramid scheme.

Harland Harrison wrote:

> Principle may not seem appropriate to you,
> Brian, but most of us find principle important

Your implication that I think principles are unimportant or inappropriate in
politics is without foundation. This is made clear by the context, in which
I said "The platforms of the other parties are principled, they just follow
the wrong principles. It's intellectually lazy for us to assume that anyone
who disagrees with us must be unprincipled."

> There is nothing unprincipled about a Libertarian
> endorsing a Green.

Having read the Green platform, I disagree. See the excerpts at
http://groups.yahoo.com/group/marketliberal/message/326.

> If you wrote "ugh" about Maad endorsing Pat Gray

I say "ugh" about anyone who would embrace without reservation the Green
platform. I note that Gray now claims that her voters were "voicing their
opposition to the Iraq War, attacks on our civil liberties and the loss of
American jobs to outsourcing". Thus Maad's endorsement of Gray has helped
the cause of protectionism.

> As principled politicians, we do not deceive voters.
> We do not make promises that we do not plan to keep.
> We do not offer solutions which we
> know will harm our constituents.
> And we do not take advantage of
> irrational fears and ignorance.

Is any of the above supposed to constitute disagreement with me?

> Now, please let me repeat what I said before:
> Since we offer truth instead of fear, we do not
> care if "government-phobes" may be "corporate-phobes"
> also. Reasonable people look for common ground instead
> of additional targets to hate.

Then I too will just cut and paste my unanswered response: Who are you
saying is looking for "additional targets to hate"?

> We do not care if "government-phobia" occurs
> with "corporate-phobia", because we do not cater
> to either phobia.

Who do you hear advocating that the LP cater to any phobia? I simply asked
you for evidence or argument that those who fear government "imperialism" or
"fascism" can be convinced to join us despite most of them also fearing
corporate "imperialism" or "fascism".

> Our voters put business and government in
> their proper places. When upset about the
> "phantoms of their lost liberties", they
> blame Ashcroft, not WalMart.

I didn't say leftists can't distinguish government from corporations. I said
that they agree with the Greens that corporations are as bad as the
government.

> If some Green says to blame WalMart, we should
> be there to say "No. Blame big government",
> because we offer truth instead of fear.

So our primary strategy should be to peel anti-war/anti-corporate leftists
from the Greens by simply "offering truth" to correct their fundamental
mis-analysis of the nature of capitalism?

> Audience targeting should mean talking to people about
> what interests them, not compromising your
> principles to win support from somebody.

Nothing I've said supports the inference that I'm asking anyone to
compromise his principles. I've merely said that of all the voter segments
and all the available issues, our smartest play (in terms of competition
from other parties, issue magnitude, issue staying power, and long-term
demographic payoff) is to pursue young voters with entitlement reform and
personals freedoms.

> Speaking at a peace rally, I probably will not
> go into Social Security theory.

The question isn't what you would say at a peace rally. The question is:
will the LP grow more if our primary strategy is to a) compete with the
Greens in wooing peace rally attendees, or b) woo the young on the issues of
entitlements and personal liberty?

> As for the question of where the biggest audience
> is, I say it must be on the left, right now.

You're mired in the present. The war in Iraq is only 18 months old. No major
constituency protests our casualty rate in Afghanistan any more, and the
rate for Iraq will be similar before 2008. The war on terror will be old
news soon at the post-9/11 rate of U.S. terrorism casualties. By contrast,
the entitlement problem is guaranteed to only get worse.

> The anti-war movement is mostly on the left too,

Precisely my point.

> but not inherently so.

Who is "inherently" anywhere in political space? You say "offer truth" to
the anti-war anti-capitalist left, but I say it pays off more to offer truth
to the entitlement-raped socially-liberal young. We don't have to deprogram
them from any deeply-held political principle, we just have to cite
statistics from e.g. USA Today.

> We should go where the administration has withdrawn.

-- and where the Greens and Democrats can't compete. (And please don't say
that, because we have a monopoly on truth, no party can compete with us
among any group of voters.)

> To recruit South Park, just Left Coast, we can offer
> civil liberties. The Republicans already offer them
> a fiscal conservative stand

Are you seriously saying the Republicans offer a good home for fiscal
conservatives? Everybody knows that fiscal conservatives are disgusted with
the Republican fiscal record since 2000. By contrast, I've heard no reports
that anti-war anti-fascism types are fed up with the economic positions of
either the Democrats or Greens. You're advocating we chase a phantom set of
voters, and ignore a group so big that it's widely written about even in
non-Libertarian circles.

> Those people get a guaranteed minimum income, straight
> from the Treasury if their 6.2 funds can't earn enough
> on the open market -- some "means-testing".

They test your means, and give you money if your means are insufficient.
Please explain how this is not "means-testing".

> The problem with Social Security now, is the pay-as-you-go
> funding, instead of an inviolable trust fund.

You're confusing two possible kinds of trust funds. The kind you're thinking
of is one in which all your future benefits are pre-funded by your prior
contributions. The kind SS has always had is instead one in which SS can
temporarily park excess funds when it happens to collect more than it pays
out in a given period.

> If a real Trust Fund maintained a balance for
> all recipients, and provided all benefits from
> its earnings

That would be terrible, because then the Social Security Administration
would be the largest investor in the country. As Cato says:

Individuals, Not Government, Should Invest

The only way to increase Social Security’s
rate of return is to invest in private capital
assets. This should be done through the creation
of individually owned accounts, not by allowing
the government to directly invest Social
Security surpluses. Individual accounts would
give workers ownership of and control over
their retirement funds, allowing them to accumulate
wealth and pass that wealth on to their
heirs; it would also give them a stake in the
American economic system. Government
investment would allow the federal government
to become the largest shareholder in every
American company, posing a potential threat to
corporate governance and raising the possibility
of social investing. And government, not
workers, would still own and control retirement
benefits.

> the original plan for SS was a trust fund,

The Social Security Act created a defined-benefit plan, not a
defined-contribution plan. (See http://www.afscme.org/wrkplace/defined.htm
for definitions.) This is confirmed by considering the earliest
beneficiaries of SS:

"On January 31, 1940, the first monthly retirement check was issued to Ida
May Fuller of Ludlow, Vermont, in the amount of $22.54. Miss Fuller, a Legal
Secretary, retired in November 1939. She started collecting benefits in
January 1940 at age 65 and lived to be 100 years old, dying in 1975.
Ida May Fuller worked for three years under the Social Security program. The
accumulated taxes on her salary during those three years was a total of
$24.75. Her initial monthly check was $22.54. During her lifetime she
collected a total of $22,888.92 in Social Security benefits."
http://www.ssa.gov/history/idapayroll.html

"The earliest reported applicant for a lump-sum benefit was a retired
Cleveland motorman named Ernest Ackerman, who retired one day after the
Social Security program began. During his one day of participation in the
program, a nickel was withheld from Mr. Ackerman's pay for Social Security,
and, upon retiring, he received a lump-sum payment of 17 cents."
http://www.ssa.gov/history/briefhistory3.html

It may indeed have been originally hoped that the overall SS benefit stream
could be financed by the aggregate SS payroll taxes flowing into its trust
fund. What undermined that hope is not how the trust fund's assets have been
invested, but rather the subsequent changes in life expectancy, population
growth, and productivity growth.

> To repeat, the SS problem is the looted Trust
> Fund.

The "looting" of the trust fund is the standard Big Lie used by
nanny-staters to scare seniors about Social Security. SS has to invest its
temporary surplus in something. If it's not T-bills, then the SSTF has to
invest in the private sector, and the Treasury would just sell to the
private sector the T-bills that the SSTF used to buy. There would be no
change in net government demand on the capital markets, which is the measure
that constitutes the primary brake on the government's efforts to live
beyond its means. There would be no change in the need of the government to
finance those T-bills when they come due. There would be no appreciable
change in the assets available to the SSTF to try to pay its unfunded
liabilities.

Complaints about "looting" are usually a smokescreen to undermine efforts to
switch from a pyramid scheme to a pre-funded plan. There is no form of
investment that the SSTF's $1.5T balance could take that would make SS not
be a pyramid scheme. If the SSTF held private-sector stocks and bonds, and
the Treasury had been selling the SSTF's T-bills to the private sector, then
the same amount of T-bills would be coming due in the future. The future
temptation to not honor the SSTF's T-bills will be equivalent to a future
temptation to use the SSTF's hypothetical private-sector assets to pay off
the corresponding extra amount of T-bills. It's naïve to think that any
accounting trick (short of individual accounts with private property rights)
would stop politicians from using assets held in government accounts.

"Looting" of a trust fund sounds like something that politicians would do,
so Libertarians naturally believe it. However, there's no accounting trick
that would stop politicians from making government do as much net borrowing
from the private sector as the credit markets will allow (before discounting
the government's ability to repay). Everybody likes to point out that the
SSTF consists of just IOUs, but nobody ever analyzes what would have
happened if the SSTF had instead been buying shares of IBM and GE and making
the Treasury sell those extra T-bills on the open market. It's naïve to
think that the SSTF would have been a non-political player on Wall Street,
and that the politicians would have applied a scissors to their credit card.
Indeed, since SS came into the "unified" federal budget in 1969, Congress
has several times moved it back "off-budget" to discipline itself -- to no
avail. Even though it's technically off-budget, policymakers and credit
markets still know how to add, and the aggregates are the numbers that
everybody watches. See
http://www.concordcoalition.org/entitlements/crs050598.html for details.

Finally, note that the same people who say the SSTF has been "looted" also
say that the Federal debt is $7T. Of that $7T, $1.5T is held by SSTF and
$1.5T by other government accounts. If the $3T owed by the government to
itself really has been "looted", then those T-bills are worthless and the
federal debt is really just the debt held by the public -- i.e. well under
$4T. You can't have it both ways.

> It has nothing to do with demographics.

No serious policy analysis about Social Security would agree with this
statement. As the SSA web site says at http://www.ssa.gov/qa.htm:

"People are living longer, the first baby boomers are five years from
retirement, and the birth rate is low. The result is that the
worker-to-beneficiary ratio has fallen from 16-to-1 in 1950 to 3.3-to-1
today. Within 40 years it will be 2-to-1."

(The SSA's web site is surprisingly frank about Social Security's dubious
history, imperiled future, and need for a transition to pre-funding. I
wonder if it was so frank under the Clinton Administration?)

> If the government had kept track of the receipts
> from each worker, carefully invested them, and
> apportioned benefits from the revenues,

The Social Security Act did not create such a defined-benefit program. Such
a program would never have served the political purpose of Social Security,
which was not to force people to finance their own retirement. There aren't
any votes to be bought by making people save for a rainy day. Ida May
Fuller could never have earned $22K in lifetime benefits no matter how
"carefully" the government "invested" her $25 lifetime contribution.

> SS was designed as a trust fund, not as a pay-as-you-go system.

That's an inaccurate characterization of the Social Security Act of 1935.

> Why would such a system even have a "Trust Fund"?

Because even a pay-as-you-go system has to maintain a positive balance if it
wants to avoid ever bouncing checks.

> Somebody has to lose. Some people may not get their
> retirement income, even though they paid taxes
> especially for that purpose.

Do you call it "losing" if you miss out on the chance to take more from your
grandchildren than you paid (plus interest and inflation) to support your
grandparents?

> How do you want to chose the victims?

I already told you: "The principle for cutting benefits should be: privatize
them so they are equivalent to your contributions plus interest plus
inflation, but provide a safety net for those near poverty, and a cushion
for those in or near retirement."

Got any more rhetorical questions you want me to re-answer? :-)

> It says that recipients get this
> benefit even if they have substantial, non 6.2, assets.

False. The document says nothing about the safety net applying to
high-wealth low-income people.

> I would call this partial privatization, at most.

This from someone praising the idea of the government managing a unified
pool of all workers' retirement savings. :-) Leftists who oppose Social
Security "privatization" indeed call the Cato 6.2 plan "privatization",
because it prevents redistribution by giving you private title to an account
with your name on it and your balance in it and your right to guide how it's
invested. See http://www.new-enlightenment.com/sss1.htm for just one example
of anti-Cato anti-privatization leftist hysteria.

> > Page 6, paragraph 1: "Workers who are retired today or who
> > are nearing retirement should not have their benefits
> > reduced or threatened in any way."
>
> Perhaps I don't know what you mean by a "cushion".

I should have been more clear that a "cushion for short-term transition
effects" means not blindsiding people who are in or near retirement.

Brian Holtz
2004 Libertarian candidate for Congress, CA14 (Silicon Valley)
http://marketliberal.org