A Majority Rule Institution

"To give a minority a negative upon the majority (which is always the case where more than a majority is requisite to a decision), is, in its tendency, to subject the sense of the greater number to that of the lesser...A sixtieth part of the Union, which is about the proportion of Delaware and Rhode Island, has several times been able to oppose an entire bar to its operations. This is one of those refinements which, in practice, has an effect the reverse of what is expected from it in theory. The necessity of unanimity in public bodies, or of something approaching towards it, has been founded upon a supposition that it would contribute to security. But its real operation is to embarrass the administration, to destroy the energy of the government, and to substitute the pleasure, caprice, or artifices of an insignificant, turbulent, or corrupt junto, to the regular deliberations and decisions of a respectable majority. In those emergencies of a nation, in which the goodness or badness, the weakness or strength of its government, is of the greatest importance, there is commonly a necessity for action. The public business must, in some way or other, go forward. If a pertinacious minority can control the opinion of a majority, respecting the best mode of conducting it, the majority, in order that something may be done, must conform to the views of the minority; and thus the sense of the smaller number will overrule that of the greater, and give a tone to the national proceedings. Hence, tedious delays; continual negotiation and intrigue; contemptible compromises of the public good." ~ Alexander Hamilton, The Federalist No. 22

Is The Filibuster Unconstitutional?

Causes Of Violent Death

Guns Kill People, In One Chilling Graph

Taxes, Voter Fraud & Campaign Finance

For Further Reading:

The Fraudulence Of Voter Fraud
The Myth Of Voter Fraud
The Voter Fraud Hoax
Voter ID Fact Sheet
Voter Identification
The Right To Vote & Voter Suppression
Voter Suppression

It's Good To Be The King

Ezra Klein's post of two graphs quite succinctly sums up the reason for our current income inequaity - top-down class warfare.

It's Good To Be Rich In America, In Two Graphs

The Ugly (And Regressive) Truth Of Paul Ryan's Proposals

Paul Ryan's Budget Priorities

Paul Ryan Budget Priorities In Two Graphs

Klein on Social Security

The boring truth about Social Security

By Ezra Klein

There was a long and mostly confused conversation about Social Security during Wednesday night’s GOP debate. But rather than get sidetracked over whether the pension program is a “monstrous lie” (Perry), “a Ponzi scheme” (Perry again), “tyranny” (yep, Perry), “broken” (Cain), or a great system that Americans are being “defrauded out of” (Romney), let’s just go to the numbers.

Over the next 75 years, Social Security’s shortfall is equal to about 0.7 percent of GDP (pdf). If we increase its revenues by that amount -- which could be accomplished by lifting the cap on payroll taxes -- or reduce its benefits by that amount or do some combination of the two, Social Security is back in the black. Here are 30 policy tweaks that could get us there.

Why does Social Security show a shortfall? As Stephen C. Goss, the system’s chief actuary, has written, Social Security projects an imbalance “because birth rates dropped from three to two children per woman.” That means there are relatively fewer young people paying for the old people. “Importantly,” Goss continues, “this shortfall is basically stable after 2035.” In other words, we only have to fix Social Security once. After we reform it to take account of modern demographics, the system is set for the foreseeable future.

And that’s...it. That’s what’s needed to fix Social Security. All this talk about it being a “monstrous lie” or “a Ponzi scheme” or “broken” is meant to create a crisis to clear the way for radical changes in Social Security. But if folks want to make radical changes to Social Security, they should just make the argument for their proposed fixes. And good luck to them. But in reality, what’s going to happen is that sometime in the next decade or so, Republicans and Democrats are going to compromise on a package that adjusts Social Security by about 0.7 percent of GDP over the next 75 years.

The Debt Ceiling

Thirty years of the debt ceiling in one graph.

Social Security

A Social Security primer from Ezra Klein:

"1) Over the next 75 years, Social Security’s shortfall is equal to about 0.7 percent of GDP. Source(PDF).

2) For the average 65-year-old retiring in 2010, Social Security replaced about 40 percent of working-age earnings. That “replacement rate” is scheduled to fall to 31 percent in the coming decades. Source.

3) Social Security’s replacement rate puts it 26th among 30 Organization for Economic Cooperation and Development nations for workers with average earnings. Source.

4) Without Social Security, 45 percent of seniors would be under the poverty line. With Social Security, 10 percent of seniors are under the poverty line. Source.

5) People can start receiving Social Security benefits at age 62. But the longer they wait, up until age 70, the larger their checks. Waiting to 66 means checks that are 33 percent larger. Waiting to 70 means checks that are 76 percent larger. But most people start claiming benefits at 62, and 95 percent start by 66. Source.

6) Raising the retirement age by one year amounts to roughly a 6.66 percent cut in benefits. Source.

7) In 1935, a white male at age 60 could expect to live to 75. Today, a white male at age 60 can expect to live to 80. Source.

8) In 1972, a 60-year-old male worker in the bottom half of the income distribution had a life expectancy of 78 years. Today, it’s around 80 years. Male workers in the top half of the income distribution, by contrast, have gone from 79 years to 85 years. Source.

The conclusions I draw from these numbers are:

1) Social Security’s 75-year shortfall is manageable. In fact, it’d be almost completely erased by applying the payroll tax to income over $106,000. Source (PDF).

2) Most opinion elites — Simpson being one good example, and the U.S. Senate being another — show a very strong preference for working as long as possible. Most Americans show a very strong preference for retiring as early as possible. Elites who enjoy their jobs need to be very careful about generalizing their experience to people who don’t enjoy their jobs. More bluntly: Raising the retirement age is the worst of all possible options for reforming Social Security. It’s not only regressive, but it also falls most heavily on those with the worst jobs. Means-testing would be much better.

3) Social Security is fairly stingy and getting stingier. We also know most 401(k)s are underfunded, and the same goes for many defined-benefit pension systems, both public and private. We need to be very careful not to “solve” the Social Security problem by worsening a broad retirement-security problem, and that requires approaching Social Security as part of our retirement-security infrastructure rather than simply as a budgetary question. Here are some ideas on how to do that."

Can't Raise Taxes? Millionaires Will Move?

Do higher taxes cause millionaires to leave? Jon Shure and Ezra Klein say, "No."

Income Inequality

Excellent discussion and charts of income inequality, via Ezra Klein and Karl Smith.

Down With The Sickness

A recently released report from the Center for Economic and Policy Research finds that, "the U.S. is the only country among 22 countries ranked highly in terms of economic and human development that does not guarantee that workers receive paid sick days or paid sick leave."

James Kwak, at Baseline Scenario, offers some comments on a posting from Ezra Klein regarding this issue.