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writing for godot

GOP Love Affair With Kooky Idea

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Written by thomas bonsell   
Thursday, 14 February 2013 11:25
It seems the right side of American politics just can’t shed its love of idiotic ideas.

The idiotic idea to be discussed here is the Republican Party “plan” to “privatize” or “personalize” Social Security to save it. That was once again brought to the fore when GOP presidential candidate Mitt Romney named Rep. Paul Ryan to be his running mate; the same Paul Ryan who has repeatedly championed this moronic idea concerning Social Security. An idea of the Republican Party promoted since 1980 by the libertarian Cato Institute that is funded by billionaire right-wing brothers David and Charles Koch. Since the GOP failed to win the White House in the 2012 elections America is safe, but the idea will crop up again if, or when, the GOP does get the presidency.

There are problems with what the GOP proposes; the first being the Constitution in Article I, Section 8, paragraph 1, authorizes Congress to tax and spend to promote the “general welfare” of the nation, which Social Security does. It doesn’t authorize Congress to use tax money to promote “personal welfare” or “private welfare.” If Republicans had the unequaled reverence for our Constitution as they claim, they would know that.

But the bigger problem involves two Supreme Court decisions of 1923 when the court was at its most conservative. These two cases (the Mellon decisions) established two obvious concepts in addition to determining what constitutes a “case” that a person must have in order to sue government.

In the first case the court ruled that once government collects taxes, the taxpayers have no claim of ownership or how tax money is used. A government program is like a policy from an insurance company in that you don’t need it until you need it. When an insurance company collects money from premium payments, the company is the legal owner of that money, just as government is the legal owner of money it collects in taxes. The second case established that when this government-owned money is spent, it can be spent only under authority of law (as the Constitution plainly states) and since only Congress can make law, a taxpayer – or state government, as in this case – has no say in how money is spent.

Now we come to a GOP proposal in which money government owns is to be placed in the stock market to fund “privatized” or “personalized” Social Security accounts. But only Congress can place that money in the market, and government will own everything that money buys. The GOP always raises the argument that stock ownership will get greater growth than the Social Security system offers. (Ignore the market from 1929 to 1933 and the halving of its value during George W. Bush’s reign of economic disaster.) Republicans never mention that Social Security isn’t designed for growth and individuals can invest – independent of payroll taxes – all they want in the market under present law. Nothing in Social Security law prevents that.

With the Social Security Trust Fund holding $2.7 trillion in IOUs from the Treasury (thank Ronald Reagan and his Deficit Reduction Act of 1984 for that), Congress can spend that to purchase stock. The GOP plan calls for benefits to be paid for a short time with borrowed money while tax receipts go into the stock market. Let’s use three years of that which would mean more than $3 trillion more government money in the stock market. So we have about $6 trillion worth of stock now owned by the government.

If this plan is carried to its ultimate and logical conclusion we come to a point in which government, when it keeps buying stock with payroll-tax surpluses, could own all the stock on all the United States (or world) stock exchanges. That, of course, would destroy numerous 401K retirement funds individual Americans have at the same time corporations are ridding themselves of solid retirement programs for their employees. This GOP nonsense would make Americans more dependent on government programs and more controlled by government.

That presents a couple other problems: does government keep corporations it owns honest or does it let them run wild as they did it the 1920s and as Wall Street did to cause the Great Recession at the end of the Bush debacle? Secondly is what does government do with any additional payroll-tax surplus when it already owns all the stock?

But the biggest problem is one a Republican can’t understand. With the value of our economy hitting $15 trillion in 2011 and the value of all stock on US markets about $13 trillion, government would essentially own about 87 percent of the economy. By owning all the banks and mortgage companies, government would also own all the private property that is being financed with mortgages – which would include all apartment complexes and most houses – as well as all non-corporate businesses financed with money borrowed from the banks that government now owns. That would probably push government ownership of the economy well past 90 percent. Any one who has a passing familiarity with the now-defunct Soviet Union knows that in that nation government owned about 90 percent of the engines of the economy. Socialism that the political right claims to hate is a system in which the people of a society own the economic engines in common. Government acting as a representative of the people to own the engines of the economy is communism, and that is the system the GOP promotes.

It should be standard practice that no entity of government should own equity in any private-sector company. Such government entity such as pension funds could buy private sector bonds or preferred stock, but ownership of stock (i.e. common equity stocks) should be prohibited.

In the Soviet Union, the 10 percent of the economy not owned by government was comprised of individuals on their own, such as writers and entertainers. Some small cooperatives that made trinkets for tourists were allowed, as were small businesses; but those small businesses were not allowed to hire employees because that would be “exploitation“ of the working class. In this way the Bolsheviks were implementing the concept that the individual was totally in control of building his/her business without outside help; the theme that dominated the 2012 GOP National Convention.

And we have a Republican Party full of fools running around claiming anyone they disagree with is a communist, socialist, pinko, fellow traveller and other such nonsense. But, in reality, if communism ever comes to the United States it will not come through violent revolution; it will come peacefully by government buying the engines of economic activity, the very proposal of the Republican Party and its willingness to screw up the nation with hare-brained ideas it can’t comprehend, but will go about its agenda with gusto regardless of the destruction it creates. These right-wingers are the same as those who nearly destroyed our constitutional freedoms in the 1940s-60s with their anti-communism hysteria or committed mass murder in Latin America under Reagan’s leadership because they haven’t the faintest idea what communism is. And when they constantly label others as “communists” they are only practicing what is called “transference,” that is attributing to others what is most odious in themselves.

This is not discussed in the American media because there is no one in that industry – including so-called liberal or progressives and those at the top, such as The New York Times, Washington Post, Chicago Tribune or Los Angeles Times – with the knowledge or logical thinking to draw the proper conclusions. In fact, The Seattle Times passes off one of its columnists as a constitutional scholar (i.e. “expert”) and he whole heartedly supported this communistic idea when George W. Bush, under the urging of anti-tax buffoon Grover Norquist, tried to implement it during his administration of ineptitude, incompetence and destruction. But, The Seattle Times is the newspaper that launched Michelle Malkin into political journalism as an editorial writer and doesn’t accept pro-Constitution material even if it is an innocuous as a letter to the editor.

To the Republican “mind” Ryan is an intellectual, and the plan to communize American through Social Security is “reform.” It’s obvious that Ryan is no intellectual and GOP “reform” is destruction. In light of this, it might be reasonable to conclude that the accumulated communal wisdom of the Republican Party isn’t quite sufficient to constitute one competent village idiot.


By Thomas A. Bonsell






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The author is a retired newspaper editor and former intelligence analyst at the National Security Agency defending America from communism and other external threats. His latest book is “Saving America: Using Democratic Capitalism to Rescue the Nation from Economic Folly.”

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