As I picked up Bill Bradley’s new book, “The New American Story”, I had high hopes that since the former senator had left public office that he might have a clear head and be able to leave his old political ways behind him. Unfortunately my expectations were not met. Bradley has written an intriguing book that does outline many of the problems facing us in the near future, but his solutions are nothing more than the typical raise taxes on the wealthy so that the government can take care of you from cradle to grave.
His ideas on Pensions and Social Security are a prime example of his career in politics overriding any hope of new or fresh ideas. He proposes that we establish a $5000 Birthright for every child born in the United States. The National Center For Health Statistics reports that there are over 4,115,000 births in 2004 with a 1% increase in 2005. Simple math shows that this would be a $20 Billion a year plan that would only increase every year. Of course it would only be a matter of time before the politicians in Washington looking to buy more votes would propose to grandfather in more children as well as illegal immigrants. Why do politicians insist that the government can better take care of us from the time we are born until the time we die? How long before they decide when we can have children and how long we live? After all they will be paying for us to have children and will want to control how much they actually have to pay out.
Senator Bradley does point out some disturbing problems that we now face concerning the Pension Guaranty Benefit Corporation, which is operating with a huge deficit. Rather than look for alternatives to shore up the PGBC, he concludes that we need a “cash infusion”, but provides no source for this capital. He speaks about the tax deduction available for IRAs and 401(k)s being more beneficial for wealthy individuals. Simple economics tells us that it is obvious that someone who pays a higher percentage in taxes will receive a higher benefit from a tax deduction than someone paying a lower rate. Bradley’s solution is to eliminate the tax deduction for the retirement plans and provide a government match up to $20000 for 401(k)s and $5000 for IRAs annually. He claims that the cost would be made up by the elimination of the tax deduction. The problem with this is that the wealthy did not become wealthy by being stupid. They wealthy will simply move the money normally allocated for IRAs and 401(k)s to a more tax friendly investment or saving plan. Why would they leave that money there to be taxed at a higher rate by the government? It just doesn’t make any economic sense.
Mr. Bradley does have some good ideas. He brought up the need for every citizen to be able to check their retirement accounts online so that they can see where they stand. That way every citizen can decide to what they need to save every year to produce their desired level of retirement. It sounds like a very good idea. I just don’t think it is the governments job to do this. It will end costing the tax payers 100 times more than it needed to and will probably never deliver what is promised. After all, look at their track record.
Over all, I liked the book because it shows that the political elite believe that the government is the only right answer to every problem we face in the United States; where I have more faith in the people of our great country to make the best decisions concerning their families’ future. While we need some government regulation to ensure corporations follow through on their retirement promises, we also need freedom from the government to make our own decisions as adults.
Troy Stouffer, Politics Correspondent:Keep up with Troy’s other postings and Gather activity by joining his Gather network -- just click here http://tds1024.gather.com/ and select the orange “Connect” button on the left-hand side of the page
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Deo Gratias
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Comments: 24
Very good review!
For some reason, many people have deluded themselves into thinking that anybody who works for a living has money left-over after they pay their rent (or mortgage) and pay the other necessities such a food, clothing, medical bills etc. They refuse to recognize that even better off working stiffs often must chose between providing for their children's education and future and providing for their own retirement.
I am among the fortunate who chose the former. My daughter acknowledges the choice that I a made and feels it is her responsibility to return the favor by at least sparing me the cost of putting a roof over my head. Without her help, I would not be getting by in even minimal comfort on my social security income I would just be surviving, and I certainly would not have been able to afford the computer system on which I am composing this comment and I wouldn't have a DSL connection to access the Internet.
Troy,
As for shoring up Pension Guaranty Benefit Corporation it would not be in such dire straits if corporations had not been allowed to bailout of their obligations and then continue with business as usual. With ownership come responsibilities and there are a number of company that have used taxpayer money to allow them to continue paying dividends to their shareholders, and exorbitant salaries to their upper level management. How about expecting responsibility from them? We could start by garnishing their profits to force them to repay their debt to the taxpayers and if that didn't work they could be forced to sell their assets just like the working stiffs who has to raise cash to pay his or her debts.
I haven't read Bill Bradley's book. So far every suggestion I've seen posted from it suggests that he has absolutely no empathy or even awareness of America's working poor. Earlier I read that he suggested providing a subsidy for the purchase of "greener" cars, then adding a one dollar tax to gasoline to further research, and taxing anyone who still kept one of the older cars. As someone in my position, I saw gas getting too expensive for me to afford to work (but I'd have to anyhow), a tax that would put me further in the hole, and no way to escape keeping my older car because I would be paying twice as much to have any car at all, and would continue to need a car to commute the 30 miles it takes to get to work anywhere...
The net worth of the average household in the bottom 40% was $2,000 in 2004, up from $1,000 in 1962. The net worth of the average household in the middle 20% is $82,000, up from $46,000 in 1962. The net worth of the average household in the top 1% is $14.7 million, up from $5.6 million in 1962.
http://www.itulip.com/forums/showthread.php?t=976
Bradley recognizes this distribution of wealth. He, like most liberals know that the top one percent are not going to just "spread the wealth" and they got the wealth from the bottom 50 %.
Don't get me wrong, I am not suggesting an arrangement that distributes wealth equally. That is communism, and it cannot work because all incentives are removed. Everybody gets lazy immediately.
What I am driving at is this: the average American is providing the value that is being given to the richest Americans. Business competition requires a lot of effort, and it deserves compensation. But it is always a team effort. There is no good reason for not paying all of the team members a reasonable part of the money they bring to the business. No good reason, but a lot of not so good reasons. You get people to provide labor by paying them. You get people to buy the product of that work by selling it at a reasonable price, labor needs a reasonable wage to be bought. AND, labor is not disposable. If you spend your life providing labor, you might rightfully expect to continue living when your productive life is over but your heart and head are still working. Even if you don't demand the right to retire, you earn it.
I am cynical, if the government did set those up, I am pretty sure they would tap into the fund for some nefarious purpose to "keep from raising taxes." That's what they have done with the Social Security Trust Fund. It is a great way to take your money without openly taxing you.
This answer isn't practical because Soc.Sec. is a pay as you go system. When the kids reach their 20s and 30s and 40s the retirement group 60s,70s,80s won't have any funds. It's a way to pass the buck and screw over those who paid in their whole life.
Besides, there is really nothing that wrong with Soc.Sec. -- If the cost of living increases are reduced by just 1% a year, the entire system would become sufficiently funded by the year 2040.
I also think there should be no limit placed on payroll taxes. The rich are laughing all the way to the bank. An average middle class person is paying 28% income and 15% Soc.Sec for a total of 43% plus State 6%, local 1%, property, and sales tax for a whopping 50-55%. The rich are paying at most 38% which is less than a middle class person, not even counting the many tax dodges available for them. The other taxes they pay are pennies compared to their million dollar incomes. Additionally the pensions of the rich are separate from the common worker. Is't that just special.