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Readers Weigh In   (January 25, 2007)

Taxes, entitlements and military spending have generated a wide variety of interesting commentary. Herewith is a selection (slightly edited for length) of reader feedback.

Strawgold makes an excellent point about government employees' retirement plans and Social Security:
I read your column about Social Security and “who gets hurt” if it goes under. But here’s what makes even more interesting reading: GOVERNMENT WORKERS DON’T HAVE TO WORRY ABOUT Social Security GOING UNDER. They are not covered under it like the rest of us ( yes, us - the ones who are paying for everything) are. THEIR retirement plan, through the good old Federal Govt has our meager Social Security beat all to the devil and is in no danger of being phased out, or going broke in the same way.
Those familiar with the philosopher John Rawls will find resonance in David M.'s observations on morality and taxation:
I again have had to suppress my disbelief at the world when reading your reader’s comments in your latest blog posting. His assertions that he has a “right” to all his earnings have at least two main problems: he has undoubtedly benefited from a peaceful society, education, and transportation; and society as a whole is likely to suffer from his expenditures (pollution, scarcity of resources).

The fact that he tries to argue that it is “immoral” to tax the rich to help the poor goes against much moral philosophy. The one that I subscribe to is the notion that we should set up a society where we would be happy being randomly assigned any position in it. I for one would not be happy to be assigned a random position in a society where there is a 30% chance that I could end up struggling for life.

Perhaps this reader’s problem is that he equates poor and lazy, when there is a huge literature on the inaccessibility of the higher rungs of our society to those born in poverty.

One last comment on your response to your reader, (re: no taxation without representation), for the past 4 years I have been paying a great deal of taxes, though as a permanent resident I have no right to vote in state or national elections. My wife jokes that the Americans are just getting their revenge on me (as I am British), but I think it also underlies a significant problem that in this age where American elected officials can cause havoc around the globe, only Americans are allowed to vote for them.
Frequent contributor Michael Goodfellow comments on the correlation between low tax-rate nations and high GDP, and on my DoD spending entry:

I also wondered what would happen if you listed those same countries in your international comparison sorted by GDP per person. I'm pretty sure the U.S. and Japan would be number 1 and 2, just as they are last in taxes on your graph. Not sure the correlation would hold up, but it still should make you think.

The comment that defense has shrunk as a percentage of GDP has always struck me as odd. Just because the country gets richer doesn't mean it costs more to defend. The defense spending should be proportional to the spending of our likely enemies. With the collapse of the Soviet Union, that enemy spending should have dropped dramatically.

Much is made of the potential threat from China or from the middle east, but they really don't spend much. The new threat is the famous "asymmetrical warfare", where we use million dollar cruise missiles, and they use guys with knives or roadside bombs. Not clear to me that any of the current defense spending really prepares us for that world. Improved spycraft might, but that doesn't seem to be happening.
Another astute reader (Michael) was kind enough to send in a link on Affluenza and the consequences of our cultural obsession with material wealth:

Earn more, spend more, want more

"In the first extract from his new book, psychologist Oliver James explains how the 'affluenza' virus can lead to insecurity and destroy personal relationships."

I see in American pop culture, a lot that reeks of the "affluenza" that the author writes about ,and I think it is destroying us. American Idol, Paris Hilton, Donald Trump and reality tv promote empty values. It frustrates me to see it all the time. I don't know what can happen to change this. It may truly be a horrible side effect of "selfish capitalism".

Keep up the good work. It is nice to read someone who has their eyes as wide open as yours are.
Next up is David A., who comments on the unsustainability of the Social Security model, and on governmental waste:

Charles, all this vastly huge Medicaid/Medicare and social security spending is in the future so THAT DEBT DOESNT COUNT!!! future debt isn't important as we will be able to pay for it in some miraculous, painless way!

you are discussing very complex problems and I don't think a lot of the hecklers get it. most people want a sound bite solution. what is scary is that the fact that the gov may never actually pay out the (future) social security payments or healthcare - so is it a debt?! do we need to add that to the budget deficit?

My parents worked for FHA/HUD from the 1960's thru the 1990's. I think if the average tax payer knew the extent of waste in the social programs they would freak.

My mother has now retired and hit the point in which she is now drawing money she never paid in. my grandmother 'retired' 25 years ago!!!! my grandparents were 'dirt farmers' in Oklahoma and they never paid a penny into the system. my girlfriends grandparents (all 4) lived for 20 years on social security.

I try and explain to my mother that the (small amount) of money she put into social security was borrowed (stolen?) and is gone. she is being paid by current taxpayers so she is getting a 'welfare' check just like the welfare recipients she dealt with for 35 years! she thinks my sisters 'corporate' retirement package is secure. she cant grasp the fact that when my sister gets ready to retire in 25 years her company will probably have defaulted/gone out of business and she will have nothing!

I know that massive debt/fiat money leads to ruin but even I cant grasp the fact that the united states could fail! the human mind doesn't think in those terms.
Frequent contributor Harun I. notes that morality isn't the only metric for taxation, nor is the cost of maintaining a military the only consideration--losing is expensive, too:

I didn’t take your view about taxation from a moral standpoint but from a correlative perspective. I also take issue with some of your readers linear thinking in regards to complex non-linear social issues. There may not be a moral basis for taxes to support social welfare but what will we do when the poor and disaffected are rising up in revolt. I have no answers, I merely raise the question of whether morality is the only benchmark by which social policy is formed. The poorest members of any society will burden that society to some extent and possibly in ways that are very undesirable.

There will always be waste in human endeavors but we should have systems of accountability to limit them. History has shown us the lesson of the result of letting military preparedness decline. I wonder if fighting a war is more or less expensive than preventing or losing one? Harun
Correspondent Mark D. shares some history on the weapons development process, and comments on "over-teching":

I really enjoyed your comments on the defense industry. Both my parents worked for Lockheed, as well as several family friends during the days of the Tristar days, as well as the older, I forget the name of the passenger plane with the funny tail. they always complained about management sticking with Rolls Royce, and that, at the time, the strength of Lockheed was efficiency of design, efficiency of aircraft, though not in vogue at the time, turned out to be inconsequential, then, but not now. My Dad worked on the Aquila, something that actually got cancelled! I had a neighbor that worked for Ampex and helped minaturize the VCR for flight recording for bombers and was PISSED they sold it to the Japanese. now he makes 1/8 scale WWII RC fighters with EVERYTHING to scale including flaps, twisting landing gear etc.

I guess I am most scared by the "over teching" of the military and communications redundancy. I have a friend in the military who sets up remote command centers for generals. interesting topic, especially if we rely too much on satellites instead of hard assets for communications.

Perhaps the biggest question about the defense industry is at what level of consolidation was innovation, costs, ontime, non-war production efficiency at it's best, which of course is subjective.

My choice is just before the Korean War because we were still unlocking all of Germany's secrets, swept wing design, 2nd generation jets, atmosphere, sound barrier, air and fuel, space, triangulation (in comes the meter again), in air records by all kinds of design's, heady days of people still alive who started their company and were motivated by proof of concept, rather than money alone, on and on. The other eras (again, not wartime, which mostly foster innovation) really pale except the 60's with the dual use platforms which mostly ended up as a military solution (P-3 orion and the british versions come to mind), and of course Skunkworks with Kelly Johnson.
Since I'd discussed the relative merits of Boeing vs. Lockheed on the C-5a aircraft, I asked Mark for the views of the Lockheed retirees he knows. His answer sheds considerable light on another source of "waste": the over-spec'ing of every component:

To a man, er woman, they all said Boeing would have done a good job, too. Most said cost overruns are underestimated based on waiting for security clearance while doing nothing, (average of 6 mos?), requirements on procurements, such as complying with the wood source of hammers, making sure the hammer can hammer (labor, etc). Based on some of this, wood source is known, but i don't think anyone would buy a hammer made out of teak or mahogony, but someone still has to run around wasting time making sure the hammer was purchased conforming to requirements. That list is not infinite, but not measurable.
Kevin K. has some doubts that reforming Medicare to emphasize prevention would work:
I was talking about your BLOG with a co-worker and even though it is sad to say, we both agree that most spending on "prevention" will do nothing.

Most Americans are so stupid that they would sit watching TV and eating KFC even if the Government paid to send out a personal trainer with a healthy meal every day.
Kevin also recommended the recent film on the dumbing-down of America: Idiocracy

James C. raises the issue of what therapies are being ignored in favor of profitable pharmaceuticals and surgery:
Health care is the one topic that I get more up in arms about than economics and investments. Have you read Politics in Healing by Daniel Haley? Do you know about IV Chelation Therapy? The medical establishment in America has become one of the most shameful aspects of our society. Worthwhile treatments and preventative methods are cast aside because they do not generate enought profit. I know about Chelation because I have studied the subject for close to four years and have been using the treatment for over a year. It works and is, in my opinion and the opinion of many other patients that I have met at the clinic, a much more effective treatment than bypass surgery, drugs et. al.

Check out what Richard Russell says about Chelation therapy. If you can't find it, I have files of his discussion of Chelation from his Dow Theory Letter. Medical expense consumes more of our GDP on a percentage basis that any other industrialized nation, yet we have lower life expectancy that all the rest with the exception of Mexico. See Michael Hodges, Grandfather economic report.

Our country is going to hell and I fear not nearly enough people are aware enough of the situation to make a difference.
And this just in, from frequent contributor Aaron K., on Medicare waste:

I'd like to add to the mix that base health care costs are anomalously high even without poor medical spending decisions, due to the employer-based tax structure of the system. I wrote an extensive essay on the matter here, titled as above:

U.S. Health Care: Addicted To The Thing That's Killing Us.

Gratzer has a book out recently saying basically the same things.

Take a look at the Epilogue anecdotes to my story, and consider I'm just a normal guy, fairly young at that, and my insurance costs are inflated by several hundred percent, and I can pick out instances of compulsory overspending on care by several thousand percent!
What an extraordinary range of commentary! Thank you readers, for your contributions and thoughtful contributions.

For more on this subject and a wide array of other topics, please visit my weblog.


copyright © 2007 Charles Hugh Smith. All rights reserved in all media.

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