Re: Question about President's Social Security plan

From: tonyp (tonyp_at_world.std.com)
Date: 01/16/05 

Date: Sat, 15 Jan 2005 23:08:31 -0500

<royls@telus.net> wrote

> > tonyp says...
> >> Private Learjets are of course _much_ better for "the economy" :-)
>
> Gogarty writes:
> >Actually, that's true.
>
> Actually, it's false.

Actually, it was ironic.

> >Private investment is much better for the economy than
> >military investment.

As Timothy Little said, military expenditure can be considered a form of
insurance. But insurance premiums are an expense, not an investment.

> For one thing, that is a _general_ rule that has many exceptions, and
> for another, private Learjets are more an investment in conspicuous
> consumption than in productive capital.

Roy, if you _travel_ by Learjet you are indeed making an "investment in
extravagance". When you buy a Learjet to rent out to conspicuous consumers,
I'd say you are making an actual investment.

> The most expensive military of all is one that is
> not strong enough to deter aggression.

The above sentence applies literally to the US military: in September 2001
it was (as it still is) the most expensive military in the world, but it
demonstrably was too weak to deter aggression.

Now, back to Learjets. Or big-screen TVs, or cosmetic surgery, or live
opera. They all give pleasure to their consumers, and employment to their
producers. None of them may be to your taste or mine, but the joy of the
free market is that it caters to all appetites. Well, not all: I value
quiet conversation with congenial friends more than I value opera, but
having a nice chat adds nothing to GDP, whereas buying an opera ticket
_does_. Life is more than "the economy".

Still, employing people to produce stuff that other people are willing to
pay for is what "the economy" is all about. CEOs and movie stars are
willing to pay for Learjets, taxpayers are willing to pay for F16s.
Producing either plane employs people and thus adds to GDP. Buying either
plane can seem like a misguided investment or a frivolous expense, to some
people. It's a matter of taste: if "taxpayers" as a group are willing to
pay for F16s, I cannot condemn their taste any more than I can condemn that
of "CEOs and rock stars".

Our current problem is along a different axis: we have a president who
thinks taxpayers should not _pay_ for F16s, but _finance_ them. Borrow,
don't tax, is the Bush line. Borrowing money from rich people, rather than
taxing rich people, is of course very good for the rich people.

You'd think the same would apply to not-rich people. Social Security (a
pool of not-rich people's money) has been lending to the Treasury for about
20 years. The government has been borrowing from the not-rich, but Bush now
wants to convince us that _those_ government IOUs are worthless, and our
only hope for retirement security is "private accounts". (As if _that_ will
somehow change the 2:1 worker:retiree ratio.) Of course, the _rich_ must
never be allowed to think that _their_ government IOUs are worthless. So
far Bush's tightrope act is working.

As Bush stirs the SS pot, however, the not-rich might wake up and see the
double standard he's trying to pass off as the natural order of things. Or
they might not. You never know, in a democracy.

-- Tony P.