About Me

In writing the "About Me" portion of this blog I thought about the purpose of the blog - namely, preventing the growth of Socialism & stopping the Death Of Democracy in the American Republic & returning her to the "liberty to abundance" stage of our history. One word descriptions of people's philosophies or purposes are quite often inadequate. I feel that I am "liberal" meaning that I am broad minded, independent, generous, hospitable, & magnanimous. Under these terms "liberal" is a perfectly good word that has been corrupted over the years to mean the person is a left-winger or as Mark Levin more accurately wrote in his book "Liberty & Tyranny" a "statist" - someone looking for government or state control of society. I am certainly not that & have dedicated the blog to fighting this. I believe that I find what I am when I consider whether or not I am a "conservative" & specifically when I ask what is it that I am trying to conserve? It is the libertarian principles that America was founded upon & originally followed. That is the Return To Excellence that this blog is named for & is all about.

Wednesday, September 2, 2015

Huckabee's Funding Change For Social Security

Kim Strassel writes disparagingly in her August 20 WSJ Potomac Watch column that Republican presidential candidate "Mike Huckabee passionately defends Social Security as it is." 
Governor Huckabee's defense of maintaining Social Security benefits is a noble enough goal for the 59 million people receiving Social Security checks let alone the 40 million who receive @ least half their income from Social Security, the 20 million people who depend on it for 90% of their income, or the 12 million people whose only source of income is Social Security.  In short, two thirds of seniors depend on Social Security as the main source of their income.  Without Social Security half of all seniors would be living in poverty.
When the federal government began collecting Social Security taxes in 1937 there were 159 people paying into the system for everyone projected to receive benefits (my mother told me "they took pennies out of my pay").  By 1960 that number was reduced to 5 to 1 & today it is 3 to 1.  As the baby boomers retire @ a rate of 10,000 per day that rate will drop to 2 to 1 in the near future so we can see that a system relying on an income base with a dwindling number of workers is inferior to one that relies on a consumption base that is twice the size of the income base. 
The part that Miss Strassel misses in all of this is that Governor Huckabee does not defend all of the current Social Security program – in particular he wants to change the funding of the program from the dwindling income base to the FairTax.
About half of income earning people do not pay federal income taxes & these people, plus @ least another 20% who do not pay enough federal income tax that it is a concern to them, are prone to be disinterested in income tax reform because they think it does not directly affect them.   This 70% of the citizenry are exactly the ones who will benefit the most by strengthening Social Security by enacting the FairTax.  See above statistics regarding Social Security dependence by seniors.
Below is the message I sent to Miss Strassel that shows the monumental difference between Governor Huckabee trying to maintain Social Security benefits as is & strengthening its funding under the FairTax.
Dear Kim,
Please note that Governor Huckabee does not passionately defend Social Security as is.  He is trying to retain the benefits as is but advocates a gigantic change in funding Social Security going from an income base to a consumption base under the FairTax.
Governor Huckabee recognizes that there is & has been a dwindling number of income earners paying into Social Security ever since its inception & today a large percentage of payroll taxes that are paid are reimbursed through the EITC.  The FairTax consumption base is over twice as great as the income base – $8.8 trillion consumption versus $4.2 trillion in 2005.
Consumption figures have been tracked by the Federal Reserve Bank of St. Louis since the 1950s & taxable income has been tracked by the IRS since 1913.  It is their figures that show the relationship between consumption & taxable income. 


Please consider the following:


a.  50% of the population today does not pay federal income tax (& many do not pay the Social Security tax either because of the EITC) but they do consume.


b.  The personal deduction & the standard deduction (or itemized) are not part of taxable income but they are part of consumption.


c.  Untaxed welfare payments are part of consumption.


d.  Foreign tourist (50 million per year) purchases are part of consumption.


e.  Illegal activities in the underground economy are not taxed but are part of consumption - illicit drugs, illegal labor, & pornography alone were estimated to be higher than $1 trillion in 1998.


f.  The shadow economy is estimated to be $350 billion per year - part of consumption but not part of taxable income.


g.  Wealth spend down also is part of consumption but not taxable income.

All of the above will strengthen Social Security under the FairTax as Governor Huckabee knows so please do not say that he is for Social Security as is.


  1. I just hope that Mike Huckabee has the opportunity to say what you have in this blog piece. If he explains how the FairTax will financially boost the coffers of Social Security exactly like you did simply and eloquently, many more Americans will understand the power of the FairTax and how it can help this country. I hope that Huckabee and his team find this piece and memorize it!

  2. Doug
    Excellent points in your letter. Perhaps more will understand that the Fair Tax is a much more stable tax system than present one due to the large tax base. I hope Kim and others realizes it also saves over $400 billion a year with IRS elimination and is also progressive, in short a winning combination.

  3. Your last article about the FairTax was a gem, the comparisons between consumption and IRS were so clear. You are really a great writer Doug, you have chosen a wonderful way to spend your retirement years taking advantage of your talent.