Monday, February 21, 2011

Whose Ox will get Gored?

President Obama established the National Commission on Fiscal Responsibility and Reform in February 2010. In December 2010, the Commission, co-chaired by former Clinton Chief of Staff Erskine Bowles and former US Senator Alan K. Simpson of Wyoming, released its report. The report included a comprehensive set of recommendations all designed to help the United States address its growing deficit problems and the mounting national debt. But, most controversial of all recommendations, the Commission had the temerity to suggest that, unless they are fixed soon, entitlement programs such as the Social Security System are doomed to financial failure.

In his usual fire-brand style of down home wit and brazen Western honesty, Senator Alan Simpson has never dodged the tough issues and some of his recent comments regarding Americans and Social Security have touched off a firestorm. Without regard for his specific words, give Al credit for taking on the elephant in the room. But, while we’re on the subject, let’s address some of the myths associated with this elephant in the room.

One of the common misconceptions about the Social Security System is that Congress has raided the Social Security Trust Fund and spent the money funding the current budget deficits. This is over-simplified at best and in many respects just not true. However, as is usually the case, the matter of accounting for the Social Security Trust Fund is too complicated to be adequately explained in this column. But, it deserves a better explanation than typical news sound bite, so let me give it a try.

When passed and signed into law in 1935, the Social Security Act established a system for collecting payroll taxes, keeping the money in a trust fund, and providing retirement assistance for the elderly as well as disability insurance for all Americans. The key to understanding the trust fund is that the Social Security Act requires that all Social Security receipts be invested in United States Treasury Bills and that the interest accrue for the benefit of the trust fund. US Treasury Bills are the debt instruments that our government uses to finance government operations and deficits. The challenge here is that in this particular case the United States is both the lender (the Social Security Trust Fund) and the borrower (the US Treasury).

Certainly, in these times of record deficits and a national debt approaching $14 trillion, many people are wondering at what point is the United States Treasury in danger of defaulting on its debt? However, for now, what is important for every American to know is that the Social Security Trust Fund is fully accounted for within the federal budget and the fund is accruing interest for the benefit of present and future recipients.

The notion that Congress has raided the fund comes from a not well understood nuance of the federal budget process. When preparing and reporting federal budgets, both the President and Congress designate certain budgetary items, such as the U.S. Postal Service and the Social Security System, as “off-budget.” This means that the receipts and outlays associated with these programs are not part of the annual budget appropriations process and are accounted for separately. However, when reporting the total budget of the United States, the receipts and outlays for off-budget programs are included in the totals. During the past and even currently, Social Security Trust Fund receipts exceed outlays, thus including the Social Security System in the total budget has the net effect of making the deficit appear smaller. This is what leads some people to suggest that Congress has raided the trust fund, but that statement simply is not true.

Now, let us consider some of the actuarial facts about the Social Security System. Since inception in 1935 until today, receipts have exceeded outlays, and accordingly, the trust fund together with interest has grown. Based on current population numbers, the size of the work force now and in the future, and the expected increased life expectancy of Americans, analysts believe the Social Security Trust Fund will continue to grow until around the year 2025. At that point in time, outlays will begin to exceed receipts, including interest, and the trust fund has been estimated to become insolvent, bankrupt, broke by about 2042, with some more recent estimates as early as 2037.

We can say what we want about how much you and I have paid or will pay into the system. We can make all the platitudes we want about how we are entitled to our Social Security retirement. But, none of that will have any bearing on the fact that, as currently funded and allocated by law, the Social Security System will be broke within our children’s life times. We may not want to see the retirement age raised or our benefits reduced, but where is the equity for our children and grandchildren who will pay into the system for decades and see nothing in return.

We may not like it when the likes of Al Simpson tells us “Where the pigs eat the cabbage” with respect to Social Security, but turning a deaf ear and a blind eye to the inherent and systemic problems with the Social Security Trust Fund will not advance us one wit. When it comes to fixing the Social Security problem, I may not want to have my ox gored, but someone’s ox will certainly get gored sooner or later.

At the risk of exposing myself to ridicule and criticism, I would like to suggest that the sooner Americans get together and help Congress find a way to address the certain and catastrophic failure of the Social Security System the better. And, the least painful it will be for all of us. There have been a number of ideas floated over the years that would make the system solvent into the foreseeable future without gutting current or near-term benefits for recipients. The scared cow will soon be on life support and it will die unless we put our differences aside and make the adjustments necessary to ensure Social Security’s viability for the long term.

Thursday, February 3, 2011

The Gun Culture in America

With recent headlines, comes the inevitable deploring of the use of words associated with guns and shooting. While I believe in measured rhetoric and I am not a supporter of vitriolic speeches, I mourn for the loss of America’s culture when I hear the political correctness movement suggest that gun metaphors lead to violence.

American history is so intermeshed with weapons and the right to bears arms that gun terminology has become part of the vernacular. Moreover, the origins of our freedom and the establishment of democracy can be directly linked to an armed citizenry who took up their muskets to secure life, liberty, and the pursuit of happiness for themselves and their posterity.

Let us consider the extent to which we use of gun metaphors in today’s modern-American English. To name a few: You’re “jumping the gun.” That’s like “shooting your self in the foot.” That person is a “straight shooter.” I need that like I need a “hole on the head.” He bought it “lock, stock, and barrel.” “Lock and load.” “Rock and fire.” That is “on target.” The goal is “within range.” Keep your “powder dry.” “Set your crosshairs” on that. They are “under the gun.” The final “shot” “beat the gun.” We are “going great guns.” You should “stick to your guns.” Bring in the “big guns.” That is the “smoking gun.” He is a “hired gun.” Why not “take a shot at it?” The idea was “shot down.” They are “shooting off” at the mouth. That person has a “hair trigger” temper. They are a little “slow on the draw.” Sometimes we have to “lower our sights.”

Some people suggest that when the 2nd Amendment refers to “a well armed militia,” it means only the National Guard or other state branch of law enforcement. Others make the case that the Amendment is only about protecting our hunting heritage. I believe the 2nd Amendment is about much more than a well armed militia and protecting opportunities for sport hunting. In fact, if you don’t think the Founding Fathers meant for you and I to have “the right to bears arms” of any kind for any lawful purpose then consider some of their writings.

Thomas Jefferson said, “Laws that forbid the carrying of arms...disarm only those who are neither inclined nor determined to commit crimes...Such laws make things worse for the assaulted and better for the assailants; they serve rather to encourage than to prevent homicides, for an unarmed man may be attacked with greater confidence than an armed man.” Jefferson put the 2nd Amendment in perspective when he said, "Those who hammer their guns into plowshares will plow for those who do not."

Samuel Adams referenced the right of citizens to bear arms when he said, “Among the natural rights of the colonists are these: First, a right to life, secondly to liberty, and thirdly to property, together with the right to defend them in the best manner they can.” He went on to say, "And that the said Constitution be never construed to authorize Congress to infringe the just liberty of the Press, or the rights of Conscience; or to prevent the people of the United States, who are peaceable citizens, from keeping their own arms; …"

Consider George Mason, co-author of the 2nd Amendment, who said, "I ask, Sir, what is the militia? It is the whole people. To disarm the people is the best and most effectual way to enslave them."

George Washington made the importance of gun rights clear. "Firearms stand next in importance to the constitution itself. They are the American people's liberty teeth and keystone under independence…”

Patrick Henry added these two points. "The great object is that every man be armed. Everyone who is able may have a gun."

Alexander Hamilton complimented that when he said, "The best we can hope for concerning the people at large is that they be properly armed."

Beyond the 2nd Amendment issues, the manufacturing of firearms in the United States in the 1800’s was one of the prime drivers of the Industrial Revolution that established America as the most powerful and benevolent nation on earth. And it was guns that won the West and, notwithstanding the scrutiny of how American Indians were treated, the settlement of the West was also crucial to making the United States a world power for good and peace.

We owe the establishment of the world’s first democracy and beacon of freedom to guns for we surely could have never prevailed against the British Empire without a well armed citizenry. We can be thankful that gun manufacturing pioneered the Industrial Revolution and the manufacturing processes used by other industries making the United States the economic hope and benefactor of the world. And, we can be proud that Americans are free to use their gun lexicon in their daily lives as they see fit, at least for now.

As pundits line up to analyze every tragic shooting and suggest their remedy to what they perceive to be the problem, let us take stock in the fact that firearms, gun ownership, shooting sports, and even the use of weapons by law enforcement and our military is as American as apple pie. Moreover, firearms are so intertwined with our culture that even those who don’t own or use a weapon, likely utilize gun metaphors in their everyday life.

The next time someone in the news media suggests, as has been done recently, that gun metaphors should be the new “N-word,” I hope someone out there has the courage to tell them that they are way “off target.”