President Obama on The 'promise' of Social Security?

Chicago Friday AM 20 August 2010

Editors, The Washington Post

Gentlepeople:

The Washington Post article “Dems' oldies tour lauds Social Security, Medicare” of Wednesday, August 18, quotes President Barack Obama: “We have an obligation to keep that promise, to safeguard Social Security for our seniors, people with disabilities and all Americans - today, tomorrow and forever."

After teaching Constitutional Law for 12 years the President must be aware that nowhere in the Constitution does it say anything about Congress getting involved with old age insurance. Some claim it's legitimate under the general welfare clause, but I'm sure the president is thoroly familiar with the Federalist Papers, where in Number 41 James Madison explains the context of the General Welfare clause:

"...a specification of the objects alluded to by these general terms [general welfare] immediately follows, and is not even separated by a longer pause than a semicolon.”

And that semicolon is immediately followed by the 17 clauses of Article 1 Section 8 specifically defining what Congress can do, from 'borrow money' to 'make all laws... necessary... for carrying into execution the foregoing powers,' but not a word about old age insurance.

Wouldn't you think with the President's broad legal training, when making a statement about the “promose” of Social Security, he would know that the United States Supreme Court did a pretty good job of explaining that “promise” in their 1961 Flemming vs Nestor decision:

"The noncontractual interest of an employee covered by the [Social Security] Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits are based on his contractual premium payments. To engraft upon the Social Security System a concept of 'accrued property rights' would deprive it of the flexibility and boldness in adjustment to ever-changing conditions which it demands and which Congress probably had in mind when it expressly reserved the right to alter, amend or repeal any provision of the Act.”

Arnold H Nelson

Paul Krugman attacks Social Security?

Chicago AM Tuesday 17 August 2010

Editors, The New York Times

Gentlepeople:

The New York Times columnist Paul Krugman opens his Monday 14 August column “Attacking Social Security” by referring to Social Security as “a program that has brought dignity and decency to the lives of older Americans.”

A reference to Krugman's I'm sure well worn copy of the 2010 Statistical Abstract of the United States would show the federal gonvernment annually distributes $900 billion to 50 million Social Security recipients. How much “dignity and decency” does $17,647/year buy a United States retiree in 2010?

Maybe Mr. Krugman could look at his apparently hardly used copy of the United States Constitution and point out where it says the Federal Government has any business being in the old age insurance business. If he thinks it comes under the general welfare clause, he should read James Madison's Federalist Paper number 41 where the father of the Consitiution patiently explains that "...a specification of the objects alluded to by these general terms [general welfare] immediately follows, and is not even separated by a longer pause than a semicolon.”

And that semicolon is immediately followed by the 17 clauses of Article 1 Section 8 specifically defining what Congress can do, from 'borrow money' to 'make all laws... necessary... for carrying into execution the foregoing powers,' but not a word about old age insurance.

If Mr. Krugman thinks the Supreme Court would make quick work with that, he can see they already have, with their 1961 Flemming vs Nestor decision:

"The noncontractual interest of an employee covered by the [Social Security] Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits are based on his contractual premium payments. To engraft upon the Social Security System a concept of 'accrued property rights' would deprive it of the flexibility and boldness in adjustment to ever-changing conditions which it demands and which Congress probably had in mind when it expressly reserved the right to alter, amend or repeal any provision of the Act.”

Arnold H Nelson

WSJ: Why small businesses are'nt hiring?

Chicago AM Wednesday 11 August 2010

Editors, The Wall Street Journal

Gentlepeople:

The Monday 9 August Wall Street Journal OpEd “Why I'm Not Hiring” presents an all-to-rare picture of how current federal tax and spend policies affect a crucial member of the team, the small business owner. A critical responsibility is collecting and remitting two significant elements of federal income: income taxes and Social Security taxes.

Just how significant shows up in the 2010 Statistical Absract of the US [table 463 page 308] as comprising nearly 2/3 of all federal income from all sources. Because the actual dollars involved come from employers' bank accounts, not wage earners', the wage earner has no human feel at all for the actual money involved, yet when it comes to politicians offering things like medicare, the wage earner looks at those pay stubs and thinks: “Why not – look at what I've paid in.”

On the employer's side the perspective is completely different, but no less critical: Employers don't like to pay taxes anymore than wage earners, but in this case, since all employers are responsible, they can add the total tax to their prices, resulting in nearly 2/3 of all federal income coming from a silent, painless national sales tax. (And they want to add a VAT to that?)

This situation can be simply corrected by changing paragraph 3402 of USC Title 26 — 'Internal Revenue Code' Subtitle C 'Employment taxes' Chapter 24 'Collection Of Income Tax At Source On Wages'... from "every employer making payment of wages shall deduct and withhold upon such wages a tax..." to "every employer making payment of wages shall pay all of those wages to the employee...." The employer would still calculate the tax, replacing the reassuring note "you earned and your employer paid" with "here is how much the feds are expecting you to send in within 30 days"

Would this be inefficient? Certainly for an insatiable federal bureaucracy. But after a few months writing checks to the Government for 20% of their take-home pay, decisions about using the nation's wealth would quickly revert to the hands of millions of intelligent citizens, at the ballot box.

Arnold H Nelson

The nation's wealth decisions in the hands of citizens?

Chicago Saturday PM 31 July 2010

Editors, The Wall Street Journal

Gentlepeople:

The Wall Street Journal's Daniel Henninger closes his Thursday 29 July column “Taxes: A Defining Issue” writing: “...[T]o compete for the next 50 years, the U.S. is going to need a tax structure that keeps more of the nation's decisions about using its wealth in the hands—and minds—of millions of intelligent citizens....:

The 2010 Statistical Abstract of the US shows 62% of the total 2008 federal government receipts of $2.745 trillion was withheld from wages. So nearly 2/3 of all the actual dollars that came into the US general fund were from employer bank accounts, not employee's. If the deductions do not get to the general fund, the employer goes to jail, never the employee. And the employer is by law required to give the employee a statement saying something to the effect that “you earned, and your employer paid”, implying that if the feds were not requiring the tax, the employer would give the money to the employee. If the employer got a reduction in property taxes, he would pass it on to the employee, right?

But employers, as opposed to wage earners, can pass all of this on to customers in price increases, resulting in the federal government being 2/3 funded by a silent national sales tax.

This anomaly can be simply corrected by changing paragraph 3402 of USC Title 26 — 'Internal Revenue Code' Subtitle C 'Employment taxes' Chapter 24 'Collection Of Income Tax At Source On Wages'... from "every employer making payment of wages shall deduct and withhold upon such wages a tax..." to "every employer making payment of wages shall pay all of those wages to the employee...." The employer would still calculate the tax, replacing the reassuring note "you earned and your employer paid" with "here is how much the feds are expecting you to send in within 30 days"

Would this be inefficient? Certainly for an insatiable federal bureaucracy. But after a few months writing checks to the Government for 20% of their take-home pay, decisions about using the nation's wealth would quickly revert to the hands—and minds—of millions of intelligent citizens....:

Arnold H Nelson

WSJ Fred Barnes on Social Security

Chicago Tuesday AM 13 July 2010

Editors, The Wall Street Journal

Gentlepeople:

The Wall Street Journal OpEd “Obama's Entitlement Opportunity” of Monday 12 July opens with a reference to “payroll taxes paid by individuals into the Social Security system.” Nearly all of those 'individuals' are wage earners, and no wage earner has ever written a check for even one cent to cover his contribution to Social Security. Do you think FDR trusted 50 million individuals to mail in 1% of their gross pay every week? Except for an occasional check from the self-employed, all money sent to Social Security has come from employer bank accounts. Social Security has been a tax on employers from its 1935 inception. If the funds don't get to Washington, the employer goes to jail, never the wage earner.

But not to worry, employers are required by law to state on the pay stub that if the feds were not requiring this tax, the employer would have given the money to the wage earner. Even better, unlike the wage earner, the employer can add the tax cost to the price of his product, transforming the Social Security contribution to a silent, painless national sales tax. According to the 2010 Statistical Abstract of te US [table 463 page 308] in 2008 this tax amounted to $900.2 billion – 35% of the entire 2008 federal tax receipts of $2,524.3 billion.

These facts, inconvenient as they may be, were clearly explained by the United States Supreme Court in its 1961 Flemming vs Nestor Decision:

"The noncontractual interest of an employee covered by the [Social Security] Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits are based on his contractual premium payments. To engraft upon the Social Security System a concept of 'accrued property rights' would deprive it of the flexibility and boldness in adjustment to ever-changing conditions which it demands and which Congress probably had in mind when it expressly reserved the right to alter, amend or repeal any provision of the Act.”

Arnold H Nelson

New York Times Social Security

Chicago Sunday PM July 11, 2010

Editors, The New York Times

Gentlepeople:

The New York Times Saturday 10 July OpEd “Make Social Security Pay, Today” claims that “Under Social Security, nearly all workers pay for their own retirement benefits.” No wage earner has ever paid a penny out of their own bank account to pay for Social Security retirement benefits. Do you think FDR trusted 50 million individuals to mail in 1% of their gross pay every week? Social Security has been a tax on employers from its 1935 inception: all contributions come from employer bank accounts, never wage earners' - if the funds don't get to Washington, the employer goes to jail, never the wage earner.

But not to worry, employers are required by law to state on the pay stub that if the feds were not requiring this tax, the employer would have given the money to the wage earner. Even better, unlike the wage earner, the employer can add the tax cost to the price of his product, transforming the Social Security contribution to a silent, painless national sales tax. According to the 2010 Statistical Abstract of te US [table 463 page 308] in 2008 this tax amounted to $900.2 billion – 35% of the entire 2008 federal tax receipts of $2,524.3 billion.

The OpEd further claims that wage earners' alleged contributions are “... converted, through a complex formula that emulates the workings of an individual retirement account, into a stream of retirement benefits.” The United States Supreme Court said of those 'benefits' in its 1961 Fleming vs Nestor Decision:

“The noncontractual interest of an employee covered by the [Social Security] Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits are based on his contractual premium payments. To engraft upon the Social Security System a concept of 'accrued property rights' would deprive it of the flexibility and boldness in adjustment to ever-changing conditions which it demands and which Congress probably had in mind when it expressly reserved the right to alter, amend or repeal any provision of the Act.”

Arnold H Nelson

Second amendment in Chicago Tribune

Chicago Saturday AM 3 July 2010

Chicago Tribune

Gentlepeople:

A letter in the Saturday 3 July Voice of the People "Take a poll" says the Second Amendment "was a good law when our government was formed, but society has changed..." such that "...keeping of arms now poses more danger to the average Chicagoan than it does to our democracy." The letter concludes: "… a national poll would support the revocation of Second Amendment."

The Founders recognized things would change, so Article V describes a procedure to amend the Constitution, which has been done 27 times. One of these actually repealed a previous amendment, so little more is needed than to dust off the 21st amendment, rename it the 28th, and change its reference to 'eighteenth' to "second", get it passed by 2/3 majorities of both the House of Reps and the Senate, and ratification by 3/4 of the state legislatures.

Arnold H Nelson