How about this headline from CNN last month, “Clinton: Alabama voting restrictions ‘a blast from the Jim Crow past’” Beyond divisive, it’s incendiary. It’s also disingenuous and just plain wrong. The article goes on to say, “The Alabama Law Enforcement Agency announced last week that an $11 million cut in the budget would force the closing of 31 part-time, county-owned satellite locations at which residents can obtain or renew their licenses…Democrats have charged that the governor’s decision to close identification offices is politically motivated due to the state’s strict voter identification laws and will disproportionately affect African-American voters”.

If CNN had done their job they would have discovered that the charges were baseless. According to True the Vote, “Voter ID opponents missed the mark this week in Alabama. They tried to whip up controversy over the AL Law Enforcement Agency’s move to shutter 31 part-time, satellite driver license offices due to budgetary restraints. Here’s the recap: on October 5, Alabama Congresswoman Terri Sewell called upon the DOJ to investigate the decision to close the offices. She claimed it would significantly hamstring her constituents’ ability to vote in future elections under the voter ID requirement. Governor Robert Bentley fired back the next day, stating, ‘I believe your comments were impulsive, ill-informed, and based on irresponsible media reports’ on the matter. He went on to explain the state’s unique system of issuing ID cards in every county courthouse across the state, free of charge.’ “

In other words, you could still go to the same building and get a free voter ID. Oops. The problem is, you’ll never hear Clinton or CNN say, “sorry” or even, with apologies to Gilda Radner, “never mind”. And as of this writing there has been no follow up by the DOJ. Of course not. It’s like the ad for car insurance: Progressives and playing the race card, “it’s what they do”.

On the other hand, Bernie Sanders is a bit more careful. So careful in fact that he sometimes trips over his own rhetoric. For example, during the recent debate Sanders was reminded that the state he represents, Vermont, is a “gun friendly” state. His response was that Vermont is a “rural state”. I’m not sure I see the connection - what one has to do with the other. Are country folk inherently superior to city folk? Perhaps “rural” is a progressive code word of some sort?

According to the Bernie Sanders website, FeelTheBern.org, “Bernie believes that gun control is largely a state issue because attitudes and actions with regards to firearms differ greatly between rural and urban communities”. Ok, wonderful. Bernie tips his cap to the 10th Amendment. But the right to bear arms, as recognized by the 2nd Amendment is as basic as the right to Free Speech or the right to practice one’s religion. It’s more basic than the right to vote. Note to Hillary, the right to vote is contingent upon citizenship. Don’t ever forget that. And despite the recognition of states’ rights, according to FeelTheBern, “Bernie believes there are situations where the federal government should intervene”. Specifically, he supports federal laws requiring background checks and a nationwide ban on “assault weapons”. How he defines that term he doesn’t say.

So, we have Hillary Clinton playing the race card on voter ID where I’m guessing she would object to a background check as a requirement. However, she and Bernie believe that a background check in order to buy a gun is appropriate. Under current criteria, since blacks have had disproportionate exposure to criminal justice system, background checks would disqualify blacks from gun ownership - disproportionately.

Regarding Vermont, again according to FeelTheBern.org, Vermont is “the most gun-friendly state in the nation”. In fact, in Vermont, the Second Amendment is your permit. You don’t need a government permit to carry a weapon, concealed or otherwise. It’s called Constitutional Carry.

But there’s something else about Vermont that is of interest. In 2011 a story was published in USA Today with the headline, “Racial diversity inches higher in Vermont”, that describes the results of the latest census. According to the article, during the most recent census period, “The number of people identifying themselves as black more than doubled” to where “blacks make up 1% of Vermonters”. The article continues, “Beverly Colston, 56, of Essex Junction [VT], is an African American who grew up in Brooklyn and moved to Vermont in 1989.” On the differences between Vermont and Brooklyn, USA Today quoted her as saying, “I always wanted to live abroad, and moving to Vermont became a way to do that without changing countries”. Very interesting - someone who “emigrated” from Brooklyn to Vermont. You can’t make this stuff up.

I wonder if Sanders, who also “emigrated” from Brooklyn to Vermont would agree. With regard to urban vs rural, the population of Brooklyn, one of New York City’s five boroughs, is greater than that of Vermont and West Virginia combined. The black population of New York City is more than three times the population of the entire state of Vermont. And, of course, New York City has extremely restrictive gun laws. By the way, according to FeelTheBern, Vermont “boasts the absolute lowest rate of gun-related crime”. Imagine that.

One of the champions of gun control is none other than former New York City mayor Michael Bloomberg. He also deciphered the code for us back in February. Speaking in Colorado and quoted in the Aspen Times, “Bloomberg claimed that 95 percent of murders fall into a specific category: male, minority and between the ages of 15 and 25. Cities need to get guns out of this group’s hands and keep them alive”, he said, and continued with, “They just don’t have any long-term focus or anything. It’s a joke to have a gun. It’s a joke to pull a trigger.”

Race card anyone? Hillary, step right up. According to Wikipedia, “Psychological Projection, also known as blame shifting, is a theory in psychology in which humans defend themselves against unpleasant impulses by denying their existence in themselves, while attributing them to others. For example, a person who is rude may constantly accuse other people of being rude”. How about a person who is racist?

As one blogger remarked, “Not only is the ex-mayor’s sweeping generalization the kind of statement that would get a Republican roasted as ‘racist,’ it also highlights the basic problem with the liberal position. For a small slice of the population — minority males aged 16 to 25 — they want to restrict the Second Amendment rights of every one of nearly 320 million Americans?” Bloomberg also defended his stop and frisk policies that were the subject of court action and deemed to have targeted minorities unfairly. Unbelievable, really.

In case you don’t know Bloomberg’s background, he is a Wall Street insider, having worked at the investment bank Salomon Brothers before starting his own company, in partnership with Merrill Lynch. The company supplies financial data to Wall Street firms, via the “Bloomberg Screen” and has branched out into radio, television and other media. According to Wikipedia his net worth is in excess of $38 Billion. With a “B”. That makes him the 10th richest man in America and 13th in the world. And he is a progressive.

Progressives rail against what they call “corporatism”, and yet they embrace corporatists like Bloomberg. Very confusing. According to FeelTheBern.Org, “Bernie believes we need to move away from a government of the billionaires, by the billionaires, and for the billionaires.” Well, does that include the likes of Michael Bloomberg? Or, how about this headline from the London newspaper The Telegraph, “Al Gore could become world’s first carbon billionaire”. Or here in West Virginia, Jim Justice is running for governor. He is a liberal Democrat that Forbes says has a net worth in excess of $1.5 Billion. Is this what Bernie is talking about?

— 

Bernie Sanders and the Social Security “Surplus”

2015-10-28

I had previously expressed some thoughts concerning the Democrat presidential primary debates. While the debate on who “won” still rages, I’m focused on what the candidates are actually saying. There are some real doozies.

Bernie Sanders has been campaigning on promises of “free” college, and a call to “strengthen and expand social security”. According to Bernie’s website, “Social Security is the most successful government program in our nation’s history…our job cannot be to cut Social Security. Our job must be to expand it so that every American can retire with dignity and respect”.

I don’t know of any politician from either the Democrats or the Republicans that proposes to cut Social Security benefits. Even libertarian Ron Paul, who believes that young people should have the right to opt out, believes that the government needs to honor its commitments to those that have already paid in to the system. That may not be so easy.

As I’ve said before in this space, Bernie has a bit of P. T. Barnum in him. Quoting from his website, “Social Security has a $2.8 trillion surplus. It can pay every benefit owed to every eligible American for the next 19 years (and more than three-quarters after that)”. And, “Social Security’s assets aren’t ‘just paper,’ as conservatives sometimes put it. Social Security invests in U.S Treasury bonds, the safest interest-bearing securities in the world. These are the same bonds wealthy investors have purchased, along with China and other foreign countries. These bonds are backed by the full faith and credit of the U.S. government, which in our long history has never defaulted on its debt obligations”.

Actually Bernie, US Treasuries are indeed “paper”, just like the currency. In fact, the “paper” that is deposited into the Social Security trust are special “non-tradable” securities. In other words, an accounting gimmick. And bonds are an asset on one set of books, but a liability on another set of books - the set belonging to the borrower - which is the US Government. To complete the circle, the bonds are backed by the “full faith and credit” of the ability of the US government to collect taxes. It’s literally smoke and mirrors.

Further, Bernie apparently hasn’t heard that foreign countries are starting to sell their US Treasuries. According to CNN Money last month there was this headline, “China is dumping US debt”. It asks the question, “Should Americans be concerned?” Apparently Bernie doesn’t think so. For CNN it was a rhetorical question. If our biggest creditor is dumping our debt, who would be the “lender of last resort”? Hint - the Federal Reserve, but the ramifications of that might not be good.

Now there are actually two Social Security Trusts, one that pays retirement benefits and the other that pays disability benefits. The disability fund was an earlier “expansion” of Social Security and it will go bust next year unless congress intervenes. According to the most recent Social Security Trust Fund Report, “The Disability Insurance (DI) Trust Fund represents a special case.  The Trustees project that the DI Trust Fund will be depleted in 2016, the same year projected in last year’s report.  After 2016, 81 percent of scheduled benefits will be payable. Disability expenditures have increased primarily due to demographic trends…” A “special case”. Got that?

According to Pew Research in August, “…since 2010, Social Security’s cash expenses have exceeded its cash receipts. Negative cash flow last year was about $74 billion, according to the latest trustees’ report, and this year the gap is projected to be around $84 billion. While the credited interest on all those Treasuries is still more than enough to cover the shortfall, that will only be true until 2020. After that, Social Security will begin redeeming its hoard of Treasuries for cash to continue paying benefits…” Of course, 2020 is only 5 years away. Not good.

That said, here’s the wake-up call for Bernie Sanders fans. At current levels of spending the US Treasury is running annual deficits ranging from hundreds of billions of dollars to over $1 Trillion. However, if the government were to use Generally Accepted Accounting Practices or GAAP, as required of publicly traded corporations, the federal deficit would be much higher. For example, according to USA Today, in 2012, “The deficit was $5 trillion last year under those [GAAP] rules. The official number was $1.3 trillion. Liabilities for Social Security, Medicare and other retirement programs rose by $3.7 trillion in 2011, according to government actuaries, but the amount was not registered on the government’s books”. In other words, when the government reports the deficit it ignores the accrued liabilities for Social Security and Medicare. Really!

Now, Bernie fans, here’s the kicker. According to economist John Williams, “A $5 trillion deficit can’t be covered by taxes. The government could take 100 percent of everyone’s income and corporate profits and still be in deficit,” adding that conversely, “They could also cut every penny of government spending except for Medicare and Social Security and still be a deficit.” In other words, the deficit is structural and at some point something’s got to give.

Bernie is a self-described “democratic socialist” - an exercise in ostrich economics. He points to Europe as the model to go by. Ironically, retirement benefits are at the root of the economic crisis in Greece that has brought instability to the European Union and caused problems for the Euro. Here in the US, Detroit recently filed for bankruptcy, defaulting on its pension obligations. And how about this headline from Crain’s Chicago. “The Illinois Pension Disaster - What Went Wrong?” Socialists aren’t very good at economic calculation which leads to massive misallocation of resources.

Although Bernie Sanders has won elections - he has never done so running as a Democrat. Earlier this year the chair of the Democrat Party, Debbie Wasserman Schultz appeared on Chris Matthews MSNBC program “Hard Ball”. Regarding Sanders run in the Democrat presidential primary, Schultz commented that the party has a big tent and welcomed his participation. Matthews then asked her, “What’s the difference between a Democrat and a Socialist?” She didn’t have an answer.

Of course not.