Wednesday, February 25, 2004

The Immoral American ''Social Security'' System

When it was first passed, the maximum “contribution” an employee could make to the Social Security system was one percent on the first $3,000 of annual income (i.e., $30). Employers had to make a matching “contribution” of up to $30 per year as well.

The U.S. government, in testimony before the Supreme Court in 1937, had to admit that Social Security is simply a tax. “It does not constitute a plan for compulsory insurance within the accepted meaning of the term ‘insurance,’” the government said in Helvering v. Davis (1937). Indeed, . . . the government admitted that Social Security taxes were “true taxes, the purpose being simply to raise revenue. No compliance with any scheme or Federal regulation is involved. The proceeds are paid, unrestricted, into the Treasury as Internal Revenue collections, available for the general support of the government.” So the government told the Supreme Court what it had to hear: that Social Security was not an insurance program, but a tax. But it continues to tell the voters what they want to hear: that it’s an insurance program, not a tax.1

In a famous (or infamous) case, Flemming v. Nestor (1960), the wife of a deported Communist had her Social Security payments cut off. But her husband had paid into the system for years. Wasn’t she entitled? No. Listen to the Supreme Court’s answer:
To engraft upon the Social Security system a concept of “accrued property rights” would deprive it of its flexibility and boldness in adjustment to ever-changing conditions, which it demands. . . .

The OASI [Old-Age and Survivors Insurance] program is in no sense a federally administered “insurance program” under which each worker pays premiums over the years and acquires at retirement an indefeasible right to receive for life a fixed monthly benefit. . . .

Sure, the politicians talk about it as though it were insurance; it’s even called insurance: “Old Age and Survivors Insurance.” It uses phrases like “contributions” and “trust funds.” . . . Justice Black . . . in his dissenting opinion to the ruling [said]:

People who pay premiums for insurance usually think they are paying for insurance, not for flexibility and boldness. I cannot believe that any private insurance company in America would be permitted to repudiate its matured contracts with its policyholders who have regularly paid all their premiums in reliance upon the good faith of the company. . . . 2
Millions of Americans . . . believe that the money they have paid into Social Security is safe and secure and just waiting for them to retire, because it’s put into a gigantic “trust fund.” The cruel truth of the situation is that there isn’t a real “trust fund” today, and there never has been.
What there used to be was a pile of unmarketable3 “special” Treasury bonds. As fast as the money would come into Social Security, it . . . was used to buy [these] government bonds. . . .4

Nowadays, compared to the promises of payment, there aren’t even that many Treasury bonds sitting in the Social Security system. There are so few people paying into the system (compared to those who are “owed”), that there is not enough money to pay those who are “owed.”

So what is the likely solution to this problem?

The following exchange . . . took place in 1976 between Senator William Proxmire and the then-Commissioner of the Social Security Administration, James Cardwell. . . .
PROXMIRE: “In my State, I figure there are 600,000 voters that receive social security. Can you imag-ine a Senator or Congressman under those circumstances saying, we are going to repudiate [i.e., refuse to pay] that high a proportion of the electorate? No.

“Furthermore, we have the capacity under the Constitution, the Congress does, to coin money, as well as to regulate the value thereof. And therefore, we have the power to provide that money. And we are going to do it. It may not be worth anything when the recipient gets it, but he is going to get his benefits paid.”

CARDWELL: “I tend to agree.”. . .

1Gary North, 12 Deadly Negatrends (Fort Worth, TX: American Bureau of Economic Research, 1985), pg. 32. Return to text.

2 Ibid., pp. 31-32. Return to text.

3 Unmarketable: i.e., unsellable—by law! Return to text.

4 When the government needs to borrow money (which, as you should know, it needs to do a lot!), it gives the lender a bond: a promise to pay back sometime in the future—five, ten, 20 or 30 years from now—the money it has borrowed . . . plus, in the meantime, interest. How will it pay back this money? There are three (and only three) ways it can possibly do this: 1) by taxing citizens enough; 2) by borrowing more money; 3) by inflating (or debasing) the currency (i.e., simply printing more pieces of paper that claim to have a certain value even though they have none; in other words, the government is doing what would be called, if done by private citizens, counterfeiting). The U.S. federal government—and, indeed, most governments of the world for the past fifty years or more—has been using the last two methods almost exclusively.

I should also point out that there are some major differences between U.S. government bonds and those issued by corporations.

First, when the government borrows money, it does so for far different reasons than do corporations. Companies borrow money in order to increase their profitability. They use cash in order to purchase new equipment that will increase productivity or quality, or in order to hire more and better quality employees who can help them earn more money.

Businesses repay their loans out of profits—i.e., new wealth. The government is not in business. It does not create items of value that generate profits. It does not create wealth. Therefore, when it borrows money, it must repay loans not from new wealth, but from taxes on citizens’ wealth, from more borrowing, or from inflation (i.e., “counterfeiting”—if any private person did it).

Second, the government has been perpetrating a fraud that would land the owners in jail if any corporation tried such a thing. The government, in its statements of indebtedness, does not count the “special” Treasury bonds held by the Social Security Administration as part of its debt! In other words, the government counts the funds that come from the Social Security Administration as it said it would and did back in 1937: as if they were general tax income to the government! The government says it owes the Social Security obligations (that’s what a bond is: it is a debt instrument that says, “I owe you this money plus interest, and I intend to pay”), but the government doesn’t count the Social Security debt as debt! So, according to the Social Security Act, the government’s Social Security Administration has multi-trillions of dollars it owes to people who have paid into the system. And what does it own in order to pay this debt? Government bonds that the government doesn’t count on its books as debt! Put another way: the national debt is actually trillions of dollars larger than the government is willing to admit. . . . Return to text.

5 Ibid., p. 37.

Monday, February 23, 2004

Did homeschoolers miss all the fun?

This is an article by Nicole Bergot who appears to be a student at Columbia University Graduate School of Journalism. I reprint it here by permission.

Here's Nicole's story:

Did homeschoolers miss all the fun?

By Nicole Bergot

Homeschooling became mainstream about 15 years ago. Now, the kids who started the trend are "graduating." Fears that home education would turn out antisocial, unschooled religious fanatics were, for the most part, unfounded. It turns out the majority are happy and productive. But many still long for what they missed by not attending regular high schools.


As a kid, Dan Witte was afraid to play in his front yard or go to the park during the day. At least not on weekdays between 9 a.m. and 3 p.m., when other kids were in school. Witte, who was homeschooled, feared the dreaded truant officer. His concern wasn't frivolous; often people in his neighborhood called the police to complain that he wasn't in school. Once, when his brother was injured during a game of pick-up basketball in the backyard, neighbors accused Witte's parents of child abuse. They would call the police and tell them we were being kept home from school," Witte said.

Witte and his five younger siblings were all educated at home by their parents in the 1970s, before the homeschooling movement had caught on. Though the 31-year-old corporate lawyer says he and his brothers and sisters had a positive homeschool experience, they constantly battled negative stereotypes. "They hear homeschooler and automatically they've conjured up in their mind ideological fanatic," he said. "They don't know what to think except weird."

Today, the 20-something-year-olds who were at the forefront of the homeschooling movement in the '70s and '80s are entering the work force with success, and challenging old myths about homeschooling. Fears that home education would turn out antisocial, unschooled religious fanatics have turned out, for the most part, to be unfounded. A recent study indicates that homeschoolers have gone on to be community leaders and successful in a range of fields. It turns out what homeschoolers missed wasn't the preparation they needed for higher education and satisfying careers, but the emotional and social aspects found in regular school, like homeroom gossip, sports camaraderie, plays and even cliques.

A new study called "Homeschooling Grows Up" is the largest survey of adult homeschoolers ever published. Dr. Brian Ray conducted the study and contacted 7,300 adults who had been educated at home. Ray found that although homeschoolers are a diverse group, the study did show common traits. Generally speaking, they are open-minded, independent thinkers who are involved in their communities and do well in their chosen fields. In essence, Ray said, homeschoolers become "good Americans."

The study showed that three out of four home-educated adults ages 18 to 24 have taken college-level courses, compared with less than half of the general American population. Seventy-one percent are involved in community service, like coaching a sports team or working with a church, compared with 37 percent of U.S. adults. In Ray's judgment, homeschooling taught students independence and confidence by "freeing them up to find their own voice with their own personality without peer pressure."

A 22-year-old former homeschooler, Cody Mattern, is a fencing instructor in Portland, Ore., who will find out in March if his team will compete in the 2004 Summer Olympics. He thinks homeschooling gave him the flexibility to spend time honing his fencing skills every afternoon. Mattern, who is dyslexic, stopped going to public high school when he was 14 because he felt unchallenged by the remedial classes he was forced to take. Besides fencing, part of his homeschool curriculum was working part-time at a local pet store where he learned about customer service and marine biology. "It was one of the most educational things in my life," he said.

Though many homeschoolers enjoyed freedom to pursue their interests, some said it came at a cost. Mattern regrets not having the social interaction he would have had at high school, where there's "exposure to so many people who are a lot more diverse and different."

Cheryl Askeland, 27, was homeschooled in San Jose, Calif., and missed having a social life. "I remember being extremely bored and deprived of social contact," she said. After pleading with her parents, she went to regular school for tenth grade. "I loved it. I liked being organized and sitting at a real desk and doing homework." She thinks homeschool works for some people but that "children need to really experience school," she said. "Even the bad things about it."

Other homeschoolers resent their parents for not allowing them a normal teenage experience. Chris Yohman, 25, a firefighter in Charleston, N.C., said he wanted the regular school stuff. "I have a longing for those memories -- going to football games, hanging out with the guys," he said. It has taken a long time for his relationship with his parents to be restored after they became his teachers. "The roles changed," he said. "They weren't the nurturers anymore, they were the instructors. I felt like I lost my folks."

Dr. Ted Feinberg, assistant director for the National Association of School Psychologists in Washington, appreciates that homeschooling allows an individualized curriculum and freedom to pursue interests. But he questions how children educated in the home acquire other important skills they would get in public school. In high school kids get "a sampling of a variety," he said. "They taste a lot of possibilities, and it's helpful when it comes to making life decisions." He thinks the insular nature of homeschooling does not prepare the student for when they must deal with tricky real-life situations or "learn how to negotiate and tolerate the less wonderful."

Witte thinks one of the few drawbacks of homeschooling is that it doesn't provide the network of alumni the regular school system has. So he created the Quaqua Society, a network of grown homeschoolers that offers career advice and scholarships to families who educate their children at home. He wants to help them avoid the problems he faced as a homeschooler. In spite of the difficulties Witte encountered, he's thankful he didn't have to endure the public school system and the pressures of trying to fit in. "I would've been in the nerd category," he said. "I wore hand-me-downs, no money, no car. I think all that would've kept me from developing my intellectual capabilities."

--28 January 2004


Okay. Your turn.

I expect that, for the majority of homeschoolers, certainly the vast majority of homeschoolers educated using
Sonlight Curriculum, the answer will be a resoundingly positive negative: i.e., something along the lines of, "Of course I didn't 'miss all the fun'! I had a great time; a much better time than I would have ever experienced in a classroom school!" --And each and every person who provides such an answer will also be able to give wonderful, glowing examples of how and why s/he believes as s/he does: "Homeschooling [or, "Homeschooling with Sonlight," or "Homeschooling with (whatever)"] meant that I _______________."

I'd be so grateful if you could share your stories here as a "Comment" on this article!