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February 28, 2005

Fools, and Damn Fools

There are common, everyday fools, whose stupid antics are more a source of amusement than concern. And then there are great damn fools in positions of power whose stupid antics are enormously harmful.

U.S. Rep. Martin Sabo (D-MN) is one of the latter:

Congressman Sabo proposes setting the rate of interest paid to the trust fund to 4.7 percent over inflation, in response to the Congressional Budget Office's deficit projections for Social Security.

"The reality is that the Social Security trust fund is in good shape. My legislation addresses future problems without spoiling this American success story," Congressman Sabo said.

My reaction was visceral and immediate — I gasped, and almost screamed.

Raising the interest rate is satire. No real human being would do it. That would be like someone reading Frédéric Bastiat and come away thinking that outlawing windows was a really swell idea.

(h/t Social Security Choice)

February 27, 2005

Hug a Robber Baron

It's rare that I simply link to something and say "read this", but this one is worth it. Coyote Blog is praising "robber barons" and it's a fantastic article. I've heard most of these facts before, but for most people they're eye-opening.

Oregon Budget is Fine

The Oregon government's budget is fine. The latest forcast for revenue is $202 million higher than previous estimates.

Already, lobbyists and legislators are salivating over where to spend it. The idea that it should be spent is taken for granted. Leaving the planned spending pattern in place and lowering taxes seems not to have crossed their minds.

What a shame.

February 26, 2005

Social Security Trustees and Funds

Joel writes:

Instead of relying on a phony source like Don Luskin for numbers about when Social Security will be in trouble, you ought to take a moment and look at the Social Security Trustees' actual report. If you did, you would notice that Luskin's numbers are completely phony. I don't know where he got them, but they do not represent what the Social Security financial reports say.

Joel is probably responding to this article where I said Bush's plan to reform Social Security was fascist. I think it's the only time (recently, anyway) that I've linked to anything of Luskin's.

I'm confused by Joel's letter. He's criticizing me for using Luskin's numbers, but Luskin was himself citing the Social Security Trustees:

According to the latest annual report of the Trustees of the Social Security Trust Funds, the surplus in 2004 was $64.4 billion dollars. It will be higher this year — at $87.7 billion. The surplus will keep getting bigger and bigger through 2008, when it will reach $108 billion. Each year, that's more and more money that the federal government won't have to raise from the world capital markets. It's a captive audience of bond buyers — and a growing one.

But in 2009, just 5 years from now, the surplus will start to shrink. In 2009 it will fall to $103.7 billion, and in that year the federal government will have to go to the capital markets to raise $4.3 billion that it didn't have to raise the year before. That's not a lot of money in the grand governmental scheme of things. But it's an important turning point for Social Security — it's the year the crisis begins.

If the Trustees' report is good, and Luskin's numbers are bad, but Luskin's numbers are from the Trustees' report… well, maybe Joel is the one who is confused.

This page of the Trustees' report has some lovely graphs that illustrate the problem. You can see for yourself in Figure II.D2 that 2009 is the year when the Social Security surplus begins to shrink. (Alan Greenspan, in his recent testimony before Congress, actually cited 2008 — but I'm not going to quibble over a single year.)

Luskin's numbers are unassailable, if you believe the Trustees' report. Only his assertion that there's a crisis could be arguable, but Joel curiously doesn't make that argument.

Back to Joel's letter:

Instead of spreading garbage in you column, check you facts instead of swallowing righ twing [sic] nonsense whole.

Stop right there. I take offense at the implication that I'm a right-winger. My preferred epithet is "procapitalist extremist." Right-wingers are emphatically not advocates of capitalism.

I always read Luskin with caution, and I have had some minor disagreements, but I do read him regularly. He's absolutely a better source than, say, Paul Krugman. [you're just inviting flames, you know - ed]

So what did the reports actually say? That income exceeds pay outs until 2028 and assets are not used up until 2042 and that Social Security can continue to pay out 69 to 75% of benefits, with no fix, in the 75th year depending on whether the percentage reduction begins in 2042 or in the 75th year.

No, the report does not say that income exceeds payouts until 2028. The year is 2018 — a decade earlier. See Figure II.D4 (same link as before).

The year 2042 is correct, but betrays a fundamental misunderstanding of the nature of the Social Security Trust Fund. Considering the Social Security system on its own, it is correct to say that it's funded until 2042. But the bonds in the trust fund are an obligation of the government, and Social Security is part of the government, so the bonds in the trust fund are the economic equivalent of owing money to oneself. The value of the bonds as assets to the Social Security system is exactly offset by the liability of the bonds to rest of the government. Considering the government as a whole, those bonds are worth exactly nothing. That's why the "lockbox" is such a howlingly funny joke.

If you "owe yourself" a thousand dollars, the only way to pay it is to earn a thousand dollars. You have to get that money from somewhere. The government's options are to tax, borrow, inflate, or spend less on other things — that's it. In 2018 it has to start diverting general revenue to Social Security. But I agree with Luskin's conclusion that 2009 is the year that really matters, because that's when Social Security stops contributing more and more every year to the general fund. That's the year when the government's budget deficit will, ceteris paribus, get worse every year automatically.

Incidentally, the roughly 30% cut in benefits forecast for 2042 should not be tossed aside lightly. Joel, if you had invested in a company that went bankrupt and could only get 70 cents on the dollar back, wouldn't you be upset? Do you think beneficiaries in 2042 will roll over and peacefully accept a 30% benefit cut? That's a lot of money.

UPDATE 2005-02-26 23:23:04 UTC: Joel responds:

First, your answer demonstrates that even if you go to the Social Security financial reports, finally, that you don't know how to read them. The 2018 number you reference is if you ignore income on the SS assets. Perhaps you could explain what a good deal private accounts would be if you ignored the income expected from them. The honest number is the one that compares income with pay outs and counts interest income. Gosh, if you want to make SS look like it is in really bad shape, why don't you just do your comparison on the assumption that SS income will be only half of what is expected?

Joel, I have a thought experiment for you. How would total government revenues and total government spending be impacted over the next forty years if the interest rate on the Social Security bonds was (a) 0%? (b) 10%?

If you understand that the answer is "total revenues and spending would be completely unaffected in either case", you understand the economic nature of the Social Security trust fund. Otherwise, you don't.

If you might better learn this lesson from satire, I recommend this. The Social Security system could be made "solvent" by increasing the interest rate on the bonds. But that doesn't help the government's financing problem in the slightest. It is this financing problem, involving the total government budget, that is the Social Security crisis. The crisis is not evident in the Social Security system when considered in isolation from the rest of the government.

If I spend $1000 but write myself a bond promising to pay myself back $1000 at 10% interest, that interest income doesn't help me at all. It's irrelevant. The interest, like the principal, is simultaneously an asset and a liability that exactly cancel each other. Simply put, the interest doesn't help me because I have to pay it!

This situation is inapplicable to private accounts because in that case the investment income is a transfer between two different people.

But instead of recognizing the facts, you suggest that I am just confused. Excuse me, but you are the one who is insulting. I hope your readers actually look at the financial reports that are readily available at the SS site. Some will certainly be smart enough to notice what you have overlooked.

Your confusion is that you attacked Luskin's numbers — you called them "completely phony" and that they "do not represent what the Social Security financial reports say" — but in fact they were the numbers from the Social Security Trustees' Report.

I wholeheartedly endorse Joel's recommendation that my readers look at the Trustees' Report. Indeed, I think these graphs make the situation very clear. The important dates — 2009, 2018, and 2042 — are all clear from Figure II.D2.

As for saying you are a right wing nut, look again at my note. That is not what I said. I said you should have checked your facts and not taken right wing garbage as fact. That still seems like a fair and relevant comment. What I did not anticipate was your inability to look at a graph and properly interpret it.

I do not think I am misinterpreting Figure II.D2 in any way. The Trustees' have done the numbers correctly by excluding interest income on the Social Security bonds in the calculation of the date when payments exceed revenues.

February 25, 2005

Man's Rights

The rights of individual men, as men, not grandiose universal "Rights of Man" stuff.

Jacqueline Mackie Paisley Passey — yes, four names! I think I'm jealous — writes about a jaw-droppingly horrible injustice of family law run amock. A man is (was? I can't tell…) being held liable for child support payments (it is his child) to a woman he never had intercourse with!

Jacqueline has some very interesting thoughts on what the rights of men should be when it comes to parenthood. Go, read them. Then come back.

I didn't know the system was so screwed up. I think I also realized that Jacqueline's formula of spicing up political and economic commentary with stuff about sex and romance would be a great way to get more readers.

As soon as I get some sex and romance, you'll be the first to know.

Ooooh, here's something. A pretty girl touched me today. On my arm. In a very nice way. Am I an alpha male yet?

Regarding the "four names" thing… I know it doesn't apply here, but I can't resist the memorable one-liner I heard a few years ago: "That's what happens when two people with hyphenated last names get married!"

No Comments

This is why I don't have comments on my blog.

Well, and the spam. And the lack of time to write the software.

Speaking of time, I've still got my nose to the grindstone at work. Depending on my progress Friday, I might be able to return to a normal blogging pace over the weekend.

February 23, 2005

Increase the Payroll Tax Cap?

Lately I've been too busy to follow the news very closely, but apparently Bush has stated he's open to the idea of raising the cap on income subject to payroll taxes:

Mr. Bush clearly said after last November's election that his visionary Social Security reform plan to include personal savings accounts would not countenance payroll-tax increases. Just this week he undercut that position when he said an increase in the payroll-tax cap — now $90,000 — would be "on the table" in forthcoming negotiations with Congress.

White House spokesmen have tried to suggest an increase in the payroll-tax cap is not a new tax and that only a rise in the payroll-tax rate would constitute a tax increase.

Why is anyone surprised by this? When I listened to the State of the Union address I immediately realized he wasn't ruling out an increase on the cap:

I wish he meant "We must not jeopardize our economic strength by increasing payroll taxes" to also rule out increasing the cap on income subject to Social Security taxes, but I rather suspect he only meant to not increase the marginal rate.

The idea has always been on the table. And it's incredibly popular among people who oppose any form of privatization.

But it's a terrible idea.

A person's benefits are based strongly on the amount they've contributed. If a person contributes more because the cap is lifted, they'll be entitled to higher benefits when they retire. There is no net improvement in the system's finances unless that person's (time-adjusted) benefits increase less than their contributions. Which is to say, there's no net improvement in the system's finances unless you're robbing that person blind.

Stated so clearly, raising the cap on payroll taxes is reprehensible. It's all the worse when you consider also the political risks of the system. Its finances are so bad that I and many other young people are convinced the system will be means-tested by the time they retire. Because I save responsibly, I won't quality for benefits at all. Because I have a high income and look forward to the day when my income exceeds the payroll tax cap, lifting the cap would increase my forced contributions but give me exactly zero benefit. As I said, robbery.

The payroll tax cap should be lowered. It should be zero. Participation should be voluntary.

Today, payroll taxes bring in more money than needed for current benefits. The amount of this surplus will continue growing until about 2008 (according to Alan Greenspan's recent testimony). Then the surplus will start shrinking. That's the date when the government will need to reach out for additional funds. Not 2018, when the surplus reaches zero. Not 2042, when the trust fund is exhausted. 2008 is the date that matters, because that's the date when the Social Security surplus will each year contribute less and less to the general fund, and Congress will need to compensate for the shrinking "extra" revenue.

Lifting the payroll tax cap would push out the 2008 date, and only in that sense does it help the system's finances in the short run. But if you believe these high-earning taxpayers will be net beneficiaries from the system, you must also believe the long-run problem is made worse by raising the cap because the additional accrued benefits will exceed the additional revenues. If you believe these taxpayers will be net losers from the system, lifting the income cap is tantamount to robbery.

Those are your alternatives. Lifting the cap either makes the long-run problem worse, or it robs people, depending on your expectations about future benefit payments. Not an appealing alternative, is it?

Here's a better idea. I don't think it's superior to allowing individuals to opt-out, but it's pretty good.

February 22, 2005

Ethics: Emergencies and Obligations - Part 6 - Justice in Emergencies

What is the role of government in an emergency? As previous articles have argued, the context of an emergency is significantly different from ordinary life, with important implications for ethics. Does this contextual difference also give rise to significant implications for politics?

One of government's responsibilities is the administration of justice. This can only be done after the emergency has passed and normal conditions have been restored. (As much as I relish the thought of lawyers rushing, lemming-like, into peril… it won't happen.)

In a natural disaster, there is no culpability. No one is at fault for e.g. a hurricane or tsunami. There are victims, but no perpetrators. Therefore, direct punitive actions are inappropriate.

Can culpabilitiy arise from the failure of disaster warning systems? A warning system essentially makes predictions, and the issue of wrong predictions should be comprehended by contract between the clients and providers of warnings systems. The contract defines the scope of culpability, and the administration of justice here consists of enforcing the terms of the contract.

When the warning system is operated by the government, rather than by a private group, the situation is messier. The standard economic concerns over government meddling in the economy apply: Does the government establish a monopoly? How is quality affected by the involuntary nature of contributions? (How) Are the operators held accountable? Is innovation stifled by statute? Is regulatory capture a factor?

The obvious subtext from my questions is that the government shouldn't be involved where capitalism will do fine by itself. Just as lighthouses were provided privately, so too can warning systems be. But if the government is involved, the administration of justice becomes more complex to the extent that law and regulation are less clear than a private contract would have been.

It is the nature of government that it can only pay for damages to one group of people by stealing the funds from another. Yet that latter group is totally innocent, and the taxation is a fresh injustice. Injustice is done in the name of administering justice. How sick.

There are also man-made disasters, such as Bhopal. In these cases there is clearly culpability, and the administration of justice demands investigation and (as appropriate) remedy to those harmed. Here the government is acting normally — it is upholding the individual rights, including property rights, of those harmed. The culpable party must pay those damages.

I leave open the possibility that the disaster was novel and unforseeable. If the danger was unknown — not hidden, but truly unknown — this is a valid defense. Omniscience is not a reasonable standard to be held to.

The actual administration of justice occurs after the emergency has passed, and is the straightforward application of government's mandate to protect individual rights. This aspect of government is little affected by the special nature of emergency situations. Others are more affected, and will be discussed next time…

February 20, 2005

I'm Okay, but Busy

You know you haven't been blogging enough when your sister calls you, cites your lack of blogging, and asks whether you're all right.

I'm fine. I'm just very busy. An old friend was in town, I've been hanging out with co-workers, I've been watching the Greenspan testimony, I've been doing music stuff, and I've been working.

In fact, I'm going back to work right after I post this. Yes, I know it's Saturday night. But Lumbergh left a whole bunch of messages on my answering machine… and you know how that is.

I'll be back to blogging soon.

February 16, 2005

Broken Systems and Filibusters

The General (of Benjo Blog) wrote me a long e-mail about my comments on judicial nominations in my State of the Union commentary.

I said:

I have never understood why it's so easy for Senators to prevent a vote. I work in validation, so I have an adverse reaction to systems that don't make progress. A system that doesn't make progress is a broken system. There should be limits to delays. If a minority in the Senate was intended to have de facto veto power, it would have been written into the Constitution.

He provided links to several related articles that he's written related to the matter. The key paragraph of his e-mail is this:

I think it is advantageous that Senators can prevent a vote relatively easily. One of the best insights of the founders is the system of checks and balances, to prevent any one branch or group from usurping control of the government. This is especially important today, when the religious right is taking over the Republican party, which is now a majority in both houses of congress. A filibuster, which can indefinitely prevent a nomination or the passage of a bill, can currently be overturned only when 60 or more Senators vote to end it. Anything less, and a Senator can read Atlas Shrugged or the Bible indefinitely. I think this is a good thing. There is no way to prevent a society from going into the crapper; but what you can do, is make damn sure it doesn't go into a crapper just because a popular minority or semi-majority wants it too.

I agree the filibuster has value. But when I put on my architect's hat, it looks like the filibuster is being used as a workaround to a system that had a bug … and the workaround has problems, too.

The original problem is that a slim majority can decide the President's nominations. Today the Republicans have a majority in the Senate, and the President is a Republican, so they can basically do whatever they want — it is undesirable for Republicans to hold so much power, when they are barely the majority.

The workaround is a filibuster, which requires 60 votes to overcome, thereby giving some additional power to the minority. But the problem with the filibuster is that it halts progress on whatever the Senate was currently doing (e.g. it's to block a nomination), and since the floor is tied up, it prevents other work too.

If this were a microprocessor, I'd say the bug is an incorrect threshhold value, and the workaround is to mutex. This is a very big hammer. It hurts the performance of other tasks, and is nearly a deadlock itself, because a filibuster can be indefinitely long.

The fix would be to increase the proportion of yea votes required to confirm a nominee. If 60 votes were required, the minority would have the same amount of power as with the filibuster, but without the negative work-stopping side-effects of using a filibuster. And if 60 isn't the right number, pick your favorite.

Make it easy to get a vote. That enables forward progress. Make it hard to win a vote. That protects minorities.

Would I get strange looks if I referred to amending the Constitution as applying a microcode patch? [wouldn't that be more like a firmware update? -ed]

UPDATE 2005-02-17 08:17:44 UTC: Skip writes with some interesting context on filibusters. I'm increasingly out of my element, here, so I'll just post his comments:

The problem with most discussion of the Seante's fillibuster rule is that it ignores the historical development of the practice. The filibuster itself was not adopted as a positive rule; that is, the Senate didn't sit down and consciously decide to permit them. In the early congresses — in both the House and Senate — the British parliamentary practice of unlimited debate was continued. Even today, Robert's Rules and similar authorities presume debate is unlimited unless the assembly — by a two-thirds vote — restricts debate.

Later in the 19th century, as both houses of Congress expanded with the admission of new states, unlimited debate became unworkable. The House limited debate, first each member to one hour, and today through the use of bill-specific "rules" that limit debate times. The Senate chose to continue unlimited debate, adopting the caveat that a three-fifths vote could set a finite limit for ending debate. (Contrary to popular belief, a filibuster doesn't end debate immediately — that would be a motion for the previous question — but rather sets a definite timetable to close the debate.) The Senate rule is actually more generous than a regular previous question, as it requires six less votes for passage.

My objection to the current filibuster practice is that it doesn't fulfill its intended purpose — preserving the right of members to debate. Today the mere threat of a filibuster usually brings action to a halt; when actual filibusters are performed, they are for show. (Another related practice, which completely contradicts parliamentary law principles, is the use of often-anonymous "holds", where a single senator can delay consideration of almost any bill or nomination.) The filibuster is now simply an obstruction tactic. One way to deal with this would be to simply require opponents of a nomination to debate — no extraneous material (i.e., reading Atlas Shrugged) allowed. A simple enforcement of traditional parliamentary procedure would go a long way.

Okay, I can't resist one cutesy comment. I don't know how reading Atlas Shrugged got into this in the first place, but I would pay real money to see someone read Francisco's speech to Congress during a filibuster. In that case, I would happily (but temporarily) put aside my distaste for filibusters, in favor of some popcorn.

February 14, 2005

State of the Union 2005

I watched the State of the Union speech. And now I'm finally writing some comments about it.

I will send you a budget that holds the growth of discretionary spending below inflation, makes tax relief permanent, and stays on track to cut the deficit in half by 2009. My budget substantially reduces or eliminates more than 150 government programs that are not getting results, or duplicate current efforts, or do not fulfill essential priorities. The principle here is clear: taxpayer dollars must be spent wisely, or not at all.

Slice away!

I'm tickled that he's cutting more than 150 programs. Wish it was more. But I'm skeptical on this cutting the deficit in half thing; he must be excluding Social Security reform from this figure and only looking at the general fund. If he gets the reform he wants, it will reduce the SS surplus now to reduce the SS liability later — but it will increase current borrowing.

He talked about a "comprehensive health care agenda" most of which I would certainly oppose if I learned the details, but he also mentioned "expanded health savings accounts" which I'd love to hear more about.

Bush wants "more [energy] production here at home, including safe, clean nuclear energy." Wow! I did not expect to hear a politician endorse nuclear energy. I've never understood why, but it's political poison. I'm glad to hear him talk it up.

Americans are burdened by an archaic, incoherent federal tax code. I have appointed a bipartisan panel to examine the tax code from top to bottom. And when their recommendations are delivered, you and I will work together to give this Nation a tax code that is pro-growth, easy to understand, and fair to all.

Yes, please. I don't understand the tax code. I don't want to understand the tax code. Every year I pay a nice man to do my taxes so I can avoid studying the tax code. If it were simpler, I might not detest the chore quite so much. And I and millions of others would save hundreds of millions of dollars in the process of figuring out our taxes. Those resources would be better spent on something, you know, productive.

For younger workers, the Social Security system has serious problems that will grow worse with time.

And how! I'm surprised that Bush has made Social Security reform the leading issue in his second term. I'm glad he's forced the issue to be discussed, but I'm afraid the ultimate reforms won't be very good. I'll have much more to say about it when I spend some quality time with the details of the proposal(s) put forward.

It was politically brilliant to precede the options (like raising the retirement age) with the names of the people who advocated them. That's a very effective way to deflect criticism.

I intend to hold Bush to his statement that "I will listen to anyone who has a good idea to offer." I'm going to keep pushing for an individual opt-out. I don't know where I'll find my megaphone, but I'll keep trying. I've had exactly zero success asking other bloggers to trumpet the idea.

I wish he meant "We must not jeopardize our economic strength by increasing payroll taxes" to also rule out increasing the cap on income subject to Social Security taxes, but I rather suspect he only meant to not increase the marginal rate.

I think the cap should be lowered. The more money not subject to payroll taxes, the better! That's the closest thing to an opt-out that's available to people today. It's a shame you have to have such a huge income (>$90,000/yr) to be able to benefit from it.

Personal retirement accounts should be familiar to federal employees, because you already have something similar, called the Thrift Savings Plan, which lets workers deposit a portion of their paychecks into any of five different broadly based investment funds. It is time to extend the same security, and choice, and ownership to young Americans.

Bravo! This undercuts the ridiculous argument that personal accounts are like gambling. If personal accounts are too risky, why isn't the Thrift Savings Plan? You can't have it both ways — you can have both, or neither — but you cannot condemn personal accounts while simultaneously approving of the TSP.

I'd like to flip the "risk" argument on its head. I would argue that personal accounts are much safer than Social Security. I can manage the financial risk of losing money… but I can do little about the political risk certainty that I won't qualify for benefits by the time I retire, because the system will be means-tested by then.

Because marriage is a sacred institution and the foundation of society, it should not be re-defined by activist judges. For the good of families, children, and society, I support a constitutional amendment to protect the institution of marriage.


Because a society is measured by how it treats the weak and vulnerable, we must strive to build a culture of life. … To build a culture of life, we must also ensure that scientific advances always serve human dignity, not take advantage of some lives for the benefit of others. We should all be able to agree on some clear standards. I will work with Congress to ensure that human embryos are not created for experimentation or grown for body parts, and that human life is never bought or sold as a commodity. America will continue to lead the world in medical research that is ambitious, aggressive, and always ethical.

Since when is society measured by how it treats the weak and vulnerable? What a ridiculous notion. I thought achievements had something to do with it — silly me.

I totally oppose all restrictions on fetal/embryonic research and also oppose restrictions on human cloning. I would very much like to clone myself in order to grow replacement organs as insurance against accident or disease.

I am frustrated that the arguments of those who would prohibit these advances are seldom more articulate than "we shouldn't play God." I think it's okay to play God. I think we ought to play God. It sounds fun. We don't even have to have a reason.

Every judicial nominee deserves an up-or-down vote.

Yes. I have never understood why it's so easy for Senators to prevent a vote. I work in validation, so I have an adverse reaction to systems that don't make progress. A system that doesn't make progress is a broken system. There should be limits to delays. If a minority in the Senate was intended to have de facto veto power, it would have been written into the Constitution.

And I am proud that the leader of this nationwide effort will be our First Lady, Laura Bush.

No! She was not elected — you were. And you can't frame it as a political appointment, the conflict of interest is too blatant. It was absolutely wrong for Hillary Clinton to be tasked with overhauling the medical system, and it's absolutely wrong for Laura Bush to be tasked with … eh, something about … compassion.

In the long term, the peace we seek will only be achieved by eliminating the conditions that feed radicalism and ideologies of murder. If whole regions of the world remain in despair and grow in hatred, they will be the recruiting grounds for terror, and that terror will stalk America and other free nations for decades. The only force powerful enough to stop the rise of tyranny and terror, and replace hatred with hope, is the force of human freedom. Our enemies know this, and that is why the terrorist Zarqawi recently declared war on what he called the "evil principle" of democracy. And we have declared our own intention: America will stand with the allies of freedom to support democratic movements in the Middle East and beyond, with the ultimate goal of ending tyranny in our world.

Go back. Read that again. Bush means it. That statement essentializes Bush's entire foreign policy. And I'm glad for it.

To promote this democracy, I will ask Congress for 350 million dollars to support Palestinian political, economic, and security reforms. The goal of two democratic states, Israel and Palestine, living side by side in peace is within reach — and America will help them achieve that goal.

Groan. How about digging up all the money Arafat stole, instead of shaking down the American taxpayers?

He's right that peace between Israel and Palestine is possible, now. With Arafat's death, the major obstacle has been removed. There are already very encouraging signs.

And to the Iranian people, I say tonight: As you stand for your own liberty, America stands with you.

Bravo! These simple words of encouragement are profoundly valuable to the Iranians yearning to be free.

And the victory of freedom in Iraq will strengthen a new ally in the war on terror, inspire democratic reformers from Damascus to Tehran, bring more hope and progress to a troubled region, and thereby lift a terrible threat from the lives of our children and grandchildren.

Wow. Diplo-speak is lots of fun. This was a clear warning shot to Syria and Iran, delivered in an almost omittable phrase! Without that phrase, the sentence would have said basically the same thing. But with it, it strikes fear into the hearts of tyrants.

Recently an Iraqi interpreter said to a reporter, "Tell America not to abandon us." He and all Iraqis can be certain: While our military strategy is adapting to circumstances, our commitment remains firm and unchanging. We are standing for the freedom of our Iraqi friends, and freedom in Iraq will make America safer for generations to come. We will not set an artificial timetable for leaving Iraq, because that would embolden the terrorists and make them believe they can wait us out. We are in Iraq to achieve a result: A country that is democratic, representative of all its people, at peace with its neighbors, and able to defend itself. And when that result is achieved, our men and women serving in Iraq will return home with the honor they have earned.

Excellently done. We will leave when and as our goals are accomplished, not by setting some arbitrary date. I believe we'll have a significant presence in Iraq for decades, because Iraq is an excellent location for a military base. In the same way the United States is still "occupying" Western Europe, Japan, and South Korea, we'll remain in Iraq for the forseeable future.

P.S., thank you for not talking about Mars.

February 13, 2005

Fun With Search Engines

Search technology is immature. I thought I had problems, but these guys have it much worse.

February 12, 2005

The Incredible Shrinking Bonus

Last year I decided to make a (nearly pointless) gesture in protest of excessive taxation. I did it again this year. And because it might provide some amusement, I'll tell you about it.

Income tax withholding on regular wages can be adjusted through a W4 form. But bonus wages are always withheld at the supplemental rate. The federal supplemental rate is 25%, and Oregon's supplemental rate is 9%, for a total income tax withholding rate of 34%. This is substantially higher than the effective withholding rate I pay on my regular wages.

I don't like that. It irritates me. I want that money to benefit me, not the government. I find little consolation in the eventual tax refund, because the government will have held my money for over a year before I get it back!

So, what's my nearly pointless gesture? The only way to reduce the effective withholding rate on a bonus is to reduce the amount of money subject to withholding. Which means a before-tax deduction, like as a 401(k) contribution. I temporarily increase my 401(k) deduction as much as possible (my employer allows up to 50%) to maximize the amount of money working for me and minimize the amount going to the government.

This decision ironically makes bonus season the time of the year when my discretionary income is smallest. Here are the deductions:

  • 1.45% - Medicare
  • 6.2% - Social Security
  • 50% - 401(k), reduces pay subject to income tax
  • 12.5% - Federal supplemental (25% of the taxable 50%)
  • 4.5% - State supplemental (9% of the taxable 50%)

That's 74.65%. Three-quarters of my bonus goes to deductions! (Actually, it's even more than that due to an employee stock purchase plan.) But only 24.65% of it goes to the government, instead of 41.65%.

Yes, that's right, regular taxes on bonuses are over 40%! I can reduce the taxes only by funneling the money into a 401(k), but this is a deduction and further decreases the amount of money I can take home and spend.

I cannot take home and spend even 60% of a bonus. If you ever wonder whether taxes are too high, the answer is "yes."

February 10, 2005

An Appeal for Honesty

There are two arguments in the Social Security debate I'm tired of hearing.

The first is that the transition costs are simply the result of taking an already-accrued liability and making it explicit in the bookkeeping, with the implication that they're therefore harmless.

The second is that the transition costs will hugely increase the national debt, with the implication that they're therefore horrible.

The nice thing about being on the political fringe is that sometimes, like now, I get to cry foul against both sides simultaneously.

Here's the reality of the transition costs. Because the Social Security system is presently running a surplus, the transition costs would decrease the magnitude of the surplus. Because the surplus is invested in Treasury bonds, the surplus (and the trust fund) is merely a bookkeeping entity without any economic significance — all the money winds up in the General Fund.

A reduced Social Security surplus means a reduced General Fund. Assuming the government will not reduce spending in response to the smaller surplus (which I think is a very reasonable assumption), the necessary funds will be obtained by borrowing from the public. In the simplest scenario, the funds going into private accounts will be exactly offset by new government borrowing, so there is no net effect.

In the short run.

Government borrowing from the public is different from government "borrowing" from the Social Security trust fund. The interest on the trust fund bonds is an accounting fiction, but the interest paid on the debt to the public is real. The true measure of the transition costs is these interest payments. (Alternately, tax increases.)

If Social Security were not changed, the borrowing (or higher taxes) would occur in the future as the (fictional, mind you) trust fund bonds are paid. Privatization makes it occur sooner. This is the real transition cost — the government's recouping of the tax revenue that no longer becomes part of the General Fund.

The pro-reform argument that the transition costs are harmless is a lie. The transition costs are quite real from the point of view of the government.

Do the transition costs hurt the economy? No. They are neutral. The government must raise additional funds to pay the interest, but the interest goes back to the public, so it's a wash on an aggregate basis. The transition costs could benefit the economy if the larger General Fund deficit leads to a reduction in government spending, "starve-the-beast" style, although I remain skeptical that this actually happens despite the popularity of the idea.

The anti-reform argument that the transition costs are horrible is also a lie. The transition costs increase the deficit in the short run, but do not affect the debt because they essentially, as the pro-reform argument goes, are taking an off-balance-sheet accrued liability and making it explicit. If the government's budgeting was done on an accrual rather than cash-flow basis, the huge figures thrown about for the "unfunded liability" would already be included in the debt figures. (Albeit, as estimates.)

Pro-reformers: Stop pretending that the transition costs are harmless. The government will tax or borrow that amount, plus more to cover interest. The number of dollars flowing through government hands will actually increase. You need to recognize that this will create pressure for a tax increase.

Anti-reformers: Stop pretending that the transition costs will increase the debt. It ain't so. The additional borrowing in the near term is offset by a reduction in the accrued liability. It only looks like the transition costs increase the debt because the liability is off-the-books.

Everybody: I still want to opt out. Ya'll can do whatever you want to the Social Security system after you let me out. You never should have forced me into this in the first place — I'm the complaining type…

Public Tsunami Aid Boosted

Shocking! Outrageous!

President Bush has requested an additional $600,000,000 in public aid for tsunami victims. This is in addition to the $350,000,000 already pledged.

When a person gives his own money to the needy, that's charity.

When a person gives his neighbor's money to the needy, that's theft.

As I've said before, charity should be private. I can't remember if I've linked to this excerpt about Davy Crockett opposing public charity before, but it's a good read and absolutely relevant.

The Constitution does not authorize public charity. The federal government does not, strictly speaking, have the power to do what it has done and continues to do. This is the position of James Madison, among other luminary figures. I regard Bush's method of expressing his "compassion" as detestable.

February 08, 2005

A Bad Day (For Me)

Arrr. This day, she was bad to me. I need to do a little harmless complaining. Bear with me, this won't take long…

I couldn't task-switch at work. I only worked on one thing all day, and it took all my available concentration.

When someone stopped into my cube to ask questions about a draft spec I wrote, I couldn't answer their questions well. I had to rediscover on-the-spot the reason for a restriction I put in. I also got my cacheline endianness backwards so for a while I was explaining something exactly wrong.

When I went back to work after lunch, I discovered I forgot my badge at home. (And when I wrote the preceding sentence, I originally wrote "back to lunch after work" — <sigh>)

I had to do some script-writing this morning related to some debugging I'm doing, and in the afternoon I realized I made an elementary error. I had incorrect constants in part of the code, sending my debug efforts down a wasted path until I found the error.

My whole day's effort yielded nothing; at the end of the day I determined the data I had been looking at wouldn't be sufficient to understand the problem. Tomorrow will mean new experiments to gather additional data. (And sadly, it will be data of a different kind, so my script-writing won't be useful.)

After work I discovered I had a nearly-flat tire. I gingerly drove to a gas station to get some air. On the way, my low fuel light came on — which wouldn't have been a problem, except that the gas station I went to was closed. I got air there, had to drive to another station to get gas. Oh, and I discovered I'm missing a valve cap — on a different tire.

It's days like this I'm glad I don't work with heavy machinery or chemicals or generally anything that might kill me. To describe this as a bad day probably sounds silly to someone who has truly serious things to worry about. Yeah, I live a very comfortable life most of the time. But today I think I'm going to go to sleep early.

Just proofreading this was depressing. I can't write today, either…

February 07, 2005

Gustafson's HPCwire Interview

I've been meaning to link to John Gustafson's HPCwire interview from last month. If you're interested in high performance computing, give this a read.

Full disclosure: I used to work for Dr. Gustafson several years ago as a research associate when I was in college. Today he works for Sun, and I for Intel, and thankfully he and I aren't competing over the same market segment.

Yes I'm Still Here

I know I haven't written in a while. I've been too busy to blog for a few days. Regular blogging will resume "soon", in the meanwhile, some more-or-less random comments.

I missed the window to write about Ayn Rand's centenary, but other people did. Bryan Caplan's literary analysis was the most interesting of what I've read recently.

Speaking of Ayn Rand, the Ayn Rand Institute put out another op-ed I have to complain about. It's critical of the idea that the Iraqi elections will help American security and puts forward absolutely valid concerns that "some assortment of collectivists and Islamists" might be elected.

Of course that's a possibility, but I'm not so pessimistic, and I think it's unwise to proclaim failure before the composition of the new government is even known. There are a lot of factors indicating success: the celebratory atmosphere, the chanting of "vote for Allawi, not Zarqawi", the clear failure of terrorists' attempts to disrupt the elections, the proud display of inked fingers, the memories of the former totalitarian ruler… these didn't deserve to be ignored.

The op-ed does not argue that a free Iraq won't strengthen American security. It only argues that we won't get a free Iraq. I remain to be convinced of that.

This was, without doubt, the worst paragraph:

Perhaps the most alarming outcome for U.S. security would be a popularly elected theocracy aligned with or highly sympathetic to Iran's totalitarian regime. Iran is reported to have smuggled nearly one million people into Iraq to vote and has donated millions of dollars to sway the election in favor of a Shi'ite-led government. Already, Iranian intelligence officials are said to roam the hallways of Iraqi party offices, on whose walls hang pictures of Iran's supreme leader.

A million people sumggled into Iraq? Are you nuts? What's your source for this alleged intelligence? I think if you smuggled a million people into a country with a population of only 25 million (and only 14 million of voting age) that would be rather easily noticed. A sudden 4% population surge would cause interesting effects, like a shortage of housing. And wouldn't people notice such a mass migration? How long were these people there? Did they get jobs? How much money did they bring with them?

I heard a few days ago that roughly 8 million ballots were cast. (Anyone have an authoritative figure?) If 1 million of those were cast by foreigners, don't'cha think the poll workers would've noticed?

It's totally ridiculous. I wish I could read an ARI op-ed without rolling my eyes.

Via EconoPundit I learned that socialized medicine keeps getting worse in Britain. Once more, with feeling: medical care is economically scarce, just like everything else. If you don't want to allocate by price, you have to ration.

More than 70% of cancer patients are having to wait beyond the recommended maximum of four weeks for radiotherapy, compared with 32% five years previously.

Socialism kills people, people! And this is even the softer, gentler, kinder socialism that at least can claim it's not slaughtering people intentionally.

Thank you, Secretary Rice. I'm glad someone in this administration will stand up to Putin.

I just wish it was the President.

A longish post on the State of the Union speech is in the works, before I return to regular topics.

February 02, 2005

Ethics: Emergencies and Obligations - Part 5 - Principles in Emergencies

Everybody needs ethics — ordinary, everyday, regular ethics. You'll use it every day throughout your life. It's clearly worth study.

Not everybody needs emergency ethics. It's a specialization of the science that only operates in rare circumstances that most people hope to avoid. Frankly, most people have better things to do with their time than to study something they'll never use.

However, there are people for whom emergency situations are an occupational reality. Firemen, police, soldiers, emergency room and military doctors, search and rescue, paramedics, and others regularly encounter emergency situations. These people need ethical principles for emergencies.

Ethical principles within emergencies aren't wholly different from normal ethical principles. The methodology is the same — even in an emergency, ethical principles are grounded in a person's hierarchy of values and derived from the facts of reality about what behavior is required to achieve those values. An important distinction, however, is that emergency ethics is not concerned with the question of what people ought to value. Emergencies are peril; it is generally possible only to preserve values, not to pursue them.

People with occupational exposure to emergencies are subject to another important consideration — it's part of their profession. These people have, by their chose of career, accepted the ethical obligation to do their job through extreme circumstances. Professionals are held to a higher standard than ordinary people in emergencies. They've chosen it and have trained for it.

It isn't my purpose here to talk about the specific ethical principles that are proper guides for policeman, firemen, soldiers, etc., except to note that they are different for different professions. The differences in acceptable behavior between law enforcement (a policeman) and war (a soldier) are clear. The differences in contexts drive differences in applicable principles. This is in clear contrast to normal ethics, which provides universal principles applicable to all normal contexts. In normal ethics, specialized subsets of ethics for e.g. different professions deal with the task of applying the universal principles in a more focused context — not with balkanizing the science into sub-groups that operate under incompatible principles.

No more discussion of professionals. Let's focus on ordinary people.

The proper ethical principle for most people in an emergency is to get out. End or leave the emergency, get out of peril, protect your life and return to a normal ethical context where you are better equipped to make decisions. In the course of "getting out", pay attention to your hierarchy of values and take those actions necessary to protect your highest values, even if in normal circumstances those actions would violate your ethical principles. This is an emergency context, remember, so your regular principles may not apply.

It is difficult to make good decisions in an emergency. You're under stress, you're in a hurry, and your automatized principles may guide you incorrectly. For all these reasons it's important to grant considerable deference to the decisions people make during emergencies. However, this is not a license to do as one pleases because "everything goes." When the emergency is over, you are obligated to make reasonable recompense for actions which violated ordinary ethics.

If in an blizzard someone breaks into a cabin to survive, they should pay to repair the window (or whatever) and to replace the food they ate. The obligation to make amends is softened by leniency — if they were reasonably trying to do right during an emergency, but caused (say) considerable property damage that they cannot afford to repair, that debt should not be binding.

Insurance may be the right analogy, here. Emergencies are a risk, like natural disasters. (In fact, natural disasters are emergencies for people present in them.) The element of human choice is certainly present in a person's actions during an emergency, and human choice may cause damages, but these are already difficult circumstances and it is easy to construct "no-win" situations where damage is unavoidable. People should not be punished for pursuing the least-bad of a set of lousy alternatives. That said, if human choice caused an emergency, no lenience should be given to that choice.

It is worthwhile to mention a few principles subordinate to "get out" that will generally serve your hierarchy of values in an emergency:

  • Think. Your decisions in an emergency are based on a risk-reward calculation. You may be able to preserve significant values with only a small increase in risk.
  • Help people. The typical person is substantially more good than evil, so the typical total stranger is worth aiding. You should first help people you know to be good, before helping strangers. You should not (ever) help people you know to be evil, unless there's an overriding short-term reason to do so.
  • Alert the professionals. They're trained for this stuff — you're not. They will also have equipment, increasing their capabilities. Even if you're safe already, they can help others, and that is a goal in an emergency. A corollary is: don't drain their resources unnecessarily.

I'm sure with additional thought I would add several more to this list. But I'm more interested in the fact that emergency ethics is different from normal ethics in important ways, than in fleshing out the contents of emergency ethics. Besides, I'm tired, and even after all this I still haven't gotten to Josh's questions yet, so this is a good place for a break. Next time, the political implications of emergencies! We saw here that emergencies are ethically significant — are they politically significant, too?

February 01, 2005

Teaching Free Speech

or not teaching it, as Dave brings to my attention:

… when told of the exact text of the First Amendment, more than one in three high school students said it goes "too far" in the rights it guarantees. Only half of the students said newspapers should be allowed to publish freely without government approval of stories.

This certainly qualifies for my Shocking! Outrageous! file. High school is old enough that students should have a better appreciation for what is arguably the single most impactful sentence ever written. The First Amendment is among a very small number of other clauses that are sacred to the American form of government.

I wonder how those students would react to the equivalent sections of the Oregon Constitution? The free speech clause (Article I, Section 8) is even more explicit:

No law shall be passed restraining the free expression of opinion, or restricting the right to speak, write, or print freely on any subject whatever; but every person shall be responsible for the abuse of this right.

The news article suggests they wouldn't get it:

When asked whether people should be allowed to express unpopular views, 97 percent of teachers and 99 percent of school principals said yes. Only 83 percent of students did.

That's a sad number for the students, but I won't be too hard on the young. I'm more upset with the teachers and principals — not only are they failing to teach the First Amendment, some of them don't even agree with it!

This seems so strange to me that I wonder about the methodology of the survey. The precise wording of questions can introduce a large bias in the results. Were people asked "Should people be allowed to express unpopular views?" or "Should the government be allowed to restrict expression of unpopular views?" The former question doesn't make the context clear. Non-government restriction of unpopular views is perfectly okay, so even I would answer that in some circumstances restrictions on unpopular views are fine. I would never allow a government restriction, though.

I doubt the survey suffers from bad sampling. This was a huge group:

The survey, conducted by researchers at the University of Connecticut, is billed as the largest of its kind. More than 100,000 students, nearly 8,000 teachers and more than 500 administrators at 544 public and private high schools took part in early 2004.

Were the statisticians asleep when this survey was put together? Those samples are much, much bigger than are necessary. They're quite excessive.

… a final thought. The news article ends with several paragraphs tying the topic of the survey into the topic of school media activities, complete with complaints that there's not enough money for them.

Where do I have to go to get journalists who report news rather than tying news into an obvious political agenda (increasing funding for schools)? At least this irrelevant crap was buried at the end of the article rather than permeating throughout.

Here's an idea, journalists: If it's "important for all students to learn some journalism skills", how about role modeling being a journalist instead of an activist? That deserves a Shocking! Outrageous! of its own.

Insert Microsoft Joke Here

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Tiny Island