I enjoy reading Dahlia Lithwick’s pieces in Slate. She reviews the Supreme Court hearings. This latest one on the display of ‘religious’ symbols in a public place is a good example: Take Two Tablets – The Supreme Court picks through the rubble of its Ten Commandments jurisprudence. By Dahlia Lithwick

What caught my attention was a quote by Justice Scalia. I sure hope that there was some other context he was using.
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Scalia’s point here: “When someone walks by the commandments, they are not studying the text. They are acknowledging that the government derives its authority from God.”
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I can’t understand how any Supreme Court Justice could believe that the government derives its authority from God. From the Declaration of Independence to the Constitution of the United States, it is We, The People, that authorize the Government. The Government derives its authority from The People.

Can you even graduate from Law School without having that drummed into the very core of your being?

The SSA withholding is 6.2 % for employee, matched by employer, for a total of 12.4% of income up to the magic cap, around $90K today. The Medicaid withholding is 1.45%, matched by employer, for a total of 2.9% with no cap. So, a total of 15.3% is withheld up to the cap and 2.9% thereafter.

Let’s see if that changes my numbers any. (how do I link back to an earlier post?)
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Social Security Reform – For 2003 there was about 533.5 billion dollars collected from 156 million workers (plus employers).

That comes down to $3420 per worker/employer or $1710 per worker per year. (Employer matches an equal amount per worker to SSA)
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Nope, I was looking at totals and not percent contributions. From What I hear, they are talking about up to 4% of the 6.2% contribution to a maximum of $1000. That doesn’t even seem to be worth the time or effort to manage. 4%/6.2%= 64.5%. So they will allow the average worker to divert 64.5% of $1710 to a private account or $1103 per year. But that’s over the $1000 limit. 58.5% would max out to $1000. 3.6% withholding diversion will meet that. So what will that do to the received SSA benefits 30-40 years down the road.

The Congress, in its infinite, partisan, wisdom, has already developed an answer to the “Private Account” It is called an Individual Retirement Account (IRA). The IRA is managed by the individual and money contributed now is non-taxable. The proceeds, when drawn out post 59.5 years old, are taxed when withdrawn (substantial penalty for early withdrawal.) The IRA can be passed on via inheritance. It belongs to the contributor. People are entitled to contribute up to $4000 a year now. That amount should grow with inflation.

So, why don’t we stop planning to downsize the SSA fund contributions with private accounts and promote IRAs? I think Congress, iiipw, can do things to promote the use of IRAs, like mandating automatic payroll deductions to IRA accounts UNLESS the employee opts out or requests a lower deduction (I think the base deduction should put the max allowable into the IRA over the course of the year.) And the Employee has to re-opt every year.

The main reason for this is to get people thinking about their retirement plans. SSA is a retirement supplement. People shouldn’t plan on surviving on it. And the way corporate America is going today, folks will be very lucky to have any retirement benefits unless they organize the benefits themselves. At least I didn’t have to worry about my company’s pension plan being sundered when it declared bankruptcy because it didn’t have one to sunder. (of course, my 401k funds took a hit when all that company-contributed stock went to $0, but that’s another story.)

Regarding the pending SSA cash-flow crunch that opponents of SS call a “crisis” there a couple of hard choices to make.

First, I think that contribution cap should disappear.

Second, benefits should be reduced to follow inflation and not income. (it’s a supplement, not a wage)

Third, the age to collect benefits needs to be raised to that age where life expectancy is, say, 10 years more. (If someone who reaches 65 can expect, on average, to live to 80, then 65 is too young to collect benefits. If someone who reaches 71 can expect to live to 81, then they can start collecting. This all depends on actuarial tables and averages and not on individuals, but SS is, effectively, an insurance program. Others can argue about the male/female life expectancy differences. I think when you get to that age it shouldn’t matter.)

Fourth; Stop using SSA money to cover government debt. Keep the SSA Trust fund as a separate account from the treasury general funds.

The President mentioned that the workers would get up to 4% of the SSA withholding to invest in private accounts. They currently contribute 7.5%, so GWB is proposing 4/7.5 or 53.3% of their withholding to invest. See the numbers below to see where that fits in the scheme of things.

I heard somewhere that some critics were saying this will reduce SSA benfits by 40%. By my calulations, that should only reduce bennies by 26.7%, since the employers contribution and 47% of the employees contribution are still going to the old SSA funds.

I missed an opportunity last night. The phone rang and a mechanical voice said “This is a political poll, it will take about 45 seconds, Did you watch the Presidents’ State of the Union Address?” This was like five minutes after the speech, while the Democrats were starting their response.

I had listened to it on radio (NPR) and was sort of watching the video on NBC. It is strange to watch the delayed video with the radio audio. Works a lot better with Football games. I wonder if NBC was delaying their feed in case they had to bleep the President.

Anyway, I thought a second and hung up on the machine. If it had been a live voice I probably would have responded. It would have been interesting to find out what sort of questions the pollsters were asking after the speech.

I don’t think the President has defined what is “broken” about Social Security and how his private accounts would “fix” it. SS is working the way it was designed, it’s not broken. The original design parameters don’t appear to be valid anymore.

It may be time to design a new system from the ground up. Of course, people who have worked on implementing new computer programs know the difficulties of implementing a new system that does what the old does plus more features that meet the new environment while keeping the old one active. I don’t know, I am still looking into the problem. (Since I am one of those under 55, I am in potential trouble. I don’t actually hit 65 until 2018, the year SSA goes red.)

Social Security Reform – For 2003 there was about 533.5 billion dollars collected from 156 million workers (plus employers).

That comes down to $3420 per worker/employer or $1710 per worker per year. (Employer matches an equal amount per worker to SSA)

The SSA Reformers are suggesting that the worker gets to put some of the SSA money into private accounts that the workers would control on their own, a la an IRA. How much should they gamble with? Let the Employers match stay with the SSA. That leaves up to $1710 to invest. No one is really suggesting that the entire $1710 go to Wall Street; what about a half, a third, a quarter?

Numbers:
57% = $979
50% = $855
33% = $564
30% = $513
25% = $427
20% = $342
10% = $171

So, in 2003, SSA took in $533,500M and spent $470,728M, leaving a surplus of $62,772M. Let’s use this number as an investment target.

That would mean that the average worker could move $402 to an investment account and leave the SSA with enough to balance the income and disbursements. That’s about 25% of the SSA contribution.

< Alternate Reality >
So, in 2003, including interest on investments, SSA took in $631,866M and spent $479,086M, leaving a surplus of $152,780M. Let’s use this number as an investment target.

That would mean that the average worker could move $979 to an investment account and leave the SSA with enough to balance the income and disbursements. That’s about 57% of the SSA contribution.

< / Alternate Reality > (they really don’t like you putting in faux tags)

The percentage to invest will be a topic of much discussion.

Unless there is some sort of guarantee that the SSA accounts will have a strict limit on the fees charged, a worker can come out of this experiment with nothing, not even the original $20K-30K contributed over the course of a lifetime. Of course, those that have maxed out on the SSA contributions at $5450 per worker per year will have a better chance to get something out of it all. (Have you noticed that the max contribution is 3 times the average contribution? I wonder if that means anything.)

Most workers will start out small and gradually work their way up to the contribution cap. Over 45 years, a worker will average about 45*1710= $76,950, or $153,894 with employer match, in contributions to the SSA Trust Funds. (Using the 2003 dollars noted above.)

So, if they direct 50% of their SSA contribution to a private account, do they then receive 50% benefits when they retire? Actually, it should be 75% since the employer is contributing the full amount to the SSA account. (50% of 50% is 25%)

pdf_paulson0704a.pdf (application/pdf Object).

This is a semi-scholarly document, in that my first impression of the author is that he is an anti-taxist. But it does seem to cover a lot of the details of what TABOR has imposed on the Colorado legislature’s spending authority.

I think that Colorado voters need to be more upfront about their state and start publicizing things like “Welcome to Colorado, where the education of your children is YOUR business, not ours. ” (All publicity to be done without spending any tax money.)

This aticle in the Washington Post highlights an “Intelligent Design” conflict in PA. Evolution Shares a Desk With ‘Intelligent Design’ (washingtonpost.com)

First, I would suggest that people learn what a “theory” is, at least in science. A searcher for knowledge makes observations and, based on those observations, puts together an Hypothesis that links and explains various observations. The Hypothesis is shared with other seekers and observers and they generate a general consensus that; Yes indeed, this hypothesis holds water, or; No, this hypothesis doesn’t float.

If the general consensus of the Hypothesis is “Yes”, then it is upgraded to a Theory. As a Theory, it will be taught in higher centers of learning; it informs the next generation of seekers of what those that have gone before have found. It does not mean that the Theory is absolute and can not be questioned, but you will need extraordinary evidence to show that the theory is wrong. Tweaks are always possible, addons that further clarify the Theory; expansions that extend the theory to new realms, although they may require new theories themselves. Theories are not Immutable.

Laws are Immutable. And there are very few laws in science. Things like :

On object in motion stays in motion unless acted upon by an outside force.

Acceleration equals force divided by mass.

For every action there is an equal and opposite reaction.

After much experimental observation and agreement a theory may become a law. Though some theories are thought of as law since they’ve been around for so long.

Even Einstein’s Relativity work is still theory, though it may become law soon.

Either way, the “Intelligent Design Theory” is not a Theory, it is a hypothesis. Once it has been accepted by the general scientific community it can become a theory. And then it will be taught in colleges and universities and some of the kinks in the theory will be worked out.

At that point, it will be fit to be taught in elementary and high schools. Trying to teach subjects in K-12 that aren’t being taught at higher levels of education is like feeding a child mud. It might fill him up but it won’t nourish him.

If the community feels strongly enough that a subject shouldn’t be taught in a curriculum, remove it, don’t replace it with material that is not accepted in higher levels of education. If a community wants to teach the 1+1 = 3, because it works for them and higher levels of education teach the 1+1 = 2, then it is better not to teach that 1+1 = anything than to teach something that will ruin the child’s chances to live in the rest of the world.