With good reason, the economy is the number one issue on voters’ minds this presidential election cycle.  After all, currently, unemployment and prices are both rising and the things we own, like houses, are worth less with each passing day.  Of course, the two major party nominees for president are offering their remedies for combating the most current economic difficulties afflicting our nation.  Both John McCain and Barack Obama are offering essentially the same pabulum that is offered up every four years by Republicans and Democrats seeking the presidency.  They would tinker with the tax code, adjust federal spending, fix social security, cure the health care crisis, lower oil prices, and ease the burden on homeowners.  What’s amazing is that in all these years and with all the resources at their disposal, Republicans and Democrats have not learned that planned economies do not work.

Let’s take social security for instance.  In the first place, I am still looking for a constitutional justification for the federal government to be in the business of retirement annuities.  That aside, social security is nothing more than a Ponzi Scheme.  In 1919, Charles Ponzi persuaded investors to send him money with the guarantee that he could double or even triple their investment by speculating in international postal reply coupons.  However, his plan simply was to pay off previous investors with the money received from current investors.  When he could no longer persuade new investors to send him money the well ran dry causing many to lose the money they sent him.  Ponzi was caught, jailed for several years and eventually deported back to his native Italy for his fraud.  Social Security is essentially the same scheme.  It relies on an ample pool of current workers/contributors to pay off those that contributed previously during their working lives.  In 1950 there were 16 workers for every retired person.  Today there are 3.3 workers for every retired person.  It is only a matter of time until the system meets the same fate as Ponzi’s and collapses.  

Of course, neither McCain nor Obama are calling for an end to social security.  They prefer to fix the system instead.  To cover the expected long-term shortfall of the system (expected to be in the trillions of dollars), McCain wants to cut benefits rather than raise taxes.  How can he do that?  Isn’t there a contractual agreement between the social security trust fund and retirees about how much they get paid each month?  The answer is no.  Retirees are at the mercy of politicians for their monthly payments unlike private annuity programs and furthermore, there really is no such thing as a social security trust fund since those same politicians have been raiding it for years in an attempt to meet current expenses of the general federal budget.

On the other hand, Barack Obama, doesn’t favor increasing the retirement age or cutting benefits.  Instead, he would increase the amount of payroll tax that very high-income workers pay by subjecting more of their income to the payroll tax.  Therefore, his solution is to throw more money at the problem.  Given the lousy economy he will inherit if elected president, this policy will only cause more economic hardship.

What we really need from McCain and Obama is a free market approach not an endorsement of continuing government planning in regards to retirement accounts.  They should be proposing that Social Security be phased out as quickly as we can dismantle our worldwide military empire, sell most federal lands, and abolish all federal government departments that do not meet constitutional muster.  With the money saved by these liquidations, current and some future recipients of social security can be paid off.  With no social security tax to pay, younger folks would realize about a 6% income increase which they could save for retirement in a real investment with real returns.  Businesses would realize the same 6% savings which can be passed along to stockholders many of which would be saving for their retirement. 

By ending government central planning in retirement accounts, we would never again be subject to the same tired proposals every four years to perpetuate a system that if done by a private citizen would get them jail time.  Economic central planning, whether it was/is the Soviet Union, Maoist China or Social Security, has proven unworkable.  McCain and Obama should practice “straight talk” and give America “Change We Can Believe In” when it comes to Social Security.  Whichever candidate is elected president should send Social Security to the same scrap heap containing the broken promises of the Soviet Union and Maoist China.

Part II will look at aid to homeowners.

Kenn Jacobine teaches History and English for the American International School of Lusaka, Zambia.  Send him email at lovesliberty@gmail.com.

Young Americans beware, Uncle Sam may ask you to join him soon on a worldwide adventure to exotic places to see fascinating sights and to meet interesting people and kill them or be killed by them.  This week as Defense Secretary Robert Gates and Joint Chiefs Chairman Admiral Mike Mullen were testifying before the Senate Appropriations defense subcommittee, its chairman, Daniel Inouye (D-Hawaii), asked the question he said no one wants to ask:  “Is the cost of maintaining an all-volunteer force becoming unsustainable and, secondly, do we need to consider reinstituting the draft."  As a stunned audience gasped for air, Gates indicated that the escalating costs of maintaining an all volunteer armed forces were worth it.  Mullen was not so hopeful.  The exchange brought out in the open an issue that has been ignored by politicians this election year - military conscription.

Why would politicians want to discuss an issue in public as controversial and loathsome as the draft in any year let alone one in which a new congress and president will be chosen?  Inouye’s reference that no one wants to ask about the draft on Capital Hill can be construed as an admission that he has had discussions in private with other members of Congress to reinstitute the draft.  In public, the two major presidential contenders, Barack Obama and John McCain, have also steered clear of this political hot potato in their speeches and pronouncements.  However, verbiage on both men’s official campaign websites raises troubling questions about their position on converting the all volunteer military into a conscripted one.

While both men never mention the word draft or anything related to it, they both directly state that the U.S. military must be enlarged.  Obama’s site states, “We have learned from Iraq that our military needs more men and women in uniform to reduce the strain on our active force. Obama will increase the size of ground forces, adding 65,000 soldiers to the Army and 27,000 Marines.”  These are strange words from a candidate that has repeatedly pledged to withdraw troops from Iraq.  If under Obama, we would withdraw troops from Iraq, why do we need more?  Additionally, how is the increase going to be achieved?  The site does not specify.  Will Congress and President Obama provide more inducements by way of higher pay and better benefits for troops to reenlist and potential recruits to sign-up?  Or are we looking at a draft?

John McCain’s site, while also avoiding the use of the word draft or anything close to it, is much more vociferous about the need to “enlarge” our military force.  The national security section of his site states:  “The most important weapons in the U.S. arsenal are the men and women of American armed forces. John McCain believes we must enlarge the size of our armed forces to meet new challenges to our security. For too long, we have asked too much of too few - with the result that many service personnel are on their second, third and even fourth tours of duty in Afghanistan and Iraq. There can be no higher defense priority than the proper compensation, training, and equipping of our troops”.  Does proper compensation, training, and equipping our troops apply to those few that we have asked so much of or does McCain want to use these benefits to induce new recruits to sign up? The statement is not totally clear.

The section goes on to address how our overseas security interests need to be handled, “John McCain believes that the answer to these challenges is not to roll back our overseas commitments. The size and composition of our armed forces must be matched to our nation's defense requirements. As requirements expand in the global war on terrorism so must our Army, Navy, Air Force, Marines, and Coast Guard be reconfigured to meet these new challenges. John McCain thinks it is especially important to increase the size of the Army and Marine Corps to defend against the threats we face today”.  Again, it is stressed that the U.S. military must be enlarged, but no specifics on how to accomplish that are given.

Rest assured that politicians of both major parties have been talking about the draft in private given their thirst for worldwide military adventure and a declining recruitment and retention rate of our voluntary force.  Call me cynical or even paranoid, but the draft is a big enough issue to demand straight answers from our leaders.  With a draft, Washington would not be limited by personnel concerns when considering military adventures around the globe.  The military would be expanded, thus increasing federal outlays for defense and further exasperating the national debt.  Most importantly, the draft would be a violation of the Constitutional rights of those drafted.  Specifically, the draft violates the Thirteenth Amendment’s prohibition against involuntary servitude and the Fourteenth Amendment’s protection of life and liberty without due process of law.

Senator Inouye’s question should incite the electorate, especially those members between the ages of 18 and 25, to question the political establishment on their individual positions on the draft.  It is one thing to have been denied a debate this presidential campaign season on whether the U.S. should or even can continue to support a worldwide empire?  It is another thing to be denied a debate on who will shoulder the burden of that worldwide empire?

Kenn Jacobine teaches History and English for the American International School of Lusaka, Zambia.  Send him email at lovesliberty@gmail.com.