Rick Santorum's Phony Fiscal Frugality

Rick Santorum attempts to defend his legacy as an avid earmarker by attacking John McCain, claiming he manufactured the earmark issue to hide his own big government tendencies:

“The reason John McCain created the earmark controversy is because he needed to say he was tough on spending. The problem is that when it came to Social Security, Medicare, Medicaid and food stamps — he never wanted to cut anything. Those are the big issues. That’s where the money was. It’s not in appropriated accounts. … Sixty percent of the spending in Washington is entitlement spending. … That’s the spending that’s going up.”

The problem with attacking McCain over not wanting to reduce Social Security or Medicare spending is this: In 2003, there was a vote to expand Medicare liabilities by several trillion dollars, i.e., Medicare Part D.  Rick Santorum voted for this massive increase in entitlements (McCain, by contrast, did not).

Oh, and by the way, while earmarks may only be a small part of the federal budget, they are used to grease the skids for other big government programs.   Medicare Part D is a key example - earmarks were used to help buy Republican votes for that.

A lot of Republican voters are looking for a "conservative alternative to Romney" - and one is needed.  Problem is, Santorum is not that guy; neither is Newt Gingrich.  


I've noted for a while I think Obama is more likely than not to win another term.  Even if that proves wrong, we are not going to have a president who embodies fiscally conservative principles.  Bottom line is this: Conservative activists need to focus on electing a conservative Congress, and then holding them accountable.

Does Newt Gingrich Believe in Limited Government?

I'll admit I haven't been watching the presidential campaign very closely, having skipped all but a few minutes of the so-called debates and mostly skimming news articles.  But it feels like I woke up from a long Rip van Winkle nap and heard Newt Gingrich was leading in the polls.  What the heck?

I've already skewered Mitt Romney on these pages during his prior run, for flip-flopping and for stealing the Aqua-Fresh logo, and blasted Rick Santorum for his big government policies and for then claiming he would have been fiscally conservative if the Tea Party had his back.  So now let me turn my ire to Newt Gingrich:

• Gingrich has long supported an individual mandate to buy health insurance.  He is trying to distance himself from his prior stance now, the only problem with that is he kept endorsing an individual mandate over and over again.  Indeed, President Obama has defended Obamacare recently by noting both Gingrich and Romney endorsed an individual mandate.  The individual mandate is such an extreme and irrational policy that even candidate Obama opposed it.  Gingrich also supported another key component of Obamacare: government-run or subsidized electronic medical records.

• Gingrich endorses taxpayer subsidies for ethanol, which makes no policy sense as ethanol is both inefficient and results in greater carbon emissions, but makes political sense when you consider big campaign donations and Gingrich's background as a well-paid ethanol lobbyist.

• Gingrich today says it was a "mistake" to do an ad with Nancy Pelosi about "climate change" (though I'm guess he got paid for that too).  But he also has supported carbon cap & trade, a big government scheme dreamed up by Goldman Sachs and Enron.

• You have his lobbying for Freddie Mac a quasi-government body that contributed mightily to the financial collapse then got billions in taxpayer bailouts.  His ties to the causes of the problem help explain why he decided to endorse the Wall Street Bailouts and TARP.

• Gingrich famously attacked the Paul Ryan plan to reform Medicare, calling it "right-wing social engineering" (though maybe that was really a compliment, Gingrich seems to appreciate right-wing social engineering). Less famously, he lobbied for Medicare Part D, a multi-trillion expansion of taxpayers' entitlement liabilities.

• On everything from earmarks to pandering to union bosses that underwrite Occupy Wall Street to pushing for a national ID card, Gingrich has chosen big government, or at least political expedience, over free enterprise.

In my review of his book, I noted Gingrich is generally committed to "efficient" government and bringing new technology into government, rather than a commitment to limited government.  I found nothing in his record to make me change my mind.

As I mentioned in a Twitter conversation, I understand that there is not "perfect candidate," but there's a difference between having a "purity" test and demanding a candidate who will expand liberty, not government.  Newt Gingrich is not that candidate.

Just Call it a "Social Security Scheme"

There's been a lot of debate over whether Social Security is a "Ponzi Scheme".  I propose we stop calling it a Ponzi Scheme - as the term is a bit dated, since Ponzi pleaded guilty to fraud in 1920 - and call such schemes "Socially Security Schemes"  For example: Bernie Madoff ripped off investors through a Social Security Scheme.  

The elements are effectively the same.  Social Security and Ponzi schemes take your money and promise some return on it at a later date.  But rather than investing your money, both schemes rely on people joining into the pyramid in the future.  Most Ponzi schemes collapse by failing to continue to attract new investors.  Social Security has avoided that fatal flaw by forcing every generation of workers to pay into the system.

Of course, as the number of recipients increased faster than the number of payers, Social Security has continued to become a worse deal.  As Michael Tanner points out, we are paying more and getting less: 

The very first Social Security recipient, Ida Mae Fuller of Vermont, paid just $44 in Social Security taxes, but the long-lived Mrs. Fuller collected $20,993 in benefits. Such high returns were possible because there were many workers paying into the system and only a few retirees taking benefits out of it. ...

Social Security taxes have been raised some 40 times since the program began. The initial Social Security tax was 2 percent (split between the employer and employee), capped at $3,000 of earnings. That made for a maximum tax of $60. Today, the tax is 12.4 percent, capped at $106,800, for a maximum tax of $13,234. Even adjusting for inflation, that represents more than an 800 percent increase.

Andrew Biggs elaborates on this, noting that - like a Ponzi scheme - those than joined the Security Security Scheme early get a much better payout than those joining late:  

A person who retired in 1950 received around a 20 percent annual return on the taxes he paid (which happens to be exactly the same return that Madoff promised to his investors). Put another way, that person received around 12 times more in benefits than he’d paid in taxes. That helps explain why Social Security became so popular: it was simply an incredibly good deal.

If you were born in 1950 and heard your grandparents say how much they liked Social Security, you’d be tempted to think you’ll get the same sort of deal. But you won’t: an average wage earner born in 1950 will receive around a 2.2 percent return from the system, which is less than what you could earn on guaranteed government bonds. A person entering the workforce today will receive only around a 1.7 percent return.

 Yikes, could I please get my money back?

Wake me when Google + is ready for prime time

I don't normally blog on technology, but since I've gotten a chance to try out Google +, and others have not, and I have a few friends who swear Google + is the awesome, I thought I'd offer some perspective.

For starters, Google + is very derivative.  It intended to be just like Facebook,  geared for folks who prefer the Google brand, with virtually all the same basic features under different names.  I'm generally dismissive of things that rip off the invention of others--though many products (examples: cars, computers, cell phones) have been improved by second generation imitators.  However, I see no improvement whatsoever in Google + over Facebook.  Let me break down a few reasons why.

• The "Network" for Social Networking: I use Facebook primarily to share articles (often on politics) with my friends and other connections to spread the word.  This includes my 700 Facebook "friends" and 3,000 plus folks who "like" my employer.  Spreading my wisdom will be a bit slower with the 16 folks who included me in their "circle" on Google +. 
  
  I also like to interact with real life friends on Facebook, and see what they are up to.  A large number of my friends are on Facebook. In fact, I have more Facebook friend requests that I need to accept or reject than total contacts on Google.
  
  
• Ease of Sharing: Google + has a "+1" button, mimicking Facebook's "like" button.  As mentioned above, I tend to share articles.  On this topic, there is a good PC World Infographic comparing features in Google + and Facebook,  a Wall Street Journal article on how Google made Facebook respond to Google +, and a PennLive blog post on how to use Google +.  All of them have a prominent Facebook Like/Recommend/Share button.  None of these articles on Google + has a Google share option. 
  
  
• RSS Feeds: I blog quite a bit.  I like to share my blogs in a variety of areas, including Facebook and Twitter.  Using RSS, I can post automatically to both my Facebook page and Twitter Account.  In fact, shortly after I click "post" on this particularly blog entry, it will appear on both.  It will not appear on my Google + account, as no such functionality exists yet.
  
  
• Games: Other than sharing articles, I also play games on Facebook, especially Jeopardy.  I play Jeopardy a lot.  But I can't play Jeopardy on Google +.
  


• Google Wave: One of my friends most insistent on getting everyone to "switch over" to Google + was also insistent I need to use Google Wave for everything.  Shortly after I got on Google Wave, it was buried next to Jimmy Hoffa.  I'm skeptical that Google + will stand the test of time.
  
• Google's Big Government rent-seeking: Google has poured millions of dollars into politics, supporting mostly liberal candidates (including heavy support for President Obama).  They lobby for internet regulation (that would benefit Google) in the form of "net neutrality" (with exemptions for applications, i.e., for Google) and to get tens of millions in government contracts.  (Note there was a Blogspot blog I found just yesterday on Google's rent-seeking that is now gone, which I find curious, as Google owns Blogspot).
  
  Granted, many companies engage in lobbying for their own benefit, and Facebook is no bastion of libertarianism.  And it makes no sense to avoid a good product because of the politics of the company or its employees--I use many Google products already.  But Google + is not a good product, and it seems the only benefit of Google + is the Google brand: a brand I have no love for.

Now a defender of Google would tell you that Google + is only in "Field Testing" stage, and much of my critique could be moot once Google adds features and reaches critical mass.  But as of now, Google + is underwhelming, and contrary to some of my real-world friends, I will not encourage others (real-world or cyber contacts) to switch over.