Social Insurance

Social insurance, the idea of government provided insurance, has its roots in the era of FDR and the New Deal of the 1930s where Social Security was developed.  It has been a controversial topic in today's political field and probably always will be.  One of the biggest debates is about the trust fund for the baby boomer generation.  This fund is about $3 trillion and will disperse from 2011 to 2030.  The idea behind it is to cover social security benefits for the generation born between 1946 and 1964 in which there was a substantial increase in births during that period.  After that, it will go back to a pay-as-you-go system.  The idea that social security is bankrupt is misleading.  However, given the fact that people are working longer and are less likely to retire at age 65 presents a problem for future beneficiaries.  This has led to the increase in "retirement age" to 67 for the generation of people in their early 20s.  If social security isn't to change to adjust to the health of individuals then it will certainly go bankrupt as later generations are likely to outlive the funds paid into social security.  

I think that social security should be gradually depleted OR an opt-out option should be available at some age.  What age that should be could be up for debate, but, my initial thought is at age 25.  At that age, I feel that an individual should be allowed to opt out of paying for social security.  That age could help alleviate the transition problem as well.  However, the counter-argument is that most would probably opt-out so they could keep the extra money and this won't create a strong enough incentive to open their own retirement account, especially those in poverty.  So this could lead to an increase in funding for welfare expenditures.  

Immigration 1

Immigration is a delicate topic is today's political spectrum.  There is the Arizona law that was recently upheld in the U. S. Supreme Court which allows for officers who make a routine traffic stop to inquire about legal status in the United States.  That, with many other steps taken by border states to contain illegal immigration, has fueled the immigration debate in the country.  In order to become a citizen in the United States residents with a green card are eligible after 5 years of resident status to apply for U.S. citizenship; or, one can Mary and wait only three years or just go strait into the military during wartime.  The only issue is the process can be very long after applying for citizenship and even though you are paying taxes because you are a resident, you can not vote or participate in the political process.  However, you are welcome to go to our schools and even receive lower tuition rates because of your immigrant status.  

Since Mexico's wage gap is so vast and inflation so large, the currency in Mexico is extremely weak in comparison to the United States.  This creates a strong incentive to migrate and I can hardly blame those who have come to the United States for a better life.  After all, we are the shining light on a hill for the rest of the world, at least for now.  I want to know what the incentives are to actually migrate legally.  The process of receiving your green card and then waiting to gain legal status can, in many cases, take years and sometimes decades.  The incentive to migrate illegally is high, especially given the state of the economy of our southern border neighbor.  Now, I don't think the Dream Act is the right solution.  However, I do think that something must be done in order to fix this problem.  There is nothing wrong with immigration, and it is done legally everyday.  The incentives for immigration to the southern border states outweigh the incentives for legal immigration.  There is what is known as the bottleneck in the southern border states.  The system can't handle that many immigrants at one time, and so the incentive for illegal immigration is high. 

Wage Gap

The wage gap is something often talked about in today's economy.  I would like to inquire about a theory I have of why the wage gap is so vast.  I theorize the the idea of a minimum wage does not promote an equal share of the money supply.  While that may seem counter-intuitive, I would argue that a minimum wage actually brings other wages in the market down as well.  The reason being is that an employer will hire someone worth a few more dollars than the minimum wage for that minimum wage amount.  This is possible because the wedge the government has created between the desired lower wage for some employees offsets the higher wage desired by others and in essence creates a lower wage for overall even though it is granting a higher wage for a few employees.  The lower wage overall only increases the wage gap between the middle and lower classes and the upper class. 

A Quote From Hayek

Given recent events, It has been difficult to find time to create a new post.  However, I do have some now.  Since classes have ended I have been reading a book titled "The Road to Serfdom" by F.A. Hayek.  In it there is a quote which says, "But to call private property as such, which all can acquire under the same rules, a privilege, because only some succeed in acquiring it, is depriving the word 'privilege' of its meaning."  This quote struck me and I began to wonder whether or not healthcare was really a privilege or indeed a right.  I began thinking about the quote in the Declaration of Independence that says, "that they[men] are endowed by their creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of happiness..."  Indeed Life is a right.  You have a right to your life and not to be deprived thereof by another individual.  You also have a right to Property which would be included in the idea of liberty and the pursuit of happiness which is later specified in the U.S. constitution.  Now, what about healthcare?  Is healthcare a right?  By the definition of privilege above, I certainly wouldn't call it a privilege.  Nor would I call healthcare a right.  Healthcare is similar to property in the sense that all may acquire it but not all will, except that all will be treated if need be in the healthcare industry even if they don't have insurance.  The word privilege applies to congressmen who receive health benefits through their elected position.  It is a privilege to be elected by the people to receive those benefits through that office which elected.  It is not a privilege for any individual to receive healthcare benefits for free and nor is it a right.  It is, rather, a result.  

It is a result of the three things every American is guaranteed which were previously cited from the Declaration of Independence.  Without Liberty, property cannot exist, and without property, a pursuit of happiness cannot ensue for any individual.  Health Insurance would fall under the category of a property and is therefore accessible to all American citizens.  To say that healthcare or health insurance is a right IS depriving the word property of ITS' meaning and therefore once taken away by the government, it can just as easily be taken away all together.