Future Generations

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By Walter E. Williams

Is there any reason for today’s Americans to care about what happens to tomorrow’s Americans? After all, what have tomorrow’s Americans done for today’s Americans? Moreover, since tomorrow’s Americans don’t vote, we can dump on them with impunity. That’s a vision that describes the actual behavior of today’s Americans. It would be seen as selfish, callous and ruthless only if it were actually articulated. Let’s look at it.

Businesses, as well as most nonprofit enterprises, by law are required to produce financial statements that include all of their present and expected future liabilities. On top of that, they are required to hold reserves against future liabilities such as employee retirement.

By contrast, the federal government gets by without having to provide transparent and honest financial statements. The U.S. Treasury’s “balance sheet” does list liabilities such as public debt, but it does not include the massive unfunded liabilities of Social Security, Medicare and other federal future obligations. A conservative estimate of Washington’s unfunded liabilities for the year ending in 2011 is $87 trillion. That’s more than 500 percent of our 2011 GDP of $15 trillion.

Former Congressmen Chris Cox and Bill Archer have written an article — “Why $16 Trillion Only Hints at the True U.S. Debt,” The Wall Street Journal (November 26, 2012) — pointing out our dire economic straits. They say, “When the accrued expenses of the government’s entitlement programs are counted, it becomes clear that to collect enough tax revenue just to avoid going deeper into debt would require over $8 trillion in tax collections annually. That is the total of the average annual accrued liabilities of just the two largest entitlement programs, plus the annual cash deficit.” Let’s analyze that.

Washington would have to collect $8 trillion in tax revenue, not to pay off our national debt and have reserves against unfunded liabilities, but just to avoid accumulating more debt. Recent IRS data show that individuals earning $66,000 and more a year have a total adjusted gross income of $5.1 trillion. In 2011, corporate profit came to $1.6 trillion. That means if Congress simply confiscated the entire earnings of taxpayers earning more than $66,000 and all corporate profits, it wouldn’t be enough to cover the $8 trillion per year growth of U.S. liabilities.

Given this impossible picture, the message coming out of Washington, especially from our leftist politicians and the news media, is that we solve our budget problems by raising taxes on the rich. If Americans were more informed, such a message would be insulting to our intelligence. There are not enough rich people to satisfy Congress’ appetite.

In 2011, Congress spent $3.7 trillion. That turns out to be about $10 billion per day. According to IRS statistics, roughly 2 percent of U.S. households have an income of $250,000 and above. By the way, $250,000 per year hardly qualifies as being rich. It can’t even buy a Learjet.

Households earning $250,000 and above account for 25 percent, or $1.97 trillion, of the nearly $8 trillion of total household income. If Congress imposed a 100 percent tax, taking all earnings above $250,000 per year, it would bring in about $1.9 trillion. That would keep Washington running for 190 days, but there’s a problem because there are 175 more days left in the year.

The profits of the Fortune 500 richest companies come to $400 billion. That would keep the government running for another 40 days, to mid-July.

America has 400 billionaires with a combined net worth of $1.3 trillion. If Congress fleeced them of their assets, stocks, bonds, yachts, airplanes, mansions and jewelry, it would get us to at least late fall.

The fact of the matter is there are not enough rich people to come anywhere close to satisfying Congress’ voracious spending appetite. The true tragedy for our future is that there are millions of uninformed Americans who will buy the political demagoguery and treachery that our problems can be solved by taxing the rich.


Why the 2nd Amendment?

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By Walter E. Williams

Rep. John Lewis, D-Ga., in the wake of the Newtown, Conn., shootings, said: “The British are not coming. … We don’t need all these guns to kill people.” Lewis’ vision, shared by many, represents a gross ignorance of why the framers of the Constitution gave us the Second Amendment. How about a few quotes from the period and you decide whether our Founding Fathers harbored a fear of foreign tyrants.

Alexander Hamilton: “The best we can hope for concerning the people at large is that they be properly armed,” adding later, “If the representatives of the people betray their constituents, there is then no recourse left but in the exertion of that original right of self-defense which is paramount to all positive forms of government.” By the way, Hamilton is referring to what institution when he says “the representatives of the people”?

James Madison: “(The Constitution preserves) the advantage of being armed, which the Americans possess over the people of almost every other nation … (where) the governments are afraid to trust the people with arms.”

Thomas Jefferson: “What country can preserve its liberties if its rulers are not warned from time to time that their people preserve the spirit of resistance? Let them take arms.”

George Mason, author of the Virginia Bill of Rights, which inspired our Constitution’s Bill of Rights, said, “To disarm the people — that was the best and most effectual way to enslave them.”

Rep. John Lewis and like-minded people might dismiss these thoughts by saying the founders were racist anyway. Here’s a more recent quote from a card-carrying liberal, the late Vice President Hubert H. Humphrey: “Certainly, one of the chief guarantees of freedom under any government, no matter how popular and respected, is the right of the citizen to keep and bear arms. … The right of the citizen to bear arms is just one guarantee against arbitrary government, one more safeguard against the tyranny which now appears remote in America but which historically has proven to be always possible.” I have many other Second Amendment references at http://econfaculty.gmu.edu/wew/quotes.html.

How about a couple of quotations with which Rep. Lewis and others might agree? “Armas para que?” (translated: “Guns, for what?”) by Fidel Castro. There’s a more famous one: “The most foolish mistake we could possibly make would be to allow the subject races to possess arms. History shows that all conquerors who have allowed their subject races to carry arms have prepared their own downfall by so doing.” That was Adolf Hitler.

Here’s the gun grabbers’ slippery-slope agenda, laid out by Nelson T. Shields, founder of Handgun Control Inc.: “We’re going to have to take this one step at a time, and the first step is necessarily — given the political realities — going to be very modest. … Right now, though, we’d be satisfied not with half a loaf but with a slice. Our ultimate goal — total control of handguns in the United States — is going to take time. … The final problem is to make the possession of all handguns and all handgun ammunition — except for the military, police, licensed security guards, licensed sporting clubs and licensed gun collectors — totally illegal” (The New Yorker, July 1976).

There have been people who’ve ridiculed the protections afforded by the Second Amendment, asking what chance would citizens have against the military might of the U.S. government. Military might isn’t always the deciding factor. Our 1776 War of Independence was against the mightiest nation on the face of the earth — Great Britain. In Syria, the rebels are making life uncomfortable for the much-better-equipped Syrian regime. Today’s Americans are vastly better-armed than our founders, Warsaw Ghetto Jews and Syrian rebels.

There are about 300 million privately held firearms owned by Americans. That’s nothing to sneeze at. And notice that the people who support gun control are the very people who want to control and dictate our lives.


Bit by Bit Strategy

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By Walter E. Williams

There’s a move on to prohibit Washington’s football team from calling itself “Redskins,” even though a 2009 U.S. Supreme Court decision said that it has that right. Now the name change advocates are turning to the political arena and intimidation. The NCAA has already banned the University of North Dakota from calling its football team the “Fighting Sioux.”

This is the classic method of busybodies and tyrants; they start out with something trivial or small and then magnify and extend it. If these people are successful in banning the use of Indian names for football teams, you can bet the rent money that won’t end their agenda. Our military has a number of fighting aircraft named with what busybodies and tyrants might consider racial slights, such as the Apache, Iroquois, Kiowa, Lakota and Mescalero. We also have military aircraft named after animals, such as the Eagle, Falcon, Raptor, Cobra and Dolphin. The people fighting against the Redskins name might form a coalition with the PETA animal rights kooks to ban the use of animal names.

Another example of the strategy of starting out small is that of the tobacco zealots. In 1965, in the name of health, tobacco zealots successfully got Congress to enact the Cigarette Labeling and Advertising Act. A few years later, they were successful in getting a complete smoking ban on planes, and that success emboldened them to seek many other bans. The issue here is not smoking, but tyrant strategy.

Suppose that in 1965, the tobacco tyrants demanded that Congress enact a law banning smoking in bars, in workplaces, in restaurants, in apartments, within 25 feet of entrances, in ballparks, on beaches, on sidewalks and in other places. Had they revealed and demanded their full agenda back in 1965, there would have been so much resistance that they wouldn’t have gotten anything. By the way, much of their later success was a result of a bogus Environmental Protection Agency study on secondhand smoke. I’d like to hear whether EPA scientists are willing to declare that people can die from secondhand smoke at a beach, on a sidewalk, in a park or within 25 feet of a building.

During the legislative and subsequent state ratification debates over the 16th Amendment — which established the income tax — the political task of overturning the Constitution’s prohibition of such tax was considerably eased by political promises that any income tax levied would fall upon only the wealthiest 3 to 5 percent of the population. Most Americans paid no federal income tax, and those earning $500,000 or more paid only 7 percent. In 1913, only 358,000 Americans filed 1040 forms, compared with today’s 140 million. That’s the rope-a-dope strategy. To get the votes of the masses, politicians start out small and exploit the politics of envy by promising that only the rich will be taxed.

In 1898, Congress imposed a temporary federal excise tax on telephones as a revenue measure during the Spanish-American War. At that time, only the rich owned phones. Soon nearly all Americans owned phones. Both the rich and the poor paid the telephone excise tax. Congress repealed this “temporary” Spanish-American War tax in 2006. Nobel laureate Milton Friedman had it right when he said, “Nothing is so permanent as a temporary government program.”


Distrusting Government

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By Walter E. Williams

Our nation’s founders recognized that most human abuses are the result of government. As Thomas Paine said, “government, even in its best state, is but a necessary evil.” Because of their fear of abuse, the Constitution’s framers sought to keep the federal government limited in its power. Their distrust of Congress is seen in the governing rules and language used throughout our Constitution.

The Bill of Rights is explicit in that distrust, using language such as “Congress shall not abridge,” “shall not infringe,” and “shall not deny.” If the framers did not believe that Congress would abuse our God-given, or natural, rights, they would not have provided those protections. I’ve always suggested that if we see anything like the Bill of Rights at our next destination after we die, we’ll know that we’re in hell. A perceived need for such protection in heaven would be an affront to God. It would be the same as saying we can’t trust him.

Other framer protections from government are found in the Constitution’s separation of powers, checks and balances, and several anti-majoritarian provisions, such as the Electoral College and the two-thirds vote to override a veto.

The heartening news for us is that state legislatures are beginning to awaken to their duty to protect their citizens from unconstitutional acts by the Congress, the White House, and a derelict Supreme Court. According to an Associated Press story, about four-fifths of the states now have local laws that reject or ignore federal laws on marijuana use, gun control, health insurance requirements and identification standards for driver’s licenses. Kansas Gov. Sam Brownback recently signed a measure threatening felony charges against federal agents who enforce certain firearms laws in his state.

Missouri legislators recently enacted the Second Amendment Preservation Act, which in part reads that not only is it the right of the state Legislature to check federal overreaching, but that “the Missouri general assembly is duty-bound to watch over and oppose every infraction of those principles which constitute the basis of the Union of the States, because only a faithful observance of those principles can secure the nation’s existence and the public happiness.”

The bill further declares that the Missouri General Assembly is “firmly resolved to support and defend the United States Constitution against every aggression, either foreign or domestic.” The legislation awaits Gov. Jay Nixon’s signature or veto.

Both lower houses of the South Carolina and Oklahoma legislatures enacted measures nullifying Obamacare on the grounds that it is an unconstitutional intrusion and violation of the 10th Amendment. You might say, “Williams, the U.S. Supreme Court has ruled Obamacare constitutional, and that settles it. Federal law is supreme.”

It’s worth heeding this warning from Thomas Jefferson: “To consider the judges as the ultimate arbiters of all constitutional questions (is) a very dangerous doctrine indeed, and one which would place us under the despotism of an oligarchy.”

Jefferson and James Madison, in 1798 and 1799 in the Kentucky and Virginia Resolutions, said, “Resolved, That the several States composing, the United States of America, are not united on the principle of unlimited submission to their general government … and whensoever the general government assumes undelegated powers, its acts are unauthoritative, void, and of no force.”

In other words, heed the 10th Amendment to our Constitution, which reads, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” That’s the message state legislatures should send to Washington during this year’s celebration of our Declaration of Independence.


Student Indoctrination

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By Walter E. Williams

The new college academic year has begun, and unfortunately, so has student indoctrination. Let’s look at some of it.

William Penn, Michigan State University professor of creative writing, greeted his first day of class with an anti-Republican rant. Campus Reform, a project of the Arlington, Va.-based Leadership Institute, has a video featuring the professor telling his students that Republicans want to prevent “black people” from voting. He added that “this country still is full of closet racists” and described Republicans as “a bunch of dead white people — or dying white people” (http://tinyurl.com/lve4te7). To a student who had apparently displayed displeasure with those comments, Professor Penn barked, “You can frown if you want.” He gesticulated toward the student and added, “You look like you’re frowning. Are you frowning?” When the professor’s conduct was brought to the attention of campus authorities, MSU spokesman Kent Cassella said, “At MSU it is important the classroom environment is conducive to a free exchange of ideas and is respectful of the opinions of others.”

That mealy-mouthed response is typical of university administrators. Professor Penn was using his classroom to proselytize students. That is academic dishonesty and warrants serious disciplinary or dismissal proceedings. But that’s not likely. Professor Penn’s vision is probably shared by his colleagues, seeing as he was the recipient of MSU’s Distinguished Faculty Award in 2003. University of Southern California professor Darry Sragow shares Penn’s opinion. Last fall, he went on a rant telling his students that Republicans are “stupid and racist” and “the last vestige of angry old white people” (http://tinyurl.com/185khtk).

UCLA’s new academic year saw its undergraduate student government fighting for constitutional rights by unanimously passing a resolution calling for the end of the use of the phrase “illegal immigrant.” The resolution states, “The racially derogatory I-word endangers basic human rights including the presumption of innocence and the right to due process guaranteed under the U.S. Constitution.” No doubt some UCLA administrators and professors bereft of thinking skills helped them craft the resolution.

The New York Post (8/25/11) carried a story about a student in training to become dorm supervisor at DePauw University in Indiana. She said: “We were told that ‘human’ was not a suitable identity, but that instead we were first ‘black,’ ‘white,’ or ‘Asian’; ‘male’ or ‘female’; … ‘heterosexual’ or ‘queer.’ We were forced to act like bigots and spout off stereotypes while being told that that was what we were really thinking deep down.” At many universities, part of the freshman orientation includes what’s called the “tunnel of oppression.” They are taught the evils of “white privilege” and how they are part of a “rape culture.” Sometimes they are forced to discuss their sexual identities with complete strangers. The New York Post story said: “DePauw is no rare case. At least 96 colleges across the country have run similar ‘tunnel of oppression’ programs in the last few years.”

University officials are aware of this kind of academic dishonesty and indoctrination; university trustees are not. For the most part, trustees are yes men for the president. Legislators and charitable foundations that pour billions into colleges are unaware, as well. Most tragically, parents who pay tens of thousands of dollars for tuition and pile up large debt to send their youngsters off to be educated are unaware of the academic rot, as well.

You ask, “Williams, what can be done?” Students should record classroom professorial propaganda and give it wide distribution over the Internet. I’ve taught for more than 45 years and routinely invited students to record my lectures so they don’t have to be stenographers during class. I have no idea of where those recordings have wound up, but if you find them, you’ll hear zero proselytization or discussion of my political and personal preferences. To use a classroom to propagate one’s personal beliefs is academic dishonesty.

Vladimir Lenin said, “Give me four years to teach the children and the seed I have sown will never be uprooted.” That’s the goal of the leftist teaching agenda.


Are Guns the Problem?

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Every time there’s a shooting tragedy, there are more calls for gun control. Let’s examine a few historical facts. By 1910, the National Rifle Association had succeeded in establishing 73 NRA-affiliated high-school rifle clubs. The 1911 second edition of the Boy Scout Handbook made qualification in NRA’s junior marksmanship program a prerequisite for obtaining a BSA merit badge in marksmanship. In 1918, the Winchester Repeating Arms Co. established its own Winchester Junior Rifle Corps. The program grew to 135,000 members by 1925. In New York City, gun clubs were started at Boys, Curtis, Commercial, Manual Training and Stuyvesant high schools. With so many guns in the hands of youngsters, did we see today’s level of youth violence?

What about gun availability? Catalogs and magazines from the 1940s, ’50s and ’60s were full of gun advertisements directed to children and parents. For example, “What Every Parent Should Know When a Boy or Girl Wants a Gun” was published by the National Shooting Sports Foundation. The 1902 Sears mail-order catalog had 35 pages of firearm advertisements. People just sent in their money, and a firearm was shipped. For most of our history, a person could simply walk into a hardware store, virtually anywhere in our country, and buy a gun. Few states bothered to have even age restrictions on buying guns.

Those and other historical facts should force us to ask ourselves: Why — at a time in our history when guns were readily available, when a person could just walk into a store or order a gun through the mail, when there were no FBI background checks, no waiting periods, no licensing requirements — was there not the frequency and kind of gun violence that we sometimes see today, when access to guns is more restricted? Guns are guns. If they were capable of behavior, as some people seem to suggest, they should have been doing then what they’re doing now.

Customs, traditions, moral values and rules of etiquette, not just laws and government regulations, are what make for a civilized society, not restraints on inanimate objects. These behavioral norms — transmitted by example, word of mouth and religious teachings — represent a body of wisdom distilled through ages of experience, trial and error, and looking at what works. The benefit of having customs, traditions and moral values as a means of regulating behavior is that people behave themselves even if nobody’s watching. In other words, it’s morality that is society’s first line of defense against uncivilized behavior.

Moral standards of conduct, as well as strict and swift punishment for criminal behaviors, have been under siege in our country for more than a half-century. Moral absolutes have been abandoned as a guiding principle. We’ve been taught not to be judgmental, that one lifestyle or value is just as good as another. More often than not, the attack on moral standards has been orchestrated by the education establishment and progressives. Police and laws can never replace these restraints on personal conduct so as to produce a civilized society. At best, the police and criminal justice system are the last desperate line of defense for a civilized society. The more uncivilized we become the more laws are needed to regulate behavior.

What’s worse is that instead of trying to return to what worked, progressives want to replace what worked with what sounds good or what seems plausible, such as more gun locks, longer waiting periods and stricter gun possession laws. Then there’s progressive mindlessness “cures,” such as “zero tolerance” for schoolyard recess games such as cops and robbers and cowboys and Indians, shouting “bang bang,” drawing a picture of a pistol, making a gun out of Lego pieces, and biting the shape of a gun out of a Pop-Tart. This kind of unadulterated lunacy — which focuses on an inanimate object such as a gun instead of on morality, self-discipline and character — will continue to produce disappointing results.


Loving and Hating America

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As I’ve documented in the past, many leftist teachers teach our youngsters to hate our country. For example, University of Hawaii Professor Haunani-Kay Trask counseled her students, “We need to think very, very clearly about who the enemy is. The enemy is the United States of America and everyone who supports it.” Some universities hire former terrorists to teach and indoctrinate students. Kathy Boudin, former Weather Underground member and convicted murderer, is on the Columbia University School of Social Work’s faculty. Her Weather Underground comrade William Ayers teaches at the University of Illinois at Chicago. Bernardine Dohrn, his wife, is a professor at Northwestern University School of Law. Her stated mission is to overthrow capitalism.

America’s domestic haters have international company. 24/7 Wall St. published an article titled “Ten Countries That Hate America Most.” The list includes Serbia, Greece, Iran, Algeria, Egypt and Pakistan. Ranking America published an article titled “The U.S. ranks 3rd in liking the United States.” Using data from the Pew Global Attitudes Project, it finds that just 79 percent of Americans in 2011 had a favorable view of Americans, compared with Japan and Kenya, which had 85 and 83 percent favorable views, respectively. Most European nations held a 60-plus percent favorable view of Americans, compared with countries such as Egypt, Pakistan and Turkey, with less than 20 percent favorable views.

An interesting facet of foreigners liking or hating America can be seen in a poll Gallup has been conducting since 2007 asking the questions: “Ideally, if you had the opportunity, would you like to move permanently to another country, or would you prefer to continue living in this country? To which country would you like to move?” Guess to which country most people would like to move. If you said “the good ol’ US of A,” go to the head of the class. Of the more than 640 million people who would like to leave their own country, 23 percent — or 150 million — said they would like to live in the United States. The U.S. has been “the world’s most desired destination for potential migrants since Gallup started tracking these patterns in 2007.” The United Kingdom comes in a distant second, with 7 percent (45 million). Other favorite permanent relocations are Canada (42 million), France (32 million) and Saudi Arabia (31 million), but all pale in comparison with the U.S. as the preferred home.

The next question is: Where do people come from who want to relocate to the U.S.? China has 22 million adults who want to permanently relocate to the U.S., followed by Nigeria (15 million), India (10 million), Bangladesh (8 million) and Brazil (7 million). The Gallup report goes on to make the remarkable finding that “despite large numbers of people in China, Nigeria, and India who want to migrate permanently to the U.S., these countries are not necessarily the places where the U.S. is the most desired destination. Gallup found that more than three in 10 adults in Liberia (37 percent) and Sierra Leone (30 percent) would move permanently to the U.S. if they had the opportunity. More than 20 percent of adults in the Dominican Republic (26 percent), Haiti (24 percent), and Cambodia (22 percent) also say the same.” That’s truly remarkable in the cases of Liberia and Sierra Leone, where one-third of the people would leave. That’s equivalent to 105 million Americans wanting to relocate to another country.

The Gallup poll made no mention of the countries to which people would least like to relocate. But I’m guessing that most of them would be on Freedom House’s list of the least free places in the world, such as Uzbekistan, Georgia, China, Turkmenistan, Chad, Cuba and North Korea.

I’m wondering how the hate-America/blame-America-first crowd might explain the fact that so many people in the world, if they had a chance, would permanently relocate here. Maybe it’s that they haven’t been exposed to enough U.S. university professors.


Is There a Way Out?

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By Walter E. Williams

According to a recent Fox News poll, 73 percent of Americans are dissatisfied with the direction of the country, up 20 points from 2012. Americans sense that there’s a lot going wrong in our nation, but most don’t have a clue about the true nature of our problem. If they had a clue, most would have little stomach for what would be necessary to arrest our national decline. Let’s look at it.

Between two-thirds and three-quarters of federal spending, in contravention of the U.S. Constitution, can be described as Congress taking the earnings or property of one American to give to another, to whom it does not belong. You say, “Williams, what do you mean?” Congress has no resources of its very own. Moreover, there’s no Santa Claus or tooth fairy who gives it resources. The fact that Congress has no resources of its very own forces us to recognize that the only way Congress can give one American one dollar is to first — through intimidation, threats and coercion — confiscate that dollar from some other American through the tax code.

If any American did privately what Congress does publicly, he’d be condemned as an ordinary thief. Taking what belongs to one American to give to another is theft, and the receiver is a recipient of stolen property. Most Americans would suffer considerable anguish and cognitive dissonance seeing themselves as recipients of stolen property, so congressional theft has to be euphemized and given a respectable name. That respectable name is “entitlement.” Merriam-Webster defines entitlement as “the condition of having a right to have, do, or get something.” For example, I am entitled to walk into the house that I own. I am entitled to drive the car that I own. The challenging question is whether I am also entitled to what you or some other American owns.

Let’s look at a few of these entitlements. More than 40 percent of federal spending is for entitlements for the elderly in the forms of Social Security, Medicare, Medicaid, housing and other assistance programs. The Office of Management and Budget calculates that total entitlement spending comes to about 62 percent of federal spending. Military spending totals 19 percent of federal spending. By the way, putting those two figures into historical perspective demonstrates the success we’ve had becoming a handout nation. In 1962, military expenditures were almost 50 percent of the federal budget, and entitlement spending was a mere 31 percent. The Congressional Budget Office estimates that entitlement spending will consume all federal tax revenue by 2048.

Entitlement spending is not the only form of legalized theft. The Department of Agriculture gives billions of dollars to farmers. The departments of Energy and Commerce give billions of dollars and subsidized loans to corporations. In fact, every Cabinet-level department in Washington is in charge of handing out at least one kind of subsidy or special privilege. Most federal non-defense “discretionary spending” by Congress is for handouts.

Despite the fact that today’s increasing levels of federal government spending are unsustainable, there is little evidence that Americans have the willingness to do anything about it. Any politician who’d even talk about significantly reining in unsustainable entitlement spending would be run out of town. Any politician telling the American people they must pay higher taxes to support handout spending, instead of concealing spending through deficits and running up the national debt and inflation, would also be run out of town. Can you imagine what the American people would do to a presidential candidate who’d declare, as James Madison did in a 1794 speech to the House of Representatives, “Charity is no part of the legislative duty of the government”?

If we are to be able to avoid ultimate collapse, it’s going to take a moral reawakening and renewed constitutional respect — not by politicians but by the American people. The prospect of that happening may be whistlin’ “Dixie.”


Do Americans Prefer Deception?

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There’s more to the deceit and dishonesty about Social Security and Medicare discussed in my recent columns. Congress tells us that one-half (6.2 percent) of the Social Security tax is paid by employees and that the other half is paid by employers, for a total of 12.4 percent. Similarly, we are told that a Medicare tax of 1.45 percent is levied on employees and that another 1.45 percent is levied on employers. The truth of the matter is that the burden of both taxes is borne by employees. In other words, we pay both the employee and the so-called employer share. You say, “Williams, that’s nonsense! Just look at what it says on my pay stub.” OK, let’s look at it.

Pretend you are my employer and agree to pay me $50,000 a year, out of which you’re going to send $3,100 to Washington as my share of Social Security tax (6.2 percent of $50,000), as well as $725 for my share of Medicare (1.45 percent of $50,000), a total of $3,825 for the year. To this you must add your half of Social Security and Medicare taxes, which is also $3,825 for the year. Your cost to hire me is $53,825.

If it costs you $53,825 a year to hire me, how much value must I produce for it to be profitable for you to keep me? Is it our agreed salary of $50,000 or $53,825? If you said $53,825, you’d be absolutely right. Then who pays all of the Social Security and Medicare taxes? If you said that I do, you’re right again. The Social Security and Medicare fiction was created because Americans would not be so passive if they knew that the tax they are paying is double what is on their pay stubs — not to mention federal income taxes.

The economics specialty that reveals this is known as the incidence of taxation. The burden of a tax is not necessarily borne by the party upon whom it is levied. The Joint Committee on Taxation held that “both the employee’s and employer’s share of the payroll tax is borne by the employee.” The Congressional Budget Office “assumes — as do most economists — that employers’ share of payroll taxes is passed on to employees in the form of lower wages than would otherwise be paid.” Health insurance is not an employer gift, either. It is paid for by employees in the form of lower wages.

Another part of Social Security and Medicare deception is that the taxes are officially called FICA, which stands for Federal Insurance Contributions Act. First, it’s not an insurance program. More importantly, the word “contribution” implies something voluntary. Its synonyms are alms, benefaction, beneficence, charity, donation and philanthropy. Which one of those synonyms comes close to describing how Congress gets Social Security and Medicare money from us?

There’s more deceit and dishonesty. In 1950, I was 14 years old and applied for a work permit for an after-school job. One of the requirements was to obtain a Social Security card. In bold letters on my Social Security card, which I still possess, are the words “For Social Security Purposes — Not For Identification.” That’s because earlier Americans feared that their Social Security number would become an identity number. According to the Social Security Administration website, “this legend was removed as part of the design changes for the 18th version of the card, issued beginning in 1972.” That statement assumes we’re idiots. We’re asked to believe that the sole purpose of the removal was for design purposes. Apparently, the fact that our Social Security number had become a major identification tool, to be used in every aspect of our lives, had nothing to do with the SSA’s getting rid of the legend saying “For Social Security Purposes — Not For Identification.”

I wonder whether political satirist H.L. Mencken was right when he said, “Nobody ever went broke underestimating the intelligence of the American public.”


Income Inequality

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By Walter E. Williams

Democrats plan to demagogue income inequality and the wealth gap for political gain in this year’s elections. Most of what’s said about income inequality is stupid or, at best, ill-informed. Much to their disgrace, economists focusing on measures of income inequality bring little light to the issue. Let’s look at it.

Income is a result of something. As such, results alone cannot establish whether there is fairness or justice. Take a simple example to make the point. Suppose Tom, Dick and Harry play a weekly game of poker. The result is: Tom wins 75 percent of the time. Dick and Harry, respectively, win 15 percent and 10 percent of the time. Knowing only the game’s result permits us to say absolutely nothing as to whether there has been poker fairness or justice. Tom’s disproportionate winnings are consistent with his being either an astute player or a clever cheater.

To determine whether there has been poker justice, the game’s process must be examined. Process questions we might ask are: Were Hoyle’s rules obeyed; were the cards unmarked; were the cards dealt from the top of the deck; and did the players play voluntarily? If these questions yield affirmative answers, there was poker fairness and justice, regardless of the game’s result, even with Tom’s winning 75 percent of the time.

Similarly, income is a result of something. In a free society, for the most part, income is a result of one’s capacity to serve his fellow man and the value his fellow man places on that service. Say I mow your lawn and you pay me $50. That $50 might be seen as a certificate of performance. Why? It serves as evidence that I served my fellow man and enables me to make a claim on what he produces when I visit the grocer. Google founders Sergey Brin and Larry Page are multibillionaires. Just as in the case of my serving my fellow man by mowing his lawn, they served their fellow man. The difference is they served many more of their fellow men and did so far more effectively than I and hence have received many more “certificates of performance,” which enables them to make greater claims on what their fellow man produces, such as big houses, cars and jets.

Brin and Page and people like them created wealth by producing services that improve the lives of millions upon millions of people all around the globe. Should people who have improved our lives be held up to ridicule and scorn because they have higher income than most of us? Should Congress confiscate part of their wealth in the name of fairness and income redistribution?

Except in many instances when government rigs the game with crony capitalism, income is mostly a result of one’s productivity and the value that people place on that productivity. Far more important than income inequality is productivity inequality. That suggests that if there’s anything to be done about income inequality, we should focus on how to give people greater capacity to serve their fellow man, namely raise their productivity.

To accomplish that goal, let’s look at a few things that we shouldn’t do. Becoming a taxicab owner-operator lies within the grasp of many, but in New York City, one must be able to get a license (medallion), which costs $700,000. There are hundreds of examples of government restrictions that reduce opportunity. What about the grossly fraudulent education received by so many minority youngsters? And then we handicap them further with laws that mandate that businesses pay them wages that exceed their productivity, which denies them on-the-job training.

Think back to my poker example. If one is concerned about the game’s result, which is more just, taking some of Tom’s winnings and redistributing them to Dick and Harry or teaching Dick and Harry how to play better? If left to politicians, they’d prefer redistribution. That way, they could get their hands on some of Tom’s winnings. That’s far more rewarding to them than raising Dick’s and Harry’s productivity.