Fergus Hodgson (page 8)

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    The end of the road for the Social Security Ponzi scheme

    This weekend the Washington Post and Bloomberg released a chilling graphic for Social Security payments and receipts—even with the CBO's more-than-rosy projections. It demonstrates a shortfall as far as the eye can see, one that will perpetuate gargantuan deficits which ought not happen. Yet federal legislators appear reluctant to address this burgeoning gap. Higher levels of taxation are economically and politically infeasible, and a majority of House members have vowed against them anyway. On the other hand, political pressure to maintain or even expand Social Security payments is immense. Whether we like it or not, we are coming to the end of the Ponzi scheme, and over time this reality is becoming evermore evident. Ponzi schemes, which do not set money aside but simply transfer it, fail when there are no longer enough people paying in to cover the payments going out. An aging baby-boom generation, along with greater longevity in general, has insured this outcome. While I appreciate the Post's willingness to run the article and graphic, a few points of clarification merit mention.
    Fergus Hodgson, October 30, 2011
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    America’s free fall in economic freedom

    How did Canada get to be economically freer than the United States, at least according to two credible measures? That’s right, both the Heritage Foundation and the Fraser Institute place the United States in that position, falling from the world’s top ten freest nations (even lower…
    Fergus Hodgson, October 28, 2011
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    Taking on a contemporary liberal (collectivist) over taxation

    Yesterday, I had the opportunity to debate John Scott of the University of North Carolina on tax policy, with all aspects on the table. He carried the "liberal" banner, while I was the "conservative." To be more precise, however, I represented classical liberal and libertarian views, and the contrast was stark. Introductions (two minutes): [audio:http://bit.ly/vGD4xG] My opening argument (15 minutes): [audio:http://bit.ly/uKTfHM] My desire was to bring to people's minds the moral implications of voting to redistribute other people's money, since that violates their right to property. I also sought to call their attention to the underlying force involved in taxation (and all government activity, for that matter)—that if you don't pay, the guns will come out.
    Fergus Hodgson, October 27, 2011
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    As glowing a review of the 9-9-9 plan as you are going to get

    If you want to understand why one would or should support Herman Cain's 9-9-9 tax plan--not that I endorse it--I strongly recommend Art Laffer's positive review in the Wall Street Journal. With "Cain's Stimulating '9-9-9' Tax Reform," Laffer (famous for the Laffer curve and popularizing supply-side economics) first laments the "ever-more arcane" tax code that we have. "...the sole purpose of the tax code was to raise the necessary funds to run government. But in today's world the tax mandate has many more facets... income redistribution, encouraging favored industries, and discouraging unfavorable behavior... Three federal taxes at 9% that would raise roughly $2.3 trillion [the current level] and replace the current income tax, corporate tax, payroll tax (employer and employee), capital gains tax and estate tax." Along with simplifying compliance, Laffer emphasizes the increased incentives for productive activity. In other words, if you face a 9 percent marginal tax rate, rather than a 35 percent one, you'll be more likely to work.
    Fergus Hodgson, October 21, 2011
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    Stand firm Grover: Tax pledges still apply

    Grover Norquist, president of Americans for Tax Reform, is under fire. More than half of U.S. representatives—238—have signed his ATR pledge to not raise taxes under any circumstances. (That includes six of North Carolina's 13 representatives, all Republicans.) So when the super-committee issues its recommendations next month, either there will be no tax increases or implementation will require pledge violations from 21 representatives. The notion that higher taxes could be off the table, however, is unfathomable to many. For example, Rep. Frank Wolf (R-W.Va.), one of six House Republicans that have not signed the pledge, has accused Norquist of “paralyzing congress” with ideological purity and working with “unsavory characters.” Evidently, hyperbolic metaphors, exaggerations, and personal attacks remain in vogue, perhaps because the relevant evidence leads us to an altogether different conclusion. (Norquist explains the ATR pledge to Stephen Colbert below.)   The Colbert Report Get More: Colbert Report Full Episodes,Political Humor & Satire Blog,Video Archive Of those who have attempted to address the ATR pledge directly, they express two leading concerns. (1) We cannot maintain the generosity of the federal spending and balance the budget (not that they’ve passed one) without higher revenues. (2) A hard line against any tax increases impedes the closing of many loopholes for special interest groups.
    Fergus Hodgson, October 21, 2011
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    Keynesian marketing

    The broken window fallacy, as explained by Henry Hazlitt.  …
    Fergus Hodgson, October 19, 2011
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    Conference on the Constitutional Convention

    Harvard University Law School recently held an historic conference, one where the participants debated and projected the growing prospect of an “amendments” or “constitutional” convention. Article V grants state legislatures authority equal to that of congress to propose amendments to the United States Constitution, by way of a convention, but…
    Fergus Hodgson, October 15, 2011
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    Ferg on Free Markets with Mike Beitler: Article V, Occupy Wall Street, and Immigration Trends

    This week, Mike Beitler of Voice America Business invited me on for an examination of Article V and the National Debt Relief Amendment, the Occupy Wall Street protests (with Greece as a parallel), and the reality of immigration policy. Mike is a host (alongside his teaching and business consulting) I've grown to respect over the years, and I encourage people to have a listen. Don't hesitate to email me feedback.
    Fergus Hodgson, October 15, 2011