Monday, January 18, 2016

Priorities: Education and Social Security

In the United States we have made unusual decisions in what we have funded. We do not fund preschool for all, yet we fund planes which don't fly and the Joint Chiefs of Staff don't want. We do not fund free annual check ups, but we do fund us spending money on chapels on military bases, which should be left to the religious organizations to bear the cost. What can and cannot be considered pork is always going to be up for debate (is protecting a local environment for a few hundred thousand dollars pork? Is making easier access to public scientific information bad for America?) even though some like the two I list here are pretty obviously not going to create bigger benefits for America than what they cost tax payers.

However, when it comes to one of the biggest issues in America's budget perhaps no bigger one is who the government gives handouts. The Federal Government redistributed $850 billion ($2700 per person), $705 billion went to the elderly ($2238 per capita), and $144 billion went to disabled people ($457 per capita). This is also one of the most re-distributive programs in America since people get a larger percentage of the amount they put in at lower income levels.

While it is re-distributive the bigger issue is everyone pays in more than the amount of money they get out of social security. Compared to investing in assets this is clearly a worse plan than if people were to invest their money in a diversified index fund. According to Politifact, the average couple will pay in $722,000 in taxes to Social Security and get back $966,000 in benefits, for a return of about 33%. On the other hand, someone who deposited $4000 a year, increasing at 1% a year (even at an income of $40,000, this is reasonable if not on the low side if you have an employer matching Roth 401k program) starting today for the next 40 years and got the average rate of return on capital (which is 8% based on the last 40 years of the S&P 500) would retire with $1.2 million saved on a $201,500 deposit for a 600% return on investment. Here is my work. Even assuming in Compared to an index fund which performs at market rate Social Security does not come close to comparing. If people invested wisely Social Security Old Age Insurance would be completely pointless, even for people near the poverty line.

The bigger issue with this is what we do not fund which is education. Education is the lifeblood of the American economy. If people are not educated it doesn't matter how many computers we have because people won't know how to use them. Education is so important that when it is put into the Solow-Swan growth model it almost completely explains economic differences between countries. If countries are to grow they need both access to capital and education, meaning high quality education is one of the most important issues to economics. Despite this, the gap in educational opportunity in the United States is extremely wide. Schools start with their funding from their local communities which are extremely unequal in terms of resources to start with and the amount which state governments equalize the inequality varies significantly state to state. Students end up at the mercy of their state governments in how much help the state provides to fix the inequality. The Federal government does little to help equalize this inequality in funding available to children (to no fault of the children) despite the amount it would cost would not be a lot. There are currently 50.1 million students in the United States in K-12. If the Federal government were to give an average of $3000 per student to help equalize the inequality between students (which could be used to get extra training for teachers, new computers, whatever they need) this would only cost us $150 billion, which would be only 25% of what we spend on military and 3.8% of the budget. Even $6000 per student would be only half of what we currently spend on military and 7.6% of the budget, assuming that spending comes from other programs. The per capita cost would also be only $476 or $922 per person, which of course would be paid more by the rich than the poor. We can afford this, in fact, we can't afford not to prepare our next generation for the technology of the future. The economic impact of an educated population is far larger than the cost of that education. If I spend $36000 on a student over 12 years and end up boosting her salary from $30000 a year to $60,000 per year it is easy to see what an impact this would have on the economy as a whole.

So, should we get rid of Social Security to pay for better education for young Americans? I'm not sure this is really a choice we have to make. One option we could do is eliminate the cap on Social Security income, fix the system so people at get at least the same amount of money than they put in on average, and use the added revenue to invest in America's education in the form of Treasury Bonds, which is what we already do with Social Security's $2 trillion surplus (and counting). This would guarantee Social Security will essentially never run out of money and provide education to those who desperately need it. Combined with the rest of my tax code this will mean that many people will have credits in Social Security but not end up paying taxes under such a system. This will help protect people, because if your parents don't end up with enough when they retire it will be the children and grandchildren who pay without a program Social Security, and it helps directly redistribute money to the people who need it. Ultimately, the choice between Social Security and education is a false dilemma as long as we are willing to tweak the Social Security program. This is possible, and this is what we must do.

Monday, January 11, 2016

The future

Music companies have complained for a long time that it is impossible to make money nowadays with people not buying CDs, tapes gone by the wayside, and records holding only a small fraction of total music sales today. With so much available on Youtube companies complain it is impossible to make a profit on music nowadays because people don't have to pay.

This is bullshit. These companies feel like they need to be protected by the government from technology, that they don't need to be required to stay on par with new technology, probably because they find that technology is difficult. That's their problem ultimately and they need to stay up to date with the modern world. We don't use wax cylinders anymore, and they need to get used to it.

The reality is that if you make an amazing music video which people watch you can make a lot of money. Let's say you get a million views on your video and you have an ad at the bottom that only 1% of the people watching the video clicked on. That will give you a total of $30,000 for that ad. If Adwords gives ads that people are actually interested in by making them relevant to their lives (because Adblock does not block text ads) than you will be able to make more money than that. If you have a channel and frequently make videos every week this can become a real business model very quickly. A large music studio pumping out perhaps 100 videos could make millions of dollars on their music videos, which is enough to stay floating. If the videos are then made accessible to all people in the world and each person watches an ad, it becomes very easy to make millions of dollars per episode of a popular show like Doctor Who or The Simpsons on ad revenue, as the TV industry has survived on for the last 100 years. This model is not new, in fact it is what producers have lived off since they began. An added advantage to this is if all the episodes are always available for free to the viewer somewhere like Youtube than there will be no reason to pirate the video and they can have Youtube take down rip offs without people losing any content if someone does choose to pirate it, increasing overall revenues.

Instead of complaining about new technology companies need to be willing to adapt to a new world, or else they will become obsolete and hopefully the artists of the world will realize this and choose to go to companies which offer them better pay. A company which is modern and makes it so no one wants to pirate would be very profitable and able to make money off of everyone who watches there video.

Thursday, December 31, 2015

2016 Presidential election Prediction

The presidential election is starting in one month on February 1st in Iowa for both major parties, and my predictions are as follows:

Hillary Clinton will sweep Iowa given her more moderate positions, and New Hampshire is a tossup between Sanders and Clinton. If Clinton succeeds in winning New Hampshire, then given her lead in the hidden primary for super delegates and amount of money raised already then she will sweep the nomination quickly. If Sanders wins in New Hampshire he will have an uphill battle to fight in most other states outside of New England, and Clinton will still probably get the nomination. Even if Sanders pulls off a miracle and gets more votes than Clinton by a small margin he still will lose the super delegate vote and she will get the nomination. It is unusually easy to predict this year's election.

The Republican field is more challenging to predict, Marco Rubio is currently leading the betting pool odds out of all Republicans, which tends to be the most accurate way to predict the winner of the primary. The biggest issue right now is the vast number of candidates and no ranked voting to tell what people's true preferences are after candidates drop out. I expect we will see most candidates drop out fairly quickly and then we will see Trump, Cruz, Rubio, and Carson left in the race. Bush and Christie supporters are closely aligned and they will fall behind Marco Rubio since he has more experience and is slightly more moderate than Ted Cruz, giving the Republicans a bigger advantage in the general election. Rubio will play into Republican fears of drugs which is one of the few wedge issues between the two, and his support of Social Security is going to win him a lot of older conservative votes in a match between the two. He is also better than Bush for most Republicans because he opposes a pathway to citizenship for illegal immigrants which will appease older white conservatives again. Donald Trump vs. Marco Rubio is going to be the major factor in the later primaries, and as less ideological Republicans come into the play Donald Trump is not going to see much more support than he already has given how he is more extreme than the other Republican Candidates.

When it comes to the General Election it will be Marco Rubio vs. Hillary Clinton. The states which are most contested are still North Carolina, Florida, Ohio, and Virginia. The states which lean more towards Clinton are Colorado, Pennsylvania, New Hampshire, Iowa, and Nevada. (in order) The only other state which could start to swing is Texas given its growing Hispanic population, Texas could start to be a swing state if the Democrats turn out the vote in Hispanic communities, but this all depends on strategy. It will be a full swing state in 2020. I do not think running Marco Rubio is going to succeed in pulling in many Hispanic voters because of his policy positions.

For Vice Presidential candidates, Clinton has a lot of options, Sanders is a possibility depending on how he talks about her in the election, Russ Feingold would be a wonderful choice, Julian or Raul Castro are amazing people and would help turn out Hispanic voters (particularly in Texas), among other picks.

Among Republicans, Rubio could pick Cruz given their ideological similarities, Jeb Bush for his connections,

The Democrats start with 237 electoral college votes not including swing states, and Republicans start with 191 (not including the 9 states which are swing states). Nevada and Colorado are seeing a growing Hispanic population and they will vote Democratic bringing the Democrats up to 252 votes. Florida continues to see an increase in its Hispanic population and this makes it lean slightly more in favor of Democrats which will determine the election. Even if Florida goes to Marco Rubio, Virginia is almost certainly going to go for Democrats again given the growing size of the DC Metro area will continue to push Virginia further to the left. This will give Hillary Clinton the Presidency and she will be our 45th President. Using 538s tool, it seems almost impossible for Democrats to lose as well.

Friday, December 11, 2015

Every Student Succeeds

Yesterday President Obama signed into law the Every Student Succeeds Act which amends significant portions of the No Child Left Behind Act. There are a few major things this bill does, such as:

  1. Requires equitable funding between schools in the same district. This is a massive improvement. (Sec. 1501)
  2. It increases the amount of money for children from at-risk homes (Sec. 1002D)
  3. The high stakes with the testing have been removed.
  4. It expands access to preschool.
There are a few major things it does not do:
  1. Standardized Testing, which does not work, is still going to waste classroom time
The biggest issue is the Federal government sends money to schools through state governments, which as we know from TANF is a horrible idea because it is inefficient (with 56 bureaucracies doing exactly the same thing) and with 2/3 of states with Republican governments gives a lot of leeway to corruption and discrimination against minorities by wasting funds, which is what happens with TANF. States are now able to set more state standards and control standardized tests, which is a huge victory for Creationists. What we need to do ultimately is get state governments out of education and fund schools from the Federal level, and make school districts so they only serve one high school each along with their feeder schools (unless if a feeder school elects to have its own district, like at my middle school which makes a lot of sense in a lot of rural areas) so that we can't see the incompetence and disproportionate allocation of resources these obscenities create. We need to eliminate property taxes which are horribly regressive obscenities and fund public education fully from a progressive income tax like the one I proposed. The Federal government would provide the same amount per pupil in every district (keeping in mind scales of efficiency for larger schools of course) which will help end a lot of racism and inequality in America's schools. I fully believe that as long as state governments and school districts are involved in allocating funds to schools we will continue to see the awful inequity of education we see in this country and the only fair way to do it is a per pupil allocation which guarantees equality of opportunity which experience tells us cannot coexist with school districts serving entire cities.

It's a long bill, with a lot of good things and a lot of bad things, and it doesn't go far enough in funding poor schools.

Sunday, November 29, 2015

Freedom and Schengen

With the latest terrorist attack in France people are trying to reduce the liberalization of Europe. Under attack now is the Schengen treaty with xenophobes calling to close the border. The issue is that there have been very few terrorist attacks in Europe relative to other countries is still very low, and his won't stop them. Even with massive surveillance no country has succeeded in stopping a single terrorist attack through such methods, and without that information all closing the borders will only waste money and hurt the economy. The United States has the NSA of course, and there is no evidence that surveillance has ever been necessary to stop a terrorist attack.

I do not think closing the border will make any significant difference regarding terrorist attacks. There were attacks before open borders, and there are still attacks. All it will do is isolate Europeans from each other and inconvenience travellers.

To fight terrorism, the only thing we can do is reach out to people at risk of these groups. Increasing communication and trust between peoples through travel, internet, and friendship will help tear down dictators and expand liberty. Closing the borders only plays into their hands by doing the opposite.

Thursday, November 26, 2015

The Evil of Mao

The 20th century saw several horrible events, Adolf Hitler, Joseph Stalin, Pol Pot, the Young Turks genocide in Armenia, and other smaller events under a million dead, but no one in the 20th century came as close to one man in terms of the total number of lives lost as a result of the action of Mao Zedong. Hitler killed up to 14 million people (including over 70% of all Jews) in the Holocaust, Stalin killed over 11 million people through famines in the USSR, Pol Pot killed a quarter of all Cambodians (over 2 million), and half of all Armenians were killed in the Turkish genocide by the Young Turks. Add up all these numbers (which is 30 million approximately) and you still don't come close to the total number of people killed as a result of one man, and that tyrant's name was Mao Zedong.

The 30 million people killed by Hitler, Stalin, Pol Pot, and the Young Turks is about 2/3 of the total number of people killed by starvation by Mao Zedong during the Great Leap Forward. As information has been released, recent estimates have concluded at least 45 million people died as a result of the famine brought on by the decisions of Mao Zedong. For these 45 million deaths the economy actually shrunk, failing in every way.

45 million people dying (0.6% of the global population and 3% of China) should be enough for a man to be seen as a monster by anyone with a soul, but this is not all that Mao Zedong committed. China has supported the dictatorship in North Korea since its founding and if it weren't for China's support of Kim Jong Song it is likely that Korea would not have been divided for long. Because of Mao Zedong's actions, and the actions of the government which follows in his footsteps of supporting the world's largest prison has given the government of North Korea the support it needs to keep from tumbling under internal pressure. They continue to support North Korea to this day by returning refugees and allowing exports of weapons to the tyrant.

For all of these reasons, there is no other person in the history of the world I am aware of who comes close to Mao Zedong in terms of his absolute destruction of human rights and inhumanity. There are certainly people who have tried and are rightfully detested and hated around the world for it, such as Hitler and Stalin, but no one else has been able to succeed as well as he did for almost 70 years.

Tuesday, November 17, 2015

Obama's roots

The hatred against Obama makes sense, not only was his father born in Africa, but his mother was born in a UU family and he attended religious education at the UU church in Honolulu. He is the antithesis of everything the Republican Party stands against. His roots are in one of the two religions (the other being Quakers) which has fought the hardest against their dogma, and it is reflected in his speeches. The values which he was raised with are embedded deeply in the decisions and political platform he has ran on his entire political life over the last 20 years. While Carter was from the South and started the NSA, and Clinton (another Southern boy) destroyed food stamps and deregulated the banks, Obama on the other hands succeeded in health care reform, put back significant regulation on the banks, and on every issue besides surveillance has been extremely liberal. He is the most liberal president since Johnson by a wide margin, and has his roots in the two things Republicans hate most, hippies and Africans. He is the only president in the last 45 years (as of 2015) who has had any desire to move us towards those goals and if he had been able to get his party behind him on the most important issues would have destroyed the Republican Party’s Nixonite ideology more than any other political leader in the last half century.

In 1961 the UUA was formed and President Obama was born. President Obama turned out to be the first truly liberal president in exactly 40 years after President Johnson left office and the only President since Johnson to expand our human rights legislation. He started live in the UU church and those values have never left him. You can take the person out of a UU church, but you can’t take the UU values out of that person. We are so lucky as a country to have him as a President.