May 22, 2010
Rent-seeking refers to the behavior of individuals or groups expending resources to achieve public policy decisions that transfer wealth to them at the expense of others. Some examples:
A nonprofit organization might seek for the government to spend taxpayer money on their pet cause, such as protecting the environment or researching a disease.
A workers’ union might want the government to force employers to provide higher wages, more benefits and greater job security.
A corporation might seek subsidization to support an unsustainable business model instead of working to become more profitable.
While the rent-seekers should be faulted for the behavior, it is the government granting rent-seekers what they want that is the real problem. As it shells out more benefits and privileges, government has to collect more taxes to administer and pay for them, thus vastly increasing its size and scope.
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May 15, 2010
The current Social Security (aka “socialist insecurity”) system is designed as a pay-as-you-go system, in which current workers’ tax dollars pay for the benefits of retirees. And the system is in serious trouble. With increased life expectancy and a declining birth rate, there are fewer workers to support a greater number of retirees. In 1950, there were 16 workers paying for the benefits of one retiree. Today, there are about three workers per retiree, and by 2025 there will only be two. According to the Social Security Administration itself, if unreformed, Social Security will begin running a deficit by 2017, and by 2060 Social Security and Medicare combined will make up 71 percent of the federal budget.
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