Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


Paul Ryan Just Proved He is Clueless about Everything

U.S Speaker of the House Paul Ryan (R-Wisconsin) just proved he is clueless about the future realities facing America.

“This is going to be the new economic challenge for America: People. . . . I did my part, but we need to have higher birthrates in this country,” Ryan reportedly said in the December 14, House Speaker Weekly Briefing. “Be smarter, more efficient, more technology . . . still going to need more people.”

So Ryan wants to increase the population at a time when the number of jobs is falling, and wages are stagnating, because of technological innovation. Many experts are predicting sharp declines in employment in a few years because of new technologies.

McKinsey & Company found that 30% of jobs in 60% of occupations might be eliminated by automation, The Guardian reported. If average Americans were to follow Ryan’s advice there would be more people for fewer jobs; and far lower wages, because supply would be higher than demand.

To make matters worse, taxes would have to be raised to provide education and social services for all those additional children. There would also be more civil unrest because come 2040; there would be a large new generation of young people with no jobs. This can lead to a future in which young people would have “three career choices;” police officer, criminal, and prison guard.

Average Americans might be smarter than Ryan, The Washington Post reported that the U.S. fertility rate hit a record low in 2016 and it’ll be lower in 2017. In an example of “Wisdom of the Crowd,” average people clearly understand that a growing population is not to their economic benefit. Unfortunately, the supposedly super-smart Speaker of the House cannot see that.

Ryan Lies about Retirement Problem

What was worse; is that Ryan also blamed average Americans for a problem he and his colleagues can easily solve.

“We have something like a 90% increase in the retirement population of America but only a 19% increase in the working population in America,” Ryan said making a demand for “entitlement reform.”

There is a simple solution to that problem simply amend the tax code so that the Old Age, Survivors and Disability (OASDI) or Social Security Tax, applies to all income. Under the current system, income over $128,400 is exempt from OSADI taxes for 2018.

That means Amazon CEO Jeff Bezos; the world’s richest man who is reportedly worth $98.6 billion, will pay $7,979.40 or $15,985.80 in Social Security tax for 2018. As an employee of Amazon Bezos; would pay an OASDI tax rate of 6.2%. If he were self-employed Bezos would a rate of 12.4%.

If Bezos had to pay OASDI on all his income he would pay $12.23 billion or $6.31 billion in Social Security taxes depending on his employment status. It also stands to reason that if every millionaire and billionaire in America had to pay the OASDI on all of his or her income; there would be enough money to finance a comfortable retirement for all Americans.

Yet, removing the cap on OASDI is not part of the current Republican tax reform Ryan is pushing. Instead, he thinks that raising the birthrate will solve the problem, which makes no sense.

Note to Mr. Ryan: it takes a child from 18 to 26 years to reach working age depending on the education she or he seeks. That means we would see no economic benefit from a higher birthrate for a generation (25 years).

Since those kids will require food, education, transportation, recreation, healthcare, housing, truant officers, police officers, juvenile hall, etc. they would be a drag on the economy for decades. That means the Speaker’s solution might make the retirement crisis worse by raising government expenditures.

Paul Ryan Must Go Now

There is now a lot of speculation that Paul Ryan might soon leave the House. If that’s his thinking; all I can say is good riddance to Ryan.

The Speaker is refusing to deal with the real problems facing America and making ridiculous statements. Worst of all those statements will appeal to white nationalists and racists that think there are not enough white babies being born in America.

My guess is that Ryan is trying to preserve the status quo and give rich people lots of money; so he can rake in the dough as a lobbyist for a few years after he leaves Congress. One reason why Ryan wants taxes low is that corporations and billionaires will have plenty of extra money to cover checks to lobbyists with.

Cynics will also note that a large population keeps wages low; which makes it easier for rich people like Ryan to hire lots of servants and pay them little. Conservatives should be scared because this sounds like the leftwing critique of free-market ideology as neo-feudalism.

Paul Ryan has demonstrated that he is a dangerous fool, who proves  America needs new leadership on Capitol Hill now. Republicans and conservatives need leadership that understands America’s problems.