The Money Chronicles, Volume 7: Reflections on the 47% vs. the 53%

Last week a video surfaced of Governor Romney speaking at a recent private fundraiser. This is what he said:

There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what. … These are people who pay no income tax. My job is is not to worry about those people. I’ll never convince them they should take personal responsibility and care for their lives.

I lifted this quotation from Yahoo; please tell me if it’s not accurate.

Several things trouble me about this quotation, and I’ll list a few here (and perhaps add to it as I think more about it).

  • Governor Romney was speaking at an event where he assumed everyone there supported him and he didn’t think it was being taped. It’s an old adage that character is developed when we think nobody is watching us. This quotation is dramatically different from what he says in public and it tells us a great deal about his character.
  • The 47% draw from a large and diverse group of people, and Governor Romney wants to put them all in one camp: they are dependent on the government, they believe they are victims, they believe someone else is responsible for their care, and they are entitled to health care, food, and housing. The meaning is clear: they are doing nothing productive and expect the 53% (of whom I belong) to care for them.
  • They believe that they only way they can keep this cushy arrangement is to vote for the President and nothing will convince them to take responsibility for their lives.
  • Lastly, it is not his job to to worry about these people.

OK, so who are these 47%? Good question. Governor Romney acquired this number from the Tax Policy Center; there are those who think it has a liberal bias, but Governor Romney must not as he quotes them. They describe the 47% here:

  • The poor: In 2011 if a family of four made $26,400 or less, their income was too low to pay taxes. To be fair, I can’t imagine them putting food on the table, let alone paying taxes. They don’t sound like freeloaders to me, and I’d guess they’d give anything to make enough money to pay taxes. They are half of the 47%: I’m guessing they’re not heartened to learn that Governor Romney’s job is to not worry about them because they are freeloaders.
  • The elderly: If you and your spouse receive less than $32,000 in Social Security benefits ($2666.67 per month) or other income, you don’t pay taxes. If you live on that much money and pay taxes, you have a point. Otherwise, move on because these are people who worked hard for their entire career, paid into Social Security, and don’t have pensions, 401(k)’s, or 403(b)’s and they are not freeloaders.
  • The disabled: Again, if you are disabled and poor, you don’t pay federal taxes. Think this is a free ride? Talk to someone who depends on this. Ask him or her if he or she would rather be able to work and pay taxes. Nearly 100% would like to be productive.

You can’t read this blog without knowing my political views. But let’s face it: Mitt is choosing the path of pandering to the wealthy. Vote for him at your own risk.

Happy Anniversary, United States Constitution

OK, so it’s not a holiday, but on this day in 1787, 225 years ago, 55 delegates gathered to vote on whether or not to approve the document they had spent the summer writing. It passed with 42 votes. You can read an interesting account here.

Most amazing to me is this: while part of the document sets up how our government will run, almost all the amendments limit the power of the government over all of us. Because of the Constitution I can criticize the government (in word and print), worship where I want, be assured of due process of law, and many other things. As a matter of fact, the only amendments that restrict my freedom are the 13th (I can’t own slaves) and the 18th (I can’t buy, sell, or transport alcohol). Of course, the 18th amendment was overturned by the 21st.

Before 1787 there had been few limits on government, but virtually all of them were in place with the consent of the ruler (think about the Magna Carta in 1215). Our Constitution is unique in that the document preceded the leaders. When George Washington took his oath of office on April 30, 1789, he submitted his power to this document. Every one of his successors pledged the same thing. Well done George.

By the way, if you think that it doesn’t have much of an impact now, the recent Supreme Court Case on the Affordable Care Act, National Federation of Independent Business et al. vs. Sebelius, Secretary of Health and Human Services, et. al turned on interpretations of the government’s ability to collect taxes and regulate interstate commerce (Article 1, Section 8).

Happy Birthday, U.S. Constitution.

PS: Happy Birthday, also, Dad. He was born on the 144th anniversary.

The Money Chronicles, Volume 6: An Economics Rap Anthem? Believe It!

For a year or so I’ve been listening to a podcast called Planet Money from National Public Radio. I look forward to listening a few times per week and it’s taught me a great deal about what is happening in the economy.

It’s also become a bit of a political football as President Obama is a follower of the economist John Maynard Keynes (1883-1946) while Governor Romney is a follower to the economist Friedrich A. Hayek (1899-1992).

Keynes believed that in times of dire economic depression the government needs to pour money into the economy to stimulate it and raise itself out of its troubles. Hayek believed that governments can’t do this effectively and it is better in the long run to allow the economy to fix itself. This rap does an excellent job of explaining their positions.