In recent years, our state has named bridges for people. Personally, I would never want a bridge named for me. When bad things happen to a bridge, the name sticks. Forever.
Do you remember the Silver Bridge? Or how about "Galloping Gertie"? You wouldn't remember them if they did not have names.
I can see the news report about my named bridge. "The David G. Allen Bridge collapsed today as a result of corrosion of the suspension cables caused by years and years of bird dropping accumulation. Engineers for the West Virginia Division of Highways reported that they believe Mr. Allen's middle name is ‘Guano.' A spokesman for the division said, ‘We thought it was a gesture of honor to name a guano-covered bridge after Mr. David Guano Allen for his past service as assistant highway commissioner.'"
After all these years of naming bridges for people, the state has finally gotten it right.
Recently, the Goff Plaza Bridge in Clarksburg was re-named for the late John C. Giese. Mr. Giese was a civil engineer who designed some 600 highway bridges in West Virginia during his six-decade career.
There is only one drawback in naming a bridge for Mr. Giese. The bar has now been set about a mile higher than anyone else can jump. So who do you honor from this point forward? For that matter, how do you reconcile the selection criteria for past honorees once John Giese's reputation enters the mix?
John Giese designed the Goff Plaza Bridge in the early 1980s. The bridge is a tribute to John's engineering skill as well as his common sense. The Goff Plaza Bridge represents the best mix of form and function that I have ever seen. John Giese did not design bridges to flatter his ego. He designed bridges that were uncomplicated and cost-efficient to build.
The original Goff Plaza Bridge was a long span over Elk Creek and its flood plain. When John was asked to submit a design to replace the bridge, he did what no other modern engineer would do. He proposed shortening the new bridge by half and building an earthen fill and roadway to span the void.
It's much cheaper to build an earth fill than it is to build a concrete and steel bridge. By doing this, John saved the taxpayers some $500,000. Perhaps the savings were even more. But you get the picture.
Of course, it follows that John got a smaller paycheck for his work. Engineering design fees are based on a project's cost. But that was John. Over the years, he saved us millions of dollars.
For a design engineer, John Giese had a remarkable keenness for understanding the construction process. When he designed a foundation slab, he understood that the major cost in pouring concrete is the labor needed to build forms and tie the reinforcing steel bars.
I used to enjoy watching John critique another engineer's fancy footer plans. He usually drew a rectangle around the whole footer area and would say, "Build it this way." Yes, his plan required more concrete. But the cost of extra concrete was always less than building complicated forms. Besides, more concrete makes a stronger foundation. Which is, after all, the purpose of the foundation.
John Giese never designed the biggest bridge in West Virginia. Nor the longest. Nor did he design bridges that appear on postage stamps and quarters. He designed the most important bridges — the ones that get you to and from your home every day.
He designed a lot of the bridges that we take for granted. And we'll always be able to take them for granted as long as the highway department inspects and maintains them.
For the record, I was assistant highway commissioner when the John Charles Giese Memorial Bridge was built. And my middle name is not Guano.
Friday, February 1, 2013
Friday, July 13, 2012
Justices shouldn't split hairs when it comes to the Constitution
I had a dream about the nine U. S. Supreme Court justices.
In my dream, all nine were young. Instead of going to law school, all nine enrolled at Georgetown Barber College. After graduation, all nine set up a barber shop in downtown Washington, D.C., where they worked harmoniously.
One day, I walked by their shop — the Supreme Barber Shop — and decided to go in. My hair had gotten too long; I needed a clip job.
I took a seat and waited for an open barber chair. Finally, John Roberts, the barber, said, "Next."
I told Roberts, the barber, "My hair is too long. I want you to cut off half of it."
"No problem." said Roberts, the barber.
He then split every hair on my head into two and clipped one of them. Half of my hair was cut but not quite the way I expected.
He beamed with pride over his clip job, and he held a mirror for me to see.
It was worse than a Donald Trump-style comb over.
The other eight barbers split hairs the same way, so you can't just blame Roberts, the barber.
Watch out for Georgetown Barber College alumni. And NEVER ask one of them for a shave!
The U.S. Constitution is not a complicated document to read. It is written in English, not Latin, nor any other dead language. But when you ask a judge to interpret what the Constitution says, you have to wonder if judges read off the same pages as do the rest of us.
In the recently decided Affordable Care Act case, the main issue had to do with the constitutionality of the individual mandate. The answer to the question as to whether the government can force individuals to buy health insurance could only be a simple yes or no.
Eight justices read the legislation. Eight justices read the Constitution. Eight justices could not agree on the answer. In fact, the best that they could do was end up diametrically opposed. Four justices emphatically voted "Yes." Four justices emphatically voted "No."
Enter Chief Justice John Roberts, the parser. Only Roberts, the parser, knew what Congress meant. Roberts, the parser, changed some words and declared the individual mandate to be constitutional.
Although Justices Ruth Bader Ginsburg and Antonin Scalia were on opposite sides of the debate, they joined together to confront Roberts, the parser, about his convoluted decision. Ginsburg and Scalia were furious, according to the law clerks I interviewed.
Roberts, the parser, told his detractors, "Mongo only pawn in game of life."
If our nation is to be governed by a written constitution, then the document should be easily understood by at least two-thirds of the governed. What good is a constitution if the people don't know what it means?
Historians will remember June 28, 2012, as the day when only one man in America understood the meaning of the Constitution, and further, that he had to re-define key words to make his explanation work.
Friday, June 29, 2012
Can two people really do the same job equally?
The Paycheck Fairness Act failed to advance in the U. S. Senate on June 5. Proponents of the act said that it would allow equal pay for men and women doing the same work. Opponents said the act just created more federal bureaucracy and more rules for businesses.
Most news reports declared Republicans defeated the legislation. That is incorrect. The vote taken was for or against: On Cloture on the Motion to Proceed (Motion to Invoke Cloture on the Motion to Proceed to Consider S. 3220). Fifty Democrats and two Independents voted "aye." Forty six Republicans and Sen. Harry Reid, D-Nev., voted "Nay." Invoking cloture requires a three-fifths majority, or 60 votes.
Before the votes were cast, everyone on Capitol Hill knew the following:
- All Democrats would vote "Aye"
- Both Independents would vote "Aye"
- All Republicans would vote "Nay"
- Majority Leader Reid would first vote "Aye" and then change his vote to "Nay" as a procedural method to bring the vote up again if he so desires.
Yes, this was another episode of election year politics. Tune in next time to see if Mr. Smith goes to Washington to filibuster the Paycheck Fairness Act!
It has always been my observation that no two people actually do the same work. Thus, "equal pay for equal work" is a sophism — an intentional fallacy.
I took Typing I in high school. I was one of two boys in the class. As I struggled to type 50 words per minute using a manual typewriter, there were a dozen girls who were typing at 90 words per minute.
If my classmates and I had been paid by the job classification "Typist," I would have loved paycheck fairness. The girls would have screamed, no doubt. If we had been paid based on productivity, then I would have been the one screaming.
Forty years ago, there were numerous sewing plants scattered throughout Appalachia. The plants had two things in common. All of the seamstresses were women. All were paid by piecework.
When I was in college, I interviewed seamstresses at a rural Virginia sewing plant for an economics study. What surprised me the most was that the women preferred piecework compensation to an hourly wage. Regardless of their individual outputs, they believed they earned much more by the piecework method. And it did not bother them at all that some women sewed faster and, thus, made more money.
It's one thing to pay people a wage based on job classification. It's quite another to pay them based on individual production or quality of work. Wages based on job classification merely hides the fact that no two workers produce equally.
Your local fast food restaurant hires many burger flippers. It goes without saying that the best burger flippers (male or female) are scheduled to work the lunch trade. Lesser flippers, like "Lefty" (so named because of his nose-picking habit), are relegated to the slow shifts.
If all of the burger flippers are paid the same hourly rate based on job classification, then the best of the lot are penalized to pay for the Lefties of this world.
When I was in high school, Miss Pearl Custer ran the office almost by herself. She had an electric typewriter, a nice calculator and the help of female students who would volunteer to work in her office during their free periods.
Miss Custer ran a tight ship; she was not known to make mistakes.
Miss Custer retired after I graduated. Later on, I asked Mr. Jim Bennett, the school's principal, what it was like trying to replace Miss Custer. His answer: "It took three people and a computer." (He did not elaborate as to their gender or pay.)
I should mention that my high school enrolled about 1,000 students.
I have never met two people who perform equally in a given task. On the other hand, everyone that I have met does have a knack for doing something very well.
Consider these lyrics from the 1946 song "Choo, Choo, Ch' Boogie":
You take your morning paper from the top of the stack / And read the situation from the front to the back.
The only job that's open needs a man with a knack. / So put it right back in the rack, Jack!
According to the news reports that I read, the Paycheck Fairness Act does not apply to the federal government. Maybe it would be a good idea for the feds to do a five-year test drive of the Act. Then we, the people who can't do anything right on our own, would know whether it works or not
Friday, May 25, 2012
Even George Orwell Couldn't Have Anticipated Facebook's Draw
George Orwell’s novel, “1984”, introduced the telescreen, a two-way video device that the government used to completely control society. The telescreen was a camera that spied on citizens. The telescreen was also a television that broadcast government-approved propaganda. Telescreens were everywhere in fictional Oceania.
The telescreen seems like quaint science fiction now. But in 1948, the year the novel was published, the telescreen was a terrifying concept. At the time, there were about 44,000 television sets in America, and three-fourths of them were in New York City.
When I first read “1984”, the concept of the telescreen was no surprise. What did pique my curiosity about the book was how a society would let itself be ruled by the telescreen. Why didn’t the citizens of Oceania simply smash the telescreens?
To be sure, George Orwell wrote a fascinating novel. But truth is stranger than fiction. Orwell, on his most creative day, could never have foretold of a powerful public official named Weiner exposing himself to the telescreen. You just can’t make that up!
To a lesser degree than that of the New York Weiner, 900 million other people expose themselves daily on Facebook and Twitter. They say: “Look at me!” “Read my thoughts!” “I fear not the telescreen!”
Facebook and Twitter are not the telescreen that Orwell envisioned. But they are the state of the art in evolving telescreen technology. Telescreen technology has come a long way from the first RCA television and Ma Bell’s party line telephone system. The telescreen has also come a long way from MySpace and AOL’s instant messaging.
Orwell also coined “Newspeak”, the heartless, soulless vocabulary approved by Oceania’s totalitarian regime. While the telescreen caused people to live in fear, it was Newspeak that bankrupted Oceania’s citizenry of thoughts and emotions.
Are we not also embracing Newspeak? Facebook and Twitter are defined as “social media.” I don’t know what “social media” means. But it sure sounds like zombie phrase turning.
Social media is a glorified term for “Reply All.” It sounds absolutely Utopian. It is narcissism. It is the pond into which we look for our own reflection. And it is a perfect mirror until an interloper enters the chat screen.
When that interloper appears, he or she must be removed. Or rather in social media speak, the interloper is unfriended.
Unfriend. What a heartless, soulless word. Orwell, on his most creative day, could never have coined “unfriend.”
May 18, 2012 was an important date in history. Investors spent $100 billion buying Facebook stock—the largest IPO ever.
The Wall Street experts said in unison—groupthink to Orwell—that Facebook will have to sell more advertising to justify its stock price. Left unsaid was the valuation of Facebook’s most important asset—your personal information which you freely gave the company.
The investors who spent $100 billion are not banking on more ad sales. The investors are betting on the power of the telescreen to collect even more personal information.
George Orwell believed that only a Fascist regime armed with guns and spies could dominate a country like Oceania. Orwell’s premise was grounded in Fascist rule of Germany and Italy in the 1930s. Hitler and Mussolini, both murdering thugs, were role models for Oceania’s Fascists.
Now we see that Orwell’s premise was wrong. You don’t need guns or thugs to interrogate the minds of a people. Give the proles their moments of vanity in front of the telescreen, and they will tell you everything.
Many of you will say that I am overreacting. And that would appear to be true for the present. You don’t fear the telescreen; you don’t fear the people who own your information. For now at least.
We are simply in a lull. So much information has been collected so quickly, that no one has had the time to sort it out and figure out how to use it. But the day is coming that the geeks will profile you accurately.
In the future—we don’t know when—the question facing you is this: What will you do, and how far will you go to avoid the thing you fear the most—unfriending?
In this regard, Orwell had the ending right.
Friday, April 27, 2012
Carmen Sandiego’s Secret Hideout Was In Clarksburg
I just love our computer age and how people trust the Internet to provide infallible information. I especially love how drivers trust the directions that float down from the map gods of cyberspace.
Having been a reconnaissance platoon leader in the U. S. Army, I trust old-fashioned, paper maps. If I want to travel from point A to point B, I look for a paper map to guide me. I do not trust Internet maps.
Take my residence for example. You cannot locate it by using MapQuest, Google or Yahoo. Ever since MapQuest went online, the service has located my domicile about two miles south and west from its actual site to a spot on Old Davisson Run Road, a secondary road.
I live on Davisson Run Road, the fast lane, state Route 98, also known as Clarksburg's South Bypass. So MapQuest performed bypass surgery and grafted me onto another neighborhood where, presumably, people live in the slow lane. Yahoo must rely on MapQuest, or the same source data, because it displays the same (wrong) map location.
Google, on the other hand, is the mother lode of all information. Google is infallible. Google has mapped the Earth and scanned every book published since Gutenberg's Bible. Google does not use the map god's directions. Google is The God.
And so it is that Google, The God, points to my domicile as being located at 300 Davisson Run Road. Google even provides a street-level view of the entrance driveway.
Google goes the extra mile in its map search. Google tells us that 500 Davisson Run Road is also located at the same spot as 300 Davisson Run Road. When I say that Google goes the extra mile, I mean this: 400, 500, 600, 700, 800, 900, and even 1000 Davisson Run Road all show up at 300 Davisson Run Road.
But wait! Reboot your computer, go back to Google, and search these addresses again. On this go around, Google might point you to the same spot on Old Davisson Run that MapQuest and Yahoo point to.
You cannot get here from anywhere if you rely on the cyberspace map gods.
The best computer map story I have heard came from a nurse. Her agency supplied her with a laptop and map software. One day, she had to drive from Shinnston to Smithburg. Her laptop selected the shortest route which took her across Five Points hill, a place so-named because five county roads meet at the top of the hill.
Five Points is a place accessible usually by Jeep or Land Rover. Fortunately for our nurse, her trusty sedan made it through, but at the cost of an extra hour driving time to save a few miles.
As smart as computers purport to be, they are illogical linear thinkers when it comes to routing a trip. Why? Because computer programmers are illogical linear thinkers.
A friend of mine who trusts his OnStar recently took a scenic, backroads trip from Ithaca, N.Y., to Rochester. I would have looked at a road map and opted to drive to Elmira and then follow Interstate 86 and Interstate 390 to Rochester.
Just for kicks, I asked Google for directions from Elmira to Rochester. Google, The God, ignored the Interstate 86 routing because it was several miles longer than backcountry New York Route 14 to Watkins Glen and along Seneca Lake.
When I travel, I know that Interstates are the fastest way regardless of mileage. If I have time to sightsee, then I will do a map recon. In this regard, I am like John Travolta as "Michael" when he detoured to see the world's biggest ball of twine.
Now that's a real map quest!
If you are looking for Carmen Sandiego, she has gone. I will miss her as she has been a good tenant. But she had insisted on a lease clause that allowed her to terminate should I ever divulge the secret nature of 640 Davisson Run Road, and by extension, Carmen's sublet.
"Where in the World Is Carmen Sandiego?" went off the air a year or so before 640 Davisson Run Road was built, and the U.S. Postal Service provided it with a street address instead of a rural route and box number. That's when Carmen showed up and why you haven't found her since.
Carmen, best wishes in finding your new safe house. Let me know when you are settled in, and I will forward your security deposit.
Labels:
Carmen Sandiego,
Google,
MapQuest,
OnStar,
Yahoo
Location:
Clarksburg, WV 26301, USA
Friday, March 23, 2012
West Virginia got two wake up calls this week
It is unfortunate that West Virginia could not interest Shell Oil in building its proposed ethane cracker plant here. But Shell's decision to locate in Monaca, Pa., did not surprise me in the least. Bigger states can offer more.
Monaca is 25 miles from Pittsburgh. The Pittsburgh metro area's population is one-third larger than West Virginia's entire population.
West Virginia proposed a site in Hancock County (population estimated at 30,500 and on a downward trend from 2000). One quick look at the map tells you that 90 percent (or more) of the plant's work force would have to commute from Ohio and Pennsylvania. Unless, of course, I have overlooked an indigenous tribe of intelligent forest creatures who could be trained to crack ethane.
West Virginia should feel very fortunate that Toyota Motors chose Putnam County to locate an engine plant. This has been wonderful for our state. The plant just keeps growing.
But a change is brewing. Japanese business executives are the most polite people in the world. A Toyota executive would never say anything derogatory about West Virginia's work force. But the executive would drop a hint when appropriate.
Recently, Japanese corporate executives convened at the Toyota plant and started dropping hints. They worried that West Virginia students tested poorly in math and science. And they worried that West Virginia needed more skilled workers to operate modern equipment. And they worried about illegal drug use.
If the Japanese were more forthright, like New Jersey plant managers, they would simply say: "Your kids can't add; your young men are wrench-turners in a robot age; and all of them are pot heads."
Here is what happened recently. The state made a pitch to bring hundreds of new skilled jobs to Hancock County while simultaneously being told in Putnam County that we barely have enough skilled workers to fill the available jobs.
As for students who rank at or near the bottom in math and science, there can only be three reasons. A). The kids are born with the "stupid gene" and will never learn anything. B). The public education system has failed to educate our children. C). The tests used to measure math and science comprehension are faulty.
West Virginia educators have opted for "C" to explain this phenomenon.
As for workers who lack those "tech savvy" skills that everyone likes to talk about, we just don't have an environment to learn these skills. West Virginia has always been a natural resources state. "Tech savvy," then, means chainsaws. We know how to saw logs. But we export our logs to the furniture manufacturing plants in North Carolina.
When your job options are coal mine, saw mill or drilling rig, then it's very difficult to learn the skills to operate a complex milling machine at Toyota's engine plant. Conversely, if you can operate a milling machine, you'll take a machinist's job in another state before going to the mines.
If West Virginia does ramp up tech savvy vocational schools, then the grads of those schools will leave the state if the skilled jobs aren't here. This is no different from losing our college grads to other states for the last 60 years.
As for West Virginians being dopers, we need to face the fact that drug abuse in our state is a health epidemic. But we have treated the problem as a crime. We have built new prisons and overfilled them. A lot of good this has done.
Drug use is an attitude. And until our elected leaders, our preachers, our teachers, our doctors and our civic leaders get on soapboxes and shame everyone who gets blitzed on bath salts, Percocet or pot, then our youth will continue to think it's cool when Mom and Dad do drugs.
Believe it or not, drug abuse was not a problem until the 1960s. That's when doctors hooked housewives on Valium, and rock stars glorified marijuana. Attitudes, how shall I say, changed.
Going forward, West Virginia has some daunting challenges if it hopes to maintain a work force. Consider the biggest hint that the Japanese executives dropped at the Toyota get-together. They worry about baby boomers retiring and not having skilled workers to replace them.
In New Jersey speak, this means: No workers? We're outta here. Bada bing!
In Japanese speak, this means: We worry about West Virginia's future.
Monaca is 25 miles from Pittsburgh. The Pittsburgh metro area's population is one-third larger than West Virginia's entire population.
West Virginia proposed a site in Hancock County (population estimated at 30,500 and on a downward trend from 2000). One quick look at the map tells you that 90 percent (or more) of the plant's work force would have to commute from Ohio and Pennsylvania. Unless, of course, I have overlooked an indigenous tribe of intelligent forest creatures who could be trained to crack ethane.
West Virginia should feel very fortunate that Toyota Motors chose Putnam County to locate an engine plant. This has been wonderful for our state. The plant just keeps growing.
But a change is brewing. Japanese business executives are the most polite people in the world. A Toyota executive would never say anything derogatory about West Virginia's work force. But the executive would drop a hint when appropriate.
Recently, Japanese corporate executives convened at the Toyota plant and started dropping hints. They worried that West Virginia students tested poorly in math and science. And they worried that West Virginia needed more skilled workers to operate modern equipment. And they worried about illegal drug use.
If the Japanese were more forthright, like New Jersey plant managers, they would simply say: "Your kids can't add; your young men are wrench-turners in a robot age; and all of them are pot heads."
Here is what happened recently. The state made a pitch to bring hundreds of new skilled jobs to Hancock County while simultaneously being told in Putnam County that we barely have enough skilled workers to fill the available jobs.
As for students who rank at or near the bottom in math and science, there can only be three reasons. A). The kids are born with the "stupid gene" and will never learn anything. B). The public education system has failed to educate our children. C). The tests used to measure math and science comprehension are faulty.
West Virginia educators have opted for "C" to explain this phenomenon.
As for workers who lack those "tech savvy" skills that everyone likes to talk about, we just don't have an environment to learn these skills. West Virginia has always been a natural resources state. "Tech savvy," then, means chainsaws. We know how to saw logs. But we export our logs to the furniture manufacturing plants in North Carolina.
When your job options are coal mine, saw mill or drilling rig, then it's very difficult to learn the skills to operate a complex milling machine at Toyota's engine plant. Conversely, if you can operate a milling machine, you'll take a machinist's job in another state before going to the mines.
If West Virginia does ramp up tech savvy vocational schools, then the grads of those schools will leave the state if the skilled jobs aren't here. This is no different from losing our college grads to other states for the last 60 years.
As for West Virginians being dopers, we need to face the fact that drug abuse in our state is a health epidemic. But we have treated the problem as a crime. We have built new prisons and overfilled them. A lot of good this has done.
Drug use is an attitude. And until our elected leaders, our preachers, our teachers, our doctors and our civic leaders get on soapboxes and shame everyone who gets blitzed on bath salts, Percocet or pot, then our youth will continue to think it's cool when Mom and Dad do drugs.
Believe it or not, drug abuse was not a problem until the 1960s. That's when doctors hooked housewives on Valium, and rock stars glorified marijuana. Attitudes, how shall I say, changed.
Going forward, West Virginia has some daunting challenges if it hopes to maintain a work force. Consider the biggest hint that the Japanese executives dropped at the Toyota get-together. They worry about baby boomers retiring and not having skilled workers to replace them.
In New Jersey speak, this means: No workers? We're outta here. Bada bing!
In Japanese speak, this means: We worry about West Virginia's future.
Friday, March 2, 2012
Payroll Tax Cut Is a Recipe for Disaster
"We put those pay roll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program."President Franklin D. Roosevelt (Memo to Luther Gulick, 1941)
Beginning in October of last year, unleaded gasoline traded on the NYMEX for under $2.75 per gallon, and it remained below $2.75 until the end of the year. For the first nine months of 2011, and except for a few brief dips, gasoline traded at prices over $2.75 per gallon. Gasoline traded at its highest price for 2011 in April and early May; the wholesale price then was over $3.00 per gallon.
For the nation’s economy, an economy that measures success by the Christmas shopping season, the downturn in gasoline prices was a boon. Money saved on gasoline poured into the retail stores, which in turn made the fourth quarter of 2011 look like a turning point in the recovery.
To examine only gasoline prices does not tell the whole story of the fourth quarter rebound. The payroll tax cut in effect for 2011 is where consumers’ extra disposable income came from.
The payroll tax is FICA—the Federal Insurance Contributions Act payment that funds Social Security. The New Dealers wanted to avoid any mention of a new tax to fund the program. The plan, after all, was hatched during the Great Depression. Hence, FICA and not FITA.
In 2010, tax cutting was on the minds of both the Republicrats and Demolicans. They got together in a rare bipartisan effort and reduced the employee’s FICA rate from 6.2% to 4.2%. They unashamedly pronounced this reduction a “tax cut”. Apparently, maintaining the illusion that Social Security is funded through contributions was no longer necessary.
As the tax reduction is two per cent of wages, the tax cut varies widely. A minimum wage worker pockets $5.80 per week. A clerk who makes $3,000.00 per month pockets $60.00. A professional making $10,000.00 per month keeps $200.00.
All in all, the payroll tax cut does not benefit any worker in noticeable fashion. But the aggregate amount of every worker’s tax cut in a community does add up.
Some economists maintain that the payroll tax cut is not spent immediately. Rather, they say that the cut is saved or used to reduce debt such as credit cards. I believe differently. I see the tax cut as pure disposable income.
For nine months last year, I would argue that most consumers used their payroll tax cut to offset higher gasoline prices. Then as gasoline prices fell, the tax cut was spent on groceries and the holiday season splurge.
The holiday season has become a season of self-gratification first and foremost. It is human nature to drive more, eat more, and buy the blu-ray version of “Transformers”. The holiday season is a powerful urge to spend those disposable dollars.
In our current fiscal condition, cutting the payroll tax is neither very smart nor very productive. We have been told in no uncertain terms that Social Security is running out of money. We have crossed the threshold—current payroll taxes no longer pay the current benefits to retirees. We are borrowing money to make up the difference. There is no trust fund to dip into—just a filing cabinet in Parkersburg filled with IOU’s.
The stimulus effect of the payroll tax cut is negligible if it even exists. Spending stimulus money on gasoline and groceries just seems to make them go up more in price while wage rates stagnate. While it would be difficult to calculate the inflationary impact on gasoline and groceries just from the payroll tax cut, one can make the general argument that any artificial subsidy dampens the market’s ability to regulate prices.
As for stagnant wages, employers have an incentive to pass up giving the workers a 2% raise. Why bother if Congress is increasing the paycheck by cutting deductions in a like amount?
Here we are in 2012, and the payroll tax cut has been renewed for the year. When will it become politically feasible to restore the FICA tax back to 6.2%? Probably not for a long time.
President Ronald Reagan, a conservative Republican, and House Speaker Tip O’Neill, a liberal Democrat, worked together in 1986 to reform the Social Security program. The FICA rate was raised to 6.2% to preserve the program.
In time, we will regret this payroll tax cut. A rational worker would never drain his 401(k) or IRA plan to pay for this week’s gasoline. But our national leaders are so desperate to win elections that they will drain the Social Security program. This is a formula for disaster.
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