It struck me this morning that Bitcoin is such a large, inviting tent, that those who have entered often find themselves surrounded by others who share in their Bitcoin enthusiasm, but not their political beliefs.
Yesterday I posted a vaguely philosophical article about “ownership” that wasn’t really intended to be provocative, but elicited a fairly lively debate about ethics, taxation, and social contracts.
Usually, the best dialogue occurs when people are brought together by a neutral forum such as an educational institution, allowing people to deepen their understanding of the issues and occasionally find common ground. In this case, the commonality is a general agreement that Bitcoin is interesting. But beyond that, if you read between the lines on the discussion threads, I think that even when people disagree on what political actions are appropriate, that they harbor very similar objectives and sensibilities.
Take, for instance, a controversial topic such as Social Security retirement benefits in the US. When I make the argument that these benefits are a bad idea, some people might mistake me for a cruel or uncaring individual, possibly selfish or greedy too.
In reality, I probably want the same thing that my left-leaning compatriots do: a guaranteed standard of living and financial safety net for seniors. I just don’t think that this is accomplished – at least not sustainably – through Social Security. Even though I may want a guaranteed standard of living for seniors, I would probably argue that the best you can do is foster an environment where more people are better off as they reach their golden years.
Furthermore, I find Social Security upsetting because in many cases it actually exploits rather than helps the poor and indigent. Take an example of how it affects two very different people of the same age: Tom, who grew up in an upper-middle class family and went to college followed by grad school, and Sam, who grew up in a poor family and didn’t finish high school.
Tom starts his first job when he turns 25, earning $50,000 per year. Sam started working when he was 16, and currently makes $27,000 per year. By the time Tom receives his first paycheck, Sam has already been paying into Social Security for 9 years.
At 45, Tom makes $175,000 per year, but he only pays Social Security taxes up to the maximum income limit of $113,700, leaving $61,300 that goes into his pocket without being subject to Social Security tax, and effectively lowering the percentage of his paycheck that is dedicated towards this entitlement from 12.4% to 8.1%. Also 45, Sam makes $75,000, all of which is subject to Social Security taxes at 12.4%.
At 62, Tom looks at his portfolio and decides that he will not take early retirement benefits, but will rather wait until he turns 70 to receive the maximum monthly payment of $3,350. Being in generally good health, Tom lives to be 94, having collected Social Security benefits for 24 years. When Sam turns 62, he needs the extra income and decides to file for retirement benefits, receiving the maximum of $1,923 per month. Never being well-educated in proper health or nutrition, Sam has expensive medical bills due to chronic conditions such as diabetes, COPD, and CHF. Sam dies at the age of 70, having received Social Security benefits for 8 years.
Doesn’t that story make Social Security seem downright regressive? Keep in mind that I didn’t make anything up. Those figures are taken straight from the SSA website. Whether you lean to the left or the right, you can probably find something wrong with this picture. Clearly Tom, who was well-equipped to manage his own retirement, benefited from the system much more than Sam, who was unfairly encumbered by Social Security taxes and received much less money in retirement.
Social Security is just one example of many where we can spark meaningful discourse. We may differ on what should be done with Social Security: for instance, I might argue it should be abolished completely, whereas you might prefer to retain it, but raise the income cap and employ means-testing to disqualify people who have enough money to take care of themselves. That’s fine, at least we’re getting somewhere.
Regardless of your political persuasion, I hope you’ll agree that despite our differences, we all have a lot in common. In the meantime, I’ll be hanging out under the Bitcoin umbrella, looking forward to arguing with some new friends.