 The 21 Convention, Tampa, Florida, today we have a pretty awesome speech prepared for you, which actually has to do with all the stuff that we talk about here at the 21 Convention, which is about independence, individuality, how to empower yourself, but here we're taking a different look of something that we've been diving into in the last couple of years. Now we have Don Watkins right here, how social security is sabotaging the land of self-reliance. Bring it on home, good stuff man, yeah you got it. All right so round of applause, who here was brought up with the idea that the best diet was you know loads of bread, low fat, kind of low calorie stuff, come on guys clap. And how many of you for instance heard, all right you guys got to do your 30 minutes of cardiovascular fitness every morning where you're running in a treadmill and everything. All right now the fact that you're in this room tells me that you think that's probably not right, is that that sound about right? So the fact that you're in this room tells me that you're willing to challenge conventional wisdom when it comes to diet, when it comes to exercise, and what I'm going to ask you to do over the next hour or so is challenge conventional wisdom concerning your political thinking. Now when somebody tells you to challenge conventional wisdom they have a burden of proof because the fact is there's a lot of things in the search to think about why challenge something that everybody already knows. And I'm going to ask you to rethink the welfare state. So why even bother with this issue? Now I'm not a big numbers guy but I want to give you some big numbers. So you probably heard at one time or another that the US government is 12 trillion dollars in debt. That's a huge number, totally phony number. If the government actually had to keep its books the way that say a private organization does we would not be talking about 12 trillion but somewhere in the neighborhood of 205 trillion dollars. Now how many of you guys are students or have been students or at one time knew that there have been such people on this earth as students? All right so I have a any student debt in the crowd? Okay well I have a proposition for you. I'm going to add 400,000 dollars of debt onto your current load but instead of getting something for it like an education we're just going to give it to other people. Any takers? Oh you guys are cold. Where is the compassion here? Well that's basically where we're headed. Now what's driving this? How is it that the government is going to be spending that much more than it receives through taxes? Well the basic answer is old age welfare state programs. So social security, Medicare, the big drivers. Also it's going to be Medicaid but primarily social security and Medicare and the basic issue is pretty simple. I'm not a math guy but even I can work this one out. Right now there's three workers for every retiree and each retiree is getting on average 30,000 dollars a year per capita. That by the time we get older and our kids start growing up that's going to go to two workers for every retiree and 40,000 dollars per capita. That is not a sustainable situation and so what I want to talk about in the time remaining is why did we even get here and what kind of world should we be living in? Which one will actually allow us to pursue and achieve our happiness? So the bottom line is that basically we're broke but let's make that a little more concrete and I want to start by taking just one slice. So I mentioned this 205 trillion dollars and you're probably thinking what the heck does 205 trillion dollars mean? Let's take 10% of that problem just social security. So right now does anybody know how much we pay for social security taxes each month? Like what percentage of our paycheck goes to it? 15 you say? Close yeah so if you look at your paycheck it's 6.2% goes to social security but as you suggested 6.2% goes from your employer except that every economist will tell you that actually comes out of your paycheck too. So 12.4% now for the average millennial worker and if you were born after 1980 you're millennial like it or not. The average millennial worker 12.4% means over $5,000 a year. That's more than a car payment each month you're making to the elderly. Before you can worry about your hopes and dreams before you can start spending on things like your car payment or paying off your student loans. So why? Why are we in the situation? Another way to think about it by the way is that's more than a month and a half each year that you are working without pay. A month and a half. Yeah imagine you open the newspaper you see a big story about Walmart and it says Walmart demanded that their employees worked a day without pay just to help out the company. People would be riding in the streets they say you can't do that that's exploiting people but a month and a half that's where we are today when we try to actually fix that $205 trillion gap it's only going to get worse we're talking two months three months four months we don't really know but it's going to be immense and this is what I call the debt draft because in a very literal sense everybody here in this room you're being conscripted to set aside your goals hopes and dreams in order to serve the retirement and health care needs of the elderly. So why? Why? I mean we can't take this lightly these programs enjoy immense support and so before we figure out what to do about this we have to figure out why do we have these programs anyway and usually I pull the room but I'm just going to tell you what you guys think. So the the three major reasons in one way or another and I've spoken to thousands of people in this issue the main reasons why people support the welfare state and don't kid yourself these are some of the most well supported popular programs that the government actually does social security gets 80% support when you when you give polls I bet you you wouldn't get 80% support for putting murderers in jail like this is enormous so the first one is Watkins what the heck are you talking about this is not even a welfare program this is I earned it I paid for it and I'm getting what I paid for it gives me economic security so hey I'm going to reach the point where I can't work and so I need something kind of a baseline to rest on so social security is good for that reason and then the third one is I want to help people in need I'm not a jerk who wants people to starve in the streets and so these programs enjoy my support for that reason so I want to talk about each one of these and if you guys think well I'm not really covering something that's important or whatever raise your hand we don't have to wait to the Q&A okay this is this is about getting clear in this topic not about me pontificating so really feel free to engage push back and so on so I earned it so this is basically the way that we're taught to think about social security right and I'm going to focus on social security not medicare it's the same principles but social security is more straightforward so if you have any questions about the details about how medicare works with something let me know but basically the idea is look I'm young I give a bunch of my money 12.4% to the government it puts it in a nice lock box and when I'm all all right I'm happy because I get a bunch of money from the government although in this case I'm sad because I'm old so that's kind of what we've been taught about the program that's the idea of I earned it because I set aside money the same way you would with you know life insurance the same way you would with like a 401k but this is how it really works bunch of money take it from you and give in to other people who are older and you're sad because people are taking a bunch of your money so that is really and don't take my word for it there's a book called social security for dummies this is not some politically charged memoir or anything this is a book just telling you the way that it works by a guy who thinks it works wonderfully and he calls it a pipeline running from young people to older people from workers to retirees a pipeline dragging your money hopes dreams goals and so on into the pockets of other people now you may think that that's a good thing you may think we have to do that we're going to get to those arguments in a minute but what I'm trying to stress is that whatever you call it you can't call that an earned benefit you can't earn the right to just have a pipeline running from other people's pockets into yours I mean it's like this is like playground justice right it's like Billy stole my wallet so I'm going to go steal Jack's wallet because it's an earned benefit now that's basically what the I what that argument says now it's true it's true that the people receiving it were once young and they had their wealth taken from them in order to support the elderly so it's it's not crazy that people think well hey I paid for it but the point is that if there was an injustice committed to them it was not by the people who say hey stop taking money from young people it was when they were young and the money was taken from them so let's then turn to the two really major reasons that people support these programs so economic security so this is the idea clearly we're most concerned about opportunity right if you're in this room it's because you want to make the best of your life you're not really concerned hey how do I not have a complete disaster of a life but nevertheless we are concerned with what happens in the worst case scenario right what happens if I reach a certain age and I just can't work I can't support myself what's going to happen to me and the whole idea behind social security is all right you have a platform of supporting yourself now this is kind of a weird notion of economic security first of all so economic security in any rational world so the way that it's usually treated is how do you guarantee that you have resources even if you haven't produced or saved for them that's the idea behind you know this idea of economic security but that's not a realistic idea of economic security because the fact is the government can't guarantee economic security it can't guarantee that those resources are there it can only guarantee that hey if people produce them we're going to take enough from them to guarantee that you'll have some floor of protection any rational idea any rational conception of economic security is really going to be that if you do create something if you do invest it if you do save nobody can come and arbitrarily take it away now that kind of conception of economic security doesn't really pretend well for the welfare state because of course the basic idea there is the government is to say hey whatever we want to take from you we're going to take from you if we think it's in the public interest we're going to do it i mean how economically secured we feel knowing that we're 205 trillion dollars in debt which by the way does anybody have 205 trillion on them because if you do let's go out for drinks after this no it's more wealth than exists in the entire world so that's kind of a problem um but let's look even deeper you might say that's kind of nice wordplay dawn but what happens if i'm old and i can't support taking a different look of something that we've been diving into in the last couple years now we have dawn Watkins right here uh how social security is sabotaging the land of self-reliance bring it on home by the way if you can do the math is longer than we've had social security since 1935 now did the elderly starve in the streets and it turns out that amazingly no amazingly people figured out a way to live without handouts for over a hundred years and they it's pretty fantastic when you think about it they were very entrepreneurial in their whole approach to life and so i'm just going to go through some of the mechanisms that they took in order to not as they say starve in the streets so first of all people worked it's kind of funny today where we think of like ah works a real burden but actually the people pushing for a welfare state complained for many years because the elderly those darned people refused to retire the fact is that they found their lives more meaningful more meaningful more valuable more enjoyable with work than without it so the first reason i think is what i call the collectivist premise and this is looking at the welfare of the group rather than the well-being of the individual and says what's good for quote society as a whole how should we distribute society's resources in a fair way i think the better way the more rational way to think about political issues is to focus on the individual and i think if you think about what's good for the individual you come to a very different conclusion so the two essentials in my judgment of what makes a happy and successful life and i think this came through in all the talks today is thought and effort this is isaac newton and steve jobs