The Greatest Economic Myth of All Time

[AgeOfEnlightenmentSCP]

According to economist Dr. Walter E. Williams, the greatest economic myth of all time is that a person can have something for nothing. The greatest economic myth in America is that you can have something and someone else is going to pay for it.

jewishworldreview.com/cols/williams083110.php3

The vision of getting something for nothing, or getting something that someone else has to pay for, explains why so many Americans are duped by politicians. A congressional hoax that's flourished for seven decades is the Social Security hoax that half of the Social Security tax (6.2 percent) is paid by employers, the other half (6.2 percent) paid by employees. The law says that if you are self-employed, you get to pay both halves. The fact of the matter is whether you're self-employed or not, you pay both halves of the Social Security tax that totals 12.4 percent. Let's look at it.

Suppose you hire me and our agreed-upon weekly salary is $500. From that $500, you're going to deduct $31 as my share of the Social Security tax and you're going to add $31 as the so-called employer's share, sending a total of $62 to the IRS. Here's the question: What is the weekly cost for you to hire me? I hope you answered $531.

The next question is: In order to make hiring me profitable, what must be the minimum dollar value of my contribution to your total output? If you said $531, go to the head of the class because if the value of my contribution to total output is only our agreed-upon salary of $500, you're making losses hiring me and you're going to be out of business soon. Therefore, if I am producing $531 worth of value per week, it is I who's paying the so-called employer as well as the employee share. The reason why Congress created the fiction of the employer share was to deceive us into thinking that we're paying fewer taxes than we in fact are.

By the way, all those other nonwage benefits that a worker receives are in fact paid for by the worker such as health insurance, retirement benefits and childcare services. Without these nonwage benefits, money wages would be higher. During WWII, Congress imposed wage and price controls making it illegal for companies to compete for employees by offering higher wages. That's when we saw many companies start to offer nonwage benefits, such as health insurance, as a means of competing for employees.

Nonwage benefits turn out to be good for the employee because, for the most part, he pays no taxes on them. In other words, if the employer paid the worker the cash value of, say, health insurance as wages, the worker would have to pay income taxes on it and then go out and buy health insurance.

The bottom line lesson is that if you think you're getting something for nothing, or somebody else is paying for something you receive, you'd better give it another look.

[❤ mollymouser ❤]

Interesting.

[cme1201]

The bottom line lesson is that if you think you're getting something for nothing, or somebody else is paying for something you receive, you'd better give it another look.

The only things free in this world are Air and Opinions, and I am sure politicians are trying to tax air.

[workpublic]

and criminalize opinions. ;D

[henryclay]

Paul, you got that so screwed up til nobody can make heads nor tails out of of it. So let me help here.

It's not you nor the guy that hires you that pays your stinkin social security tax. And it ain't even the guy that hires you that pays your $500 a week. It's the guy he sells his stuff to that pays both.

It may be true that your employer gives you $469.00 and sends the government $62.00 for a total of $531.00 every week. but he just turns around and takes it every bit , , all $531.00 of it off on his tax return. All he can even "hope" to make for himself is whatever he can sell his stuff for that is over and above what it costs him to pay you to produce it. And where does that come from ? ? ? I already said it. It comes from the guy that buys whatever it is you all can convince him to buy.

Now, don't that explain it better?.

[EVT1]

Wall street does it all of the time- as do thieves. Something for nothing is their business plan.

[lakhota]

The rich Wall Street robber barons know all about getting something for nothing. They do it 24/7.

[Deleted]

The bottom line lesson is that if you think you're getting something for nothing, or somebody else is paying for something you receive, you'd better give it another look.

Unless of course your eating from the government trough. Then you really ARE getting something for nothing.

[Opti]

PBP, the quote in the OP is nothing new.


I don't keep track of myths economic or otherwise. Is there something about getting stuff for much less than other people pay? I went to Kohls today and paid $0.49 and got two wash clothes and a short sleeve T-shirt. (I love those Kohl's $10 coupons off $10 or more.)

[NoMoreLunacy]

Social Security is a scam. I have no wish to pay for the elderly. They should have saved for their own retirement. Otherwise they can live in the streets and eat dog food. I don't see why I have to pay taxes to support such people.

[lakhota]

Jun 8, 2011 23:37:24 GMT -5 NoMoreLunacy said:

Social Security is a scam. I have no wish to pay for the elderly. They should have saved for their own retirement. Otherwise they can live in the streets and eat dog food. I don't see why I have to pay taxes to support such people.

Did you forget that working people pay into Social Security and Medicare their entire working lives? Social Security and Medicare are all many of them end up with.

[hello fromWarsaw]

Keep digging 20%!

[NoMoreLunacy]

Jun 8, 2011 23:42:54 GMT -5 @lakhota said:

Jun 8, 2011 23:37:24 GMT -5 NoMoreLunacy said:

Social Security is a scam. I have no wish to pay for the elderly. They should have saved for their own retirement. Otherwise they can live in the streets and eat dog food. I don't see why I have to pay taxes to support such people.

Did you forget that working people pay into Social Security and Medicare their entire working lives? Social Security and Medicare are all many of them end up with.

That money went to support the elders at that time. It's gone. Now I have to pay tax to support these folks? I have to because that's the law but I don't like it. There was no Social Security 100 years back and America was booming. It was the Gilded Age.

[hello fromWarsaw]

Read "The Good Old Days- They Were Terrible" You are dreaming ;D

[NoMoreLunacy]

Jun 8, 2011 23:53:04 GMT -5 hello fromWarsaw said:

Read "The Good Old Days- They Were Terrible" You are dreaming ;D

Terrible for the poor and the middle class may be but great for the rich. I qualify as rich in the USA so I don't have a problem with the good old days.

[Deleted]

Did you forget that working people pay into Social Security and Medicare their entire working lives? Social Security and Medicare are all many of them end up with.

Again, SS was never meant to be "all many of them end up with" but was to be in addition to what they saved. The people that "need" social security didn't do their part.

[NoMoreLunacy]

Jun 9, 2011 0:00:42 GMT -5 @oldtex said:

Did you forget that working people pay into Social Security and Medicare their entire working lives? Social Security and Medicare are all many of them end up with.

Again, SS was never meant to be "all many of them end up with" but was to be in addition to what they saved. The people that "need" social security didn't do their part.

Even if people need Social Security I don't see why I should support them. Live in the streets. Eat at soup kitchens. Work longer. Whatever.

[hello fromWarsaw]

St. Peter will NOT be amused

[Value Buy]

As Superman had his opposite from Bazarro World, Warsaw has his opposite here at P&M with ravinglunatic

[privateinvestor]

The Greatest Economic Myth of All Time


Is Obamacare...plain and simple IMHO

[ChiTownVenture]

Jun 9, 2011 0:02:56 GMT -5 NoMoreLunacy said:

Jun 9, 2011 0:00:42 GMT -5 @oldtex said:

Did you forget that working people pay into Social Security and Medicare their entire working lives? Social Security and Medicare are all many of them end up with.

Again, SS was never meant to be "all many of them end up with" but was to be in addition to what they saved. The people that "need" social security didn't do their part.

Even if people need Social Security I don't see why I should support them. Live in the streets. Eat at soup kitchens. Work longer. Whatever.

Just as you posed other options you have the same options. You don't have to support them, don't pay into the system, make sure to shelter your money from taxes, make less so you don't pay taxes, move to a country that doesn't support the poor.

I think it's funny to see the two extremes argue when in all honesty I think most people want something in between.

[ugonow]

I think it's funny to see the two extremes argue when in all honesty I think most people want something in between.

[AgeOfEnlightenmentSCP]

Jun 8, 2011 19:25:01 GMT -5 @lakhota said:

The rich Wall Street robber barons know all about getting something for nothing. They do it 24/7.

Crony capitalism is the result of big government, not free markets. When the government can, through a series of threats, intimidations, and cash bribes using other people's money, effectively "buy" a business, or at least control it-- the capitalists tend to do what's in their best interest and go along to get along.

I'm certain you're aware that many banks were FORCED to take TARP money. This was so the government could hide from the public information about which banks were in trouble-- if they ALL took TARP money, they could shield the troubled banks from transparency. The way they used force was simple: they told the small banks, "We know you don't need TARP money now but you'd better take it because we're going to change the capitalization rules and if you don't meet them federal regulators will shut you down". That's not free market capitalism, friend.

[jkapp]

Jun 8, 2011 23:42:54 GMT -5 @lakhota said:

Jun 8, 2011 23:37:24 GMT -5 NoMoreLunacy said:

Social Security is a scam. I have no wish to pay for the elderly. They should have saved for their own retirement. Otherwise they can live in the streets and eat dog food. I don't see why I have to pay taxes to support such people.

Did you forget that working people pay into Social Security and Medicare their entire working lives? Social Security and Medicare are all many of them end up with.

The first people to receive it didn't...hence the ponzi scheme label for it.

[NoMoreLunacy]

Jun 9, 2011 8:13:17 GMT -5 ChiTownVenture said:

Jun 9, 2011 0:02:56 GMT -5 NoMoreLunacy said:

Even if people need Social Security I don't see why I should support them. Live in the streets. Eat at soup kitchens. Work longer. Whatever.

Just as you posed other options you have the same options. You don't have to support them, don't pay into the system, make sure to shelter your money from taxes, make less so you don't pay taxes, move to a country that doesn't support the poor.

I think it's funny to see the two extremes argue when in all honesty I think most people want something in between.

I am not moving anywhere. On principle I would give money to politicians who will work to cut my taxes and cut spending even more than give the same amount of money to the poor. Purely on principle.

[NoMoreLunacy]

Jun 9, 2011 8:22:31 GMT -5 AgeOfEnlightenmentSCP said:

Jun 8, 2011 19:25:01 GMT -5 @lakhota said:

The rich Wall Street robber barons know all about getting something for nothing. They do it 24/7.

Crony capitalism is the result of big government, not free markets. When the government can, through a series of threats, intimidations, and cash bribes using other people's money, effectively "buy" a business, or at least control it-- the capitalists tend to do what's in their best interest and go along to get along.

I'm certain you're aware that many banks were FORCED to take TARP money. This was so the government could hide from the public information about which banks were in trouble-- if they ALL took TARP money, they could shield the troubled banks from transparency. The way they used force was simple: they told the small banks, "We know you don't need TARP money now but you'd better take it because we're going to change the capitalization rules and if you don't meet them federal regulators will shut you down". That's not free market capitalism, friend.

I fully agree. Bush and Paulson should have let the big banks fail instead of bailing them out with MY tax dollars.

[Politically_Incorrect12]

Jun 9, 2011 0:02:56 GMT -5 NoMoreLunacy said:

Jun 9, 2011 0:00:42 GMT -5 @oldtex said:

Did you forget that working people pay into Social Security and Medicare their entire working lives? Social Security and Medicare are all many of them end up with.

Again, SS was never meant to be "all many of them end up with" but was to be in addition to what they saved. The people that "need" social security didn't do their part.

Even if people need Social Security I don't see why I should support them. Live in the streets. Eat at soup kitchens. Work longer. Whatever.

Anybody else think we have another poster just looking for a reaction....but the name probably gives it away.

[jkapp]

Jun 9, 2011 15:13:48 GMT -5 Politically_Incorrect12 said:

Jun 9, 2011 0:02:56 GMT -5 NoMoreLunacy said:

Even if people need Social Security I don't see why I should support them. Live in the streets. Eat at soup kitchens. Work longer. Whatever.

Anybody else think we have another poster just looking for a reaction....but the name probably gives it away.

Typical far-left loony ploy though... Of course I think it shows just how warped their minds are that they probably think this is what conservatives believe. Just because their far-left political ideology drives them to madness doesn't mean that's what happens to everyone else though ;D

[NoMoreLunacy]

Jun 10, 2011 0:22:30 GMT -5 @patstab said:

Wonder if you will mind caring for all your elderly relatives as they won't be able to care for themselves. That's ok, I'm sure you will, oh and pay for their meds, their healthcare and furnish nursing home care in your home when they need it. You will have put all the nursing homes and all care out of business if they do not get healthcare or SS.

There will be nursing homes for the rich. Don't worry about me. And yes, I can pay for my elderly relatives, but I have none. I can pay for myself and my family. I can pay even more if I get some tax cuts.

[AgeOfEnlightenmentSCP]

Jun 10, 2011 0:26:02 GMT -5 NoMoreLunacy said:

Jun 10, 2011 0:22:30 GMT -5 @patstab said:

Wonder if you will mind caring for all your elderly relatives as they won't be able to care for themselves. That's ok, I'm sure you will, oh and pay for their meds, their healthcare and furnish nursing home care in your home when they need it. You will have put all the nursing homes and all care out of business if they do not get healthcare or SS.

There will be nursing homes for the rich. Don't worry about me. And yes, I can pay for my elderly relatives, but I have none. I can pay for myself and my family. I can pay even more if I get some tax cuts.

Those that know me dating back to YM circa 2002 know darn well that I have been building wealth specifically with the collapse of the social welfare system in mind. I have been warning against the "I'm comfortable, I have everything I need" mindset since that time. I have been saying that you need to build wealth in order to prepare for a time when you MUST be self sufficient or you will die- or at the very least be very uncomfortable.