Category: social security

The Magical Beast

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February 23, 2025

by Stephen Stofka

This is second in a series on centralized power. I decided to use a more conventional narrative rather than the debate format of previous posts. Research on this topic upset my “apple cart” of preconceptions regarding spending, taxes, and Republican support for some social programs. I survived.

Proponents of smaller government aim to restrain the growth of government spending by reducing tax revenue. In a 1981 Address to the Nation shortly after taking office, President Ronald Reagan first proposed the idea. If Congress would not cut back spending, then reducing tax revenues would force them to cut spending. As many political leaders did, Reagan assumed that the public would not tolerate the nation running large fiscal deficits. For most of the eight years he was in office, government spending stayed fairly constant at about 22% of GDP and the federal deficit remained at the same percent of GDP as during Jimmy Carter’s term. After 9-11, the public’s tolerance for deficits grew. The feckless Bush administration promised that Iraqi oil production would pay for the costs of invading the country. In 2003, the Republican Congress passed tax cuts and Bush won reelection despite the many failures of the Iraqi invasion. This time, he did so without the help of the conservative justices on the Supreme Court. It was the last time a Republican would win the popular vote until the election of Donald Trump in 2024.

A 2006 analysis by Christina and David Romer found little support for the Starve the Beast hypothesis and suggested that lowering taxes may, in fact, increase spending. In a 2006 paper, William Niskanen, former head of the Cato Institute, found that spending and tax revenues moved in opposite directions. One of the pathways for this phenomenon may be that taxpayers come to disconnect the two forces, taxes and spending, and don’t hold politicians responsible. For a politician, cutting taxes is a popular brand but they keep their seats by “bringing home the bacon” for their constituents. A farming community does not want to see decreases in crop subsidies or favorable tax breaks. Voters magnify the burden of spending cuts, feeling as though they are shouldering more of the burden than other voter groups.

In his second term, Donald Trump has adopted a different approach – kill the beast. Readers of William Golding’s Lord of the Flies will remember the scene where a mob mentality overtakes a group of shipwrecked boys and they start a feverish chant after a hunt, “Kill the pig, spill its blood.” The cuts that Musk and his DOGE team are making on the federal work force resemble less the precision of a surgeon and more the frantic swinging of a knife in the dark. They have targeted recent hires with few job protections and paid little attention to what those workers do. In their zeal to kill or wound the bloated government – the beast – they have laid off nuclear safety and food safety workers,  infectious disease specialists and IRS workers near the height of tax filing season. Both Musk and Trump are among the wealthy elite. Neither is dependent on a tax refund.

In his recently published book Why Nothing Works: Who Killed Progress—and How to Bring It Back, Marc J. Dunkelman recounts the expansion of the federal government, starting with the Progressive movement that began under Theodore Roosevelt’s administration over a hundred years ago. The movement embodies two instincts that are in constant tension, a “progressive schism” whose roots began when the nation was founded (pg. 22). Alexander Hamilton favored a strong central government whose institutions could facilitate the commerce and defense of the new American republic. Thomas Jefferson believed that the integrity and character of the new nation depended on the yeoman farmer, who must be protected from the power of government. Jefferson was horrified by the abuses of a strong British government headed by a monarch.

Progressives want to expand the reach of government – the Hamiltonian instinct – but are fearful of the power of government – the Jeffersonian instinct. The struggle between these two sentiments frustrates the aims of the Progressive movement. Progressives’ “cultural aversion to power renders government incompetent, and incompetent government undermines progressivism’s political appeal” (pg. 15).

For more than a century conservatives in both political parties have tried to check the ambitions of the progressives and the expansion of the federal government. For almost a century following the civil war, southern Democrats fought to preserve their political dominance and cultural institutions from the imposition of reformist norms by “northern elites.” There is still a strong antipathy to federal power but most of us have adapted to and enjoy federal institutions created by progressive legislation. Millions of Americans enjoy our national parks and monuments but over a century ago, local groups protested federal interference in the management of lands within state boundaries like Yellowstone Park, Glacier National Park and Grand Canyon National Park.

We no longer argue over child labor laws introduced by progressives in the early 20th century. Though popular today, conservative groups fought against the Social Security program when it was first introduced in the 1930s. Congressional Republicans, however, were largely unopposed, according to this 1966 interview with George Bigge. Opposition to “socialized medicine” stymied proponents of a Medicare type system first proposed in 1942. In the 1950s, President Eisenhower initially supported a health plan financed through the Social Security system but dropped his endorsement over objections that the program was a slippery slope to socialized medicine (Source). Wilbur Mills, the powerful Chairman of the House Ways and Means Committee, overcame Republican opposition to the Medicare program by introducing a Part B system for physician payments that would be voluntary. Many of us make an uneasy truce with federal power when those policies produce a net gain for our well-being, or there are limits to federal mandates.

This week, Donald Trump completed the first month of his second presidential term with a whirlwind of federal job cuts and controversial remarks. The first ninety days of a presidential term are said to be the honeymoon period when public opinion is still forming but recent polls by Quinnipiac University and CNN indicate that initial favorable sentiment has soured. More respondents disapprove of Trump’s policies than approve. Trump has promised to downsize both spending and taxes but preserve the Social Security and Medicare programs. Both programs are popular, as many voters feel that people have earned the benefits after a lifetime of paying taxes. The taxes, or dues, come first; the benefits come later.

There are no dues for the Medicaid program which provides health care insurance for low-income households. The federal government and states share the costs of this program in varying degrees, with the federal government picking up the majority of the costs. The Republican majority in the House has proposed $880 billion in cuts to the Medicaid program and Trump has expressed support for the cuts, surprising some Republican lawmakers and Trump’s own staff.

Trump acts with the impulsiveness of a 14-year-old boy. In an earlier age, the public wanted a stable hand in control of a vast nuclear arsenal. Thirty years after the end of the Cold War, voters seemed less concerned with Trump’s erratic behavior. Some excuse it as a negotiating ploy; others see it as a tactical maneuver. In Washington, where everyone has a “loaded weapon,” so to speak, Trump presents a moving target. Others see the policy moves as sheer incompetence. Over a thousand employees at the National Park Service were laid off and seasonal hiring was frozen (Source). Oops. Seasonal employees fight forest fires and clean bathrooms at National Parks. The Trump administration did an about face and promised to hire even more seasonal employees than the Biden administration did (Source). The daily two-step is a boon for news organizations and pundits. Lots of copy. Not a dull moment in the 24-hour news cycle.

Advocates may clamor for the death of the beast – the government – but many of the functions that the beast provides are popular. In 1963, the folk group Peter, Paul and Mary released the song Puff, the Magic Dragon. Although Puff was an eternal creature, his friend Jackie Paper eventually lost interest in Puff as he grew up. After his friend abandoned him, Puff lost all his vigor and retreated into his cave by the sea. Some wish that the federal government would do the same. Lobbyist Grover Norquist wished that government would become so small that “we can drown it in a bathtub” (Source). Unlike Jackie Paper, the majority of the public has not outgrown its affection for government programs or its belief in the magic of government power.

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Image by ChatGPT at the suggestion “draw a picture of a multi-colored dragon on the shore of the ocean with a cliff behind him.”

The Role of Government

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March 3, 2024

by Stephen Stofka

This week’s letter is about the federal government, its expenses and the role it plays in our lives. As originally designed in 1787, the federal government was to act as an arbiter between the states and provide for the common defense against both Indians and the colonial powers of England, France and Spain. James Madison and others considered a Bill of Rights unnecessary since the powers of Congress were clearly set forth in Article 1, Section 8 of the Constitution. However, they agreed to attach those first ten amendments to the ratification of the Constitution to soften objections to a more powerful central government (Klarman, 2016, p. 594). After the Civil War, the federal government was given a more expanded role to protect citizens from the authoritarianism of the states. The authority to do so came from the amendments, particularly the recently ratified 13th, 14th and 15th additions to the Constitution (Epstein, 2014, p. 15).

After the Civil War, the Congress awarded pensions to Union soldiers, their widows, children and dependent parents. In 2008, there were still three Civil War dependents receiving pensions! (link below). This program indebted future generations for the sacrifices of a past generation. Aging soldiers sometimes married young women who would help take care of them in return for a lifetime pension until they remarried. The provision of revenues for these pensions provoked debate in Congress. In the decades after the Civil War, the federal government’s primary source of revenue was customs duties on manufactured goods and excise taxes on products like whiskey. Farmers and advocates for working families complained that this tax burden fell heaviest on them, according to an account at the National Archives. There were several attempts to enact an income tax, but these efforts ran afoul of the taxing provision in the Constitution and courts ruled them invalid. Fed up with progressive efforts to attach an income tax to legislation, conservatives in Congress proposed a 16th amendment to the Constitution, betting that the amendment would not win ratification by three-quarters of the states. Surprisingly, the amendment passed the ratification hurdle in 1913. In its initial implementation, the burden of the tax fell to the top 1% so many disregarded the danger of extending federal power. Filling out our income tax forms is a reminder that our daily lives are impacted by events 150 years in the past.

In the decade after the stock market crash of 1929, the government extended its reach across the generations. Under the Franklin D. Roosevelt (FDR) administration, the newly enacted Social Security program bound successive generations into a “pay-go” compact where those of working age paid taxes to support the pensions of older Americans. The government assumed a larger role in the economy to correct the imbalance of a free-market system which could not find a satisfying equilibrium. This expanded role of government and the writing of John Maynard Keynes (1936) helped spawn a new branch of economics called macroeconomics. This new discipline studied the economy as a whole and a new bureaucracy was born to measure national output and income.

Students in macroeconomics learn that the four components of output, or GDP, are Consumption, Investment, Government Spending and Net Exports. In its simplest definitional form, GDP = C+I+G+NX. In the American economy each of these four components has a fixed portion of output. Net exports (FRED Series NETEXP) are a small share of the economy and are negative, meaning that America imports more goods and services than it exports. The largest share is consumption (PCE), averaging 67% over the past thirty years. Government spending and investment (GCE) and private investment (GPDI) have averaged an 18% share during that time. Because these two components have an equal share of the economy, more government spending and taxes will come at the expense of private investment. This helps explain the intense debates in Congress over federal spending and taxes. Federal investment includes the building of government facilities, military hardware, and scientific R&D. I have included a link to these series in the notes.

The Social Security program is as controversial as the pensions to Civil War veterans and their survivors. The long-term obligations of the Social Security program are underfunded so that the program cannot fully meet the promises made to future generations of seniors. The payments under this program are not counted as government spending because they are counted elsewhere, either in Consumption or Investment. They are treated as transfers because the federal government takes taxes from one taxpayer and gives them to another taxpayer. The taxpayer who pays the tax has less to spend on consumption or saving and the person who receives the tax has more to spend on consumption or saving. However, those transfer payments represent already committed tax revenues.

The chart below shows total transfer payments as a percent of GDP. Even though they are not counted in GDP, it gives a common divisor to measure the impact of those payments. The first boomers born in 1946 were entitled to full retirement benefits in 2012 at age 66. In the graph below those extra payments have raised the total amount of transfers to a new level. After the pandemic related relief transfers, total transfers are returning to this higher level of about 15% of GDP. I have again included government spending and investment on the chart to illustrate the impact that the federal government alone has on our daily lives. In one form or another, government policy at the federal level steers one-third of the money flows into the economy.

For decades, the large Boomer generation contributed more Social Security taxes than were paid out and the excess was put in a trust fund, allowing Congress to borrow from the fund and minimize the bond market distortions of government deficits. Outgoing payments first exceeded incoming taxes in 2021 and Congress has had to “pay back” the money it has borrowed these many years. To some it seems like a silly accounting exercise of the right pants pocket borrowing from the left pocket, but the accounting is true to the spirit of the Social Security program as an insurance program. Paul Fisher, undersecretary of the Treasury, quipped in 2002 that the US government had become “an insurance company with an army” but the quip underscores public expectations. Workers who have been paying Social Security taxes their entire working life expect the government to make good on its promises.

We are mortal beings who create long-lived governments that act as a compact between generations. We argue the terms and scope of that compact. What is the role of government? The founding generation debated the words to include in the Constitution and even after the words were on the page, they could not agree on what those words meant. The current generations are partners in that compact, still debating the meaning of the text of our laws and the role of government in our lives.

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Photo by Samuel Schroth on Unsplash

Civil War pensions – a National Archives six page PDF https://www.archives.gov/files/calendar/genealogy-fair/2010/handouts/anatomy-pension-file.pdf

Data: a link to the four data series at FRED https://fred.stlouisfed.org/graph/?g=1hxIK. There is a small statistical discrepancy, and that series is SB0000081Q027SBEA.

Social Security: Notes on the adoption of a 75-year actuarial window used by the trustees of the Social Security funds to assess the ability of the program to meet its obligations. https://www.ssa.gov/history/reports/65council/65report.html. In 2021, the Congressional Research Service published a three-page PDF explainer for the choice of a 75-year term.

Epstein, Richard Allen. (2014). The classical liberal constitution: The uncertain quest for limited government. Harvard University Press.

Keynes, J. M. (1936). The general theory of employment interest and money. Harcourt, Brace & World.

Klarman, M. J. (2016). The Framers’ Coup: The Making of the United States Constitution. Oxford University Press.

The Interest Payment Load

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November 26, 2023

by Stephen Stofka

This week’s letter is about the federal interest paid on the country’s debt. Why does the U.S. pay more on its debt than other advanced economies? In the second quarter of this year, federal government paid 20% of its revenue in interest, almost three times the average 7.34% percentage of similar countries. High interest payments crowd out spending in other areas. They spark even more debates about the debt itself which is now 120% of GDP. This added interest expense exacerbates animosities in a country that is already fractured by divided perspectives and priorities.

In the second quarter of 2022, before the Fed began to raise rates, the federal government paid 13.6% of its revenues in interest (I/R) to service the debt. That was 6% less than the percentage in 2023 and represented $280 billion, more than twice the $128 billion spent in 2022 for the SNAP (food stamp) program. The higher interest payments, however, were about the same as the 50-year average I/R of 19% (median = 17.8%). In 2021, the 27 countries of the Euro area reported to the World Bank that they paid 3.11% of their revenues in interest (see note below).

Over the past fifty years, the federal government has collected about 20% of GDP in taxes. In the chart below, I have added both averages to the chart of federal interest payments as a percentage of revenue. The average revenue is almost identical to the median so this average is representative of a variety of economic conditions and policy responses over the long term.

As an approximation, the interest expense is 20% of revenue and revenue is 20% of GDP so interest expense has averaged 4% of GDP. However, neither the public nor policymakers are accustomed to average. For two decades, the Fed has kept interest rates low to accommodate economic recovery after the dot-com bust, 9-11, the financial crisis, the slow recovery from that crisis and the Covid-19 pandemic.

The pandemic simulated several critical conditions of a large scale war and the inflation that followed was typical of those inflationary periods following wars. I will cover that in next week’s letter. To curb an accelerating inflation, the Fed began to systematically raise rates from zero in the spring of 2022. In six months it raised rates by 2%, a rapid change that was six times faster than the period from late 2015 to early 2019 when the Fed gradually raised rates by the same 2%. By early 2023, the Fed raised rates an additional 2% within six months.

As a consequence of the higher rates, the government has paid higher interest rates on its debt. (The reasons for that are complex). We have become so accustomed to “easy money” and lower interest rates that the sudden increase in interest payments has caught the attention of both the public and policymakers. Will this further fracture political sentiment ahead of the 2024 elections?

At the beginning of this letter I mentioned divided perspectives and priorities. What are they?  Some give priority to the social programs that promote individual citizen welfare as essential to a general welfare. Their opposition may deride them as socialists but they are more properly called institutionalists because they champion a lot of control and planning by a central government to achieve that welfare. Those who oppose institutionalist policies also care about individual welfare but think that well-intentioned bureaucrats in government can cause more damage to the general welfare than they repair. These might properly be called marketists who believe that the price system distributes resources in an efficient and sustainable manner.  They respond that a centrally planned economy creates moral hazard, rewarding individual needs instead of personal hard work, planning and integrity.

Institutionalists label marketists as capitalists or plutocrats and accuse them of being mean-spirited and driven only by profit and self-interest. Vulnerable communities do not have the resources to help themselves, the institutionalists argue. Marginalized communities need to draw from a central funding pool. They must overcome decades of legal policies that disenfranchised them to benefit other groups. Marketists respond that profits reward people for taking risks. The willingness to accept risk is a key component of technological innovation that benefits all of society.

Interest payments have nudged aside defense spending to become the third largest percentage of federal receipts. The top category is health insurance like Medicare, Medicaid, CHIP and payments under the ACA which take up 30% of federal receipts (see note below). Social Security comes in second. Cuts to either of these programs have been a “hot rail” for conservative politicians. Everyone in Congress talks about cuts to defense spending but not in their district because it supports the local economy. The issue of rising interest payments and the federal debt is a safe one for politicians of both parties to run on in the upcoming election. According to Open Secrets, $14.4 billion was spent on the 2020 election, double the spending of the 2016 election. As candidates complain about excess spending, voters might consider why the major parties will spend about $100 for each of the votes in this coming election (notes below). I would call that excess spending.

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Photo by Joshua Woroniecki on Unsplash

Keywords: health care, ACA, Social Security, Medicare, defense spending, interest payments

Health Care Note: The health care programs are 24% of the federal budget including deficits, according to an analysis by the Center on Budget and Policy Priorities.

Election Spending: $14,400 million / 160 million voters ≈ $86 per voter in the 2020 election.

World Bank data: https://data.worldbank.org/indicator/GC.XPN.INTP.RV.ZS?end=2021&start=1972&view=chart. You can download an Excel file at https://api.worldbank.org/v2/en/indicator/GC.XPN.INTP.RV.ZS?downloadformat=excel to view interest payments for countries and regions dating back several decades.

Historic Employment Boom

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September 10, 2023

by Stephen Stofka

This week’s letter is about the mix of full-time and part-time workers and what it tells us about the economy. Although unemployment remains below 4%, it rose slightly, according to the most recent unemployment report. This was a good sign, however, because much of that increase was due to formerly discouraged people returning to the labor force and looking for a job. This economy is producing historic employment numbers. Let’s dig in.

I’ll be looking at ratios of workers to the working age population so I’ll discuss that briefly before heading into the data. The Bureau of Labor Statistics now defines the working age population as someone 16 years and older. According to that definition, a 90 year old person is working age. The U.S. is part of the OECD group of developed countries, which uses a more traditional definition of the working age population as 15 to 64.  I am going to use the OECD definition to make historic comparisons more accurate. Two-thirds of this working age population is employed full or part time.

The percent of working age people who are employed full time – the red line in the chart below – is about 64%, a historic high that has eclipsed the economic boom of the late 1990s.

Only 2% of working age people are working part time.

The ratio of full-time workers to part-time workers reveals the strength of the economy. When it is high, employers have the confidence to commit resources to full-time workers, including better benefit packages. Workers have more bargaining power. The chart below shows the peaks in that ratio since the 1960s. A rise in investment accompanied each period. Defense spending led the surge in the 1960s. Investment in technology was a major driver of emploment growth in the 1990s. Spending on infrastructure has been a key driver of growth since the pandemic.

In the post-pandemic recovery, employers have sharply increased wages to fill positions, as shown below by the Atlanta Fed’s wage growth tracker. The decrease in wage growth during the past year is more typical of recessions but without a recession. In the chart below, note that today’s wage growth is one percent higher than the peak during the strong labor market of the late 1990s.   

The greater the number of full-time workers, the more the federal government receives in FICA taxes, reducing the yearly deficit in the Social Security Trust Funds. Since the early 1980s, income tax rates have been indexed to inflation but social security taxes have not. Only the earnings subject to social security, the earnings cap, is indexed. According to the latest Trustees report, the drain on the trust fund last year was $22 billion, less than 1% of the $2.8 trillion fund, but a drain, nevertheless. The first of the historically large Boomer generation were eligible for retirement almost a decade ago. The last of that generation will be eligible for retirement in eight years. The era of annual surpluses in the trust funds is over. During the past decade, outlays increased at a 4.5% annual pace while tax collections increased at a 5.3% rate. This was a welcome change of pace from the previous decade 2003 through 2012 when social security tax collections grew at only 3.6% annually, while outlays grew at a 5.4% rate.

The financial crisis had a deep negative impact on the trust funds and the current estimate is that the trust funds will be depleted in 2034. After that date, retirees will not receive full benefits without some legislation to provide additional funding. In 1990, the trustees estimated a depletion date of 2043, almost nine years later than today’s estimate. These long-range forecasts necessitate many assumptions about economic growth and benefits and such forecasts cannot anticipate outlier events like the financial crisis. There is a lot of catching up to do. We need all the boom we can get.

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Photo by bruce mars on Unsplash

Keywords: social security, taxes, employment, wages

Note: In the past twenty years, the number of working Americans who are older than 65 has jumped from four million to 11 million, or 6.5% of the labor force.

Tower of Babel

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October 23, 2022

by Stephen Stofka

This week’s letter is about taxes and income. Each month, the Federal Reserve (2022) releases an estimate detailing how people spend their money and the sources of their income. I was surprised that 17% of personal income is from government transfers like Social Security and other programs. This is 2% more than the income people receive on their assets. A bit of history for context.

In the 1960s, 2/3 of income was from wages and salaries. Each decade, the wages and salaries component declined 5% until this past decade when wages and salaries were just 50 cents out of every dollar of income.

A greater portion of employee compensation shifted from discretionary income to dedicated non-taxable benefits like health care insurance and pensions. In the early 1960s employer benefits were 10% of wages and salaries. Now they are 21%. Despite the rise in the non-taxable share of compensation, workers give up more out of their paychecks to taxes.

A growing share of income goes to FICA taxes

In 1960, workers paid 6% of their paychecks to FICA taxes. The Medicare program, about 20% of our FICA taxes today, would not be enacted until 1965 when President Johnson ushered in his Great Society programs. Within five years analysts realized that lawmakers had wildly underestimated the costs of the program. By 1980, increases in Social Security and Medicare taxes increased the FICA portion to 12% of paychecks. Today, workers pay 15% of their paychecks in FICA taxes (see note).

In 1960, all other taxes were 11% of total income in 1960, had climbed to almost 13% in 1980 then to over 14% by the year 2000 and are now 15% of total income. In the past twenty years, the rich have paid a growing share of income taxes but their effective tax rate has changed little. Why? When lawmakers put a heavier burden on rich people, they lobby for legal income exclusions and Congress obliges.

Top 10% pay a growing share of income tax

In 2001, the top 1% paid 33% of income taxes. In 2019, they paid 39% (IRS, 2022). In 2001, the top 10% (the Tennies, I’ll call them) paid 64% of personal income taxes. In 2019, they paid 71%. Whether it is the super-rich or the rich, their share of income tax has grown by 6 -7%. That’s not the end of the story.

Growth in incomes of the top 10% is far higher

The Tennies have seen their share of gross income increase from 42.5% in 2001 to 47.3% in 2019, a gain of almost 5 percentage points. They have paid a rising share of the nation’s income taxes but the rise in taxes is less than the rise in personal income (BEA, 2022). In the 2001-2003 period the income tax paid by the Tennies averaged 5.6% of national personal income. In the 2017-2019 period, that tax share was 6.3%, a difference of just .7%. It is a cheap price to pay for a 5% gain in the nation’s total income.

Effective Tax Rate of the top 10% is steady despite rise in Income

In the 2001-3 period the Tennies averaged an effective tax rate of 13.5%. In the 2017-19 period, that effective rate had declined to 13.2% despite a 2% rise in the top marginal tax rate from 35% in 2001 to 37% in 2019. Raising the marginal tax rate on the highest income brackets has little net effect yet it was a campaign issue for Mr. Biden and many Democrats. Political scientists call it position-taking.

The party of no taxes produces higher deficits

Despite their rhetoric about reducing the deficit, Republicans have adopted a no new taxes on anyone pledge that ensures the deficit will get worse. True to form, the budget deficit has grown more under Republican administrations over the past four decades. The party also has a record of slower economic growth but that is mostly due to the two terms of the George Bush administration. Mr. Bush’s failures caused many Republicans to abandon more mainstream Republican values and adopt a mean spirited attitude of radical defiance exemplified by the Tea Party and the Republican Study Committee.

Action requires Compromise

The “Just Say No” Republican factions permit little compromise so the party cannot get significant legislation passed. In the first year of Mr. Trump’s Presidency, Republicans held all three legislative bodies but were stymied by their internal squabbles. In November of 2017, they hastily assembled the corporate tax reform package, TCJA, to show their constituents that they were capable of legislating and to give Mr. Trump some accomplishment that he could tweet  about.

A look ahead

If Republicans take control of the House after the upcoming elections, we can expect more of the same dysfunction under Speaker Kevin McCarthy. Libertarians in the Republican Party want a limited role for the federal government as specified in Article 1, Section 8 of the Constitution. They have little tolerance for national abortion laws and other bullying social legislation that Republicans have promised. The uncompromising factions within the Republican Party ensure that the party cannot govern. They are like drivers in a car with a manual transmission who don’t know how to clutch and shift. Democratic lawmakers, on the other hand, drive down the road, focused on staying perfectly centered between the white lane markers of equality and equity. The rich benefit when party leaders cannot assemble a cohesive coalition of interest groups and voters. The economic interests of the top 10% are protected when voters remain fragmented. Party elites and partisan interest groups speak in languages that are understandable only to a narrow constituency. By promoting dissension, social media has helped create a Tower of Babel.

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Photo by Osman Rana on Unsplash

BEA: U.S. Bureau of Economic Analysis, Personal Income [PI], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/PI, October 19, 2022.

Federal Reserve. (2022). Personal income and its disposition. FRED. Retrieved October 19, 2022, from https://fred.stlouisfed.org/release/tables?rid=54&eid=155443&od=#. The FICA tax percentage includes the employer and employee portion of the tax. The employee effectively bears the burden of the entire tax.

IRS. (2022). SOI tax stats – individual income tax rates and tax shares. Internal Revenue Service. Retrieved October 19, 2022, from https://www.irs.gov/statistics/soi-tax-stats-individual-income-tax-rates-and-tax-shares#Early%20Release. Table 4.2, Selected Descending Cumulative Percentiles of Returns Based on Income Size Using the Definition of AGI for Each Year.

A Global Wave

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October 16, 2022

by Stephen Stofka

On Thursday, September’s CPI came out, showing an annual price increase of 8.2%. A quarter of that increase was housing costs – rent and owner equivalent rent. Price increases have decelerated this quarter. Remember that inflation is the change in prices. Acceleration (+) or deceleration (-) is the change of that change. Inflation is like the speed in a car. Acceleration is the change in speed. The graph below shows the acceleration for the past five years.

Notice the regular up and down in small increments before the pandemic. When we drive down the highway without cruise control, we experience the same minor variations in speed. After the pandemic, price acceleration became more erratic. Why?

Usually, we do not synchronize our spending and saving. During the pandemic in 2020, we began to coordinate our buying habits. The first round of stimulus checks went out in April 2020, shortly after the economy was locked down. We bought workout equipment, computers and peripherals, appliances for the home. The second round of stimulus went out in December 2020 and January 2021. President Biden was sworn into office in January 2021 and immediately began discussions of a third stimulus payment, part of the American Rescue Plan.

Critics say the third stimulus payment was too much, that it was the impetus to the recent inflationary surge. That is an ex-post or hindsight criticism. On December 18, 2020, Moderna was granted emergency approval by the FDA (2020) for its MRNA vaccine, a relatively new vaccine manufacturing technology. The Pfizer vaccine was the first to get such approval but its vaccine required a temperature of -94F. Moderna’s vaccine required a temperature of only -4F, about the same level as the freezer temperature in a home refrigerator. The vaccine was deemed safe but the drug makers did not know how long the vaccines would last. Secondly, they needed a booster shot as well. Moderna promised 100 million doses by March of 2021. What if the vaccines lasted only a few months and development of a better formulation was delayed another year? The third stimulus would have been entirely appropriate. Policymakers must make ex-ante decisions – before all the evidence is known or evaluated.

In 2021, some economists predicted higher inflation in 2022. They turned out to be right. Ten years ago, those same economists predicted higher inflation after the 2009 ARRA stimulus. They were wrong. Economists, like traders, are right sometimes and wrong sometimes. Like traders, the winning prediction rate is closer to 50-50 or pure chance. Others are likening this to the inflation of the 1970s. However, there is a big difference. In the 1970s, price acceleration kept rising like a car which is speeding up. Currently it is falling, like a car slowing down. Here’s a look price acceleration in the 1970s.

As I mentioned last week the Social Security Administration announces the yearly COLA for Social Security recipients after the September CPI figure is reported. The 2023 COLA adjustment will be 8.7%, adding $146 to the average $1673 monthly payment for retirees. As I discussed last week, worker’s wages have not kept up with inflation. They are more on a fixed income than retirees at this point.

The inflation is global – a first in economic history. Global market research company Ipsos (2022) survey people in 29 countries. Inflation has become the top concern for 40% of respondents. Here’s the chart I downloaded from their page. Look at the surge in inflation as a concern over the past year. Unemployment and Covid-19 were the top concerns in 2020. Stimulus assistance and monetary policy in the Eurozone countries helped relieve job concerns. Covid-19 became less worrying as more people got vaccinated and hospital admissions decreased. After Russia’s invasion of Ukraine, rising oil prices lifted inflation worries in many countries.

As the world becomes more integrated financially and economically, will we reach a self-destructive resonance? Our economic systems could become less stable as they synchronize. I hope not.

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Photo by Providence Doucet on Unsplash

FDA. (2020, December 18). FDA takes additional action in fight against COVID-19 by issuing emergency use authorization for second COVID-19 vaccine. U.S. Food and Drug Administration. Retrieved October 15, 2022, from https://www.fda.gov/news-events/press-announcements/fda-takes-additional-action-fight-against-covid-19-issuing-emergency-use-authorization-second-covid

Ipsos. (2022, September 22). What worries the world – September 2022 . Ipsos. Retrieved October 14, 2022, from https://www.ipsos.com/en-uk/what-worries-world-september-2022

The Old, Young and Middle

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October 9, 2022

by Stephen Stofka

This week I’ll compare inflation-adjusted or real spending on Social Security and K-12 education with wage growth. I was surprised to learn that the number of people in both programs are the same. I’ll begin with Friday’s employment report because the market’s reaction to it indicates the erratic – but rational – thinking that higher inflation can trigger. Job gains of 263,000 were in line with expectations, but the unemployment rate went down by .1% because people stopped looking for jobs. Three years ago a .1% move would be discarded as a survey error. The unemployment rate is derived from a survey of households, not businesses, and often exaggerates any move up or down. In today’s volatile market, traders are skittish, employing algorithms that don’t care about the extent of a move, only whether it is up or down. Short term options trading leverages both money and time and they are now almost half of the options market. A minus sign might trigger a sell, a plus sign a buy. The number after that plus or minus is less important. A trader might have taken a position forecasting a slight uptick in the unemployment rate. No increase or a decrease = sell and minimize losses. This is reactive trading, not economic evaluation.

This week’s ADP report of private job gains showed a decline of 7,000. Averaged together job gains were only 116,000 in September and has shown a distinct downward response to the Fed’s raising of interest rates. The historical average of the two surveys has been the more accurate after revisions. More disappointing for workers is that wage growth has been more than 3% below the inflation rate.

While workers’ wages are not keeping up with inflation, social security recipients will likely get a COLA (cost-of-living-adjustment) raise of about 8.6% this year. By law, the COLA calculation compares this year’s average third quarter CPI to last year’s third quarter average. September’s CPI report will be released Thursday, October 13th, finalizing this year’s 3rd quarter and the final adjustment percentage. It will be the largest increase since 1981’s adjustment of 11.3%, according to the Social Security Administration (2022).

An eternal theme in the Republican platform is the privatization of Social Security before it goes broke. A few weeks before the election, some Republicans will undoubtedly use the COLA adjustment to call for Social Security privatization. They will claim that higher payments will inevitably lead to the insolvency of the fund. Retirees will get partial payments or no payments.

Former House Speaker and Republican Vice-Presidential candidate, Paul Ryan once asked Alan Greenspan, then Chairman of the Fed and a fellow conservative, a leading question meant to demonstrate the insolvency of Social Security. Wouldn’t personal retirement accounts (privatized Social Security accounts) make the retirement system more financially secure? In his dry tone, Greenspan answered that “there is nothing to prevent the Federal Government from creating as much money as it wants and paying it to somebody” (C-Span, 2005). Ryan, a champion of privatization, was disappointed in the answer.

Why then do we have the trust funds? The Social Security system is “Pay-Go.” The taxes of current workers pay for the benefits to retired workers. When the program was created almost 90 years ago, President Roosevelt (FDR) thought that Republicans – and some conservative southern Democrats – would be more hesitant to cancel the program if funds were – on paper at least – dedicated to the program and called “insurance.” Republicans challenged the program up to the Supreme Court on the basis that the Federal government had no Constitutional right to force people to pay into a retirement program. The Court ruled that, even if the program was called “insurance,” it was a tax and the government had the right to tax incomes. Read the 16th Amendment. The unfairness in the system was that the first generation of recipients paid little into the system for the benefits they received when they retired. Today, the average retiree receives $1673 a month, or $20K per year (SSA, 2022). Let’s compare that to spending on K-12 education.

The U.S. has about the same number of K-12 students as it does retirees who are collecting Social Security – a bit more than 50 million. Social Security is a federal program. K-12 education is funded at the state and local level with only 8% federal funding. The federal government has deep pockets. State and local governments have shallow pockets with many demands from their constituents. In 2019, federal, state and local governments spent $765B, or $15,120 per pupil in 2019 (Hanson, 2022). That’s 75% of what we spend on retirees. Have we shifted too many resources to seniors from children?

Retirees have paid Social Security taxes for their entire working lives and feel that those funds have been set aside for them. The federal government doesn’t have to provide goods and services to retirees. Even the task of computing and remitting Social Security taxes is done by businesses – by law and for free. The accounting is a business expense. State and local governments must provide real resources. These include schools and facilities, teachers and lunches, school nurses and security guards.

Education competes with other essential services. The 2008 financial crisis and the slow recovery “put a hurt” in most state and local budgets. Since 2008, the national average of real per pupil funding has increased only 6% (Hanson, 2022). For most of that time, inflation has been low. Imagine what a sustained period of high inflation might do. Let’s look back at the last period – the 1970s and early 1980s.

Higher inflation wakes us up. Even when inflation is low, workers are squeezed, having to support children and retirees. Inflation increases the budget squeeze so workers pay closer attention to personal budgets and public policies. In the high inflation decade of the 1970s the public discovered that income and real estate taxes were not indexed to inflation. Rising wages caused people to go into higher tax brackets even when their real wages had barely moved. Tax laws were changed in the 1980s.

Ever rising real estate taxes in California made it difficult for retired homeowners on fixed incomes to stay in their homes. A growing taxpayer revolt rose up in many states. In 1978, California voters approved Proposition 13 which limited annual increases in taxes. Real estate taxes are the largest source of funding for schools so today California spends 10% less than the national average on K-12 students. Will today’s higher inflation provoke some sweeping policy changes?

Knowing past history, the Fed can’t let high inflation get entrenched in the economy for long. People will demand policy and institutional changes. Next week I’ll look at consumer psychology during high inflation periods.

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Photo by CDC on Unsplash

C-Span. (2005, March 3). User Clip: Alan Greenspan answers Paul Ryan. C-Span. Retrieved October 7, 2022, from https://www.c-span.org/video/?c4923562%2Fuser-clip-alan-greenspan-answers-paul-ryan

Hanson, Melanie. “U.S. Public Education Spending Statistics” EducationData.org, June 15, 2022, https://educationdata.org/public-education-spending-statistics

Social Security Administration. (2022). Cost of Living Adjustments. Cost-Of-Living Adjustments. Retrieved October 7, 2022, from https://www.ssa.gov/oact/cola/colaseries.html

SSA: Social Security Administration. (2022, August). Monthly Statistical Snapshot, August 2022. Research, Statistics & Policy Analysis. Retrieved October 7, 2022, from https://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/

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A Generation’s Legacy

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October 24, 2021

By Steve Stofka

There are two types of federal benefit programs: those that require “dues” to qualify for benefits and those that are means-tested. Social Security is an example of the first type. With some exceptions recipients must contribute to the program to qualify for benefits. Supplemental Security Income (SSI) and the SNAP food program are examples of the latter. A person’s circumstances, not their contributions, determine their qualification for benefits. Because people think of Social Security as an insurance program, not a government charity, it is the “third rail” of politics. Voters feel that they have paid into the system and deserve their promised benefits. The Boomer generation points to the $2.9 trillion in the Social Security Trust Fund as evidence they have indeed paid into the system. Talk of cutting benefits can earn a politician the boot. The question is: have workers paid in enough?

Our choices today are constrained by the priorities and choices of past generations. The Social Security program was created in 1935 to relieve seniors burdened with crushing poverty. The failure of thousands of banks prior to that time had wiped out the lifetime savings of many workers. With a commanding majority in the House and Senate, Democrats responded to the plight of many seniors. Those first generations received far more in benefits than they paid in contributions and created what is called a “legacy debt.”

In 1965 the program was expanded and in 1975 benefits were indexed to inflation. By that time, the sum of contributions exceeded benefits paid so that the trust fund had a reserve of 56% of benefits expected to be paid that year. By 1983, the reserve stood at only 18% of that year’s anticipated benefits. High inflation during the 1970s and some miscalculations in computing inflation adjustments to beneficiaries had depleted reserves. At that time, the Boomer generation ranged in age from 20 to 37, about the same as the Millennial generation today. By 2008, the first of the Boomer generation would be eligible for benefits. A commission recommended accelerating tax increases to build up the trust fund in anticipation of this demographic bulge. When the great financial crisis hit in 2008, the trust funds had 358% in reserves. It should have been much more.

Economists and politicians have remarked on the slow wage growth of the past decades. The cause of that slow growth is a matter of political perspective, but one thing is certain. Labor productivity has slowed as well and there is no consensus on the cause of that. In the chart below, I’ve smoothed out some data from the Bureau of Labor Statistics on Labor Productivity to show the long term trends. I set the 70-year average of 2.2% annual growth at zero to show the periods of below average productivity. The chart shows the two decades of below average growth from 1975 to 1995.

Labor Productivity – 70 year average of 2.2% annual growth set to zero

In a 2001 paper William Nordhaus (2001, 2), a researcher at the National Bureau of Economic Research (NBER) noted “after growing rapidly for a quarter century, productivity came to a virtual halt in the early 1970s.” Nordhaus attributed the growth of the late 1990s to the “new economy,” the communications technology and software development at the dawn of the internet. The productivity surge lasted about a decade, succumbing to the drag of low productivity in the service sector in general.

Because many service jobs have low productivity growth, America has given up the robust growth of the modern industrial age in the post-WW2 period. Low wage growth means less taxes to fund benefits and political tension. Since 2010, Social Security has been tapping the trust funds to pay benefits as the Boomers retire. By 2034, the trust funds will be depleted and the trustees estimate that each year’s taxes will be enough to pay about ¾ of promised benefits unless taxes are raised or general taxes are used to pay benefits. As much as workers have paid in SS taxes, it wasn’t enough. The Social Security trustees estimate that an additional 2.83% in taxes would cure the problem for another 75 years but politicians don’t have the courage to push taxes higher.

The program was created during the depths of the Depression. The generation that enjoyed SS benefits far above their contributions has passed on, leaving their legacy debt with us. They believed that the future would be like the past, that strong productivity and wage growth could pay inflation adjusted benefits for 15-20 years of retirement. Across a divided country and a divided Congress, we must put down the word weapons and ask ourselves “What are we going to do?”

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Photo by Markus Spiske on Unsplash

Nordhaus, W. D. (2001, January 01). Productivity growth and the New Economy. Retrieved October 24, 2021, from https://www.nber.org/papers/w8096

SSA. (2021). Social Security – Trust Fund Ratios. Retrieved October 24, 2021, from https://www.ssa.gov/oact/tr/2020/lr4b4.html

Bridge the Gap?

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Photo by Ragnar Vorel on Unsplash

September 6, 2020

by Steve Stofka

What issues are your priorities this election? For more than thirty years Pew Research has surveyed people about their priorities. For the first time in 2019 a majority of 765 respondents answered that there is a “great deal” of difference in where each party stands, up from 25% in 1987 (Pew Research, 2020). I’ve included the full list at the end.

In January 2019, soon after the midterm elections Pew surveyed 1500 adults (Jones, 2020). I don’t know why the abortion/free choice debate is not on the issue list since that single issue may decide some voters. I’m particularly interested in the large gaps in those priorities among those who lean Democrat or Republican. I’ll start with gaps of 25%. For instance, terrorism is a concern for 80% of Republicans but only 55% of Democrats. Other Republican priorities are Immigration, the Military and Crime.

As you can see, these are fear issues. Should a person in a town of 2000 be more concerned about terrorism than a resident of NYC? Of course not, but it is what it is. People vote out of fear and hope, but fear probably wins the wrestling match, especially among Republican voters who are not hopey, changey voters, as former VP candidate Sarah Palin noted (Gonyea, 2010).

The issue of crime illustrates the conflicting complexities of these issues. It is a 60% priority for Republicans, who are in suburban and rural areas where there is less crime, and a 40% priority for Democrats, who are in dense urban areas where there is a higher incidence of crime. Because crime is much lower than in past decades, this issue has slipped as a priority for Democrats (FBI, n.d.).  

Two of the highest Democrat priorites – Cimate Change and the Environment – have a huge gap of 50% with Republican voters. Democrat politicians have not been able to make these two fear issues personal for Republicans. If they could, they would draw more voters to their side on this issue. 25% gaps exist on issues of the Poor and Needy, Health Care, Education and Race Relations. Rural Republican voters are more likely to be poor and needy, but this is not a fear issue for them (USDA, n.d.).

What strategy would a politician or political consultant advise? Run toward the base? If so, one would emphasize these issues where there are large gaps between the two primary factions in this country. The President has largely adopted this strategy. Republican voters are more inclined to fall in line and the President is relying on this party loyalty even if they don’t like him personally.

Some issues where there is a smaller gap between factions are the economy, the budget deficit, jobs, global trade, drug addiction, transportation, Social Security and Medicare.

A politician reaching out to voters on the fence in this election would focus on these issues. Joe Biden hits the jobs theme, the budget deficit, and protecting Social Security and Medicare to appeal to voters who have had their fill of the President’s divisiveness.

In the coming two months, candidates may adjust their strategies. In the 2016 election, Hillary Clinton may not have addressed these shared concerns as well and it cost her the election.  Governing comes after winning an election. In politics, winning is packaging the concerns and identities of voters into an appealing, if not attractive, box that will get them to come out and vote.

What are your priorities this election season? Are you a multi-issue voter, a single issue voter, a party voter regardless of the issues? Here’s the Pew survey list of 18 issues: terrorism, immigration, military, crime, climate change, environment, poor and needy, race relations, health care, education, economy, Social Security, Medicare, jobs, drug addiction, transportation, global trade, and the budget deficit.

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Notes:

FBI. (n.d.). Crime rates in the United States, 2008 – 2018. Retrieved September 05, 2020, from https://crime-data-explorer.fr.cloud.gov/explorer/national/united-states/crime

Gonyea, D. (2010, February 07). ‘How’s That Hopey, Changey Stuff?’ Palin Asks. Retrieved September 05, 2020, from https://www.npr.org/templates/story/story.php?storyId=123462728

Jones, B. (2020, August 26). Republicans and Democrats have grown further apart on what the nation’s top priorities should be. Retrieved September 05, 2020, from https://www.pewresearch.org/fact-tank/2019/02/05/republicans-and-democrats-have-grown-further-apart-on-what-the-nations-top-priorities-should-be/

Pew Research Center. (2020, August 21). Public’s 2019 Priorities: Economy, Health Care, Education and Security All Near Top of List. Retrieved September 05, 2020, from https://www.pewresearch.org/politics/2019/01/24/publics-2019-priorities-economy-health-care-education-and-security-all-near-top-of-list/

U.S.D.A. (n.d.). Rural Poverty & Well-Being. Retrieved September 05, 2020, from https://www.ers.usda.gov/topics/rural-economy-population/rural-poverty-well-being/

A Tug of War

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June 7, 2020

by Steve Stofka

Is grandma your enemy? An uncomfortable thought. Different generations have different concerns. Funding a solution to one generation’s problem may take resources from other generations. Grandma wants to protect her Social Security and Medicare. Grandma votes her interests.

The introduction of Social Security eighty years ago marked an extraordinary shift in federal policy. For the first time in the history of this country the government took money from one set of people – those who were younger and working – and gave it to other people. This transfer was not a reward for military service – an old soldier pension – but a reward for getting old.  

During the Great Depression thousands of banks failed and millions of people lost their savings. That crisis called for a solution. Instead of addressing the problem, FDR and a super-majority of congressional Democrats created a permanent program that transferred money from people raising families to retired people. No military or community service required. The combined tax contribution to fund the program was 2%. It is now more than six times that.

In 1965, Democrats again enjoyed a super-majority in Congress and a Democratic President. Never waste a super-majority. There are no checks and balances. They passed the Medicare program, funded by a tax on working families who were ineligible for benefits under the program. In every election, old people vote to keep their benefits, and are the largest demographic of voters (Census Bureau, 2019). 

Younger voters change addresses more often. In dense urban areas with multiple voting districts, they are more likely to have out of date voter registration. Voters in rural districts remain in the same voting district when they move a few miles. Rural voters are predominantly older, white and conservative. In the first half of the 20th Century, rural populations migrated from the farm to the city. Rural voters controlled political power in many states because one rural vote counted far more than one urban vote. In two decisions in the 1960s, the Supreme Court interpreted the Constitution to mean one person, one vote (Mosvick, 2020).

As the children of farmers continued to move away in the last half of the century, rural voters adopted other strategies to control electoral power. Less funding for polling places in urban areas, claims of voter fraud, lifetime restrictions against voting by convicted felons, and locating prisons in rural areas where the prisoners are included in the county’s population, but the prisoners cannot vote. Groups like Judicial Watch initiate hundreds of lawsuits in Democratic leaning counties to invalidate the registrations of many voters (Lacy, 2020).

In 1965, a year after passage of the Civil Rights Act, President Johnson hoped that the newly instituted Medicare program would help stem the defection of Southern voters from the Democratic Party. It didn’t. The Party had successfully stifled the voting power of black people in the south for a century. The 13th, 14th and 15th Amendments which gave black people voting power and citizenship status had been forced on the Southern states after their defeat in the Civil War. Feeling that President Johnson and the party had betrayed them, voters sought a champion who could protect white voting power. 

Richard Nixon became their champion by default. In the 1968 race, the Republican candidate employed a “ southern strategy” that spoke to white voters worried that the recently passed Civil Rights Act would give blacks too much electoral power. In the spring, riots and demonstrations broke out after Martin Luther King’s assassination. At the Democratic Convention that summer, bloody conflicts broke out between Chicago police and anti-Vietnam War demonstrators. Nixon promised to be a law and order President, protecting the “old order,” older Americans and the white rural domination that had been the calling card of the Democratic Party in the South. When leading Democratic candidate Robert Kennedy was assassinated that summer, the party was too disorganized to mount a challenge to Nixon. He won by a convincing margin in the electoral college, but bested Hubert Humphrey by only ½% of the popular vote (Wikipedia, 2020). 9 million voters chose Independent Party candidate George Wallace, who appealed to disaffected conservative Democratic voters in the South (PBS, n.d.).

Some of us have supremacist attitudes, some of us condemn those attitudes. Some of us feel threatened at the sight of a black man and call the police. Some of us understand Black Lives Matter; others don’t. We all understand our point of view a lot better than our neighbor’s. We all want to be believed more than believe.

We grant police the sanctioned use of force but we require temperance in their use of it. Clearly, there are many officers who do not have a tempered behavior. The lie is that it is a few bad apples. Smart phones have become common only in the past decade and there are hundreds of videos of officers acting without restraint. In another ten years, there will be thousands.

 One person, one vote. This country has been engaged in a tug of war since its founding. Regional and generational interests pitted against each other. Rural against urban. Businesses vs workers. City governments vs. workers. States vs. citizens. Decide which end of the rope you are on and pull. Grandma grabs the rope. In every election, a lot of money and effort is spent to prevent people from voting. If you don’t vote you are doing those on the other end of the rope a favor and they thank you.

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Notes:

Photo by Arnaud Jaegers on Unsplash

Census Bureau. (2019, July 16). Behind the 2018 U.S. Midterm Election Turnout. Retrieved from https://www.census.gov/library/stories/2019/04/behind-2018-united-states-midterm-election-turnout.html

Lacy, A. (2020, May 28). Right-Wing Groups Aims to Purge 800,000 Voters in Pennsylvania. Retrieved from https://theintercept.com/2020/05/28/pennsylvania-voter-rolls-purge-judicial-watch/

Mosvick, N. (2020, March 26). On this day, Supreme Court reviews redistricting. Retrieved from https://constitutioncenter.org/interactive-constitution/blog/on-this-day-supreme-court-reviews-redistricting.  Also, see Stahl, 2015.

PBS. (n.d.). Thematic Window: The Election of 1968. Retrieved from https://www.pbs.org/johngardner/chapters/5a.html

 Stahl, J. (2015, December 7). Baker v. Carr: The Supreme Court gets involved in redistricting. Retrieved from https://constitutioncenter.org/blog/baker-v-carr-the-supreme-court-gets-involved-in-redistricting

Wikipedia. (2020, June 06). 1968 United States presidential election. Retrieved from https://en.wikipedia.org/wiki/1968_United_States_presidential_election