Political Violence Is Rare, But Charlie Kirk's Murder Marks a Chilling Turning Point for Freedom of Speech

In light of last week's events, it looks like we might have the 21st-century equivalent of the "shot heard 'round the world." While giving a public debate at Utah Valley University, conservative political activist and author Charlie Kirk was shot and murdered as part of his American Comeback Tour. The impact of Kirk's assassination cannot be overstated. 

Kirk was a defining voice for the modern-day conservative movement. As a co-founder of the organization Turning Point, Kirk helped mobilize a generation of young right-wing activists on college campuses, institutions that are known to notoriously lean far to the Left. Kirk was also known for touring college campuses. His open debate forum and confrontational Q&A sessions often sparked national debates. He was a key figure in the culture battles over freedom of speech and ideological diversity at institutions of higher learning, which are prone to Left-leaning ideological lockstep. 

As horrific as such examples of politically motivated violence as Kirk's murder is, it is a statistically rare occurrence. Using terrorism as the broadest definition of politically-motivated violence, the Cato Institute found that there have been 3,599 political motivated murders since 1975. Excluding the 83 percent of those murdered on 9/11, this brings the figure down to 620 murders. Murders committed in terrorist attacks accounted for 0.35 percent of all murders since 1975. 

Yes, politically motivated murders are statistically rare. Like with any murder, politically motivated murder is unacceptable and morally reprehensible, regardless of the political persuasion of the target. What makes politically motivated murder so socially corrosive, is in no small part, the symbolism behind his death. He was murdered while speaking publicly on campus, which is especially emblematic because a college campus was the signature venue for his activism. A question that I have is how the political Right and conservative activists will react. Will they become more cautious because they want to avoid the fate of Charlie Kirk? Will they become more emboldened, more defensive, or more radical? How will the conservative movement's overall evolve in response? Given his rare combination of oratory skills, media savvy, policy knowledge, and organizational acumen, it also begs the question of who will guide the conservative moment from here on out. 

Some accuse Charlie Kirk of spreading hate. I am not going to dissect some of his more controversial statements because it is irrelevant to the following argument. Similar to my criticism of "hate speech" in 2017, the reality is that hate speech often becomes shorthand for "speech I do not like" and also that there is no universally accepted definition of hate. What is hateful for one person could be considered a respectful disagreement for another person. Or to quote the Stoic philosopher Epictetus, "Men are not disturbed by things, but by the views they take of them." If we are to live in a free society, we cannot define hatred based on ideology or feelings because then free speech would only be for the powerful or the majority. For freedom of speech to work in a democratic society, it needs to apply to all. That includes people whose opinions I find detestable, such as pro-Palestine protestors.

To support freedom of speech means that diverging viewpoints exist within a democratic society. Allowing those viewpoints to exist and to be expressed allows for tolerance of others who think, believe, and act different to co-exist in the same society, which ultimately creates a more cohesive civil society. We could get into his debate tactics or the extent to which the comments he made were considered controversial. While his critics question his tone or tactics, this does not change the fact that Kirk's ideal was open debate and having discussions with those with whom he disagreed. He helped to create a mass movement based on the persuasiveness of his arguments, and that appeal revived the conservative moment in the United States. 

To quote the First Amendment advocacy group FIRE, "Words are not violence. Words are what we use instead of violence to resolve our differences." Charlie Kirk was using his words to engage college students, and he got murdered for practicing the very freedom he preached. Being part of a free society means feeling safe to express opinions and ideas without the fear of getting shot. People should not have to wonder whether expressing their beliefs requires metaphorical or literal body armor. Speaking your mind, especially on controversial issues, should not come with a high personal risk. If those hesitate to raise their hands, speak their voices, publish their essay, or partake in political activism as a result of what happened to Charlie Kirk, the foundation of dialogue erodes and democracy loses. 

I fear that people could self-censor out of this level of fear, which would make the intellectual marketplace suffer, people cling to echo chambers, and have extremism fester. There is a risk that the Trump administration could use this assassination as pretext for political witch hunts, expanded executive powers, or restarting the War on Terror. 

In short, I dread that this could be a pivot point in which the United States heads towards greater authoritarianism, and it would hardly be unprecedented. The assassination of Tzar Alexander II in Russia led to repression and stonewalling liberal reforms. A 2016 coup attempt in Türkiye inspired Erdoğan to consolidate power. The assassination of Anwar Sadat led to a 30-year declaration of emergency. Since I am currently in Peru, I bring up the Maoist Shining Path's political violence that led to democratically-elected Alberto Fujimori dissolve Peruvian Congress and commit human rights abuses in the name of fighting terrorism. 

Such moves towards greater authoritarianism are not exclusive to non-democratic societies. Modern-day democracies have also experienced authoritarian backlash, whether it was expanded police presence in France as a result of the Charlie Hebdo attacks, Israel using emergency responses to curtail civil liberties in response to war and intifada, the Patriot Act in the United States, or the United Kingdom's Anti-Terrorism Acts that allowed for infinite detention. I am not here to say that authoritarianism is the inevitable outcome, but rather to illustrate that any country, including constitutional democracies, can drift into authoritarianism in response to political violence. 

 

As I have brought up before, as long as people want more power and/or money, freedom and democracy will always be on the defensive. Freedom of speech is no exception. Both the Left and the Right believe that the assassination was spurred by the violence that the other side fomented. If the citizens of the United States are to get past this political assassination, there needs to be a cultivation of the ideals that Kirk strived towards, including open debate and respectfully engaging with those whose opinions are disagreeable or unpalatable. 

This country has undoubtedly steered far from those ideals. I highlighted survey work last year showing that most Americans do not care for the First Amendment. Even more disturbingly, a survey from Yale University found that about 40 percent of college students believe that violence is a justifiable response to speech, including death. 

In spite of these trends showing a lack of appreciation for the First Amendment, we need to keep our eye on the ball. One study from the Research Institute of Industrial Economics shows that greater freedom of expression eases social conflict (Bjørnskov and Mchangama, 2023), which is to say that we need to foster freedom of expression. The people of America need to stop viewing dissidents as "other" or as downright evil. We cannot accept the notion that speech is violence and that actual physical violence is an appropriate response to disagreeable opinions. Using that logic would mean that it would become acceptable to murder people for their opinions, and that would only increase intolerance and political violence. 

We either resolve our differences by discussions and a peaceful process or we do so with violence and bloodshed. As this Politico article detailing the analysis of political violence experts shows, the United States is not doomed to violence, but it is at a dangerous crossroads. There are declining democratic norms, increased divisions, and political incitement. If opponents continue to be demonized and if politicized violence continues to increase, this cycle of political violence can become entrenched in U.S. society. Unless there is a major course correction, America will do more than cease to be a city on a shining hill. It will risk trading its place as a beacon of liberty and be one step closer to becoming the authoritarian hellhole that the Founding Fathers were trying to avoid. 

Trump DOJ's Trans Gun Ban Proposal Is a Direct Hit on the Second Amendment

The right to keep and bear arms is guaranteed under the Second Amendment and applies to all Americans, regardless of race, religion, sexual orientation, or gender. However, the Trump administration might look to change that. Last month, the mass shooting at the Annunciation Catholic Church in Minnesota, which left two children dead and 17 wounded, was allegedly committed by a transgender individual. In response, the Department of Justice (DOJ) was reported to have been "reviewing ways to ensure that mentally ill individuals suffering from gender dysphoria are unable to obtain firearms while they are unstable and unwell." In other words, the DOJ is looking to ban transgender people from owning firearms. While there is no formal rule or a statement from the DOJ, the Right-leaning Daily Wire broke the story last week. 

Let us begin by asking whether the DOJ has a policy basis for such a proposal. The question to answer is whether the DOJ's theory that transgender people are mentally unstable enough to take away their Second Amendment rights is warranted. The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition (DSM-5) classifies gender dysphoria as a medical condition. It is true that transgender people have high levels of suicidal ideation and mental health diagnoses. However, there are three major counterarguments that refute the DOJ's premise that banning transgender people from owning firearms would help with public safety.

First of all, as I explained in 2017 in response to the Las Vegas mass shooting, mental illness is a poor predictor of violent behavior. The think tank RAND Corporation showed an absence of evidence when it came to the effects of firearm prohibitions related to mental illness on mass shootings. The only outcome with impact was violent crime generally, and even that was with limited evidence. More to the point, RAND pointed out that 2 to 4 percent of all violent behavior may be attributable to mental illness. The American Association of Medical Colleges found that less than 5 percent of mass shooters had a psychiatric diagnosis that resulted in a gun-disqualifying adjudication. 

The second counterargument that I have made before is that in spite of being frequently covered in the media, mass shootings are statistically rare, as research from the Cato Institute details. The Cato Institute defines a mass shooting as "an indiscriminate rampage with a firearm in a public place or place of business that results in at least three victims killed by the attacker." With this definition, there have been 298 shooters responsible for 1,733 murders and 2,459 people injured between 1966 and 2024. In total, the murder victims of mass shooters account for about 0.15 percent of all homicides since 1966. The probability of being murdered in a mass shooting is 1 in 9.1 million per year, whereas being injured in a mass shooting is 1 in 6.4 million. For context, the probability of being struck by lightning is 1 in 1.6 million, which is to say that an American is about six times more likely to be struck by lightning than shot in a mass shooting.  

Third, if having a mental disorder were the only factor in whether someone commits a mass shooting, we would see that arise in mass shooter demographic data. Transgender people do not pose a special or disproportionate threat, especially since 75 percent of transgender people do not report frequent mental distress. If anything, the data shows the opposite. The Gun Violence Archive data shows that 0.17 percent of mass shooters from 2018 to 2025 were transgender. Considering that 0.8 percent of Americans are transgender, this would mean that transgender people are almost five times less likely to commit a mass murder than the average American.

It was not simply LGBTQ Nation that was angry about this possible ban. That anger does not surprise me because LGBT organizations tend to lean Left and have been anti-Trump. What was surprising is that none of the pro-Second Amendment rights groups were happy, whether it was the National Rifle Association, Gun Owners of America, or the Firearms Policy Coalition. 

It makes sense why that would be the reaction. Since there is no public health threat, there would be no justification to impose a blanket prohibition on transgender people's Second Amendment rights. The DOJ's line of thinking is even worse considering that a quarter of all Americans will qualify for a psychological diagnosis within a given year. Should we take away their Second Amendment rights, as well? Things generally do not go well for minorities when they are disarmed, whether that is African-Americans, Jews, gay people, or transgender people. 

The Supreme Court and federal courts have made it clear that disarming an entire group violates constitutional protections, particularly the Second and Fourteenth Amendments. If a court does uphold a Second Amendment ban, it is an individual adjudication based on an assessment or a commitment process, not a group-based ban. I hope that this proposal remains a failed idea in the backroom during a brainstorming session and does not become actual law. If this proposal goes forward it will not solely undermine the rights of transgender Americans. It will establish a dangerous precedent that civil rights can be revoked by bureaucratic fiat. That is a threat to liberty we should all oppose.

Mandate the Shot, Not the Choice: Why Florida Should Support Vaccine Requirements with Opt-Outs

The COVID pandemic might be behind us, but the vaccine debate is not. I am not surprised that people did not react kindly to lockdowns so harmful that we still feel their impact in 2025, ineffective face mask mandates, useless travel bans, and deleterious school closures. In aggregate, the COVID pandemic response entailed some of history's worst public policy choice in an era of peace. That being said, there is difference between a proportionate response to such carnage and having the pendulum swing too far to the other extreme. 

Last week, the Florida Surgeon General Joseph Ladapo said at a press conference that he plans to eliminate all vaccine mandates for Florida, including for children in public schools. Setting aside him inflammatory remark of equating a vaccine mandate to "slavery", he made a distinctively libertarian appeal: "Who am I to tell you what you should put in your body?" 

I have advocated for the right to consume marijuana and psychedelic mushrooms, engaging in sex work, not being forced to take a COVID vaccine, selling one's organs for cash, adults having consensual sex with whichever adults they want, eating and drinking what you want (including raw milk and processed foods), and using birth control. This is my way of saying that I understand that few freedoms are more fundamental than what one puts into their body.   

I can understand how the COVID pandemic played a role in this decision. COVID vaccines had newer technology (mRNA) that was politicized from the onset and used executive orders to implement. Furthermore, herd immunity is not possible with COVID, which was evident as early as 2021. The politicization of COVID health measures and COVID vaccines was an overreach by the government. Plus, with the COVID vaccine mandate, it was either get the shot or lose your job. There was no third option. All of these reasons point to why I argued against a COVID vaccine mandate in 2021, both because of the nature of the vaccine and because of how the mandate was imposed.  

Ladapo was hired during the pandemic due to his reputation against harmful COVID interventions. He shaped Florida's COVID response to be focused on medical freedom over public mandate. I pointed out last year the heavy-handed approach with COVID vaccines eroded trust in all vaccines among many Americans. This distrust is now bleeding into policy, as reflected in Florida's move to repeal all vaccine mandates.

For such diseases with legacy vaccines as measles, mumps, and polio, it is unfortunate that Ladopo is conflating them with the COVID vaccines. Ladapo's view is consistent with medical freedom and bodily autonomy. So why is it that I take issue with the COVID vaccine mandate but not for legacy vaccines? There are decades of clinical data showing that legacy vaccines reduce mortality and morbidity with minimal risk. There is generally bipartisan support for the legacy vaccines and were supported by the legislative process, not executive orders. Most importantly, herd immunity is also achievable for many of the legacy vaccines.   

The reality is that completely removing the vaccine mandates increases the risk of outbreaks. A couple of multinational systematic reviews of school vaccine mandates show that immunization mandates generally increase vaccination uptake (Greyson et al., 2019; Lee and Robinson, 2016). This is good because these vaccines are shown to reduce morbidity and mortality, whether that is measles, chicken pox, or rotavirus. The World Health Organization's Expanded Programme on Immunization (EPI) was shown to have averted 154 million deaths from 1970 to 2024 (Shattock et al., 2024). Since vaccines are shown to avert deaths, not having enough children vaccinated undermines herd immunity. 

Much like I expressed with water fluoridation, outcomes are better when there is an opt-out option for such health interventions. Unlike with water fluoridation, there is the ability to have an opt-out option for a vaccine mandate. There are already 28 states that have religious exemptions for a vaccine mandate, as well as 16 states that allow for it on personal or philosophical grounds. An opt-out process should entail something such as a formal written exemption and signing a waiver stating that you acknowledge risks to others. 

As long as an opt-out exists for those who do not want to, society can balance the public health concerns with the matters of personal autonomy. Most will comply with the mandate by default, thereby maintaining herd immunity in most instances (with rare, localized outbreaks taking place) and making sure others are not harmed along the way. The minority that is opposed, which is about 21 percent per recent polling from Harvard, can opt out without state coercion. This "least restrictive means" approach to public health establishes public health standards while still allowing for personal refusal.

Dr. Ladapo's approach appears to be a win for freedom at first glance. In practice, it is a lose-lose for public health and for freedom. Libertarianism is supposed to defend liberty up to the point until it causes harm to others. By discarding minimal requirements for proven life-saving measures, the state of Florida abandons decades of research while exposing its citizens, children in particular, to avoidable risks. A mandate with a clear opt-out option upholds liberty while protecting individual autonomy and public safety. 

Worse still, this could ironically invite more government intervention, whether in the form of emergency powers in the event of an outbreak, a higher burden on state medical services that increase healthcare costs, or federal preemption from the CDC that could undermine Florida's sovereignty. A pragmatic path respects both freedom and evidence. In trying to protect freedom at all costs, Florida may end up sacrificing both liberty and life. A smarter, liberty-respecting state would choose a middle path that trusts people without abandoning its responsibilities. 

Trump's Tariff Mirage: His Tax Plan to Replace Income Tax With Tariffs Does Not Add Up

President Trump is clearly not happy with the way his legal case for the "Liberation Day" tariffs is going. Yesterday, Trump said that losing this legal battle would "cause the U.S. to suffer greatly" and that "our country has a chance to be unbelievably rich again [with the tariffs]." This pattern of rhetoric glorifying tariffs is nothing new. Earlier this week, he opined that removing tariffs, what should simply be referred to as import taxes because that is what tariffs are, would turn the United States into a third-world country. Let us forget for a moment that the United States has been a developed country for decades without the high tariff rates that Trump is trying to implement. In April, Trump said that tariff revenue could be so great that it could replace the federal income tax. The problem with that assertion is that it does not make economic sense nor would it make America great again. 

Economic Logic Problem

First, as I pointed out in April, the rationales used by Trump for tariffs do not make sense. Trump both wants to protect American workers from "unfair foreign protection" and generate tax revenue. Either tariffs will be high enough to deter imports from coming in, or they will generate enough revenue to make America rich again. These goals are in tension with one another, and maximizing one goal comes at the expense of the other. Trump wants to have his protectionist cake and eat it too, but that is not how tariffs work. 

Revenue Realities

Even setting aside these contradictions, the math to replace the federal income tax with tariffs simply does not add up. With the current tariffs in play, the Congressional Budget Office (CBO) estimated last month that the tariffs would generate $3.3 trillion in revenue over the next decade. Contrast this to the CBO's January 2025 federal income tax estimate (which was made before the tariffs were enacted) over the same period, which is $36.9 trillion (see below). That is a difference of $33.6 trillion, or put differently, the tariff revenue is projected to be less than 10 percent of the income tax revenue. The gap in revenue levels makes replacement impossible. So why is it that tariffs bring in so much less revenue than the federal income tax? 

Historical Perspective

As the Tax Foundation reminds us, the federal government of the late 19th century and early 20th century, which Trump is romanticizing, was different from today's government. Back in the day, federal government spending was about 2 percent of total GDP. Thanks to the implementation of the federal income tax, the government's ability to collect revenue expanded, in no small part to its large tax base. Now, the government spends the equivalent of 22.7 percent of GDP. Tariff revenue could not pay for Medicare, Medicaid, or Social Security, never mind the rest of government spending.  

Why Tariffs Are More Harmful Than the Income Tax

Since the tax base of imports is smaller, the economic harm per unit of trade is higher. This means that raising meaningful revenue means tariffs need to be high. This results in greater economic damage than a broad-based income tax because tariffs tend to distort product and supply chain markets more directly than income taxes, which more often than not influence individual decisions cut as work and savings.

Tariffs affect what to buy, where to buy it from, and how to produce it. They are distortive because they only affect imports, as opposed to all goods. It is more distortive in part because goods from different countries get imposed with different tariff rates. With tariffs, it might cause consumers to buy overpriced domestic goods or force businesses to redesign supply chains inefficiently. As a result of shifting domestic production to less efficient domestic industries, this misallocation harms overall economic efficiency. 

Furthermore, tariffs also hit lower-income households harder because they spend a larger share of their income on goods. To make matters worse, tariffs are systematically higher on lower-end versions of goods (about an average of 4 percent) than their high-end counterparts (Acosta and Cox, 2024), which hits low-income households even harder.  

As I explained last year, free trade is beneficial to the poor because it reduces their cost of living while increasing the price of what they sell. Since tariffs make the economy less free, Trump's tariffs will have the opposite effect on cost of living, as we have seen in the past. Additionally, the Peterson Institute for International Economics (PIIE) showed that a revenue-neutral swap of $780 billion in tariffs for income tax cuts would cause significant losses, including 8.5 percent of after-tax income for the bottom quintile. 

Global Implications

Unlike the income tax, tariffs invite the possibility for other countries to retaliate with their own taxes. Not only does this hurt U.S. exporters, but it disrupts global supply chains and diminishes global trade diminishes, much like it did during the Great Depression. Those higher import costs could very well put upward pressure on prices, thereby risking stagflation. This would likely appreciate the dollar, which would worsen trade deficits and undermine international collaboration. Furthermore, if Trump continues imposing tariffs on the U.S.' allies, he risks alienating allies. This could push allies towards China, which would undermine stated national security goals while diminishing the U.S.' influence in the global economy, as well as in East Asia specifically.

Conclusion

Trump's proposal to have tariffs guide policy on government revenue is not only economically unsound but historically misguided.  When these tariffs were at their heyday in the 19th century, it resulted in lower economic productivity in terms of propping up inefficient enterprises, lower standard of living, and higher consumer prices. If Trump goes ahead with this inane idea, not only will he harm the economy, but he will anger the United States' allies while failing to generate enough revenue to replace the federal income tax. Tariffs are no substitute for a broad-based income tax. Reviving tariffs under the guise of making America great again might make for a catchy slogan on the campaign trail, but in practice, it would cause enough economic decline to send the U.S. economy back to the 19th century, and not in a good way. 

How the Government's War on Single-Room Occupancy Fueled the Housing Crisis

Along with food and clothing, a roof over one's head has been considered one of the three fundamental needs for human survival. This remains true even for those who have next to nothing. There was a time when housing existed for those who had very little: a room, a lockable door, and typically a shared bathroom. It was not glamorous, but it was a roof over one's head. These housing units, called single-room occupancies (or SROs), were a reliable and affordable source of housing for the United States' poorest residents, seniors, and those looking to climb out of poverty. Today, SROs are all but nonexistent in the United States. Rent is higher than ever, homeless shelters are jam-packed, and many are out of luck when it comes to housing. What happened to SROs? In two words: government intervention. 

Last week, a report from Pew Research that was released in July was brought to my attention. With the title "How States and Cities Decimated Americans' Lowest-Cost Housing Option," the researchers at Pew Research detail the various policies that state and local governments used to get rid of SROs. The reason why governments went after SROs was because even as early as the early 1900s, SROs were seen as run-down, neglected, dilapidated. They were stigmatized as a public nuisance and blamed for such outbreaks as pneumonia and tuberculosis. Between the 1950s to 1980s, there were numerous local-level, piecemeal government regulations that severely curtailed SRO usage:

• Los Angeles and San Francisco rewrote zoning codes to prohibit rooming houses and share-living arrangements. 
• Chicago adopted stricter building and housing codes (e.g., imposed requirements for private bathrooms, minimum square footage) that effectively outlawed traditional SRO designs. 
• San Diego used code enforcement and licensing crackdowns to close SROs for safety or sanitation violations. 
• Seattle used redevelopment campaigns in "blighted" areas to clear out residential units where SROs were concentrated in exchange for higher-value development. Other countries similarly subsidizer to demolish these areas courtesy of the Federal Urban Renewal programs, especially Title I of the 1949 Housing Act
• Denver provided housing subsidies for traditional apartment-style housing that effectively sidelined SROs.

There could be better health inspections, rehabilitation incentives, or proper building management to make SROs more habitable, but these regulations that de facto eliminated SROs were overkill. SROs were the lowest-cost housing for individuals in need without requiring government subsidies or intervention. Primarily as a result of this crackdown, the overall SRO housing supply was reduced by 2.5 million units. This especially puts a crunch on the housing supply for those in the lowest-cost tier. This has placed undue demand on government services, subsidized housing, and homeless shelters because they cannot meet the housing demand. Just as one example, about half of the men who entered homeless shelters in 1980 were previously living in SROs. Without SROs, low-income individuals have very few alternatives of places to live, thereby contributing to homelessness, as we will see shortly.

This pushes low-income renters into larger, more expensive units when all they needed was a single room. As the Pew Research pointed out, an SRO in 1924 only cost $230 in today's dollars, which is below the $391 per month that an individual at the federal poverty line can afford in rent. Contrast that to the $1,205 that a median one-bedroom apartment costs. This should not be a mystery. Regulations requiring larger units crowds out the smaller units from the market and forces low-income individuals into more expensive units than necessary. These zoning regulations put additional strain on housing supply.

I first raised the alarm on overregulation in the housing market in 2017, citing a range of studies on how land-use restrictions reduce supply and inflate housing costs. Eight years later, the data has only grown stronger and the consequences more visible. These SRO-related land-use regulations are tantamount to a production quota, which restricts housing supply while jacking up housing costs. In the case of SROs, it is especially problematic because it constricts housing supply for the poorest of Americans, thereby squarely and concretely affecting low-income Americans. 

The Manhattan Institute found that areas with greater housing regulations also had a greater homelessness population (see below). While a compelling pattern, it stops short of showing causation. However, a peer-reviewed study from the University of Maryland fills that gap. The author found that land use regulations are responsible for increasing homelessness by 9 to 12 percent (Dawkins, 2023). In other words, restrictive land-use regulations are not merely correlated with homelessness. They are shown to cause increased homelessness.

There is a way to provide a modern-day equivalent of an SRO that is well-designed, hygienic, clean, and up to code. To do so, the government needs to get out of the way. Modifying current zoning laws to include small, shared-unit formats is a necessary first step. Second, remove the stringent codes in order to allow for smaller units and shared bathrooms and kitchens. Relax permitting regulations to allow for conversion of older building into SROs, especially since it is 25-35 percent cheaper than new construction.

Millions already live in shared housing without stigma, whether it is college dormitories, senior co-housing (aka "Golden Girls" Homes), professional households in which young professionals rent individuals in shared homes to split rent, transitional housing, monasteries, boarding schools, and military barracks. States and cities need to remove regulatory barriers and provide incentives to create low-housing options so that we can reduce homelessness, help financially vulnerable Americans, and help keep America's streets safer and cleaner.

The Cost of Trump's Cashless Bail Crackdown: A Waste of Taxpayer Dollars and an Erosion of Justice

President Trump is at it again signing executive orders this week. One of them had to do with making flag burning unconstitutional. I do not need to cover that executive order today because I already covered it in 2016. There was another executive order that Trump signed this week about cashless bail, threatening to cut off funding for those jurisdictions that implement cashless bail. 

Cashless bail is a system that allows criminals accused of a crime to be released before trial without having to pay money. It is meant to be a system that is based on risk to public safety rather than ability to pay bail. Trump finds that cashless bail is a threat to order and public safety, not to mention a drain on public finances. That is why Trump's executive order will restrict the "Federal policies and resources" to jurisdictions with cashless bail policies. 

For some conservative policy groups who are for cash bail, cashless bail is a system that prioritizes the rights of violent offenders over the general public while releasing repeat offenders with impunity. Forgetting questionable constitutionality for a moment, disincentivizing cashless bail is an unwise move that does not help with reducing crime, has disparate impact on minorities, and is a waste of taxpayer dollars. 

Effects on Crime and Public Safety

Cashless bail is a relatively new policy concept. The earliest implementers were New Jersey in 2017, and New York started around 2019-2020. Even so, long-term data is starting to emerge. Jurisdictions who implemented cashless bail have been compared to those who did not in quasi-experimental studies. The Brennan Center for Justice (Craigie and Grawert, 2024) used a Difference-in-Differences (DiD) method to compare 22 cities with bail reform to 11 cities that did not. While there are rare instances in which defendants commit serious crimes, this study found that there were no statistically significant differences in crime rates, whether violent crime or property crime. 

Furthermore, a study from the Journal of Criminal Justice shows that longer pretrial retention translates into quicker new arrests (Silver et al., 2024). What this means is that unnecessary jail time could increase public risk while harming the individuals and families that this policy is claiming to protect. A study from the University of Chicago puts that recidivism rate as increasing by 6 to 9 percent as a result of cash bail (Gupta et al., 2016).

Racial and Economic Disparities

Cash bail disproportionately harms the poor and minorities. As of mid-2023, the Department of Justice data shows that 70 percent of those in jail were not convicted and were awaiting trial. While not broken down by race, this finding strongly suggests that the racial proportions of the pretrial population closely mirror those of the overall jail population, i.e., 48% White, 35% Black, and 14% Hispanic. This would indicate that cash bail disproportionately affects Black suspects. For those who cannot pay, the jail experience is coercive and horrific enough to pressure them into pleading guilty to a lower charge to avoid jail time, regardless of innocence. 

Considering that the median bail is $10,000, those who get harmed by this experience are those who do not have the money to afford bail. This ends up creating a two-tier justice system: one for those with money and one for those who are not well off. Because pretrial detention increases the likelihood of guilty pleas, those held pretrial are four times more likely to be sentenced than those released before trial. It also undermines the legal concept that one is innocent until proven guilty.

Fiscal Costs

Beyond the moral concerns, having increased reliance on cash bail translates into greater fiscal costs. In 2017, the Prison Policy Initiative estimated that cash bail cost $13.6 billion, which would be $18.1 billion in 2025 dollars. In 2023, the American Bar Association estimated those costs to be $14 billion. This is phenomenal considering that the pretrial jail population increased by 433 percent between 1970 and 2011. 

Removing cash bail would go a long way in lowering the burden on corrections systems and the mass incarceration that I criticized back in 2015. Then there is the broader economic costs. Research from the Brookings Institution shows (Miller and Wolfers, 2021) that those experience pretrial detention face a reduction of employment probability of about 9.4 percent, which translates into an average income lifetime loss of $29,000. Brookings estimated that eliminating money bail could increase aggregate U.S. income by up to $80.9 billion per year.

Conclusion

As we can see, there is no compelling public safety justification for cash bail. It is fiscally irresponsible and an affront to the limited government that conservatives are supposed to support to have such high rates of unnecessary incarceration. Rather than punishing poverty and disproportionately harming minorities, we should move away from the outdated cash bail system and adopt evidence-based alternatives that assess flight risk and public safety more effectively. Cashless bail is not about being soft on crime. It is about being smart on justice, fair in process, and responsible with taxpayer dollars.

Trump's 1% Mistake: How a Remittance Tax Will Fuel the Immigration It Aims to Stop

Last month, President Trump signed the One Big Beautiful Bill Act (OBBBA), a budget reconciliation bill that had quite a bit in it considering it is over 1,100 pages long. As I mentioned shortly after the enactment, I would probably need to cover other provisions in the future and here we are. The Left-leaning outlet Vox brought one such provision to my attention: a one percent remittances tax. A remittances tax is an excise tax imposed on the non-commercial transfer of money that individuals send from one country to another. Remittances are most common for immigrants who send money to their families in their home country. 

Despite of what some might think, remitted dollars are not "lost" because the U.S.' global dominance means that the dollars return in the form of trade, investment, and dollar demand. Rather than disappear, remittances act more like temporary outflows. So why did the Republicans decide to tax remittances? In the Committee report's own words:  

The Committee believes that the ability of non-citizens and non-nationals of the United States to send payments to individuals in other countries through the system of remittance transfers may encourage illegal immigration and lead to the over reliance of some jurisdictions on the receipt of such remittance flows.

In short, the justification is curtailing illegal immigration. Some might argue that because it was initially proposed at 5 percent and eventually lowered to 1 percent, that somehow makes it better. Guess what? It really does not, and not simply because the 1 percent applies to all remittance senders, including U.S. citizens (although bank accounts and U.S.-issued credit cards and debit cards are exempt). This tax will have many ramifications both in the United States and the global economy. 

Taxes have two main functions: to generate revenue and to discourage behavior. First, let us take a look at the revenue. In the case of the remittances tax, the Joint Committee on Taxation (JCT) estimated that it would generate $10 billion in revenue over the next decade. The Center for Global Development (CGD) puts the estimate at an even lower $4 billion in revenue over that time period. Remittances taxes imposed in other countries offer little hope. An International Monetary Fund (IMF) study found that the other two nations that notably have a remittances a tax, Gabon and Palau, did so while generating a negligible enough amount of revenue where both countries scrapped the tax.

I am not too optimistic about the revenue estimates considering that the compliance costs will diminish actual revenue, including requirements for financial institutions to distinguish between taxable and exempt payment methods, maintain detailed transaction records, and manage refundable tax credits for eligible senders. The compliance will also violate data privacy since the financial institutions will have to collect and share such sensitive personal data such as citizenship status and payment method details. While it will hit low-income and immigrant communities most heavily, U.S. citizens may face privacy risks due to increased financial surveillance, documentation requirements for refunds, and potential misclassification or data exposure. 

What behavior does a remittance tax discourage? Sending money to other countries. This might sound like a win for the anti-immigration Republicans, but it will not be. Remittances outpace foreign direct investment and overseas development aid at a rate of 3 to 4 times. Destinations include such nations as Mexico, El Salvador, Guatemala, and India, which are among the top countries of origin for the undocumented workers that Trump does not want illegally entering the country. 

A study from the Center for European, Governance, and Economic Research found that a one percent increase in the cost of sending remittances translates into a 1.6 percent decrease in remittances sent (Martínez-Zarzoso et al., 2020). This is a big deal because remittances account for at least 3 percent of GDP for 78 countries (World Bank). The Center for Global Development used the aforementioned study along with bilateral remittances data from the World Bank to find that Mexico that stands to lose, at $1.55 billion annually. 

In terms of percentage of GNI, El Salvador, Honduras, Jamaica, and Guatemala will feel it the most (see below).

A one percent tax does not sound like a lot, but it translates into money that never reaches people in developing countries. For example, remittances in Mexico have helped pay for medical bills and support pensions and public services. With underdeveloped banking systems, cash is often how many in developing countries receive money. As the Overseas Development Institute brings up, remittances are effective because have a greater impact on poverty reduction because they directly reach a greater share of the population and more poor households, not to mention that the greater purchasing power results in greater economic utility. By curtailing funds that help people in developing countries that reduce poverty, cope with financial shocks, and weather natural disasters, life will become that much more unstable for people in these countries. The increased instability created as a result will incentivize citizens in developing countries to want to emigrate to the United States, which undermines Trump's stated goal of curtailing illegal immigration.

Then there is the matter of crime. Taxing remittances incentivizes sender to bypass regulated services providers and push their transactions into informal or underground channels, which like all underground markets, are less transparent and harder to monitor.  This shift makes it more difficult to trace illicit flows, thereby undermining national security and foreign policy interests. Because this will push immigrants to underground options, they will be exposed to greater fraud, theft, and organized crime exploitation.  

On top of all of this, this remittances tax has the hallmarks of inferior tax policy. It is a form of double taxation because migrants already pay an income tax to the host country. It is a regressive tax because remittances are most commonly sent to the poor families of migrants, thereby increasing the burden of poverty. This remittances tax is also non-neutral because it discourages an arrangement where a household is split between the United States and another country. This tax is targeted, inconsistent with an overall tax design for a country without a value-added tax (VAT). The targeted nature of this tax is hypocritical considering that the GOP is purportedly the party of family values and these remittances senders are trying to help their families in poverty-stricken parts of the world.

Ultimately, the remittances tax is not about controlling immigration. This misguided and counterproductive tax will weaken economies abroad, disrupt families, and burden law-abiding individuals with needless bureaucracy and privacy violations. It is a tax that raises little revenue, targets vulnerable communities, and increases government surveillance. This policy ends up depreciating the American values of opportunity and responsibility that made this country great. This tax will contribute to the global inequalities that fuel migration in the first place. Instead of deterring it, this tax will fuel the immigration at a considerable human and economic cost.

Nonbinary and Nonsensical?: Gender Identity Should Not Shape Public Policy or the Law

How people perceive identity has shifted in recent years. Sex, gender, and social roles used to be debated in terms of biology, behavior, or politics. These days, it has become more prevalent to define identity in terms of internal feelings, truths only known to the self, getting to the point where some demand external recognition of that identity. This shift in how identity is perceived is clearest in the concept known as "nonbinary." How I understand the concept of nonbinary is as a gender identity that is characterized by a rejection of, or identification outside of, the binary framework of man and woman, which can encompass diverse gender experiences. Nonbinary resists the classification of man and woman not through visible and external nonconformity, but rather a personal and internal sense of disconnect.

Yesterday, I was reading an article from U.K. media outlet Spiked Online titled The dark truth behind the 'nonbinary' identity. It is criticizing how an individual identifying as nonbinary is trying to get the European Court of Human Rights (ECHR) to legally recognize nonbinary as a category, even as the United Kingdom has rejected this individual's claim. It got me thinking about the whole concept of nonbinary.

 

What is logically wrong with nonbinary? I will start off by saying this is not a critique of individuals that identify as nonbinary, nor is it a dismissal of their personal experiences. As we will see later, the critique is how the concept of nonbinary identity, and the concept of gender identity more broadly, is being used to shape legal categories.

For much of history, the debate about identity essentialism was based on biological sex. Now it is based on the subjective experience of something along the lines of "I am nonbinary because I have always felt this way, and that feeling is the truth of who I am." Here is where the idea logically runs into a problem. If someone says they are not a man or a woman, but then does not define those categories or says "I reject all gender roles," what in the world does it mean to be nonbinary?  It is akin to saying something is neither red nor blue without saying what red or blue are. If you cannot describe the thing you are not, how can you meaningfully claim to not be it? 

There is no coherent way to socially define nonbinary identity because it has become more of a catch-all term rather than a clear concept.  How an individual feels discomfort with a certain set of gender stereotypes does not negate their biological sex. Nonbinary only makes sense when adhering to an overly rigid societal and stereotypical definition of what a man or a woman are supposed to be. There are very few, if any, people who perfectly embody these gender stereotypes. In this respect, nonbinary identification is less about embracing a coherent identity and more about avoiding the discomfort that comes from not fitting neatly into traditional gender expectations or roles. But this discomfort does not constitute a new identity, and should not require one. 

I can anticipate someone bringing up other identities, such as sexual orientation or religion, in which self-identification is claimed to be the basis for that identity. But that is not the case. Same-sex attraction is observable in behavior, whether sexual or romantic. While religion has a component of belief, religion can be observed through such behaviors as prayer, attending a house of worship, observing dietary laws, or celebrating holidays. While identity does not necessarily require material observability, having some definable or external features helps give it shape. Without conceptual clarity or internal coherence, an identity cannot meaningfully function as a societally recognizable or analytically useful category. It is on this front that the nonbinary identity conceptually and intellectually falls flat.

What is wrong with the concept of gender identity? This gets into where I take issue with gender identity generally. I will start with what I wrote in June about gender identity with regards to the U.S. Supreme Court case on gender-affirming "care": 

The concept of gender identity is incoherent. It is claimed to be based on objective truth, but it can be changed on one's subjective whim. Gender identity is supposed to be a societal construct, but somehow is simultaneously biological and internal. Gender identity is identified as independent of biological sex but is also identified in reference to biological sex. It is designated based on self-expression but also as a product of socialization.

This incoherence comes from the fact that if something has "X" quality, it cannot simultaneously have "non-X" quality. It is how gender identity proponents define a woman using the circular logic of "A woman is someone who identifies as a woman." Similar to nonbinary, the way it is being defined (or not defined, as the case may be) is intellectually unstable because it relies on internal contradictions, not to mention being unverifiable and unfalsifiable. As I detailed in April after the U.K. Supreme Court ruled that only biological women are actually women, I explained how simply because you feel like something or identify as something does not automatically make you that identity, as is the case with race, age, or species. In spite of how one feels about their biological sex does not change their biological sex and cannot change their biological sex. 

How Gender Identity Adversely Affects Society and Erodes Rights. Gender identity relies on an internal experience without external reference. If an identity is purely self-defined with no stable criteria, it becomes incoherent for public understanding or policy. As I brought up in June, "human rights and legal protections cannot be based on something as unintelligible, muddled, and disjointed as gender identity." It is de facto impossible to build social, legal, or medical policy based on such ambiguity, as we will see shortly. 

There are certain instances where gender identity causes harm. Here are some examples, first in a medical policy context. One big one is gender-affirming care, which has been shown to cause patients harm. This is why I am against the practice for minors and only support the practice for adults if there is informed consent, even in spite of known harms. There are more general medical implications, as well. By diagnosing on gender identity instead of biological sex, patients can miss life-saving screenings or being treated with protocols misaligned with their biology. Then there is the undermining of sex-based data collection which can determine sex-based disparities in such areas as crime, health, or education, thereby eroding our ability to identify and address such problems. 

Policies that mandate pronoun usage or compel pronoun usage, a practice that  I criticized in 2022, has a chilling effect on freedom of speech in terms of forcing pronouns, as well as putting stress on parents and teachers in an education setting. It also affects speech in terms of changing such terms as "mother" and "female" to "birthing parent" and "assigned female at birth," which either depersonalize biological realities or erode the cultural and political significance of women. 

Speaking of the significance of women, feminism and women's rights are rooted in material conditions tied to female biology. Women's sex-based rights depend on a stable, material definition of what a woman is. Without that tie, protections for women are undermined, such as is the case with Title IX in the United States. It is how biological men playing in women's sports has become such a contentious topic. Similarly, biological men have been allowed into women-only shelters or prisons based on self-reported identities that cannot be tested or disproved, which can put the lives of women at risk. 

A similar argument could be made for the erosion of gay rights. As I have argued before, when discussing how refusing to date a trans person is not transphobic, "being gay has meant rejecting a strict definition of gender norms while still claiming biological distinction vis-à-vis same-sex attraction." Same-sex attraction depends on the premise that sex is real, binary, and materially grounded. A gay man is attracted to other men. A lesbian is attracted to other women. For gay people, the biological categories of "man" and "woman" are not fluid or interchangeable. They are necessary anchors for same-sex relations to work. Those anchors are based in biological sex, not gender identity. To demand that [gay] people date or have sex with those who are not of the same biological sex (including trans people) undermines the concept of sexual orientation. Since gender identity detaches "man" and "woman" from biological sex, it becomes a form of gay erasure because being gay loses meaning. 

By prioritizing logical consistency and material categories, we can preserve the credibility and coherence of legal rights. As we see, gender identity undermines the very foundations upon which women's rights and gay rights were built. Sexual orientation and sex-specific protections are based on meaningful and stable categories. Disability benefits require medical diagnosis and documentation. Even mental illness requires a DSM-based diagnosis by a professional. In contrast, gender identity is subjective and exempt from scrutiny or verification. If subjective identity is the sole criterion for legal rights or classification, where does that principle end? What about identifying as a different species, race, or age? If it is wholly subjective, then there is no limiting principle in the law. As I brought up in April, we cannot protect human rights if we cannot do so on the basic of reality or what humans are. To quote political commentator Ben Shapiro, "Facts don't care about your feelings."

Postscript. On a personal level, subjective identity is fine. I do not care on a personal level because it does not hurt anyone, which is in line with the libertarian concept of the nonaggression axiom. People should be free to live and express themselves as they choose, regardless of how much it corresponds to reality. After all, people live their lives viewing and conceptualizing things contrary to reality all the time. My concern is not with personal identification per se, but with how these identities are being formalized into legal and institutional frameworks without clear definitions or limiting principles. Legal rights, access to services, and social categories all require shared and observable standards. Other legal categories have objective criteria by which identity can be determined. Gender identity generally, and the nonbinary identity in particular, lacks that verifiable structure that makes it disastrous in philosophical, logical, legal, and practical terms. At a minimum, how are you supposed to create a legal classification for a demographic that refuses to define itself?

When all is said and done, rights that depend on shared reality cannot be sustained by individual perception alone. When legal and social frameworks abandon objectivity in favor of subjective identity, they risk becoming unworkable, incoherent, and ultimately unjust. Critiquing how an identity is defined and used in law is not the same as attacking the dignity of individuals. People deserve respect and dignity, but so do the legal and material foundations on which our rights depend. Upholding clear, observable, and materially grounded standards is not an act of exclusion. It is a foundation for fairness and justice. If we want to protect the rights that so many have worked hard for, then we need to defend those categories to ensure that those rights stay intact, which means not legally recognizing gender identity as a category.  

Trump's Mass Deportation Will Hurt At Least 63% of U.S. Workers and Cause Economic Fallout

During Trump's 2024 presidential campaign, he relentlessly emphasized border security, enforcement, and crimes committed by illegal immigrants. It does not matter that Biden was actually quite strict on immigration or that illegal immigrants are much less likely to commit crimes. Immigration ended up being one of the main issues that catapulted Trump into a second term. It even resonated enough with the Latino community that 48 percent of Latinos voted for Trump in 2024.  Not only are more Americans in support of reduced immigration to this country, but Trump's idea of mass deportation has become more popular. Last decade, 37 percent of Americans supported mass deportation. As of last year, that climbed to 47 percent, with 84 percent of Republicans being on board (Gallup). 

While mass deportation is becoming increasingly popular, there are real-world implications that are not neatly captured in campaign slogans. Before embracing or rejecting mass deportation, we should look to what the data have to say about economic and fiscal implications. The Wharton School of Business, which is the premier business school, did exactly that in a policy brief it released late last month.

This report presents two possible scenarios. The first is a four-year policy in which unauthorized immigration returns to baseline levels in 2029, after Trump's current presidential term. The second scenario assumes that all unauthorized immigrants will be removed from the United States by 2034. This paper gets into a few of the fiscal and economic implications that go beyond the generic "GDP will decline." Unsurprisingly, the second scenario has larger outcomes because it costs more to implement a policy that removes all unauthorized workers. 

One of the more interesting implications is that of wages of those in the U.S. labor market. The report distinguishes between high-skilled labor (which accounts for 63% of the working force) and low-skilled labor. In both scenarios, high-skilled labor experiences a decline in wages. That decrease would be an average decrease of $494 per year in the first scenario and $2,764 in the second scenario. 

It ends up a bit different for low-skilled workers. In the first scenario, low-skilled wages increase by 1.1 percent in 2034 and fall by 0.6 percent in 2054. It is in the second scenario where low-skilled labor experiences true increases. This means that low-skilled workers can experience a decrease in lifetime earnings of $8,600 (four-year policy) or a gain of $63,600 (10-year policy), depending on which policy takes in effect.

Then there are the other effects of the deportation. The four-year scenario is expected to increase the budget deficit by $350 billion and reduce the GDP by 1.0 percent by 2034. In contrast, the ten-year scenario is expected to increase the budget deficit by $987 billion and reduce the GDP by 3.3 percent by 2034.

While the 10-year plan makes for flashier headlines, it is also the less likely of the two. Being able to remove all unauthorized workers is unfeasible, and I do not simply say that because it has not been done in the past. Think about all the enforcement, detention, legal proceedings, and transportation that it would take to remove 11 million people from the United States. The legal, economic, and social blowback would be tremendous. While more difficult, the four-year plan is more feasible than the ten-year plan. 

Regardless of which scenario plays out, this study concludes that mass deportation policies harm the greater U.S. economy, reduce overall average wages, and increase federal deficits. The only way that low-skilled workers benefit from mass deportation is if the U.S. government manages to remove all unauthorized workers, which is unlikely. These findings largely consistent with what I wrote in October 2024 when I scrutinized Trump's mass immigration idea on economic, social, legal, and political terms. 

What this Wharton School study adds to the deportation debate is a clearer sense of the tradeoffs of deportation, not simply in dollars and cents, but also in the economic futures of most American workers. For those who care about the national interest of the United States, what should matter is a policy grounded in economic reality, not empty slogans. All Trump's mass deportation does is throw American workers under the bus.

Social Security at 90: An Outdated, Broken System Failing Retirees and Betraying Future Generations

On August 14, 1935, President Franklin Delano Roosevelt signed the Social Security Act. With the stroke of his pen, FDR established the Social Security program that we know today. Social Security was initially created as a safety net for the elderly during the Great Depression, many of whom lost their savings, jobs, and family support. Over time, Social Security became a source of supplementary retirement income. It has also faced increasing criticism, including here at Libertarian Jew. It drew enough of my ire that I listed it as one of the twelve reasons we should all dislike FDR. What makes Social Security so terrible? 

Why Social Security Is Fiscally Unsustainable 

Social Security is insolvent and fundamentally unstable. Why fundamentally unstable? In part, it has to do with its pay-as-you-go mechanism. In spite of what most Americans believe, recipients do not have their personal account with their own funds. Current workers pay the benefits of current retirees through the pay-as-you-go mechanism. Social Security's pay-as-you-go mechanism shares structural similarities with Ponzi schemes in that current contributors fund current recipients. Although Social Security is legally sanctioned (unlike a Ponzi scheme), this structure of transferring income instead of saving it raises sustainability concerns. No one has money saved in a personal Social Security retirement account because money is transferred from current taxpayer dollars to current beneficiaries. The only difference between a Ponzi scheme and a Social Security is that when the payout pyramid collapses, no one goes to jail. Taxpayers simply pay more. 

Because Social Security relies on current workers' contributions to pay current retirees, its stability is directly tied to the number of workers supporting each beneficiary. When the ratio is high, the system can function smoothly, like it did when the worker-to-beneficiary ratio was 159.4 to 1 in 1940 (SSA). With the Baby Boomer generation retiring, that ratio has decreased to 2.7 in 2023 and is expected to decrease to 2.1 workers by the end of the century (Pew Research). This decreasing worker-to-benefit ratio means that there are fewer workers shoulder the burden of a growing system, thereby putting greater financial strain on Social Security. 

When the demographic shifts are combined with the pay-as-you-go mechanism, the payroll tax becomes a more unsound funding source of the Social Security program. Over time, the deficits add up and will deplete the Social Security Trust Fund. The most recent SSA annual report predicts depletion in 2034, although it is likely that one of the negative effects of the "Big, Beautiful Bill" is accelerating that date to 2032. Once that Fund is depleted, statute dictates that Social Security payments are limited to incoming revenue. According to the bipartisan Committee for a Responsible Federal Budget's (CRFB) estimates, that will translate into a 24 percent cut in Social Security benefits (see below). 

To maintain this behemoth that is 21 percent of the federal budget and the single largest item in the budget, the government needs to find a way to fund $25 trillion in unfunded Social Security obligations. Right now, the current Social Security tax rate is 12.4 percent: 6.2 percent paid by the employer and the other 6.2 percent by the employee. If you are self-employed, you pay the 12.4 percent. Historically, Social Security taxes have increased, not decreased (Tax Policy Center). Given that the worker-to-beneficiary ratio is expected to decline, do not be surprised to see the payroll tax increase as a response from Congress to try to "fix" Social Security.

The Burden on Younger Generations

Younger people especially get harmed if politicians decide to fund Social Security program in perpetuity. How much will it cost the median worker entering the workforce to keep Social Security going indefinitely? According to a Cato Institute analysis, it would cost $157,000, which is the equivalent of giving up 29 months of pay over a lifetime, which is more than two years' worth of salary. Despite paying more, these workers are expected to receive reduced benefits compared to current retirees, or even have reduced or means-tested benefits. In short, younger generations are being asked to pay more for less.

What is the Return on Investment?

And what does a taxpayer, regardless of age, get for paying all that money? A low return on investment, or ROI for short. The SSA publishes internal real rates of return (IRR), which act as a measure of ROI. Using a simple midpoint estimate of the IRR from its most recent IRR report, the ROI for Social Security is 2.7 percent, while the Treasury bond real rate of return is about 2-3 percent (nominal is closer to 4-5 percent). In contrast, the average stock market return in the last five years was 8.9 percent when adjusted for inflation; 8 percent in the last decade; and 6.3 percent in the last 30 years. 

Why the low ROI? The reality is that Social Security reserves are mandated to be invested in U.S. government securities only. Treasury bonds are essentially IOUs from the federal government to itself, which means that Social Security will never be high-yielding in its current form. A Tax Foundation study confirms that it is the combination of these investment choices, a lower birth rate, and a lower worker-to-beneficiary ratio that contribute to this low ROI (Entin, 2016).

For Social Security proponents, they see Social Security as a safety net that provides baseline financial protection. But what good is that safety net if it fails to meet the financial needs of retirees, especially those who depend on it as their primary or sole income source? With rising costs and increased lifespans, seniors need an investment tool that allows them to maintain a dignified standard of living. Social Security fails spectacularly on that front, especially when compared to the average ROI of the stock market. That safety net mentality of prioritizing insurance-like protection over investment-like returns is what has gotten the American people into hot water, much like it has with Medicaid. If retirees had the ability to invest their Social Security taxes elsewhere, 27 percent of Americans would not have to rely solely on Social Security for income (Pew Research). 

Structural Flaws and Moral Hazards

In case fiscal insolvency, a low return on investment, or disproportionately harming young workers was not enough, here are more reasons to take issue with Social Security:

• There is no ownership or inheritance of Social Security. If someone dies, they cannot pass on their hard-earned savings to heirs as they can with a 401K. Even the Supreme Court has recognized that individuals are not guaranteed Social Security contributions (Flemming v. Nestor).
• Despite its progressive formula, Social Security is not means-tested. High-income retirees can still collect full benefits, regardless of need. This feeds into the program's entrenched safety net mentality, which prioritize broad, guaranteed payouts over investment-like returns or personalized savings. This undermines both its financial sustainability and its ability to efficiently target those truly in need. The fact that it fails on both counts undermines its rationale for existing as a government program.  
• Social Security hits the poor harder with its flat tax, i.e., everyone pays the same rate. However, the tax cap at $176,100 effectively makes it regressive. The reason why it hits hard is that the 6.2 percent cuts into one's expenses when struggling to make ends meet. This tax takes a significant share of income that would otherwise go to basic needs or personal savings. 
• Social Security is designed as a lifetime, inflation-adjusted annuity. The longer one lives, the more one can collect through Social Security. Although lower earners receive a higher benefit as a percentage of their earnings, it is not so helpful because the structure disadvantages demographics with shorter average lifespans (e.g., Bostworth et al., 2016), such as low-income workers and certain racial minorities (e.g., African-Americans, Native Americans). 

Alternatives and a Case for Privatization

Reform is always kicked down the road because the myopia of the election cycle disincentivizes long-term thinking. As this report from the Cato Institute shows, reform is possible. Other countries have implemented social security reforms, whether it is transitioning to a basic benefit structure (New Zealand), reducing excessive benefits for higher earners, implementing automatic stabilizers (e.g., Sweden's age-indexed eligibility), or voluntary Universal Savings Accounts (e.g., Canada). Countries like Sweden and New Zealand have adopted innovated reforms that improve solvency and fairness, offering models that the U.S. could adapt. 

Changing demographics and increasing obligations make the current system outdated in terms of serving the needs of the retirees of today and in the future. Since Social Security is the "third rail" in U.S. politics, U.S. politicians lack the willpower to do anything aside from kicking this volatile can down the road. Rather than more incremental reforms, I would prefer privatization, in no small part because the Organisation for Economic Co-operation and Development (OECD) found that private accounts lead to broader economic growth. 

Individuals need greater control over their retirement savings, potential for higher returns, and flexibility in retirement goals to help avoid poverty in their old age. In short, they need autonomy over their future quality of life. If U.S. politicians stay mired in the inertia that is the myopia of election cycles and buying votes, future retirees remain vulnerable to government stupidity. It is time for politicians to embrace privatization instead of keeping retirees trapped in a subpar retirement system.