Tuesday, May 22, 2012 | Privacy Policy
Exclusive: October 20, 2010 -
What America can learn from Australia, Part 1
The fine economic historican Burt Folsom has pointed out that a major strength of America was copying some inventions from Europe, but “We could take those inventions and make them work on a large scale in ways the Europeans could never imagine. … We got where we were by watching the Europeans, studying their methods, and then doing something different–and something better.”
But even better than Europe is Australia—unlike Europe, it has been our staunchest ally ever since America fought in WW1, and it has a number of government policies much better for its people. It has also made mistakes that we must avoid as well.
Don’t copy its gun control silliness!
The most glaring was its harsh gun control laws, a knee-jerk reaction after a gun massacre in 1996—of people lacking guns to defend themselves, as usual. This resulted in Australians handing in over 640,000 hunting rifles and shotguns to the government, which were destroyed.
But although fire-arm homicide rate had declined by two-thirds in the 15 years before the gun control laws, it increased markedly after the ban. In the next year, three times more people in the Australian state of Victoria were murdered by guns, and 19% more in Australia as a whole. Armed robberies, gun-related assaults and home invasions also jumped markedly. (See this documentation from the NRA.)
But who should be surprised? Criminals are not totally irrational: they don’t want to take unnecessary risks any more than law-abiding citizens do. So if thugs think that their prey is unarmed, they calculate that there is less risk to themselves. If they have a choice between a house with NRA stickers and one with stickers saying “There are no guns in this household”, which would they choose? Clue: the Virginia Tech massacre in 2007 occurred in a “gun-free zone”, while a murder spree in New Life Church in Colorado Springs was stopped when armed heroine Jeanne Assam shot the thug.
Do copy its retirement scheme
One of America’s worst schemes is Social Security. This has been fraudulent right from the start, and a Ponzi scheme that pays money from current payers to older payees, and doesn't even give Americans any right to their SS ‘contributions’, and will soon be insolvent. Yet Americans have 12.4% of money confiscated from their earnings, to fund Congress’ mad spending programs. Economist Dr Walter Williams explains below:
Conversely, in Australia, employers must contribute 9% to their employees’ personal retirement (“superannuation”) accounts. Further, the employee may choose the retirement fund, and whether to invest in stocks, bonds, or real estate. While it may not satisfy a libertarian purist, it is light years ahead of our system.
Al Gore laughably talked about a “lock box” for Social Security, but nothing is locked when Congress wants to get its greedy paws on our money. Australia’s personal superannuation accounts really are locked.
And while leftist front organizations like the AARP demonized the stock market as “gambling” (while it hypocritically offered its own members stock-based mutual funds), in reality, over long time frames, it has made far more than social security.
In fact, $100,000 invested in stocks matching the Dow over 20-year periods would be $165,000 at worst, and $2.7 million at best, and 90% of the time would be worth over 300,000. Alternatively, even a horrible 20-year period that suffered the 1929 crash and the Great Depression still produced a return of over 3% after inflation. Putting it another way, what if $100,000 of Social Security ‘contributions’ were invested in the stockmarket index about 20 years ago (as from October 2009)? Despite the horrible recent stockmarket crash, it would be worth $495,000. If it were invested in a mixture of 60% stocks and 40% bonds, it would also have returned over 9% per annum, and with less volatility (up and down rides). It sounds like a “gamble” worth taking—but our political masters won’t let us!
GWB tried to reform America's retirement system part-way towards something similar to Australia's model, i.e. allowing some private investment of Social Security ‘contributions’. But the craven Republican (aka Dem-Lite) majority wouldn’t back him—they were afraid of being hammered by the voters. That gutlessness really worked for them, as we know so well.
