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My Personal Struggle with OPM Addiction: A Cautionary Tale
Opium is my pet name for OPM – Other People’s Money. I know that it’s addictive and dangerous. I have personal friends whose lives have spiraled out of control after just trying a little bit of it. It seems harmless enough in small doses, but their experience has led me to do my very best to avoid experimenting even with recreational use of this powerful substance. But recently, I have fallen off the wagon. I share my story, hoping to help others. My name is Dr. Bastiat, and I am addicted to OPM.
I live in a very nice house on a golf course in a gated community in Hilton Head. A few months ago, we found a leak in our roof. My neighbor down the street had just replaced his roof. His estimate was $13,000, but during the repair, they found some problems with flashing and sheeting, and it ended up costing nearly $15,000. My house is a little bigger, so I was thinking of numbers close to $20,000. That would be a setback, but not enough of one to lead me to get hooked on OPM. At least, you wouldn’t think so, would you? But hear my story, dear reader, so that you do not suffer the same fate as me.
The roofer shows up, and he finds the leak. There’s a 5×5-foot area of bad shingles, plus some flashing that would need to be replaced. He figured $2,000 – maybe $3,000 if they found some other problems when they got into it. I mentioned that my neighbor got a whole new roof for five times that amount, and he just shrugged.
So he goes to my HOA. Our gated community has very restrictive rules – our mailboxes all match, and I recently got a letter from them pointing out that I needed more mulch around my landscaping. No kidding. Our neighborhood looks very nice. But the HOA rules supreme.
So he goes to my HOA and tells the lady that he needed to replace a 5×5-foot section of shingles on my roof. The lady there asked if he could match them. He said no, they don’t make that shingle anymore. And even if they did, the roof is 14 years old, and has faded some, and they wouldn’t match anyway. But he showed her samples he had found that were very, very close. He pointed out that the repair was in a valley of the roof, facing away from the road, and the new shingles were so close in color, that no one would ever notice the difference. Easy repair, and it’ll look great.
She said, “No.”
He said, “I have to fix this. His roof is leaking.”
She said “No.”
He said, “I need that in writing.”
So he comes to me with a letter stating that he was not permitted to repair my roof. I said some bad words, and he says, “Relax – the game is just beginning. Watch this.”
So he sends that letter to my home insurance company. They had already approved the $3,000 repair. He explained to the insurance company that he was not permitted to do the repair they had approved, and that the only way that he could repair this leak, and have all the shingles match, would be to replace the entire roof. Which would cost $70,000.
The insurance company approved it. They had to fix the leak.
The HOA approved it. The shingles all match, and it didn’t cost them anything.
My roofer approved it. He drives a Shelby Mustang.
My wife approved it. She got a new roof, and it didn’t cost her anything.
And here I sit, rocking back and forth in the dark, struggling with my addiction to OPM. You just can’t imagine the horror until you’ve been there yourself.
But I’ll bet that you have been there yourself, haven’t you? Don’t try to act holier than thou with me – I know you’ve dabbled in the pleasures of this drug yourself, correct? Be truthful. Maybe a little harmless experimentation in college, like a Pell Grant or something? No big deal, right? In fact, it was kind of nice, wasn’t it?
Right. I knew it. So don’t judge me.
Plus, this was just a little relapse. A long weekend, if you will.
I can quit anytime I want.
In fact, I quit now. I’ve had enough. That was it. Never again. I really mean it this time. You’ll see.
Oh, boy…
It’s just that OPM is, um… so, well, so wonderful. There. I said it. It’s wonderful. It really is.
But I don’t want any more. Nope. Not me.
The politicians continue to run for office promising more and more OPM for the masses.
And they win, and they hand out the OPM. Not just to those who really need it — they hand it out to everybody. The people are happy and content, and re-elect the politicians. And we don’t criticize, because now we’re all on the take. And after all, just a little is harmless, right? Maybe just a little more. Why not?
And the politicians keep handing it out — it doesn’t cost them anything.
And they keep getting re-elected. And on and on we go.
It’s mostly harmless, right? Why not?
Oh boy…
This is going to be difficult to stop.
My name is Dr. Bastiat, and I’m addicted to OPM.
Published in General
I have enough Choctaw blood to qualify for federal aid! Hey-y-y-y-y…. I’ll be right back, I have to look up some stuff online
Some here may be trying, as I am, to learn economics, and want to know what Austrian theory says about the above.
The answer is that it does not agree at all.
Note: please don’t think that I am saying that that Matcho’s ideas are wrong, or that the Austrians are right!*
An Austrian would say that these statements are based on an interconnected system of false premises about value, the value of money, the relationship between money and real wealth, the fungibility and ownership of money, claims on money, and time preference.
So if you think you have a basic grasp of Austrian economics and agree with it, and think the quoted sentences are true, it’s time to re-read the basic texts!
For this purpose, I recommend “Theory of Money and Credit”, “Human Action” by Mises; “Prices and Production” by Hayek; the first part of “Money, Bank Credit, and Economic Cycles” by Jesus Huerta de Soto, where he explains money and banking law; and “Economic Science and the Austrian Method” by Hans-Hermann Hoppe.
*I am only saying this for the benefit of serious amateur students of economics who are not as far along as I am…each of us must learn from the older and teach the younger, or else the current body of thought of mainline economics will be forgotten, and the important project of advancing the science will be extinguished by the intellectual gangsters of the Progressivist movement.
Part of the discussion here is trying to distinguish insurance from a government taking called taxation. I personally don’t like using the term ‘economics’ to describe any legally mandated financial action such as Social Security, Medicare, and States’ Auto Liability ‘insurance’. None of these transactions are voluntary and so are not marketplace determinant. I’m definitely an amateur. I have also always thought the ‘general welfare clause’ of the U.S. Constitution was meant to be applicable to American people as a universal concept i.e. national defense, and not to be applied to selected groups of individuals who qualify under certain terms. Those latter situations were to be left to the states. But federalism and free market economics are both losing in America today.
Huh?
Only for those strange few Ricocheteers :-), if any, who are interested in understanding economics, and in particular Austrian economics:
@rightangles
Between the various ploys corprotions hold over us, ditto HOA’s, and the things the government does to us, a banner like this one, and its statements, start to make sense:
####
And 125 years ago if some minor government flunky posted himself at a turnpike and looked at your wife’s and daughter’s naked bodies and you shot him dead, no one would have objected.
I’m not even so sure we’re free range anymore.
I’ve read lots of Hayek (and Marx and Engels, too, for that matter, in college, as reference points of insanity). I minored in Economics. I have an MBA. And I’m still not sure what you’re trying to say, regarding Social Security, and whether or not you get more out than you paid in, and whether it’s a good idea at all, etc.
But OK.
A little whisky is a dangerous thing.
So much for clarity. Social Security is a government redistribution of OPM, one of several, through taxation and borrowing. I’m no expert on Austrian or any other school of economics but I see nothing I think of as ‘a good idea’ about human behavior where coercion is the critical factor. Oh, and I don’t like it either.
I know that in this thread the issue of “other people’s money” got confounded with insurance. There was also significant animus against HOAs, and not without good reason. When I served on the board, I always tried to be respectful of the homeowners and treat them as I wanted to be treated while being a good steward of our collective funds. Of course when you are on the board, you also realize that the homeowners act like jerks a significant portion of the time. My favorite was when a woman who lived adjacent to a park came into complain to us because a portion of the hedge lining our property had died in front of her unit. We replaced it with new bushes which, of course, were young and not at the same height or density as the 30 year old hedge. She was furious that we didn’t buy larger bushes, which are significantly more expensive and don’t really give you that much of an advantage. We explained that to her and she said: “I find it suspicious that only the hedges in front of my unit died.” I asked her if she thought we had deliberately poisoned her hedges and she indignantly backed down.
But the number of times that people would demand that the HOA pay for something that the homeowner was legally obligated to pay for was huge. And they always got very angry when we pointed that out. Some of the boards would just pay to avoid a scene or being dragged to court. I never understood why there were not more people of good character who understood that the HOA was the most local of their local governments and that you were literally making your neighbors pay for your home or trash removal. And these are the same people who then complain when their HOA fees go up.
I think that’s what the nanny state does and even insurance. It insulates you from the idea that you are making others pay for you because it is all viewed as someone else’s money and not yours. I use it when I need to, and that’s what government programs and insurance is for, but I always try to be a good steward of other people’s money and my own as well, even when I’m not on the HOA.
It is quite wise to point out the inherent weirdness of Social Security. For instance, it is one of the only “retirement funds” that do not allow any recovery of the assets placed by an individual in the retirement fund to be swept away if the person dies after putting monies in but not receiving one red cent out. (Already 15% of all Baby Boomers have died, many before their 60th B-days.)
It also must be pointed out that if an individual does not contribute to Soc Sec funds while an individual is young, then they violate the law. If as an independently employed person, you leave the section of the 1040 blank where you’ re supposed to calculate a sum for Soc Security, the IRS will calculate the sum for you. And then bill you accordingly.
If you work for someone who distributes a W2, they snatch your Soc Security funds from you before you’d consider whether you like it happening or not.
It should also be pointed out: many of us rely on the fact that we paid into Soc Security for many years, and should the country suddenly flip libertarian, then what are we to do if the fund vanishes?
No one can predict the future, but most libertarians do not want social security to continue but know that people have invested in it. It is a program that must be cut off gradually.
However, government being as avaricious as we know it to be, I wouldn’t put it past any government to take it away for their own uses.
I know there are sources where one hears Social Security referred to as a retirement fund and required payments called contributions but you must have also heard FICA deductions called a payroll tax and that is a more appropriate label, particularly since the redistributions are funded from general tax revenues.
Bob already covered this, but there ain’t no fund, and it ain’t an investment. It’s a tax and distributions.
Here’s another bit about it, what one gets is based on one’s last forty working quarters before taking SS (at least last I knew). So, let’s say that due to health reasons, someone who was being taxed the maximum has to stop working and live off savings they have at a relatively young age, such as fifty-two. When they reach the minimum age for distribution of sixty-two (again, last I checked), they will have contributed zero for the last forty quarters. I’m not sure what they get at that point. Is there a minimum? But had they been investing the same money, they would have something when they came of age.
There is a minimum and there is a maximum. I get something less than the minimum since they cut my larger than minimum calculated payment for 20 years paying FICA taxes because I have a federal civil service pension and they say I’m double dipping.
There were likely plenty of sound reasons for adopting the kinds of terminology in the Great Depression when the Social Security Program legislation was being developed under FDR. Plenty of people with strong work ethics had been struggling and living in relative poverty but did not like even a hint that they were on or would be on welfare. And most Americans despised the Communist movement. So we get this safety net described using terms like retirement and insurance and they set up an accounting mechanism and call it a ‘trust fund’. So a classic social program passes muster and most don’t even realize what we have until the Medicare proposals hit the table 30 years later.
Semantics. Legalistic semantics. Investment, insurance, tax. It’s all the same. It is a coerced taking of money with the promise to be paid in the future upon old age or disability. It is based on your contributions. You have a moral right to that money, no matter what they might call it.
You may have a moral right to it, but I’m pretty sure the Supremes have decided you don’t have a legal right.
That’s a totally different matter.
I’d axe it immediately. Stop the payroll tax immediately. Every citizen would receive his choice of
No one would lose anything and the economic benefits would begin immediately.
Jimmy Carter, you seem to think like your namesake. In typical form for him, you’ve completely misinterpreted my comment. It was a small comment and since you, obviously, did not understand it, perhaps you should have asked for expansion or explanation before attacking me.
Dang! I had to replace my roof due to wind damage and had the same matching problem. I also live in an HOA (actually a Property Owners’ Association) community that has appearance controls. But my roofer wasn’t smart enough to have me go to the POA. Insurance covered a third of the bill (they took responsibility for an entire section –the west facing area) but I ponied up the rest. The roofer gave me samples of the old and new tile to try and induce the insurance company to cover it all. But the match, while not perfect, was close enough that the insurance didn’t bite, and I didn’t have a letter from POA demanding that it be an absolutely perfect match.
1000%
I was just watching Larry Kudlow. he had a segment about how off the inflation measurements are. They are leaving out the cost of credit in the extreme. In other words, how bad your payments are on anything you buy like a car or a home. They didn’t used to do this. The whole thing is a scam to enable government. It’s going to crash hard at some point. The Fed is pushing way too many things around, way too much. Total idiocy. Credit card debt has gone up 47% since Biden got in office. It’s too much central planning, and you are a fool to believe in it.
Government Is How We Steal From Each Other™
1000%
The economy constantly produces deflation. the Fed produces too much inflation. That is where the excess money comes from.
We can’t adjust from this madness because the Chinese mafia have made so much money from trading with us, and they are evil.
Well done, sir.
It’s outrageous.