The Social Security Mattress Fund

Back in 2005, George W.  Bush suggested that maybe, just maybe, Social Security ought to let some money should be invested in the market.  Naturally, Washington reacted as if he had proposed funding retirement by making seniors fight raccoons for loose change behind the Cracker Barrel.  We were told this was dangerous.  Reckless.  Radical.  Possibly the end of civilization, or at least the end of the entitlement system as a sacred government-operated mattress stuffed with IOUs.

The idea was simple enough: instead of putting every Social Security dollar into the federal government’s own weird bookkeeping system, take some portion of the incoming payroll-tax money and invest it in the productive American economy.  Not in tulip bulbs.  Not in Uncle Louie’s alpaca ranch.  Not in a cryptocurrency named RetireCoin bearing a cartoon eagle wearing sunglasses.  Just something boring, broad, and dull enough to make a Vanguard brochure seem like a Tom Clancy novel: an S&P 500 index fund, the darkest blue of blue chip investments.

Now suppose we had taken half of new Social Security payroll-tax receipts beginning around 2005 and invested that half in a broad S&P 500 index fund.  The other half would still have gone into the regular Social Security system to help pay current benefits.  This was not a proposal to stop paying Grandma.  Grandma would still get her check.  She might even get it while glaring at CNBC and demanding to know why Pfizer was down three-eighths.

Under a rough model, investing half of the incoming payroll-tax money from 2005 through 2025 in the S&P 500 would have produced a gross investment account of roughly $38 trillion.  That is not a typo.  It is not $38 billion, which is the kind of number Congress loses in a sofa cushion while looking for a defense contractor.  It is $38 Trillion, with a T.

Of course, that gross number is not the same as saying Social Security would have had $38 trillion sitting in the vault, stacked neatly between the Ark of the Covenant and Jimmy Hoffa.  Social Security still had to pay benefits during those years.  People retired.  Checks went out.  Medical alert bracelets were purchased.  Grandchildren were slipped twenty-dollar bills and told not to tell their parents.  If we subtract the continuing cost of paying benefits from the fantasy version where all of this was magically self-contained, the more realistic rough net figure comes down to something like $16.5 trillion to $17 trillion.

That is still an astonishing number.  The actual Social Security trust fund was about $2.6 trillion at the end of 2025.  So instead of limping along with a fund that Washington keeps warning will be exhausted in the foreseeable future, we might have had a net fund in the neighborhood of $16.6 trillion.  That is a difference of about $14 trillion.  Fourteen trillion dollars is not walking-around money.  That is not “rounding error.” That is not the amount the federal government spends because someone in a subcommittee discovered there are still three counties in America without a federally funded interpretive dance center.

And here is where it gets really irritating.

This period was not exactly a golden escalator ride to prosperity.  Anyone who says, “Well sure, the stock market did well, but only because everything went perfectly,” should be required to sit quietly in a room and watch financial news from 2008 on a loop until they apologize to the nearest index fund.  Since 2005, we have had the housing collapse, the financial crisis, the Great Recession, the COVID crash, inflation panic, interest-rate panic, recession panic, bank panic, election panic, European panic, China panic, debt-ceiling panic, and the recurring American tradition of yelling “This is unsustainable!” while continuing to sustain it with borrowed money.

The S&P still won. 

That does not mean stocks always go up.  They do not.  Sometimes they fall down the stairs, burst through the screen door, and land in the shrubbery.  But over long periods, owning pieces of profitable companies has historically done better than lending money to the federal government so it can write itself a note promising to repay itself later.  The Social Security trust fund is not exactly Scrooge McDuck’s money bin.  It is mostly a pile of special Treasury securities, which is Washington’s way of saying, “We spent the money, but we left ourselves a very formal Post-it note.”

Now, for the truly nervous, let us run a deliberately ridiculous stress test.  Suppose the invested half of payroll taxes had not earned the actual S&P returns.  Suppose it had lost 10% every single year.

Not one bad year.  Not one crash.  Not a recession.  Not 2008.  I mean losing 10% per year, every year, for twenty-one years.  That is not an investment model.  That is a financial horror movie.  That is the stock market being managed by rabid squirrels with margin accounts.  That is a mutual fund whose prospectus simply says, “Abandon hope, all ye who enroll.”

Even then, if half of annual payroll-tax contributions had been set aside each year from 2005 through 2025 and the balance had shrunk by 10% annually, the side fund would still have ended up around $3.95 trillion.  Compared with the actual trust fund reserve of about $2.56 trillion, even that disaster scenario would be ahead by roughly $1.4 trillion.

That number requires an important explanation, because otherwise someone from Washington will run into the room waving a blue-ribbon commission report and wheezing into a microphone.  The $3.95 trillion figure is the value of the side investment fund under the absurd “loses 10% every year” assumption.  It assumes benefits are still being paid through the regular Social Security cash-flow system.  If you charged all benefits against that side fund alone, then of course it would not work.  But that was never the point.  The point is that setting aside part of incoming money creates a growing asset pool, even under comically terrible assumptions.  Under real-world market returns from 2005 through 2025, that asset pool would have been gigantic.

And no, this does not mean we should turn Social Security into a day-trading app.  Nobody needs Grandma checking candlestick charts between “Wheel of Fortune” and the evening news.  The point is not speculation.  The point is ownership.  A broad index fund is not betting on one company.  It is buying a slice of American productivity.  It is owning part of the companies that make the phones, build the stores, drill the oil, run the railroads, process the payments, sell the groceries, manufacture the drugs, ship the packages, write the software, and generally keep the country functioning while Congress holds hearings about why nothing functions.

A system like this would also have changed the psychology of Social Security.  Instead of workers seeing payroll taxes vanish into the federal fog, they would know that at least some part of the money was being invested in real assets.  Not promises.  Not slogans.  Not “the full faith and credit” of people who cannot pass a budget without theatrical hostage negotiations.  Real ownership in real companies.

Imagine what that much sustained investment in the American economy could have meant.  Not every dollar would have gone directly into a new factory or a new job, because index funds mostly buy shares that already exist.  But long-term investment strengthens markets.  It lowers the cost of capital.  It supports expansion.  It helps companies grow, hire, modernize, research, build, and compete.  It also gives ordinary workers a direct stake in the growth of the country.  The people paying into Social Security would not just be funding benefits for today’s retirees.  They would be building a national nest egg tied to the success of American enterprise.

Instead, we chose the mattress.

Every year, payroll taxes come in.  Benefits go out.  The surplus, when there is one, gets lent to the federal government.  The federal government spends it.  The trust fund receives a Treasury security.  Everyone in Washington puts on a serious face and says the system is “invested.” Technically, that is true.  It is invested in the same sense that giving your brother-in-law $500 and receiving a napkin that says “I owe you big-time” is fixed-income investing.

The obvious reply is that it is too late now.  We missed the chance.  The 2005 train left the station.  The conductor retired, the station was renamed after a senator, and the tracks are now part of a federal high-speed rail study that will be completed in 2147.

But it is not too late.

We do not have to fix the entire system in one heroic act.  Washington loves heroic acts because they create press conferences, commemorative pens, and bipartisan photographs in which everyone looks as if they just smelled smoke.  But Social Security could begin modestly.  Set aside a small percentage of annual payroll-tax receipts into a true national investment fund.  Make it broad.  Make it boring.  Make it automatic.  Make it legally protected from congressional raids, which means putting it behind more locks than Fort Knox, NORAD, and a teenager’s phone.

Start with 1%.  Or 2%.  Or 5%.  The exact number matters less than the principle: stop treating every incoming dollar as if it must be spent immediately or loaned to the same government that is already broke.  Begin building an actual asset base.  Let compounding do what compounding does.  It will not solve every problem overnight.  It would not make actuarial deficits disappear like a magician’s assistant but it would move the system in the right direction.

The best time to have begun  was twenty years ago.  The second-best time is now.  The worst time is always “after the next election,” which in Washington means approximately never.

Social Security does not need a casino.  It sure as hell does not need any more immoral politicians promising the elderly the economic impossible.  It needs a savings account with ambition.  It needs a portion of its annual inflow tied to the productive economy instead of buried in the federal mattress.  We had a chance in 2005 and ran away from it screaming.  Fine.  We are older now.  Presumably wiser.  Certainly more indebted.

Maybe it is time to stop pretending the mattress is a retirement plan.

Cruel and Unusual

What no one argues is that four people were killed in Tommy Zeigler’s family furniture store in Winter Garden, Florida, on Christmas Eve.  That much is not in dispute.  The dead were Zeigler’s wife, Eunice; her parents, Perry and Virginia Edwards; and a customer named Charlie Mays.  Zeigler himself was also shot and badly wounded, which is either evidence that he was a surviving victim of a robbery gone catastrophically wrong, or evidence that he was a very determined murderer willing to shoot himself in the abdomen to sell the story.

This is not a cheerful Christmas story.  Somewhere Norman Rockwell just put down his paintbrush and poured himself bourbon.

The State of Florida’s theory was that Zeigler planned the whole thing.  According to prosecutors, he killed his wife for a large life-insurance payout, then killed her parents and Charlie Mays as part of an elaborate cover-up.  Mays, in the state’s version, was not an innocent customer who wandered into the wrong furniture store at the wrong time—he was the convenient corpse Zeigler needed in order to make the murders look like a robbery or shootout.

Zeigler has always maintained the opposite.  He says he walked into violence already in progress, fought for his life, and barely survived.  His lawyers have repeatedly argued that physical evidence, blood evidence, and DNA evidence do not support the prosecution’s version of events.  Prosecutors, with equal enthusiasm, have insisted that the case was proved and the jury agreed.

A Florida jury convicted Zeigler.  He was convicted of first-degree murder in the deaths of Eunice Zeigler and Charlie Mays, and second-degree murder in the deaths of Perry and Virginia Edwards.  The jury recommended life imprisonment for the death-eligible counts.  The judge overrode that recommendation and imposed death sentences anyway, because Florida law at the time allowed judges to do that sort of thing.  It is always comforting when the justice system finds a way to make “recommended by the jury” mean “thank you for your suggestion, please enjoy a complimentary mint on the way out.”

The case then moved into the strange afterlife of capital punishment, where nothing is ever really finished.  Zeigler’s original trial concluded, but the litigation continued.  His death sentence was vacated and then reimposed by a different judge.  There have been appeals, post-conviction motions, DNA fights, evidentiary hearings, death warrants, stays, more motions, more hearings, and enough paperwork to mulch a small national forest. 

This is where the phrase “cruel and unusual” begins to chew through the bars of Tommy’s cell on death row.  You see, Tommy Ziegler was convicted in 1976, he has been waiting to be executed for 50 years.

The Constitution prohibits cruel and unusual punishment.  Any civilized person should be willing to admit that the deliberate killing of a prisoner by the state at least wanders into the neighborhood of that prohibition, even if the Supreme Court has decided, for now, that capital punishment is not automatically unconstitutional.  “For now” is doing a great deal of work in that sentence.  Constitutional law is permanent in the same way wallpaper is permanent.  It stays right where it is until enough people decide it has become hideous.

There are endless debates about the death penalty, and I understand both sides, which is inconvenient because it prevents the clean pleasures of yelling.  I dislike the idea of the state executing people.  I especially dislike the idea of the state executing people after the state has repeatedly demonstrated that it can lose evidence, botch trials, rely on junk science, believe jailhouse informants, and occasionally confuse “beyond a reasonable doubt” with “close enough for government work.”

On the other hand, I can think of crimes so monstrous that life in prison feels inadequate.  There are people who have done things so evil that the soul reaches for punishment before the brain can call a committee meeting.  For someone like Osama bin Laden, even my better angels admit the executioner should browse the power-tool aisle at Lowe’s in search of a method of fulfilling the court’s sentence. 

So, I am not writing this as someone who thinks the death penalty is always morally impossible.  I am writing as someone who thinks it is far too easy to support the death penalty in theory and far too hard to defend it in practice.

Because in practice, it is a mess.  A slow, expensive, contradictory, lawyer-fed mess.

And it is expensive.  That is the part that always surprises people.  Many assume execution must be cheaper than keeping someone in prison for life.  After all, food costs money.  Guards cost money.  Medical care costs money.  Prisons are not free, no matter how many politicians speak as if we built them out of surplus righteousness and unpaid interns.

But the execution itself is not the expensive part.  The syringe, the chemicals, the gurney, and the last meal are not what bankrupts the state.  The money disappears decades earlier, in the capital trial process.  A death-penalty case is not just a murder trial.  It becomes a media circus that lingers for years.

The lawyers have to be more specialized.  Jury selection takes longer.  Experts are hired.  Motions breed in the file cabinet like rabbits.  If there is a conviction, there is often a separate penalty phase, which is essentially a second trial to decide whether the defendant will live or die.  Then come the automatic appeals, state post-conviction proceedings, federal habeas petitions, challenges to evidence, challenges to lawyers, challenges to the method of execution, and occasionally litigation over whether the state’s preferred chemical cocktail is medicine, punishment, or a very grim chemistry fair project.  All of this clogs up the court calendar and costs some very real taxpayer money.

And there should be safeguards.  That is the maddening part.  The cost is not simply waste.  Much of it is the price of trying not to kill the wrong person.  A mistaken prison sentence is terrible, but at least there is some possibility of correction.  A mistaken execution cannot be fixed with an apology, a check, and a plaque reading, “Oops.”

Study after study has found that death cases cost more than life-without-parole cases.  Maryland found that a death sentence cost millions more than a comparable non-death case.  California’s death-penalty system has been estimated to cost billions more than a system where life without parole is the maximum penalty.  North Carolina researchers reached similar conclusions.  Kansas found that death cases devour more court time than ordinary murder cases, which is a little like discovering that a hippopotamus takes up more room in the bathtub than a duck.

So no, the death penalty is not the budget-conscious option…it is not discount justice.  It is premium-priced vengeance, financed one hearing at a time with the taxpayers footing the bill.

If we lived in some imaginary country where the sheriff arrested a murderer on Monday, the judge sentenced him on Tuesday, and the executioner handled matters on Wednesday before lunch, then yes, execution would probably be cheaper.  But that is not the United States.  We have constitutional protections, appellate review, evidentiary rules, procedural safeguards, and a national memory full of wrongful convictions.  We also have judges, lawyers, prosecutors, clerks, experts, transcripts, motions, remands, re-hearings, and a legal vocabulary apparently designed by people paid by the syllable.

The real question, then, is not whether execution is cheaper.  The real answer is that it usually is not.  The real question then becomes whether the state should spend extra money to achieve death rather than permanent imprisonment.

Some people will say “yes” because they believe certain crimes deserve the ultimate punishment regardless of cost.  That is a moral argument and it may be right or wrong, but at least it is honest.  What is not honest is pretending the death penalty saves money.  It does not.  In fact, it is the most expensive way to prove that the state is very, very angry.

Which brings me to a possible compromise (though I admit compromises on the death penalty have all the natural grace of a committee-designed camel).  What if the death penalty were reserved exclusively for the worst of the worst: serial killers and mass murderers?  Not every murderer.  Not every horrible case.  Not every crime that makes the evening news unbearable.  Only those who kill multiple people in a single mass-murder event, or those who murder repeatedly over time.

This would not end the moral argument, it would not satisfy abolitionists, and it would not satisfy those who think every aggravated murder deserves death, but it would narrow the system dramatically.  America’s death rows include roughly two thousand people.  If capital punishment were restricted to serial killers and mass murderers, the number of eligible prisoners would shrink to a small minority (probably only a few hundred at most).  Most capital murders are horrifying, but they are not Ted Bundy, John Wayne Gacy, the Oklahoma City bombing, or a school massacre.

But the larger point remains:  If society insists on keeping the death penalty, it should at least stop pretending that every death-eligible case is equally clear, equally monstrous, and equally worth the cost.  Reserve it for the rare category of crimes where the evidence is overwhelming, the public scrutiny is intense, and the scale of the crime is beyond ordinary murder.  For everyone else, life in prison without parole is not mercy.  It is a concrete box with meals, boredom, old age, and no exit.

If this rule had been in use for the last half century, we would have reduced the number of people sitting on death row in this country from roughly two thousand to about three hundred.  Not only would we have taken a significant step to unclogging the our country’s court dockets, we would have saved the taxpayers about $4 billion.

That may not satisfy the hunger for vengeance, but it would have been cheaper, cleaner, and less likely to leave us fifty years later, staring at an old man on death row and wondering whether punishment has become less a sentence than a national nervous breakdown.

The death penalty, as practiced, is not swift, it is not cheap, it is not simple, and, after half a century, it is hard to call it justice without feeling the word wobble in your mouth.  Can anyone really argue that Florida’s executing an eighty-year-old man now confined to a wheelchair after he has endured half a century on death row serves the cause of justice?

At some point, the state should either carry out the sentence quickly, constitutionally, and correctly, or admit that it cannot.  Because a system that takes fifty years to decide whether to kill a man is not projecting moral certainty.  It is pacing the floor in a black robe, mumbling to itself, and billing the taxpayers by the hour.

The Roman Seal Box

There is a scene in one of my favorite movies, Roxanne, where Steve Martin’s character sits down to write a letter.  But he does not merely grab the nearest ballpoint pen from the coffee mug, rip a page out of a legal pad, and start scribbling.  No, this is a man who understands civilization.  He opens a desk drawer and begins searching for the perfect stationery.  Then he selects the perfect pen.  He is not just writing a letter.  He is preparing a small act of theater.

How wonderful!

Compare that with a modern text message.

“u up?”

There it is: the collapse of Western civilization in three characters and a question mark.

I still like letters.  I like to write them.  I assume I would like to receive them, although, at this point, that is mostly theoretical.  I have heard rumors that people once received personal letters in the mail, but that may be one of those apocryphal stories, like rain following the plow, or a city council’s lowering taxes.

There was a time when the mail was exciting.  You opened the mailbox and found something besides bills, campaign flyers, and a postcard from your dentist featuring a cartoon molar water-skiing.  There might be a letter.  A real letter.  From a real person.  Written by hand.  Folded carefully.  Slipped into an envelope.  Addressed by someone who knew where you lived and, more importantly, thought about you long enough to find a stamp.  There is a little magic in a letter that has touched both the hand of the writer and the hand of the reader, carrying across the miles not just words, but evidence of affection.

Now the mailbox is mostly a metal spam folder with hinges, a temporary repository for grocery store advertisements and assorted junk mail.

But I still like the ritual of writing letters.  Occasionally, I like to go whole hog and I get out nice stationery—not “printer paper from the bottom drawer” nice, but actual stationery—but paper that suggests I might own a smoking jacket, a globe, and opinions about port wine.  Then I choose an old fountain pen (preferably one temperamental enough to remind me that convenience is the enemy of character).  A fountain pen does not simply write…It negotiates.  It makes demands: “Hold me correctly!”  “Use decent paper!”  “Do not rush!”  “Do not press down like you are filling out a loan application!”  “Write legibly!”

Then, when the letter is finished, I sometimes close it with a wax seal.

Now, we are getting somewhere.

A wax seal turns a letter into an event.  Without a wax seal, an envelope says, “Here is some correspondence.” With a wax seal, it says, “This may contain news of inheritance, betrothal, or troop movements.” It gives even a note about lunch the dignity of a royal decree.

The process itself is ridiculous in the best possible way.  You light a little flame, melt sealing wax, drip it onto the flap, and press a seal into it.  For one brief shining moment, you are not a person sitting at a desk in the age of password resets and software updates, you are a Venetian doge, a Tudor minister, or a minor nobleman with troubling peasants and a cousin in exile.

Of course, the modern postal system does not fully share my enthusiasm.  A wax seal can be torn off, smashed, smeared, or otherwise brutalized by sorting machines that treat envelopes the way airport baggage handlers treat guitars.  The U.S.  Postal Service, which can deliver a birthday card across the continent for the price of a candy bar, is still not really designed for my eighteenth-century correspondence cosplay.

But I have an answer…Or at least I have the beginning of an answer, which is more or less the same thing in blog form.

I need a Roman seal box.

Let me explain. No, there is too much. Let me sum up.

In the Roman world, important documents were sometimes sealed using little containers called seal boxes.  The document, often written on a wax tablet or on folded material, would be tied shut with string.  The string would pass through or around the box.  Wax would be placed inside the box, and then a signet ring or seal would be pressed into the wax.  The box protected the wax seal from damage, while the seal protected the message from tampering.

That is the kind of sensible over-engineering I admire.

The Roman seal box was usually small, often made of bronze, and sometimes decorated.  It had a base and a lid.  The cords holding the document closed ran through slots or holes.  Once the wax was sealed inside, you could tell whether anyone had opened the document because the cord would have to be cut or the seal broken.  In other words, it was ancient two-factor authentication, except instead of a six-digit code texted to your phone, it involved string, wax, metalwork, and suspicion.

The steps are simple enough.  First, write your letter.  This is already where most modern people drop out, because writing more than two sentences without autocorrect or emojis now counts as a survival skill.  Second, fold the letter.  Third, wrap it with string or ribbon.  Fourth, pass the string through the seal box and tie it up.  Fifth, drip wax into the box, press your seal into it, and close the lid.  Sixth, send the letter to someone who either will be delighted or will be deeply concerned about your mental state.

I want one.

Not an original Roman seal box, of course.  That would belong in a museum, or at least in the hands of someone who knows the difference between “patina” and “I dropped it in the driveway.” I want a cheap modern version.  Something made for the eccentric letter writer.  Something you could buy in a set with sealing wax, cotton cord, and a little brass seal engraved with a cat, a family initial, or the words “You Have Been Formally Notified.”

Why does no one make these?

We live in an age when you can buy a plastic banana slicer, a Bluetooth toaster, and a phone case shaped like a waffle, yet I cannot easily buy a Roman-style seal box for mailing personal letters.  This seems like a failure of capitalism.  We have 47 kinds of toothpaste, but no affordable device for making my correspondence look like it was intercepted on the Appian Way.

Perhaps the answer is 3D printing.  Surely someone with a 3D printer, a small Etsy shop, and a willingness to indulge harmless weirdos could produce these things.  Make them in bronze-colored resin.  Make them in faux ivory.  Make a starter kit.  Call it “The Cicero.” Offer premium editions called “The Cleopatra,” “The Hadrian,” and “The Maiden Aunt Who Still Writes Thank-You Notes.”

There is a market here.  It may be a tiny market, but it is a market.  There are people who buy fountain pens.  There are people who collect sealing wax.  There are people who still know what blotting paper is.  There are people who own more than one inkwell and are not currently appearing in a period drama.  These people need tools.  They need encouragement.  They need enablers.

Which gives me an idea.

The Post Office is forever lamenting the loss of business.  Nobody writes letters anymore, they say.  Mail volume is down.  The system is under strain.  Packages are keeping things alive, but the personal letter has been shoved into history alongside calling cards, hat pins, and people who knew how to fold a road map.

Fine.  Then revive the art of letter writing.

Do not merely sell stamps with flowers and lighthouses.  Launch a campaign.  “Write Someone a Real Letter Month.” Put up posters.  Show a grandmother receiving a handwritten note and not one more email beginning, “We value your privacy.” Show a child opening an envelope and realizing that paper can contain affection.  Show a man choosing a fountain pen as if the fate of the Republic depends on it.

And then offer a discount for personal mail sealed with wax. 

The Post Office could create a special “hand-cancelled personal correspondence” rate.  Bring in a letter with a wax seal, and instead of feeding it to the sorting machines like a chicken into a combine, a postal clerk gently hand-cancels it while classical music plays.  For an additional fee, the clerk could nod gravely and say, “Very good, sir.  We shall see that it reaches Albany.”

And if the letter has a Roman box seal, the Post Office doesn’t charge anything, it will be their way of reinvigorating the lost art of writing letters.

This might not solve the Post Office’s financial problems, but neither has anything else, so why not try charm?

They could sell the supplies right there.  Stamps, stationery, envelopes, sealing wax, inexpensive fountain pens, and officially approved Roman-style seal boxes.  Put them next to the passport forms and the padded envelopes.  Sell a “First Letter Kit” for children, a “Love Letter Kit” for romantics, and a “Complaint Letter Kit” for retirees with excellent handwriting and unfinished business.

There could even be classes.  “How to Write a Letter Without It Sounding Like a Hostage Note.” “Fountain Pens: Friend or Ink-Filled Menace?” “Wax Seals for Beginners.” “Advanced Grievance Correspondence.”  I would attend that last one just for the refreshments.

Because a letter is not just communication—it is evidence of time spent, time dedicated.  It says, “I sat down.  I thought about you.  I chose words.  I made marks on paper.  I folded this object and sent it into the world.” A text says, “I was standing in line at the pharmacy and my thumb slipped.”

There is room for both, of course.  Text messages are useful.  Emails are efficient.  Phone calls still exist for people who enjoy panic.  But letters occupy a different place.  They are slower, quieter, and more deliberate.  They do not demand an immediate answer.  They do not buzz in your pocket.  They wait.

That may be why they feel almost luxurious now.  Not expensive luxurious, necessarily, but human luxurious.  The luxury of attention.  The luxury of paper.  The luxury of ink drying before the next sentence.  The luxury of sending something that cannot be deleted by accident, buried under newsletters, or answered with a thumbs-up emoji.

So, I will keep writing letters, even if I am mostly writing into the void.  I will keep using fountain pens that occasionally blob ink like wounded squid.  I will keep melting wax and pressing seals.  And someday, when I find or make the right little Roman seal box, I will tie up a letter, seal it properly, and send it off through the modern postal system like a message from a saner, slower, more ceremonious world.

And if the recipient opens the mailbox, sees that mysterious little sealed object, and thinks, “Good heavens, what is this?” then the letter will already have done half its work.

The New Mexico Film Miracle, Now Showing at Taxpayer Expense

New Mexico politicians dearly love the film industry, and why wouldn’t they?  It gives them everything politics likes best: celebrities, ribbon cuttings, press releases, big numbers, and a chance to stand in front of a camera while pretending the camera showed up entirely on its own.  If a governor or legislator can point to a soundstage, a catered lunch, a movie star hiding behind sunglasses, and a rented van full of assistant auxiliary vice-producers, then, by golly, economic development has arrived!

Or so we are told.

The official story is that New Mexico’s film subsidy is working.  Hollywood comes here, spends money, hires people, uses our landscapes, and occasionally blows up a fake gas station somewhere outside Albuquerque.  In return, the state writes a very large check, calls it a tax credit, and assures the public that this is how prosperity is made.  The whole thing is presented as if the state has discovered a magic well: drop taxpayer money in one end, and out come jobs, glamour, and—maybe—a Netflix series with better lighting than plot.

But before we start polishing the Oscar and naming a new state highway after some producer from Burbank, it might be worth asking the rude question: are New Mexico taxpayers actually making money on this deal?

The answer appears to be no.  Not “maybe no.”  Not “no, but only if you use mean arithmetic.”  More like plain, old “NO”—the kind your banker gives you when you ask whether buying a bass boat counts as retirement planning.

The film industry creates activity.  Nobody seriously denies that: when a production comes to town, people rent hotel rooms, they eat meals, and they hire drivers, security guards, extras, caterers, construction workers, set dressers, location scouts, and folks whose job titles sound like they were invented during a lunch break. Trucks move around.  People wear radios and look busy.  A local restaurant might sell 200 breakfast burritos before sunrise.  Money changes hands.  That is all real.

But activity is not the same thing as profit.  A fellow can set fire to his barn and create a lot of activity.  Firefighters arrive, insurance adjusters appear, lumber gets ordered, contractors get hired, and everybody in the county has something to talk about at the local diner.  That does not mean burning down barns is a sound rural-development strategy.

The state’s sales pitch often relies on big “economic impact” numbers.  Those numbers count money moving around.  What they do not necessarily show is whether the state treasury gets back what it spent.  That is the difference between a business’s making money and a carnival’s coming through town.  A carnival produces traffic, noise, corndog sales, and temporary employment.  But if the town must pay the carnival to show up, pay for the cleanup, and then brag that the cotton-candy stand had a good weekend, somebody ought to check the books.

New Mexico’s film credit is not just a polite tax break.  It is fully refundable, which is a fancy way of saying that if the credit is larger than the production company’s tax bill, the state will hand over cash.  That money does not fall from the sky—it comes from New Mexico people who paid taxes, including people who will never be invited to a wrap party, who will never meet a star, and who will never get residuals when the show streams in Belgium.

That is where the whole thing starts to smell less like economic development and more like political theater.

The politicians tax a waitress in Roswell, a mechanic in Farmington, a retiree in Las Cruces, and a small-business owner in Deming, then they send part of that money to a studio.  Then, when the studio hires a temporary crew in Albuquerque, the politicians hold a press conference to announce that they have created jobs.  This is a little like stealing a man’s cow, selling him a glass of milk, and then asking him to applaud your dairy program.

And what kind of jobs are we buying?  Some are good jobs.  To be fair, New Mexico does have a few skilled film workers: grips, electricians, carpenters, camera people, wardrobe people, set builders, production accountants, and other craftspeople who know their trades.  Those jobs can be skilled, respectable, and well-paid…when the work is steady.

But that little phrase—when the work is steady—is where the mule bogs down in the arroyo.

Film work is project work: the production arrives, spends money, hires people, shoots, wraps, and leaves.  It is not the same as a factory that opens, runs year-round, trains workers, buys supplies, expands, and puts down roots.  It is more like a cattle drive: there may be dust, payroll, and excitement, but when it passes through, the herd is gone.

The state’s own accounting shows that New Mexico is not making its money back from the film subsidy.  According to the Legislative Finance Committee, the film production tax credit returned only about 6 cents in state tax revenue for every $1.00 spent in FY25 — meaning state government recovered roughly six percent of what it paid out, while losing the other ninety-four cents from the treasury.  That does not mean no one made money; hotels, caterers, drivers, extras, crew members, and vendors certainly did.  But it does mean the state’s “return on investment” argument depends on counting economic activity, not actual money returning to the state budget.  In plain English, New Mexico is paying Hollywood a dollar, getting back about six cents in tax revenue, and calling the noise in between prosperity.

If you could make a state rich by using tax money to hire citizens…. You could fly by pulling on your bootstraps. 

The state also loves to talk about local jobs.  Fine.  But headcounts can be slippery.  When someone says most workers are local, are we talking about total people, total hours, or total payroll?  A local extra who works two days and earns pocket money counts as a job.  So does a driver.  So does a hotel clerk indirectly serving the production.  Meanwhile, the larger checks may go to stars, directors, producers, editors, specialists, and imported crew, all of whom show up temporarily, spend some time under our painfully blue sky, and then go home to wherever people say “the industry” without irony.

If the state counts every local extra and driver as proof of transformation, then we need to be careful.  A movie set can create the same kind of service jobs that a big wedding, a rodeo, or a convention creates.  That does not mean the economy has been reborn.  It means visitors came to town and spent money, partly because we paid them to.

Then there is the grand dream of building a permanent cluster of film-related businesses.  This is the part where the consultants get misty-eyed.  We are told that, if New Mexico just keeps subsidizing Hollywood long enough, the industry will take root here.  Studios will expand.  Workers will train.  Vendors will appear.  The ecosystem will mature.  One day, presumably, we will all wake up, and New Mexico will be the new Hollywood, only with better enchiladas and fewer agents named Brent. (Yeah—and the Rio Grande will have water running in it 24/7/365!)

Maybe…but film production is famously mobile.  It goes where the money is and it’s a target-rich environment.  Georgia offers money, Louisiana offers money, Oklahoma offers money, Canada offers money, and the next state governor who wants to hide economic failure will offer money, too.  (In fact, only 38 states are subsidizing film production!).  If New Mexico builds a film industry that survives only as long as New Mexico keeps writing checks, then we have not built an industry.  We have built a hostage situation.

Take, for example, the case of the Sylvester Stallone’s television series, Tulsa King.  The first season was filmed in Oklahoma because the state offered sizable subsidies.  The next three seasons were filmed in Georgia because Georgia offered a bigger subsidy.  You don’t have to be a particularly sharp viewer to notice that “Tulsa” no longer looks like Tulsa.  (The Georgia Department of Audits and Accounts reports that the state recovers only 10% of the money they spend to attract the movie industry.)

Even workforce training has a leak in the bucket.  Suppose we do train New Mexicans into real film professionals.  Good.  Then what?  A trained film worker can take those skills anywhere and when work inevitably slows down here, that person will head to Georgia, California, Texas, Oklahoma, or Canada.  The state will end up subsidizing productions to train workers who become valuable enough to leave.  And if they stay, then taxpayers must keep subsidizing Hollywood to make sure they have work.

That is not an industry.  That is Hollywood renting New Mexico’s checkbook.

New Mexico is not merely helping local grips, drivers, caterers, and extras get work—it is also helping pay the checks of people who were never New Mexicans and may never intend to become New Mexicans.  Under the film-credit system, the state can subsidize wages for certain nonresident crew, and the larger partner arrangements can reach into payments for nonresident actors, directors, producers, writers, and editors.  In plain English, that means a director flies in from Los Angeles, a star arrives with an entourage, specialized crew members come for a few weeks or months, the production wraps, and then they go home — while New Mexico taxpayers help underwrite their paychecks.  The state counts that as local economic activity because the work happened here, but much of the paycheck will leave on the same plane as the people who earned it.

Under New Mexico’s film-subsidy program, a movie star can roll into the state in a million-dollar bus, sleep in it, eat in it, shoot her scenes, cash her check, and drive away — while New Mexico taxpayers help underwrite the paycheck.  That is the magic of film incentives: even when the glamour leaves town, the bill stays behind.

The underlying question is simple: would the money do more economic good if left in the pockets of New Mexicans?

State government assumes that if it collects money from citizens and redistributes it to a politically favored industry, the resulting activity is proof of wisdom.  But maybe the citizens would have spent that money better.  Maybe they would have fixed trucks, bought appliances, paid medical bills, expanded small businesses, hired local help, repaired roofs, replaced water heaters, or just bought groceries without wincing.  That spending would also create jobs, only without needing a government office to issue a press release about it.

There is an old country test for this sort of thing: if the deal is so good, why does it need my money?

If New Mexico’s scenery, light, culture, climate, and talent pool are enough to make this a natural film center, then Hollywood should come here because it makes sense.  If Hollywood comes only because we pay it, then we are not selling New Mexico.  We are discounting it—bribing them to come.

That does not mean film production is bad.  Let them come.  Let them shoot Westerns, crime dramas, science fiction, prestige miniseries, and whatever else requires a lonely road, a suspicious sheriff, or a desert sunrise.  Sell them hotel rooms.  Rent them warehouses.  Feed them green chile.  Hire local workers.  Charge fair prices.  Welcome them warmly.

But stop pretending that writing checks to Hollywood is the same thing as building prosperity.

New Mexico has real needs: water, roads, crime, schools, courts, healthcare, broadband, housing, and a private economy strong enough that young people do not have to leave to make a living.  Against that list, subsidizing a wealthy entertainment industry starts to look less like vision and more like vanity.

The film subsidy creates smoke.  Sometimes it creates a pretty flame, too.  But after the crew leaves, the trailers roll out, the rented furniture is returned, and the last assistant director boards a plane, New Mexico is left with the bill and a politician pointing at the smoke as proof there was a fire.

Cecil B. DeMille supposedly said that young Hollywood actresses were called starlets because the word piglets was already taken.  In a similar vein, we call an elected moron in the state house a politician because the word thief was already taken.

New Mexico, An Art Colony Built Around a Gas Station

On and off for the last couple of weeks, I’ve been talking about cities getting dangerously close to plunging into an economic death spiral, primarily New York City because I find the likelihood of a young socialist like Mayor Mamdani fixing the city’s financial problems about as likely as a spavined hearse horse winning the Kentucky Derby.

An economic death spiral is what happens when a town gets to circling the drain like a tired dog before a nap: businesses pull out, workers move off, tax money dries up, the roads go to washboard, the schools start selling raffle tickets for copy paper, and the only folks still optimistic are the chamber of commerce, three realtors, and a man at the diner who insists a new truck stop is going to turn everything around just as soon as somebody fixes the exit ramp.  As tax income dries up, the city government inevitably tries to raise revenue by raising taxes, thus lighting the bundle of rags tied to the tail of the last fleeing business.

But, it is not only cities that can enter that downward spiral, but whole states can also do it as well, and my state, New Mexico, would be a classic example—if not for one saving economic factor that is an industry that our state government absolutely hates.

There is an old joke that New Mexico is a poor state with excellent scenery.  Like many old jokes, it survives because it is uncomfortably close to true.

If one were brutally honest—and honesty is rarely encouraged in economic development brochures—it is difficult to avoid the conclusion that, if not for the oil and gas industry, New Mexico would be firmly planted in an economic death spiral somewhere between “rust belt cautionary tale” and “forgotten Soviet republic.”

This is not entirely New Mexico’s fault.  Geography dealt the state a strange hand:  It is large, sparsely populated, dry, mountainous, and far from the great population centers of the country.  Unlike Texas, California, or Florida, nobody accidentally passes through New Mexico and decides to move there because the freeway exits looked lively.

What New Mexico does possess is beauty, culture, laboratories, military bases, chile, and an astonishing number of turquoise shops.  Unfortunately, none of those things generates the kind of tax revenue required to keep an entire state government fed, paved, pensioned, and air-conditioned.

Enter oil.

Oil in New Mexico is less an industry than a life-support system with pump jacks.

The southeastern part of the state—in the Permian Basin region—produces staggering amounts of wealth compared to the rest of the state economy.  One could argue that Hobbs and Carlsbad are effectively subsidizing Santa Fe’s ability to debate bicycle lanes, climate justice, and whether chile should be capitalized in official state documents.

Without petroleum revenue, New Mexico would face a deeply uncomfortable reckoning.  State government spending would have to shrink dramatically or taxes would have to rise to levels usually associated with medieval tribute systems.

This creates one of the great political ironies of modern America: New Mexico is culturally and politically suspicious of the very industry preventing its becoming economically indistinguishable from rural West Virginia with better sunsets.

The state’s public rhetoric often treats oil companies the way Victorian families treated embarrassing relatives: tolerated because they pay the bills, but never mentioned in polite company.  A recent governor of New Mexico declared that it should be the primary goal of the nation to reduce the dependency on petroleum by 50%.  Cut New Mexico petroleum income by 50% and the state will be desperate for a recipe for sand soup.

Meanwhile, every time oil prices rise, state government revenues suddenly bloom like desert wildflowers after a thunderstorm.  Budget surpluses appear.  Legislative wish lists expand.  New programs emerge.  Everyone becomes an economic genius for six months.

Then oil prices wobble and panic quietly spreads through Santa Fe like a norovirus outbreak on a cruise ship.

The deeper issue is that New Mexico has never quite solved the puzzle of creating a broad, diversified private-sector economy.

There are islands of success:

• Los Alamos,
• Sandia,
• defense contracting,
• tourism,
• healthcare,
• and, a trickle of retirement migration,

But these sectors do not combine into a roaring engine of population growth and entrepreneurial dynamism.  They create pockets of prosperity floating in a much larger sea of government dependency, low labor participation, and economic fragility.

One sees this in the demographics.

Young educated people leave in such large numbers that they may well be the state’s largest export.  Many rural communities steadily age, so that entire small towns seem to survive on a mixture of federal transfers, retirees, and determination.  Outside of Albuquerque and a few select corridors, economic momentum can feel thin.

And yet, oddly enough, New Mexico narrowly avoids outright collapse.

Why?

Again: oil.

Oil revenue functions like an enormous invisible subsidy that holds together a state economy otherwise struggling to generate sufficient taxable activity on its own.

New Mexico’s state government is not merely “helped” by oil and gas; it is structurally dependent on it.  Using the cautious state-budget framing, roughly one-third of recurring general-fund revenue comes from oil and natural gas, while a broader accounting that includes severance taxes, royalties, gross-receipts taxes, corporate taxes, worker income taxes, permanent-fund distributions, and related economic activity can push the oil-and-gas share into the 40%-50% range of general-fund support.  The direct money alone is enormous — billions from severance taxes, rents, and royalties — but the real dependency is larger because the industry also supports high-wage jobs, contractors, local purchases, and investment funds that feed the state treasury.  In practical terms, New Mexico can talk like an energy-transition state, but its schools, roads, agencies, reserves, and recurring spending are still heavily financed by the petroleum economy.

Imagine a household where one cousin works offshore rigs in the Gulf and sends home checks large enough to support twelve other relatives who spend most of their time discussing sustainable gardening and beadwork.  That, in simplified form, is New Mexico’s fiscal structure.

The state’s defenders will object that New Mexico has recently experienced pockets of economic growth.  This is true:  Intel has reinvested in Rio Rancho and Albuquerque has seen some revitalization, so there are real success stories.

But remove the petroleum sector from the ledger and the picture changes very quickly.

Worker participation remains weak compared to many states and private-sector depth is limited.  Many counties remain heavily dependent on government employment.  The state consistently struggles to retain college graduates.  Crime concerns in Albuquerque continue to hurt perceptions.  Educational rankings remain stubbornly poor despite decades of reform efforts and spending increases.

And while businesses are fleeing California and New York for the Southwest, almost none of them come to New Mexico because of our state personal income tax, our generally anti-business climate, and the state’s strong union laws.  If we draw a line across the United States, going along the northern boundary of New Mexico stretching from the Atlantic Ocean to the Pacific, only two states below this line are not right-to-work states:  California and New Mexico.  These two are also the only states below that line whose industrial bases are declining.

On paper, New Mexico has quite a few advantages:  several large state universities, low land cost, and a low cost of living.  Even with those resources, economic activity stops at the state border, as can be seen by this satellite photo of the Texas/New Mexico border at night.

The result is a state that often feels suspended between two futures.

One future imagines New Mexico transforming into a southwestern Colorado: affluent, outdoorsy, technologically sophisticated, culturally rich, and attractive to remote workers and retirees.

The other future looks more like a slow demographic fade: stagnant population, shrinking economic dynamism, rising dependency ratios, and a permanent reliance on federal and petroleum revenue to sustain living standards.

At present, oil is keeping the second future at bay, which creates a curious emotional atmosphere in the state.

New Mexico simultaneously behaves like:

• a frontier state,
• a federal dependency,
• an arts colony,
• a retirement haven,
• and an energy exporter. 

These identities do not always coexist gracefully.

The state wants the tax revenue from petroleum without fully embracing the culture that produces it.  It wants environmental prestige while depending heavily on extractive industry revenue.  It wants Scandinavian-style social programs with an economy that’s closer to rural Arizona plus uranium ghosts.

These contradictions could continue for quite some time.  Governments are perfectly capable of living with contradictions, especially when oil is above $70 a barrel.

But long term, New Mexico faces uncomfortable strategic questions:

What happens if the petroleum industry contracts substantially before the state develops a replacement economic engine?  What happens if the petroleum availability expands and the industry begins shutting down wells in states where governments tax production the most?

These questions lurk behind almost every optimistic press release about film studios, green energy corridors, aerospace hubs, startup incubators, and artisanal lavender festivals.

Because, despite all the brochures featuring happy hikers and attractive people drinking craft beer beside adobe walls, New Mexico’s modern fiscal reality remains astonishingly simple:

The oil patch is paying the electric bill…

And deep down, almost everyone in Santa Fe knows that and hates it.