by wj
One of the on-going problems for numerous governments, from Chicago to Greece, is that they have made big pension commitments without setting aside sufficient funds to meet them. (As distinct from those, like Social Security, which were basically designed to pay-as-you-go.) Pensions are funded based two parameters: demographic data on how long people will live and some assumptions on what returns they can get on their money over time. If the rates of return are wildly optimistic (as they so often have been, because it reduces current costs), the money won’t be there.
The Economist as an interesting blog post on what a realistic long-term return on investment would be. It’s based on some research comparing discount rates for leasehold vs freehold properties in Britain and Singapore. The idea being that, since the leases involved are for decades, the discount rate they display reflects what people really think returns on long-term investments should be. (Note: that same rate, it is suggested, should be used when evaluating other possible investments, such as infrastructure investments by governments, etc.)
For example, the Economist notes that: “If the fund’s assets are expected to return 6% each year, then a pension liability of $1m in 50 years’ time would warrant setting aside $50,000 of assets today. But if the assets only grow by 2% per year, then in 50 years’ time the $50,000 will only have grown into $135,000.” Sound familiar?
The “wisdom of crowds” expectation for very long term returns: 2.6%.
What that means is, if your local government body has made pension commitments assuming an ROI higher than that, you are looking at a big problem down the road. And, if it has done so in the past, “down the road” may be upon you already.
wj,
Long ago, on the old usenet group sci.econ, somebody was pushing the notion that we should privatize Social Security because real annual returns on stocks are around 7%.
My sanity check on that was the following:
At 7% annual growth, capital doubles in about 10 years. Over 40 years, it grows 16-fold. So if you invest about 6% of your gross income at age 25, and let it grow at 7% for 40 years, it will amount to an entire year’s gross income when you have grown to age 65. Do the same at age 26, you have a year’s income at 66. Repeat every year, and 6% of a year’s income at age 25+N turns into a whole year’s income at age 65+N. You could therefore work 40 years, live on full income for another 40, and die broke at age 105– if you can keep getting 7% annual returns over 80 years.
An ardent privatizer (but a reasonable guy) named Jim Blair pointed out that in years 65 to 105 you could be saving 6% again. After all, you were content to live on only 94% of your income during your 40 working years; same should hold in retirement. Now, you could fund yourself for ages 105 to 145. And of course, by repeating the process, you could LIVE FOREVER IN RETIREMENT — if you can keep getting 7% annual returns forever.
This only reinforced my point, of course. If stocks, or any other investment, really did return 7% annually, consistently, and over the very long run, then (since people do die and leave their money to younger relatives) eventually every baby would be born a millionaire and nobody would ever have to work again!
So 7% is a ridiculous claim. Is 2.6% reasonable?
Well, money grows about 3-fold (2.8x to be precise) over 40 years at 2.6%, so in the above scheme you’d have to lay aside about 1/3 of your annual income during 40 working years, if you expect to live 40 years in retirement at the same standard. If you only expect to live 20 years in retirement, you can keep to about 1/6th, or 16%. If you’re willing to allow a slightly lower retirement income — say 5/6ths, because that’s what you were living on anyway — then you can save slightly less than 16%.
Social Security amounts to saving around 12%, counting both employee and employer halves, which is “slightly less than 16%”. Or a lot less, depending on how you care to modify the assumptions. Or maybe SS has it just about exactly right.
–TP
wj,
Long ago, on the old usenet group sci.econ, somebody was pushing the notion that we should privatize Social Security because real annual returns on stocks are around 7%.
My sanity check on that was the following:
At 7% annual growth, capital doubles in about 10 years. Over 40 years, it grows 16-fold. So if you invest about 6% of your gross income at age 25, and let it grow at 7% for 40 years, it will amount to an entire year’s gross income when you have grown to age 65. Do the same at age 26, you have a year’s income at 66. Repeat every year, and 6% of a year’s income at age 25+N turns into a whole year’s income at age 65+N. You could therefore work 40 years, live on full income for another 40, and die broke at age 105– if you can keep getting 7% annual returns over 80 years.
An ardent privatizer (but a reasonable guy) named Jim Blair pointed out that in years 65 to 105 you could be saving 6% again. After all, you were content to live on only 94% of your income during your 40 working years; same should hold in retirement. Now, you could fund yourself for ages 105 to 145. And of course, by repeating the process, you could LIVE FOREVER IN RETIREMENT — if you can keep getting 7% annual returns forever.
This only reinforced my point, of course. If stocks, or any other investment, really did return 7% annually, consistently, and over the very long run, then (since people do die and leave their money to younger relatives) eventually every baby would be born a millionaire and nobody would ever have to work again!
So 7% is a ridiculous claim. Is 2.6% reasonable?
Well, money grows about 3-fold (2.8x to be precise) over 40 years at 2.6%, so in the above scheme you’d have to lay aside about 1/3 of your annual income during 40 working years, if you expect to live 40 years in retirement at the same standard. If you only expect to live 20 years in retirement, you can keep to about 1/6th, or 16%. If you’re willing to allow a slightly lower retirement income — say 5/6ths, because that’s what you were living on anyway — then you can save slightly less than 16%.
Social Security amounts to saving around 12%, counting both employee and employer halves, which is “slightly less than 16%”. Or a lot less, depending on how you care to modify the assumptions. Or maybe SS has it just about exactly right.
–TP
wj,
Long ago, on the old usenet group sci.econ, somebody was pushing the notion that we should privatize Social Security because real annual returns on stocks are around 7%.
My sanity check on that was the following:
At 7% annual growth, capital doubles in about 10 years. Over 40 years, it grows 16-fold. So if you invest about 6% of your gross income at age 25, and let it grow at 7% for 40 years, it will amount to an entire year’s gross income when you have grown to age 65. Do the same at age 26, you have a year’s income at 66. Repeat every year, and 6% of a year’s income at age 25+N turns into a whole year’s income at age 65+N. You could therefore work 40 years, live on full income for another 40, and die broke at age 105– if you can keep getting 7% annual returns over 80 years.
An ardent privatizer (but a reasonable guy) named Jim Blair pointed out that in years 65 to 105 you could be saving 6% again. After all, you were content to live on only 94% of your income during your 40 working years; same should hold in retirement. Now, you could fund yourself for ages 105 to 145. And of course, by repeating the process, you could LIVE FOREVER IN RETIREMENT — if you can keep getting 7% annual returns forever.
This only reinforced my point, of course. If stocks, or any other investment, really did return 7% annually, consistently, and over the very long run, then (since people do die and leave their money to younger relatives) eventually every baby would be born a millionaire and nobody would ever have to work again!
So 7% is a ridiculous claim. Is 2.6% reasonable?
Well, money grows about 3-fold (2.8x to be precise) over 40 years at 2.6%, so in the above scheme you’d have to lay aside about 1/3 of your annual income during 40 working years, if you expect to live 40 years in retirement at the same standard. If you only expect to live 20 years in retirement, you can keep to about 1/6th, or 16%. If you’re willing to allow a slightly lower retirement income — say 5/6ths, because that’s what you were living on anyway — then you can save slightly less than 16%.
Social Security amounts to saving around 12%, counting both employee and employer halves, which is “slightly less than 16%”. Or a lot less, depending on how you care to modify the assumptions. Or maybe SS has it just about exactly right.
–TP
I recall a famous quote, which I’m doubtless mangling, to the effect that, if you invest $1 a day at 5% interest, in 100 years you’ll be a millionaire.
And $25,000 will buy you a hamburger.
In the year I left college, inflation was very high, and I bought a universal life policy which had a guaranteed rate of interest of 9%. The insurance company apparently thought inflation would never go down. I thought otherwise.
Soon inflation had dropped back to close to zero, and I was putting every cent into that policy I could afford, in the expectation that I’d retire in my late 30’s.
It was then that the insurance company proved they understood life better than I did: They went to court, and got a judge to lower the guaranteed interest to 4%, and never mind that contract I’d signed in good faith with the insurance company.
I’ve never forgotten that lesson in the realities of investment.
I recall a famous quote, which I’m doubtless mangling, to the effect that, if you invest $1 a day at 5% interest, in 100 years you’ll be a millionaire.
And $25,000 will buy you a hamburger.
In the year I left college, inflation was very high, and I bought a universal life policy which had a guaranteed rate of interest of 9%. The insurance company apparently thought inflation would never go down. I thought otherwise.
Soon inflation had dropped back to close to zero, and I was putting every cent into that policy I could afford, in the expectation that I’d retire in my late 30’s.
It was then that the insurance company proved they understood life better than I did: They went to court, and got a judge to lower the guaranteed interest to 4%, and never mind that contract I’d signed in good faith with the insurance company.
I’ve never forgotten that lesson in the realities of investment.
I recall a famous quote, which I’m doubtless mangling, to the effect that, if you invest $1 a day at 5% interest, in 100 years you’ll be a millionaire.
And $25,000 will buy you a hamburger.
In the year I left college, inflation was very high, and I bought a universal life policy which had a guaranteed rate of interest of 9%. The insurance company apparently thought inflation would never go down. I thought otherwise.
Soon inflation had dropped back to close to zero, and I was putting every cent into that policy I could afford, in the expectation that I’d retire in my late 30’s.
It was then that the insurance company proved they understood life better than I did: They went to court, and got a judge to lower the guaranteed interest to 4%, and never mind that contract I’d signed in good faith with the insurance company.
I’ve never forgotten that lesson in the realities of investment.
The whole life insurance contract that I signed in my early 20s wasn’t quite that good. But it was for $10K, which in the early 70s was a lot of money (i.e. substantially more than I made in a year, and I had a good paying job). Then inflation hit, and today it would probably cover the expenses of wrapping up my estate.
A lesson I’ve never forgotten in the realities of inflation. Not to mention that, in economics, things will not remain static — which puts me ahead of most people.
The whole life insurance contract that I signed in my early 20s wasn’t quite that good. But it was for $10K, which in the early 70s was a lot of money (i.e. substantially more than I made in a year, and I had a good paying job). Then inflation hit, and today it would probably cover the expenses of wrapping up my estate.
A lesson I’ve never forgotten in the realities of inflation. Not to mention that, in economics, things will not remain static — which puts me ahead of most people.
The whole life insurance contract that I signed in my early 20s wasn’t quite that good. But it was for $10K, which in the early 70s was a lot of money (i.e. substantially more than I made in a year, and I had a good paying job). Then inflation hit, and today it would probably cover the expenses of wrapping up my estate.
A lesson I’ve never forgotten in the realities of inflation. Not to mention that, in economics, things will not remain static — which puts me ahead of most people.
Don’t the Oath Keepers have an armed platoon dedicated to contract law that can be dispatched to look into financial corporations who break their promises to the citizenry?
Don’t the Oath Keepers have an armed platoon dedicated to contract law that can be dispatched to look into financial corporations who break their promises to the citizenry?
Don’t the Oath Keepers have an armed platoon dedicated to contract law that can be dispatched to look into financial corporations who break their promises to the citizenry?
“I’ve never forgotten that lesson in the realities of investment.”
So very true. From crooked individual brokers/advisors to lawyered-up corporate greedheads, an individual is terribly vulnerable to having their carefully-gathered nest egg plundered.
It’s one of the best arguments for the 2nd Amendment, IMO.
“I’ve never forgotten that lesson in the realities of investment.”
So very true. From crooked individual brokers/advisors to lawyered-up corporate greedheads, an individual is terribly vulnerable to having their carefully-gathered nest egg plundered.
It’s one of the best arguments for the 2nd Amendment, IMO.
“I’ve never forgotten that lesson in the realities of investment.”
So very true. From crooked individual brokers/advisors to lawyered-up corporate greedheads, an individual is terribly vulnerable to having their carefully-gathered nest egg plundered.
It’s one of the best arguments for the 2nd Amendment, IMO.
Count: Jinx!
Count: Jinx!
Count: Jinx!
Brett,
That calculation is about right.
But you do need to distinguish between nominal rates, which include expected inflation, and real rates, which don’t, and reflect actual gains in purchasing power.
Brett,
That calculation is about right.
But you do need to distinguish between nominal rates, which include expected inflation, and real rates, which don’t, and reflect actual gains in purchasing power.
Brett,
That calculation is about right.
But you do need to distinguish between nominal rates, which include expected inflation, and real rates, which don’t, and reflect actual gains in purchasing power.
The flaw, or one of them, with the whole “privatize Social Security because the stock market offers better returns argument” is that it won’t.
Returns don’t come out of nowhere. They are generated by the operations of businesses. The notion that the return companies earn on their capital will somehow dramatically increase because a bunch of people buy vast amounts of stock in those companies is silly. You would see a one-time jump in stock prices, after which returns would be much less than before.
The flaw, or one of them, with the whole “privatize Social Security because the stock market offers better returns argument” is that it won’t.
Returns don’t come out of nowhere. They are generated by the operations of businesses. The notion that the return companies earn on their capital will somehow dramatically increase because a bunch of people buy vast amounts of stock in those companies is silly. You would see a one-time jump in stock prices, after which returns would be much less than before.
The flaw, or one of them, with the whole “privatize Social Security because the stock market offers better returns argument” is that it won’t.
Returns don’t come out of nowhere. They are generated by the operations of businesses. The notion that the return companies earn on their capital will somehow dramatically increase because a bunch of people buy vast amounts of stock in those companies is silly. You would see a one-time jump in stock prices, after which returns would be much less than before.
Bernie,
You might add this: whether retirees collect a certain amount of income directly from the “operations of businesses” in the form of dividends, or whether government collects the same amount of money in the form of taxes to pass on to retirees, the bottom line for businesses is exactly the same.
–TP
Bernie,
You might add this: whether retirees collect a certain amount of income directly from the “operations of businesses” in the form of dividends, or whether government collects the same amount of money in the form of taxes to pass on to retirees, the bottom line for businesses is exactly the same.
–TP
Bernie,
You might add this: whether retirees collect a certain amount of income directly from the “operations of businesses” in the form of dividends, or whether government collects the same amount of money in the form of taxes to pass on to retirees, the bottom line for businesses is exactly the same.
–TP
Snarki, you left out Republicans.
The GOP scam wrt to SS is truly spectacular. For almost my entire working life, SS has been collecting more from us boomers than our parents were taking out, in order to “pre-fund” our own bulgey retirement. The Trust Fund was invested in Treasury bonds. Now the GOP line is “Sorry, those bonds are worthless because, hey, we already spent the money.” I’d like to see them try that line on the Kochs or the Chinese central bank.
–TP
Snarki, you left out Republicans.
The GOP scam wrt to SS is truly spectacular. For almost my entire working life, SS has been collecting more from us boomers than our parents were taking out, in order to “pre-fund” our own bulgey retirement. The Trust Fund was invested in Treasury bonds. Now the GOP line is “Sorry, those bonds are worthless because, hey, we already spent the money.” I’d like to see them try that line on the Kochs or the Chinese central bank.
–TP
Snarki, you left out Republicans.
The GOP scam wrt to SS is truly spectacular. For almost my entire working life, SS has been collecting more from us boomers than our parents were taking out, in order to “pre-fund” our own bulgey retirement. The Trust Fund was invested in Treasury bonds. Now the GOP line is “Sorry, those bonds are worthless because, hey, we already spent the money.” I’d like to see them try that line on the Kochs or the Chinese central bank.
–TP
“But you do need to distinguish between nominal rates, which include expected inflation, and real rates, which don’t, and reflect actual gains in purchasing power.”
And real real rates, which take into account the fact that the government is lying about the rate of inflation. (As anybody who buys groceries is aware.) I currently keep my meager savings in a bank account with a nominal rate of return which is negligible, a ‘real’ rate of return that’s zero, and a real real rate of return that’s substantially negative. Investments that actually have significantly positive real rates of return are even legally prohibited for most people, under qualified investor rules!
IMO, the real problem with social security, as with other public pension plans, is that it makes the productivity of the next generation into a commons. When people relied upon their children to support them in their old age, they had a fairly direct interest in having enough children, and making sure they were productive and well socialized. If they didn’t they might starve in their dotage!
Now we route that support through the government, in such a way that your old age support does not appear to depend on your having children, or their being productive. But, of course, on an average basis it still does.
The standard tragedy of the commons: It costs the individual to produce the children who will support him in his old age, but that support does not, nominally, hinge on this actually producing them, and so productive children get under-produced.
The birth dearth in welfare states isn’t hard to understand, is it?
“But you do need to distinguish between nominal rates, which include expected inflation, and real rates, which don’t, and reflect actual gains in purchasing power.”
And real real rates, which take into account the fact that the government is lying about the rate of inflation. (As anybody who buys groceries is aware.) I currently keep my meager savings in a bank account with a nominal rate of return which is negligible, a ‘real’ rate of return that’s zero, and a real real rate of return that’s substantially negative. Investments that actually have significantly positive real rates of return are even legally prohibited for most people, under qualified investor rules!
IMO, the real problem with social security, as with other public pension plans, is that it makes the productivity of the next generation into a commons. When people relied upon their children to support them in their old age, they had a fairly direct interest in having enough children, and making sure they were productive and well socialized. If they didn’t they might starve in their dotage!
Now we route that support through the government, in such a way that your old age support does not appear to depend on your having children, or their being productive. But, of course, on an average basis it still does.
The standard tragedy of the commons: It costs the individual to produce the children who will support him in his old age, but that support does not, nominally, hinge on this actually producing them, and so productive children get under-produced.
The birth dearth in welfare states isn’t hard to understand, is it?
“But you do need to distinguish between nominal rates, which include expected inflation, and real rates, which don’t, and reflect actual gains in purchasing power.”
And real real rates, which take into account the fact that the government is lying about the rate of inflation. (As anybody who buys groceries is aware.) I currently keep my meager savings in a bank account with a nominal rate of return which is negligible, a ‘real’ rate of return that’s zero, and a real real rate of return that’s substantially negative. Investments that actually have significantly positive real rates of return are even legally prohibited for most people, under qualified investor rules!
IMO, the real problem with social security, as with other public pension plans, is that it makes the productivity of the next generation into a commons. When people relied upon their children to support them in their old age, they had a fairly direct interest in having enough children, and making sure they were productive and well socialized. If they didn’t they might starve in their dotage!
Now we route that support through the government, in such a way that your old age support does not appear to depend on your having children, or their being productive. But, of course, on an average basis it still does.
The standard tragedy of the commons: It costs the individual to produce the children who will support him in his old age, but that support does not, nominally, hinge on this actually producing them, and so productive children get under-produced.
The birth dearth in welfare states isn’t hard to understand, is it?
Well, I was going to post my opinion that “investing for retirement” is very nice, and necessary for a comfortable old-age.
But one want to have a “subsistence level” component, that is risk-free, barring apocalyptic-level malfeasance. So that you won’t starve to death on the street when your crooked broker runs off with your nest egg.
SS isn’t that good as an investment, but it’s outstanding as a super-low-risk support: backed up by a huge economy, with inflation-protection mechanisms built in, and with widespread participation.
Of *course* the GOP is working on their “apocalyptic-level malfeasance”: there’s a huge pot of money just sitting there!
Well, I was going to post my opinion that “investing for retirement” is very nice, and necessary for a comfortable old-age.
But one want to have a “subsistence level” component, that is risk-free, barring apocalyptic-level malfeasance. So that you won’t starve to death on the street when your crooked broker runs off with your nest egg.
SS isn’t that good as an investment, but it’s outstanding as a super-low-risk support: backed up by a huge economy, with inflation-protection mechanisms built in, and with widespread participation.
Of *course* the GOP is working on their “apocalyptic-level malfeasance”: there’s a huge pot of money just sitting there!
Well, I was going to post my opinion that “investing for retirement” is very nice, and necessary for a comfortable old-age.
But one want to have a “subsistence level” component, that is risk-free, barring apocalyptic-level malfeasance. So that you won’t starve to death on the street when your crooked broker runs off with your nest egg.
SS isn’t that good as an investment, but it’s outstanding as a super-low-risk support: backed up by a huge economy, with inflation-protection mechanisms built in, and with widespread participation.
Of *course* the GOP is working on their “apocalyptic-level malfeasance”: there’s a huge pot of money just sitting there!
“Of *course* the GOP is working on their “apocalyptic-level malfeasance”: there’s a huge pot of money just sitting there!”
That’s kind of the point: There ISN’T a huge pot of money just sitting there. It got spent as fast as it came in.
Look, if I have money coming in, and I give it to somebody else to spend in return for an IOU, the IOU represents an asset of mine, because it is a claim on somebody else’s assets.
But if I have money coming in, and spend it, and put my own IOU in a jar, THOSE IOUs do not represent an asset, because they are a claim on my own assets; Cashing them in doesn’t bring me any funds I didn’t already have, the IOUs do not contribute in any way to my capacity to spend.
Unfortunately, SS bonds, by law only held by the Treasury, fall into that latter category of IOUs; They don’t represent an additional potential source of money over and above tax revenues, because it is only those tax revenues that can pay them off.
No, there’s no huge pot of money. Never was, it was always a lie.
“Of *course* the GOP is working on their “apocalyptic-level malfeasance”: there’s a huge pot of money just sitting there!”
That’s kind of the point: There ISN’T a huge pot of money just sitting there. It got spent as fast as it came in.
Look, if I have money coming in, and I give it to somebody else to spend in return for an IOU, the IOU represents an asset of mine, because it is a claim on somebody else’s assets.
But if I have money coming in, and spend it, and put my own IOU in a jar, THOSE IOUs do not represent an asset, because they are a claim on my own assets; Cashing them in doesn’t bring me any funds I didn’t already have, the IOUs do not contribute in any way to my capacity to spend.
Unfortunately, SS bonds, by law only held by the Treasury, fall into that latter category of IOUs; They don’t represent an additional potential source of money over and above tax revenues, because it is only those tax revenues that can pay them off.
No, there’s no huge pot of money. Never was, it was always a lie.
“Of *course* the GOP is working on their “apocalyptic-level malfeasance”: there’s a huge pot of money just sitting there!”
That’s kind of the point: There ISN’T a huge pot of money just sitting there. It got spent as fast as it came in.
Look, if I have money coming in, and I give it to somebody else to spend in return for an IOU, the IOU represents an asset of mine, because it is a claim on somebody else’s assets.
But if I have money coming in, and spend it, and put my own IOU in a jar, THOSE IOUs do not represent an asset, because they are a claim on my own assets; Cashing them in doesn’t bring me any funds I didn’t already have, the IOUs do not contribute in any way to my capacity to spend.
Unfortunately, SS bonds, by law only held by the Treasury, fall into that latter category of IOUs; They don’t represent an additional potential source of money over and above tax revenues, because it is only those tax revenues that can pay them off.
No, there’s no huge pot of money. Never was, it was always a lie.
But Brett, the “birth dearth” doesn’t occur just in welfare states. It has been experienced in every developed economy — and some which are still some ways from reaching that point. So maybe it isn’t the “welfare state” which is responsible.
Either that, or somehow every developed economy is a welfare state. Which would be an intereswting factoid in and of itself, wouldn’t it?
But Brett, the “birth dearth” doesn’t occur just in welfare states. It has been experienced in every developed economy — and some which are still some ways from reaching that point. So maybe it isn’t the “welfare state” which is responsible.
Either that, or somehow every developed economy is a welfare state. Which would be an intereswting factoid in and of itself, wouldn’t it?
But Brett, the “birth dearth” doesn’t occur just in welfare states. It has been experienced in every developed economy — and some which are still some ways from reaching that point. So maybe it isn’t the “welfare state” which is responsible.
Either that, or somehow every developed economy is a welfare state. Which would be an intereswting factoid in and of itself, wouldn’t it?
Um.
Could we not go off on a Brett Bellmore tangent here.
First, the government does not understate the inflation rate. It’s not lying. Among other things, the billion-price index, a non-government project, closely tracks the CPI. I really hate to see the thread get hijacked because Brett read some wingnut stuff and wants to make an issue of it.
Second, the whole SS Trust Fund business has been hashed to death, and there’s no point in going around again. Those who are interested in actually understanding what’s going on have plenty of sources. Those who want to yell wingnut slogans should be ignored.
Um.
Could we not go off on a Brett Bellmore tangent here.
First, the government does not understate the inflation rate. It’s not lying. Among other things, the billion-price index, a non-government project, closely tracks the CPI. I really hate to see the thread get hijacked because Brett read some wingnut stuff and wants to make an issue of it.
Second, the whole SS Trust Fund business has been hashed to death, and there’s no point in going around again. Those who are interested in actually understanding what’s going on have plenty of sources. Those who want to yell wingnut slogans should be ignored.
Um.
Could we not go off on a Brett Bellmore tangent here.
First, the government does not understate the inflation rate. It’s not lying. Among other things, the billion-price index, a non-government project, closely tracks the CPI. I really hate to see the thread get hijacked because Brett read some wingnut stuff and wants to make an issue of it.
Second, the whole SS Trust Fund business has been hashed to death, and there’s no point in going around again. Those who are interested in actually understanding what’s going on have plenty of sources. Those who want to yell wingnut slogans should be ignored.
I have to say, Brett’s 1:25 provides an interesting twist on Hardin’s “Tragedy of the Commons” essay from 1968.
Hardin claimed the welfare state encouraged people to have too many kids, thus stressing finite resources. Brett says SS encourages people to have too few kids, because somebody else’s kids will pay the bills.
SS does not make the “productivity of the next generation” into a commons. The concept of a commons has a reasonably crisp definition in current economics, which is not applicable to concepts like “the productivity of the next generation”.
The “classic tragedy of the commons” is basically horsecrap. It was basically made up as a justification for privatizing common land in the 18th and 19th C. In actual historical practice, people did not abuse common resources out of “enlightened self-interest”, because (a) they existed in a social context where “enlightened self-interest” wasn’t held out as the be-all and end-all of human motivations, and (b) their neighbors wouldn’t let them even if they were so inclined.
Commons were subject to management. The issue of some guy grazing 20 cows on common land when he was only entitled to 10 didn’t come up, because it would result in 10 of his cows ending up in the pound.
The same things apply to Hardin’s essay. Hardin himself has stated that his essay should have been titled “The Tragedy of the Unmanaged Commons”, which is correct. And, speaks to the need for things that *actually are commons* to be managed, and not left for any random dude to abuse through “enlightened self-interest”.
None of which is relevant to your argument, because the productivity of hundreds of millions of people is not a commons.
Argument by analogy is like rhetorical Calvinball.
I have to say, Brett’s 1:25 provides an interesting twist on Hardin’s “Tragedy of the Commons” essay from 1968.
Hardin claimed the welfare state encouraged people to have too many kids, thus stressing finite resources. Brett says SS encourages people to have too few kids, because somebody else’s kids will pay the bills.
SS does not make the “productivity of the next generation” into a commons. The concept of a commons has a reasonably crisp definition in current economics, which is not applicable to concepts like “the productivity of the next generation”.
The “classic tragedy of the commons” is basically horsecrap. It was basically made up as a justification for privatizing common land in the 18th and 19th C. In actual historical practice, people did not abuse common resources out of “enlightened self-interest”, because (a) they existed in a social context where “enlightened self-interest” wasn’t held out as the be-all and end-all of human motivations, and (b) their neighbors wouldn’t let them even if they were so inclined.
Commons were subject to management. The issue of some guy grazing 20 cows on common land when he was only entitled to 10 didn’t come up, because it would result in 10 of his cows ending up in the pound.
The same things apply to Hardin’s essay. Hardin himself has stated that his essay should have been titled “The Tragedy of the Unmanaged Commons”, which is correct. And, speaks to the need for things that *actually are commons* to be managed, and not left for any random dude to abuse through “enlightened self-interest”.
None of which is relevant to your argument, because the productivity of hundreds of millions of people is not a commons.
Argument by analogy is like rhetorical Calvinball.
I have to say, Brett’s 1:25 provides an interesting twist on Hardin’s “Tragedy of the Commons” essay from 1968.
Hardin claimed the welfare state encouraged people to have too many kids, thus stressing finite resources. Brett says SS encourages people to have too few kids, because somebody else’s kids will pay the bills.
SS does not make the “productivity of the next generation” into a commons. The concept of a commons has a reasonably crisp definition in current economics, which is not applicable to concepts like “the productivity of the next generation”.
The “classic tragedy of the commons” is basically horsecrap. It was basically made up as a justification for privatizing common land in the 18th and 19th C. In actual historical practice, people did not abuse common resources out of “enlightened self-interest”, because (a) they existed in a social context where “enlightened self-interest” wasn’t held out as the be-all and end-all of human motivations, and (b) their neighbors wouldn’t let them even if they were so inclined.
Commons were subject to management. The issue of some guy grazing 20 cows on common land when he was only entitled to 10 didn’t come up, because it would result in 10 of his cows ending up in the pound.
The same things apply to Hardin’s essay. Hardin himself has stated that his essay should have been titled “The Tragedy of the Unmanaged Commons”, which is correct. And, speaks to the need for things that *actually are commons* to be managed, and not left for any random dude to abuse through “enlightened self-interest”.
None of which is relevant to your argument, because the productivity of hundreds of millions of people is not a commons.
Argument by analogy is like rhetorical Calvinball.
there’s no huge pot of money. Never was, it was always a lie.
I managed to figure out in my early 20s that I was unlikely to ever see a dime out of Social Security; that it was just another income tax, and should be regarded as such. Which observation influenced what kind of savings for my retirement I did from the beginning.
That’s really good for my personal position. But I shudder to think of my fellow Boomers who didn’t bother to save for retirement because, after all, there would be Social Security — which, even if it remained in place was never going to do more than protect against one starving on the streets.
there’s no huge pot of money. Never was, it was always a lie.
I managed to figure out in my early 20s that I was unlikely to ever see a dime out of Social Security; that it was just another income tax, and should be regarded as such. Which observation influenced what kind of savings for my retirement I did from the beginning.
That’s really good for my personal position. But I shudder to think of my fellow Boomers who didn’t bother to save for retirement because, after all, there would be Social Security — which, even if it remained in place was never going to do more than protect against one starving on the streets.
there’s no huge pot of money. Never was, it was always a lie.
I managed to figure out in my early 20s that I was unlikely to ever see a dime out of Social Security; that it was just another income tax, and should be regarded as such. Which observation influenced what kind of savings for my retirement I did from the beginning.
That’s really good for my personal position. But I shudder to think of my fellow Boomers who didn’t bother to save for retirement because, after all, there would be Social Security — which, even if it remained in place was never going to do more than protect against one starving on the streets.
People over 65 are, as a group, the wealthiest people in the country.
I recently had cataract surgery. It cost me about 20% out of pocket. It would cost Bill Gates the same if he even bothered to use Medicare.
People over 65 are, as a group, the wealthiest people in the country.
I recently had cataract surgery. It cost me about 20% out of pocket. It would cost Bill Gates the same if he even bothered to use Medicare.
People over 65 are, as a group, the wealthiest people in the country.
I recently had cataract surgery. It cost me about 20% out of pocket. It would cost Bill Gates the same if he even bothered to use Medicare.
Apparently human beings have a detailed chin-wag while in the heat of passion regarding their retirement plans far down the road and the resultant upsides and downsides of getting pregnant.
The conversation is so riveting that they forget to use birth control, the bodily fluids run amok, and then young women visit an abortion clinic and tell the onsite counselor that the reason for aborting the fetus is the promise of a lousy $12,000 bucks a year some 35 years down the road.
Hobby Lobby is planning on counseling all of their female employees of child-bearing age that sexual abstinence is preferred because the checks start arriving in roughly 2050, so who needs birth control through the company plan, anyhoo?
Unless you are black, then reverse the reasoning.
Get on up!
https://www.youtube.com/watch?v=HdOdLHNPzTw
Apparently human beings have a detailed chin-wag while in the heat of passion regarding their retirement plans far down the road and the resultant upsides and downsides of getting pregnant.
The conversation is so riveting that they forget to use birth control, the bodily fluids run amok, and then young women visit an abortion clinic and tell the onsite counselor that the reason for aborting the fetus is the promise of a lousy $12,000 bucks a year some 35 years down the road.
Hobby Lobby is planning on counseling all of their female employees of child-bearing age that sexual abstinence is preferred because the checks start arriving in roughly 2050, so who needs birth control through the company plan, anyhoo?
Unless you are black, then reverse the reasoning.
Get on up!
https://www.youtube.com/watch?v=HdOdLHNPzTw
Apparently human beings have a detailed chin-wag while in the heat of passion regarding their retirement plans far down the road and the resultant upsides and downsides of getting pregnant.
The conversation is so riveting that they forget to use birth control, the bodily fluids run amok, and then young women visit an abortion clinic and tell the onsite counselor that the reason for aborting the fetus is the promise of a lousy $12,000 bucks a year some 35 years down the road.
Hobby Lobby is planning on counseling all of their female employees of child-bearing age that sexual abstinence is preferred because the checks start arriving in roughly 2050, so who needs birth control through the company plan, anyhoo?
Unless you are black, then reverse the reasoning.
Get on up!
https://www.youtube.com/watch?v=HdOdLHNPzTw
Apparently human beings have a detailed chin-wag while in the heat of passion regarding their retirement plans far down the road and the resultant upsides and downsides of getting pregnant.
The conversation is so riveting that they forget to use birth control, the bodily fluids run amok, and then young women visit an abortion clinic and tell the onsite counselor that the reason for aborting the fetus is the promise of a lousy $12,000 bucks a year some 35 years down the road.
Hobby Lobby is planning on counseling all of their female employees of child-bearing age that sexual abstinence is preferred because the checks start arriving in roughly 2050, so who needs birth control through the company plan, anyhoo?
Unless you are black, then reverse the reasoning.
Get on up!
https://www.youtube.com/watch?v=HdOdLHNPzTw
Apparently human beings have a detailed chin-wag while in the heat of passion regarding their retirement plans far down the road and the resultant upsides and downsides of getting pregnant.
The conversation is so riveting that they forget to use birth control, the bodily fluids run amok, and then young women visit an abortion clinic and tell the onsite counselor that the reason for aborting the fetus is the promise of a lousy $12,000 bucks a year some 35 years down the road.
Hobby Lobby is planning on counseling all of their female employees of child-bearing age that sexual abstinence is preferred because the checks start arriving in roughly 2050, so who needs birth control through the company plan, anyhoo?
Unless you are black, then reverse the reasoning.
Get on up!
https://www.youtube.com/watch?v=HdOdLHNPzTw
Apparently human beings have a detailed chin-wag while in the heat of passion regarding their retirement plans far down the road and the resultant upsides and downsides of getting pregnant.
The conversation is so riveting that they forget to use birth control, the bodily fluids run amok, and then young women visit an abortion clinic and tell the onsite counselor that the reason for aborting the fetus is the promise of a lousy $12,000 bucks a year some 35 years down the road.
Hobby Lobby is planning on counseling all of their female employees of child-bearing age that sexual abstinence is preferred because the checks start arriving in roughly 2050, so who needs birth control through the company plan, anyhoo?
Unless you are black, then reverse the reasoning.
Get on up!
https://www.youtube.com/watch?v=HdOdLHNPzTw
Apparently human beings have a detailed chin-wag while in the heat of passion regarding their retirement plans far down the road and the resultant upsides and downsides of getting pregnant.
The conversation is so riveting that they forget to use birth control, the bodily fluids run amok, and then young women visit an abortion clinic and tell the onsite counselor that the reason for aborting the fetus is the promise of a lousy $12,000 bucks a year some 35 years down the road.
Hobby Lobby is planning on counseling all of their female employees of child-bearing age that sexual abstinence is preferred because the checks start arriving in roughly 2050, so who needs birth control through the company plan, anyhoo?
Unless you are black, then reverse the reasoning.
Get on up!
https://www.youtube.com/watch?v=HdOdLHNPzTw
Apparently human beings have a detailed chin-wag while in the heat of passion regarding their retirement plans far down the road and the resultant upsides and downsides of getting pregnant.
The conversation is so riveting that they forget to use birth control, the bodily fluids run amok, and then young women visit an abortion clinic and tell the onsite counselor that the reason for aborting the fetus is the promise of a lousy $12,000 bucks a year some 35 years down the road.
Hobby Lobby is planning on counseling all of their female employees of child-bearing age that sexual abstinence is preferred because the checks start arriving in roughly 2050, so who needs birth control through the company plan, anyhoo?
Unless you are black, then reverse the reasoning.
Get on up!
https://www.youtube.com/watch?v=HdOdLHNPzTw
Apparently human beings have a detailed chin-wag while in the heat of passion regarding their retirement plans far down the road and the resultant upsides and downsides of getting pregnant.
The conversation is so riveting that they forget to use birth control, the bodily fluids run amok, and then young women visit an abortion clinic and tell the onsite counselor that the reason for aborting the fetus is the promise of a lousy $12,000 bucks a year some 35 years down the road.
Hobby Lobby is planning on counseling all of their female employees of child-bearing age that sexual abstinence is preferred because the checks start arriving in roughly 2050, so who needs birth control through the company plan, anyhoo?
Unless you are black, then reverse the reasoning.
Get on up!
https://www.youtube.com/watch?v=HdOdLHNPzTw
My mouse had triplets.
My mouse had triplets.
My mouse had triplets.
wj,
But your conclusion turned out wrong, didn’t it?
That’s not to say that saving for retirement wasn’t a very good idea. But I do seem to recall the widely publicized notion that retirement financing consisted of a “three-legged stool” – private saving, private pensions, and Social Security.
No doubt many people, either through improvidence or lack of resources or various unfortunate circumstances rely solely or primarily on Social Security. But it is there.
wj,
But your conclusion turned out wrong, didn’t it?
That’s not to say that saving for retirement wasn’t a very good idea. But I do seem to recall the widely publicized notion that retirement financing consisted of a “three-legged stool” – private saving, private pensions, and Social Security.
No doubt many people, either through improvidence or lack of resources or various unfortunate circumstances rely solely or primarily on Social Security. But it is there.
wj,
But your conclusion turned out wrong, didn’t it?
That’s not to say that saving for retirement wasn’t a very good idea. But I do seem to recall the widely publicized notion that retirement financing consisted of a “three-legged stool” – private saving, private pensions, and Social Security.
No doubt many people, either through improvidence or lack of resources or various unfortunate circumstances rely solely or primarily on Social Security. But it is there.
Yes, a “three-legged stool”.
And then the corporations bailed on their pension obligations.
And then the banksters trashed the economy, and lots of people lost their investments.
So some people teeter on a one-legged stool, while the GOP is busily trying to saw through that last leg.
Yes, a “three-legged stool”.
And then the corporations bailed on their pension obligations.
And then the banksters trashed the economy, and lots of people lost their investments.
So some people teeter on a one-legged stool, while the GOP is busily trying to saw through that last leg.
Yes, a “three-legged stool”.
And then the corporations bailed on their pension obligations.
And then the banksters trashed the economy, and lots of people lost their investments.
So some people teeter on a one-legged stool, while the GOP is busily trying to saw through that last leg.
Well, they are still paying out, so I hear. But personally I haven’t seen that dime. Yet. 😉
(It’s nice to be able to put off starting as long as possible. It’s my own version of the lottery — pass up some cash now, for the prospect of larger cash later.)
Well, they are still paying out, so I hear. But personally I haven’t seen that dime. Yet. 😉
(It’s nice to be able to put off starting as long as possible. It’s my own version of the lottery — pass up some cash now, for the prospect of larger cash later.)
Well, they are still paying out, so I hear. But personally I haven’t seen that dime. Yet. 😉
(It’s nice to be able to put off starting as long as possible. It’s my own version of the lottery — pass up some cash now, for the prospect of larger cash later.)
So some people teeter on a one-legged stool, while the GOP is busily trying to saw through that last leg.
Only consider. Suppose the trashing of Social Security succeeds. And suppose further that the folks pushing it believe as Brett does — that people are having fewer children because the “welfare state.” So, now the masses will stop using birth control and go back to having lots of kids! What’s not to like?
So some people teeter on a one-legged stool, while the GOP is busily trying to saw through that last leg.
Only consider. Suppose the trashing of Social Security succeeds. And suppose further that the folks pushing it believe as Brett does — that people are having fewer children because the “welfare state.” So, now the masses will stop using birth control and go back to having lots of kids! What’s not to like?
So some people teeter on a one-legged stool, while the GOP is busily trying to saw through that last leg.
Only consider. Suppose the trashing of Social Security succeeds. And suppose further that the folks pushing it believe as Brett does — that people are having fewer children because the “welfare state.” So, now the masses will stop using birth control and go back to having lots of kids! What’s not to like?
Payroll taxes are a transfer from the young and relatively poor to the old and relatively wealthy.
One reason for having fewer children is the expense. A cost that competes with other things people would like to spend their money on. Payroll taxes don’t make it easier.
Payroll taxes are a transfer from the young and relatively poor to the old and relatively wealthy.
One reason for having fewer children is the expense. A cost that competes with other things people would like to spend their money on. Payroll taxes don’t make it easier.
Payroll taxes are a transfer from the young and relatively poor to the old and relatively wealthy.
One reason for having fewer children is the expense. A cost that competes with other things people would like to spend their money on. Payroll taxes don’t make it easier.
Charles,
Inheritances are a transfer from the recently-old and relatively wealthy to the young and relatively poor — who thus get a bit of help becoming relatively rich in their own old age. Transfers across generations work both ways.
Furthermore, what is your personal savings except a transfer from your younger to your older self? What is your personal borrowing except an advance from your older to your younger self? Transfers across generations are a way of life.
Let’s not bad-mouth “transfers”.
–TP
Charles,
Inheritances are a transfer from the recently-old and relatively wealthy to the young and relatively poor — who thus get a bit of help becoming relatively rich in their own old age. Transfers across generations work both ways.
Furthermore, what is your personal savings except a transfer from your younger to your older self? What is your personal borrowing except an advance from your older to your younger self? Transfers across generations are a way of life.
Let’s not bad-mouth “transfers”.
–TP
Charles,
Inheritances are a transfer from the recently-old and relatively wealthy to the young and relatively poor — who thus get a bit of help becoming relatively rich in their own old age. Transfers across generations work both ways.
Furthermore, what is your personal savings except a transfer from your younger to your older self? What is your personal borrowing except an advance from your older to your younger self? Transfers across generations are a way of life.
Let’s not bad-mouth “transfers”.
–TP
There’s a difference between consensual and coerced transfers.
There’s a difference between consensual and coerced transfers.
There’s a difference between consensual and coerced transfers.
No, there’s no huge pot of money. Never was, it was always a lie.
everything is a conspiracy. always.
No, there’s no huge pot of money. Never was, it was always a lie.
everything is a conspiracy. always.
No, there’s no huge pot of money. Never was, it was always a lie.
everything is a conspiracy. always.
Inheritances are a transfer from the recently-old and relatively wealthy to the young and relatively poor
My first reaction to this was: Nonsense! After all, in the last decade or so we lost one of my parents and both of my wife’s. All of whom were well past 80, but the youngest of their heirs pushing 50 — i.e. not really young at all.
But then it occurred to me that, just maybe, my family was not exactly typical in this regard. Amazing the things that open our eyes to the obvious.
Inheritances are a transfer from the recently-old and relatively wealthy to the young and relatively poor
My first reaction to this was: Nonsense! After all, in the last decade or so we lost one of my parents and both of my wife’s. All of whom were well past 80, but the youngest of their heirs pushing 50 — i.e. not really young at all.
But then it occurred to me that, just maybe, my family was not exactly typical in this regard. Amazing the things that open our eyes to the obvious.
Inheritances are a transfer from the recently-old and relatively wealthy to the young and relatively poor
My first reaction to this was: Nonsense! After all, in the last decade or so we lost one of my parents and both of my wife’s. All of whom were well past 80, but the youngest of their heirs pushing 50 — i.e. not really young at all.
But then it occurred to me that, just maybe, my family was not exactly typical in this regard. Amazing the things that open our eyes to the obvious.
Marie Antoinette’s head in a basket was a coerced transfer, because …. cake.
Marie Antoinette’s head in a basket was a coerced transfer, because …. cake.
Marie Antoinette’s head in a basket was a coerced transfer, because …. cake.
wj,
I’d say 50ish people inheriting from 85ish people is more typical than not. If so — if the dead old tend to leave their money to the young old — it’s not astonishing that retirees might be “relatively wealthy”.
Between you and me, of course, I don’t take the “relatively-wealthy old” construct too seriously. It’s a talking point for sure, but is it a fact?
–TP
wj,
I’d say 50ish people inheriting from 85ish people is more typical than not. If so — if the dead old tend to leave their money to the young old — it’s not astonishing that retirees might be “relatively wealthy”.
Between you and me, of course, I don’t take the “relatively-wealthy old” construct too seriously. It’s a talking point for sure, but is it a fact?
–TP
wj,
I’d say 50ish people inheriting from 85ish people is more typical than not. If so — if the dead old tend to leave their money to the young old — it’s not astonishing that retirees might be “relatively wealthy”.
Between you and me, of course, I don’t take the “relatively-wealthy old” construct too seriously. It’s a talking point for sure, but is it a fact?
–TP
Contains charts of wealth by age groups.
Wealth Is Distributed Extremely Unevenly Within Every Age Group
Contains charts of wealth by age groups.
Wealth Is Distributed Extremely Unevenly Within Every Age Group
Contains charts of wealth by age groups.
Wealth Is Distributed Extremely Unevenly Within Every Age Group
CharlesWT,
Fascinating link. Thanks.
One point not mentioned, but which is stunning to me, is the difference between mean and median in the various age groups.
Look at the top two charts. The mean wealth in each age group is a multiple, between 3 and 7, of the median.
CharlesWT,
Fascinating link. Thanks.
One point not mentioned, but which is stunning to me, is the difference between mean and median in the various age groups.
Look at the top two charts. The mean wealth in each age group is a multiple, between 3 and 7, of the median.
CharlesWT,
Fascinating link. Thanks.
One point not mentioned, but which is stunning to me, is the difference between mean and median in the various age groups.
Look at the top two charts. The mean wealth in each age group is a multiple, between 3 and 7, of the median.
Yes, wealth is distributed on a power curve instead of a bell curve.
Yes, wealth is distributed on a power curve instead of a bell curve.
Yes, wealth is distributed on a power curve instead of a bell curve.
Not to disagree with your words. But they actually apply to the distribution within age groups.
No reasonable person would expect wealth distribution by age to resemble a bell curve. After all, we (mostly) start out from school with little or nothing, and proceed to build up or wealth over time — assuming we bother to build it up, of course.
Not to disagree with your words. But they actually apply to the distribution within age groups.
No reasonable person would expect wealth distribution by age to resemble a bell curve. After all, we (mostly) start out from school with little or nothing, and proceed to build up or wealth over time — assuming we bother to build it up, of course.
Not to disagree with your words. But they actually apply to the distribution within age groups.
No reasonable person would expect wealth distribution by age to resemble a bell curve. After all, we (mostly) start out from school with little or nothing, and proceed to build up or wealth over time — assuming we bother to build it up, of course.
The mathematical law that shows why wealth flows to the 1%
The mathematical law that shows why wealth flows to the 1%
The mathematical law that shows why wealth flows to the 1%
The mathematical law that shows why wealth flows to the 1%
Actually, it doesn’t show that at all. The power law is descriptive, but without an underlying model of the process it says nothing about why wealth should follow the particular distribution it does.
And even if you can show that, you have to show why the parameters have the values they do in the particular case of wealth distribution in the US.
The mathematical law that shows why wealth flows to the 1%
Actually, it doesn’t show that at all. The power law is descriptive, but without an underlying model of the process it says nothing about why wealth should follow the particular distribution it does.
And even if you can show that, you have to show why the parameters have the values they do in the particular case of wealth distribution in the US.
The mathematical law that shows why wealth flows to the 1%
Actually, it doesn’t show that at all. The power law is descriptive, but without an underlying model of the process it says nothing about why wealth should follow the particular distribution it does.
And even if you can show that, you have to show why the parameters have the values they do in the particular case of wealth distribution in the US.
You have meddled with the primal forces of nature!
The King of England actually said that first.
You have meddled with the primal forces of nature!
The King of England actually said that first.
You have meddled with the primal forces of nature!
The King of England actually said that first.
Which King?
Which King?
Which King?
“One of the on-going problems for numerous governments, from Chicago to Greece, is that they have made big pension commitments without setting aside sufficient funds to meet them. (As distinct from those, like Social Security, which were basically designed to pay-as-you-go.) Pensions are funded based two parameters: demographic data on how long people will live and some assumptions on what returns they can get on their money over time. If the rates of return are wildly optimistic (as they so often have been, because it reduces current costs), the money won’t be there.”
Seems to me the confluence of two American traits have created a whirlpool of anxiety.
Tell em, like Brett’s insurance company telling him, that we’ve put aside reserves to handle all eventualities over heah, nothin to worry bout, didja read the small print? nevah mind, you’re in the good hands of Allcrap, heah’s five to tide you ovah, one, two, whoops, look ovah deah, geez, dat was close … five ……… combined with, ya know, the shining City On the Hill, look how shiny it is, your fellow Muricans will do you wise in the end, won’t we, yeah the commission’s upfront, what, am I a putz, and could you designate heah where I marked which end you’d like it in.
Call me a cock-eyed optimist. But don’t,whatevah you do, call me Ronnie.
We are the Greece of the tax evaders and the short changers.
That’s our heritage.
Not Socrates and Aristotle and whodjamacallit, Heraclitus, which sounds, now dat I tink about it, like a social disease.
He’s gotta dose of heraclitus, did ya heah?
You never step into the same river twice.
Now, dog shit, dats a different madda. It’s amazin, given marketing surveys, how often the same guy will step in the same pile of financial dog shit oveah and oveah again.
Americans count on it.
“One of the on-going problems for numerous governments, from Chicago to Greece, is that they have made big pension commitments without setting aside sufficient funds to meet them. (As distinct from those, like Social Security, which were basically designed to pay-as-you-go.) Pensions are funded based two parameters: demographic data on how long people will live and some assumptions on what returns they can get on their money over time. If the rates of return are wildly optimistic (as they so often have been, because it reduces current costs), the money won’t be there.”
Seems to me the confluence of two American traits have created a whirlpool of anxiety.
Tell em, like Brett’s insurance company telling him, that we’ve put aside reserves to handle all eventualities over heah, nothin to worry bout, didja read the small print? nevah mind, you’re in the good hands of Allcrap, heah’s five to tide you ovah, one, two, whoops, look ovah deah, geez, dat was close … five ……… combined with, ya know, the shining City On the Hill, look how shiny it is, your fellow Muricans will do you wise in the end, won’t we, yeah the commission’s upfront, what, am I a putz, and could you designate heah where I marked which end you’d like it in.
Call me a cock-eyed optimist. But don’t,whatevah you do, call me Ronnie.
We are the Greece of the tax evaders and the short changers.
That’s our heritage.
Not Socrates and Aristotle and whodjamacallit, Heraclitus, which sounds, now dat I tink about it, like a social disease.
He’s gotta dose of heraclitus, did ya heah?
You never step into the same river twice.
Now, dog shit, dats a different madda. It’s amazin, given marketing surveys, how often the same guy will step in the same pile of financial dog shit oveah and oveah again.
Americans count on it.
“One of the on-going problems for numerous governments, from Chicago to Greece, is that they have made big pension commitments without setting aside sufficient funds to meet them. (As distinct from those, like Social Security, which were basically designed to pay-as-you-go.) Pensions are funded based two parameters: demographic data on how long people will live and some assumptions on what returns they can get on their money over time. If the rates of return are wildly optimistic (as they so often have been, because it reduces current costs), the money won’t be there.”
Seems to me the confluence of two American traits have created a whirlpool of anxiety.
Tell em, like Brett’s insurance company telling him, that we’ve put aside reserves to handle all eventualities over heah, nothin to worry bout, didja read the small print? nevah mind, you’re in the good hands of Allcrap, heah’s five to tide you ovah, one, two, whoops, look ovah deah, geez, dat was close … five ……… combined with, ya know, the shining City On the Hill, look how shiny it is, your fellow Muricans will do you wise in the end, won’t we, yeah the commission’s upfront, what, am I a putz, and could you designate heah where I marked which end you’d like it in.
Call me a cock-eyed optimist. But don’t,whatevah you do, call me Ronnie.
We are the Greece of the tax evaders and the short changers.
That’s our heritage.
Not Socrates and Aristotle and whodjamacallit, Heraclitus, which sounds, now dat I tink about it, like a social disease.
He’s gotta dose of heraclitus, did ya heah?
You never step into the same river twice.
Now, dog shit, dats a different madda. It’s amazin, given marketing surveys, how often the same guy will step in the same pile of financial dog shit oveah and oveah again.
Americans count on it.
Which King?
The one we defied, so’s we could live among ourselves, the many Kings, who want a lotta little pieces of us, which adds up to the same thing.
Which King?
The one we defied, so’s we could live among ourselves, the many Kings, who want a lotta little pieces of us, which adds up to the same thing.
Which King?
The one we defied, so’s we could live among ourselves, the many Kings, who want a lotta little pieces of us, which adds up to the same thing.
In the olden days, most old people died much earlier or sold pencils on the street. Old people were poor as hell.
Social Security and other government assistance programs have decrease the incidence of poverty among the elderly dramatically.
The 401k policy has been pretty much a failure as many now approaching retirement have nowhere near enough savings. When they chopped defined benefit pensions, the business community effectively gave workers a pay cut.
Increasing Social Security benefits is the answer.
In the olden days, most old people died much earlier or sold pencils on the street. Old people were poor as hell.
Social Security and other government assistance programs have decrease the incidence of poverty among the elderly dramatically.
The 401k policy has been pretty much a failure as many now approaching retirement have nowhere near enough savings. When they chopped defined benefit pensions, the business community effectively gave workers a pay cut.
Increasing Social Security benefits is the answer.
In the olden days, most old people died much earlier or sold pencils on the street. Old people were poor as hell.
Social Security and other government assistance programs have decrease the incidence of poverty among the elderly dramatically.
The 401k policy has been pretty much a failure as many now approaching retirement have nowhere near enough savings. When they chopped defined benefit pensions, the business community effectively gave workers a pay cut.
Increasing Social Security benefits is the answer.
Dean Baker has more.
Dean Baker has more.
Dean Baker has more.
If increasing Social Security benefits is the answer, where do you propose to get the money?
Not arguing whether it is the answer or not. Just wondering how you propose to go about funding it.
If increasing Social Security benefits is the answer, where do you propose to get the money?
Not arguing whether it is the answer or not. Just wondering how you propose to go about funding it.
If increasing Social Security benefits is the answer, where do you propose to get the money?
Not arguing whether it is the answer or not. Just wondering how you propose to go about funding it.
I’ve heard that the Federal Reserve has a printing press…
I’ve heard that the Federal Reserve has a printing press…
I’ve heard that the Federal Reserve has a printing press…
Cool! We can spend a little extra adding a zero to all of our pension checks. And to all of the price tags. Such a marvelous improvement for all concerned!
Cool! We can spend a little extra adding a zero to all of our pension checks. And to all of the price tags. Such a marvelous improvement for all concerned!
Cool! We can spend a little extra adding a zero to all of our pension checks. And to all of the price tags. Such a marvelous improvement for all concerned!
In the olden days, most old people died much earlier or sold pencils on the street.
Yes, what bobbyp said.
It’s kind of a standard article of conservative rhetoric that, in the good old days, youngsters took care of old folks in their dotage, and now we don’t do that anymore, because of government programs.
Youngsters didn’t always take care of old folks in their dotage as a matter of obvious course.
Lots and lots of people take care of their old folks nowadays, in spite of the oppressive burden of government programs.
If you want to advance that argument you need to demonstrate two things:
1. People used to directly care for their older generations to a degree significantly more than they do now
2. If so, the reason for the change is government programs, and not the other 100 factors that contribute to it
We need to see (1) and (2), otherwise it’s just nostalgic wankery. And demonstrating (1) is not a matter of anecdotes about how Aunt Sarah took in your Granny Jones.
I want numbers.
In the olden days, most old people died much earlier or sold pencils on the street.
Yes, what bobbyp said.
It’s kind of a standard article of conservative rhetoric that, in the good old days, youngsters took care of old folks in their dotage, and now we don’t do that anymore, because of government programs.
Youngsters didn’t always take care of old folks in their dotage as a matter of obvious course.
Lots and lots of people take care of their old folks nowadays, in spite of the oppressive burden of government programs.
If you want to advance that argument you need to demonstrate two things:
1. People used to directly care for their older generations to a degree significantly more than they do now
2. If so, the reason for the change is government programs, and not the other 100 factors that contribute to it
We need to see (1) and (2), otherwise it’s just nostalgic wankery. And demonstrating (1) is not a matter of anecdotes about how Aunt Sarah took in your Granny Jones.
I want numbers.
In the olden days, most old people died much earlier or sold pencils on the street.
Yes, what bobbyp said.
It’s kind of a standard article of conservative rhetoric that, in the good old days, youngsters took care of old folks in their dotage, and now we don’t do that anymore, because of government programs.
Youngsters didn’t always take care of old folks in their dotage as a matter of obvious course.
Lots and lots of people take care of their old folks nowadays, in spite of the oppressive burden of government programs.
If you want to advance that argument you need to demonstrate two things:
1. People used to directly care for their older generations to a degree significantly more than they do now
2. If so, the reason for the change is government programs, and not the other 100 factors that contribute to it
We need to see (1) and (2), otherwise it’s just nostalgic wankery. And demonstrating (1) is not a matter of anecdotes about how Aunt Sarah took in your Granny Jones.
I want numbers.
If increasing Social Security benefits is the answer, where do you propose to get the money?
Increase the income cap on SS.
It will cost me money, personally. Do it, because it needs doing.
If increasing Social Security benefits is the answer, where do you propose to get the money?
Increase the income cap on SS.
It will cost me money, personally. Do it, because it needs doing.
If increasing Social Security benefits is the answer, where do you propose to get the money?
Increase the income cap on SS.
It will cost me money, personally. Do it, because it needs doing.
The “classic tragedy of the commons” is basically horsecrap.
Tell that to the North Atlantic cod fishery.
Or to the Oglala Aquifer.
The “classic tragedy of the commons” is basically horsecrap.
Tell that to the North Atlantic cod fishery.
Or to the Oglala Aquifer.
The “classic tragedy of the commons” is basically horsecrap.
Tell that to the North Atlantic cod fishery.
Or to the Oglala Aquifer.
The 401k policy has been pretty much a failure as many now approaching retirement have nowhere near enough savings. When they chopped defined benefit pensions, the business community effectively gave workers a pay cut
Bobbyp,
I don’t think it has much to do with chopping defined benefit pensions. A big part of the motivation for 401(k)’s, IRA’s and so on was, IIRC, concern over the effectiveness of DB programs. There were enormous issues of vesting and portability, as workers increasingly switched jobs. The result was that lots of pension benefits were simply lost, so there was a move to attach them more closely to the worker. That all seemed to make sense at the time.
What happened, IMO, was that company contributions were never adequate to provide retirement security. Probably, that means the promises of DB plans were likely not to be kept, because the plans were underfunded. So you are comparing an illusion with reality.
And DB plans have other defects as well. Companies go broke, sometimes, or are bought in ways that mysteriously make pensions disappear. Or the plans just change. IBM, I think, was a notorious case.
What is needed, I think, is strict requirements about funding, for both private and public plans, as well as more help, including greater transparency, for those in 401(k)’s.
The 401k policy has been pretty much a failure as many now approaching retirement have nowhere near enough savings. When they chopped defined benefit pensions, the business community effectively gave workers a pay cut
Bobbyp,
I don’t think it has much to do with chopping defined benefit pensions. A big part of the motivation for 401(k)’s, IRA’s and so on was, IIRC, concern over the effectiveness of DB programs. There were enormous issues of vesting and portability, as workers increasingly switched jobs. The result was that lots of pension benefits were simply lost, so there was a move to attach them more closely to the worker. That all seemed to make sense at the time.
What happened, IMO, was that company contributions were never adequate to provide retirement security. Probably, that means the promises of DB plans were likely not to be kept, because the plans were underfunded. So you are comparing an illusion with reality.
And DB plans have other defects as well. Companies go broke, sometimes, or are bought in ways that mysteriously make pensions disappear. Or the plans just change. IBM, I think, was a notorious case.
What is needed, I think, is strict requirements about funding, for both private and public plans, as well as more help, including greater transparency, for those in 401(k)’s.
The 401k policy has been pretty much a failure as many now approaching retirement have nowhere near enough savings. When they chopped defined benefit pensions, the business community effectively gave workers a pay cut
Bobbyp,
I don’t think it has much to do with chopping defined benefit pensions. A big part of the motivation for 401(k)’s, IRA’s and so on was, IIRC, concern over the effectiveness of DB programs. There were enormous issues of vesting and portability, as workers increasingly switched jobs. The result was that lots of pension benefits were simply lost, so there was a move to attach them more closely to the worker. That all seemed to make sense at the time.
What happened, IMO, was that company contributions were never adequate to provide retirement security. Probably, that means the promises of DB plans were likely not to be kept, because the plans were underfunded. So you are comparing an illusion with reality.
And DB plans have other defects as well. Companies go broke, sometimes, or are bought in ways that mysteriously make pensions disappear. Or the plans just change. IBM, I think, was a notorious case.
What is needed, I think, is strict requirements about funding, for both private and public plans, as well as more help, including greater transparency, for those in 401(k)’s.
If increasing Social Security benefits is the answer, where do you propose to get the money?
Where did GWB get the money to squander our resources in Iraq? Why were my SS taxes raised significantly in the 80’s and rich people given endless tax cuts in the interim? Why did conservatives never ask about where to get the money to pay for star warz?
With all due respect, wj, I find that to be little more than a rhetorical question.
Eliminating the cap will address nearly all of the projected “shortfall”. We can still do better and raise benefits significantly.
Have you ever stopped and asked yourself how all those companies in the past could afford defined benefit packages? Where did they get the money?
See here.
Or here.
If increasing Social Security benefits is the answer, where do you propose to get the money?
Where did GWB get the money to squander our resources in Iraq? Why were my SS taxes raised significantly in the 80’s and rich people given endless tax cuts in the interim? Why did conservatives never ask about where to get the money to pay for star warz?
With all due respect, wj, I find that to be little more than a rhetorical question.
Eliminating the cap will address nearly all of the projected “shortfall”. We can still do better and raise benefits significantly.
Have you ever stopped and asked yourself how all those companies in the past could afford defined benefit packages? Where did they get the money?
See here.
Or here.
If increasing Social Security benefits is the answer, where do you propose to get the money?
Where did GWB get the money to squander our resources in Iraq? Why were my SS taxes raised significantly in the 80’s and rich people given endless tax cuts in the interim? Why did conservatives never ask about where to get the money to pay for star warz?
With all due respect, wj, I find that to be little more than a rhetorical question.
Eliminating the cap will address nearly all of the projected “shortfall”. We can still do better and raise benefits significantly.
Have you ever stopped and asked yourself how all those companies in the past could afford defined benefit packages? Where did they get the money?
See here.
Or here.
Yes, but Joel, you overlooked Russell’s stipulation “for the need for things that “actually are commons” to be managed, and not left for any random dude to abuse through “enlightened self-interest”.
Random dudes, for whom the Constitution was written.
Yes, but Joel, you overlooked Russell’s stipulation “for the need for things that “actually are commons” to be managed, and not left for any random dude to abuse through “enlightened self-interest”.
Random dudes, for whom the Constitution was written.
Yes, but Joel, you overlooked Russell’s stipulation “for the need for things that “actually are commons” to be managed, and not left for any random dude to abuse through “enlightened self-interest”.
Random dudes, for whom the Constitution was written.
Cool! We can spend a little extra adding a zero to all of our pension checks.
We have spent decades fashioning public policies to give rich people even more money (more “zeros” if you will).
Tell me, sir, what is the difference?
Cool! We can spend a little extra adding a zero to all of our pension checks.
We have spent decades fashioning public policies to give rich people even more money (more “zeros” if you will).
Tell me, sir, what is the difference?
Cool! We can spend a little extra adding a zero to all of our pension checks.
We have spent decades fashioning public policies to give rich people even more money (more “zeros” if you will).
Tell me, sir, what is the difference?
byomtov,
Good points. But I would argue that the driving force shifting from DB to DC retirement plans was because they cost the employer less and shift risk to employees, and perhaps also incentivized by public policy, as pointed out here.
byomtov,
Good points. But I would argue that the driving force shifting from DB to DC retirement plans was because they cost the employer less and shift risk to employees, and perhaps also incentivized by public policy, as pointed out here.
byomtov,
Good points. But I would argue that the driving force shifting from DB to DC retirement plans was because they cost the employer less and shift risk to employees, and perhaps also incentivized by public policy, as pointed out here.
russell: Increase the income cap on SS.
A sensible move in any wise. But enough to do more than maintain the current levels into the future? I’d like to see some numbers on that before getting too optimistic.
russell: Increase the income cap on SS.
A sensible move in any wise. But enough to do more than maintain the current levels into the future? I’d like to see some numbers on that before getting too optimistic.
russell: Increase the income cap on SS.
A sensible move in any wise. But enough to do more than maintain the current levels into the future? I’d like to see some numbers on that before getting too optimistic.
bobbyp: Where did GWB get the money to squander our resources in Iraq? . . .
With all due respect, wj, I find that to be little more than a rhetorical question.
He got it exactly where conservatives routinely accuse liberals of getting money (frequently with complete accuracy): by mortgaging the future to avoid facing the reality of the cost.
Now politicians, of all stripes, do this routinely. But we here are trying (at least I am trying) to find a way to fund these things without abandoning reality. I’m open to changes, and eliminating the cap would be a good start. But as I said to Rusell, I would like to see something resembling real data to show that raising the cap would be sufficient.
Have you ever stopped and asked yourself how all those companies in the past could afford defined benefit packages? Where did they get the money?
Don’t have to ask, as it is entirely obvious. Eliminating (or just cutting back) benefit plans, including pension plans, reduces costs and thus increases profits. Which increase then went into a) larger payouts to shareholders, and b) larger bonuses for the executives.
They could get the money again, but it would require smaller paychecks for the executives, and smaller dividends for the shareholders. (And, as an aside, would tend to reduce the skew in incomes/wealth across the population. You can fight it out with Brett as to whether or not that would be a good thing.)
bobbyp: Where did GWB get the money to squander our resources in Iraq? . . .
With all due respect, wj, I find that to be little more than a rhetorical question.
He got it exactly where conservatives routinely accuse liberals of getting money (frequently with complete accuracy): by mortgaging the future to avoid facing the reality of the cost.
Now politicians, of all stripes, do this routinely. But we here are trying (at least I am trying) to find a way to fund these things without abandoning reality. I’m open to changes, and eliminating the cap would be a good start. But as I said to Rusell, I would like to see something resembling real data to show that raising the cap would be sufficient.
Have you ever stopped and asked yourself how all those companies in the past could afford defined benefit packages? Where did they get the money?
Don’t have to ask, as it is entirely obvious. Eliminating (or just cutting back) benefit plans, including pension plans, reduces costs and thus increases profits. Which increase then went into a) larger payouts to shareholders, and b) larger bonuses for the executives.
They could get the money again, but it would require smaller paychecks for the executives, and smaller dividends for the shareholders. (And, as an aside, would tend to reduce the skew in incomes/wealth across the population. You can fight it out with Brett as to whether or not that would be a good thing.)
bobbyp: Where did GWB get the money to squander our resources in Iraq? . . .
With all due respect, wj, I find that to be little more than a rhetorical question.
He got it exactly where conservatives routinely accuse liberals of getting money (frequently with complete accuracy): by mortgaging the future to avoid facing the reality of the cost.
Now politicians, of all stripes, do this routinely. But we here are trying (at least I am trying) to find a way to fund these things without abandoning reality. I’m open to changes, and eliminating the cap would be a good start. But as I said to Rusell, I would like to see something resembling real data to show that raising the cap would be sufficient.
Have you ever stopped and asked yourself how all those companies in the past could afford defined benefit packages? Where did they get the money?
Don’t have to ask, as it is entirely obvious. Eliminating (or just cutting back) benefit plans, including pension plans, reduces costs and thus increases profits. Which increase then went into a) larger payouts to shareholders, and b) larger bonuses for the executives.
They could get the money again, but it would require smaller paychecks for the executives, and smaller dividends for the shareholders. (And, as an aside, would tend to reduce the skew in incomes/wealth across the population. You can fight it out with Brett as to whether or not that would be a good thing.)
About a month ago, I had to make a DB/DC decision.
I worked for some years for the old DEC — long enough to get vested in a small defined-benefit pension. After I left, Compaq bought DEC. A bit later, HP bought Compaq. Fidelity has managed the HP retirement plan for many years. Recently, they began bombarding me with offers to roll my HP pension entitlement over into a personal IRA.
Without going into absolute numbers, the offer boiled down to two options worth considering: take $X as a one-time roll-over today, or stay with the DEC deal of $Y/month (nominal dollars) starting at age 65. By my calculation, I would need 5% (nominal) returns on the $X for about 30 years in order to draw $Y(nominal)/month from 65 until 30 years from now, when I shall be either 88 or comfortably dead.
Gentle reader: what would you have chosen, in my place?
–TP
About a month ago, I had to make a DB/DC decision.
I worked for some years for the old DEC — long enough to get vested in a small defined-benefit pension. After I left, Compaq bought DEC. A bit later, HP bought Compaq. Fidelity has managed the HP retirement plan for many years. Recently, they began bombarding me with offers to roll my HP pension entitlement over into a personal IRA.
Without going into absolute numbers, the offer boiled down to two options worth considering: take $X as a one-time roll-over today, or stay with the DEC deal of $Y/month (nominal dollars) starting at age 65. By my calculation, I would need 5% (nominal) returns on the $X for about 30 years in order to draw $Y(nominal)/month from 65 until 30 years from now, when I shall be either 88 or comfortably dead.
Gentle reader: what would you have chosen, in my place?
–TP
About a month ago, I had to make a DB/DC decision.
I worked for some years for the old DEC — long enough to get vested in a small defined-benefit pension. After I left, Compaq bought DEC. A bit later, HP bought Compaq. Fidelity has managed the HP retirement plan for many years. Recently, they began bombarding me with offers to roll my HP pension entitlement over into a personal IRA.
Without going into absolute numbers, the offer boiled down to two options worth considering: take $X as a one-time roll-over today, or stay with the DEC deal of $Y/month (nominal dollars) starting at age 65. By my calculation, I would need 5% (nominal) returns on the $X for about 30 years in order to draw $Y(nominal)/month from 65 until 30 years from now, when I shall be either 88 or comfortably dead.
Gentle reader: what would you have chosen, in my place?
–TP
“Tell em, like Brett’s insurance company telling him, that we’ve put aside reserves to handle all eventualities over heah, nothin to worry bout, didja read the small print?”
Count, I think perhaps you do not understand what happened with my universal life policy. I did read the fine print, every bit of it. It was unambiguously on my side. The insurance company went to court, and got a judge to permit them to unilaterally CHANGE the print!
Being a naive youth, I hadn’t considered the possibility that the legal system would alter a contract entered into voluntarily by both parties, just because it turned out to be more favorable to the smaller party than the larger party had anticipated. After all, if things had turned out the other way, they’d have required me to comply to the point of bankruptcy, rather than kindly rewriting the policy for me. While the insurance company wasn’t looking at bankruptcy, just some unprofitable years due to the policies they’d foolishly written over a couple of years worked through the system.
“Tell em, like Brett’s insurance company telling him, that we’ve put aside reserves to handle all eventualities over heah, nothin to worry bout, didja read the small print?”
Count, I think perhaps you do not understand what happened with my universal life policy. I did read the fine print, every bit of it. It was unambiguously on my side. The insurance company went to court, and got a judge to permit them to unilaterally CHANGE the print!
Being a naive youth, I hadn’t considered the possibility that the legal system would alter a contract entered into voluntarily by both parties, just because it turned out to be more favorable to the smaller party than the larger party had anticipated. After all, if things had turned out the other way, they’d have required me to comply to the point of bankruptcy, rather than kindly rewriting the policy for me. While the insurance company wasn’t looking at bankruptcy, just some unprofitable years due to the policies they’d foolishly written over a couple of years worked through the system.
“Tell em, like Brett’s insurance company telling him, that we’ve put aside reserves to handle all eventualities over heah, nothin to worry bout, didja read the small print?”
Count, I think perhaps you do not understand what happened with my universal life policy. I did read the fine print, every bit of it. It was unambiguously on my side. The insurance company went to court, and got a judge to permit them to unilaterally CHANGE the print!
Being a naive youth, I hadn’t considered the possibility that the legal system would alter a contract entered into voluntarily by both parties, just because it turned out to be more favorable to the smaller party than the larger party had anticipated. After all, if things had turned out the other way, they’d have required me to comply to the point of bankruptcy, rather than kindly rewriting the policy for me. While the insurance company wasn’t looking at bankruptcy, just some unprofitable years due to the policies they’d foolishly written over a couple of years worked through the system.
Tell that to the North Atlantic cod fishery.
Or to the Oglala Aquifer.
A very apt point, and amen.
I’ll restate – the tragedy of the commons as originally presented in the context of the enclosure debates was horsecrap. It ignored the fact that, in actual practice, commons were not subject to abuse, because they were generally well managed.
It was a hypothetical thought experiment, not an accurate description of the real case, which was advanced to justify privatization of the common resources.
And, whenever it appears in public discourse, it tends to have the same character, to this day.
None of which is to say that there are not thing that are common goods, in the economic sense, and which *ought to be managed as a commons, but are not*. Or, are not, to a sufficient degree.
So, North Atlantic fish stocks, and the Oglala aquifer, among others.
What I take away from those examples is that there is a need for more effective management of those resources *as a commons*. Not that they should be delivered into private hands for management.
Tell that to the North Atlantic cod fishery.
Or to the Oglala Aquifer.
A very apt point, and amen.
I’ll restate – the tragedy of the commons as originally presented in the context of the enclosure debates was horsecrap. It ignored the fact that, in actual practice, commons were not subject to abuse, because they were generally well managed.
It was a hypothetical thought experiment, not an accurate description of the real case, which was advanced to justify privatization of the common resources.
And, whenever it appears in public discourse, it tends to have the same character, to this day.
None of which is to say that there are not thing that are common goods, in the economic sense, and which *ought to be managed as a commons, but are not*. Or, are not, to a sufficient degree.
So, North Atlantic fish stocks, and the Oglala aquifer, among others.
What I take away from those examples is that there is a need for more effective management of those resources *as a commons*. Not that they should be delivered into private hands for management.
Tell that to the North Atlantic cod fishery.
Or to the Oglala Aquifer.
A very apt point, and amen.
I’ll restate – the tragedy of the commons as originally presented in the context of the enclosure debates was horsecrap. It ignored the fact that, in actual practice, commons were not subject to abuse, because they were generally well managed.
It was a hypothetical thought experiment, not an accurate description of the real case, which was advanced to justify privatization of the common resources.
And, whenever it appears in public discourse, it tends to have the same character, to this day.
None of which is to say that there are not thing that are common goods, in the economic sense, and which *ought to be managed as a commons, but are not*. Or, are not, to a sufficient degree.
So, North Atlantic fish stocks, and the Oglala aquifer, among others.
What I take away from those examples is that there is a need for more effective management of those resources *as a commons*. Not that they should be delivered into private hands for management.
I’d like to see some numbers on that before getting too optimistic.
The CBO analysis. Not enough for a complete fix, but enough to make a very large difference.
And, isn’t it wonderful that we have a government that makes this information available to us at the click of a mouse, so we can make more- and better-informed decisions about these things.
Speaking of transfers:
I’d also like to follow up Tony P’s 1:04 by noting that responding to SS shortfalls, whether real or imagined, by reducing benefits rather than increasing revenues *is a transfer*, from the folks who have paid into SS at rates greater than expenditures for the last 30 years, to the folks today who refuse to accept either an increase in SS taxes to fund the shortfalls, or an increase in general revenue to *pay back what was owed*.
In practice, it’s a transfer of the “productivity” of the entire working public for the last 30 years, to folks who would prefer to not have the SS cap raised, or the top marginal rates increased by some single-digit number of points.
And, in practice, since SS is a highly regressive tax, it is largely a transfer from the not-wealthy to the wealthy.
We spent the money. Now the bill is due. Time to pay up.
Gentle reader: what would you have chosen, in my place?
Tough choice. The odds that you will ever actually see the $Y/mo are the big unknown.
To some degree, you have to read the fact that they even presented you with the option as their declaration of intent to be shed of the DB obligation.
So, how much confidence do you have in assurances given by HP / Fidelity?
I’d like to see some numbers on that before getting too optimistic.
The CBO analysis. Not enough for a complete fix, but enough to make a very large difference.
And, isn’t it wonderful that we have a government that makes this information available to us at the click of a mouse, so we can make more- and better-informed decisions about these things.
Speaking of transfers:
I’d also like to follow up Tony P’s 1:04 by noting that responding to SS shortfalls, whether real or imagined, by reducing benefits rather than increasing revenues *is a transfer*, from the folks who have paid into SS at rates greater than expenditures for the last 30 years, to the folks today who refuse to accept either an increase in SS taxes to fund the shortfalls, or an increase in general revenue to *pay back what was owed*.
In practice, it’s a transfer of the “productivity” of the entire working public for the last 30 years, to folks who would prefer to not have the SS cap raised, or the top marginal rates increased by some single-digit number of points.
And, in practice, since SS is a highly regressive tax, it is largely a transfer from the not-wealthy to the wealthy.
We spent the money. Now the bill is due. Time to pay up.
Gentle reader: what would you have chosen, in my place?
Tough choice. The odds that you will ever actually see the $Y/mo are the big unknown.
To some degree, you have to read the fact that they even presented you with the option as their declaration of intent to be shed of the DB obligation.
So, how much confidence do you have in assurances given by HP / Fidelity?
I’d like to see some numbers on that before getting too optimistic.
The CBO analysis. Not enough for a complete fix, but enough to make a very large difference.
And, isn’t it wonderful that we have a government that makes this information available to us at the click of a mouse, so we can make more- and better-informed decisions about these things.
Speaking of transfers:
I’d also like to follow up Tony P’s 1:04 by noting that responding to SS shortfalls, whether real or imagined, by reducing benefits rather than increasing revenues *is a transfer*, from the folks who have paid into SS at rates greater than expenditures for the last 30 years, to the folks today who refuse to accept either an increase in SS taxes to fund the shortfalls, or an increase in general revenue to *pay back what was owed*.
In practice, it’s a transfer of the “productivity” of the entire working public for the last 30 years, to folks who would prefer to not have the SS cap raised, or the top marginal rates increased by some single-digit number of points.
And, in practice, since SS is a highly regressive tax, it is largely a transfer from the not-wealthy to the wealthy.
We spent the money. Now the bill is due. Time to pay up.
Gentle reader: what would you have chosen, in my place?
Tough choice. The odds that you will ever actually see the $Y/mo are the big unknown.
To some degree, you have to read the fact that they even presented you with the option as their declaration of intent to be shed of the DB obligation.
So, how much confidence do you have in assurances given by HP / Fidelity?
“I’d also like to follow up Tony P’s 1:04 by noting that responding to SS shortfalls, whether real or imagined, by reducing benefits rather than increasing revenues *is a transfer*, from the folks who have paid into SS at rates greater than expenditures for the last 30 years, to the folks today who refuse to accept either an increase in SS taxes to fund the shortfalls, or an increase in general revenue to *pay back what was owed*.”
I’d like to note that you seem to have problems with the direction of causality, and the nature of time. In the past, transfers of wealth from myself to, for instance, my parents, took place. These are part of the unalterable past.
In another decade, transfers from other people to me might take place. Reducing these would not retroactively alter the past. Neither would increasing them.
“I’d also like to follow up Tony P’s 1:04 by noting that responding to SS shortfalls, whether real or imagined, by reducing benefits rather than increasing revenues *is a transfer*, from the folks who have paid into SS at rates greater than expenditures for the last 30 years, to the folks today who refuse to accept either an increase in SS taxes to fund the shortfalls, or an increase in general revenue to *pay back what was owed*.”
I’d like to note that you seem to have problems with the direction of causality, and the nature of time. In the past, transfers of wealth from myself to, for instance, my parents, took place. These are part of the unalterable past.
In another decade, transfers from other people to me might take place. Reducing these would not retroactively alter the past. Neither would increasing them.
“I’d also like to follow up Tony P’s 1:04 by noting that responding to SS shortfalls, whether real or imagined, by reducing benefits rather than increasing revenues *is a transfer*, from the folks who have paid into SS at rates greater than expenditures for the last 30 years, to the folks today who refuse to accept either an increase in SS taxes to fund the shortfalls, or an increase in general revenue to *pay back what was owed*.”
I’d like to note that you seem to have problems with the direction of causality, and the nature of time. In the past, transfers of wealth from myself to, for instance, my parents, took place. These are part of the unalterable past.
In another decade, transfers from other people to me might take place. Reducing these would not retroactively alter the past. Neither would increasing them.
He got it exactly where conservatives routinely accuse liberals of getting money (frequently with complete accuracy): by mortgaging the future to avoid facing the reality of the cost.
Please explain how this is so.
Perhaps this will help you.
Yes, we do have a retirement crisis, but it is not the one you think it is.
He got it exactly where conservatives routinely accuse liberals of getting money (frequently with complete accuracy): by mortgaging the future to avoid facing the reality of the cost.
Please explain how this is so.
Perhaps this will help you.
Yes, we do have a retirement crisis, but it is not the one you think it is.
He got it exactly where conservatives routinely accuse liberals of getting money (frequently with complete accuracy): by mortgaging the future to avoid facing the reality of the cost.
Please explain how this is so.
Perhaps this will help you.
Yes, we do have a retirement crisis, but it is not the one you think it is.
a bit late, but
Youngsters didn’t always take care of old folks in their dotage as a matter of obvious course.
This is interesting cause I think that people who look on the past nostalgically are not lying, but are failing to understand structural conditions that made those things possible.
When a majority of the people lived in the town they were born in, or if the children got a job and then had their parents relocate to be near them, they probably did take care of their parents. I mean, imagine you live in a place where everyone knows you AND knows your parents and they see your dad living on the streets caging change. That’s a pretty big incentive to make sure that they have a roof over their head. As this sort of multi generational family disappeared, that pressure/obligation to take care of the older generation was moved to out of sight/out of mind.
Unfortunately, people who think that the good old days were great often fail to understand that a lot of what they are nostalgic for was supported by a network of other conditions that have long since disappeared.Some of those conditions (like segregation or sexism) were not so good, others (people living in the same town as their parents, and having multi-generation families together, head of the household getting paid a living wage) were good, but have been dismantled by progress.
a bit late, but
Youngsters didn’t always take care of old folks in their dotage as a matter of obvious course.
This is interesting cause I think that people who look on the past nostalgically are not lying, but are failing to understand structural conditions that made those things possible.
When a majority of the people lived in the town they were born in, or if the children got a job and then had their parents relocate to be near them, they probably did take care of their parents. I mean, imagine you live in a place where everyone knows you AND knows your parents and they see your dad living on the streets caging change. That’s a pretty big incentive to make sure that they have a roof over their head. As this sort of multi generational family disappeared, that pressure/obligation to take care of the older generation was moved to out of sight/out of mind.
Unfortunately, people who think that the good old days were great often fail to understand that a lot of what they are nostalgic for was supported by a network of other conditions that have long since disappeared.Some of those conditions (like segregation or sexism) were not so good, others (people living in the same town as their parents, and having multi-generation families together, head of the household getting paid a living wage) were good, but have been dismantled by progress.
a bit late, but
Youngsters didn’t always take care of old folks in their dotage as a matter of obvious course.
This is interesting cause I think that people who look on the past nostalgically are not lying, but are failing to understand structural conditions that made those things possible.
When a majority of the people lived in the town they were born in, or if the children got a job and then had their parents relocate to be near them, they probably did take care of their parents. I mean, imagine you live in a place where everyone knows you AND knows your parents and they see your dad living on the streets caging change. That’s a pretty big incentive to make sure that they have a roof over their head. As this sort of multi generational family disappeared, that pressure/obligation to take care of the older generation was moved to out of sight/out of mind.
Unfortunately, people who think that the good old days were great often fail to understand that a lot of what they are nostalgic for was supported by a network of other conditions that have long since disappeared.Some of those conditions (like segregation or sexism) were not so good, others (people living in the same town as their parents, and having multi-generation families together, head of the household getting paid a living wage) were good, but have been dismantled by progress.
Brett,
Can you please rewrite your 8:59 comment in English, after you’ve had your coffee? You might have a coherent point in there somewhere, and I’d like to understand it if you do. But the best I can make out from your actual words is that “the past” doesn’t count, and you’re fine with that. And I have a hard time squaring that with your complaint about a court changing a contract YOU signed in the past.
Russell,
I have more confidence in Social Security than I do in Fidelity. It’s more likely that Fidelity will go out of business during my remaining lifetime than that SS will, in my view. After all, DEC went out of business, and Compaq went out of business; the jury’s still out on HP. Still, I have reasonable confidence that Fidelity (or its successor) will fork over the $Y/month when the time comes.
The big uncertainties for me were:
1) How long am I likely to live? If I live to 100, collecting $Y/month, Fidelity loses. If I only live to 70, Fidelity wins. If I die tomorrow, Fidelity wins big.
2) How much will $Y (nominal) be worth 10, 20, 30, or 40 years from now? Fidelity stands to me as debtor to creditor. Inflation favors debtors.
3) How likely am I to manage the $X lump-sum rollover so as to get the consistent 5% returns that (by my calculation) Fidelity is planning on? Past experience suggests: not bloody likely. Fidelity’s apparent eagerness to push the rollover option suggests that maybe they’re worried about achieving 5% returns themselves, but they still have a better shot at it than I personally do.
In the end, I stayed with the defined-benefit $Y/month option. Partly because $Y is a pretty small amount anyhow, and not worth agonizing too much over. And partly because, under the DEC legacy rules, I can still decide to take a lump-sum rollover at 65. Overall, I’d describe it as a “close call” rather than a “tough choice”.
lj,
In Greece, houses tend to be built on a concrete post-and-beam framework. Quite often, you see re-bar sticking up out of the posts of an otherwise-finished house. The reason is that the Greek dream is (or at least, was) that the kids would grow up locally and build their house(s) on top of the old folks’ house.
That sort of family togetherness does have its good points, as you say. But I have long suspected that most Americans have liked Social Security over the decades precisely because they preferred paying FICA to living upstairs from their parents.
–TP
Brett,
Can you please rewrite your 8:59 comment in English, after you’ve had your coffee? You might have a coherent point in there somewhere, and I’d like to understand it if you do. But the best I can make out from your actual words is that “the past” doesn’t count, and you’re fine with that. And I have a hard time squaring that with your complaint about a court changing a contract YOU signed in the past.
Russell,
I have more confidence in Social Security than I do in Fidelity. It’s more likely that Fidelity will go out of business during my remaining lifetime than that SS will, in my view. After all, DEC went out of business, and Compaq went out of business; the jury’s still out on HP. Still, I have reasonable confidence that Fidelity (or its successor) will fork over the $Y/month when the time comes.
The big uncertainties for me were:
1) How long am I likely to live? If I live to 100, collecting $Y/month, Fidelity loses. If I only live to 70, Fidelity wins. If I die tomorrow, Fidelity wins big.
2) How much will $Y (nominal) be worth 10, 20, 30, or 40 years from now? Fidelity stands to me as debtor to creditor. Inflation favors debtors.
3) How likely am I to manage the $X lump-sum rollover so as to get the consistent 5% returns that (by my calculation) Fidelity is planning on? Past experience suggests: not bloody likely. Fidelity’s apparent eagerness to push the rollover option suggests that maybe they’re worried about achieving 5% returns themselves, but they still have a better shot at it than I personally do.
In the end, I stayed with the defined-benefit $Y/month option. Partly because $Y is a pretty small amount anyhow, and not worth agonizing too much over. And partly because, under the DEC legacy rules, I can still decide to take a lump-sum rollover at 65. Overall, I’d describe it as a “close call” rather than a “tough choice”.
lj,
In Greece, houses tend to be built on a concrete post-and-beam framework. Quite often, you see re-bar sticking up out of the posts of an otherwise-finished house. The reason is that the Greek dream is (or at least, was) that the kids would grow up locally and build their house(s) on top of the old folks’ house.
That sort of family togetherness does have its good points, as you say. But I have long suspected that most Americans have liked Social Security over the decades precisely because they preferred paying FICA to living upstairs from their parents.
–TP
Brett,
Can you please rewrite your 8:59 comment in English, after you’ve had your coffee? You might have a coherent point in there somewhere, and I’d like to understand it if you do. But the best I can make out from your actual words is that “the past” doesn’t count, and you’re fine with that. And I have a hard time squaring that with your complaint about a court changing a contract YOU signed in the past.
Russell,
I have more confidence in Social Security than I do in Fidelity. It’s more likely that Fidelity will go out of business during my remaining lifetime than that SS will, in my view. After all, DEC went out of business, and Compaq went out of business; the jury’s still out on HP. Still, I have reasonable confidence that Fidelity (or its successor) will fork over the $Y/month when the time comes.
The big uncertainties for me were:
1) How long am I likely to live? If I live to 100, collecting $Y/month, Fidelity loses. If I only live to 70, Fidelity wins. If I die tomorrow, Fidelity wins big.
2) How much will $Y (nominal) be worth 10, 20, 30, or 40 years from now? Fidelity stands to me as debtor to creditor. Inflation favors debtors.
3) How likely am I to manage the $X lump-sum rollover so as to get the consistent 5% returns that (by my calculation) Fidelity is planning on? Past experience suggests: not bloody likely. Fidelity’s apparent eagerness to push the rollover option suggests that maybe they’re worried about achieving 5% returns themselves, but they still have a better shot at it than I personally do.
In the end, I stayed with the defined-benefit $Y/month option. Partly because $Y is a pretty small amount anyhow, and not worth agonizing too much over. And partly because, under the DEC legacy rules, I can still decide to take a lump-sum rollover at 65. Overall, I’d describe it as a “close call” rather than a “tough choice”.
lj,
In Greece, houses tend to be built on a concrete post-and-beam framework. Quite often, you see re-bar sticking up out of the posts of an otherwise-finished house. The reason is that the Greek dream is (or at least, was) that the kids would grow up locally and build their house(s) on top of the old folks’ house.
That sort of family togetherness does have its good points, as you say. But I have long suspected that most Americans have liked Social Security over the decades precisely because they preferred paying FICA to living upstairs from their parents.
–TP
Increase the income cap on SS.
On the subject of removing the cap:
http://crfb.org/blogs/setting-record-straight-social-security
According to the Social Security Chief Actuary, repealing the taxable maximum would close about seven-tenths of the program’s 75-year shortfall, and only about one-third of the gap in the 75th year. Senator Harkin’s legislation on the whole would close only one-half of the 75-year shortfall and one-fifth of the shortfall in the 75th year.
But russell’s CBO link is good too.
Also relevant to consider generational views on this, which I find a fairly striking:
http://www.pewsocialtrends.org/2012/12/20/the-big-generation-gap-at-the-polls-is-echoed-in-attitudes-on-budget-tradeoffs/
Over half of young adults don’t think benefits will be at the same level when they retire.
Increase the income cap on SS.
On the subject of removing the cap:
http://crfb.org/blogs/setting-record-straight-social-security
According to the Social Security Chief Actuary, repealing the taxable maximum would close about seven-tenths of the program’s 75-year shortfall, and only about one-third of the gap in the 75th year. Senator Harkin’s legislation on the whole would close only one-half of the 75-year shortfall and one-fifth of the shortfall in the 75th year.
But russell’s CBO link is good too.
Also relevant to consider generational views on this, which I find a fairly striking:
http://www.pewsocialtrends.org/2012/12/20/the-big-generation-gap-at-the-polls-is-echoed-in-attitudes-on-budget-tradeoffs/
Over half of young adults don’t think benefits will be at the same level when they retire.
Increase the income cap on SS.
On the subject of removing the cap:
http://crfb.org/blogs/setting-record-straight-social-security
According to the Social Security Chief Actuary, repealing the taxable maximum would close about seven-tenths of the program’s 75-year shortfall, and only about one-third of the gap in the 75th year. Senator Harkin’s legislation on the whole would close only one-half of the 75-year shortfall and one-fifth of the shortfall in the 75th year.
But russell’s CBO link is good too.
Also relevant to consider generational views on this, which I find a fairly striking:
http://www.pewsocialtrends.org/2012/12/20/the-big-generation-gap-at-the-polls-is-echoed-in-attitudes-on-budget-tradeoffs/
Over half of young adults don’t think benefits will be at the same level when they retire.
Tony P, another reason for that Greek practice is that one has to pay no taxes for ‘unfinished’ buildings there. Once the house is formally finished property taxes would apply. Greeks have been hereditary tax evasion artists for centuries (a necessary, even essential survival trait in the past) and see no reason to change those habits. Greece has always been so dysfunctional that tax honesty was foolish at best if not outright suicidal.
Who can blame them now that all money the state takes in gets confiscated instantly to pay foreign corporations holding Greek debts and the rich Greeks that transferred their wealth* abroad do not get importuned in the least?
*e.g. with help from Dutch firms and tacit suppport by the Dutch government in exchange for a share
Tony P, another reason for that Greek practice is that one has to pay no taxes for ‘unfinished’ buildings there. Once the house is formally finished property taxes would apply. Greeks have been hereditary tax evasion artists for centuries (a necessary, even essential survival trait in the past) and see no reason to change those habits. Greece has always been so dysfunctional that tax honesty was foolish at best if not outright suicidal.
Who can blame them now that all money the state takes in gets confiscated instantly to pay foreign corporations holding Greek debts and the rich Greeks that transferred their wealth* abroad do not get importuned in the least?
*e.g. with help from Dutch firms and tacit suppport by the Dutch government in exchange for a share
Tony P, another reason for that Greek practice is that one has to pay no taxes for ‘unfinished’ buildings there. Once the house is formally finished property taxes would apply. Greeks have been hereditary tax evasion artists for centuries (a necessary, even essential survival trait in the past) and see no reason to change those habits. Greece has always been so dysfunctional that tax honesty was foolish at best if not outright suicidal.
Who can blame them now that all money the state takes in gets confiscated instantly to pay foreign corporations holding Greek debts and the rich Greeks that transferred their wealth* abroad do not get importuned in the least?
*e.g. with help from Dutch firms and tacit suppport by the Dutch government in exchange for a share
I’d like to note that you seem to have problems with the direction of causality, and the nature of time.
I believe the issue is your failure to understand the concepts of “borrow” and “repay”.
I’d like to note that you seem to have problems with the direction of causality, and the nature of time.
I believe the issue is your failure to understand the concepts of “borrow” and “repay”.
I’d like to note that you seem to have problems with the direction of causality, and the nature of time.
I believe the issue is your failure to understand the concepts of “borrow” and “repay”.
thompson,
when the crfb claims right off the bat that the current Social Security operational deficit is “contributing to the deficit”, a statement that is, at best, misleading, i take the rest with a grain of salt. the crfb is funded by Pete Peterson…’nuff said.
the current younger generation has been exposed to a well funded propaganda campaign against ‘entitlements’ for decades. it is no wonder they believe as the survey shows. however, if they act politically as the GOP asks, the belief will become a self fulfilling prophecy.
thompson,
when the crfb claims right off the bat that the current Social Security operational deficit is “contributing to the deficit”, a statement that is, at best, misleading, i take the rest with a grain of salt. the crfb is funded by Pete Peterson…’nuff said.
the current younger generation has been exposed to a well funded propaganda campaign against ‘entitlements’ for decades. it is no wonder they believe as the survey shows. however, if they act politically as the GOP asks, the belief will become a self fulfilling prophecy.
thompson,
when the crfb claims right off the bat that the current Social Security operational deficit is “contributing to the deficit”, a statement that is, at best, misleading, i take the rest with a grain of salt. the crfb is funded by Pete Peterson…’nuff said.
the current younger generation has been exposed to a well funded propaganda campaign against ‘entitlements’ for decades. it is no wonder they believe as the survey shows. however, if they act politically as the GOP asks, the belief will become a self fulfilling prophecy.
Over half of young adults don’t think benefits will be at the same level when they retire.
distrust of SS’s future is a perennial thing. it’s been around since the program’s founding.
Over half of young adults don’t think benefits will be at the same level when they retire.
distrust of SS’s future is a perennial thing. it’s been around since the program’s founding.
Over half of young adults don’t think benefits will be at the same level when they retire.
distrust of SS’s future is a perennial thing. it’s been around since the program’s founding.
Brett wrote:
“Count, I think perhaps you do not understand what happened with my universal life policy. I did read the fine print, every bit of it. It was unambiguously on my side. The insurance company went to court, and got a judge to permit them to unilaterally CHANGE the print!
Being a naive youth, I hadn’t considered the possibility that the legal system would alter a contract entered into voluntarily by both parties, just because it turned out to be more favorable to the smaller party than the larger party had anticipated. After all, if things had turned out the other way, they’d have required me to comply to the point of bankruptcy, rather than kindly rewriting the policy for me. While the insurance company wasn’t looking at bankruptcy, just some unprofitable years due to the policies they’d foolishly written over a couple of years worked through the system.”
Oh, I get it.
There is plenty to get.
Brett wrote:
“Count, I think perhaps you do not understand what happened with my universal life policy. I did read the fine print, every bit of it. It was unambiguously on my side. The insurance company went to court, and got a judge to permit them to unilaterally CHANGE the print!
Being a naive youth, I hadn’t considered the possibility that the legal system would alter a contract entered into voluntarily by both parties, just because it turned out to be more favorable to the smaller party than the larger party had anticipated. After all, if things had turned out the other way, they’d have required me to comply to the point of bankruptcy, rather than kindly rewriting the policy for me. While the insurance company wasn’t looking at bankruptcy, just some unprofitable years due to the policies they’d foolishly written over a couple of years worked through the system.”
Oh, I get it.
There is plenty to get.
Brett wrote:
“Count, I think perhaps you do not understand what happened with my universal life policy. I did read the fine print, every bit of it. It was unambiguously on my side. The insurance company went to court, and got a judge to permit them to unilaterally CHANGE the print!
Being a naive youth, I hadn’t considered the possibility that the legal system would alter a contract entered into voluntarily by both parties, just because it turned out to be more favorable to the smaller party than the larger party had anticipated. After all, if things had turned out the other way, they’d have required me to comply to the point of bankruptcy, rather than kindly rewriting the policy for me. While the insurance company wasn’t looking at bankruptcy, just some unprofitable years due to the policies they’d foolishly written over a couple of years worked through the system.”
Oh, I get it.
There is plenty to get.
a statement that is, at best, misleading
Someone upthread wisely suggested that the whole SS trust fund thing has been hashed and rehashed, there is little reason to enter into that discussion. If you think the SSA numbers are wrong or have been misrepresented, I’d be curious to learn more.
the current younger generation has been exposed to a well funded propaganda campaign against ‘entitlements’ for decades. it is no wonder they believe as the survey shows.
And the possibility that people who are farther away from retirement than you are might have a different view for good reason doesn’t exist? It’s all propaganda?
a statement that is, at best, misleading
Someone upthread wisely suggested that the whole SS trust fund thing has been hashed and rehashed, there is little reason to enter into that discussion. If you think the SSA numbers are wrong or have been misrepresented, I’d be curious to learn more.
the current younger generation has been exposed to a well funded propaganda campaign against ‘entitlements’ for decades. it is no wonder they believe as the survey shows.
And the possibility that people who are farther away from retirement than you are might have a different view for good reason doesn’t exist? It’s all propaganda?
a statement that is, at best, misleading
Someone upthread wisely suggested that the whole SS trust fund thing has been hashed and rehashed, there is little reason to enter into that discussion. If you think the SSA numbers are wrong or have been misrepresented, I’d be curious to learn more.
the current younger generation has been exposed to a well funded propaganda campaign against ‘entitlements’ for decades. it is no wonder they believe as the survey shows.
And the possibility that people who are farther away from retirement than you are might have a different view for good reason doesn’t exist? It’s all propaganda?
IMO this gets the gist of it, in plain and simple language.
There are two sort of separate issues to consider.
One is whether repaying the intra-governmental debt that is represented by the T bills held by the SS trust funds increases the deficit.
The answer is yes, it does. And, like all sovereign debt obligations, we will have to find the money to repay it, or default on our obligations. We have never done so, and doing so by f***ing over the people who have paid into SS at a rate greater than expenses for the last 30 years would be a really crappy place to start.
If we don’t have the money to pay our bills, we need to raise more money, or find things to not spend money on. Not paying back money we borrowed doesn’t count as a thing to not spend money on.
And “oops, sorry, we spent that money, so we don’t have it in our pockets to pay you back” is sure as hell not a good plan.
The second issue is that, in about a generation, the trust funds will be used up. At that point, we hit a brick wall, and benefits will have to be cut by about a quarter, immediately.
To address that, we need to increase revenue into the SS program. Again, that means raise more money. Or, we can find things to not spend money on. So, our choices are raise taxes in one way or another, or reduce SS benefits.
My understanding is that much of the gap in the second case can be met by some combination of increasing the SS income cap and means-testing benefits.
Both of those seem like reasonable things to do, to me, and both seem preferable to taking benefits away from people who have, in good faith, paid toward them over a lifetime of work, and who have relied on them being available as part of their retirement planning.
SS is already a highly regressive plan, in terms of how it is funded, making it slightly less so does not seem out of line.
Or, of course, in about a generation, we can just flip the bird to all of our old folks.
In about a generation I will probably be senile or dead, so it’s all the same to me either way. I just think it would be a shame to flush what has been a remarkably popular, useful, and successful program, all because we don’t want to make wealthy people feel put upon.
There are some folks who would be happy to flush SS just because it’s a government program and WE HATES THEM WE DO!!! But those folks are, basically, in the minority, so it behooves the rest of us to not let those folks dominate the conversation and decision-making.
And yes, I am considering SS and the general federal budget as two separate pots of money, because legally that is what they are.
IMO this gets the gist of it, in plain and simple language.
There are two sort of separate issues to consider.
One is whether repaying the intra-governmental debt that is represented by the T bills held by the SS trust funds increases the deficit.
The answer is yes, it does. And, like all sovereign debt obligations, we will have to find the money to repay it, or default on our obligations. We have never done so, and doing so by f***ing over the people who have paid into SS at a rate greater than expenses for the last 30 years would be a really crappy place to start.
If we don’t have the money to pay our bills, we need to raise more money, or find things to not spend money on. Not paying back money we borrowed doesn’t count as a thing to not spend money on.
And “oops, sorry, we spent that money, so we don’t have it in our pockets to pay you back” is sure as hell not a good plan.
The second issue is that, in about a generation, the trust funds will be used up. At that point, we hit a brick wall, and benefits will have to be cut by about a quarter, immediately.
To address that, we need to increase revenue into the SS program. Again, that means raise more money. Or, we can find things to not spend money on. So, our choices are raise taxes in one way or another, or reduce SS benefits.
My understanding is that much of the gap in the second case can be met by some combination of increasing the SS income cap and means-testing benefits.
Both of those seem like reasonable things to do, to me, and both seem preferable to taking benefits away from people who have, in good faith, paid toward them over a lifetime of work, and who have relied on them being available as part of their retirement planning.
SS is already a highly regressive plan, in terms of how it is funded, making it slightly less so does not seem out of line.
Or, of course, in about a generation, we can just flip the bird to all of our old folks.
In about a generation I will probably be senile or dead, so it’s all the same to me either way. I just think it would be a shame to flush what has been a remarkably popular, useful, and successful program, all because we don’t want to make wealthy people feel put upon.
There are some folks who would be happy to flush SS just because it’s a government program and WE HATES THEM WE DO!!! But those folks are, basically, in the minority, so it behooves the rest of us to not let those folks dominate the conversation and decision-making.
And yes, I am considering SS and the general federal budget as two separate pots of money, because legally that is what they are.
IMO this gets the gist of it, in plain and simple language.
There are two sort of separate issues to consider.
One is whether repaying the intra-governmental debt that is represented by the T bills held by the SS trust funds increases the deficit.
The answer is yes, it does. And, like all sovereign debt obligations, we will have to find the money to repay it, or default on our obligations. We have never done so, and doing so by f***ing over the people who have paid into SS at a rate greater than expenses for the last 30 years would be a really crappy place to start.
If we don’t have the money to pay our bills, we need to raise more money, or find things to not spend money on. Not paying back money we borrowed doesn’t count as a thing to not spend money on.
And “oops, sorry, we spent that money, so we don’t have it in our pockets to pay you back” is sure as hell not a good plan.
The second issue is that, in about a generation, the trust funds will be used up. At that point, we hit a brick wall, and benefits will have to be cut by about a quarter, immediately.
To address that, we need to increase revenue into the SS program. Again, that means raise more money. Or, we can find things to not spend money on. So, our choices are raise taxes in one way or another, or reduce SS benefits.
My understanding is that much of the gap in the second case can be met by some combination of increasing the SS income cap and means-testing benefits.
Both of those seem like reasonable things to do, to me, and both seem preferable to taking benefits away from people who have, in good faith, paid toward them over a lifetime of work, and who have relied on them being available as part of their retirement planning.
SS is already a highly regressive plan, in terms of how it is funded, making it slightly less so does not seem out of line.
Or, of course, in about a generation, we can just flip the bird to all of our old folks.
In about a generation I will probably be senile or dead, so it’s all the same to me either way. I just think it would be a shame to flush what has been a remarkably popular, useful, and successful program, all because we don’t want to make wealthy people feel put upon.
There are some folks who would be happy to flush SS just because it’s a government program and WE HATES THEM WE DO!!! But those folks are, basically, in the minority, so it behooves the rest of us to not let those folks dominate the conversation and decision-making.
And yes, I am considering SS and the general federal budget as two separate pots of money, because legally that is what they are.
The “wisdom of crowds” expectation for very long term returns: 2.6%.
As such, it apparently tracks the real growth of the economy reasonably closely.
Which makes sense.
The “wisdom of crowds” expectation for very long term returns: 2.6%.
As such, it apparently tracks the real growth of the economy reasonably closely.
Which makes sense.
The “wisdom of crowds” expectation for very long term returns: 2.6%.
As such, it apparently tracks the real growth of the economy reasonably closely.
Which makes sense.
Some propaganda, but the usual suspects believe the same thing about Social Security, Medicare, what have you:
http://talkingpointsmemo.com/livewire/david-brat-free-market-obamacare
Apparently, every time a guy signs up his kids for Obamacare, or a Social Security payment keeps an elderly, demented person off the streets, the lights dim in America.
Of course, the guy’s name is “Brat”.
Charles Dickens must have christened him.
Some propaganda, but the usual suspects believe the same thing about Social Security, Medicare, what have you:
http://talkingpointsmemo.com/livewire/david-brat-free-market-obamacare
Apparently, every time a guy signs up his kids for Obamacare, or a Social Security payment keeps an elderly, demented person off the streets, the lights dim in America.
Of course, the guy’s name is “Brat”.
Charles Dickens must have christened him.
Some propaganda, but the usual suspects believe the same thing about Social Security, Medicare, what have you:
http://talkingpointsmemo.com/livewire/david-brat-free-market-obamacare
Apparently, every time a guy signs up his kids for Obamacare, or a Social Security payment keeps an elderly, demented person off the streets, the lights dim in America.
Of course, the guy’s name is “Brat”.
Charles Dickens must have christened him.
Russell,
There are two sort of separate issues to consider.
One is whether repaying the intra-governmental debt that is represented by the T bills held by the SS trust funds increases the deficit.
The answer is yes, it does. And, like all sovereign debt obligations, we will have to find the money to repay it, or default on our obligations.
Let’s be careful here. Repaying the SS trust funds increases the deficit in the sense that, if we didn’t repay, the money would be available for other uses, for which we will now be required to borrow. True.
But that is no different than repaying Treasury borrowing from other sources. Stiffing a creditor is stiffing a creditor.
Russell,
There are two sort of separate issues to consider.
One is whether repaying the intra-governmental debt that is represented by the T bills held by the SS trust funds increases the deficit.
The answer is yes, it does. And, like all sovereign debt obligations, we will have to find the money to repay it, or default on our obligations.
Let’s be careful here. Repaying the SS trust funds increases the deficit in the sense that, if we didn’t repay, the money would be available for other uses, for which we will now be required to borrow. True.
But that is no different than repaying Treasury borrowing from other sources. Stiffing a creditor is stiffing a creditor.
Russell,
There are two sort of separate issues to consider.
One is whether repaying the intra-governmental debt that is represented by the T bills held by the SS trust funds increases the deficit.
The answer is yes, it does. And, like all sovereign debt obligations, we will have to find the money to repay it, or default on our obligations.
Let’s be careful here. Repaying the SS trust funds increases the deficit in the sense that, if we didn’t repay, the money would be available for other uses, for which we will now be required to borrow. True.
But that is no different than repaying Treasury borrowing from other sources. Stiffing a creditor is stiffing a creditor.
But I have long suspected that most Americans have liked Social Security over the decades precisely because they preferred paying FICA to living upstairs from their parents.
I agree completely, and here in Japan, the cohort of foreigners who came here at the same time I did is now at the age where we have to think about aging parents, and talk more often turns to these issues. What the folks peddling nostalgia don’t point out is that supporting ones parents in their old age goes hand in hand with a general inability to pick up stakes and move to a different city or state or country. The provision of SS goes hand in hand with a more mobile population. As with all trade-offs, it is hard to be certain what we are gaining is better than what we lost.
But I have long suspected that most Americans have liked Social Security over the decades precisely because they preferred paying FICA to living upstairs from their parents.
I agree completely, and here in Japan, the cohort of foreigners who came here at the same time I did is now at the age where we have to think about aging parents, and talk more often turns to these issues. What the folks peddling nostalgia don’t point out is that supporting ones parents in their old age goes hand in hand with a general inability to pick up stakes and move to a different city or state or country. The provision of SS goes hand in hand with a more mobile population. As with all trade-offs, it is hard to be certain what we are gaining is better than what we lost.
But I have long suspected that most Americans have liked Social Security over the decades precisely because they preferred paying FICA to living upstairs from their parents.
I agree completely, and here in Japan, the cohort of foreigners who came here at the same time I did is now at the age where we have to think about aging parents, and talk more often turns to these issues. What the folks peddling nostalgia don’t point out is that supporting ones parents in their old age goes hand in hand with a general inability to pick up stakes and move to a different city or state or country. The provision of SS goes hand in hand with a more mobile population. As with all trade-offs, it is hard to be certain what we are gaining is better than what we lost.
Hartmut,
Thanks for that bit on the Greek property tax loophole. I guess I knew about it — that is, I know I’ve heard it mentioned before, by Greeks and possibly even by you. I have not kept up with Greek doings for many years; do you know whether the loophole is still in place?
thompson,
The people “who are farther away from retirement” than russell or me will of course be able to make up their own minds about how much to tax themselves, and how to divvy up their taxes between “entitlements” and everything else.
I will never tire of pointing out that the first American who will be retiring 75 years from now has not been born yet, and is only marginally likely to be born before presumptuous old farts like Alan Simpson and Pete Peterson are likely to croak.
–TP
Hartmut,
Thanks for that bit on the Greek property tax loophole. I guess I knew about it — that is, I know I’ve heard it mentioned before, by Greeks and possibly even by you. I have not kept up with Greek doings for many years; do you know whether the loophole is still in place?
thompson,
The people “who are farther away from retirement” than russell or me will of course be able to make up their own minds about how much to tax themselves, and how to divvy up their taxes between “entitlements” and everything else.
I will never tire of pointing out that the first American who will be retiring 75 years from now has not been born yet, and is only marginally likely to be born before presumptuous old farts like Alan Simpson and Pete Peterson are likely to croak.
–TP
Hartmut,
Thanks for that bit on the Greek property tax loophole. I guess I knew about it — that is, I know I’ve heard it mentioned before, by Greeks and possibly even by you. I have not kept up with Greek doings for many years; do you know whether the loophole is still in place?
thompson,
The people “who are farther away from retirement” than russell or me will of course be able to make up their own minds about how much to tax themselves, and how to divvy up their taxes between “entitlements” and everything else.
I will never tire of pointing out that the first American who will be retiring 75 years from now has not been born yet, and is only marginally likely to be born before presumptuous old farts like Alan Simpson and Pete Peterson are likely to croak.
–TP
Operationally, the ss fund cashing one of their bonds is exactly the same as pete peterson cashing one of his.
Both contribute to the current deficit, but somehow one is a crisis and the other is not.
Now one can view SS as ‘just another’ program that has to be funded. In that case the argument is “who pays”? What the rich are basically saying is, “Not me.”
This, after decades of tax cuts for them.
That is why the crfb framing of the issue is misleading. it assumes these tax cuts must necessarily stay in place going forward.
Operationally, the ss fund cashing one of their bonds is exactly the same as pete peterson cashing one of his.
Both contribute to the current deficit, but somehow one is a crisis and the other is not.
Now one can view SS as ‘just another’ program that has to be funded. In that case the argument is “who pays”? What the rich are basically saying is, “Not me.”
This, after decades of tax cuts for them.
That is why the crfb framing of the issue is misleading. it assumes these tax cuts must necessarily stay in place going forward.
Operationally, the ss fund cashing one of their bonds is exactly the same as pete peterson cashing one of his.
Both contribute to the current deficit, but somehow one is a crisis and the other is not.
Now one can view SS as ‘just another’ program that has to be funded. In that case the argument is “who pays”? What the rich are basically saying is, “Not me.”
This, after decades of tax cuts for them.
That is why the crfb framing of the issue is misleading. it assumes these tax cuts must necessarily stay in place going forward.
We have spent decades fashioning public policies to give rich people even more money (more “zeros” if you will).
Tell me, sir, what is the difference?
The difference is between nominal and real dollars. If you get 10 times more dollars, but they still by the same amount of stuff, you haven’t really gained anything. You income, in real dollars, is unchanged.
Whereas, if you get 10 times more dollars, and they but 10 times more stuff, you have really gained something.
See the distinction?
We have spent decades fashioning public policies to give rich people even more money (more “zeros” if you will).
Tell me, sir, what is the difference?
The difference is between nominal and real dollars. If you get 10 times more dollars, but they still by the same amount of stuff, you haven’t really gained anything. You income, in real dollars, is unchanged.
Whereas, if you get 10 times more dollars, and they but 10 times more stuff, you have really gained something.
See the distinction?
We have spent decades fashioning public policies to give rich people even more money (more “zeros” if you will).
Tell me, sir, what is the difference?
The difference is between nominal and real dollars. If you get 10 times more dollars, but they still by the same amount of stuff, you haven’t really gained anything. You income, in real dollars, is unchanged.
Whereas, if you get 10 times more dollars, and they but 10 times more stuff, you have really gained something.
See the distinction?
The CBO analysis. Not enough for a complete fix, but enough to make a very large difference.
Thanks for the link, Russell. Note, however, that what this will do is reduce the shortfall for current benefits. Which is certainly worth doing, but isn’t the same as funding increased benefits, which was the immediate point in question.
The CBO analysis. Not enough for a complete fix, but enough to make a very large difference.
Thanks for the link, Russell. Note, however, that what this will do is reduce the shortfall for current benefits. Which is certainly worth doing, but isn’t the same as funding increased benefits, which was the immediate point in question.
The CBO analysis. Not enough for a complete fix, but enough to make a very large difference.
Thanks for the link, Russell. Note, however, that what this will do is reduce the shortfall for current benefits. Which is certainly worth doing, but isn’t the same as funding increased benefits, which was the immediate point in question.
Tony:
The people “who are farther away from retirement” than russell or me will of course be able to make up their own minds about how much to tax themselves, and how to divvy up their taxes between “entitlements” and everything else.
I get the impression that’s a little tongue in cheek, but I appreciate the statement none-the-less. 🙂
I will never tire of pointing out that the first American who will be retiring 75 years from now has not been born yet
Suggesting what, exactly? As true as that statement is, I plan on being very much alive as those people start paying payroll taxes. How those voters feel about the program and its viability may not affect you, Tony, but it very much will effect me and my plans for retirement.
bobbyp:
Now one can view SS as ‘just another’ program that has to be funded.
IMO, we should consider all government outlays as things that need to be funded, at least on the longterm.
That is why the crfb framing of the issue is misleading. it assumes these tax cuts must necessarily stay in place going forward.
No, but it does suggest that the money required to continue SS in its current form come at the expense of other costs:
In addition to the potential economic consequences of a 12.4 percent rate hike, a tax increase that large would make it politically challenging to raise more revenue from the wealthy, if it all. The government has many important needs, from financing growing health care costs to investing in infrastructure and education to keeping debt levels under control. Raising that much revenue to fund Social Security (including higher benefits for wealthy seniors) would suggest that spending more money on retirement benefits for seniors is a higher priority than other options including new investments or spending on children.
Tony:
The people “who are farther away from retirement” than russell or me will of course be able to make up their own minds about how much to tax themselves, and how to divvy up their taxes between “entitlements” and everything else.
I get the impression that’s a little tongue in cheek, but I appreciate the statement none-the-less. 🙂
I will never tire of pointing out that the first American who will be retiring 75 years from now has not been born yet
Suggesting what, exactly? As true as that statement is, I plan on being very much alive as those people start paying payroll taxes. How those voters feel about the program and its viability may not affect you, Tony, but it very much will effect me and my plans for retirement.
bobbyp:
Now one can view SS as ‘just another’ program that has to be funded.
IMO, we should consider all government outlays as things that need to be funded, at least on the longterm.
That is why the crfb framing of the issue is misleading. it assumes these tax cuts must necessarily stay in place going forward.
No, but it does suggest that the money required to continue SS in its current form come at the expense of other costs:
In addition to the potential economic consequences of a 12.4 percent rate hike, a tax increase that large would make it politically challenging to raise more revenue from the wealthy, if it all. The government has many important needs, from financing growing health care costs to investing in infrastructure and education to keeping debt levels under control. Raising that much revenue to fund Social Security (including higher benefits for wealthy seniors) would suggest that spending more money on retirement benefits for seniors is a higher priority than other options including new investments or spending on children.
Tony:
The people “who are farther away from retirement” than russell or me will of course be able to make up their own minds about how much to tax themselves, and how to divvy up their taxes between “entitlements” and everything else.
I get the impression that’s a little tongue in cheek, but I appreciate the statement none-the-less. 🙂
I will never tire of pointing out that the first American who will be retiring 75 years from now has not been born yet
Suggesting what, exactly? As true as that statement is, I plan on being very much alive as those people start paying payroll taxes. How those voters feel about the program and its viability may not affect you, Tony, but it very much will effect me and my plans for retirement.
bobbyp:
Now one can view SS as ‘just another’ program that has to be funded.
IMO, we should consider all government outlays as things that need to be funded, at least on the longterm.
That is why the crfb framing of the issue is misleading. it assumes these tax cuts must necessarily stay in place going forward.
No, but it does suggest that the money required to continue SS in its current form come at the expense of other costs:
In addition to the potential economic consequences of a 12.4 percent rate hike, a tax increase that large would make it politically challenging to raise more revenue from the wealthy, if it all. The government has many important needs, from financing growing health care costs to investing in infrastructure and education to keeping debt levels under control. Raising that much revenue to fund Social Security (including higher benefits for wealthy seniors) would suggest that spending more money on retirement benefits for seniors is a higher priority than other options including new investments or spending on children.
I never did understand how returns on the stock market could be higher in the long run than the growth rate of the economy–assuming that is true in the first place. If it is true, it maybe has something to do with what Piketty writes about. (Sooner or later I should get around to reading that book).
I never did understand how returns on the stock market could be higher in the long run than the growth rate of the economy–assuming that is true in the first place. If it is true, it maybe has something to do with what Piketty writes about. (Sooner or later I should get around to reading that book).
I never did understand how returns on the stock market could be higher in the long run than the growth rate of the economy–assuming that is true in the first place. If it is true, it maybe has something to do with what Piketty writes about. (Sooner or later I should get around to reading that book).
Fidelity has managed the HP retirement plan for many years. Recently, they began bombarding me with offers to roll my HP pension entitlement over into a personal IRA.
Tony, the thing you have to ask yourself first, when this happens, is Why are they doing this?
It could be that all they are trying to do is shift the uncertainty from them to you. Except that, having a large pool of future retirees, they can work out statistically how much they are likely to have to spend. An option that you, having a statistical pool of one (1) do not have.
The more likely motivation is that they have figured out that they don’t (and won’t) have the funds to cover their future obligations. At least, not without putting a lot more money into the pot. But if they can manage to dump the problem of lack of sufficient growth onto you, they can get clear.
Fidelity has managed the HP retirement plan for many years. Recently, they began bombarding me with offers to roll my HP pension entitlement over into a personal IRA.
Tony, the thing you have to ask yourself first, when this happens, is Why are they doing this?
It could be that all they are trying to do is shift the uncertainty from them to you. Except that, having a large pool of future retirees, they can work out statistically how much they are likely to have to spend. An option that you, having a statistical pool of one (1) do not have.
The more likely motivation is that they have figured out that they don’t (and won’t) have the funds to cover their future obligations. At least, not without putting a lot more money into the pot. But if they can manage to dump the problem of lack of sufficient growth onto you, they can get clear.
Fidelity has managed the HP retirement plan for many years. Recently, they began bombarding me with offers to roll my HP pension entitlement over into a personal IRA.
Tony, the thing you have to ask yourself first, when this happens, is Why are they doing this?
It could be that all they are trying to do is shift the uncertainty from them to you. Except that, having a large pool of future retirees, they can work out statistically how much they are likely to have to spend. An option that you, having a statistical pool of one (1) do not have.
The more likely motivation is that they have figured out that they don’t (and won’t) have the funds to cover their future obligations. At least, not without putting a lot more money into the pot. But if they can manage to dump the problem of lack of sufficient growth onto you, they can get clear.
The political problem with means testing SS benefits ( or so I’ve read) is that once you do this, then SS becomes less of a right that we all have and more of, well, a kind of welfare program. And once Americans start seeing something as welfare or as redistribution or whatever, that program is in real trouble.
The political problem with means testing SS benefits ( or so I’ve read) is that once you do this, then SS becomes less of a right that we all have and more of, well, a kind of welfare program. And once Americans start seeing something as welfare or as redistribution or whatever, that program is in real trouble.
The political problem with means testing SS benefits ( or so I’ve read) is that once you do this, then SS becomes less of a right that we all have and more of, well, a kind of welfare program. And once Americans start seeing something as welfare or as redistribution or whatever, that program is in real trouble.
And the possibility that people who are farther away from retirement than you are might have a different view for good reason doesn’t exist? It’s all propaganda?
As far as I can recall (and no doubt someone will correct me if I’m wrong), any time that someone disagrees with Brett, it is the result of propaganda from the (MSM) media. If Brett has ever actually said here, “Thanks for the additional information. I will reconsider my position.” (let alone actually saying “I was wrong”), I seem to have missed it.
Not sure that everyone else has admitted to being in error at some point. But a lot of other people have done so.
And the possibility that people who are farther away from retirement than you are might have a different view for good reason doesn’t exist? It’s all propaganda?
As far as I can recall (and no doubt someone will correct me if I’m wrong), any time that someone disagrees with Brett, it is the result of propaganda from the (MSM) media. If Brett has ever actually said here, “Thanks for the additional information. I will reconsider my position.” (let alone actually saying “I was wrong”), I seem to have missed it.
Not sure that everyone else has admitted to being in error at some point. But a lot of other people have done so.
And the possibility that people who are farther away from retirement than you are might have a different view for good reason doesn’t exist? It’s all propaganda?
As far as I can recall (and no doubt someone will correct me if I’m wrong), any time that someone disagrees with Brett, it is the result of propaganda from the (MSM) media. If Brett has ever actually said here, “Thanks for the additional information. I will reconsider my position.” (let alone actually saying “I was wrong”), I seem to have missed it.
Not sure that everyone else has admitted to being in error at some point. But a lot of other people have done so.
The political problem with means testing SS benefits ( or so I’ve read) is that once you do this, then SS becomes less of a right that we all have and more of, well, a kind of welfare program.
I’ve heard that as well, Donald. I don’t know how absolute that is, but it is reasonable I suppose.
I think that’s a discussion we need to have nationally, and arrive at some sort of consensus about. Is SS basically a federally run retirement account that we pay into in the expectation of getting a return? Or is it a welfare program so that retirees aren’t put out on the street? A combination thereof or something else entirely?
The political problem with means testing SS benefits ( or so I’ve read) is that once you do this, then SS becomes less of a right that we all have and more of, well, a kind of welfare program.
I’ve heard that as well, Donald. I don’t know how absolute that is, but it is reasonable I suppose.
I think that’s a discussion we need to have nationally, and arrive at some sort of consensus about. Is SS basically a federally run retirement account that we pay into in the expectation of getting a return? Or is it a welfare program so that retirees aren’t put out on the street? A combination thereof or something else entirely?
The political problem with means testing SS benefits ( or so I’ve read) is that once you do this, then SS becomes less of a right that we all have and more of, well, a kind of welfare program.
I’ve heard that as well, Donald. I don’t know how absolute that is, but it is reasonable I suppose.
I think that’s a discussion we need to have nationally, and arrive at some sort of consensus about. Is SS basically a federally run retirement account that we pay into in the expectation of getting a return? Or is it a welfare program so that retirees aren’t put out on the street? A combination thereof or something else entirely?
wj:
any time that someone disagrees with Brett, it is the result of propaganda from the (MSM) media.
I’m not sure what Brett’s relevance to my response to bobbyp is. But broadly dismissing claims because ‘propaganda’ is unproductive.
wj:
any time that someone disagrees with Brett, it is the result of propaganda from the (MSM) media.
I’m not sure what Brett’s relevance to my response to bobbyp is. But broadly dismissing claims because ‘propaganda’ is unproductive.
wj:
any time that someone disagrees with Brett, it is the result of propaganda from the (MSM) media.
I’m not sure what Brett’s relevance to my response to bobbyp is. But broadly dismissing claims because ‘propaganda’ is unproductive.
To be more precise, the political problem with means-testing is that the usual propagandistic (of the sort bobbyp notes) demagogues of a certain stripe will now appeal (gear it up for every election) to those means-tested with “why should you be paying for these parasites who blah, blah, blah) and then we’re off to “welfare reform” and instead of insisting that fat black welfare mothers STOP having babies, the same suspects will demand that fat, black welfare mothers have MORE babies so the kids can take care of them in their old age.
The well is poisoned. The country is full of shit and made so purposefully.
To be more precise, the political problem with means-testing is that the usual propagandistic (of the sort bobbyp notes) demagogues of a certain stripe will now appeal (gear it up for every election) to those means-tested with “why should you be paying for these parasites who blah, blah, blah) and then we’re off to “welfare reform” and instead of insisting that fat black welfare mothers STOP having babies, the same suspects will demand that fat, black welfare mothers have MORE babies so the kids can take care of them in their old age.
The well is poisoned. The country is full of shit and made so purposefully.
To be more precise, the political problem with means-testing is that the usual propagandistic (of the sort bobbyp notes) demagogues of a certain stripe will now appeal (gear it up for every election) to those means-tested with “why should you be paying for these parasites who blah, blah, blah) and then we’re off to “welfare reform” and instead of insisting that fat black welfare mothers STOP having babies, the same suspects will demand that fat, black welfare mothers have MORE babies so the kids can take care of them in their old age.
The well is poisoned. The country is full of shit and made so purposefully.
Sorry, Thompson. I thought that *your* comment was referencing Brett’s on-going position.
Sorry, Thompson. I thought that *your* comment was referencing Brett’s on-going position.
Sorry, Thompson. I thought that *your* comment was referencing Brett’s on-going position.
I thought that *your* comment was referencing Brett’s on-going position.
Ah, sorry. Looking back, the comment was a little opaque.
I thought that *your* comment was referencing Brett’s on-going position.
Ah, sorry. Looking back, the comment was a little opaque.
I thought that *your* comment was referencing Brett’s on-going position.
Ah, sorry. Looking back, the comment was a little opaque.
In a thread like this, things can get confused all too easily. Especially when I come in on the West Coast, and find a couple dozen comments have appeared before ever I got out of bed. (No doubt lj and Hartmut have similar problems. 😉
In a thread like this, things can get confused all too easily. Especially when I come in on the West Coast, and find a couple dozen comments have appeared before ever I got out of bed. (No doubt lj and Hartmut have similar problems. 😉
In a thread like this, things can get confused all too easily. Especially when I come in on the West Coast, and find a couple dozen comments have appeared before ever I got out of bed. (No doubt lj and Hartmut have similar problems. 😉
Tony P., I do not know, whether they closed the loophole by now. I fear it would not matter much because the ‘reforms’ forced on them could be no more destructive to their economy and tax base, if they had been designed for that very purpose.
Greek is (and has been) a basket case for many reasons, both internal corruption and international sharkery and now it’s vampires selling their victim blood, so they can suck on it longer while presenting themselves as selfless paramedics.
And btw, I am not aware that selling them weapons has stopped either. We all know that interfering with profitable arms races is a no-no. Sooner or later they will need all the stuff to fight it out with their archenemy and NATO ally Turkey (also a cherished customer of the same weapons manufacturers). Germany can’t afford to lose this highly lucrative trade (we even pay the manufactures for subs that we then give away for free to Israel).
The only problem is that Greece (a favorite holiday destination) has become a wee bit hostile to our tourists. Their government must do more to keep the rabble in line (provided they spent no money on it since gutting those services too is top priority).
Greece got itself into a huge mess mainly through its own faults but I can fully understand the Greeks for their hostile reactions to the ‘help’ they get.
Tony P., I do not know, whether they closed the loophole by now. I fear it would not matter much because the ‘reforms’ forced on them could be no more destructive to their economy and tax base, if they had been designed for that very purpose.
Greek is (and has been) a basket case for many reasons, both internal corruption and international sharkery and now it’s vampires selling their victim blood, so they can suck on it longer while presenting themselves as selfless paramedics.
And btw, I am not aware that selling them weapons has stopped either. We all know that interfering with profitable arms races is a no-no. Sooner or later they will need all the stuff to fight it out with their archenemy and NATO ally Turkey (also a cherished customer of the same weapons manufacturers). Germany can’t afford to lose this highly lucrative trade (we even pay the manufactures for subs that we then give away for free to Israel).
The only problem is that Greece (a favorite holiday destination) has become a wee bit hostile to our tourists. Their government must do more to keep the rabble in line (provided they spent no money on it since gutting those services too is top priority).
Greece got itself into a huge mess mainly through its own faults but I can fully understand the Greeks for their hostile reactions to the ‘help’ they get.
Tony P., I do not know, whether they closed the loophole by now. I fear it would not matter much because the ‘reforms’ forced on them could be no more destructive to their economy and tax base, if they had been designed for that very purpose.
Greek is (and has been) a basket case for many reasons, both internal corruption and international sharkery and now it’s vampires selling their victim blood, so they can suck on it longer while presenting themselves as selfless paramedics.
And btw, I am not aware that selling them weapons has stopped either. We all know that interfering with profitable arms races is a no-no. Sooner or later they will need all the stuff to fight it out with their archenemy and NATO ally Turkey (also a cherished customer of the same weapons manufacturers). Germany can’t afford to lose this highly lucrative trade (we even pay the manufactures for subs that we then give away for free to Israel).
The only problem is that Greece (a favorite holiday destination) has become a wee bit hostile to our tourists. Their government must do more to keep the rabble in line (provided they spent no money on it since gutting those services too is top priority).
Greece got itself into a huge mess mainly through its own faults but I can fully understand the Greeks for their hostile reactions to the ‘help’ they get.
Poison:
Means-test Social Security/Medicare and the response will be to means-test the parasites who continue to receive their full benefits, to wit, prevent the use of Social Security money for purchasing cruise line tickets, Cheetos, lingerie, iphones, qphones, wphones, theater tickets, etc, and for good measure, the money formerly provided via monthly Social Security checks will be available only in $25 increments at the fee-based ATM.
Just so with Medicare.
Say it ain’t so.
It’s nice to have a reasoned discussion.
Unfortunately, those in the ascendancy pushing “entitlement reform” who actually wield power are no more than sadistic pigs.
And there is only one answer to sadism.
And it ain’t masochism.
Poison:
Means-test Social Security/Medicare and the response will be to means-test the parasites who continue to receive their full benefits, to wit, prevent the use of Social Security money for purchasing cruise line tickets, Cheetos, lingerie, iphones, qphones, wphones, theater tickets, etc, and for good measure, the money formerly provided via monthly Social Security checks will be available only in $25 increments at the fee-based ATM.
Just so with Medicare.
Say it ain’t so.
It’s nice to have a reasoned discussion.
Unfortunately, those in the ascendancy pushing “entitlement reform” who actually wield power are no more than sadistic pigs.
And there is only one answer to sadism.
And it ain’t masochism.
Poison:
Means-test Social Security/Medicare and the response will be to means-test the parasites who continue to receive their full benefits, to wit, prevent the use of Social Security money for purchasing cruise line tickets, Cheetos, lingerie, iphones, qphones, wphones, theater tickets, etc, and for good measure, the money formerly provided via monthly Social Security checks will be available only in $25 increments at the fee-based ATM.
Just so with Medicare.
Say it ain’t so.
It’s nice to have a reasoned discussion.
Unfortunately, those in the ascendancy pushing “entitlement reform” who actually wield power are no more than sadistic pigs.
And there is only one answer to sadism.
And it ain’t masochism.
JFTR, Social Security is subject to a sort of “soft” means-testing now, since benefits are partly taxable to recipients with significant outside income.
JFTR, Social Security is subject to a sort of “soft” means-testing now, since benefits are partly taxable to recipients with significant outside income.
JFTR, Social Security is subject to a sort of “soft” means-testing now, since benefits are partly taxable to recipients with significant outside income.
Donald,
I never did understand how returns on the stock market could be higher in the long run than the growth rate of the economy–assuming that is true in the first place.
It is possible, I think, if a large part of financing is debt. Debtholders take a lower return on their investment in exchange for seniority and consequent lower risk. The stockholders get a bigger cut, in exchange for assuming more risk.
Of course, total returns in the economy cannot be increased simply by converting debt to equity.
Donald,
I never did understand how returns on the stock market could be higher in the long run than the growth rate of the economy–assuming that is true in the first place.
It is possible, I think, if a large part of financing is debt. Debtholders take a lower return on their investment in exchange for seniority and consequent lower risk. The stockholders get a bigger cut, in exchange for assuming more risk.
Of course, total returns in the economy cannot be increased simply by converting debt to equity.
Donald,
I never did understand how returns on the stock market could be higher in the long run than the growth rate of the economy–assuming that is true in the first place.
It is possible, I think, if a large part of financing is debt. Debtholders take a lower return on their investment in exchange for seniority and consequent lower risk. The stockholders get a bigger cut, in exchange for assuming more risk.
Of course, total returns in the economy cannot be increased simply by converting debt to equity.
No, but it does suggest that the money required to continue SS in its current form come at the expense of other costs
That’s what they want you to believe. Look, forecasting the economy 75 years out is pretty much a wild guess-depending on population growth, productivity, etc., etc. The SS trustee’s reports are very, very conservative in this regard. If the economy were to grow at a little over 3% a year going forward, then actually the trust fund is never exhausted.
Secondly, yes, the folks like Pete Peterson have consistently painted the darkest of future prospects for political reasons-1. to keep the tax cuts for the wealthy in place; and 2. to delegitimize support for these programs so they can fund programs they like.
So what they implicitly argue is that the social security tax is just a tax like any other and (despite the letter of the law) should be viewed from that standpoint.
Then it is the government that has a spending problem, not “entitlements”. OK?
Having a conversation of who gets what is, I would agree with you, one we should have, but painting wild eyed panic scenarios (with lots of scary 0000’s, 75 years out to cut benefits today (which, by the way does absofuckinglutely nothing for future beneficiaries) is essentially dishonest.
cf the recent Mcardle piece and wild eyed left wing responses here, for example.
No, but it does suggest that the money required to continue SS in its current form come at the expense of other costs
That’s what they want you to believe. Look, forecasting the economy 75 years out is pretty much a wild guess-depending on population growth, productivity, etc., etc. The SS trustee’s reports are very, very conservative in this regard. If the economy were to grow at a little over 3% a year going forward, then actually the trust fund is never exhausted.
Secondly, yes, the folks like Pete Peterson have consistently painted the darkest of future prospects for political reasons-1. to keep the tax cuts for the wealthy in place; and 2. to delegitimize support for these programs so they can fund programs they like.
So what they implicitly argue is that the social security tax is just a tax like any other and (despite the letter of the law) should be viewed from that standpoint.
Then it is the government that has a spending problem, not “entitlements”. OK?
Having a conversation of who gets what is, I would agree with you, one we should have, but painting wild eyed panic scenarios (with lots of scary 0000’s, 75 years out to cut benefits today (which, by the way does absofuckinglutely nothing for future beneficiaries) is essentially dishonest.
cf the recent Mcardle piece and wild eyed left wing responses here, for example.
No, but it does suggest that the money required to continue SS in its current form come at the expense of other costs
That’s what they want you to believe. Look, forecasting the economy 75 years out is pretty much a wild guess-depending on population growth, productivity, etc., etc. The SS trustee’s reports are very, very conservative in this regard. If the economy were to grow at a little over 3% a year going forward, then actually the trust fund is never exhausted.
Secondly, yes, the folks like Pete Peterson have consistently painted the darkest of future prospects for political reasons-1. to keep the tax cuts for the wealthy in place; and 2. to delegitimize support for these programs so they can fund programs they like.
So what they implicitly argue is that the social security tax is just a tax like any other and (despite the letter of the law) should be viewed from that standpoint.
Then it is the government that has a spending problem, not “entitlements”. OK?
Having a conversation of who gets what is, I would agree with you, one we should have, but painting wild eyed panic scenarios (with lots of scary 0000’s, 75 years out to cut benefits today (which, by the way does absofuckinglutely nothing for future beneficiaries) is essentially dishonest.
cf the recent Mcardle piece and wild eyed left wing responses here, for example.
thompson,
“No, but it does suggest that the money required to continue SS in its current form come at the expense of other costs…”
and then you quote a snippet that does precisely that.
Somehow the Pete Petersons of the world never come right out and state, “let’s assume your social security taxes are just taxes and have a conversation”.
Because they know it would never fly.
thompson,
“No, but it does suggest that the money required to continue SS in its current form come at the expense of other costs…”
and then you quote a snippet that does precisely that.
Somehow the Pete Petersons of the world never come right out and state, “let’s assume your social security taxes are just taxes and have a conversation”.
Because they know it would never fly.
thompson,
“No, but it does suggest that the money required to continue SS in its current form come at the expense of other costs…”
and then you quote a snippet that does precisely that.
Somehow the Pete Petersons of the world never come right out and state, “let’s assume your social security taxes are just taxes and have a conversation”.
Because they know it would never fly.
“Of course, total returns in the economy cannot be increased simply by converting debt to equity.”
It’s not exactly the same, but public expenditures on things like infrastructure, education, etc., financed by debt that take slack out of the economy are similar, and provide more assets upon which future generations can build.
“Of course, total returns in the economy cannot be increased simply by converting debt to equity.”
It’s not exactly the same, but public expenditures on things like infrastructure, education, etc., financed by debt that take slack out of the economy are similar, and provide more assets upon which future generations can build.
“Of course, total returns in the economy cannot be increased simply by converting debt to equity.”
It’s not exactly the same, but public expenditures on things like infrastructure, education, etc., financed by debt that take slack out of the economy are similar, and provide more assets upon which future generations can build.
bobbyp,
I agree with you.
I was talking about shifting the financing of private business.
Making more intelligent public investments of course improves the economy.
bobbyp,
I agree with you.
I was talking about shifting the financing of private business.
Making more intelligent public investments of course improves the economy.
bobbyp,
I agree with you.
I was talking about shifting the financing of private business.
Making more intelligent public investments of course improves the economy.
I never did understand how returns on the stock market could be higher in the long run than the growth rate of the economy–assuming that is true in the first place.
Oh, that’s easy. In fact, the method was explained nearly 100 years ago:
You buy a stock. If it goes up, you sell it and take a profit. If it doesn’t go up, you don’t buy it.
The “invest pension funds in the stock market” schemes use the same strategery.
I never did understand how returns on the stock market could be higher in the long run than the growth rate of the economy–assuming that is true in the first place.
Oh, that’s easy. In fact, the method was explained nearly 100 years ago:
You buy a stock. If it goes up, you sell it and take a profit. If it doesn’t go up, you don’t buy it.
The “invest pension funds in the stock market” schemes use the same strategery.
I never did understand how returns on the stock market could be higher in the long run than the growth rate of the economy–assuming that is true in the first place.
Oh, that’s easy. In fact, the method was explained nearly 100 years ago:
You buy a stock. If it goes up, you sell it and take a profit. If it doesn’t go up, you don’t buy it.
The “invest pension funds in the stock market” schemes use the same strategery.
If increasing Social Security benefits is the answer, where do you propose to get the money?
Good question. Does this give you any ideas?
Note that the Social Security OASDI Trust Funds hold something under $3 trillion in assets.
If increasing Social Security benefits is the answer, where do you propose to get the money?
Good question. Does this give you any ideas?
Note that the Social Security OASDI Trust Funds hold something under $3 trillion in assets.
If increasing Social Security benefits is the answer, where do you propose to get the money?
Good question. Does this give you any ideas?
Note that the Social Security OASDI Trust Funds hold something under $3 trillion in assets.
“It is possible, I think, if a large part of financing is debt. Debtholders take a lower return on their investment in exchange for seniority and consequent lower risk. The stockholders get a bigger cut, in exchange for assuming more risk.
Of course, total returns in the economy cannot be increased simply by converting debt to equity. ”
I’ll have to think about that.
I suppose what confuses me is that if the economy grows at, say, 3 percent, and the stock market grew at, say 5 percent (just pulling numbers out of the air)’ given how exponential growth works wouldn’ the value of all stocks eventually reach and far exceed the actual value of all assets? I’m probably thinking about this wrongly.
“It is possible, I think, if a large part of financing is debt. Debtholders take a lower return on their investment in exchange for seniority and consequent lower risk. The stockholders get a bigger cut, in exchange for assuming more risk.
Of course, total returns in the economy cannot be increased simply by converting debt to equity. ”
I’ll have to think about that.
I suppose what confuses me is that if the economy grows at, say, 3 percent, and the stock market grew at, say 5 percent (just pulling numbers out of the air)’ given how exponential growth works wouldn’ the value of all stocks eventually reach and far exceed the actual value of all assets? I’m probably thinking about this wrongly.
“It is possible, I think, if a large part of financing is debt. Debtholders take a lower return on their investment in exchange for seniority and consequent lower risk. The stockholders get a bigger cut, in exchange for assuming more risk.
Of course, total returns in the economy cannot be increased simply by converting debt to equity. ”
I’ll have to think about that.
I suppose what confuses me is that if the economy grows at, say, 3 percent, and the stock market grew at, say 5 percent (just pulling numbers out of the air)’ given how exponential growth works wouldn’ the value of all stocks eventually reach and far exceed the actual value of all assets? I’m probably thinking about this wrongly.
Donald,
Good question.
I too will think about it.
Donald,
Good question.
I too will think about it.
Donald,
Good question.
I too will think about it.
Donald,
At least part of the reason is that stock market returns are not the same thing as stock market growth. The former includes dividends, so we can think of that part of the return as being consumed rather than reinvested.
So the returns on stocks don’t fully compound.
Donald,
At least part of the reason is that stock market returns are not the same thing as stock market growth. The former includes dividends, so we can think of that part of the return as being consumed rather than reinvested.
So the returns on stocks don’t fully compound.
Donald,
At least part of the reason is that stock market returns are not the same thing as stock market growth. The former includes dividends, so we can think of that part of the return as being consumed rather than reinvested.
So the returns on stocks don’t fully compound.
Donald,
I’d agree that is an interesting question. Now, in theory, somebody could have invested a couple of Spanish dubloons in 1500 at 5% compound interest and have them left untouched until today, thus accumulating a vast fortune.
But it did not happen. The reason is people can’t keep their hands off the dough. Spending it (sooner or later) is, for the most part, why we have it.
Donald,
I’d agree that is an interesting question. Now, in theory, somebody could have invested a couple of Spanish dubloons in 1500 at 5% compound interest and have them left untouched until today, thus accumulating a vast fortune.
But it did not happen. The reason is people can’t keep their hands off the dough. Spending it (sooner or later) is, for the most part, why we have it.
Donald,
I’d agree that is an interesting question. Now, in theory, somebody could have invested a couple of Spanish dubloons in 1500 at 5% compound interest and have them left untouched until today, thus accumulating a vast fortune.
But it did not happen. The reason is people can’t keep their hands off the dough. Spending it (sooner or later) is, for the most part, why we have it.
Look, forecasting the economy 75 years out is pretty much a wild guess-depending on population growth, productivity, etc., etc. The SS trustee’s reports are very, very conservative in this regard.
Yes, forecasting the economy 75 years out is hard, which is why we should make conservative assumptions, so we don’t have unexpected shortfalls.
If the economy were to grow at a little over 3% a year going forward, then actually the trust fund is never exhausted.
This is a great piece of information, and I’d be interested in a citation, so I could learn more. As it stands, however, I don’t know that assuming 3% GDP growth for the next 75 years is safe. The US economy has averaged 3.37% if you go back to 1930 (the earliest the BEA has numbers). But 1980-2014, the average is 2.65%. Data from:
http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1#reqid=9&step=3&isuri=1&904=1930&903=1&906=a&905=2014&910=x&911=0
but painting wild eyed panic scenarios (with lots of scary 0000’s, 75 years out to cut benefits today (which, by the way does absofuckinglutely nothing for future beneficiaries) is essentially dishonest.
To be clear, I provided a source based on SSA numbers. Are you calling the SSA out for ‘painting wild eyed panic’?
cf the recent Mcardle piece
If you mean (http://www.bloombergview.com/articles/2015-04-07/the-left-gets-it-wrong-about-social-security ), I also wouldn’t describe it as ‘wild eyed’.
If you want to criticize McArdle’s article on merits, I’d be willing to listen. But if you want to dismiss it because ‘propaganda’ that ‘they want me to think’, I’m not interested.
and then you quote a snippet that does precisely that.
Yes, I try to quote things that support what I say.
Secondly, yes, the folks like Pete Peterson have consistently painted the darkest of future prospects for political reasons
If you want to have a conversation with peterson, I won’t stand in your way, but I’m not part of it.
Look, forecasting the economy 75 years out is pretty much a wild guess-depending on population growth, productivity, etc., etc. The SS trustee’s reports are very, very conservative in this regard.
Yes, forecasting the economy 75 years out is hard, which is why we should make conservative assumptions, so we don’t have unexpected shortfalls.
If the economy were to grow at a little over 3% a year going forward, then actually the trust fund is never exhausted.
This is a great piece of information, and I’d be interested in a citation, so I could learn more. As it stands, however, I don’t know that assuming 3% GDP growth for the next 75 years is safe. The US economy has averaged 3.37% if you go back to 1930 (the earliest the BEA has numbers). But 1980-2014, the average is 2.65%. Data from:
http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1#reqid=9&step=3&isuri=1&904=1930&903=1&906=a&905=2014&910=x&911=0
but painting wild eyed panic scenarios (with lots of scary 0000’s, 75 years out to cut benefits today (which, by the way does absofuckinglutely nothing for future beneficiaries) is essentially dishonest.
To be clear, I provided a source based on SSA numbers. Are you calling the SSA out for ‘painting wild eyed panic’?
cf the recent Mcardle piece
If you mean (http://www.bloombergview.com/articles/2015-04-07/the-left-gets-it-wrong-about-social-security ), I also wouldn’t describe it as ‘wild eyed’.
If you want to criticize McArdle’s article on merits, I’d be willing to listen. But if you want to dismiss it because ‘propaganda’ that ‘they want me to think’, I’m not interested.
and then you quote a snippet that does precisely that.
Yes, I try to quote things that support what I say.
Secondly, yes, the folks like Pete Peterson have consistently painted the darkest of future prospects for political reasons
If you want to have a conversation with peterson, I won’t stand in your way, but I’m not part of it.
Look, forecasting the economy 75 years out is pretty much a wild guess-depending on population growth, productivity, etc., etc. The SS trustee’s reports are very, very conservative in this regard.
Yes, forecasting the economy 75 years out is hard, which is why we should make conservative assumptions, so we don’t have unexpected shortfalls.
If the economy were to grow at a little over 3% a year going forward, then actually the trust fund is never exhausted.
This is a great piece of information, and I’d be interested in a citation, so I could learn more. As it stands, however, I don’t know that assuming 3% GDP growth for the next 75 years is safe. The US economy has averaged 3.37% if you go back to 1930 (the earliest the BEA has numbers). But 1980-2014, the average is 2.65%. Data from:
http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1#reqid=9&step=3&isuri=1&904=1930&903=1&906=a&905=2014&910=x&911=0
but painting wild eyed panic scenarios (with lots of scary 0000’s, 75 years out to cut benefits today (which, by the way does absofuckinglutely nothing for future beneficiaries) is essentially dishonest.
To be clear, I provided a source based on SSA numbers. Are you calling the SSA out for ‘painting wild eyed panic’?
cf the recent Mcardle piece
If you mean (http://www.bloombergview.com/articles/2015-04-07/the-left-gets-it-wrong-about-social-security ), I also wouldn’t describe it as ‘wild eyed’.
If you want to criticize McArdle’s article on merits, I’d be willing to listen. But if you want to dismiss it because ‘propaganda’ that ‘they want me to think’, I’m not interested.
and then you quote a snippet that does precisely that.
Yes, I try to quote things that support what I say.
Secondly, yes, the folks like Pete Peterson have consistently painted the darkest of future prospects for political reasons
If you want to have a conversation with peterson, I won’t stand in your way, but I’m not part of it.
Yes, I try to quote things that support what I say.
But it didn’t.
If you want to criticize McArdle’s article on merits, I’d be willing to listen.
I linked to a post that did exactly that. if you don’t want to take it on on the merits, I really don’t care.
Yes, I try to quote things that support what I say.
But it didn’t.
If you want to criticize McArdle’s article on merits, I’d be willing to listen.
I linked to a post that did exactly that. if you don’t want to take it on on the merits, I really don’t care.
Yes, I try to quote things that support what I say.
But it didn’t.
If you want to criticize McArdle’s article on merits, I’d be willing to listen.
I linked to a post that did exactly that. if you don’t want to take it on on the merits, I really don’t care.
This is a great piece of information, and I’d be interested in a citation, so I could learn more.
Here you go. I also cited the article above, but apparently you don’t bother to check out my links.
But I really don’t care one way or the other.
This is a great piece of information, and I’d be interested in a citation, so I could learn more.
Here you go. I also cited the article above, but apparently you don’t bother to check out my links.
But I really don’t care one way or the other.
This is a great piece of information, and I’d be interested in a citation, so I could learn more.
Here you go. I also cited the article above, but apparently you don’t bother to check out my links.
But I really don’t care one way or the other.
IIRC, from about ten years ago (when Dubya was pushing to privatize SS), the SS trustee’s report gives three estimates of the future of the program: optimistic, pessimistic, and “middle”.
And if you go back to old reports and compare the estimates to what actually happened, reality most closely matches the “optimistic” projection, if not doing even better.
Two conclusions: they really ought to recalibrate their methods; and, no sense in getting knickers in a twist NOW, because the “pessimistic” forcast for 75 years from now shows a non-catastrophic problem.
IIRC, from about ten years ago (when Dubya was pushing to privatize SS), the SS trustee’s report gives three estimates of the future of the program: optimistic, pessimistic, and “middle”.
And if you go back to old reports and compare the estimates to what actually happened, reality most closely matches the “optimistic” projection, if not doing even better.
Two conclusions: they really ought to recalibrate their methods; and, no sense in getting knickers in a twist NOW, because the “pessimistic” forcast for 75 years from now shows a non-catastrophic problem.
IIRC, from about ten years ago (when Dubya was pushing to privatize SS), the SS trustee’s report gives three estimates of the future of the program: optimistic, pessimistic, and “middle”.
And if you go back to old reports and compare the estimates to what actually happened, reality most closely matches the “optimistic” projection, if not doing even better.
Two conclusions: they really ought to recalibrate their methods; and, no sense in getting knickers in a twist NOW, because the “pessimistic” forcast for 75 years from now shows a non-catastrophic problem.
If you mean (http://www.bloombergview.com/articles/2015-04-07/the-left-gets-it-wrong-about-social-security ), I also wouldn’t describe it as ‘wild eyed’.
No. The link through the CEPR piece that bobbyp links to goes here.
In the above piece, McArdle characterizes the argument that the US government should honor its sovereign debt as follows:
She got the “raising your payroll taxes” part right, and she got the “putting the money in a trust fund” part right.
She apparently considers the idea that this represents any kind of binding agreement with the SS program – the holder of the debt – as some kind of left-wing fable.
She also seems to think it has something to do with the Reagan tax cuts. I don’t know why.
But on the merits, McArdle is full of crap.
In the 80’s, it became apparent that the SS program was not in a good position to handle the retirement of the boomers. So, the decision was taken to increase the FICA withholding such that revenue would be greater than expenses. The surplus would be invested in US federal government debt. I.e., SS would lend the money to the general federal budget, and at the appointed time the general federal budget would pay it back.
McArdle seems to see this as some kind of three card monte game, and seems to see the debt that was incurred as some kind of accounting fiction.
McArdle is eminently qualified to comment on how the government finances its various programs, because she has a BA in English and an MBA from Chicago. Oh, and she has a blog.
The general budget borrowed the money and spent it. Now, the debt is due. So, we need to pay the debt.
Is it more complicated than that?
It’s a shame that we started a war that is likely to cost us a trillion and a half bucks, and that will likely cost us 6 trillion before we’re done. It’s a shame that we instituted tax cuts that were known *at the time they were instituted* to be guaranteed to lead us directly into huge deficits, to the point that they had to be time-limited in order to be passed, and it’s a shame that the time limit was then removed.
All of that is a shame. But *we did it*.
So now everybody is screaming that “SS needs to be reformed”. It doesn’t need to be reformed. The money that is owed to the program needs to be repaid, and relatively minor adjustments need to be made to ensure that, a generation from now, the trust funds will not be depleted.
What this whole line of argument boils down to is:
1. To pay the debt we will probably have to raise revenue
2. We don’t want to raise revenue
3. Fuck you, old timers
4. Oh, and you 25 and 40 year olds, don’t even ask
If I’m mistaking the argument on any substantive point, kindly show me where.
And if you can show me *any other federal program* whose management and financial position is in as good order as that of the SS program, I’ll be amazed.
In addition to the merits of her argument, I would also like to criticize McArdle for being an entitled self-important twerp, who argues in weasely bad faith, and who knows less about the topics she opines upon than the average general economics undergraduate.
Let them eat pink Himalayan salt, says she. If there is any justice, she will eat her own words someday.
If you mean (http://www.bloombergview.com/articles/2015-04-07/the-left-gets-it-wrong-about-social-security ), I also wouldn’t describe it as ‘wild eyed’.
No. The link through the CEPR piece that bobbyp links to goes here.
In the above piece, McArdle characterizes the argument that the US government should honor its sovereign debt as follows:
She got the “raising your payroll taxes” part right, and she got the “putting the money in a trust fund” part right.
She apparently considers the idea that this represents any kind of binding agreement with the SS program – the holder of the debt – as some kind of left-wing fable.
She also seems to think it has something to do with the Reagan tax cuts. I don’t know why.
But on the merits, McArdle is full of crap.
In the 80’s, it became apparent that the SS program was not in a good position to handle the retirement of the boomers. So, the decision was taken to increase the FICA withholding such that revenue would be greater than expenses. The surplus would be invested in US federal government debt. I.e., SS would lend the money to the general federal budget, and at the appointed time the general federal budget would pay it back.
McArdle seems to see this as some kind of three card monte game, and seems to see the debt that was incurred as some kind of accounting fiction.
McArdle is eminently qualified to comment on how the government finances its various programs, because she has a BA in English and an MBA from Chicago. Oh, and she has a blog.
The general budget borrowed the money and spent it. Now, the debt is due. So, we need to pay the debt.
Is it more complicated than that?
It’s a shame that we started a war that is likely to cost us a trillion and a half bucks, and that will likely cost us 6 trillion before we’re done. It’s a shame that we instituted tax cuts that were known *at the time they were instituted* to be guaranteed to lead us directly into huge deficits, to the point that they had to be time-limited in order to be passed, and it’s a shame that the time limit was then removed.
All of that is a shame. But *we did it*.
So now everybody is screaming that “SS needs to be reformed”. It doesn’t need to be reformed. The money that is owed to the program needs to be repaid, and relatively minor adjustments need to be made to ensure that, a generation from now, the trust funds will not be depleted.
What this whole line of argument boils down to is:
1. To pay the debt we will probably have to raise revenue
2. We don’t want to raise revenue
3. Fuck you, old timers
4. Oh, and you 25 and 40 year olds, don’t even ask
If I’m mistaking the argument on any substantive point, kindly show me where.
And if you can show me *any other federal program* whose management and financial position is in as good order as that of the SS program, I’ll be amazed.
In addition to the merits of her argument, I would also like to criticize McArdle for being an entitled self-important twerp, who argues in weasely bad faith, and who knows less about the topics she opines upon than the average general economics undergraduate.
Let them eat pink Himalayan salt, says she. If there is any justice, she will eat her own words someday.
If you mean (http://www.bloombergview.com/articles/2015-04-07/the-left-gets-it-wrong-about-social-security ), I also wouldn’t describe it as ‘wild eyed’.
No. The link through the CEPR piece that bobbyp links to goes here.
In the above piece, McArdle characterizes the argument that the US government should honor its sovereign debt as follows:
She got the “raising your payroll taxes” part right, and she got the “putting the money in a trust fund” part right.
She apparently considers the idea that this represents any kind of binding agreement with the SS program – the holder of the debt – as some kind of left-wing fable.
She also seems to think it has something to do with the Reagan tax cuts. I don’t know why.
But on the merits, McArdle is full of crap.
In the 80’s, it became apparent that the SS program was not in a good position to handle the retirement of the boomers. So, the decision was taken to increase the FICA withholding such that revenue would be greater than expenses. The surplus would be invested in US federal government debt. I.e., SS would lend the money to the general federal budget, and at the appointed time the general federal budget would pay it back.
McArdle seems to see this as some kind of three card monte game, and seems to see the debt that was incurred as some kind of accounting fiction.
McArdle is eminently qualified to comment on how the government finances its various programs, because she has a BA in English and an MBA from Chicago. Oh, and she has a blog.
The general budget borrowed the money and spent it. Now, the debt is due. So, we need to pay the debt.
Is it more complicated than that?
It’s a shame that we started a war that is likely to cost us a trillion and a half bucks, and that will likely cost us 6 trillion before we’re done. It’s a shame that we instituted tax cuts that were known *at the time they were instituted* to be guaranteed to lead us directly into huge deficits, to the point that they had to be time-limited in order to be passed, and it’s a shame that the time limit was then removed.
All of that is a shame. But *we did it*.
So now everybody is screaming that “SS needs to be reformed”. It doesn’t need to be reformed. The money that is owed to the program needs to be repaid, and relatively minor adjustments need to be made to ensure that, a generation from now, the trust funds will not be depleted.
What this whole line of argument boils down to is:
1. To pay the debt we will probably have to raise revenue
2. We don’t want to raise revenue
3. Fuck you, old timers
4. Oh, and you 25 and 40 year olds, don’t even ask
If I’m mistaking the argument on any substantive point, kindly show me where.
And if you can show me *any other federal program* whose management and financial position is in as good order as that of the SS program, I’ll be amazed.
In addition to the merits of her argument, I would also like to criticize McArdle for being an entitled self-important twerp, who argues in weasely bad faith, and who knows less about the topics she opines upon than the average general economics undergraduate.
Let them eat pink Himalayan salt, says she. If there is any justice, she will eat her own words someday.
It behooves me to say, and I don’t believe I’ve ever been previously to this moment so exquisitely behooved……… Said
Russell
And How
It behooves me to say, and I don’t believe I’ve ever been previously to this moment so exquisitely behooved……… Said
Russell
And How
It behooves me to say, and I don’t believe I’ve ever been previously to this moment so exquisitely behooved……… Said
Russell
And How
Remember “infinite time horizon” accounting? Truly some major some major propaganda.
Scary numbers, indeed.
Remember “infinite time horizon” accounting? Truly some major some major propaganda.
Scary numbers, indeed.
Remember “infinite time horizon” accounting? Truly some major some major propaganda.
Scary numbers, indeed.
Oh, I think I know the “Reagan tax cut” connection.
Because that SS surplus in the 80’s? Reagan counted it in the overall Federal budget, so “more money coming in? TAX CUT!!”
McArdle should not be trusted with any numbers larger than three; she has math issues.
Oh, I think I know the “Reagan tax cut” connection.
Because that SS surplus in the 80’s? Reagan counted it in the overall Federal budget, so “more money coming in? TAX CUT!!”
McArdle should not be trusted with any numbers larger than three; she has math issues.
Oh, I think I know the “Reagan tax cut” connection.
Because that SS surplus in the 80’s? Reagan counted it in the overall Federal budget, so “more money coming in? TAX CUT!!”
McArdle should not be trusted with any numbers larger than three; she has math issues.
Unfunded liabilites!
Repeat ad nauseum.
Ask the Post Office.
Unfunded liabilites!
Repeat ad nauseum.
Ask the Post Office.
Unfunded liabilites!
Repeat ad nauseum.
Ask the Post Office.
I’ve a question about the Boomers and SS, and any related or similar expenditures.
We’re told we have looming financial troubles when the boomers hit and pass retirement age, due to the demographic pyramid, which is now a demographic baobab, becoming a demographic Big Top trapeze act. To illustrate it we’re given scary numbers about the imbalance of receipts to payments out to 75 years.
But the demographic effect of the baby boom is a 1-2 generation thing. Right? After that I’d expect a more normal (or at least different) demographic pattern to show up.
It seems suss to me that this is never described as a difficult lean period we have to prepare for, with a predictable depth and a predictable end.
Like warning about the onset of Winter with no mention of Spring.
I’ve a question about the Boomers and SS, and any related or similar expenditures.
We’re told we have looming financial troubles when the boomers hit and pass retirement age, due to the demographic pyramid, which is now a demographic baobab, becoming a demographic Big Top trapeze act. To illustrate it we’re given scary numbers about the imbalance of receipts to payments out to 75 years.
But the demographic effect of the baby boom is a 1-2 generation thing. Right? After that I’d expect a more normal (or at least different) demographic pattern to show up.
It seems suss to me that this is never described as a difficult lean period we have to prepare for, with a predictable depth and a predictable end.
Like warning about the onset of Winter with no mention of Spring.
I’ve a question about the Boomers and SS, and any related or similar expenditures.
We’re told we have looming financial troubles when the boomers hit and pass retirement age, due to the demographic pyramid, which is now a demographic baobab, becoming a demographic Big Top trapeze act. To illustrate it we’re given scary numbers about the imbalance of receipts to payments out to 75 years.
But the demographic effect of the baby boom is a 1-2 generation thing. Right? After that I’d expect a more normal (or at least different) demographic pattern to show up.
It seems suss to me that this is never described as a difficult lean period we have to prepare for, with a predictable depth and a predictable end.
Like warning about the onset of Winter with no mention of Spring.
“I’d like to note that you seem to have problems with the direction of causality, and the nature of time.
I believe the issue is your failure to understand the concepts of “borrow” and “repay”.”
One last comment before I spend the rest of the day driving:
I understand the concepts of “borrow” and “repay”. I don’t think they’re really applicable to situations like SS. My son, Victor, is logically incapable of doing any “repaying”, in as much has he’s never “borrowed” anything to repay. I was in a similar situation in regards to my parents.
At best “borrowing” and “repaying” could be some sort of analogy to SS, but a bad one, as it obscures the key aspect of the situation, which is that borrowing obligates one to repay because one agrees to repay when borrowing. While nobody actually gets asked to agree to anything with SS.
Another of those “let’s you and him” situations you get so often with government, where one set of people impose an obligation on a different set of people, and then folks who are a bit unclear about the nature of obligations berate the second set of people for being irate about it.
“I’d like to note that you seem to have problems with the direction of causality, and the nature of time.
I believe the issue is your failure to understand the concepts of “borrow” and “repay”.”
One last comment before I spend the rest of the day driving:
I understand the concepts of “borrow” and “repay”. I don’t think they’re really applicable to situations like SS. My son, Victor, is logically incapable of doing any “repaying”, in as much has he’s never “borrowed” anything to repay. I was in a similar situation in regards to my parents.
At best “borrowing” and “repaying” could be some sort of analogy to SS, but a bad one, as it obscures the key aspect of the situation, which is that borrowing obligates one to repay because one agrees to repay when borrowing. While nobody actually gets asked to agree to anything with SS.
Another of those “let’s you and him” situations you get so often with government, where one set of people impose an obligation on a different set of people, and then folks who are a bit unclear about the nature of obligations berate the second set of people for being irate about it.
“I’d like to note that you seem to have problems with the direction of causality, and the nature of time.
I believe the issue is your failure to understand the concepts of “borrow” and “repay”.”
One last comment before I spend the rest of the day driving:
I understand the concepts of “borrow” and “repay”. I don’t think they’re really applicable to situations like SS. My son, Victor, is logically incapable of doing any “repaying”, in as much has he’s never “borrowed” anything to repay. I was in a similar situation in regards to my parents.
At best “borrowing” and “repaying” could be some sort of analogy to SS, but a bad one, as it obscures the key aspect of the situation, which is that borrowing obligates one to repay because one agrees to repay when borrowing. While nobody actually gets asked to agree to anything with SS.
Another of those “let’s you and him” situations you get so often with government, where one set of people impose an obligation on a different set of people, and then folks who are a bit unclear about the nature of obligations berate the second set of people for being irate about it.
Like with declarations of war.
Brett, my sympathies go with you.
Like with declarations of war.
Brett, my sympathies go with you.
Like with declarations of war.
Brett, my sympathies go with you.
While nobody actually gets asked to agree to anything with SS.
yes, it’s true: the US is not a direct democracy.
that doesn’t make the decisions of the US government any less legitimate.
While nobody actually gets asked to agree to anything with SS.
yes, it’s true: the US is not a direct democracy.
that doesn’t make the decisions of the US government any less legitimate.
While nobody actually gets asked to agree to anything with SS.
yes, it’s true: the US is not a direct democracy.
that doesn’t make the decisions of the US government any less legitimate.
“I would also like to criticize McArdle for being an entitled self-important twerp, who argues in weasely bad faith”
this defines a long list of people often quoted here and elsewhere
“I would also like to criticize McArdle for being an entitled self-important twerp, who argues in weasely bad faith”
this defines a long list of people often quoted here and elsewhere
“I would also like to criticize McArdle for being an entitled self-important twerp, who argues in weasely bad faith”
this defines a long list of people often quoted here and elsewhere
I understand the concepts of “borrow” and “repay”. I don’t think they’re really applicable to situations like SS.
I’m not applying them in some broad way to SS. I’m applying them, specifically, to the obligation of the government of the United States to repay, out of the general fund, the money that it has borrowed from the SS trust funds.
Regarding most of the rest of your comment:
You seem, over and over again, to object to the idea that you, or anyone, should be obliged to do something that you, personally, have not explicitly agreed to do. And, that you should be so obliged, by virtue of having been born, without having consented to it, into a society that imposes those obligations.
You don’t need anyone to tell you this, but we don’t live in a Lockean state of nature. Locke didn’t live in a Lockean state of nature, and didn’t suggest or recommend that people live as if they did.
That ideal – where all men are free “to order their actions, and dispose of their possessions and persons, as they think fit” – is just that – an ideal. It’s a philosophical artifice, not a historical account of any actual human experience.
In the actual world we all live in, we *are all obliged* to each other and to the society we live in, in thousands of ways, most of which we have not, personally, signed up for. Many of which we, personally, may object to and even find obnoxious or illegitimate.
We can do whatever is available to us to try to remove the obligations that we find objectionable, but we won’t always prevail. And, the obligations that seem most sensible to us, will probably be obnoxious to somebody else.
C’est la vie.
It’s got nothing to do with “not understanding the nature of obligations”. On the contrary.
And to the degree that your various points boil down to “if it’s coerced it’s not legitimate”, I personally don’t find them persuasive. To me, it’s like objecting to being subject to the law of gravity.
Human beings are social creatures. They live in societies. Societies impose obligations on the people who participate in them.
I have at least 10,000 years of human history to point to in making those statements. Not speculative notional ideals, but the actual lived experience of the entire recorded history of the human race.
We do it that way, because it’s in our nature to do it that way. Living in societies, with all of their entanglements and mutual obligations, *is* our state of nature, and apparently has always been.
Safe travels, I’m sorry about your sister.
I understand the concepts of “borrow” and “repay”. I don’t think they’re really applicable to situations like SS.
I’m not applying them in some broad way to SS. I’m applying them, specifically, to the obligation of the government of the United States to repay, out of the general fund, the money that it has borrowed from the SS trust funds.
Regarding most of the rest of your comment:
You seem, over and over again, to object to the idea that you, or anyone, should be obliged to do something that you, personally, have not explicitly agreed to do. And, that you should be so obliged, by virtue of having been born, without having consented to it, into a society that imposes those obligations.
You don’t need anyone to tell you this, but we don’t live in a Lockean state of nature. Locke didn’t live in a Lockean state of nature, and didn’t suggest or recommend that people live as if they did.
That ideal – where all men are free “to order their actions, and dispose of their possessions and persons, as they think fit” – is just that – an ideal. It’s a philosophical artifice, not a historical account of any actual human experience.
In the actual world we all live in, we *are all obliged* to each other and to the society we live in, in thousands of ways, most of which we have not, personally, signed up for. Many of which we, personally, may object to and even find obnoxious or illegitimate.
We can do whatever is available to us to try to remove the obligations that we find objectionable, but we won’t always prevail. And, the obligations that seem most sensible to us, will probably be obnoxious to somebody else.
C’est la vie.
It’s got nothing to do with “not understanding the nature of obligations”. On the contrary.
And to the degree that your various points boil down to “if it’s coerced it’s not legitimate”, I personally don’t find them persuasive. To me, it’s like objecting to being subject to the law of gravity.
Human beings are social creatures. They live in societies. Societies impose obligations on the people who participate in them.
I have at least 10,000 years of human history to point to in making those statements. Not speculative notional ideals, but the actual lived experience of the entire recorded history of the human race.
We do it that way, because it’s in our nature to do it that way. Living in societies, with all of their entanglements and mutual obligations, *is* our state of nature, and apparently has always been.
Safe travels, I’m sorry about your sister.
I understand the concepts of “borrow” and “repay”. I don’t think they’re really applicable to situations like SS.
I’m not applying them in some broad way to SS. I’m applying them, specifically, to the obligation of the government of the United States to repay, out of the general fund, the money that it has borrowed from the SS trust funds.
Regarding most of the rest of your comment:
You seem, over and over again, to object to the idea that you, or anyone, should be obliged to do something that you, personally, have not explicitly agreed to do. And, that you should be so obliged, by virtue of having been born, without having consented to it, into a society that imposes those obligations.
You don’t need anyone to tell you this, but we don’t live in a Lockean state of nature. Locke didn’t live in a Lockean state of nature, and didn’t suggest or recommend that people live as if they did.
That ideal – where all men are free “to order their actions, and dispose of their possessions and persons, as they think fit” – is just that – an ideal. It’s a philosophical artifice, not a historical account of any actual human experience.
In the actual world we all live in, we *are all obliged* to each other and to the society we live in, in thousands of ways, most of which we have not, personally, signed up for. Many of which we, personally, may object to and even find obnoxious or illegitimate.
We can do whatever is available to us to try to remove the obligations that we find objectionable, but we won’t always prevail. And, the obligations that seem most sensible to us, will probably be obnoxious to somebody else.
C’est la vie.
It’s got nothing to do with “not understanding the nature of obligations”. On the contrary.
And to the degree that your various points boil down to “if it’s coerced it’s not legitimate”, I personally don’t find them persuasive. To me, it’s like objecting to being subject to the law of gravity.
Human beings are social creatures. They live in societies. Societies impose obligations on the people who participate in them.
I have at least 10,000 years of human history to point to in making those statements. Not speculative notional ideals, but the actual lived experience of the entire recorded history of the human race.
We do it that way, because it’s in our nature to do it that way. Living in societies, with all of their entanglements and mutual obligations, *is* our state of nature, and apparently has always been.
Safe travels, I’m sorry about your sister.
this defines a long list of people often quoted here and elsewhere
Including Megan McArdle.
Would you like some pink Himalayan salt with that? 🙂
this defines a long list of people often quoted here and elsewhere
Including Megan McArdle.
Would you like some pink Himalayan salt with that? 🙂
this defines a long list of people often quoted here and elsewhere
Including Megan McArdle.
Would you like some pink Himalayan salt with that? 🙂
But it didn’t.
I said: No, but it does suggest that the money required to continue SS in its current form come at the expense of other costs:
And then I quoted a passage that suggests the money required to continue SS in its current form will come at the expense of other costs.
Here you go. I also cited the article above, but apparently you don’t bother to check out my links.
Thanks, I appreciate the link. I missed the link to prospect.org. Going back, I can’t seem to find it, but that’s pretty irrelevant.
About the prospect.org analysis, I think its good, but I think it overestimates GDP growth.
Over the last 3 decades and change, we’ve average less then 3, as I mentioned above. Further, the prospect.org analysis only discusses GDP growth, while the SSA analysis is based on a number of factors:
The low cost alternative includes a higher ultimate total fertility rate, slower improvement in mortality, a higher real-wage differential, and lower unemployment. The high cost alternative, in contrast, includes a lower ultimate total fertility rate, more rapid declines in mortality, a lower real-wage differential, and higher unemployment. These alternatives are not intended to suggest that all parameters would be likely to differ from the intermediate values in the same direction, but are intended to illustrate the effect of scenarios that are, on balance, very favorable or unfavorable for the program’s financial status.
http://www.socialsecurity.gov/OACT/TR/TR08/II_project.html#105057
So, I think the SSA is probably correct to say:
The actual outcome for future costs is unlikely to be as extreme as either of the outcomes portrayed by the low and high cost projections.
I linked to a post that did exactly that. if you don’t want to take it on on the merits, I really don’t care.
Fine. The article you linked (http://www.cepr.net/index.php/blogs/beat-the-press/the-social-security-trust-fund-one-more-time ) pretty much had this to say:
By the second view there is no reason to worry about Social Security’s finances because the premise is that it doesn’t have its own finances. Hey, there’s just one government, who cares which pocket the money comes out of? In this view it makes no more sense to worry about Social Security’s finances than it does to worry about the finances of the defense or state departments. It’s all part of the government.
Which is pretty much McArdles point in the article they cited (http://www.bloombergview.com/articles/2015-04-10/social-security-and-the-ghost-of-ronald-reagan ):
Let’s change the system, with some combination of phased-in taxes and adjustments to benefit levels, so that no one ever has to deal with a massive benefit cut. And let’s make it actuarially stable over the long term, so that young workers know what is coming and can plan their retirements accordingly. To us, the trust fund is irrelevant; what matters is deciding how much money is going to go into the government, how much is going to come out, and keeping those amounts roughly in balance.
So, as far as contradicting her on the merits, it leaves a lot to be desired.
russell:
No. The link through the CEPR piece that bobbyp links to goes here.
Thanks. I linked the wrong article McArdle article.
She apparently considers the idea that this represents any kind of binding agreement with the SS program – the holder of the debt – as some kind of left-wing fable.
I’d describe it more as she thinks the money has to come from somewhere in the government, and is interested in how to make that work.
She also seems to think it has something to do with the Reagan tax cuts. I don’t know why.
It’s her characterizing a ‘left-wing’ argument (there was some kind of deal involving tax cuts and SS). As a rhetorical technique, its something I have little patience for.
and seems to see the debt that was incurred as some kind of accounting fiction.
I think her point is that debt within a consolidated entity (the government) is kind of a meaningless red herring to the SS discussion. Either the government has the money, prints the money, taxes the money, or increases the deficit. It has to come from somewhere.
All of that is a shame. But *we did it*.
I would agree with all that.
The money that is owed to the program needs to be repaid, and relatively minor adjustments need to be made to ensure that, a generation from now, the trust funds will not be depleted.
Where I think you and I part ways is ‘relatively minor adjustments’. Increasing taxes by 12.4% on higher incomes is not ‘relatively minor’ in my mind (it may be necessary, but its not minor). And means-testing, which I think is actually a good idea, breaks the concept of paying people back for what they put in. Which various people across the political spectrum don’t like. So again, I think ‘minor’ is a misnomer.
What this whole line of argument boils down to is: […]
3. Fuck you, old timers
4. Oh, and you 25 and 40 year olds, don’t even ask
I’ll quote her again:
Let’s change the system, with some combination of phased-in taxes and adjustments to benefit levels, so that no one ever has to deal with a massive benefit cut. And let’s make it actuarially stable over the long term, so that young workers know what is coming and can plan their retirements accordingly. To us, the trust fund is irrelevant; what matters is deciding how much money is going to go into the government, how much is going to come out, and keeping those amounts roughly in balance.
Which is pretty much not your 3 and 4.
I would also like to criticize McArdle for being an entitled self-important twerp
I wouldn’t be as harsh, but yes, I don’t like her writing very much either.
And if you can show me *any other federal program* whose management and financial position is in as good order as that of the SS program, I’ll be amazed.
I can’t, but that has very little to do with how to ensure SS is around a generation from now.
But it didn’t.
I said: No, but it does suggest that the money required to continue SS in its current form come at the expense of other costs:
And then I quoted a passage that suggests the money required to continue SS in its current form will come at the expense of other costs.
Here you go. I also cited the article above, but apparently you don’t bother to check out my links.
Thanks, I appreciate the link. I missed the link to prospect.org. Going back, I can’t seem to find it, but that’s pretty irrelevant.
About the prospect.org analysis, I think its good, but I think it overestimates GDP growth.
Over the last 3 decades and change, we’ve average less then 3, as I mentioned above. Further, the prospect.org analysis only discusses GDP growth, while the SSA analysis is based on a number of factors:
The low cost alternative includes a higher ultimate total fertility rate, slower improvement in mortality, a higher real-wage differential, and lower unemployment. The high cost alternative, in contrast, includes a lower ultimate total fertility rate, more rapid declines in mortality, a lower real-wage differential, and higher unemployment. These alternatives are not intended to suggest that all parameters would be likely to differ from the intermediate values in the same direction, but are intended to illustrate the effect of scenarios that are, on balance, very favorable or unfavorable for the program’s financial status.
http://www.socialsecurity.gov/OACT/TR/TR08/II_project.html#105057
So, I think the SSA is probably correct to say:
The actual outcome for future costs is unlikely to be as extreme as either of the outcomes portrayed by the low and high cost projections.
I linked to a post that did exactly that. if you don’t want to take it on on the merits, I really don’t care.
Fine. The article you linked (http://www.cepr.net/index.php/blogs/beat-the-press/the-social-security-trust-fund-one-more-time ) pretty much had this to say:
By the second view there is no reason to worry about Social Security’s finances because the premise is that it doesn’t have its own finances. Hey, there’s just one government, who cares which pocket the money comes out of? In this view it makes no more sense to worry about Social Security’s finances than it does to worry about the finances of the defense or state departments. It’s all part of the government.
Which is pretty much McArdles point in the article they cited (http://www.bloombergview.com/articles/2015-04-10/social-security-and-the-ghost-of-ronald-reagan ):
Let’s change the system, with some combination of phased-in taxes and adjustments to benefit levels, so that no one ever has to deal with a massive benefit cut. And let’s make it actuarially stable over the long term, so that young workers know what is coming and can plan their retirements accordingly. To us, the trust fund is irrelevant; what matters is deciding how much money is going to go into the government, how much is going to come out, and keeping those amounts roughly in balance.
So, as far as contradicting her on the merits, it leaves a lot to be desired.
russell:
No. The link through the CEPR piece that bobbyp links to goes here.
Thanks. I linked the wrong article McArdle article.
She apparently considers the idea that this represents any kind of binding agreement with the SS program – the holder of the debt – as some kind of left-wing fable.
I’d describe it more as she thinks the money has to come from somewhere in the government, and is interested in how to make that work.
She also seems to think it has something to do with the Reagan tax cuts. I don’t know why.
It’s her characterizing a ‘left-wing’ argument (there was some kind of deal involving tax cuts and SS). As a rhetorical technique, its something I have little patience for.
and seems to see the debt that was incurred as some kind of accounting fiction.
I think her point is that debt within a consolidated entity (the government) is kind of a meaningless red herring to the SS discussion. Either the government has the money, prints the money, taxes the money, or increases the deficit. It has to come from somewhere.
All of that is a shame. But *we did it*.
I would agree with all that.
The money that is owed to the program needs to be repaid, and relatively minor adjustments need to be made to ensure that, a generation from now, the trust funds will not be depleted.
Where I think you and I part ways is ‘relatively minor adjustments’. Increasing taxes by 12.4% on higher incomes is not ‘relatively minor’ in my mind (it may be necessary, but its not minor). And means-testing, which I think is actually a good idea, breaks the concept of paying people back for what they put in. Which various people across the political spectrum don’t like. So again, I think ‘minor’ is a misnomer.
What this whole line of argument boils down to is: […]
3. Fuck you, old timers
4. Oh, and you 25 and 40 year olds, don’t even ask
I’ll quote her again:
Let’s change the system, with some combination of phased-in taxes and adjustments to benefit levels, so that no one ever has to deal with a massive benefit cut. And let’s make it actuarially stable over the long term, so that young workers know what is coming and can plan their retirements accordingly. To us, the trust fund is irrelevant; what matters is deciding how much money is going to go into the government, how much is going to come out, and keeping those amounts roughly in balance.
Which is pretty much not your 3 and 4.
I would also like to criticize McArdle for being an entitled self-important twerp
I wouldn’t be as harsh, but yes, I don’t like her writing very much either.
And if you can show me *any other federal program* whose management and financial position is in as good order as that of the SS program, I’ll be amazed.
I can’t, but that has very little to do with how to ensure SS is around a generation from now.
But it didn’t.
I said: No, but it does suggest that the money required to continue SS in its current form come at the expense of other costs:
And then I quoted a passage that suggests the money required to continue SS in its current form will come at the expense of other costs.
Here you go. I also cited the article above, but apparently you don’t bother to check out my links.
Thanks, I appreciate the link. I missed the link to prospect.org. Going back, I can’t seem to find it, but that’s pretty irrelevant.
About the prospect.org analysis, I think its good, but I think it overestimates GDP growth.
Over the last 3 decades and change, we’ve average less then 3, as I mentioned above. Further, the prospect.org analysis only discusses GDP growth, while the SSA analysis is based on a number of factors:
The low cost alternative includes a higher ultimate total fertility rate, slower improvement in mortality, a higher real-wage differential, and lower unemployment. The high cost alternative, in contrast, includes a lower ultimate total fertility rate, more rapid declines in mortality, a lower real-wage differential, and higher unemployment. These alternatives are not intended to suggest that all parameters would be likely to differ from the intermediate values in the same direction, but are intended to illustrate the effect of scenarios that are, on balance, very favorable or unfavorable for the program’s financial status.
http://www.socialsecurity.gov/OACT/TR/TR08/II_project.html#105057
So, I think the SSA is probably correct to say:
The actual outcome for future costs is unlikely to be as extreme as either of the outcomes portrayed by the low and high cost projections.
I linked to a post that did exactly that. if you don’t want to take it on on the merits, I really don’t care.
Fine. The article you linked (http://www.cepr.net/index.php/blogs/beat-the-press/the-social-security-trust-fund-one-more-time ) pretty much had this to say:
By the second view there is no reason to worry about Social Security’s finances because the premise is that it doesn’t have its own finances. Hey, there’s just one government, who cares which pocket the money comes out of? In this view it makes no more sense to worry about Social Security’s finances than it does to worry about the finances of the defense or state departments. It’s all part of the government.
Which is pretty much McArdles point in the article they cited (http://www.bloombergview.com/articles/2015-04-10/social-security-and-the-ghost-of-ronald-reagan ):
Let’s change the system, with some combination of phased-in taxes and adjustments to benefit levels, so that no one ever has to deal with a massive benefit cut. And let’s make it actuarially stable over the long term, so that young workers know what is coming and can plan their retirements accordingly. To us, the trust fund is irrelevant; what matters is deciding how much money is going to go into the government, how much is going to come out, and keeping those amounts roughly in balance.
So, as far as contradicting her on the merits, it leaves a lot to be desired.
russell:
No. The link through the CEPR piece that bobbyp links to goes here.
Thanks. I linked the wrong article McArdle article.
She apparently considers the idea that this represents any kind of binding agreement with the SS program – the holder of the debt – as some kind of left-wing fable.
I’d describe it more as she thinks the money has to come from somewhere in the government, and is interested in how to make that work.
She also seems to think it has something to do with the Reagan tax cuts. I don’t know why.
It’s her characterizing a ‘left-wing’ argument (there was some kind of deal involving tax cuts and SS). As a rhetorical technique, its something I have little patience for.
and seems to see the debt that was incurred as some kind of accounting fiction.
I think her point is that debt within a consolidated entity (the government) is kind of a meaningless red herring to the SS discussion. Either the government has the money, prints the money, taxes the money, or increases the deficit. It has to come from somewhere.
All of that is a shame. But *we did it*.
I would agree with all that.
The money that is owed to the program needs to be repaid, and relatively minor adjustments need to be made to ensure that, a generation from now, the trust funds will not be depleted.
Where I think you and I part ways is ‘relatively minor adjustments’. Increasing taxes by 12.4% on higher incomes is not ‘relatively minor’ in my mind (it may be necessary, but its not minor). And means-testing, which I think is actually a good idea, breaks the concept of paying people back for what they put in. Which various people across the political spectrum don’t like. So again, I think ‘minor’ is a misnomer.
What this whole line of argument boils down to is: […]
3. Fuck you, old timers
4. Oh, and you 25 and 40 year olds, don’t even ask
I’ll quote her again:
Let’s change the system, with some combination of phased-in taxes and adjustments to benefit levels, so that no one ever has to deal with a massive benefit cut. And let’s make it actuarially stable over the long term, so that young workers know what is coming and can plan their retirements accordingly. To us, the trust fund is irrelevant; what matters is deciding how much money is going to go into the government, how much is going to come out, and keeping those amounts roughly in balance.
Which is pretty much not your 3 and 4.
I would also like to criticize McArdle for being an entitled self-important twerp
I wouldn’t be as harsh, but yes, I don’t like her writing very much either.
And if you can show me *any other federal program* whose management and financial position is in as good order as that of the SS program, I’ll be amazed.
I can’t, but that has very little to do with how to ensure SS is around a generation from now.
My son, Victor, is logically incapable of doing any “repaying”, in as much has he’s never “borrowed” anything to repay. I was in a similar situation in regards to my parents.
Think of it this way. You borrow money. When your children inherit, they inherit your liabilities, as well as your assets. So they then have a debt to repay for monies that they did not personally borrow.
Something similar applies, be it noted, to any government debt — the folks who decided to borrow it may well not be the folks who repay it. Move to a city with substantial pension liabilities, and your tax rates will be determined, in part, by the need to pay those pensions. Even if, that pension scheme is no longer in place for current empoyees.
P.S. Godspeed, Brett.
My son, Victor, is logically incapable of doing any “repaying”, in as much has he’s never “borrowed” anything to repay. I was in a similar situation in regards to my parents.
Think of it this way. You borrow money. When your children inherit, they inherit your liabilities, as well as your assets. So they then have a debt to repay for monies that they did not personally borrow.
Something similar applies, be it noted, to any government debt — the folks who decided to borrow it may well not be the folks who repay it. Move to a city with substantial pension liabilities, and your tax rates will be determined, in part, by the need to pay those pensions. Even if, that pension scheme is no longer in place for current empoyees.
P.S. Godspeed, Brett.
My son, Victor, is logically incapable of doing any “repaying”, in as much has he’s never “borrowed” anything to repay. I was in a similar situation in regards to my parents.
Think of it this way. You borrow money. When your children inherit, they inherit your liabilities, as well as your assets. So they then have a debt to repay for monies that they did not personally borrow.
Something similar applies, be it noted, to any government debt — the folks who decided to borrow it may well not be the folks who repay it. Move to a city with substantial pension liabilities, and your tax rates will be determined, in part, by the need to pay those pensions. Even if, that pension scheme is no longer in place for current empoyees.
P.S. Godspeed, Brett.
It has to come from somewhere.
If they want to look at it this way, then it behooves the crisis mongers to remain consistent. #1 on the list is to admit that they view social security taxes as just another tax, just like income taxes, and that the revenue from that tax is not dedicated to any particular program but is just going into the general fund.
Then the story becomes this: Back in ’86 the working population took on a big tax hike to “save” a particular program, but it was all a ruse to just generate more revenue and give tax relief to the well off.
You may now commence to lay out a “solution” to the problem as macardel has defined it….the federal government has a spending problem. Thus you cannot claim Social Security is “going broke” because it is just one of many government programs. You have to argue that the government is “going broke”.
Also, as pointed out by Dean Baker, this whole problem boils down to something like 1-2% of GNP 75 years from now.
Hardly a crisis.
It has to come from somewhere.
If they want to look at it this way, then it behooves the crisis mongers to remain consistent. #1 on the list is to admit that they view social security taxes as just another tax, just like income taxes, and that the revenue from that tax is not dedicated to any particular program but is just going into the general fund.
Then the story becomes this: Back in ’86 the working population took on a big tax hike to “save” a particular program, but it was all a ruse to just generate more revenue and give tax relief to the well off.
You may now commence to lay out a “solution” to the problem as macardel has defined it….the federal government has a spending problem. Thus you cannot claim Social Security is “going broke” because it is just one of many government programs. You have to argue that the government is “going broke”.
Also, as pointed out by Dean Baker, this whole problem boils down to something like 1-2% of GNP 75 years from now.
Hardly a crisis.
It has to come from somewhere.
If they want to look at it this way, then it behooves the crisis mongers to remain consistent. #1 on the list is to admit that they view social security taxes as just another tax, just like income taxes, and that the revenue from that tax is not dedicated to any particular program but is just going into the general fund.
Then the story becomes this: Back in ’86 the working population took on a big tax hike to “save” a particular program, but it was all a ruse to just generate more revenue and give tax relief to the well off.
You may now commence to lay out a “solution” to the problem as macardel has defined it….the federal government has a spending problem. Thus you cannot claim Social Security is “going broke” because it is just one of many government programs. You have to argue that the government is “going broke”.
Also, as pointed out by Dean Baker, this whole problem boils down to something like 1-2% of GNP 75 years from now.
Hardly a crisis.
The “FU old folks” part is where she describes the obligations of the SS program as follows:
The red herring is the weird BS about the Reagan tax cuts.
Basically her whole argument, root and branch, is mendacious. It’s nice that she concludes with a call for everyone to sensibly sit around the table and work it all out, but the piece as a whole is garbage.
Start with this:
What is the “give the money to rich people” and “get back later in the form of higher income taxes” stuff about? It’s just dishonest BS. It doesn’t hang together because it’s something she made up, specifically to not hang together.
In real life, the deal was: as of the early 80’s, there wasn’t going to be enough to cover boomer retirement. So, we deliberately paid in more than was needed to fund the program, for about 30 years, to build up a cushion that would deal with *the boomer retirement*.
Full stop.
Not secure the program in perpetuity. Not as part of some quid pro quo with Scrooge McDuck.
Just a simple, sensible strategy to deal with a forseeable shortfall in revenue.
It’s lovely that McArdle arrives at a call for us all to sit around the table and work it all out, but she’s a liar. She is not an honest person.
Regarding expanding SS benefits, yes, it will cost money, and yes, if we want to do it, we will have to raise revenue to pay for it.
If that’s a non-starter, we won’t do it, and there are going to be a lot of really freaking poor old people for the next 20 or so years.
It’s not like the problem is going to go away, and it’s not like it isn’t going to cost us a great big pile of public money either way. And it’s not like there haven’t been 30 years of bad public policy decisions that contributed to the situation in the first place.
If you thought I was just being hyperbolic when I said “FU old folks”, wait and see how the public conversation plays out.
The “FU old folks” part is where she describes the obligations of the SS program as follows:
The red herring is the weird BS about the Reagan tax cuts.
Basically her whole argument, root and branch, is mendacious. It’s nice that she concludes with a call for everyone to sensibly sit around the table and work it all out, but the piece as a whole is garbage.
Start with this:
What is the “give the money to rich people” and “get back later in the form of higher income taxes” stuff about? It’s just dishonest BS. It doesn’t hang together because it’s something she made up, specifically to not hang together.
In real life, the deal was: as of the early 80’s, there wasn’t going to be enough to cover boomer retirement. So, we deliberately paid in more than was needed to fund the program, for about 30 years, to build up a cushion that would deal with *the boomer retirement*.
Full stop.
Not secure the program in perpetuity. Not as part of some quid pro quo with Scrooge McDuck.
Just a simple, sensible strategy to deal with a forseeable shortfall in revenue.
It’s lovely that McArdle arrives at a call for us all to sit around the table and work it all out, but she’s a liar. She is not an honest person.
Regarding expanding SS benefits, yes, it will cost money, and yes, if we want to do it, we will have to raise revenue to pay for it.
If that’s a non-starter, we won’t do it, and there are going to be a lot of really freaking poor old people for the next 20 or so years.
It’s not like the problem is going to go away, and it’s not like it isn’t going to cost us a great big pile of public money either way. And it’s not like there haven’t been 30 years of bad public policy decisions that contributed to the situation in the first place.
If you thought I was just being hyperbolic when I said “FU old folks”, wait and see how the public conversation plays out.
The “FU old folks” part is where she describes the obligations of the SS program as follows:
The red herring is the weird BS about the Reagan tax cuts.
Basically her whole argument, root and branch, is mendacious. It’s nice that she concludes with a call for everyone to sensibly sit around the table and work it all out, but the piece as a whole is garbage.
Start with this:
What is the “give the money to rich people” and “get back later in the form of higher income taxes” stuff about? It’s just dishonest BS. It doesn’t hang together because it’s something she made up, specifically to not hang together.
In real life, the deal was: as of the early 80’s, there wasn’t going to be enough to cover boomer retirement. So, we deliberately paid in more than was needed to fund the program, for about 30 years, to build up a cushion that would deal with *the boomer retirement*.
Full stop.
Not secure the program in perpetuity. Not as part of some quid pro quo with Scrooge McDuck.
Just a simple, sensible strategy to deal with a forseeable shortfall in revenue.
It’s lovely that McArdle arrives at a call for us all to sit around the table and work it all out, but she’s a liar. She is not an honest person.
Regarding expanding SS benefits, yes, it will cost money, and yes, if we want to do it, we will have to raise revenue to pay for it.
If that’s a non-starter, we won’t do it, and there are going to be a lot of really freaking poor old people for the next 20 or so years.
It’s not like the problem is going to go away, and it’s not like it isn’t going to cost us a great big pile of public money either way. And it’s not like there haven’t been 30 years of bad public policy decisions that contributed to the situation in the first place.
If you thought I was just being hyperbolic when I said “FU old folks”, wait and see how the public conversation plays out.
why is it that none of these people who wail and moan and cry about SS rarely express concern over the $16,000/sec we spend at the DoD ?
why is it that none of these people who wail and moan and cry about SS rarely express concern over the $16,000/sec we spend at the DoD ?
why is it that none of these people who wail and moan and cry about SS rarely express concern over the $16,000/sec we spend at the DoD ?
remove either “none of” or “rarely”, as you prefer.
remove either “none of” or “rarely”, as you prefer.
remove either “none of” or “rarely”, as you prefer.
Increasing taxes by 12.4% on higher incomes is not ‘relatively minor’ in my mind
Well, neither was the big tax hike back in the 80’s on working wages to “save” the program. But apparently, rolling this back is somehow “off the table”?
Why?
Let’s start here: Roll back the Reagan and Bush tax cuts.
Increasing taxes by 12.4% on higher incomes is not ‘relatively minor’ in my mind
Well, neither was the big tax hike back in the 80’s on working wages to “save” the program. But apparently, rolling this back is somehow “off the table”?
Why?
Let’s start here: Roll back the Reagan and Bush tax cuts.
Increasing taxes by 12.4% on higher incomes is not ‘relatively minor’ in my mind
Well, neither was the big tax hike back in the 80’s on working wages to “save” the program. But apparently, rolling this back is somehow “off the table”?
Why?
Let’s start here: Roll back the Reagan and Bush tax cuts.
Sorry, again into the breach on McArdle.
Check this out:
And she immediately follows that by asserting that, based on her hazy “as far as I can tell” brain fart that the “implied contract”, which she misrepresents in the first place, didn’t emerge in the public conversation until Bush 43, it should therefore be considered to have no force whatsoever.
Because the people who agreed to the deal in the 80’s never thought about it in those terms. You know, the terms she made up.
What a lazy-ass sorry excuse for a public commentator she is.
Want to make a statement of fact, and then base an argument on it?
GO LOOK IT UP AND SEE IF IT’S TRUE. You’ve got the Bloomberg gig, go earn your freaking money. Look it up, you lazy twit.
The people who comment here do a better job, day in and day out, of making clean, honest arguments, then McArdle has ever done in her life.
She’s a lazy, dishonest hack.
Sorry, again into the breach on McArdle.
Check this out:
And she immediately follows that by asserting that, based on her hazy “as far as I can tell” brain fart that the “implied contract”, which she misrepresents in the first place, didn’t emerge in the public conversation until Bush 43, it should therefore be considered to have no force whatsoever.
Because the people who agreed to the deal in the 80’s never thought about it in those terms. You know, the terms she made up.
What a lazy-ass sorry excuse for a public commentator she is.
Want to make a statement of fact, and then base an argument on it?
GO LOOK IT UP AND SEE IF IT’S TRUE. You’ve got the Bloomberg gig, go earn your freaking money. Look it up, you lazy twit.
The people who comment here do a better job, day in and day out, of making clean, honest arguments, then McArdle has ever done in her life.
She’s a lazy, dishonest hack.
Sorry, again into the breach on McArdle.
Check this out:
And she immediately follows that by asserting that, based on her hazy “as far as I can tell” brain fart that the “implied contract”, which she misrepresents in the first place, didn’t emerge in the public conversation until Bush 43, it should therefore be considered to have no force whatsoever.
Because the people who agreed to the deal in the 80’s never thought about it in those terms. You know, the terms she made up.
What a lazy-ass sorry excuse for a public commentator she is.
Want to make a statement of fact, and then base an argument on it?
GO LOOK IT UP AND SEE IF IT’S TRUE. You’ve got the Bloomberg gig, go earn your freaking money. Look it up, you lazy twit.
The people who comment here do a better job, day in and day out, of making clean, honest arguments, then McArdle has ever done in her life.
She’s a lazy, dishonest hack.
It’s lovely that McArdle arrives at a call for us all to sit around the table and work it all out, but she’s a liar. She is not an honest person.
Russell, I think you do the lady an injustice. She is basically a libertarian (albeit perhaps not quite so dogmatic as Brett). So, given her philosophical perspective, her arguments may be no more dishonest than someone who believes in the Bible being literally true arguing against evolution.
That is, she may be wrong and grasping at straws. But to be dishonest, and a liar, she would have to realize that what she says is incorrect. And the evidence suggest that this is not the case.
It’s lovely that McArdle arrives at a call for us all to sit around the table and work it all out, but she’s a liar. She is not an honest person.
Russell, I think you do the lady an injustice. She is basically a libertarian (albeit perhaps not quite so dogmatic as Brett). So, given her philosophical perspective, her arguments may be no more dishonest than someone who believes in the Bible being literally true arguing against evolution.
That is, she may be wrong and grasping at straws. But to be dishonest, and a liar, she would have to realize that what she says is incorrect. And the evidence suggest that this is not the case.
It’s lovely that McArdle arrives at a call for us all to sit around the table and work it all out, but she’s a liar. She is not an honest person.
Russell, I think you do the lady an injustice. She is basically a libertarian (albeit perhaps not quite so dogmatic as Brett). So, given her philosophical perspective, her arguments may be no more dishonest than someone who believes in the Bible being literally true arguing against evolution.
That is, she may be wrong and grasping at straws. But to be dishonest, and a liar, she would have to realize that what she says is incorrect. And the evidence suggest that this is not the case.
Russell, I think you do the lady an injustice.
No, I really don’t think that I do.
See my 11:09 and explain how the argument of hers that I refer to is the product of an attempt at honest, if mistaken, conversation.
Russell, I think you do the lady an injustice.
No, I really don’t think that I do.
See my 11:09 and explain how the argument of hers that I refer to is the product of an attempt at honest, if mistaken, conversation.
Russell, I think you do the lady an injustice.
No, I really don’t think that I do.
See my 11:09 and explain how the argument of hers that I refer to is the product of an attempt at honest, if mistaken, conversation.
bobbyp:
Thus you cannot claim Social Security is “going broke” because it is just one of many government programs. You have to argue that the government is “going broke”.
Which is pretty much what McArdle said:
what matters is deciding how much money is going to go into the government, how much is going to come out, and keeping those amounts roughly in balance.
I think that is pretty much the way we need to think about it. If its a commitment, we need to figure out a way to pay for it.
Also, as pointed out by Dean Baker, this whole problem boils down to something like 1-2% of GNP 75 years from now.
Using the intermediate assumptions, which might be an over or under estimate. And, as pointed out by Baker That’s not trivial
And it is better to address those problems early on. Or, in the words of the SSA: Therefore, legislative action is needed as soon as possible to address the DI program’s financial imbalance.
http://www.ssa.gov/oact/tr/2014/II_A_highlights.html
Which also outlines possible solutions:
For the combined OASI and DI Trust Funds to remain solvent throughout the 75-year projection period: (1) revenues would have to increase by an amount equivalent to an immediate and permanent payroll tax rate increase of 2.83 percentage points3 (from its current level of 12.40 percent to 15.23 percent; a relative increase of 22.8 percent); (2) scheduled benefits during the period would have to be reduced by an amount equivalent to an immediate and permanent reduction of 17.4 percent applied to all current and future beneficiaries, or 20.8 percent if the reductions were applied only to those who become initially eligible for benefits in 2014 or later; or (3) some combination of these approaches would have to be adopted.
bobbyp:
Thus you cannot claim Social Security is “going broke” because it is just one of many government programs. You have to argue that the government is “going broke”.
Which is pretty much what McArdle said:
what matters is deciding how much money is going to go into the government, how much is going to come out, and keeping those amounts roughly in balance.
I think that is pretty much the way we need to think about it. If its a commitment, we need to figure out a way to pay for it.
Also, as pointed out by Dean Baker, this whole problem boils down to something like 1-2% of GNP 75 years from now.
Using the intermediate assumptions, which might be an over or under estimate. And, as pointed out by Baker That’s not trivial
And it is better to address those problems early on. Or, in the words of the SSA: Therefore, legislative action is needed as soon as possible to address the DI program’s financial imbalance.
http://www.ssa.gov/oact/tr/2014/II_A_highlights.html
Which also outlines possible solutions:
For the combined OASI and DI Trust Funds to remain solvent throughout the 75-year projection period: (1) revenues would have to increase by an amount equivalent to an immediate and permanent payroll tax rate increase of 2.83 percentage points3 (from its current level of 12.40 percent to 15.23 percent; a relative increase of 22.8 percent); (2) scheduled benefits during the period would have to be reduced by an amount equivalent to an immediate and permanent reduction of 17.4 percent applied to all current and future beneficiaries, or 20.8 percent if the reductions were applied only to those who become initially eligible for benefits in 2014 or later; or (3) some combination of these approaches would have to be adopted.
bobbyp:
Thus you cannot claim Social Security is “going broke” because it is just one of many government programs. You have to argue that the government is “going broke”.
Which is pretty much what McArdle said:
what matters is deciding how much money is going to go into the government, how much is going to come out, and keeping those amounts roughly in balance.
I think that is pretty much the way we need to think about it. If its a commitment, we need to figure out a way to pay for it.
Also, as pointed out by Dean Baker, this whole problem boils down to something like 1-2% of GNP 75 years from now.
Using the intermediate assumptions, which might be an over or under estimate. And, as pointed out by Baker That’s not trivial
And it is better to address those problems early on. Or, in the words of the SSA: Therefore, legislative action is needed as soon as possible to address the DI program’s financial imbalance.
http://www.ssa.gov/oact/tr/2014/II_A_highlights.html
Which also outlines possible solutions:
For the combined OASI and DI Trust Funds to remain solvent throughout the 75-year projection period: (1) revenues would have to increase by an amount equivalent to an immediate and permanent payroll tax rate increase of 2.83 percentage points3 (from its current level of 12.40 percent to 15.23 percent; a relative increase of 22.8 percent); (2) scheduled benefits during the period would have to be reduced by an amount equivalent to an immediate and permanent reduction of 17.4 percent applied to all current and future beneficiaries, or 20.8 percent if the reductions were applied only to those who become initially eligible for benefits in 2014 or later; or (3) some combination of these approaches would have to be adopted.
Move to a city with substantial pension liabilities, and your tax rates will be determined, in part, by the need to pay those pensions.
I think the net trend is to move from those cities.
Move to a city with substantial pension liabilities, and your tax rates will be determined, in part, by the need to pay those pensions.
I think the net trend is to move from those cities.
Move to a city with substantial pension liabilities, and your tax rates will be determined, in part, by the need to pay those pensions.
I think the net trend is to move from those cities.
The fact of the matter is that McArdle’s argument is not just a stretch. It is self-defeating.
Here is what she says about the alleged contract.
“As a fallback, the trust funders say that the bonds convey some sort of moral obligation. We made a deal with people, they say: higher taxes in the 1980s and onward in exchange for promised benefits. Because the program was overfunded in the early years, a significant chunk of those (regressive) payroll taxes helped fund Ronald Reagan’s tax cuts for the wealthy. Now that it’s their turn to pay higher taxes to fund Social Security, they’re trying to welsh.”
I’m not sure how the whole business of the Reagan tax cuts, etc. got pulled in here. It’s my understanding that the deal related totally to Social Security. IOW, there was an agrement to increase payroll taxes in exchange for securing the promised benefits. Workers pay more now, so the government will be able to pay the benefits later. That’s the deal. Nothing about Reagan tax cuts. Besides, all this is saying is that some of the borrowing needed to fund the cuts came from workers. If that hadn’t happened it would have come from elsewhere. The payroll tax increase did not, was not intended to, finance the cuts.
Now, oddly enough, McArdle agrees with this.
“First of all, the idea that workers somehow explicitly cut a deal to pay more payroll taxes now, give the money to rich people, and then get it back later in the form of higher income taxes doesn’t really hang together. The timeline is wrong, for one thing; the first round of Reagan tax cuts preceded the Social Security deal by several years. Also, since “the rich” in 1983 and “the rich” today are not the same group, it’s hard to see how the former could make any sort of agreement binding on the latter.”
So she understands the point. But then she makes up – there is no other way to describe it – a hypothetical deal that now should be altered. And of course she describes it in a way that leads inevitably to her preferred outcome, as she speaks airily of “benefit adjustments.”
So no. It’s not a persuasive argument.
The fact of the matter is that McArdle’s argument is not just a stretch. It is self-defeating.
Here is what she says about the alleged contract.
“As a fallback, the trust funders say that the bonds convey some sort of moral obligation. We made a deal with people, they say: higher taxes in the 1980s and onward in exchange for promised benefits. Because the program was overfunded in the early years, a significant chunk of those (regressive) payroll taxes helped fund Ronald Reagan’s tax cuts for the wealthy. Now that it’s their turn to pay higher taxes to fund Social Security, they’re trying to welsh.”
I’m not sure how the whole business of the Reagan tax cuts, etc. got pulled in here. It’s my understanding that the deal related totally to Social Security. IOW, there was an agrement to increase payroll taxes in exchange for securing the promised benefits. Workers pay more now, so the government will be able to pay the benefits later. That’s the deal. Nothing about Reagan tax cuts. Besides, all this is saying is that some of the borrowing needed to fund the cuts came from workers. If that hadn’t happened it would have come from elsewhere. The payroll tax increase did not, was not intended to, finance the cuts.
Now, oddly enough, McArdle agrees with this.
“First of all, the idea that workers somehow explicitly cut a deal to pay more payroll taxes now, give the money to rich people, and then get it back later in the form of higher income taxes doesn’t really hang together. The timeline is wrong, for one thing; the first round of Reagan tax cuts preceded the Social Security deal by several years. Also, since “the rich” in 1983 and “the rich” today are not the same group, it’s hard to see how the former could make any sort of agreement binding on the latter.”
So she understands the point. But then she makes up – there is no other way to describe it – a hypothetical deal that now should be altered. And of course she describes it in a way that leads inevitably to her preferred outcome, as she speaks airily of “benefit adjustments.”
So no. It’s not a persuasive argument.
The fact of the matter is that McArdle’s argument is not just a stretch. It is self-defeating.
Here is what she says about the alleged contract.
“As a fallback, the trust funders say that the bonds convey some sort of moral obligation. We made a deal with people, they say: higher taxes in the 1980s and onward in exchange for promised benefits. Because the program was overfunded in the early years, a significant chunk of those (regressive) payroll taxes helped fund Ronald Reagan’s tax cuts for the wealthy. Now that it’s their turn to pay higher taxes to fund Social Security, they’re trying to welsh.”
I’m not sure how the whole business of the Reagan tax cuts, etc. got pulled in here. It’s my understanding that the deal related totally to Social Security. IOW, there was an agrement to increase payroll taxes in exchange for securing the promised benefits. Workers pay more now, so the government will be able to pay the benefits later. That’s the deal. Nothing about Reagan tax cuts. Besides, all this is saying is that some of the borrowing needed to fund the cuts came from workers. If that hadn’t happened it would have come from elsewhere. The payroll tax increase did not, was not intended to, finance the cuts.
Now, oddly enough, McArdle agrees with this.
“First of all, the idea that workers somehow explicitly cut a deal to pay more payroll taxes now, give the money to rich people, and then get it back later in the form of higher income taxes doesn’t really hang together. The timeline is wrong, for one thing; the first round of Reagan tax cuts preceded the Social Security deal by several years. Also, since “the rich” in 1983 and “the rich” today are not the same group, it’s hard to see how the former could make any sort of agreement binding on the latter.”
So she understands the point. But then she makes up – there is no other way to describe it – a hypothetical deal that now should be altered. And of course she describes it in a way that leads inevitably to her preferred outcome, as she speaks airily of “benefit adjustments.”
So no. It’s not a persuasive argument.
Just a simple, sensible strategy to deal with a forseeable shortfall in revenue.
Which it was. And now we need another simple sensible strategy to deal with a foreseeable shortfall.
She’s a lazy, dishonest hack.
Again, I wouldn’t be as harsh, but, I don’t disagree with you regarding her in general.
Just a simple, sensible strategy to deal with a forseeable shortfall in revenue.
Which it was. And now we need another simple sensible strategy to deal with a foreseeable shortfall.
She’s a lazy, dishonest hack.
Again, I wouldn’t be as harsh, but, I don’t disagree with you regarding her in general.
Just a simple, sensible strategy to deal with a forseeable shortfall in revenue.
Which it was. And now we need another simple sensible strategy to deal with a foreseeable shortfall.
She’s a lazy, dishonest hack.
Again, I wouldn’t be as harsh, but, I don’t disagree with you regarding her in general.
The crisis mongers argue that the system under current law will “go broke” at some point in the future, leaving us with trillions of “unfunded liabilities”, then they turn around and argue that the trust fund is just a “fiction”.
This is the heart of the dishonesty.
That, and ALWAYS the solution is to “reform entitlements”, and keep both the ’86 payroll tax hike and the Bush tax cuts in place.
They are trying to have it both ways, and if they don’t know this they are either ignorant of the implications of their own arguments or they are disingenuous liars.
Given the fact this has been an open sore since the day of discussions about “lock boxes” in 2000, I can only conclude the latter applies.
The crisis mongers argue that the system under current law will “go broke” at some point in the future, leaving us with trillions of “unfunded liabilities”, then they turn around and argue that the trust fund is just a “fiction”.
This is the heart of the dishonesty.
That, and ALWAYS the solution is to “reform entitlements”, and keep both the ’86 payroll tax hike and the Bush tax cuts in place.
They are trying to have it both ways, and if they don’t know this they are either ignorant of the implications of their own arguments or they are disingenuous liars.
Given the fact this has been an open sore since the day of discussions about “lock boxes” in 2000, I can only conclude the latter applies.
The crisis mongers argue that the system under current law will “go broke” at some point in the future, leaving us with trillions of “unfunded liabilities”, then they turn around and argue that the trust fund is just a “fiction”.
This is the heart of the dishonesty.
That, and ALWAYS the solution is to “reform entitlements”, and keep both the ’86 payroll tax hike and the Bush tax cuts in place.
They are trying to have it both ways, and if they don’t know this they are either ignorant of the implications of their own arguments or they are disingenuous liars.
Given the fact this has been an open sore since the day of discussions about “lock boxes” in 2000, I can only conclude the latter applies.
I think the net trend is to move from those cities. [which have large pension liabilities]
Quite possibly. But it doesn’t change the argument that, legally and logically, it is entirely possible to acquire a debt which you did not personally run up. And that’s all I was addressing.
Although I would also not that the reasons that people are leaving those cities is probably not this. Most people do not even think to check that particular arcane point when making home purchase decisions.
I think the net trend is to move from those cities. [which have large pension liabilities]
Quite possibly. But it doesn’t change the argument that, legally and logically, it is entirely possible to acquire a debt which you did not personally run up. And that’s all I was addressing.
Although I would also not that the reasons that people are leaving those cities is probably not this. Most people do not even think to check that particular arcane point when making home purchase decisions.
I think the net trend is to move from those cities. [which have large pension liabilities]
Quite possibly. But it doesn’t change the argument that, legally and logically, it is entirely possible to acquire a debt which you did not personally run up. And that’s all I was addressing.
Although I would also not that the reasons that people are leaving those cities is probably not this. Most people do not even think to check that particular arcane point when making home purchase decisions.
One more thing.
McArdle mocks the idea of a trust fund because there is no legally enforceable obligation that Congress cannot change.
Well, OK.
But the entire structure of the US retirement system is subject to the same caveat. You think you are accruing tax-deferred savings in your IRA? Don’t be ridiculous. Congress can slap a tax on that IRA any time it feels like it, or any time there is a fiscal problem.
There is more money in 401(k)’s than in the OASDI trust funds. There is also more money in IRA’s. Cite.
One more thing.
McArdle mocks the idea of a trust fund because there is no legally enforceable obligation that Congress cannot change.
Well, OK.
But the entire structure of the US retirement system is subject to the same caveat. You think you are accruing tax-deferred savings in your IRA? Don’t be ridiculous. Congress can slap a tax on that IRA any time it feels like it, or any time there is a fiscal problem.
There is more money in 401(k)’s than in the OASDI trust funds. There is also more money in IRA’s. Cite.
One more thing.
McArdle mocks the idea of a trust fund because there is no legally enforceable obligation that Congress cannot change.
Well, OK.
But the entire structure of the US retirement system is subject to the same caveat. You think you are accruing tax-deferred savings in your IRA? Don’t be ridiculous. Congress can slap a tax on that IRA any time it feels like it, or any time there is a fiscal problem.
There is more money in 401(k)’s than in the OASDI trust funds. There is also more money in IRA’s. Cite.
“Most people do not even think to check that particular arcane point when making home purchase decisions.”
True, even the municipal fireman on a generous, bur deserved pension from Philly or Pittsburgh or Chicago who retires to Florida or Texas or Arizona for the better climate and votes Republican to gut everyone elses’ pensions and Social Security rarely gives this much thought.
“Most people do not even think to check that particular arcane point when making home purchase decisions.”
True, even the municipal fireman on a generous, bur deserved pension from Philly or Pittsburgh or Chicago who retires to Florida or Texas or Arizona for the better climate and votes Republican to gut everyone elses’ pensions and Social Security rarely gives this much thought.
“Most people do not even think to check that particular arcane point when making home purchase decisions.”
True, even the municipal fireman on a generous, bur deserved pension from Philly or Pittsburgh or Chicago who retires to Florida or Texas or Arizona for the better climate and votes Republican to gut everyone elses’ pensions and Social Security rarely gives this much thought.
I don’t have enough of an opinion of McArdle for it to color my reading of her Bloomberg piece, so I’ll just say it’s possible she’s implying things I wouldn’t pick up on, but for having read more of her stuff and it having left a lasting impression on me.
With that, it’s hard to tell when she’s discussing her opinions or characterizations of things or describing those of others, but I don’t take much issue with the idea that the trust fund is a fiction of sorts. I mean, it’s real, because that’s how things were set up, and the bonds held in the trust exist, but that’s also what makes it a fiction of sorts, because there’s no reason it had to be set up that way.
I remember having this discussion years ago when Hilzoy was still here, regarding why Social Security has its own designated revenue stream and trust fund, and why its outlays are evaluated specifically against them, whereas most other government programs cost what they do, in aggregate, usually in excess of federal revenue.
Perhaps it protects SS from the whims of congress in the exercise of its budgetary authority. But then I wonder if the political ramifications of screwing around with SS aren’t protection enough.
In any case, regardless of what remains in the trust, it comes down to a question of whether or not paying SS benefits at whatever level is a worthwhile expenditure of federal dollars, like anything else the federal government spends money on. I mean, is keeping old and/or sick people out of abject poverty while also more or less directly injecting demand into the economy (as directed by private, non-government actors according to their individual preferences, no less! – the market!) any less worthwhile than, say, building destructive and deadly flying machines?
I don’t have enough of an opinion of McArdle for it to color my reading of her Bloomberg piece, so I’ll just say it’s possible she’s implying things I wouldn’t pick up on, but for having read more of her stuff and it having left a lasting impression on me.
With that, it’s hard to tell when she’s discussing her opinions or characterizations of things or describing those of others, but I don’t take much issue with the idea that the trust fund is a fiction of sorts. I mean, it’s real, because that’s how things were set up, and the bonds held in the trust exist, but that’s also what makes it a fiction of sorts, because there’s no reason it had to be set up that way.
I remember having this discussion years ago when Hilzoy was still here, regarding why Social Security has its own designated revenue stream and trust fund, and why its outlays are evaluated specifically against them, whereas most other government programs cost what they do, in aggregate, usually in excess of federal revenue.
Perhaps it protects SS from the whims of congress in the exercise of its budgetary authority. But then I wonder if the political ramifications of screwing around with SS aren’t protection enough.
In any case, regardless of what remains in the trust, it comes down to a question of whether or not paying SS benefits at whatever level is a worthwhile expenditure of federal dollars, like anything else the federal government spends money on. I mean, is keeping old and/or sick people out of abject poverty while also more or less directly injecting demand into the economy (as directed by private, non-government actors according to their individual preferences, no less! – the market!) any less worthwhile than, say, building destructive and deadly flying machines?
I don’t have enough of an opinion of McArdle for it to color my reading of her Bloomberg piece, so I’ll just say it’s possible she’s implying things I wouldn’t pick up on, but for having read more of her stuff and it having left a lasting impression on me.
With that, it’s hard to tell when she’s discussing her opinions or characterizations of things or describing those of others, but I don’t take much issue with the idea that the trust fund is a fiction of sorts. I mean, it’s real, because that’s how things were set up, and the bonds held in the trust exist, but that’s also what makes it a fiction of sorts, because there’s no reason it had to be set up that way.
I remember having this discussion years ago when Hilzoy was still here, regarding why Social Security has its own designated revenue stream and trust fund, and why its outlays are evaluated specifically against them, whereas most other government programs cost what they do, in aggregate, usually in excess of federal revenue.
Perhaps it protects SS from the whims of congress in the exercise of its budgetary authority. But then I wonder if the political ramifications of screwing around with SS aren’t protection enough.
In any case, regardless of what remains in the trust, it comes down to a question of whether or not paying SS benefits at whatever level is a worthwhile expenditure of federal dollars, like anything else the federal government spends money on. I mean, is keeping old and/or sick people out of abject poverty while also more or less directly injecting demand into the economy (as directed by private, non-government actors according to their individual preferences, no less! – the market!) any less worthwhile than, say, building destructive and deadly flying machines?
In any case, regardless of what remains in the trust, it comes down to a question of whether or not paying SS benefits at whatever level is a worthwhile expenditure of federal dollars, like anything else the federal government spends money on.
Yes, exactly. And further, as SS payments are in theory something that people have to plan on having/not having a couple of decades in advance, it behooves us to look ahead and ensure that the government spending (and SS specifically) is sustainable.
In any case, regardless of what remains in the trust, it comes down to a question of whether or not paying SS benefits at whatever level is a worthwhile expenditure of federal dollars, like anything else the federal government spends money on.
Yes, exactly. And further, as SS payments are in theory something that people have to plan on having/not having a couple of decades in advance, it behooves us to look ahead and ensure that the government spending (and SS specifically) is sustainable.
In any case, regardless of what remains in the trust, it comes down to a question of whether or not paying SS benefits at whatever level is a worthwhile expenditure of federal dollars, like anything else the federal government spends money on.
Yes, exactly. And further, as SS payments are in theory something that people have to plan on having/not having a couple of decades in advance, it behooves us to look ahead and ensure that the government spending (and SS specifically) is sustainable.
Another aspect of the McArdle piece is that it should be uncontroversial that payroll taxes for SS are regressive, with a marginal rate of 0% for all income above whatever the number is these days, and a straight percentage for income below that.
I think the issue regarding the Regan tax cuts is that the same president reduced income taxes, mostly to the benefit of wealthier people, and raised SS payroll taxes on everyone, with the effects being most acute for people with lower incomes.
So, while someone would have bought the bonds issued to cover tax shortfalls, made larger because of the income-tax cuts, the SS surplus realized by increasing SS payroll taxes made some of them intra-governmental debt when they otherwise wouldn’t have been.
The extrapolations about “deals” beyond those points of fact are just stylized rhetoric.
Another aspect of the McArdle piece is that it should be uncontroversial that payroll taxes for SS are regressive, with a marginal rate of 0% for all income above whatever the number is these days, and a straight percentage for income below that.
I think the issue regarding the Regan tax cuts is that the same president reduced income taxes, mostly to the benefit of wealthier people, and raised SS payroll taxes on everyone, with the effects being most acute for people with lower incomes.
So, while someone would have bought the bonds issued to cover tax shortfalls, made larger because of the income-tax cuts, the SS surplus realized by increasing SS payroll taxes made some of them intra-governmental debt when they otherwise wouldn’t have been.
The extrapolations about “deals” beyond those points of fact are just stylized rhetoric.
Another aspect of the McArdle piece is that it should be uncontroversial that payroll taxes for SS are regressive, with a marginal rate of 0% for all income above whatever the number is these days, and a straight percentage for income below that.
I think the issue regarding the Regan tax cuts is that the same president reduced income taxes, mostly to the benefit of wealthier people, and raised SS payroll taxes on everyone, with the effects being most acute for people with lower incomes.
So, while someone would have bought the bonds issued to cover tax shortfalls, made larger because of the income-tax cuts, the SS surplus realized by increasing SS payroll taxes made some of them intra-governmental debt when they otherwise wouldn’t have been.
The extrapolations about “deals” beyond those points of fact are just stylized rhetoric.
In any case, regardless of what remains in the trust, it comes down to a question of whether or not paying SS benefits at whatever level is a worthwhile expenditure of federal dollars, like anything else the federal government spends money on.
I fundamentally disagree with this, particularly in the context that we’re talking about.
Basically what it comes down to is yes, we all agreed to put money aside, yes we all agreed to invest the money in federal bonds to be redeemed 30 or so years hence (i.e., now), but no, now we don’t want to pay them back.
That’s a big “screw you” to all of the people who signed on to pay at an increased rate, many of them for their entire working lives.
It’s bad faith. And to the degree that it’s based on a claim that SS is “unsustainable” and some kind of fiscal disaster waiting the happen, it’s a lie.
Of all of the programs the feds run, SS is probably the most sustainable and is certainly one of the best run.
We just don’t want to pay our debts.
We spent the money, now we have to pay it back. You can call it an “accounting trick” if you like, but that’s what we’re talking about.
What’s funny to me is that it’s always people on the left side of the aisle who are accused of being fiscally irresponsible.
In any case, regardless of what remains in the trust, it comes down to a question of whether or not paying SS benefits at whatever level is a worthwhile expenditure of federal dollars, like anything else the federal government spends money on.
I fundamentally disagree with this, particularly in the context that we’re talking about.
Basically what it comes down to is yes, we all agreed to put money aside, yes we all agreed to invest the money in federal bonds to be redeemed 30 or so years hence (i.e., now), but no, now we don’t want to pay them back.
That’s a big “screw you” to all of the people who signed on to pay at an increased rate, many of them for their entire working lives.
It’s bad faith. And to the degree that it’s based on a claim that SS is “unsustainable” and some kind of fiscal disaster waiting the happen, it’s a lie.
Of all of the programs the feds run, SS is probably the most sustainable and is certainly one of the best run.
We just don’t want to pay our debts.
We spent the money, now we have to pay it back. You can call it an “accounting trick” if you like, but that’s what we’re talking about.
What’s funny to me is that it’s always people on the left side of the aisle who are accused of being fiscally irresponsible.
In any case, regardless of what remains in the trust, it comes down to a question of whether or not paying SS benefits at whatever level is a worthwhile expenditure of federal dollars, like anything else the federal government spends money on.
I fundamentally disagree with this, particularly in the context that we’re talking about.
Basically what it comes down to is yes, we all agreed to put money aside, yes we all agreed to invest the money in federal bonds to be redeemed 30 or so years hence (i.e., now), but no, now we don’t want to pay them back.
That’s a big “screw you” to all of the people who signed on to pay at an increased rate, many of them for their entire working lives.
It’s bad faith. And to the degree that it’s based on a claim that SS is “unsustainable” and some kind of fiscal disaster waiting the happen, it’s a lie.
Of all of the programs the feds run, SS is probably the most sustainable and is certainly one of the best run.
We just don’t want to pay our debts.
We spent the money, now we have to pay it back. You can call it an “accounting trick” if you like, but that’s what we’re talking about.
What’s funny to me is that it’s always people on the left side of the aisle who are accused of being fiscally irresponsible.
it behooves us to look ahead and ensure that the government spending (and SS specifically) is sustainable.
If I understand correctly, the CBO says that raising the SS tax rate about 2.5% on the current tax base – no change to the cap – makes the program sustainable out 75 years.
Which basically means in perpetuity, because that’s as far out as they plan.
If that’s too much, raise the cap and mitigate it somewhat. Or, make some adjustment to benefits, phased in over, say, 20 years, and mitigate it that way.
Or, if we want to get really crazy, make other policy changes to increase the rate of growth of the economy.
But no matter how you slice it, the “looming disaster” facing SS is small beer.
Unless I’m really missing something.
The debate about SS is really about 1,000 things other than SS.
it behooves us to look ahead and ensure that the government spending (and SS specifically) is sustainable.
If I understand correctly, the CBO says that raising the SS tax rate about 2.5% on the current tax base – no change to the cap – makes the program sustainable out 75 years.
Which basically means in perpetuity, because that’s as far out as they plan.
If that’s too much, raise the cap and mitigate it somewhat. Or, make some adjustment to benefits, phased in over, say, 20 years, and mitigate it that way.
Or, if we want to get really crazy, make other policy changes to increase the rate of growth of the economy.
But no matter how you slice it, the “looming disaster” facing SS is small beer.
Unless I’m really missing something.
The debate about SS is really about 1,000 things other than SS.
it behooves us to look ahead and ensure that the government spending (and SS specifically) is sustainable.
If I understand correctly, the CBO says that raising the SS tax rate about 2.5% on the current tax base – no change to the cap – makes the program sustainable out 75 years.
Which basically means in perpetuity, because that’s as far out as they plan.
If that’s too much, raise the cap and mitigate it somewhat. Or, make some adjustment to benefits, phased in over, say, 20 years, and mitigate it that way.
Or, if we want to get really crazy, make other policy changes to increase the rate of growth of the economy.
But no matter how you slice it, the “looming disaster” facing SS is small beer.
Unless I’m really missing something.
The debate about SS is really about 1,000 things other than SS.
russell:
If I understand correctly, the CBO says that raising the SS tax rate about 2.5% on the current tax base – no change to the cap – makes the program sustainable out 75 years.
The SSA, which I linked and quoted above, puts it at 2.83% (a relative increase of 22.8%). I think that’s doable, but the key aspect of this is that its across the entire tax base: it will hit low and mid income americans. And those tax increases will make it harder to find funding for the ‘discretionary’ parts of the budget. Things like education and infrastructure that are essential to positioning the US for continued growth. Which may be acceptable, but its something that should be discussed publicly, not dismissed as ‘minor.’
Or, make some adjustment to benefits, phased in over, say, 20 years, and mitigate it that way.
Yes, I think we need to make some adjustments to benefits going forward. Likely in combination with some increase in taxes in order to guarantee the program.
Look, the SSA puts cuts, if we only do them on people who are becoming eligible now, at 20.8% to maintain solvency. That’s a big cut. If that’s phased in over 20 years, its going to be even bigger.
And if we kick the can down the road on those tax increases and cuts, they are going to be steeper and deeper, respectively.
Or, if we want to get really crazy, make other policy changes to increase the rate of growth of the economy.
Seriously, you linked above a historical rate of about 2% growth per capita. If you think there’s a way to exceed that on a continuing basis, I’m all ears.
But no matter how you slice it, the “looming disaster” facing SS is small beer.
I’m not slicing any “looming disaster”. I don’t buy into panics. I do, however, buy into reasonable projections, like the ones put together by the SSA, which predicts substantial budgetary shortfalls.
We can wish them away with 3% growth in perpetuity, but bluntly, that’s just kicking the can down the road and making the situation worse when it is dealt with.
russell:
If I understand correctly, the CBO says that raising the SS tax rate about 2.5% on the current tax base – no change to the cap – makes the program sustainable out 75 years.
The SSA, which I linked and quoted above, puts it at 2.83% (a relative increase of 22.8%). I think that’s doable, but the key aspect of this is that its across the entire tax base: it will hit low and mid income americans. And those tax increases will make it harder to find funding for the ‘discretionary’ parts of the budget. Things like education and infrastructure that are essential to positioning the US for continued growth. Which may be acceptable, but its something that should be discussed publicly, not dismissed as ‘minor.’
Or, make some adjustment to benefits, phased in over, say, 20 years, and mitigate it that way.
Yes, I think we need to make some adjustments to benefits going forward. Likely in combination with some increase in taxes in order to guarantee the program.
Look, the SSA puts cuts, if we only do them on people who are becoming eligible now, at 20.8% to maintain solvency. That’s a big cut. If that’s phased in over 20 years, its going to be even bigger.
And if we kick the can down the road on those tax increases and cuts, they are going to be steeper and deeper, respectively.
Or, if we want to get really crazy, make other policy changes to increase the rate of growth of the economy.
Seriously, you linked above a historical rate of about 2% growth per capita. If you think there’s a way to exceed that on a continuing basis, I’m all ears.
But no matter how you slice it, the “looming disaster” facing SS is small beer.
I’m not slicing any “looming disaster”. I don’t buy into panics. I do, however, buy into reasonable projections, like the ones put together by the SSA, which predicts substantial budgetary shortfalls.
We can wish them away with 3% growth in perpetuity, but bluntly, that’s just kicking the can down the road and making the situation worse when it is dealt with.
russell:
If I understand correctly, the CBO says that raising the SS tax rate about 2.5% on the current tax base – no change to the cap – makes the program sustainable out 75 years.
The SSA, which I linked and quoted above, puts it at 2.83% (a relative increase of 22.8%). I think that’s doable, but the key aspect of this is that its across the entire tax base: it will hit low and mid income americans. And those tax increases will make it harder to find funding for the ‘discretionary’ parts of the budget. Things like education and infrastructure that are essential to positioning the US for continued growth. Which may be acceptable, but its something that should be discussed publicly, not dismissed as ‘minor.’
Or, make some adjustment to benefits, phased in over, say, 20 years, and mitigate it that way.
Yes, I think we need to make some adjustments to benefits going forward. Likely in combination with some increase in taxes in order to guarantee the program.
Look, the SSA puts cuts, if we only do them on people who are becoming eligible now, at 20.8% to maintain solvency. That’s a big cut. If that’s phased in over 20 years, its going to be even bigger.
And if we kick the can down the road on those tax increases and cuts, they are going to be steeper and deeper, respectively.
Or, if we want to get really crazy, make other policy changes to increase the rate of growth of the economy.
Seriously, you linked above a historical rate of about 2% growth per capita. If you think there’s a way to exceed that on a continuing basis, I’m all ears.
But no matter how you slice it, the “looming disaster” facing SS is small beer.
I’m not slicing any “looming disaster”. I don’t buy into panics. I do, however, buy into reasonable projections, like the ones put together by the SSA, which predicts substantial budgetary shortfalls.
We can wish them away with 3% growth in perpetuity, but bluntly, that’s just kicking the can down the road and making the situation worse when it is dealt with.
Basically what it comes down to is yes, we all agreed to put money aside, yes we all agreed to invest the money in federal bonds to be redeemed 30 or so years hence (i.e., now), but no, now we don’t want to pay them back.
What what comes down to? Not what I wrote. My point is that people should get benefits even if the trust fund were to be depleted. My point is that it would asinine and stupid (both! for emphasis!) not to pay benefits, whether the bonds existed or not.
Maybe I’m just not sufficiently hip to whatever (right-wing?) meme is out there to word things in a way that doesn’t look like the meme to people who are sufficiently hip to it … or something.
I’m not entirely sure what we’re not agreeing about.
Basically what it comes down to is yes, we all agreed to put money aside, yes we all agreed to invest the money in federal bonds to be redeemed 30 or so years hence (i.e., now), but no, now we don’t want to pay them back.
What what comes down to? Not what I wrote. My point is that people should get benefits even if the trust fund were to be depleted. My point is that it would asinine and stupid (both! for emphasis!) not to pay benefits, whether the bonds existed or not.
Maybe I’m just not sufficiently hip to whatever (right-wing?) meme is out there to word things in a way that doesn’t look like the meme to people who are sufficiently hip to it … or something.
I’m not entirely sure what we’re not agreeing about.
Basically what it comes down to is yes, we all agreed to put money aside, yes we all agreed to invest the money in federal bonds to be redeemed 30 or so years hence (i.e., now), but no, now we don’t want to pay them back.
What what comes down to? Not what I wrote. My point is that people should get benefits even if the trust fund were to be depleted. My point is that it would asinine and stupid (both! for emphasis!) not to pay benefits, whether the bonds existed or not.
Maybe I’m just not sufficiently hip to whatever (right-wing?) meme is out there to word things in a way that doesn’t look like the meme to people who are sufficiently hip to it … or something.
I’m not entirely sure what we’re not agreeing about.
“And real real rates, which take into account the fact that the government is lying about the rate of inflation. (As anybody who buys groceries is aware.) ”
This is a lie; see Krugman’s columns for more details, and links to other research. For example, the Billion Prices project agrees well with the official inflation rate.
“And real real rates, which take into account the fact that the government is lying about the rate of inflation. (As anybody who buys groceries is aware.) ”
This is a lie; see Krugman’s columns for more details, and links to other research. For example, the Billion Prices project agrees well with the official inflation rate.
“And real real rates, which take into account the fact that the government is lying about the rate of inflation. (As anybody who buys groceries is aware.) ”
This is a lie; see Krugman’s columns for more details, and links to other research. For example, the Billion Prices project agrees well with the official inflation rate.
it will hit low and mid income americans.
OK, raise the cap instead. Or, some of each.
And those tax increases will make it harder to find funding for the ‘discretionary’ parts of the budget. Things like education and infrastructure that are essential to positioning the US for continued growth.
My personal point of view is that we should rescind the Bush tax cuts and pay for all of the above.
I’m not trying to dodge your point, I’m just trying to address it appropriately.
We are short in the general fund because – amazingly enough – the tax cuts that were predicted to create huge deficits, actually did create huge deficits.
Fix that, and leave SS alone.
Which may be acceptable, but its something that should be discussed publicly, not dismissed as ‘minor.’
Again, my personal point of view is that problems that can be solved by low-single-digit increases in tax rates are not large problems.
If taxes only ever went up monotonically, I’d feel otherwise. They don’t.
the SSA puts cuts, if we only do them on people who are becoming eligible now, at 20.8% to maintain solvency.
My understanding is that, assuming the trust fund notes are paid, the retirement program is solvent until 2036.
The disability program, not so, it’s going to run out of money next year. So, yikes, for the disability fund.
But broad 20% cuts would, I think, be a matter of the general fund failing to repay the SS bonds.
Seriously, you linked above a historical rate of about 2% growth per capita. If you think there’s a way to exceed that on a continuing basis, I’m all ears.
Put more of the 2% growth in the pockets of the folks who are actually paying the SS tax. That will result in a greater than 2% increase in the revenue to SS.
I’m not entirely sure what we’re not agreeing about.
Yeah, it’s hard to keep track of it all.
I just took exception to thompson’s citing your comment to the effect of it all being federal money.
It is all federal money, I just object to imposing cuts on the SS program to backstop fiscal irresponsibility in the management of the general fund.
Find something else to cut. Quit fighting wars off budget via “supplementals”, for starters.
it will hit low and mid income americans.
OK, raise the cap instead. Or, some of each.
And those tax increases will make it harder to find funding for the ‘discretionary’ parts of the budget. Things like education and infrastructure that are essential to positioning the US for continued growth.
My personal point of view is that we should rescind the Bush tax cuts and pay for all of the above.
I’m not trying to dodge your point, I’m just trying to address it appropriately.
We are short in the general fund because – amazingly enough – the tax cuts that were predicted to create huge deficits, actually did create huge deficits.
Fix that, and leave SS alone.
Which may be acceptable, but its something that should be discussed publicly, not dismissed as ‘minor.’
Again, my personal point of view is that problems that can be solved by low-single-digit increases in tax rates are not large problems.
If taxes only ever went up monotonically, I’d feel otherwise. They don’t.
the SSA puts cuts, if we only do them on people who are becoming eligible now, at 20.8% to maintain solvency.
My understanding is that, assuming the trust fund notes are paid, the retirement program is solvent until 2036.
The disability program, not so, it’s going to run out of money next year. So, yikes, for the disability fund.
But broad 20% cuts would, I think, be a matter of the general fund failing to repay the SS bonds.
Seriously, you linked above a historical rate of about 2% growth per capita. If you think there’s a way to exceed that on a continuing basis, I’m all ears.
Put more of the 2% growth in the pockets of the folks who are actually paying the SS tax. That will result in a greater than 2% increase in the revenue to SS.
I’m not entirely sure what we’re not agreeing about.
Yeah, it’s hard to keep track of it all.
I just took exception to thompson’s citing your comment to the effect of it all being federal money.
It is all federal money, I just object to imposing cuts on the SS program to backstop fiscal irresponsibility in the management of the general fund.
Find something else to cut. Quit fighting wars off budget via “supplementals”, for starters.
it will hit low and mid income americans.
OK, raise the cap instead. Or, some of each.
And those tax increases will make it harder to find funding for the ‘discretionary’ parts of the budget. Things like education and infrastructure that are essential to positioning the US for continued growth.
My personal point of view is that we should rescind the Bush tax cuts and pay for all of the above.
I’m not trying to dodge your point, I’m just trying to address it appropriately.
We are short in the general fund because – amazingly enough – the tax cuts that were predicted to create huge deficits, actually did create huge deficits.
Fix that, and leave SS alone.
Which may be acceptable, but its something that should be discussed publicly, not dismissed as ‘minor.’
Again, my personal point of view is that problems that can be solved by low-single-digit increases in tax rates are not large problems.
If taxes only ever went up monotonically, I’d feel otherwise. They don’t.
the SSA puts cuts, if we only do them on people who are becoming eligible now, at 20.8% to maintain solvency.
My understanding is that, assuming the trust fund notes are paid, the retirement program is solvent until 2036.
The disability program, not so, it’s going to run out of money next year. So, yikes, for the disability fund.
But broad 20% cuts would, I think, be a matter of the general fund failing to repay the SS bonds.
Seriously, you linked above a historical rate of about 2% growth per capita. If you think there’s a way to exceed that on a continuing basis, I’m all ears.
Put more of the 2% growth in the pockets of the folks who are actually paying the SS tax. That will result in a greater than 2% increase in the revenue to SS.
I’m not entirely sure what we’re not agreeing about.
Yeah, it’s hard to keep track of it all.
I just took exception to thompson’s citing your comment to the effect of it all being federal money.
It is all federal money, I just object to imposing cuts on the SS program to backstop fiscal irresponsibility in the management of the general fund.
Find something else to cut. Quit fighting wars off budget via “supplementals”, for starters.
Look, the SSA puts cuts, if we only do them on people who are becoming eligible now, at 20.8% to maintain solvency.
Look, are you arguing in the context of the (a.)actual current law; or (b.) in the context that Social Security is just another federal program like any other program?
Please tell us which.
If (a.) Raising the cap and increasing only slightly the wage tax will solve this so called problem in the context of the actual law in place.
If (b.) The program’s ‘solvency’ is not an issue at all. For starters, it makes no sense to deem a federal program “insolvent”. Do we undertake projections of future defense spending needs and then throw our hands in the air and declare the Department insolvent? Why, no, we do not.
In fact, given the current slack condition of the economy, we should be increasing government spending to promote economic growth now and going forward. We should be discussing how much to raise benefits, not how much to cut them.
So pick one. Then we can have a discussion.
But we cannot have one if you continually go back and forth claiming at one point that the program is “insolvent” and then turn around and whine that “the money has to come from somewhere”.
Again, that is the essential dishonesty of the crisis mongers’ argument.
Look, the SSA puts cuts, if we only do them on people who are becoming eligible now, at 20.8% to maintain solvency.
Look, are you arguing in the context of the (a.)actual current law; or (b.) in the context that Social Security is just another federal program like any other program?
Please tell us which.
If (a.) Raising the cap and increasing only slightly the wage tax will solve this so called problem in the context of the actual law in place.
If (b.) The program’s ‘solvency’ is not an issue at all. For starters, it makes no sense to deem a federal program “insolvent”. Do we undertake projections of future defense spending needs and then throw our hands in the air and declare the Department insolvent? Why, no, we do not.
In fact, given the current slack condition of the economy, we should be increasing government spending to promote economic growth now and going forward. We should be discussing how much to raise benefits, not how much to cut them.
So pick one. Then we can have a discussion.
But we cannot have one if you continually go back and forth claiming at one point that the program is “insolvent” and then turn around and whine that “the money has to come from somewhere”.
Again, that is the essential dishonesty of the crisis mongers’ argument.
Look, the SSA puts cuts, if we only do them on people who are becoming eligible now, at 20.8% to maintain solvency.
Look, are you arguing in the context of the (a.)actual current law; or (b.) in the context that Social Security is just another federal program like any other program?
Please tell us which.
If (a.) Raising the cap and increasing only slightly the wage tax will solve this so called problem in the context of the actual law in place.
If (b.) The program’s ‘solvency’ is not an issue at all. For starters, it makes no sense to deem a federal program “insolvent”. Do we undertake projections of future defense spending needs and then throw our hands in the air and declare the Department insolvent? Why, no, we do not.
In fact, given the current slack condition of the economy, we should be increasing government spending to promote economic growth now and going forward. We should be discussing how much to raise benefits, not how much to cut them.
So pick one. Then we can have a discussion.
But we cannot have one if you continually go back and forth claiming at one point that the program is “insolvent” and then turn around and whine that “the money has to come from somewhere”.
Again, that is the essential dishonesty of the crisis mongers’ argument.
Funny how conservatives whine about the poors not having “skin in the game”. Yet most poors work. Most poors thus contribute 12+ per cent (yes, yes, I know that includes the employer’s “contribution”) of their wages to the federal government. For decades this was more than was needed to sustain the program.
The rest of it sustained the General Fund.
Now a reasonable person would say that it appears the General Fund has a sustainability problem, not Social Security.
But the Megan Mcardles of the world are not reasonable.
Funny how conservatives whine about the poors not having “skin in the game”. Yet most poors work. Most poors thus contribute 12+ per cent (yes, yes, I know that includes the employer’s “contribution”) of their wages to the federal government. For decades this was more than was needed to sustain the program.
The rest of it sustained the General Fund.
Now a reasonable person would say that it appears the General Fund has a sustainability problem, not Social Security.
But the Megan Mcardles of the world are not reasonable.
Funny how conservatives whine about the poors not having “skin in the game”. Yet most poors work. Most poors thus contribute 12+ per cent (yes, yes, I know that includes the employer’s “contribution”) of their wages to the federal government. For decades this was more than was needed to sustain the program.
The rest of it sustained the General Fund.
Now a reasonable person would say that it appears the General Fund has a sustainability problem, not Social Security.
But the Megan Mcardles of the world are not reasonable.
russell:
OK, raise the cap instead. Or, some of each.
The cap, as mentioned earlier, is not sufficient, especially if it stays coupled to benefit payouts. Decoupling the increased taxation from benefits, and/or means-testing, I think is a very practical way of increasing solvency. But there are political objections, etc.
I think some of each is a good way to go.
I’m not trying to dodge your point, I’m just trying to address it appropriately.
I appreciate that, in both senses of the word. So, I probably want an overall government budget than is smaller than you have in mind. However, in the near term, its unlikely our spending is going to come in line with my vision for America, so I’ll settle for some form of increased revenues and fight the spending battle another day.
In that regard, I think the bush tax cuts are a fine target. I’d be interested to see numbers for what you are talking about…how much excess revenues would be raised, etc, and how that would compare to our current deficit. I don’t think they are sufficient to eliminate our deficit or start paying down our debt, let alone infrastructure/education/etc, but again, I’d be interested in numbers regarding what you were thinking.
I’d also, as I said in a previous thread, be very interested in reforming our loophole rich tax code.
Again, my personal point of view is that problems that can be solved by low-single-digit increases in tax rates are not large problems.
Respectfully, 2.83% is over $1000 for someone making ~40K a year. That’s an appreciable chunk of their income.
Further, it’s low-single percentages now, but the longer its unaddressed, the higher those numbers will be.
But broad 20% cuts would, I think, be a matter of the general fund failing to repay the SS bonds.
My understanding, based on the SSA report (highlights here: http://www.ssa.gov/oact/tr/2014/II_A_highlights.html ), is that is the Trust Fund, which is held in special issue U.S. Treasury securities, would need to institute those, or similar cuts, or run out of money.
If there is part of the SSA analysis you find insufficient, it would be helpful to me if you could point out where, and provide some numbers.
Further, it doesn’t really matter to me whether the money is ‘paid back’ by the general fund or not. It matters that it is a liability that we either need to reduce or find a way to fund.
I just took exception to thompson’s citing your comment to the effect of it all being federal money.
It is all federal money
Great. So you took exception to me saying it is all federal money, but its a point you seem to agree on?
Find something else to cut. Quit fighting wars off budget via “supplementals”, for starters.
Bluntly, I’m not a war hawk. I have, on this board, called for reductions in defense spending and overseas engagements. And if I haven’t been obvious enough about previously, I say that unequivocally now.
Because honestly, it’s a little tiring to be lumped into the ‘fighting wars off budget via “supplementals”‘ camp.
I can’t go back in time and make Iraq not happen. It happened, and its impact on our budget is only one of the many damaging aspects of its legacy. However, its money we’ve spent, and we can’t get it back. If you want me to stipulate that it is part of the problem (http://www.gao.gov/financial_pdfs/citizensguide2008.pdf ) we have going forward, consider it stipulated.
If you want to take exception to me, I don’t mind. Take it to something I said, rather than tying me to a budgetary position I do not hold.
russell:
OK, raise the cap instead. Or, some of each.
The cap, as mentioned earlier, is not sufficient, especially if it stays coupled to benefit payouts. Decoupling the increased taxation from benefits, and/or means-testing, I think is a very practical way of increasing solvency. But there are political objections, etc.
I think some of each is a good way to go.
I’m not trying to dodge your point, I’m just trying to address it appropriately.
I appreciate that, in both senses of the word. So, I probably want an overall government budget than is smaller than you have in mind. However, in the near term, its unlikely our spending is going to come in line with my vision for America, so I’ll settle for some form of increased revenues and fight the spending battle another day.
In that regard, I think the bush tax cuts are a fine target. I’d be interested to see numbers for what you are talking about…how much excess revenues would be raised, etc, and how that would compare to our current deficit. I don’t think they are sufficient to eliminate our deficit or start paying down our debt, let alone infrastructure/education/etc, but again, I’d be interested in numbers regarding what you were thinking.
I’d also, as I said in a previous thread, be very interested in reforming our loophole rich tax code.
Again, my personal point of view is that problems that can be solved by low-single-digit increases in tax rates are not large problems.
Respectfully, 2.83% is over $1000 for someone making ~40K a year. That’s an appreciable chunk of their income.
Further, it’s low-single percentages now, but the longer its unaddressed, the higher those numbers will be.
But broad 20% cuts would, I think, be a matter of the general fund failing to repay the SS bonds.
My understanding, based on the SSA report (highlights here: http://www.ssa.gov/oact/tr/2014/II_A_highlights.html ), is that is the Trust Fund, which is held in special issue U.S. Treasury securities, would need to institute those, or similar cuts, or run out of money.
If there is part of the SSA analysis you find insufficient, it would be helpful to me if you could point out where, and provide some numbers.
Further, it doesn’t really matter to me whether the money is ‘paid back’ by the general fund or not. It matters that it is a liability that we either need to reduce or find a way to fund.
I just took exception to thompson’s citing your comment to the effect of it all being federal money.
It is all federal money
Great. So you took exception to me saying it is all federal money, but its a point you seem to agree on?
Find something else to cut. Quit fighting wars off budget via “supplementals”, for starters.
Bluntly, I’m not a war hawk. I have, on this board, called for reductions in defense spending and overseas engagements. And if I haven’t been obvious enough about previously, I say that unequivocally now.
Because honestly, it’s a little tiring to be lumped into the ‘fighting wars off budget via “supplementals”‘ camp.
I can’t go back in time and make Iraq not happen. It happened, and its impact on our budget is only one of the many damaging aspects of its legacy. However, its money we’ve spent, and we can’t get it back. If you want me to stipulate that it is part of the problem (http://www.gao.gov/financial_pdfs/citizensguide2008.pdf ) we have going forward, consider it stipulated.
If you want to take exception to me, I don’t mind. Take it to something I said, rather than tying me to a budgetary position I do not hold.
russell:
OK, raise the cap instead. Or, some of each.
The cap, as mentioned earlier, is not sufficient, especially if it stays coupled to benefit payouts. Decoupling the increased taxation from benefits, and/or means-testing, I think is a very practical way of increasing solvency. But there are political objections, etc.
I think some of each is a good way to go.
I’m not trying to dodge your point, I’m just trying to address it appropriately.
I appreciate that, in both senses of the word. So, I probably want an overall government budget than is smaller than you have in mind. However, in the near term, its unlikely our spending is going to come in line with my vision for America, so I’ll settle for some form of increased revenues and fight the spending battle another day.
In that regard, I think the bush tax cuts are a fine target. I’d be interested to see numbers for what you are talking about…how much excess revenues would be raised, etc, and how that would compare to our current deficit. I don’t think they are sufficient to eliminate our deficit or start paying down our debt, let alone infrastructure/education/etc, but again, I’d be interested in numbers regarding what you were thinking.
I’d also, as I said in a previous thread, be very interested in reforming our loophole rich tax code.
Again, my personal point of view is that problems that can be solved by low-single-digit increases in tax rates are not large problems.
Respectfully, 2.83% is over $1000 for someone making ~40K a year. That’s an appreciable chunk of their income.
Further, it’s low-single percentages now, but the longer its unaddressed, the higher those numbers will be.
But broad 20% cuts would, I think, be a matter of the general fund failing to repay the SS bonds.
My understanding, based on the SSA report (highlights here: http://www.ssa.gov/oact/tr/2014/II_A_highlights.html ), is that is the Trust Fund, which is held in special issue U.S. Treasury securities, would need to institute those, or similar cuts, or run out of money.
If there is part of the SSA analysis you find insufficient, it would be helpful to me if you could point out where, and provide some numbers.
Further, it doesn’t really matter to me whether the money is ‘paid back’ by the general fund or not. It matters that it is a liability that we either need to reduce or find a way to fund.
I just took exception to thompson’s citing your comment to the effect of it all being federal money.
It is all federal money
Great. So you took exception to me saying it is all federal money, but its a point you seem to agree on?
Find something else to cut. Quit fighting wars off budget via “supplementals”, for starters.
Bluntly, I’m not a war hawk. I have, on this board, called for reductions in defense spending and overseas engagements. And if I haven’t been obvious enough about previously, I say that unequivocally now.
Because honestly, it’s a little tiring to be lumped into the ‘fighting wars off budget via “supplementals”‘ camp.
I can’t go back in time and make Iraq not happen. It happened, and its impact on our budget is only one of the many damaging aspects of its legacy. However, its money we’ve spent, and we can’t get it back. If you want me to stipulate that it is part of the problem (http://www.gao.gov/financial_pdfs/citizensguide2008.pdf ) we have going forward, consider it stipulated.
If you want to take exception to me, I don’t mind. Take it to something I said, rather than tying me to a budgetary position I do not hold.
Fair enough, Thompson.
Still it would be a touch easier to listen to others – the Petersons and McArdles of the world – start their arguments by admitting that the whole Iraq business was a giant f—up on many levels, including the financial, and suggest that without it the whole “entitlements problem” would be easy to deal with.
Fair enough, Thompson.
Still it would be a touch easier to listen to others – the Petersons and McArdles of the world – start their arguments by admitting that the whole Iraq business was a giant f—up on many levels, including the financial, and suggest that without it the whole “entitlements problem” would be easy to deal with.
Fair enough, Thompson.
Still it would be a touch easier to listen to others – the Petersons and McArdles of the world – start their arguments by admitting that the whole Iraq business was a giant f—up on many levels, including the financial, and suggest that without it the whole “entitlements problem” would be easy to deal with.
Perhaps someone can explain to me why the link to payout benefits should be linked to the amount contributed beyond the current maximum. It isn’t at all clear that those making more than the current cap are going to be reduced to poverty in their old age. Or even to a painful constraint on their lifestyle. So just continue to pay at the current maximum rate, while eliminating the cap onwhat earnings are taxed.
The purpose of Social Security is not, after all, to allow everyone to continue living at their accustomed level. It is to allow everyone to avoid abject poverty in their old age.
Perhaps someone can explain to me why the link to payout benefits should be linked to the amount contributed beyond the current maximum. It isn’t at all clear that those making more than the current cap are going to be reduced to poverty in their old age. Or even to a painful constraint on their lifestyle. So just continue to pay at the current maximum rate, while eliminating the cap onwhat earnings are taxed.
The purpose of Social Security is not, after all, to allow everyone to continue living at their accustomed level. It is to allow everyone to avoid abject poverty in their old age.
Perhaps someone can explain to me why the link to payout benefits should be linked to the amount contributed beyond the current maximum. It isn’t at all clear that those making more than the current cap are going to be reduced to poverty in their old age. Or even to a painful constraint on their lifestyle. So just continue to pay at the current maximum rate, while eliminating the cap onwhat earnings are taxed.
The purpose of Social Security is not, after all, to allow everyone to continue living at their accustomed level. It is to allow everyone to avoid abject poverty in their old age.
I think some of each is a good way to go.
Yes, that’s all I was trying to say with the “raise the cap” comment.
If 2.8% on the current base is not acceptable, especially because of its regressive nature, we could, potentially, raise the cap some to spread it over a larger base.
I agree that the best way to thread the needle will probably be some combination of things.
So, I probably want an overall government budget than is smaller than you have in mind.
I’m sure I’d be fine with a smaller overall government budget as well. Who likes to pay taxes?
My point is that, due to imprudent choices, we owe a lot of money. So, for some period of time, we should increase revenue, until we’re closer to where we want to be in terms of debt.
I’m not freaked out by the current debt levels, but I think it would be helpful from a “keep it honest” point of view to consider funding operations from revenue rather than further borrowing.
If we’re even having a conversation like “which should we neglect, infrastructure or fulfilling current legal obligations to retirees?”, then we’re not being honest about whether our revenues match what we actually want government to do.
The “we” in that is rhetorical, not directed at you.
I generally object to arguments by analogy, but in case it helps clarify – in my household budget, I treat money I set aside for retirement differently than money I budget for home repairs, and from money I budget to pay the mortgage, and from money I budget to buy new clothes, etc etc etc.
It’s not all fungible.
I’m sure you get all of this.
So you took exception to me saying it is all federal money, but its a point you seem to agree on?
I guess the point I’m struggling to make here is that *all federal money is not the same*.
If you set up a separate funding regime for certain programs, keep it off the general budget, make specific provisions to address expected shortfalls *in those programs*, etc., then it’s not the same as the other federal money.
From a totally macro point of view, it all comes out of some kind of taxes, but from point of view of the obligations and commitments that were made with regard to the different programs and funding streams, IMO it’s incorrect to see it all as one big fungible bucket.
it’s a little tiring to be lumped into the ‘fighting wars off budget via “supplementals”‘ camp.
I’m absolutely not doing that, apologies if that wasn’t clear.
My comment about wars being fought via supplementals was basically just me citing what I see as an example of fiscal imprudence. More than imprudence, a kind of recklessness.
I would hardly see you as supporting anything like that, I’m sorry to have not made that clear.
Yes, that money has been spent, and spent poorly. If we need to tighten our belts to make up for it, I’m fine with that. I don’t want it coming out of SS, because it’s not a problem that SS caused.
I think some of each is a good way to go.
Yes, that’s all I was trying to say with the “raise the cap” comment.
If 2.8% on the current base is not acceptable, especially because of its regressive nature, we could, potentially, raise the cap some to spread it over a larger base.
I agree that the best way to thread the needle will probably be some combination of things.
So, I probably want an overall government budget than is smaller than you have in mind.
I’m sure I’d be fine with a smaller overall government budget as well. Who likes to pay taxes?
My point is that, due to imprudent choices, we owe a lot of money. So, for some period of time, we should increase revenue, until we’re closer to where we want to be in terms of debt.
I’m not freaked out by the current debt levels, but I think it would be helpful from a “keep it honest” point of view to consider funding operations from revenue rather than further borrowing.
If we’re even having a conversation like “which should we neglect, infrastructure or fulfilling current legal obligations to retirees?”, then we’re not being honest about whether our revenues match what we actually want government to do.
The “we” in that is rhetorical, not directed at you.
I generally object to arguments by analogy, but in case it helps clarify – in my household budget, I treat money I set aside for retirement differently than money I budget for home repairs, and from money I budget to pay the mortgage, and from money I budget to buy new clothes, etc etc etc.
It’s not all fungible.
I’m sure you get all of this.
So you took exception to me saying it is all federal money, but its a point you seem to agree on?
I guess the point I’m struggling to make here is that *all federal money is not the same*.
If you set up a separate funding regime for certain programs, keep it off the general budget, make specific provisions to address expected shortfalls *in those programs*, etc., then it’s not the same as the other federal money.
From a totally macro point of view, it all comes out of some kind of taxes, but from point of view of the obligations and commitments that were made with regard to the different programs and funding streams, IMO it’s incorrect to see it all as one big fungible bucket.
it’s a little tiring to be lumped into the ‘fighting wars off budget via “supplementals”‘ camp.
I’m absolutely not doing that, apologies if that wasn’t clear.
My comment about wars being fought via supplementals was basically just me citing what I see as an example of fiscal imprudence. More than imprudence, a kind of recklessness.
I would hardly see you as supporting anything like that, I’m sorry to have not made that clear.
Yes, that money has been spent, and spent poorly. If we need to tighten our belts to make up for it, I’m fine with that. I don’t want it coming out of SS, because it’s not a problem that SS caused.
I think some of each is a good way to go.
Yes, that’s all I was trying to say with the “raise the cap” comment.
If 2.8% on the current base is not acceptable, especially because of its regressive nature, we could, potentially, raise the cap some to spread it over a larger base.
I agree that the best way to thread the needle will probably be some combination of things.
So, I probably want an overall government budget than is smaller than you have in mind.
I’m sure I’d be fine with a smaller overall government budget as well. Who likes to pay taxes?
My point is that, due to imprudent choices, we owe a lot of money. So, for some period of time, we should increase revenue, until we’re closer to where we want to be in terms of debt.
I’m not freaked out by the current debt levels, but I think it would be helpful from a “keep it honest” point of view to consider funding operations from revenue rather than further borrowing.
If we’re even having a conversation like “which should we neglect, infrastructure or fulfilling current legal obligations to retirees?”, then we’re not being honest about whether our revenues match what we actually want government to do.
The “we” in that is rhetorical, not directed at you.
I generally object to arguments by analogy, but in case it helps clarify – in my household budget, I treat money I set aside for retirement differently than money I budget for home repairs, and from money I budget to pay the mortgage, and from money I budget to buy new clothes, etc etc etc.
It’s not all fungible.
I’m sure you get all of this.
So you took exception to me saying it is all federal money, but its a point you seem to agree on?
I guess the point I’m struggling to make here is that *all federal money is not the same*.
If you set up a separate funding regime for certain programs, keep it off the general budget, make specific provisions to address expected shortfalls *in those programs*, etc., then it’s not the same as the other federal money.
From a totally macro point of view, it all comes out of some kind of taxes, but from point of view of the obligations and commitments that were made with regard to the different programs and funding streams, IMO it’s incorrect to see it all as one big fungible bucket.
it’s a little tiring to be lumped into the ‘fighting wars off budget via “supplementals”‘ camp.
I’m absolutely not doing that, apologies if that wasn’t clear.
My comment about wars being fought via supplementals was basically just me citing what I see as an example of fiscal imprudence. More than imprudence, a kind of recklessness.
I would hardly see you as supporting anything like that, I’m sorry to have not made that clear.
Yes, that money has been spent, and spent poorly. If we need to tighten our belts to make up for it, I’m fine with that. I don’t want it coming out of SS, because it’s not a problem that SS caused.
Cost of Bush Tax Cuts
Cost of Bush Tax Cuts
Cost of Bush Tax Cuts
Respectfully, 2.83% is over $1000 for someone making ~40K a year. That’s an appreciable chunk of their income.
A rejoinder.
What’s really driving the projected long term Social Security shortfall?
You may be surprised.
Respectfully, 2.83% is over $1000 for someone making ~40K a year. That’s an appreciable chunk of their income.
A rejoinder.
What’s really driving the projected long term Social Security shortfall?
You may be surprised.
Respectfully, 2.83% is over $1000 for someone making ~40K a year. That’s an appreciable chunk of their income.
A rejoinder.
What’s really driving the projected long term Social Security shortfall?
You may be surprised.
bymotov:
Still it would be a touch easier to listen to others – the Petersons and McArdles of the world
I get that, I really do. Everything is connected, and people who have a stance A on subject B often have a contradictory stance X on subject Y. It’s frustrating as all get out.
If it helps, I’ll say it: Iraq was a huge f*** up. In terms of lives, in terms of policy, and in terms of budget. I can’t change any of that, and I don’t think saying that changes much going forward. It’s one of many choices we’ve made and have to deal with the legacy of.
Two budgetary wrongs don’t make a right.
russell:
I really have no disagreements with your post. And agree with this strongly:
then we’re not being honest about whether our revenues match what we actually want government to do.
That really is a point I’ve been thinking but haven’t artfully put into words.
From a totally macro point of view, it all comes out of some kind of taxes, but from point of view of the obligations and commitments that were made with regard to the different programs and funding streams, IMO it’s incorrect to see it all as one big fungible bucket.
Yes, granted. And if there was really one point I was making with the totally macro view, it would be this:
The money has to come from somewhere. If its increased taxes, its increased taxes, and that should be stated openly and publicly, so the public can have an informed debate.
I’m absolutely not doing that, apologies if that wasn’t clear.
No problem. I misread your comment, but I appreciate the clarification.
More than imprudence, a kind of recklessness.
No argument here.
If we need to tighten our belts to make up for it, I’m fine with that. I don’t want it coming out of SS, because it’s not a problem that SS caused.
If your stance is that SS is unchanged, but we will tap X, Y, Z sources of revenue and tighten spending in A, B, C ways, I have no complaints. Assuming the math adds up and it doesn’t rely on unrealistic expectations about the future.
I do, however, want math to be part of the public discussion. FWIW, I’ve done my best to provide links to actuarial projections and analysis of what some of those numbers might look like.
bymotov:
Still it would be a touch easier to listen to others – the Petersons and McArdles of the world
I get that, I really do. Everything is connected, and people who have a stance A on subject B often have a contradictory stance X on subject Y. It’s frustrating as all get out.
If it helps, I’ll say it: Iraq was a huge f*** up. In terms of lives, in terms of policy, and in terms of budget. I can’t change any of that, and I don’t think saying that changes much going forward. It’s one of many choices we’ve made and have to deal with the legacy of.
Two budgetary wrongs don’t make a right.
russell:
I really have no disagreements with your post. And agree with this strongly:
then we’re not being honest about whether our revenues match what we actually want government to do.
That really is a point I’ve been thinking but haven’t artfully put into words.
From a totally macro point of view, it all comes out of some kind of taxes, but from point of view of the obligations and commitments that were made with regard to the different programs and funding streams, IMO it’s incorrect to see it all as one big fungible bucket.
Yes, granted. And if there was really one point I was making with the totally macro view, it would be this:
The money has to come from somewhere. If its increased taxes, its increased taxes, and that should be stated openly and publicly, so the public can have an informed debate.
I’m absolutely not doing that, apologies if that wasn’t clear.
No problem. I misread your comment, but I appreciate the clarification.
More than imprudence, a kind of recklessness.
No argument here.
If we need to tighten our belts to make up for it, I’m fine with that. I don’t want it coming out of SS, because it’s not a problem that SS caused.
If your stance is that SS is unchanged, but we will tap X, Y, Z sources of revenue and tighten spending in A, B, C ways, I have no complaints. Assuming the math adds up and it doesn’t rely on unrealistic expectations about the future.
I do, however, want math to be part of the public discussion. FWIW, I’ve done my best to provide links to actuarial projections and analysis of what some of those numbers might look like.
bymotov:
Still it would be a touch easier to listen to others – the Petersons and McArdles of the world
I get that, I really do. Everything is connected, and people who have a stance A on subject B often have a contradictory stance X on subject Y. It’s frustrating as all get out.
If it helps, I’ll say it: Iraq was a huge f*** up. In terms of lives, in terms of policy, and in terms of budget. I can’t change any of that, and I don’t think saying that changes much going forward. It’s one of many choices we’ve made and have to deal with the legacy of.
Two budgetary wrongs don’t make a right.
russell:
I really have no disagreements with your post. And agree with this strongly:
then we’re not being honest about whether our revenues match what we actually want government to do.
That really is a point I’ve been thinking but haven’t artfully put into words.
From a totally macro point of view, it all comes out of some kind of taxes, but from point of view of the obligations and commitments that were made with regard to the different programs and funding streams, IMO it’s incorrect to see it all as one big fungible bucket.
Yes, granted. And if there was really one point I was making with the totally macro view, it would be this:
The money has to come from somewhere. If its increased taxes, its increased taxes, and that should be stated openly and publicly, so the public can have an informed debate.
I’m absolutely not doing that, apologies if that wasn’t clear.
No problem. I misread your comment, but I appreciate the clarification.
More than imprudence, a kind of recklessness.
No argument here.
If we need to tighten our belts to make up for it, I’m fine with that. I don’t want it coming out of SS, because it’s not a problem that SS caused.
If your stance is that SS is unchanged, but we will tap X, Y, Z sources of revenue and tighten spending in A, B, C ways, I have no complaints. Assuming the math adds up and it doesn’t rely on unrealistic expectations about the future.
I do, however, want math to be part of the public discussion. FWIW, I’ve done my best to provide links to actuarial projections and analysis of what some of those numbers might look like.
I have a question for liberals, moderates, and conservatives:
Do you have parents living? If they could not survive without the SS benefit they’re receiving, would you let them starve?
I’m guessing: no, you would not let them starve. You would dig into your own pocket to support them.
Now consider: the money you’d spend on your retired parents would come out of the same pocket as you pay taxes from.
On the national scale, what retirees get to consume, workers have to produce. Whether that “transfer” is done by government mediation (i.e. taxation), private contract (e.g. dividends and interest), or family obligation (i.e. paying your own parents’ bills) makes no difference: workers don’t get to consume some of what they produce.
You can argue that retirees live too high on the hog if you like — that they get to consume too much. But unless you’re willing to make that argument explicitly, it’s almost pointless to obsess about whether the cost is borne by The Government or by The Nation. A solvent Government of an insolvent Nation is no better than an insolvent Government of a solvent Nation, except to ideologues.
–TP
I have a question for liberals, moderates, and conservatives:
Do you have parents living? If they could not survive without the SS benefit they’re receiving, would you let them starve?
I’m guessing: no, you would not let them starve. You would dig into your own pocket to support them.
Now consider: the money you’d spend on your retired parents would come out of the same pocket as you pay taxes from.
On the national scale, what retirees get to consume, workers have to produce. Whether that “transfer” is done by government mediation (i.e. taxation), private contract (e.g. dividends and interest), or family obligation (i.e. paying your own parents’ bills) makes no difference: workers don’t get to consume some of what they produce.
You can argue that retirees live too high on the hog if you like — that they get to consume too much. But unless you’re willing to make that argument explicitly, it’s almost pointless to obsess about whether the cost is borne by The Government or by The Nation. A solvent Government of an insolvent Nation is no better than an insolvent Government of a solvent Nation, except to ideologues.
–TP
I have a question for liberals, moderates, and conservatives:
Do you have parents living? If they could not survive without the SS benefit they’re receiving, would you let them starve?
I’m guessing: no, you would not let them starve. You would dig into your own pocket to support them.
Now consider: the money you’d spend on your retired parents would come out of the same pocket as you pay taxes from.
On the national scale, what retirees get to consume, workers have to produce. Whether that “transfer” is done by government mediation (i.e. taxation), private contract (e.g. dividends and interest), or family obligation (i.e. paying your own parents’ bills) makes no difference: workers don’t get to consume some of what they produce.
You can argue that retirees live too high on the hog if you like — that they get to consume too much. But unless you’re willing to make that argument explicitly, it’s almost pointless to obsess about whether the cost is borne by The Government or by The Nation. A solvent Government of an insolvent Nation is no better than an insolvent Government of a solvent Nation, except to ideologues.
–TP
The way SS works is that I would have to give money to my parents regardless of whether they needed it or not or what my own financial situation is.
The way SS works is that I would have to give money to my parents regardless of whether they needed it or not or what my own financial situation is.
The way SS works is that I would have to give money to my parents regardless of whether they needed it or not or what my own financial situation is.
Charles,
That was part of the political genius of the program. If you parents don’t need it, they can always gift it back to you.
Regards,
Charles,
That was part of the political genius of the program. If you parents don’t need it, they can always gift it back to you.
Regards,
Charles,
That was part of the political genius of the program. If you parents don’t need it, they can always gift it back to you.
Regards,
If the SS trust fund is just “an accounting fiction”, then what is an IRA entirely invested in t-bills?
(Rhetorical question, I know.)
If the SS trust fund is just “an accounting fiction”, then what is an IRA entirely invested in t-bills?
(Rhetorical question, I know.)
If the SS trust fund is just “an accounting fiction”, then what is an IRA entirely invested in t-bills?
(Rhetorical question, I know.)
Do you have parents living? If they could not survive without the SS benefit they’re receiving, would you let them starve?
All hands in the generation ahead of me are now gone.
Most of them basically lived independently up until within a week or two of their passing. The exception was my mother, who went by way of Parkinson’s, which truly did suck.
When she got to where she couldn’t do for herself, my sister took her in.
At some point, that didn’t work anymore due to the kind of direct care that was required by the disease, and she went to a residential care facility.
Among the people I know who are approximately of my age, a very generous handful participate in caring for their folks, in some way shape or form. It’s not uncommon, even in this day and age.
If the SS trust fund is just “an accounting fiction”, then what is an IRA entirely invested in t-bills?
T-bills owned by financial institutions and private investors are different than SS T-bills.
The difference is that SS T-bills have moral hazard cooties.
Do you have parents living? If they could not survive without the SS benefit they’re receiving, would you let them starve?
All hands in the generation ahead of me are now gone.
Most of them basically lived independently up until within a week or two of their passing. The exception was my mother, who went by way of Parkinson’s, which truly did suck.
When she got to where she couldn’t do for herself, my sister took her in.
At some point, that didn’t work anymore due to the kind of direct care that was required by the disease, and she went to a residential care facility.
Among the people I know who are approximately of my age, a very generous handful participate in caring for their folks, in some way shape or form. It’s not uncommon, even in this day and age.
If the SS trust fund is just “an accounting fiction”, then what is an IRA entirely invested in t-bills?
T-bills owned by financial institutions and private investors are different than SS T-bills.
The difference is that SS T-bills have moral hazard cooties.
Do you have parents living? If they could not survive without the SS benefit they’re receiving, would you let them starve?
All hands in the generation ahead of me are now gone.
Most of them basically lived independently up until within a week or two of their passing. The exception was my mother, who went by way of Parkinson’s, which truly did suck.
When she got to where she couldn’t do for herself, my sister took her in.
At some point, that didn’t work anymore due to the kind of direct care that was required by the disease, and she went to a residential care facility.
Among the people I know who are approximately of my age, a very generous handful participate in caring for their folks, in some way shape or form. It’s not uncommon, even in this day and age.
If the SS trust fund is just “an accounting fiction”, then what is an IRA entirely invested in t-bills?
T-bills owned by financial institutions and private investors are different than SS T-bills.
The difference is that SS T-bills have moral hazard cooties.
You may be surprised.
I actually guessed correctly what that article was going to say. When you have a regressive tax funding a program, while wages have stagnated with less than full employment, and an ever-larger share of national income is going to an ever-smaller, ever-richer portion of the population, what would you expect to happen to that program’s revenue?
Snarki, my answer would be that those t-bills wouldn’t be debt you owed to yourself denominated in a currency you could create out of thin air, so no. That’s not to say that the t-bills in the SS fund aren’t real and aren’t a form of money, just that SS benefits could be paid whether those bonds were there or not, like anything else the federal government finds a way to pay for when it deems it important enough.
You may be surprised.
I actually guessed correctly what that article was going to say. When you have a regressive tax funding a program, while wages have stagnated with less than full employment, and an ever-larger share of national income is going to an ever-smaller, ever-richer portion of the population, what would you expect to happen to that program’s revenue?
Snarki, my answer would be that those t-bills wouldn’t be debt you owed to yourself denominated in a currency you could create out of thin air, so no. That’s not to say that the t-bills in the SS fund aren’t real and aren’t a form of money, just that SS benefits could be paid whether those bonds were there or not, like anything else the federal government finds a way to pay for when it deems it important enough.
You may be surprised.
I actually guessed correctly what that article was going to say. When you have a regressive tax funding a program, while wages have stagnated with less than full employment, and an ever-larger share of national income is going to an ever-smaller, ever-richer portion of the population, what would you expect to happen to that program’s revenue?
Snarki, my answer would be that those t-bills wouldn’t be debt you owed to yourself denominated in a currency you could create out of thin air, so no. That’s not to say that the t-bills in the SS fund aren’t real and aren’t a form of money, just that SS benefits could be paid whether those bonds were there or not, like anything else the federal government finds a way to pay for when it deems it important enough.
If the SS trust fund is just “an accounting fiction”, then what is an IRA entirely invested in t-bills?
A fictional investment with (appropriately) extremely low returns?
If the SS trust fund is just “an accounting fiction”, then what is an IRA entirely invested in t-bills?
A fictional investment with (appropriately) extremely low returns?
If the SS trust fund is just “an accounting fiction”, then what is an IRA entirely invested in t-bills?
A fictional investment with (appropriately) extremely low returns?
Barry,
“And real real rates, which take into account the fact that the government is lying about the rate of inflation. (As anybody who buys groceries is aware.) ”
This is a lie; see Krugman’s columns for more details, and links to other research. For example, the Billion Prices project agrees well with the official inflation rate.
There is an even stronger, much stronger, piece of evidence that the claim is a lie. Interest rates. Does anyone think that some random blogger or whoever knows more about the rate of inflation than the financial markets? Surely market-oriented thinkers, like Brett, must believe the market’s message: Little or no inflation.
Barry,
“And real real rates, which take into account the fact that the government is lying about the rate of inflation. (As anybody who buys groceries is aware.) ”
This is a lie; see Krugman’s columns for more details, and links to other research. For example, the Billion Prices project agrees well with the official inflation rate.
There is an even stronger, much stronger, piece of evidence that the claim is a lie. Interest rates. Does anyone think that some random blogger or whoever knows more about the rate of inflation than the financial markets? Surely market-oriented thinkers, like Brett, must believe the market’s message: Little or no inflation.
Barry,
“And real real rates, which take into account the fact that the government is lying about the rate of inflation. (As anybody who buys groceries is aware.) ”
This is a lie; see Krugman’s columns for more details, and links to other research. For example, the Billion Prices project agrees well with the official inflation rate.
There is an even stronger, much stronger, piece of evidence that the claim is a lie. Interest rates. Does anyone think that some random blogger or whoever knows more about the rate of inflation than the financial markets? Surely market-oriented thinkers, like Brett, must believe the market’s message: Little or no inflation.
Watch out though.
Inflation hawks, who watch wage inflation most of all, but oddly enough have seen their incomes rise considerably over the past three decades (it’s a productivity thing; they claim more times a week than they did thirty years ago that inflation is rising, so they get raises every year) are watching very carefully the stagnant incomes of the lower half and are ready to pull the plug on any windfall that might come the latter’s way.
When Brett’s gets a raise, and I hope he does, that’s it, the punch bowl will be whisked away and then conservatives who love to bash the unemployed can get back into the pleasurable business of rolling down the window on their Lincoln Town Cars and admonishing folks who they just fired to get a freaking job.
Watch out though.
Inflation hawks, who watch wage inflation most of all, but oddly enough have seen their incomes rise considerably over the past three decades (it’s a productivity thing; they claim more times a week than they did thirty years ago that inflation is rising, so they get raises every year) are watching very carefully the stagnant incomes of the lower half and are ready to pull the plug on any windfall that might come the latter’s way.
When Brett’s gets a raise, and I hope he does, that’s it, the punch bowl will be whisked away and then conservatives who love to bash the unemployed can get back into the pleasurable business of rolling down the window on their Lincoln Town Cars and admonishing folks who they just fired to get a freaking job.
Watch out though.
Inflation hawks, who watch wage inflation most of all, but oddly enough have seen their incomes rise considerably over the past three decades (it’s a productivity thing; they claim more times a week than they did thirty years ago that inflation is rising, so they get raises every year) are watching very carefully the stagnant incomes of the lower half and are ready to pull the plug on any windfall that might come the latter’s way.
When Brett’s gets a raise, and I hope he does, that’s it, the punch bowl will be whisked away and then conservatives who love to bash the unemployed can get back into the pleasurable business of rolling down the window on their Lincoln Town Cars and admonishing folks who they just fired to get a freaking job.
It’s lovely that McArdle arrives at a call for us all to sit around the table and work it all out, but she’s a liar. She is not an honest person.
Russell, I think you do the lady an injustice. … But to be dishonest, and a liar, she would have to realize that what she says is incorrect. And the evidence suggest that this is not the case.
I find myself obliged to walk back part of my comment about McArdle.
wj is correct, to call her a liar assumes a kind of intent on her part that is not in evidence, and I have no good reason not to extend her the benefit of the doubt.
I do quite sincerely believe her to be lazy, in the sense that she quite often makes statements about simple, non-obscure factual matters, without taking the trouble to actually go see if they are so.
And, I find her dishonest, in the sense of bad faith in pursuing her arguments. I.e., a lack of candor, an unwillingness to examine what she has said in the light of criticism, a laziness about holding herself to account in basic ways.
So, not my favorite pundit, and not simply because I disagree with her stance.
But, liar is a different thing than the above, and I agree with wj, I have no basis for that, and no good reason to assume the worst.
Apologies to Ms McArdle, wherever she is.
It’s lovely that McArdle arrives at a call for us all to sit around the table and work it all out, but she’s a liar. She is not an honest person.
Russell, I think you do the lady an injustice. … But to be dishonest, and a liar, she would have to realize that what she says is incorrect. And the evidence suggest that this is not the case.
I find myself obliged to walk back part of my comment about McArdle.
wj is correct, to call her a liar assumes a kind of intent on her part that is not in evidence, and I have no good reason not to extend her the benefit of the doubt.
I do quite sincerely believe her to be lazy, in the sense that she quite often makes statements about simple, non-obscure factual matters, without taking the trouble to actually go see if they are so.
And, I find her dishonest, in the sense of bad faith in pursuing her arguments. I.e., a lack of candor, an unwillingness to examine what she has said in the light of criticism, a laziness about holding herself to account in basic ways.
So, not my favorite pundit, and not simply because I disagree with her stance.
But, liar is a different thing than the above, and I agree with wj, I have no basis for that, and no good reason to assume the worst.
Apologies to Ms McArdle, wherever she is.
It’s lovely that McArdle arrives at a call for us all to sit around the table and work it all out, but she’s a liar. She is not an honest person.
Russell, I think you do the lady an injustice. … But to be dishonest, and a liar, she would have to realize that what she says is incorrect. And the evidence suggest that this is not the case.
I find myself obliged to walk back part of my comment about McArdle.
wj is correct, to call her a liar assumes a kind of intent on her part that is not in evidence, and I have no good reason not to extend her the benefit of the doubt.
I do quite sincerely believe her to be lazy, in the sense that she quite often makes statements about simple, non-obscure factual matters, without taking the trouble to actually go see if they are so.
And, I find her dishonest, in the sense of bad faith in pursuing her arguments. I.e., a lack of candor, an unwillingness to examine what she has said in the light of criticism, a laziness about holding herself to account in basic ways.
So, not my favorite pundit, and not simply because I disagree with her stance.
But, liar is a different thing than the above, and I agree with wj, I have no basis for that, and no good reason to assume the worst.
Apologies to Ms McArdle, wherever she is.
I think she’s tucking in Mrs. Calabash.
I think she’s tucking in Mrs. Calabash.
I think she’s tucking in Mrs. Calabash.
Russell,
I think McArdle deserves some slack, but less than you are giving. A long time ago, when she was Jane Galt, she always seemed to back up her arguments by reference to convenient “friends in the industry” or sometimes “an old prof (a Democrat!!).” I think these were BS.
To some degree she’s cleaned up her act. But in the article cited she’s back at it, claiming that “financial analysts” treat the notion of an SS trust fund as laughable. To my knowledge, “financial analysts” don’t spedn much time worrying about Social Security. They study companies, or industries, looking for good investment opportunities. That they have any special expertise wrt SS is open to question. And I might add, whether McArdle has had any serious discussions with said analysts concerning SS is also open to question.
Russell,
I think McArdle deserves some slack, but less than you are giving. A long time ago, when she was Jane Galt, she always seemed to back up her arguments by reference to convenient “friends in the industry” or sometimes “an old prof (a Democrat!!).” I think these were BS.
To some degree she’s cleaned up her act. But in the article cited she’s back at it, claiming that “financial analysts” treat the notion of an SS trust fund as laughable. To my knowledge, “financial analysts” don’t spedn much time worrying about Social Security. They study companies, or industries, looking for good investment opportunities. That they have any special expertise wrt SS is open to question. And I might add, whether McArdle has had any serious discussions with said analysts concerning SS is also open to question.
Russell,
I think McArdle deserves some slack, but less than you are giving. A long time ago, when she was Jane Galt, she always seemed to back up her arguments by reference to convenient “friends in the industry” or sometimes “an old prof (a Democrat!!).” I think these were BS.
To some degree she’s cleaned up her act. But in the article cited she’s back at it, claiming that “financial analysts” treat the notion of an SS trust fund as laughable. To my knowledge, “financial analysts” don’t spedn much time worrying about Social Security. They study companies, or industries, looking for good investment opportunities. That they have any special expertise wrt SS is open to question. And I might add, whether McArdle has had any serious discussions with said analysts concerning SS is also open to question.
If a pension fund has made pension commitments, it needs to concern itself with long-term rates of return – it needs to have an expectation of future income to meet its commitments.
Governments, even if they pay pensions, are not pension funds.
It is meaningless, within a closed economy, to talk about saving money for the future. You can’t sensibly save food and retirement homes and hospital care to meet the needs of people retiring in the future. Whatever government bonds are held by the Social Security Trust Fund, when it comes to it the resources consumed by retired people are produced by working people – in terms of resources, the system is pay-as-you-go. So you need to consider what size of retired population the future economy will be able to sustain at what level of comfort.
The Social Security Trust Fund? It’s a cumulative record of government borrowing which was rendered notional rather than actual by Social Security Taxes. Not having that external debt is a good thing, and leaves the economy better placed to pay future benefits. But on the other hand, if external debt has been created anyway by deficits exceeding SSTF surpluses…
If a pension fund has made pension commitments, it needs to concern itself with long-term rates of return – it needs to have an expectation of future income to meet its commitments.
Governments, even if they pay pensions, are not pension funds.
It is meaningless, within a closed economy, to talk about saving money for the future. You can’t sensibly save food and retirement homes and hospital care to meet the needs of people retiring in the future. Whatever government bonds are held by the Social Security Trust Fund, when it comes to it the resources consumed by retired people are produced by working people – in terms of resources, the system is pay-as-you-go. So you need to consider what size of retired population the future economy will be able to sustain at what level of comfort.
The Social Security Trust Fund? It’s a cumulative record of government borrowing which was rendered notional rather than actual by Social Security Taxes. Not having that external debt is a good thing, and leaves the economy better placed to pay future benefits. But on the other hand, if external debt has been created anyway by deficits exceeding SSTF surpluses…
If a pension fund has made pension commitments, it needs to concern itself with long-term rates of return – it needs to have an expectation of future income to meet its commitments.
Governments, even if they pay pensions, are not pension funds.
It is meaningless, within a closed economy, to talk about saving money for the future. You can’t sensibly save food and retirement homes and hospital care to meet the needs of people retiring in the future. Whatever government bonds are held by the Social Security Trust Fund, when it comes to it the resources consumed by retired people are produced by working people – in terms of resources, the system is pay-as-you-go. So you need to consider what size of retired population the future economy will be able to sustain at what level of comfort.
The Social Security Trust Fund? It’s a cumulative record of government borrowing which was rendered notional rather than actual by Social Security Taxes. Not having that external debt is a good thing, and leaves the economy better placed to pay future benefits. But on the other hand, if external debt has been created anyway by deficits exceeding SSTF surpluses…
Russell,
Read the exchange between Baker and Mcardle (links provided above).
When you point out that repayment of principle and interest on the Trust Fund bonds is legally obligated by law and are dismissed as “pushing a tired old argument”, then you know you are dealing with somebody who, if not an out an out liar, lights it up big time on the mendacity scale.
Russell,
Read the exchange between Baker and Mcardle (links provided above).
When you point out that repayment of principle and interest on the Trust Fund bonds is legally obligated by law and are dismissed as “pushing a tired old argument”, then you know you are dealing with somebody who, if not an out an out liar, lights it up big time on the mendacity scale.
Russell,
Read the exchange between Baker and Mcardle (links provided above).
When you point out that repayment of principle and interest on the Trust Fund bonds is legally obligated by law and are dismissed as “pushing a tired old argument”, then you know you are dealing with somebody who, if not an out an out liar, lights it up big time on the mendacity scale.
It is meaningless, within a closed economy, to talk about saving money for the future.
Exactly correct.
It is meaningless, within a closed economy, to talk about saving money for the future.
Exactly correct.
It is meaningless, within a closed economy, to talk about saving money for the future.
Exactly correct.
So you need to consider what size of retired population the future economy will be able to sustain at what level of comfort.
I’ve heard that, since poor people can now afford cell phones (maybe even smart ones), we’re all at unheard-of levels of comfort as it is, and it’s only getting better. I guess the people who think being poor in the United States is awesome should stop worrying about how we’re going to take care of the future aged population. We’re obviously so chock full of resources that money should be the least of our worries.
So you need to consider what size of retired population the future economy will be able to sustain at what level of comfort.
I’ve heard that, since poor people can now afford cell phones (maybe even smart ones), we’re all at unheard-of levels of comfort as it is, and it’s only getting better. I guess the people who think being poor in the United States is awesome should stop worrying about how we’re going to take care of the future aged population. We’re obviously so chock full of resources that money should be the least of our worries.
So you need to consider what size of retired population the future economy will be able to sustain at what level of comfort.
I’ve heard that, since poor people can now afford cell phones (maybe even smart ones), we’re all at unheard-of levels of comfort as it is, and it’s only getting better. I guess the people who think being poor in the United States is awesome should stop worrying about how we’re going to take care of the future aged population. We’re obviously so chock full of resources that money should be the least of our worries.
Not entirely on point, but apropos:
“Thus did a handful of rapacious citizens come to control all that was worth controlling in America. Thus was the savage and stupid and entirely inappropriate and unnecessary and humorless American class system created. Honest, industrious, peaceful citizens were classed as bloodsuckers, if they asked to be paid a living wage. And they saw that praise was reserved henceforth for those who devised means of getting paid enormously for committing crimes against which no laws had been passed. Thus the American dream turned belly up, turned green, bobbed to the scummy surface of cupidity unlimited, filled with gas, went bang in the noonday sun.”
― Kurt Vonnegut, God Bless You, Mr. Rosewater, 1965
Cribbed from Atrios.
Not entirely on point, but apropos:
“Thus did a handful of rapacious citizens come to control all that was worth controlling in America. Thus was the savage and stupid and entirely inappropriate and unnecessary and humorless American class system created. Honest, industrious, peaceful citizens were classed as bloodsuckers, if they asked to be paid a living wage. And they saw that praise was reserved henceforth for those who devised means of getting paid enormously for committing crimes against which no laws had been passed. Thus the American dream turned belly up, turned green, bobbed to the scummy surface of cupidity unlimited, filled with gas, went bang in the noonday sun.”
― Kurt Vonnegut, God Bless You, Mr. Rosewater, 1965
Cribbed from Atrios.
Not entirely on point, but apropos:
“Thus did a handful of rapacious citizens come to control all that was worth controlling in America. Thus was the savage and stupid and entirely inappropriate and unnecessary and humorless American class system created. Honest, industrious, peaceful citizens were classed as bloodsuckers, if they asked to be paid a living wage. And they saw that praise was reserved henceforth for those who devised means of getting paid enormously for committing crimes against which no laws had been passed. Thus the American dream turned belly up, turned green, bobbed to the scummy surface of cupidity unlimited, filled with gas, went bang in the noonday sun.”
― Kurt Vonnegut, God Bless You, Mr. Rosewater, 1965
Cribbed from Atrios.
Perhaps better posted on one of the Hugo threads.
“I have been a soreheaded occupant of a file drawer labeled Science Fiction and I would like out, particularly since so many serious critics regularly mistake the drawer for a urinal.” —Kurt Vonnegut
Perhaps better posted on one of the Hugo threads.
“I have been a soreheaded occupant of a file drawer labeled Science Fiction and I would like out, particularly since so many serious critics regularly mistake the drawer for a urinal.” —Kurt Vonnegut
Perhaps better posted on one of the Hugo threads.
“I have been a soreheaded occupant of a file drawer labeled Science Fiction and I would like out, particularly since so many serious critics regularly mistake the drawer for a urinal.” —Kurt Vonnegut
Cribbed from Charles Pierce:
The rich person speaks and all are silent; they extol to the clouds what he says. The poor person speaks and they say, “Who is this fellow? “And should he stumble, they even push him down.
— Sirach: 13:23
And down:
http://www.eschatonblog.com/2015/04/kicking-poors.html
Swine
Cribbed from Charles Pierce:
The rich person speaks and all are silent; they extol to the clouds what he says. The poor person speaks and they say, “Who is this fellow? “And should he stumble, they even push him down.
— Sirach: 13:23
And down:
http://www.eschatonblog.com/2015/04/kicking-poors.html
Swine
Cribbed from Charles Pierce:
The rich person speaks and all are silent; they extol to the clouds what he says. The poor person speaks and they say, “Who is this fellow? “And should he stumble, they even push him down.
— Sirach: 13:23
And down:
http://www.eschatonblog.com/2015/04/kicking-poors.html
Swine
This is an open thread, so …
I found PaulB’s comment interesting, so followed the “Posted by” link to his blog, where I found a link, on his blog list, to this entirely reasonable discussion on Laffer curves, including both the top post and comments thread.
(Note 2 describes something I’ve been considering to be true for some time, for what it’s worth.)
This is an open thread, so …
I found PaulB’s comment interesting, so followed the “Posted by” link to his blog, where I found a link, on his blog list, to this entirely reasonable discussion on Laffer curves, including both the top post and comments thread.
(Note 2 describes something I’ve been considering to be true for some time, for what it’s worth.)
This is an open thread, so …
I found PaulB’s comment interesting, so followed the “Posted by” link to his blog, where I found a link, on his blog list, to this entirely reasonable discussion on Laffer curves, including both the top post and comments thread.
(Note 2 describes something I’ve been considering to be true for some time, for what it’s worth.)
Count, the Kansas bill is something I read about on FB over the weekend. Of course, the person who posted the story thought it was just great. My only comment was, “I hope they also banned hang-gliding lessons and electron microscopes.”
Liberals can use dog-whistles, too. The difference is that, rather than requiring fear, hatred or bigotry to hear them, one only needs an ear for satire. I tend to think the cheerleaders for the Kansas bill didn’t get my intent.
Count, the Kansas bill is something I read about on FB over the weekend. Of course, the person who posted the story thought it was just great. My only comment was, “I hope they also banned hang-gliding lessons and electron microscopes.”
Liberals can use dog-whistles, too. The difference is that, rather than requiring fear, hatred or bigotry to hear them, one only needs an ear for satire. I tend to think the cheerleaders for the Kansas bill didn’t get my intent.
Count, the Kansas bill is something I read about on FB over the weekend. Of course, the person who posted the story thought it was just great. My only comment was, “I hope they also banned hang-gliding lessons and electron microscopes.”
Liberals can use dog-whistles, too. The difference is that, rather than requiring fear, hatred or bigotry to hear them, one only needs an ear for satire. I tend to think the cheerleaders for the Kansas bill didn’t get my intent.
It is meaningless, within a closed economy, to talk about saving money for the future.
So. The world is, pretty much by definition, a “closed economy” — as in, nothing trades in or out. Does that mean that there’s no point in saving for the future?
What am I missing here?
It is meaningless, within a closed economy, to talk about saving money for the future.
So. The world is, pretty much by definition, a “closed economy” — as in, nothing trades in or out. Does that mean that there’s no point in saving for the future?
What am I missing here?
It is meaningless, within a closed economy, to talk about saving money for the future.
So. The world is, pretty much by definition, a “closed economy” — as in, nothing trades in or out. Does that mean that there’s no point in saving for the future?
What am I missing here?
wj:
Why go to Greece? It sounds like you are talking about our CalSTRS problem out here in California. The state waited too long to fix the problem and is now trying to pass the buck on to teachers and school districts. If memory serves, the state cut its contribution based on the dot com boom (and unrealistic expectations) and is only now becoming realistic.
But hey, we are going to have our bullet train! Priorities, don’t you know.
wj:
Why go to Greece? It sounds like you are talking about our CalSTRS problem out here in California. The state waited too long to fix the problem and is now trying to pass the buck on to teachers and school districts. If memory serves, the state cut its contribution based on the dot com boom (and unrealistic expectations) and is only now becoming realistic.
But hey, we are going to have our bullet train! Priorities, don’t you know.
wj:
Why go to Greece? It sounds like you are talking about our CalSTRS problem out here in California. The state waited too long to fix the problem and is now trying to pass the buck on to teachers and school districts. If memory serves, the state cut its contribution based on the dot com boom (and unrealistic expectations) and is only now becoming realistic.
But hey, we are going to have our bullet train! Priorities, don’t you know.
bc, I used Chicago and Greece as examples because I thought they would be familiar to most of those here. I could have used Vallejo, CA going bankrupt (since it is just a few miles away, so *I* am familiar with it). But how many folks east of the Sierras would have even heard of it?
bc, I used Chicago and Greece as examples because I thought they would be familiar to most of those here. I could have used Vallejo, CA going bankrupt (since it is just a few miles away, so *I* am familiar with it). But how many folks east of the Sierras would have even heard of it?
bc, I used Chicago and Greece as examples because I thought they would be familiar to most of those here. I could have used Vallejo, CA going bankrupt (since it is just a few miles away, so *I* am familiar with it). But how many folks east of the Sierras would have even heard of it?
What am I missing here?
Assume an economy with a fiat currency and no foreign trade. Envision the government placing a pile of currency in a vault to spend at some time in the future to meet some envisioned need.
The future arrives. Has anything been gained from this effort?
What am I missing here?
Assume an economy with a fiat currency and no foreign trade. Envision the government placing a pile of currency in a vault to spend at some time in the future to meet some envisioned need.
The future arrives. Has anything been gained from this effort?
What am I missing here?
Assume an economy with a fiat currency and no foreign trade. Envision the government placing a pile of currency in a vault to spend at some time in the future to meet some envisioned need.
The future arrives. Has anything been gained from this effort?
I think the rub is that PaulB didn’t explicitly say it is meaningless to talk about the federal government saving money for the future.
I think the rub is that PaulB didn’t explicitly say it is meaningless to talk about the federal government saving money for the future.
I think the rub is that PaulB didn’t explicitly say it is meaningless to talk about the federal government saving money for the future.
A funny story about a related discussion – I was reading a blog post some years ago that was addressing a criticism of the sectoral-balances model (you know, the one based on a simple, unavoidable accounting identity).
The criticism was based on a thought experiment involving a man alone on a tropical island collecting coconuts and saving them (to eat later?). What this thought experiment was supposed to prove was that there was no need for a government deficit in order for the private sector to save in excess of investment over a given period (with no external sector involved). Since there was no government on this island, the man’s ability to save coconuts was supposed to demonstrate that “saving” was not dependent on government in any way at all.
But, alas, coconuts are not money, and, even if they were, the trees they came from would be playing the role of the government, creating net currency for the man, representing the private sector, to save.
If I recall, the guy who came up with this thought experiment was another blogger – who blogged on economics, no less. I’m guessing his readership consisted mostly of Tea Party members/sympathizers.
A funny story about a related discussion – I was reading a blog post some years ago that was addressing a criticism of the sectoral-balances model (you know, the one based on a simple, unavoidable accounting identity).
The criticism was based on a thought experiment involving a man alone on a tropical island collecting coconuts and saving them (to eat later?). What this thought experiment was supposed to prove was that there was no need for a government deficit in order for the private sector to save in excess of investment over a given period (with no external sector involved). Since there was no government on this island, the man’s ability to save coconuts was supposed to demonstrate that “saving” was not dependent on government in any way at all.
But, alas, coconuts are not money, and, even if they were, the trees they came from would be playing the role of the government, creating net currency for the man, representing the private sector, to save.
If I recall, the guy who came up with this thought experiment was another blogger – who blogged on economics, no less. I’m guessing his readership consisted mostly of Tea Party members/sympathizers.
A funny story about a related discussion – I was reading a blog post some years ago that was addressing a criticism of the sectoral-balances model (you know, the one based on a simple, unavoidable accounting identity).
The criticism was based on a thought experiment involving a man alone on a tropical island collecting coconuts and saving them (to eat later?). What this thought experiment was supposed to prove was that there was no need for a government deficit in order for the private sector to save in excess of investment over a given period (with no external sector involved). Since there was no government on this island, the man’s ability to save coconuts was supposed to demonstrate that “saving” was not dependent on government in any way at all.
But, alas, coconuts are not money, and, even if they were, the trees they came from would be playing the role of the government, creating net currency for the man, representing the private sector, to save.
If I recall, the guy who came up with this thought experiment was another blogger – who blogged on economics, no less. I’m guessing his readership consisted mostly of Tea Party members/sympathizers.
See also “paradox of thrift”?
Also, a call for cuts in benefits and raising the retirement age does not “save” Social Security in the future. It just cuts the program both now AND in the future.
But the fear mongers never come right out and say they think we, as a society, should cut spending that insures the elderly do not sleep in the gutters and spend those resources elsewhere so others can enjoy a greater share of the total social output.
See also “paradox of thrift”?
Also, a call for cuts in benefits and raising the retirement age does not “save” Social Security in the future. It just cuts the program both now AND in the future.
But the fear mongers never come right out and say they think we, as a society, should cut spending that insures the elderly do not sleep in the gutters and spend those resources elsewhere so others can enjoy a greater share of the total social output.
See also “paradox of thrift”?
Also, a call for cuts in benefits and raising the retirement age does not “save” Social Security in the future. It just cuts the program both now AND in the future.
But the fear mongers never come right out and say they think we, as a society, should cut spending that insures the elderly do not sleep in the gutters and spend those resources elsewhere so others can enjoy a greater share of the total social output.
dig that awful black culture.
dig that awful black culture.
dig that awful black culture.
Capitol Hill Babysitting Co-op?
Capitol Hill Babysitting Co-op?
Capitol Hill Babysitting Co-op?
Re: The conflation of the Reagan Tax Cuts with the Trust Fund.
They’re conflated because they’re part of the same thing. For lots of reasons obvious to anyone who sits and thinks about it for five minutes, the only place for the US to save trillions of dollars over thirty+ years is in it’s own debt.
The only way to pay it back is, of course, to pay back that debt.
So to make the whole thing work out, Reagan raised SS taxes (as SS recipients would be getting the extra money) and CUT taxes on the upper brackets (that is, those who were above the cap or, like capital gains, not subject to the cap).
This was planned to be revenue neutral (that is, the hikes and cuts were to be equivalent, to avoid screwing with the economy…we are talking a lot of money here).
And, of course, when the SS Trust Fund needed to be reedemed — the lucky duckies who saw their taxes CUT in 1983 would kick in the extra money. That is, it’d come from rolling back those tax cuts (or magical supply-side fairies. Your pick). And when the Boomers were gone, the SS tax hikes evaporate.
That was the plan. Boomers pay extra for 30 years, rich pay less. Then Boomers retire, rich end their 30 year tax-cut vacation, and kick in what they used to to cover the boomers. Then it all reverts back to the pre-1983 rates.
What the SS shuffle is all about is pretty simple: The people who paid EXTRA are about to ask for the money they’re owed. The people who got a tax break really don’t want to pay it.
So, ergo, SS is in crisis. Nothing to do but cut benefits or get rid of the whole program.
It’s like when a company shortchanges their pension fund (usually claiming they’ll get 8% yearly returns, so they can put in less) and when the shortfall becomes huge, states that their pension was ‘too generous’ and slashes it.
Welcome to America. If you can’t spot the sucker, it’s you.
Re: The conflation of the Reagan Tax Cuts with the Trust Fund.
They’re conflated because they’re part of the same thing. For lots of reasons obvious to anyone who sits and thinks about it for five minutes, the only place for the US to save trillions of dollars over thirty+ years is in it’s own debt.
The only way to pay it back is, of course, to pay back that debt.
So to make the whole thing work out, Reagan raised SS taxes (as SS recipients would be getting the extra money) and CUT taxes on the upper brackets (that is, those who were above the cap or, like capital gains, not subject to the cap).
This was planned to be revenue neutral (that is, the hikes and cuts were to be equivalent, to avoid screwing with the economy…we are talking a lot of money here).
And, of course, when the SS Trust Fund needed to be reedemed — the lucky duckies who saw their taxes CUT in 1983 would kick in the extra money. That is, it’d come from rolling back those tax cuts (or magical supply-side fairies. Your pick). And when the Boomers were gone, the SS tax hikes evaporate.
That was the plan. Boomers pay extra for 30 years, rich pay less. Then Boomers retire, rich end their 30 year tax-cut vacation, and kick in what they used to to cover the boomers. Then it all reverts back to the pre-1983 rates.
What the SS shuffle is all about is pretty simple: The people who paid EXTRA are about to ask for the money they’re owed. The people who got a tax break really don’t want to pay it.
So, ergo, SS is in crisis. Nothing to do but cut benefits or get rid of the whole program.
It’s like when a company shortchanges their pension fund (usually claiming they’ll get 8% yearly returns, so they can put in less) and when the shortfall becomes huge, states that their pension was ‘too generous’ and slashes it.
Welcome to America. If you can’t spot the sucker, it’s you.
Re: The conflation of the Reagan Tax Cuts with the Trust Fund.
They’re conflated because they’re part of the same thing. For lots of reasons obvious to anyone who sits and thinks about it for five minutes, the only place for the US to save trillions of dollars over thirty+ years is in it’s own debt.
The only way to pay it back is, of course, to pay back that debt.
So to make the whole thing work out, Reagan raised SS taxes (as SS recipients would be getting the extra money) and CUT taxes on the upper brackets (that is, those who were above the cap or, like capital gains, not subject to the cap).
This was planned to be revenue neutral (that is, the hikes and cuts were to be equivalent, to avoid screwing with the economy…we are talking a lot of money here).
And, of course, when the SS Trust Fund needed to be reedemed — the lucky duckies who saw their taxes CUT in 1983 would kick in the extra money. That is, it’d come from rolling back those tax cuts (or magical supply-side fairies. Your pick). And when the Boomers were gone, the SS tax hikes evaporate.
That was the plan. Boomers pay extra for 30 years, rich pay less. Then Boomers retire, rich end their 30 year tax-cut vacation, and kick in what they used to to cover the boomers. Then it all reverts back to the pre-1983 rates.
What the SS shuffle is all about is pretty simple: The people who paid EXTRA are about to ask for the money they’re owed. The people who got a tax break really don’t want to pay it.
So, ergo, SS is in crisis. Nothing to do but cut benefits or get rid of the whole program.
It’s like when a company shortchanges their pension fund (usually claiming they’ll get 8% yearly returns, so they can put in less) and when the shortfall becomes huge, states that their pension was ‘too generous’ and slashes it.
Welcome to America. If you can’t spot the sucker, it’s you.
Has anybody calculated the “unfunded liabilities” of Department of Defense Spending going out to infinity? I’d wager it is a big scary number!
Maybe we should cut it or submit it to chained CPI, or even, yes I know this is dire, require an official Congressional Declaration of War before it can be employed.
Has anybody calculated the “unfunded liabilities” of Department of Defense Spending going out to infinity? I’d wager it is a big scary number!
Maybe we should cut it or submit it to chained CPI, or even, yes I know this is dire, require an official Congressional Declaration of War before it can be employed.
Has anybody calculated the “unfunded liabilities” of Department of Defense Spending going out to infinity? I’d wager it is a big scary number!
Maybe we should cut it or submit it to chained CPI, or even, yes I know this is dire, require an official Congressional Declaration of War before it can be employed.
It is meaningless, within a closed economy, to talk about saving money for the future.
I’m not so sure.
Assume an economy with a fiat currency and no foreign trade. Envision the government placing a pile of currency in a vault to spend at some time in the future to meet some envisioned need.
The future arrives. Has anything been gained from this effort?
But this is not a good analogy. Savings are not usually turned into $100 bills to be stashed in vaults. They are invested. (That’s why the whole issue of whether there is a “pot of money” in the trust fund is nonsense, as you know. There’s not, any more than our private savings are a pot of money).
So we as a society have some savings to spend on capital goods. Don’t we have a choice as to what thse capital goods, in turn, will produce? Why doesn’t deciding to produce yet more capital goods as opposed to consumer items constitute saving for the future? Similarly, the use we make of dual-purpose goods, or maybe even of our time, may constitute savings.
It is meaningless, within a closed economy, to talk about saving money for the future.
I’m not so sure.
Assume an economy with a fiat currency and no foreign trade. Envision the government placing a pile of currency in a vault to spend at some time in the future to meet some envisioned need.
The future arrives. Has anything been gained from this effort?
But this is not a good analogy. Savings are not usually turned into $100 bills to be stashed in vaults. They are invested. (That’s why the whole issue of whether there is a “pot of money” in the trust fund is nonsense, as you know. There’s not, any more than our private savings are a pot of money).
So we as a society have some savings to spend on capital goods. Don’t we have a choice as to what thse capital goods, in turn, will produce? Why doesn’t deciding to produce yet more capital goods as opposed to consumer items constitute saving for the future? Similarly, the use we make of dual-purpose goods, or maybe even of our time, may constitute savings.
It is meaningless, within a closed economy, to talk about saving money for the future.
I’m not so sure.
Assume an economy with a fiat currency and no foreign trade. Envision the government placing a pile of currency in a vault to spend at some time in the future to meet some envisioned need.
The future arrives. Has anything been gained from this effort?
But this is not a good analogy. Savings are not usually turned into $100 bills to be stashed in vaults. They are invested. (That’s why the whole issue of whether there is a “pot of money” in the trust fund is nonsense, as you know. There’s not, any more than our private savings are a pot of money).
So we as a society have some savings to spend on capital goods. Don’t we have a choice as to what thse capital goods, in turn, will produce? Why doesn’t deciding to produce yet more capital goods as opposed to consumer items constitute saving for the future? Similarly, the use we make of dual-purpose goods, or maybe even of our time, may constitute savings.
byomtov,
Appreciated. However, it is a widely shared misconception that if the government spends less today (puts dollar bills in a vault) that somehow it will have more “fiscal room” to increase spending in the future.
Agree on what we spend it on today matters. One may call it investment (it certainly is) or consumption (we expend labor hours and consume resources to build it).
But I’m pretty sure you would agree that foregoing the use of currently available labor hours today (unemployment) can never be recovered. Once they go unused, it is too late.
Thus, from a fiscal standpoint, we should be spending more, not less.
byomtov,
Appreciated. However, it is a widely shared misconception that if the government spends less today (puts dollar bills in a vault) that somehow it will have more “fiscal room” to increase spending in the future.
Agree on what we spend it on today matters. One may call it investment (it certainly is) or consumption (we expend labor hours and consume resources to build it).
But I’m pretty sure you would agree that foregoing the use of currently available labor hours today (unemployment) can never be recovered. Once they go unused, it is too late.
Thus, from a fiscal standpoint, we should be spending more, not less.
byomtov,
Appreciated. However, it is a widely shared misconception that if the government spends less today (puts dollar bills in a vault) that somehow it will have more “fiscal room” to increase spending in the future.
Agree on what we spend it on today matters. One may call it investment (it certainly is) or consumption (we expend labor hours and consume resources to build it).
But I’m pretty sure you would agree that foregoing the use of currently available labor hours today (unemployment) can never be recovered. Once they go unused, it is too late.
Thus, from a fiscal standpoint, we should be spending more, not less.
wj,
If collectively “saving” (i.e., spend less today)would result in a better future, then fiscal austerity should bring us prosperity.
So, does it?
wj,
If collectively “saving” (i.e., spend less today)would result in a better future, then fiscal austerity should bring us prosperity.
So, does it?
wj,
If collectively “saving” (i.e., spend less today)would result in a better future, then fiscal austerity should bring us prosperity.
So, does it?
Kind of depends on which spending you cut. If you cut spending on white elephants (the F-35 leaps to mind), austerity will help. If you cut spending on building and maintaining infrastructure, austerity will hurt.
Kind of depends on which spending you cut. If you cut spending on white elephants (the F-35 leaps to mind), austerity will help. If you cut spending on building and maintaining infrastructure, austerity will hurt.
Kind of depends on which spending you cut. If you cut spending on white elephants (the F-35 leaps to mind), austerity will help. If you cut spending on building and maintaining infrastructure, austerity will hurt.
bobbyp,
Sure. It’s stupid to let resources sit idle when they can be put to productive use. That’s not saving, it’s waste. And if we need to borrow to do that then so what?
Positive NPV, anyone?
bobbyp,
Sure. It’s stupid to let resources sit idle when they can be put to productive use. That’s not saving, it’s waste. And if we need to borrow to do that then so what?
Positive NPV, anyone?
bobbyp,
Sure. It’s stupid to let resources sit idle when they can be put to productive use. That’s not saving, it’s waste. And if we need to borrow to do that then so what?
Positive NPV, anyone?
“Kind of depends on which spending you cut.”
In a slack economy net decreases in spending hurt.
“That’s not saving, it’s waste.”
Yes. But somebody has to “not spend” (i.e., “save”) to have that waste.
I guess it’s all in how you look at it 🙂
“Kind of depends on which spending you cut.”
In a slack economy net decreases in spending hurt.
“That’s not saving, it’s waste.”
Yes. But somebody has to “not spend” (i.e., “save”) to have that waste.
I guess it’s all in how you look at it 🙂
“Kind of depends on which spending you cut.”
In a slack economy net decreases in spending hurt.
“That’s not saving, it’s waste.”
Yes. But somebody has to “not spend” (i.e., “save”) to have that waste.
I guess it’s all in how you look at it 🙂
That’s the point, Bernard. The federal government can’t really “save” the way you or I can. It’s meaningless for it to save the money it creates out of thin air. It can spend money into existence or tax it out of existence, borrowing (unnecessarily, mind you) when it spends more than it taxes.
That’s the point, Bernard. The federal government can’t really “save” the way you or I can. It’s meaningless for it to save the money it creates out of thin air. It can spend money into existence or tax it out of existence, borrowing (unnecessarily, mind you) when it spends more than it taxes.
That’s the point, Bernard. The federal government can’t really “save” the way you or I can. It’s meaningless for it to save the money it creates out of thin air. It can spend money into existence or tax it out of existence, borrowing (unnecessarily, mind you) when it spends more than it taxes.
Just gotten a report from one commenter that his comments appear on the blog and then disappear. We aren’t deleting anything, so if anyone else is experiencing this, please send us a mail (address under the kitty) and I’ll put a ticket in.
Just gotten a report from one commenter that his comments appear on the blog and then disappear. We aren’t deleting anything, so if anyone else is experiencing this, please send us a mail (address under the kitty) and I’ll put a ticket in.
Just gotten a report from one commenter that his comments appear on the blog and then disappear. We aren’t deleting anything, so if anyone else is experiencing this, please send us a mail (address under the kitty) and I’ll put a ticket in.
bobbyp: while you are completely correct about the Feds having to pony up the cash for SS, regardless of the status of the SS trust fund, packaging the obligation in the form of “bonds” makes it a much more serious matter.
The Feds will drag their feet paying supplier invoices, they’ll blow off court settlements and UN dues for *years* if it suits them, but when Little Bobby P’s $25 savings bond is presented for redemption, they better cough up the cash (even if freshly printed).
Does that mean that a SS bond default would trigger a wider default? No idea, and I’d rather not have the GOP light the fuse on that particular nuke to find out if it works.
bobbyp: while you are completely correct about the Feds having to pony up the cash for SS, regardless of the status of the SS trust fund, packaging the obligation in the form of “bonds” makes it a much more serious matter.
The Feds will drag their feet paying supplier invoices, they’ll blow off court settlements and UN dues for *years* if it suits them, but when Little Bobby P’s $25 savings bond is presented for redemption, they better cough up the cash (even if freshly printed).
Does that mean that a SS bond default would trigger a wider default? No idea, and I’d rather not have the GOP light the fuse on that particular nuke to find out if it works.
bobbyp: while you are completely correct about the Feds having to pony up the cash for SS, regardless of the status of the SS trust fund, packaging the obligation in the form of “bonds” makes it a much more serious matter.
The Feds will drag their feet paying supplier invoices, they’ll blow off court settlements and UN dues for *years* if it suits them, but when Little Bobby P’s $25 savings bond is presented for redemption, they better cough up the cash (even if freshly printed).
Does that mean that a SS bond default would trigger a wider default? No idea, and I’d rather not have the GOP light the fuse on that particular nuke to find out if it works.
Maybe the fed could defuse that nuke by going all QE4 on their asses, buying up every bond in existence.
Maybe the fed could defuse that nuke by going all QE4 on their asses, buying up every bond in existence.
Maybe the fed could defuse that nuke by going all QE4 on their asses, buying up every bond in existence.
bobbyp,
I’m not talking about a slack economy, but in more general, abstract terms.
Imagine an economy that relies entirely on cattle, to take an example. It obviously faces decisions as to how much to slaughter for food and how much to save for breeding. To the extent they increase the breeding stock thay are saving.
That’s all I’m saying. Society-wide saving is possible.
bobbyp,
I’m not talking about a slack economy, but in more general, abstract terms.
Imagine an economy that relies entirely on cattle, to take an example. It obviously faces decisions as to how much to slaughter for food and how much to save for breeding. To the extent they increase the breeding stock thay are saving.
That’s all I’m saying. Society-wide saving is possible.
bobbyp,
I’m not talking about a slack economy, but in more general, abstract terms.
Imagine an economy that relies entirely on cattle, to take an example. It obviously faces decisions as to how much to slaughter for food and how much to save for breeding. To the extent they increase the breeding stock thay are saving.
That’s all I’m saying. Society-wide saving is possible.
byomtov, actually, your point makes sense in a non-abstract way.
Putting oil in a strategic petroleum reserve: saving. Putting banknotes in a vault: not really, when you have the power to print more, any time you want.
Or, in the modern era: adding bits to the electronic account balance.
Good thing we’re not going to run short on “zeros” and “ones” anytime soon…I’ve got a few terabytes hoarded against the apocalypse, even so.
byomtov, actually, your point makes sense in a non-abstract way.
Putting oil in a strategic petroleum reserve: saving. Putting banknotes in a vault: not really, when you have the power to print more, any time you want.
Or, in the modern era: adding bits to the electronic account balance.
Good thing we’re not going to run short on “zeros” and “ones” anytime soon…I’ve got a few terabytes hoarded against the apocalypse, even so.
byomtov, actually, your point makes sense in a non-abstract way.
Putting oil in a strategic petroleum reserve: saving. Putting banknotes in a vault: not really, when you have the power to print more, any time you want.
Or, in the modern era: adding bits to the electronic account balance.
Good thing we’re not going to run short on “zeros” and “ones” anytime soon…I’ve got a few terabytes hoarded against the apocalypse, even so.
It’s like purposely not scoring a touchdown in a football game, because you might need one more in the next game.
It’s like purposely not scoring a touchdown in a football game, because you might need one more in the next game.
It’s like purposely not scoring a touchdown in a football game, because you might need one more in the next game.
I’ve supported an inordinate number of teams that seem to have employed that philosophy.
I’ve supported an inordinate number of teams that seem to have employed that philosophy.
I’ve supported an inordinate number of teams that seem to have employed that philosophy.
hsh,
The federal government can’t really “save” the way you or I can. It’s meaningless for it to save the money it creates out of thin air. It can spend money into existence or tax it out of existence, borrowing (unnecessarily, mind you) when it spends more than it taxes.
It can. For example, using tax revenues to pay down the national debt would be saving, just as paying down your mortgage is saving. Suppose, for example, with no change in revenues, there had been no Iraq War. What would have happened to the money spent on Iraq?
You seem to be saying that it would have somehow disappeared with no benefit to the country at all. I don’t think that’s right.
hsh,
The federal government can’t really “save” the way you or I can. It’s meaningless for it to save the money it creates out of thin air. It can spend money into existence or tax it out of existence, borrowing (unnecessarily, mind you) when it spends more than it taxes.
It can. For example, using tax revenues to pay down the national debt would be saving, just as paying down your mortgage is saving. Suppose, for example, with no change in revenues, there had been no Iraq War. What would have happened to the money spent on Iraq?
You seem to be saying that it would have somehow disappeared with no benefit to the country at all. I don’t think that’s right.
hsh,
The federal government can’t really “save” the way you or I can. It’s meaningless for it to save the money it creates out of thin air. It can spend money into existence or tax it out of existence, borrowing (unnecessarily, mind you) when it spends more than it taxes.
It can. For example, using tax revenues to pay down the national debt would be saving, just as paying down your mortgage is saving. Suppose, for example, with no change in revenues, there had been no Iraq War. What would have happened to the money spent on Iraq?
You seem to be saying that it would have somehow disappeared with no benefit to the country at all. I don’t think that’s right.
You seem to be saying that it would have somehow disappeared with no benefit to the country at all. I don’t think that’s right.
The benefit would be that we wouldn’t have wasted actual resources. Not issuing the additional bonds for the defict spending required for the war might have reduced the amount of quantitative easing the fed later did, increased the amount of excess reserves the banks held at the fed, marginally reduced the amount of interest the treasury would have paid over some period (possibly offset by interest paid on additional excess reserves), or some combination thereof.
What it wouldn’t do, in and of itself, is give the federal government future spending power that it wouldn’t otherwise have had.
What we’re talking about here isn’t whether spending on a particular thing is or isn’t a good idea when we’re talking about saving in this context. That’s always the consideration – whether or not putting resources to a particular use is worthwhile, in the context of all the other things those resources might be put toward, including nothing at all. But it’s not a question of saving money.
If you’re trying to do what’s best for the health and welfare of the nation, money isn’t the problem. What you’re limited by is resources, if you’re the issuer of the nation’s currency. It’s stupid to say we can’t do something, when everyone knows it’s the right thing to do, simply because we “don’t have the money,” especially when it’s really because you think you might need that money later.
You seem to be saying that it would have somehow disappeared with no benefit to the country at all. I don’t think that’s right.
The benefit would be that we wouldn’t have wasted actual resources. Not issuing the additional bonds for the defict spending required for the war might have reduced the amount of quantitative easing the fed later did, increased the amount of excess reserves the banks held at the fed, marginally reduced the amount of interest the treasury would have paid over some period (possibly offset by interest paid on additional excess reserves), or some combination thereof.
What it wouldn’t do, in and of itself, is give the federal government future spending power that it wouldn’t otherwise have had.
What we’re talking about here isn’t whether spending on a particular thing is or isn’t a good idea when we’re talking about saving in this context. That’s always the consideration – whether or not putting resources to a particular use is worthwhile, in the context of all the other things those resources might be put toward, including nothing at all. But it’s not a question of saving money.
If you’re trying to do what’s best for the health and welfare of the nation, money isn’t the problem. What you’re limited by is resources, if you’re the issuer of the nation’s currency. It’s stupid to say we can’t do something, when everyone knows it’s the right thing to do, simply because we “don’t have the money,” especially when it’s really because you think you might need that money later.
You seem to be saying that it would have somehow disappeared with no benefit to the country at all. I don’t think that’s right.
The benefit would be that we wouldn’t have wasted actual resources. Not issuing the additional bonds for the defict spending required for the war might have reduced the amount of quantitative easing the fed later did, increased the amount of excess reserves the banks held at the fed, marginally reduced the amount of interest the treasury would have paid over some period (possibly offset by interest paid on additional excess reserves), or some combination thereof.
What it wouldn’t do, in and of itself, is give the federal government future spending power that it wouldn’t otherwise have had.
What we’re talking about here isn’t whether spending on a particular thing is or isn’t a good idea when we’re talking about saving in this context. That’s always the consideration – whether or not putting resources to a particular use is worthwhile, in the context of all the other things those resources might be put toward, including nothing at all. But it’s not a question of saving money.
If you’re trying to do what’s best for the health and welfare of the nation, money isn’t the problem. What you’re limited by is resources, if you’re the issuer of the nation’s currency. It’s stupid to say we can’t do something, when everyone knows it’s the right thing to do, simply because we “don’t have the money,” especially when it’s really because you think you might need that money later.
I’m going to add that I think we actually agree, if we can understand each other’s way of putting things. The discussion of money, as such, is not in reaction to what you’re saying so much as in reaction to those who argue against things that are actually worthwhile – things they, themselves, might admit are worthwhile – because “deficits!” and “burdening future generations!” and such.
You know what’s a burden? Crumbling infrastructure and lots of sick, poor, and poorly educated people.
I’m going to add that I think we actually agree, if we can understand each other’s way of putting things. The discussion of money, as such, is not in reaction to what you’re saying so much as in reaction to those who argue against things that are actually worthwhile – things they, themselves, might admit are worthwhile – because “deficits!” and “burdening future generations!” and such.
You know what’s a burden? Crumbling infrastructure and lots of sick, poor, and poorly educated people.
I’m going to add that I think we actually agree, if we can understand each other’s way of putting things. The discussion of money, as such, is not in reaction to what you’re saying so much as in reaction to those who argue against things that are actually worthwhile – things they, themselves, might admit are worthwhile – because “deficits!” and “burdening future generations!” and such.
You know what’s a burden? Crumbling infrastructure and lots of sick, poor, and poorly educated people.
It’s like purposely not scoring a touchdown in a football game, because you might need one more in the next game.
Wouldn’t it be more like not trying to score well on the 18th hole if you do not need to do so to win? Just to keep from cutting your handicap for next time.
In some sports, you actually can save points (strokes, in this case) for next time.
It’s like purposely not scoring a touchdown in a football game, because you might need one more in the next game.
Wouldn’t it be more like not trying to score well on the 18th hole if you do not need to do so to win? Just to keep from cutting your handicap for next time.
In some sports, you actually can save points (strokes, in this case) for next time.
It’s like purposely not scoring a touchdown in a football game, because you might need one more in the next game.
Wouldn’t it be more like not trying to score well on the 18th hole if you do not need to do so to win? Just to keep from cutting your handicap for next time.
In some sports, you actually can save points (strokes, in this case) for next time.
HSH,
Great football analogy!
Perhaps the confusion is there are those who believe that cutting “real stuff” today gives you room in the future to “spend more money” and thus conflate two different things.
We can certainly have a petroleum reserve to have “more oil” in the future. But couldn’t we do the same thing by just leaving it in the ground? The total amount of oil is unchanged in either case. We are just deferring consumption.
But if we raised taxes today to “save” for tomorrow, that would not make any sense. In a fiscal sense there is no “saving” that can be realized in the future.
Apples and oranges?
I think you, byomtov, and I pretty much agree.
HSH,
Great football analogy!
Perhaps the confusion is there are those who believe that cutting “real stuff” today gives you room in the future to “spend more money” and thus conflate two different things.
We can certainly have a petroleum reserve to have “more oil” in the future. But couldn’t we do the same thing by just leaving it in the ground? The total amount of oil is unchanged in either case. We are just deferring consumption.
But if we raised taxes today to “save” for tomorrow, that would not make any sense. In a fiscal sense there is no “saving” that can be realized in the future.
Apples and oranges?
I think you, byomtov, and I pretty much agree.
HSH,
Great football analogy!
Perhaps the confusion is there are those who believe that cutting “real stuff” today gives you room in the future to “spend more money” and thus conflate two different things.
We can certainly have a petroleum reserve to have “more oil” in the future. But couldn’t we do the same thing by just leaving it in the ground? The total amount of oil is unchanged in either case. We are just deferring consumption.
But if we raised taxes today to “save” for tomorrow, that would not make any sense. In a fiscal sense there is no “saving” that can be realized in the future.
Apples and oranges?
I think you, byomtov, and I pretty much agree.
I think we do.
Of course definitions of “waste”differ, so that’s a trap for the discussion. And yes, the issue is recources, not cash. Talking about it in monetary terms adds confusion, I think. So does conflating what the government, in isolation, doea with what society does.
We can cut down a tree today or let it grow. Letting it grow is saving. Who the woodsman works for is immaterial.
I think we do.
Of course definitions of “waste”differ, so that’s a trap for the discussion. And yes, the issue is recources, not cash. Talking about it in monetary terms adds confusion, I think. So does conflating what the government, in isolation, doea with what society does.
We can cut down a tree today or let it grow. Letting it grow is saving. Who the woodsman works for is immaterial.
I think we do.
Of course definitions of “waste”differ, so that’s a trap for the discussion. And yes, the issue is recources, not cash. Talking about it in monetary terms adds confusion, I think. So does conflating what the government, in isolation, doea with what society does.
We can cut down a tree today or let it grow. Letting it grow is saving. Who the woodsman works for is immaterial.
In some sports, you actually can save points (strokes, in this case) for next time.
Well, no. Because you have to execute more strokes “now” to do this. However, if you could go out and birdie every hole and still manage to raise your handicap, well, that would be something!
In some sports, you actually can save points (strokes, in this case) for next time.
Well, no. Because you have to execute more strokes “now” to do this. However, if you could go out and birdie every hole and still manage to raise your handicap, well, that would be something!
In some sports, you actually can save points (strokes, in this case) for next time.
Well, no. Because you have to execute more strokes “now” to do this. However, if you could go out and birdie every hole and still manage to raise your handicap, well, that would be something!
But what counts is winning matches, not how many strokes you take to do it. No bonuses for winning by 4 strokes this time, rather than 2.
But what counts is winning matches, not how many strokes you take to do it. No bonuses for winning by 4 strokes this time, rather than 2.
But what counts is winning matches, not how many strokes you take to do it. No bonuses for winning by 4 strokes this time, rather than 2.
I don’t know from golf, wj. If you’re right, then, no – it’s not like golf. It’s like football (and other real sports – ZINGER!!!).
I don’t know from golf, wj. If you’re right, then, no – it’s not like golf. It’s like football (and other real sports – ZINGER!!!).
I don’t know from golf, wj. If you’re right, then, no – it’s not like golf. It’s like football (and other real sports – ZINGER!!!).
Hope I’m not overdoing this, but here’s why govenrment can “save.” It collects some taxes, and then can spend that money on things with long-term benefits, or on current consumption, wasteful or not, as opinions will differ on that point.
If it does the former it saves. If it sticks the extra cash in a mattress nothing happens. If it uses it to reduce the debt then it marginally reduces the interest rates it faces, and enables greater borrowing later, when there are worthwhile things to do – like in a downturn when the returns on spending are large and it makes sense to borrow generously.
Hope I’m not overdoing this, but here’s why govenrment can “save.” It collects some taxes, and then can spend that money on things with long-term benefits, or on current consumption, wasteful or not, as opinions will differ on that point.
If it does the former it saves. If it sticks the extra cash in a mattress nothing happens. If it uses it to reduce the debt then it marginally reduces the interest rates it faces, and enables greater borrowing later, when there are worthwhile things to do – like in a downturn when the returns on spending are large and it makes sense to borrow generously.
Hope I’m not overdoing this, but here’s why govenrment can “save.” It collects some taxes, and then can spend that money on things with long-term benefits, or on current consumption, wasteful or not, as opinions will differ on that point.
If it does the former it saves. If it sticks the extra cash in a mattress nothing happens. If it uses it to reduce the debt then it marginally reduces the interest rates it faces, and enables greater borrowing later, when there are worthwhile things to do – like in a downturn when the returns on spending are large and it makes sense to borrow generously.
byomtov,
you’re getting yourself tangled up in the (all too common) confusion between fiat currency and “precious metal” currency.
One, it makes sense for a government to hoard, the other, it has an infinite supply, only subject to constraints set by political and economic stability factors.
byomtov,
you’re getting yourself tangled up in the (all too common) confusion between fiat currency and “precious metal” currency.
One, it makes sense for a government to hoard, the other, it has an infinite supply, only subject to constraints set by political and economic stability factors.
byomtov,
you’re getting yourself tangled up in the (all too common) confusion between fiat currency and “precious metal” currency.
One, it makes sense for a government to hoard, the other, it has an infinite supply, only subject to constraints set by political and economic stability factors.
snarki,
I don’t think so, and I don’t think I’m tangled up, but maybe you’re right, and could explain. I am not talking about gold and the like at all (not that I think hoarding that ultimately makes sense, either.)
I am agreeing that hoarding dollars makes no sense for the government. My definition of “saving” is not consuming all real production, but using some of it to increase future production.
snarki,
I don’t think so, and I don’t think I’m tangled up, but maybe you’re right, and could explain. I am not talking about gold and the like at all (not that I think hoarding that ultimately makes sense, either.)
I am agreeing that hoarding dollars makes no sense for the government. My definition of “saving” is not consuming all real production, but using some of it to increase future production.
snarki,
I don’t think so, and I don’t think I’m tangled up, but maybe you’re right, and could explain. I am not talking about gold and the like at all (not that I think hoarding that ultimately makes sense, either.)
I am agreeing that hoarding dollars makes no sense for the government. My definition of “saving” is not consuming all real production, but using some of it to increase future production.
If I can stick with the fooball analogy, what you’re describing would be like pulling your starting quarterback late in a game when you have an insurmountable lead, to avoid injury and/or to give your back-up some reps. That might reduce your chances of scoring more points, but you wouldn’t be doing it for that purpose, and if you did score more points, it wouldn’t reduce your ability to score in future games.
If I can stick with the fooball analogy, what you’re describing would be like pulling your starting quarterback late in a game when you have an insurmountable lead, to avoid injury and/or to give your back-up some reps. That might reduce your chances of scoring more points, but you wouldn’t be doing it for that purpose, and if you did score more points, it wouldn’t reduce your ability to score in future games.
If I can stick with the fooball analogy, what you’re describing would be like pulling your starting quarterback late in a game when you have an insurmountable lead, to avoid injury and/or to give your back-up some reps. That might reduce your chances of scoring more points, but you wouldn’t be doing it for that purpose, and if you did score more points, it wouldn’t reduce your ability to score in future games.
Perhaps we are confusing “savings” (not playing golf today) with “investment” (taking more strokes today to raise my handicap tomorrow).
In std. macro theory they are supposed to be equal, but when savings = not playing golf, well, that is totally unacceptable.
heh. 😉
Perhaps we are confusing “savings” (not playing golf today) with “investment” (taking more strokes today to raise my handicap tomorrow).
In std. macro theory they are supposed to be equal, but when savings = not playing golf, well, that is totally unacceptable.
heh. 😉
Perhaps we are confusing “savings” (not playing golf today) with “investment” (taking more strokes today to raise my handicap tomorrow).
In std. macro theory they are supposed to be equal, but when savings = not playing golf, well, that is totally unacceptable.
heh. 😉
taking more strokes today to raise my handicap tomorrow
Which, by the way, is cheating. Golfers, like fishermen, never lie.
Fore!
taking more strokes today to raise my handicap tomorrow
Which, by the way, is cheating. Golfers, like fishermen, never lie.
Fore!
taking more strokes today to raise my handicap tomorrow
Which, by the way, is cheating. Golfers, like fishermen, never lie.
Fore!
Yes bobby.
It all gets confusing, especially when money comes into the picture.
Fallacies of composition lurk everywhere.
Yes bobby.
It all gets confusing, especially when money comes into the picture.
Fallacies of composition lurk everywhere.
Yes bobby.
It all gets confusing, especially when money comes into the picture.
Fallacies of composition lurk everywhere.
byomtov,
it’s just that practically everyone’s mental picture of “money” is something very much like “precious-metal based”, absorbed by osmosis at a young age, no doubt.
For everyone other than the government, there’s no real difference between the two: you have a limited supply of money. The problem comes when people try to apply a “family budget” model to a government that prints it’s own money, implying limitations that do not actually apply.
byomtov,
it’s just that practically everyone’s mental picture of “money” is something very much like “precious-metal based”, absorbed by osmosis at a young age, no doubt.
For everyone other than the government, there’s no real difference between the two: you have a limited supply of money. The problem comes when people try to apply a “family budget” model to a government that prints it’s own money, implying limitations that do not actually apply.
byomtov,
it’s just that practically everyone’s mental picture of “money” is something very much like “precious-metal based”, absorbed by osmosis at a young age, no doubt.
For everyone other than the government, there’s no real difference between the two: you have a limited supply of money. The problem comes when people try to apply a “family budget” model to a government that prints it’s own money, implying limitations that do not actually apply.
My understanding of economics is pretty basic, at best, but I have a question.
Isn’t there some relationship between the stock of money, and the underlying wealth that it represents? Where “underlying wealth” basically means “stuff” – goods, available services, infrastructure, etc.
I understand that there are cases (like the DC co-op example) where insufficient circulating money can impede productive activity. So, in those cases, maybe it makes sense to put more money in circulation.
But isn’t there a point at which it’s a bad idea to, for instance, deal with revenue shortfalls by printing more money?
I do understand that the two things – money per se, and stuff – are not the same, but surely they are not unrelated to each other?
My understanding of economics is pretty basic, at best, but I have a question.
Isn’t there some relationship between the stock of money, and the underlying wealth that it represents? Where “underlying wealth” basically means “stuff” – goods, available services, infrastructure, etc.
I understand that there are cases (like the DC co-op example) where insufficient circulating money can impede productive activity. So, in those cases, maybe it makes sense to put more money in circulation.
But isn’t there a point at which it’s a bad idea to, for instance, deal with revenue shortfalls by printing more money?
I do understand that the two things – money per se, and stuff – are not the same, but surely they are not unrelated to each other?
My understanding of economics is pretty basic, at best, but I have a question.
Isn’t there some relationship between the stock of money, and the underlying wealth that it represents? Where “underlying wealth” basically means “stuff” – goods, available services, infrastructure, etc.
I understand that there are cases (like the DC co-op example) where insufficient circulating money can impede productive activity. So, in those cases, maybe it makes sense to put more money in circulation.
But isn’t there a point at which it’s a bad idea to, for instance, deal with revenue shortfalls by printing more money?
I do understand that the two things – money per se, and stuff – are not the same, but surely they are not unrelated to each other?
In a fiat system, dah money created to cover central government deficits (either by printing or issuing bonds) = net financial assets of the private sector.
The government can also create money from nothing and buy anything the economy is able to produce. If they print too much to try to buy too much stuff you get monetary inflation.
At that point, pretty much everybody would agree that it’s not a good policy…unless, of course, you are deeply in debt.
In a fiat system, dah money created to cover central government deficits (either by printing or issuing bonds) = net financial assets of the private sector.
The government can also create money from nothing and buy anything the economy is able to produce. If they print too much to try to buy too much stuff you get monetary inflation.
At that point, pretty much everybody would agree that it’s not a good policy…unless, of course, you are deeply in debt.
In a fiat system, dah money created to cover central government deficits (either by printing or issuing bonds) = net financial assets of the private sector.
The government can also create money from nothing and buy anything the economy is able to produce. If they print too much to try to buy too much stuff you get monetary inflation.
At that point, pretty much everybody would agree that it’s not a good policy…unless, of course, you are deeply in debt.
OK, cool, that makes sense. Thanks bobbyp.
OK, cool, that makes sense. Thanks bobbyp.
OK, cool, that makes sense. Thanks bobbyp.
Yeah, there’s a relationship, but it’s complicated. And abusive, sometimes. It’s because money services two purposes (cribbing from Krugthulu, although this is standard stuff): a store of value, and a medium of exchange.
Simplest case: too much money chasing a fixed amount of “stuff” makes the prices increase (inflation). But if that extra cash isn’t chasing “stuff”, but instead being put in mattresses or bank accounts or paying down debt (and not being lent out), then there’s little affect on prices.
But if you have too little money (as you mention), it hampers the exchanges that make an economy function, and you get a classic deflationary depression: prices drop (cash gets more valuable), trade stagnates, debt becomes difficult to service.
Getting the right balance isn’t trivial, but there’s some leeway, and a fiat currency system can adjust, unlike a metal-currency system.
The most common “failure mode” for fiat currency is runaway inflation, for metal-currency it’s deflationary depression.
Yeah, there’s a relationship, but it’s complicated. And abusive, sometimes. It’s because money services two purposes (cribbing from Krugthulu, although this is standard stuff): a store of value, and a medium of exchange.
Simplest case: too much money chasing a fixed amount of “stuff” makes the prices increase (inflation). But if that extra cash isn’t chasing “stuff”, but instead being put in mattresses or bank accounts or paying down debt (and not being lent out), then there’s little affect on prices.
But if you have too little money (as you mention), it hampers the exchanges that make an economy function, and you get a classic deflationary depression: prices drop (cash gets more valuable), trade stagnates, debt becomes difficult to service.
Getting the right balance isn’t trivial, but there’s some leeway, and a fiat currency system can adjust, unlike a metal-currency system.
The most common “failure mode” for fiat currency is runaway inflation, for metal-currency it’s deflationary depression.
Yeah, there’s a relationship, but it’s complicated. And abusive, sometimes. It’s because money services two purposes (cribbing from Krugthulu, although this is standard stuff): a store of value, and a medium of exchange.
Simplest case: too much money chasing a fixed amount of “stuff” makes the prices increase (inflation). But if that extra cash isn’t chasing “stuff”, but instead being put in mattresses or bank accounts or paying down debt (and not being lent out), then there’s little affect on prices.
But if you have too little money (as you mention), it hampers the exchanges that make an economy function, and you get a classic deflationary depression: prices drop (cash gets more valuable), trade stagnates, debt becomes difficult to service.
Getting the right balance isn’t trivial, but there’s some leeway, and a fiat currency system can adjust, unlike a metal-currency system.
The most common “failure mode” for fiat currency is runaway inflation, for metal-currency it’s deflationary depression.
I have also encountered the theory that part (but only part) of the reason for the boom and bust cycles in the 19th century was that we kept finding large gold and silver fields — California, the Yukon, Nevada, etc. Which meant that our precious-metal-based currency featured the same inflationary problems as fiat money — more money was going into circulation, without any (or at least without adequate) corresponding increase in the real economy.
I have also encountered the theory that part (but only part) of the reason for the boom and bust cycles in the 19th century was that we kept finding large gold and silver fields — California, the Yukon, Nevada, etc. Which meant that our precious-metal-based currency featured the same inflationary problems as fiat money — more money was going into circulation, without any (or at least without adequate) corresponding increase in the real economy.
I have also encountered the theory that part (but only part) of the reason for the boom and bust cycles in the 19th century was that we kept finding large gold and silver fields — California, the Yukon, Nevada, etc. Which meant that our precious-metal-based currency featured the same inflationary problems as fiat money — more money was going into circulation, without any (or at least without adequate) corresponding increase in the real economy.
The most common “failure mode” for fiat currency is runaway inflation, for metal-currency it’s deflationary depression.
Good recap. That was mostly true, but no country I am aware of is on a metal (i.e., gold) standard. Some peg their currencies to the dollar…which is similar.
So now we witness an all to common “failure mode” in fiat currency systems (cf. Eurozone, and possibly even the USofA) where we have actual deflation in systems where the government can, technically, spend as much as it wants.
Krugman’s “lower bound” complicates matters.
The most common “failure mode” for fiat currency is runaway inflation, for metal-currency it’s deflationary depression.
Good recap. That was mostly true, but no country I am aware of is on a metal (i.e., gold) standard. Some peg their currencies to the dollar…which is similar.
So now we witness an all to common “failure mode” in fiat currency systems (cf. Eurozone, and possibly even the USofA) where we have actual deflation in systems where the government can, technically, spend as much as it wants.
Krugman’s “lower bound” complicates matters.
The most common “failure mode” for fiat currency is runaway inflation, for metal-currency it’s deflationary depression.
Good recap. That was mostly true, but no country I am aware of is on a metal (i.e., gold) standard. Some peg their currencies to the dollar…which is similar.
So now we witness an all to common “failure mode” in fiat currency systems (cf. Eurozone, and possibly even the USofA) where we have actual deflation in systems where the government can, technically, spend as much as it wants.
Krugman’s “lower bound” complicates matters.
Yeah, the “deflationary depression” was much more common in the 19th century, when most countries were still on metal-based currency. Not that there’s anything magic about the “metal”, but it’s just an effect of having a money supply that is out of a country’s control.
wj: yes, gold/silver rushes…Spain had similar problems a couple of centuries earlier, when all the metal from the New World hit their economy.
Also, England and China in the 19th century: China had wonderful high-quality goods to sell, but was only interested in getting silver in return…draining the English economy of silver. SO, the English started to ship opium to China, and fought wars to open up the trade.
The Greeks are finding out just how much fun it is to turn over monetary policy to forces that are out of their control.
The “lower bound” means that it’s much easier to recover from inflation than deflation.
Yeah, the “deflationary depression” was much more common in the 19th century, when most countries were still on metal-based currency. Not that there’s anything magic about the “metal”, but it’s just an effect of having a money supply that is out of a country’s control.
wj: yes, gold/silver rushes…Spain had similar problems a couple of centuries earlier, when all the metal from the New World hit their economy.
Also, England and China in the 19th century: China had wonderful high-quality goods to sell, but was only interested in getting silver in return…draining the English economy of silver. SO, the English started to ship opium to China, and fought wars to open up the trade.
The Greeks are finding out just how much fun it is to turn over monetary policy to forces that are out of their control.
The “lower bound” means that it’s much easier to recover from inflation than deflation.
Yeah, the “deflationary depression” was much more common in the 19th century, when most countries were still on metal-based currency. Not that there’s anything magic about the “metal”, but it’s just an effect of having a money supply that is out of a country’s control.
wj: yes, gold/silver rushes…Spain had similar problems a couple of centuries earlier, when all the metal from the New World hit their economy.
Also, England and China in the 19th century: China had wonderful high-quality goods to sell, but was only interested in getting silver in return…draining the English economy of silver. SO, the English started to ship opium to China, and fought wars to open up the trade.
The Greeks are finding out just how much fun it is to turn over monetary policy to forces that are out of their control.
The “lower bound” means that it’s much easier to recover from inflation than deflation.
The most common “failure mode” for fiat currency is runaway inflation, for metal-currency it’s deflationary depression.
True.
The difference is that under a precious metal system you can’t do anything except hope for more discoveries or go off the system. And going off the gold/whatever system has often been a very good idea. (The history of this is a good argument against gold bugs, BTW).
Under a fiat system it is possible, albeit sometimes painful, to stop the problem via government action. See Volcker, Paul.
The most common “failure mode” for fiat currency is runaway inflation, for metal-currency it’s deflationary depression.
True.
The difference is that under a precious metal system you can’t do anything except hope for more discoveries or go off the system. And going off the gold/whatever system has often been a very good idea. (The history of this is a good argument against gold bugs, BTW).
Under a fiat system it is possible, albeit sometimes painful, to stop the problem via government action. See Volcker, Paul.
The most common “failure mode” for fiat currency is runaway inflation, for metal-currency it’s deflationary depression.
True.
The difference is that under a precious metal system you can’t do anything except hope for more discoveries or go off the system. And going off the gold/whatever system has often been a very good idea. (The history of this is a good argument against gold bugs, BTW).
Under a fiat system it is possible, albeit sometimes painful, to stop the problem via government action. See Volcker, Paul.
wj,
It is also instructive that Andrew Jackson paid off every penny of all outstanding national debt during his presidency, kicking off one of the nastiest of the 19th century depressions.
This, his war against the National Bank, and his racism makes mockery of his portrait being on the 20 dollar bill, a widely circulated unit of currency backed by, well, nothing.
There is some small comfort to be had knowing the level of apoplexy he would undoubtedly experience if he could somehow know this.
wj,
It is also instructive that Andrew Jackson paid off every penny of all outstanding national debt during his presidency, kicking off one of the nastiest of the 19th century depressions.
This, his war against the National Bank, and his racism makes mockery of his portrait being on the 20 dollar bill, a widely circulated unit of currency backed by, well, nothing.
There is some small comfort to be had knowing the level of apoplexy he would undoubtedly experience if he could somehow know this.
wj,
It is also instructive that Andrew Jackson paid off every penny of all outstanding national debt during his presidency, kicking off one of the nastiest of the 19th century depressions.
This, his war against the National Bank, and his racism makes mockery of his portrait being on the 20 dollar bill, a widely circulated unit of currency backed by, well, nothing.
There is some small comfort to be had knowing the level of apoplexy he would undoubtedly experience if he could somehow know this.
about 1,200 Americans control more than 40 percent of election contributions
because pseudo-libertarian sugar daddies and their lackeys in the courts say they should.
about 1,200 Americans control more than 40 percent of election contributions
because pseudo-libertarian sugar daddies and their lackeys in the courts say they should.
about 1,200 Americans control more than 40 percent of election contributions
because pseudo-libertarian sugar daddies and their lackeys in the courts say they should.
Please go back in time to the mid 90s and explain this all to the New Jersey legislature that allowed Whitman (and by extension, every NJ governor after her) to blithely ignore the pension in the pursuit of political power thru legal bribery of the constituents. Cause my current governor is ignoring a contractual obligation to fund the pension, citing necessity. Just like Whitman.
Please go back in time to the mid 90s and explain this all to the New Jersey legislature that allowed Whitman (and by extension, every NJ governor after her) to blithely ignore the pension in the pursuit of political power thru legal bribery of the constituents. Cause my current governor is ignoring a contractual obligation to fund the pension, citing necessity. Just like Whitman.
Please go back in time to the mid 90s and explain this all to the New Jersey legislature that allowed Whitman (and by extension, every NJ governor after her) to blithely ignore the pension in the pursuit of political power thru legal bribery of the constituents. Cause my current governor is ignoring a contractual obligation to fund the pension, citing necessity. Just like Whitman.
Not that I agree with what they did with state pensions in NJ, but the discussion here applies to the federal government. States are constrained as users, but not issuers, of currency. There are no fiat New Jersey dollars. New Jersey is stuck with using US dollars and is not fiscally sovereign (the same way Greece is currently not fiscally sovereign and is stuck with using the Euro).
Not that I agree with what they did with state pensions in NJ, but the discussion here applies to the federal government. States are constrained as users, but not issuers, of currency. There are no fiat New Jersey dollars. New Jersey is stuck with using US dollars and is not fiscally sovereign (the same way Greece is currently not fiscally sovereign and is stuck with using the Euro).
Not that I agree with what they did with state pensions in NJ, but the discussion here applies to the federal government. States are constrained as users, but not issuers, of currency. There are no fiat New Jersey dollars. New Jersey is stuck with using US dollars and is not fiscally sovereign (the same way Greece is currently not fiscally sovereign and is stuck with using the Euro).
HSH, Jado’s point is more about the OP topic of states playing dishonest games with pension investment estimates.
NJ is a particularly egregious case, where the governorship has alternated between Republicans and Democrats: Democrats try to raise the taxes needed for pensions, lose popularity; Republicans run on a platform of tax cuts, play dishonest games with investment estimates, leave a pension mess. Rinse, repeat, ad nausium.
The workers don’t get to decide “hey, my bills are high this month, so I’m going to skip on that pension contribution”, so why should a governor?
HSH, Jado’s point is more about the OP topic of states playing dishonest games with pension investment estimates.
NJ is a particularly egregious case, where the governorship has alternated between Republicans and Democrats: Democrats try to raise the taxes needed for pensions, lose popularity; Republicans run on a platform of tax cuts, play dishonest games with investment estimates, leave a pension mess. Rinse, repeat, ad nausium.
The workers don’t get to decide “hey, my bills are high this month, so I’m going to skip on that pension contribution”, so why should a governor?
HSH, Jado’s point is more about the OP topic of states playing dishonest games with pension investment estimates.
NJ is a particularly egregious case, where the governorship has alternated between Republicans and Democrats: Democrats try to raise the taxes needed for pensions, lose popularity; Republicans run on a platform of tax cuts, play dishonest games with investment estimates, leave a pension mess. Rinse, repeat, ad nausium.
The workers don’t get to decide “hey, my bills are high this month, so I’m going to skip on that pension contribution”, so why should a governor?
Ah, I think you’re right. I took “this all” and “citing necessity” respectively to mean “all of this stuff about non-existent fiscal constraints” and “citing a thereby non-existent necessity.”
But I do know what Jado’s getting at. I live in NJ, my dad’s a retired cop, and I have a number of friends and neighbors who are working cops, so I do get exposed to all the happiness over the NJ pensions.
Ah, I think you’re right. I took “this all” and “citing necessity” respectively to mean “all of this stuff about non-existent fiscal constraints” and “citing a thereby non-existent necessity.”
But I do know what Jado’s getting at. I live in NJ, my dad’s a retired cop, and I have a number of friends and neighbors who are working cops, so I do get exposed to all the happiness over the NJ pensions.
Ah, I think you’re right. I took “this all” and “citing necessity” respectively to mean “all of this stuff about non-existent fiscal constraints” and “citing a thereby non-existent necessity.”
But I do know what Jado’s getting at. I live in NJ, my dad’s a retired cop, and I have a number of friends and neighbors who are working cops, so I do get exposed to all the happiness over the NJ pensions.
Since corps and public entities are moving to shun defined benefit pensions like the plague, I feel a few ground rules should apply:
1. Pensions are part of the wage. Reneging on a pension promise is therefore theft as surely as if they shorted your paycheck. Pensioners should be first in line in the event of a corporate or public entity bankruptcy.
2. If an entity has no pensions for front line employees, then no pensions for executives, either.
3. Changes to the program can only apply to new enrollees.
4. Try paying public employees a decent wage instead of extravagant and likely to go unfulfilled future promises.
5. Maybe fix the assumed ROI to match that crowd wisdom and no cheating on the “fully funded” part.
6. Chris Christy and Meg Whitman should be sharing a jail cell.
Since corps and public entities are moving to shun defined benefit pensions like the plague, I feel a few ground rules should apply:
1. Pensions are part of the wage. Reneging on a pension promise is therefore theft as surely as if they shorted your paycheck. Pensioners should be first in line in the event of a corporate or public entity bankruptcy.
2. If an entity has no pensions for front line employees, then no pensions for executives, either.
3. Changes to the program can only apply to new enrollees.
4. Try paying public employees a decent wage instead of extravagant and likely to go unfulfilled future promises.
5. Maybe fix the assumed ROI to match that crowd wisdom and no cheating on the “fully funded” part.
6. Chris Christy and Meg Whitman should be sharing a jail cell.
Since corps and public entities are moving to shun defined benefit pensions like the plague, I feel a few ground rules should apply:
1. Pensions are part of the wage. Reneging on a pension promise is therefore theft as surely as if they shorted your paycheck. Pensioners should be first in line in the event of a corporate or public entity bankruptcy.
2. If an entity has no pensions for front line employees, then no pensions for executives, either.
3. Changes to the program can only apply to new enrollees.
4. Try paying public employees a decent wage instead of extravagant and likely to go unfulfilled future promises.
5. Maybe fix the assumed ROI to match that crowd wisdom and no cheating on the “fully funded” part.
6. Chris Christy and Meg Whitman should be sharing a jail cell.
about 1,200 Americans control more than 40 percent of election contributions
Ha! Nonsense:
about 1,200 Americans control more than 40 percent of election contributions
Ha! Nonsense:
about 1,200 Americans control more than 40 percent of election contributions
Ha! Nonsense:
Who the hell is Meg Whitman?
Who the hell is Meg Whitman?
Who the hell is Meg Whitman?
bobbyp: all good stuff; the accounting profession needs to crack down on those crazy investment assumptions.
BTW, to add to your list: require state and municipal employees be enrolled in SS. Some aren’t, because of “state sovereignty”, which makes the underfunding of public pensions even more devastating.
bobbyp: all good stuff; the accounting profession needs to crack down on those crazy investment assumptions.
BTW, to add to your list: require state and municipal employees be enrolled in SS. Some aren’t, because of “state sovereignty”, which makes the underfunding of public pensions even more devastating.
bobbyp: all good stuff; the accounting profession needs to crack down on those crazy investment assumptions.
BTW, to add to your list: require state and municipal employees be enrolled in SS. Some aren’t, because of “state sovereignty”, which makes the underfunding of public pensions even more devastating.
around 125 people
blessed honorable patriots who deserve to speak for the rest of us, each and every one!
around 125 people
blessed honorable patriots who deserve to speak for the rest of us, each and every one!
around 125 people
blessed honorable patriots who deserve to speak for the rest of us, each and every one!
“…around 125 people…”
I think that’s the best argument ever made for extended magazines.
“…around 125 people…”
I think that’s the best argument ever made for extended magazines.
“…around 125 people…”
I think that’s the best argument ever made for extended magazines.
Who the hell is Meg Whitman?
oops…meant Christine Todd Whitman.
Who the hell is Meg Whitman?
oops…meant Christine Todd Whitman.
Who the hell is Meg Whitman?
oops…meant Christine Todd Whitman.
They could share a cell, which Meg in for intent to emulate Christine.
They could share a cell, which Meg in for intent to emulate Christine.
They could share a cell, which Meg in for intent to emulate Christine.
with, witch, whatever.
with, witch, whatever.
with, witch, whatever.
You know, you could do a sociological study of American history in the here and now by comparing the fall in subscription rates of magazines and the rise in the demand and purchase of larger caliber magazines.
Reading your enemies opinions is down.
Preparing to shoot your enemies is the thing now.
People Magazine.
Dead People Magazine.
Us.
Them.
You know, you could do a sociological study of American history in the here and now by comparing the fall in subscription rates of magazines and the rise in the demand and purchase of larger caliber magazines.
Reading your enemies opinions is down.
Preparing to shoot your enemies is the thing now.
People Magazine.
Dead People Magazine.
Us.
Them.
You know, you could do a sociological study of American history in the here and now by comparing the fall in subscription rates of magazines and the rise in the demand and purchase of larger caliber magazines.
Reading your enemies opinions is down.
Preparing to shoot your enemies is the thing now.
People Magazine.
Dead People Magazine.
Us.
Them.
Perhaps someone should make a movie: “I see soon to be dead people.”
Perhaps someone should make a movie: “I see soon to be dead people.”
Perhaps someone should make a movie: “I see soon to be dead people.”
“Reading your enemies’ opinions is down.”
No kidding. You know how often I’ll post a link to something, and be told it isn’t worth following because it’s a rightwing site? The only sites they’ll go to are the ones that would never tell them anything that might change their views.
“Reading your enemies’ opinions is down.”
No kidding. You know how often I’ll post a link to something, and be told it isn’t worth following because it’s a rightwing site? The only sites they’ll go to are the ones that would never tell them anything that might change their views.
“Reading your enemies’ opinions is down.”
No kidding. You know how often I’ll post a link to something, and be told it isn’t worth following because it’s a rightwing site? The only sites they’ll go to are the ones that would never tell them anything that might change their views.
The Washington Post continues its War on Old People
The Washington Post continues its War on Old People
The Washington Post continues its War on Old People
You know how often I’ll post a link to something, and be told it isn’t worth following because it’s a rightwing site?
I haven’t seen a link from you for a while. Looking in the dashboard, since you’ve come back to taunt the Count, you haven’t posted a single link. But don’t let the presence of actual evidence force you to change your views.
You know how often I’ll post a link to something, and be told it isn’t worth following because it’s a rightwing site?
I haven’t seen a link from you for a while. Looking in the dashboard, since you’ve come back to taunt the Count, you haven’t posted a single link. But don’t let the presence of actual evidence force you to change your views.
You know how often I’ll post a link to something, and be told it isn’t worth following because it’s a rightwing site?
I haven’t seen a link from you for a while. Looking in the dashboard, since you’ve come back to taunt the Count, you haven’t posted a single link. But don’t let the presence of actual evidence force you to change your views.
That was mostly a problem at Crooked Timber, though it g
has happened here once or twice.
That was mostly a problem at Crooked Timber, though it g
has happened here once or twice.
That was mostly a problem at Crooked Timber, though it g
has happened here once or twice.
You know how often I’ll post a link to something, and be told it isn’t worth following because it’s a rightwing site?
I’ve made comments to that effect when you’ve linked to stuff on Breitbart or similar.
Some folks are just so partisan that you have to go fact-check everything they say. That’s a big PITA, so I don’t bother reading them.
There are left-wing sites I don’t read for the same reason.
There are only so many hours in a day.
You know how often I’ll post a link to something, and be told it isn’t worth following because it’s a rightwing site?
I’ve made comments to that effect when you’ve linked to stuff on Breitbart or similar.
Some folks are just so partisan that you have to go fact-check everything they say. That’s a big PITA, so I don’t bother reading them.
There are left-wing sites I don’t read for the same reason.
There are only so many hours in a day.
You know how often I’ll post a link to something, and be told it isn’t worth following because it’s a rightwing site?
I’ve made comments to that effect when you’ve linked to stuff on Breitbart or similar.
Some folks are just so partisan that you have to go fact-check everything they say. That’s a big PITA, so I don’t bother reading them.
There are left-wing sites I don’t read for the same reason.
There are only so many hours in a day.
Yes, and there’s a difference between fairly obvious bias, on one hand, and being purposely full of crap, or crazy enough to believe your own crap, on the other.
I might diagree with the conclusion of an analysis in the Wall Street Journal, for instance, but it will at least have enough factual information and detail that it’s worth the read, even if for the sole purpose of criticizing it.
Yes, and there’s a difference between fairly obvious bias, on one hand, and being purposely full of crap, or crazy enough to believe your own crap, on the other.
I might diagree with the conclusion of an analysis in the Wall Street Journal, for instance, but it will at least have enough factual information and detail that it’s worth the read, even if for the sole purpose of criticizing it.
Yes, and there’s a difference between fairly obvious bias, on one hand, and being purposely full of crap, or crazy enough to believe your own crap, on the other.
I might diagree with the conclusion of an analysis in the Wall Street Journal, for instance, but it will at least have enough factual information and detail that it’s worth the read, even if for the sole purpose of criticizing it.
Too bad I didn’t run across this earlier.
Too bad I didn’t run across this earlier.
Too bad I didn’t run across this earlier.
Good link, bobbyp. Clear-headed.
Good link, bobbyp. Clear-headed.
Good link, bobbyp. Clear-headed.