Adult discussions of Social Security
Is it possible to have an adult discussion of SS?
I have long been amazed by the attention people pay toward their disagreements with their "opponents" and their lack of attention toward those areas where they disagree. Witness Michael Medved and libertarians, Bill O'Reilly and anyone, etc. The worst sin I think a thinking person can make is to engage in rabid partisanship. I look at Democrat vs. Republican rivalries as a Spy vs. Spy, where there is no true difference except the color of their outfits. Remember The Savage Curtain, the Star Trek episode where Kirk, Spock, Lincoln, and Surak are forced into a combat with evil forces? If the two sides had been Democrats and Republicans, there would have been no discernable differences between the sides. It's like high school rivalries, where children perceive themselves as good and the others as evil based on nothing more than the neighborhood in which they were born.
So, here we have a group of kids who would refute everything said about Social Security by the president or anyone in favor of change simply because the president said something about change. [In fact, in their recent updates, they point out that the president hasn't formally said anything, but yet they still criticize everything he says because he said it. Or didn't say it. Or whatever.] In contrast, here is an adult discussion.
Just a few things I find amusing from the fracas:
1) The claim that there is no crisis.
1a) Really? Coulda fooled me, after listening to Clinton use the phrase "looming crisis", and Al Gore shape his campaign around the fictitious "lock box". Notice: This program is not 70 years old. Roosevelt changed it from its stated purpose (forced savings and pension) to a pay-as-you-go system early on, Johnson and the Democrats running the Vietnam war raided the lock box, Reagan and other presidents signed on to increases in the taxes that fund it, Clinton and other presidents signed on to tax (tax the proceeds that come from taxes?), and so on.
1b) Is there a new rule in American politics that says that unless there is a crisis (definition anyone?), we cannot talk about reform? Note to people just being born, for your consideration in, say, 2080, when you are first eligible to start receiving your benefits (if any): sorry, I suppose you would have preferred that we do something now rather than waiting until there was an actual crisis. How's that going?
2) "This is a progressive [tax and benefit] program." Poppycock, on at least 3 counts. This is what happens when partisanship trumps truth-seeking: you start to abandon whatever core principles you might have had and begin to deny the obvious simply for rhetorical points. First, lower income people don't tend to live as long as higher income people. Second, lower income enter the work force and pay into the system longer than higher income people. Third, the amount of income taxed is capped, clearly a regressive measure. For example, let's look at a real world case of a man who opts out of Vietnam service on a medical excuse, takes up skiing for a few years, then gets $1 million from his father to play the market (no payroll taxes on gifts or capital gains), then enters medical school. He retires early, and spends years living off of his trust funds, probably longer than many of his peers. I guarantee you that he will apply for SS at 62.5 years of age. What do you suppose his rate of and total return are going to be? Compared to your local mechanic, for example?
3) "What happens if the economy tanks?"
3a) Indeed, what happens if it tanks and the system stays as it is? How are we going to pay for the Baby Boomers when there will only be 2 workers for every retiree? Even Paul Krugman has been struggling with understanding the growth problem.
3b) The alternative form of this is, "What happens if your investments sour?" Let me pose an alternative question: What is the purpose of SS reform if you actually think reformers are out to screw the average American? Most people who believe this (aka, lock-step partisans) believe that the rich get richer and the poor get poorer. How? The rich own stocks (capitalists own the means of production, in Marx-speak). So, they actually think that the rich are going to screw the poor by "forcing" them to engage in the same type of asset acquisition that enriches the rich. Sort that out and get back to me.
3c) Why is everyone in favor of 401(k)s, IRAs, the Civil Service pension, the CALPERS, etc., if private investments are so risky? The long term return on stocks is ... ? Given the likely age at which people will begin contributing to these risky accounts (25) and retire (65), their time horizon is 40 years. Can anyone find me a 40 year period in which stocks lost money, even if you invested at a peak? And could someone please look up the relationship between risk and reward in the markets?
Finally, although it was more adult than most discussions I have seen, I saw this in a speech given by the President of the AARP I saw on CSpan today (paraphrasing):
5) From Left2Right, one of the risks (#8) that SS mitigates is that you will die, leaving your spouse with nothing. BZzzt! Actually, SS is much worse on that score because SS cannot be left to survivors as you see fit. Yep, the SCOTUS actually told us that yourPonzi invesment benefits are not your property (back to Roosevelt's little Potomac 2-step), so you cannot transfer them to, say, your siblings or grandkids.
Personally, I think there are good reasons to tinker with it, privatize it, or completely abandon it in favor of something better, but the tone of the debate is so puerile as to make me sick.
I have long been amazed by the attention people pay toward their disagreements with their "opponents" and their lack of attention toward those areas where they disagree. Witness Michael Medved and libertarians, Bill O'Reilly and anyone, etc. The worst sin I think a thinking person can make is to engage in rabid partisanship. I look at Democrat vs. Republican rivalries as a Spy vs. Spy, where there is no true difference except the color of their outfits. Remember The Savage Curtain, the Star Trek episode where Kirk, Spock, Lincoln, and Surak are forced into a combat with evil forces? If the two sides had been Democrats and Republicans, there would have been no discernable differences between the sides. It's like high school rivalries, where children perceive themselves as good and the others as evil based on nothing more than the neighborhood in which they were born.
So, here we have a group of kids who would refute everything said about Social Security by the president or anyone in favor of change simply because the president said something about change. [In fact, in their recent updates, they point out that the president hasn't formally said anything, but yet they still criticize everything he says because he said it. Or didn't say it. Or whatever.] In contrast, here is an adult discussion.
Just a few things I find amusing from the fracas:
1) The claim that there is no crisis.
1a) Really? Coulda fooled me, after listening to Clinton use the phrase "looming crisis", and Al Gore shape his campaign around the fictitious "lock box". Notice: This program is not 70 years old. Roosevelt changed it from its stated purpose (forced savings and pension) to a pay-as-you-go system early on, Johnson and the Democrats running the Vietnam war raided the lock box, Reagan and other presidents signed on to increases in the taxes that fund it, Clinton and other presidents signed on to tax (tax the proceeds that come from taxes?), and so on.
1b) Is there a new rule in American politics that says that unless there is a crisis (definition anyone?), we cannot talk about reform? Note to people just being born, for your consideration in, say, 2080, when you are first eligible to start receiving your benefits (if any): sorry, I suppose you would have preferred that we do something now rather than waiting until there was an actual crisis. How's that going?
2) "This is a progressive [tax and benefit] program." Poppycock, on at least 3 counts. This is what happens when partisanship trumps truth-seeking: you start to abandon whatever core principles you might have had and begin to deny the obvious simply for rhetorical points. First, lower income people don't tend to live as long as higher income people. Second, lower income enter the work force and pay into the system longer than higher income people. Third, the amount of income taxed is capped, clearly a regressive measure. For example, let's look at a real world case of a man who opts out of Vietnam service on a medical excuse, takes up skiing for a few years, then gets $1 million from his father to play the market (no payroll taxes on gifts or capital gains), then enters medical school. He retires early, and spends years living off of his trust funds, probably longer than many of his peers. I guarantee you that he will apply for SS at 62.5 years of age. What do you suppose his rate of and total return are going to be? Compared to your local mechanic, for example?
3) "What happens if the economy tanks?"
3a) Indeed, what happens if it tanks and the system stays as it is? How are we going to pay for the Baby Boomers when there will only be 2 workers for every retiree? Even Paul Krugman has been struggling with understanding the growth problem.
3b) The alternative form of this is, "What happens if your investments sour?" Let me pose an alternative question: What is the purpose of SS reform if you actually think reformers are out to screw the average American? Most people who believe this (aka, lock-step partisans) believe that the rich get richer and the poor get poorer. How? The rich own stocks (capitalists own the means of production, in Marx-speak). So, they actually think that the rich are going to screw the poor by "forcing" them to engage in the same type of asset acquisition that enriches the rich. Sort that out and get back to me.
3c) Why is everyone in favor of 401(k)s, IRAs, the Civil Service pension, the CALPERS, etc., if private investments are so risky? The long term return on stocks is ... ? Given the likely age at which people will begin contributing to these risky accounts (25) and retire (65), their time horizon is 40 years. Can anyone find me a 40 year period in which stocks lost money, even if you invested at a peak? And could someone please look up the relationship between risk and reward in the markets?
Finally, although it was more adult than most discussions I have seen, I saw this in a speech given by the President of the AARP I saw on CSpan today (paraphrasing):
Tinkering with SS is bad in any form. Furthermore, there needs to be more encouragement to save. We need to force people into 401 (k) programs and make it difficult for them to opt out.Let's get this straight: incentives matter. Why do you suppose people who could afford to do so fail to save for retirement? I submit to you that they no longer regard SSI (Supplemental Security Income) as supplemental, but rather as the whole ball of wax. In fact, that was always the push from the left: invent stories about seniors living on cat food, then increase benefits so that someone could live solely off of SS. Anyone surprised that people think they don't need to save for retirement?
5) From Left2Right, one of the risks (#8) that SS mitigates is that you will die, leaving your spouse with nothing. BZzzt! Actually, SS is much worse on that score because SS cannot be left to survivors as you see fit. Yep, the SCOTUS actually told us that your
Personally, I think there are good reasons to tinker with it, privatize it, or completely abandon it in favor of something better, but the tone of the debate is so puerile as to make me sick.
Labels: politics
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