the cato institute explains why young people should be pissed off

[chequita guevara]

Exactly.

[Dr Strangelove]

IIRC everyone born after 1939 will pay more to social sceurity than they will get out of it. That said, I don't know where these wealthy old people are, because they certainly aren't showing up at my office. Say! I've just gotten a Jim Dandy of an idea! Let's start a Federal program that will force medical clinics having a higher than normal ratio of well-off coots to share the wealth! In exchange they can have some of my Medicaid patients!

[Imran Siddiqui]

Oh oh... stop agreeing with me quick... before someone sees .

[chequita guevara]

So, we got Dr. S down for universal payer. Excellent.

[MrFun]

Originally posted by Imran Siddiqui
Oh oh... stop agreeing with me quick... before someone sees .

You think that's big news?

I have found myself agreeing with DinoDoc in this thread.

[David Floyd]

You think that's big news?

I have found myself agreeing with DinoDoc in this thread.

And me, which is probably bigger news.

[DinoDoc]

Originally posted by GePap
The point of Social security is not to make one rich, or to create furhter capital, but to insure a steady income.

I've repeatedly stated (and apparently been ignored) that in that respect SS fulfils that purpose extremely poorly when compared with 90%+ of the pension plans because it is consistently out-preformed by them when it comes to the creation of an income level that will allow you to maintain your previous standard of living. No one has really answered that other than to say that isn't the point of the program, which again serves as a strike against the program as a pension plan.

I also see little to no political will to institute the "simple" changes to SS you have been proposing in this thread.

[Kidicious]

Originally posted by DinoDoc
I've repeatedly stated (and apparently been ignored) that in that respect SS fulfils that purpose extremely poorly when compared with 90%+ of the pension plans because it is consistently out-preformed by them when it comes to the creation of an income level that will allow you to maintain your previous standard of living. No one has really answered that other than to say that isn't the point of the program, which again serves as a strike against the program as a pension plan.

I also see little to no political will to institute the "simple" changes to SS you have been proposing in this thread.

SS is not just a pension plan. It's also an insurance plan. You're comparing apples to oranges.

[MrFun]

Originally posted by David Floyd


And me, which is probably bigger news.

UGH

[Agathon]

Originally posted by DinoDoc
I've repeatedly stated (and apparently been ignored) that in that respect SS fulfils that purpose extremely poorly when compared with 90%+ of the pension plans because it is consistently out-preformed by them when it comes to the creation of an income level that will allow you to maintain your previous standard of living. No one has really answered that other than to say that isn't the point of the program, which again serves as a strike against the program as a pension plan.

I also see little to no political will to institute the "simple" changes to SS you have been proposing in this thread.

No you haven't been ignored.

Pension plans simply won't provide the broad coverage that SS manages and thus, they won't be as good at doing the job.

Compare it to health insurance and tell me if private markets manage to provide everyone with decent health insurance. Canada provides excellent health care to all its citizens for a fraction of the cost that the US pays (private plans included) to provide varying standards of health care to between 50-65% of its population. Exactly the same would happen if SS was abolished.

Social Security and other Welfare programs are in a large part public goods. As Che says, people are sometimes blinded to this fact because they've forgotten what life was like without one.

Most people don't want to live in a society where people are dying of easily treatable diseases and where the elderly live in poverty and face the indignity of relying on charity. Most people don't want to live in a society where a large section of the population has no stake in the social and economic system. Hence everyone pays into a central fund which alleviates these problems. It's compulsory because if it wasn't hardly anyone would pay. That's not to say that people wouldn't want to pay, but they would only pay if they could be sure that everyone else was and they weren't being taken for suckers. State compulsion solves this problem.

Of course each of us would be better off if everyone else paid and we didn't, but that's not a realistic option.

I'm not saying that it works well, and sometimes it doesn't. But that is an argument for reform, not an argument for abolition.

[pchang]

SS/Medicaid/etc. are all Ponzi schemes. Every generation of payers is getting ripped of by the prior generation's payouts. It gets worse for every generation and must eventually collapse. If you are ripped off, does that make it right for you to rip off someone else?

[Agathon]

Originally posted by pchang
SS/Medicaid/etc. are all Ponzi schemes. Every generation of payers is getting ripped of by the prior generation's payouts. It gets worse for every generation and must eventually collapse. If you are ripped off, does that make it right for you to rip off someone else?

No it isn't. It's just an insurance scheme. One might as well say that insurance schemes rip off those who don't collect. In which case there would be no insurance schemes.

[Rex Little]

Originally posted by Agathon


No it isn't. It's just an insurance scheme.

Ri-i-ight. An "insurance" scheme which pays off people who never paid premiums (the original retirees when it was first introduced). An "insurance" scheme which pays off whether or not anything happens to you. Anyone who sells or writes insurance policies for a living would be insulted if his product was compared to Social Security.

It's a Ponzi scheme.

[Agathon]

Originally posted by Rex Little

Ri-i-ight. An "insurance" scheme which pays off people who never paid premiums (the original retirees when it was first introduced). An "insurance" scheme which pays off whether or not anything happens to you. Anyone who sells or writes insurance policies for a living would be insulted if his product was compared to Social Security.

It's a Ponzi scheme.

Jesus Christ...

...that's essentially what it is. It's just compulsory risk sharing and risk sharing is what insurance is. That's why in Britain it's called National Insurance. All pension schemes are insurance schemes - they are insurance against dying young and running out of savings.

People who die young lose out, people who die old win - just like a normal pension scheme. The only difference is that it is compulsory and the reason it is compulsory is that private voluntary insurance would not yield as good an outcome overall. No private scheme can universally solve the problem of poverty among the elderly. None ever has, and there is reason to believe that none ever will.

You need to think again.

Of course the initial beneficiaries won't have paid into it. That's because the scheme has to start somewhere. This is no different than a private insurer putting up capital to underwrite the start of his business. In this case the state is the insurer.

[Ned]

For my understanding, Social Security payouts approximately equal its revenue from taxes. This differs from a trust fund where payouts are both from income produced by the res and the res self. In order to make Social Security like a trust, we would have to increase Social Security taxes above the level required for payouts and use that surplus to build a res that would eventually be able to supplement payouts with income from the res.

The problem with this thinking is that equivalent programs are already available to the people in the form of IRAs and 401(k) programs. A major problem with IRAs though is that the amount one can put into such are IRAs are woefully insufficient.

I would leave Social Security alone, but drastically raise the amount one can contribute to IRAs.

[Agathon]

Originally posted by Ned

The problem with this thinking is that equivalent programs are already available to the people in the form of IRAs and 401(k) programs.

Don't discount the effect that the SS system has on these.

In NZ when the government started cutting health services, insurance costs skyrocketed and many people who had supplementary health insurance got really annoyed.

[pchang]

Insurance has a couple of very important differences:
Current beneficiaries are current payers
Insurance funds must maintain a certain level of reserves

[Agathon]

Originally posted by pchang
Insurance has a couple of very important differences:
Current beneficiaries are current payers
Insurance funds must maintain a certain level of reserves

Ok so in a pension scheme the current beneficiaries are the current payers.

The state has to maintain enough to pay folks SS.

Looks real different to me.

[pchang]

Originally posted by Agathon


Ok so in a pension scheme the current beneficiaries are the current payers.

The state has to maintain enough to pay folks SS.

Looks real different to me.

Now you're just being purposely obtuse.
Social Security isn't even close to being a pension scheme.
And no, the state does not have to maintain enough to pay folks. They aren't and that's why the fund is projected to run out in 20 years or so.

[Berzerker]

Hobbes says, roughly, that if we allow a bunch of self interested people to act completely voluntarily, poverty, anarchy and death will be the result.

Yes, because it is in our self-interest to be impoverished and die.

This isn't so much an empirical claim as a logical claim. It's what accounts for the famous "Prisoner's dilemma" thought experiment. In short if one acts in one's self interest then it's always rational not to contribute to any collective scheme that promises a general benefit. This isn't because people are innately evil, but because of lack of trust.

If it's so logical, why can't you provide actual "prisoner's dilemmas" that result in poverty, anarchy and death? I guess I'll just have to read Hobbes because when I've asked you for these prisoner's dilemmas I don't get examples of self-interest resulting in your predictions.

[chequita guevara]

Originally posted by Berzerker
Yes, because it is in our self-interest to be impoverished and die.

Apparently you people seem to think so.

[David Floyd]

I guess I'll just have to read Hobbes because when I've asked you for these prisoner's dilemmas I don't get examples of self-interest resulting in your predictions.

You won't find any real examples there either - you WILL find a defender of authoritarianism, though.

[Agathon]

Originally posted by pchang


Now you're just being purposely obtuse.
Social Security isn't even close to being a pension scheme.

Go back to school.

[Agathon]

Originally posted by Berzerker

If it's so logical, why can't you provide actual "prisoner's dilemmas" that result in poverty, anarchy and death? I guess I'll just have to read Hobbes because when I've asked you for these prisoner's dilemmas I don't get examples of self-interest resulting in your predictions.

I've provided plenty and all you have been able to come up with either changes the subject or ignores the argument.

I'll do so one more time. Lets take pollution.

Example - My company is deciding whether or not to enact anti-pollution measures. These will cost money and reduce the competitiveness of the company's products through increased prices (to recover my costs). All the other companies face the same decision. So the various possibilities work out like this.

1. I don't enact, the others do. Result: overall pollution goes down radically and I have a competitive advantage.

2. We all enact. Result: overall pollution goes down radically and no one has a competitive disadvantage.

3. No one enacts. Result: overall pollution stays the same and no one is at a competitive disadvantage.

4. I enact, no one else does. Result: overall pollution goes down slightly and I am at a competitive disadvantage.

No matter what the others do I am better off not enacting because for me 1 is better than 2 and 3 is better than 4. Everyone else is in the same position. But 2 is better than 3 so everyone acting in their self interest leads to a worse overall outcome.

One objection is that if I know the others are going to enact then I don't have to worry about being left in position 4, so I can enact and the overall situation will be better.

But this is wrong. If I know for sure that the others will enact, then I shouldn't because 1 is better than 2 for me. So it turns out that whatever the others do I am always better off not enacting. Hence we end up with the suboptimal situation three.

But if the state steps in and takes away the choice by making enaction mandatory, then everyone has to settle for 2 and everyone is better off than they would have been had they been allowed to act in their own self interest.

This is a matter of logic. Nothing you can say can stop it being in my interest to not enact. Of course you can change the case, but that's not addressing the argument. There are cases like this all the time (obeying contracts is one - it's in our self interest to try to get away with cheating - that's why Libertarians allow the state to enforce contracts) and there's nothing you can do to change that. Self interest would lead to our destruction were it not checked.

You can't deny this consequence of rationality Berz, since it is what accounts for a competitive market (see my post above - a market fixes prices because of a sort of "reverse" prisoner's dillemma).

It's a knock down argument. Complete Libertarianism just cannot work because of collective action problems.

This is not to say that we couldn't have a somewhat more Libertarian state than the one we presently enjoy, but a completely Libertarian state is out of the question.

[Agathon]

Originally posted by David Floyd

You won't find any real examples there either - you WILL find a defender of authoritarianism, though.

Yeah you will. Read "The Logic of Leviathan" - I think it's by David Gauthier. Whoever it is makes a convincing case. The other reading of Leviathan is a bit too implausible.

[Drake Tungsten]

On a side note, what kind of effect do you think the coming collapse of Social Security will have on the political beliefs of the generations after the Baby Boomers? I can't help but think that the complete failure of a giant social program will make young people less trusting of big government and push them towards conservatism.

For example, I'm pretty sure my loathing of SS is one of the reasons I've drifted towards the right, at least economically. When more people my age realize how badly they're being ripped off by a broken system that has too much inertia to be reformed, I think they're going to become very disillusioned with socialism and big government. The collapse of SS may be a boon for the Republican party.

[JohnT]

SS is not just a pension plan. It's also an insurance plan. You're comparing apples to oranges.

No it isn't. It's just an insurance scheme.

I really don't want to get into this - I get sucked into two SS threads a year and I think I've reached my limit this year.

However, the SSA is not, I repeat: not an insurance program. Such was determined in Halvering vs. Davis (1939) and Nestor vs. Fleming (1960 (1961?)). IIRC, because of the Nestor case, the SSA had to re-write all their promotional material that called or likened OASDI to an insurance policy. The Supreme Court rightly identified OASDI as nothing more than a mere entitlement, one that Congress conferred to people over the age of 65 and one that they can just as easily do away.

[Berzerker]

chegitz -

Apparently you people seem to think so.

Umm...that's Agathon's premise, not "us people".

Agathon -

I've provided plenty and all you have been able to come up with either changes the subject or ignores the argument.

No, you provided maybe 3 which were easily shot down

I'll do so one more time. Lets take pollution.

Example - My company is deciding whether or not to enact anti-pollution measures. These will cost money and reduce the competitiveness of the company's products through increased prices (to recover my costs). All the other companies face the same decision. So the various possibilities work out like this.

You keep introducing prisoner's dilemmas that involve other people's property as if we have a right to pollute - we don't. Can you offer up a PD showing that self-interested freedom has the dire results you claim without violating the definition of freedom with your example?

You can't deny this consequence of rationality Berz, since it is what accounts for a competitive market (see my post above - a market fixes prices because of a sort of "reverse" prisoner's dillemma).

People aren't free to dump their trash on my lawn in a competitive market. This is the problem with your position, you don't understand libertarianism and the result are illogical PD's.
Remember, self-interest cannot include murder et al when arguing against libertarianism since freedom does not include every possible behavior dreamed up by man... only those that qualify as acts of freedom. Your position is this: libertarianism or freedom (self-interest) is self-destructive because Joe wants to pollute his neighbor's property. Well, Joe doesn't have that right under libertarianism or freedom...

David -

You won't find any real examples there either - you WILL find a defender of authoritarianism, though.

Thx, I won't waste my time then. Given Agathon's insistence on using acts of self-interest that violate the concept of freedom and rights to argue that libertarianism and freedom are self-destructive, I can see why he thinks Hobbes has "discovered the wheel".

[Adam Smith]

SS got in the current mess due to two long term trends: decreasing birth rates as income rises, and increasing life expectancy. SS is not that hard to fix because we only need to make small changes over long periods of time.

1. Make benefits means tested. This converts SS from an entitlement to a welfare program. The reasoning is quite simple: why should a two earner family that makes $60K, pays a mortgage, and is trying to save for their kids college education pay retirement for a couple making $100K or more? Its just simple equity.

2. Increase retirement age by three to five years for workers coming into the system.

3. Raise wages subject to SS tax from about $80K to $100K or $120K.

4. Reduce benefits by about 1 percent per year, since the Consumer price index, which is used to adjust SS benefits for inflation, overstates inflation by about this much each year. (See Boskin Commission report)

These very proposals were made by a bipartisan Social Security commission appointed by President Clinton 1997. President Clinton rejected these proposals so the Democrats counld use SS as an issue in the upcoming Congressional elections. Valuable time has now been lost. Another example of Clinton @#$%^&* the country to play politics.

edit: spelling

[JohnT]

Clinton's team wasn't the first task force set to analyze Social Security, nor were they the first to recognize the problems and come up with a number of potentially effective solutions to the problem. Bob Dole lead such a task force in 1981, 82 and the conclusions were pretty much the same - but rather than make politically risky changes in the outflow of promised monies, the Reagan administration decided to increase (IIRC, they almost doubled) the tax rates and to increase the maximum taxable salary to its current level.

Bush I had a task force for Social Security, and Bush II will probably have one if he stays around for eight full years - a task force gives the impression of doing something while not committing you to actually take any action: a win-win situation for a politician if there ever was one.