Prog Rock

I see that Paul Krugman and I were thinking about progressive indexing of Social Security benefits. But Krugman has some strange ways of viewing the issue. First, he argues that "benefits for the poor would be maintained, not increased" under progressive indexing There's a sense in which that's true, but not a sense anyone should care about. First, it sounds like benefits paid out to elderly poor would be about the same as under current law—which is pretty good, considering that benefit schedule's unsustainable without significant tax increases if we keep it for everyone. But under current law, benefits paid out to the elderly poor would increase over time. So what Krugman really means is that they wouldn't be increased any faster. But then he goes on to make it sound as though they wouldn't increase in real terms either, because workers would still be getting a check equivalent to 49 percent of wages. And the key here is that the wage amount they're using to calculate that 49 percent does increase over time. Now, maybe this is me, but what I care about is whether the inflation-adjusted dollar amount I'm getting grows, not the percentage. If I'm getting half of $100, and then someone offers me half of $1000, I don't spurn it and say: "Oh, that's no improvement; it's still only 50 percent!" In absolute terms, poor retirees of my generation will still be far better off than poor retirees today.

Then we get an objection I'll dub the Krugman-DeSade theory of tax equity: "But the rich wouldn't feel any pain, because people with high incomes don't depend on Social Security benefits." He then goes on to talk about what a small proportion of pre-retirement income Social Security benefits—and by extension, benefit cuts—represent for the wealthy. Which is true: That's why the current system makes less sense than just admitting we're going to provide welfare benefits for the elderly poor. But it's also a bizarre way to argue. What he's essentially saying is that the benefits structure of Social Security was already somewhat progressive, such that cutting the benefit level for the rich doesn't "hurt" them much—it wasn't that great a deal for them to begin with. But what exactly is this supposed to prove? Bush could propose eliminating Social Security benefits for top income earners altogether, and Krugman could still write a column showing how, relative to a sufficiently gigantic income, this would inflict less "pain" than even quite modest cuts for the middle class. Well, fab. But unless you're some sort of satanic anti-matter John Rawls who gives lexical priority to minimizing the welfare of the best-off, who cares?

In a similar vein, I note that Matt Yglesias, guest blogging at TalkingPointsMemo, both approvingly cites Krugman's warning that when "a program is defined as welfare, it becomes a target for budget cuts" and blasts Bush's version of indexing as insufficiently progressive. Well, dude, pick one. Same goes for Krugman.

You can have a sharply progressive, means-tested system that's going to be perceived as old-age welfare—which of the available options is what I'd do, I guess. Or you can keep up the appearance of "social insurance" with much milder progressivity. But complaining about both the appearance of welfare and the mild progressivity simulataneously doesn't make much sense. Or rather, it might make sense on the assumption that there's a sort of non-linearity in the political disadvantage to progressivity, such that Bush's plan amounts to the worst of both worlds. In other words, you might claim that at this level of progressivity, the program already bears about as much of the welfare-stigma as it's going to attract, so one might as well make it even more progressive.

But since the premise of the welfare-stigma argument is precisely that past a certain point, the future benefit structure comes under political assault and starts shrinking, any greater progressivity would presumably be politically unstable. So, again, it seems like you've got to pick one of these objections.

Comments

bubba | May 3, 2005, 11:23am | #

You are illustrating the cognitive dissonance of the Left on Social Security. Social Security IS welfare. The arguments are all about starving grandmas, despite the observation that the elderly hold a very large fraction (most) of this nation'a wealth. So, we can't possibly be worried about most old people not having enough money. Instead, we're worried only about those old people who need welfare assistance.

However, the Left observes (perhaps correctly) that if Social Security is seen as just another welfare program, then it is at the mercy of all the unsympathetic, productive people in the US. While the US is very charitable, it's not sympathetic toward slackers. Long-term welfare is not something we like.

So, how do you preserve (and even grow) a welfare program, without admitting that it IS a welfare program. You pretend that it's an investment or insurance for everyone. From each according to ability to pay, to each in some more even distribution.

The wage cap is a beautiful mechanism that both preserves the illusion of a retirement system, and buys off the rich people who might otherwise have the influence to kill the system. The farther I move above the cap, the less I care about the whole mess.

The Newt | May 3, 2005, 11:51am | #

Bubba's right, lets drop the cap to 40K and then the whole issue will disappear!

phocion | May 3, 2005, 12:07pm | #

The Democrats are in a weird place on this one. They have to argue that a plan which guarantees at least the current level of benefits and is more progressive than the current system is worse than what we currently have. Since when were Democrats against wealth redistribution? They'll probably be successful though, because all they have to say is "Bush is gonna dick with Social Security!" and they get about 60% approval on the issue right there.

Did anyone else watch the Senate Finance Committee's hearing on the issue? When that one nasal-voiced guy from the Brookings Institution said we should deal with the situation with "revenue increases" I think I cursed out my TV.

Shawn Smith | May 3, 2005, 12:11pm | #

Hey, joe,

Didn't you offer me a couple months ago to pay me half my currently projected earnings once I started receiving SS checks if I signed them all over to you? Do you have proof yet that you (will) have the money available? You should still have 25-30 years before it starts, so there is time to prepare. Are you still interested?

Evan Williams | May 3, 2005, 12:14pm | #

Or the AARP ads where they knock down the entire house because the sink is backed up. Ugh. What they forget to mention is that this house is built on balsawood foundations, and needs to be knocked down anyway. Controlled building demolitions are much better than 9/11-style collapses, am I right?

Newt: would that mean that anyone who makes more than 40k/yr would be exempt from SS taxes? Or exempt from SS benefits? Forgive my ignorance.

too many steves | May 3, 2005, 12:14pm | #

Right on Julian, Bubba, and The Newt.

Let's just retire the idea that Social Security is "perceived" to be welfare. It is welfare and perception ain't got nothing to do with it. For me, the answer to this simple question is all the proof needed:

Question: Once the money is taken from you and your employer via the Social Security tax, to whom does it belong?

Answer: Not you.

Someone else, a current retiree or widow(er) or work disabled person or orphaned child, but not you.

You are not entitled to get all the money back that you put in, with or without interest. You will be paid until you die, regardless of how much you contributed.

It is a re-distribution of wealth, Welfare system. No more, no less.

KipEsquire | May 3, 2005, 12:29pm | #

The idea that welfare programs are "more susceptible" to budget cuts is laughable given the recent track record of the tax-and-spend Republicans now in power in Congress.

thoreau | May 3, 2005, 12:34pm | #

KipEsquire-

Medicare prescription drugs. 'Nuf said.

joe | May 3, 2005, 12:35pm | #

"The Democrats are in a weird place on this one. They have to argue that a plan which guarantees at least the current level of benefits and is more progressive than the current system is worse than what we currently have."

That's not terribly hard, since "the current level of benefits" will barely keep your cardboard box stocked with cat food in 40 years. And how hard is it to argue that cutting benefits for the middle class is a bad thing?

The point of redistribution is not the good achieved by taking from the rich but the benefit of giving to the poor. Bush's proposal doesn't benefit the poor one whit. If you've swallowed the "liberals just want to hurt rich people" kool aid, this is going to be a tough couple of months for you.

too many steves, yes, it's a redistribution of wealth. We all put money into a big pot while we're working, and we all take money out of that pot when we're retired. You can keep coming up with clarifications all you want; your problem is not that the public doesn't understand what's going on, but that they don't share your values.

joe | May 3, 2005, 12:38pm | #

KipEsquire,

"The idea that welfare programs are "more susceptible" to budget cuts is laughable given the recent track record of the tax-and-spend Republicans now in power in Congress."

You mean the ones who just cut $10 billion from programs that largely benefit the poor, and passed $100 billion in tax cuts that almost all go to the rich?

thoreau,

Medicare Drug Benefits are available to people at all wealth levels. Congress could have passed a bill that provides drug benefits to people based on their ability to pay, but decided to pass one that covers all retirees. This one disproves your point.

Ironchef | May 3, 2005, 12:50pm | #

"your problem is not that the public doesn't understand what's going on, but that they don't share your values." Yeah right. The AARP ads and the Dems typical scare tactics are surely 100% accurate of "what's going on".

All I ask is to use the 12.4% that I put in, and all you should expect of me is not to take anyone else's money.

Who wouldn't "share this value", joe?

Lowdog | May 3, 2005, 12:54pm | #

Not everyone understands what's going on, joe. For instance, some of my friends think that the government actually sets aside the SS money. Actually, you just said "We all put money into a big pot while we're working..." but the problem is that there isn't a pot. The government takes our money and spends it, then tries to figure out a way to pay people their SS income. Not very efficient or smart.

Look, if there was a program that helped out folks who could no longer work, whether it was from being old, being injured, or for being unfortunate enough to be born with a disability, and I had to sacrifice a little of my money to help those folks, but the government (or a private entity, for that matter) really did invest it and make it a more efficient system, I wouldn't complain too loudly. But that's not how it works, so I complain at a reasonable level, I think.

I'm not an economist, or very good with money, so I don't have a master plan, just to throw out a little disclaimer. But something needs to be done.

joe | May 3, 2005, 12:56pm | #

'Yeah right. The AARP ads and the Dems typical scare tactics are surely 100% accurate of "what's going on".'

Back on planet Earth, support for Bush's proposal drops as people learn more about it. Surely, Ironchef, you've noticed that the libertarian economic vision commands slightly less than majority support.

People like having a Social Security system.

Steve | May 3, 2005, 1:02pm | #

joe,

Would you care to address the merits of ... well, anything, rather than reminding us that yes, there are more liberals out there than libertarians. I think we're all aware of that.

Warren | May 3, 2005, 1:03pm | #

Hey folks, PLEASE stop talking about Social Security as though it benefits poor people. In fact it's a reverse Robin Hood scheme that 'robs from the poor and gives to the middle class'. The working poor pay into SS most of their lives and collect only an average of two years. All the rest goes to those of us that can afford to work and live in clean environments, get decent medical care, and live into our 80's and 90's. Good thing too, or else that money could be used to lift their children out of poverty, and then who would pay for my SS?

MP | May 3, 2005, 1:11pm | #

People like having a Social Security system.
Yeah, welcome to Public Choice theory...

too many steves | May 3, 2005, 1:22pm | #

as others have already said, my values have nothing to do with my argument that social security is, by any practical definition, a welfare system and not, as lots of people believe, a retirement or pension system.

the proper description for the Democrats' approach to solving the social security crisis (which they admit exists) is obstructionism toward anything the president proposes and a, so far, complete unwillingness to even discuss alternatives.

Xavier | May 3, 2005, 1:23pm | #

That's not terribly hard, since "the current level of benefits" will barely keep your cardboard box stocked with cat food in 40 years.

Again with the cat food? The middle class will be partially switched to price indexing rather than wage indexing (and the poor would be unaffected). That means that their benefits will still rise faster than inflation, but slower than they would under the current plan. The cat food horror story isn't going to work this time.

Coarsetad | May 3, 2005, 1:32pm | #

Wait, so Im confused. Its not secular Jews that control the U.S., but old people?

Honestly, the only way to get rid of SS is to replace it with some old people like more that money. Coupons!

Every retiree will be sent a phonebook sized stack of them every month. Problem-o solved!

joe | May 3, 2005, 2:02pm | #

Xavier, "Again with the cat food? The middle class will be partially switched to price indexing rather than wage indexing (and the poor would be unaffected). That means that their benefits will still rise faster than inflation, but slower than they would under the current plan. The cat food horror story isn't going to work this time."

The statement my comment was addressed to was, "They have to argue that a plan which guarantees at least the current level of benefits and is more progressive than the current system is worse than what we currently have."

Steve, I have addressed a number of issues on the merits in this, and many other, Social Security threads. This one happened to turn to the question of whether the public supports the concept of a public retirement system.

Warren, there was a time when I would have been surprised, nay outraged, by a commenter whose reaction to a situation in which the poor die early, live in polluted areas, and have poor medical care is...to get rid of their retirement system. After a couple years of coming here, however, not so much.

Coarsted, and each month, the World War II-themed photo on the cover can change.

Allen Phelps | May 3, 2005, 2:07pm | #

Don Boudreaux over at Cafe Hayek put it pretty succinctly responding to a Boston Globe article that also resisted reducing Social Security's applicability to the middle class.

http://cafehayek.typepad.com/hayek/2005/04/social_security.html

"In short, you endorse a massive middle-class entitlement program as a bribe to quiet the bulk of Americans who might otherwise resist being taxed to pay for a safety net for the poor. "

Evan Williams | May 3, 2005, 2:11pm | #

Joe: "People like having a Social Security system."

Yes, Joe, people "like" getting free shit that they didn't earn. Doesn't mean it's right. That's not a viable argument.

Here is the problem: the more everyone talks about social security, the muddier the water gets. At the end of the day, this muddy vision scares people, because they have no idea what's going on. As is, right now, people get their social security check in the mail. So, without a clear vision of the plan, the status quo is preferable, for the time being, to the unknown (because that unknown MIGHT result in huge benefit cuts for alot of people who have been forced to pay into social security for decades).

I'd be willing to bet, if you go up to 30 random people on the street who don't support Bush's plan, and ask them why the don't support it, most of them won't be able to give a specific answer---and even if they do, most of them won't jive.

You say, "support for Bush's proposal drops as people learn more about it", but I dare you to ask 30 liberals exactly why, and see how many answers are the same, or even valid criticisms of Bush's plan.

Yes, people "like" social security. But, this is not about "liking" anything; it's not a choice between social security, or no social security. There are other options.

For example, if you asked a cross section of random people whether they would like to have a program in place where they get assistance if they are old and on the verge of homelessness. Most, if not all, would say yes.

However, if you asked a random cross section of people whether they'd rather have forced retirement accounts for everyone, or simply a smaller tax that helps the most down-and-out, then I would venture you would see more support for the latter than the former.

You want to paint this with the "would you rather have social security, or no social security?" color palate, but that is, to be polite, disingenuous. Though, this is the same crap that I see from lefties all over...hijacking a rather sane conversation on the future of social security, and turning it into "they wanna kill it! we need to save it! do you want to die when you turn 65 because the gubment is selfish!? booo!"

It's not all or nothing, Joe, and while most people WOULD probably prefer social security over nothing at all, I'm also guessing that those same people would prefer a viable "safety-net" for the emergency cases rather than the non-viable status quo.

joe | May 3, 2005, 2:15pm | #

"Yes, Joe, people "like" getting free shit that they didn't earn. Doesn't mean it's right. That's not a viable argument."

True, but irrelevant. People did earn their social security, by paying into the system for years.

But polls show that people don't just like getting benefits; they like the system as a whole. In fact, the only time people oppose a Social Security-like system is if they are convinced that it isn't going to continue to operate as it has for the past seven decades.

And Evan, before you start labelling as "insane" the statement that conservatives want to kill Social Security, why don't you go back though the comments of this, or any other, Social Security thread. See what the conservatives themselves are saying.

But yes, people would rather have a welfare program than a non-viable universal program. But they would rather have a viable universal program than either.

dhex | May 3, 2005, 2:32pm | #

i'd like to be able to opt out. is that so much to ask?

joe | May 3, 2005, 2:41pm | #

dhex,

Can I opt out of paying for any police work that involves enforcing contracts or protecting property rights?

Really, I think it's more moral if the squatters are allowed to live in other people's buildings. Why should I have my money stolen - stolen, I tells ya! - to pay for a system I disapprove of?

jc | May 3, 2005, 2:42pm | #

joe,

Once again we're having a discussion about math, and you want to have a discussion about feelings. Try to stay on topic, mmmkay?

dhex | May 3, 2005, 2:44pm | #

that's a real good question.

but armed robbery is armed robbery. wouldn't it have been nice to have been able to pull funding from the iraq war before it started? morally square and all.

but my larger point is that if given the option, many workers who will be forced to pay for larger numbers of retirees would have opted out. the system exists only because there really is no choice. you participate (and get fucked) or you get fucked.

not that bush's fakeass "personal accounts" bullshit is the answer, mind you, or that everyone involved isn't spewing bullshit to accomodate those zombies over at the AARP. but the whole thing stinks.

thoreau | May 3, 2005, 2:45pm | #

joe-

Maybe I didn't use the best example. The GOP certainly doesn't mind handouts, of course, but my example certainly did not illustrate a handout restricted to/targeted at lower income families.

On the general issue of social security, well, I won't interrupt everybody else's fun, I'll just enjoy the show.

Evan Williams | May 3, 2005, 2:48pm | #

Joe: "Warren, there was a time when I would have been surprised, nay outraged, by a commenter whose reaction to a situation in which the poor die early, live in polluted areas, and have poor medical care is...to get rid of their retirement system. After a couple years of coming here, however, not so much."

Of course you would be outraged. "Outrage", an emotional response to a rational question. Typical leftist response.

First, the "get rid of the retirement system so those old fucks can die in a gutter!" line is a strawman, to the T. It smacks of a rather massive lack of understanding of economic theory (unless we're talking about Keynes).

Second, your problem is that anyone who doesn't support your particular viewpoint on the subject is automatically a monster who wants to let the old folks die in a gutter. This is, as I noted above, disingenuous. If Social Security were, in fact, a safety-net program, and ONLY a safety-net program, well, I wouldn't be so opposed to it. If I had to pay a small tax to help those people at the very bottom of the shitpile, you wouldn't see me protesting on street corners over it. But, that's not what social security is. It's a ponzi scheme, an attempt by the government to increase our dependence on it, and also an attempt to centrally plan everyone's retirement. Both of those things are foolish, in my opinion. I'm not a fan of letting old folks die in a gutter, though...if only you were able to distinguish between a safety net, and a central planning ponzi scheme.

For there to be a safety net for the worst-off, the rest of this bullshit is not necessary. That's like saying your air bags and antilock brakes won't work unless you have Sprewell rims, a big spoiler, and a flame paint job.

Henderson | May 3, 2005, 2:56pm | #

joe,

Police protection is a non-excludable good. If individuals were not required to support some kind of law enforcement it would not get properly funded. On the other hand, the consequences of not saving for retirement are faced only by the individual in question. Allowing squatters to live in other people's buildings would violate the property rights of others.

Bob Dobalina | May 3, 2005, 2:59pm | #

People did earn their social security, by paying into the system for years.

Umm. That money is *gone*.

"Your parents paid for your grandparents. Therefore, they've earned the right to seize the fruits of your labor."

Evan Williams | May 3, 2005, 3:01pm | #

Joe says, "But yes, people would rather have a welfare program than a non-viable universal program. But they would rather have a viable universal program than either."

First, please show me this viable universal system. We tried it once, it h'aint working.

Second, I don't buy that. I think their supposed acclaim for a universal program is based on the mistaken belief that this is the only way to save poor old folks. If you told most people, "you have a choice: you plan for your retirement, or you let government beaurocrats plan for your retirement", I think I know which one most people would choose, Joe---your dubious claims about everyone in the entire country loving social security notwithstanding.

The only logical justification for SS is as a welfare safety net for old folks on their last dime. Other than that, why would any rational person rather give their money to the government than to a personal IRA, if they had the choice? You're saying that most people support centralized government planning of their private financial portfolio? I know the lefties love the gubment and all, but I doubt that, deep down, very many people really trust the government with their financial planning more than they trust themselves.

joe | May 3, 2005, 3:09pm | #

"On the other hand, the consequences of not saving for retirement are faced only by the individual in question."

Not so. If high earners weren't contributing to Social Security, there would be inadequate funds to provide poor retirees with their checks.

"Your parents paid for your grandparents. Therefore, they've earned the right to seize the fruits of your labor," just as you're earning the right to have your kids pay for your Social Security. Yes, if you arbitarily exclude some portion of history from your analysis, you can make it look like somebody is getting screwed. Not sure what that accomplishes.

joe | May 3, 2005, 3:14pm | #

T"he only logical justification for SS is as a welfare safety net for old folks on their last dime." No, the added level of security and dependability it provides benefits middle income people as well.

"Other than that, why would any rational person rather give their money to the government than to a personal IRA, if they had the choice?" Because the funds from an IRA can run out. Your portfolio could tank shortly before you're due to retire. Without a guarantee, a defined benefit, people would have to be much more cautious in their investements, resulting in less dynamic investments.

"You're saying that most people support centralized government planning of their private financial portfolio?" No, most people support a public scheme that provides a minimum benefit for the needy, and a bedrock foundation from which the better off can build. Nobody's arguing for the government to take over private portfolios.

dhex | May 3, 2005, 3:16pm | #

"Yes, if you arbitarily exclude some portion of history from your analysis, you can make it look like somebody is getting screwed."

because everyone is getting screwed.

Shawn Smith | May 3, 2005, 3:23pm | #

Evan Williams,

...You're saying that most people support centralized government planning of their private financial portfolio?...

I would guess that most soccer/security Moms would answer that question with a big, "HELL YEAH!" They're trying to protect their precious little ones from the big, bad world "out there." Anything the government can do to lessen the number bad (non-guaranteed good) options, the better. Of course, I could be wrong.

joe | May 3, 2005, 3:26pm | #

"because everyone is getting screwed."

And this is where the big division takes place. I don't consider it to be "getting screwed" to buy into a guaranteed benefit, even if I end up not needing it. I might have ended up needing it. I guess I'm arguing from John Rawls here, on a thread that typically ranges from Hobbes to Hayek.

fyodor | May 3, 2005, 3:28pm | #

Warren, there was a time when I would have been surprised, nay outraged, by a commenter whose reaction to a situation in which the poor die early, live in polluted areas, and have poor medical care is...to get rid of their retirement system. After a couple years of coming here, however, not so much.

joe, maybe you've been "coming here", but not with a very open mind if that's all you see. At the risk of restating the obvious (that you ignore), Warren's problem is not with what the poor get, but with what they are forced to PAY.

joe | May 3, 2005, 3:35pm | #

Yes, fyodor, in the face of polluted neighborhoods, bad medical care, and high mortality, he displays is sympathy by offering to take away their guaranteed retirement, in exchange for adding a tiny bit to their paychecks.

In other words, the poison, illness, and death with which they live are treated as baseline background conditions whose possibility of change is so small as to justify basing public policy around the assumption that they'll always be the same, rather than on trying to change them.

Evan Williams | May 3, 2005, 3:43pm | #

"And this is where the big division takes place. I don't consider it to be "getting screwed" to buy into a guaranteed benefit, even if I end up not needing it. I might have ended up needing it."

Then, by all means, Joe, buy the fuck into it. But don't tell me that I should have to. Let me make my own decisions, and you make yours.

Here, this hypothetical model should satisfy all your concerns:

1) Everyone is taxed to provide a minimal welfare safety net for the downest-and-outest old folks.

2) Beyond this old folks welfare tax, government retirement accounts are voluntary. If you trust the government more than an IRA or other investments, then you can have money deducted from your paychecks. If you trust private investments more than gubmint beaurocracy, then you're free to put into an IRA, etc. (or nothing at all, if you're a gamblin' man).


I don't understand why, just because YOU trust the government more than private investments, I must follow your lead.

Oh, and I got news for you: if you think that SS is any more "guaranteed" than an IRA, I've got a bridge you might be interested in buying.

fyodor | May 3, 2005, 3:45pm | #

Blah, blah, blah. It was also too obvious to state but I guess I'll have to. Just because he didn't address any of those other issues (which YOU hadn't either) doesn't mean he doesn't give a shit about them. Meanwhile he likely feels that that "tiny bit" of money in their own pocket is their best bet for improvement. You disagree, fine. But the worst thing about your gratuitous cynicism about his post is that I've seen you say that it takes libertarians to be cynical about others' motives. Oh, but you'll probably say I've misrepresented you. Whatever. Sometimes you can be pretty smart, joe, but sometimes you disappoint me.

Thomas Paine's Goiter | May 3, 2005, 3:46pm | #

IF everyone just ignored Joe, he'd go away...

Jason Ligon | May 3, 2005, 3:54pm | #

Hey, Evan. Here's $100 bucks. Oh, and since you are complaining so much in your old age, here are some free drugs that you never had to buy for your parents. Oh, crap, I see that there is a shortfall so that I really need to give you $120 for you to actually get $100.

I guess I've earned the right for joe to pay me a guaranteed $100 bucks. I sure feel secure.

Jason Ligon | May 3, 2005, 4:02pm | #

Rawls, now that is an interesting thought.

Suppose you had pulled over your eyes a Veil of Ignorance such that you might wind up as a 20-30 something that was going to have to pay for the shortfall in both social security and medicare, and the expanded benefits demanded by the Grey Legion. You might think to yourself, man, I don't seem to be benefitting from this crap at all. All I see is increased taxes on me to maintain a series of programs that guarantees me a loss.

Russ D | May 3, 2005, 4:04pm | #

joe,

I can't believe your ignorance on this issue. I can understand the idea of a safety net, blah blah blah, but you're actually playing the game of "take away their guaranteed retirement, in exchange for adding a tiny bit to their paychecks"!!

We're talking $40-$50 bucks a month for people making a relatively small paycheck. I don't know about Boston, but in Chicago that extra $50 in my pocket is the difference between having to live in a slum and not having to. I checked the rental options at $500 a month and had a grand total of 20 buildings - all in shitty neighborhoods. I upped that to $550 and I got SIX TIMES the number of buildings to choose from, including some much better neighborhoods.

You go tell a single mother with 2 kids "Sorry, your kids will just have to live in a crime-ridden neighborhood with bad schools. But don't worry, you'll all get checks in 40 years."

Perhaps if landlords would just let people sign over their future soc. sec. benefits....

joe | May 3, 2005, 4:07pm | #

On the now-common assertion that libertarians and conservatives would be thrilled - thrilled, I tell ya - to pay for a welfare retirement system for those seniors too stupid and lazy to provide for their own needs...

Not. Buying. It.

Evan Williams | May 3, 2005, 4:08pm | #

"Yes, fyodor, in the face of polluted neighborhoods, bad medical care, and high mortality, he displays is sympathy by offering to take away their guaranteed retirement, in exchange for adding a tiny bit to their paychecks."

Or, perhaps, we could give them a CHOICE? Joe, it's obvious that your argument is an emotional one, rather than rational. This isn't about someone displaying their "sympathy" for some poor suffering hypothetical. Question: is it possible for you to depart, just for a moment, from the whole "won't somebody PLEASE think of the children/old-folks!" mentality? As long as you're arguing emotionally, and your adversaries are arguing rationally, this discussion will go nowhere. Oh, and I suggest you read up on the difference between "injustice" and "misfortune". Thomas Sowell's "The Quest for Cosmic Justice" is a good place to begin.

"In other words, the poison, illness, and death with which they live are treated as baseline background conditions whose possibility of change is so small as to justify basing public policy around the assumption that they'll always be the same, rather than on trying to change them."

Or, perhaps, that person believes that society itself is better at "changing them" than public policy/government force might be. Yeah, wrap your head around that one for a minute...because, frankly, your entire mantra is getting a bit old. Your attempts to paint the gubmint as the one and only solution to any and all problems is rediculous...as is your attempt to paint anyone who doesn't wholeheartedly agree with central government planning as a heartless monster.

You're just as bad as the moral traditionalists I argue with. Oh, just because I don't support government morality legislation, that means I'm a moral relativist, and have no morals at all.

No, no, no. Whether it's morality on the right, or economics on the left, just because you don't support government control of something doesn't mean that you don't care about it. But, from your POV, a brilliant strawman. I enjoy being a moral relativist AND a heartless monster.

thoreau | May 3, 2005, 4:11pm | #

Nobody's arguing for the government to take over private portfolios.

Isn't that sort of the idea with Bush's "private accounts"?

joe | May 3, 2005, 4:12pm | #

There's a funny thing about 20-30 year olds, Jason. After a few decades, they turn into 70-80 year olds.

20-30 year olds get a whole lot out of Social Security. Just not right away. If you want to assume you end up that individual you describe, you're going to have to consider his later years, too.

Evan Williams | May 3, 2005, 4:16pm | #

"On the now-common assertion that libertarians and conservatives would be thrilled - thrilled, I tell ya - to pay for a welfare retirement system for those seniors too stupid and lazy to provide for their own needs...

Not. Buying. It.

I don't give a shit if you're "buying" it, Joe. Yes, I know, god forbid someone who calls themself a libertarian doesn't fit your stereotypical libertarian strawman. Uh-oh! What to do now? I can actually think for myself, instead of toeing a party line. Crazy, isn't it?

Moving on: regardless of whether you're "buying it" or not, why don't you at least respond to my hypothetical model in earnest, rather than slinking back in your chair and questioning my genuineness.

joe | May 3, 2005, 4:17pm | #

Evan,

You can keep ignoring my arguments and making your little "emotional" assertion all you want, but I'm done responding to you.

Evan Williams | May 3, 2005, 4:23pm | #

"20-30 year olds get a whole lot out of Social Security. Just not right away. If you want to assume you end up that individual you describe, you're going to have to consider his later years, too."

Well, then, if 20-30 year olds get a whole lot out of retirement investments (which they do), why not just let them choose how to do it? I still don't understand why the government should be able to maintain a monopoly on baseline retirement accounts.

joe | May 3, 2005, 4:23pm | #

OK, Even, I'll respond to actual arguments.

Actually, I pre-responded in my 3:14 post.

Evan Williams | May 3, 2005, 4:28pm | #

Joe:

Specifically, which argument am I ignoring? Inversely, I can name about 10 arguments of mine that YOU ignored. So, why don't you try naming exactly which arguments, which you directed at me, I the proceeded to ignore.

I've asked you myriad questions, and have gotten no response to many of them. So, if you're "done responding to me", I guess, that'll be status quo. Run, Forest, run! I will say this: at least the traditionalist conservatives, who label me a moral relativist, don't run away from too many arguments. I figured you'd stay in the ring longer than that, chief.

joe | May 3, 2005, 4:30pm | #

"Well, then, if 20-30 year olds get a whole lot out of retirement investments (which they do), why not just let them choose how to do it? I still don't understand why the government should be able to maintain a monopoly on baseline retirement accounts."

For the same reason that larger insurance pools are better than smaller. Socializing the risk allows the cost of the hardest cases to be covered with a minimum to pain to all of the other members. If the pool gets smaller, especially if the best off opt out, the system works less and less well for those remaining.

If it ain't Social, it ain't Security.

Evan Williams | May 3, 2005, 4:35pm | #

OK, so, according to your 3:14 post, people should be forced to give money to the government accounts, instead of other retirement investments, because if they didn't, then, their investments would not be as diversified? That as your argument against private investments?

Regardless, it amazes me that YOU know how to handle everyone's retirement money better than they do.

Evan Williams | May 3, 2005, 4:44pm | #

"For the same reason that larger insurance pools are better than smaller. Socializing the risk allows the cost of the hardest cases to be covered with a minimum to pain to all of the other members. If the pool gets smaller, especially if the best off opt out, the system works less and less well for those remaining."

Joe,

By this logic, the government should confiscate 100% of our paychecks, and dole out equal amounts to everyone. Ah, yes, egalitarianism! I mean, if everyone was made economically equal by the government, wouldn't everyone be happier?

I reassert my statement: the only justifiable logical position is, baseline tax for the worst-off. Otherwise, it's simply a redistribution scheme. And, as I noted above, if you support the government control of retirement accounts, why stop there? If the government is so great at economic planning, why not just take all their money and dole it out as we see fit?

Anyway, it's time for me to go home. Have a nice evening, all.

joe | May 3, 2005, 4:45pm | #

Evan, I don't have an argument against private investments. How can I put this so that you'll get it? How about "joe HEART private accounts?"

Private accounts are a good thing. Private security companies are a good thing, too. But having a police force patrolling the town doesn't reduce people's security, it improves it. It improves the security of people who'd never be able to hire a security firm, even if they were given back the $15/month of their taxes that go to the police. It improves the security of people who would be able to hire one security guard with their police tax dollars. And it improves the security of people who already have a ring of security guards, and who'd be able to have one more guy in the ring.

Please note, absolutely none of this has anything to do with a belief that the Chief of Police knows how to hire security personnel better than the average citizen. Although he probably does.

Steve | May 3, 2005, 4:45pm | #

joe,

I think you're trivializing the amount of money that people lose through social security. Whether you consider payroll taxes to be 6% or 12%, it's still a great big chunk of my paycheck. If the payroll taxes went away, and I took half of my raise and blew it on hookers and crank, and invested the other half, by the time I retired, I'd be filthy rich. Plus, I'd have a lot of hookers and crank.

Lowdog | May 3, 2005, 4:46pm | #

How is giving some of my money to the government, who then spends it without really knowing how they'll give some of it back to me, supposed to be secure?? That sounds like something I would like to avoid. If the government let me keep that money and I just put it in a savings account I'd be better off, so wtf is so great about SS?

joe | May 3, 2005, 4:50pm | #

"By this logic, the government should confiscate 100% of our paychecks, and dole out equal amounts to everyone."

"if you support the government control of retirement accounts, why stop there? If the government is so great at economic planning, why not just take all their money and dole it out as we see fit? "

No, that doesn't follow. The security provided by a government guarantee and socialized funding is not the only interest that needs to be considered. Such a program would eliminate the wealth-creating dynamism inherent in having a capitalist private sector, which is also an important goal.

"the only justifiable logical position is, baseline tax for the worst-off. Otherwise, it's simply a redistribution scheme." It's even MORE of a redistribution scheme if the benefits only go to the poorest slice of the public.

Have a good night.

joe | May 3, 2005, 4:53pm | #

Steve, wouldn't that depend on your income? Your income now, and also your income for the rest of your working life?

Lowdog,

You might not always have a paycheck that allows you to put money into a savings account. In fact, you might end up taking money out of that savings account if you have no paycheck at all.

Under those circumstances, you will still receive exactly the same Social Security check, for life.

Thomas Paine's Goiter | May 3, 2005, 4:56pm | #

Steve,

A person that makes $30k per year for their entire life (adjusted for inflation) loses out on a minimum of $750,000 (adjusted for inflation) assuming that they would ONLY invest in muni bonds and T-bills.

Steve | May 3, 2005, 5:01pm | #

joe,

Not really. Even for people like me, making below median wages, saving close to 5 percent of your income in any sort of IRA is going to let you retire with a shitload of money. Enough to live much better than you will if you rely on SS. If you make way, way below median and you can't save at all, well, that's where my means-tested social security plan comes in. But for people who make, say, more than $20,000 and less than $80,000, losing 6% or 12% off the top makes it hard to save.

jeff | May 3, 2005, 5:18pm | #

Someone said "buying into a guaranteed benefit" is a great deal "whether you end up needing it or not".

So let's say that thru taxing the result of my effort to earn a living I end up "buying in" $140,000, buy my "guaranteed benefit" will only allow me to collect a fraction of that at the very end of my life. I have to ask - where the fuck is the great deal?

Why don't we get honest and admit the perception of a "guarantee" costs most people 50% of their "buy in" or MORE. If I tried to set up this very scheme among a few friends and promote is among the masses I'd be jailed for running an illegal ponzi scheme.

Most will never collect even CLOSE to what they "bought in" for - and a very few will collect vastly MORE than they contributed.

It's a pretty shitty retirement plan that makes mattress stuffing seem outrageously productive by comparison.

Lowdog | May 3, 2005, 6:21pm | #

joe, so if I were to get injured tomorrow, and couldn't work, I'd get paid by SS for the rest of my life (obviously if I could never work again)? I'd be surprised if that's the case, though I don't actually have any idea.

To be honest, I don't put away much money for savings, other than what my work has for me. I should, I know, but I don't. Can I honestly say that if I didn't have to pay SS tax that I would instead invest all of that or put it into a savings account? Probably not. But that's partly why I'm against the whole thing, besides having the understanding that it "works" the way jeff just described.

Besides, I've got some "career academic" friends and some others who've never paid into SS (or who've paid very little into it), some of whom already get large sums of money from the government for grants and such. I don't want to be required to support them when they're older, although if we're still close friends, I might.

I don't know, I just rail against the government taking my money from me and throwing away a large portion of it. Because you better believe that by the time my money gets from here in Phoenix, AZ to DC, a bunch of it has been eaten up. If anyone can honestly say that the government is going to be more efficient with my money than me, they're nuts.

Jason Ligon | May 3, 2005, 6:31pm | #

joe:

Concerning the 20-30 year old veil of ignorance:

Yes, such a person will get old. No, I don't think that the claim of a guaranteed benefit that cost them more than they paid in by a good margin, along with the costs of all other programs for the largest group of unworking elderly in history, makes that group at all feel better. The total costs vs the total benefits expected over the life of the people who have to fund the shortfall is an unpleasant calculation for them. Us, I should say.

The sale of social security in its current form is targeted at those people for whom it will be a good deal. We paying the shortfall bill are being told to suck it up.

nmg | May 3, 2005, 6:39pm | #

On the question of whether or not people should be able to opt out.

The only reason for mandatory social security is paternalism, pure and simple. Joe, and the democrats and others, would tell low income earners they are incapable of deciding what's best for themselves. Furthermore, they would tell these workers you will ALWAYS be poor and stupid, so we must collect 15% now to pay for your retirement.

The truth is that many low-income workers eventually rise out of poverty, and they could REALLY use that payroll tax during the time that their earnings are low.

The argument that only the rich would opt out leaving the general budget holding the bag for the poor's benefit is nonsense. The poor will be the first to opt out. The program would collapse almost overnight if no one was forced into it, which kind of makes you wonder about joe's claims that everyone loves it so much.

nmg

Lowdog | May 3, 2005, 6:41pm | #

Jason - I think you're right on there. People in that 20-30 yo age bracket don't vote in nearly the numbers that old folks do. If you're an old folk who paid in for years and years and are now receiving benefits, you're gonna prolly buy into the notion that tinkering with the system is a bad idea.

But let's take someone like my dad. He's 62 and won't get enough from SS to take care of himself. So he's still working. Is part of that his fault? Sure. But he also was a house-husband for a number of years, so that affected his input to good ol' SS. Why should he really care about reforming SS, though? It's not like they're just going to completely cut him off. If he cared at all, he should care that it gets reworked so that I can keep more of my money and take better care of him as he gets even older...

dhex | May 3, 2005, 8:17pm | #

"The only reason for mandatory social security is paternalism, pure and simple."

actually, it's a bit more simple - and less nefarious-sounding - than that. too many people would pull out of the program on the working end, stressing the system further.

no one near retirement age would opt out. instead it would be everyone under the age of 35.

Tracy Hall | May 3, 2005, 11:12pm | #

I think you may be missing a point about SS and the middle/upper class:

SS is not just to ensure that the already-poor do not retire in poverty - it is also to ensure the anyone who may become poor does not retire in poverty. Like any insurance policy (even if I disagree with limiting the concept of SS to insurance), it spreads the risk pool across all who might face the risk, not just those who are most likely to face the risk. I do not expect to "re-coop" my payments into SS - I see it part of my commitment to society. If means testing is any part of "SS", it should be part of the benefits - not the contributions/payroll taxes.

It also seems prudent to remember the first "S" of "SS" - Social. It is a general "Social Good" that poverty, especially amongst the elderly, be avoided. A "Social Good" that we all have agreed to as part of our society.

There seems to be an unacknowledged rise in old-style Calvinism - that "God" has pre-ordained our status, a sign of one's good status (and "God's" favor) is being or becoming wealthy - which then becomes a religiously pursued goal. Poverty is tolerated as a sign of "God's" pre-ordained disfavor; wealth and greed, a sign of "God's" pre-ordained favor. No need for any social programs; it's all "God's" plan, anyhow...

This Calvinist notion (however clumsily I may have expressed it) has already been rejected by our society, from labor laws through the "New Deal" to civil rights and beyond. It is only the latest extreme Political Movements that feel the need to give life to this old, dead, philosophy - without even the courage to say so openly.

Tracy Hall

{n.b. spreading the risk pool does not mean "spreading it over all income" (i.e. the 100% confiscation mentioned above), any more the car insurance does. It simply means spreading the cost across the people of the risk pool - such that none bear the catastrophic full load....

David Nieporent | May 4, 2005, 3:47am | #

It also seems prudent to remember the first "S" of "SS" - Social. It is a general "Social Good" that poverty, especially amongst the elderly, be avoided. A "Social Good" that we all have agreed to as part of our society.

What do you mean, "we"? And how is it a "general" "social" good? It's good for those who are in poverty, to be sure, to be handed lots of money. How is it good for those who aren't to have their money given away, however?

There seems to be an unacknowledged rise in old-style Calvinism - that "God" has pre-ordained our status, a sign of one's good status (and "God's" favor) is being or becoming wealthy - which then becomes a religiously pursued goal. Poverty is tolerated as a sign of "God's" pre-ordained disfavor; wealth and greed, a sign of "God's" pre-ordained favor. No need for any social programs; it's all "God's" plan, anyhow...

Not at all. If God had pre-ordained it, then it wouldn't matter what we did, governmentpolicywise. I don't think even the Leviathan in Washington could overrule what God had preordained. Social programs could be implemented or not; whether they succeeded would be God's design, not ours.

It's just a rejection of the idea that success and failure is luck. Hence, a rejection of the idea of a "risk pool." (Insurance is for unforseeable events. Accident. Disease. Tree falling on your head. But poverty is not an accident, not bad luck.

Evan Williams | May 4, 2005, 8:42am | #

Joe sayeth,

"Such a program would eliminate the wealth-creating dynamism inherent in having a capitalist private sector, which is also an important goal."

It's amusing to hear someone praise the forced confiscation of assets by the government, then turn around and say that we shouldn't take people's money, because the "wealth-creating dynamism" of capitalism is better. If that "wealth-creating dynamism" of the private sector is so great (which it is), then, um, why not unleash that power on retirement security? Yes, yes, I know, "Joe heart private investments"...but you're talking out of both sides of your mouth. Government beaurocracy, as Jeff described above, is the least efficient method of doing most things. Major infrastructure that transcends private property limitations (such as interstate roads, certain telecom networks, national defense, justice) are, in many cases, easier to handle via the government. But when it comes to economic planning, funnelling this shit through the gubmint is like going through a million middle-men. Perhaps, if you were able to create a perfect system, it might be more palatable. But the fact is, your utopian view of this "universal viable system" is a pipe-dream. The problem with social security, as it is right now, is inherent in government economic planning. It's not just a simple flaw in an otherwise efficient system, Joe---this problem will exist in any sort of government-run retirement plans. It is inherent. I dunno how many ways I can put this.

joe | May 4, 2005, 9:46am | #

"Talking out of both sides of your mouth" is known in some circles as "recognizing that the world is complex place," Evan.

Try to follow me here: there are two goods to be pursued. They cannot both be maximized at the same time, so we need to settle somewhere that provides the maximum combination of both, without allowing either to decline below a sustainable level.

Social Security isn't there to maximize economic growth - that's what private sector investment is for. The good pursued through Social Security is, um, security. Security for the poorest, who will at least have something, and security for the everyone else, who will have a rock solid foundation, so they can be a little more ambitious with their other investments.

Economic growth and material progress are also important goals, which are best achieved through market dynamics. Therefore, because we need to pursue both in our public policy, we have a mixed system. It's really not that complicated an concept, Evan.

joe | May 4, 2005, 9:49am | #

David,

"How is it good for those who aren't to have their money given away, however?" It is good for them to be certain that they will not be left penniless in case of bad luck.

But more important, in the realm of social utility, the good of keeping poor people from going hungry or freezing outweighs the harm of reducing a wealthy person's bank account by a small fraction.

joe | May 4, 2005, 9:58am | #

Try this, Evan:

"It's amusing to hear (Evan) praise the forced confiscation of assets by the government (to pay for police and roads), then turn around and say that we shouldn't take people's money, because the "wealth-creating dynamism" of capitalism is better."

But but but...the police budget isn't suppposed to grow the economy. Neither is Social Security - it achieves a different good.

BTW, Social Security is not "economic planning." It's just the collection and disbursement of funds, quite removed from any planning or engineering. Collecting money and cutting checks is a core competence of government, which handles this task quite efficiently.

Evan Williams | May 4, 2005, 10:42am | #

"But but but...the police budget isn't suppposed to grow the economy. Neither is Social Security - it achieves a different good."

You seem wholly unable to distinguish between "protection from the aggressive and fraudulent actions of other citizens" and "forced confiscation of retirement funds which will be doled out in guaranteed lesser amounts later in life". You keep obfuscating the rather obvious distinction between police and forced retirement accounts. This "good" you speak of (and its presumed antithesis) are not externally interdependent (whereas, prosecuting the rule of law is); as such, this supposed "good" is none of the government's bidness. If I want to invest my hard-earned money in an IRA, instead of forking it over to the government, then that should be my choice, given that the consequences of that choice are internalized.

"BTW, Social Security is not "economic planning."

Of course it is. The government doesn't think you'll be able to adequately plan for your retirement, so it steals your money and plans for you. You have to do some mighty fine twisting to earnestly state that it's not "planning". You have REPEATEDLY called it "insurance". Correct me if I am wrong, but, isn't insurance a form of PLANNING?

Speaking of twisting...

"It's just the collection and disbursement of funds, quite removed from any planning or engineering."

Let's go through this again: it takes your money, holds onto it, and lets you have it as it sees fit, at a time when it sees fit. If that ain't "planning", I don't know what is. If I put money into an IRA so that I will have money when I get older and cannot work, then it is PLANNING. Nobody with a brain would dispute that fact. Yet, somehow, when the government does it, it's not planning?

"Collecting money and cutting checks is a core competence of government, which handles this task quite efficiently."

HAHAHA! OK, OK, so, once my sides stop hurting...I'll respond....

So efficiently, in fact, that, in less than a century, it has taken an old folks retirement fund, and turned it into a ponzi scheme, wherein the current benefactors' payments are funded not by their own payments, but by the current workers' payments. Why? Because the greedy, slimy gubmint couldn't keep its greasy fingers out of the honey pot. Oh, yes, the model of efficiency, to be sure.

So, folks, this debate has reached the point of ultimate absurdity. Yes, yes, someone actually asserted that this ticking time bomb called social security is, um, a model of efficiency. Wow.

No, Joe, they DON'T "collect money and cut checks" efficiently, because the political class is inherently powerhungry, and they have no self-control when it comes to buying votes with your money. They have every incentive to be INefficient with your money. Oh, if only gubmint were as simple as "collecting money and cutting checks". What the hell kinda bizarro world you livin in? Yeah, they're great at collecting money...because they have lots of guns to back them up. When it comes to "cutting checks", though, they act in their own best interests [see: last pork-barrel omnibus bill]. Oh, yes, let's entrust even MORE of our money to these crooks.

joe | May 4, 2005, 10:52am | #

That's all well and good, Evan, but it's completely irrelevant to the question you raised about how I could both recognize the good achieved by capitalism, and the good achieved by a public retirement system.

You don't consider economic security a worthwhile good - fine, we have a different set of values.

Your cute wordplay, conflating the different meanings of the word "planning," isn't particularly impressive. Do you actually have all of those distinct concepts conflated in your mind, or do you just pretend to do so to try to salvage some dignity when an argument goes against you?

BTW, are you aware the government was mandated, by the Social Security legislation, to use surpluses to augment general revenues? You seem to be very selectively informed about the issue - one of the hazards of only reading your own side's propaganda, I guess.

Nice little rant you end with. Tell me, what has the Social Security Administration spent money improperly on? Or are you just talking out of your ass?

Evan Williams | May 4, 2005, 11:02am | #

"Economic growth and material progress are also important goals, which are best achieved through market dynamics. Therefore, because we need to pursue both in our public policy, we have a mixed system. It's really not that complicated an concept, Evan."

It's not complicated, I never said it was...just misguided. Unless something is inherently externalized, then, there is no justification for getting the government involved, given how inefficient it is at central economic planning. If someone wants to invest in an IRA, they should be free to do so. Then, they can STILL be more ambitious with their other investments, which spurs market progress (which you seem to be concerned with, obviously). Just because people need a retirement nest egg is not a rational justification for the government to be the one to forcibly create that nest egg.

Evan Williams | May 4, 2005, 11:15am | #

You don't consider economic security a worthwhile good - fine, we have a different set of values.

Oh, please. I consider it a very worthwhile good. I just don't see government theft as the only way to achieve that good.

"Your cute wordplay, conflating the different meanings of the word "planning," isn't particularly impressive. Do you actually have all of those distinct concepts conflated in your mind, or do you just pretend to do so to try to salvage some dignity when an argument goes against you?"

I engaged in no wordplay or conflation. The government takes money and doles it out as it sees fit, in order to acheive a particular future outcome. This is defined as "planning". There is no wordplay. No conflation. Simply describing the government's actions, and asserting that it is indeed planning. I have no need to "salvage dignity", Joe. Let's stick to the issue at hand, instead of personal jabs about my supposed need to salvage dignity. It serves absolutely no purpose. What WOULD serve a purpose is if could actually address the content of that argument.

"BTW, are you aware the government was mandated, by the Social Security legislation, to use surpluses to augment general revenues? You seem to be very selectively informed about the issue - one of the hazards of only reading your own side's propaganda, I guess."

I am completely aware of this, and I never claimed the opposite. However, that authorization does not refute my assertion that the government is extremely inefficient, given that social security is now being funded by the next generation up. Authorization to use surplus funds does not shield it from criticisms regarding its inefficiency. Personally, I am "authorized" to spend any discretionary funds I have in my bank account right now. But, if, 5 years down the road, I am up to my teets in debt, would I be able to make the claim that I am economically wise, simply because I "had authorization" to spend? That's rediculous.

"Tell me, what has the Social Security Administration spent money improperly on? Or are you just talking out of your ass?"

The money goes into and comes out of the general fund, which pays for, oh, I dunno, thousands upon thousands of improper things. The minute one cent went into the general fund, instead of cutting pork spending, it was improperly spent. Pretty simple. If you're asking for a bloody paper trail of individual dollars, we all know that the budget doesn't work that way. If I spend my liquid assets on hookers and booze, then end up in the red, and am forced to dip into my savings account in order to pay for rent and food, then, well, you can't exactly say that I used my savings to buy hookers and booze, but, in the end, that IS really what happened.

nmg | May 4, 2005, 12:19pm | #

"no one near retirement age would opt out. instead it would be everyone under the age of 35."

Including the very poor, the segment that is targeted by this paternalistic program.


nmg

nmg | May 4, 2005, 12:23pm | #

[b]But more important, in the realm of social utility, the good of keeping poor people from going hungry or freezing outweighs the harm of reducing a wealthy person's bank account by a small fraction.[/b]

What about the poor people who don't want to participate, who don't want to have their bank account reduced by an even larger fraction than the non-poor? Why are people forced into this program when anyone who wants to insure against old-age poverty can do so, even the very poor? (you can open an annuity accoutn at a very young age for a very reasonable price). This doesn't make any sense in a free society.

nmg

nmg | May 4, 2005, 12:28pm | #

[b]But more important, in the realm of social utility, the good of keeping poor people from going hungry or freezing outweighs the harm of reducing a wealthy person's bank account by a small fraction.

Ahhh Joe. You're getting off your talking points. Most posters here agree that it's a social good to feed and clothe the starving poor. What does that have to do with the current incarnation of a universal Social Security program that cuts checks for Warren Buffett?

nmg

joe | May 4, 2005, 12:52pm | #

If you remove the universal nature of the program, it becomes rational for each individual to opt out. nmg's argument is comparable to saying, if you limit the amount of sheep each person can graze on the common, each shepherd would "opt out" of the limits; ergo, nobody wants to have limits.

As for your last question, nmg, I was hardly alone in "wandering off" into a general discussion of the benefits of redistribution.

dhex | May 4, 2005, 3:13pm | #

"Including the very poor, the segment that is targeted by this paternalistic program."

maybe, maybe not. if someone from the pew center cares to poll them - and last time i checked the pew survey on the 2nd didn't break things down by income levels - it's not really the point. if there's paternalism, it's in the rhetoric used. it's all about keeping the structure afloat, as joe mentions.

Brian | May 4, 2005, 3:46pm | #

joe: "But more important, in the realm of social utility, the good of keeping poor people from going hungry or freezing outweighs the harm of reducing a wealthy person's bank account by a small fraction."

Sure. So what's wrong with means testing again?

"Security for the poorest, who will at least have something, and security for the everyone else, who will have a rock solid foundation, so they can be a little more ambitious with their other investments."

And the point is that SS is a really crappy "foundation" for those of us who are not going to retire in poverty. Give me back some of my payroll taxes and I can easily create a much better foundation. I will be better off, and so will society, because my foundation will consist of actual assets instead of IOUs which only represent a promise to tax the hell out of future generations.

But fine, let's pretend that the government really does need to save me from myself and absolutely guarantee a baseline. Why should this baseline be any higher than that for the poor? Bush's plan makes the curve flatter by not paying wealthy retirees *as much* more than poor retirees, but if the purpose is just to insure a livable baseline why not make the curve completely flat? You turn 67, you get a check for $X every month. Why not? You could even make X greater than what the poor get today and still save money.

"If you remove the universal nature of the program, it becomes rational for each individual to opt out."

Yes, but it would *still* be rational to opt out even if I was the only one given that opportunity. It's not the case that forcing everyone else to participate makes it a good deal for me.

nmg | May 4, 2005, 4:19pm | #

JOE: If you remove the universal nature of the program, it becomes rational for each individual to opt out.


It'a *already* rational for each person to opt out, that's the point.

nmg's argument is comparable to saying, if you limit the amount of sheep each person can graze on the common, each shepherd would "opt out" of the limits; ergo, nobody wants to have limits.

WTF? The tortuous reasonings required to defend Social Security.... Amazing.

Dhex: it's not really the point. if there's paternalism, it's in the rhetoric used. it's all about keeping the structure afloat, as joe mentions.

Ah, so at least you're honest, the point of the program *is* the program. Typical. This is usually the truth behind any govt bureaucracy but it's unusual to hear this openly admitted to by a mere citizen subject to that bureaucracy.

Some would argue that the point of a govt program should be to benefit people, which Social Security clearly does not do in any manner that approaches acceptable efficiency. The poor are hurt by it, the middle class is hurt by it, and the rich are annoyed by it.

This brings us back to Julian's original point. Redistribution will save the program, but the dems are afraid that it will also kill the program. So they resort to the mental gymnastics we've seen Joe put on display for us here.

nmg

Matthew Cromer | May 4, 2005, 6:17pm | #

Of course, there are PLENTY of people who get to opt out -- members of congress for starters -- as well as a number of other government employees.

I've never heard of anyone with the option to opt out refusing to do so either!

dhex | May 5, 2005, 11:38am | #

"Ah, so at least you're honest, the point of the program *is* the program."

uh, yeah, but i think you're confusing my position with joe's.

i have no illusions about what SS is. and i would opt out in a heartbeat, if given the chance.