Social security won’t be around long enough for me to collect it (repost from 2014)

The claim that our current healthcare and pension policies are unsustainable is a classic zombie idea on the political right, embodied in the regular Interngerational Reports produced by the Australian Treasury which invariably fail to mention the real threat to the future posed by climate change and environmental destruction more generally.

In the US, the release of the trustees reports for Social Security and Medicare has produced <a href=”https://www.washingtonpost.com/opinions/the-cowardice-of-the-political-class/2018/06/10/71520c0e-6b40-11e8-9e38-24e693b38637_story.html?utm_term=.42caa7a6e650″>the usual crop of alarmist articles</a>, though with more pushback than in the days when the political class was united around the idea of a “grand bargain”. So, I thought I’d repost <a href=”http://crookedtimber.org/2014/03/23/social-security-wont-be-around-long-enough-for-me-to-collect-it/”>this piece from 2014</a>.

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Salon has a couple of interesting articles about millennials. Tim Donovan focuses on <a href=”http://www.salon.com/2014/03/22/this_is_not_a_typical_millennial_the_dark_truth_about_a_misunderstood_generation/”>the plight of young people without college education</a> who are suffering the combined effects of long-term growth in inequality and the scarring that comes from entering the worst labor market in at least a generation[^1]. Elias Isquith has a piece <a href=”http://www.salon.com/2014/03/22/rand_pauls_youth_snow_job_why_hell_never_ever_ever_win_over_young_voters/”>debunking Rand Paul’s prospects of pulling the millennial vote</a> (I’ve seen a few of these lately, which may or may not mean anything), which includes the following observation<blockquote>Despite the fact that a whopping 51 percent of millennials believe they’ll receive no Social Security benefits by the time they’re eligible, and despite the fact that 53 percent of millennials think government should focus spending on helping the young rather than the old, a remarkable 61 percent of young voters oppose cutting Social Security benefits in any way, full stop.</blockquote> The idea that “Social security won’t be around long enough for me to collect it” is a hardy perennial, and thinking about it led me to the following observation:

It’s now possible for someone to have spent their entire working life believing that Social Security would not last long enough for them to receive it, and now to have retired and started collecting benefits. This belief has been prevalent at least since the early years of the Reagan Administration when it was pushed hard by David Stockman, and I’m going to date it to the first big “reform” of the system in 1977. Someone born in 1952, who entered the workforce in 1977 at the age of 25, would now be turning 62 and eligible to collect Social Security.
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I’m betting that, in 20 years time, when the 1952 cohort reaches their average life expectancy, having enjoyed their full entitlement to benefits (assuming no ‘grand bargain’ intervenes) that the belief will be just as prevalent

[^1]: As I’ve argued <a href=”http://crookedtimber.org/2012/08/17/the-generation-game-2/”>many</a&gt; <a href=”https://johnquiggin.com/2003/12/07/can-we-stop-the-generation-game/”>times</a&gt;, the shared experience of entering the labor market in a recession is one of the few instances where membership of a particular generation is more than a marketing label.

21 thoughts on “Social security won’t be around long enough for me to collect it (repost from 2014)

  1. Mr Quiggin, it is always the folks on the left, who endorses one failed
    economic program after another.

    There are numerous reasons as to why social insecurity will ultimately
    go bankrupt, yet socialists are incapable of any and all reasoning.

    Just a single fact for starters, Mr Quiggins, is that since 2010 America’s
    SS has been running in the red. Yes, indeed, it is paying out more than it
    is taking in.

    For leftists, it is policy over economic acuity. Caracas is awaiting for your
    economic expertise!

  2. If Werner Nieder is even vaguely on the mark regarding the situation in the US, then with all these guns of various calibers around in the US, one would expect a major blood bath in the future, or the Canadians are going to face a boat people crisis or both.

    The question of social security for the aged population is a question of income and wealth distribution via a set of fiscal and other policies. Full stop. Some societies are able to solve this problem even under difficult circumstances, others are not. Historically, social security for the aged has nothing to do with ‘leftists’ or ‘rightists’ in most if not all EU countries.

  3. Werner, you’ve thrown around lots of insults but you have not made out your case. The only factoid you’ve given us in support of your claim is that:

    “since 2010 America’s SS has been running in the red. Yes, indeed, it is paying out more than it is taking in.”

    This particular factoid is completely irrelevant. The capacity to pay for a decent welfare system is many orders of magnitude greater now than it was in the 1880s, when the welfare state first emerged.

    Please have a bex and a good lie down.

  4. In a mixed economy, if a developed modern nation has a functional government, a functional market, enough food to feed everyone and enough structures to house everyone, then it can pay welfare. The term “pay welfare” in this context means the government gives enough money tokens to people, who don’t have other access to money tokens, to enable them to purchase adequate food and shelter. The provision of food and shelter also presuppose other functional systems such as functional agriculture, functional transport and functional construction capabilities.

    If a modern advanced nation can’t “pay welfare”, or it is predicted to be unable to, then there are four main possibilities. These are systemic dysfunction, environmental limits, war or sabotage. Any current inability of advanced nations to ensure the welfare of all citizens logically must stem from systemic dysfunction and/or sabotage. Any prediction of future problems without predicting impacts of environmental limits or widespread war also logically means positing the existence of systemic dysfunction and/or sabotage.

    It seem that Werner Nieder, without realizing it, has made the correct assessment that America (the USA) is currently suffering from systemic dysfunction and sabotage. The sabotage is internal and inflicted by the elites. It’s called neoliberal or market fundamentalist economics. We can also call it class war.

  5. “Historically, social security for the aged has nothing to do with ‘leftists’ or ‘rightists’ in most if not all EU countries.”

    Of course, Mr Gross, nothing in EuroLand has to do with politics. FDR, was warned about
    the future consequences of SS, but chose to ignore them.

    Social Insecurity is nothing other than a leftist dream (you are all dreamers) of redistribution.

    The fact remains, that the programs was already facing insolvency, which required all too
    numinous adjustments.

    The tax increases to the point were now 1 out of 8 dollars are taken from income. Those retiring
    now and especially those in a decade, will be fortunate to see a return of a dollar in benefits
    for each dollar paid in.

    The last grieves act by CONgress, was to tax social insecurity up to 85%. SS and Medicare, are
    now part of the general budget rather than a stand alone operation. Just another way to hide
    a failed program.

    They is even more bad news. I am just warming up.

  6. Hugo said “This particular factoid is completely irrelevant. The capacity to pay for a decent welfare system is many orders of magnitude greater now than it was in the 1880s, when the welfare state first emerged.”

    What in God’s name are you saying?? Have a good lie down.

  7. Ikonoclast said “In a mixed economy, if a developed modern nation has a functional government, a functional market, enough food to feed everyone and enough structures to house everyone, then it can pay welfare.”

    How right you are, until you run out of others people’s money. The governmental unit is only a
    transfer agent. It is a host on those whom are the most productive and provides little needed
    functions that helf to aid either freedoms or economic growth; which should be their principal
    course of act.

    “Any current inability of advanced nations to ensure the welfare of all citizens logically must stem from systemic dysfunction and/or sabotage.”

    I agree and the systemic dysfunction are those that interferes with economic development
    and productivity, which of course the socialist model does so well.

    Hugo, if you need examples of these failures, I can provide them as history is littered
    with them.

    Ikonoclast, benefits can only be paid out if everyone is a producer. When there are
    more host than providers, the system is damaged or destroyed. There is NEVER an
    exception to this law; other than those whom are ignorant or just blissful.

  8. If there is one thing that exemplifies the mean end of the Australian spirit it is the current approach to social security based on an attitude around since the great depression then the recession of the 1970’s.

    It is based on a fallacy that the unemployed are unemployed because they don’t want to work (why would you want to live like a dog?) rather than through chronic lack of availability of jobs.

    Like refugees and aborigines, also many women, the unemployed have been “othered” into an untenable psychic space through a cynical and cruel caricaturing by propagandist alibiing political ignorance and opportunism. The creation of a divisive “wedge” doesn’t just apply to scapegoated asylum seekers.but to many on the wrong end of the deal within our own country, but works well for conservative politics seeking to keep the public diverted from realising where the money has really gone through a playing on by propagandists of the baser elements of human nature, .involving massaged fear, envy and ignorance.

    Werner Nieder rightly queries what happens when you “run out of other people’s money”.

    Quite right, what DOES happen to the likes of Rupert Murdoch and his class when they can no longer rob the common wealth through their scams?

    We know the answer is to put in conservative governments like the Turnbull one, who dumb down media and education, pass fishy security laws to muzzle the press and dissent and allow or turn a blind eye to new scams, like the tax cuts for the rich one being proposed by the IPA and prosecuted by soulless individuals like Corman and Turnbull himself.

    Meanwhile, the unemployed are expected to live on sixteen dollars a days after rent, maligned as bludgers while what is left of the local jobs market is farmed out to visa operators and holders.

  9. Hugo, hear is another “factoid” for you.

    Why are these governmental unit retirement schemes mandated?????
    If they are so “great” no mandate would be required.
    Returns on USA social insecurity is no more than 1 to 1 1/2 percent
    per year. This means, that total return for the retiree would only double
    in 72 years. A grade school student could do better than that.

    If private and public pension schemes offered such a low return on investments
    they would be investigated and charged with fraud. But in the world of governmental
    units, there is rarely any consequences.

    Disability insurance had already received billions of dollars recently to avoid its
    “trust” fund from going bankrupt. Yet, another statist scheme which is failing to
    perform as pledged by the left.

    Another factoid, Hugo, is the payments do not mirror previous income levels, which
    means the retiree either needs to reduce consumption or seek employment.

    The Chilean model has manage to do just that, by returning 90% to 100% of income earnings,
    wherein the USA retirement plan is significantly less than that.

    over and out

  10. Mr Walter said “Quite right, what DOES happen to the likes of Rupert Murdoch and his class when they can no longer rob the common wealth through their scams?”

    I shall never make common cause with the discriminatory mantra of “class warfare.”

    One can avoid the likes of Murdoch’s and the Soros Brothers, by simply not consuming
    their services or products. Unlike governmental units, which through police powers,
    enforce their fiats with threats of criminal or civil actions.

    I do agree with my debating socialists, that there has be a massive increase in assets
    wealth by the 1 percenters; much of it driven by your loyal and devoted governmental unit,
    with the compliant of central banks.

    The difference between Conservatives and Progressives philosophy is akin to a desert
    adjoining a lush game reserve. The only question that needs to be ask, which one am I
    in.

  11. “Hugo says:
    June 12, 2018 at 5:21 am
    Werner, you’ve thrown around lots of insults but you have not made out your case.”

    Another cause bella of the far left, speech control or denial. In this case, political claims
    and labels are inferred as “insults”. The hallmark of the far left, to control what is
    acceptable speech and by whom.

    This is what is happening in the UK, as the local po”lice” spends more time investigating
    complaints by you locally imported Muslame against British citizens.

    This denial of discourse is meant to silence those whom have a grievance, as is witness
    by the jailing of Mr Robinson, a victim of po”lice” terror. Free Englishmen, leave while you
    can because shortly an export licence will be required.

  12. We have so much and people need so little for a good life ,to me its impossible to believe we cant help the less fortunate.

  13. @1 I’ve been off-air for a while, but the first two words of Werner Nieder’s comments assured me that what followed would be both hostile and silly, and the mis-spelling of my name later in the same comment confirmed me.

    https://johnquiggin.com/2014/10/06/my-dear-mr-quiggan/

    I’m sorry to have let a string of comments through from this troll, but there won’t be any more. Go away, and don’t come back.

  14. In a funny way, it was fortuitous that the comments got through, providing such a detailed example of the conservative mentality.

  15. Paul, I agree. In a way it was interesting. Though it also indicated that arguing logically with a person with that set of a priori assumptions is not possible. Sometimes though, it elicits a clearer expression of the “priors”.

    W.N. agreed with my first sentence-proposition but added the caveat “until you run out of others people’s money”. Immediately, we see;

    (1) The reification of money. Money, a notional unit of account, is falsely concretised as the fundamental real quantity, the lack of which will prevent the allocation or re-allocation of quantities of other materially real quantities like food and shelter.

    (2) The phrase “other people’s money” completely omits the political, social and economic processes in any really existing money economy which assign income and ownership of money or money denominated “tokens”. The complex questions surrounding allocation and ownership are entirely glossed over.

    As John Ralston Saul said: “You can always tell you’re in deep trouble when people start thinking money’s real.” In addition, I think we can always tell we are in trouble when people think the extant allocation and possession of money in any given money economy is entirely obvious, normal and just without any further analysis.

  16. “In addition, I think we can always tell we are in trouble when people think the extant allocation and possession of money in any given money economy is entirely obvious, normal and just without any further analysis.”

    Spot on, Ikon. It is extraordinary that adults could be so unthinking. The funny thing is that if the crazed uber capitalists were put in charge, capitalism itself would suffer and fall into compete disrepute because most folk would be immiserated. The arch conservative, Bismarck, invented the welfare state to save capitalism from itself.

  17. Hugo, they are in charge and capitalism is suffering quite drastically in a number of ways, most of which are to do with the Monopolist FTA regime. Education and information rationed so that better-informed people don’t point out that the emperor has no clothes. doesn’t offend the oligarchy, misuse of patents to keep pharmaceuticals prices way too high, leading to a less productive workforce, stifling of environmental measures against the interests of monopolists so that cost effectivity is radically downgraded through expensive downstream consequences to become apparent later when a multi $trillion dollar clean-up becomes necessary. Many others if I thought longer on it, I suppose.

    The corruption of politics and the law ensures no countervailing measures in the community and global interest are ever taken.

  18. FTA’s (Free Trade Agreements) are actually Free Take Agreements. Corporations are free to take compensation from sovereign governments, and hence from the people, via judgements in extra-legal star-chamber tribunals run by lawyers and “judges” selected by corporations. There are no appeals against the judgements. Governments and peoples are powerless. The arrogance and effrontery are stupendous. Taken to its extreme, this will bankrupt democratic government and render it non-operative. The outcome would be corporate dictatorship. Taken to a merely “operative extreme” government would be reduced to the minarchist level desired by corporatism.

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