Some Interesting Quotes to Debate

I was reading this article and couldn’t help but think of all of you.

Social Security, for example, has significantly reduced poverty among the old in the United States

 Discuss my friends! *ducks for cover*

Oh, and I enjoyed this one too:

The only good news I can offer is that projections of the future that rely on straight-line extensions of the present, as this one does, are almost always wrong. Maybe Angela Merkel and Nicolas Sarkozy will pull tighter EuroZone integration out of their chapeau and hutte and we’ll see a new assertive euro economy emerge in five years. Maybe rising labor costs in China will lead to a meaningful shift in jobs back to the United States. Maybe current trends in U.S. oil production will turn the United States into an oil-exporting nation. Maybe something that I can’t think about now will change the low-growth scenario that projections based on the euro crisis now make seem so inevitable.

Discuss this one too.

8 thoughts on “Some Interesting Quotes to Debate

  1. Regarding the first quote, how about this counter weight from Marion Romney:

    “Everyone agrees that poverty and social privation should be eliminated. We ourselves must do all we can to eliminate them. We know, however, that success in such an endeavor would not cure our ills unless that success were accomplished in the Lord’s way. Poverty and social privations and other of our ills are not the cause, but the consequences of our evil practices.”

  2. Social Security is fine. However the way it’s administered is not. Why is 65 some magical age of retirement? Life expectancy has gone up in the last 70 years, so should the age at which you can draw SS.

  3. Bruce, I can’t believe that the quotation about Social Security was what you got out of that article. It was a completely tangential point that really didn’t have anything to do with the larger article.

    On the larger point of global economic trends, I think that, while I agree with many points the writer made, there is a lot of discussion about the trees but not enough about the forest when it comes to both the European and US economic situation. We really have only three choices for the future, and the choices are the same for both the U.S. and Europe.

    1)We can continue to do what we are doing, ie, hoping the crisis will go away. Eventually it will explode into a bigger crisis. (By, “crisis,” I am referring to both the huge public debt, about 100 percent of GDP for the US, and the debt on the balance sheets of the biggest banks, which the Fed has been papering over through constant loans to keep the banks afloat).
    2)We can bail out all the banks that made all the bad investments and continue to print money and maintain deficits. This will cause further inflation and ruin living standards. This is will continue the policy in 1) but perhaps delay the crisis for a few months or so. When the crisis hits, it will be worse because there will be more debt to deal with.
    3)We can have the political will to let all of the banks that have made bad investments go bankrupt and refuse to bail them out. We can reform the Fed so it no longer sends trillions to these banks. And we can make severe cuts in our public expenditures and move aggressively to a balanced budget. This will cause a short-term recession, and it probably would be very steep, but it would last no more than 18 months before real growth began again.

    Obviously, I favor 3, but I expect 1 or 2 to continue.

  4. Geoff, who said anything about that “quotation about Social Security [being] what [I] got out of that article”

    Well, except in the sense that it made me think of M*

  5. Social Security was never meant to be the sole retirement program for Americans, but for some it is all they have or ever will have. For the rest of us, why not a means test? We should get back all we paid in, plus interest, but if we’re worth $5 million, do we need to get SS benefits for life?

    A related question: Should someone who serves in the military get BX and commissary privileges for life even if they have used their military experience to become multi-millionaires in the private sector? How about means testing these privileges?

  6. Don,
    I’m sure the last thing AAFES wants is for less retired military to be shopping at the exchange. It would reduce their buying power, reduce their discount power, and likely reduce their service. Being able to buy things on base at a slightly reduced price, in exchange for years or a lifetime of military duty, isn’t much of an entitlement we need to worry about at this point!

    The arguments against means testing are as follows:
    – It’s expensive, so you don’t end up saving as much as you think you do (you create programs, departments, appeals, etc. to handle the means testing)
    – It adds even more perverse incentives to an already perverse incentive structure — now you have to worry about losing your EBT today and your and social security tomorrow if you make too much.
    – It makes it unpopular. Generally programs that everyone can use are popular, programs that 10% can use are unpopular.

    I think social security is a terrible program, with some well intentioned aims at its heart. But I can’t imagine a worse way to implement “care” for someone in their old age than to send a check to them from 1000 miles away without actually taking notice of that individual.

    If there is one area where communities need more involvement it’s caring for the poor, needy, and aged. It would be awesome if these kinds of things could be handled by town councils, etc. You might say that if you do that, then town councils wouldn’t have time to do much else. Yes! Wouldn’t that be great if our local elected officials had to spend their time helping people, or administrating programs that directly help people in their area, rather than passing the buck to the State or Washington, and then devising more ways they can muck up their local business/housing/zoning/etc. environment.

  7. The main problem with Social Security is that it starves the United States of capital investment, provides no real returns, and as a consequence provides for far worse retirements for nearly all retirees than if they had just saved the same amount of money in the first place.

    But since many people are (apparently) too irresponsible to save for old age, we can do far better with a combination of mandatory private retirement account contributions for employees, plus a means tested welfare program for those who fall through the cracks.

    Of course, this should all be done at the state level. It is none of the federal government’s business.

  8. I agree that it has reduced poverty among the elderly. However, it has done so very inefficiently. The return on SS funds is about 2%/year. Had we instead used a Chile-style private investment retirement plan, most elderly would have at least twice as much for retirement funds, if not more. The system would likely stay solvent without fixing it every couple decades, and Congress could not steal the money for other pork projects. Finally, when the individual dies, any left over funds would go to the family, instead of being reabsorbed by the government.

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