Thursday, May 10, 2007
My whereabouts, and a new discussion opportunity
Sorry about the slowdown around here, guys. I've been driving myself around New England from one business commitment to another, so I have not had my usual time in airports and taxis to post my traditional drivel. Starting this evening, I should be around for a while. In the meantime, another discussion opportunity looms. This one relates to questions that have bothered me for some time.
Is it the case that our entitlements programs (such as Social Security and Medicare) require (or barring an extraordinary surge in economic growth probably will require) a constantly growing population so that each generation is in a position to pay for the generation that precedes it? If so, then is there a moral duty to choose to have children? If somebody chooses not to have children yet still supports entitlement programs that depend on a growing population, does that make him or her a hypocite, or only a free-rider? After all, the entitlement programs cannot survive if everybody chooses infertility; advocates for these programs who do not have children are relying on the promise that other people will have children. Is voluntary infertility in the modern welfare state therefore a form of "negative externality," as economists would say, or "social pollution," as leftists of a certain ilk might say? If you say yes, then what is your opinion of people who choose to smoke, get obese through choices they can probably control, or play with matches? To what degree does our "socialization" of retirement and medical benefits raise complex questions about what it means to be a good citizen, and about the degree to which we should demand changes in the private lives of citizens?
For the time being, discuss without reference to your position on immigration, which can substitute for infertility to some degree.
10 Comments:
By 
Christopher Chambers, at
Thu May 10, 08:25:00 AM:
It's a choice. Period. I don't think too many people put that spin on the choice. Perhaps these same people also believe--and I think it's not an irrational or stupid creed--that there are people and entities out there who are more than capable of helping maintain these programs, rebuild our infrastructure, clean up polluted lan, water, air, find new energy sources. But these persons and entities are more concerned with yet more "yachts to water ski behind" (an allegory from the film "Wall Street;" not just literally or figuratively). This also includes making the hedge funds, the Chinese, the bankers happy around shareholder meeting time, rather than maintaining the commonweal. Sad that a program for children like CHIP or Head Start or even Ryan White funding under state Medicaid is eyed for destruction, yet we can loose billions to contractors?
In other words--make Exxon and Halliburton pay for Social Security hahaha
Those of the water ski crowd who do have kids--all of the money and power in the world (maintained by abolishing the "death tax" etc)--will not protect a soul from NOT finding ways to fix these "entitlement" programs, or fixing the environment, etc. You can't build a gated community with 1000ft gates. You ca't hide in Idaho forever, right?
By SR, at
Thu May 10, 08:39:00 AM:
Chris,
They're already paying 90% of the taxes on 50% of the income. Not enough?
By Purple Avenger, at
Thu May 10, 08:51:00 AM:
In other words--make Exxon and Halliburton pay for Social Security
Companies don't pay taxes, their customers do through higher prices. Might as well just implement VAT and eliminate some book keeping.
If you tax them enough, then they lose profitability and go out of business, and your tax revenues decline accordingly.
Corporations aren't the horn of plenty you think them to be.
By 
, at
Thu May 10, 08:57:00 AM:
I actually agree with Chambers on the point of "choice". And it might actually be fairer not to breed children into a system that's going to drain every dime they earn, to pay for socialist programs, lazy bums of all colors, and illegals our politicians are too cowardly to deal with (for fear of losing their cushy job).
To Chris' other point(s), the issues with Social Security don't rest with super wealthy not paying enough, as poster 2 has already pointed out. We have a problem in DC, and it needs to be addressed.
Social Security is badly broken. It should not be a system that relies on a growing population, and should not be a fund that the government can use to pay for other entitlements like AFDC or the next wet born just over the border. We've been paying benefits to those illegals for a long time, and it's draining and nearly drained the system.
Anyone who has ever managed a P&L knows that you make bottom line nubmers by managing above and below the line (GM/GP). We don't have a revenue problem, we take in what we take in. We have a spending problem.
With all due respect to all the "disadvantaged" out there who have lived off of Lady Liberty's abundant teet, it's time that they started pulling their freight, or committed to the lifetime of poverty slackers get. 100 years ago in America, there was no free lunch. We've made it way too easy for people to drain our system, and the people paying for it are dutifully paying into a system that'll be bankrupt before they draw from it.
Taxing the life out of those whose hard work, commitment to education, and so forth have given them a strong(er) income just isn't going to work. First of all, you could take 100% of their income and the program will still go under. You have to stop paying for those who've paid in nothing. And you have to let those who are paying in have a choice to earmark some of THEIR money into an account THEY control. And you should give the "wealthy", who can save if they choose, great opportunities for tax deferred contributions to other vehicles, since those people will likely draw zero from the program as it drifts into bankruptcy.
I can accept that FICA is just another tax, but as long as there's the "promise" of a monthly check, I'm going to plan for that check in my retirement. Sure, it'll be beer money or a car payment by then, and a negative return if the monies (and matching funds that are part of my comp) were invested, but just the same, I want my piece.
By Charlottesvillain, at
Thu May 10, 09:11:00 AM:
The babyboom generation represents such a generational imbalance that such questions are irrelevant. There is nothing we can now do reproductively to make entitlement programs work. Even assuming a big increase in immigration, if you look at the numbers the programs are not sustainable. And its actually worse than that.
Professor Jeremy Seigel at Wharton maintains that the demographic issue is far larger when you consider the retirement savings of the babyboomers, who begin retiring now. These savings are not, for the most part, sitting in piles of cash, but are invested in assets. Houses, for one thing, but also financial assets through their defined benefit and defined contribution plans.
Seigel maintains that looking at demographic data for the US, which is quite favorable when compared with Europe and Japan, there is simply not enough younger, productive, saving people to buy the assets of the older generation as they are liquidated. His models show that immigration cannot possibly solve the problem either.
Based on this analysis, he maintains that we will either experience rather dramatic and systematic declines in asset prices over the next 25 years, or they will need to be purchased by productive, saving people in the developing world. He expects a massive transfer in ownership of the assets of the developed world to new owners in the developing world over the next 30-60 years. I expect we'll need to rely on these folks to continue to fund our government entitlement programs through bond purchases over the same period.
We're about to get a lot more global folks, whether we like it or not.
By Dawnfire82, at
Thu May 10, 09:41:00 AM:
Wow. Not only have the boomers screwed up our politics and social systems beyond recovery, but they are inadvertantly conniving to, literally, sell out the country to foreigners.
Thanks, dad.
By , at
Thu May 10, 10:19:00 AM:
Recently we have seen from the latest leftist religion "Global Warming" the message that having kids is bad for the environment.
Kind of a paradox. Need the numbers to support our retirement, but kids harm the environment.
By D.E. Cloutier, at
Thu May 10, 12:50:00 PM:
The left-wing mess wasn't created by the boomers. It was created by the two previous generations (the so-called "greatest generation" and their parents). Boomers ushered in the Reagan era as soon as they got some power.
By D.E. Cloutier, at
Thu May 10, 01:01:00 PM:
P.S.
""We make the rules -- the news, war, peace, famine, upheaval, the cost of a paper clip... you're not naive enough to think we're living in a democracy are you? It's the free market." -- Gordon Gekko
By honestpartisan, at
Thu May 10, 02:35:00 PM:
I don't know how useful it is to ponder the qualities of a person who would support things like Social Security and Medicare but not have kids themselves. I've always thought that one of the biggest advantages of capitalism and democracy is that they don't assume that people are altruistic. Instead, they assume people are self-interested, so democracy and capitalism have built-in accountability mechanisms to address that (the market, elections).
Be that as it may, my understanding was that the baby-boom bulge in Social Security was anticipated when FICA taxes were raised in 1983. Roger Lowenstein wrote a New York Times magazine article a couple of years ago arguing that this pretty successfully addressed the problem. Even if you don't have kids, you've been paying much higher FICA taxes than people were pre-1983 to pay for retirements.
Also, Medicare doesn't necessarily have to be a generational issue, but rather a health care cost control issue that could be addressed in other ways, like a single-payer system.
