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The Politics of Social Security and the Problem with Perry’s Approach

Maggie Gallagher wrote the following over at NRO yesterday:

If Social Security is going to be reformed, it’s going to be by politicians who appear visibly more interested in protecting it than ideologically transforming it.

Perry did not appear that way last night.

I think this is fundamentally correct.  One can run on the notion the Social Security needs reform and one can certainly tap into anxieties of voters of a certain ago who are skeptical that they will see SS benefits when they hit retirement age.

What creates problems, however, is tossing out terms like “Ponzi Scheme” because even if one does not like SS (or welfare policies in general), likening one of the most popular programs in US history to a fraudulent, illegal venture is problematic.  Beyond, there are the empirics of the situation.  Perry has called SS a “failure.”

The basic problem is:  that is empirically untrue.  One may not like SS.  One may think it is inefficient.  One may have a preferred alternative.  One may even think that is non sustainable in the long haul.  However, to call it a failure ignores over half a century of operation.  It also denies the reality of millions who currently receive monthly checks (who will be stunned, no doubt, to hear what a failure the program has been).

BTW, I don’t think, contra what Doug Mataconis suggested earlier today, that one can try and go the individual accounts/Chilean route.*  First, Bush tried that at the start of his second term and it was a non-starter.  Second (and more importantly), we just had the most significant financial meltdown  in multiple generations.  That meltdown 1) creates a lot of doubt about having too much of one’s retirement linked directly to the stock market (all of us with 401k statements remember what they looked like just a few years ago), and 2) demonstrated that the ultimate guarantor of the economy remains the US Government, not Wall Street financiers.   All of that sums to a tough row to hoe if the goal is convincing general election voters that Social Security is a failed scam that needs to be replaced with private investment accounts.

—-
*I must confess, this is an idea that I like in the abstract.  However, 1)  the Chilean experience is less the sunshine and roses that Cato makes it out to be, and 2) the problem with private accounts is that the government still has to act as guarantor.

h/t:  Andrew Sullivan.

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About Steven L. Taylor
Steven L. Taylor is Professor of Political Science and Dean of the College of Arts and Sciences at Troy University. His main areas of expertise include parties, elections, and the institutional design of democracies. His most recent book is the co-authored A Different Democracy: American Government in a 31-Country Perspective. He earned his Ph.D. from the University of Texas and his BA from the University of California, Irvine. He has been blogging since 2003 (originally at the now defunct Poliblog). Follow Steven on Twitter

Comments

  1. Polaris says:

    Perry’s position on SS is subject to valid criticism. That said, I am appalled by Romney’s response which is essentially to deny that there is a problem.

    I’d much rather have someone go over the rhetorical top I think and proclaim a program a failure (even if that’s not strictly true) because at least people start discussing it, examining the issues, and hopefully generate enough political momentum to fix it.

    That clearly won’t happen under a Romney Administration if I am to take Romney’s response at face value, and that should be even frightening because this is a problem (and entitlement spending in general) that’s going to get a lot worse before it gets better.

    -Polaris

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  2. Boyd says:

    I can’t even pretend to be sufficiently prescient to say who will ultimately reform the Social Security program, or how they will do it, but it seems to me that the only ones who have made changes to it so far fall in the “more interested in protecting it” category, and they have clearly failed to achieve anything close to reform.

    Like or Dislike: Thumb up 1 Thumb down 0

  3. bandit says:

    SS is an insurance plan not based on actuarial data. The gov’t needs to adjust the age to receive benefits significantly to make it viable.

    Like or Dislike: Thumb up 0 Thumb down 0

  4. john personna says:

    Let’s remember the projections:

    CBO is predicting that the Social Security Trust Fund will be exhausted in 2038 (two years later than the Social Security Administration projects), at which time beneficiaries would face a 19 percent benefit cut (slightly smaller than the cut SSA projects). The 75-year actuarial deficit is pegged at 1.58 percent of taxable payroll under the extended baseline and 2.00 percent under the Alternative Fiscal Scenario; the difference is accounted for by lower revenue from taxation of Social Security benefits due to the tax cuts. In both scenarios, CBO’s projection of the shortfall is lower than the SSA projection (2.22 percent of taxable payroll under current law), mostly due to higher revenue under CBO’s projections.

    Every time this rolls around, there is a tendency to view it as an immediate problem, rather than a “by 2038” problem.

    @bandit:

    Social Security is overhauled periodically by congress, and those overhauls are “actuarial updates” at a gross level. It is true that this could be done better. Either by adjusting the payout or adjusting the withholding for each cohort.

    The suggestion to change the age to receive benefits really is another gross adjustment.

    It would be finer-grained to make a different pay-in/pay-out for every single year of birth.

    Like or Dislike: Thumb up 2 Thumb down 0

  5. Polaris says:

    That’s only the SS fund paid to the elderly John. SS Disability is due to go belly up within the year…two on the outside.

    -Polaris

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  6. MSS says:

    *
    […]

    3) It was imposed by a highly repressive military dictatorship, and 4) It was recently modified to incorporate, among other things, a stronger state component because of significant failures of the private system.

    Like or Dislike: Thumb up 1 Thumb down 0

  7. john personna says:

    @Polaris:

    This August 2011 article says “by 2017,” but I’m certainly willing to break out disability and treat it as a separate issue. That seems warranted.

    Like or Dislike: Thumb up 0 Thumb down 0

  8. @MSS: Indeed.

    Like or Dislike: Thumb up 0 Thumb down 0

  9. samwide says:

    @Polaris:

    That’s only the SS fund paid to the elderly John. SS Disability is due to go belly up within the year…two on the outside.

    Can I make a suggestion? When you assert something like that, could you supply a link so we can see the evidence? My research says SS Disability is due for rough water in 2017:

    Social Security disability on verge of insolvency:


    New congressional estimates say the trust fund that supports Social Security disability will run out of money by 2017, leaving the program unable to pay full benefits, unless Congress acts. About two decades later, Social Security’s much larger retirement fund is projected to run dry, too, leaving it unable to pay full benefits as well.

    Claims for disability benefits typically increase in a bad economy because many disabled people get laid off and can’t find a new job. This year, about 3.3 million people are expected to apply for federal disability benefits. That’s 700,000 more than in 2008 and 1 million more than a decade ago.

    “It’s primarily economic desperation,” Social Security Commissioner Michael Astrue said in an interview. “People on the margins who get bad news in terms of a layoff and have no other place to go and they take a shot at disability,”

    The disability program is also being hit by an aging population — disability rates rise as people get older — as well as a system that encourages people to apply for more generous disability benefits rather than waiting until they qualify for retirement.

    Like or Dislike: Thumb up 0 Thumb down 0

  10. Polaris says:

    You’re right. You are linking the same thing I did, and I recalled it incorrectly. 2017 is the target date of catastrophe.

    I accept the correction, but I believe my basic point stands. If you are going to talk about SS, then you have to talk about SS Disability as well, or make it clear that we are addressing it seperately, and 2017 is virtually overnight. In fact the demographic critical mass is already upon us now which explains part of my error.

    -Polaris

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  11. john personna says:

    @Polaris:

    I don’t know why we’d treat disability as the general case. I don’t see any of the candidates doing that.

    Disability is important, and it’s important not to let the rolls inflate inauthentically. IIRC, it is hard in some European nations to fire someone, but easier to get them declared disabled. They go off the company books and onto the state’s. This has led to a rapid increase in “disability.”

    Hopefully we do not have such structural problems.

    Like or Dislike: Thumb up 0 Thumb down 0

  12. David M says:

    So what if there is a shortfall for SS Disabilty after 2017? DI is only 18% of the entire SS program, I’d be shocked if it wasn’t pretty simple make up such a small shortfall.

    Like or Dislike: Thumb up 0 Thumb down 0

  13. Hey Norm says:

    It cracks me up when y’all label a 75+ year old program, which enjoys unprecedented popular support, and is sustainable through the next 25+ years, a failure…much less a ponzi scheme. Talk about drama queens.

    Like or Dislike: Thumb up 1 Thumb down 0

  14. jan says:

    Two cheers for Perry the Provocateur

    Basically, this is a void that Perry is filling — openly and provocatively discussing SS.

    Most politicians circumvent such dicey issues, as it brings out instant nastiness and loss of votes, especially among those who see any reconfiguration of an entitlement program as a specific attack on their benefits.

    Like or Dislike: Thumb up 0 Thumb down 3

  15. jan says:

    @Hey Norm:

    It cracks me up when y’all label a 75+ year old program, which enjoys unprecedented popular support, and is sustainable through the next 25+ years, a failure…much less a ponzi scheme. Talk about drama queens.

    So why are you in such turmoil, wanting to dramatic impact our economy, over disputed computer models, showing what might happen towards the end of this century, some 75 years down the line? I guess, by such a down-the-road assertion, you’re an even bigger ‘drama queen.’

    Like or Dislike: Thumb up 0 Thumb down 4

  16. Hey Norm says:

    Dearest Jan…off the meds?
    What am I in turmoil over?
    What disputed computer models?
    WTF are you babbling on incoherently about?

    Like or Dislike: Thumb up 3 Thumb down 0

  17. jan says:

    @Hey Norm:

    I’ll help you , Norm

    Disputed Computer models = the ‘science’ in which AGW dire predictions are based on.

    Like or Dislike: Thumb up 0 Thumb down 3

  18. Terrye says:

    I guess the thing that bothers me is that Perry will get up there and throw around words like Ponzi scheme..and yet what does he propose? Are we supposed to reform a system he has called illegal? Are we supposed to think he will find a way to save a system he called unconstitutional.

    And I also get annoyed when these conservatives who could not be bothered to support Bush’s reform package get all excited by Perry calling the system some names. Well talk is cheap…what does he actually propose?

    My guess is that he and Romney will both come up with something. But I am not sure anything will get anywhere.

    Like or Dislike: Thumb up 3 Thumb down 0

  19. Terrye says:

    @Polaris:

    Romney did not deny there was a problem. In fact he took some criticism for saying in his book that Congress had been criminal in its management of the social security system.

    I think Romney was more critical of Perry’s rhetoric than his substance.

    Like or Dislike: Thumb up 0 Thumb down 0

  20. Polaris says:

    @Terrye: Hmm, that wasn’t how it came across to me or even to the reviewers of NRO (hardly pro-Perry territory). I mention NRO since that is a conservative publication and we are refering to a GOP debate between two GOP candidates.

    It came across to me (and many of the editors of NRO) that Romney was defending the SS status quo (and many at NRO think Perry’s rhetoric is OTT btw), and that’s not where Romney wants to be especially during the GOP primaries.

    -Polaris

    Like or Dislike: Thumb up 0 Thumb down 0

  21. Polaris says:

    Terrye,

    For the record, I strongly supported GWB’s push to reform SS. I might have had issues with some of the particular components, but at least he was trying to do something.

    -Polaris

    Like or Dislike: Thumb up 0 Thumb down 1

  22. Steve Verdon says:

    @john personna:

    Every time this rolls around, there is a tendency to view it as an immediate problem, rather than a “by 2038″ problem.

    Actually, if you wait until 2038 the cost of fixing the problem becomes much, much larger. The fixes proposed by entities like the CBO and SSA are if they were implemented in short order, not in another 26 years.

    Think of it this way, the current imbalance is calculated as how much of the taxable payroll for the next 75 years (i.e. a big part of that time period–a bit over 26 years–there is a positive balance to the trust fund). If we waited until 2038 there would be no positive balance and the tax increase to restore actuarial balance would have to be larger.

    You can also see this on page 10 in the grey box on the right hand side of the report.

    This analysis focuses on CBO’s extendedbaseline scenario, which adheres closely to current law. In that scenario, federal income taxes on benefits would increase over time, and the estimated 75-year actuarial balance would be -0.58 percent of GDP or -1.58 percent of taxable payroll. That means, for example, that if the Social Security payroll tax rate was increased immediately and permanently by 1.58 percentage points—from the current rate of 12.40 percent to 13.98 percent—or if scheduled benefits were reduced by an equivalent amount, then the trust funds’ projected balance at the end of 2085 would equal projected outlays for 2086.

    So idea this is a 2038 problem is highly misleading. If you want the problem to be really, really difficult to deal with, then yeah ignore it for the next quarter century.

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  23. Steve Verdon says:

    @john personna and @Polaris:

    Back in 1994 DI was near exhaustion. Emergency legislation diverted funds from OASI to DI. As a result, most analysts consider the two in combination not seperate. DI will be exhausted, as it currently stands in 2017. OASI will be exhausted by 2040.

    Oh, and I’m using your source.

    Jesus people, learn to read the damn links you post.

    Like or Dislike: Thumb up 0 Thumb down 0

  24. Polaris says:

    Indeed Steve, to put it another way, think of Social Security as the Titanic and think of the insolvency issue as the approaching iceberg.

    It may be true that the Titanic doesn’t hit the iceberg until 2038, but the point of no return to FIX the problems will happen much sooner. That’s because SS (like the Titanic) has a great deal of momentum, and the longer one waits, the more and more that momentum has to be shifted.

    Likewise for SS Disability, the Iceberg will hit in 2017 but the point of no return is quite literally upon us.

    -Polaris

    Like or Dislike: Thumb up 1 Thumb down 1

  25. Steve Verdon says:

    @Hey Norm:

    I guess that depends on how you count success. Sure, SS has worked moderately well so far with some periodic tweaks (about 40 tax increases, of the most regressive kind to boot). However, in about 25 years (give or take 2-3 years) the program will necessitate a substantial tax increase (larger than the 1.58 percentage points today), a bigger share of the general revenues (i.e. alot fewer other services or bigger deficits or both), a pretty significant reduction in benefits, or a combination of the three. So it might be working okay now, but it is in serious need of an overhaul before it really gets ugly. Kind of like an engine. The check engine light is on, and we’d be better off dealing with it now vs. when there is smoke coming out from under the hood.

    In fact, given that SS is collecting less than it is paying out now, it will be a net contributor to the size of the deficit. Fixing SS would also help deal with that issue as well.

    Like or Dislike: Thumb up 0 Thumb down 0

  26. Steve Verdon says:

    I like Polaris’ analogy better (+1 rep), we are like the Titanic sailing towards the iceberg. In 2038 we hit it. If we wait till 2037 to try and fix the problem, it will likely be too late.* If we act now, we can sail harmlessly by the iceberg.

    *By too late I mean that the adverse consequences for the economy will be much greater than they are now. Further, our real fiscal nightmare is Medicare. To the extent that we can mitigate our fiscal problems associated with SS now, we can have more room to maneuver when it comes to the 800 pound gorilla.

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  27. anjin-san says:

    I like Polaris’ analogy better (+1 rep), we are like the Titanic sailing towards the iceberg. In 2038 we hit it. If we wait till 2037 to try and fix the problem, it will likely be too late.*

    There is something to this. Problem is, what we generally hear from the right is “Screw waiting for the iceberg, lets plant some mines and sink this puppy today.”

    Like or Dislike: Thumb up 3 Thumb down 0

  28. Steve Verdon says:

    @anjin-san:

    Well my inner libertarian screams, “Kill it with fire now!!!” Of course, I also realize that just isn’t going to happen, so now it is an issue of making sure things don’t to go completely to Hell in a hand basket. I don’t have much faith in that being accomplished though.

    (Whew, thank goodness for that editing functionality….leaving out “don’t” would completely change what I wanted to say…)

    Like or Dislike: Thumb up 0 Thumb down 0

  29. john personna says:

    @Steve Verdon:

    Actually, if you wait until 2038 the cost of fixing the problem becomes much, much larger. The fixes proposed by entities like the CBO and SSA are if they were implemented in short order, not in another 26 years.

    Of course. I was just trying to counter the idea of immediate crisis.

    I like Polaris’ analogy better (+1 rep), we are like the Titanic sailing towards the iceberg. In 2038 we hit it. If we wait till 2037 to try and fix the problem, it will likely be too late.* If we act now, we can sail harmlessly by the iceberg.

    Well, we’ve got 26 years, a quarter century, between now and 2037. Certainly the earlier the better, but that isn’t to say September 2011 is the last chance for that graceful turn.

    Much sound and fury signifying … that we’ve got a quarter century until the collision?

    Like or Dislike: Thumb up 1 Thumb down 0

  30. john personna says:

    @Steve Verdon:

    In fact, given that SS is collecting less than it is paying out now, it will be a net contributor to the size of the deficit.

    But we think that has something to do with 9% unemployment.

    A lot rides on what “the new normal” will actually be.

    Like or Dislike: Thumb up 1 Thumb down 0

  31. Polaris says:

    @john personna:

    Well, we’ve got 26 years, a quarter century, between now and 2037. Certainly the earlier the better, but that isn’t to say September 2011 is the last chance for that graceful turn.

    Much sound and fury signifying … that we’ve got a quarter century until the collision?

    This exact attitude is what will keep us from solving the issue until it’s too late.

    -Polaris

    Like or Dislike: Thumb up 0 Thumb down 1

  32. Hey Norm says:

    Steve…I don’t disagree. But the hyperbole is ridiculous. And it won’t help solve anything.
    I think this is one of our biggest problems today: people with the most childish understanding of the issues are making a huge racket. Evolution is just a theory, tax cuts pay for themselves, climate change is a hoax, etc.

    Like or Dislike: Thumb up 2 Thumb down 0

  33. WR says:

    @Polaris: You know, throwing people in concentration camps and working them to death if they hit 65 without saving as much as Polaris is also “doing something.” Simply “doing something” — or even more comically, calling a program inaccurate names instead of “doing something” — isn’t a solution. You’ve got to find a thing that is worth doing before you do it. Otherwise you end up invading Iraq just to prove you’re tough on “bad guys.”

    Like or Dislike: Thumb up 1 Thumb down 0

  34. WR says:

    @Steve Verdon: And all we need to do to fix it is simply lift the cap on earnings subject to SS taxations. Generations of older people saved from poverty. But that will cost billionaires a couple of dollars, so it can’t even be mentioned. Back to slashing benefits!

    Like or Dislike: Thumb up 1 Thumb down 0

  35. john personna says:

    @Polaris:

    Down with rationality, eh?

    Saying we should deal with it soon, even if it is not an immediate crisis, is rational.

    Do you notice that this is my position in both AGW and SS?

    Curiously, you are against catastrophe thinking in AGW, but for it in SS.

    I rest easy in my consistency.

    Like or Dislike: Thumb up 2 Thumb down 0

  36. Polaris says:

    @john personna: There is a big difference between SS and AGW. With SS, the facts are known. No one disputes them. With AGW, the facts are still very much in doubt.

    Big difference.

    -Polaris

    Edit PS: Likewise with SS the solutions are easy to see (although the political will is lacking). With AGW it’s not at all clear even IF there is AGW and even IF it is CAGW that enough (if anything) can realistically be done.

    Like or Dislike: Thumb up 0 Thumb down 1

  37. john personna says:

    @Polaris:

    There is a big difference between SS and AGW. With SS, the facts are known. No one disputes them. With AGW, the facts are still very much in doubt.

    Dude, seriously?

    What is the unemployment rate, and the median income, in 2020?

    We have a model, with uncertainty. That’s all. It is a rough guess that needs cycles of improvement, as more future-data reveals itself. Familiar?

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  38. john personna says:

    What is the unemployment rate, and the median income, in 2020?

    And yes Steve, I recognize that this cuts both ways. The actual rate and median in 2020 could be much worse than we expect, forcing further changes, and reductions in benefits.

    I sure hope the technologies of the next decade make happy retirement for the elderly more affordable … for all our sakes, young and old alike.

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  39. Polaris says:

    John,

    Yes seriously. We not only have a model, but actual records and hard demographic data. Is the model perfect? No, but the facts are not in doubt by anyone. SS will hit the iceberg in 2038 (or 2017 for Disability) if not sooner.

    That’s a hard projection based on the agreed upon facts. No one disputes this.

    That’s a far cry from AGW and CAGW.

    -Polaris

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  40. john personna says:

    @Polaris:

    You just blew off a couple very important factors in the SS model. As Drew reminded us earlier today, it is about inflows and outflows. Inflows are based on how many are working and at what wages. In periods of stability it is reasonable to put in long-term averages, but in the face of lost decades, what do you really do? Do you assume that things will revert to trend? If so, how soon?

    The “hard facts” in economics are all about the past. None of the are about the future. It is as that old tag line says:

    “past performance does not guarantee future results.”

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  41. Polaris says:

    @WR:

    And all we need to do to fix it is simply lift the cap on earnings subject to SS taxations. Generations of older people saved from poverty. But that will cost billionaires a couple of dollars, so it can’t even be mentioned. Back to slashing benefits!

    I wouldn’t be too sure that it does solve the problems. Most of the really rich (outside of pro athletes and the like) don’t make their money off of income, and SS tax only goes after income because originally (FDR days) it was intended to be a program designed to divert a certain amount of income as a pension plan….and if you were rich enough not to have actual income, then you were rich enough not to need it (and for a long time SS was voluntary).

    Right, now, though you do bring up an interesting point that the SS tax is probably the most regressive tax on the books since it hurts the poor and lower middle class taxpayers the hardest.

    -Polaris

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  42. john personna says:

    Oh, I thought of a change that goes the other way. As you may have heard, fewer seniors are leaving the workforce this year. That changes the model, increasing inflows, and decreasing outflows.

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  43. Polaris says:

    @john personna: That may be true, but you can input different economic assumptions into the basic model and come out with a reasonable spread. Economics may not be well known, but how money grows (i.e. basic banking) is extremely well known.

    Again that’s a far cry from AGW and CAGW modeling. In fact AGW and CAGW modeling make economic modeling look simple.

    -Polaris

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  44. john personna says:

    @Polaris:

    Right, now, though you do bring up an interesting point that the SS tax is probably the most regressive tax on the books since it hurts the poor and lower middle class taxpayers the hardest.

    I think to model that you would have to do life-cycle analysis. That is, what does “typical Joe or Jane” put in during their working life, and what do they get back in retirement?

    It isn’t all out-flow for Joe or Jane.

    Like or Dislike: Thumb up 0 Thumb down 0

  45. john personna says:

    @Polaris:

    That may be true, but you can input different economic assumptions into the basic model and come out with a reasonable spread. Economics may not be well known, but how money grows (i.e. basic banking) is extremely well known.

    Again that’s a far cry from AGW and CAGW modeling. In fact AGW and CAGW modeling make economic modeling look simple.

    No, I think I’ve shown that they are very much alike. Neither is, or has to be, perfect. But either can give us an early warning of the shape of things to come.

    Interesting that you talk about “input different economic assumptions into the basic model and come out with a reasonable spread.”

    Do you do that on the AGW side?

    Like or Dislike: Thumb up 0 Thumb down 0

  46. Polaris says:

    @john personna: No I don’t. All I have to do is view SS Tax like any other (and yes SS income is taxed including SS taxes). It is in fact the most regressive tax on the books.

    -Polaris

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  47. Polaris says:

    @john personna: With all due respect, you have no idea what you are talking about. Economic theory is at worst simple differential calculus in the Argand plane. Climate Theory has to be done by super-computers using advanced differential geometry dealing with functions that have no analytic solutions (and often must use advanced numeric chaos theory) that must be cranked out numerically. It’s vastly more complex and far, far more sensitive to initial assumptions.

    They are nothing alike.

    -Polaris

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  48. David M says:

    With all due respect, Polaris has no idea what he is talking about. Not only is it clear that AGW exists, that fact has not been in dispute for almost a decade.

    Like or Dislike: Thumb up 1 Thumb down 0

  49. Polaris says:

    @David M: Yes there is a current academic orthodoxy that asserts that AGW exists. The problem is it’s based on politics and not science. If you don’t think reserach killing orthodoxies exist in academia, then you’ve never experienced academia, is all I can say. Academics can be and often are the most brutally political and unforgiving politicians regardless of the actual facts or science (including effectively burying the theorywork needed to test whether or not cosmic rays might have an effect on cloud formation and thus albedo for more than ten years).

    Right now in academia, if one even suggests that AGW might not be real, one can lose funding, tenure, or worse. That’s not science. That’s politics of the most brutal sort.

    In fact if you go to the other thread, I don’t deny AGW. I simply say given the new data that there is no longer enough scientific evidence to call AGW “settled science”. That’s all.

    Certainly getting back to this topic, it’s childsplay to model SS and other entitlement insolvencies to that of dealing with AGW and CAGW if it exists (which btw I think it probably does to some degree) and what if anything we can (or should) do about it.

    -Polaris

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  50. Polaris says:

    Just to clarify (because this had to be revised on David M’s link as well which btw is dated), I certainly agree with the premise that CO2 has increased in the earth’s atmosphere and most of this is certainly due to human activities.

    I said as much in the earlier thread too. I am even willing to accept that it seems likely that this human increase is an important factor that probably does have a real effect on our global climate. The problem comes in quantifying that. I too used to think (even as a conservative in most other ways) that #2 in David M’s link was pretty much settled. With the latest information coming in (as I said his link is dated), I am no longer so sure.

    It’s healthy to retreat to skepticism in the face of new data.

    -Polaris

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  51. CB says:

    i just have to say that as a rare commenter but compulsive lurker, threads like these are why this is one of the best blogs on the intertubes. its hard to find actual discussion such as this out there. keep it up, people.

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  52. ponce says:

    Only Nixon could go to China.

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  53. Terrye says:

    @Polaris:

    No matter how Romney came across to you, he has made it plain in other venues, such as town halls that he does support reform. You just were not paying attention.

    In fact he said the following in New Hampshire:

    ROMNEY: How about the 20-year-olds? How about those under 55? And in that case the answer is, let’s talk about it. We have one of three ways we can go, mathematically. One, we can raise taxes on people that are under 55. Number two, and by the way, if we don’t change the programs at all, if we leave them exactly as they are, Medicare, Medicaid, and Social Security, for those that are 20, 30, and 40, their payroll tax will have to go up. Do you know what the payroll tax is now? What is it? It’s 15.3 percent. (Interrupted) Let me finish. So the tax is 15.3 percent today. If we don’t change the programs at all, ultimately it will have to rise to 44 percent. I’m not willing to raise the tax on the American young people to that level.

    I think most Republicans accept the fact that reform is needed, but they don’t always agree on the rhetoric or the method.

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  54. ratufa says:

    @Steve Verdon:

    Actually, if you wait until 2038 the cost of fixing the problem becomes much, much larger.

    If the “fix” being talked about just involves raising the payroll tax, then the overall cost to taxpayers doesn’t change all that much if we wait until 2038 to raise it, unless you’re making some other assumptions. By “overall cost to taxpayers”, I’m including both payroll taxes and those taxes paid into the Treasury general fund. But, you’re right that waiting ’til the trust fund is exhausted to raise payroll taxes will require a larger increase than would otherwise be necessary and an increase of that size might have painful consequences.

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  55. Polaris says:

    Raising the Payroll tax to 44% is a nonstarter. Remember that many of the wealthiest people pay no SS Tax because unlike many other taxes, SS Tax only taxes earned income (and capital gains doesn’t qualify as income for this purpose).

    -Polaris

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  56. jan says:

    @Polaris:

    It’s healthy to retreat to skepticism in the face of new data.

    Very true…..

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  57. Scott O. says:

    @Polaris:

    I simply say given the new data that there is no longer enough scientific evidence to call AGW “settled science”. That’s all.

    What is this new data? If you saw the link mattb put up in that other thread, http://www.realclimate.org/index.php/archives/2011/08/the-cerncloud-results-are-surprisingly-interesting/ , it gives what to me seems like a good explanation of why cosmic rays are not responsible for the warming we have seen to date.

    “Of course, to show that cosmic rays were actually responsible for some part of the recent warming, you would need to show that there was actually a decreasing trend in cosmic rays over recent decades – which is tricky, because there hasn’t been (see the figure).”

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  58. Polaris says:

    Scott O,

    There have been a number of things that give me pause including mismatches with anti-arctic ice core samples, a dismissal of solar ray activity (and solar activity…and I don’t just mean raw luminosity) can affect climate models just as cosmic ray activity apparently can, and then there have been cases of late of actual honest-to-god academic/scientific dishonesty when it came to reporting climate change results.

    Does all of this make me disbelieve AGW? No. It is enough to put me on the fence. Yes….especially when a self-appointed academic orthodoxy actively discourages basic research with a “nothing to see here” attitude. It might be that there is nothing to see, but that should be determined after the basic research is done and not before. The theorywork behind the recent CERN experiments is over ten years old, and one of the reasons that CERN is being so cautious (and I applaud them for their caution btw) is because of the political blowback in academia.

    -Polaris

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  59. David M says:

    @Scott O.: The claims of new data and suppressed research have been mentioned many times, but never with a link. I’m beginning to be skeptical they actually exist.

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  60. Scott O. says:

    @Polaris:

    there have been cases of late of actual honest-to-god academic/scientific dishonesty when it came to reporting climate change results.

    Got any examples?

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  61. Polaris says:

    I wrote a nice long response but the anti-spam filter got it (mods please look for it?).

    However, here is at least one case where researchers dumped data they didn’t like:

    http://www.timesonline.co.uk/tol/news/environment/article6936328.ece

    I am sure I can find others without too much trouble.

    -Polaris

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  62. Polaris says:

    Really the whole AGW thing belongs elsewhere and had a thread of it’s own. The question here was if I had two different standards between AGW and SS and I do not. Mere SS funding and projections simply happens to be much easier to understand and model.

    What gets me is when a bunch of scientists get used (often willingly) to push for political action far beyond what the science actually justifies. Even David M’s site is none to happy about that saying that it’s by no means certain (and there is no concensus) about what should be done about AGW.

    -Polaris

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  63. Scott O. says:

    Back to the topic of this post, we can now blame ongoing problems with the economy on the Republicans. All this talk of SS being a Ponzi scheme or unconstitutional is creating uncertainty, causing seniors to curtail their investment in pancake house meals, the ripples of which are affecting all economic activity.

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  64. Polaris says:

    @Scott O.: If you believe that SS uncertainty is what’s causing this economy to fail, then I’d say you need to broaden the scope of your vision. Right now, the data at least suggests that it’s Obamacare that’s at least seems to have a temporal proximate relationship with the stalling out of new jobs (the increase in the job growth numbers flattened out to zero right when Obamacare was passed). Is this enough to declare a causal relationship as a fact? No, but it’s certainly suggestive especially when you listen to the various people (both big business and small) having to deal with the regulation already inherent in Obamacare.

    Basically what seems to be dragging this economy down is uncertainty and fear of spending, and IMHO (but I think it’s based on reasonable inferences of data), the anti-business stance of this administration bears a large part of the blame.

    -Polaris

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  65. Scott O. says:

    @Polaris:
    Any evidence that they dumped data that they didn’t like?

    Could this be a reasonable explanation of what happened?

    “There was further criticism following the revelation that the university had thrown out much of the raw temperature data on which some of its global warming research was based. The university said in a statement last week that the data, stored on paper and magnetic tape, was dumped in the 1980s to save space when the unit moved to a new location.”

    http://www.cbsnews.com/stories/2009/12/03/tech/main5878981.shtml

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  66. Scott O. says:

    @Polaris:

    If you believe that SS uncertainty is what’s causing this economy to fail,…

    Do I really need to say that this was an attempt at humor? Guess it was a failed attempt.

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  67. David M says:

    @Scott O.: Or they didn’t actually dump any data..just their copies of the data. They didn’t even have the “original” data to destroy. They’ve since completely released all their data, which doesn’t make it seem like they have much to hide.

    Seriously, all this buildup and claims of new information are for “climategate” all over again?

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  68. Terrye says:

    @Polaris: Of course raising the payroll tax to 44% is a non starter, that was Mitt Romney’s point. He was saying that changes have to be made in the system because you can not raise the tax that high. I think that is obvious.

    On the other hand I think Perry has not even come up with any kind of plan and instead just trashes this one we have. He calls it illegal, a monstrous lie, unconstitutional and yet it seems he wants to keep it..or not. I just think he is a big phoney who is talking tough on social security so that conservatives will overlook his crappy immigration record.

    Talk is cheap.

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  69. john personna says:

    Steve V would not like this first sentence. It is even more tortured than one of mine, but this bit from Stephen King (the economist, not the horror writer) is scary nonetheless:

    The underlying problem relates to the totality of claims within the financial system on economies that have badly underperformed relative to previous – over-optimistic – expectations. Gross domestic product in the developed world is still lower than it was at the beginning of 2008, before the crisis really kicked in. It increasingly looks as though earlier estimates of “long-term” economic growth were seriously overstated. Pre-crisis, economists routinely thought the US economy could expand at a 3 per cent annual rate in perpetuity. Yet, through the course of the economic cycle that coincided with the Bush presidency, the US grew at only a 2 per cent rate despite the “help” of a housing boom, excessively loose credit and financial trickery in all its many forms. The long-term growth rate may now be even lower.

    Much is up in the air, in terms of developed-world growth and GDP, and this goes beyond specific country policy responses.

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  70. john personna says:

    (Obviously the projections of a SS in a 2% GDP growth world are very different than in a 3% world.)

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  71. Racehorse says:

    One solution has been proposed in the past: give people some options with the SS money such as being given the choice of investing some of i, such as 20-30% a year. Any money made would be tax free, exempt from capital gains and can be passed on to their children or anyone else; thus freeing them up from ever needing Social Security. Think of where many people would be now if this had been implemented years ago – millionaires with no more need for SS support. Think of how this would help businesses with this huge influx of investing.
    This was proposed years ago by Senator Daniel Moynihan and then in 2000 by President Bush.
    It got nowhere because of the SS “scare” that is put out every time any change is proposed.

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  72. john personna says:

    @Racehorse:

    I don’t know man, distrust in Social Security has been around for a long time now, and if people were that rational they would already be saving.

    But median savings are less than $100K for people nearing retirement. There is a good table here, be sure to contrast average and median.

    So, I distrust this idea “free us, and then we’ll save.” I think it might be even worse, as people take their redirected SS funds, and call that enough.

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  73. Catfish says:

    @john personna: Very good thoughts. I do know some people who are retired and have done very well; although not huge amounts, using the internet to invest – they lose some and then will gain it back quickly. These people are “amateurs” and had no prior experience. Now they have the time to play around in this field.

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  74. john personna says:

    @Catfish:

    A further scary fact we all have to deal with is that researchers have found a peak age for financial decision-making … and it is somewhere in our 50’s. Before we get too old it’s good to get that money locked up in something boring.

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  75. Rob in CT says:

    @john personna:

    I’m not familiar with that research, but if one assumes a general cognitive decline that hits with old age, it makes sense.

    I was stunned to discover that at the time of the 2008 crash, my mother’s investments were still mostly in stock funds. She was 60 in 2008. At that point, I would think you’d want to have some stocks, but also have a bunch of low-risk stuff (increasingly so). She had done a good job saving, so at that point what she needed to do was hang on to what she’d already saved. Well that’s done and she’s still in much better shape than the average American at her age, so she’ll be fine, but damn I was surprised when I found out that her investments took basically the same hit that mine did back in 2008. I had assumed she knew better.

    She now plans to work until she’s 69, unless she is layed off before then w/severance. Her main concern? Medical benefits for my father (86 yrs old this winter) and to a lesser extent her. Medicare “sucks” (her characterization) and trying to get insurance in the private market for an 86-year old who has a history of cancer is a nightmare. So she will work until they “retire her” (as she puts it). Of course, she hates “Obamacare.” I don’t know for sure, but I’d wager she would say she likes Paul Ryan’s plan (if she’s heard of it) to voucher-ize Medicare (so she can then take said voucher and go get that insurance on the market… oh, wait…). Why? The R next to his name, and the D next to Obama’s, basically.

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