The 7 Biggest Economic Lies
January 27, 2012 9:06 AM Subscribe
The seven biggest economic lies with Robert Reich.
Reich, along with Krugman are great at distilling economics down for people. Krugman, obviously talks at a much higher level, but if you read his blog for a long time you get a lot of what he's saying. Reich on the other hand does these videos every once in a while that do a great job of explaining stuff for everyone else.
posted by delmoi at 9:12 AM on January 27, 2012 [2 favorites]
posted by delmoi at 9:12 AM on January 27, 2012 [2 favorites]
(For those of us in non-YouTube environments at the moment.)
posted by gimonca at 9:19 AM on January 27, 2012 [5 favorites]
posted by gimonca at 9:19 AM on January 27, 2012 [5 favorites]
I understand the whole distilled for the masses approach; but saying the right answer when you have no idea how you got there is still wrong.
posted by Felex at 9:20 AM on January 27, 2012
posted by Felex at 9:20 AM on January 27, 2012
I've been a fan of Robert Reich for a long time, but I had no idea he was such a nifty illustrator!
posted by Xoebe at 9:21 AM on January 27, 2012 [4 favorites]
posted by Xoebe at 9:21 AM on January 27, 2012 [4 favorites]
Those seven points are all good, but here's what I really learned:
Reich is pretty good at cartooning, but sucks at pulling giant pieces of paper off of a pad.
posted by defenestration at 9:21 AM on January 27, 2012 [20 favorites]
Reich is pretty good at cartooning, but sucks at pulling giant pieces of paper off of a pad.
posted by defenestration at 9:21 AM on January 27, 2012 [20 favorites]
The Median 25-65 year old male earned one quarter less than this 1969 counterpart
posted by The Whelk at 9:25 AM on January 27, 2012 [3 favorites]
posted by The Whelk at 9:25 AM on January 27, 2012 [3 favorites]
1 Tax cuts on the rich trickle down to the rest of us
2 High taxes on the rich hurt the economy
3 If we shrink government we’ll create jobs
4 Cutting the budget deficit is more important now than boosting the economy with bigger spending
5 Medicare and medicaid are killing the budget
6 Social security is a ponzi scheme
7 It’s unfair that lower income Americans pay lower income taxes
posted by fearfulsymmetry at 9:26 AM on January 27, 2012 [13 favorites]
2 High taxes on the rich hurt the economy
3 If we shrink government we’ll create jobs
4 Cutting the budget deficit is more important now than boosting the economy with bigger spending
5 Medicare and medicaid are killing the budget
6 Social security is a ponzi scheme
7 It’s unfair that lower income Americans pay lower income taxes
posted by fearfulsymmetry at 9:26 AM on January 27, 2012 [13 favorites]
Re: Lie One
I remember, some time ago, a former Reagan operative stated that the whole trickle down trope was "just a dodge to get the top rate down." I mean he was saying that's how they thought of it at the time.
posted by Trochanter at 9:29 AM on January 27, 2012 [7 favorites]
I remember, some time ago, a former Reagan operative stated that the whole trickle down trope was "just a dodge to get the top rate down." I mean he was saying that's how they thought of it at the time.
posted by Trochanter at 9:29 AM on January 27, 2012 [7 favorites]
I was talking to a guy who I just met and said to him "I don't think you can under-spend your way out of a recession." He said "you just want to print money then?" This is American politics at a standstill.
posted by zerobyproxy at 9:31 AM on January 27, 2012
posted by zerobyproxy at 9:31 AM on January 27, 2012
Trochanter, that sounds familiar. Would love to have a cite for that.
posted by armoir from antproof case at 9:39 AM on January 27, 2012 [1 favorite]
posted by armoir from antproof case at 9:39 AM on January 27, 2012 [1 favorite]
Me too. It was at Salon, I'm pretty sure. But it was, like, three years ago. I've tried searching Salon for it in the past, with no luck.
posted by Trochanter at 9:42 AM on January 27, 2012
posted by Trochanter at 9:42 AM on January 27, 2012
In 1981 the Atlantic published a profile of the White House budget director, David Stockman, in which Stockman said all kinds of impolitic things. About the most impolitic was his admission that the Reagan tax cuts had been "a Trojan horse to bring down the top tax rate." The article's author, William Greider, could barely contain his delight:When Did Trickle-Down Get Respectable?
"A Trojan horse? This seemed a cynical concession for Stockman to make in private conversation while the Reagan Administration was still selling the supply-side doctrine to Congress. Yet he was conceding what the liberal Keynesian critics had argued from the outset—the supply-side theory was not a new economic theory at all but only new language and argument to conceal a hoary old Republican doctrine: give the tax cuts to the top brackets, the wealthiest individuals and largest enterprises, and let the good effects 'trickle down' through the economy to reach everyone else. Yes, Stockman conceded, when one stripped away the new rhetoric emphasizing across-the-board cuts, the supply-side theory was really new clothes for the unpopular doctrine of the old Republican orthodoxy. 'It's kind of hard to sell "trickle down,"' he explained, 'so the supply-side formula was the only way to get a tax policy that was really "trickle down." Supply-side is "trickle-down" theory.'"
posted by deanklear at 9:45 AM on January 27, 2012 [18 favorites]
Is this what you're referring to?
posted by zombieflanders at 9:46 AM on January 27, 2012 [3 favorites]
I mean, Kemp-Roth [Reagan's 1981 tax cut] was always a Trojan horse to bring down the top rate.... It's kind of hard to sell 'trickle down.' So the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory.It's from a 1981 Atlantic Monthly article titled "The Education of David Stockman" according to Wikipedia.
posted by zombieflanders at 9:46 AM on January 27, 2012 [3 favorites]
Curse you deanklear! *shakes fist ineffectually*
posted by zombieflanders at 9:47 AM on January 27, 2012 [2 favorites]
posted by zombieflanders at 9:47 AM on January 27, 2012 [2 favorites]
Thanks guys.
posted by Trochanter at 9:47 AM on January 27, 2012
posted by Trochanter at 9:47 AM on January 27, 2012
Terrific stuff, absolutely terrific. These are not just falsehoods, they are FUNDAMENTAL falsehoods that drive economic conservative dogma. This is absolutely the right way to address these pernicious ideas; strike right to the heart with accurate but simple statements, and dispense with Maddow-style clowning (she sucks).
posted by Edgewise at 9:48 AM on January 27, 2012 [2 favorites]
posted by Edgewise at 9:48 AM on January 27, 2012 [2 favorites]
Maddow-style clowning
Sometimes, when watching Maddow, I forget that she isn't on the comedy network.
posted by asnider at 9:50 AM on January 27, 2012
Sometimes, when watching Maddow, I forget that she isn't on the comedy network.
posted by asnider at 9:50 AM on January 27, 2012
I was talking to a guy who I just met and said to him "I don't think you can under-spend your way out of a recession." He said "you just want to print money then?" This is American politics at a standstill.
Well how else do you get out of a deflationary liquidity crisis?
posted by Talez at 9:57 AM on January 27, 2012 [1 favorite]
Well how else do you get out of a deflationary liquidity crisis?
posted by Talez at 9:57 AM on January 27, 2012 [1 favorite]
I know you were just kidding. Thanks for helping out.
stupid zombie flanders
posted by deanklear at 9:58 AM on January 27, 2012
stupid zombie flanders
posted by deanklear at 9:58 AM on January 27, 2012
Why don't more people denounce President Reagan? His economic proposals of three decades ago have negatively reverberated across the modern day and I wish more people understood that.
posted by Renoroc at 9:58 AM on January 27, 2012 [13 favorites]
posted by Renoroc at 9:58 AM on January 27, 2012 [13 favorites]
Well, Renoroc, I can tell you that when Reagan died I participated in a small but festive victory march through San Francisco.
posted by latkes at 10:01 AM on January 27, 2012 [7 favorites]
posted by latkes at 10:01 AM on January 27, 2012 [7 favorites]
Because the Right has decided that the Great Raygun built the Crystal Dome that protects America from harm and keeps the sun in the sky and then did battle the Mighty Coyote for the secrets of the Dead in order to defeat the Soviet Giant who imprisoned Princess Free Market in horrid chains.
posted by The Whelk at 10:02 AM on January 27, 2012 [29 favorites]
posted by The Whelk at 10:02 AM on January 27, 2012 [29 favorites]
6 Social security is a ponzi scheme
Why is this not reassuring?
posted by ZenMasterThis at 10:11 AM on January 27, 2012
Why is this not reassuring?
posted by ZenMasterThis at 10:11 AM on January 27, 2012
I'm with MoonOrb on the Social Security thing. Amway doesn't stop being Amway if they just start charging more for what they give you.
posted by radwolf76 at 10:12 AM on January 27, 2012
posted by radwolf76 at 10:12 AM on January 27, 2012
> Because the Right has decided that the Great Raygun built the Crystal Dome that protects America from harm and keeps the sun in the sky and then did battle the Mighty Coyote for the secrets of the Dead in order to defeat the Soviet Giant who imprisoned Princess Free Market in horrid chains.
Oh yeah...I read about that in a history textbook I bought in Texas.
posted by The Card Cheat at 10:13 AM on January 27, 2012 [1 favorite]
Oh yeah...I read about that in a history textbook I bought in Texas.
posted by The Card Cheat at 10:13 AM on January 27, 2012 [1 favorite]
Don't totally agree with all 7, but Reich's videos are well done.
posted by kgasmart at 10:13 AM on January 27, 2012
posted by kgasmart at 10:13 AM on January 27, 2012
I agree, except that 3 and 4 are dependent on where you are in the economic cycle, and even then 3 is true only in the negative sense that expanding government creates jobs in an economic slump.
posted by Jehan at 10:19 AM on January 27, 2012
posted by Jehan at 10:19 AM on January 27, 2012
John Kenneth Galbraith noted that trickle-down economics is based on the horse-and-sparrow theory.
"If you feed the horse enough oats, some will pass through to the road for the sparrows."
posted by JackFlash at 10:20 AM on January 27, 2012 [11 favorites]
"If you feed the horse enough oats, some will pass through to the road for the sparrows."
posted by JackFlash at 10:20 AM on January 27, 2012 [11 favorites]
2 High taxes on the rich hurt the economy
This one drives me nuts. See top-tier tax rates on the wealthy during the classic growth years of the 50's & 60's -- the economic era that conservatives would hypothetically return us to, given the mandate-- then compare those rates to those since the economy really started to tank & the defect took off during the Bush years.
If anything the correlation shows quite the opposite. America was at its strongest when we were taxing the crap out of the wealthy. That may not be the main reason (something, something, manufacturing base, something, something, union jobs) that the economy was strong, but still, if we're going to talk about facts, the historical facts utterly destroy this argument.
posted by Devils Rancher at 10:23 AM on January 27, 2012 [3 favorites]
This one drives me nuts. See top-tier tax rates on the wealthy during the classic growth years of the 50's & 60's -- the economic era that conservatives would hypothetically return us to, given the mandate-- then compare those rates to those since the economy really started to tank & the defect took off during the Bush years.
If anything the correlation shows quite the opposite. America was at its strongest when we were taxing the crap out of the wealthy. That may not be the main reason (something, something, manufacturing base, something, something, union jobs) that the economy was strong, but still, if we're going to talk about facts, the historical facts utterly destroy this argument.
posted by Devils Rancher at 10:23 AM on January 27, 2012 [3 favorites]
So what are the seven?
* shit
* piss
* fuck
* cunt
* cocksucker
* motherfucker
* tits
From noted economist and philosopher G. Carlin, who also said:
* shit
* piss
* fuck
* cunt
* cocksucker
* motherfucker
* tits
From noted economist and philosopher G. Carlin, who also said:
Forget the politicians. They are irrelevant. The politicians are put there to give you the idea that you have freedom of choice. You don't. You have no choice! You have OWNERS! They OWN YOU. They own everything. They own all the important land. They own and control the corporations. They’ve long since bought, and paid for the Senate, the Congress, the state houses, the city halls, they got the judges in their back pockets and they own all the big media companies, so they control just about all of the news and information you get to hear. They got you by the balls.posted by Celsius1414 at 10:25 AM on January 27, 2012 [32 favorites]
They spend billions of dollars every year lobbying, lobbying, to get what they want. Well, we know what they want. They want more for themselves and less for everybody else, but I'll tell you what they don’t want:
They don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. Thats against their interests.
I'd score it 5.0 out of 7. That Medicare thing does have some pretty bad effects on your projected future budget deficits, give him half a point on that as he sort of gives a hint it does need fixing. Stimulus spending may be more important than budget restraint right now, but I deduct half a point for implying that it inevitably will remain so until the country returns to really strong economic growth. That might not happen in time. Zero points for incorrectly saying that higher taxes don't have any negative effect on the economy ceteris paribus, and for trying to support that claim with an obvious error in logic.
posted by sfenders at 10:28 AM on January 27, 2012 [1 favorite]
posted by sfenders at 10:28 AM on January 27, 2012 [1 favorite]
Social security is a ponzi scheme.
This is one of those myths that appeals to the numerically illiterate. Social Security has sufficient resources to provide 100% of benefits for at least another 26 years. After that it can still provide 80% of benefits to the end of the century, but note that since benefits rise with wages, an 80% benefit in the future will be worth more than a 100% benefit today.
posted by JackFlash at 10:30 AM on January 27, 2012
This is one of those myths that appeals to the numerically illiterate. Social Security has sufficient resources to provide 100% of benefits for at least another 26 years. After that it can still provide 80% of benefits to the end of the century, but note that since benefits rise with wages, an 80% benefit in the future will be worth more than a 100% benefit today.
posted by JackFlash at 10:30 AM on January 27, 2012
From noted economist and philosopher G. Carlin, who also said:
Forget the politicians. They are irrelevant. The politicians are put there to give you the idea that you have freedom of choice. You don't. You have no choice! You have OWNERS! They OWN YOU. They own everything. They own all the important land. They own and control the corporations. They’ve long since bought, and paid for the Senate, the Congress, the state houses, the city halls, they got the judges in their back pockets and they own all the big media companies, so they control just about all of the news and information you get to hear. They got you by the balls.
From the equally noted economist and philosopher Y Smirnoff, who said:
In Soviet Russia, YOU own the economy!
posted by Jehan at 10:34 AM on January 27, 2012
Forget the politicians. They are irrelevant. The politicians are put there to give you the idea that you have freedom of choice. You don't. You have no choice! You have OWNERS! They OWN YOU. They own everything. They own all the important land. They own and control the corporations. They’ve long since bought, and paid for the Senate, the Congress, the state houses, the city halls, they got the judges in their back pockets and they own all the big media companies, so they control just about all of the news and information you get to hear. They got you by the balls.
From the equally noted economist and philosopher Y Smirnoff, who said:
In Soviet Russia, YOU own the economy!
posted by Jehan at 10:34 AM on January 27, 2012
Another great Reich video .
posted by infinitywaltz at 9:42 AM on January 27 [+] [!]
That's the THIRD Reich video.
I see what you did there.
posted by chavenet at 10:35 AM on January 27, 2012 [2 favorites]
posted by infinitywaltz at 9:42 AM on January 27 [+] [!]
That's the THIRD Reich video.
I see what you did there.
posted by chavenet at 10:35 AM on January 27, 2012 [2 favorites]
Celsius1414, I've seen that quote before, and here was my response last time:
Carlin was mostly right.posted by deanklear at 10:35 AM on January 27, 2012 [13 favorites]
The question is, are you going to sit there and take it, or are you going to educate yourself and fight back? I'm afraid Carlin fell for an old trick: a tiny minority of powerful people telling the vast majority that they don't have any power. The term that has been coined for this is "antipolitics." Yes it is pervasive, and the message contained in the media and the whole platform of right wing anti-government and left-wing anarchist philosophies.
The truth is that we have (compared with the rest of the world) relatively free and fair elections, relatively uncorrupted government, and the capability to change our government however we want to if we are willing to sacrifice some time and money to make the change happen. The truth is that most Americans have the government they deserve. We have achieved the technical definition of democracy, but we are letting new forms of aristocracy corrupt it.
"The price good men pay for indifference to public affairs is to be ruled by evil men."
— Plato
8. Tackling the issue of anthropogenic climate change in any capacity would cripple the economy.
posted by wikipedia brown boy detective at 10:38 AM on January 27, 2012 [6 favorites]
posted by wikipedia brown boy detective at 10:38 AM on January 27, 2012 [6 favorites]
I'd like to see a reference on that Plato quote, deanklear.
posted by koeselitz at 10:39 AM on January 27, 2012
posted by koeselitz at 10:39 AM on January 27, 2012
I loved all the points, but especially how he pivots and attacks on #7. He doesn't waste breath explaining to idiots why poor people shouldn't have to pay taxes. He *attacks* and says they pay TOO MUCH taxes in other forms.
Yes, this is what we need.
posted by DU at 10:44 AM on January 27, 2012 [4 favorites]
Yes, this is what we need.
posted by DU at 10:44 AM on January 27, 2012 [4 favorites]
This one drives me nuts. See top-tier tax rates on the wealthy during the classic growth years of the 50's & 60's -- the economic era that conservatives would hypothetically return us to, given the mandate-- then compare those rates to those since the economy really started to tank & the defect took off during the Bush years.
Back then rich people also had a sense of self-interest/self-preservation/keeping the proles happy. They would keep investing, innovating and entrepreneuring to make more money. The middle class could get a job on a factory line and buy a house, a car and a couple of nice things for their 2.3 kids. In 1968 the minimum wage reached a peak and has been on the decline ever since. The price of labour has been decimated and devalued.
However, over the past 30 years amassing large amounts of wealth has become sort of a sport no doubt helped along by the "greed is good" fad back in the '80s. Bit by bit the rich have decided to take a "little bit more" of the slice normally allocated to the middle class simply because they needed that extra ivory back scratcher.
Now with OWS and the 99% the rich are starting to realise they've fucked up and pushed the elastic band that is the middle class too far. To be slightly dramatic, the question now is whether they go quietly into the night and restore the middle class before we come with pitchforks to claim it back or go for broke and destroy what's left of it hoping they can hole up with private standing armies.
It's not really enough to restore high tax rates on the rich. The fundamental idea of post-WWII America, that the large majority of people need to be paid a wage enough to live a life on, has been stripped from our collective consciousness. And until that changes we can tax the rich until the cows come home but nothing will really change.
posted by Talez at 10:46 AM on January 27, 2012 [7 favorites]
Back then rich people also had a sense of self-interest/self-preservation/keeping the proles happy. They would keep investing, innovating and entrepreneuring to make more money. The middle class could get a job on a factory line and buy a house, a car and a couple of nice things for their 2.3 kids. In 1968 the minimum wage reached a peak and has been on the decline ever since. The price of labour has been decimated and devalued.
However, over the past 30 years amassing large amounts of wealth has become sort of a sport no doubt helped along by the "greed is good" fad back in the '80s. Bit by bit the rich have decided to take a "little bit more" of the slice normally allocated to the middle class simply because they needed that extra ivory back scratcher.
Now with OWS and the 99% the rich are starting to realise they've fucked up and pushed the elastic band that is the middle class too far. To be slightly dramatic, the question now is whether they go quietly into the night and restore the middle class before we come with pitchforks to claim it back or go for broke and destroy what's left of it hoping they can hole up with private standing armies.
It's not really enough to restore high tax rates on the rich. The fundamental idea of post-WWII America, that the large majority of people need to be paid a wage enough to live a life on, has been stripped from our collective consciousness. And until that changes we can tax the rich until the cows come home but nothing will really change.
posted by Talez at 10:46 AM on January 27, 2012 [7 favorites]
Zero points for incorrectly saying that higher taxes don't have any negative effect on the economy ceteris paribus, and for trying to support that claim with an obvious error in logic.
You need to draw me a picture on a big easel, because I seem to have missed your evidence, reasoning or the obvious error in logic.
posted by DU at 10:48 AM on January 27, 2012 [4 favorites]
You need to draw me a picture on a big easel, because I seem to have missed your evidence, reasoning or the obvious error in logic.
posted by DU at 10:48 AM on January 27, 2012 [4 favorites]
Does anyone have any good citations for going more in depth around the failure of trickledown? and negative impacts on cutting taxes for the wealthy.
posted by prodigalsun at 10:54 AM on January 27, 2012
posted by prodigalsun at 10:54 AM on January 27, 2012
I've said it before and I'll say it again: Reich is a huckster and is always looking out for number 1. He was the judas goat that lead the progressive/labor left in the Democratic party to Clinton's sell-out to Wall Street. Traipsing around the country touting 'call centers' and job retraining as if that had anything to do with what vultures like Bain capital (and the corporate raiders before the rise of "private equity") were doing to American employment. If you press him, he still believes in the "knowledge economy."
posted by ennui.bz at 10:54 AM on January 27, 2012 [1 favorite]
posted by ennui.bz at 10:54 AM on January 27, 2012 [1 favorite]
Social Security has sufficient resources to provide 100% of benefits for at least another 26 years.
JackFlash: This is one of those myths that appeals to the numerically illiterate.
The other myth is that there is a "lock-box" of gold bullion stored safely away. The "sufficient resources" of which you speak JackFlash are in fact debt obligations to be funded by future payroll taxes.
In other words, if the payroll tax was set to zero today, SS benefits would not continue to flow for 26 years, but would quickly come to a halt if no new flows of capital were found. SSI requires a continuous inflow of new capital in order to pay out existing obligations and on that basis it would seem SS operates much more like a Ponzi scheme than as the insurance program it was intended to be.
A lot of these "lies" lack context. Of course taxes have an influence on economic activity, but the influence is different at different times. Cutting taxes in the 1980s - when businesses were cash poor - made sense in spurring economic growth. Cutting taxes in 2010s when businesses are cash rich - makes no sense at all.
He doesn't waste breath explaining to idiots why poor people shouldn't have to pay taxes.
The bigger problem is why poor people don't have income on which they can and should pay taxes like everyone else. In socialist Europe tax rates are high across the board and sales taxes can reach 25%. Protecting the "poor" from paying taxes is what is idiotic. It is applying the faulty logic of conservatives to wrong end of the economic scale. The poor don't need tax cuts - they need income.
The idea that tax cuts for the poor is the same thing as income for the poor is a fundamentally conservative idea and one of the many things which is wrong with American liberal thinking.
posted by three blind mice at 10:54 AM on January 27, 2012 [6 favorites]
JackFlash: This is one of those myths that appeals to the numerically illiterate.
The other myth is that there is a "lock-box" of gold bullion stored safely away. The "sufficient resources" of which you speak JackFlash are in fact debt obligations to be funded by future payroll taxes.
In other words, if the payroll tax was set to zero today, SS benefits would not continue to flow for 26 years, but would quickly come to a halt if no new flows of capital were found. SSI requires a continuous inflow of new capital in order to pay out existing obligations and on that basis it would seem SS operates much more like a Ponzi scheme than as the insurance program it was intended to be.
A lot of these "lies" lack context. Of course taxes have an influence on economic activity, but the influence is different at different times. Cutting taxes in the 1980s - when businesses were cash poor - made sense in spurring economic growth. Cutting taxes in 2010s when businesses are cash rich - makes no sense at all.
He doesn't waste breath explaining to idiots why poor people shouldn't have to pay taxes.
The bigger problem is why poor people don't have income on which they can and should pay taxes like everyone else. In socialist Europe tax rates are high across the board and sales taxes can reach 25%. Protecting the "poor" from paying taxes is what is idiotic. It is applying the faulty logic of conservatives to wrong end of the economic scale. The poor don't need tax cuts - they need income.
The idea that tax cuts for the poor is the same thing as income for the poor is a fundamentally conservative idea and one of the many things which is wrong with American liberal thinking.
posted by three blind mice at 10:54 AM on January 27, 2012 [6 favorites]
Does anyone have any good citations for going more in depth around the failure of trickledown? and negative impacts on cutting taxes for the wealthy.
Your local interstate onramp or offramp?
posted by Talez at 10:55 AM on January 27, 2012
Your local interstate onramp or offramp?
posted by Talez at 10:55 AM on January 27, 2012
Aussie economist John Quiggin has a book along the same lines as RR's video: Zombie Economics: How Dead Ideas Still Walk among Us
posted by Wretch729 at 10:57 AM on January 27, 2012 [1 favorite]
posted by Wretch729 at 10:57 AM on January 27, 2012 [1 favorite]
Ponzi scheme or not, if caring for the elderly and infirm through Social Security and Medicare aren't a national priorities, then your government doesn't exist for any worthwhile reason.
posted by bonobothegreat at 10:59 AM on January 27, 2012 [19 favorites]
posted by bonobothegreat at 10:59 AM on January 27, 2012 [19 favorites]
In other words, if the payroll tax was set to zero today, SS benefits would not continue to flow for 26 years, but would quickly come to a halt...
By this definition, human civilization is a Ponzi scheme. Which it might be, but it doesn't tell us much about SS.
posted by DU at 11:00 AM on January 27, 2012 [11 favorites]
By this definition, human civilization is a Ponzi scheme. Which it might be, but it doesn't tell us much about SS.
posted by DU at 11:00 AM on January 27, 2012 [11 favorites]
if the payroll tax was set to zero today, SS benefits would not continue to flow for 26 years ...
Well, duh, of course not. It shouldn't surprise you that if you stop funding a government program, then the program will cease. But the point is that changing nothing at all, Social Security will be fine long past everyone here is dead and beyond. That in no way can be considered a Ponzi scheme. A Ponzi scheme relies on mathematically impossible conditions. Social Security does not.
posted by JackFlash at 11:03 AM on January 27, 2012 [5 favorites]
Well, duh, of course not. It shouldn't surprise you that if you stop funding a government program, then the program will cease. But the point is that changing nothing at all, Social Security will be fine long past everyone here is dead and beyond. That in no way can be considered a Ponzi scheme. A Ponzi scheme relies on mathematically impossible conditions. Social Security does not.
posted by JackFlash at 11:03 AM on January 27, 2012 [5 favorites]
You need to draw me a picture on a big easel, because I seem to have missed your evidence, reasoning or the obvious error in logic.
Really? It's a pretty short video, not hard to spot... He claims that "high taxes on the rich" have no harmful effect whatsoever on the economy because the "top tax rate was over 70% between WWII and 1980, and the economy grew faster than it has since." That is nonsense.
That at some selected period in the past there was both a high top income tax rate and a strong economy tells you pretty much exactly nothing about the marginal effect of raising the tax rate. It's hard enough to find evidence of such relationships when you do look at many decades across many countries and try to normalize things and look for correlations. When you just pick one time period like that, it is utterly hopeless. One might as well conclude that raising the top marginal tax rate would directly help the economy. At present the long-run social benefits of such a move would very likely be worth the cost, I would think, but it's silly to pretend the costs would exactly equal zero.
posted by sfenders at 11:04 AM on January 27, 2012 [4 favorites]
Really? It's a pretty short video, not hard to spot... He claims that "high taxes on the rich" have no harmful effect whatsoever on the economy because the "top tax rate was over 70% between WWII and 1980, and the economy grew faster than it has since." That is nonsense.
That at some selected period in the past there was both a high top income tax rate and a strong economy tells you pretty much exactly nothing about the marginal effect of raising the tax rate. It's hard enough to find evidence of such relationships when you do look at many decades across many countries and try to normalize things and look for correlations. When you just pick one time period like that, it is utterly hopeless. One might as well conclude that raising the top marginal tax rate would directly help the economy. At present the long-run social benefits of such a move would very likely be worth the cost, I would think, but it's silly to pretend the costs would exactly equal zero.
posted by sfenders at 11:04 AM on January 27, 2012 [4 favorites]
>> Social security is a ponzi scheme.
>
> This is one of those myths that appeals to the numerically illiterate.
What it's a good example of is bunch A, who see a subject in a particular light and think these aspects are most important, pointing at bunch B, who see the subject in a different light and think those aspects are most important, and going "Liar!" (Reich) and "numerically illiterate" (somebody.)
Before we reached such a degree of mudball-hurling polarization, someone who is not numerically illiterate, namely Prof. P. Krugman, thought nothing of acknowledging Social Security's Ponzi-like characteristics in print.
Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today's young may well get less than they put in).
posted by jfuller at 11:05 AM on January 27, 2012
>
> This is one of those myths that appeals to the numerically illiterate.
What it's a good example of is bunch A, who see a subject in a particular light and think these aspects are most important, pointing at bunch B, who see the subject in a different light and think those aspects are most important, and going "Liar!" (Reich) and "numerically illiterate" (somebody.)
Before we reached such a degree of mudball-hurling polarization, someone who is not numerically illiterate, namely Prof. P. Krugman, thought nothing of acknowledging Social Security's Ponzi-like characteristics in print.
Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today's young may well get less than they put in).
posted by jfuller at 11:05 AM on January 27, 2012
He claims that "high taxes on the rich" have no harmful effect whatsoever on the economy because the "top tax rate was over 70% between WWII and 1980, and the economy grew faster than it has since." That is nonsense.
That at some selected period in the past there was both a high top income tax rate and a strong economy tells you pretty much exactly nothing about the marginal effect of raising the tax rate.
It certainly weakens the evidence for the extraordinary claim that high taxes = poor growth. And without some extraordinary evidence, it seems like the pretty reasonable claim of "the more money the government takes in, the more it can spend on helping people who are actually growing the economy, like workers and small business people" is more likely.
posted by DU at 11:10 AM on January 27, 2012 [5 favorites]
That at some selected period in the past there was both a high top income tax rate and a strong economy tells you pretty much exactly nothing about the marginal effect of raising the tax rate.
It certainly weakens the evidence for the extraordinary claim that high taxes = poor growth. And without some extraordinary evidence, it seems like the pretty reasonable claim of "the more money the government takes in, the more it can spend on helping people who are actually growing the economy, like workers and small business people" is more likely.
posted by DU at 11:10 AM on January 27, 2012 [5 favorites]
The truth is that most Americans have the government they deserve.
Sorry, I'm on a phone and can't figure out how to highlight the text above or link to the comment. I just wanted to say how tired I am of hearing this. Maybe most Americans are so busy working their asses off to just get by that they don't have the time or energy to do what it takes to get the government that they SHOULD have. What, exactly, do you propose these people do? It seems that it would take a high level of involvement from the majority to really change things in a significant way.
posted by orme at 11:11 AM on January 27, 2012 [2 favorites]
Sorry, I'm on a phone and can't figure out how to highlight the text above or link to the comment. I just wanted to say how tired I am of hearing this. Maybe most Americans are so busy working their asses off to just get by that they don't have the time or energy to do what it takes to get the government that they SHOULD have. What, exactly, do you propose these people do? It seems that it would take a high level of involvement from the majority to really change things in a significant way.
posted by orme at 11:11 AM on January 27, 2012 [2 favorites]
Prof. P. Krugman, thought nothing of acknowledging Social Security's Ponzi-like characteristics in print.
Ah, you picked an out of context quote from 15 years ago. This is what Krugman said just a couple months ago about the very article you selectively quoted:
"Notice what I didn’t say. I didn’t say that the system was a fraud; I didn’t say that it would collapse.
... anyone who uses my statement as some kind of defense of Rick Perry and all that is playing word games. I explained what I meant in that Boston Review article, and it was nothing at all like the claims that Social Security is a fraud, is destined to collapse, and all that. Social Security is and always has been mainly a pay-as-you-go system, which is nothing at all like a classic Ponzi scheme."
posted by JackFlash at 11:16 AM on January 27, 2012 [9 favorites]
Ah, you picked an out of context quote from 15 years ago. This is what Krugman said just a couple months ago about the very article you selectively quoted:
"Notice what I didn’t say. I didn’t say that the system was a fraud; I didn’t say that it would collapse.
... anyone who uses my statement as some kind of defense of Rick Perry and all that is playing word games. I explained what I meant in that Boston Review article, and it was nothing at all like the claims that Social Security is a fraud, is destined to collapse, and all that. Social Security is and always has been mainly a pay-as-you-go system, which is nothing at all like a classic Ponzi scheme."
posted by JackFlash at 11:16 AM on January 27, 2012 [9 favorites]
DU: it seems like the pretty reasonable claim of "the more money the government takes in, the more it can spend on helping people who are actually growing the economy, like workers and small business people" is more likely.
Well yes, in normal times that would be the primary reason you can always get some benefits from raising taxes, along with the costs... but one reason I mentioned "the long run" in there is because at present US government spending does not appear to be at all constrained by revenue.
If he'd said "the economy just can't handle higher taxes on rich people" was one of the "lies", that'd be different. Though I'm not sure whether that's a claim that anyone serious is actually making. Probably, I guess, but I don't pay attention to whoever they are.
posted by sfenders at 11:23 AM on January 27, 2012
Well yes, in normal times that would be the primary reason you can always get some benefits from raising taxes, along with the costs... but one reason I mentioned "the long run" in there is because at present US government spending does not appear to be at all constrained by revenue.
If he'd said "the economy just can't handle higher taxes on rich people" was one of the "lies", that'd be different. Though I'm not sure whether that's a claim that anyone serious is actually making. Probably, I guess, but I don't pay attention to whoever they are.
posted by sfenders at 11:23 AM on January 27, 2012
While I generally agree with Reich on almost everything, this video is frustrating because he points to potential solutions to a problem as proof that the problem doesn't exist.
Also, the term "Ponzi" is reaching Godwin-like status.
posted by mullacc at 11:24 AM on January 27, 2012 [4 favorites]
Also, the term "Ponzi" is reaching Godwin-like status.
posted by mullacc at 11:24 AM on January 27, 2012 [4 favorites]
if the payroll tax was set to zero today, SS benefits would not continue to flow for 26 years, but would quickly come to a halt if no new flows of capital were found. SSI requires a continuous inflow of new capital in order to pay out existing obligations and on that basis it would seem SS operates much more like a Ponzi scheme than as the insurance program it was intended to be.
Do you really think that insurance companies would be able to stop charging premiums while continuing to be able to pay out claims for any significant length of time? No? Then on what grounds do you think Social Security is in any way more like a Ponzi scheme than it is like insurance?
posted by one more dead town's last parade at 11:24 AM on January 27, 2012 [3 favorites]
Do you really think that insurance companies would be able to stop charging premiums while continuing to be able to pay out claims for any significant length of time? No? Then on what grounds do you think Social Security is in any way more like a Ponzi scheme than it is like insurance?
posted by one more dead town's last parade at 11:24 AM on January 27, 2012 [3 favorites]
The problem with that video is that it's preaching to the choir. If you believe those lies with or without evidence, a 2.5 minute video probably won't change your mind. It seems to be much easier to get people to consistently vote against their own interests than it is to do the opposite.
posted by Ducks or monkeys at 11:25 AM on January 27, 2012
posted by Ducks or monkeys at 11:25 AM on January 27, 2012
if the payroll tax was set to zero today, SS benefits would not continue to flow for 26 years ...
Can't find anywhere where anyone says or suggests this. The Ponzi scheme reference refers to the number of those paying in versus those paying out. The concern has always been how to deal with demographic peaks and troughs. I prefer raising the SS tax itself, not increasing the income.
As for it operating like an insurance program like it was "intended to" you are aware that benefits were paid out 2 years after the bill was passed? Not exactly insurance, as those people never paid into the system.
posted by Ironmouth at 11:28 AM on January 27, 2012 [1 favorite]
Can't find anywhere where anyone says or suggests this. The Ponzi scheme reference refers to the number of those paying in versus those paying out. The concern has always been how to deal with demographic peaks and troughs. I prefer raising the SS tax itself, not increasing the income.
As for it operating like an insurance program like it was "intended to" you are aware that benefits were paid out 2 years after the bill was passed? Not exactly insurance, as those people never paid into the system.
posted by Ironmouth at 11:28 AM on January 27, 2012 [1 favorite]
I'd like to see a reference on that Plato quote, deanklear.
It's apparently an inexact paraphrasing, check out the talk on wikiquote. They suggest:
The more you knowwwww...
posted by deanklear at 11:34 AM on January 27, 2012 [2 favorites]
It's apparently an inexact paraphrasing, check out the talk on wikiquote. They suggest:
"Hence, necessity and a penalty must be there in addition for them, if they are going to be willing to rule - it is likely that this is the source of its being held to be shameful to seek to rule and not to await necessity - and the greatest of penalties is being ruled by a worse man if one is not willing to rule oneself."be paraphrased to:
"If the decent are not willing to rule, they are punished by being ruled by worse men."Originally it was an unverified phrase attributed to Plato by the Constitution Party.
The more you knowwwww...
posted by deanklear at 11:34 AM on January 27, 2012 [2 favorites]
This is, in a very broad way, a lot like a Ponzi Scheme.
Ponzi was defrauding people. He paid returns from incoming money, not investment income.
Social Security invests the funds, gets a rate of return and pays out later, taking advantage of the time value of money. It is a pay as you go system. A Ponzi scheme is an outright fraud, where stated returns do not exist.
Hence, Social Security is in no way a Ponzi scheme.
posted by Ironmouth at 11:34 AM on January 27, 2012 [9 favorites]
Ponzi was defrauding people. He paid returns from incoming money, not investment income.
Social Security invests the funds, gets a rate of return and pays out later, taking advantage of the time value of money. It is a pay as you go system. A Ponzi scheme is an outright fraud, where stated returns do not exist.
Hence, Social Security is in no way a Ponzi scheme.
posted by Ironmouth at 11:34 AM on January 27, 2012 [9 favorites]
When will people realize that trickle down economics is the rich people pissing on you?
Also, why is there never a discussion and often a conflation of wealth and income? Also there is no popular discussion of taxing wealth in the USA, only income. Taxing high earners is seen as taxing the wealthy. Though there is overlap, the sets are not isomorphic. Other countries have taxes on wealth. Why doesn't the US?
posted by GregorWill at 11:46 AM on January 27, 2012 [2 favorites]
Also, why is there never a discussion and often a conflation of wealth and income? Also there is no popular discussion of taxing wealth in the USA, only income. Taxing high earners is seen as taxing the wealthy. Though there is overlap, the sets are not isomorphic. Other countries have taxes on wealth. Why doesn't the US?
posted by GregorWill at 11:46 AM on January 27, 2012 [2 favorites]
If he'd said "the economy just can't handle higher taxes on rich people" was one of the "lies", that'd be different. Though I'm not sure whether that's a claim that anyone serious is actually making. Probably, I guess, but I don't pay attention to whoever they are.
Depends what you mean by "serious." I think pretty much every Republican politician is making the claim, and with some earnestness. But it's certainly true that none of these people seems to have a "serious" grasp of basic economics.
You are right, of course, that this video is pretty glib and that he's fudging the point about the sustainability/fairness of higher tax rates vs. their total economic effect. Given the constraints of the format I think we can give him a pass, though, on most off the points. I do think he's playing it a bit too fast and loose with points 5 and 7. Saying that 'if we did things differently then we might be able to constrain medical cost growth sufficiently so as to make Medicare/caid growth less of a problem" isn't really the same thing as saying that the claim that Medicare/caid cost growth is a threat to the budget is a 'myth.' It's like saying "it's a myth that guns can kill you, because you could always wear body armor."
And #7 just frames the question badly. It can't be a "myth" that something is unfair. It's an opinion, surely. If you think that the only fair tax is a flat tax, for example, then you will quite correctly think that the fact that the poor typically don't pay federal income tax is unfair--regardless of the fact that they still pay quite a high tax burden overall; which you will also consider to be "fair." This is a values question, after all--what do you think should happen. What Reich meant was that it's myth that the poor have a very low total tax burden relative to the wealthy. That, certainly, is a myth.
Mind you, Reich is also wrong to suggest that the poor have the highest tax burden in percentage terms relative to income. That falls on the middle class--high wage earners who bump into the Alternative Minimum Tax. Personally, I think it's entirely fair for them to pay higher taxes than the poor, but it's not a good idea to go about exploding myths by framing them badly and then using a false claim as the centerpiece of your argument.
posted by yoink at 11:47 AM on January 27, 2012 [1 favorite]
Depends what you mean by "serious." I think pretty much every Republican politician is making the claim, and with some earnestness. But it's certainly true that none of these people seems to have a "serious" grasp of basic economics.
You are right, of course, that this video is pretty glib and that he's fudging the point about the sustainability/fairness of higher tax rates vs. their total economic effect. Given the constraints of the format I think we can give him a pass, though, on most off the points. I do think he's playing it a bit too fast and loose with points 5 and 7. Saying that 'if we did things differently then we might be able to constrain medical cost growth sufficiently so as to make Medicare/caid growth less of a problem" isn't really the same thing as saying that the claim that Medicare/caid cost growth is a threat to the budget is a 'myth.' It's like saying "it's a myth that guns can kill you, because you could always wear body armor."
And #7 just frames the question badly. It can't be a "myth" that something is unfair. It's an opinion, surely. If you think that the only fair tax is a flat tax, for example, then you will quite correctly think that the fact that the poor typically don't pay federal income tax is unfair--regardless of the fact that they still pay quite a high tax burden overall; which you will also consider to be "fair." This is a values question, after all--what do you think should happen. What Reich meant was that it's myth that the poor have a very low total tax burden relative to the wealthy. That, certainly, is a myth.
Mind you, Reich is also wrong to suggest that the poor have the highest tax burden in percentage terms relative to income. That falls on the middle class--high wage earners who bump into the Alternative Minimum Tax. Personally, I think it's entirely fair for them to pay higher taxes than the poor, but it's not a good idea to go about exploding myths by framing them badly and then using a false claim as the centerpiece of your argument.
posted by yoink at 11:47 AM on January 27, 2012 [1 favorite]
While I generally agree with Reich on almost everything, this video is frustrating because he points to potential solutions to a problem as proof that the problem doesn't exist.
Really? Isn't that a rather ontological question? In engineering, a problem is something that exists when you don't have a solution.
Other countries have taxes on wealth. Why doesn't the US?
Because that would be socialism.
/teaparty
posted by dhartung at 11:47 AM on January 27, 2012 [1 favorite]
Really? Isn't that a rather ontological question? In engineering, a problem is something that exists when you don't have a solution.
Other countries have taxes on wealth. Why doesn't the US?
Because that would be socialism.
/teaparty
posted by dhartung at 11:47 AM on January 27, 2012 [1 favorite]
Then on what grounds do you think Social Security is in any way more like a Ponzi scheme than it is like insurance?
In insurance, the insurance takes and invests the premiums elsewhere, and pays claims out of that pool of money. It's required to keep a pool of money invested like this to pay off claims.
When the governments takes money allocated to social security and gives it to itself in exchange for IOUs (treasury bonds), it doesn't look like a normal insurance program at all. It would be as if the insurance company simply used the premiums to purchase its own corporate bonds. Very suspect.
Of course, because US treasury bonds happen to be considered the safest investments on earth, this strangeness isn't easily seen. But there's definitely some kind of disconnect between what SS purports to be and what it is.
posted by shivohum at 11:52 AM on January 27, 2012 [1 favorite]
In insurance, the insurance takes and invests the premiums elsewhere, and pays claims out of that pool of money. It's required to keep a pool of money invested like this to pay off claims.
When the governments takes money allocated to social security and gives it to itself in exchange for IOUs (treasury bonds), it doesn't look like a normal insurance program at all. It would be as if the insurance company simply used the premiums to purchase its own corporate bonds. Very suspect.
Of course, because US treasury bonds happen to be considered the safest investments on earth, this strangeness isn't easily seen. But there's definitely some kind of disconnect between what SS purports to be and what it is.
posted by shivohum at 11:52 AM on January 27, 2012 [1 favorite]
Maybe most Americans are so busy working their asses off to just get by that they don't have the time or energy to do what it takes to get the government that they SHOULD have. What, exactly, do you propose these people do? It seems that it would take a high level of involvement from the majority to really change things in a significant way.
Americans collectively watch 250 billion hours of television every year. Yes, our entire society has evolved to punish the middle and working classes, but in comparison to the past we really have it easy. People protesting in the 20s and 30s were gunned down in the street, or jailed for years for making speeches. There are similar cases today, but I don't think you can make the case that it's worse.
A good argument for your side is the wholesale disappearance of independent journalism, but compared to what people in Egypt or China or Iran or Russia face, we're doing a pretty poor job with what we have.
posted by deanklear at 11:52 AM on January 27, 2012 [2 favorites]
Americans collectively watch 250 billion hours of television every year. Yes, our entire society has evolved to punish the middle and working classes, but in comparison to the past we really have it easy. People protesting in the 20s and 30s were gunned down in the street, or jailed for years for making speeches. There are similar cases today, but I don't think you can make the case that it's worse.
A good argument for your side is the wholesale disappearance of independent journalism, but compared to what people in Egypt or China or Iran or Russia face, we're doing a pretty poor job with what we have.
posted by deanklear at 11:52 AM on January 27, 2012 [2 favorites]
Benefits to social security recipients require constant new payments from people not receiving benefits ... Just like a Ponzi Scheme! Or any insurance company!
posted by sfenders at 11:53 AM on January 27, 2012 [4 favorites]
posted by sfenders at 11:53 AM on January 27, 2012 [4 favorites]
prodigalsun wrote:
From "Deficits, Interest Rates, and the User Cost of Capital: A Reconsideration of the Effects of Tax Policy on Investment" (pdf):
Does anyone have any good citations for going more in depth around the failure of trickledown? and negative impacts on cutting taxes for the wealthy."Under more realistic assumptions, the Treasury study finds that the tax cuts could even hurt the economy."
From "Deficits, Interest Rates, and the User Cost of Capital: A Reconsideration of the Effects of Tax Policy on Investment" (pdf):
Under traditional formulations, lower capital income tax rates reduce the user cost of capital and stimulate investment. The traditional approach, however, implicitly or explicitly considers a revenue-neutral reduction in capital income taxation. We extend the traditional approach by considering a reduction in taxes that generates an increase in the budget deficit; the expanded budget deficit may raise interest rates and the opportunity cost of investment. This provides a mechanism through which tax cuts can raise the cost of capital. Representative calculations show that, even with relatively modest interest rate effects, the net effect of making the administration’s recent tax cuts permanent or a 10 percent reduction in individual income tax rates would be to raise the user cost of capital. Thus, sustained tax cuts can raise the cost of capital and reduce investment.posted by Critical_Beatdown at 11:57 AM on January 27, 2012
When the governments takes money allocated to social security and gives it to itself in exchange for IOUs (treasury bonds), it doesn't look like a normal insurance program at all. It would be as if the insurance company simply used the premiums to purchase its own corporate bonds. Very suspect.
You forget about those bonds being the most stable instruments on earth. Isn't that where the fund are supposed to be? Perhaps Greek Soverign debt would be better.
A Ponzi scheme interntionally lies about its investments and returns. Social Security is transparent.
posted by Ironmouth at 11:59 AM on January 27, 2012 [2 favorites]
You forget about those bonds being the most stable instruments on earth. Isn't that where the fund are supposed to be? Perhaps Greek Soverign debt would be better.
A Ponzi scheme interntionally lies about its investments and returns. Social Security is transparent.
posted by Ironmouth at 11:59 AM on January 27, 2012 [2 favorites]
I'm annoyed that he didn't do Raising the minimum wage causes a rise in unemployment.
Basically, this is a shitty lie for two reasons. Historically, minimum wage hikes have not been followed by a rise in unemployment. Quite the opposite, in fact. Secondly, while it's a classic piece of economist logic that when the price of labor goes up, the amount purchased will go down, what happens is that lower-income people end up with more money to spend, and, being lower-income people, immediately spend it, creating demand and therefore jobs. The way economists continue to parrot this lie is a perfect example of why mainstream economics should be ejected from universities and forced to build their own temples.
posted by Pope Guilty at 12:00 PM on January 27, 2012 [13 favorites]
Basically, this is a shitty lie for two reasons. Historically, minimum wage hikes have not been followed by a rise in unemployment. Quite the opposite, in fact. Secondly, while it's a classic piece of economist logic that when the price of labor goes up, the amount purchased will go down, what happens is that lower-income people end up with more money to spend, and, being lower-income people, immediately spend it, creating demand and therefore jobs. The way economists continue to parrot this lie is a perfect example of why mainstream economics should be ejected from universities and forced to build their own temples.
posted by Pope Guilty at 12:00 PM on January 27, 2012 [13 favorites]
Social Security invests the funds, gets a rate of return and pays out later, taking advantage of the time value of money. It is a pay as you go system.
Except it's not. The average worker takes out more than what they put in, even taking into account the investment of the funds. the pool of workers available to support every retiree has shrunk dramatically over the last 80 years.
posted by prodigalsun at 12:00 PM on January 27, 2012 [1 favorite]
Except it's not. The average worker takes out more than what they put in, even taking into account the investment of the funds. the pool of workers available to support every retiree has shrunk dramatically over the last 80 years.
posted by prodigalsun at 12:00 PM on January 27, 2012 [1 favorite]
The problem with calling Social Security a "Ponzi scheme" is that it suggests it's doomed to collapse. Ponzi schemes collapse suddenly because the flow of new investors dries up as soon as promised returns start to falter, which creates a vicious cycle that implodes the whole scheme. This is because Ponzi schemes are frauds; if people find out that their "returns" are just new investor's premiums, they rationally respond by pulling their money. With Social Security, there is no comparable attempt to hide the fact that current benefits are paid for with current payroll taxes.
If the ratio of retirees to workers remained constant, Social Security would be sustainable forever. There would be no problem. The baby boom created a problem that was recognized before that generation even entered the workforce. Social Security reforms implemented as a result of the Greenspan Commission (yes, that one) ensured that during the Boomer’s working years, there would be a surplus of payroll tax receipts after benefits were paid. This is the Social Security Trust Fund, which by law could invest only in US Treasuries. This came at the same time as the top tax rate was slashed from 74% to 28%.
So essentially, Regan’s tax cut for the rich was paid for in part by borrowing from the retirement savings of the working and middle classes. Now, the Republicans are crying “Ponzi scheme” because they want not only to default on this debt, but to kill the whole system too.
All this could be avoided by simply eliminating the payroll tax cap. The whole reason for the cap in the first place was that Social Security wasn’t supposed to be redistributive. Since the Trust Fund was used to pay for tax cuts that redistributed upward, I say fuck that, and make payroll taxes apply to all income, even *gasp* capital gains!
Bam, Social Security is not only solvent for the foreseeable future, but could see real increases in benefits paid.
posted by [expletive deleted] at 12:04 PM on January 27, 2012 [13 favorites]
If the ratio of retirees to workers remained constant, Social Security would be sustainable forever. There would be no problem. The baby boom created a problem that was recognized before that generation even entered the workforce. Social Security reforms implemented as a result of the Greenspan Commission (yes, that one) ensured that during the Boomer’s working years, there would be a surplus of payroll tax receipts after benefits were paid. This is the Social Security Trust Fund, which by law could invest only in US Treasuries. This came at the same time as the top tax rate was slashed from 74% to 28%.
So essentially, Regan’s tax cut for the rich was paid for in part by borrowing from the retirement savings of the working and middle classes. Now, the Republicans are crying “Ponzi scheme” because they want not only to default on this debt, but to kill the whole system too.
All this could be avoided by simply eliminating the payroll tax cap. The whole reason for the cap in the first place was that Social Security wasn’t supposed to be redistributive. Since the Trust Fund was used to pay for tax cuts that redistributed upward, I say fuck that, and make payroll taxes apply to all income, even *gasp* capital gains!
Bam, Social Security is not only solvent for the foreseeable future, but could see real increases in benefits paid.
posted by [expletive deleted] at 12:04 PM on January 27, 2012 [13 favorites]
Social Security invests the funds, gets a rate of return and pays out later, taking advantage of the time value of money. It is a pay as you go system. A Ponzi scheme is an outright fraud, where stated returns do not exist.
You make it sound like current SS disbursements are paid out of investment returns from past tax receipts. They are actually paid out of current tax receipts.
This is the feature people point to when they describe SS as a Ponzi Scheme. In a classic Ponzi Scheme, existing "investors" are paid out of the contributions of new "investors." The scheme collapses because the growth in new investment eventually can't deliver expected rates of return to existing investors (the amount of new investment required grows exponentially on time).
Ponzi Scheme is just a word, though. The attempt to paint SS as bad because it shares some features with classic Ponzi Schemes might or might not work. Arguably a Ponzi Scheme is only bad because it's deceptive and unsustainable. In that case, Social Security would be a destructive Ponzi Scheme if 1) people are deceived about what generates their disbursements and 2) future would-be Social Security beneficiaries are screwed because there are not enough working people paying into the system to fund current entitlements.
This seems to me an open empirical question. But a lot of people would like it to be an ideological question, I guess.
posted by grobstein at 12:06 PM on January 27, 2012 [1 favorite]
You make it sound like current SS disbursements are paid out of investment returns from past tax receipts. They are actually paid out of current tax receipts.
This is the feature people point to when they describe SS as a Ponzi Scheme. In a classic Ponzi Scheme, existing "investors" are paid out of the contributions of new "investors." The scheme collapses because the growth in new investment eventually can't deliver expected rates of return to existing investors (the amount of new investment required grows exponentially on time).
Ponzi Scheme is just a word, though. The attempt to paint SS as bad because it shares some features with classic Ponzi Schemes might or might not work. Arguably a Ponzi Scheme is only bad because it's deceptive and unsustainable. In that case, Social Security would be a destructive Ponzi Scheme if 1) people are deceived about what generates their disbursements and 2) future would-be Social Security beneficiaries are screwed because there are not enough working people paying into the system to fund current entitlements.
This seems to me an open empirical question. But a lot of people would like it to be an ideological question, I guess.
posted by grobstein at 12:06 PM on January 27, 2012 [1 favorite]
The only thing I learned from this video is that I can be totally squicked out by the sound of marker on chart paper in a recording, not just in real life. All the rest of that shit, the economics, yeah I knew that. Nicely presented, punchy script, though it won't change anyone's minds, because sheep'll just write it off as bunk.
posted by seanmpuckett at 12:08 PM on January 27, 2012
posted by seanmpuckett at 12:08 PM on January 27, 2012
But there's definitely some kind of disconnect between what SS purports to be and what it is.
Social Security cannot purport to be anything. Human beings purport.
posted by Ironmouth at 12:08 PM on January 27, 2012
Social Security cannot purport to be anything. Human beings purport.
posted by Ironmouth at 12:08 PM on January 27, 2012
Since a couple comments have already been made re: antipolitics and "the government we deserve," it doesn't seem unreasonable to ask: How exactly are we supposed to fix the policies that are being advanced in the U.S. around these myths?
Charles P. Pierce had a good quote regarding Occupy Wall Street: "The protests here are omni-directional. They appear inchoate because their target is so diffuse — an accelerating sense in the country that there is no pea under any of the shells, that the red Jack is not in the deck, that the wealth of the country is being swindled and gambled and frittered away by so many people in so many ways that to sharpen the focus on one of the long cons is to let a dozen others reach fruition."
That seems to be the case with a lot of these problems. There is so much wrong on so many levels that it doesn't seem like a question of just getting out and voting or calling your congressperson. A lot of these problems, it seems like, aren't bugs in the system: They're features. Our political system has been gamed to produce and protect massive disparities in wealth and power, regardless of how much of the citizenry participates in it. So what are we supposed to do?
And I know this question has already been asked and answered hundreds of times, but it seems productive to re-visit it regularly.
posted by Misunderestimated at 12:18 PM on January 27, 2012 [9 favorites]
Charles P. Pierce had a good quote regarding Occupy Wall Street: "The protests here are omni-directional. They appear inchoate because their target is so diffuse — an accelerating sense in the country that there is no pea under any of the shells, that the red Jack is not in the deck, that the wealth of the country is being swindled and gambled and frittered away by so many people in so many ways that to sharpen the focus on one of the long cons is to let a dozen others reach fruition."
That seems to be the case with a lot of these problems. There is so much wrong on so many levels that it doesn't seem like a question of just getting out and voting or calling your congressperson. A lot of these problems, it seems like, aren't bugs in the system: They're features. Our political system has been gamed to produce and protect massive disparities in wealth and power, regardless of how much of the citizenry participates in it. So what are we supposed to do?
And I know this question has already been asked and answered hundreds of times, but it seems productive to re-visit it regularly.
posted by Misunderestimated at 12:18 PM on January 27, 2012 [9 favorites]
tl;dw
Does he admit that never-ending growth is impossible? Otherwise, I can't take him seriously.
posted by clvrmnky at 12:19 PM on January 27, 2012
Does he admit that never-ending growth is impossible? Otherwise, I can't take him seriously.
posted by clvrmnky at 12:19 PM on January 27, 2012
You forget about those bonds being the most stable instruments on earth. Isn't that where the fund are supposed to be?
I didn't forget about it. I pointed it out in my next paragraph. I think that, given the scale of the SS trust fund, it's categorically different from a normal investment, and putting the money in treasury bonds is a license for the government to act irresponsibly with the money, not ensure that it's used in a prudent and thrifty way. And that's the real issue and point of distinction between SS and an insurance company. There are protections designed to ensure the latter doesn't just consume the money.
Social Security cannot purport to be anything. Human beings purport.
You should be careful about purporting to know better when you clearly haven't checked. According to Merriam-Webster, purport means "to have the often specious appearance of being, intending, or claiming (something implied or inferred) [a book that purports to be an objective analysis]"
posted by shivohum at 12:26 PM on January 27, 2012 [1 favorite]
I didn't forget about it. I pointed it out in my next paragraph. I think that, given the scale of the SS trust fund, it's categorically different from a normal investment, and putting the money in treasury bonds is a license for the government to act irresponsibly with the money, not ensure that it's used in a prudent and thrifty way. And that's the real issue and point of distinction between SS and an insurance company. There are protections designed to ensure the latter doesn't just consume the money.
Social Security cannot purport to be anything. Human beings purport.
You should be careful about purporting to know better when you clearly haven't checked. According to Merriam-Webster, purport means "to have the often specious appearance of being, intending, or claiming (something implied or inferred) [a book that purports to be an objective analysis]"
posted by shivohum at 12:26 PM on January 27, 2012 [1 favorite]
Somewhat relevant: Average Americans don’t think like economists
posted by zombieflanders at 12:28 PM on January 27, 2012
posted by zombieflanders at 12:28 PM on January 27, 2012
Ponzi scheme or not, if caring for the elderly and infirm through Social Security and Medicare aren't a national priorities, then your government doesn't exist for any worthwhile reason.
posted by bonobothegreat at 1:59 PM on January 27 [6 favorites +] [!]
And yet it is precisely those two things that are not listed among the explicitly identified priorities in the US Constitution.
I happen to think it is absolutely disgusting to burden a generation of young people with caring for the Baby Boomer generation, which (a) lost the Vietnam war, (b) raided the US treasury, (c) gutted non-military industrial production order to create a consumer society driven by marketing, and (d) replaced the ailing consumer society with an over-leveraged economy dependent on "high" finance.
If members of that generation couldn't be bothered to spawn enough progeny to care for them in their old age, too bad for them. Now there are no jobs for young people and the government that the Baby Boomers ran since the 90's is totally broke. Maybe if you had gotten a job at Philco or American Motors instead of dancing high and naked in the rain at Woodstock, you might have saved some money for your retirement.
posted by Pastabagel at 12:35 PM on January 27, 2012 [4 favorites]
posted by bonobothegreat at 1:59 PM on January 27 [6 favorites +] [!]
And yet it is precisely those two things that are not listed among the explicitly identified priorities in the US Constitution.
I happen to think it is absolutely disgusting to burden a generation of young people with caring for the Baby Boomer generation, which (a) lost the Vietnam war, (b) raided the US treasury, (c) gutted non-military industrial production order to create a consumer society driven by marketing, and (d) replaced the ailing consumer society with an over-leveraged economy dependent on "high" finance.
If members of that generation couldn't be bothered to spawn enough progeny to care for them in their old age, too bad for them. Now there are no jobs for young people and the government that the Baby Boomers ran since the 90's is totally broke. Maybe if you had gotten a job at Philco or American Motors instead of dancing high and naked in the rain at Woodstock, you might have saved some money for your retirement.
posted by Pastabagel at 12:35 PM on January 27, 2012 [4 favorites]
You know what might be entertaining?
Ben Stein and Robert Reich debating this list.
posted by mmrtnt at 12:35 PM on January 27, 2012
Ben Stein and Robert Reich debating this list.
posted by mmrtnt at 12:35 PM on January 27, 2012
if you believe SS is funded by general government revenue and the SS tax goes to into the general government revenue then SS is not a ponzi scheme. the problem is a lot of people argue that SS is not a ponzi scheme while also claiming it is funded by SS contributions.
posted by drscroogemcduck at 12:43 PM on January 27, 2012
posted by drscroogemcduck at 12:43 PM on January 27, 2012
Secondly, while it's a classic piece of economist logic that when the price of labor goes up, the amount purchased will go down, what happens is that lower-income people end up with more money to spend, and, being lower-income people, immediately spend it, creating demand and therefore jobs. The way economists continue to parrot this lie is a perfect example of why mainstream economics should be ejected from universities and forced to build their own temples.
posted by Pope Guilty at 3:00 PM on January 27 [2 favorites +] [!]
I really hate how you talk like an authority when its clear you've never taken a serious economics course in your life. Your idiotic hypothetical assumes that the minimum wage labor is producing the thing that it itself would consume in greater quantities if it was paid more, which is not always true. A minimum wage worker flipping burgers will not eat more burgers if his wage increases.
Furthermore, increased demand does not mean more jobs, it means more production. But production increases at the margin can be met by (a) excess/idle production capacity, and (b) productivity increases from technology and automation.
posted by Pastabagel at 12:56 PM on January 27, 2012
posted by Pope Guilty at 3:00 PM on January 27 [2 favorites +] [!]
I really hate how you talk like an authority when its clear you've never taken a serious economics course in your life. Your idiotic hypothetical assumes that the minimum wage labor is producing the thing that it itself would consume in greater quantities if it was paid more, which is not always true. A minimum wage worker flipping burgers will not eat more burgers if his wage increases.
Furthermore, increased demand does not mean more jobs, it means more production. But production increases at the margin can be met by (a) excess/idle production capacity, and (b) productivity increases from technology and automation.
posted by Pastabagel at 12:56 PM on January 27, 2012
Rodrigo: Part of the problem here, I think, is with the way the media sort of stuffs all the different makes and models of "Economists" into the same bucket in its reporting.
Specifically, corporate "economists" of various stripes (many of whom are functionally probably more like marketing folks than actual Economists in the academic sense) are often cited in the press as reputable authorities.
It's kind of like how all those years of marketing products as "scientifically proven," "using the latest science," etc., have fostered and promoted the common, widespread misapprehension that science = commercialism/industry, and that looking to science to solve problems created by reckless industrial practices and commercial abuses of science is somehow paradoxical or self-defeating.
posted by saulgoodman at 12:57 PM on January 27, 2012 [1 favorite]
Specifically, corporate "economists" of various stripes (many of whom are functionally probably more like marketing folks than actual Economists in the academic sense) are often cited in the press as reputable authorities.
It's kind of like how all those years of marketing products as "scientifically proven," "using the latest science," etc., have fostered and promoted the common, widespread misapprehension that science = commercialism/industry, and that looking to science to solve problems created by reckless industrial practices and commercial abuses of science is somehow paradoxical or self-defeating.
posted by saulgoodman at 12:57 PM on January 27, 2012 [1 favorite]
Pastabagel: If members of that generation couldn't be bothered to spawn enough progeny to care for them in their old age, too bad for them. Now there are no jobs for young people and the government that the Baby Boomers ran since the 90's is totally broke. Maybe if you had gotten a job at Philco or American Motors instead of dancing high and naked in the rain at Woodstock, you might have saved some money for your retirement.Wow. Hell of a field they had up there in Vermont, that could take all those people. Y'know, Pastabagel, I'm just as hostile to the clueless boomer hegemony as the next jaded and cynical Xer, but still. It's about time we came up with interpretations of 20th-century history that were a little more ... nuanced than Forrest Gump if we're going to be taken seriously.
posted by Sonny Jim at 1:14 PM on January 27, 2012 [1 favorite]
looking to science to solve problems created by reckless industrial practices and commercial abuses of science is somehow paradoxical or self-defeating.
posted by saulgoodman at 3:57 PM on January 27
I don't even want to imagine where we'd be looking other than science for solutions to problems.
But saulgoodman, I notice that all three paragraphs of your comment mention the media at least implicitly. "the way the media sort of stuffs," in the first; "cited in the press as reputable authorities," in the second; and "years of marketing products."
The problem is that people--let's be honest, the stupid ignorant masses--rely on an entertainment industry where content is simply a vector for delivering advertising to give them accurate information. But the stupid ignorant masses elect people to lead them, so you can't really blame them.
The people to blame are people like you. You are an educated person, right? You went to college, studied, etc. Right? So what in the world are you doing reading what's in the press or on TV, or God forbid in commericals? That stuff is for the masses, not for people like you.
As an educated person, you shouldn't be paying attention to the press and media because it is literally bad for your mind, like cigarettes are for your lungs or alcohol for your liver. Mass communications is communication for the masses. Are the stupid people fooled by the messages? Well, sure. It wouldn't be effective mass media if they weren't.
Does this sound elitist to you? It should. Are you afraid of being counted among that elite? I can understand why. Because being in the elite is a responsibility. If you were some stupid backwater hillbilly, you could dismiss Obama because he was black or muslim and get on with your life. It's easy. But as a member of the elite, you are expected to do much much much more work. You need to read some books, get acquainted with theory, formulate a worldview in which all aspects of the economy and culture are interconnected, and you have to make judgments based on your understanding of the facts and how they fit into your model. Maybe your model is economic, or maybe its cultural, or perhaps psychological or sociological. Ideally it should be everything. But that's a whole lot of books to read.
It's so much easier to call republicans tools of the rich and democrats socialists than to do any actual thinking. But that's what you have to do. It's your responsibility as the educated in society to do it, because if you don't, the idiots who read the New York Times and watch Fox News or the Daily Show sure aren't going to do it.
posted by Pastabagel at 1:15 PM on January 27, 2012
posted by saulgoodman at 3:57 PM on January 27
I don't even want to imagine where we'd be looking other than science for solutions to problems.
But saulgoodman, I notice that all three paragraphs of your comment mention the media at least implicitly. "the way the media sort of stuffs," in the first; "cited in the press as reputable authorities," in the second; and "years of marketing products."
The problem is that people--let's be honest, the stupid ignorant masses--rely on an entertainment industry where content is simply a vector for delivering advertising to give them accurate information. But the stupid ignorant masses elect people to lead them, so you can't really blame them.
The people to blame are people like you. You are an educated person, right? You went to college, studied, etc. Right? So what in the world are you doing reading what's in the press or on TV, or God forbid in commericals? That stuff is for the masses, not for people like you.
As an educated person, you shouldn't be paying attention to the press and media because it is literally bad for your mind, like cigarettes are for your lungs or alcohol for your liver. Mass communications is communication for the masses. Are the stupid people fooled by the messages? Well, sure. It wouldn't be effective mass media if they weren't.
Does this sound elitist to you? It should. Are you afraid of being counted among that elite? I can understand why. Because being in the elite is a responsibility. If you were some stupid backwater hillbilly, you could dismiss Obama because he was black or muslim and get on with your life. It's easy. But as a member of the elite, you are expected to do much much much more work. You need to read some books, get acquainted with theory, formulate a worldview in which all aspects of the economy and culture are interconnected, and you have to make judgments based on your understanding of the facts and how they fit into your model. Maybe your model is economic, or maybe its cultural, or perhaps psychological or sociological. Ideally it should be everything. But that's a whole lot of books to read.
It's so much easier to call republicans tools of the rich and democrats socialists than to do any actual thinking. But that's what you have to do. It's your responsibility as the educated in society to do it, because if you don't, the idiots who read the New York Times and watch Fox News or the Daily Show sure aren't going to do it.
posted by Pastabagel at 1:15 PM on January 27, 2012
Wow. Hell of a field they had up there in Vermont, that could take all those people. Y'know, Pastabagel, I'm just as hostile to the clueless boomer hegemony as the next jaded and cynical Xer, but still. It's about time we came up with interpretations of 20th-century history that were a little more ... nuanced than Forrest Gump if we're going to be taken seriously.
posted by Sonny Jim at 4:14 PM on January 27
I'll admit that I painted with something of a broad brush there. But that generation seems awfully proud not only of that event but also of the entire cultural ethos that created it and permeated all of society in its aftermath. So it isn't so much Woodstock itself, but the fact that Boomers everywhere (not just in Vermont (I thought it was NY???) held it up as the watershed moment of their generation.
posted by Pastabagel at 1:20 PM on January 27, 2012
posted by Sonny Jim at 4:14 PM on January 27
I'll admit that I painted with something of a broad brush there. But that generation seems awfully proud not only of that event but also of the entire cultural ethos that created it and permeated all of society in its aftermath. So it isn't so much Woodstock itself, but the fact that Boomers everywhere (not just in Vermont (I thought it was NY???) held it up as the watershed moment of their generation.
posted by Pastabagel at 1:20 PM on January 27, 2012
And, funny thing, his vote counts just as much as the vote of a hillbilly.
posted by seanmpuckett at 1:21 PM on January 27, 2012 [2 favorites]
posted by seanmpuckett at 1:21 PM on January 27, 2012 [2 favorites]
I really hate how you talk like an authority when its clear you've never taken a serious economics course in your life. Your idiotic hypothetical assumes that the minimum wage labor is producing the thing that it itself would consume in greater quantities if it was paid more, which is not always true. A minimum wage worker flipping burgers will not eat more burgers if his wage increases.
This is hilarious. Usually I have to make arguments against people, but you're delightfully self-refuting.
posted by Pope Guilty at 1:22 PM on January 27, 2012 [1 favorite]
This is hilarious. Usually I have to make arguments against people, but you're delightfully self-refuting.
posted by Pope Guilty at 1:22 PM on January 27, 2012 [1 favorite]
So it isn't so much Woodstock itself, but the fact that Boomers everywhere (not just in Vermont (I thought it was NY???)Ah yes, the self-refuting historical takedown. I'm good at those. Yeah. New York. As you were.
On the whole, I largely agree with you. But the problem is that while it's easy to deride a group of people based on poor collective decision-making ("too bad for them"), many of these people happen to be our parents, aunts, uncles; that sort of thing. We can't just kick them out on the street. Indeed, if we did (metaphorically, by letting social security and its analogues in other countries fail), we'd be the ones looking after this generation. In our own (rented, poorly heated) homes and garages and sheds. It's essentially a return to the life-ways of the 19th century. And it's because people found those burdensome and unfair that the concept of the old-age pension was mooted in the first place.
posted by Sonny Jim at 1:30 PM on January 27, 2012
I happen to think it is absolutely disgusting to burden a generation of young people with caring for the Baby Boomer generation, which (a) lost the Vietnam war, (b) raided the US treasury, (c) gutted non-military industrial production order to create a consumer society driven by marketing, and (d) replaced the ailing consumer society with an over-leveraged economy dependent on "high" finance.
You might want to look into the compassion upgrade for that chip on your shoulder, friend. Resentment painted with such a very broad brush is dangerous stuff. Also, as your parents should've taught you, two wrongs do not make a right.
posted by aught at 1:32 PM on January 27, 2012 [1 favorite]
You might want to look into the compassion upgrade for that chip on your shoulder, friend. Resentment painted with such a very broad brush is dangerous stuff. Also, as your parents should've taught you, two wrongs do not make a right.
posted by aught at 1:32 PM on January 27, 2012 [1 favorite]
This is hilarious. Usually I have to make arguments against people, but you're delightfully self-refuting.
posted by Pope Guilty at 4:22 PM on January 27
Yes, I imagine you find yourself making a lot of arguments against people, because I can't imagine that there is ever anyone anywhere who agrees with you.
posted by Pastabagel at 1:37 PM on January 27, 2012
posted by Pope Guilty at 4:22 PM on January 27
Yes, I imagine you find yourself making a lot of arguments against people, because I can't imagine that there is ever anyone anywhere who agrees with you.
posted by Pastabagel at 1:37 PM on January 27, 2012
I can't imagine that there is ever anyone anywhere who agrees with you.
The hyperbole, it goes to 11.
posted by deanklear at 1:39 PM on January 27, 2012 [1 favorite]
The hyperbole, it goes to 11.
posted by deanklear at 1:39 PM on January 27, 2012 [1 favorite]
zombieflanders: "Somewhat relevant: Average Americans don’t think like economists"
I'm not sure which choice I'd prefer, that or the alternative.
posted by symbioid at 1:40 PM on January 27, 2012
I'm not sure which choice I'd prefer, that or the alternative.
posted by symbioid at 1:40 PM on January 27, 2012
And yet it is precisely those two things that are not listed among the explicitly identified priorities in the US Constitution.
The Supreme Court long ago ruled Social Security constitutional, as in before you were born.
You should be careful about purporting to know better when you clearly haven't checked. According to Merriam-Webster, purport means "to have the often specious appearance of being, intending, or claiming (something implied or inferred) [a book that purports to be an objective analysis]"
Except this isn't a book. It isn't even a document. Those things purport to things because they actually put forward claims. You're misusing the word to make it seem as if the program itself claims to be something. It claims nothing. It is a program. It takes in money and pays out money. It cannot purport to do anything.
posted by Ironmouth at 1:45 PM on January 27, 2012 [1 favorite]
The Supreme Court long ago ruled Social Security constitutional, as in before you were born.
You should be careful about purporting to know better when you clearly haven't checked. According to Merriam-Webster, purport means "to have the often specious appearance of being, intending, or claiming (something implied or inferred) [a book that purports to be an objective analysis]"
Except this isn't a book. It isn't even a document. Those things purport to things because they actually put forward claims. You're misusing the word to make it seem as if the program itself claims to be something. It claims nothing. It is a program. It takes in money and pays out money. It cannot purport to do anything.
posted by Ironmouth at 1:45 PM on January 27, 2012 [1 favorite]
I'll admit that I painted with something of a broad brush there. But that generation seems awfully proud not only of that event but also of the entire cultural ethos that created it and permeated all of society in its aftermath. So it isn't so much Woodstock itself, but the fact that Boomers everywhere (not just in Vermont (I thought it was NY???) held it up as the watershed moment of their generation
I think what people are saying is that focusing on Reich's claims and whether or not they are true is where this discussion is going to be most fruitful, instead of re-litigating cultural battles from the Nixon Administration.
posted by Ironmouth at 1:48 PM on January 27, 2012 [2 favorites]
I think what people are saying is that focusing on Reich's claims and whether or not they are true is where this discussion is going to be most fruitful, instead of re-litigating cultural battles from the Nixon Administration.
posted by Ironmouth at 1:48 PM on January 27, 2012 [2 favorites]
As an educated person, you shouldn't be paying attention to the press and media because it is literally bad for your mind, like cigarettes are for your lungs or alcohol for your liver
Really? Extraordinary claims require extraordinary proof.
posted by Ironmouth at 1:50 PM on January 27, 2012
Really? Extraordinary claims require extraordinary proof.
posted by Ironmouth at 1:50 PM on January 27, 2012
I happen to think it is absolutely disgusting to burden a generation of young people with caring for the Baby Boomer generation, which (a) lost the Vietnam war, (b) raided the US treasury, (c) gutted non-military industrial production order to create a consumer society driven by marketing, and (d) replaced the ailing consumer society with an over-leveraged economy dependent on "high" finance.
Jesus tap dancing Christ, Pastabagel.
posted by Talez at 1:53 PM on January 27, 2012 [2 favorites]
Jesus tap dancing Christ, Pastabagel.
posted by Talez at 1:53 PM on January 27, 2012 [2 favorites]
Social Security invests the funds, gets a rate of return and pays out later, taking advantage of the time value of money. It is a pay as you go system.
Except it's not. The average worker takes out more than what they put in, even taking into account the investment of the funds. the pool of workers available to support every retiree has shrunk dramatically over the last 80 years.
A misleading statistic. Some workers take out nothing. Some take out more than they pay in. As currently organized, in 26 years, there will be not enough coming in to support pay out at the current rates. This is due to demographics.
However, this is not the first time this problem has been faced and fixed. In 1983, we faced an even-closer date. What did they do? Raised the retirement age by 2 years to be phased in by 2020 and raised the payroll tax on everyone.
One must expect that as demographic trends rise and fall, adjustments will have to be made. They've been made in the past and they will be made again.
posted by Ironmouth at 1:58 PM on January 27, 2012 [1 favorite]
Except it's not. The average worker takes out more than what they put in, even taking into account the investment of the funds. the pool of workers available to support every retiree has shrunk dramatically over the last 80 years.
A misleading statistic. Some workers take out nothing. Some take out more than they pay in. As currently organized, in 26 years, there will be not enough coming in to support pay out at the current rates. This is due to demographics.
However, this is not the first time this problem has been faced and fixed. In 1983, we faced an even-closer date. What did they do? Raised the retirement age by 2 years to be phased in by 2020 and raised the payroll tax on everyone.
One must expect that as demographic trends rise and fall, adjustments will have to be made. They've been made in the past and they will be made again.
posted by Ironmouth at 1:58 PM on January 27, 2012 [1 favorite]
Rodrigo: "I am an economist, I know a lot of other economists and very few, if any of us, think that. The people you see spouting this crap are politicians and pundits who learned a little about supply and demand and called it a day."
Right. There's a significant set of economists who make quite a bit of hay by sucking up to power. Be it corporate or policital. Economists who aren't playing footsie with the Cato institute need to pull their heads out of their books from time to time and issue smackdowns on the clowns behind destructive public policies. Sort of like how the medical profession from time to time has to run a snake oil salesman out of town...
posted by kaibutsu at 2:02 PM on January 27, 2012 [3 favorites]
Right. There's a significant set of economists who make quite a bit of hay by sucking up to power. Be it corporate or policital. Economists who aren't playing footsie with the Cato institute need to pull their heads out of their books from time to time and issue smackdowns on the clowns behind destructive public policies. Sort of like how the medical profession from time to time has to run a snake oil salesman out of town...
posted by kaibutsu at 2:02 PM on January 27, 2012 [3 favorites]
I think what people are saying is that focusing on Reich's claims and whether or not they are true is where this discussion is going to be most fruitful,
Fine. All seven of these "lies" are statements that Reich himself made up. Is there a signle serious economist who ever said or wrote that something as glib as "high taxes on the rich hurt the economy"?
But that really isn't the point. The point is the one buried in saulgoodman's comment. Reich's arguments cannot possibly be correct, because that video is less than three minutes long. He purports to refute 7 of these lies--that he himself frames--less than 24 seconds each. The issues he raises, the effects of taxation, the budget, the effect on the labor market of high government employment are issues that can and do fill entire books on their own. It is simply impossible to clearly and convincingly establish the "truth" of any of these issues in that short a time frame.
And yet he does it with each one in less than 24 seconds. Using a cartoon.
But this video isn't an economics lesson. It's a political argument. There is no right or wrong answer to how high taxes should be, or how big the government should be. Any argument about the rich paying their fair share simply becomes an argument over the definition of "fair." Ditto for "too big" or "rich" all of which are the words he uses. Control the dictionary and you control the argument, data and models be damned.
The problem is that we live in a culture where a PhD economist and former labor secretary believes the only way to communicate with the public is in a YouTube video with the cartoons. And you ask me to have a focused discussion about his cartoons.
Now go back and read my comment.
posted by Pastabagel at 2:15 PM on January 27, 2012 [2 favorites]
Fine. All seven of these "lies" are statements that Reich himself made up. Is there a signle serious economist who ever said or wrote that something as glib as "high taxes on the rich hurt the economy"?
But that really isn't the point. The point is the one buried in saulgoodman's comment. Reich's arguments cannot possibly be correct, because that video is less than three minutes long. He purports to refute 7 of these lies--that he himself frames--less than 24 seconds each. The issues he raises, the effects of taxation, the budget, the effect on the labor market of high government employment are issues that can and do fill entire books on their own. It is simply impossible to clearly and convincingly establish the "truth" of any of these issues in that short a time frame.
And yet he does it with each one in less than 24 seconds. Using a cartoon.
But this video isn't an economics lesson. It's a political argument. There is no right or wrong answer to how high taxes should be, or how big the government should be. Any argument about the rich paying their fair share simply becomes an argument over the definition of "fair." Ditto for "too big" or "rich" all of which are the words he uses. Control the dictionary and you control the argument, data and models be damned.
The problem is that we live in a culture where a PhD economist and former labor secretary believes the only way to communicate with the public is in a YouTube video with the cartoons. And you ask me to have a focused discussion about his cartoons.
Now go back and read my comment.
posted by Pastabagel at 2:15 PM on January 27, 2012 [2 favorites]
Why are we arguing with the dude who read some "radical" economics theory and then decided he was going to edumacate the dirty proles with pugilistic (and nonsensical) rhetoric? His soapbox is a pile of horseshit, so let him rub it on himself without getting any on us.
posted by Burhanistan at 4:59 PM on January 27
And what economic theory have you studied?
posted by Pastabagel at 2:16 PM on January 27, 2012
Pastabagel The problem is that we live in a culture where a PhD economist and former labor secretary believes the only way to communicate with the public is in a YouTube video with the cartoons.
He is demonstrably correct to believe that, and as you say, he is not so much "proving" as "asserting". And yet, assertion of a fact is still a valuable thing to do. In the realm of politics, the popularity of an argument increases its weight, and its chances of being implemented; in the realm of logic, it doesn't really matter if ten or a million people think something is true.
Political arguments are won on truthiness and soundbites. Whether they should be, is irrelevant. They are. Even if your assertion is logically correct, you won't get to implement it unless you win the political argument.
I agree that this is a crap way to run a country, or even a girl scout troop. It nonetheless is the way humans run these things.
posted by aeschenkarnos at 2:38 PM on January 27, 2012
He is demonstrably correct to believe that, and as you say, he is not so much "proving" as "asserting". And yet, assertion of a fact is still a valuable thing to do. In the realm of politics, the popularity of an argument increases its weight, and its chances of being implemented; in the realm of logic, it doesn't really matter if ten or a million people think something is true.
Political arguments are won on truthiness and soundbites. Whether they should be, is irrelevant. They are. Even if your assertion is logically correct, you won't get to implement it unless you win the political argument.
I agree that this is a crap way to run a country, or even a girl scout troop. It nonetheless is the way humans run these things.
posted by aeschenkarnos at 2:38 PM on January 27, 2012
Is there a signle serious economist who ever said or wrote that something as glib as "high taxes on the rich hurt the economy"?
dozens.
Arnold Laffer. Jude Wanninski, John Maynard Keynes to name 3.
At certain high rates of taxation, of course taxation will hurt the economy because money that could go to private enterprise will be tied up by the government, especially if it builds a huge surplus and doesn't invest the funds.
But we are nowhere near that point. That's the point that is being made by Reich.
posted by Ironmouth at 2:39 PM on January 27, 2012 [3 favorites]
dozens.
Arnold Laffer. Jude Wanninski, John Maynard Keynes to name 3.
At certain high rates of taxation, of course taxation will hurt the economy because money that could go to private enterprise will be tied up by the government, especially if it builds a huge surplus and doesn't invest the funds.
But we are nowhere near that point. That's the point that is being made by Reich.
posted by Ironmouth at 2:39 PM on January 27, 2012 [3 favorites]
Nuance doesn't sell. Simplicity sells. If you want people to do the right thing, you have to figure out what the right thing is for them, summarize it, and sell it to the people in simple terms. If you can't do that, you and/or your policy position simply aren't good enough.
Only about a quarter of the population understands or cares about nuance anyway; the rest just want to know what they are supposed to do, when, where, and how. "Why" is given to them in your summary, and if it sounds better than the opposition's "why", they will enthusiastically defend it.
The people will do what they have been persuaded to do, and then practical reality (which does "care" all about nuances) will have its effect. And then we get to have the argument all over again, only this time, those who were correct have the advantage of practical, real examples. Note that this is just an advantage, not a deciding factor.
posted by aeschenkarnos at 2:57 PM on January 27, 2012
Only about a quarter of the population understands or cares about nuance anyway; the rest just want to know what they are supposed to do, when, where, and how. "Why" is given to them in your summary, and if it sounds better than the opposition's "why", they will enthusiastically defend it.
The people will do what they have been persuaded to do, and then practical reality (which does "care" all about nuances) will have its effect. And then we get to have the argument all over again, only this time, those who were correct have the advantage of practical, real examples. Note that this is just an advantage, not a deciding factor.
posted by aeschenkarnos at 2:57 PM on January 27, 2012
Except this isn't a book. It isn't even a document. Those things purport to things because they actually put forward claims. You're misusing the word to make it seem as if the program itself claims to be something. It claims nothing. It is a program. It takes in money and pays out money. It cannot purport to do anything.
This is some pretty silly wriggling. First, the SS system is a broad, fuzzy, and abstract concept; it obviously includes within it the documents, legislation, court rulings, and officials that work as part of and with that system. Otherwise it couldn't even transfer money, since "Social Security" as an abstract concept cannot "take in money and pay out money" -- only human beings (or computers) do that.
More fundamentally, purporting does not need to involve claiming anything. It can involve the "often specious appearance of being" something, as per my definition earlier.
The SS system appears to be a forced savings and/or insurance program. Thus it purports to be those things.
posted by shivohum at 3:16 PM on January 27, 2012
This is some pretty silly wriggling. First, the SS system is a broad, fuzzy, and abstract concept; it obviously includes within it the documents, legislation, court rulings, and officials that work as part of and with that system. Otherwise it couldn't even transfer money, since "Social Security" as an abstract concept cannot "take in money and pay out money" -- only human beings (or computers) do that.
More fundamentally, purporting does not need to involve claiming anything. It can involve the "often specious appearance of being" something, as per my definition earlier.
The SS system appears to be a forced savings and/or insurance program. Thus it purports to be those things.
posted by shivohum at 3:16 PM on January 27, 2012
It's so much easier to call republicans tools of the rich and democrats socialists than to do any actual thinking. But that's what you have to do. It's your responsibility as the educated in society to do it, because if you don't, the idiots who read the New York Times and watch Fox News or the Daily Show sure aren't going to do it.I completely get where you're coming from Pastabagel, but I'm going to tell you that there are a lot of days where it's all I can do to not roll up in a little ball and chant "I wish I were a beta" over and over. I spent a year working on the Hill, and I recently received a nice photo and note from the gentleman for which I worked. I miss the people there, but I don't miss feeling that the system is completely broken. As a scientist in my day job, I also feel that nobody in this country really gives a crap. I appreciate that those of us fortunate enough to have the opportunity to acquire an education and work in places like the Senate really do have an obligation to repay those opportunities by spending at least some of our time and energy working to make the world a better place, but at least acknowledge that it's a hard thing to ask, and not all of us have the crusading spirit it takes to keep fighting year after year.
posted by Pastabagel at 1:15 PM on January 27 [+] [!]
posted by wintermind at 3:33 PM on January 27, 2012
The SS system appears to be a forced savings and/or insurance program. Thus it purports to be those things.
I'm glad we've got to the "your opinion about social security" (which is as valid as anyone else's) and away from the "social security pretending to be something its not." You end up inadvertently strawmanning.
But the system works. It needs adjustment from time to time to take into account demographic changes. The problem is with our inability to get anything done because of the Tea Party people.
posted by Ironmouth at 3:50 PM on January 27, 2012 [1 favorite]
I'm glad we've got to the "your opinion about social security" (which is as valid as anyone else's) and away from the "social security pretending to be something its not." You end up inadvertently strawmanning.
But the system works. It needs adjustment from time to time to take into account demographic changes. The problem is with our inability to get anything done because of the Tea Party people.
posted by Ironmouth at 3:50 PM on January 27, 2012 [1 favorite]
See also: scientists, doctors, lawyers, computer scientists, etc. There are a large number of people who make hay sucking up to power and the press eat them up.
Can we at least agree that Larry Summers is to economists what John Yoo is to lawyers?
posted by mek at 3:59 PM on January 27, 2012 [2 favorites]
Can we at least agree that Larry Summers is to economists what John Yoo is to lawyers?
posted by mek at 3:59 PM on January 27, 2012 [2 favorites]
I'm annoyed that he didn't do Raising the minimum wage causes a rise in unemployment.
Everyone knows a minimum Living Wage is $45/hr. Why do liberals hate poor people?
posted by ZenMasterThis at 6:54 PM on January 27, 2012
Everyone knows a minimum Living Wage is $45/hr. Why do liberals hate poor people?
posted by ZenMasterThis at 6:54 PM on January 27, 2012
All this (SS potential shortfalls) could be avoided by simply eliminating the payroll tax cap. The whole reason for the cap in the first place was that Social Security wasn’t supposed to be redistributive. Since the Trust Fund was used to pay for tax cuts that redistributed upward, I say fuck that, and make payroll taxes apply to all income, even *gasp* capital gains!
Bam, Social Security is not only solvent for the foreseeable future, but could see real increases in benefits paid.
posted by [expletive deleted]
Close, but you'd also have to change how payouts are computed. In the current system payouts are (linearly?) computed based upon individual pay-ins. If you maintain that relationship, then eliminating the payroll tax cap doesn't actually change the trust fund math. The extra money collected goes right back out the door as higher payouts. Specifically, they go right back out the door as higher payouts to high income earners, exactly the people that don't need it.
If you combine lifting the payroll tax cap (which I support) with some mix of means testing or payout caps, then you've improved the balance sheet.
posted by NortonDC at 1:29 PM on January 28, 2012
Bam, Social Security is not only solvent for the foreseeable future, but could see real increases in benefits paid.
posted by [expletive deleted]
Close, but you'd also have to change how payouts are computed. In the current system payouts are (linearly?) computed based upon individual pay-ins. If you maintain that relationship, then eliminating the payroll tax cap doesn't actually change the trust fund math. The extra money collected goes right back out the door as higher payouts. Specifically, they go right back out the door as higher payouts to high income earners, exactly the people that don't need it.
If you combine lifting the payroll tax cap (which I support) with some mix of means testing or payout caps, then you've improved the balance sheet.
posted by NortonDC at 1:29 PM on January 28, 2012
The truth is that we have (compared with the rest of the world) relatively free and fair elections, relatively uncorrupted government, and the capability to change our government however we want to if we are willing to sacrifice some time and money to make the change happen.
There remains the question of how to go about getting rid of the entrenched lizards.
posted by flabdablet at 7:45 PM on February 23, 2012
There remains the question of how to go about getting rid of the entrenched lizards.
posted by flabdablet at 7:45 PM on February 23, 2012
Hey, he said two minutes thirty seconds but the video is two minutes and FORTY EIGHT seconds. Who's the liar now, LIAR?!?
posted by Deathalicious at 2:04 PM on February 25, 2012 [1 favorite]
posted by Deathalicious at 2:04 PM on February 25, 2012 [1 favorite]
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posted by deadmessenger at 9:10 AM on January 27, 2012 [5 favorites]