Has western style socialism broken people's spirits?

[piezoe]

Quote from MKTrader:

Disability is the real elephant in the room. The SSA Disability ranks have grown faster than new jobs throughout this administration's "recovery." Among other things, it has a lot of unintended consequences:

http://www.washingtonpost.com/opini...-not-to-work/2012/07/30/gJQA8UvHLX_story.html

Also, it doesn't help that you can file for a number of nebulous mental disabilities, or that some of the judges are bleeding hearts who can't say "no" to any application:

http://online.wsj.com/article/SB10001424052748704681904576319163605918524.html

I agree. The disability Trust is separate from the pension Trust (thank goodness!)

The pension trust is sound so long as Congress follows the actuaries advice. (Given our Congress, that's a big "if"!)

The S.S. administration throws up lots of hurdles to get over in order to qualify for disability. The result has been a lot of work for lawyers who, for a big cut, specialize in leading their clients trough the disability qualifying maize. When you're dealing with mental illness and alcoholism --something that disqualifies you, so that's always covered up when it goes hand in hand with a mental condition such as bipolar disorder-- you have a real problem evaluating. Especially so because many of these applicants are indigent and thus bounced from pillar to post in an overworked, understaffed public mental health program. There are a number of mental disorders that can be treated effectively enough that the patient could hold down a job, but for the indigent to get access to good treatment is iffy, at best.

burn8 says:
"Is it not clear by now that government is not capable of running a program like this?

That's a double negative, so if I take it as written without the "?" I'd have to agree. But with the "?" I'd have to disagree.

Time has revealed (so far) that the old age pension and survivors benefits aspect of Social Security is something the Federal government has succeeded at marvelously. I wouldn't go so far as to say that's the only thing the Federal government has done well, but it is one of a handful of things we've done well, to be sure.

Oddly, most people think that running the military is something the Government does well, but in reality that's probably where the most graft and corruption is in all the Federal agencies, and that's saying a lot because there is plenty of graft and corruption to go around. (But I am not so foolish as to blame the military for the wars the U.S. has lost.) One outfit, besides Social Security, that has always impressed me with their competence and concern for carrying out their mandate efficiently with a real eye toward preventing favoritism and corruption is the NIH, which is part of the PHS. Kudos to them!

 

[logic_man]

Quote from piezoe:



The system has always been based on actuarial calculation. It has always been assumed that adjustments to the contribution rate would be needed from time to time as lifespans and bond returns changed over the years. There has been a number of adjustments since the inception of Social Security, and there will be more in the future. That's common sense. You wouldn't expect an insurance company selling an annuity in 1970 to necessarily sell the same annuity for exactly the same amount in 2012 would you? I hope not.

No, I wouldn't expect an insurance company to be selling the same annuity in 2012 that it sold in 1970, but at least if I were buying an annuity, I would have a choice of multiple providers or the choice of investing my own way.

I mentioned Greenspan because he headed the commission that "fixed" SS in the 1980s.

Point is, the government should take a step back from being an actual provider of retirement income and simply be a regulator of providers of retirement income. That aligns with the idea of free citizens in a free society and a free economy. This current system, as I said, is a sign of biological degeneracy on the part of its supporters, since it is "too hard" to actually take care of yourselves. As Nietzsche said, "Decadent parents have even more decadent children". No one who wasn't already a "broken spirit" would want the system we have now.

Hopefully, science will find the "can't take care of myself" genes and we can eradicate it from future generations.

 

[logic_man]

Quote from piezoe:



Time has revealed (so far) that the old age pension and survivors benefits aspect of Social Security is something the Federal government has succeeded at marvelously. I wouldn't go so far as to say that's the only thing the Federal government has done well, but it is one of a handful of things we've done well, to be sure.

What's your "base case" to compare the outcomes with SS to the outcomes without?

You can't just point to the decrease in poverty among the elderly and say that therefore the program "works", since alternatives to the program could have worked even better. One such alternative would have been to put tax-deferred account options on the table back in the 1930s.

You seem to be locked in to the idea that because things got better for the elderly under SS, they could not have been better still under a different approach.

For example, I read a study of Medicare's impact on the pharma industry a few years back and one of the findings was that Medicare actually was killing the elderly at faster rates than necessary because the payments from the government to pharma providers were decreasing profits and, hence, capital available to R&D, leading to fewer drugs coming to market.

Mind you, this was during the time period before the current ways of developing drugs seem to have declined in productivity, which is a legit point now, but wasn't during the first 30+ years of Medicare. Critics of the industry can complain that all it creates now are copy-cat drugs, and there is some truth to that, but in the absence of Medicare, the industry would have started producing only copy-cat drugs in the 1980s instead of the 1990s and would have had 10 years of increased capital for R&D into next generation drug development techniques.

It's about what options get taken away when the government becomes a player, rather than a referee, as much as it is about what options the government becoming a player provides.

A certain type of person can live with the plethora of options that exist when government lets the market handle things and a certain type of person cannot. I happen to be one of the former, not the latter. And, no, I do not think there is anything so "fundamental" that government should take all other options off the table to become a monopoly provider, at least not outside of its roles as the holder of a monopoly of legitimate force and as final arbiter of legal disputes.

 

[Random.Capital]

Quote from logic_man:


Point is, the government should take a step back from being an actual provider of retirement income and simply be a regulator of providers of retirement income.

In practice, there is no meaningful difference between the two.

 

[logic_man]

Quote from Random.Capital:

In practice, there is no meaningful difference between the two.

Not so. When government is a monopoly provider (or even the price-setter in a specific market like Medicare), there are fewer innovations available to consumers. Where do innovations happen? At the boundaries between current regulation and emerging consumer needs, provided that private entities have sufficient capital to pursue those innovations.

Think of "target-date" funds in the financial services industry. Those products came about due to the confusing nature of asset allocation to the average 401k or IRA investor. If the only provider of retirement income in the economy were Social Security, target date funds would be unnecessary due to SS's annuity-like structure and would not have come about.

I have a colleague who patented a system for generating retirement income to consumers from a given asset base. The fact that he was able to get a patent says that it was an innovative solution and the fact that he does not work for the government shows that such solutions are more likely when more institutions are seeking them out.

There are few regulations so heavy-handed that they leave no space for new products and services.

As government takes over more and more of the economy, we end up boxed in to the current solution sets available, rather than enable new solutions to emerge from competition.

I guess there are a significant number of people who want to live like ants or bees, either because they think they'll be the "higher caste" ant or bee or they relish the thought of being the "lower caste" ant or bee. I'm just not one of them, as I've stated. I'd rather live as a human being.

 

[limitdown]

Quote from morganist:

Has western style socialism broken people's spirits?

A discussion on the above topic. What do you think? Has the socialist style of government or wealth distribution system through the confiscation of goods made people feel like it is not worth working or at least it is harder than the alternative?

what is this?

western socialism?, please define?

does it mean that if any neighbor or governing body (town govt, county, state, federal) forms a fire / police / ambulance to help one's neighbor, that

that is socialism?

 

[piezoe]

MKtrader, I can't let your Pozi scheme remark go unchallenged, simply because this is one of the most damaging myths about social security that a surprising number of people believe. Even Senator Wicker (Mississippi) apparently believes this, based on some recent correspondence I had from him. It's completely unacceptable for any Congress man to hold such an incorrect understanding of how something as important as Social Security works. I've written him, of course, regarding this issue.

If you want to understand how the Pension and Survivor benefits part of Social Security works it is best to think of it as being closely related to the annuities sold by private insurance companies. Both of these are based on amount contributed, the estmated ROI of the contribution, and life expectancy. Social security differs in several ways of course. One important difference is that Social Security uses weighting factors that have the equivalent effect of producing a somewhat higher ROI for those at the low end of the income scale than for those at the top end.

Just as with an annuity, if you live beyond your actuarial death age, your retirement benefits continue. Your benefits under social security may be considered as paid first from your own contributions plus interest and then from the contributions plus interest of those who died before their actuarial death age. This is the well know "insurance" aspect of social security at work to make the possibility of you exhausting your benefits before death virtually nil. Because of the large risk pool, and the non-profit aspect too, you will find that you have to contribute less per month, significantly so for lower wage earners, to assure a pension you can not outlive than would be the case for a private IRS or 401K type plan.

It is often thought that current workers pay the benefits of those already retired. This is patently untrue! Current workers are contributing to their own retirement benefits and potentially to the retirement benefits of their fellow workers who may die before they do. The odds on dying before retirement age are very roughly 1 in 6. And to the extent that someone who dies before drawing benefits leaves any residual in their account after survivor benefits, etc., I suppose the residual could end up supplementing the retirement of those already retired, but that can be just as well thought of as supplementing the retirement benefits of their colleagues who ultimately live beyond their actuarial death age.

It is a modern absurdity that so many ridiculous myths have grown-up around U.S. Social Security. There can be only one original source: the crooks and ne'er-do-wells of Wall Street.

 

[hughb]

Here is a sample of a Social Security statement from 2006: https://secure.ssa.gov/apps10/poms/images/SSA7/G-SSA-7005-SM-SI-1.pdf At that time it said that it expected the Social Security Trust Fund would be exhausted by 2040.

Now, I have the last one I received in March of 2010 that has that same statement on it except that it says it expects the Fund to be exhausted by 2037.

Also, both of them say this, "Social Security is a compact between generations."

Now, having said that I also need to say that I don't believe that Social Security is a ponzi scheme either. Like piezoe stated, that is a malicious rumor from Wall Streeters who want to get their hands on W2 worker's payroll deductions.

 

[hughb]

ooops, double post

 

[piezoe]

Quote from logic_man:
You can't just point to the decrease in poverty among the elderly and say that therefore the program "works", since alternatives to the program could have worked even better. One such alternative would have been to put tax-deferred account options on the table back in the 1930s.

I hope I have made it clear that private investment accounts can not meet the needs of the low wage earner because they have too little disposable income to properly fund such an account. Whether tax deferred or not, is immaterial. The shared risk feature of Social Security is invaluable to the low wage worker chiefly because it significantly reduces the contribution amount needed.

Please spend your time studying social security and how it functions rather than posting nonsense.