NationStates Jolt Archive

The head of the GAO is taking a personal tour of the US warning of the deficit problem. This is very scary. By GAO projections the national deficit is going to increase by 50 trillion over the next 20 years! Can you say "HOLY SHIT"?!

http://www.cnn.com/2007/US/03/28/federal.debt/index.html

A few garage sales?

Exagerating the affect of the retiring boomers. So long as the economy continues to grow as it is, dealing with retiring boomers will be no problem.

Still, if we stopped wasting money on this damn war, it would be a step in the right direction.

Well, it makes it clear that the retirement age for SS needs to be adjusted ASAP, as do aspects of Medicare and Medicaid. We need to face the fact that people 20 years from now, even the aged boomers, will be far more healthy and will have a significantly longer lifespan, as well as rapid growth in that number, that will affect the retirement situation considerably.

I mean, if a worker in 2027 can do at age 80 what a person today is capable of in their 40's or even 30's, that means we will have to adjust the retirement age to reflect it. Otherwise, we're talking 20, even 30 years of possible productive work being flushed down the drain; they can retire at 65 if they want with their own money, but the taxpayers shouldn't be forced to bear the burden of productive workers. That's massively unfair to everyone involved, almost as much as having the AMT not adjusted for inflation.

Of course, these effects could have a massively beneficial effect on Medicare/Medicaid as well, if we were to expand access to these innovations to the lower class and elderly. Preventative and rejuvenative medicine could greatly reduce the cost burden in the long term, enhancing the health of our entitlement programs and enabling us to weather the future without financial implosion. And the current situation doesn't take enhancement in to account; these technologies will lead to major growth in productivity with knock-on effects on economic growth and inflation. At the same time, without Medicare/Medicaid reform, they will likely lead to a further widening of the income gap and more displaced workers who can't afford them.

So, in short: If we don't update our entitlements to reflect the future, we're going to suffer quite badly economically and financially for a long time. A system designed for the health, economics, and longevity of the 1930's isn't going to work in the 2020's and beyond.

I mean, if a worker in 2027 can do at age 80 what a person today is capable of in their 40's or even 30's, that means we will have to adjust the retirement age to reflect it.

fuck that shit. shorter shorter workday, shorter workweek, shorter work-lives. what the fuck is the point of increasing productivity if it just means working more?

abolish work!

Thats what happens when millions of men come home from overseas horny as hell.

fuck that shit. shorter shorter workday, shorter workweek, shorter work-lives. what the fuck is the point of increasing productivity if it just means working more?

Productivity means working less to produce the same amount of output. That means you can produce more without an increase in costs, which means lower prices per unit, more goods, and as a result higher living standards and more products to choose from.

So, you work "more", but at the same time the work itself is less strenuous and you get more for it. A damn good trade if you ask me.

abolish work!

And starve!

Productivity means working less to produce the same amount of output. That means you can produce more without an increase in costs, which means lower prices per unit, more goods, and as a result higher living standards and more products to choose from.

So, you work "more", but at the same time the work itself is less strenuous and you get more for it. A damn good trade if you ask me.



And starve!

indeed.

Productivity means working less to produce the same amount of output. That means you can produce more without an increase in costs, which means lower prices per unit, more goods, and as a result higher living standards and more products to choose from.

So, you work "more", but at the same time the work itself is less strenuous and you get more for it. A damn good trade if you ask me.

not how it actually works these days. and that certainly won't be changed by pushing ideas about how people ought to work more. less, always less.

And starve!

work is unnecessary for subsistence. it ain't even necessary for luxury. it's just a bad idea all around.

So, in short: If we don't update our entitlements to reflect the future, we're going to suffer quite badly economically and financially for a long time. A system designed for the health, economics, and longevity of the 1930's isn't going to work in the 2020's and beyond.

We should abolish all entitlements. When we get rid of the 75-85% of the Federal budget that there's no constitutional authorization for, we can get rid of most taxes, and then people will have enough money to pay for their own goddamn retirements and medical needs.

fuck that shit. shorter shorter workday, shorter workweek, shorter work-lives. what the fuck is the point of increasing productivity if it just means working more?

abolish work!

I've always thought it is odd that at the same time the government is encouraging people to stay in school for longer and longer, they also want to push back the retirement age.

How's that for fucking crackers?

Anway, most of this is medicare/medicaid not SS. The US could just bite the bullet and copy the UK's NHS system and most of this problem would go away. The AARP wouldn't stand for that however.

Here is a novel idea, DUMP SOCIAL SECURITY!!!

Productivity means working less to produce the same amount of output. That means you can produce more without an increase in costs, which means lower prices per unit, more goods, and as a result higher living standards and more products to choose from.

So, you work "more", but at the same time the work itself is less strenuous and you get more for it. A damn good trade if you ask me.


Productivity is falling again though. Apparently powerpoint could only take us so far. :(

not how it actually works these days. and that certainly won't be changed by pushing ideas about how people ought to work more. less, always less.

But not everyone does jobs they don't like; some people do work, and do enjoy it. Honestly, I'd say most people are pretty content with the work they have to do and don't mind doing it because of the rewards they get.

work is unnecessary for subsistence. it ain't even necessary for luxury. it's just a bad idea all around.

I want the things working provides me. If the alternative to working was so great, we'd already be doing it because nobody does more than they have to to get the things they want.

There's that black hole for money called Iraq.

Productivity is falling again though. Apparently powerpoint could only take us so far. :(

One big problem is that companies relied on increasing productivity alone rather than growing their workforce at the same time because it delivered more profits in the short term.

I mean, there's only so much you can squeeze out of a worker in a given day; we may be able to increase the efficiency and power of the tools we have, but there's still 24 hours in a day no matter what, and nobody's going to want to work for 12 or 15 hours a day no matter how much you pay them. You have to grow your workforce to increase productivity constantly; some improvements might only work on a given scale. That's a hard limit for us on Earth, and I highly doubt it will change any time in the foreseeable future.

There's that black hole for money called Iraq.

That black hole will eventually end however Entitlements are the black hole that just keeps getting bigger and bigger with nothing to stop it.

That black hole will eventually end however Entitlements are the black hole that just keeps getting bigger and bigger with nothing to stop it.

Quoted for truthery.

But not everyone does jobs they don't like; some people do work, and do enjoy it.

Then do you think that if we said, "From now on, we pay everyone the same regardless of how and how much you work", everyone would stay in the jobs they have now?

Honestly, I'd say most people are pretty content with the work they have to do and don't mind doing it because of the rewards they get.

If you need to "reward" them to get them to do it, they clearly DO mind doing it.

because nobody does more than they have to to get the things they want.

Artificial necessity. Not necessary necessity.

We should abolish all entitlements. When we get rid of the 75-85% of the Federal budget that there's no constitutional authorization for, we can get rid of most taxes, and then people will have enough money to pay for their own goddamn retirements and medical needs.

I'd agree, but politically and economically in the short term it would be impossible to pull off. I would say that's going to be the necessary long-term solution to the problem, although we would also have to be careful to prevent increases in income inequality as a result.

I think you mean the debt will increase by 50 trillion. But if the deficit really is going to increase to 50 trillion per year, then I guess that's bye bye feds.

One big problem is that companies relied on increasing productivity alone rather than growing their workforce at the same time because it delivered more profits in the short term.

I mean, there's only so much you can squeeze out of a worker in a given day; we may be able to increase the efficiency and power of the tools we have, but there's still 24 hours in a day no matter what, and nobody's going to want to work for 12 or 15 hours a day no matter how much you pay them. You have to grow your workforce to increase productivity constantly; some improvements might only work on a given scale. That's a hard limit for us on Earth, and I highly doubt it will change any time in the foreseeable future.

I was more thinking of worker productivity per hour. The IT revolution in the two preceding decades did allow a complete shift in many industries. Think about it, personal computers, networking and such, massively alter the amount a worker could produce in dollar terms per hour. For example a single engineer with a PC in 1997 could replace a team of engineers waiting for mainframe time in 1967. (Similarly consider the impact of inventory tracking, public auditing, legal research, document production &c.)

It also allowed for workers to be more flexible. User friendly software eliminated many specialist positions (you are probably to young to remember that for a while there were actually people who specialized in word processing, go figure).

Two things have happened since then:

First, the IT revolution is seemingly now mature. There just doesn't seem to be room for the type of revolutionary improvements that have occurred in the previous twenty years, and the process will now be one of small incremental improvement in efficiency instead of wholesale revolutions. (I except of course that there may be some type of expert system just around the corner which will replace the knowledge worker entirely, but in that event it sort of goes to zero anyway).

Second. Now that computers have made it so easy to do so much that was once the province of large highly structured groups of specialists, these products just aren't worth as much anymore. What maybe only a few large well funded consulting firms could produce in the 1960s, can often be bettered by a keen college student in his dorm room these days. (Like I said, powerpoint can only take you so far).

So, we are back to the problem of the 1970s, stagnating worker productivity (per hour) coupled to increasing costs of employment. It's a bit of problem however companies choose to try and structure themselves domestically for growth in the future.

Well prolly get some type of stagflation.

I'd agree, but politically and economically in the short term it would be impossible to pull off.

And it would be stupid generally, for lots of reasons.

Well prolly get some type of stagflation.

Well, not until after the coming recession - brought to you by by the friendly bankers at Bear Stearns and Casey Serin - of course.

First, the IT revolution is seemingly now mature. There just doesn't seem to be room for the type of revolutionary improvements that have occurred in the previous twenty years, and the process will now be one of small incremental improvement in efficiency instead of wholesale revolutions. (I except of course that there may be some type of expert system just around the corner which will replace the knowledge worker entirely, but in that event it sort of goes to zero anyway).

Yes, much of the low-hanging fruit that was available in the 90's has already been improved upon, so later progress just isn't going to be as significant. Another thing is the fact that the kind of work we do with computers is getting more powerful and more complex, which means you can't really achieve the kind of productivity growth you could in the past; scaling problems and things like that just aren't open to those kinds of improvements.

So, we're able to do more, but because it is more complicated we can't really achieve the same kind of improvements.

So, we are back to the problem of the 1970s, stagnating worker productivity (per hour) coupled to increasing costs of employment. It's a bit of problem however companies choose to try and structure themselves domestically for growth in the future.

Yup. The good thing, at least, is that there are new technologies in development offering opportunities for further productivity growth; we're stuck in a lull point between major tech shifts, where the older methods are mature and are starting to slow and their replacements are still in their early phase of development.

So, maybe 5-10 years from now we'll be in better shape, but right now slowing productivity is going to be the norm, with the obvious knock-on effects on economic growth and inflation.

Well prolly get some type of stagflation.

I think it depends on a lot of things, but I think elevated inflation is a given going in to the next few years.

And it would be stupid generally, for lots of reasons.

Well, it depends on whether or not we need them. The thing with the kinds of technological changes happening in the near future is that they have the possibility of either mitigating or worsening the economic situation that gives rise to these entitlement programs in the first place. Personally, I feel that we will need to expand the scope of our entitlements to combat this inequality, and reform them at the same time to deal with new technological realities.

We could see either a continuation of present conditions, an increase, or a decrease in income inequality in the next two decades, and that would definitely determine the best course of action in regard to these programs.

Well, not until after the coming recession - brought to you by by the friendly bankers at Bear Stearns and Casey Serin - of course.

Barring a major energy shock, I don't think we'd get a true recession first. Rather, we'd decline in to stagflation, producing recession-like effects on employment but over several years rather than a few quarters like a regular recession.

It would be like 2001, but with significantly more inflation, slightly stronger GDP growth, and a lot longer duration.

We could see either a continuation of present conditions, an increase, or a decrease in income inequality in the next two decades, and that would definitely determine the best course of action in regard to these programs.

It really doesn't matter. Either way, the entitlements need to stay.

They are not merely redistributive. If they were, you would be right - their merit would depend on whether or not there is actually a need for redistribution. But they have a second purpose - social SECURITY.

They ensure that even if something happens - if a person's retirement plan doesn't work out, if the children he or she was going to be economically dependent upon lose their jobs, if a severe, unexpected medical problem deprives him or her of needed funds, and so on - they still have basic economic security.

Just because you identify the problem does not mean that your solution is the correct one.

If entitlements are abolished, taxes can be lowered, and people will be able to save up more of their own money.

There's also this thing called private charity...

If entitlements are abolished, taxes can be lowered, and people will be able to save up more of their own money.

Yes, and they will also have to spend it on what entitlements currently entitle them to.

The result is, semmingly, two equivalent options - but, of course, it doesn't actually work that way. Because some of those people will waste their own money, and some of them will get bad luck - and those people will be in trouble.

There's also this thing called private charity...

Social security.

Not "social dependence on the whims of the wealthy."

It really doesn't matter. Either way, the entitlements need to stay.

They are not merely redistributive. If they were, you would be right - their merit would depend on whether or not there is actually a need for redistribution. But they have a second purpose - social SECURITY.

They ensure that even if something happens - if a person's retirement plan doesn't work out, if the children he or she was going to be economically dependent upon lose their jobs, if a severe, unexpected medical problem deprives him or her of needed funds, and so on - they still have basic economic security.

Oh, I agree. That's why, in my most likely predictions of future trends, tend towards reform rather than dismantling them. Barring everyone being capable of creating their own private retirement plan, it would be impossible to dismantle social security without creating more inequality, more suffering, and a widening of the technological divide which would mean people being unfairly denied access to the kinds of opportunities the wealthy would be able to take advantage of.

Far more than today, equal access to technology will be a major metric of equality in our society. And, without these kinds of safety nets, people will likely be denied the opportunity to have access to those technologies, many of which will be more revolutionary than anything we've developed yet. We've got a moral responsibility to do this.

Barring a major energy shock, I don't think we'd get a true recession first. Rather, we'd decline in to stagflation, producing recession-like effects on employment but over several years rather than a few quarters like a regular recession.

It would be like 2001, but with significantly more inflation, slightly stronger GDP growth, and a lot longer duration.

I think it will be worse, for several reasons. But mostly because it is inevitable that food and energy prices are going to continue to rise, which will dampen discretionary consumer spending and hamper the feds ability to act.

Also, consider the negative savings rate, the removal of MEW with from the marketplace, and the possibility that there is a bond bubble. It doesn't look that pretty.

It's also worth considering that the collapse of the Nasdaq only effected about 20% of households, while collapsing real estate prices effect about 70%.

I would also reject the idea of full employment preventing foreclosures from reaching enormous levels. That might have been true in the past, where employment typically led housing, but the recent lax underwriting standards mean that alt-a is potentially as much of a time bomb as subprime.

Yes, and they will also have to spend it on what entitlements currently entitle them to.

The result is, semmingly, two equivalent options

The difference being that under the welfare-state model, 3/4 of the tax revenue goes toward feeding a massive, corrupt bureocracy, whereas the Libertarian model operates at 100% efficiency.

but, of course, it doesn't actually work that way. Because some of those people will waste their own money, and some of them will get bad luck - and those people will be in trouble.

So? Whether I provide financial assistance to them should be MY choice, not the Government's.

Social security.

Not "social dependence on the whims of the wealthy."

Since when have only the wealthy given to charity?

The difference being that under the welfare-state model, 3/4 of the tax revenue goes toward feeding a massive, corrupt bureocracy, whereas the Libertarian model operates at 100% efficiency.

So all of those private facilities (if we go by capitalist libertarianism) would not need a bureaucracy (which would be replicated many times to do the same thing) to run each of those companies?

Also, what kind of efficiency is that? Pareto efficiency? Kaldor-Hicks efficiency? Social Welfare/distribution efficiency?

So, try explaining how 75% of the revenue collected from a person goes into running the system rather than most of it going to where it is needed and the reason for thewastage is usually stupidity on the government's side.

All you end up with is many more companies that are just as corrupt as the previous state one.

So? Whether I provide financial assistance to them should be MY choice, not the Government's.

Why?

Since when have only the wealthy given to charity?

Yet, given the trend for a greater inequality that dismantling your SS would produce it would mean that it would be primarily the wealthy who would have to take up the slack of donating to charity. That cahirty would also haveto belarger as ther would be more people worse off.

work is unnecessary for subsistence. it ain't even necessary for luxury. it's just a bad idea all around.

Until we can create everything we need out of thin air, we still need work. Welfare bums just leech off other people's work.

So all of those private facilities (if we go by capitalist libertarianism) would not need a bureaucracy (which would be replicated many times to do the same thing) to run each of those companies?

Correct.

Also, what kind of efficiency is that? Pareto efficiency? Kaldor-Hicks efficiency? Social Welfare/distribution efficiency?

It's the kind of efficiency where, to receive a thousand dollars' worth of healthcare, I only have to pay a thousand dollars, whereas getting the same treatment from the government would require 3 to 5 times as much tax money.

So, try explaining how 75% of the revenue collected from a person goes into running the system rather than most of it going to where it is needed and the reason for thewastage is usually stupidity on the government's side.

Dude, don't you have the slightest fucking clue how government works?

Story:

The Night Watchman

Once upon a time the government had a vast scrap yard in the middle of a desert. Congress said that someone may steal from it at night; so they created a night watchman position and hired a person for the job.

Then Congress said, "How does the night watchman do his job without instruction?" So they created a planning position and hired two people, one person to write the instructions, and one person to do time studies.

Then Congress said, “How will we know that the night watchman is doing the tasks correctly?” So they created a Quality Control position and hired two people, one to do the studies and one to write the reports.

Then Congress asked, “How are these people going to get paid?” So they created the following positions, a time keeper and a payroll officer, and hired two people.

Then Congress asked, “Who will be accountable for all of these people?” So they created an administrative position and hired three people, an Admin. Officer, an Assistant Admin. Officer, and a Legal Secretary.

Then Congress said, “We have had this command in operation for one year and we are $18,000 over budget, we must cut back our overall cost.”

So they fired the night watchman.

It's funny because it's disturbingly close to the truth. A typical private-school tuition is 3-4 thousand dollars per year, whereas public schools cost 10-14 thousand tax dollars per student per year. Hmmmmm....

All you end up with is many more companies that are just as corrupt as the previous state one.

Just as corrupt, yes, but far more cost-efficient :)

Why?

Because the government doesn't own me.

Yet, given the trend for a greater inequality that dismantling your SS would produce it would mean that it would be primarily the wealthy who would have to take up the slack of donating to charity. That cahirty would also haveto belarger as ther would be more people worse off.

No, there would NOT be more people worse off, because EVERYONE would be KEEPING MORE OF THE MONEY THAT THEY EARN.

And if this benefits the rich more than it benefits the poor... so what? As long as everyone benefits, I don't see the problem.

Besides, we can always just raise the minimum wage if poverty becomes too problematic.

I would like for Republicans to seriously consider the fact that both Reagan and Bush sent government spending through the ceiling next time before they advocate they are the party for minimal government and fiscal conservatism. Not that they'd care, of course. If it's them spending the cash it's justified... so will spending 50 trillion then, whichever party is responsible for it.

I would like for Republicans to seriously consider the fact that both Reagan and Bush sent government spending through the ceiling

In Reagan's case, it was a huge cut in taxes, not a huge increase in spending.

But yeah, the Republicans do have a funny habit of talking about fiscal conservatism and then suddenly getting Alzheimer's.

In Reagan's case, it was a huge cut in taxes, not a huge increase in spending.
The problem was that this was not accommodated by a decrease in spending. Reagan is overrated in my opinion.

Vegeta, what does the scouter say about the US federal deficit increase?

The libertarian / capitalist ideologues on here have got a valid point - but be careful you don't take it much too far.

Yes, Government is corrupt - but as has been said, private enterprise is usually just as corrupt, if not more so. Yes, Government is often inefficient - but that's the price you must pay for a system which is accountable to the public and will stand up to legal scrutiny.
I agree up to a point - that there probably are a few too many "non-jobs" in government, where people are paid for doing nothing very useful. Identifying where those jobs are though is pretty difficult (but not impossible).

G-Max - if you can really find a private school anywhere in the USA that will educate a child for $4000 per year, please give a link. If it really is that cheap, then I'm sure there are plenty of people out there who would jump at the chance to give their kids private schooling for that kind of money.
However, I think you've probably mis-read the costing - $4000 per term might be more realistic ($12000 per year). Despite all the shortcomings of the state education system, I find it incredibly hard to believe that it costs three times as much as the private sector. Private schooling is usually more expensive than state schooling, not less.

The free market is a wonderful idea, and has been very successfully applied to many industrial sectors. I respect the ideology, but that doesn't mean I'm blind to it's limitations. There are some sectors where privatisation / free markets are just not appropriate. In particular, I'm talking about things we regard as being "public services" - which includes social security, medicare / medicaid, education, and the basic utilities (water, gas, electricity). These are not supposed to be run for a profit; therefore it makes no sense to put private corporations in charge of them.

A case in point: the Bush Administration did try to propose a bill to transfer medicare insurance to private health insurance companies - effectively a privatisation of medicare. This bill was thrown out after immense pressure from insurance industry lobby groups - probably the first time any private companies have lobbied against privatisation. Why? Because, believe it or not, medicare is more efficiently run in government hands.

Another case in point: The Bush plan for Social Security (to allow people to invest their social security payments in private retirement accounts), if it goes ahead, will bankrupt the system. Why? Because social security runs on a pay-as-you-go basis - payments collected today are used the same day to pay benefits to retirees. Removing that money from the system means that benefits can no longer be paid to retirees. The system won't implode overnight because social security does have a trust fund to draw on - but that won't last for long if there's no money coming in. Besides, it may not last at all - the Bush Administration has the attitude that the social security trust fund isn't "real", because it is invested in US government bonds. I'll leave you to consider the logic of that one.

In short, there's nothing wrong with government that a little efficiency won't cure - but we can't even have a sensible debate about it due to hardcore republicans / libertarian capitalists / free market fundamentalists drowning the issue by repeatedly trashing the very idea of government.

G-Max - if you can really find a private school anywhere in the USA that will educate a child for $4000 per year, please give a link.

Secondhand information, sadly. I overheard some guy say it when he was talking to one of my friends. Specifically, he researched the Catholic school system in the state of New York. Or at least claimed to.

The free market is a wonderful idea, and has been very successfully applied to many industrial sectors. I respect the ideology, but that doesn't mean I'm blind to it's limitations. There are some sectors where privatisation / free markets are just not appropriate. In particular, I'm talking about things we regard as being "public services" - which includes social security, medicare / medicaid, education, and the basic utilities (water, gas, electricity). These are not supposed to be run for a profit; therefore it makes no sense to put private corporations in charge of them.

I'll agree with you on the utilities point simply for the fact that the infrastructure crisscrosses so much public land, and real competition between utility providers is pretty much impossible because there's one company that owns all of the networking and just sub-leases to its "competition". For education and medicine, though, the best services can only come from competition and consumer choice, not a government monopoly.

The next time you have to mail a package, go to a store like Mailboxes Etc. and ask them for the prices and shipping times using UPS, FedEx, and the US Postal Service. You'll find that the government-run service is vastly inferior to the other two.

A case in point: the Bush Administration did try to propose a bill to transfer medicare insurance to private health insurance companies - effectively a privatisation of medicare. This bill was thrown out after immense pressure from insurance industry lobby groups - probably the first time any private companies have lobbied against privatisation. Why? Because, believe it or not, medicare is more efficiently run in government hands.

HA HA HA HA HA HA... Medicare buys band-aids for a hundred dollars each. There's nothing remotely efficient about it.

I would like for Republicans to seriously consider the fact that both Reagan and Bush sent government spending through the ceiling next time before they advocate they are the party for minimal government and fiscal conservatism. Not that they'd care, of course. If it's them spending the cash it's justified... so will spending 50 trillion then, whichever party is responsible for it.

A large part of the problem is politicians promise things and then don't properly fund them, leaving bag holders years down the line. Like the S&L bailout. Sure, the government could (and maybe should have) said fuck it, we lied about insuring the depositors, but if they had, the lawsuits would probably still be going on.

That, and the fact that politicians usually only get elected because they promise 'new' things. New things of course cost money, but it is impossible to get traction with the news media without promising them.

Nevermind though, stealth inflation will save the day!!

Another case in point: The Bush plan for Social Security (to allow people to invest their social security payments in private retirement accounts), if it goes ahead, will bankrupt the system. Why? Because social security runs on a pay-as-you-go basis - payments collected today are used the same day to pay benefits to retirees. Removing that money from the system means that benefits can no longer be paid to retirees. The system won't implode overnight because social security does have a trust fund to draw on - but that won't last for long if there's no money coming in. Besides, it may not last at all - the Bush Administration has the attitude that the social security trust fund isn't "real", because it is invested in US government bonds. I'll leave you to consider the logic of that one.

Pay as you go is polite way of saying ponzi scheme. If it is illegal for me to run one, why the fuck should the government get away with it?

Pay as you go is polite way of saying ponzi scheme. If it is illegal for me to run one, why the fuck should the government get away with it?

Because the voters are too stupid to know the difference.

If a politician votes to vote the treasury to the voters as a benefit of voting for him, the "government" has to come up with a ponzi scheme to make everyone happy.

Pay as you go is polite way of saying ponzi scheme. If it is illegal for me to run one, why the fuck should the government get away with it?

woot! I nearly cried when I read this, because I didn't realise that there were people on NS who agreed with me.

I remember when Reagan ran against Carter saying that the national debt had reached 1 trillion. Then the very god of "conservatives" doubled that, then his apostle Bush 1 doubled it again. Then Bush 2 pulled the cork out of the champaign bottle. I wish some "conservative" would explain what the word "conservative" means today.

In principle, yes, pay-as-you-go is the same as a Ponzi Scheme. But there is an important difference - the Social Security program is not a profit-making enterprise, it is not a business, it is a welfare state program run by the government. A Ponzi Scheme is a deliberate con which will eventually collapse due to failure of investor confidence. Social security is not a con - it is not a Ponzi Scheme - the only people who think it is are those who misunderstand how the system works.

When Social Security first started, where do you think they found the money to start paying benefits to retirees straight away? There was no trust fund back then. Nobody had "invested" in the system. In fact, to consider your social security payments as an "investment" is just plain wrong, because that's not how the system works.
No, they upped the payroll tax a few percent, and immediately started using that revenue to pay benefits to retirees. The system hasn't changed much since then - like it or not, it's not your money that you get back, it's the money that subsequent workers pay in.

So why is there a trust fund? Because, believe it or not, the impending crisis where the baby-boomer generation retires, leaving a much smaller proportion of workers to retirees, has been foreseen. The payroll tax was increased again by Reagan in the early 1980's, leading to a social security surplus which was used to accummulate reserves - enough, hopefully to put off the financial day of reckoning or even eliminate the problem altogether. The renewed problem is due to the Bush Administration raiding the cookie jar for funds in order to try and hide some of the cavernous fiscal deficit it has created.

G-Max - I do agree with your point about postal services. That was part of my point as well, really. Postal services are one sector where privatisation has made an improvement. But this doesn't mean that everything is better when done by the private sector.

The state education sector is nowhere near as good as the private sector - but that doesn't mean it can't be. Consumer choice is what drives market forces - but for people who can't afford private education, choice is irrelevant because they have none.
The state education sector could easily compete with the private sector, if it was properly funded, and if it didn't have a government hell-bent on improving test scores rather than investing in proper resources and teaching.

About medicare, perhaps I was being too subtle. I didn't say it was efficiently run - I simply said that it is more efficient in government hands than it would be in the private sector. I was making a comparison, not an absolute statement.
Private insurance companies don't want to take on medicare recipients because they would lose money hand-over-fist. Therefore medicare needs heavy subsidies. Even if the private sector did run it (with subsidies from the government), where do you think the money would go? Some of it would be sliced off to make "profits" - leaving behind an inferior service.

It's probably true to say that the government doesn't get the best price it can for medical supplies, but whose fault is that? Probably comes down to lobbying efforts by the pharmaceutical industries, who really don't appreciate the government trying to bargain for lower prices on their products.

Again, with healthcare, having choice is a fine thing, but if you're too poor to afford health insurance it becomes irrelevant. You might argue that not many people are that poor - but think again. At any one time, 40 million Americans are without health insurance, despite American healthcare being (at it's best) the best in the world.

Also consider that in countries with nationalised healthcare (Canada, the UK), the annual cost per person is much lower. In the USA, healthcare spending averages between $3000 and $4000 per person. In Canada and the UK, it is below $2000 per person. You could say that the standard of care is lower in the UK or Canada, and to a certain extent, you might be right. But the main saving is because there is far less spent on administrative costs - all healthcare is under centralised control. It's also because national healthcare systems can act as massive bulk-buyers of drugs and medical supplies, lowering the consumables costs quite considerably. There's no reason why Medicare in the USA can't do this - it just needs to tell the pharmaceutical industry lobbyists to get lost.

In principle, yes, pay-as-you-go is the same as a Ponzi Scheme. But there is an important difference - the Social Security program is not a profit-making enterprise, it is not a business, it is a welfare state program run by the government. A Ponzi Scheme is a deliberate con which will eventually collapse due to failure of investor confidence. Social security is not a con - it is not a Ponzi Scheme - the only people who think it is are those who misunderstand how the system works.

Of course it is a con. That's why the government borrows against it to fund other idiotic projects. The whole thing stinks.

And it's a ponzi scheme in the fact that the first 'investors' made out like bandits, while the people who are paying into it now, for the most part realize they are going to get FA, despite having paid a premium over people earlier in the line.

Further, there has been failure of investor confidence, because everyone who can figure out a way of not paying in to the scam usually does so. The only reason why it is still limping along is because of the al capone tactics the government uses to compel people to pay. If it were optional, the thing would have gone belly up years ago.

Provide for the general welfare of the elderly? Fine, I have no problem with that. But it should be done so out of the general revenue fund, and benefits should be needs based. This ridiculous farce of pretending that social security is somehow equivalent to an actual retirement plan or pension scheme should stop.

There's no misunderstanding on my part.

It's the kind of efficiency where, to receive a thousand dollars' worth of healthcare, I only have to pay a thousand dollars, whereas getting the same treatment from the government would require 3 to 5 times as much tax money.

Considering that the U.K's cost of healthcare being very low (lower per capita than the U.S') due to it being a comprehensive public package (such as prevention of serious diseases as well as trying to cure them) due to being more unified, even after all of the budget cuts and politisation of the system shows that public good can work well.

Dude, don't you have the slightest fucking clue how government works?

Yep. You are getting state run apparatus confused with an element of the state. I'd agree with you that governments in your country (and mine) work too much on the short term. This is allowed by the populace by voter apathy.

Story:

The Night Watchman
*cut because of length*

It's funny because it's disturbingly close to the truth. A typical private-school tuition is 3-4 thousand dollars per year, whereas public schools cost 10-14 thousand tax dollars per student per year. Hmmmmm....

Apart from that being simply overheard I think (as I found it rather difficult to find out spending comparisons so help with that would be helpful) that usually does not happen. Given that the scholarships would either be funded by expensive tuition for other students or due to generous donations most places would still be more expensive than public.

I am not sure about the U.S.A but Australian private schools tend to get a rather large pay packet from the government.

Just as corrupt, yes, but far more cost-efficient :)

If both are equally corrupt then it would stand to reason that they would lose the same amount of money. Add that to the increase of beureaucracy due to duplicating various groups and you get a situation where it is about the same if not worse.

Because the government doesn't own me.

It does to some extent.

No, there would NOT be more people worse off, because EVERYONE would be KEEPING MORE OF THE MONEY THAT THEY EARN.

Yet the product would most likely be more expensive when deployed in the 'free' market. Look at California's derugulation of electricity and what happened.

And if this benefits the rich more than it benefits the poor... so what? As long as everyone benefits, I don't see the problem.

Usually relative national inequality is just as important as international relative inequality.

Besides, we can always just raise the minimum wage if poverty becomes too problematic.

Wage caps would be nice as well but most of the people in charge in private corporations would complain against that as much as they would against minimum wage (as that is the state forcing them to cut their profits in order to give to the working class).

Secondhand information, sadly. I overheard some guy say it when he was talking to one of my friends. Specifically, he researched the Catholic school system in the state of New York. Or at least claimed to.

Apart from the state schools being designed to be cheap some schools get 'benefactors' so that they can provide some element of low prices to intelligent people. Partial meritocracy at best.

I'll agree with you on the utilities point simply for the fact that the infrastructure crisscrosses so much public land, and real competition between utility providers is pretty much impossible because there's one company that owns all of the networking and just sub-leases to its "competition". For education and medicine, though, the best services can only come from competition and consumer choice, not a government monopoly.

Well, my country sold off a state telecom coroporation with it's networks, making the need for regulation for others to come in and not we wiped out by a massive monopoly.

The next time you have to mail a package, go to a store like Mailboxes Etc. and ask them for the prices and shipping times using UPS, FedEx, and the US Postal Service. You'll find that the government-run service is vastly inferior to the other two.

Probably due to a) your government starving the state of funds needed to keep up with the times (good chance) or b) your government skewering all the regulations in favour of the private groups (very good chance).

HA HA HA HA HA HA... Medicare buys band-aids for a hundred dollars each. There's nothing remotely efficient about it.

Source? The only time I could believe that is if they were military bandaids (leaving about 99.99 USD for more shady payments).

Part of the problem of govenments in the U.S and mine (as well as across the world) is that they always focus on the short term and tend to try to make the state apparatus see the world more like them and do everything on the short term (like the wrecking of the U.K's national health services).

There was a european country that has all political parties having their own 4 year (or was it 5?), 20 year and 50 year plans to try to make them think about the long term and not just go on a spending splurge on election year.

Until we can create everything we need out of thin air, we still need work. Welfare bums just leech off other people's work.

Hence the need to promote the person going to work or being trained as a tradesperson. Also a reason to have better ways of creating public works.

Even when we get a massive amount of supply/material (as utopian communism/anarchism usually requires) work would still exist either as a hobby or as a form of social control (a single unified experience among everyone).

The free market is a wonderful idea, and has been very successfully applied to many industrial sectors. I respect the ideology, but that doesn't mean I'm blind to it's limitations. There are some sectors where privatisation / free markets are just not appropriate. In particular, I'm talking about things we regard as being "public services" - which includes social security, medicare / medicaid, education, and the basic utilities (water, gas, electricity). These are not supposed to be run for a profit; therefore it makes no sense to put private corporations in charge of them.

Markets are never free, yet I still support the market principle to some extent as a Democratic/Market/State Socialist (wow, socialist, who would have guessed that :rolleyes: ). Markets work well better domestically than internationally.

Look at Argentina's 'reforms' when it came to privatising water, they tried to get it to run a profit (usually but making the state pay more for less) and ended up creating a huge debacle.

I'm curious, would you count public transport as a not-for-profit sector?

Another case in point: The Bush plan for Social Security (to allow people to invest their social security payments in private retirement accounts), if it goes ahead, will bankrupt the system. Why? Because social security runs on a pay-as-you-go basis - payments collected today are used the same day to pay benefits to retirees. Removing that money from the system means that benefits can no longer be paid to retirees. The system won't implode overnight because social security does have a trust fund to draw on - but that won't last for long if there's no money coming in. Besides, it may not last at all - the Bush Administration has the attitude that the social security trust fund isn't "real", because it is invested in US government bonds. I'll leave you to consider the logic of that one.

We have superannuation (certain percentage of our pay goes into fund which usually gains interest and the state pays up to 150% of any personal contribution made on top of the mandatory payment if the person is on a low income). That replaced the earlier version of. It is also usually not given to the government and is instead used with private equity usually in the stock market (which I don't support, since some of them tend to go silly on speculation adventures and end up losing a lot of money).

However the results still show it is a viable approach, with either a bit under or a bit over (give or take 50 billion) a trillion dollars of money stored away when retirement comes. This would have been two trillion if the forced deposit rate was increased by 6% (from 9%-15%).

In short, there's nothing wrong with government that a little efficiency won't cure - but we can't even have a sensible debate about it due to hardcore republicans / libertarian capitalists / free market fundamentalists drowning the issue by repeatedly trashing the very idea of government.

Too true, too true. The main pains is the lack of vision in the other parts of the state, allowing services to be run down until election year, when the faults of it is blamed on the previous governmen and massive amounts of money are put in (That is horribly inefficient and allow massive overallocation/underallocation). Hooray for the democratic process (well, when politicians try to rort it in such a manner)!

*Snipped to the point* The renewed problem is due to the Bush Administration raiding the cookie jar for funds in order to try and hide some of the cavernous fiscal deficit it has created.

A bit like how governments over the past 11 years not paying public servents (to make it look like they weren't spending too much) then realising the problem and trying to shore up a fund *cough*my country*cough*. Incidentally enough this has actually led to the amount needed rising considerably.

G-Max - I do agree with your point about postal services. That was part of my point as well, really. Postal services are one sector where privatisation has made an improvement. But this doesn't mean that everything is better when done by the private sector.

The state education sector is nowhere near as good as the private sector - but that doesn't mean it can't be. Consumer choice is what drives market forces - but for people who can't afford private education, choice is irrelevant because they have none.
The state education sector could easily compete with the private sector, if it was properly funded, and if it didn't have a government hell-bent on improving test scores rather than investing in proper resources and teaching.

That seems correct to me. Also leads to a skills shortage over time (which is solved by planning education, which could be inferred to a form of partial planned economy).

About medicare, perhaps I was being too subtle. I didn't say it was efficiently run - I simply said that it is more efficient in government hands than it would be in the private sector. I was making a comparison, not an absolute statement.
Private insurance companies don't want to take on medicare recipients because they would lose money hand-over-fist. Therefore medicare needs heavy subsidies. Even if the private sector did run it (with subsidies from the government), where do you think the money would go? Some of it would be sliced off to make "profits" - leaving behind an inferior service.

Everything is relative, on a quantum level :p .

Yep, 'economic efficiency' (if we go by x-efficiency of pareto efficiency) is not everything.

It's probably true to say that the government doesn't get the best price it can for medical supplies, but whose fault is that? Probably comes down to lobbying efforts by the pharmaceutical industries, who really don't appreciate the government trying to bargain for lower prices on their products.

Yep, lobbying is unfortunately not really a consultency approach (which would usually allow less corruption when compared to 'donations'). That is the ultimate power of the state to reduce prices by either buying at a much larger bulk or by being the ultimate political, regulatory and wealthy 'entity'.

Again, with healthcare, having choice is a fine thing, but if you're too poor to afford health insurance it becomes irrelevant. You might argue that not many people are that poor - but think again. At any one time, 40 million Americans are without health insurance, despite American healthcare being (at it's best) the best in the world.

Hence relative inequality. Don't forget a large proportion of the ones on the insurance would not be on comprehensive insurance, meaning that a particularily rare event may not be covered.

Also consider that in countries with nationalised healthcare (Canada, the UK), the annual cost per person is much lower. In the USA, healthcare spending averages between $3000 and $4000 per person. In Canada and the UK, it is below $2000 per person. You could say that the standard of care is lower in the UK or Canada, and to a certain extent, you might be right. But the main saving is because there is far less spent on administrative costs - all healthcare is under centralised control. It's also because national healthcare systems can act as massive bulk-buyers of drugs and medical supplies, lowering the consumables costs quite considerably. There's no reason why Medicare in the USA can't do this - it just needs to tell the pharmaceutical industry lobbyists to get lost.

The free trade agreement will probably allow the U.S to use the IMF to force Australia to get rid of its PBS (pharmaceuticals benefits scheme, which covers crucial drugs).

Also our health service is facing the same problems as the U.K one, where the government believes there is magical ability of the state hospitals to be able to easily cover any amount of money that is pulled out of it.

So, in short: If we don't update our entitlements to reflect the future, we're going to suffer quite badly economically and financially for a long time. A system designed for the health, economics, and longevity of the 1930's isn't going to work in the 2020's and beyond.

Fix the system now. Fix the system now. Damn both parties for not doing so.

Fix the system now. Fix the system now. Damn both parties for not doing so.

It wouldn't be partisan politics without exceedingly stupid (or smart if you get in majority) partisanship would it?

It wouldn't be partisan politics without exceedingly stupid (or smart if you get in majority) partisanship would it?

In other words, if it ain't broke don't fix it policy even though it needs updating fast.

In other words, if it ain't broke don't fix it policy even though it needs updating fast.

Yeah well.... *shouts and points at Corneliu* look! A comm... I mean terrorist! Why do you want to destroy freedom?

Yeah well.... *shouts and points at Corneliu* look! A comm... I mean terrorist! Why do you want to destroy freedom?

I'm trying to look out for my country. Having things runned into the ground is not helping the country. Fixing things that need to be done now, will help the country in the future.

I'm trying to look out for my country. Having things runned into the ground is not helping the country. Fixing things that need to be done now, will help the country in the future.

Now I know that you could never be a proper modern pollie; your pragmatic, rational and sane.

It is also a problem with many forms of socialism and anarchism and libertarianism; the lack of realism and pragmatic approaches to achieve your goals.