Hate to puncture your loony libertarian balloon, but interstates are safer than other roads. Cite
If the roads enabled white flight, did they also enable the flight of whites back to the city, which is also causing problems in places like San Francisco?
Speed limits on rural roads are as high as the interstates. You think that cars would be any slower if there weren’t interstates?
Ever drive through Wyoming on I80? Think that mass transit would be profitable there? Or would you support subsidies from the big bad government for it? Ripped from the poor innocent arms of billionaires, no doubt.
The effects of quite a number of social programmes are often going to be diffuse, indirect and not easy to measure, since they depend on a priori value judgements about what actually constitutes success in the first place, and on opportunity costs and losses if they hadn’t existed. There isn’t a linear and easily quantifiable input-output relationship: social “engineering” is anything but. For example, in the UK programmes to support early years education, new parents and so on, may not show much in the way of quantifiable results till years later, but are indeed generally thought to have improved life chances for children from the worst off backgrounds, reduced the number of problem cases for health services and criminal justice systems.
And anyone here would say the NHS is the prime example of a successful state programme: it’s one of the things that define our sense of ourselves as a community, so embedded is it in our lives. But what would be the gains and losses if we had some other system? Who can be sure?
We don’t need to know what the world looks like without social security. We simply have to look at the world before social security. If you think social security can be improved upon, well make your case.
Absolutely. It’s a wonder that so many policies from the right sound like they’ve been dreamed up in late-night ideological dorm-room philosophizing instead of real-life outcomes. Maybe they seem to make no sense because they don’t, and have traction only because they’re being supported by the plutocrats whose interests they serve.
With regard to F-P’s quoted points:
No, you only need consider likely or plausible alternatives, not theoretically “possible” but implausible ones. One highly implausible one that keeps being advanced is the idea that individuals, left on their own, will wisely save for retirement. The reality is that most have not done so and never will, at least not to any extent even remotely adequate, and this remains true even when they’re offered amazing tax incentives. The other myth is that the individual will get a better ROI than the government. See below.
The salient fact here is that well managed institutional pension programs, as well as very wealthy individuals, have far more investment options with far more lucrative returns than the ordinary small investor – indeed, this is one of the major themes explored in Thomas Piketty’s Capital in the Twenty-First Century; it’s a phenomenon that has always been true, but has become a major economic differentiator in recent decades.
That SS does not achieve these returns is not due to governmental incompetence but to a law that requires them to only invest in special-issue Treasury bonds, so that the government is borrowing from itself and putting the taxpayer on the hook to support SS. There is no reason that SS could not operate in the same manner as a large private pension fund, investing in global markets, sustaining a managed level of higher risk but much higher average returns at no cost to the taxpayer. Why do conservatives always clamoring about the miracle of free markets never put forward this option, and instead seek to abolish SS in favor of returning the money to the private individual who will spend it on beer and investments in lotteries and race-horse bets?
You were fine up to here. Since Social Security has to be absolutely secure for its beneficiaries, the most secure investment with interest was chosen, which is government bonds. Other investments might have higher returns, but at higher risk. People with enough money so that SS is not the only source of income can invest in these options.
Conservatives do talk about moving SS money to the markets - not just eliminating the program. That was Bush’s proposal. Besides the level of risk, the amount of money invested in Social Security is so large as to distort any markets, assuming that investment choices are limited to some “safe” options.
Think of the opportunity for graft, since convincing the decision makers that your fund or your stock should be chosen will guarantee a big rise in price.
Some countries do offer funds, but they are so much smaller that they don’t distort the market as much.
During the debate on the Bush plan, lots of people noted that the market never went down over a 20 year period. Until it did a few years later.
Absolutely correct - and reasonably wealthy people can take on more risk since it is easier to diversify with a lot of money than with very little. I’m retired, but can afford to defer taking SS until I’m 70. I can also take a $100K hit to my investments without really feeling it, not true for the person for whom SS is vital to live on.
Yes, the “market distortion” thing had occurred to me, which is why I cited investments in global markets, not just domestic ones; also, only some portion of total assets need be invested this way. As well, the investments need not be conventional trading markets, they could be private ventures of many kinds. As a retired person myself, I continue to be impressed by these guys who are the source of one of my major monthly deposits.
I just don’t buy the “higher risk” argument, for the simple reason that private pension funds and even public pension funds do just fine with a market-based approach, which is invariably well diversified both globally and in respect to investment type, with a broad array of private bond holdings as well as public stock and private venture holdings.
But that would apply to every private and public institutional investor, yet it doesn’t seem to be a systemic problem. It’s probably a good idea not to have graft-taking crooks in your major pension management organizations.
Invest “our” money in foreign investments not covered by the SEC? shudder. Individual investors can make their own decisions, but that is even worse.
State pension funds - as well as industrial ones - invest in the broader market. Pensions are in terrible shape - private as well as public.
Maybe in general, but I’m sure you are aware of the many losses in these things? Even pension funds got screwed. I don’t know how much money you theoretically lost in 2008, but I lost a bundle - or I would have if I needed to get money out, or if I panicked.
Even Calpers is tiny compared to Social Security. How do you plan on keeping graft taking crooks out of the system? Or people who take excessive risks? Or help to inflate bubbles? Put too many restrictions on them and they will complain about how you are preventing them from getting the return their public clients deserve.
And are you going to keep investors from changing investment directions? How to keep them from dumping equities at lows and going to T-bills? (Happened last time.)
All of which is fine - unless the investment is the investment of last resort. Let’s keep the money we retired need to survive in worst case safe, and we can gamble all we want on anything beyond that.
Pensions were and are underfunded. That doesn’t mean they were invested poorly. Shudder all you want, foreign stocks are half of the global stock market and don’t travel in step with ours. That’s not “worse”.
SS doesn’t need to get money out and can be legislated to not panic.
With laws. There are any number of options, including requiring indexes, fixed baskets, proportional allocation based on capitalization, demographics-based allocation, etc.
That you’re using the word “gamble” is telling.
Of course all of this is moot given that the trust fund isn’t exactly a long-term investment vehicle anyway, having what, 3 years of payments built up? And dropping soon, if we haven’t hit that point already. That cut from my paycheck isn’t going to sit around for 40 years and shouldn’t be invested like money that won’t be seen in 40 years.
I’m talking about massive influxes of money. Clearly international investment is an important part of a diversified portfolio. Let’s just hope they don’t invest in China.
Actually it does need to get the money out, now that boomers are going on SS. But unless you don’t give people any control over what they invest in, they will be able to sell low and move the money to other funds still high.
Indexes still go down. Remember when AT&T Bonds were listed right after T-bills as one of the safest investments around? What happened to them?
And a massive drop in the markets leads to high unemployment, early retirement, and people taking SS before they had planned to. In other words, selling low.
You think investing isn’t a gamble? Now that’s really telling.
However the money is invested, we do need to reform the system, maybe by raising the cap. I’m only scared about politicians who had the system ideologically.
If only we had liberal politicians who can face the facts and do something - liberals like Ronald Reagan, for instance.