Social Security "Solvency" and Irrational Partisan Rhetoric

Context -- The Problem: Our Unsustainable OVERALL Long-term Fiscal Imbalance

There is nearly universal agreement among economists and budget policy experts that under current spending policies, and at anything anywhere close to our current level of taxation, we are on an unsustainable fiscal course, with deficits (and, debt-to-GDP ratio) growing out of control and eventually devastating our economy. Long-term projections are obviously debatable, but, as CBO put it in the CBO Long-Term Budget Outlook, December 2007:

Significant uncertainty surrounds long-term fiscal projections, but under any plausible scenario, the federal budget is on an unsustainable path—that is, federal debt will grow much faster than the economy over the long run. In the absence of significant changes in policy, rising costs for health care and the aging of the U.S. population will cause federal spending to grow rapidly. If federal revenues as a share of gross domestic product (GDP) remain at their current level, that rise in spending will eventually cause future budget deficits to become unsustainable. To prevent deficits from growing to levels that could impose substantial costs on the economy, revenues must rise as a share of GDP, or projected spending must fall—or some combination of the two outcomes must be achieved. http://www.cbo.gov/ftpdocs/88xx/doc8877/Chapter1.4.1.shtml#1045449

Potential Solutions...

There are obviously many ways we can reduce this fiscal imbalance to sustainable levels, or beyond merely sustainable to healthy levels, including raising taxes (and thus projected revenues), reducing projected spending anywhere in the budget to lower projected overall spending, or (most likely to occur) a combination of the two. And of course, the dynamic effects on GDP and on revenues will also have to be taken into consideration, but they don’t alter the fundamental reality that we will need to spend substantially less than is projected, raise substantially more revenues are projected, or both. Again, there is nearly universal agreement among experts on this point. (Highly recommended reading http://www.brookings.edu/~/media/Files/rc/papers/2008/04_fiscal_future/04_fiscal_future.pdf and highly recommended viewing http://www.cbsnews.com/stories/2007/03/01/60minutes/main2528226.shtml )

...and Partisan Nonsense:

Obviously, if we reduce projected overall spending as a % of GDP, and keep projected overall revenues as a % of GDP unchanged, we will reduce this projected overall fiscal imbalance as a % of GDP. One would think that that would be so obvious that it didn’t need to be pointed out. Yet, believe it or not, there are those in the blogosphere who contend otherwise. These people oppose any reduction in projected Social Security (abbreviating as “SS” henceforth) spending, and they actually claim that reducing projected SS spending could NOT reduce our overall fiscal imbalance – one blogger even contending that doing so could only worsen our long-term fiscal imbalance.

Here’s their (obviously NONSENSICAL) argument:

- Their premise: Under current SS FICA tax rates and applicable income, SS will be fully “solvent” (or very close to it) forever (or at least for many decades). That is, projected SS FICA revenues (at current SS FICA tax rates and applicable income) plus repayment of the Trust Fund bonds, with interest, are sufficient to cover projected SS spending under current policies covering benefit levels and eligibility. (Those bonds resulting from prior SS surpluses being spent on non-SS budget items – in effect, loaned by future SS recipients to the nation, to be paid back by taxpayers later)

- Another premise, which is valid: SS FICA revenues must ultimately spent on SS benefits, whether directly (in the same year) or, in the case of surplus revenues, when Trust Fund bonds are paid off.

- Therefore (their argument goes), if we reduce projected SS spending, the only possible result is that the balance of the Trust Fund will grow perpetually, with the SS FICA revenues constituting that balance never being used for their intended purpose (SS benefits), nor helping to reduce our overall fiscal imbalance (since that balance cannot be used for other spending except via loan, which represents additional debt – an unfunded liability placed on future taxpayers). Apparently these folks think that in such a scenario, the only possible outcomes would be either a growing Trust Fund balance that is never used, or increasing SS spending to use up that Trust Fund balance (which would mean taxpayers would have to pay higher taxes to pay – again demonstrating why, per this argument, reducing projected SS spending could not reduce our overall long-term fiscal imbalance).

- So, they conclude, reducing projected SS spending cannot be part of our efforts to reduce our projected overall long-term fiscal imbalance. SS “solvency”, they contend, implies that reducing projected SS spending could not lead to a reduction in our overall long-term fiscal imbalance. And, they contend, SS “solvency” means that projected SS spending is totally unrelated to our overall fiscal imbalance, not something that should be viewed as a contributor to this imbalance, since projected SS FICA revenues cover projected SS spending.

- So just to bottom-line this absurd argumentation: We should not even consider reducing projected SS spending as part of our efforts to reduce or projected overall long-term fiscal imbalance, because there’s just no way doing so would have that effect.

- Also, some of them contend (falsely) that the only way we could reduce projected SS spending would be to default on Trust Fund bonds.

Here’s why their argument is obviously nonsensical: First, the Trust Fund balance today is only about $2 trillion, only enough to cover a couple of year’s worth of SS spending. Projected spending over the next several decades is obviously many, many times this amount. No one disputes that fact. Even those who project full, infinite SS solvency do so based on the assumption of SS funding coming primarily from FUTURE SS FICA taxation. So projected SS spending over the next several decades obviously can be reduced very, very substantially without getting anywhere close to defaulting on the Trust Fund bonds – i.e., without getting close to spending only $2 trillion. OK, that myth is out of the way.

Second, although official projections do NOT support their contention that SS, under the aforementioned current policies, will be fully “solvent” forever, I grant them this premise arguendo (i.e., just for the sake of argument), because my point holds even if I grant them this premise.

So let’s assume, arguendo, that they are correct that, under current policies, SS will be fully “solvent” forever.

Now, what would happen if we decided to reduce projected SS spending as part of our efforts to reduce our projected overall long-term fiscal imbalance -- (or at the very least COULD happen, and would be very highly likely to happen if the whole purpose of these reductions were to reduce our overall fiscal imbalance)?

Well, under the assumption of full, infinite SS “solvency” under current policies, the immediate effect would be what they point to – a projected increase in the Trust Fund balance, as I’ve described in their argument. But the obvious next move would be to lower SS FICA taxation (eliminating the unneeded SS surplus), and offset that revenue reduction with increases in other taxes, resulting in lower projected overall spending, unchanged projected overall revenues, and therefore a lower projected overall fiscal imbalance. Just algebra and common sense.

Let me illustrate why my point is just common sense. As a note, there may be some who get hung up on extraneous imperfections in this analogy (and some may use such extraneous imperfections to create diversions from the key point). All I can say is: Try to focus on what is relevant.

The Apartment Illustration:

Joe rents an apartment for $1,000/month and plans to continue doing so for the foreseeable future. Joe has a "policy" of taking $1,000 out of his first paycheck of each month and putting that $1,000 into a separate bank account, his Apartment account, that he will only withdraw from to pay rent.

Suppose it Joe projects that he will be facing some OVERALL financial shortfall next year (or further down the road, or over his lifetime, etc.). He will have more than enough income to cover his $1,000/month rent (i.e., under his current policy of putting $1000/month into that bank account, his "apartment program" will be "solvent" forever), but he won't be able to afford other things that he values highly and that he wants and plans to purchase -- and if he does purchase those things his debt level and debt service expenses will rise to an unsustainable level.

Now, I (“Brooks”) tell Joe that one option for him, if he wants to free up some funds to cover non-apartment expenses and reduce his OVERALL financial shortfall, is to move to an apartment that rents for only $900/month.

Joe’s neighbor, Barry, doesn’t want Joe to move. Barry says to Joe “Hey Joe, don’t listen to Brooks. He’s wrong. You have a policy of putting $1,000 each month into your Apartment account. If you move to a cheaper apartment, all that will happen is that you’ll keep building up a balance in your Apartment account. So it won’t help you cover other expenses. Oh, and if you loan the extra money from your Apartment account to your other (general use) account and use it to cover other expenses, you’ll just owe money to your Apartment account, so your overall long-term financial balance won’t be helped at all. So moving to a cheaper apartment cannot help reduce your long-term financial imbalance. So you shouldn’t even consider moving to a cheaper apartment as one way to reduce this overall financial imbalance.”

I then tell Joe (if he hasn’t immediately realized this on his own and smacked Barry like Moe slapping Curly) that Barry’s argument is obviously ridiculous. If Joe moved to that cheaper, $900/month apartment in order to cover non-apartment expenses and reduce his projected overall long-term financial imbalance, he obviously would NOT continue to put $1,000 into his apartment account each month, but rather would put $900 into that account, and put an incremental $100 into his other account to use for other expenses. To use a technical term, “Duh!” Sure, Barry is technically correct that the IMMEDIATE effect of ONLY moving to the cheaper apartment while KEEPING his policy of depositing $1,000/month into the Apartment account would only result in a growing balance in the Apartment account. But for Barry to insist that moving to a cheaper apartment cannot possibly reduce Joe’s projected overall financial imbalance because of this -– and ignoring the obvious (or at the very least POSSIBLE) accompanying policy change of reducing his monthly deposit into the Apartment account -- is beyond ridiculous. It’s kind of like someone telling you not to have surgery to remove a tumor, because the immediate effect will be that, during the actual surgery, at the exact moment the tumor is removed, you will have a huge open wound (from the surgeon’s incision, etc.), which will probably lead to dangerous and possibly deadly infection…ignoring the possibility that the surgeon just might, well, close up the opening as his next move!

Well, it’s just as ridiculous for anyone to contend that, because under a full, infinite SS “solvency” scenario, that reducing projected SS spending could not reduce our projected overall long-term fiscal imbalance, but could only result in a perpetually growing Trust Fund balance…ignoring the possibility that we just might, well, lower SS FICA taxation if that were the case, and offset that revenue reduction with increases in other taxes, thus lowering projected overall spending, keeping overall revenues unchanged, and thus lowering the overall projected long-term imbalance...which just happens to be the whole friggin' purpose of reducing the projected SS spending in the first place (or at least COULD be the purpose, and most likely would be).

One more illustration, with apologies to anyone to whom my point was painfully obvious from the start (believe me, there are people who are just not getting this, despite much effort on my part).

The "Defense Tax" Illustration:

Let's assume, arguendo, that you favor cutting Defense spending as part of the solution to our long-term fiscal imbalance. Now let's assume that tomorrow a "Defense Tax" is put in effect, with revenues dedicated to the Defense budget, projected to fully provide for a continuation of the current level of Defense spending, and let's assume that some other taxes that go into the general fund are lowered such that all the changes end up revenue-neutral. Now, all of a sudden, presto! -- Defense is "solvent". Would you now say "Well, it doesn't make sense to look at cutting Defense spending as part of the solution to our fiscal imbalance, because Defense is "solvent" ????? Hopefully you would NOT say that, because that would be nonsensical. We can adjust the Defense Tax rate up or down as we wish, in accordance to any increases or decreases we choose to make in Defense spending, and if we choose to reduce projected Defense spending, we can reduce “Defense taxation” and offset that revenue loss with increases in other taxes, thus lowering projected overall spending, keeping projected overall revenues unchanged, and thus reducing the projected overall fiscal imbalance. And the same applies to SS.

Just in case it isn’t clear to anyone, my point here does NOT constitute policy advocacy. It has nothing to do with what we SHOULD do – whether or not we SHOULD reduce projected SS spending as part of our solution to the enormous problem of our overall long-term fiscal imbalance. I happen to think we should (via some form of means testing), but that has nothing to do with the merits of my conceptual/analytical point here. If someone thinks he can consume two cakes of 1000 calories each and will only have consumed 1500 total calories and I correct him and tell him it would actually be 2000, that doesn’t constitute a suggestion that he go on a diet, whether or not I think he should. Same thing here.

A shift in argument that came along the way -- Shift #1

As you’ll read below, someone on another blog, who had for a long time claimed that my point was invalid, shifted to calling it "true, but trivial” (rather than "meaningful" or "important"), though offering no explanation, no argument to support that characterization of my point as "trivial". I have explained to this person (as if it needed explaining) that my point is a correction of a fundamental conceptual error on which some people are basing their position on an extremely important issue (our unsustainable long-term fiscal imbalance and how to deal with it). Hardly trivial.

Another attempted shift -- Shift #2

Another argument that someone came up with recently* (perhaps as a result of my dogging him for months on the invalidity of the bullet-pointed argument above) is that if we cut projected SS spending, ostensibly (the argument goes) to reduce our overall long-term fiscal imbalance, and if the immediate effect is projected perpetual SS surpluses, instead of actually fulfilling the stated purpose of these spending reductions by changing tax rates as I've discussed above (lowering SS FICA, offsetting that with increases in other taxes) to lower the overall imbalance, the politicians certainly will instead just use ALL of that incremental amount of SS surpluses to either lower taxes that much more or to spend that much more on other budget items (e.g., Defense) than they would otherwise, so the result could not possibly be a reduction in the overall long-term fiscal imbalance. (* Obviously I don't know for sure that he never raised this issue before recently, but in my 7 months of sharing threads on which he has posted and commented on this matter, I hadn't seen him raise it until recently.)

Well, first of all, this argument really just came up as it (apparently) dawned on this person that his arguments (the bullet points above) may just be invalid (and they ARE indeed obviously invalid).

Second, this argument is obviously exceedingly presumptuous. He asserts CERTAINTY that Congress, upon telling seniors and soon-to-be seniors that at least some of them (and perhaps all of them) will receive less in SS, will keep taxing workers just as much as before (via SS FICA payroll taxation), even though it would be agreed by all that this payroll taxation is unnecessarily high (i.e., it will produce more revenue than necessary to cover future SS benefits) and even though that would create that much more of an unfounded SS liability, just to use ALL the extra cash for that much higher spending elsewhere or lower taxes. In other words, the argument goes, we can be certain that politicians (regardless of which party is in power, by the way) will do perhaps the toughest two things in politics – taking benefits away from seniors and openly maintaining unnecessarily high payroll taxes -- with the stated rationale that such difficult measures are necessitated by our unsustainable long-term fiscal imbalance, but use ALL of the gains that result for purposes other than the stated purpose of reducing our long-term fiscal imbalance. I can’t completely rule out the possibility that that could occur (and it’s certainly plausible that SOME of this effect could occur, with SOME of the gains used, in effect, for purposes other than reduction in our overall fiscal imbalance), but it is unlikely that it will happen with ALL the gains, and more importantly, it is ridiculous for anyone to believe with certainty (or anything close to certainty) that this WILL occur – again, to be CERTAIN that ALL the gains would be squandered on incremental spending or incremental tax cuts.

And notice that this argument could be made against ANY reduction in spending (or tax revenue increases) in our efforts to reduce our fiscal imbalance. Why bother, the argument goes, if it will certainly only lead to that much higher spending elsewhere or that much lower taxes, thus erasing any potential benefit? To illustrate the flaw in this argument by taking it to an extreme, this argument seems to imply that, if we almost eliminated SS spending altogether, limiting our total spending on SS between now and eternity to only the amount we are obligated to spend due to Trust Fund bonds (about $2 trillion) rather than the much, much higher amount we are projected to spend under current policies over the next several decades, this huge spending reduction (the argument goes) could not possibly reduce our overall long-term fiscal imbalance. Seem silly? It is.

Also, why assume that the reduction of projected SS spending and the reduction of SS FICA taxation would have to occur sequentially and in that order? Obviously a new policy containing both could be agreed to at the same time, as could offsetting that SS FICA revenue loss with increases in other taxes.

And the most recent arrival -- an attempted bait & switch -- Shift #3

One of the most persistent perpetuators of the nonsensical argument I've described in the bullet points above is Bruce Webb. Bruce is not an economist nor anyone who deals with SS policy in any official capacity, just a blogger who focuses on SS from a partisan perspective. I’m not an economist either, nor do I deal with SS policy in any official capacity. I do not focus on SS in my blogging, and Bruce undoubtedly knows more about the details of SS than I do. For months I have asked Bruce to engage me substantively on the conceptual/analytical point I have made above, but he has refused, merely contending (most of the time) that my point was invalid, or on some occasions characterizing it as “true, but trivial” with no argument behind the “trivial” claim. During these months, Bruce has presented essentially the argument I’ve described above (that reducing projected SS spending could not reduce our projected overall fiscal imbalance because all that would happen would be a growing Trust Fund balance). He recently offered to debate on HIS blog, but the last time he made that offer and I took him up on it, some debate took place, but then he deleted the whole thread. For that reason, plus my even greater concern that he would selectively delete or edit comments of mine (or of his) on his blog, I pressed him (publicly, on another blog) to debate me on neutral ground – here at Forvm, and finally (and publicly) he agreed to do so.

I mention the above history not for it’s own sake, but to note a curious development. Faced now with having to actually engage me substantively and seek to refute my argument or support his claim that it is “trivial”, out of nowhere Bruce, just yesterday, brought up an entirely new argument: that reducing projected SS spending would lower GDP so much that it would not improve our overall long-term fiscal imbalance (something of a Keynesian argument, I suppose). If I have to contend with this entirely new straw that Bruce Webb has grasped, so be it, but it should be known that that has NOT been his argument all along. Rather, it is an attempted bait & switch.

The Bottom Line

Obviously part of our solution to our unsustainable overall long-term fiscal imbalance COULD be reducing projected SS spending. This is true even if, under current policies (benefit levels, eligibility, and SS FICA tax rates and applicable income), SS would be fully "solvent" forever. All we'd have to do in that case is to reduce SS FICA taxation and offset that lost revenue with increases in other taxes. The result would be lower projected overall spending, unchanged projected overall revenues, and thus lower projected overall deficits and overall long-term fiscal imbalance. Whether we SHOULD do this or not is another debate, but anyone who disputes the above and contends that SS "solvency" means that reducing projected SS spending could not help reduce our overall long-term fiscal imbalance is being nonsensical, and the implication of this nonsense -- that we should not even consider reducing projected SS spending as part of our efforts to reduce our overall fiscal imbalance -- is not just nonsensical, but potentially harmful insofar as it (like any irrational approach to any problem) may lead to suboptimal policy with trade-offs that do not fit with our priorities and values.

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My view of the argument

(#99133)

Late to the party again. Brooks' posts really have been deleted at Angry Bear, so I just noticed that he posted this over here.

Brooks and Bruce both have focused views on this subject. Brooks clearly believes that his point (what has been called a tautology here) has been ignored by partisan liberal bloggers. Bruce clearly believes that there are people out to destroy SS, and that Brooks is enabling their rhetoric. Since each of them is tightly focused, they aren't able to realize that they are talking at cross purposes.

I have had two long exchanges with Brooks. I do not think he does a very good job (above) of summarizing the arguments he was faced with. There are actually posts where people said exactly what Brooks is reacting to, but since the arguments stretch over many comments, it is hard to know for sure whether the context is making them ambiguous. As Gabriel seems to say, I do not think even the most partisan fail to understand Brooks' simple point.

I believe that his point can be illustrated by observing that if you reduce benefits and divert current payroll taxes from SS to Medicare, you will reduce the projected imbalance of the two combined (without affecting SS solvency) - an obvious corollary of the way Brooks stated his point. But I assert that since you cannot divert the taxes under the current rules, that this requires making policy. Brooks argues that he was saying nothing about policy. We had a long debate about whether his argument involved policy without reaching a common understanding. I suspect Bruce read most of that exchange.

We had a second long exchange about whether solvency is ever relevant to SS policy. I agreed that by itself solvency is not an adequate reason to leave SS as it is, but claimed that as one of a set of criteria, it is relevant. Again, we were unable to reach a common understanding about the validity of each others arguments.

Note: I am probably not being fair here, I have told Brooks that since he is intentionally offensive I will not respond to him, but Brooks did suggest that I find someone not part of a partisan echo-chamber to look at my arguments, so I will happily respond to others here.

Arne, Actually, while there

(#99142)

Arne,

Actually, while there are a number of problems with what you've said, the most "unfair" part was your claiming that you won't respond to me because I am "intentionally offensive". To put it mildly, you are applying an extreme double standard in that regard.

As for our past exchanges, I hope anyone interested in having an informed view of both the content (the arguments made) and tone will check the facts rather than relying on your characterization. I tried first months ago to explain this stuff to you on another blog, followed by our discussion at that time via several emails until it became apparent that you weren't going to get it, and recently we had this exchange on SwordsCrossed
http://swordscrossed.org/node/1720#comment-88296 on which you showed some signs of finally getting my point, and I think getting it in part, but then falling short of a full understanding despite my best efforts to explain, leading me to wonder if you were really making a good-faith effort to listen and think about what I was saying prior to responding. After most of the exchange there was already done you posted a comment on Angry Bear that seemed to show either such a lack of listening/thinking or perhaps some lack of sincerity (perhaps out of a desire to side with your fellow partisans there), and while I don't recall my exact response, I assume it was along the lines of "I find it hard to believe that you really still don't get it!".

All that said, if you'd like to start fresh here and discuss this matter, I am willing to try yet again. All I ask is that you give me your word that you'll listen and think before responding to something I've said.

Lame

(#98747)

70+ responses and no mention of "LOCKBOX"?

Tears of a Clown.

~At times like these I am reminded of the immortal words of Socrates when he said...."I drank what?"

Great signature (Socrates

(#98794)

Great signature (Socrates line). You got a belly-laugh out of me. Whose line is that?

It's a moral imperative!

(#98807)

I wrote it on memory, but when looking at the original quote in Real Genius.....eh, I'm close enough...

Self-realization. I was thinking of the immortal words of Socrates, who said, "I drank what?".

~At times like these I am reminded of the immortal words of Socrates when he said...."I drank what?"

Social Security is Fine

(#98569)

You start with the premise that we have a long-term budget problem. Then you attack Social Security. Social Security is fine. The long-term budget issue is due to a deficit in the way we finance Medicare. Which will be resolved after Democrats rehaul the way we handle health care in this country. Your attack on Social Security is not financial, it is ideological.

"I don't know where bin Laden is. I have no idea and really don't care. It's not that important. It's not our priority."
- G.W. Bush, 3/13/02

Social Security is Fine What

(#98581)

Social Security is Fine

What does that mean? And what do you think it means with regard to our overall long-term fiscal imbalance and our options for reducing it?

No, I'm not "attacking" SS at all.

No, the point I'm making is not at all ideological. It's not even policy advocacy. It's merely a correction of a conceptual error many people make with regard to the implication of SS "solvency" vis a vis our overall fiscal imbalance.

Uh Oh

(#98549)
M Scott Eiland's picture

[reads the above comments, and notices a familiar pattern]

I hope the troika remembers the Forvm's self-destruct codes.

. . .and Don Mattingly must be fired (bye Ned--don't let the door hit you in the @$$ on the way out!).

Why would we want to blow ourselves up?

(#98580)

Is this some kind of hint?

I used to be with it, but then they changed what it was. Now what I'm with isn't it, and what's it seems scary and weird. It'll happen to you.—Abraham Simpson

Silly Scott

(#98556)
HankP's picture

you really think I'd give those codes to the mods? I'd come back from work one day and find that they'd cross-connected the tubes of the internets into a klein bottle.

I blame it all on the Internet

Just As Long As Someone Has Them

(#98557)
M Scott Eiland's picture

Watch out for the one who looks like The Riddler--he's a tricky devil.

. . .and Don Mattingly must be fired (bye Ned--don't let the door hit you in the @$$ on the way out!).

HA!

(#98555)
aireachail's picture

Beauty...

Guys, Not sure I get the

(#98558)

Guys,

Not sure I get the reference (the Star Trek episode), but I'm guessing it's referring to the longstanding dispute (and animosity) Bruce Webb and I have had.

I hope you don't mind my choosing Forvm as the venue at which to (hopefully) finally get Bruce Webb to substantively address the point I've been trying to get across to some people. I give some of the background in my post (diary), although I didn't mention Bruce's many underhanded tactics he employed in lieu of just debating me substantively. Anyway, for reasons I explained in my post, I wanted to debate him on neutral ground where moderators would not censor my side of the debate (as they have on partisan blogs), and he refused to do so on SwordsCrossed since I'm a regular there (as "B Rational" http://swordscrossed.org/blog/3005 ), which I guess presented a problem for him. He finally agreed to debate me here.

As you know, I'm new to Forvm, but I'd like you all to know that I consider blogs like Forvm and SwordsCrossed -- blogs with communities spanning a variety of ideological perspectives -- to be extremely important, and I hope that blogs such as these will be a growing counter-weight to hyperpartisan "echo chamber" group-think blogs of right and left. So my thanks to the creators, moderators and participants here for TheForvm.

Well, that was Scott's reference,

(#98560)
aireachail's picture

and it springs in part from the fact that he remembers everything he's ever seen on TV. He even remembers everything about shows that were airing opposite what he was watching at the time. That's the really creepy part.

For me, it was more like sitting in a cheap, comfortable little Okinawa bar on BC street, downing an Orion beer with pals. Suddenly, two strangers burst through the door, locked in mutual combat. Paying no attention to anything or anyone else, they kick & gouge, bite & punch, and work to get their hands around the other's throat. Nobody recognizes them, but they are really making a fuss.

It's interesting to observe, but in the back of our minds, we all realize that their momentum will carry them back out the door before long.

But welcome to the Forvm, Brooks!

I thought of these two guys:

(#98607)

http://youtube.com/watch?v=jlDhyhr8FhM

But welcome to both Brooks and B Rational & Bruce Webb. We take all types around here, as long as you stick to the posting rules -- no profanity; no personal attacks; post according to a "comment, not the commenter" rule of thumb. Believe me, though the rules may seem a bit nancy, there's plenty of room for mortal enmity between the lines. :)

"Hell is truth seen too late." --Thomas Hobbes

thanks. And LOL re: the

(#98609)

thanks. And LOL re: the video and your signature (quote) re: the shoes. Is that an original line? (Are you "JH"?)

Don't ask why I thought of this (it's not related), but perhaps you'll like this one:
A lot of people say "Life sucks and then you die". The Hindus say "Life sucks and then you die. And then you're reincarnated and life sucks all over again."

(mine's not original)

As for the policy "post according to a 'comment, not the commenter' rule of thumb, I think that's great, although I realize that the first impression I'm making here may indicate that I don't adhere completely to that rule. All I can say is that I always at least start out seeking substantive discussion/debate on the merits of arguments, and I try to give people the benefit of the doubt (assuming they are debating in good faith), but along the way I've felt the need to call out some people (on partisan blogs of both right and left) who have refused to engage substantively and in good faith, and who have engaged in underhanded tactics as means of evasion -- accusing me of having hidden motives (some branded me a "lefty troll" on RedState and some on blogs of the left some painted me as secretly part of some vast right-wing conspiracy), gross mischaracterizations of past comments I've made and exchanges I've had, obvious straw men, etc.). But I'll leave it at that, and again, glad you guys have the right policy here.

Jack Handey...

(#98614)

who turns out to be a real guy, a NY writer now retired to Santa Fe or someplace. I never knew back when SNL was originally running Deep Thoughts that he was a writer for the show...I guess the name struck me as improbably onantic. Anyhow, an amazingly wise individual.

The 'comment not the commenter' principle isn't a hard and fast rule, just a guideline to bear in mind when responding to one of Timmy's infuriatingly gnomic posts, or when you feel like breaking off that stupid emoticon Bernard Guererro puts at the end of his bons mots and shoving it up...well anyhow, you get the picture.* Ask yourself if you're addressing the argument as written or slipping into ad hom. If it involves your interlocutor's mental defects, unfortunate lacunae in his or her reading, congenital inability to grasp elementary logic, wildly debilitating mood disorder, periodic dementia, grade school emotional development, consanguineous parentage well inside the proscribed degrees of kinship, residence in a trailer park, boobyhatch or their parents' basement, or that they listen to and even sing along with Celine Dion, then obviously the line has been crossed into personal attack. But we also ask people to avoid characterizing each other at all, at least in the context of a heated argument. "You Republicans always..." or "It figures you would say..." usually add more heat than light to a discussion. Not forbidden, just discouraged.

*Bernard's emoticon looks like this:

: ^ )

Nice to be able to use it in context. Normally when I see that thing I've just lost whatever point was under discussion. God, do I hate that stupid caret. I'd have it painted on a punching bag, only it's too small to hit.

"Hell is truth seen too late." --Thomas Hobbes

LOL, thanks for the detailed

(#98619)

LOL, thanks for the detailed explanation/examples.

I loved Jack Handey's Deeeeeeep Thoughts. When my little sister got engaged, I got her a Deep Thoughts card that pictured two swans embracing and said inside:

Just because swans mate for life, I don't think it's that big a deal, because if you're a swan, the chances aren't that great that you'll find another swan that's much better looking than the one you've got, so why not mate for life?

But my personal favorite:

It's too bad that families have to be torn apart by something as simple as wild dogs.

I just remembered another

(#98621)

I just remembered another great Deep Thought:

I believe in saving the environment for our children, but not for our children's children, because I don't think children should be having sex

By the way, this one isn't a

(#98620)

By the way, this one isn't a Jack Handey, but you might like it, and it's the shortest joke I know:

A cannibal passed his friend in the woods.

Reminds me of the two lions

(#98650)

eating a clown. One lion turns to the other, says "This taste funny to you?"

"Hell is truth seen too late." --Thomas Hobbes

lol, that sounds like Gary

(#98701)

lol, that sounds like Gary Larson (The Far Side) humor. good one.

also

(#98563)



Just for the heck of it,

(#98565)

Just for the heck of it, here's one of my favorite all-time Family Guy scenes -- hope this embed works:


Now Playing:
peter hates the godfather video

Can I admit it?

(#98604)

I've never watched any of the Godfather movies. Only bits and pieces on TV and never got into them.

This place is my vacation.

In keeping with a

(#98606)

In keeping with a distinction I've emphasized in my post: You CAN, but that doesn't mean you SHOULD :-)

Just curious: was there more

(#98564)

Just curious: was there more than one episode in which Peter fought that chicken?

It happens once in a while

(#98597)

I think there have been 4 now :)

thanks. It's the funniest

(#98603)

thanks. It's the funniest show on TV. And I was saying that back after it was cancelled. My understanding is that DVD sales were so strong (and so indicative of popularity of the show) that the show was brought back.

thanks. As for: He even

(#98562)

thanks.

As for: He even remembers everything about shows that were airing opposite what he was watching at the time.

As Seinfeld observed about men's use of the TV remote control, we men don't want to know what's on TV; we want to know what else is on TV.

As for stumbling out the back door, I plan to stay, for the same reason I've enjoyed being a regular at SwordsCrossed (I guess I'll cross-post, assuming that's ok). I can't speak for Bruce, though, since he seems to spend most of his time in the relatively safe confines of partisan blogs with a sympathetic, biased crowds and protective moderators.

FYI

(#98566)
HankP's picture

about the only things we don't allow are profanity and personal attacks on other commenters.

I blame it all on the Internet

That reminds me of this

(#98567)

That reminds me of this courtroom scene from And Justice For All:

Officer Leary: I told him to move on, but he continued to use profanity and he refused to leave the premises.

Judge Rayford: What sort of profanity?

Officer Leary: You know, the normal kind.

Judge Rayford: Officer Leary, we've all heard these words before, now for the record what did he say?

Officer Leary: [uncomfortably] He used..."f-ck" a lot..."piss on you"...then said he was gonna..."bung-hole the short order chef"..."cream on the waitress"...stuff like that, Your Honor.

Defendant: There's a very good reason for all of that, Your Honor.

Judge Rayford: Oh? What is that?

Defendant: I'm a diabetic.

Judge Rayford: I fail to see the connection. I've never heard of diabetes causing foul language!

Defendant: That's because you're a douchebag.

Just Having Some Fun, Brooks

(#98559)
M Scott Eiland's picture

I'm certainly not trying to tell you guys to go away and argue somewhere else--I've probably been spending too much time digging around in here lately and made a connection that led to the joke. Welcome, and enjoy yourselves.

. . .and Don Mattingly must be fired (bye Ned--don't let the door hit you in the @$$ on the way out!).

thanks.

(#98561)

thanks.

Reducing benefits

(#98479)

If we reduce benefits, we destroy the concept of a prepaid Social Security Trust Fund. The purpose of the prepayment was to smooth SS taxation; if we instead smooth SS taxation by reducing benefits, what we are doing is proclaiming that the SS Trust Fund was, in fact, a massive bait-and-switch -- an attempt to sneak in an increase in regressive taxation disguised as social insurance for the poor and middle class.

I have little doubt that such was Greenspan's original intention; his hostility to our elderly eating food not meant for pets is known. However, we would destroy what tattered remnants of our credibility remain if we reveal that literally trillions of dollars of debt associated with a program was meant from the very first to be a confidence scam.

It's impossible to debate if people simply hold beliefs that have no grounding in reality.

I understand what you're

(#98486)

I understand what you're saying. In aggregate, workers have have been paying more in SS FICA taxes than has been needed to pay for current benefits, the idea being that this surplus, and the Trust Fund balance that has resulted from it, will represent an obligation to spend the amount of that balance, on top of revenues from ongoing SS FICA taxation, on SS benefits, presumably to fund (or help fund) the levels of benefits promised as the number or recipients increases due to the baby boomers retiring (along with longer life spans).

First, just to be clear, nothing I've said, not even my conceptual point, involves (much less advocates) defaulting on the Trust Fund bonds.

Second, your argument is a legitimate POLICY argument. It is unrelated to the CONCEPTUAL point I'm making to correct the CONCEPTUAL error some others are making.

Third, as for the policy argument (not that I want to get into a policy debate on this thread) your argument applies to PAST SS FICA taxation and related promises, not to what we do hence forth if we choose to change SS FICA taxation and/or promised future benefits based on this future taxation.

But I really don't want to get into a policy debate on this thread because it tends to distract and confuse some people with regard to my conceptual point (and the conceptual error they are making). I'd welcome your thoughts at this link if you wish to present and discuss that policy argument or any other http://swordscrossed.org/node/2192 (while that post discusses means testing in particular, the broader point would apply to opposition to any type of reduction of projected SS spending).

All I'm trying to do here is correct a fundamental conceptual error that many are making and basing their position upon -- the argument I describe in the bullet points in my post. Again, this correction doesn't mean that we SHOULD cut projected SS spending, only that doing so COULD help reduce our overall long-term fiscal imbalance, which is something that some people cannot see or refuse to accept on a conceptual level, instead thinking that SS "solvency" means (or would mean) that SS spending is unrelated to our overall fiscal imbalance and that cutting projected SS spending could not help reduce this imbalance, which is just ridiculous.

It's not much of a conceptual argument

(#98487)

It boils down to ' if you cut spending, spending will fall'.

Yes, if you cut SS spending, overall spending will fall. If you cut defense spending, overall spending will fall. And so on.

This place is my vacation.

Oh, believe me, I agree that

(#98491)

Oh, believe me, I agree that it is a simple, obvious conceptual point, although it's a bit more than what you've just said (to put it simply, if you cut overall projected spending and keep projected revenues unchanged, overall deficits will fall). But a lot of people actually reject it, and base their opposition to reducing projected SS spending on their conceptual error -- indeed, their nonsensical argument would preclude even CONSIDERING reducing projected SS spending as part of our efforts to reduce our overall fiscal imbalance, since they think it can't help!

If everyone here can agree that reducing projected SS spending COULD help reduce our projected overall long-term fiscal imbalance (whether or not you think we SHOULD do so), GREAT!! It's more than many others elsewhere can manage.

Like I said

(#98492)

It's not much of a point, in fact it's basically a tautology. I have no idea who would deny something as basic as saying that lower spending means you spend less.

This place is my vacation.

See my reply to you

(#98494)

See my reply to you downthread (in reponse to a comment of yours in which you say basically the same thing)

Link: http://theforvm.org/diary/brooks-and-b-rational/social-security-solvency-and-irrational-partisan-rhetoric#comment-98493

Social Security Finance

(#98456)

(Brooks has been pursing a feud with me across many websites. If you really want to see where I am coming from please visit my Social Security series on Angry Bear, most installments of which are linked from:
http://bruceweb.blogspot.com/2008/05/social-security-posts-on-angry-bear.html)

Social Security is a PayGo Worker funded insurance program run by the Social Security Administration. The Trust Fund serves in normal times as a simple reserve account and like any reserve account can be overfunded in ways that are inefficient or it can be projected to be underfunded at some point in the future.

In the face of the well known demographics related to Boomer retirement the Trust Fund has been allowed to accumulate a larger than typical Reserve and is projected under standard assumptions to reach a ratio of 359 by years end, or three and a half years of cost equivalent. And this is where we lose Brooks.

Currently the Social Security system is running total surpluses of around $200 billion a year with actual cash surpluses taken from the real economy in the form of FICA at about $79 billion a year, the rest being accrued interest. This interest is simply a credit against future productivity. Which doesn't make it any less 'real', but does mean it is not actively adding to overall current productivity in any way that would assist future tax payers to pay it back. On the other hand it does go right to the bottom line of the debt clock in the form of increasing Total Debt (Debt held by the Public combined with Intragovernmental Debt). When we say that the Total Debt has increased by x number of billions of dollars, a good part of that is simply the result of interest accrued but not financed in any real way out of the current economy. Which delivers the rather odd result.

Cutting benefits would cut costs and so result in a bigger cash surplus for Social Security. Under current law this extra cash flows to the General Fund and is replaced by debt instruments which themselves carry interest charges. Which has the net effect of actually increasing the burden for future tax payers. Now it is true that if that additional cash flowing to the General Fund was actually used dollar for dollar to reduce current borrowing needs then the net effect would be zero, interest debt added here and subtracted there while borrowing needs from the public would be reduced by exactly the amount of the cash surplus and so potentially raise price and lower yield on publicly held Treasuries. Unfortunately there is no real world evidence that this actually operates in practice, Republicans under Gingrich reacted to surpluses in 1998 and 1999 that were entirely the product of Social Security with the demand they be used for tax cuts. And of course Bush followed through on this when he took office.

Given the actual historical record it is clear that the only immediate effect of Social Security benefit cuts is to cut the living standards of retirees, they do not in fact provide any relief on any other part of federal finance currently or in the future. And the following assumes some static effects in what is a dynamic situation.

"Obviously, if we reduce projected overall spending as a % of GDP, and keep projected overall revenues as a % of GDP unchanged, we will reduce this projected overall fiscal imbalance as a % of GDP. One would think that that would be so obvious that it didn’t need to be pointed out. "

On the surface this point is obvious, it is also wrong. If any given category of government spending results in a net gain in GDP over the cost of that program then cutting that program may in fact have the counterintuitive result on increasing federal spending as a share of GDP. Now certainly if you can identify a SPECIFIC category of spending that was a net drag on GDP, then cutting it does move the ratio the other way. But the suggestion that all government spending moves the arrow in the same way and that that any and all spending cuts improve the ratio is simply not the fact, or at least we cannot assume it a priori. The devil is in the details and Brooks is simply not a detail guy.

The argument from Defense is nonsense simply because Social Security is insurance financed with a specific tax stream, and diverting that to any other purpose amounts to theft from the insurance pool. Brooks is arguing that this doesn't matter, not if you regard this from the conceptual basis. Unfortunately that is not the right basis to address this particular issue, as multiple commenters have pointed out multiple times, Brooks general line of argument is at one level true, at a deeper level trivial, and at the policy level where this debate is actually going on meaningless. That he insists that none of this is about policy has been belied by a number of statements admitting he is in fact taking in relative sizes of the programs in question.

And pace Brooks' claims his argument has been addressed at length by professional economists including perhaps the biggest expert on the pro-Social Security side of the aisle, Dean Baker. And I have addressed it on multiple occasions in the manner I explain it here. Brooks simply will not accept that when everyone, and I mean everyone with detailed knowledge rejects your argument then maybe that is a hint that the argument is not sound. Brooks doesn't see it that way, he has convinced himself that he can perceive Truth directly. Which means that while he comprehends portions of my argument he can't accept the fact that his argument returns a counter-factual conclusion.

If anyone wants to pursue this I have an eighteen part series on Social Security on Angry Bear as well as three and a half years of posting about Social Security on the BruceWeb. The professional economists who post and comment there have near universally come down on my side of the analysis, so I am pretty comfortable sitting where I am.

Lest anyone be fooled by

(#98465)

Lest anyone be fooled by what Bruce Webb has said:

First, her refers you all to his posts on Angry Bear, and you should all know that a great many of my comments there were deleted by the moderator, at Bruce Webb’s encouragement, after Bruce absolutely refused to engage me substantively there, simply calling my point “dishonest” and throwing out personal attacks, calling my point a “bizarre conceptual framework” (without offering any attempted refutation whatsoever), and engaging in evasion after evasion upon each request from me that he simply addresss my point. So, while you’ll find some of my comments on threads of Bruce’s series, including in the first one (at least for now – obviously the moderator can go back and delete all of them), you won’t find most of my comments refuting Bruce’s arguments (and exposing lies he told about past comments of mine and past exchanges I’ve had with him and others), because they’ve been deleted. I did copy threads and I’ve posted some, showing the deleted comments – example at this link if anyone is interested http://brooksblogging.blogtownhall.com/2008/05/28/the_uncensored_angry_bear_soc_sec_xiii_crisis_at_shortfall;_or_show_me_the_money.thtml .

As for Bruce’s arguments here, as I noted in my post (diary), there have been a couple of shifts in arguments along the way since I first challenged the pervasive, nonsensical argument that I encountered and sought to correct -- the bullet-pointed argument in my post (diary). For the 7 months since I first commented on this matter and as I’ve persisted with my attempted correction of this conceptual error, that bullet-pointed argument was what Bruce Webb and others were making (basically, the argument that because SS is fully “solvent”, it has nothing to do with our OVERALL fiscal imbalance, SS spending is not contributing to this overall imbalance, and it’s not possible that reducing projected SS spending could help lower this overall imbalance).

It was only two weeks ago (and number 14 in his series on SS on Angry Bear, throughout which he either contended explicitly or strongly implied the conceptual error that I am correcting here) that Bruce posted his dubious argument, as I describe in my post (diary), that if we cut projected SS spending, ostensibly (the argument goes) to reduce our overall long-term fiscal imbalance, and if the immediate effect is projected perpetual SS surpluses, instead of actually fulfilling the stated purpose of these spending reductions by changing tax rates as I've discussed above (lowering SS FICA, offsetting that with increases in other taxes) to lower the overall imbalance, the politicians certainly will instead just use ALL of that incremental amount of SS surpluses to either lower taxes that much more or to spend that much more on other budget items (e.g., Defense) than they would otherwise, so the result could NOT POSSIBLY be ANY reduction in the overall long-term fiscal imbalance. I explain the weakness of this argument in my post, in the section headed “Another attempted shift -- Shift #2” (I have added the “Shift #2” part, and numbered the other shifts as well, for more efficient reference).

And it was only 2 DAYS ago (and knowing that he had publicly committed to finally engaging me substantively and addressing my conceptual point) that Bruce Webb first* offered the argument I describe in the section headed “And the most recent arrival -- an attempted bait & switch -- Shift #3”. He seems to be grasping at straws. Well, as I said, if I must address this out-of-nowhere, grasping-at-straws, bait & switch argument from Bruce, I will. First, he writes:

If any given category of government spending results in a net gain in GDP over the cost of that program then cutting that program may in fact have the counterintuitive result on increasing federal spending as a share of GDP. Now certainly if you can identify a SPECIFIC category of spending that was a net drag on GDP, then cutting it does move the ratio the other way. But the suggestion that all government spending moves the arrow in the same way and that that any and all spending cuts improve the ratio is simply not the fact, or at least we cannot assume it a priori.

ok, let me sort out some of Bruce’s confused (and potentially confusing) statements. First, whether a particular government expenditure increases or decreases overall spending as a percent of GDP is NOT simply determined by whether or not that expenditure increases or decreases GDP (and indeed, the direct, immediate effect is to increase GDP since government spending is a component of GDP), but rather whether or not that expenditure increases GDP (the denominator) ENOUGH to offset the higher spending and yield a ratio that is no greater than before. In other words, an expenditure can have a positive impact on GDP but still increase overall spending as a percent of GDP (for simplified illustration – and remember, the numerator is spending and the denominator is GDP -- 2/102 is greater than 1/101. Indeed 2/201 is greater than 1/101. So an increase in spending can positively impact GDP and still yield a higher ratio of overall spending to GDP).

Moreover, we need to consider the long-term effect and secondary effects, and do so, in the case, in the context of overall budget deficits and enormous projected growth in deficits (meaning more spending requires more borrowing and more interest expense). If Bruce can present analyses from credible, expert (preferably non-partisan) sources, that reducing projected SS spending over the next several decades would have the net effect of RAISING federal spending as a percent of GDP, by all means I’d like to see such analyses. Until then, his use of this speculation as support for the contention that reducing projected SS spending could not possibly help reduce our overall long-term fiscall imbalance (i.e., HIS making THAT assumption a priori) should be seen as mere grasping at straws.

* First time to the best of my knowledge, and I’ve seen much of his posts/comments over the past 7 months in which such an argument would have been quite fitting had it been in his mind over that time period.

The argument from Defense is nonsense simply because Social Security is insurance financed with a specific tax stream, and diverting that to any other purpose amounts to theft from the insurance pool. Brooks is arguing that this doesn't matter, not if you regard this from the conceptual basis. Unfortunately that is not the right basis to address this particular issue, as multiple commenters have pointed out multiple times, Brooks general line of argument is at one level true, at a deeper level trivial, and at the policy level where this debate is actually going on meaningless.

ok, let me decipher what Bruce is saying here. First, he is making a POLICY argument here: That people have paid SS FICA taxes based on promised benefits, and that any reduction in promised benefits constitutes “theft”. As I’ve said many times on threads Bruce has been on, and as I discuss in my own post at this link http://swordscrossed.org/node/2192 I think that it may not be unreasonable to use the term “theft” if referring to reductions in specific benefit levels already promised based on SS FICA taxes already paid (I’d need to check into the language of policy communications to know if I’d use the word myself), and that breaking such promises would indeed be, in itself, a bad thing (to be weighed against other considerations / trade-offs) and that the “theft” argument is a respectable argument against such spending reductions, but (1) again, that is a POLICY argument, separate from my conceptual point, and (2) that would not apply to promises of benefits made in the FUTURE based on SS FICA taxes paid in the FUTURE if we were to change the benefit formula or eligibility rules, nor would it necessarily apply if we were to reduce SS FICA taxation and correspondingly reduce the level of promised benefits.

That he insists that none of this is about policy has been belied by a number of statements admitting he is in fact taking in relative sizes of the programs in question.

Bruce is extremely conceptually-challenged and is a classic hyperpartisan. He is unable (or unwilling) to distinguish between a purely conceptual point and policy advocacy. And he thinks that if someone does have some policy preference, then any conceptual/analytical point made by that person CONSTITUTES policy advocacy and should not be judged on its own merits. If Bruce were about to eat 2 cakes, each with 1,000 calories, and thought the total would be 1,500 calories, and I corrected him (pointing out that the total would actually be 2,000), Bruce would reject my correction and say that my mathematical correction is really just advocacy that he go on a diet. And if a lot of people I know make this kind of error, but do so with food items containing much fewer calories or which they eat infrequently, and I took more time to pointing out the errors where they occurred with very high-calorie or frequently eaten items, Bruce would claim that my focus on the bigger items “belies” my claim that my mathematical correctin is distinct from advocacy that he (or others) go on a diet. Also, Bruce would think that if I DO think think that he should go on a diet (just as I’ve openly, from the first time I encountered Bruce and since then, advocated some form of means testing of SS at some point), then my mathematical corrections (of the calorie totals) are invalid, or at best meaningless, even though his (and others’) eating choices are fundamentally affected by the error they are making.

And just so you all know what specifically Bruce is ridiculously referring to in his statement above, Bruce once asked me why I bothered to devote effort to making the conceptual point that I’ve presented here, rather than on spending on some tiny government agency, and I gave him the obvious, common sense answer: SS is not a tiny portion of government spending, so as we look to reduce our unsustainable long-term fiscal imbalance and debate the difficult choices ahead, it would only seem sensible to focus more on a large program than on a small program (the Willie Sutton rule: When asked why he robs banks, he replied: “Because that’s where the money is.”). I also pointed out at the same time (and provided evidence) that I have spent far MORE time debunking the myth on the right that “tax cuts increase revenues” (always, generally, or with regard to the Bush tax cuts), and that I have advocated tax increases as well. But Bruce persists with this his absurdities.

And pace Brooks' claims his argument has been addressed at length by professional economists including perhaps the biggest expert on the pro-Social Security side of the aisle, Dean Baker. And I have addressed it on multiple occasions in the manner I explain it here. Brooks simply will not accept that when everyone, and I mean everyone with detailed knowledge rejects your argument then maybe that is a hint that the argument is not sound. Brooks doesn't see it that way, he has convinced himself that he can perceive Truth directly. Which means that while he comprehends portions of my argument he can't accept the fact that his argument returns a counter-factual conclusion.

Folks, the above is a whole bucket of bullsh*t. Bruce loves to misrepresent the nature, content, and results of past exchanges I’ve had with people. And notice that he says that my “argument is not sound”. BRUCE, what “argument” of mine are you referring to, the one that is “not sound”??? My argument is simply that it is possible that reducing projected SS spending could help reduce our overall long-term fiscal imbalance, and that this is true even if SS is/were currently projected to be fully “solvent” forever. If you are saying that my argument isn’t “sound” then you are saying that it is NOT possible (or at least highly unlikely). Well, you imply that you’ve proven that in the past, so by all means, keep trying to do it here, because you most certainly haven’t so far.

If anyone wants to pursue this I have an eighteen part series on Social Security on Angry Bear as well as three and a half years of posting about Social Security on the BruceWeb. The professional economists who post and comment there have near universally come down on my side of the analysis, so I am pretty comfortable sitting where I am.

Folks, just put aside Bruce’s claims about who said what and what that implies, and judge based on the debate here. I could spend all day with links to past exchanges and discussions of the players, etc., etc. But I’d rather just debate Bruce here for all to see. And if anyone from Angry Bear wish to joing in, they obviously can, and can speak for themselves (and they probably won’t have kind words for me, since I intruded on their comfortable, insular echo chamber and pressed them, generally unsuccessfully, to debate matters they’d rather preserve as convenient premises and talking points).

Final note (for this comment) -- Bruce writes:

The devil is in the details and Brooks is simply not a detail guy.

Actually, the problem is that, while Bruce is immersed in details, he is utterly conceptually-challenged. I told him in the very first thread on which I encountered him, that he was not seeing the forest throught the trees. I was making a conceptual point, essentially a simple algebraic one, and one that granted, arguendo, his assumption of full, infinite SS “solvency” and he kept demanding that I either demonstrate that SS faces a LACK of such solvency or shut up, and he repeatedly insisted that I debate one projection vs. another of SS “solvency” even though it was irrelevant to my conceptual point. At this point, after 7 months of my corrections/explanations, it’s harder to tell if he really doesn’t get my point, if he’s just pretending not to (to save face or for partisan reasons), or if he is just now intent on shifting to other, newly-introduced arguments that he can (erroneously) contend render my point moot on a practical level.

Apparently my "Highly

(#98441)

Apparently my "Highly recommended reading" link is not working. Apologies for not checking it sooner. Here is a link to the same paper ("Taking Back Our Fiscal Future") http://www.brookings.edu/~/media/Files/rc/papers/2008/04_fiscal_future/04_fiscal_future.pdf

I "highly recommend" it to all :->

SS is not a problem

(#98418)

Medicare and Medicaid are.

This place is my vacation.

Medicare is certainly a

(#98419)

Medicare is certainly a larger part of the problem, but it is incorrect to say that SS "is not a problem". Every dollar spent, by definition, contributes to our overall fiscal imbalance*. Medicare is projected to grow more than Social Security, and is projected to be a larger component of the budget, and therefore is a larger part of the problem. But SS is also a large and growing portion of the budget, so it cannot be said that "SS is not part of the problem" just because Medicare (or Medicare and Medicaid combined) is a larger part of the problem.

* except to the extent that it has revenue feedback effects (i.e., grows the tax base, which in turn allows for some partial recouping of the spent funds, or in exceptional or extreme cases, full recouping) and grows GDP.

SS is simply not a problem

(#98427)

In 75 years SS spending will go from roughly 4% of GDP to 6% of GDP. A non issue.

And no, it's not a 'growing' portion of the budget. It's been around 21% of all federal spending for 35 years now.

This place is my vacation.

First, even if SS were not

(#98446)

First, even if SS were not projected to grow AT ALL as a portion of the budget or as a percent of GDP, it would still be a large portion or our budget and therefore a substantial part of our overall fiscal imbalance.

Second, it is indeed projected to grow, even as a percent of GDP as you acknowledge, which should be no surprise to anyone, considering that the baby boom generation is just starting to reach retirement age now.

Third, while your 6% of GDP may be a bit off (although not by that much), whether or not 6% of GDP is a lot depends on the budgetary and economic context, and the context is that we face an enormous, unsustainable long-term fiscal imbalance under current policies.

For reference, please see: http://www.heritage.org/research/features/BudgetChartBook/fed-rev-spend-2008-boc-P4-Entitlements-Alone-Will-Eclipse.html

and:
http://www.heritage.org/research/features/BudgetChartBook/fed-rev-spend-2008-boc-P6-Entitlement-Reforms-are-Needed-to.html

Both charts are based on data in the CBO report to which I link in my post (diary). See the report for the two different scenarios and related assumptions.

No

(#98461)

Unlike most of the budget SS is self financing so it is incorrect to claim that it is a 'substantial part of our overall fiscal imbalance'. In fact today it is running a surplus so I assume that you meant to write that SS WILL be a significant part of the PROJECTED fiscal imbalances. Which is, of course, something quite different.

For all we know SS will never have any problems, the high-growth scenario has been the most accurate in the last 15 years. Even if that's not the case it will take decades to find out what happens and, as George Will has noted, if the economy grows as expected in the central scenario SS will be the least of our problems.

The long term unsustainable fiscal problems are due to Medicare and Medicaid, NOT to SS.

This place is my vacation.

That is exactly the kind of

(#98474)

That is exactly the kind of fundamental conceptual error I'm talking about (and I don't mean that to be snarky or insulting, but I have to point it out).

Again, even if we were to assume, just for the sake of argument, that SS will be fully "solvent" forever under current policies, SS spending -- just like ANY spending -- contributes to overall spending, and thus to our overall fiscal imbalance.

But if semantics are becoming a distraction, let me put it this way, yet again: Even if we assume full, infinite SS "solvency", one way we could reduce our overall long-term fiscal imbalance, and do so without any net tax increase, is to reduce projected SS spending, reduce SS FICA taxation, and offset that revenue reduction with increases in other taxes (e.g., capital gains, individual income, corporate income).

Do you see that?

Huh?

(#98482)

Yes, if you reduce spending then you reduce spending.

I'm sorry, but you are making no sense. Your initial argument was that SS is a big part of the deficit. This, as I pointed out, is completely wrong. Right now SS is in surplus.

Now maybe you meant that SS would be a big part of PROJECTED deficits. If so, you should have at least acknowledged you misspoke and wrote something that was wrong. In any case, that argument is also wrong. SS is not a big part of projected deficits. Medicare and Medicaid are. If you are unclear about that you need to read more.

Finally, you change your argument yet again to say that it doesn't matter if SS is solvent, that we should reduce SS spending and taxes in any case. That's a political decisions and Americans have made clear they have no interest in it. And if you reduce SS spending and SS taxes by the same amount there will be no change to the long-term budget results so I don't see what your point is.

This place is my vacation.

Gabriel, No offense

(#98488)

Gabriel,

No offense intended, but you are misunderstanding (and mischaracterizing) much of what I've said.

Yes, of course I'm aware of the SS surpluses.

No, I have not changed my argument.

No, my conceptual point is NOT policy advocacy. It says nothing about what we SHOULD do. It only corrects people who erroneously think that SS "solvency" means that reducing projected SS spending COULD NOT be one way to reduce our overall long-term fiscal imbalance. That's it, ok?

And if you reduce SS spending and SS taxes by the same amount there will be no change to the long-term budget results so I don't see what your point is.

Please pay attention, because I explained this clearly in my post and again in comments. The reduction in overall fiscal imbalance would occur if/when we offset the SS FICA tax cuts with increases in other taxes, the point being that we could lower this overall fiscal imbalance by reducing projected SS spending and making revenue-neutral changes in tax rates (i.e, without a net tax increase).

Please read and think about my explanation above and re-read my post if necessary. I don't mind clarifying to a reasonable extent, but I'm just asking you to pay attention so I don't have to repeat stuff I've already said more than once.

No offense taken

(#98490)

As you point out this is clearly not an area of your expertise.

This seems to be quite the strawman argument. Exactly who is it that thinks that cutting SS spending will have no impact on the fiscal balance? I know no one who claims that.

All you are saying is that if you cut spending, then spending will be lower. It's not much of an insight, and I can't imagine anyone who disagrees with that.

This place is my vacation.

Exactly who is it that

(#98493)

Exactly who is it that thinks that cutting SS spending will have no impact on the fiscal balance? I know no one who claims that.

Oh, I do. I've encountered plenty of people on liberal econ blogs who nonsensically contend that, because (per their projections), SS will be fully solvent forever (or very close to it), reducing projected SS spending could not reduce our overall long-term fiscal imbalance.

Believe me, it's not straw man (and I HATE straw men).

Well

(#98495)

If in the other blogs you also spent something like 5,000 words, as you did here, to say something as basic as 'spending less means less spending' maybe you managed to confuse people.

I still don't get this diary. It goes on and on (and on and on and on...) and your only point is basically a tautology?

Here's a simpler way.

B=Budget Balance
S=Spending
S1: Spending with Lower SS spending
B1: Budget Balance with S1
R=Revenues

B=R-S

B1=R-S1

If Sl is less than S then B1 is greater than B.

Not that complicated. My grade schooler probably gets it.

This place is my vacation.

Believe me, I didn't start

(#98500)

Believe me, I didn't start with anything close to 5,000 words. And my point can be expressed even more simply than you have above. As I said upthread, if you cut overall projected spending and keep projected overall revenues unchanged, projected overall deficits will fall. Believe me, I consider this very simple and very obvious, but there are many people I've encountered who not only DON'T get this point, but who fiercely resist accepting it, and who use their nonsensical OPPOSITE view as an argument that we shouldn't even consider reducing projected SS spending to help reduce our overall fiscal imbalance, because, they contend, it can't help. I know I'm being repititious, but I'm trying to get all this across to you.

That may be the case

(#98502)

I don't think any of them are here and it's here that you are posting and we are debating. In any case I certainly agree since I think it's a simple tautology.

This place is my vacation.

Well, certainly one person

(#98508)

Well, certainly one person is here (Bruce Webb) who has been making the nonsensical argument I have described, explicitly and implicitly, on several liberal econ blogs, in comments and posts, for a long time. As I explained in my post (and as he has demonstrated in his comment), very recently he has started trying to shift to other arguments, since I've been pressing him publicly to defend his nonsensical argument (or concede that it's invalid) and he finally agreed (publicly) to debate me here on Forvm.

But if you see my point as very simple and painfully obvious, good. So do I. Wish I could say the same for everyone.

Based on what I read here

(#98515)

Bruce Webb agrees with me that your point is simply a tautology. See his #98459.

This place is my vacation.

For almost all of the past 7

(#98516)

For almost all of the past 7 months since I first engaged on this matter, and including as recently as last month, Bruce has contended that reducing projected SS spending CANNOT be an effective part of our efforts to reduce our overall long-term fiscal imbalance, and he has done so based on the argument that I've described in the bullet points of my post.

More recently he has begun grasping at straws and trying to shift to other arguments, as I've explained.

You just don't know the history of Bruce's comments and posts prior to the last couple of weeks.

Having said that, if Bruce will now agree that it is indeed possible for us to reduce our overall long-term fiscal imbalance by reducing projected SS spending -- WILL YOU NOW, BRUCE??? -- then I will be quite happy to see that I've helped him finally achieve that breakthrough and that he can now understand this rather simple conceptual point, even if he is now trying to shift to new arguments as to why he thinks it wouldn't work (his recent bait & switch arguments of GDP impact and incremental spending or incremental tax cuts, respectively).

correction: phrase in last

(#98520)

correction: phrase in last line of my comment above should have read
"...even if he is now trying to shift to new arguments as to why he thinks it MAY not work..."

By the way, as hopefully

(#98489)

By the way, as hopefully folks here can tell, I use italics to quote people. I don't know what the convention here on Forvm is (blockquote vs. italics?). I'll check, but for this thread, I'll stay consistent (using italics) to avoid confusion.

No

(#98421)
HankP's picture

SS is just fine, possibly with minor changes; the source of the fiscal imbalance you talk about are the general fund deficits that need to be fixed. Cutting SS will not happen, simply because any politicians who seriously tries to do so while the general fund is in deficit will (correctly) be seen as taking from the many to benefit the few. Cutting SS and SS taxes won't help with fiscal imbalances, only cutting SS while leaving SS taxes to generate surpluses will do that.

You might want to read the latest report from Technical Panel of the SSAB (Social Security Advisory Board) (pdf), it's interesting if you want to see the basis of many of the projections used. I found the comments in this post interesting, and this post gives a good background the long term ideological efforts to eliminate SS.

I blame it all on the Internet

Hank you are rubbing salt in Brooks' wound.

(#98457)

Those two posts are mine, and are part of what Brooks is reacting against.

But thanks anyway, I appreciate the (inadvertent) backup to my post below.

Even if you are assuming

(#98423)

Even if you are assuming (notwithstanding official projections) that, under current policies, SS will be fully solvent forever, let me ask you this:

I've explained that if we reduce projected SS spending and reduced SS FICA taxation accordingly, and offset that revenue loss with increases in other taxes, projected overall spending will be lower, projected overall revenue would be unchanged, and therefore projected overall deficits would be lower.

Do you dispute that logic?

As for "the long term ideological efforts to eliminate SS", that's not relevant to my point, which is purely conceptual. As I said in my post (diary), whether or not we SHOULD reduce projected SS spending as part of our efforts to reduce our overall fiscal imbalance is another, separate debate. It's important to separate conceptual/analytical matters -- which identify and quantify consequences and trade-offs -- from policy choices, which are a matter of which consequences and trade-offs best reflect our priorities and values. All too often people let their policy preferences interfere with (and obstruct) a rational approach to conceptual/analytical matters.

Throw Mama from the Train

(#98459)

Yes if we spend less of GDP on seniors we spend less overall. If we spend less on Defense we spend less overall. If we spend less shuffling billions of dollars into the pockets of corrupt Iraqi ministers we spend less overall.

None of which makes any of those statements meaningful. You are simply stating and restating a tautology at ever increasing length.

Bruce, It's actually unclear

(#98548)

Bruce,

It's actually unclear to me where you stand at this point, and perhaps ambiguity is your intention. Seems like you're walking away from your past arguments and now relying on the two new ones, the GDP argument (that spending less on SS would lower GDP so much that it would INCREASE spending a percent of GDP -- you know, the argument you came up with 2 days ago) and the argument that ALL of any reduction in projected SS spending would definitely just end up causing incremental spending or incremental tax cuts of the same amount.

Is that where you are now?

Bruce, I guess you decided

(#99119)

Bruce,

I guess you decided not to follow through with an actual debate here. No surprise to me. But I'll try again by posting this comment and bringing it to your attention elsewhere.

I have argued all along (meaning from the first time I made my point 7 months ago) that, contrary to what many people (including you) on liberal econ blogs were saying or strongly implying, reducing projected SS spending could be one way to reduce our long-term fiscal imbalance, and that that fact does not change even if I grant you your premise that proper projections of SS would show full, infinite SS "solvency", because all we'd have to do is lower SS FICA taxation and offset that tax cut with increases in other taxes, resulting in lower projected overall spending, unchanged projected overall revenues, and therefore lower projected overall deficits and lower long-term fiscal imbalance.

Initially you characterized my point as invalid and reflecting utter ignorance or dishonesty on my part. At some point along the way you shifted to alternating between characterizing my point as invalid and characterizing it as valid but "trivial" or "meaningless" without ever offering a rational explanation as to why it is "trivial" or "meaningless" or responding to my explanation as to why my point is indeed important.

Recently, I assume due to being pressed by me to be more rational, you grasped at straws and came up with two new arguments. Three weeks ago you came up with the (dubious) argument that ALL of any reduction in projected SS spending would definitely just end up causing incremental spending or incremental tax cuts of the same amount. And last week, after committing to finally debating me substantively here on Forvm, you grasped again and came up with your GDP argument: that spending less on SS would lower GDP so much that it would INCREASE spending a percent of GDP.

So again:

I say that reducing projected SS spending could be one way to reduce our long-term fiscal imbalance, and that that fact does not change even if I grant you your premise that proper projections of SS would show full, infinite SS "solvency", because all we'd have to do is lower SS FICA taxation and offset that tax cut with increases in other taxes, resulting in lower projected overall spending, unchanged projected overall revenues, and therefore lower projected overall deficits and lower long-term fiscal imbalance.

(1) Are you now saying that the above is valid UNLESS ALL of any reduction in projected SS spending would definitely just end up causing incremental spending or incremental tax cuts of the same amount and/or spending less on SS would lower GDP so much that it would INCREASE spending a percent of GDP?

As for your vague characterization of my point as "trivial" or "meaningless":

It would be meaningless (in the sense of being as obvious as 3 - 2 = 1) if everyone realized that it's true. But many don't realize that it's true, many erroneously make the opposite assumption, and many based their position on this important issue on that fundamental error. That's why it IS meaningful, and that's why, 7 months ago, I first corrected people on that fundamental conceptual error (remember, you were there, you immediately launched into attack mode, and you've been attacking me ever since rather than engaging me substantively despite my many, many requests that you do the latter).

To be specific (not that you don't know this, but for the benefit of others here, and to have it explicitly on this thread), many people believe (or at least say or strongly imply) that SS "solvency" means that we could NOT reduce our overall long-term fiscal imbalance by reducing projected SS spending. The argument is that if SS is fully "solvent" forever, the only possible result of reducing projected SS spending would be unnecessarily high SS surpluses and growth in the Trust Fund balance, so there could not be any fiscal benefit (i.e, there could be no reduction of deficits and the overall long-term fiscal imbalance).

So:
(2) Are you contending that no one on the threads where you saw me make my conceptual point (on Thoma's site, Baker's, Delong's and AB) was actually making that conceptual error -- i.e., everyone all along has realized that we could indeed reduce our overall long-term fiscal imbalance by reducing projected SS spending, just by accompanying that spending reduction with the tax shift I've described? And are you denying that people were basing their opposition to cutting projected SS spending in part or whole on this erroneous assumption?

(3) If that's NOT what you're contending -- i.e., if you're acknowledging that people WERE making that error -- are you saying that a correction of that error, on which they were basing their position on this important issue, is "meaningless" just because my point was a correction of a conceptual error upon which people were basing their position rather than my point being an argument in favor of a particular policy? If the folks at RedState argue in favor of tax cuts because "tax cuts always increase revenues", is it "meaningless" for my to point out that their assumption is invalid?

(4) Also, just to pick up on something you said to me on Angry Bear, do you believe that we can continue on our current spending policy course over the next several decades and that the growth in overall spending as a percent of GDP would not end up substantially harming our economy?

I guess the part I'm not sure about

(#98443)
HankP's picture

is that if you pull SS out of general government, with it's own separate funding mechanism that is (in your example) in balance with expenditures, then whatever you do to SS won't affect the fiscal situation. In other words, theoretically you could consider cutting SS as cutting spending (and cutting taxes, since in your example they are balanced) in the overall scheme of things, but it won't affect anything having to do with the general fund balance. So technically you could call it "cutting spending", but practically it wouldn't make any difference. Besides, as I said earlier I doubt that there's much support for changing SS radically, either by cutting it severely or by increasing it dramatically.

I blame it all on the Internet

I suggest you re-read my

(#98471)

I suggest you re-read my post (diary -- by the way, which do you call it here on Forvm, "post" or "diary"?)

But in a nutshell, SS "solvency" (to the extent that it exists, whether partial, as official projections state, or full and infinite, as Bruce contends it is or is at least close to) is merely the result of us having high enough SS FICA taxation to cover projected spending. And remember that this SS FICA taxation is part of the overall taxation that comes from the same overall population (not that everyone pays SS FICA; I'm talking about OVERALL taxation). So if current policies already provide for full, infinite SS solvency, then what you are saying is correct (as I explained in my post), the immediate effect would just be a perpetual, unused SS Trust Fund balance rather than help with our overall fiscal imbalance. But we can CHANGE tax rates. If reducing projected SS spending (by reducing benefit levels or eligibility) would result in these unnecessary SS surpluses, obviously we could lower SS FICA taxation to reduce or eliminate these surpluses. If we left it at that, it would just be a tax cut. But if our purpose is to reduce our overall fiscal imbalance, the next move would be to offset that cut in SS FICA taxation with an increase in other taxes (Capital Gains, Individual Income, Corporate Income). That way, without a net tax increase (i.e., unchanged projected revenues) we would reduce our overall fiscal imbalance. See?

As for whether or not cutting projected SS spending is politically feasible or likely, please excuse me from getting into that on this thread since I really want to keep the focus on the conceptual point. For what it's worth, I agree (as most do) that it would be very difficult politically, except perhaps means testing among the very wealthy (which probably wouldn't yield all that much savings).

As for "increasing it dramatically", you should keep in mind that it is on auto-pilot. It is a mandate. If you qualify, you get benefits, and the benefits you get follow a formula. So when I speak of projected increases in SS spending, I'm talking about CURRENT policy, just applied to the demographics of the future as the baby boomers retire.

I understand what you're saying

(#98496)
HankP's picture

my point is that except for a 30 year long bump from the baby boom (which is what the trust fund is all about), I don't see that SS contributes meaningfully to future fiscal problems. Medicare and medicaid, yes. The inability of Congress and the President to understand that cutting taxes while running deficits is just deferring present taxes to future taxpayers, yes. The refusal by voters to fully pay for the services they receive from government, yes. SS just doesn't really make more than a few percentage points difference compared to these issues.

I blame it all on the Internet

I don't see that SS

(#98501)

I don't see that SS contributes meaningfully to future fiscal problems

If you understand what I'm saying, I'm not sure how you can make that statement. Are you basing it on the degree of SS "solvency"?

If so, then, again, SS "solvency" does NOT mean that SS spending is not contributing to our overall fiscal imbalance. ALL spending is contributing to our overall fiscal imbalance. SS having a dedicated tax that it set high enough to cover projected spending doesn't change that fact. See my "Defenst Tax" illustration in my post.

If you're NOT basing that statement on SS "solvency", are you implying that SS is just not projected to be a substantial part of our projected overall spending or that our projected overall spending level is not a problem? If so, please see:
http://www.heritage.org/research/features/BudgetChartBook/fed-rev-spend-2008-boc-P4-Entitlements-Alone-Will-Eclipse.html
and
http://www.heritage.org/research/features/BudgetChartBook/fed-rev-spend-2008-boc-P6-Entitlement-Reforms-are-Needed-to.html

There is a context in which Brooks makes sense

(#98460)

If your overall argument is that government spending is currently too high a percentage of GDP then surely all options should be on the table. But Brooks is not making that argument, at least not explicitly, although he seems to hint at this from time to time. Absent that the debate has to shift over to overall policy preferences for the various programs, which for whatever reason is to go to a place that Brooks doesn't want to tread.

Bruce confuses things once

(#98472)

Bruce confuses things once again.

First, my point is obviously NOT dependent on the assumption that "government spending is currently too high [as] a percentage of GDP". Rather, quite clearly, my point does presume that we face a problematic long-term fiscal imbalance. That is, under current policies, PROJECTED spending over the next several decades is far too high relative to projected revenues, resulting in unsustainably large deficits as a GDP and unsustainably high debt-to-GDP. And there is almost universal agreement on that point among economists and budget experts.

As for why I don't "want to tread" over to a policy debate, it's not "for whatever reason", it's for the reason I have clearly stated here: that I have made a purely conceptual point -- indeed an important correction of a pervasive conceptual error on which some people are basing their position on a very important issue -- and I want to keep the focus on THIS thread on that conceptual point, rather than get diverted into a policy debate, particularly since part of the problem here is that people are mixing up the two, and in the process, getting the conceptual part wrong, "for whatever reason", so to speak.

Your logic is fine.

(#98433)

But as you state in your last paragraph, the debate on lowering SS benefits is separate issue. Yes, by taking away benefits you save money one way or the other.

But, no, it's not a good idea. Lets cut farm subsidies, earmarks, Pentagon pork, anything. Lowering SS benefits constitutes a form of fraud, especially after Reagan/Greenspan raised FICA.

And, in any case, it's such a political non-starter it's not worth debating. Just about the only possible exception I can imagine is raising the retirement age a year or two, assuming people live healthier and continue to work and so on.

In any case, I believe our obesity epidemic will stop and even reverse lifespan growth for some time, till sophisticated genetic technologies start taking over, at which point life expectancy will zoom, for the wealthy.

I suppose we could add a clause at some point to the effect that re-engineered people who are or become for all intents and purposes young, except for their calendar age, lose their benefits. But these are issues that might turn up in 30 or 50 years. Today, SS has to stay exactly as is.

This was clear enough to Larkin, whose patriotism rested on the notion that England was the worst place on earth with the possible exception of everywhere else.

M, I appreciate your

(#98435)

M,

I appreciate your comment, but I'd rather keep this thread focused on the conceptual point rather than the policy debate. I'm glad that you can see that my conceptual point is valid even though you don't think we should reduce projected SS spending (it's good to see someone not letting his policy preference interfere with his consideration of a conceptual/analytical matter). As for the policy debate, I'd be more than happy to discuss your position and rationale at http://swordscrossed.org/node/2192

Thanks...

(#98583)

I call them as I see them, and like I said, your point is technically valid. But in the current political environment it is also a moot point, and I'm not really passionate about SS anyway, so I don't have the energy for a debate on it.

This was clear enough to Larkin, whose patriotism rested on the notion that England was the worst place on earth with the possible exception of everywhere else.