Get rid of social security?

There certainly is when deriving feasible policy. Ignoring market failures will, for example, assuredly lead to coercion against the individual.

They would be hypocritical to oppose it if it can be shown to be necessarily pareto improving. It cannot. You merely continue to hide from the evidence.

You assume they must be flawed as they do not agree with the dogmatic conclusions that you have made. This is of course the standard requirement for an utopian approach.

We've already seen that your views on poverty are not consistent with the available analysis in the field. Your position has been based on building on falsehoods, nothing more

 

As we approach the Singularity (where the AI exceeds the Human) and the Artificially Intelligent Robotic Principle Means of Production (or other workers doing the work) replaces OUR domestic humans, how one defines the word "irresponsible" will change from the consumer (who simply must consume to live) beware to the vendor (who is irresponsible with the economy) beware. Assuming that Jobs and low enough unemployment will be there to in essence pay the equivalent of Social Security to satisfy the mob, who will have the majority of the vote, is irresponsible.

Mandatory investing still requires that the economy be managed by the vendor (or, owner of the principle means of production), to provide jobs or enough investment income to those who as we approach the Singularity cannot be expected to be responsible for their own future financial needs.

The Right of Property changes for the vendor as we approach the Singularity, or the vendor does not manage the economy.

 

Please provide an example of a market failure that would affect an investor over a 45 year investment period where their investments were diversified and age-adjusted. That didn't even happen with the Wall Street crash in 1929.

A person nearing retirement in 1929 would not have had their investments in stocks and would have been unaffected. A person just starting out on their investment program would have initially been adversely affected but by March of 1933 the stock market began to recover, stocks began to gain value and the GDP increased. A person that was less than 30 in 1929 that would be highly invested in stocks would have had until 1959 to overcome the market crash in 1929.

Diversified and age adjusted investment accounts have always proven to be successful and there are no historical instances in the US that don't reflect this.

 

Today the "means of production" is held in very few hands with about 5% of the population controlling a very large precentage of the means of production. If the "90%" that current doesn't have ownership becomes the primary owners of the means of production by stock ownership then the ownership of the means of production is diversified as opposed to becoming more and more concentrated. A stockholder is co-owner of a corporation.

 

That SS is found to be pareto improving compared to the privatised alternative is itself an example of a market failure in action.

 

Who provides the insurance? What about people with pre-existing conditions who can't get private insurance? What is the cost and did you take that cost into consideration in your calculations?

Who provides the insurance? What about people with pre-existing conditions who can't get private insurance? What is the cost and did you take that cost into consideration in your calculations?

What is the cost and did you take that cost into consideration in your calculations?

Of course social security resolved it. Have you checked poverty rates amongst seniors before and after SS? They went from having the highest rate of poverty to the lowest.

If anything, SS has been too rich and successful.

Had pigs had wings ... SS resolves the problem because it provides a basic level of income for almost all seniors. A private system where bad decisions lead to destitution among the aged is not a solution.

 

Basically in order.

Pre-existing conditions for a group insurance life and disability private insurance plan covering tens of millions of people where the liabilities of the insurance company decline over time based upon the increased assets of the individuals involved is not an issue. This insurance, because it overwhelmingly addresses young workers that are far less likely to suffer a disability or die would be about the lowest cost insurance possible.

The problem was that individuals were placing a financial burden on society. Social Security actually increased the financial burden on society instead of reducing or eliminating it. Reducing poverty with welfare doesn't actually eliminate the poverty but instead just subsidizes it. Private wealth eliminates poverty and the welfare needed for poverty.

Limiting the options for the individual to diversified and age adjusted private investment removes the ability of the individual to make "bad" investment decisions. They might earn more or less depending upon their decisions but in all cases they would earn and not lose any investment capital. For example, a stock fund for a 20 year old that has 100 or more stocks in it from diversified industries may have a couple of "failures" but overall they pool of stocks is going to increase based upon the average ROI.

Of course the investment experts at each investment company are going to do everything possible to avoid including potential losers in an investment option weeding out as many risky investments as possible. They'll do this because the performance of their funds will have a direct impact on how much of the "investment pie" their company will get. If "Investment Company A's" investment options are earning 12% and "Investment Company B's" investment options are earning 6% who are the investors going to place their money with?

 

Why can we not find Persons in our republic who are willing to be moral enough to bear true witness to our own laws, simply for the sake of morals and the rule of law?

From one perspective, the fact that our elected representatives are getting wealthier should imply that they should also have better solutions to our modern social dilemmas, under any form of Capitalism, but not necessarily Socialism.

 

A note on "poverty" that is important. Poverty is a lack of personal wealth. The fact that our government subsidizes those in poverty does not eliminate the fact that the individual is in poverty. This can be exemplified by a news story from last year.

http://www.nytimes.com/2011/09/14/us/14census.html?pagewanted=all

We can assumen that those 46.2 million people qualify for government welfare programs such as food stamps, housing assistance, and financial aid that would bring them well above the "poverty line" but they are still identified as being in poverty because of their low income. I have read that government welfare programs ensure that a person will have up to the equivalent "income" of $30,000/yr. They are identified as living in poverty before any government benefits are calculated.

When we judge those that are in "poverty" in their old age it is based upon their income before they receive any benefits from the government including Social Security. Social Security was a welfare program to address poverty which was a lack of personal wealth. It has done nothing to resolve that problem of a lack of personal wealth but has merely provided a welfare check to Americans. The poverty has actually gotten worse under Social Security.

 

No, poverty is a lack of income (or consumption, if you want to refer to alternative methodologies). And one will again note that your opinion over poverty and SS has been shown to be wrong, with your reaction just being 'that published economic evidence must be wrong'

 

I would have to disagree with a lack of income being the criteria for poverty. A person with ten million dollars in their mattress is not in poverty and requires no income. They have the wealth to provide for whatever their needs are. I would agree that the lack of the ability to "consume" that which is necessary for living can be identified as poverty regardless of whether it's from an lack of personal income or wealth. If they require assistance from external sources just to live then they are in poverty.

What advocates of Social Security aren't willing to admit is that Social Security is a "welfare program" just like food stamps and aid to families with dependent children. It doesn't elimitate the poverty but instead mitigates the poverty of the individual. Social Security has certainly mitigated poverty but has done absolutely nothing to eliminate it. People are less able to support themselves in retirement today than they were in the 1930's. The "poverty" has actually increased because people are less able to live without government assistance. More people are dependent upon external assistance (government and private) than at any time in the history of America.

 

That would be a 'so what?' moment. That the vast majority of poverty analysis considers income is just 'matter of fact'. The debate over whether alternative definitions should be used is focused on very specific issues, such as the ability of an equivalence scale to suitably control for heterogeneous needs (e.g. the OECD scales use very simplistic measures that merely control for adults and children in the household, whilst British measures have also controlled for age of children). You could have referred to 'permanent income', whereby we effectively control for wealth issues through the notion of how it impacts on income smoothing. However, that is merely a correction to income and continues (obviously) to define poverty as a lack of income.

I don't particularly care what SS advocates are willing to admit (or at least care about people's perceptions over what SS advocates are willing to admit). I care about the economic evidence and whether a policy change is rational. Being a fan of individualism I cannot accept a dogmatic rejection of a Pareto improving policy. The idea of deliberately harming exchange is just inconsistent with economic rationality

 

Is a person with zero income but millions of dollars in poverty? If the "majority of poverty analysis" states that a millionaire without any income is in poverty then their statements are based upon absurdity. Generally speaking "income" can be used but a person with millions of dollars can generate "income" if they so choose but they don't have to if they choose not to. They are not in poverty. I would be more expansive to cover all considerations related to poverty which would be "income or personal wealth which allows a person the ability to provide for their own fundamental needs" as being a logical definition of poverty.

In any case if a person requires external assistance just to survive then I would consider them to be "living in poverty" because they are incapable of supporting themself. I believe that is a rational definition of poverty. The requirement of external assistance to survive.

 

Increasing the personal weath of low and middle income workers is a pareto improvement. If it comes at the "expense" of anyone then it comes at the expense of the very wealthy as they would lose control of the means of production that they overwhelmingly control today.

 

You're looking for outliers to try and hide from the truth: poverty analysis is based on income. Such outliers are statistically insignificant so its a nonsense to refer to them to suggest poverty analysis needs an overhaul. And lets not forget that you have deliberately misrepresented the effects of privatisation on poverty (using opinion, rather than economic evidence, to provide a non-supported conclusion)

 

I still don't think you understand the idea of 'pareto improving' (which, if you were primarily concerned about coercion, would be a minimum requirement for supportable remark). The evidence indicates that the current system is pareto improving. That might fit comfortably with your dogma, but we can't play pretend and just ignore that evidence

 

You make it seem like the wealthy cannot make more money with their substantial wealth under any form of Capitalism.

 

Can you cite any sources on the effect of social security on the elderly?

 

Perhaps that can be explained. While Social Security mitigates poverty it doesn't reduce poverty. In fact the number of people that can't support themselves in their old age is greater today that it was in the 1930's when Social Security was created. In the 1930's approximately one-half of the People could provide for their own retirement. Today the median savings of all Americans by the time they reach 64 is only $100,000 and that isn't anywhere near enough to retire on.

The problem is "poverty" that requires government financial assistance to mitigate the poverty. Providing that financial assistance causes a great burden to society in the form of FICA/Payroll taxation. Close to one trillion dollars per year are required to mitigate the poverty that is getting worse and not better.

It would be my opinion that if we can eliminate a one-trillion dollar annual tax burden by having 1/2 of those funds (i.e. FICA taxes) being used to build the personal wealth of the individuals so that they don't require the government assistance then that is a pareto improvement. While the Payroll tax would continue for awhile to ensure a safety net the historic analysis of investments would indicate that this 1/2 of the taxation could be greatly reduced as well in the future because of the personal wealth being accumulated.

For there to be a negative pareto effect someone has to "lose" but no one loses when personal wealth is accumulated. That's where I see the problem with the "experts" opinion. Who loses is the key and the "loser" has yet to be identified when the lowest income workers and their families would be the greatest beneficiaries of privatization. So I'd welcome someone pointing out who the losers would be when long term diversified and age adjusted retirement accounts have a historical 100% success rate.

 

Just a quick search shows that Social Security significantly mitigates poverty in America although this is an old study.

http://www.cbpp.org/cms/index.cfm?fa=view&id=1863

A couple of quick notes on this.

First of all this study was based upon the "official poverty" level that most agree is really about 1/2 of the amount of income necessary to lift someone out of poverty. The official poverty level incomes threshold varies based mostly on number of members in the household and for a single person today it's slightly more than $11,000/yr and unquestionably living with only $11,000/yr in income is "poverty" in the United States. I would actually assume the position that having less than double that amount of income is still living in virtual poverty. Those that have even $22,000/yr in income are still being afforded numerous other government subsidies including food and housing assistance because they are really living in poverty even though they have double the official poverty level of income. The "official poverty level" is arbitrary and doesn't reflect actual poverty level which is much higher than that.

Next is the fact that Social Security doesn't eliminate the poverty but instead merely mitigates that poverty. The People are still poor but the government welfare check from Social Security mitigates their poverty by providing additional income which imposes a huge tax burden on the workers in America.

These are important facts that warrant consideration when we address privatization. Privatization doesn't mitigate poverty by imposing a tax burden on other Americans but instead eliminates poverty by increasing personal wealth that ulitmately eliminates virtually all of the tax burden on Americans. If poverty in old age is eliminated then we don't require a Social Welfare program based upon taxation to mitigate the poverty. This removes a huge tax burden on Americans.

 

SS isn't the bee's knees. Its origins, in terms of world affairs, can arguably be traced back to concerns such as imperialist competition and the need to maintain the physical efficiency of the working class oiks. But that's also a 'so what?' moment. The facts are simple. You've ignored the evidence that shows SS is pareto improving (ensuring that you've openly attacked a very basic aspect of individualism) and you've made bogus claims about both poverty and the impact of privatisation on poverty.

This is just repetition of your erroneous dodge. SS is found to be pareto improving. You can't reject that evidence as its based on realistic assumption over wage shocks. You've therefore twinned utopianism with an ideological attack on individualism. Not a good result!

 

How can social security be Pareto improving when every dollar of benefit that a recipient gets comes by taking a dollar from someone else? Does that Pareto improvement assume that every contributor will be given benefits art least equal to what they pay?

 

SS, compared to the alternative, is pareto improving. I don't think its too difficult to work out, so the continued 'pretend ignorance' really isn't appreciated

 

Compared to what alternative? Personal Wealth? That seems illogical. There are two fundamentally opposing positions. The first (existing Social Security) is to mitigate poverty and the other (privatized investments) is to overcome poverty by creating personal wealth.

The elimination of poverty through personal investment actually costs about 1/2 as much as mitigating poverty through welfare but there is a transitional period of several decades to eliminate the other 1/2 of the dollars required for the welfare program. It took decades for us to create the huge welfare program we have today and it will take decades to eliminate it.

In the end the elimination of the welfare program that only mitigates ever increasing poverty and replacing it with personal wealth that eliminates the poverty costs far less.

 

I've always liked to look at these things by assuming there are X$ which are going to be moved between people and government. The X$ are what Congress and people currently are willing to move around. Today those X$ are about $2.2 trillion. Who pays the $2.2 trillion will be defined by politics. Regarding FICA, since it operates precisely like a Ponzi scheme, we take $1 from the private sector, give that $1 to the government, who turns around and gives that $1 to the SS recipient. Actually we are taking $1 from the private sector, giving $.75 to the SS recipient and $.25 to the government. Since that $1 cannot be moved without some costs, perhaps the $1 that returns to the SS recipient might only be worth $.75. So we take $1 out of the private sector and return $.75 to the private sector and do this annually to the tune of about $700 billion! If this scenario can be fairly accurate, then in terms of the actual private economy, this type of program has a negative impact on the economy. In terms of the SS program and the redistribution of wealth to support welfare programs, it benefits the SS recipient at the cost to others.

This is only one example why government is absolutely necessary...but government must be minimized...