CEPR - Center for Economic and Policy Research

Multimedia

En Español

Em Português

Other Languages

Home Publications Blogs Beat the Press NPR Continues Its Campaign Against Social Security by Telling Listeners That We Don't Have Enough People

NPR Continues Its Campaign Against Social Security by Telling Listeners That We Don't Have Enough People

Print
Monday, 03 October 2011 04:32

Morning Edition had a segment with journalist Phillip Longman who told listeners that the world was suffering from having too few children [sorry, no link yet]. Longman wrongly said that European countries now have large budget deficits because they have too few workers and large pension obligations.

This is not true. European countries have large budget deficits because their economies collapsed as a result of the collapse of housing bubbles in countries like Spain, the United Kingdom, and Ireland. This can be easily shown by the fact that almost all of these countries had moderate budget deficits or surpluses just a few years ago, when their demographics were almost exactly the same.

The prospect of stagnant or declining populations actually offers many benefits for densely populated countries. It means that there will be less strain on infrastructure and natural resources (a larger percent of the population can have beachfront property). It also means that it will be easier for to meet targets on greenhouse gas emissions.

It would be useful if Morning Edition tried to make sure that the people it brings on to speak on economic issues at least had some knowledge of the economy.

Comments (5)Add Comment
Inefficiency is Sexy
written by izzatzo, October 03, 2011 6:17
...the world was suffering from having too few children


Exactly. Socialist interference with the natural order via birth control is where it all began.

Neoclassical economists from the marginal revolution proved via Malthus that while there were no diminishing returns to having sex there were sharply diminishing returns to the last child born at the margin - thus the introduction of birth control.

Once sex was severed from reproduction inefficiencies set in to cull down population size as pleasure-pain principles became the primary source of productivity over other input-output relationships, causing it to decline sharply.

If only Europe had stuck with the Christian Missionary Position on Productivity there would be plenty of workers today along with cushy pension plans large enough to make the rich wince with envy, especially given the small size of their carefully planned families cultivated as inheritance targets.

Stupid liberals.
...
written by uwo, October 03, 2011 8:15
Izzatzo, I really hope you've been saving these over the years. I would love to see a collection.

(though i don't know how many people have posed as izzatzo over the years)
Socialism
written by laturb, October 03, 2011 12:59
The UK's economic difficulties may have been exacerbated by the property downturn, but it's misleading to lump them in with Ireland and the US, who both have had considerably more difficulties is this area.
What the UK suffered from was thirteen years of incompetent management by a socialist administration. Both Blair and Brown recklessly spent and borrowed, and expanded the public sector until it was responsible, in many areas of the country, for over half of all employment.
Would be true if there were no productivity growth
written by rationalrevolution, October 03, 2011 2:34
See my post here for a full rebuttal of the NPR claim:
http://www.rationalrevolution....d=2133122

Basically, the real problem is growing income inequality, not population growth rates, at least for Social Security, but also for some of the European systems as well.

In order to support a growing number of people in a retirement system you need at least 1 of 3 things, either a growing number of workers to keep the ratio of workers to retirees at least stable or growing, you need to put a growing portion of the worker's pay toward the benefits of the retirees, ****OR**** you need growing productivity!

Here is the key. Productivity has increased dramatically in every Western nation, especially the US, over the past 50 years, which is to say that a worker today creates 3 dollars for every 1 dollar that a worker produced 30 or 40 years, or in practical terms, a farmer today grows 3 ears of corn for every 1 ear of corn grown 30 or 40 years ago. So if a farmer is growing 3 ears of corn for every one 30 years ago, then a farmer today can support 3 retirees today for every 1 retiree a farmer supported 30 years.

Here is the problem: ALL OF THE INCOME GROWTH OF THE PAST 30 YEARS HAS GONE TO THE SUPER-RICH, IN FORMS OF INCOME THAT ARE COMPLETELY UN-TAXED BY SOCIAL SECURITY!

So, our economy has grown and productivity has grown in such a s way that we easily COULD support may more retirees today even with a shirking population and fewer workers per retiree, *IF*, *IF*, we actually applied our Social Security tax to ALL income instead of a DECLINING form of income, which is to say middle-class wages!

Since Social Security is funded purely through working class wages, not capital gains and not high end wages (which all income growth has occurred in the past 30 years) it means that all economic growth of the past 30 years has been untaxed by Social Security.

Social Security would be totally fine if the income growth of the past 30 years had been evenly distributed, and thus been taxed by Social Security, instead of having almost entirely all escaped Social Security taxation. It is simply a fact that when Social Security was set and when it was revised again in 1983, everything was done under the assumption of static income distribution, but it hasn't worked out that way, and that's why we have funding problems, NOT because of "too few people".
Any day now I expect to see ...
written by John Puma, October 04, 2011 7:45
a report that this site's commenter "izzatzo" has been interviewed by NPR on economic issues.

Write comment

(Only one link allowed per comment)

This content has been locked. You can no longer post any comments.

busy
 

CEPR.net
Support this blog, donate
Combined Federal Campaign #79613

About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

Archives