Comments for Inter-generational Equity and the Lies They Tell in Washington at http://www.cepr.net , comment 1 to 12 out of 12 comments http://www.cepr.net Tue, 21 May 2013 21:19:31 +0100 FeedCreator 1.7.3 http://www.cepr.net/index.php/blogs/beat-the-press/inter-generational-equity-and-the-lies-they-tell-in-washington#comment-1962 I already know my kids, who range in age from 22 to 30, are going to have to work harder and longer to earn a decent wage and that fact has absolutely nothing to do with the deficit. It has everything to do with "American" corporations shipping all their jobs overseas to places like Indonesia where labor is dirt cheap. No one is worrying about the deficit, but everyone is worrying about jobs. Everyone in Washington knows this and they are deliberately not doing anything about it. Hence, no Town Halls this summer because they do not want to face the reality that their voters need jobs and not a lecture on the deficit. Fixing the deficit is actually easy if they want to do it but they don't. Start by slashing the Pentagon's many, many budgets, and then go one by cutting foreign aid to countries that are more trouble than they are worth, and whose citizens enjoy government paid for health care while Americans are going bankrupt because of their medical bills. Maybe then there will be some money left to do a jobs bill, but I'm not holding my breath with this wimpy administration, and especially this congress (the Senate specifically) to grab their sack and do the right thing. - Pat Sat, 07 Aug 2010 01:33:30 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/inter-generational-equity-and-the-lies-they-tell-in-washington#comment-1953 Ironic isn't it, how the tea party zealots wish to harken back to the wisdom of the "Fathers" (I suppose that makes them children), whose world was a preindustrial plantation system founded on princely crown land grants. They do indeed yearn for the days when their lowly place was clearly defined, as servility seems to come naturally to them. Too bad another revolution occurred in the interim--the industrial--of which they appear to be unaware, and which renders them hapless wage slaves rather than tenet farmers or sovereign small holders. - diesel Fri, 06 Aug 2010 15:04:55 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/inter-generational-equity-and-the-lies-they-tell-in-washington#comment-1952 I wonder if our grandparents obsessed about the debt they were passing on to us when they recklessly decided to fight in WWII, or build the Interstate highway system or put Americans on the moon or . . . Fortunately, they didn't care about our debt burden at all. - Paul Fri, 06 Aug 2010 11:03:43 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/inter-generational-equity-and-the-lies-they-tell-in-washington#comment-1951 There is a further weakness in the “whinger” argument. This is that in as far as national debt is held by natives of the country concerned, one set of natives pass on an asset to their heirs, namely national debt or “Treasuries”, while others (those who hold little or no national debt) pass on a liability: the obligation to pay interest and repay principal. These two, (assets and liabilities) are of exactly equal magnitude, thus these payments have NO EFFECT WHATEVER on average living standards of future generations. In contrast, there is the portion of national debt held by foreigners. The effects here are more complicated and are way beyond the comprehension of the whingers (and beyond the comprehension of those “foundations” which regularly get articles in the WSJ – you know the ones). It would take me a thousand words or so to set out all the different possible effects here, and this isn’t the place for a full length article. - Ralph Musgrave Fri, 06 Aug 2010 10:31:36 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/inter-generational-equity-and-the-lies-they-tell-in-washington#comment-1950 Well, having gone after home equity--the second-to-last bit of wealth most people had--they've now discovered there's something else to be had. So they're going after Social Security benefits. Then there really won't be anything. - PeonInChief Fri, 06 Aug 2010 09:52:11 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/inter-generational-equity-and-the-lies-they-tell-in-washington#comment-1949 Yes, if the official wage-growth projections are correct, let alone if they are too high, SS taxes will have to be increased or benefits reduced to meet the objective of current benefit levels when the Trust Fund expires. But this is a matter of adjusting tax or benefit levels so that there is no discontinuity at that time, not of survival of the program. When the Trust fund is gone, if the population growth has been relatively steady there will be no real need for long-term projections. And if wages do not increase - they are now around 1970 level - should workers be taxed at higher rates to maintain current benefits? These things will have to be decided, but there is plenty of time and there is no crisis now. The idea that economists (or anyone) could predict something like wage growth 30 years in advance is absolutely ridiculous. This is one reason why SS is not dependent to the first order on investment funds etc. - it is basically an immediate transfer of income from wage earners to retirees. The SS bashers seize on any kind of projection, from a wide possible range, that seems to support their case, which is a phony one in the first place (based on the lie that the Trust Fund is the program itself). - skeptonomist Fri, 06 Aug 2010 09:41:52 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/inter-generational-equity-and-the-lies-they-tell-in-washington#comment-1948 don't care about this generations living standards, why would they care about the next one's? These folks are just looting the piggy bank, for them and their funders. - dcdan Fri, 06 Aug 2010 08:02:50 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/inter-generational-equity-and-the-lies-they-tell-in-washington#comment-1946 skeptonomist: Largely for the reasons you have stated, I am in favor of maintaining the current Social Security benefit structure, even at the cost of tax increases. I just think it is a tactical mistake to overstate the case for the result one favors. Also, I think SS cost projections cannot be ignored. If the % increase in the average wage over the next 30 years is no higher than it was in the past 30 years, then the cost of maintaining the current SS benefit structure will be higher (as a % of covered payroll and of GDP), than it would if the more optimistic wage projections in the Trustees Report proved out. Again, I believe that tax increases to maintain the current SS benefit structure will be a price worth paying. However, I also believe that is important to be realistic in thinking about what that price is likely to be. - wkj Fri, 06 Aug 2010 06:08:21 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/inter-generational-equity-and-the-lies-they-tell-in-washington#comment-1945 wkj - 47.8% over 30 years is about 1.3%/yr, which doesn't seem that high (they assume a long-term 1.2%, with higher than that in the next few years due to assumed recovery from the recession). For 1960-2005, the average was about 1%. For 1978-2008, the first 2 years saw a total drop of about 7.2%, and the last year of 2.1%, which pulls the average down a lot. - Mike B. Fri, 06 Aug 2010 05:58:50 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/inter-generational-equity-and-the-lies-they-tell-in-washington#comment-1942 Running up the debt does put a burden on our descendents, but the clash is really inter-class, not intergenerational. The reason that we have been running large deficits since 1981 is that taxes have been reduced on the rich, while SS has been accumulating a surplus. Now the rich and those they control want the Trust Fund debt to be dishonored in order to keep taxes on upper brackets from rising. wkj: Projections are not really the issue. The trust fund will run out eventually and then what retirees get will depend on the wage level at that time, and what fraction of it goes to retirees. The demographics are fixed for a considerable time into the future. If income inequality continues to increase, both workers and retirees dependent on SS will be in trouble. The real issues are the income inequality and skewing of the economy toward finance and other things which do not really increase the general standard of living. Fiddling with retirement ages or adjusting payout rates is not the solution to these problems. SS bashers like to get people arguing about projections because it diverts attention from the real issues. - skeptonomist Fri, 06 Aug 2010 04:09:14 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/inter-generational-equity-and-the-lies-they-tell-in-washington#comment-1937 Dean--I believe that the CPI-adjusted cumulative increase in the Social Security average wage for the 30 years from 1978 to 2008 (the last year for which I could find figures) was 13.8%. This skimpy increase was also slightly exaggerated by the change in the definition of "wages" 1990 to include certain deferred compensation contributions that had not previously be counted. The SS Trustees assumption of a 47.8% increase in real wages over the next 30 years is thus almost 3.5 times the 13.8% increase over the last reported 30 year period. What are they smoking? Also, you are usually pretty skeptical about "expert" projections, why are you buying their assumption? - wkj Fri, 06 Aug 2010 01:53:22 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/inter-generational-equity-and-the-lies-they-tell-in-washington#comment-1936 The unrelenting march to armegeddon by the Republican party is de je vu all over again. Fresh off of "fwee markets and fwee twade", the shifting of medical, pension and financial risk to the unorganized citizenry, they are busy polishing off the last leg of FDR America. Back to the days of the plantation society. Who could possibly have seen it coming ? - zinc Fri, 06 Aug 2010 01:27:04 +0100