orb@whuts.UUCP (SEVENER) (11/05/85)
> > > Ronald Reagan has spent over $1 trillion on the military during his > > administration, far more than combined outlays for "social spending". > > For your information, Mr. Wheeler, "social spending" is usually not > > defined as money for the Weather Bureau, the Parks System, > > federal highways, etc. but money for various welfare programs. > > -- Tim Sevener (orb@whuts) > > Tim makes this claim from time to time, and it doesn't seem to matter that > I usually post statistics which show that it's utter nonsense. I wish Tim > would get a copy of the *US Statistical Abstract* and look this up for > himself each time he gets the urge to post an article about the federal > budget. > > For the record, military spending does not exceed outlays for "social > spending". Data for the following table was obtained from the US > Statistical Abstract, 1984, p.316; the numbers indicate acutal outlays in > millions of dollars. > 1980 1983 > ----- ----- > National Defense 135.9 214.8 > Vet.Benefits 21.2 24.4 > Total Military 157.1 239.2 > % of total outlays 27.2 29.7 > > Income Security 193.1 282.5 > Health 55.2 82.4 > Education 30.8 26.7 > Total Social Spending 279.1 391.6 > % of total outlays 48.4 48.6 > > 1980 is of course the last full Carter year. The figures for 1983 are > estimates in the Abstract; other sources (Congressional Quarterly, Feb. 4, > 1984, pp.206-7) indicate that the actual figures for the military are > *lower*, and actual figures for social spending are *much higher*). > The budgets of the weather bureau, parks system, federal highways, etc. do > not appear anywhere in the table. > Scott Renner Scott you know very well that you are greatly confusing the issue by including Social Security as part of "social spending". When most Americans talk of "social spending" I do not think that they consider Social Security as a part of that. Most Americans think of "social spending" as first off welfare (i.e. Aid to Families with Dependent Children, Food Stamps), and then perhaps such things as Medicare, Medicaid, and education. Social Security is not even a part of the Federal budget as such but technically is an independent trust fund to which people pay every year for their retirement like any other pension fund. Savings for retirement or disability, whether forced by the government, by a corporation, or any other organization, can hardly be considered in the same class as welfare programs. Welfare programs are deliberate subsidies to those with lower incomes. Pension funds, such as Social Security, are established and maintained by workers' own contributions and are as much a part of the remuneration for a job as the weekly paycheck. The money paid out is partially based upon the money paid in and the amount of quarters worked. By including the government sponsored Social Security pension fund you can therefore create the impression that subsidies to the poor are enormous and the largest part of the federal budget. This is patently false and I hope you will cease making such misleading comparisons. Such a comparison would be like corporations claiming that their "philanthropy" includes corporate pension funds (which include much larger pensions for executives than ordinary workers), so that they are practically giving away all their profits. It is more accurate to either 1)totally exclude the Social Security Trust Fund OR 2)explicitly note it as a special category independent of "Income Security"- which lumps a worker paid pension fund with actual welfare subsidies to the poor thank you, tim sevener whuxn!orb
js2j@mhuxt.UUCP (sonntag) (11/06/85)
> Scott you know very well that you are greatly confusing the issue by > including Social Security as part of "social spending". > When most Americans talk of "social spending" I do not think that > they consider Social Security as a part of that. Most Americans > think of "social spending" as first off welfare (i.e. Aid to Families > with Dependent Children, Food Stamps), and then perhaps such things > as Medicare, Medicaid, and education. > Social Security is not even a part of the Federal budget as such but > technically is an independent trust fund to which people pay every year > for their retirement like any other pension fund. Savings for > retirement or disability, whether forced by the government, by a > corporation, or any other organization, can hardly be considered > in the same class as welfare programs. If social security *were* government forced savings for retirement, then I wouldn't consider it social spending. But that's not what social security is. In reality, as I'm sure Sevener is well aware of, the government collects funds from working people and transfers them to retired or disabled people immediately. This sounds *awfully* similar to other forms of social spending. > subsidies to those with lower incomes. Pension funds, such as Social > Security, are established and maintained by workers' own contributions > and are as much a part of the remuneration for a job as the weekly > paycheck. The money paid out is partially based upon the money > paid in and the amount of quarters worked. > > By including the government sponsored Social Security pension fund > you can therefore create the impression that subsidies to the poor > are enormous and the largest part of the federal budget. > This is patently false and I hope you will cease making such > misleading comparisons. Such a comparison would be like corporations > claiming that their "philanthropy" includes corporate pension funds > (which include much larger pensions for executives than ordinary > workers), so that they are practically giving away all their profits. > It is more accurate to either > 1)totally exclude the Social Security Trust Fund > OR > 2)explicitly note it as a special category independent of > "Income Security"- which lumps a worker paid pension fund > with actual welfare subsidies to the poor > thank you, > tim sevener whuxn!orb *** REPLACE THIS LINE WITH YOUR MESSAGE *** -- Jeff Sonntag ihnp4!mhuxt!js2j "What would Captain Kirk say?"
larryk@tektronix.UUCP (Larry Kohn) (11/07/85)
>> >> Data for the following table was obtained from the US >> Statistical Abstract, 1984, p.316; the numbers indicate acutal outlays in >> millions of dollars. Adding some calculations not included in the previous two postings, yields: CALCULATIONS ---------------- >> 1980 1983 AMOUNT PERCENT >> ----- ----- ------ ------- >> National Defense 135.9 214.8 +78.9 +58.1% >> Vet.Benefits 21.2 24.4 + 3.2 +15.1% >> Total Military 157.1 239.2 +82.1 +52.3% >> % of total outlays 27.2 29.7 + 2.5% ------ >> >> Income Security 193.1 282.5 +89.4 +46.3% >> Health 55.2 82.4 +27.2 +49.3% >> Education 30.8 26.7 - 4.1 -13.3% >> Total Social Spending 279.1 391.6 +112.5 +40.3% >> % of total outlays 48.4 48.6 + 0.2% ------ ALTERNATIVE VIEWPOINT: ---------------------- CALCULATIONS ---------------- >> 1980 1983 AMOUNT PERCENT >> ----- ----- ------ ------- >> National Defense 135.9 214.8 +78.9 +58.1% >> Vet.Benefits 21.2 24.4 + 3.2 +15.1% >> Total Military 157.1 239.2 +82.1 +52.3% >> % of total outlays 27.2 29.7 + 2.5% ------ >> >> Health 55.2 82.4 +27.2 +49.3% >> Education 30.8 26.7 - 4.1 -13.3% Total Social Spending 86.0 109.1 +23.1 +26.9% % of total outlays 14.9 13.5 - 1.4% ------ DRAW YOUR OWN CONCLUSIONS!
orb@whuxl.UUCP (SEVENER) (11/07/85)
> From Jeff Sonntag: > If social security *were* government forced savings for retirement, > then I wouldn't consider it social spending. But that's not what social > security is. In reality, as I'm sure Sevener is well aware of, the > government collects funds from working people and transfers them to > retired or disabled people immediately. This sounds *awfully* similar > to other forms of social spending. It is *not* similar to other forms of social spending. In order to be eligible for social security you must have paid into Social Security for a certain number of quarters of your working life. Those people who have worked all their lives and dutifully paid into the Social Security have every right to the pension they have paid for. Moreover this is often the *only* protection some people have, particularly those with lower incomes and less ability to save voluntarily, for some sort of pension at retirement. There are some major problems with the way that many corporate pension programs work. If you get laid off and are forced to work somewhere else your private pension is usually untransferable. Social Security remains in effect wherever you work, so long as payments are made into the Social Security Trust Fund. Many corporations unfortunately engage in the practice of deliberately laying off older employees as they approach their retirement so they are not forced to pay the full benefits they would otherwise have to pay if those workers remained in the company until their retirement. This is frequently done to engineers and others with technical skills which become considered *obsolescent*. Younger workers fresh out of college are assumed to be more up-to-date and also to be a lot cheaper given that they have not accumulated the vacation days, and salaries of older workers at the same time they do not present the same potential costs in terms of imminent full-fledged retirement benefits. Nor are corporations (*or* unions!) immune to using pension funds for other uses besides simply paying workers' retirement. The New York Times Business Section just had an article on corporations use of pension funds for their own investments and purposes. I believe there is something approaching $400 billion controlled by pension funds in today's economy. That is a lot of money to have to use for capital leverage. The fact that current payments to Social Security are used to pay retirement benefits to current retirees is a potential problem for the Social Security system as the very large baby boom population comes to retirement to be supported by a much smaller generation of younger workers. But this problem and this practice is no different than that used by banks, insurance companies or other pension and disability funds. -tim sevener whuxn!orb
tw8023@pyuxii.UUCP (T Wheeler) (11/08/85)
Wrong again, Sevener. You say that private pensions are not transferable. Better catch up on your reading. The fact is is that private pensions ARE transferable by law since about 1977. That' Federal Law. T. C. Wheeler
scott@hou2g.UUCP (Colonel'K) (11/08/85)
I'd worry a lot less about Social Security if people were only allowed to take out what they put in (plus "interest"). As it is, there are quite a few who draw funds far in excess of what's been put in. I'm perfectly capable of doing my retirement saving on my own, thank you. Scott Berry
mcgeer@ucbvax.BERKELEY.EDU (Rick McGeer) (11/09/85)
In article <784@whuxl.UUCP> orb@whuxl.UUCP (SEVENER) writes: >> From Jeff Sonntag: >> If social security *were* government forced savings for retirement, >> then I wouldn't consider it social spending. But that's not what social >> security is. In reality, as I'm sure Sevener is well aware of, the >> government collects funds from working people and transfers them to >> retired or disabled people immediately. This sounds *awfully* similar >> to other forms of social spending. > >It is *not* similar to other forms of social spending. In order to >be eligible for social security you must have paid into Social Security >for a certain number of quarters of your working life. Those people >who have worked all their lives and dutifully paid into the Social >Security have every right to the pension they have paid for. >Moreover this is often the *only* protection some people have, >particularly those with lower incomes and less ability to save >voluntarily, for some sort of pension at retirement. Sevener, you never fail to amaze me. I didn't think that anyone other than Tip O'Spendit could actually spout that propaganda with a straight face. OK. (1) Nobody currently receiving social security paid into the program anything like what they're getting out. The relationship between payments made and benefits received is essentially nonexistent. Those currently receiving benefits have contributed a small fraction of the amount they receive. Second. At no time did the US government contract for any particular level of benefits -- the benefits are those mandated by Congress from time to time. Hence not only do those receiving SS not have a moral claim to the level of benefits they receive, they don't have a legal one, either. Social Security may be the single most odious program the US Federal Government runs. It is not so much a pension plan as a ponzi scheme, and it is as singularly successful as the latter as it is unsuccessful as the former. It is a poor social program, as well: it transfers from the poor to the rich, from the working to the idle, and from the young to the old. Milton Friedman points out that it is a genius for political salesmanship that a program which consists of a regressive tax and a welfare-for-the-rich scheme (neither of which, obviously, would have flown alone) has been turned into the most popular political program of the century. > >There are some major problems with the way that many corporate pension >programs work. If you get laid off and are forced to work somewhere >else your private pension is usually untransferable. Social Security >remains in effect wherever you work, so long as payments are made >into the Social Security Trust Fund. IRAs have the same advantage, as do other private (non-corporate) pension plans. >Many corporations unfortunately engage in the practice of deliberately >laying off older employees as they approach their retirement so >they are not forced to pay the full benefits they would otherwise >have to pay if those workers remained in the company until their >retirement. This is frequently done to engineers and others with >technical skills which become considered *obsolescent*. Younger >workers fresh out of college are assumed to be more up-to-date and >also to be a lot cheaper given that they have not accumulated the vacation >days, and salaries of older workers at the same time they do not >present the same potential costs in terms of imminent full-fledged >retirement benefits. EVIDENCE? >Nor are corporations (*or* unions!) immune to using pension funds for >other uses besides simply paying workers' retirement. The New York >Times Business Section just had an article on corporations use of >pension funds for their own investments and purposes. I believe there >is something approaching $400 billion controlled by pension funds >in today's economy. That is a lot of money to have to use for capital >leverage. This is true. But note how we're now financing the deficit, since the house won't pass the deficit-cutting package. > >The fact that current payments to Social Security are used to pay >retirement benefits to current retirees is a potential problem >for the Social Security system as the very large baby boom population >comes to retirement to be supported by a much smaller generation of >younger workers. Bingo. I'm 28, and I'll never see a nickel of Social Security. A combination of extended lifespans and fewer young workers will see Social Security to its deserved death long before 2022, or whenever it is that I retire -- and I'll bet that the same demographic forces that kill SS will keep me working well into my 70s, at least: of course, I'm at the age where that doesn't sound unattractive. >But this problem and this practice is no different than that used by >banks, insurance companies or other pension and disability funds. > >-tim sevener whuxn!orb The difference is that most such programs are actuarially sound -- and those that aren't go broke. SS is run on principles that would make an actuary puke, and when it goes tits up -- every decade, or thereabouts -- another generation is stiffed to pay for the mistakes of the past. One of these days the con won't fly anymore. Rick.
myers@uwmacc.UUCP (Latitudinarian Lobster) (11/09/85)
> Sevener, you never fail to amaze me. I didn't think that anyone other than > Tip O'Spendit could actually spout that propaganda with a straight face. > OK. (1) Nobody currently receiving social security paid into the program > anything like what they're getting out. The relationship between payments > made and benefits received is essentially nonexistent. Those currently > receiving benefits have contributed a small fraction of the amount they > receive. Statistics? The statistics quoted should use 1972 dollars, so that inflation is taken into account. My Dad's buck in 1935 is a little different than his buck today. Both he and I are glad that he is receiving some of his money back from SS. > ...It > is a poor social program, as well: it transfers from the poor to the rich, > from the working to the idle, and from the young to the old. Yeah, death to the idle, rich oldsters! Better not let a Gray Panther hear you talk, buddy. > Milton Friedman points out... Ah, it all becomes clear now. I heard Friedmanite Chicago School economic policies pulled a real coup in Chile. Pretty funny, huh? Get it, coup in Chile! Yuk, yuk. Maybe Rick can tell us how the Chileans didn't REALLY follow Friedman's policies to explain the failure of their economy. > Bingo. I'm 28, and I'll never see a nickel of Social Security. A combination > of extended lifespans and fewer young workers will see Social Security to its > deserved death long before 2022, or whenever it is that I retire -- and I'll > bet that the same demographic forces that kill SS will keep me working well > into my 70s, at least: of course, I'm at the age where that doesn't sound > unattractive. I'm more worried about nuclear war. For today's lesson in basic governmental economics, let's turn to the February 1983 issue of *Monthly Review*. I sent this article to my conservative parents, and it impressed them. Let's look at the short term, first. There are three separate trust funds set up under the social security system. Here are some projections of trust fund assets from the Congressional Budget Office, quoted in the June 6, 1982 issue of the *New York Times*: Assets in Trust Funds in Billions of Dollars End Year Old Age and Disability Hospital Combined Survivors Ins. Insurance Insurance Funds ------------------------------------------------------------------------ 1982 12.6 6.4 21.0 40.0 1983 2.8 6.2 22.1 31.1 1984 -16.6 14.9 21.1 19.4 1985 -33.5 30.2 18.4 15.1 1986 -50.5 50.8 15.7 16.0 1987 -69.1 75.1 10.0 16.0 ``All the hue and cry about insolvency stems exclusively from the estimated negative figures ... in the first column of the above table. It has no other basis whatsoever.... One obvious way to straighten out what is really a very minor difficulty, in spite of the big numbers involved, is to change the allocation of payroll-tax inflow among the three trust funds.'' MR, pp. 8-9. I'm not sure whether anything along this line has been done, but I don't believe so. The article goes on to point out that, when the baby boom generation gets old and needs to collect social security, there won't be as many children around to support, and thus the overall number of dependants being supported by society will not change much. The author (Jacob Morris) concludes: ``The main purpose of the gross exaggeration of the Social Security crisis of the twenty-first century is to demoralize the active workers who pay the current taxes which provide the current benefits for the retired workers, who are their parents and grandparents. The crisis- mongers [like our own Rick] want to drive a wedge between the generations; they want to weaken the political opposition of the younger workers to the current attack on the benefits of their parents and grandparents. But beyond that the enemies of Social Security want to soften up the many millions of young workers for a dismantling of the whole system and for its partial replacement by individual insurance and private company pensions.'' > The difference is that most such programs are actuarially sound -- and those > that aren't go broke. SS is run on principles that would make an actuary > puke, and when it goes tits up -- every decade, or thereabouts -- another > generation is stiffed to pay for the mistakes of the past. One of these days > the con won't fly anymore. > > Rick. Well, let's look at the actual input and output from the three funds in recent years. These figures are from table B-71 of the 1985 *Economic Report of the President*, a book every budding Friedmanite should own (I got my copy for $1.50) (figures below are in billions): 76 80 81 82 83 84 85 86 ---- ---- ---- ---- ---- ---- ---- ---- Receipts 90.8 157.8 182.7 201.5 209.0 241.7 268.4 289.4 Outlays 89.7 150.6 178.7 202.5 223.3 235.7 257.4 269.4 The 85 and 86 figures are, of course, projections. Note how the trend corroborates the figures given in the *Times* article of 1982. Good job, Rick -- your lack of skill as a truthsayer is rivaled only by your sexism (tits up, indeed). Por la defensa de la verdad, jeff myers
carnes@gargoyle.UUCP (Richard Carnes) (11/11/85)
In article <10936@ucbvax.BERKELEY.EDU> Rick McGeer writes: >Social Security may be the single most odious program the US Federal >Government runs. It is not so much a pension plan as a ponzi scheme, >and it is as singularly successful as the latter as it is >unsuccessful as the former. It is a poor social program, as well: it >transfers from the poor to the rich, from the working to the idle, >and from the young to the old. Milton Friedman points out that it is >a genius for political salesmanship that a program which consists of >a regressive tax and a welfare-for-the-rich scheme (neither of which, >obviously, would have flown alone) has been turned into the most >popular political program of the century. Friedman characteristically overlooks the possibility that the popularity of the program may be due to a widely shared consensus in favor of the ideal that Social Security represents, so he must invent imaginary political supersalesmen to explain its popularity. The ideal is communal provision of a subsistence for those who are not able to work or who have lost their source of support: the elderly, survivors, and the disabled. Communal provision was not invented by the New Deal; every society has practiced some form of it. Social Security was instituted during the New Deal years in order to facilitate this communal provision, since the need for it was acute. There are many serious flaws in its implementation, such as the regressive nature of the taxes. But by and large people are not aware of such subtleties, but only that it is supposed to provide "security" for persons who are deemed to be entitled to it -- as distinguished from welfare for the poor, who, according to the devout belief of most Americans, are not owed a living by anyone, certainly not by Joe Taxpayer. In other words, J. Taxpayer believes that the elderly and disabled *deserve* a portion of his income, while the poor in general do not, although he is sometimes willing to give charity to the poor, as God gives grace to us undeserving sinners. Anyone with a serious interest in the effect of government in the US on the distribution of income and wealth should read Benjamin Page's book *Who Gets What From Government*. This is outstanding: thorough and well written. It contains surprises for most readers, but especially for those who believe that government is engaged in some kind of massive transfer of wealth from rich to poor in the US. -- Richard Carnes, ihnp4!gargoyle!carnes
carnes@gargoyle.UUCP (Richard Carnes) (11/12/85)
>Social Security may be the single most odious program the US Federal >Government runs. ... It is a poor social program, as well: it >transfers ... from the working to the idle... Horrors. The elderly, the disabled, widows, orphans, etc. are not often called "the idle." >...and from the young to the old. What an outrage. In fact, thanks to Social Security, most of the aged poor have been raised out of poverty, an accomplishment of which Americans can be very proud. It takes some kind of clod to dismiss a program with this accomplishment to its credit as a mere failure or scam. >It transfers from the poor to the rich.... Inaccurate. For example, in 1974, ~60% of SS payments went to those with pre-transfer incomes below the poverty line, i.e. to those who would have been poor without it. Administrative costs are extremely low in percentage terms. However, the redistributive impact of SS is quite limited. On average in 1981 it replaced only about 40% of a worker's pre-retirement income. And most of the aged who are poor when they receive SS benefits have previously been middle-class through most of their lives. SS smoothes lifetime income streams by forcing people to save while they are working and paying back money when people retire. Also, workers in effect are buying insurance against certain kinds of poverty, through being disabled, leaving a widowed spouse, or outliving one's private savings. The private sector would probably not provide such insurance (or Medicare either) even though there is a demand for it (see P. A. Diamond, "A Framework for Social Security Analysis," J Public Econ 8 (1977): 279-98). Insurance, rather obviously I hope, is not a commodity for sale on the open market. But: SS does *not* equalize lifetime incomes among income classes. It is financed by regressive payroll taxes, and workers with relatively higher incomes tend to receive greater benefits, although it is true that certain features of SS do not fit the pure insurance model. But the SS system cannot continue unless population or productivity continues to grow fast enough so each generation of retirees is supported by a larger or more productive group of workers. This is the resemblance to a Ponzi game. >Hence not only do those receiving SS not have a moral claim to >the level of benefits they receive... According to libertarians, they don't have a moral claim (a right) to any benefits at all. Social Security inspires great wrath and outrage among libertarians, because it provides at taxpayer expense a subsistence for the elderly and disabled, and some of those taxpayers may actually prefer to spend the money in other ways. This is a question of one's philosophy of ownership rights and other political rights. Unfortunately many libertarians never get this far: it doesn't occur to some of them that they must defend, rather than merely assert, their views on ownership rights, according to which taxation is of necessity theft and individuals have a right to own privately the means of production. -- Richard Carnes, ihnp4!gargoyle!carnes
mvs@meccts.UUCP (Michael V. Stein) (11/13/85)
In article <784@whuxl.UUCP> orb@whuxl.UUCP (SEVENER) writes: >The fact that current payments to Social Security are used to pay >retirement benefits to current retirees is a potential problem >for the Social Security system as the very large baby boom population >comes to retirement to be supported by a much smaller generation of >younger workers. >But this problem and this practice is no different than that used by >banks, insurance companies or other pension and disability funds. > >-tim sevener whuxn!orb Totally *false*. All pension funds/annutities are operated on an actuarial basis. They certainly do not operate by paying off the retirees with current payments. -- Michael V. Stein Minnesota Educational Computing Corporation - Technical Services UUCP ihnp4!dicomed!meccts!mvs