Re: Re: [Pen-l] PK on the Madoff Nation

[raghu <mraghu01@xxxxxxxxx>]

On Sat, Dec 20, 2008 at 4:55 PM, David B. Shemano <dshemano@xxxxxxxxxx> wrote:
> Social security payments will be paid until the payments become unpopular.  Social security is relatively popular now because (1) the taxes are both stable and hidden (the tax is paid by the employer before the wage check is given), (2) the taxes are capped to maintain the argument that benefits are linked to contributions and the the program is not redistributionist, and (3) most people believe they will receive the payments when they get older.

The obvious solution to this is to educate people on how Soc Sec
really works and then find out if there is still support for it. My
guess is it will still be highly popular. With all due respect, I
think you are projecting your personal beliefs on the whole US
population.



> If entitlements continue to increase as a share of government budgets, the programs will ultimately have to require signicantly more taxation, and/or become explicitly redistributionist.  Furthermore, more and more workers will truly believe they will receive nothing.

It is redistributionist in the same sense as any insurance is
redistributionist. It is old age poverty insurance. What exactly is
wrong with that? Do you consider your car insurance
"redistributionist" because you didn't have an accident and so
received nothing?

But I don't understand why it'll necessarily require more taxation.
Any demographic trends are only temporary and will reverse itself in
time.


> At a certain point, the program will become sufficiently unpopular and there will be a crisis.

Of course. Thats a tautology. But you are making the unfounded
assumption that it will somehow become unpopular. Also the same
argument holds for *any* government obligation. If it becomes
unpopular, the government will probably renege on it.
-raghu.

--
milli-helen : The amount of beauty required to launch one ship.
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