Liberal Social Policies: greatest economic threat to US

http://www.msnbc.com/news/940556.asp?0dm=T12OB

You have to read down a bit to get to the real point:

In fact many economists say the biggest budget problems are not even reflected in the latest budget projections. They warn of a potential fiscal train wreck in the making as the government piles up trillions of dollars in obligations to pay Social Security and Medicare expenses for generations of baby boomers now approaching retirement.

Economists Jagadeesh Gokhale and Kent Smetters of the conservative American Enterprise Institute estimate the current imbalance for the two massive entitlement programs at $43 trillion, dwarfing the reported $3.5 trillion national debt. Economists at the more centrist Brookings Institution estimate the gap at $59 trillion.

To put even the smaller figure into perspective, Smetters, an assistant professor at the Wharton School, said the government could eliminate all its so-called discretionary spending forever "” everything other than Social Security, Medicare and interest on the national debt "” and still not close the gap. Or to put it another way, the government would have to raise federal income taxes by 70 percent "” permanently "” to close the gap.

In 1976, defense was 24% of the federal budget. In 1996 it was 17%. It was still at 17% in 2002. Even counting the Iraq war, which is a one-time expenditure, defense spending will be under 24% of government spending for 2003, and is projected to stay around 17% every year through 2008.

In 1976, human resources spending - mainly Social Security and Medicare - was 55% of goverment spending. In 1996 it was 61%. In 2002 it was 66%. And the Baby Boomers haven't started to retire yet...

The only programs which grow every year in dollars, as well as percentage of federal spending and GDP are social entitlements - specifically Medicare and Social Security. You want more funding for education? Fine. Tell Grandma to buy her own perscription drugs. You say you want butter instead of guns. I tell you the guns aren't the problem. You need to change your rallying cry to "Schools, not Metamucil!"

We have to quit wasting our money on the wrong end of life. Time to means-test entitlements and cap benefits. People over 50 have the highest income and wealth of any group in America. Tax cuts for the rich? Please. The real problem is welfare for wealthy senior citizens.

When old people start voting less and young people start voting more, we''ll follow your advice.

We have to quit wasting our money on the wrong end of life. Time to means-test entitlements and cap benefits. People over 50 have the highest income and wealth of any group in America. Tax cuts for the rich? Please. The real problem is welfare for wealthy senior citizens.

Amen brother....

But, unfortunately, Lawyeron is right. No way Congress is going to do the right thing for at least 15 years. Social change happens in a hearse.

I was under the understanding that there would not be math in this forum...

I don''t think we should even have a social security system.

Uhh, aren''t people who have/had an income above an x number of $$ exempt from _any_ social security or welfare donations? If that isn''t so and the rich guys would profeteer from said programs that I reckon your social security policy is pretty f*cked up. Tax the guys who can spare the money, including the old rich, and give it to the poor and needing. That''s basically the idea right? Taking into account that most of those poor people would be youngsters who will be stimulated by the soc. security program and the needing will be the people you should be helping anyway, widowz ''n orphanz yo. Most European countries have a highly complicated and elaborate welfare-state system running for over 50 years now and wel... I haven''t seen any looters and burning cars on the streets yet and I won''t have to pay for my university study so it works pretty wel for me Seriously though, economy isn''t a religion, there are more solutions to the problem. I don''t think abolotition of every social security measurement would be a ''solution'' though.

Tax the guys who can spare the money, including the old rich, and give it to the poor and needing. That''s basically the idea right?

That is arguably the most offensive statement I have ever heard.

Why on earth would I get up and bust my ass to be productive every day if I know that all I have to do is be a screw up and get all my bills paid?

People should be incented for doing the right things, and penalized for doing the wrong things. Wealth and income are not ''distributed''. Wealth and income are earned. All handouts from the government should be short term, and should involve a trade-off where you have to give back to the system in one fashion or another. Philanthropy should be a private endeavor, not one funded by taxes.

How about we talk that topic again when you are in desperate need of an operation, but don''t have the money because you didn''t do enough ''right'' things, eh?

No, I''ll spend some of the money I make on health insurance. It really isn''t that hard. Sometimes distasteful, but not that hard.

People should be incented for doing the right things, and penalized for doing the wrong things. Wealth and income are not ''distributed''.

Which makes the dramatically naive statement that all the rich people do the right thing, and all the poor people don''t. A blind system where those with more are neither encouraged nor forced to contribute a greater percentage to the welfare of society as a whole would be a crime nest of abject poverty and violent corruption. One of our greatest strengths as a sympathetic, compassionate, and spiritual nation (all good values, I thought), is that we take care of the weakest and the poorest among us. I''ve said it before, I''ll say it again, the rich have a greater responsibility to society.

And, please, my heart does not bleed for the man who makes $250,000 a year. I mean, you make it sound as if this poor taxed man, this paragon of right, might as well trade in his BMW - which he can still own with his poor taxed salary - to sign up for food stamps and welfare.

All handouts from the government should be short term, and should involve a trade-off where you have to give back to the system in one fashion or another.

I agree in parts, particularly with giving back to society, but you forgot the part of keeping it within means. Unless of course, you want to have the severely handicapped thrown into the ocean when their usefulness to the Capitalism Machine ends. Also, time limits are nice, as long as it is managed with compassion, including continued support for those who make an effort to contribute but still can not support their own.

Boy, I got all worked up there! That woke me up nicely.

You know, every time the economy is good, and people are becoming wealthier, philanthropy rises. People with means are typically very generous. Hell, Bill Gates gives away an average of $5 billion a year. I think encouragement to be generous is good. Forcing the same is bad.

One of our greatest strengths as a sympathetic, compassionate, and spiritual nation (all good values, I thought), is that we take care of the weakest and the poorest among us. I''ve said it before, I''ll say it again, the rich have a greater responsibility to society.

Agreed. That is why, as I said before, as people''s incomes rise, so does their philantropy. But the weak and the poor are actually a very small percentage of the population, far less than the government would have you believe, and far less than warrants the massive social programs foisted on the taxpayers by the Federal goverment.

The amazing thing about the US as a free market system is that the people who are the richest change year in and year out. If you look at the Forbes list of the 400 wealthiest Americans from 20 years ago, and then compare it to the 400 wealthiest Americans today, there are only 23 names that are on both lists. Looking at the ''rich'' as a snapshot in time is misleading to the extreme. People make more money as they get older. Something like 90% of all millionaires are first generation: they earned it themselves. It wasn''t given to them. And this group is the most generous in history.

And, please, my heart does not bleed for the man who makes $250,000 a year. I mean, you make it sound as if this poor taxed man, this paragon of right, might as well trade in his BMW - which he can still own with his poor taxed salary - to sign up for food stamps and welfare.

I wasn''t talking about people in the top 1% of income earners. I was talking about the people that currently don''t take jobs at McDonalds or other lowpaying wages because they can live just as well on welfare and food stamps. The ''poor'' in our country have air conditioning, cable TV, 85% of the people in the bottom 20% of income earners have a car, 45% of them have two cars, etc. The ''poor'' in our country have a higher standard of living than millionaires did 30 years ago.

Plus, ''poor'' is just as transient a term as ''rich''. Because poor and rich refer to wealth, not income. But, every conversation about poor and rich refers to how much money you made that year. So, keeping with income as the criteria, if you actually track the number of people who are in the bottom 20% of income, and stay there for more than eight years, the actual percentage of the population is about 3%. Do people in that situation need to be taken care of and helped? Yes, but not with blanket handouts. Charity and welfare need to be handled on a local level, with a greater degree of intervention, not a lesser one.

including continued support for those who make an effort to contribute but still can not support their own

People who stay in poverty for more than 8 years are usually there because of life choices that they have made. Giving them a handout and saying ''see you next week'' doesn''t fix their condition. And that is about as good as you get with a federal program.

Churches, communities, private organizations, etc. can give a better quality of assistance to those in actual need.

One other thing:

Which makes the dramatically naive statement that all the rich people do the right thing, and all the poor people don''t.

As far as earnings are concerned, I bet that is accurate. One thing is very true: the free market is ruthlessly efficient in rewarding productivity and good choices, and punishing lower levels of contribution.

People that have high incomes have almost always earned it. People that have low incomes haven''t. There is no reward system for not contributing in the free market.

It might not be ''fair'', but neither is life. The purpose of laws are to enforce ethical behavior and make sure that everyone has a level playing field, but only as far as the rules are concerned.

Tying it all back in, the US should put retirement back in the hands of the private citizens. It isn''t an overnight thing, but if you have more than 20 years to go until retirement, you should have to provide for it yourself.

One thing is very true: the free market is ruthlessly efficient in rewarding productivity and good choices, and punishing lower levels of contribution.

There is no such thing as a completely free market, outside factors will always weigh heavily in the economy. Trade tariffs, conflic, political tension or even a petty thing like boycotting french wine directly interfere with the ''free'' market. These are just examples, on the job market, race, gender or even social background are important factors in job applications. And what about people with a chronical ailment, couldn''t they be just as productive as a ''normal'' person if only insurance companies would back off from some of their outrageous perception that these people are a motherfarking liability? Sometimes you just do not choose your social, economical or even political position so yes, I do believe there are outcasts and some of them should be helped by the government. Done right, putting them back on track makes them stand on their own legs instead of breeding dependancy on church or welfare organisations.

on the job market, race, gender or even social background are important factors in job applications

There are isolated cases where that is true, but for the vast majority, those things don''t have impact into the process anywhere near as much as ''can the applicant do the job''?

And what about people with a chronical ailment, couldn''t they be just as productive as a ''normal'' person if only insurance companies would back off from some of their outrageous perception that these people are a motherfarking liability ?

I''m not sure what you mean by that. Could you clairfy?

Done right, putting them back on track makes them stand on their own legs instead of breeding dependancy on church or welfare organisations.

And there is the rub. It is hardly ever ''done right''. When the ''abolish poverty'' movement began in the 60''s in the US, the number of people in poverty had been declining for 20 years, even with a growing population. More relevant, the number of people dependent on the government had been declining year over year. Since the change in the welfare system in the 60''s, the dependency rate in the US has quadrupled, even controlling for population growth.

A federal body does not have the wisdom or the vision to deal with individual cases, which these are. That is why charity should be on a local level. Welfare on a federal level should be a trade off. Get something in exchange for giving something back. Need welfare? Join the military for a year. (Just an example)

One thing is very true: the free market is ruthlessly efficient in rewarding productivity and good choices, and punishing lower levels of contribution.

Yeah, yeah, social darwinism at its best. Interestingly enough a recent study I read indicated that more than half of the people in top/leading positions achieved it through connections (usually being son/daughter of someone etc.), not simply through being ''highly productive'' or harder working than anyone else.

Are you seriously going to tell us that, for instance, George W. Bush didn''t benefit from his father''s experience and connections?

Nope. Nor am I going to claim that life is fair. You are absolutely correct, some people are born into better circumstances than others. So what? Do you actually think it is possible to legislate equality between all people?

No matter what you do, Michael Jordan, or any other NBA player would own my ass on a basketball court. That''s why I don''t play basketball for a living. Is it fair that I will never get to play professional sports? Should they legislate a way for me to make the team?

But just because you weren''t born with the same privileges as someone else doesn''t mean that you can''t be a success. As I said before, 90% of all millionaires in the US are first generation wealthy. So obviously it is done. I''m not related to money, I was raised by a single parent who raised two kids on $19,000/year for a good part of my childhood. I went to a state college. And I do all right for myself and my family. Why? Because I work hard and I am good at what I do (other than when I post here instead of work :D).

No business gives money in exchange for nothing. If someone is hired because of their ''connections'', it is because those connections make more money for the company doing the hiring. And that it a microscopically small part of the overall labor force.

Show me the ''recent study''. I would love to see it. I don''t believe it is anywhere near half of the people in top/leading positions. Of course, statistics being what they are, it depends on how they define ''top/leading'', now doesn''t it.

There is a difference between skill and connections. Your example of Michael Jordan does not apply here. JD was talking about the fact that no matter how hard you work another one will get the job because his daddy is playing golf with the CEO. Thus the market isn''t that efficient in rewarding productivity at all. Jordan didn''t get in the team because he has connections, but because he is a excellent player.

http://www.spiegel.de/wirtschaft/0,1...

Here is a link to an article about the study. Sadly it is in German, but I hope I can find an english equivalent. The study is by Katherine Bradbury and Jane Katz if it is the one JD is referring to.

EDIT: this is one, but not the latest one:

http://www.mindfully.org/Reform/2002...

on the job market, race, gender or even social background are important factors in job applications

There are isolated cases where that is true, but for the vast majority, those things don''t have impact into the process anywhere near as much as ''can the applicant do the job''?

What JD said, I wanted to refrain from the term ''social darwinism'' as it implies heavy handedly towards nazi-germany. But yeah I believe the correct term is social darwinism.

And what about people with a chronical ailment, couldn''t they be just as productive as a ''normal'' person if only insurance companies would back off from some of their outrageous perception that these people are a motherfarking liability ?

I''m not sure what you mean by that. Could you clairfy?

Oops leftist rant

Done right, putting them back on track makes them stand on their own legs instead of breeding dependancy on church or welfare organisations.

And there is the rub. It is hardly ever ''done right''. When the ''abolish poverty'' movement began in the 60''s in the US, the number of people in poverty had been declining for 20 years, even with a growing population. More relevant, the number of people dependent on the government had been declining year over year. Since the change in the welfare system in the 60''s, the dependency rate in the US has quadrupled, even controlling for population growth.

A federal body does not have the wisdom or the vision to deal with individual cases, which these are. That is why charity should be on a local level. Welfare on a federal level should be a trade off. Get something in exchange for giving something back. Need welfare? Join the military for a year. (Just an example)

Your numbers don''t add up so I''ll give you the chance to explain again.

EDIT: I now see I misread them, still, too bad various US governments have been unable to undertake proper measurements on social issues

Whose federal body does not have the wisdom or the vision to deal with individual cases though? I''m still waiting for the looters and anarchists to come out of their caves and we haven''t witnessed a social breakdown here in commie Europe since... well... the last soccer world cup Seriously though, economics are a study not a religion, there are multiple ways to success and your debunking of the enabling state has failed to convince me yet. Quite on the contrary actually, looking out of the window I see more than 40 years of positive experience on socially progressive governance.

Maybe you can afford a 52"" plasma TV but I''m very willing to just watch practically the same channels and movies on my 5 year old 40""er during the 6 weeks of vacation or the state sponsored retirement I get </flamebait disclaimer: some parts of the statement might be exaggerated, my tv is actually 38"">

How about we talk that topic again when you are in desperate need of an operation, but don''t have the money because you didn''t do enough ''right'' things, eh?

Ah, policy by anecdote...

Everyone makes a big deal of the fact that there are 40 million Americans with no health insurance. But health insurance and medial care are two different things.

First of all, it is illegal for a US hospital to turn away anyone in need of medical attention (This is why many hospitals which are near the border with Mexico are nearing bankruptcy as they are flooded with illegal immigrants).

Secondly, there are lots of people who don''t have insurance because they are students or young people working hourly jobs. But as a group, these people are incredibly healthy and rarely need medical care. And should they suffer and accident, they will get treatment.

Thirdly, some people have the income to pay for medical care, and self-insure by paying as they go, rather than paying an insurance company money every month for a service they don''t need.

The only real problem is uninsured, lower-income people with serious or long term illnesses. Fine. Let''s usae taxpayer dollars to establish a fund for impoverished transplant and dialysis patients. But don''t tell me I have to pay to provide insurance for 40 million people becase you got weepy eyed watching ""John Q""...

Quite on the contrary actually, looking out of the window I see more than 40 years of positive experience on socially progressive governance.

That''s great. More power to you. Now, I don''t want you to take this personally, but what percent of the world economy comes from the Netherlands? Looking at countries with a socialist bent, has their importance risen or fallen when compared to the rest of the world? Who would you say has had stronger economic growth and more real wealth generation over the last 15 years: the Netherlands or Hong Kong?

I never meant to imply that the ''enabling state'', as you put it, can function for its citizens. But there are trade-offs. There are always trade-offs. You trade economic prosperity for social security (not Social Security).

But for pure economic growth, nothing beats the free market. Period.

There is a difference between skill and connections. Your example of Michael Jordan does not apply here. JD was talking about the fact that no matter how hard you work another one will get the job because his daddy is playing golf with the CEO. Thus the market isn''t that efficient in rewarding productivity at all. Jordan didn''t get in the team because he has connections, but because he is a excellent player.

That is an oversimplification. Are you actually saying that a majority of people lose out on job opportunities because another candidate''s father played golf with the CEO? I''m sure it happens, but in an infinitesimally small number of cases. But these few are the ones you hear about and remember, because the overwhelming majority of times where the system works right are non-events. Businesses that hire people that aren''t qualified don''t typically stay in business for long, which is why I said that most businesses screen based on applicant''s capabilities and past performance, not on other criteria.

As for my basketball example, why is the fact that Jordan is 6''7"" any more fair than someone''s dad knowing a CEO? If you are going to enforce fariness, it should be equally arbitrary. I should get a chance to play basketball. Corky from Life Goes On should get to be CEO of IBM, and once every year, the government should institute a form of job swapping, similar to Dan Ackroyd and Eddie Murphy in Trading Places.

Here is a link to an article about the study. Sadly it is in German, but I hope I can find an english equivalent. The study is by Katherine Bradbury and Jane Katz if it is the one JD is referring to.

The study is yet another example of showing a lot without saying anything. I''ll get a few of the articles that show that the article you referenced are misleading. And a few of the studies that show contradictory evidence, with more explanation.

Ralcydan: I don''t (can''t) watch these shows. I just know how expensive it was for my parents to arrange steady medical care at home for my grandparents who suffered from parkinson. Without the social system we have this would not have been possible. So I happily refuse your free market and stay in a system that helps me through tough times. No doubt there are people abusing this system. But in general nobody here would want to live without it.
EDIT: Reading your post again I was asking myself what you define as medical attention. Will these people get any operation or medical care needed? How much do you have to pay if you have malfunctioning kidneys? Or will you get a brain surgery in case of a tumor without extra costs with all diagnostics necessary? Who pays for your recovering period after these kind of operations?

JMJ: Go ahead. I sure am interested in these.

JMJ: I am actually saying that connections play a larger role than skill does. No matter what area, the moment you compare two people one skilled and one with the right connections, the one with the connections will get the job. Where is the reward for the skilled person in the market then?

And again your Basketball example does not fit. Jordan cannot cut his legs to be more equal. Also he did not choose to be 6''7"" tall. But someone can refuse to let his dad handle one''s career or take the easy route. Also in case you did not notice, height has nothing to do with playing basketball. There are several small players out there and they do their job very well.

Real rough, but looking at census data, it sure looks like there has been movement of families from the lowest quintile to the highest and even top 5% from 1947 to 2001.

The fact that there is a widening ''income gap'' means that the wages associated with the higher productivity of the higher earners has gone up with technology improvements. Someone that uses a computer can be more productive as technology and networks improve, making their job more valuable and earning greater compensation. While at the opposite end, there hasn''t been a lot of productivity gains in ditch digging.

Also important to note is that across all quintiles, quality of living has improved dramitically year after year, so that now even the lowest quintile in income has luxuries that were limited to the highest quintile 30 years ago.

JMJ: I am actually saying that connections play a larger role than skill does. No matter what area, the moment you compare two people one skilled and one with the right connections, the one with the connections will get the job. Where is the reward for the skilled person in the market then?

This is purely antecdotal, but I have personally been responsible for hiring over 300 people into technical companies over the years. And not one of them got the job for any reason other than they were qualified. I know recruiters who have placed thousands of people, and not one of them could point to someone that got a job because of ''connections''. I know a lot of people who work and contribute to the economy, and I know less than a dozen people that ever got a job because of who they knew or were related to. And of those, the ones that kept the job for more than 6 months also happened to be able to actually do the job.

So, forgive me if after actually being in the work force, I am highly skeptical of a claim that 50% of people in positions of authority got there because of ''who they were related to''.

As to the nebulous claim of ''connections'', I have built my connections as I have worked. I haven''t looked for a job for years. Every time I have changed jobs it has been because someone I knew wanted me on their team. So yes, ''connections'' are responsible for playing a part in hiring decisions. First hand knowledge of someone''s capabilities is better than relying on a brief interview. But no one has ever offered to hire my wife to a position of authority because she is my wife. Except in the rarest of cases, it just doesn''t work like that.

And you seem to imply that CEO''s routinely hire the unqualified children of friends for important high-paying positions. This is ludicrous. Sure connections matter. But only in a small way.

Between two otherwise qualified applicants, I am going to hire the one where there is already a relationship, even if the other person looks better on paper. Why wouldn''t you? Resumes can be faked. Recommendations are skewed. But presumably I trust the existing relationship - their judgement, or what they have done for me in the past.

I owned a business with my best friend. Should I have shopped around for someone I barely knew because they might have had 6 months more experience?

You also assume making connections itself isn''t a skill. You know why men make more money than women, in the same position with the same qualifications? Women don''t negotiate as hard as men. Selling yourself is a skill. Building relationships is no different.

This is true throughout life and the business world. Who you know is important. Building relationships will prove to be rewarding for you and those who know you.

But the idea that you won''t have to perform, no matter how you got in the door, is just plain wrong...

"ralcydan" wrote:

You know why men make more money than women, in the same position with the same qualifications? Women don''t negotiate as hard as men.

Uh oh. Just when I thought this thread wouldn''t get any more active or heated....

Luckily, there aren''t any active woman posters here AFAIK.

You know why men make more money than women, in the same position with the same qualifications? Women don''t negotiate as hard as men.

That''s actually untrue. Women with identical qualifications with identical responsibilities make the same as men.

There is a reason why statistics like ''women with the same education make 76% of the salary of men with a comparable amount of education'' are misleading. These studies look at generalizations when the specifics explain the reasons. Women who complete a 4 year degree make, on average, 76% of what a man with a 4 year degree makes. The majority of that is understood once you recognize that women typically get their 4 year degrees in ''soft'' subjects, like psychology, education, etc. while men typcially have a higher percentage of degrees in engineering, accounting, business, etc.

Even controlling for degrees in social sciences, women typically have degrees in anthropology or psychology, while men get degrees in economics. The market determines the value of those degrees.

Studies that actually control for the variances such as education length, educational focus, quality of school, work experience and responsibilities show that women make as much as men.

Women also have lower general incomes because of life choices they make. Women typically choose to focus on family as opposed to career, so they choose careers that supplement that (which is why most teachers are women - they like the hours).

I would welcome their thoughts on the matter. Men are the more aggressive sex. Period. You may make the Women''s Studies argument that it is nurture not nature, but you can''t argue the fact of the result.

I don''t hear women clamoring for ""more representation"" when it comes to violent crime and war-making, but they seem to think there is no correlation in the business world.

For those of you who have ever hired people, you will recognize this fact. Aggressive people who push harder do better in salary and raise negotiations. And men are more aggressive than women in today''s society. Ergo...