Jimmy Carter appointed as Fed Chair the biggest inflation hawk that institution had ever seen. Volcker told Carter personally that he would essentially engineer a deep recession in order to reduce inflation expectations, and despite all the criticism leveled at Carter, he never once questioned the process or tried to undermine the Fed's independence. Carter was the anti-Nixon/Trump who sacrificed his reputation for the longer term stability of the country. And to whom do Americans attribute this legacy, Reagan. After all, that's when things started to improve.
I don't blame politicians for trolling the electorate. We get who we deserve.
"Populism retains the portion of the agenda that appeals to the public while getting rid of the less palatable parts, and declares itself morally superior for “taking on the elites.” It’s the ideology of you can eat ice cream all the time and never get fat."
Great observation here. As I have noted, this is core to every radical ideology; they present themselves as having simple, downright obvious, solutions to problems that involve no trade offs whatsoever. People buy into these idealogues, totally unaware of the complexity of the issues and trade offs that underlie them.
"JD Vance, and think he genuinely wants to do the right thing for the country. I don’t believe he’s consciously trying to mislead voters." - Vance is a pathetic hypocrite. He is intelligent enough to know Trump lost in 2020 but he dumbs himself down to play to the MAGA crowd. Morons like Boebert and MTG probably do actually believe TFG but Cruz, Gaetz, Hawley appear to have a high enough IQ to know better but Vance and his ilk play the part well. How did we ever get to this? A country that is close to sending folks to Mars but has a sizeable segment that pays fealty to a deranged clown.
While I do agree that we desperately need to slow entitlement growth, I think saying that seniors are the richest demographic is misleading. Yes, they have the highest median net worth, but many have greatly diminished earning power, and a 4% drawdown on the median $400k household net worth yields $16k/year, below the poverty line for a two-person household.
Depending on job, many people can continue working into their 70s, supplementing retirement savings, but beyond 75 or so, that share falls off quickly.
The privilege no one is discussing is silver-top privilege. Society worships the elderly, seen most acutely in the COVID era. Young people's education and careers were disrupted for years just so gramps could live a few more weeks (literally a few more weeks statistically). This sick way of thinking needs to change.
Unilateral austerity in a two-party system is stupid. You cut debt by 2 trillion, the Democrats will just win back control of the government in two, four, or six years and then use the "savings" to spend that money on student loan forgiveness, green new deal, etc. Whereas unfunded tax cuts, by inflating the debt, somewhat limit future Democratic spending, since they can't borrow an infinite amount.
Missing from this article is anything about how you're going to build a political coalition for this, which is kind of important as you can't do anything without getting elected first. If you think you can pursue these kinds of policies with the current Republican electorate, look into why Kentucky has a Democratic governor. You're going to lose a lot of old people and working-class people, who are you going to gain?
There's two distinct ways to think about politics. In one, a politician is expected to pursue the best policies for all citizens of his country. In another, a politician is expected to pursue the best interests of his voters and not concern himself too much with those who didn't vote for him. You can see the latter attitude as "mean" or "spiteful," an attempt to "punish" those on the other team. You can also imagine that politician saying "those on the other team, you have a party of your own, you have representatives and you can go to them with your complaints." When I look at the relationship between corporations and the Republican Party, with the former showing absolutely no appreciation for the latter going to bat to cut their taxes, I don't see "principled, responsible leadership." I see the GOP as a bunch of weak beta orbiters.
And anyway, this whole conversation will likely be made irrelevant by AGI.
I wonder sometimes whether economic circumstances that make seniors more dependent on their families would not go a decent way toward fixing the infertility culture. People who know that their children will be the ones providing for them may be more inclined to treat their children better, who in turn won't be given the message that they (the children) themselves are an enraging burden, and be more inclined to pursue family life. I've met a lot of people my age and younger whose parents treated them poorly, and they internalize that frustration and believe not only that they are deficient but that starting a family is pure emotional cost with little benefit.
What is WRONG with "just raise taxes" to pay for social insurance programs like SS, Medicare, Medicaid, unemployment insurance (and a Child Tax Credit) if the taxes are broad based and on consumption like a VAT?
RH is just wrong that closing the social insurance deficit would mean reducing the American standard of living unless that means reducing consumption. The effect of a lower deficit, given the Fed's inflation target would be to shift resources to investment.
[BTW, many of the items on RH's list are good ideas regardless of their budget effects; the improve incentives and so are real income increasing.]
I get what Richard is saying about populism being important to push back against COVID insanity, but I have trouble feeling good about it because it seems pretty clear to me that populists turned out to be right about that because of dumb luck, not because their instincts were right. I think that even if COVID NPIs had been massively effective and saved huge amounts of lives, they still would have experienced populist resistance. Populists weren't rationally concluding that NPIs weren't worth it, they were pushing back against them because of perverse antisocial contrarianism. They just happened to get lucky that NPIs really were ineffective. The continued populist resistance to COVID vaccines, which actually are effective, strengthens my view.
Why not wait till entitlements are “insolvent” under their funding mechanisms before addressing them? As I understand the programs, benefits will fall without congressional action. Then, benefits proponents will have to get legislation passed. So, they’ll need republican votes. Republicans might even control a chamber at that point. Also, to prevent the automatic benefit cut, proponents will have to raise taxes, which will make the costs more real to the public.
I don’t see any upside to handing the issue preemptively. Procedurally, reformers would need to assemble a legislative coalition. And, for reform, the upside is currently abstract. But cuts are real. So, ryanism seems futile and bad, to me.
Richard could have titled this "How democracy enables gerontocracy" just as easily. Why didn't he? Oh ya, because he thinks liberal democracy is the greatest thing ever. The truth is populism is the same exact thing as democracy. When you let everyone vote, it's no surprise that it becomes a contest about who can pass out the most money to whom.
This analysis misses the root cause of the problem: A rapidly increasing dysgenic, lower IQ, darkening population in America, one that hoovers up more and more redistribution. Blacks, browns, and illegals consume the overwhelming majority of healthcare costs (with their obesity and chronic illnesses) and the bulk of all forms of welfare (no matter what euphemistic names you give them). Since the New Deal, adjusted for inflation, we have redistributed $70T to them. Redistribution leads to the low IQ having more children, and the high IQ having fewer. And this is indeed what is happening, at an EXPONENTIAL RATE. One doesn't need a PhD in mathematics to come up a conclusion: The Great Replacement will bankrupt America.
The suggestions by Hanania and others are jerry rigs, akin to plugging holes in Hoover Dam with your fingers. They will not work. Only a solution that will reverse the Great Replacement will work, and there is only one of those: Privatized Eugenics to sterilize the underclass. https://childfreebc.com/candidates/ - free market & voluntary. If we want to save the US economy, reducing the huge #'s of net negatives in the country must be done.
Use $5 donation voucher: 5freecbc1 -- to try it out, no registration needed. Donate & share. Save the West.
You’ve come to the same conclusion I came to long ago - that social security is going to have to be cut for those who have other sources of retirement funding. But I think you and I place the blame in different places.
Social security was originally intended to be retirement savings plan. The government would take money out of your paycheck, invest it, and then you’d get it back during retirement, avoiding the situation where some people didn’t save for retirement and ended up destitute or dependent on relatives or public assistance. Only of course it didn’t work that way because the government soon realized it could spend that money, and how to pay future retirees was a problem for future politicians to solve.
The point is, people paid into this their entire careers with the promise that they would get social security later. The government took money that people should have otherwise saved and invested for their retirement, and now after they planned on getting that money back, the government is going to steal it. “I’ve never seen one argue that government should subsidize the lifestyles of the rich just because they happen to be old.” particularly rankled. Giving people back their retirement savings isn’t “subsidizing”, it’s giving people what they are actually owed.
I see no choice other than to phase out social security, starting by eliminating and reducing benefits for those who have other sources of savings/income, while still making everyone pay into it. But I admit it’s a bitter pill for my generation. I’m 50 and I’ve been paying into it for 34 years. My grandparents relied on it, and now my parents and in-laws do, so I know I have to keep paying. We can’t leave people destitute who were promised this money and can’t survive without it. But I also know I’ll likely never see a penny of it myself. I’m well-off enough and have enough saved that I won’t starve without it, but not so well-off that it won’t have a major impact on my quality of life during retirement. And that kind of makes me mad - basically the government stole my money and isn’t living up to their end of the bargain. And those who were responsible and saved for retirement are going to be told that all the sacrifices they made to do that don’t mean a thing, their money is being taken to pay people who didn’t save.
I agree it’s an issue that people are basically voting for what benefits them personally, rather than what’s actually responsible and best for the country, but I disagree with your conclusion that retirees who are receiving money that they worked hard for all their lives and that was promised to them are the bad guys here. Politicians who decided to spend other people’s retirement savings are the ones to blame.
My first thought is to say that that the GOP is older and hence even more of a gerontocracy than the Democrats. Per Pew, in 2020, 49% of Democrat voters were under 50, vs. 38% of Republicans. And the Democrats' under-50 percentage actually increased in 2020 vs. 2016 (a bunch of younger voters showed up to unseat Trump), while it decreased for the Republicans.
The fact that young voters hate Trump is a large part of the reason why his odds are lower in 2024 than polls indicate right now. The youngs don't love Biden and aren't focused on their hate for Trump right now, but when they get focused (with the help of social media and peer pressure), they'll presumably show up again and Biden will win easily.
So the push for reform is going to come from Democrats. The Democrats are also the dominant party in national elections for the foreseeable future, which means they naturally have a little more confidence when tackling unpopular issues. In a system where one party is structurally dominant, the dominant party naturally has more of a sense of ownership over the polity than the minority/insurgent party. Odds are we'll see another Democrat trifecta, the filibuster killed, within the next 10 years or so. It's tougher to shift the blame when something happens under a trifecta's watch. The odds of a Republican trifecta are much lower.
Republicans are operating under the understanding that national elections can only be won by the skin of their teeth. Trump managing the largest electoral vs. popular vote split in American history being case in point. The natural mentality of a minority coalition like this is that you only do unpopular things if they're super-popular with the base. The Republicans have concluded that Paul Ryan politics are a loser, and I think changing its mind will require a highly charismatic figure to try again with those ideas. It's not going to be anyone we've seen in a GOP primary in the last few decades.
I agree with the broad thrust of this article, but take issue with two points:
1. Even if it were politically feasible, a higher retirement age isn’t the solution people think it is. First, because the number of disability applications would skyrocket for 60 year olds if retirement benefits weren’t on the horizon for them. Do you talk to people that age? Many have bad backs, hips, and knees, which means they technically qualify for disability. With some technical exceptions, disability benefits comes from the same money jar as social security retirement benefits. Second, advancing medicine means people will be starting to live a lot longer soon. Raising retirement age by 5 years while extending lifespan by 15 means you gained nothing. (Perhaps extended lifespans also mean fewer disability applications, but still means the money jar runs out of money).
2. I’m not understanding why a statutory change to the funding of social security would cause economic shocks. We would fund benefits via debt, like we do with everything else. Maybe it kicks the van down the road for two decades, by which time Productivity gains from AI and genomics means a much higher tax base and the ability to pay off a large portion of US debt. If AI is half the economic revolution people think it is, there will be much GDP growth these next few decades.
Jimmy Carter appointed as Fed Chair the biggest inflation hawk that institution had ever seen. Volcker told Carter personally that he would essentially engineer a deep recession in order to reduce inflation expectations, and despite all the criticism leveled at Carter, he never once questioned the process or tried to undermine the Fed's independence. Carter was the anti-Nixon/Trump who sacrificed his reputation for the longer term stability of the country. And to whom do Americans attribute this legacy, Reagan. After all, that's when things started to improve.
I don't blame politicians for trolling the electorate. We get who we deserve.
"Populism retains the portion of the agenda that appeals to the public while getting rid of the less palatable parts, and declares itself morally superior for “taking on the elites.” It’s the ideology of you can eat ice cream all the time and never get fat."
Great observation here. As I have noted, this is core to every radical ideology; they present themselves as having simple, downright obvious, solutions to problems that involve no trade offs whatsoever. People buy into these idealogues, totally unaware of the complexity of the issues and trade offs that underlie them.
"JD Vance, and think he genuinely wants to do the right thing for the country. I don’t believe he’s consciously trying to mislead voters." - Vance is a pathetic hypocrite. He is intelligent enough to know Trump lost in 2020 but he dumbs himself down to play to the MAGA crowd. Morons like Boebert and MTG probably do actually believe TFG but Cruz, Gaetz, Hawley appear to have a high enough IQ to know better but Vance and his ilk play the part well. How did we ever get to this? A country that is close to sending folks to Mars but has a sizeable segment that pays fealty to a deranged clown.
While I do agree that we desperately need to slow entitlement growth, I think saying that seniors are the richest demographic is misleading. Yes, they have the highest median net worth, but many have greatly diminished earning power, and a 4% drawdown on the median $400k household net worth yields $16k/year, below the poverty line for a two-person household.
Depending on job, many people can continue working into their 70s, supplementing retirement savings, but beyond 75 or so, that share falls off quickly.
The privilege no one is discussing is silver-top privilege. Society worships the elderly, seen most acutely in the COVID era. Young people's education and careers were disrupted for years just so gramps could live a few more weeks (literally a few more weeks statistically). This sick way of thinking needs to change.
Unilateral austerity in a two-party system is stupid. You cut debt by 2 trillion, the Democrats will just win back control of the government in two, four, or six years and then use the "savings" to spend that money on student loan forgiveness, green new deal, etc. Whereas unfunded tax cuts, by inflating the debt, somewhat limit future Democratic spending, since they can't borrow an infinite amount.
Missing from this article is anything about how you're going to build a political coalition for this, which is kind of important as you can't do anything without getting elected first. If you think you can pursue these kinds of policies with the current Republican electorate, look into why Kentucky has a Democratic governor. You're going to lose a lot of old people and working-class people, who are you going to gain?
There's two distinct ways to think about politics. In one, a politician is expected to pursue the best policies for all citizens of his country. In another, a politician is expected to pursue the best interests of his voters and not concern himself too much with those who didn't vote for him. You can see the latter attitude as "mean" or "spiteful," an attempt to "punish" those on the other team. You can also imagine that politician saying "those on the other team, you have a party of your own, you have representatives and you can go to them with your complaints." When I look at the relationship between corporations and the Republican Party, with the former showing absolutely no appreciation for the latter going to bat to cut their taxes, I don't see "principled, responsible leadership." I see the GOP as a bunch of weak beta orbiters.
And anyway, this whole conversation will likely be made irrelevant by AGI.
I wonder sometimes whether economic circumstances that make seniors more dependent on their families would not go a decent way toward fixing the infertility culture. People who know that their children will be the ones providing for them may be more inclined to treat their children better, who in turn won't be given the message that they (the children) themselves are an enraging burden, and be more inclined to pursue family life. I've met a lot of people my age and younger whose parents treated them poorly, and they internalize that frustration and believe not only that they are deficient but that starting a family is pure emotional cost with little benefit.
What is WRONG with "just raise taxes" to pay for social insurance programs like SS, Medicare, Medicaid, unemployment insurance (and a Child Tax Credit) if the taxes are broad based and on consumption like a VAT?
RH is just wrong that closing the social insurance deficit would mean reducing the American standard of living unless that means reducing consumption. The effect of a lower deficit, given the Fed's inflation target would be to shift resources to investment.
[BTW, many of the items on RH's list are good ideas regardless of their budget effects; the improve incentives and so are real income increasing.]
I get what Richard is saying about populism being important to push back against COVID insanity, but I have trouble feeling good about it because it seems pretty clear to me that populists turned out to be right about that because of dumb luck, not because their instincts were right. I think that even if COVID NPIs had been massively effective and saved huge amounts of lives, they still would have experienced populist resistance. Populists weren't rationally concluding that NPIs weren't worth it, they were pushing back against them because of perverse antisocial contrarianism. They just happened to get lucky that NPIs really were ineffective. The continued populist resistance to COVID vaccines, which actually are effective, strengthens my view.
Why not wait till entitlements are “insolvent” under their funding mechanisms before addressing them? As I understand the programs, benefits will fall without congressional action. Then, benefits proponents will have to get legislation passed. So, they’ll need republican votes. Republicans might even control a chamber at that point. Also, to prevent the automatic benefit cut, proponents will have to raise taxes, which will make the costs more real to the public.
I don’t see any upside to handing the issue preemptively. Procedurally, reformers would need to assemble a legislative coalition. And, for reform, the upside is currently abstract. But cuts are real. So, ryanism seems futile and bad, to me.
A means tested entitlement program is relevantly like a tax. Having peoples payouts decrease with greater earnings is basically just a tax.
Richard could have titled this "How democracy enables gerontocracy" just as easily. Why didn't he? Oh ya, because he thinks liberal democracy is the greatest thing ever. The truth is populism is the same exact thing as democracy. When you let everyone vote, it's no surprise that it becomes a contest about who can pass out the most money to whom.
This analysis misses the root cause of the problem: A rapidly increasing dysgenic, lower IQ, darkening population in America, one that hoovers up more and more redistribution. Blacks, browns, and illegals consume the overwhelming majority of healthcare costs (with their obesity and chronic illnesses) and the bulk of all forms of welfare (no matter what euphemistic names you give them). Since the New Deal, adjusted for inflation, we have redistributed $70T to them. Redistribution leads to the low IQ having more children, and the high IQ having fewer. And this is indeed what is happening, at an EXPONENTIAL RATE. One doesn't need a PhD in mathematics to come up a conclusion: The Great Replacement will bankrupt America.
The suggestions by Hanania and others are jerry rigs, akin to plugging holes in Hoover Dam with your fingers. They will not work. Only a solution that will reverse the Great Replacement will work, and there is only one of those: Privatized Eugenics to sterilize the underclass. https://childfreebc.com/candidates/ - free market & voluntary. If we want to save the US economy, reducing the huge #'s of net negatives in the country must be done.
Use $5 donation voucher: 5freecbc1 -- to try it out, no registration needed. Donate & share. Save the West.
(Referral Bonus = 10% of donations: https://childfreebc.com/referral/)
You’ve come to the same conclusion I came to long ago - that social security is going to have to be cut for those who have other sources of retirement funding. But I think you and I place the blame in different places.
Social security was originally intended to be retirement savings plan. The government would take money out of your paycheck, invest it, and then you’d get it back during retirement, avoiding the situation where some people didn’t save for retirement and ended up destitute or dependent on relatives or public assistance. Only of course it didn’t work that way because the government soon realized it could spend that money, and how to pay future retirees was a problem for future politicians to solve.
The point is, people paid into this their entire careers with the promise that they would get social security later. The government took money that people should have otherwise saved and invested for their retirement, and now after they planned on getting that money back, the government is going to steal it. “I’ve never seen one argue that government should subsidize the lifestyles of the rich just because they happen to be old.” particularly rankled. Giving people back their retirement savings isn’t “subsidizing”, it’s giving people what they are actually owed.
I see no choice other than to phase out social security, starting by eliminating and reducing benefits for those who have other sources of savings/income, while still making everyone pay into it. But I admit it’s a bitter pill for my generation. I’m 50 and I’ve been paying into it for 34 years. My grandparents relied on it, and now my parents and in-laws do, so I know I have to keep paying. We can’t leave people destitute who were promised this money and can’t survive without it. But I also know I’ll likely never see a penny of it myself. I’m well-off enough and have enough saved that I won’t starve without it, but not so well-off that it won’t have a major impact on my quality of life during retirement. And that kind of makes me mad - basically the government stole my money and isn’t living up to their end of the bargain. And those who were responsible and saved for retirement are going to be told that all the sacrifices they made to do that don’t mean a thing, their money is being taken to pay people who didn’t save.
I agree it’s an issue that people are basically voting for what benefits them personally, rather than what’s actually responsible and best for the country, but I disagree with your conclusion that retirees who are receiving money that they worked hard for all their lives and that was promised to them are the bad guys here. Politicians who decided to spend other people’s retirement savings are the ones to blame.
My first thought is to say that that the GOP is older and hence even more of a gerontocracy than the Democrats. Per Pew, in 2020, 49% of Democrat voters were under 50, vs. 38% of Republicans. And the Democrats' under-50 percentage actually increased in 2020 vs. 2016 (a bunch of younger voters showed up to unseat Trump), while it decreased for the Republicans.
The fact that young voters hate Trump is a large part of the reason why his odds are lower in 2024 than polls indicate right now. The youngs don't love Biden and aren't focused on their hate for Trump right now, but when they get focused (with the help of social media and peer pressure), they'll presumably show up again and Biden will win easily.
So the push for reform is going to come from Democrats. The Democrats are also the dominant party in national elections for the foreseeable future, which means they naturally have a little more confidence when tackling unpopular issues. In a system where one party is structurally dominant, the dominant party naturally has more of a sense of ownership over the polity than the minority/insurgent party. Odds are we'll see another Democrat trifecta, the filibuster killed, within the next 10 years or so. It's tougher to shift the blame when something happens under a trifecta's watch. The odds of a Republican trifecta are much lower.
Republicans are operating under the understanding that national elections can only be won by the skin of their teeth. Trump managing the largest electoral vs. popular vote split in American history being case in point. The natural mentality of a minority coalition like this is that you only do unpopular things if they're super-popular with the base. The Republicans have concluded that Paul Ryan politics are a loser, and I think changing its mind will require a highly charismatic figure to try again with those ideas. It's not going to be anyone we've seen in a GOP primary in the last few decades.
I agree with the broad thrust of this article, but take issue with two points:
1. Even if it were politically feasible, a higher retirement age isn’t the solution people think it is. First, because the number of disability applications would skyrocket for 60 year olds if retirement benefits weren’t on the horizon for them. Do you talk to people that age? Many have bad backs, hips, and knees, which means they technically qualify for disability. With some technical exceptions, disability benefits comes from the same money jar as social security retirement benefits. Second, advancing medicine means people will be starting to live a lot longer soon. Raising retirement age by 5 years while extending lifespan by 15 means you gained nothing. (Perhaps extended lifespans also mean fewer disability applications, but still means the money jar runs out of money).
2. I’m not understanding why a statutory change to the funding of social security would cause economic shocks. We would fund benefits via debt, like we do with everything else. Maybe it kicks the van down the road for two decades, by which time Productivity gains from AI and genomics means a much higher tax base and the ability to pay off a large portion of US debt. If AI is half the economic revolution people think it is, there will be much GDP growth these next few decades.