Sunday, November 18, 2007

Social Security

According to Greg Mankiw,
Concern about social security's future comes not from decades of scare-mongering by conservative ideologues but from decades of dispassionate analysis by some of the best policy economists.
He cites a 1998 statement by Bill Clinton and another by President Clinton’s Advisory Council on Social Security. Greg certainly has a point that Paul Krugman is stretching by using the word “decades,” since 1998 was less than a decade ago, and there were, at the time, clearly many relatively liberal policy analysts who were concerned about the future of Social Security (though I think the most vocal expressions of concern came from conservatives). But I think Greg is also being a bit disingenuous here.

Though I know little about the details of Social Security projections, I know something about the assumptions that go into them, and those assumptions, I’m pretty sure, have changed dramatically between 1997 (when the Advisory Council published its report) and 2007. The title of the report is “Report of the 1994-1996 Advisory Council on Social Security,” which suggests that the analysis was done before 1997, at a time when the US productivity slowdown that began in the 1970s still appeared to be an ongoing process. When productivity grows slowly, the outlook for Social Security looks bad.

Starting in the mid-1990s, but not fully apparent in available statistics until the decade was drawing to a close, US productivity accelerated to growth rates not seen since the 1960s. Productivity in the early 2000s appeared to accelerate even further. Over the past couple of years, productivity has appeared to decelerate again, but this deceleration is at least partly a cyclical phenomenon that is not expected to last (and, for the last two quarters, I might add, productivity has accelerated again, although that acceleration is also suspect). Certainly the average expectation of economists today would call for much faster productivity growth in the future than did the average expectation in 1996. When productivity grows quickly, the outlook for Social Security looks fine.

One could, however, make the point that, if we want to be honest with ourselves, we really don’t have much of a clue whether the Social Security system is in trouble or not. Any expectation – high, low, or in between – about the future rate of productivity growth is scarcely more than a slightly educated guess. To be truly conservative, we should make the worst reasonable assumption (based still on only a slightly educated guess as to what range of assumptions is reasonable), and use that assumption in the analysis, which will then tell us that Social Security is in trouble. So on this issue at least, the conservatives (and Barrack Obama) really are being conservative.

But I still have a problem with Senator Obama’s conservative position. As I understand it, the Medicare system fails even under fairly optimistic assumptions about productivity. If you make the assumptions bad enough to make Social Security require significant changes, you’ve made them so bad that the Medicare system requires a complete overhaul and damn near goes broke anyway. Given our limited analytic and political resources in coming up with and implementing solutions to these problems, doesn’t it make sense to spend those resources in such a way that we at least have a chance of coming out OK – that is, spend them on a Medicare overhaul that is almost surely necessary, rather than on a Social Security overhaul that may or may not be necessary?

Labels: , , , , , , ,


Blogger Gabriel M. said...

I disagree. The problem is precisely that you're looking at net liabilities driven by hard-to-forecast exogenous factors such as demographics and productivity.

With something like mandatory, personal accounts, invested in a diversified portfolio of local and international assets, you're looking at a higher return and a direct link between effort/contribution and reward (a.k.a. "equity"). Augmented with some "safety net" features for those in accidents or disabled, such a system beats down any pay-as-you-go, Bismarkian sooner-or-later-disaster.

Sun Nov 18, 03:44:00 AM EST  
Blogger knzn said...

Gabriel, you may have a point that such a system would be safe, permanent fix to an inherently risky system, but then my point about political resources becomes even stronger. The Republicans already tried to move in the direction of what you are proposing; that was when they were in control of Congress, and they not only failed in their relatively modest goals, but they spent a whole lot of political capital on the failure. The best hope for "fixing" Social Security now is something like Obama's plan, which will probably cost him politically if it's ever implemented -- and distract him from more important issues.

Sun Nov 18, 05:13:00 AM EST  
Blogger Gabriel M. said...

I'm buying only half of what you're saying... restructuring SS would be difficult in terms of getting the politics right, but in terms of non-political resources, it more of a free lunch.

The experience in Chile and everywhere else, Romania too, starting this year, goes to show that you're actually relieving the budget... and that can spill-over and help with other programs.

I don't get US politics... but as far as I know, I wouldn't call what the Republicans sold under the strange label of "privatization" as a step in the right direction... I don't know.

Sun Nov 18, 05:24:00 AM EST  
Blogger Ken Houghton said...

Yeah, Chile worked SO WELL that the privatized members are getting 1/3 of what their SocSec would have returned.

If you want to be certain Mankiw is being disingenuous, take a look at the projections from the 1983 Greenspan report. The amazing thing about them is that they are still fairly spot-on in all the major demographics.

For Gabriel's general point, we've already p*ss*d away any resemblance of the SSDI Trust Fund surplus on tax cuts for Mankiw, Samwick (who at least admits he doesn't intend to make good on the promise of the Greenspan Commission), and others (self included). The absurdity of claiming you're "relieving the budget" would be at best double counting.

Wed Nov 21, 02:19:00 PM EST  
Blogger Gabriel M. said...

Ken, where you do get your estimate of one third? Plus, that's one big counter-factual, so excuse my skepticism.

Management fees for those pension funds have been excessive, and that's certainly a problem, but you need to look at things on the net.

Wed Nov 21, 02:27:00 PM EST  
Anonymous Anonymous said...

BOTH sides of the SS debate are making a fundamental analytical/conceptual error. SS solvency is IRRELEVANT to our decision of whether or not to reduce projected SS spending (via reduction of benefits and/or eligibility).

Mon Nov 26, 08:57:00 AM EST  
Anonymous Anonymous said...







Wed Jan 14, 06:52:00 AM EST  
Anonymous Anonymous said...


Thu Apr 02, 10:41:00 AM EDT  
Anonymous Anonymous said...

酒店喝酒,禮服店,酒店小姐,酒店領檯,便服店,鋼琴酒吧,酒店兼職,酒店兼差,酒店打工,伴唱小姐,暑假打工,酒店上班,酒店兼職,ktv酒店,酒店,酒店公關,酒店兼差,酒店上班,酒店打工,禮服酒店,禮服店,酒店小姐,酒店兼差,暑假打工,酒店經紀,台北酒店,禮服店 ,酒店小姐,酒店經紀,酒店兼差,寒假打工,酒店小姐,台北酒店,禮服店 ,酒店小姐,酒店經紀,酒店兼差,暑假打工,酒店小姐,台北酒店,禮服店 ,酒店小姐,酒店經紀,酒店兼差,寒假打工,台北酒店,禮服店 ,酒店小姐,酒店經紀,酒店兼差,暑假打工,酒店小姐,台北酒店,禮服店 ,酒店小姐,酒店兼差,暑假打工,酒店小姐,台北酒店,禮服店 ,酒店小姐,酒店經紀,酒店兼差,寒假打工,酒店小姐,台北酒店,禮服店 ,酒店小姐,酒店經紀,酒店兼差,暑假打工,酒店小姐,台北酒店,禮服店 ,酒店小姐,酒店經紀,酒店兼差,寒假打工,酒店小姐,台北酒店,禮服店 ,酒店小姐,酒店經紀,酒店兼差,暑假打工,酒店小姐,禮服店 ,酒店小姐,酒店經紀,酒店兼差,寒假打工,酒店小姐,禮服店 ,酒店小姐,酒店經紀,酒店兼差,暑假打工,酒店小姐,禮服店 ,酒店小姐,酒店經紀,酒店兼差,寒假打工,酒店小姐,禮服店 ,酒店小姐,酒店經紀,酒店兼差,暑假打工,酒店小姐,酒店傳播,酒店經紀人,酒店,酒店,酒店,酒店 ,禮服店 , 酒店小姐,酒店經紀,酒店兼差,暑假打工,招待所,酒店小姐,酒店兼差,寒假打工,酒店上班,暑假打工,酒店公關,酒店兼職,禮服店 , 酒店小姐 ,酒店經紀 ,酒店兼差,暑假打工,酒店,酒店,酒店經紀,酒店領檯 ,禮服店 ,酒店小姐 ,酒店經紀 ,酒店兼差,暑假打工, 酒店上班,禮服店 ,酒店小姐 ,酒店經紀 ,酒店兼差,暑假打工, 酒店上班,禮服店 ,酒店小姐 ,酒店經紀 ,酒店兼差,暑假打工, 酒店上班,酒店經紀

Mon Apr 20, 11:01:00 PM EDT  
Anonymous Anonymous said...

Some new style Puma Speed is in fashion this year. chaussure puma is Puma Shoes in french. Many france like seach “chaussure sport” by the internet when they need buy the Puma shoes or buy the nike max shoes.The information age is really convenient. By the way ,the puma CAT is really good chaussures puma ,don’t forget buy the puma mens shoes and nike air max ltd by the internet when you need them . Do you know Nike Air Shoes is a best Air Shoes .

Spring is coming, and how to choose the polo shirts is the main concern of many people. ralph lauren polo shirts is a classic type and reliable. ed hardy clothing is more in line with the aesthetic ideas of young people, so many young people filled with a variety of ed hardy clothes in their wardrobes. New style ed hardy womens shirt match the new style ed hardy sunglasses , it is a good idea.
Do you think this season is not for ugg boots ? maybe yes .but this season is best time that can buy the cheap ugg boots. Many sellers are selling discounted. Do not miss . Please view my blog and fc2 blog .thank you .

Tue May 19, 05:51:00 AM EDT  
Anonymous Anonymous said...

Do you wannaghd hair straighteners for you own , we have many
cheap ghd hair straightenersin style and great,you can choose one from these
hair straighteners
Authentic chaussure puma
chaussure sport
And chaussure nike shoes
Come here to have a look of our Wholesale Jeans
Many fashionMens Jeans ,eye-catching
Womens Jeans ,and special out standing
Blue Jeans ,you can spend less money on our
Discount Jeans but gain really fine jeans, absolutely a great bargain.
China Wholesale
wholesale from china
buy products wholesale
China Wholesalers

Mon Jun 08, 02:51:00 AM EDT  
Anonymous Anonymous said...

There are ed hardy shirts
,pretty ed hardy shirt for men,

ed hardy womens in the ed hardy online store

designed by ed hardy ,
many cheap ed hardy shirt ,glasses,caps,trouers ed hardy shirts on sale ,

You can go to to have a look ,you may find one of ed hardy clothing fit for you
Top qualitymen's jacket,
These cheap jacket are on sale now,you can find
north face jackets inmage on our web

Mon Jun 08, 02:52:00 AM EDT  
Anonymous Anonymous said...

cheap wow gold buy wow power leveling my wow gold cheapest wow power leveling
replica replica rolex
CHEAP wow power level
BUY power leveling
replica rolex replica
cheap lotro gold
replica rolex
CHEAPEST power leveling
cheap rs gold l

Tue Jun 09, 10:38:00 PM EDT  
Anonymous Anonymous said...

cheap hair straighteners
chi hair straightener
chi flat iron

new polo shirts
cheap Lacoste polo shirts
cheap Lacoste polo shirts

cheap handbags
cheap bags
puma chaussures
chaussures puma
chaussure puma

Men's North Face
Women's North Face

hair straighteners
sexy lingerie store
cheap ugg boots
tattoo wholesale
men's clothing
women's clothing

2009 nike shoes
new nike shoes
Women's max
Men's max 93
nike shox
Nike air force
Nike air max 2003
nike air max ltd
nike air max tn
Nike air rift
Nike air Yeezy
nike airmax
Nike air max 90
Nike air max 97
nike birds nest shoes
nike dunk
nike RT1 shoes
nike SB
nike shox shoes
Nike shox OZ shoes
Nike shox R2 shoes
Nike shox R3 shoes
Nike shox R4 shoes
Nike shox R5 shoes
Nike shox TL3
nike trainers lovers

tennis rackets
Wilson tennis rackets
HEAD tennis rackets
Babolat tennis rackets

Fri Jun 12, 03:44:00 AM EDT  
Anonymous Anonymous said...

クレジットカード 現金化

Tue Jul 07, 04:46:00 AM EDT  
Anonymous Anonymous said...

人材育成 システム

Tue Jul 07, 04:47:00 AM EDT  
Anonymous Anonymous said...


Tue Jul 07, 04:47:00 AM EDT  
Anonymous Anonymous said...

wholesale gemstone jewelry
wholesale crystal jewelry
crystal wholesale
rock crystal

crystal jewelry
wholesale jewelry
jewelry wholesale
cheap jewelry

Sun Sep 27, 10:32:00 PM EDT  
Anonymous Anonymous said...

Your article is very good.I like it very much.
Once upon a time, there was a mouse father.He wanted to marry his daughter to the greatest person in the world.But, who was the greatest person in the world?Oh!
puma ferrari shoes
cheap nike shoesThe sun! He must be the greatest person in the world.The mouse father went to talk to the sun."Hello! Mr. Sun.
puma shoes
ferrari shoes
I know you are the greatest person in the world.Would you marry my daughter?""What? I'm not the greatest person in the world. The greatest person is the cloud.If he comes out, I’ll be covered."
nike shox nz
Ugg Boots
The mouse father went to talk to the cloud. “Hello! Mr. Cloud. I know you are the greatest person in the world. Would you marry my daughter?”
nike 360 air max
nike shox shoes
“What? I’m not the greatest person in the world. The greatest person is the wind.If he comes out, I’ll be blown away.”
cheap puma shoes
puma drift cat
The mouse father went to talk to the wind. “Hello! Mr. Wind. I know you are the greatest person in the world.Would you marry my daughter?” “What? I’m not the greatest person in the world. The greatest person is the wall. If he comes out, I’ll be stopped.”
cheap nike shox
nike air max 360
The mouse father went to talk to the wall. “Hello! Mr. Wall. I know you are the greatest person in the world. Would you marry my daughter?” “What? I’m not the greatest person in the world. The greatest person is YOU, the mouse.” “The greatest person in the world is … mouse?” “Yes, the greatest person in the world is mouse. See? If mouse comes out, I’ll be bit!”
nike air max
pumas shoes
The mouse father was very happy. He finally knew mouse was the greatest person in the world. He would marry his daughter to the handsome mouse next door.
cheap jeans
cheap levis jeans
ed hardy jeans

Wed Nov 04, 03:08:00 AM EST  
Blogger janewangleilei said...

jordan 20
jordan 21
jordan 22

Sun Mar 21, 09:25:00 PM EDT  
Blogger janewangleilei said...

jordan 15
jordan 16
jordan 17 rings

Sun Mar 21, 09:25:00 PM EDT  
Blogger Jimmy Wang said...

I had never see a blog batter than this blog, I like this blog very very much.By the way, do you like my products: solar street lights, street lights, street lighting, street lamps, ball valves, butterfly valves, butterfly valve handles, check valves, sanitary fittings, butterfly valve handles, butterfly valve handles, street light, butterfly valve handles butterfly valve handles, street lamp, solar street light, ball valve, butterfly valve, check valve

Wed Mar 24, 05:39:00 AM EDT  
Blogger janewangleilei said...

air jordans shoes
micheal jordan
Air Jordan 2010
Jordan fusions
nike ajf shoes

Wed Mar 31, 08:39:00 PM EDT  
Blogger barazhao said...

jordan 8
There are cheap shoes to choose
jordan 9
You can have a look at it.
jordan 10
Funny things like this.
jordan 11
jordan 12
jordan 13

Sat Apr 03, 05:53:00 AM EDT  
Blogger daiyanren said...

There are cheap shoes to choose
jordan 6
jordan 7
Good quality with low price.
air jordan 2010
Air Jordan 2009
You can have a look at it.
jordan shoes
jordan ajf shoes
We offer different styles.
jordan 1
jordan 2
If you like,you can contact us.
jordan 3
jordan 4
jordan 5

Sat Apr 03, 09:34:00 PM EDT  
Anonymous Anonymous said...

I can't believe it.
abercrombie outlet
You can have a look at it.
abercrombie fitch outlet
The quality is so good
nike shoes wholesale
wholesale jordan shoes
Young and creative style
wholesale clothing
wholesale nike shoes
wholesale jordans
Young and creative style
china wholesale
There are cheap shoes to choose
jordan 6
jordan 28

Sun Jun 13, 10:05:00 PM EDT  

Post a Comment

Links to this post:

Create a Link

<< Home