Back to previous post: Insufficiently Boring

Go to Making Light's front page.

Forward to next post: How to vote for the Hugos

Subscribe (via RSS) to this post's comment thread. (What does this mean? Here's a quick introduction.)

June 26, 2012

On the prospect of being left behind on a ice floe
Posted by Abi Sutherland at 01:44 PM * 199 comments

Like many people in the various post-Boomer generations, I grew up being told repeatedly and plausibly that Social Security would not be around by the time I was old. Although I left the country—and that particular economic context—behind when I was 23, that mindset has stayed with me. Something in me doesn’t really expect to be able to retire, ever. Deep down, I expect to have to work until I am unable to, either from ill health or lack of opportunities. And then I expect to live in much reduced circumstances.

I was fortunate to start my adulthood without student debt (in-state tuition at UC Berkeley, back when it was a three-digit number of dollars a semester, plus two parents working full-time as lawyers. Also known as privilege and luck.) I’ve done my best to save money here and there, and joined whatever pension schemes I was eligible for. But many of my contemporaries, and even more people younger than me, haven’t had that good fortune, and many who have saved have watched the value of their savings melt away in the financial crisis.

This topic came up in the punishment and statistics thread. It’s a difficult discussion to have in hard times, because there really does not seem to be enough money to go around. We all feel vulnerable.

Lori Coulson, who used to work for Social Security, made a comment that was, for me, a completely different way of thinking about things. The key excerpt:

Right now if the current financial circumstances continue for the next 20 years SSA will be able to pay out full retirement benefits until 2036. If we raise the cap on the amount of income subject to OASDI tax (currently $110,100), the program will be solvent until 2075, when it may need to be tweaked again.

SSID(isability) is in trouble, so is Medicare. Getting people back to work would solve most of the problem (more revenues). Allowing people who don’t have insurance to buy into Medicare, or reducing the age at which one becomes eligible for Medicare (say age 50)** would also help, again more revenue because enrollees pay about a premium of about $100-200 per month.

**This might keep the over-50 crowd employed, as their health insurance wouldn’t be coming out of their employer’s pocket.

Her thesis—and it’s a plausible one—is that these waves of Serious People Telling Us SS Is Going Away are (a) Wall Street wanting its hands on our investment money, and (b) a lingering aftereffect of discussions that have taken place as the system has been adapted over time.

There is nothing new under the sun — the Boomers got the same “SS won’t be there for you” back in the late 1970s and early 1980s. That’s when Reagan and Congress passed the last changes to OASDI.

In 1983, the retirement age was raised from 65 to 67, and the FICA tax was doubled (both the employee and the employer contribution) to build the SS Trust Fund. Please note the Trust Fund was designed to deplete as the Boomers die off.

So perhaps I was naïve in thinking that, because everyone has always told me that I will get a less comfortable retirement than my parents’ generation, it might be true. Maybe I didn’t think through the idea that voter pressure can change even those things that were presented to me as immutable. But I will note, judging by the thread, that I’m in very good company.

I’d suggest you read the subthread before getting onto the topic here. But be aware, as you do so, that there aren’t any villains, knaves or fools in the conversation we’re having here. We’re just a bunch of people who don’t want anyone—ourselves, our elders, or our children—to be impoverished in old age.

Comments on On the prospect of being left behind on a ice floe:
#1 ::: Bruce Cohen (Speaker to Managers) ::: (view all by) ::: June 26, 2012, 02:29 PM:
there aren’t any villains, knaves or fools in the conversation we’re having here.

Quite true; all of us are trying to live our lives to the best of our abilities, while being concerned about the way we might have to live when we are too old or infirm to work a full-time job1.

The real danger, as you pointed out, abi, is that there are villains out there, thieves and scoundrels who want to steal the money we've all been putting away for retirement. They've already taken a large part of it by throwing millions out of work and removing trillions of dollars from the economy, causing local and state governments to make damaging cuts to vital services like education, public safety, and critical infrastructure maintenance. So there's every reason to believe that they will try to make good on their threats to steal more.

We all, Millennials, Boomers, and everyone in between, need to recognize that much of the talk about the collapse of the social safety nets, especially the rants about how the Boomers are taking all the retirement savings, or the Millennials are lazy and shiftless and won't get jobs, is deliberate propaganda on the part of those same villains and their henchpersons, intended to divide us from each other and make it easier to take the part of the US economy they haven't stolen already. We really shouldn't let them split us apart; our interests are very similar, and our power together may be able to not only stop the intended thefts, but also to roll back some of the damage they've already done.

1. As I whinedranted in the subthread, I've already gotten to that point, and I can tell you that my circumstances are substantially reduced from just a few years ago when I had a job in a (somewhat) healthy economy.

#2 ::: BSD ::: (view all by) ::: June 26, 2012, 02:47 PM:

There's another, weird thread to this -- from my experiences (anecdotal, etc.), Boomers are NOT retiring the way pre-Boomers did, even those who can. Additionally, those who do retire do so only nominally, taking up fewer hours or less remuneration, but still very arguably a form of work. Now, I'm certainly seeing this from a certain sector of the economy, but I think we're also seeing it (minus the "those who can" caveat) in other sectors, as SSA simply can't cover expenses if there's nothing else.

#3 ::: Carrie S. ::: (view all by) ::: June 26, 2012, 03:10 PM:

My father retired at the end of last year. So now he has a several months' contract with a company, and is happily working from home three days a week, commuting two of them, and making an hourly rate that's more than his salary worked out to before.

#4 ::: Stefan Jones ::: (view all by) ::: June 26, 2012, 03:46 PM:

I think there are naves, villains, and fools involved.

Naves who have the resources to manage retirement without help, assume everyone else can do the same if they just tried harder, and if they really can't manage, better they get on with it, and decrease the surplus population.

Ideological fools who actually believe in the Laffer Curve or the miracle-working powers of privatization.

Useful fools whose nostrils flare and eyes widen when they hear villains use words like "socialism," or when they read about _____ getting ___ using their taxpayer dollars. Never considering that they could be in that same boat next year...

* * *
From the The Texas GOP 2012 party platform: “We support an immediate and orderly transition to a system of private pensions based on the concept of individual retirement accounts, and gradually phasing out the Social Security tax”

Yes, that would certainly work out just fine for everybody. (Everybody who counts, at least.)
* * *
I'm in a good place, financially, and I'm saving like crazy, but I still assume that I'll be working through to age 67.

I'm assuming that whatever Social Security retirement benefits I do get would go toward bolstering whatever is left of Medicare.

* * *
Raising the cap on social security taxes would affect me, to the tune of a few hundred dollars a year. But I'm all for raising it if it means Social Security remains solvent for my siblings and cousins and friends and neighbors.

#5 ::: Diatryma ::: (view all by) ::: June 26, 2012, 03:46 PM:

I think everyone is facing the same basic question: "How am I going to keep this up?" For those my parents, this means retirement-- how long will they teach, how long will Mom teach after Dad retires, and will their age-old plan of moving to be closer to family and substitute teaching be workable? This is complicated by changing state retirement plans and the fact that while my father's been teaching for more than three decades, his official teacher-retirement only works if he's in the same state-- the years teaching in Nevada and other states don't count at all. They've never planned to retire the way we're taught it means. They plan to retire to... something better than my almost-full-time job. The only one I can get at twenty-eight with a Master's degree.

I, meanwhile, really don't care about my retirement. I am upset that I won't get to have one, but that would change if I could just get a real job. If I could start saving anything at all, and yes, I know I could, but it would mean cutting my current quality of life down a lot. I do not care how I will be living when I'm seventy. I care about how I will be living when I'm thirty.

Some of the tension is that I don't live in the same world they do. I get career advice that flatly does not apply to me. My father got substantial help from his career center-- weekly lists of schools hiring teachers. I got my Master's from the same university, and the alumni services cost between twenty and three hundred fifty dollars. My mother tells me to just move to a city I want to live in and get a job there, as if I am not already looking at all the jobs I can find anywhere, as if moving to Pittsburgh, away from all my friends in Iowa, will make me more likely to survive computerized resume searches, as if I wouldn't get a job in Alaska immediately after.

It's really wearing to repeat, "No, that is not my reality. No, you aren't listening. No, you are just not getting it."

That's the other source of tension: being told to do the same things, which may not work, and being told to do them for the same reasons. I'm supposed to donate to my universities because I want to pay it forward, help support the next generation of young minds. In my reality, I wouldn't mind joining the Alumni Association because it would get me a discount on career services. I'm supposed to pay my parents back for things because that is what adults do, like living on their own and starting a family. In my reality, I pay them back because someday, I will pay them back for everything; someday, I will be able to pay them back, and not paying them back is giving up hope.

And I am lucky. My parents paid for college, the EPA paid for grad school. I am of mostly sound mind and body-- there's about three hundred dollars of mental health coming up next month and probably another two hundred of physical, but it remains within what I can manage. I am living in a place I love. My family could, if necessary, support me either here or there. The work I do is interesting and I'm awesome at it. I have done almost everything right, and that means that I don't have to meekly accept criticism from people for making the 'wrong' choices.

If anyone knows of someone looking for a biologist slash environmental engin-- no, let's just say scientist there-- who can write like the dickens, prepare seriously competent presentations, and speak Spanish moderately fluently, point them out to me.

Thanks for the Dysfunctional Economies Day thread, Abi. It is good to say all of this at once and not be attacking anyone.

#6 ::: abi ::: (view all by) ::: June 26, 2012, 03:49 PM:

Stefan Jones @4:
I think there are naves, villains, and fools involved.

But not in the conversation we're having here, and I will thank everyone to remember that. Right?

#7 ::: pedantic Serge Broom ::: (view all by) ::: June 26, 2012, 03:55 PM:

No nave, nor any knave.

#8 ::: Xopher HalfTongue ::: (view all by) ::: June 26, 2012, 03:56 PM:

abi, I think it's possible that there might be some confusion about the word 'in'. You mean "in the conversation" in the sense of "participating here on Making Light." It strikes me as not impossible that some might misconstrue it as meaning "involved in the topic of conversation."

None of us here is a knave, a fool, or a villain.

#9 ::: abi ::: (view all by) ::: June 26, 2012, 04:06 PM:

Xopher @8:

I don't think Stefan was pointing the finger at anyone here on Making Light. I just wanted to make sure that no one starts, because the previous iteration of this conversation included a lot of pain from people feeling accused, pointed at, and otherwise in other folks' cross-hairs.

Thus the phrase "in the conversation we're having here", where "here" is Making Light. Where we are not, and will not be, divided to be conquered.

I think we're all in violent agreement here. I just want to be sure. Because it's a painful conversation to be having, and we won't do very well at it if we aren't feeling secure.

#10 ::: Stefan Jones ::: (view all by) ::: June 26, 2012, 04:07 PM:

Sorry, I'm still coming down from that Texas GOP piece. (And you can edit out the first part of my post if you wish.)
* * *
My parents seem to have it The Way It Is Supposed To Be. A school teacher's pension, Social Security, paid off house, and an appropriate amount of savings. My father actually retired early (55). They travel, have a trailer home in Florida for wintering, can help out their kids where needed.

The idea of me retiring in five years is laughable.

#11 ::: Melissa Singer ::: (view all by) ::: June 26, 2012, 04:25 PM:

My parents also were able to retire, though my dad was kind of forced into it by being fired at an age when getting a new job in his field was next-to-impossible, so he became an independent contractor for a few years.

In the interim, my mother retired--early--from her secretarial career, since my father had income, and became an amazing volunteer. She taught ESL, worked as an unpaid teacher's aide 2 days/week in an elementary school, started knitting for a charity, worked out every day, etc.

My father got old enough to begin collecting SS and pretty much fully retired at that point; they both had SS income and were doing okay.

Then my dad's mother died (his father had died a number of years before) and my father inherited everything (only child). And there was a good chunk of money there. When my mother's mother also died, a few years later (again, her husband had died years earlier), they got a some more money, and used some of it to buy my grandmother's house (from my mother's siblings), in which my brother lived for a while (he paid rent) before my parents sold it.

So my parents have had enough to live on in their accustomed middle-class way--but primarily because _their parents_ left them money and because their apartment is rent-stabilized. SS alone, and no rent-stabilization, and it would be a different world (and I'd be living with her, ye gods NO).

When my father died, life insurance was added to the stash. But every year for some years now, my mother's savings have shrunk. She's eating into the principle. She has to--no one begrudges her. And she's been generous to my brother and me. But one serious illness and that money will be gone.

My mother retired when she was less than 10 years older than I am now. I won't be able to do the same.

Oh, they never did "retired people" stuff--no big vacations, no golf, no world travel. They just kept living their lives, except they didn't go to work. My dad did some teaching at his alma mater and taught himself how to use a computer, and then I gave him a grandchild and he (they) did childcare two days a week for 3 years (and loved it).

#12 ::: Matthew Ernest ::: (view all by) ::: June 26, 2012, 04:32 PM:

"But I'm all for raising it if it means Social Security remains solvent for my siblings and cousins and friends and neighbors."

If there are no fools in the conversation here, we had better remember that "if" and expect that the case be made first that it won't otherwise be solvent. So far, that case has not been made.

#13 ::: Matthew Brown ::: (view all by) ::: June 26, 2012, 04:33 PM:

You know what I don't trust to be there when I'm older? My 401K money. After the events of the last ten years, I quite honestly expect Wall Street to screw me out of it, one way or another.

I also think that making retirement savings dependent on the market has messed up that market rather badly. One of the big things behind the crash was mortgage-backed securities. Why did they exist? To feed all those hungry retirement funds, desperate for "safe" investments that yield good returns. Built in to so many of these things is the assumption that rates of return of about 8% are attainable with reasonable safety.

It seems that that's not been the case for a while, certainly not in the quantity desired. So we have the dotcom boom, searching for that holy grail; and then a housing boom following on from that.

The history of the financial industry is very much one of people finding ways to con themselves and others into thinking risky investments are safe. Thing is, safe investments don't pay high rates; risky ones do.

If you find a way of making high returns at low risk -- well, you probably haven't. You just haven't noticed the risk yet. If such a way exists, it's an aberration in the system, and market arbitrage WILL correct it as soon as enough people notice it.

#14 ::: albatross ::: (view all by) ::: June 26, 2012, 04:42 PM:

Matthew:

In particular, you may be accepting a small risk of a big loss, which is inherently hard to measure and thus easy to fool yourself into thinking isn't all that big a problem....

#15 ::: abi ::: (view all by) ::: June 26, 2012, 04:53 PM:

Matthew Brown @13:
I also think that making retirement savings dependent on the market has messed up that market rather badly.

Oh, even more so than you outline. Even safe old stocks are affected, because pension funds own so many of them.

The upshot of that is that the people who vote the big blocs of shares have a fiduciary duty to maximize returns and little to no discretion in exercising it. They don't have any duties to encourage socially or environmentally responsible corporate behavior; indeed, if it's going to lead to lower profits, they have to be against it.

Of course, the management teams of these large companies know which side of the bread their butter is on. It's very much in their interests to persuade the trustees of the various pension funds which way of voting will best fit their fiduciary duty.

#16 ::: Bruce Cohen (Speaker to Managers) ::: (view all by) ::: June 26, 2012, 05:29 PM:

Even in the generation previous to mine (the "Greatest Generation" say the Boomers with hedgerow envy) there was a wide variation of retirement lifestyles and finances. Paraphrasing @GreatDismal, "The economy is all around us, just not well distributed."

My in-laws scored bigtime: F-il was an electrical engineer at the Radiation Lab, and stayed on to work on military radar after the war, becoming a GS-15 civil servant working for the Army at a regular base, and so had PX privileges along with a great retirement plan, and worked 1/4 time for some years after retirement as a consultant. M-il was a chemist working on the Manhattan project and later became a science teacher; she had a really good pension plan too. Also, they invested their money pretty well; their retirement was very comfortable, and now that she's in her late 80's and well into dementia, she's living in one of the best private assisted living facilities available.

On the other hand, my parents did not save much and he was self-employed most of his life, so never was in a formal pension plan, although they retired before the changes in Social Security up the age limit and reduced the benefits. My father died more than 15 years ago; my mother has survived by having most of the family living nearby and helping out, and by teaching ESL in night school up until a couple of years ago. But even in her mid 80s she's in pretty good health, and all there mentally; if she needed to go to a facility it might be a real problem financially.

#17 ::: Fragano Ledgister ::: (view all by) ::: June 26, 2012, 05:32 PM:

My wife and I were born during the Baby Boom. Neither of us feel any sense that we can have a safe and comfortable retirement.

Paul Ryan, in fact, has made it clear that I should not since I am right at the cut-off point for what he considers to be the class of people whose contributions to Social Security should be secured (I pass into the "safe zone" later this year). Now, if there's a villain, Congressman Ryan, a man who spends more on wine than my grocery bill (http://tpmdc.talkingpointsmemo.com/2011/07/rep-paul-ryans-pricey-pinot-noir.php) would seem to be the appropriate person.

Social Security will be, in fact, the basis of any retirement I have. This worries me since I am confronted with the prospect of having to stay in work until I am 70, while worrying about my health, which has been significantly compromised and is never going to be normal. I am fortunate that I have a 403 (b) to supplement it, but I work for a university that pays below the median for an already low-paying state so I have to see that pension as supplemental rather than foundational.

At the same time, I keep hearing that I am part of some wealthy, powerful élite. I wish.

#18 ::: Lila ::: (view all by) ::: June 26, 2012, 05:32 PM:

My eldest just turned 28. Although she and her boyfriend are both employed they can't afford housing (they live with his parents) and neither of them has health insurance.

When I was her age I'd been married for 9 years; my spouse's job provided good health insurance (which has gotten steadily both less good and more expensive) and a retirement plan (which is now worth about 30% less than before the mortgage crisis).

We can't afford to give our kids the help our parents gave us. Our kids can't afford to live independently, let alone have kids of their own.

#19 ::: Fragano Ledgister has been Gnomed ::: (view all by) ::: June 26, 2012, 05:33 PM:

Their Gnomish Lownesses seem to dislike either my linking to TPM or my opinion of Congressman Paul Ryan, or both.

[No, it was something far more subtle. Gnomes on a rampage! -- Rovirian Smalpeece, Duty Gnome.]

#20 ::: Bruce Cohen is visiting the gnomes ::: (view all by) ::: June 26, 2012, 05:34 PM:

My last post which had no links at iall n it is in the high tower. I really can't think of any words of power I used either. I'll be by for tiffin shortly, with some home-made pasta salad and Lapsang souchong, and maybe they'll enlighten me.

[Or perhaps not. We gnomes are capricious. -- Hoaiur Mysox, Duty Gnome]

#21 ::: heresiarch ::: (view all by) ::: June 26, 2012, 05:57 PM:

More and more, I'm struck by how much of the prosperity of post-War America was borrowed. Borrowed from the past, in the form of a depressed economy that had left all sorts of economic space to expand into; from the rest of the world, in the form of cheap resources provided by armed despots and of wide-open markets left in the rubble of the industrial world; and from the future in the form of pensions and benefits that weren't, it turns out, something they could sustain. They justified it to themselves with the claim that soon enough everyone could have the same prosperity, but it was never true.

(I don't mean SS in particular with that last bit; I mean state and corporate pensions mostly. Though the assault on SS is symptomatic of the same fading prosperity: the growing impetus to raid SS is driven in part by the ever-decreasing number of other investment options.)

#22 ::: jim ::: (view all by) ::: June 26, 2012, 06:19 PM:

There is distrust. My wife is still working. Nonetheless, she is going to apply for Social Security later this summer so that she will receive her first check in December. That way, come Jan 20th, she will safely be in the category of current Social Security recipient. It's like cutting the cards.

#23 ::: rm ::: (view all by) ::: June 26, 2012, 07:02 PM:

I always figured that "it won't be there for you" was not a prediction, but a promise.

#24 ::: Matthew Brown ::: (view all by) ::: June 26, 2012, 07:43 PM:

Heresiarch@21: Very much agreed.

I also wonder how immigration has played into this. One of the "rising tide lifts all boats" effects American society benefitted from was the constant growing of America. Just by keeping the same market share, doing what they'd always done, a company would experience nice growth year-on-year. Was this broken by cutting off legal immigration? People have been added, sure, but illegals; those who cannot rise up, cannot better themselves, by nature of their status. Has that changed things? I think it has.

On kind of the same topic, I don't think anyone linked Kevin Drum's blog posting today entitled The War Against The Young, which definitely is going over some of the same ground as this discussion.

#25 ::: Lizzy L ::: (view all by) ::: June 26, 2012, 08:02 PM:

I read the Kevin Drum piece, and it totally pissed me off. There appears to be a ready cohort of folks which wants to imagine and cheer a generational war, in which the boomers are the greedy villains, groveling over their hoard, a la Smaug. This is bullshit and delusion; this is ooh shiny and fireworks, designed to distract us while banks, pension funds, universities, and Wall Street manipulate us for their own profit.

The trouble is, they've rigged the game, and it's the only game in town, unless you want to hide your cash in your mattress. Bruce Cohen said it well and truly, in comment #1: We all, Millennials, Boomers, and everyone in between, need to recognize that much of the talk about the collapse of the social safety nets, especially the rants about how the Boomers are taking all the retirement savings, or the Millennials are lazy and shiftless and won't get jobs, is deliberate propaganda on the part of those same villains and their henchpersons, intended to divide us from each other and make it easier to take the part of the US economy they haven't stolen already. We really shouldn't let them split us apart; our interests are very similar, and our power together may be able to not only stop the intended thefts, but also to roll back some of the damage they've already done.

So how do we do that?

#26 ::: Paula Helm Murray ::: (view all by) ::: June 26, 2012, 08:11 PM:

This is all scary for me at age 56. We had to bail out of my 401(k) while I was unemployed because I watched the mutual fund it was in lose almost $10,000 out of it in three months. Taking the tax payment lug was better and it saved our asses.

That said, SS is going to be it. I hope I can keep working but who knows? I lost a foot to a staph infection about a month ago, fortunately I'm insured but I am now handicapped. If I dwell on it, it just makes me anxious so I have to let it go and think one day at a time for now.

#27 ::: Fragano Ledgister ::: (view all by) ::: June 26, 2012, 08:14 PM:

Paula Helm Murray #56: Oh bugger! You have my best wishes. That is just terrible.

#28 ::: Nenya ::: (view all by) ::: June 26, 2012, 08:18 PM:

I'm 32 and in pretty much the same boat as Diatryma @#5--unless something major changes in the next thirty years, I don't imagine I'll ever be able to retire. At this point, I have student loans I can't pay off, and no degree; I work as many hours as I can get at my entry-level job, and *if* I'm lucky I can afford a bus pass, rent, and enough calories each month. I've gotten good at the penny-pinching, but it's a constant stress. Saving? Hah. Hahaha. You have a unicorn to sell me too, huh?

My father, in his sixties, is working retail because that's all he can get, despite having been a teacher while I was growing up. My mom's arts and crafts home business is actually bringing in some money now, but they're limping along as well. They certainly can't help me out, although maybe ten years ago when my dad had better work they could, sometimes. And there isn't anything I can do to pay back, to help them out, either. I hate that. I tell myself that I have uncles and aunts who are more well off, who have been known to help out my parents when they need it. And my brothers are more financially secure than I am: maybe they'll be able to help "support them in their old age."

I generally want to punch something when I see those cheerful, stupid ads at the bank about how terribly easy it is to save $600/month for retirement, or whatever. Not my reality, no.

#29 ::: Elliott Mason ::: (view all by) ::: June 26, 2012, 08:30 PM:

In re the pensions subthread over at the old conversation ...

My husband works for a Big State University; we live in a state that starts with I and ends with S. Our state is in substantial deficit (and for half the cost of bailing out big banks, the feds could have bailed out BOTH California and my state, the two with the worst problems ... but that's a digression). Because of this, the state wishes to save money anywhere it can.

Also, for decades, the way the pension plan for Big University was supposed to work thusly: The employee would contribute $.6x per year, and the state would contribute $.4x, all to a joint fund from which a fixed-benefit pension of certain terms would eventually be paid out.

The employees have been duly paying in their contributions, making a fat pile of cash the state is borrowing from, leaving state bonds in their place. The state, however, for over 15 years, has been contributing less than 10% of 'their' portion.

Because of this, the fund from which pensions are to be paid out is, for quite obvious reasons, seriously depleted.

The state's reaction is to say, "Lawsy sakes, how can we have promised such generous pensions to all our employees for all these years when there's CLEARLY no way we could EVER pay for it?!?" and decide to retroactively change the pension deal for very nearly every university employee who has not yet retired.

This is theft on a grand scale, or at minimum, breach of contract ... especially when you realize that none of these employees are ALLOWED to contribute to Social Security. Because of the nature of the jobs, most of the people currently working at Big University have BEEN working there for at least half their employed working lives, and not contributing to social security in any way. The reason they were willing to accept this deal, and the (substantially sub-industry, in the case of the computer center employees) salaries they've been working for, was BECAUSE of the stable, promised, defined-benefit pensions.

The exact nature of the totally-screwed pension deal is still being negotiated. However, anyone who retires this fiscal year -- before Jul 1 -- gets the old deal.

A really staggering percentage of the older workforce at Big University is retiring this week, for perfectly obvious reasons. In my husband's department, they are losing nearly a third of their manpower ... he doesn't qualify for any pension at all if he retires right now (under the old deal, he qualified at 30years of continuous employment, and he's only been there 12.5), so he's staying, and we'll just have to take whatever Hobson's Choice is offered us.

#30 ::: j h woodyatt ::: (view all by) ::: June 26, 2012, 08:52 PM:

You really do have to admire the villainy of Alan Greenspan, who devised an utterly brilliant plan to subvert Social Security when he was chair of the Greenspan Commission:

1. Raise the regressive payroll tax on the Boomer generation at the peak of their earning power, to start building a surplus in the Social Security trust fund intended to pay for their benefits when they reach retirement age.

2. Wait until almost everybody forgets that you did this, and you can shut down anybody who still remembers by accusing them of being socialist extremists. Or, in the case of Nobel Prize winning economists, labeling them as overly shrill and, therefore, unsuitable for inclusion in serious discussions.

3. When the Boomers finally start retiring, and the Social Security trust fund is burning its surplus as it was intended to do, start ringing the alarms about how the trust fund will be depleted unless there are benefit cuts for the Thirteeners, Millennials and everyone who comes later. As if "depletion" wasn't the plan all along, c.f. step one.

4. Watch as thoroughly confused Thirteeners and the Millenials proceed to flex their political strength and respond to the fake crisis by dismantling Social Security and replacing it with a system of privately managed individual accounts funded with a regressive payroll tax and enhanced with myriad ways for people to borrow against their retirement savings at usurious interest rates.

The word 'sublime' applies here.

#31 ::: P J Evans ::: (view all by) ::: June 26, 2012, 09:16 PM:

I'm not much past 60, and I can only hope that SS will be there when I can retire. I can't get the full promised amount until I'm 67, and it will supposedly be about half what I'm being paid now. I've thrown money into 401(k), and that lost a big part of its paper value (along with the IRAs and my share of my parents' investments) when Wall Street 'investment' houses crashed the economy.
If they think I'm going to vote for privatizing SS, or anyone who thinks that's a good idea, hell no! (They'd have done better to take the umpteen billion dollars that they gave to the banks and give it to people so they could actually retire before they're 70. But then Wall Street executives would have had to admit that they don't really know what they're doing.)

#32 ::: Dena Shunra ::: (view all by) ::: June 26, 2012, 09:33 PM:

What worries me in this field (and relates to Matthew Brown @13) is inflation. The devastating kind, the kind that demolishes savings after you've gotten to the finish line of your working life.

There's a good reason for this fear: I came of age as a financial person in a place with 800% annual inflation. Prices changing from day to day, savings disappearing, the actual practice of saving money being supremely foolish, any planning being impossible.

I have no idea how to hedge against it (yeah, I-bonds. Right. A gamble, like all other investments.) It's kind of like surfing: you can ride it if you hit it right, you can drown if you don't. Unlike surfing, skill doesn't matter much - luck is the big factor.

This is an uncomfortable thing for me to know; I'd much prefer a belt to go with my suspenders, and probably an elastic waist-band, too.

#33 ::: Megpie71 ::: (view all by) ::: June 26, 2012, 09:51 PM:

[Context: Australian]

We Aussies have been told for about the last twenty years or so that we should be planning our superannuation for our retirements. There's a regular, government-sanctioned contribution (I think it's up to 9% of wages now) which is paid by one's employer, and of course we're all told this is going to be wonderful for all of us. Unless, of course, you're one of those silly people who is in temporary or contract work a lot of the time, or you've been changing employers frequently rather than staying with the one employer for your entire working life.

You know - someone who isn't part of the upper-middle-classes.

I started out getting super paid into the Retail Employees Superannuation Trust. Then my next employer was the Commonwealth Government. Comsuper (which has a whole heap of rules and regulations about where it will accept money from, and when and how and all the rest of it) wouldn't accept me rolling over my REST money into their coffers. So every year, I'd receive nice little notes from REST about how my super was growing with them - to put it simply, it wasn't. Their administration fees were eating up all the interest, and with no new contributions going in, I was losing money. I stopped working for the Commonwealth after about ten months (for reasons I shan't go into here) and spent about three years unemployed, studying, or looking for work (watch the super dwindle). I got a couple of temp jobs (a few days here, a few days there) but they didn't add anything to the whole bundle, and my next full time job I wound up contributing to (yet another) superannuation fund. In the meantime, I'd moved states, and REST lost track of me, ditto Comsuper. I started getting the letters from the tax office I've become quite familiar with since then: the ones which say "we've received this small amount of superannuation with your tax file number attached, what do you want us to do with it?".

The amount is usually about $2000 or less, and what you're supposed to do is roll this over into your current super fund. Which is fine, except that at the time I first started receiving those, I didn't have a super fund. I didn't even have a bank account, because I couldn't afford that.

Things continued in a similar fashion (aside from a five year stint at the same employer - Commonwealth government, back to Comsuper again) along the line. I have no idea where my superannuation is at now. I've letters and notes and statements all over the place from various funds over the years, but quite honestly, I've never really been able to pull together the enthusiasm to consolidate things. I know I should; it'd be financially sensible to do so. But really - I think at this point, I'd need a trained accountant and a couple of weeks to wade through the whole mess, and I can't afford either.

Hopefully the pension will still be there when I reach retirement age (67 for women these days, it's heading up toward 70). But with a mental illness which means I can't take full time work even now (in my supposed peak earning years) and makes me damn near unemployable in the long term, I'm looking forward to a lot more time spent in social security offices over here, arguing with public servants about my eligibility for payment and jumping through bureaucratic hoops.

And if you all don't mind, I'm going to stop talking, thinking and reading about this, because I don't need the extra kick in the depression.

#34 ::: Emma in Sydney ::: (view all by) ::: June 26, 2012, 10:48 PM:

Megpie, at the risk of being hlepy, and having recently consolidated my Australian superannuation funds as you describe, I thought you should know that your major super fund will help you get all those bits together, and all you will need to do is fill out one form giving the names and numbers of your accounts at the others. Which will be on the letters. I was astounded at how much easier it was in practice than in my imagination. And I felt much better afterwards. You might too.

#35 ::: j h woodyatt ::: (view all by) ::: June 26, 2012, 11:54 PM:

Dena @32, inflation isn't a problem for sovereign powers that can print their own currency. Curbing inflation is easily done by a central bank that controls a fiat currency, like the U.S. Federal Reserve does. This is especially true for any central bank that doesn't give a flying fig about paying for it by taking an uptick in unemployment for a trade, which is— in practice— every central bank on the planet, but especially the U.S. Federal Reserve.

I would suggest that people think about whether this ubiquitous fear of runaway inflation might actually be all of a piece with the ongoing fear of being left on ice floe in our old age. It's a fake crisis. High inflation is a ridiculously easy problem for the Fed to solve, and it's one that the Fed is constitutionally and ideologically incapable of ignoring.

Really, at this point, you almost cannot go wrong by tuning into CNBC or Fox Business or what have you, watching for three or four minutes until you know what scares the bejesus out of everyone who appears on camera there, then deciding that's exactly what we need to do right this very second why are you still standing there start doing something useful already please. Those people have been so wrong about so much for so long with so little consequence that you've got to feel compelled to think it's a conspiracy.

#36 ::: Mishalak ::: (view all by) ::: June 27, 2012, 12:46 AM:

Xopher HalfTongue @ #8

I am a villain, or at least since I cannot prove a lover, To entertain these fair well-spoken days, I am determined to prove a villain...

In all seriousness I very much doubt that Social Security will be available to me in its present form should I make it another 40 some years (gosh 2042, what a number that is) due to political dysfunction and the accompanying economic malaise.

It is not that I think we cannot fix things, I am just pessimistic that we will fix things and thus we will fail to advance (as opposed to outright collapse, I am not quite that gloomy). Rather than absolutely not being there I expect that Social Security will be a pittance, if I reach retirement age if I reach retirement age since I cannot afford health insurance.

I also think that Obama has about as much chance of reelection as a gay Republican has of getting lucky while wearing a "W in '04" tee shirt. But then, I am a pessimist.

#37 ::: Bruce Cohen (Speaker to Managers) ::: (view all by) ::: June 27, 2012, 01:24 AM:

Not going to be any sort of runaway inflation (or probably even the "normal" 3% / year inflation) in the US or the EU anytime soon. The austerity being enforced on us has reduced GDP growth so far that we will be lucky not to go into a recession in the US next year, while the UK is already there, and Spain, Greece, and Portugal are in a depression now (I've lost track of where Italy is, probably in Silvio Berlisconi's favorite brothel). If anything, we can all look forward to the possibility of significant deflation.

#38 ::: B. Durbin ::: (view all by) ::: June 27, 2012, 01:26 AM:

I've always accepted the "SS won't be there for you" as a prediction that was not so much to be taken at face value—there will be SS—but as a comment that it won't be sufficient to keep you alive by itself. I don't expect to be able to do what my parents did; my father got an early buyout when the base shut down and had various pensions and such in place, so he and my mom were able to enjoy over a decade of retirement before he died last year, only a few years into the traditional retirement age.

(Stop smoking, really. Quitting didn't save him but it gave him that dozen years of really good time.)

Anyway. I work at a radio station on Sunday mornings and one of our shows is with a financial planner who deals with the elderly, and one of the things he always says is that his group works on long term plans with the understanding that they WILL fail at some point, because unpredictable things always crop up. So my "plan" (cue celestial laughter) is to work as long as I'm able (because I enjoy my job, and there should be some reasonable permutation for a long time) and hope for a quick decline when it comes (preferably well into the decade starting with a 9.) I can't plan on SS being anything other than supplemental at best.

#39 ::: Neil W ::: (view all by) ::: June 27, 2012, 05:12 AM:

Elliott Mason @29 The state's reaction is to say, "Lawsy sakes, how can we have promised such generous pensions to all our employees for all these years when there's CLEARLY no way we could EVER pay for it?!?" and decide to retroactively change the pension deal for very nearly every university employee who has not yet retired...This is theft on a grand scale, or at minimum, breach of contract

Also gross mismanagement. Whatever has already been promised, has already been earned and is owed to those employees as (essentially) part of their pay. If they now need to change the deal and going forward close the old pension plan and offer a new pension plan (as part of a, presumably, less generous compensation package), well that's not completely outrageous.

Also Melissa Singer @87 on Previous Thread A year or so after that, laws were changed to allow vesting at 5 years. Still a long time, but better. However, again, if you were a nonunion employee, your employer could scrap your pension plan for any number of reasons, including bankruptcy, merger, or sale of the firm.

So you're supposed to plan for your retirement based on pensions that you may or may not be entitled to due to events happening in the next five years, many of which are not under your or even your employers control. This pokes me hard in my vestigal finanical professionalism.

#40 ::: Neil W ::: (view all by) ::: June 27, 2012, 05:17 AM:

Also inflation mildly inconveniences people with large amounts of capital wealth. Which is almost certainly unrelated to j h woodyat's note that there are institutions with the right tools to tackle inflation and the inclination to use them.

#41 ::: Serge Broom ::: (view all by) ::: June 27, 2012, 05:52 AM:

Mishalak @ 36... I also think that Obama has about as much chance of reelection as a gay Republican has of getting lucky while wearing a "W in '04" tee shirt.

I've broken the promise I made to myself in 2004, and I've contributed to a presidential campaign. Have you? That being said, your comment about a gay Republican reminds me of what a non-Republican gay once said to me about the Log Cabin's Republicans - something about dropping a house on the head of a wicked witch. He's also the gent who a few years ago gave me the "Hustler Squad" calendar that still adorns my garage's tool area after all these years. But I digress.

#42 ::: iliadawry ::: (view all by) ::: June 27, 2012, 06:07 AM:

I'm not sure where I stand in this discussion. I graduated from college a number of years ago, with a degree (that I loved getting) in a non-employing field, more or less -- at the very least, it doesn't employ those without graduate degrees in any capacity I'd be comfortable with. I'd planned to go back to school, but my father got sick, and so I put that off and juggled on-again off-again part-time jobs with taking care of him. My employment history is spotty, and the recession combined with an ill-timed move have sort of punched me in the gut. I haven't touched my student loans in the decade or so since I've graduated, mostly because I've never had the income. I haven't had insurance since the day I graduated. I don't believe Social Security will be there for me because I haven't had a chance to pay into it in any meaningful way, and I don't know what to do. Taking care of one's parents is a good and noble thing (and my dad is doing a lot better now!), but it doesn't look good on a resume, and I wish dearly that there was a safety net for people like me. I'm intelligent and capable, I learn quickly, and I write well -- but that doesn't get me in the door.

I'm glad to pay in when I can. My parents have helped me a lot, and continue to do so, despite me moving across the country. Like Diatryma, I don't foresee a future where I can take real vacations or retire ever. I'd just like a future where I'm not looking for work the rest of my life -- and real work that pays a living wage would be ideal.

#43 ::: dichroic ::: (view all by) ::: June 27, 2012, 06:29 AM:

For both my parents (pre-Boomer) and me (GenX) it all comes down to healthcare. Dad had to retire several years ago due to health issues, but Mom worked up until age 71, largely just to keep their health insurance. I think part of the reason she retired then was just due to an inheritance. (Not a happy reason; it was from her younger brother and she'd rather have kept the brother). We're looking at taking some time off from work to travel, and the main issue there will be health insurance; it was also be the main thing keeping us from retiring early unless the problem is solved in the next decade or so.

#44 ::: LMM ::: (view all by) ::: June 27, 2012, 06:59 AM:

@25: Permit me to explain a bit here. (And, once again, I am not a lone individual. This is how *many* people my age feel.)

Maybe it's the banks that are driving decisions. But it's the AARP and the Greatest Generation that were out protesting against universal health care. When people insist that we *can't* have a stimulus, they often point to inflation and say that people on fixed incomes (i.e. retirees) might be hurt. Tuition hikes are justified by the "fact" that we can't take money out of entitlement programs and the like. Prop 13 in CA has decimated the school systems -- in the names of the grandmothers (real or not) who might otherwise have been driven from their (overvalued, high-demand) homes. When people talk about cutting benefits, they never cut them for people who are established. The policy decisions may be made by other groups, but when those decisions are made, they point to retirees as the reason why they can't make them. And the people who are "benefiting" don't speak up in protest. [1]

There is a very real sense among Millenials (and, I suspect, the younger X-ers) that the Boomers and Greatest Generation pretty much pulled the ladder up behind them. The timing works out *perfectly* -- people in their twenties and thirties have been hit with wave after wave of tuition hikes followed by poor job markets followed by poorly funded benefits packages ... all the while being told that we're not doing enough to benefit ourselves. At best, older individuals have absolutely no idea what's going on. At worst, well.

And I get it. No one else is doing well, either. Everyone else is suffering from a poor economy, too. And, ultimately, every generation feels like *it* is the worst off. But, ultimately, the solutions a lot of people seem to be proposing are ones which will help protect *them*. Like it or not, Boomers have a lot more political sway than most twenty-somethings. (Hell, a lot of the people who are taking on student loans right now are just barely eligible to vote. Which, come to think of it, may very well be one reason why the states feel they can cut the budgets as much as they do.) And when that political clout is used to propose, say, lowering the age of Medicare enrollment to 50 (as I've seen *here*) -- that really doesn't help convince anyone that we're in this together.

[1] I have a *very* similar complaint about much of the military -- cuts that, in practice, would eliminate the F32 or some other such nonsense are argued against on the basis that it would harm the troops on the ground. In both cases, the silence of the "beneficiaries" is damning -- it's essentially condolence of the claims.

#45 ::: abi ::: (view all by) ::: June 27, 2012, 07:41 AM:

LMM @44:

I'd point out that just because someone cries, "Won't someone think of the children?" doesn't mean that the actual views of the children in question have been taken into account. Retirees and military people may agree with whatever has been proposed in their name this time round, or may just be grateful that someone is seeing their perspective for once, or may not have any opinion on they were being used in that fashion. Or they may disagree, shake their heads, and move on, tired of the whole circus.

There's no obligation to stand up every time someone takes your name in vain, particularly not in our vitriolic political climate. Silence does not equal endorsement.

Also, there were plenty of elderly people voting for universal health care, whether because it was in their personal interests, in the interests of their families, or just because they felt it was the right thing to do. The AARP may have been out against it, but please stop confusing the actions of an organization with the universal views of the people it purports to represent.

I get that you're angry. I get that you feel short-changed, that it's a finite pie and other people have left you too little to get by on. Question that assumption. And even if it's true, you'd do better to seek out allies rather than dismissing everyone whose (percieved) advantage is against yours.

On a more moderatorial note, you felt piled on in the last thread. I started this one, and phrased the original post here very carefully, specifically to deal with and deflect a lot of the ways that you felt things had ended up pointed at you individually. Do you really think that, disclaimers aside, being even more confrontational is going to lead to a better outcome this time around?

Specifically, is this kind of shotgun accusation really productive or useful? Particularly in conversations where actual older people, really present, have said no such thing to you, me, or anyone else?

all the while being told that we're not doing enough to benefit ourselves. At best, older individuals have absolutely no idea what's going on. At worst, well.

(There is one place where older individuals are saying younger people aren't doing enough to benefit themselves: the ballot box. And they're right. Voter turnout among younger people is lower than among older people. Politicians know this.)

#46 ::: Fragano Ledgister ::: (view all by) ::: June 27, 2012, 09:06 AM:

LMM #44: I understand your anger and frustration. You've been told a great deal of nonsense.

I've been paying into Social Security for decades -- since I came to the US -- and I am not happy at being told that it ought not to be there for me. Especially not by a jackass who thinks nothing of paying $350 for a bottle of wine.

Your frustration is palpable, what about mine? I've got to consider working until seventy. At that point I should, cæteris paribus, be in a position to retire (providing that I'm not dead).

At some point, people should be allowed to take life easy and reap the rewards of hard work.

#47 ::: Howard Bannister ::: (view all by) ::: June 27, 2012, 09:21 AM:

Just a few things.

One, if you're not reading Paul Krugman regularly, you really should. See: http://krugman.blogs.nytimes.com/2012/04/09/socialsecuritymedicareandmedicaid-strikes-again/

Two, from the SSA webpage: http://www.ssa.gov/history/hfaq.html

Excerpt:

Q7: Is it true that life expectancy was less than 65 back in 1935, so the Social Security program was designed in such a way that people would not live long enough to collect benefits?

A: Not really. Life expectancy at birth was less than 65, but this is a misleading measure. A more appropriate measure is life expectancy after attainment of adulthood, which shows that most Americans could expect to live to age 65 once they survived childhood. (See more detailed explanation.)

That is a lie that is told about the Social Security fund. The truth is that the architects of the fund were not looking at total life expectancy, but the expected life expectancy of somebody who makes it to 65. And they then assumed it would get better! (it has, but barely)

A few sources to peruse.

Now, here's the thing; a lot of folks have expressed an expectation that the furious Republican push will succeed. That they are determined to take away Social Security, so we can't rely on it.

(which is a totally understandable feeling)

But if they take it away and give it to the financial industry, with its record profits and unbelievable executive compensation, and continues to grind the 99% into dust...

Well. At that point we'll have bigger concerns than not retiring, I think, because where will they look next? These are the people who sunk a vibrant economy in search of profits. They will make things worse, and push expansionary wars to cover it up.

Those things go hand in hand. They can't win Social Security and not do that. Simply can't.

If they don't, then people might notice what they're doing. If they don't, where will their captive market be?

I don't want to sound like a 'rah rah fight fight' kind of guy... although I'm certainly feeling like one. But the fact of the matter is that I bought their lies once. I bought them, and I worked counter to my interests, to your interests, to everybody's best interests.

I learned better.

If any one individual can be made to see that these are cynical lies, then I have to believe that there's hope on a larger scale, that more people can be shown.

#48 ::: Serge Broom ::: (view all by) ::: June 27, 2012, 09:58 AM:

Abi @ 45... no obligation to stand up every time someone takes your name in vain

...especially if your name is Gore, or Blood.

#49 ::: Lori Coulson ::: (view all by) ::: June 27, 2012, 10:47 AM:

For the record, so you know where I'm coming from:

I just retired from the Federal government. Mostly because I couldn't take another year where my health insurance increased, and my salary didn't.* Also, my fibro has reached the point where continuing working meant being on a steady diet of painkillers.

Now, I'm getting about $200 more a month to live on, and I used part of my TSP money** to pay off my remaining debts so I have SOME breathing space. It will be 6 years before I'm eligible for Social Security, and 9 years until I'm eligible for Medicare.

I have spent the last 5 years making sure I could live on the $1,500 I receive each month. If my health holds out long enough, my monthly income once I apply for Social Security (SS) may be as much as $2,000 -- $24,000 a year. Part of my pension disappears when I reach age 62 -- I'm hoping what I have left in TSP will keep my income at the current level until I file for SS at age 67.

I was one of those "high paid" Federal employees...

*Wages frozen Fiscal Years 2011/2012 and maybe 2013
**Federal equivalent of the 401(k)

#50 ::: PrivateIron ::: (view all by) ::: June 27, 2012, 10:59 AM:

I am an old X around Abi's age. I will be paying off student loans until I am 63. I have an OK job (above average in some respects; less in others.) I cannot save for a down payment. I have no idea how to pay for my children's college. My retirment savings are a joke.

I am way luckier than almost everyone 10 years younger than me. The psychology of that is very hard to overcome. How do people learn to do long term planning under those conditions? It is a severe cultural problem that some of the commentators here might be missing as they make their cogent, reasoned economic arguments about the viability of SS, political activism and the like. The villains have institutionalized despair. Just getting young people in the mind frame of approaching these issues is now going to be laborious.

#51 ::: abi ::: (view all by) ::: June 27, 2012, 11:27 AM:

One age-gap issue I've noted many times is the issue of student loans.

It can sometimes be difficult for Boomers and older X's like me to really internalize how necessary college has become for getting any kind of a good job these days. When I went to college, it was optional. My academically high-rated high school had a significant proportion of students who didn't go on to college but just went straight to work instead. Some of their jobs had real growth potential, enough to make them better choices than college. And by now, I'm sure no one looking to hire them cares what they did in their late teens.

Those kinds of jobs are much harder to find now. Connections help (privilege! nepotism!), but from what I hear, if you want anything better than food service or phone work, you have to go to college. My moment of shock was reading an interview with a car rental manager who said that he wouldn't hire anyone for checking cars in and out who didn't have at least an Associate of Arts*. He felt that high school graduates simply weren't literate and numerate enough.

Now, maybe his local high school graduates weren't that well-educated. Or maybe the competition was such that they didn't get a look-in because there were too many AA applicants. In any case, that was how he hired, and I didn't get the sense that he was unusual.

In that kind of a job market, higher education is not a luxury. It's a necessity. Combine that with the excruciating rise in tuition fees (partly through competition, now that everyone is trying to go to college) and the steady erosion of grants, and you get eye-watering student debt.

Repaying it is a steady drain on many people's finances, right when they're "supposed" to be starting to save for retirement. And bankruptcy doesn't clear it.

Much as I worry about Social Security, if there is one topic in American finance that makes me want to light a torch and find a barricade to stand at, it's student debt. (Well, that and health care.)

----
* For non-Americans: a two-year college degree, frequently awarded by community colleges. Some universities will let you transfer your AA into the first half of a BA -- UC Berkeley certainly did when I was there.

#52 ::: heresiarch ::: (view all by) ::: June 27, 2012, 11:51 AM:

j h woodyatt @ 35: "inflation isn't a problem for sovereign powers that can print their own currency. Curbing inflation is easily done by a central bank that controls a fiat currency, like the U.S. Federal Reserve does."

You might want to tell that to Zimbabwe, what with their fiat currency and 516 quintillion* percent inflation and all.

* A real number; the actual figure (in 2008. It's better now.)

LMM @ 44: "Permit me to explain a bit here. (And, once again, I am not a lone individual. This is how *many* people my age feel.)"

abi @ 45: "I get that you're angry. I get that you feel short-changed, that it's a finite pie and other people have left you too little to get by on. Question that assumption. And even if it's true, you'd do better to seek out allies rather than dismissing everyone whose (percieved) advantage is against yours."

I feel there's a bit of disconnect here: LMM seems to be articulating how things feel and is speaking from the perspective of a group, and abi seems to be describing how things ought to be thought about and is speaking to LMM as an individual. (Apologies if I'm misrepresenting either of you.)

These are kind of orthogonal conversations: the truth value of whether old people are conspiring against the young, whether SS is really going to be there in seventy years is a bit irrelevant as to whether people feel those things are true, and even if LMM is persuaded (though I think s/he already is) it isn't going to change the general social impression being described.

Both of these strike me as worthwhile conversations, but they're not quite the same worthwhile conversation.

#53 ::: Lila ::: (view all by) ::: June 27, 2012, 11:54 AM:

Student loans. Jesus, don't get me started. If you've not been following the for-profit colleges/student loans issue, you should take a look.

One thing I'm profoundly grateful for is that my husband and I and the 2 out of 3 kids who stayed in college managed not to take out any student loans. We do have a HELOC we had to use to cover the youngest's tuition when she lost the HOPE grant (due to rule changes that meant it was two semesters before she could be evaluated to get it back). It took a combination of state vs. private schools for 3 of the 4 of us; a full merit scholarship for the one who went to a private school; work-study, research fellowships, delivering newspapers, tutoring jobs on the side, help from parents, etc. etc. Getting a college education without taking out student loans is still possible, but certainly not easy.

Community colleges are to for-profit colleges as credit unions are to banks. I can't understand why more people don't take advantage of them. I have an AA degree from a community college whose health-related programs boast pass rates on the national licensing exams in the high 90 percents, every year. Tuition is very low compared even to a state university, let alone a private school, and there are scholarships available.

#54 ::: Melissa Singer ::: (view all by) ::: June 27, 2012, 11:56 AM:

abi @51: I completely agree.

The Village Voice has for several years run a steady series of articles on student debt (generally under the "Generation Debt" banner) which have made it abundantly clear (to me) how crippling student debt is to people's lives and to the US economy.

As the single mother of a person who will be a junior in high school this fall, it's rather terrifying. I'm leaning toward impoverishing myself to try to have her take on as little debt as possible, especially as she might well have to go to graduate school. Assuming she gets into college in the first place, which is not guaranteed.

#55 ::: Diatryma ::: (view all by) ::: June 27, 2012, 11:56 AM:

I managed to catch myself before going into a Four Yorkshiremen sketch. Yay for restraint!

Abi, my mother's been saying for years that college is useless. Perhaps this is because her three children have an MS, a BA, and an AA, and the one of us who's been most consistently successful is the AA. I'm the only one not working with customers, and a lot of that is because none of the places I've applied for retail will hire me-- they know, or think they know, I'll leave as soon as I get a realjob. Never mind it's been three years since I graduated and that hasn't happened yet....

#56 ::: Fade Manley ::: (view all by) ::: June 27, 2012, 12:14 PM:

My spouse is making what seems to both of us an absurdly high amount per year at his current job. And as we went over the bills, to consider how much savings we'd need to survive for six months if he lost the job and needed a replacement, he asked, "How does anyone become middle class anymore?"

And...I don't know. We have a single car we bought used. We have a nice house we're very happy with, which is a little three-bedroom one in a modest neighborhood right by the freeway. We have no children yet. (There's a lot of charity giving, but it doesn't add up to what a single child would cost.) It's a nice comfortable life, and...with the amount he's making, which seems staggeringly high to me--what I would have deemed Wealthy when I was younger--that's...about as much as we can maintain. We're wildly lucky, and I don't expect we'll ever have a two-story house, or buy a new car.

It bewilders me, sometimes. I'm extraordinarily lucky--even reading this thread would have told me that, if I didn't know it already--and our Extraordinary Luck equals a rather nice middle-class lifestyle, so long as we don't have any sudden emergencies. It'll drop a bit if we have a child. That shouldn't be extraordinary luck. It should be...normal.

#57 ::: OtterB ::: (view all by) ::: June 27, 2012, 12:18 PM:

abi @51 from what I hear, if you want anything better than food service or phone work, you have to go to college

I'd like to edit this to "you have to have some post-secondary education." Not all of that comes in the form of a college degree; alternatives I can think of are technical certifications in IT and in various kinds of health care technology, and apprenticeships to the skilled trades such as plumbing, electricians, etc. Around here, a number of certification programs are run through the workforce development branch of the community college. One has to shop for these things warily: do they train on current technology for current employer needs? But when they are well aligned, they are highly useful.

In theory, the college degree gives one more flexibility for the long term. It may, in fact, make it easier to retool as technology changes (though it may not).

#58 ::: Mishalak ::: (view all by) ::: June 27, 2012, 12:22 PM:

Serge Broom @ #41
I've broken the promise I made to myself in 2004, and I've contributed to a presidential campaign. Have you?

I have not contributed to any campaign since '08 (And I love saying Oh-Eight, it is like being a character in a novel) when I got swept up in things and contributed money. Though this was not a promise or any kind of reasoned decision.

I could talk about my financial situation, how very little I live on, my lack of health insurance, my lack of air conditioning, my need for a car with less than 220,000 miles on it, but all those would just be excuses. I am not going to contribute because I am wholly convinced that Obama cannot win and I will not throw away good money on a hopeless causes. I would rather save it or spend it on beer than give it to a political campaign.

#59 ::: abi ::: (view all by) ::: June 27, 2012, 01:00 PM:

heresiarch @52:

I'm talking to LMM because LMM is the person in the conversation. Also, although as a fellow citizen, I sympathize with LMM's frustration, as a moderator, I have to ask that it not be expressed in that particular way right here. In particular, the degree of anger at older people as a group is leading to some quite negative statements that other members of the conversation would be entitled to take personally and object to as inaccurate. (I'd rather they didn't. Which is why I'm stepping in.)

However LMM's group feels, LMM is the person who needs to find a constructive way to participate in this conversation.

#60 ::: Lee ::: (view all by) ::: June 27, 2012, 01:02 PM:

LMM, #44: You are misinformed here. AARP supported Obamacare, and has been losing members because of it. I am an AARP member, and the literature I've been getting is strongly in favor of the plan because of the increased benefits it offers to senior citizens. What you may have heard about is that AARP wants an exemption from the new policies for its own employees, which is a pretty clear case of eat-our-cake-and-have-it-too syndrome.

It is true that a number of older people have been fighting against health care reform of any kind, but they are not being pushed or backed by AARP, but by Faux News and its ilk.

#61 ::: Lori Coulson ::: (view all by) ::: June 27, 2012, 01:45 PM:

And some of us have left AARP because it was active in supporting the Bowles/Simpson Catfood Plan -- making major changes to Social Security and Medicare that would have been harmful to both current and future recipients of the same.

AARP is not your friend -- it has long since abandoned its founder's principles to go whoring after insurance sales.

#62 ::: Russell Letson ::: (view all by) ::: June 27, 2012, 01:55 PM:

The Ambrose Bierce part of me wants to define "entitlement" as "an obligation, voluntarily accepted, that a politician now hopes to default on."

We (the domestic rather than royal "we") are too old to be Boomers, but we entered the grownup workforce late (grad school delays some aspects of adulthood) and thus were exposed to the notion that SS was going to collapse before we did. Our employer was a state institution with a decent but lackadaisically managed pension system (which took its own paycheck bite in addition to SSI's), so we made a point of coppering those bets with private retirement planning. And here we are, old enough for the pasture (but not yet turned out to it) and SS is still operational, and the state retirement system got a much-needed overhaul. It was our good fortune not to work in one of those sectors where management was allowed to raid or otherwise diddle the pension plan.

Having lived through this history, I have to agree with the view that most of the scare talk about the SS system's solvency is recycled right-wing manipulation designed to serve the interests of the financial-conservative axis--nothing attracts the finance guys like a big pot of retirement money, just sitting there instead of being churned into a tasty mix of fees and risky investments.

On a semi-related note: A meme I find troubling is that "old folks should retire and get out of the way so the young folks can have their jobs." Aside from the fact that many in their mid-sixties have experienced the kind of reverses that Bruce Cohen reported and can't afford to retire, for some professionals like my-wife-the-professor, both the economic and the social-psychological conditions of retirement are less than attractive. (If you're doing what you love doing and sound of mind and body, why quit?) Then there's the spectre of one health crisis destroying the family nest egg in months--who in her right mind would walk away from 1) decent health insurance and 2) the opportunity to grow that nest egg to a less vulnerable size? I'm not sure where prudence shades over into paranoia, but those of us raised by the Depression Generation are subject to nightmares.

Diatryma@5: Yours is not the first generation to finish school with lousy job prospects. Ask a sixty-something English prof what it was like to be on the job market in 1975 with a shiny new Ph.D. Most of my cohort eventually left the academy for government work or law school or other retraining. Those who did get teaching jobs relocated to wherever they had to (as journeyman professors always have) and generally stayed there for decades (instead of climbing the career/institutional ladder, as our mentors had). That's one reason so many provincial colleges have really well-trained teachers currently eligible for retirement.

#63 ::: guthrie ::: (view all by) ::: June 27, 2012, 02:01 PM:

It occured to me that it might be useful to point out Abi's Parhelia on the trial of people involved in ripping Americans off:
"The defendants in the case – Dominick Carollo, Steven Goldberg and Peter Grimm – worked for GE Capital, the finance arm of General Electric. Along with virtually every major bank and finance company on Wall Street – not just GE, but J.P. Morgan Chase, Bank of America, UBS, Lehman Brothers, Bear Stearns, Wachovia and more – these three Wall Street wiseguys spent the past decade taking part in a breathtakingly broad scheme to skim billions of dollars from the coffers of cities and small towns across America."

These are the people who want your social security in the market where they can do what they want with it. Sure, this time they've been caught, eventually, but there are undoubtedly plenty more where they came from.

Secondly, here in the UK there seem to be some hidden drivers to all of the cuts. Public sector pensions have been under attack, and one of the possible, hidden ideas behind privatising the police force (well everything except the actual constable who makes the arrest, you don't need me to tell you how bad an idea it is) is that it relieves the government of anything to do with pension costs and gives the private firm the opportunity to destroy pay and benefits.

Of course one of the reasons given by both new labour and the tories for privatising the Royal Mail is the pension costs. But the tories have quietly taken public ownership of the pension deficit, leaving the Royal Mail a good target for a sell off. This is the standard mode of operation and has been seen numerous times before, take the debts into public ownership and let the private companies walk off much lighter. (see also banks)

The question for those of us who would like to fund a retirement is, where has all the money gone?
As far as I can tell part of the issue is the simple logic of demographic change, meaning fewer workers supporting more retirees and suchlike. But as in the USA, income inequality is increasing, (Although nothing like as bad as it did in the 1980's), which together with the speculative bubble in houses etc and higher oil costs means people are less able to afford things that even 10 years ago we took for granted.

(Even car insurance for first time drivers is extortionate, reasons given include that modern cars are simply more expensive to fix and therefore more often written off and youngsters who are statistically more likely to crash find their premiums are incredible)

So anyway, back to where has all the money gone? I'm only an amateur, so am probably mostly wrong, but it seems to me that a huge amount of it has been dropped into the global financial markets where it has chased the highest returns it can get. This has led to a massive bubble in quick and easy things to monetise, i.e. land and houses. And probably other things, but that's the most obvious destination for a lot of the money. Oh, and I suspect its probably been borrowed and used to consolidate areas of business as well, with big firms able to take on higher debt loads and then drive smaller firms out of business that way or simlpy buy them out.

I'm sure there are other factors at work, such as the relative decline in proportion of Global economic products that the USA, UK etc. have, which I think means we have less ability to buy in what we want. Also the offshoring of skilled jobs from the UK continues, see the recent RBS problems. Our lords and masters are economially illiterate, since none of them seem to wonder who is going to buy their products when everyone is on the minimum wage and government activities have been privatised.

Oh yes, one last thing - Patrick's thingumabob from Graeber about how the spare money over the last few decades has been invested in things which do not threaten the status quo seems fairly accurate to me. Also corporate takeovers of universities hits research - I've been looking for a PhD recently, and all too many of them that come up are basically engineering, and should really be done by the company who will benefit from it, not at the university using taxpayer subsidies.

#64 ::: Emily H. ::: (view all by) ::: June 27, 2012, 02:01 PM:

Speaking of what Abi said about student loans upthread... I'm finding the mocking of Occupy Wall Street very weird. It's all, "You should have known better than to go to college!" -- when we were told that college was the way to a better job. "You should have known better than to get a degree in English/linguistics/philosophy!" -- when we were told that the major didn't matter that much as long as you had the degree. "You should have known better than to take out student loans" -- when we were told that student loans were "good debt."

And all the while, tuition prices were going up so fast that a college degree might as well be a piece of paper saying "I'm upper-middle-class and at least marginally competent." (That seems harsh, but a library school classmate of mine was confused on what century the American Civil War happened in.)

Those of us who are unemployed get told we should have more gumption and go into business for ourselves; those of us who are self-employed get told it's our own fault if we don't have health insurance.

I am extremely lucky because I have a job, and I have a pension that I'm almost vested in. (Libraries, by the way, are one of those fields that are simultaneously "Hey, a practical career for humanities types, and all the librarians are retiring soon" and "Psych! There are no jobs. You should have known better than to get this degree.")

It sure feels like whole mess of catch-22s for my generation. But I know that we're all in this mess together, whatever generation we are...

#65 ::: fidelio ::: (view all by) ::: June 27, 2012, 03:06 PM:

Emily H @64: But I know that we're all in this mess together, whatever generation we are...

This is an insight the puppetmasters would like us to forget. Thanks for saying it, and I hope we can keep reiterating it. Because it's really important.


#66 ::: Diatryma ::: (view all by) ::: June 27, 2012, 03:17 PM:

Russell Letson at 62: I appreciate the sympathy. There is a difference, though, between 'not getting an academic job' (impossible for me, as I don't have a PhD) and 'not getting a job that relates to my degree in any way'. My MS is in environmental science. My BA's in biology, mostly molecular biology. I have seven years of microbiological, invertebrate, and molecular biology research experience. I work as a substitute teacher's aide because the office store, the grocery store, the coffeeshops, the bookstores, and three hundred forty-three realjobs won't hire me.

It's hard to tell if someone is being overly picky when they say there's nothing available. I know I'm being picky because I'm not willing to move across the country for a job I'd hate that pays slightly more than I make now. Most of the time, I'm able to convince myself it's not my fault I'm misemployed because of that.

It's kind of sad when someone with a Master's considers going back to grad school because the money's so much better.

#67 ::: Stefan Jones ::: (view all by) ::: June 27, 2012, 03:23 PM:

Another case study:

A relative married early . . . to a jerk. She spent many years taking care of his elderly mother. She didn't have any job other than that until marriage to the jerk became intolerable. She kept things together for many years on her underpaying, non-career "woman's job," then remarried. A union man with a good pension. That took care of things for a long while, even after he became dreadfully disabled and had to go to a nursing home.

My relative discovered, too late to change things, that her spouse had taken the "100% until I die" rather than the "90% until my wife dies" pension.

No social security, because of her own spotty unemployment.

Fortunately, she has a paid-off house, and can still do little odd jobs.

Rotten situation.

#68 ::: albatross ::: (view all by) ::: June 27, 2012, 03:38 PM:

The explosive inflation of student loan debt and tuitions looks to me like a bubble of much the same kind as the housing bubble. All right thinking people knew and told you that you should stretch to buy the biggest house you can afford, that home ownership was the key to middle class prosperity and a well-off retirement. Millions of people followed that advice. The prices of houses went up and up over time. Wall Street, supported by Washington, created ever more gimmicky and scary ways to borrow to buy a house, to overcome the fact that housing prices in many places were too much for most people who wanted to live there to realistically afford. Those loans also fueled more increases in housing prices, creating a competition where prudent people were priced out of many markets, or were forced to accept way too much debt in order to get any kind of a house within driving distance of their jobs.

Now, all right thinking people know and tell you that you shoujld stretch to get into the best college you can, spending whatever it costs, because that's the key to middle class prosperity. Tuitions get more expensive every year, and have for a couple decades. Washington and private lenders have gotten together to create gimmicky mechanisms to let people borrow enough to pay these tuitions, to get around the fact that the tuitions at many schools, for many majors, are much too high for what the students can realistically afford to pay back, given their employment prospects after graduation. Those loans have helped fuel ongoing price increases, and priced prudent people out of the market for many schools, or forced them to swallow insanely high amounts of debt.

Both bubbles have had awful effects on the world. A huge number of people have lost the ability to move to find better work or be closer to family, because doing so will force them into bankruptcy--they owe $100K more on their house than they can sell it for. A huge number of people are carrying unrepayable debts that they can never, ever get rid of[1]. Marriages, families, starting their own businesses, trying out a completely different line of work if the one you trained for doesn't seem right--all those things become way harder if you have $40K of impossible-to-discharge debt hanging over you.

[1] An interesting irony is that the other big pool of unrepayable debt that pretty much can't be gotten rid of involves child support obligations. Alongside that, apparently some states have been imposing large fines to inmates when they're released from prison, and those fines are also not possible to discharge in bankruptcy. If you want to make debt peons of the lower class, these are the tools to do it with. To make debt peons of the middle class, student loan debt does the job admirably early on, whereas later on you want underwater mortgage debt. (This can be discharged in bankruptcy, I think, but it ruins your credit--a major problem for most middle class people who might still want to be able to get a cellphone or buy a car.)

#69 ::: Howard Bannister ::: (view all by) ::: June 27, 2012, 03:46 PM:
Community colleges are to for-profit colleges as credit unions are to banks. I can't understand why more people don't take advantage of them.

Same reason a lot of people don't use credit unions; because of the noise.

Because the for-profits are interested in sneering, 'ah, a community college degree, how worthless. You couldn't hack a real college, huh?'

The message is out there, and LOUD.

Same as the message that unions are worthless, corrupt, and violent.

And the message that tort reform is necessary.

Big lies, at the top of their lungs, because the for-profit system needs lies to avoid having to compete with a system without profit margins.

#70 ::: Fade Manley ::: (view all by) ::: June 27, 2012, 03:52 PM:

I went to a community college for a few years recently. Top-notch education in English Lit and Latin and Geology (we will pass quietly over the Spanish department, but it wasn't terrible) at astoundingly affordable prices. I learned a hell of a lot there from excellent professors.

...and I still feel vaguely embarrassed to admit my attendance when it comes up in conversation at the state university I'm at now. Not so much that I'll hide the fact, but there is that automatic internal sensation of having admitted to doing something a little bit shameful whenever it comes up.

So, anecdotally, what Howard Bannister said @69 more succinctly.

#71 ::: j h woodyatt ::: (view all by) ::: June 27, 2012, 04:05 PM:

heresiarch quips: "You might want to tell that to Zimbabwe, what with their fiat currency and 516 quintillion* percent inflation and all."

I think you will find that "sovereign" is the key word in what I wrote previously that makes the example of Zimbabwe problematic in this context.

If the government in Zimbabwe had the sovereign power required to control effectively the actual currency in use on the streets in Zimbabwe, as the United States and well-developed industrial nations do in their countries, and if the Central Bank of Zimbabwe could make a credible promise about anything at all, much less the rate of interest, then hyperinflation in Zimbabwe would be a simple problem to solve.

Really. In the United States and most other well-developed industrial countries, fear of hyperinflation is not grounded in any rational model of macroeconomics. By the time you get to hyperinflation in the United States, you've already seen the Strategic Air Command run gibbering and naked into the rainforest in madness and despair.

Citing the risk of uncontrollable inflation as a reason for Why We Can't Have Social Security is just silly.

#72 ::: j h woodyatt ::: (view all by) ::: June 27, 2012, 04:22 PM:

Please indulge me as I express a sentiment I suspect LMM would find sympathetic.

It perplexes me that politicians and pundits can assert with a straight face that a feature of various so-called "reform" proposals is that "current beneficiaries will not be required to suffer any cuts" and ths dsn't sm t prdc vry mch psh bck frm ll ths ldr vtrs wh r s vry vrrprsntd t th plls nd n cmpgn cntrbtns. Indeed, politicians seem to know that any howls of indignation they might hear from the younger generations may be easily dismissed, because as well all know, young people don't vote.

I shall refrain from expressing the bitter words that spring to mind when I mull over that observation for any length of time, because well... they wouldn't be appropriate here.

#73 ::: OtterB ::: (view all by) ::: June 27, 2012, 04:29 PM:

Russell Letson @62 nothing attracts the finance guys like a big pot of retirement money, just sitting there

What goes around ... There was a Doonesbury book in 1979 with the title But the Pension Fund Was Just Sitting There. I had to look up the date, but I remembered the title.

#74 ::: abi ::: (view all by) ::: June 27, 2012, 04:37 PM:

jh woodyatt @72:
Please indulge me as I express a sentiment I suspect LMM would find sympathetic.

No.

Feel free to reuse these in a comment that doesn't continue the intergenerational warfare: ioeeeooueeuuaoaoeoeoeoaeoeoeeeeeaeoaiaaioiuio

We are not playing along with divide and conquer politics in this thread. No more slagging off other demographic groups.

#75 ::: albatross ::: (view all by) ::: June 27, 2012, 04:58 PM:

This link has some information on voting by age. (This was the first link Google gave me, and while it doesn't include 2008 data it does show a general trend pretty well.). This is important to understand, not so we can slag on how old voters are voting wrong or young voters are slacking off on election day, but rather so we can see what incentives politicians face.

Even outside of different rates of voting by age, any big change to an existing program is likely to be grandfathered in so that the current or near-term recipients don't get clobbered by the change. If we wanted to get rid of SS (not something I am recommending!) we would pretty much have to grandfather in people within a certain number of years of retirement, since those people would have the least ability of anyone to adjust their plans and preparations for retirement to account for SS going away. Similarly, any change that is going to inflict X amount of pain on you today will provoke a much bigger outcry from you than a change that will inflict X amount of pain on you in ten years, just from discounting. Politicians are always going to take that into account when proposing changes to anything.

[Added rel="nofollow" to link. Sardonicus Immolatior, Duty Gnome]

#76 ::: albatross has been gnomed ::: (view all by) ::: June 27, 2012, 05:00 PM:

Grmbl

#77 ::: alsafi ::: (view all by) ::: June 27, 2012, 05:22 PM:

I'm very much of the mindset that we are all in this together, and that attempts to divide us are cynical manipulations by those in power to keep us squabbling amongst ourselves while they rob us all blind. I'm also late Gen-X, shading into Gen-Y.

So please, can we treat the "young people don't vote" business as inter-generational unkindness with the same zero-tolerance? Empirical, statistically-backed observation it may be, but it's slagging off young people who have a hell of a lot of good reasons that they don't vote, including the pessimism we've been taught since childhood that our voices don't count and we'd better keep our heads down and our noses clean or we'll find ourselves even worse off than we've already been told (the "stop crying, or we'll give you something to cry about" gambit), and the fact that a LOT of us--despite having worked hard and done what we thought was right to get ourselves shined up and employable and lovable and wanted--find ourselves in the kind of scutwork jobs and/or shitty life situations where we can't make it to the polls.

I'm REALLY political. I work hard to educate myself about politics, and I care so much it hurts. But my $30K worth of student debt and my hard-fought-for BA in English landed me a front-desk receptionist/secretarial dogsbody job that pays none too generously, comes with time-off benefits that are only generous in comparison to none at all (and in some ways are worse than contract work, where I had no paid time off at all, but I could pretty much take unpaid time as needed), and where they would pretty much shackle me by my ankle to the front desk, if they thought they could get away with it (having to find someone so I can ask permission to go to the toilet means never having to worry my pretty little head about dignity at work). And I know quite well that I'm one of the lucky ones. Getting to the polls to vote is tough--it's been made tougher; the polls aren't open very early, or very late, and the lines... Do you stand in line for three hours and lose the job that is your livelihood? Or do you suck it up and feel like you count even less because you can't even register your vote?

Retirement, ha. I can hardly get a sick day, and get punished for it if I do. I had dreams of entrepreneurship, someday, that I'm dismally certain the SCOTUS is going to torpedo entirely tomorrow. And like I said, I know I'm one of the lucky ones.

I don't think the young people who don't vote are really apathetic. I think we're treading water as hard as we can to keep from going under.

#78 ::: heresiarch ::: (view all by) ::: June 27, 2012, 05:33 PM:

j h woodyatt @ 71: "If the government in Zimbabwe had the sovereign power required to control effectively the actual currency in use on the streets in Zimbabwe, as the United States and well-developed industrial nations do in their countries, and if the Central Bank of Zimbabwe could make a credible promise about anything at all, much less the rate of interest, then hyperinflation in Zimbabwe would be a simple problem to solve."

No--if Zimbabwe's governmental debts were denominated in its own currency, then it would have little problem solving its inflation problem. They are not--as they are not, to a significant extent, for every country in the world except for one. That* is what makes inflation such a laughable fear in the US context, not the presence of fiat currency.

* Plus the status of the US dollar as the world reserve currency.

#79 ::: abi ::: (view all by) ::: June 27, 2012, 05:55 PM:

asalfi @77:

So what you're saying is that the advice to "vote" is like the advice to "save": theoretically correct, but ignores so many obstacles that it feels like blame?

I can see where you're coming from. So we need to tackle the things that make it difficult for people who can't take the time off to get to the polls to vote. That means pushing for more absentee and postal voting, more polls open late and early, more polls where people actually work. A tough battle, because voter disenfranchisement is another brick in the wall right now.

But the discouragement thing...that's internal. That one truly is on each of us, no matter what messages we've absorbed over the years. Not to be bright and shiny and optimistic every day, but to keep trying in the face of despair, discouragement and politics' own peculiar form of the Goddamned Tapes.

It's rather like my effort, in the light of the comments that I quoted in the OP, to believe that the death of Social Security is not an inevitability, but a choice that we as a society have to make.

#80 ::: Jim Macdonald ::: (view all by) ::: June 27, 2012, 06:32 PM:

#76:

I expect the reason "pollster.com" turns up first on a Google search is because "pollster.com" is an indefatigable link spammer.

We do not reward link spammers.

#81 ::: j h woodyatt ::: (view all by) ::: June 27, 2012, 06:45 PM:

heresiarch @78, it would be fair to note here that the government and central bank of Zimbabwe quite effectively put a stop to its hyperinflation by the expedient measure of abandoning the Zimbabwean Dollar in 2009.

So, it turns out that being up to your eyeballs in debt that is denominated in a foreign currency doesn't actually make it any more difficult to stop hyperinflation.

A fine example of the kind of bullshit I'm actually complaining about in this thread was highlighted today by Duncan "Atrios" Black, to which he said, "'No.' This has been another edition of Simple Answers To Simple Questions," which I think is just about right. It's saddening that a treasurer at a big division of RBS feels no embarrassment about demonstrating his confusion about this in public. Inflation fears in the U.S., U.K. and Eurozone today are totally irrational. Totally.

#82 ::: Bruce Cohen (Speaker to Managers) ::: (view all by) ::: June 27, 2012, 07:02 PM:

Lori Coulson @ 61:

Yes, that is precisely the reason Eva and I both tore up our AARP cards: they were in serious negotiation with CongressMonsters who wanted to destroy Medicare. And both of us believe that Medicare should not only be kept running, but that it should be extended to every single person in the United States regardless of age.

#83 ::: guthrie ::: (view all by) ::: June 27, 2012, 07:03 PM:

re. inflation, when the UK went in for quantitative easing some, erm, uneducated folks were predicting massive inflation. Unsurprisingly this did not happen. There has been price inflation because of high oil prices and a falling pound against currencies that we are importing from, but that is not due to increased money in circulation, because mostly the banks have been sitting on the money they got that way.
The truth of the matter is that we've had a decade of massive inflation based upon debt, only the inflation has focused on specific asset types which have been bid up to ridiculous heights. The only way we could get any sort of dangerous inflation would be if the government actually did print lots of money, by the barrowful and paid the 40% of GDP or so that is government expenditure that way instead of the usual way. Now that would inject a massive amount of money into the economy very quickly. But nobody is proposing to do that, it would be silly.

So, the type of inflation many people think of is not a danger. What is a danger is the type of inflation where costs go up, and that leads to people having to make the same money go further, especially when their wages don't go up. Then you get less expenditure, leading to negative feedback. See the Condems useless economic policy which is partly responsible for the UK going back into recession, and the EU being in such a state.

It is also worth nothing that from what I have heard, a proper course on history of economics is not something that most people who do economics actually get at any point. Therefore they are truly unaware of the problems of the past and how they were solved (or not) and continue to spout rubbish based on the limited theories they were taught at university, never mind the actual history of the topic.

#84 ::: Mycroft W ::: (view all by) ::: June 27, 2012, 07:36 PM:

re: alsafi #77 and following: Up here in Socialist Snowistan, we have a law that states that for all federal, provincial, and (I think) municipal elections, there must be a continuous three-hour block during which the polls are open available for each employee to vote (doesn't have to be the same one for all, of course, and if the polls open at 0700 in your area, and you're working the 1200-2400 shift, they're good - but if it's 0800-2000, and you work 0900-1800, by law your employer must arrange your work hours so that there's a three-hour window). Yes, employers play games with this, occasionally, but not so much now after a couple of high-profile criminal trials.

Are people implying that in the Birthplace of True Democracy, there's nothing like this? That your right to vote can be curtailed by your employer, just by scheduling you to work through the polls?

I am bescroggled.

(Now, our problems with elections is that we try to avoid playing the "Easterners determine the election" game by trying to schedule the poll closure time sanely. It used to be 0800-2000 local time, and no reporting until the polls close, and everyone in Vancouver would just call their friends in Toronto, and if Trudeau already had a majority by the time they finished work, they'd just go home instead of voting. Now, of course, I can (and do) get the Halifax TV channels, and can see the reporting starting at 1700, never mind Twitter and LiveJournal, et al. So, while they (so far, it's probably going away next election) still have the rule that Thou Shalt Not tell election results anywhere the polls are still open, they've somewhat harmonised the poll times. It's a bugger for B.C, but still the polls are 0700-1900).

#85 ::: Steve C. ::: (view all by) ::: June 27, 2012, 09:15 PM:

Here's a page listing Absentee and early voting by state.

I didn't start voting regularly until my 30s. Part of the reason was that I moved around between various cities in Texas and didn't really settle down until then, and part was simply being young with other things on my mind.

You do get kind of self-fulfilling prophecy because of this. Politicians aim for likely voters. Voters in turn respond to that. Broadly speaking (quite broadly) the needs and desires of those 40 - 70 don't intersect all that much with those of the 18 - 39 cohort (with some understandable fuzziness at the middle).

While demographics are not destiny, population shifts do swing one hell of a club, albeit in slow motion. While I don't buy the Social Security doom messages, the coming century will see inevitable global changes as population peaks and then declines. We simply have no idea what all the effects of this will be, because the modern economy has emerged in a world where we had more and more mouths to feed every year. Not only feed, but also clothe, shelter, and provide education to, plus a whole host of goods and services.

What happens when global market stops growing? The economy won't stop, but it's not going to be the same.

#86 ::: Xopher HalfTongue ::: (view all by) ::: June 27, 2012, 09:32 PM:

Sardonicus (addendum to albatross) 75: I thought ML automatically added rel="nofollow" to all links. Did that fail here or am I just wrong?

alsafi 77: The fact that your generation has been taught that your voices don't count etc. is a crime that has been committed against you. I would submit that the perps of that crime are the ones who oppose reform. (I'd also point out that "stop crying, or we'll give you something to cry about" is a line that is pathognomonic* for child abuse.)

*Wow! I never thought I'd actually get to use my favorite word in an appropriate context without bullshitting! But there it is. Used appropriately, if I know anything.

I'm extremely sympathetic to your complaints about voter suppression (and that's what you've described). I'd ask that you look at who wants to make it easier to vote and who wants to make it harder (and from your described level of political activity I'm sure you already know) and encourage everyone you know who CAN make it to the polls to vote for the ones who want to make it easier.

I'm almost certain there IS a law that says your employers have to let you go vote, but I know how much weight the law carries these days, if the people you're dealing with can afford expensive lawyers and know you can't.

My complaint is against people who, in contrast to you, say that politics is "too dirty," or that "all politicians are the same," or that they don't vote because they think it somehow makes them clean of the whole dirty process and/or that not voting is actually a useful form of social activism. It is emphatically NOT against people like you who would like to vote but can't get to the polls; you have both my sympathy and my rage against your oppressors (and I'll certainly be doing what little is in my power to get the problem fixed).

Also, what abi said at #79. Also, what Steve says about absentee ballots at #85. If you don't think you'll be able to make it to the polls you can vote absentee. I'm pretty sure they can't say your reason just isn't good enough.

Bruce 82: Hear, hear.

#87 ::: C. Wingate ::: (view all by) ::: June 27, 2012, 10:00 PM:

re 45 and "I'd point out that just because someone cries, 'Won't someone think of the children?' doesn't mean that the actual views of the children in question have been taken into account":

Some months back the Standing Committee on Liturgy and Music of the Episcopal Church did a poll on the subject of doing a new hymnal and church music in general. And after years of being told that we had to have guitar masses to attract/keep the young folks, what do they find? Young people under 35 were one of the groups most attached to traditional hymns and opposed to hymnal revision, and especially so for young clergy.

#88 ::: Lizzy L ::: (view all by) ::: June 27, 2012, 10:37 PM:

I'm pretty sure that the state you live in gets to set the conditions on voting: some states require employers to give you time off with pay to vote, some require employers to do nothing.

This may help.

#89 ::: Ginger ::: (view all by) ::: June 27, 2012, 11:27 PM:

Somewhere I saw a suggestion that the voting day in the US be set on a Saturday, or else made into a Federal Holiday, so that more people could expect to be off work without being dinged in the paycheck. I like that; voting should be an expected norm, not an outrageous imposition upon the voters.

In Maryland, we've got extended poll hours, and Federal employees are allowed to arrive late/leave early to vote. I'm lucky that my polling place is a short walk over the hill.

My family took voting seriously, and I've voted in every election since I came of age. When I have a problem with a politician, I vote for someone else. My father was an elected official in our town for a few years; I know most politicians and elected officials are decent human beings doing a thankless job. I may disagree with their ideas, but as long as they're working hard, I can't fault them for trying their best. It's when power corrupts and corruption spreads, and we get farther behind in fixing things because we don't have the money -- that's when we need an educated electorate, out in force.

I hate that there are people who think their votes don't count. Maybe a single vote doesn't have a huge impact, but all of us working together does make a difference.

#90 ::: Lee ::: (view all by) ::: June 27, 2012, 11:32 PM:

We have taken to doing early voting whenever we can. If you have any weekday off during the week or two prior to the election, and you have this option available, it's one of the best ways to circumvent your employer making you work thru polling hours. The lines are usually very short, which makes it a much more pleasant experience. And votes cast during the early-voting period are much less susceptible to shenanigans of the "lost" or "miscounted" type, not to mention downright fraudulent crap like "Republican voters should go to the polls on Tuesday, Democratic voters on Wednesday".

#91 ::: Lee ::: (view all by) ::: June 27, 2012, 11:49 PM:

Another thought about voting: saying "I don't vote because my vote won't count" is a fool's game and invites defeat in detail. If everybody who says that actually got off their duffs and VOTED, you'd better believe it would make a difference! The people you don't want running things don't want you to vote and will go to extreme lengths to convince you to stay home.

#92 ::: Dena Shunra ::: (view all by) ::: June 27, 2012, 11:54 PM:

Inflation is not an abstract for me. As I said upthread, I came of age under conditions of 800% annual inflation.
That sort of thing messes with one's mind (or at least, it sure messed with mine). And it was indeed in the nature of prices-rising-but-salaries-not.

Several people have suggested that my fear is irrational, and while that may be the case, what I'm worried about is not "anytime soon" but "over the course of my lifetime & likely retirement."
The thing that makes governments devalue their currency is exactly their ability to print as much as they like of the means-of-payment aspect of money, without putting more energy into the store-of-value aspect of money.

I don't think it's a conspiracy that makes a government resort to this. It's usually an urgent need, often a need deriving from an overextended military. (That was one of the big factors in the iteration of this I experienced.)

At the end of her post Abi suggested that there are no villains, knaves, or fools in this conversation. I would like to reiterate that - I am no fool, nor am I particularly irrational. I bring my experience to this conversation, as do the rest of you - and I bring my retirement horizon. Whatever provisions I make had better keep me solvent until somewhere in the 2050s, judging by my family's history.
Inflation in 2030 or 2040 would be even more devastating than inflation in 2014 or 2016. And - as I've said - I've lived through it. It's not something that only happens in books, in history, or to Other PeopleTM.

And when it does, the people most vulnerable are the ones trying to live off fixed income based on money saved up over a lifetime.

#93 ::: KayTei ::: (view all by) ::: June 27, 2012, 11:59 PM:

Abi, to confirm, is the line you're drawing the one between describing effects (permitted) and attributing intent (not so permitted)? Otherwise, I'm confused.

On the question of vote-value, I just note that we have had a ridiculous number of races, in recent years, determined by 100 votes or less. So saying that "your vote doesn't count" is somebody selling you something in hopes of reversing the swing in tight races.

(I was so excited in this year's primary! It's the first time I've ever been able to cast a vote for someone to the left of DiFi, with the reasonable expectation that they might actually make it to the election in a position to make a respectable showing. They didn't, but they might have. And I had to choose between two candidates who were almost exactly equally appealing! So amazing!!!)

#94 ::: heckblazer ::: (view all by) ::: June 28, 2012, 12:07 AM:

Stefan Jones @ 4:

I read the actual platform and I find hard to make a list of merely top five kinds of crazy, let alone top five crazy things. You have crazy because The UN Does Not Have Black Helicopters, crazy because The Plank Contradicts Itself, crazy because Science Does Not Work Like That, crazy because Economics Does Not Work Like That...and I'm discounting the racism, sexism and and anti-choice stuff I expect from in a Texas GOP platform.

Anyway, on page 16 right under the heading of 'Strengthening the Economy' it states:

"We support the principles regarding the public economy as stated in the Republican Party Platform of 1932."

No, really. I mention this because I'd say this means there is a category c) of people who genuinely look at the time before regulation and the safety net sounds great.

#95 ::: Tom Whitmore ::: (view all by) ::: June 28, 2012, 12:25 AM:

I have a friend whose mother lives in Florida, on the west coast. She's about to turn 94. She went in to renew her driver's license, and was told she'd have to produce her birth certificate, marriage license, and two pieces of mail with her address (in a county where she's been a property owner for 20 years). And she failed the visual portion of the exam, requiring a separate test by an eye doctor (which had to be delivered in a sealed, notarized envelope because she might have changed it). The doctor who examined her eyes found nothing wrong. He was surprised that she'd failed. And it cost her an extra $120 for the exam.

Guess what political party she's registered in.

And think about how the anti-immigrant laws are getting used to manage who gets to vote. If certain people can't drive to the polls, they are less likely to vote. This does make it easier to understand how some people think that their votes just aren't going to be counted.

#96 ::: KayTei ::: (view all by) ::: June 28, 2012, 12:37 AM:

The people crying elections fraud frustrate me. I participated in a ballot/registration review when I was in college, aimed at identifying the incidence of voter fraud. We found nothing.* Based on the news over the last several election cycles, I feel comfortable operating on the assumption that there's a much higher risk of shenanigans by politicians and elections administrators than by individual voters.

*Well. We did find a handful of couples where one signed the other's registration form or absentee ballot, just to get it in on time, or where signatures had changed over time. But we didn't find people voting multiple times, or who should have been disqualified, or any of the things people are making a big deal about trying to prevent.

#97 ::: etv13 ::: (view all by) ::: June 28, 2012, 01:43 AM:

On the intergenerational thing: I am 52. I have parents and in-laws in their late 70's/early 80's, and a daughter who just turned 14. I am perfectly capable of perceiving that it is in my best interests, in the most mercenary and selfish sense as well as in a more altruistic one, that there be a strong social safety net, including health care and sound educational finance, for both the elderly and young people. I don't want to be in the position of waiting for my parents/in-laws to die so that I will have the money to pay for my daughter's education; I would much rather have them all at her college graduation. I also don't want my daughter burdened with tens of thousands of dollars of non-dischargeable debt. I don't imagine that I am alone.

#98 ::: abi ::: (view all by) ::: June 28, 2012, 02:11 AM:

KayTei @93:
Abi, to confirm, is the line you're drawing the one between describing effects (permitted) and attributing intent (not so permitted)? Otherwise, I'm confused.

Describing factually verifiable effects is OK, but it would be a good idea to ask why $demographicGroup is doing or not doing a given thing, or at the very least, attribute to them a good reason for doing or not doing that thing.

Telling any group that if they just do $thing without wondering why they don't (which I did about voting, and was wrong to do so) is another way of finger-pointing across the generations. It's less obnoxious than actively attributing malice to other groups, but it still deepens the divides among us.

#99 ::: Emma in Sydney ::: (view all by) ::: June 28, 2012, 03:42 AM:

In my country, elections are held on Saturdays, and there is ample absentee and early voting, because voting is compulsory. Well, turning up to a polling place and taking a ballot is compulsory. You can screw it up and throw it away if you like, after you are marked off. This means that electoral resources have to be adequate for the whole electorate. It also means that there are basically no resources spent on 'getting out the vote' . We have a national Electoral Commission that does all redistricting at arms length from government, and runs all elections. If you don't turn up to vote you have to explain why and if your reason isn't sufficient, you get fined $50.

I realize this would be impossible in the US. It's a good system though. It makes us all equally responsible for what our governments do, because no one can say they took no part.

#100 ::: Serge Broom ::: (view all by) ::: June 28, 2012, 03:52 AM:

Is it true that, in England, some polling stations can be found inside pubs?

#101 ::: abi ::: (view all by) ::: June 28, 2012, 04:32 AM:

This isn't just an American problem. Here's a relevant British piece in the Guardian today.

#102 ::: Emma in Sydney ::: (view all by) ::: June 28, 2012, 04:40 AM:

I dunno about England. In Australia, all schools are polling places, and many church halls as well as town halls and other civic buildings.

We vote on paper ballots, all of which are counted by hand.

#103 ::: Neil W ::: (view all by) ::: June 28, 2012, 06:30 AM:

For your enjoyment, the finest in British Electoral Reporting: Top 10 Weird Polling Stations from the 2010 general election.

I currently vote in a function room in the town hall; elsewhere in the country it's been in schools.

#104 ::: Niall McAuley ::: (view all by) ::: June 28, 2012, 07:50 AM:

Barry Pilcher is the only voter on Inishfree Upper island off Donegal, so his living room is the polling station.

#105 ::: Serge Broom ::: (view all by) ::: June 28, 2012, 09:51 AM:

Neil W @ 103... I especially like the polling station at the hairdresser.

"Are you here for a mullet or a ballot?"

#106 ::: Lori Coulson ::: (view all by) ::: June 28, 2012, 09:54 AM:

It's taken a couple of days for me to process this,* but Abi, I'm so glad my statement from the other thread gave you food for thought. The judges and lawyers in the SSA office I worked for believed that we COULD educate the public, and I have done my best, and often I have felt like a lone voice in the wilderness.

*I have been alternately croggling and blushing at making the front page...

#107 ::: Mea ::: (view all by) ::: June 28, 2012, 10:15 AM:

Lori at # 49: one more bit of data I would add to your very honest discussion is that the average pension under the American federal pension is currently $13,000.

I am also a fed - I took a 50% pay cut to get my foot in the door, and am currently earning (after 12 years of work) the entry salary for private sector work at the firms that would have been my private sector employment options the year I was hired by the Feds. And in the federal pay scheme, I am towards the top. My agency is heavy with engineers and lawyers, and the analysis of federal employment says that high level of credentials compared to private sector is normal. Professionals in federal government are paid less than our private sector counterparts - but support staff have better benefits than their private sector counterparts.

Stories about Congressmen and Senators and retired doctors getting high federal pensions are using examples that are NOT a reflection of the typical federal retiree. And despite all Lori said about what she had to do to get ready for retirement, she isn't joking about having been on the high end of federal government pay to be pulling down such a hefty pension as $24k a year.

Also: Thank you Lori for speaking up so effectively. Social security isn't my agency but I am a HUGE believer that we all need to be in this together in providing good social insurance. We can't do it alone, and we don't have to.

#108 ::: Leigh Kimmel ::: (view all by) ::: June 28, 2012, 10:49 AM:

I'm wondering if "Social Security won't be there for you" isn't just one particularly ugly element of an even larger meme of "The Future of Diminishing Horizons." Not only do I feel continually bombarded with messages about how my generation (X) will be the first generation to be poorer than its predecessors, but as I reach middle age, I'm feeling like the future ahead of me is falling way short of the future we were promised when we were kids. I've noticed that of late, I've been writing a lot of retrofuturistic fiction (steampunk, dieselpunk, rocketpunk, etc), and what few stories I've written in what's supposed to be our future center around the struggles of people who've been pressured to downsize their dreams in the name of "being realistic" until there wasn't anything left.

#109 ::: Serge Broom ::: (view all by) ::: June 28, 2012, 10:54 AM:

Leigh Kimmel @ 108... the future ahead of me is falling way short of the future we were promised when we were kids

When I was growing up, it looked like the Future would involve a diet of Soylent Green - if we were lucky. That's why things like "Star Trek" mattered to me. They were saying that, not only would we not die choking on our own refuse, but we would overcome our differences and thus flourish.

#110 ::: Emily H. ::: (view all by) ::: June 28, 2012, 11:02 AM:

This 2004 Making Light post is apropos, and still one of my favorite posts on the site.

#111 ::: SamChevre ::: (view all by) ::: June 28, 2012, 11:34 AM:

My great-uncle [1] made the point, firmly and frequently, that it's important to keep clear the distinction between money and stuff.

One of the major issues with the whole retirement system is that individuals can save money and use it to buy stuff, but societies can't; the stuff there is can be distributed based on money, but money doesn't just turn into stuff when needed.

That's the problem with Social Security, and it's also the problem right now in the Eurozone. In both cases, societies put money aside yesterday, with an intention of converting the money into stuff today. But at the societal level, that doesn't work. Germans invested pension funds in Greece, planning that when they retired, they'd get stuff back; Americans set up a SS Trust Fund, planning that when the wave of retirements hit they'd draw it down and use it to get stuff. But in both cases, there's not enough stuff to meet everyone's expectations[2].

I do think that looking at Social Security alone (without Medicare and Medicaid, which are key to old-age provision) and treating the Trust Fund as a real asset (as opposed to a claim on already-allocated income[3] tax funds) tend to be more confusing than helpful in most circumstances.

1) One of my heroes, and one of the more amazing people I've been privileged to meet, and the person who started me on the path to going to college, and who introduced me to economics, and after whom two of my sons are partly named--who studied economics from 1936 until he died a couple years ago.

2) Stuff here is very general--anything you can use is stuff.

3) Already-allocated, in that even if income taxes (individual and corporate) as a percentage of GDP goes back to the highest-ever rates since WW2, this still wouldn't pay for anything we aren't already paying for.

#112 ::: SamChevre ::: (view all by) ::: June 28, 2012, 11:42 AM:

Links from Department of Numbers, intended to go in footnote 3 of above.

Tax revenue as a % of GDP, by component; I'm taking the max of each component, and adding them, to get to a total of around 22%.

Federal spending as a proportion of GDP, showing it as currently at 25%.

#113 ::: Melissa Singer ::: (view all by) ::: June 28, 2012, 12:05 PM:

Leigh @108: yours will not be the first generation to be poorer than its predecessors. Unfortunately, much of mine is already living that reality.

I'm in my 50s and a significant number of my friends and I have never owned new cars, often don't own our homes, rarely buy new furniture (and the exceptions tend to be DIY stuff--which I'm not knocking, some of that stuff is really good and it can be fun to build, but my parents could shop in "real" furniture stores and even custom-order things from time to time), and routinely shop in thrift stores for clothing and household items. Vacations are once-a-year if we're lucky and often/usually local or the kind of things where you stay with friends to avoid/decrease hotel and restaurant costs.

My parents owned two cars--which they always bought new and replaced every 7-8 years, rented a summer home every summer for more than a decade and took at least one additional vacation each year. Shopping at a thrift store was unthinkable. --it was what poor people did, while we donated to thrift stores. If they needed new furniture, they bought it (whereas I'm sleeping on the bed I've had since childhood).

My parents were upper middle class. My mother says I'm middle class. I feel like I'm holding on to middle class status by my fingertips, and slipping more each year. (and yes, if I was childless, my economic picture would look different, so I'm paying for a choice I made freely.)

#114 ::: David Wald ::: (view all by) ::: June 28, 2012, 12:07 PM:

Serge@109: When I was growing up, it looked like the Future would involve a diet of Soylent Green

Why is everyone so horrified by lentils and soy, anyway?

#115 ::: guthrie ::: (view all by) ::: June 28, 2012, 12:14 PM:

Emily H #110 - as far as I can see few participants in that thread are also in this one; I wonder what those defending the system in general would say now after the last 4 years of crashing, burning and looting?

#116 ::: abi ::: (view all by) ::: June 28, 2012, 12:22 PM:

SamChevre @111:
That's the problem with Social Security, and it's also the problem right now in the Eurozone. In both cases, societies put money aside yesterday, with an intention of converting the money into stuff today. But at the societal level, that doesn't work. Germans invested pension funds in Greece, planning that when they retired, they'd get stuff back; Americans set up a SS Trust Fund, planning that when the wave of retirements hit they'd draw it down and use it to get stuff. But in both cases, there's not enough stuff to meet everyone's expectations[2].

Could you, um, reify this a bit more? Your definition of stuff is confusing me.

Germans didn't expect their dividends from Greek bonds in olives, after all. They expected to get the money back with interest.

And I don't really see Americans running out of stuff any time soon. There seems to be a lot of it lying around, precisely the kind of stuff retired people might want: housing, food, clothing, transport...

Further unpacking would be very useful.

I do think that looking at Social Security alone (without Medicare and Medicaid, which are key to old-age provision) and treating the Trust Fund as a real asset (as opposed to a claim on already-allocated income[3] tax funds) tend to be more confusing than helpful in most circumstances.

Cites, please? I'm pretty confused by the dueling figures and futures at this point; it's hard to figure out who's using what assumptions to get where they get. And I used to be an accountant, so I suspect I'm not alone in wrinkling my forehead.

Or maybe Lori can help clarify?

#117 ::: Russell Letson ::: (view all by) ::: June 28, 2012, 12:25 PM:

Leigh @108--I recall diminished horizons as a possiblity since before I started reading SF in 1955. I'm of the Duck and Cover generation, conditioned from a very early age to expect vaporization or at the very least post-atomic-war barbarism long before I hit retirement. ("Die early and avoid the fate," as Frost recommends.) Then there were the varieties of future tyranny, starting in my case with "'If This Goes On--'" and including all those gaudy repressive, totalitarian societies and comic infernos onto which adolescents project their dissatisfaction with (or fear of) the adult world. Then there were the environmental disaster futures, and then there was the corporate inferno of cyberpunk. . . .

That may be why I never found Star Trek very interesting. Or maybe I just need low expectations to make the real world palatable.

#118 ::: PrivateIron ::: (view all by) ::: June 28, 2012, 12:25 PM:

Melissa @ 13 and others: The dystopia is already here. It's just not evenly distributed. If one comes from a less affluent background, then there is probably less shock, but maybe at least as much frustration as economic and social mobility is curtailed. As an oldish/mid? Gen X from a working class background, I very slowly rose into the middle class, but I feel like I have few options to secure that life for me or my family. Not the worst situation by any means, but not the greatest. I am probably less bewildered than someone who started with "stuff," but still pretty mad about how likely I am to not gain certain "basic" things (reasonable house, reasonable retirement, small amount of travel) and even more fatalistic about how quickly I could lose even the smaller comforts and dignities of life.

#119 ::: Howard Bannister ::: (view all by) ::: June 28, 2012, 12:31 PM:

Basically, there's a meme floating around that what's in the trust fund is worthless, because it's in government bonds.

Never mind that this government has never defaulted on a bond. That means it's money it owes itself, so it doesn't exist.

That is another conservative meme put out there. Paul Krugman has a great column where he shows that it's having it both ways--if it's not real money, then we're allowed to use general funds to shore it up, surely?

Krugman's explanation.

#120 ::: Mycroft W ::: (view all by) ::: June 28, 2012, 12:48 PM:

I'm sure I've told this story here before, but:

I vote, no matter what, because my mother voted, no matter what.

My mother votes, no matter what, because her mother *couldn't*, when she was born, and that only changed when she was 15.

When (and where) my grandmother was born, in fact, I would not have been able to vote either, until I was about 40 (due to property ownership rules).

The "right" to vote is that fragile, and one of the ways to ensure it stays "universal"... is to vote. Every time. Somehow.

--
Notes:
- I have been known to refuse my ballot, when either I can't make a sane choice (like last year's school trustee ballot; I'm a little embarrassed that I didn't do any investigation and find some to vote for), or because I wished to make clear that "none of the above" was my First Choice. But I still voted, and the entries are still registered.
- My vote has almost never "mattered", as I am a crazy-ass liberal in Republican North; but even trying to ensure that my Tory Blue MP only won first-past-the-post, instead of having a clear majority of voters, is important.
- I seem to recall a law somewhen that bars and restaurants were required to be dry on Voting Day (or places close to polling stations, at least, or...). I think that's gone away (along with the "drinks for votes" campaigning that triggered the Laws), at least here.

#121 ::: Lori Coulson ::: (view all by) ::: June 28, 2012, 01:18 PM:

Sam Chevre:
I do think that looking at Social Security alone (without Medicare and Medicaid, which are key to old-age provision) and treating the Trust Fund as a real asset (as opposed to a claim on already-allocated income[3] tax funds) tend to be more confusing than helpful in most circumstances.

Abi:
Cites, please? I'm pretty confused by the dueling figures and futures at this point; it's hard to figure out who's using what assumptions to get where they get. And I used to be an accountant, so I suspect I'm not alone in wrinkling my forehead.

Lori:

Abi, the right wingers have a habit of lumping the costs of Social Security and Medicare/Medicaid together. In this way, they make the situation look worse than it actually is -- and they never make clear that the money flowing to the three items come from different revenue streams.

Social Security's money comes from the OASDI (aka FICA) tax. It has been running a surplus since Reagan and Greenspan raised the contribution rates back in 1983. Some of those funds flow out of SS to current beneficiaries, the remaining funds are used to buy US Treasury Bonds. Those bonds are the Social Security Trust Fund.

The "payroll tax holiday" which has been going on for the past two years reduced the employee contribution by 2.2% IIRC. If it continues for much longer or if unemployment is not reduced, the Trust Fund depletes faster. Supposedly, the Treasury is putting an equivalent amount into SS from the general revenues to make up the difference...

Medicare's funds come from the Medicare tax -- last time I looked this is 2.45% of pay, half paid by the employee and half by the employer. Medicare has three problems -- health care costs are continuing to rise with no end in sight, again high unemployment is reducing revenue the program might otherwise have received, and with the leading edge of the Boomers becoming eligible in 2011, more beneficiaries. I'm afraid this tax is going to have to increase or cuts will have to be made in the program.

To the best of my knowledge, Medicaid does not have a specific tax that funds it -- the funds come from the general revenues of both the Federal Government and the states (50/50). Here again we're up against rising health care costs, unemployment, and rising numbers of beneficiaries. Here getting additional money may well mean increasing taxes, with income being the most likely.

Sam, I can't see how the Trust Fund is an asset. It represents monies that must be paid when those bonds come due. Having worked in Admin for HHS most of my life, I'd say the bonds represent "obligated funds." When they are redeemed the money will come from the general revenues, which are more than just "income taxes."

#122 ::: Lori Coulson ::: (view all by) ::: June 28, 2012, 01:25 PM:

The best info on the Social Security Trust Fund:

Trustees Report

#123 ::: SamChevre ::: (view all by) ::: June 28, 2012, 01:26 PM:

abi @ 116

I have cites in my gnomed post.

I found the money/stuff distinction confusing for the first several hours. (I did mention that Uncle Halder could go on rather at length on the subject, yes?)

I'll try to explain it with the Greek/Germany issue, but I may get details wrong.

German pension funds expected to get money, with interest, back from Greece--but that's only the first step. The next step was to distribute it to pensioners, and the last step is for those pensioners to spend it on--stuff. Healthcare; natural gas; a vacation to Austria; gasoline; someone to come in and help clean the apartment; beer; and so on. And Greeks, both workers and pensioners, want similar things.

The thing is, all those things have to be produced, today. You can't produce them in 1960 and use them today. It's the stuff that's scarce. The money is just a way of allocating stuff. If your pension or your wages won't buy the house and food and care you anticipated, it doesn't really matter whether that's because your pension is smaller than anticipated in nominal terms, or because the stuff is more expensive.[2]

Is that clearer?

Howard Bannister @ 119

I'm making a slightly different argument than the one you are mocking. I'm saying that government promises to pay money today have to be funded by taxes or borrowing today, whether they are to pensioners or bondholders, and even if the government is a bondholder that doesn't change.

1) I'm really focusing on German pension funds, who I understand to be the major creditors, when I say "Germany".

#124 ::: Persephone ::: (view all by) ::: June 28, 2012, 01:54 PM:

We (my husband and I) come from a rural poor background. Today, we make more money than most of the people we grew up with can even dream about. (We also live in a very expensive metro area, so the money we make here isn't as impressive as the same money would be there. Still.) We go on a vacation every year, plus a couple of long weekends. We own our home*, eat out quite a bit, put money into savings, are paying down debt and can still afford to buy nice things occasionally.

We're both intelligent, hard working and reasonably prudent, but the only reason we have what I consider to be a middle- to upper-middle-class life is luck. Sheer, pure, unadulterated luck. Just after I graduated from college, I happened to say something about looking for a technical writing job in the right online community at the right time, and another member of that community had a company who was hiring and willing to take a chance on someone who'd have to relocate to take the job.

Without that lucky break, despite any intelligence or determination we had, we'd likely still be working dogsbody** jobs in our hometown, drowning in student loan debt and deep in that same rural poverty.

Doing whatever it took to get a college degree happened to work out for us, but it wasn't because we did everything "right." I can name several people off the top of my head who did the same "right" things -- worked hard, went way into debt to get their degree, and so on -- who can't even make ends meet. That seems to be much more typical of my cohort (on the X/Y border, I think) than our story.

This is all so much anecdata, for sure, but it's an interesting illustration of how even when you follow all the prescribed steps for landing in the middle class, it doesn't always work. And much like victim blaming, it's very easy for others to pick apart every decision you've made or circumstance you've had with 20/20 hindsight and find the ways you just don't deserve a living wage or healthcare or the other benefits of a middle-class life.

There's a couple I know, around our age, who've been lucky in much the same way we have. They claim that they just made all the right choices, and that anyone who doesn't enjoy the lifestyle they do is just doing life wrong. This infuriates me beyond words.

*We have a mortgage. It's underwater. Nonetheless.

**Thanks, alsafi, for the term.

#125 ::: Serge Broom ::: (view all by) ::: June 28, 2012, 01:58 PM:

Persephone @ 124... the only reason we have what I consider to be a middle- to upper-middle-class life is luck. Sheer, pure, unadulterated luck

Those who believe in the Just World would say that we make our own luck.
Right.

#126 ::: Howard Bannister ::: (view all by) ::: June 28, 2012, 01:59 PM:

Howard Bannister @ 119
"I'm making a slightly different argument than the one you are mocking. I'm saying that government promises to pay money today have to be funded by taxes or borrowing today, whether they are to pensioners or bondholders, and even if the government is a bondholder that doesn't change."

Slightly different, but it's the same ballpark. Because... that may apply to a pension fund, but that is Not How Social Security Works.

It's conflating the concepts. Which is where the problems lies.

Because even if we said the Trust Fund didn't exist, then in 2030 we could still pay out more than we're paying now to retirees. (which is less than scheduled benefits.... yes.)

The problem isn't that you're wrong about government debt and how that works; the problem is that conflating that with SS blurs the corners of how it works.

See why that works so well for the right-wing noise machine?

#127 ::: Clarentine ::: (view all by) ::: June 28, 2012, 02:09 PM:

Tangential, perhaps, but maybe not. What source are people using anymore to draw the lines between lower class, middle class, upper class? (I remember a large confusion back in college days in the 1980s, and I am betting that's still there, but it's worth the asking.)

#128 ::: abi ::: (view all by) ::: June 28, 2012, 02:10 PM:

SamChevre @123:

I think you may be underestimating the amount of stuff in Germany as well. And Greece. Housing, people willing to clean an old person's flat for pay, seats by the pool in Austria and towels to reserve them with, all in adequate supply. Pensioners expect to live small; if the prices are too high in Austria they may go to the Czech Republic, or just stay home.

The one things that may run short are things like fuel: a rise in the price of petroleum products, or any other such commodity, would cause more inflation, which would eat into fixed incomes.

And, of course, medical care. There's the real challenge.

But this is all so true it's a truism. I'm still not seeing what the notion that stuff is limited brings to this.

It might not be a mental model that fits with the rest of my (fairly reliable, so far) perception of how the world works.

#129 ::: Dave DuPlantis ::: (view all by) ::: June 28, 2012, 02:12 PM:

The way most US states run elections (general polls open only one day, only on a weekday, somewhat-limited hours, restrictions on voting other than at polling places) is a significant inconvenience for both voters and workers, and I don't think it's an accident. (Not many things turn out to be accidents, do they?)

Polls are open 6 AM to 6 PM in Indiana; in my precinct, we do about an hour of setup the night before and then 30-45 minutes of setup right before the polls open. Workers are not allowed to leave and return to the polling place while the polls are open - there is a provision to split your shift with another worker, but it seems difficult to find blue volunteers to cover the existing positions.

With an experienced crew and few complications, teardown can be done in an hour or so; running the results up to the county courthouse* and passing all the checkpoints (ensuring all forms are completed, everything checks out and such) takes 30-60 minutes. It ends up being a 13- to 15-hour day, all told. (The time requirements exclude anyone with sole responsibility for children from the position: you can't leave to pick up or drop off kids, and general elections during presidential years don't give you time to watch what your kids would be doing even if the polling place had a spot for them to stay and play or whatever.)

We are paid for the work - the rate varies from county to county, but I would guess the pay in Hamilton County is probably near the top in the state (it's a comparatively rich county). Still, even if you bring your own food and take the money for it (I think we get $20, which is solid), you get $115-$120 as a judge, a little less, I think, as a clerk. It's no small amount, and if you have a full-time job and can take time off with pay, it's a great bonus ... but $120 for a 15-hour day is crap pay if you are unemployed or otherwise taking time off without pay - it's barely above minimum wage.

It's no wonder that counties like Marion (Indianapolis) have such trouble filling their positions. Who wants to risk their hard-won jobs spending all day at the polls, dealing with frustration from people who may also have hard-won jobs and don't understand why they have to wait in line for three hours to vote? Hamilton is significantly smaller (suburbs rather than main city) and still struggles to fill all its positions.

I'm glad that I'm in a position to be able to do the work (I've never had a problem taking time off, and I was fortunate enough during my contracting years to work the polls on a day when I wouldn't have otherwise been working), but it's hard to look at that situation and see it as anything other than a deliberate attempt to keep people from voting.

*done by the inspector, from the Secretary of State's party - by number of votes, meaning that even if Charlie White** had been replaced by the Democrat whom he beat in the election, the inspectors would have stayed Republican - and the judge of the opposing party, who in my precinct is me.

**who was convicted on six counts of voter fraud and removed from office; he had been ineligible to be on the ballot in the first place. Governor*** Daniels quickly selected another Republican to take his place.

***soon to be president of my alma mater - asdkajlsdjaslakasda. /endrant

#130 ::: SamChevre ::: (view all by) ::: June 28, 2012, 02:22 PM:

Howard Bannister @ 126
I'm sorry, but I'm not following the argument you are making.

abi @ 128

I may well be underestimating the amount of stuff in Germany. It has been my sense reading the European press that German workers and pensioners do not think they are as well off as they should be; I don't read German, though, so my sources are not the best.

The key thing the the money/stuff distinction did for me was to clarify the difference between people (who can save money and buy stuff later) and societies (who cannot really save money today and buy stuff later, except as far as they have claims on other societies.)

#131 ::: Bruce Cohen (Speaker to Managers) ::: (view all by) ::: June 28, 2012, 02:28 PM:

Oregon has been running all elections via mailed ballots for years now, and none of the predicted awful things has happened. It's much more convenient than going to the polls, especially for hourly wage employees who often are actively discouraged from taking time from the job to vote. And it's less susceptible to fraud and mistakes than electronic voting, which so far has been a lesson in How Not To Implement Computer Systems™.

I think everyone who wants to promote fair and convenient voting should consider lobbying for voting by mail in their states.

#132 ::: Howard Bannister ::: (view all by) ::: June 28, 2012, 02:34 PM:

Wait, hold on:

"3) Already-allocated, in that even if income taxes (individual and corporate) as a percentage of GDP goes back to the highest-ever rates since WW2, this still wouldn't pay for anything we aren't already paying for."

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?DocID=200&Topic2id=20&Topic3id=23

Keep in mind that wealth and income have shifted higher and higher, consolidating to the very rich.

Note that in 1953 the highest marginal tax rate was 92%. Federal receipts were 18.7% of the GDP; outlays were 20.4%.

Spending is now at 24% of GDP.

The highest marginal income tax rate is 35%. Almost a third of what it was then. (92%)

So when you say 'as a percentage of GDP' ... what you are curiously eliding is that the rich are paying less as a percentage than they ever did since 1951, but somehow receipts as a % of GDP have gone up.

Curious.

What's that? As a small anecdote of what the tax code has done, an increase in the regressive FICA tax back in the 80s, coupled with tax cuts on the rich? What did GE pay in corporate taxes last year? How very... odd.

So, yes, the federal government's outlays as a percentage of GDP are higher than they were then.

4% higher than in 1953.

Does that sound catastrophic? Or like a tax burden that couldn't be handled by asking the rich to be part of the tax pool again?

And keep in mind a lot of that is not 'social security.' We're still paying for two unfunded wars. We could probably control that number down four or five percent with some fairly progressive policies.

The idea that the level of non-war-time-spending is hugely unprecedented is... well.

NOT QUITE RIGHT.

Yes, I've cherry-picked my numbers. I've also linked you to charts where you can peruse the total numbers.

#133 ::: abi ::: (view all by) ::: June 28, 2012, 02:35 PM:

SamChevre @130:

There's plenty of stuff in Germany. It's not well-distributed, any more than it is in the U.S. Basically, there's plenty of stuff in the Western world. With a few exceptions (petrochemicals, medical care), what we have, and are likely to have into the future, is a distribution problem, not a shortage.

Also, remember our demographics over here. Birthrates in Europe are dropping, even when supplemented by immigration. We're worried about running out of people over here. (The "right sort" of people, of course. I have very interesting discussions with my Dutch neighbors, sometimes.)

To understand the Germans -- indeed all of Europe, think about history. The Germans are deeply anxious about inflation after their experiences in the last century. But that's fear more than realistic assessment.

#134 ::: Serge Broom ::: (view all by) ::: June 28, 2012, 02:40 PM:

Abi @ 133... The "right sort" of people, of course

"But we don't want the Irish! "
- Blazing Saddles

#135 ::: John M. Burt ::: (view all by) ::: June 28, 2012, 02:41 PM:

If just half of the people who are entitled to vote were to register and show up to write in "Ferd Snerd III" for President, ol' Ferd would be sworn in on January 20th.

#136 ::: Howard Bannister ::: (view all by) ::: June 28, 2012, 02:46 PM:

SamChevre @130:
Howard Bannister @ 126
I'm sorry, but I'm not following the argument you are making.

I'm working at about my limit in math and economic related stuff. Did you read Paul Krugman's column?

Some excerpts:

"The lesser problem is that if you say that there is no link between the payroll tax and future Social Security benefits – which is what denying the reality of the trust fund amounts to – then Greenspan and company pulled a fast one back in the 1980s: they sold a regressive tax switch, raising taxes on workers while cutting them on the wealthy, on false pretenses. More broadly, we’re breaking a major promise if we now, after 20 years of high payroll taxes to pay for Social Security’s future, declare that it was all a little joke on the public. "

(I was referring to that in my last post, to be clear)

But more importantly:

"The bigger problem for those who want to see a crisis in Social Security’s future is this: if Social Security is just part of the federal budget, with no budget or trust fund of its own, then, well, it’s just part of the federal budget: there can’t be a Social Security crisis. All you can have is a general budget crisis. Rising Social Security benefit payments might be one reason for that crisis, but it’s hard to make the case that it will be central."

"...today, when the payroll tax takes in more revenue than SS benefits, they say that’s meaningless, but when – in 2018 or later – benefits start to exceed the payroll tax, why, that’s a crisis. Huh?"

Does that make it more clear? The idea of a Social Security lockbox is both a convenient fiction and not. And even once we sweep that off the table, we are left with a working system, where the biggest problem is that it is funded with a regressive tax.

#137 ::: SamChevre ::: (view all by) ::: June 28, 2012, 02:54 PM:

Howard Bannerman @ 132

I will note that in my math, an increase from 20% to 24% is a 20% increase, not a 4% increase.

My links are now available in #112, with an explanation. However, the revenues link I intended is this one.

I think the percent of GDP collected by a particular tax is a more helpful metric than the marginal rate[1]. As I noted above, I'm saying that if the percentage of GDP collected by the individual income tax was at its historic high of 10% (Y2000), by the corporate income tax was at its historic high of 6% (1952), FICA at its historic high of 6.5% (2001), the revenues still ouldn't be sufficient to cover current spending.

Sure--everyone has a favorite target for spending cuts. I'm assuming all the achievable-consensus targets have already been cut.

1) Largely because the definition of taxable income has varied dramatically over time.

#138 ::: SamChevre gnomed again ::: (view all by) ::: June 28, 2012, 02:56 PM:

Numbers; tasty, tasty numbers, from the appropriate department thereof.

#139 ::: SamChevre ::: (view all by) ::: June 28, 2012, 03:00 PM:

Howard Bannister @ 136
there can’t be a Social Security crisis. All you can have is a general budget crisis.

Right; and I'm arguing that we have a general budget crisis.

#140 ::: Howard Bannister ::: (view all by) ::: June 28, 2012, 03:13 PM:

Which I picked up on and responded to more generally in 132.

I'm afraid I'm going offline now, and won't be in till tomorrow. Feel free to take that time to collate a number of smaller responses into one large presentation with footnotes. :) Or have a nice (meal-at-whatever-arbitrary-rotation-of-the-earth-you're-at) and take a stab at my post later.

#141 ::: albatross ::: (view all by) ::: June 28, 2012, 03:57 PM:

I'm not quite sure I'm following either Sam or Howard's points in this discussion.

I think whether there is a problem with the trust fund depends on what you think are the constraints on government spending and budgets, and where you think that money might have gone otherwise. We're somewhere close to the crossover point between when money goes into the trust fund every year and when it comes out of the trust fund every year. So you have this situation:

a. In the past, each year, a little more taxes were collected than were used to pay SS benefits, and these were used to buy US government debt. Since the federal government ran deficits in most of those years, this had the effect of decreasing the amount of debt we had to sell to investors each year, and thus decreasing the size of the deficit that year.

b. In the future, each year, a little less taxes will be collected than benefits will be paid out. Since the feds will surely continue to run deficits every year, this has the effect of increasing the amount of debt we must sell to investors each year, and thus increasing the size of the deficit each year.

If you believe there is some constraint on our spending based on how much debt we have to sell to investors each year, or that there is some added risk with having to roll over more and more debt every year, then this looks like a problem. Where the treasury previously would have had to sell $X of debt per year, now it has to sell $X+K of debt.

If you don't think there's really a constraint there (for example, if you think the US government will not run into important problems selling that larger amount of debt per year; you may think there is a problem at some size of deficit, but not the size we will have in the forseeable future), then this doesn't seem like a much of a problem.

If there is such a constraint on the size of the deficit, then we will have to cut spending or raise taxes over time, in order to keep SS benefits at promised levels.

My suspicion (which I don't have enormous faith in--I'm certainly no expert in this area) is that large deficits, as well as large amounts of debt that must be rolled over every year, impose a small risk of really awful things happening. We must continue rolling over our debt and selling enough extra debt every year. If investors begin to doubt that it's a good investment (they fear we will default, or (more likely) they fear we will have serious inflation to dilute the value of the existing pool of debt), we will pay more and more for interest, which will accelerate the growth of the debt, and I think that can quickly become a very destructive feedback loop.

#142 ::: albatross ::: (view all by) ::: June 28, 2012, 04:05 PM:

Howard #136:

One fundamental problem here is that Congress cannot actually bind its successors to pay some benefit. Even if every Congressman until 2012 swore on a stack of bibles that SS benefits would never be cut, the next Congress can do just that--it's within their power. I predict that they won't do that, because it will cost them their seats in the next election, but they *could* do it. Promises made by politicians, even fervent ones that people built their whole lives around, are not actually binding on their successors, nor even on those politicians when they decide sticking to their promises is no longer convenient.

So, in that sense, any promises made about future SS benefits wrt the trust fund are simply politicians' promises. They will stick to them, if they do, because they perceive it as being in their interests, or because not sticking to them would violate their own morals at some deep level. Not because Greenspan or Reagan or someone made promises.

#143 ::: albatross ::: (view all by) ::: June 28, 2012, 04:18 PM:

Serge #125:

The tricky part is that the world is not just, and yet we do often make some of our own luck. All else being equal, people who make better decisions will have better outcomes, even though some people make every decision right and get creamed, and others make a hash of everything they do and still come out fine. That's why we as a society invest a great deal in trying to help people make better decisions (like, by providing thirteen years of free schooling, running PSAs encouraging people not to smoke or do drugs, etc.) Just about every parent is trying to equip his kids to make good decisions when they're on their own, for the same reason.

It always seems to me that the two attractors of conversations in this area are either blaming the victim or hopeless fatalism. Neither is very useful for understanding reality, in which plenty of people who did about everything right got creamed when their whole industry shut down in their 40s, and yet people who studied hard in college and majored in something that seemed to have a future did, in general, do better than people that didn't.

#144 ::: Jacque ::: (view all by) ::: June 28, 2012, 04:28 PM:

heresiarch @21: More and more, I'm struck by how much of the prosperity of post-War America was borrowed.

Has anyone ever done economic analysis coming from a thermodynamics perspective? Seems to me it would be a rather straightforward (if not simple) proposition: you've got these resources, times this activity, producing this result.

As I say that, though I realize that, historically, obstacles to doing that include limitations in the understanding of the physical/material base and processes which undergird human activity, plus limited understanding of human behavior as it interacts with itself and the physical systems.

#145 ::: heresiarch ::: (view all by) ::: June 28, 2012, 04:39 PM:

j h woodyatt @ 81: "it would be fair to note here that the government and central bank of Zimbabwe quite effectively put a stop to its hyperinflation by the expedient measure of abandoning the Zimbabwean Dollar in 2009. So, it turns out that being up to your eyeballs in debt that is denominated in a foreign currency doesn't actually make it any more difficult to stop hyperinflation."

I'm not sure what about abandoning your nation's currency qualifies as "expedient," "easily done" or "a simple solution." I'd think "economic catastrophe" or perhaps "fiduciary apocalypse" is more fitting. The Zimbabwean case doesn't suggest that having a sovereign, fiat currency makes inflation easily solvable; quite the reverse, actually. They "solved" hyperinflation by abandoning their fiat currency--effectively transferring their economy onto the currency of a country not indebted, but also not subject to their sovereign control.

#146 ::: David Harmon ::: (view all by) ::: June 28, 2012, 04:49 PM:

albatross #142: That is possibly a fatal flaw in governance in general¹, but I can't see what's to be done about it. Once government is too badly infected by those acting in bad faith, it's broken, and needs to be fixed before it will work properly again.

¹ Old joke: "The perfect government is a benevolent despotism. The only flaw is the succession."

#147 ::: albatross ::: (view all by) ::: June 28, 2012, 05:23 PM:

David,

I'm just saying that it's easy to talk about Social Security, farm subsidies, fat defense contracts, the interstate highway system, whatever, as though they involve some unbreakable promise. They don't. They can be changed if the people in power decide to. If they couldn't, we could never be rid of really bad things.

It's not a bug that Congress can't bind future Congresses to vote a certain way, it's a feature.

#148 ::: albatross ::: (view all by) ::: June 28, 2012, 05:28 PM:

A lot of postwar prosperity was not exactly borrowed, but was based on conditions that would only last for so long--the rest of the industrialized world was mostly either picking up the pieces after being bombed and burned and smashed up, or was drowning in debt and losing its colonies.

I suspect this is always true--tomorrow won't be like today. How much of our prosperity now is based on being the world's reserve currency, something not guaranteed to continue? How much of our prosperity now is based on past accomplishments that are now being consumed?

#149 ::: guthrie ::: (view all by) ::: June 28, 2012, 06:10 PM:

The post WW2 boom was built upon technological and scientific innovations that increased energy availability and exploitable resources. Now those resources are more expensive to exploit or have run out, things get more complex and growth areas include recycling.

Looking at it in a cod-ecological perspective, the more energy available to flow through the system, the more complex the ecology. At the moment, with austerity ruling, there is less energy flowing through the system, thus the ecology of money simplifies- companies go bust, especially those odd little extra fancy ones which grew up when money was plentiful, fewer things are traded etc.

#150 ::: Allan Beatty ::: (view all by) ::: June 28, 2012, 08:37 PM:

Here's why the US has no serious risk of hyperinflation. The ruling classes in this country hold a significant chunk of their wealth in the form of cash, and they're not going to let it evaporate. As someone else pointed out, we have a Federal Reserve Bank that knows how to tame inflation when necessary. (Now is not one of those times; the economic slowdown has been deflationary, and policies which in other circumstances would fuel inflation, this year just counter the deflation.)

This doesn't apply to societies where the ruling classes hold their wealth in other forms, such as land, or slaves, or the loyalty of the men with the guns. The last is the case in Zimbabwe AIUI, and so in that country there was no constituency among the powerful with an interest in controlling inflation.

I don't know what country Dena Shunra grew up in, so I can't comment on her experiences.

#151 ::: forgot the name ::: (view all by) ::: June 29, 2012, 12:21 AM:

ISTM that the pervasiveness of student loan debt could be part of the despair around Social Security -- does anyone have any guarantee that whatever SS people get, if ever, won't just be used to pay off their parents' student loans, or their own? Will they see any of it even if they get to a point where they might be able to retire? Will they be able to retire, or will the student loan debt chase them for the rest of their life?

The student loan repayment rates I've heard say to me that it's an awful like a mortgage deliberately formulated so that it cannot be repaid under any circumstances less than absolutely privileged and fortunate, and given the capriciousness of luck and the economy, 30/40/50/forever-years are what a lot of people in my cohort in the US (Millenials) are looking at in terms of 'maybe I'll have it paid off by then'.

But I've recently read that the grace period between graduation and repayment is being abolished, or shortened even further from six months, and generally it takes a lot of people a bit of time to find a job post-graduation, certainly much longer than the grace period. But to abandon the grace period entirely and begin demanding repayments immediately upon graduation seems ... poorly-done, in the current job market, with so many unemployed graduates and so many jobs requiring masters on top of bachelors and even more student debt for entry-level jobs that cannot repay the loans within ten years to begin with, especially when factoring in any cost of living or transportation to be able to work to pay off the loan/rent/food/etcetera.

Additionally I remember loooking around a little in the 2000-2005 period, looking at overseas universities (including in the US) for their tuition rates and fees and whatnot (it was at the time expected that I would get scholarships), and I was croggled at the increases between one year and the next, the similarity of overseas fee-paying students to the expected amounts in-country and in-state students were expected to incur, as well as the relative rates of what scholarships and grants were prepared to offer.

I'm croggled that they have continued to rise so precipitously, and while scholarships and grants have proliferated, even trying to obtain a combination of them in most cases cannot pay for even half of total tuition cost.

Much of the advice I read back then was to shop for specific departments of, say, engineering, or social work, rather than the university as a whole, and it was good advice for a while, I think, as it opened up possibilities beyond Ivy League and the Seven Sisters and so forth for state and community universities to host and develop excellent, focused programs, particularly when it came to hosting graduate students and attendant research grants, etc. Frequently they were cheaper. But their tuition costs have risen too, and in some cases I've seen the difference between Big Name Uni X and State University Y With Good Program Z is negligible.

Adding in mortgage costs, or rent, or cost of living, or transportation, or job markets, or any other factors -- the future would feel very far away, I think. Retirement? Debt. School? Debt. Job? Debt. House? Debt. Food? Debt. There's also that, in conversation with a few people who are studying, or who have finished studying and now cannot find jobs and so on, I'm finding they don't actually expect a future. The impression I get is that 40 years might as well be forever away, and it might not ever happen. They expect to die, they expect to get sick or they are sick, they expect to be homeless, they expect to go under water, they expect to kill themselves when it gets too much, they expect a whole lot that's very, very different from the assumption of 'I'll live long enough for Social Security to matter to me'.

It won't be there for them because they won't be, is some of the attitude I've been seeing.

I don't know how common this is, but I think it's the extreme edge of a kind of overwhelming, inculcated despair that makes it really difficult to think about things like Social Security and Medicare, because they feel so very, very far off. 'When I retire' has become 'if I retire' and 'if I even have a job to retire from'.

#152 ::: Lizzy L ::: (view all by) ::: June 29, 2012, 12:45 AM:

Student debt is not confined to the young. A dear friend of mine has +$50,000 in student debt which she is paying off at 7% interest -- she's 67. She made a decision to get a PhD late in life. She currently has a job, but she will never be free of that debt, since she is also paying off a mortgage on a house which is no longer worth what she's paying for it. If she were to fall ill, she'd be bankrupt and on the street in no time. (Well, actually, no, she would not be on the street as long as I have a house to share...) But you get the point. She's as f***ed as any 25-year-old: the more so, in fact, since her earning years and choices are now so limited.She can't even borrow at a lower rate to pay it off, because of the damn mortgage. She's tried.

#153 ::: B. Durbin ::: (view all by) ::: June 29, 2012, 12:46 AM:

Dave DuPlantis: In Sacramento County, it's fairly similar for poll workers, except workers can leave for short periods of time, one at a time, if it's not busy. This means you can send someone out to get lunch, for example. Our ballots are paper Scantron-style ballots that are scanned and dropped into the box; if the scanner goes on the blink, the ballots are automatically hand-counted but otherwise the hand-counting waits until after they're deposited at the district office.

No polling station can have a majority of workers from any party, which makes unaffiliated types like me pure gold.

I worked the 2004 election at a location with two polling stations, with my parents as the clerks on both. My mother's station was the larger one, absolutely crazy busy to the point where I got pulled over there to assist some legally blind formerly-Russian immigrants to fill out their ballots, and my mom actually got to throw someone out for electioneering (passing out "voters' guides" with choices pre-selected—which, for you non-States types, is illegal within 100 feet of a polling location.) And then somebody hit my parents' car in the parking lot, which they had to use to take the ballots in. (They only had to pry the fender off the wheel...) Usually the job isn't quite that memorable.

It's federal law, posted in every workplace, that your job has to provide accommodation for you to vote. I've never been bored enough to read the specifics (never had to work twelve-hour days, either), so I don't know which accommodations are legally mandated. Since I've been old enough to vote, the only major election that I've missed was the 1996 one, because my absentee ballot didn't get to campus until after the election. I don't blame my home state; mail was notoriously delayed at that time and place.

#154 ::: Jacque ::: (view all by) ::: June 29, 2012, 12:48 AM:

forgot the name @151: The student loan repayment rates I've heard say to me that it's an awful like a mortgage deliberately formulated so that it cannot be repaid under any circumstances less than absolutely privileged and fortunate

Aaaannnnd what's old is new again. ObRef Tennessee Ernie Ford:

You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store

#155 ::: Diatryma ::: (view all by) ::: June 29, 2012, 01:05 AM:

Forgot the name, yes. I know I'm damned lucky that my parents have all the debt-- mine is limited to brief medical issues, traveling, and car repairs. That's the other way of acquiring student loan debt even after you're twenty-two, that you always expected to pay for your kids and managed to do so. One of my roommates paid for her entire education herself, and her debt is... I don't even know. But she has a job in her field that she likes and is good at, so that's something at least.

#156 ::: Bruce Cohen (Speaker to Managers) ::: (view all by) ::: June 29, 2012, 01:34 AM:

Jacque @ 154:

And that's not a coincidental similarity in economic status for people, that's an intentional push by our Galtian rulers to put as many of the lower classes as possible into debt peonage. If you don't believe me, look up the last revisions to the bankruptcy laws, or the way that "payday loan" companies have been allowed to charge truly obscene levels of interest on unsecured loans, or on loans secured by automobile titles.

#157 ::: Bruce Cohen's last comment has gone to the gnomes ::: (view all by) ::: June 29, 2012, 01:46 AM:

The gnight duty gnomes have my last comment. I'll bring by some (unsweetened) iced tea I just made containing about 25% green tea, and we can chat. I remember how much night shift was improved by a drink and a pleasant conversation.

#158 ::: PrivateIron ::: (view all by) ::: June 29, 2012, 07:54 AM:

@151 Forget: thanks for saying some things far more eloquently than I was managing.

@154 Jacque: If there is a difference between now and anytime (other than maybe the 1930's), it is that those situations were localized geographically or compartmentalized to certain classes of people. And/or The Engine of Progress (whichever version you subscribed to) was going to raise all boats sooner or later. Now people don't see a place beyond the Doom, much less a path out. (Except maybe be born with lots of money or luck into latching onto a future member of Economy 2.0 (shout out to Charlie Stross).)

#159 ::: Dave DuPlantis ::: (view all by) ::: June 29, 2012, 08:41 AM:

Bruce Cohen (StM) @ 131: in Indiana, at least, it's an uphill battle to get anything about voting changed, not that it wouldn't be worthwhile to do so. We've been fortunate enough to get the hours for early voting extended, but money isn't being allocated for more voting machines to handle turnout during general elections in presidential years (which supposedly is intentional), and the ones we have are most definitely the no-receipt-available types. Changing to a different system would probably require a change in control ... while the state went blue in 2008 at the presidential level, it's deep red in most other ways, and the red around here seems to be content with the way things are.

John M. Burt @ 135: unfortunately, it would likely take a bit more than that. From what I gather, Ferd would have to file as a declared write-in candidate in each* state and list their candidates for presidential electors. That appears to be easier in some states than in others. But then getting half of eligible voters to vote, period, would be quite an accomplishment ... it might be easier to get on the ballot in all 50 states!

B. Durbin @ 153: I like the idea of letting people out occasionally ... during primaries, especially, we have all kinds of free time. (Yes, fellow Indiana residents, your tax dollars are paying for me to sit and play Crawl. Doesn't voting-by-mail sound a little better now?) Here, all workers are provided by the two major parties, so independents could work, but they're still working on behalf of Rs or Ds.

I think we're mostly electronic (but not touch-screen; old computers, sadly), with the standard paper ballots if things go awry (which they haven't in six years, cross my fingers).

I'm not sure there is a federal law requiring employers to let you vote ... I'd guess there isn't, given that there are a number of states that have laws about that. Apparently, Indiana has no such law. (sigh)

*I knew Indiana required write-ins to register with the election office; I checked a few other states, and they all seemed to have similar requirements. For Prez, it's not surprising - the Electoral College, after all - but I wonder about similar requirements for other offices. Seems a bit sketchy.

#160 ::: Howard Bannister ::: (view all by) ::: June 29, 2012, 11:29 AM:
Howard Bannerman @ 132

...I will just note in passing that is not how my nym is spelt nor pronounced. If you were trying to be witty, aim for 'staircase.' Or 'Steve.' For obvious reasons, 'Steve' would be hilarious.

I will note that in my math, an increase from 20% to 24% is a 20% increase, not a 4% increase.

Ahem. Okay. "An increase of 4% of the GDP."

My links are now available in #112, with an explanation. However, the revenues link I intended is this one.

I think the percent of GDP collected by a particular tax is a more helpful metric than the marginal rate[1].

Eliding the fact that the rich have shifted the tax base to the poor.



As I noted above, I'm saying that if the percentage of GDP collected by the individual income tax was at its historic high of 10% (Y2000), by the corporate income tax was at its historic high of 6% (1952), FICA at its historic high of 6.5% (2001), the revenues still ouldn't be sufficient to cover current spending.

But if federal receipts were at their historic high of 20.6%, then we're be a whole lot closer, eh?

Hmm. Why the sudden emphasis on where the gov't gets the tax rather than the total collected? That 20.6% was 2000, before the Bush tax cuts. Gee.

Sure--everyone has a favorite target for spending cuts. I'm assuming all the achievable-consensus targets have already been cut.

What was the percentage of Americans against the Iraq war in 2002? 60%? How long did it take to get the troops out after that?

Whose consensus?

That is not an idle question. Yeah, some of the high-spending items are really important to somebody. And they are the enemies of democracy.

...

So what am I saying? I'm not saying you're wrong, exactly. Federal spending as a % of GDP is higher than it has ever been. But Social Security is not the driver. And it was never designed to act like a Pension fund. It was designed as a sustainable payout from FICA taxes right now to pensioners right now.

Read about the architects of the program, about the way they did the math. They figured that medical technology would extend old age, since that's what it was doing then, and built in conservative estimates. The ratio of workers to pensioners has been fairly constant--the dip we're hitting is recession-based. If we can deal with the recession in real terms it'll return to where it should be.

Your framing is too similar to the noise being pounded out by the right-wing noise machine.

A helpful article on deficits from ThinkProgress.

Here's a table. I can't cut and paste a table, so I'll try to insert it in plaintext as best I can.

This is in billions. It is from the trustee's report linked before. (for each of the different SSA programs)

Assets (end of 2010)
OASDI - $2,429.0
DI - $179.9
HI - $271.9
SMI - $72.1


Income during 2011
698.8
106.3
228.9
301.0


Outgo during 2011
603.8
132.3
256.7
292.5


Net increase in assets
95.0
-26.1
-27.7
8.6


Assets (end of 2011)
2,524.1
153.9
244.2
80.7

So, remember, FICA still takes in more than it needs to pay out SS funds.

And will for the near future.

As this is a dedicated system designed to pay for itself, inside a larger system that has some problems that can mostly be described as "The Bush Years"...

Why would we TOUCH SS when we could simply try to fix the problems (and avoid a repeat) of the Bush years?

Am I ranting and raving? Yes. Because allowing the deficit framing to be about Social Security instead of about Republicans IS THE PROBLEM. That is the Republican framing, and it IS THE PROBLEM.

I'm not trying to say you're wrongity wrong wrong, and I hope I'm not coming off that way. I am ranting very hard in your general direction because I think allowing that framing of this discussion is allowing them to set the tone, set the framing, and continue to steal and destroy and pillage.

And, um, I think that would be a bad thing.

#161 ::: Howard Bannister ::: (view all by) ::: June 29, 2012, 11:35 AM:

Gnomed. Probably for links, possibly for length--The gnomes said to me, "The most common reason that a post is held is that it contained a Whole Lot of URLs. Alternatively, you may have used one or more Words of Power, and we must determine if your intentions are Good, Evil, or Amusing."

Good, Evil, Amusing? I'm the guy with the links.

#162 ::: Lee ::: (view all by) ::: June 29, 2012, 02:10 PM:

Dave, #159: I miss the old lever-flip voting machines. Quite aside from my discomfort about security levels on the electronic ones, it made such a satisfying THUNK when you pulled the big lever to cast your final vote.

On an entirely different level, I miss voting booths with a curtain you could pull. In Texas we have voting cubicles with side-walls but no curtain, and although I guess they're secure enough (since the touch-screen is horizontal and blocked from view by the voter's body), they always make me feel like someone could be looking over my shoulder.

#163 ::: Jacque ::: (view all by) ::: June 29, 2012, 02:57 PM:

Bruce Cohen @156: that's not a coincidental similarity in economic status for people

Oh, yes, exactly my point. One principle of ecology, which is forgotten at one's peril, it that anytime energy becomes concentrated, something will evolve to exploit it. ...Which actually leads me to contemplate the fact that there's an awfully large concentration of energy at the "apex" of the economy right now. I think it's time to start doing some evolvin', don't you? }:-)=

I think it is further not a coincidence that public education is being gutted, so that people have to actually go out and research history instead of automatically getting innoculated at an early age. Makes the general population much less likely to twig to these kinds of isomorphims.

#164 ::: albatross ::: (view all by) ::: June 29, 2012, 03:49 PM:

Jacque:

At what point in the past would you recommend we return to, for public school history classes that were more useful and informative and accurate? My impression is that these have generally been state sponsored fairytales or date-memorization-derbies almost everywhere and everywhen.

If the public is going to finance the teaching of something to their kids, that something is going to be influenced by what the public believes and wants their kids to hear. This applies to history, science, sex ed--everything. One thing we can and should try to do is make sure kids get something like real and useful educations. A more important thing (because the first one is often very hard to accomplish) is to make sure our own kids get something like a clear picture of these things.

More broadly, I am deeply skeptical of stories where all the bad stuff going on in the world is the result of some bad people at the top carrying out some decades-long plan to screw the rest of us over. What evidence do you have that anyone at or close to the top has enough competence to manage anything remotely like that?


#165 ::: Dave DuPlantis ::: (view all by) ::: June 29, 2012, 04:18 PM:

Lee @ 162, yeah, there is something different about tangible voting systems. (And not just the weight of setting them up!) Our setup is similar to what you describe, at least in my precinct, where we're somewhat limited in terms of space - we set up the room to ensure that voters never pass behind an occupied machine, but it's on us to do that now.

I think volunteering at the polls is like making sausage. I'm OK with what I touch personally, mostly. (I think I've mentioned that here before. I mostly trust our machines through the tests we perform; I would prefer to test individual votes too, but we don't get to do that.) I'm uncertain about what I don't touch, whether it's electronic or paper. After all, they're both counting systems, and they both happen while I'm not around. (We just turn in counts and the machines to be tallied.)

I can picture a system that would provide better individual feedback, but I wouldn't care to be responsible for it ... e-commerce is difficult enough ...

#166 ::: Emma in Sydney ::: (view all by) ::: June 29, 2012, 08:33 PM:

Dave duPlantis @ 165, of course, I never thought about the difficulty of setting up voting machines, of whatever type . Australian Electoral Commission supplies are all lightweight cardboard -- booths, boxes, signs, everything, and with paper ballots, it can all be printed and packaged up. The system has been used for elections in other countries in our region, because it is low tech and portable, suitable for places with little available power, tropical climates and the rest.

#167 ::: Jacque ::: (view all by) ::: June 29, 2012, 08:35 PM:

albatross @164: What evidence do you have that anyone at or close to the top has enough competence to manage anything remotely like that?

None whatsoever (except what has been reported elsewhere here on ML). I'm riffing on plausible side effects of the trend described in abi's @51.

At what point in the past would you recommend we return to, for public school history classes that were more useful and informative and accurate?

Well, I think we did reasonably well here in Boulder County when I was in school in the '70s. I got specific training in how to keep advertising from sticking to my brain, as one example. We learned about some of the more uncomfortable aspects of US history (Sand Creek Massacre, anyone?), for another. I came out of my education with a reasonably good sense of what the Civil War was about, when it happened, and who the parties to conflict were.

But in this day and age, I find it very easy to credit that there are "bad people at the top carrying out some decades-long plan to screw the rest of us over." I mean, hello, financial meltdown? Mortgage and foreclosure fraud? Et-fricking-cetera? I am not (nor is anyone I know) claiming that all the bad stuff is a result of the actions of "some bad people at the top," but an awful lot of it is. I mean, George Why-the-hell-are-you-still-on-my-planet? Really, you ask this question?

#168 ::: heresiarch ::: (view all by) ::: June 30, 2012, 12:06 AM:

albatross @ 164: "More broadly, I am deeply skeptical of stories where all the bad stuff going on in the world is the result of some bad people at the top carrying out some decades-long plan to screw the rest of us over. What evidence do you have that anyone at or close to the top has enough competence to manage anything remotely like that?"

That's the intelligent design version of the theory--it emphasizes deliberate, purposeful action over non-directed systemic tendencies. It doesn't however take a conspiracy, much less a premeditated and competent one, for elites to systematically screw over everyone else. A more elegant version of the hypothesis holds that such an outcome can emerge spontaneously, simply as a result of everyone acting independently according to their needs and desires.

One example can be found in The Philanthropic Complex, an article I think I originally found here on ML:

The great paradox of environmental philanthropy is this: How do institutions founded on property, wealth, and privilege (in short, plutocrats) seek to address the root source of environmental destruction if that source is essentially the unbridled use of property, wealth, and privilege? And yet when we ask that foundations abandon their privileges and simply provide funding so that we activists can do our work without hindrance, what the foundation hears is a request that they will their own destruction. Not unreasonably, they are bewildered by the suggestion and unwilling to do so.

It's not that there's some vast conspiracy directing environmental philanthropism away from transformative action; no shadowy cabal ever sat down and said "Okay guys, here's how we subvert the environmental movement away from anti-capitalist activism mwa ha ha." That it consistently fails to accomplish anything transformative is inherent to the structure of institution, embedded in the incentives that each person feels, emerging from the collective momentum of thousands of individual choices.

Human beings tend to see deliberate human agency even when it isn't there, when non-deliberative, non-human processes are at work. No less in the design of our societies than in the design of our bodies.

#169 ::: Jacque ::: (view all by) ::: June 30, 2012, 02:57 AM:

heresiarch: Yes, thank you. Far more thoughtful and articulate response that I was able to come up with.

#170 ::: B. Durbin ::: (view all by) ::: June 30, 2012, 03:31 PM:

I definitely prefer the "Scantron" method—instant, verifiable paper ballots (filled with pen, of course) that are scanned for "instant" vote counts. I've seen those scanners go on the blink a time or two, and it's nice to know that if there's any question at all, the ballots get counted otherwise. Oh, and it notifies you if there's an "overvote" (two bubbles filled in the same race) AND an "undervote" (nothing checked; you can choose to still have it go through if you didn't vote on some races.) They may have the undervote function disabled at primaries, since most voters don't fill out every race at those.

You also get a barcode receipt at the bottom, so you can check to see if your ballot was counted. I have no idea if anyone actually uses those things, but the potential is there.

#171 ::: Leah Miller ::: (view all by) ::: June 30, 2012, 05:09 PM:

I think a lot of people of my "mini generation" feel that voting doesn't necessarily work because it literally did not work in the first election we ever participated in. If you're a part of the Nintendo generation (or the "cold Y," people born between 1979 and 1982), then your first real entrance into the political process was seeing the Supreme court decide that it wasn't important to count votes.

This is also, to some extent, why Supreme Court appointments are one of my top political priorities: I can't count on anyone who didn't dissent in that decision to uphold the right to vote in the future, and I honestly think that there's a decent chance that the right to vote may be seriously compromised in years to come. (One of my more cynical friends postulated a world in which failing to repay one's student loan within a certain time is declared felony theft, thus making all debtors into non-voting felons.)

Which is also, I think, why my generations seems so consistently pessimistic about close races: we have no reason to believe that a close race will result in anything but a predetermined win.

I still vote every single time, no matter how close the election. But there is a cynical part in the back of my head that looks at the result of every election and asks how much of the result was based on underhanded political machinations rather than people who wanted to cast votes. I can see that tinge of worry becoming a feeling of utter powerlessness for a lot of people.

#172 ::: albatross ::: (view all by) ::: June 30, 2012, 07:10 PM:

heresiarch, Jacque:

Okay, heresiarch's description makes sense to me. My qualm with the intelligent design version is that is seems bound to lead us astray, in terms of sensible responses to the problems.

#173 ::: Jacque ::: (view all by) ::: July 01, 2012, 05:28 PM:

albatross @172: My qualm with the intelligent design version is that is seems bound to lead us astray, in terms of sensible responses to the problems.

As well as simply being highly unlikely. Which would be why that's a thesis I'm not likely to put forth.

Oh, don't get me wrong. I do think there are probably high-level secret cabals plotting to overthrow Democracy As We Know It. But I think they're competing against all the other high-level secret cabals (as well as the population in general), so the result is rather more ... averaged than they would prefer.
/snark

#174 ::: Bruce Cohen (Speaker to Managers) ::: (view all by) ::: July 01, 2012, 07:22 PM:

Jacque @ 173:

Would this be a fair paraphrase of your last paragraph: "Evil is here; it's just not evenly distributed"?

#175 ::: Elliott Mason ::: (view all by) ::: July 01, 2012, 11:16 PM:

Bruce Cohen @174: Not to put words in Jacque's mouth, but I read it more as "Sure, there are evil cabals. But there are lots of DIFFERENT ones (with micro-focussed individual evil agendas) pulling in all different directions and getting in each other's way, not a Single Unified Grand Cabal That Controls The UUUUUUUUUUUUUUniverse."

#176 ::: Jacque ::: (view all by) ::: July 01, 2012, 11:51 PM:

What Bruce Cohen is certainly true, but as to what I meant, Elliott has the right of it.

If there is Single Unified Grand Cabal That Controls The UUUUUUUUUUUUUUniverse, I have to say, they're doing a piss-poor job of it. "No, no! The Chaos is deliberate. Otherwise you could tell we're running things!"

#177 ::: Howard Bannister ::: (view all by) ::: July 02, 2012, 09:26 AM:

My own story of how-the-world-works does involve villains. But they aren't as smart as they think they are, and they believe their own lies.

They do believe that if you take the regulations and rules off of them that they can make more money, and that this is prosperity, and that what's good for them is good for everybody. That this is demonstratively not so is invisible to them, because they don't live the life the 99.9% live.

Also, they aren't as clever as they think. Look at the Republican party; the people at the top are monied interests, and they only care about lowering tax rates on the rich. They don't care about gay marriage.

But they know it plays well to the base, the people, so they harp on it.

But America's changing. Demographics are changing. The young aren't buying that gay people are 'the greatest evil facing us today.' (hey, Rick Santorum, how'd you get in here??)

If you abandon that, though, you lose the base. And if you lose the base, then you have to focus on subverting the Democratic party. Which, admittedly, is still too addicted to money from, say, Goldman Sachs...

Cold truth about obama and fdr--David Atkins

Pleasing Wall Street--David Atkins

That's why Sheldon Adelson and the like are desperately trying to buy this election, preparing to outspend the president five-to-one. Because the cynical 'buy both sides,' 'advance business interests' advocated by the Powell Memo is still working, but it's faltering.

(see also; how the Chamber of Commerce has had its way in every case decided so far this term (which, yes, includes the ACA))

...yes, there are villains in this piece. But they are small-minded, and in their cleverness have destroyed every part of the economy that they've got their grubby hands on. They're smart enough to see how to get their way, but not smart enough to see that getting their way is a disaster.

And they're only able to succeed by appealing to the hatred of the close-minded, by appealing to greed, and by calculatingly giving enough money to the Ds to ensure that they are addicted to that teat--even though the vast majority of their money goes to Rs.

More broadly, I am deeply skeptical of stories where all the bad stuff going on in the world is the result of some bad people at the top carrying out some decades-long plan to screw the rest of us over. What evidence do you have that anyone at or close to the top has enough competence to manage anything remotely like that?

...only the sum total of the events I've seen in my lifetime. :(

#178 ::: Howard Bannister has been gnomed ::: (view all by) ::: July 02, 2012, 09:27 AM:

...I've become addicted to links. They are my weakness, my kryptonite.

#179 ::: David Harmon ::: (view all by) ::: July 02, 2012, 04:22 PM:

Jacque #173, Howard Bannister #177: The thing is, lots of little evils, each trying to exploit their power for their own advantage... has a perfectly cromulent name already. It's called corruption -- a word originally used for gangrene and rot. And such folk do act like an infection, spreading through an organismation and damaging its defenses in ways that enable further corruption.

#180 ::: Howard Bannister ::: (view all by) ::: July 02, 2012, 04:53 PM:

...just because Darth Cheney is not currently in possession of a Death Star doesn't mean we can call him merely corrupt.

#181 ::: Diatryma ::: (view all by) ::: July 02, 2012, 06:26 PM:

I would argue that corruption is worse than evil. Corruption is something good people do because hey, it's just one little thing, right?

#182 ::: albatross ::: (view all by) ::: July 02, 2012, 06:54 PM:

The point is, corruption, some point source of intentional evil, and the mindless operation of unthinking processes with bad consequences are three different things. Remedies for one will usually not work too well for the others.

Consider the financial meltdown. It's clear there was corruption involvved in it, both the overt kind where someone violates the laws to make a profit, and the more common kind where someone dances right on the edge of the law, or does something systemically destructive but personally profitable that is within the law, or lobbies to have his destructive but profitable thing legalized. My layman's understanding of the history behind the financial meltdown is that this sort of thing set the stage for the meltdown. And yet, there was not really some kind of quorum of the rich and powerful who wanted the meltdown to happen. Some people had bets that paid off on the disasters that led to the meltdown, but I don't think they caused or intended anything like what happened. Many very rich and powerful people lost a hell of a lot of money. An investment bank that I'd have assumed had more staying power than most nations was destroyed. A lot of huge and powerful companies too huge hits, and had to call in a lot of favors (and rely on politicians and regulators and central bankers being scared sh-tless about which dominoes would fall next) to get a cobbled-together bailout. IMO, that bailout, as much as the financial meltdown and recession that followed, is behind a great deal of the anger and loss of legitimacy of both parties. Without the bailouts, IMO, there would be no tea party, and quite possibly no occupy movement. None of this was a win for the powerful.

Now, corruption set the stage for the collapse, but didn't exactly cause it. Bubbles happen and burst even without the specific kind of corruption we had then. (And corruption, like the poor, will be always with us, though we can and should try to push back where we can on both.) If there was some central figure of evil trying to cause this bailout, I can't see who he was or what his power base was. My understading is that the meltdown was largely driven by unthinking market forces, and by the financial modeling tools used by big investors misleading them, and by all the organizational problems that afflict all groups of people (peter principle, iron law, organizational politics, agency problem) afflicting the biggest and most powerful investment houses in the world.

If we want to minimize the damage of the next bubble bursting, we need to start by understanding what caused this meltdown. Darth Cheney was no more planning this out than was Osama Bin Laden, Vladimir Putin, or George Soros. Those guys all make good Big Bads for the movie-plot version of the world, but if you try to fix the world's problems on that basis, you will probably not get the results you would like.

#183 ::: Lee ::: (view all by) ::: July 02, 2012, 09:28 PM:

albatross, #182: You forgot to include "regulatory capture" in your list of causes. We used to have regulations which, if followed, would have prevented the financial meltdown. But they had all been either repealed outright or rendered toothless by the people who saw an opportunity for short-term profit in doing things prohibited by those regulations, and didn't care about anything else.

#184 ::: P J Evans ::: (view all by) ::: July 02, 2012, 10:30 PM:

183
'Regulatory capture' part means that the regulators come mostly, if not entirely, from the group being regulated. Think of Goldman Sachs executives being in charge of the government's financial agencies. Or former aerospace executives running the Pentagon.

#185 ::: David Harmon ::: (view all by) ::: July 03, 2012, 06:33 AM:

Cheney many not be "merely" corrupt, but he's certainly corrupt! And corruption also paves the way for other problems to come in, not limited to letting sociopaths into the halls of power.

Albatross: Yes, the collapse as a whole was systemic, but that doesn't mean it was completely disconnected from the behavior of the participants! A healthy economic system has defenses against market whiplash, fraud, and so forth. In an unhealthy one, those defenses have been disabled or suborned.

I suspect that the problem is, we currently have a breed of corruption that's actively targeting and countering our political "immune system", generation after generation. The Mafia and Hoover's FBI set the modern pattern with widespread suborning of police forces and infiltration of (other parts of) government, and other players have adopted their methods. We, the public as a whole, need to find a way to stop those attacks before the crooks get a clawhold.

#186 ::: Howard Bannister ::: (view all by) ::: July 03, 2012, 08:38 AM:

"Gee, here are these nice rules that prevent me from doing all sorts of nifty things that would probably be vastly profitable, although risky with other people's money. Let's spend millions and billions in lobbying to change those rules, and say it's for freedom!"

...

The point is, corruption, some point source of intentional evil, and the mindless operation of unthinking processes with bad consequences are three different things. Remedies for one will usually not work too well for the others.

Yes. So if we put in some rules that just ask bankers to play a little nicer, because it's just corruption... well. I linked to the Powell Memo earlier, a plan to systematically deregulate through corrupting the government. A corporate blueprint to dominate democracy.

That's not just the minor corruption of 'I think I can get away with this,' that's the corruption of 'I think I can subvert this government to maximize my profits.'

And, no, they aren't as smart as they think they are; as they deregulate, they destroy.

Without the bailouts, IMO, there would be no tea party, and quite possibly no occupy movement. None of this was a win for the powerful.

...um...

Koch and the Tea Party

That Tea Party?

Yeah.

#187 ::: SamChevre ::: (view all by) ::: July 03, 2012, 08:44 AM:

In thinking about regulatory changes that caused the housing bust, it is importatant to remember that the key change was the reduction in down payment and income requirements to get a mortgage; everything else is and was a sideshow, changing how the losses are allocated rather than how large those losses are.

#188 ::: abi ::: (view all by) ::: July 03, 2012, 10:24 AM:

SamChevre @187:
In thinking about regulatory changes that caused the housing bust, it is importatant to remember that the key change was the reduction in down payment and income requirements to get a mortgage; everything else is and was a sideshow, changing how the losses are allocated rather than how large those losses are.

I think you're underestimating the impact of the changes to Glass-Steagall, and the subsequent inability of banking regulation to keep up with banking practices.

The losses would have been markedly lower if the mortgage-backed securities had been correctly risk-rated, because then they would not have been sold, much less the subject of derivatives. The fact that they weren't is not a result of any failure in the terms of the mortgages themselves.

#189 ::: SamChevre ::: (view all by) ::: July 03, 2012, 10:58 AM:

abi @ 188

The losses would have been markedly lower if the mortgage-backed securities had been correctly risk-rated, because then they would not have been sold, much less the subject of derivatives.

Leaving out the derivatives for the moment, I see two possible branches.

In one case, the same mortgages are made, but they are held by their originators/sold as whole loans/sold to different parties because the securities are rated differently. I argue that in that case, the losses to lenders are the same in size even if they are differently allocated(and the losses to the homeowners are identical).

In the other case, fewer/smaller/more expensive mortgage loans are made. In that case, I would assume that the lower-risk mortgages would be the ones made--the effect would be to have higher underwriting and down payment standards, and for banks to earn more on each mortgage.

I don't think the derivatives increase the losses; they are a zero-sum game if my understanding is correct.

My thinking here is probably influenced by my work; the really nasty disputes with counterparties are all cases where we and they expected X, and X didn't work out--and now we are arguing over who bears the loss. The loss has already happened; all the battling over who disclosed what to whom, and who relied on what for what, are generally beside th point of the main problem, which is that "costs in market X went up twice as fast as we both thought they would 10 years ago."

#190 ::: SamChevre has been gnomed ::: (view all by) ::: July 03, 2012, 11:00 AM:

I'm hungry too, gnomes. I do have three packets of mustard, but sadly, I have no sandwiches to go with.

#191 ::: abi ::: (view all by) ::: July 03, 2012, 11:16 AM:

Leaving out the derivatives means leaving out the elephant and arguing about the mouse.

Fine, though, mouse.

The problem is that many of the mortgages were not legal even under the new rules. People were encouraged to lie on their applications, and claim income that they didn't have. (Surely you have heard about this?)

The pressure to do that was from demand. The demand was from the back-end, because the mortgage issuers knew they could make money by reselling the loans. They could make that money because the market was under-regulated.

So yes, actual losses that would not have occurred did occur because of lax market regulation. Even in the mouse-sized end of things.

#192 ::: Lee ::: (view all by) ::: July 03, 2012, 12:04 PM:

abi, #191: It was a giant game of "hot potato" -- everybody who knew those loans were time bombs waiting to go off trying not to be the one left holding them when it blew.

#193 ::: abi ::: (view all by) ::: July 03, 2012, 01:03 PM:

Lee @192:

Yes, but those time bombs were only built, armed, and tossed into the game because reselling them was so damn profitable.

And that's down to insufficient financial regulation.

#194 ::: heresiarch ::: (view all by) ::: July 03, 2012, 01:07 PM:

albatross @ 182: "The point is, corruption, some point source of intentional evil, and the mindless operation of unthinking processes with bad consequences are three different things. Remedies for one will usually not work too well for the others."

This is true. However, corruption is both a personal moral failing AND a non-deliberative systemic tendency. The key phrase is, I think, "systemically destructive but personally profitable". Their behavior wasn't driven by a desire to cause economic ruin, but ruin was nonetheless the collective result: actions have unintended consequences. Thus, by addressing the moral failing, by tarring it as wicked and discouraging that kind of behavior, we can to some extent head off the systemic collapse that really worries us.

(I find this to be the case with many moral failings: the reason why we think of them as moral failings is BECAUSE they lead to bad systemic outcomes. It's hard, in the abstract, to get very upset about mono-crop agriculture. Put it in the context of disease cultivation, environmental decline, and nutritional degradation that occur when it is extended throughout the whole system, and suddenly it becomes a moral issue.)

I do agree that there's a limit to how effective this approach can be. I wouldn't go so far as "corruption is always with us", for I do believe it waxes and wanes quite a bit. Part of that range is controlled by social opinion on the issue; a larger part is controlled by legal regulation. But social opinion affects legal regulation as well. It's wise to differentiate between corruption, cabals, and systemic tendencies, but it's also important to understand how they are connected.

#195 ::: albatross ::: (view all by) ::: July 03, 2012, 05:14 PM:

abi/Sam:

A bubble needs money to inflate it. MBS made it possible to bring money from all over the world into the US (and Spanish, and Icelandic, and....) mortgage markets. Fraud in mortgage writing, plus systematic underestmate of riskiness of these MBS (both motivated by greed and based on genuine misunderstanding of the risks, I think) made it possible to sell these MBS on the pretext that the top tranches were extremely safe investments, like buying bonds from Microsoft. Many investors had legal or contractual requirements that required that they keep their money in AAA securities.

My understanding is that the ongoing fraud in mortgages was known and understood by investors in this market, but that they had lousy models of it, partly because until the bubble burst, the main painful thing that happened to the mortgages in the MBS wasn't default, it was prepayment. Also, in a fast-rising market, inability to pay your mortgage was easier to resolve by selling the house than by going into foreclosure.

I have less understanding of the derivatives, but as I understand it, these had two interesting added effects:

a. They allowed massive side bets to be placed on the mortage markets, in the form of (among many other things) simulated MBS--a mortage backed security based, not on actual mortgages, but on side bets on the performance of real MBS.

b. They tied the big players in the financial world together in webs of obligations that could unravel in a really scary way. As I understand it, the total value of all the derivatives was many times larger than the wealth in the system, and each derivative is basically a side bet on some security (like you and I make a bet about whether Deadbeat Bank, Inc will default on their bonds. And the big players could have very complicated networks of these bets, so that, say, Alice promised to pay Bob if Deadbeat defaults, and Bob promised to pay Carol if Deadbeat defaults, and Carol promised to pay Alice if Deadbeat defaults.

In this situation, with dozens of these networks of bets, you can't know whether Alice is really able to pay her bills tomorrow unless you know whether Carol is solvent, and to know that, you need to know if Bob is solvent.

[I would really love it if someone smarter and more informed would correct me here--I am sure I am only grasping the outline of reality, at best, and may just be wrong]

My understanding is that one reason the feds stepped in with AIG had to do with this sort of calculation, because AIG had written credit protection (aka bet that a bunch of things wouldn't default) that other banks relied on, and AIG going away might undermine those banks' ability to borrow money.

#196 ::: Lizzy L ::: (view all by) ::: July 07, 2012, 10:27 PM:

A friend of mine was just informed that her student loan, which has previously been "serviced" by ABC Corp, was now going to be "serviced" by XYZ Corp. It might take them as much as 10 days to transfer all the information blah blah yadda-yadda-yadda.

I feel stupid for not having seen it before, but (duh!) this student loan thing is all about Making Money. Not merely the money being collected as interest and late fees on the loans, but the money being collected by multiple entities for "servicing" the loans: sending out notices, setting up websites, hiring people to answer questions, to say nothing of payments for insurance... This is a monstrous creation: ugly, enormous, and remorseless. Possibly tentacled.

#197 ::: B. Durbin ::: (view all by) ::: July 08, 2012, 12:15 AM:

Lizzy—my student loan has been serviced by several different companies. Right now it's in the hands of one that is notoriously incompetent, so I am working hard to keep everything timely so that I don't get into their phone tree hell. (I have paper statements and I am NOT doing automatic payments, because they have been known to change things behind the scenes and lose track of those auto-deposits, putting the payer in arrears, and that generally takes a few weeks of phone tag to straighten out.)

Read the side-note about the credential crisis. When people speak of a higher-education bubble, it's the credentials (or really, the increasing requirements for credentials) they're complaining about. Credentials are a barrier to entry and are not directly equivalent to a desire to learn or to succeed. Unfortunately, they are often equivalent to the ability to pay.

#198 ::: Bruce Cohen (Speaker to Managers) ::: (view all by) ::: July 08, 2012, 08:21 PM:

albatross @ 190:

AIUI that web of obligations still exists: many banks, both in the US and Europe, still hold large amounts of debt in the form of derivatives whose true value they haven't yet admitted to, because it would substantially reduce the reported value of the bank. So they're assessing those derivatives at 40 to 60% of face value, when in fact, once they're unraveled (if they can be) their actual value could be anywhere from 0 to 25 or 30% of face. One of the reasons that everyone is terrified of the EU peripheral nations defaulting is that one consequence might be that the banks holding that debt will have to come clean about their real asset holdings in order to convince both their customers and their investors that they won't be damaged or destroyed by the default, and that it might turn out that they don't actually have enough to prevent failure.

#199 ::: GC80 ::: (view all by) ::: March 22, 2013, 10:00 AM:

On the subject of went wrong with the global economy, has anyone here read Yanis Varoufakis's book The Global Minotaur?

Welcome to Making Light's comment section. The moderators are Avram Grumer, Jim Macdonald, Teresa & Patrick Nielsen Hayden, and Abi Sutherland. Abi is the moderator most frequently onsite. She's also the kindest. Teresa is the theoretician. Are you feeling lucky?

If you are a spammer, your fate is in the hands of Jim Macdonald, and your foot shall slide in due time.

Comments containing more than seven URLs will be held for approval. If you want to comment on a thread that's been closed, please post to the most recent "Open Thread" discussion.

You can subscribe (via RSS) to this particular comment thread. (If this option is baffling, here's a quick introduction.)

Post a comment.
(Real e-mail addresses and URLs only, please.)

HTML Tags:
<strong>Strong</strong> = Strong
<em>Emphasized</em> = Emphasized
<a href="http://www.url.com">Linked text</a> = Linked text

Spelling reference:
Tolkien. Minuscule. Gandhi. Millennium. Delany. Embarrassment. Publishers Weekly. Occurrence. Asimov. Weird. Connoisseur. Accommodate. Hierarchy. Deity. Etiquette. Pharaoh. Teresa. Its. Macdonald. Nielsen Hayden. It's. Fluorosphere. Barack. More here.















(You must preview before posting.)

Dire legal notice
Making Light copyright 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014 by Patrick & Teresa Nielsen Hayden. All rights reserved.