Hard Choices

In any society, some individuals will succeed… and some will fail… and some, for various reasons, will only make a minimal effort, if that. In the so-called natural state, which never completely existed, the results would be obvious. Those who failed or could not or would not work hard enough to survive would die.

For all of human history, such a totally natural state has never existed. Fossil and other remains show that all societies have assisted people, at least at some stage of their life, who would have died much sooner otherwise. So every society has faced the question of who gets help and under what circumstances. Because humans are incapable of surviving without assistance for years after birth, all societies help the majority of infants, but not always all of them.

Only in the last century or so, however, have societies embarked on large-scale, societally-wide programs of assistance. Some programs, such as many of those involved in Franklin Roosevelt’s New Deal, were designed as much as economic stabilization efforts as assistance efforts, but the creation of the Social Security system was definitely a program of assistance for the elderly.

Over the seventy or so years since then, U.S. federal government assistance and support programs have grown enormously, to the point that so-called assistance “entitlement programs” comprise roughly 42% percent of total federal spending and are projected to increase yearly, yet last year almost 30% of federal spending had to be borrowed, i.e., deficit spending. Over any length of time, that much of a deficit can’t be financed without catastrophic economic impacts

The largest assistance programs are Social Security and Medicare. Without an SSA tax increase of some sort, the Social Security Trust Fund will be exhausted in 15 years, and under current law, benefits would have to be reduced by roughly 20% because incoming SSA taxes would only cover 80% of benefits. The situation with Medicare is worse, given the skyrocketing costs of healthcare.

While many people like the idea of wealth taxes and higher income taxes on wealthy individuals, such taxes, even if they were enacted in a fashion that disallowed subsidies and selective taxable income exemptions and cuts, which is not at all certain, couldn’t make up the current deficits, let alone future ones, without effectively confiscating the majority of income from the upper middle class and upper classes, and I seriously doubt that most of them would stay around for such taxes to take effect.

So any realistic reform is going to have to include significant but not confiscatory tax increases, especially on the wealthier members of society, coupled with spending cuts and reforms in a vast array of programs. The political problem is that no one wants his or her benefits/programs cut, and everyone, including the rich, wants someone else to pay for it.

All the rhetoric – on both sides – won’t change this reality. But people and politicians, being what they are, will insist that their one-sided approach will solve the problem.

Welcome to the 2020 political misrepresentation season.

4 thoughts on “Hard Choices”

  1. Tom says:

    Hanging onto life is a costly human habit. Why do we do that? Perhaps because we still do not have an agreed definition of what makes life desirable? We continue to persist in supporting life even when we know that the result of our effort cannot become independent in the future. Maybe it is indeed that we humans are too weak to be able to make hard decisions? That is why we created gods who we have relied upon to make decisions we cannot make.

    Hanging on to a productive work was a habit but we now seem to wish retirement on ourselves. Some retire to volunteer, so one could think of that as changing jobs. It use to be that the elderly, who could no longer work, became care-takers of the young of the family: dispersal of families makes that difficult even as such a necessity has increased in society.

    We must make hard decisions or hope that artificial intelligence will become our new god and we will let mathematics make our decisions. I fear that we will cop out yet again and allow war to solve our problems via decimation of the world population and our resources.

    Of course, since we have a new interest in pilots seeing UFOs, then we can all be saved by aliens!

  2. JakeB says:

    I was reflecting on the fact that by another 5 years from now, if not less, every significant problem in the world is going to be seen in the light of global warming. Yet even in the Democratic debates, filled with a number of extremely intelligent and well-informed people, there was relatively little discussion of this. Whoever is president in 2024 is going to be facing one climate disaster after another.

    Of course, winning the nomination doesn’t necessarily have anything to do with governing well. As we’ve unfortunately seen . . . .

    1. What almost no politicians seem willing to recognize publicly is that climate change is going to be expensive. Preparing for it and trying to minimize CO2 and methane emissions won’t be cheap, no matter what anyone says. Not preparing for it will entail hundreds of billions of dollars in lost real estate, destroyed properties, and rebuilding homes and commercial property, not to mention dealing with millions of refugees… and that’s just the beginning.

  3. R. Hamilton says:

    Given that water transport is far less essential than in the times coastal cities were established, maybe they ought to be moving inland anyway, or at least beefing up their flood resistance. Regardless of likelihood of substantial sea level rise*, in the lifetime of a city, hurricanes, tsunamis, and even ocean asteroid strikes are not implausible. Truly long term planning would take that into account.

    The preparation for alleged climate change disaster would be better spent on infrastructure robustness inland as much as in coastal areas; that would be useful in case of e.g. massive solar flare, EMP attack, etc. Modernizing the electric grid to prevent such threats would be far cheaper than the alleged hundreds of billions to trillions that preparation for global warming (not to mention the corrupt con that prevention would be, regardless of whether or not there’s something to prevent) would cost, and would be likelier to prevent greater devastation in the long run.

    * Darn right I’m skeptical, but I’m not all that bothered about the alleged consequences, even if they happen; heck, I’m not too bothered if a planet killer is coming our way, and even if we could do something about it, I’m ambivalent about whether we should, as stupid as we are – and that measure of stupidity is quite independent of global warming or not. Like the stupidity of thinking magic free stuff for all machines could exist without violating some sort of conservation law…and even if they could, they’d violate the “what’s the point of being alive if you’re not useful” principle. Or the stupidity of supposing that tax increases necessarily increase revenue; they frequently don’t (although the devil is in the details), because they depress the economy being taxed; government revenue has _increased_ with tax cuts on some occasions, although that of course doesn’t apply directly to benefits fed from separate taxes, esp. with a cap on the maximum taxable amount as with Social Security (but that cap exists because it was sold as something where you were paying your own way to some degree, where in fact you’re paying for previous recipients, and younger people will have to pay yours, talk about robbing your children!); or the stupidity of benefits that have become not a last resort fallback, but a means of redistribution by fiat, accompanied by the stupidity of encouraging the belief that having one’s needs met is a right. Or the stupidity of supposing that government should be the primary means (or could except rare circumstances be the most effective means) by which society assists its members.

    So I’d vote to cut benefits to match existing receipts rather than increasing Social Security and Medicare taxes; and to always maintain the actuarial balance rather than expanding benefits without regard to future fluctuations in age demographic. We should never have built a system that (due to FDR and later versions of the vote buying that goes back at least to Hoover (“a chicken in every pot” (an “R” doesn’t always mean conservative, unfortunately)), if not earlier, demanded a constantly growing population to remain solvent; that’s just a slightly milder version of a Ponzi scheme.

    Let substantive compassion be voluntary and private, and let the consciences (if any) of those who don’t support it by private means be troubled, rather than letting everyone think they do their part by paying confiscatory taxes. And shoot rioters regardless of whether need or greed or attitude motivates them.

    Or replace (after paying off the existing eligibles and some grandfathered years of people approaching eligibility, I suppose) Social Security with private funds (like a Roth IRA), and Medicare and traditional insurance with catastrophic coverage and medical savings accounts (both with higher caps on how much one can put into the accounts), and most people would be better off. No time bomb that way; solvency of private funds (if with mandatory minimum withholding and robustness requirements) would depend on individual restraint spending from the funds, individual prudence saving more via the funds, and yes, that some people are more fortunate than others in the expenses they may face. With that as a first step, everyone would at least be assured to get more (given interest) out than they put in. The only society-wide risk would be insuring the investments. And if one should choose to have a public program to assist ONLY those who after that were still in need, then it would be relatively modest compared to a program that tries to do more without encouraging individual financial prudence and wise consumption.

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