So own the libs by increasing immigration. And with a bigger tax base, we make social security solvent without having to significantly increase taxes or cut parental benefits. Thereby, increasing U.S. citizen birth rates.
Yeah, I really don't understand the Republican stance against almost all immigration since immigrants from many countries are more likely to be conservative
People have legitimate concerns about changes in culture. All people everywhere have this concern. It is not just an American White Nationalist concern. My guess is it goes back a very long time and is embedded in our tribal instincts. It is rooted in a very deep instinct for survival.
How much is Biden's controversial asylum legal immigration reducing entitlement costs by? I feel like I would've heard him brag about it by now if it was a big number...
I should've said shortfall instead of costs, thanks for clarifying. But my question remains what fraction of that shortfall is being fixed by Biden's move.
I agree with this broadly, but given the wage structure of our current immigrants, it is not true in a broad sense. Yes, more immigrants will help SS and Medicare/Medicaid, but given the wage structure of our current immigrants, the total costs exceed the total benefits for about a generation. This is one reason you see states (who actually fund the services used) freaking out about immigration, even (or lately especially) blue states.
I would like to see more immigration (a lot more actually) but balance it so that it allows more highly skilled immigrants who will make above median wages and roughly the same amount of lower-skilled immigrants. We need more people, period. This approach would also lessen income inequality, and I suspect it would introduce a less conservative political balance. It would also increase the benefits of immigration to lower skilled US workers by increasing demand for their skills, further decreasing income inequality and potentially building support for more immigration.
Unfortunately, I do not see this happening as Republicans are generally opposed to immigration, and the democratic political base of upper-middle-class professionals has been resistant to allowing people with comparable skill sets into the country.
It’s not just spending, it’s regulation too. Retirees are less likely to support pro growth regulation because they have far less participation in the upside. They’re gonna be impacted by the disruption of building that new semiconductor fab but they’re not gonna get a job working there or even live to see the majority of the economic benefit it will provide for the community.
Not only do they not support growth but they believe they have the greatest standing in being against it. I’ve lived in this community for 35 years and….
A lot of it is status quo bias. Older people have already went through a lot of existing hoops, and reforming various regulations puts them in a position to be worse off.
Now, if those laxing of regulations makes it so that there is more wealth around, people feel like starting up families and working more, then the case is obvious that the old would be better off.
I agree that some regulations can support growth - by building confidence in new, unknown technologies or procedures - but in what sense is building a semiconductor fab "pro growth regulation"? Did you mean *removing* regulations, like land use? Or were those two different thoughts? (And it's hard to imagine seniors objecting to the regulations I'm talking about here).
Ok, but how elastic is fertility to parental allowances. Don’t most of the European countries with child allowances have low fertility? Would $350/monty really make you want to go out and get someone pregnant?
Quote: "The core point here is merely to illustrate that yes, government policies absolutely can increase birth rates, and can do so at reasonable prices. Prospective parents choosing how many children to have, or whether to have children at all, very much respond to incentives about what their lives and finances would look like."
Boy's club hyuk hyuk sex joke nonsense like this always just makes me think of dogs going around pissing on streetlamps and fire hydrants to mark their territory.
If I may speak in my own defense, I found David A's idea that men "go out and get someone pregnant" funny, but unintentionally so. If I was marking my territory, it was only to say, hey, bud, I write the punchlines here.
It's not that forums have to be female-coded. They just have to be female-dominant. I'm in plenty of forums or online social circles for gender-neutral interests (genre fiction, art, outdoor activities, etc.) that are female-dominant, but usually they were started by a woman or had a big female userbase early on that generated some gendered momentum.
The politics forums tend to be male unless female-coded, though - but female-coded tends to be about schools or reproductive rights or healthcare, and those are all pretty big topics people get passionate about.
A weird half-baked idea that I have is that we should have a massively generous child tax credit (like $10K+ a year or something) but it should be non-refundable. It won't incentivize people to have kids they can't afford and would be a net transfer from childless adults to parents.
Isn't this exactly the opposite of proposals to extend and enhance the Child Tax Credit (i.e., making it more refundable)?
I've read so much commentary about how the pandemic-era expanded Child Tax Credit was an unparalleled way to end child poverty, without even mentioning the possible negative consequences it might have for child-bearing behavior.
France and Sweden have much more generous family benefits than the rest of Europe and they also have non-catastrophic TFRs, although still below replacement. I think the Occam's Razor approach to declining fertility is to spend as much as France before seeing if other steps are needed. (The benefits would be expensive, but the US doesn't have a value-added tax so bringing one in would be an option for financing them.)
According to Ezra’s guest in a recent podcast episode the TFR for the US is 1.66. The TFR for Sweden is 1.67. Is that an improvement we should shoot for? How much should we spend on it?
That was an interesting episode! But it really just cemented the fact that the factors driving lower birthrates in developed economies are so deeply multifaceted and seemingly non-solvable.
There are so many different factors in play, you can't just isolate one. For example, the religiosity of Americans probably cancels out some of the effects.
But do you think that Sweden’s policies (visavi the US) only adds up to a 0.01% increase in TFR? That sounds weird. I think it increases it (a bit) more but there are other factors which increases US fertility.
I don't think we should be doing it to improve the birth rate. I think we should be doing it out of concern for kids and families. That episode also discussed how little we seem to care for you g families - not just financially, but culturally - than peer countries.
Desired fertility rate is a thing and building a society that doesn’t care about it causes real people real pain. Native-born American women deserve to have the children they want to raise and we should prioritize ways that allow them to do so.
They also have free public child care, which must cost a lot more. (I don't think that's the right approach; it should all be cash so parents have freedom of choice.)
A cash benefit of $1000 per month for every child under 18 would cost a little over 3 percent of GDP. Since the US is a low-tax country with no VAT, that could easily be done if the political will existed. And I think it would virtually wipe out poverty among families with children, not to mention making the old-age programs more solvent.
There's no other type of welfare state expansion that could potentially get buy-in from the right, so this is worth pushing
"I don't think that's the right approach; it should all be cash so parents have freedom of choice."
The Swedish Christian Democratic Party still advocates for - and managed to implement once in the past - giving a lump sum of money to parents which they can spend on kindergarten or on themselves to stay at home with the kids, but it was abolished (rightly so IMO) since the left thought it was bad for women (more women staying home which affects all women's career opportunities and makes some women dependent on their husbands for pension etc) and the right thought it was bad for the economy since it kept many women from participating in the work force.
lol I love how a policy where some women choose to stay home with their children is labelled “bad for women” and required changing to remove this choice and put a thumb on the scales of women going back to work and having someone else care for their child. I think feminists should take a hard look at themselves if they favour this position.
France comes in at just under 3 percent, with Sweden at 3.4. So these wouldn't be crazy levels of spending, especially for an economy that's already lower-tax than Europe's.
Totally agree, and my kids are mostly grown. I know so many people who miss days of work because of child care issues. On the lower end of the income spectrum, this means people losing their jobs, high turnover, etc. it seems like a program for under 5s would be good for business too.
I would love to see the program also pay for training and certification of child care workers. There are not enough people doing this job, and it is something that would not take a lot of training to give people interested in working with kids a way to a job. With subsidized care, those jobs might be more stable, too.
You could structure it a lot of different ways. (I think benefits should be much higher for the first child than for subsequent children, because it's with the first child that women's lifetime earnings take a huge hit. And they should probably be higher in the first few years than afterwards.)
I just wanted to put a number down that shows the right order of magnitude for total spending. Three percent of GDP is what France and Sweden allocate, and it does seem to make a significant difference to the birth rate.
I think the gap in Sweden is pretty large. They have a sizable Muslim underclass due to their generous asylum policies in the past.
This may be one reason they've stuck with the free public daycare. It's not worth anything to a family where the mother stays home, so one effect is to encourage migrants to adopt more Scandinavian gender norms.
I suspect a lot of white voters think the incentives of an all-cash family policy for those communities would be... suboptimal.
Except, as Ruxandra Teslo writes, echoing Anna Rotkirch, research director at the Family Federation of Finland’s Population Research Institute: "there is no obvious policy-level explanation for the European country with the highest birth rate - France" (https://www.writingruxandrabio.com/p/culture-over-policy-the-birth-rate). Not to say it's hopeless, and she argues otherwise in the rest of her piece (as does Zvi in the pieces MondSemmel linked). Nonetheless it is not simple, and I am very pessimistic, as industrialized countries have struggled just to claw back a tiny fraction of our premodern birth rates.
I don't care about TFR. What I do care about is the reality that productive abilities are more broadly distributed in the population than income is. It's bad for the future productivity of the nation to be constrained by the luxury childcare preferences/economic indifference of the electorate.
Ezra just did a podcast on how Sweden provides a heavenly level of benefits compared to the US and still hasn’t managed to raise its birth rate more than one-hundredth of a kid above ours; that’s what, a . The route to more naturally born citizens does not run through increased parental/childcare benefits.
I think that's the wrong comparison. Sweden's TFR is well above the European average. So unless there's a specific reason to think they're more culturally similar to the US than to the rest of Europe, the spending does seem to have an effect.
Yeah, it certainly seems like a deeply shady assumption to say that Sweden's natural TFR is equal to America's, and the marginal effect of their natalist policies is +0.01 TFR.
My general impression of Sweden is that it's very culturally different from America, and kind of nihilistic.
Population aging is a consequence of things that most of us— correctly— consider desirable (economic growth, medical technology improving, lengthening lifespans), but it really has created a bunch of tough political problems. I’ll be interested in seeing how Japan and South Korea try to handle it; they’re the closest to having population pyramids which break everything.
Yes. So we need to figure out how to manage those pyramids with better productivity and distribution of assets. We ain't going to breed our way out of it short of handmaid's tale forced birth.
But we may need to only delay it for a few more generations before AI/robots essentially solve the problem for us (for good or bad depending on your outlook!).
"but it really has created a bunch of tough political problems."
The population aging isn't what caused those problems, it's anti-growth policy all the way down. Restricting supply and stimulating demand, in tandem, in many areas of the economy.
Again, as talked about a few days (?) ago in here, this is part of the reason, just like I'm sure the ordenous regulations at the corners, and that combines why our TFR in 1.67, not 1.87, but the main reason is all women in the US are far more educated (including young barely high school educated girls via 16 & Pregnant + IUD's not having as many babies), raising a baby is a tough time, especially with heightened non-economic expectations for being a good parent, plus as noted below, even programs I support as a good social democrat who believes in a welfare state, not natalism, doesn't seem to help things.
I don't think the cost of child rearing is why TFR is declining greatly basically everywhere but some African countries and among ultra-orthdox people in Israel.
As a woman, I always find these conversations really creepy. I have one kid because I want one kid. I could afford another but it would limit my career options, free time, public engagement, and time that I get to spend with my current child. You could offer to pay me $300 a month or $3,000 a month and I am not having another kid for you to avoid a population age distribution problem.
I think we should be supporting families with kid more because I care about the families and kids in my community and because I think supporting families and kids is a good investment in our future.
I do think that there are probably women who would be having a few more kids if there were better financial supports for both infertility treatment and parenting. But I think that is going to be on the margin. For them, great because people who want to parent should have that opportunity.
But I think we may just have to deal with the reality that in a society in which women have both free access to family planning and anything approaching economic and social equality we are going to see mostly smaller families which appears to be a widespread preference by women. Where you see big families it is mostly in areas with low rates of equality for women, limited access to birth control, and low rates of infant survival. Most women are not looking to go back to that.
So we are going to need to come up with solutions that don't involved forcing or ineffectually bribing women to birth more babies. Some of that is allowing for immigration into richer countries to spread the young around. But it probably also involves actually using increased productivity in more socially meaningful ways so that a smaller group of younger people can economically afford to support a large aging population.
Right now, our society is structured such that having kids comes with very high costs, in terms of both money and time, that are not borne by childless adults.
I don’t think of pro-natalist policy as being about bribing people to be parents. I think of it as restructuring our modern economy and society sufficiently that people are not dissuaded from having children due to these kinds of costs.
Within our existing primarily market-driven system, a person can say, “I really love to travel, so I’m not looking to have kids anytime soon.” and this is completely comprehensible and rational on its own terms.
But imagine if taxes, transfers, airline tickets, hotels, and childcare worked in such a way that the one thing didn’t really have anything to do with the other. If DINK couples and couples with young kids both went on similar numbers of vacations per year. That kind of rough equivalence is the goal as I see it, and I don’t think it requires rejecting modernity, family planning, or equality.
I guess, I just see a significant part of those costs in time and opportunity loss and lifestyle limitations as being baked into the parenting package independent of expense.
When someone says, as my of my friends do, "I don't want kids because I really love to travel," they are not primarily thinking about the costs of bringing along extra bodies in terms of airline tickets and hotel rooms. They are thinking that they want the sponiatity to travel whenever they want without regard to school vacation schedules. They want to be able to visit romantic or exotic locations without having the romance ruined by having a crying toddler at the table or having to worry about how to keep a little kid safe. They want to be able to go a museum and linger over art without having to worry about a six year old's attention span or stay out late eating dinner in Madrid without worrying about bedtime meltdowns.
Having kids necessitate a reduction in your freedom of movement and time. They are little dependent humans whose needs are going to have take priority over yours or at least be considered with them. I can't think of anything that would necessitate a larger lifestyle change than taking in a elderly parent with dementia or inviting a friend with an ongoing heroine addiction to move into your place.
The research suggests that kids actually do reduce the day to day happiness of their parents in meaningful ways even as they increase their sense of purpose, meaning, and joy. It's a real trade off. Each additional kid adds differently to each side of that scale.
The only way to have my happily childless friends not face those tradeoffs would be to give them so much stinking money that they could hire a full time nanny which doesn't seem like a viable option.
When I think about my friends who would ideally like to have kids but don't or don't have as many as they might the reasons are usually tied up with either not have stable romantic partnerships, disability concerns, or issues with fertility. There are probably some policy changes we could make that would make it easier for folks to marry and maintain marriages by reducing economic stress for everyone and we could certainly work to make fertility treatments more widely available.
But my friends who don't want kids are not going to bought at a price anyone wants to pay them and honestly probably shouldn't have kids. They love hanging out with mine but are happy to hand her back when they are done. Folks who don't find the idea of parenting joyful or enticing may just not be the right people to parent. We can find them other "it takes a village jobs." My friends who have small families also never mention cost as why they don't have more.
The only things I have heard with regard to expense and kids is folks who say they are delaying having kids because they want to buy a house or pay of student loans first. That might be a population who would parent if they could afford it but they would probably need to be bought with debt forgiveness and cheaper housing prices rather than a per child credit.
Again, all about the child tax credit because parenting is important and should be done well and money helps. I just don't see it making anything but a tiny shift in family size.
"The research suggests that kids actually do reduce the day to day happiness of their parents in meaningful ways even as they increase their sense of purpose, meaning, and joy. It's a real trade off. Each additional kid adds differently to each side of that scale."
This has been my exact experience since becoming a parent. Especially as a relatively older one who really enjoyed his day-to-day life prior to becoming a father.
Most of the declining fertility rate, I believe, is explained by smaller family sizes not childless couples. That is an easier problem to solve (though still very hard) and doesn’t squash quite so many preferences. For example, earlier family formation is highly correlated with more kids. People have their first kid at 22 are much more likely to have multiples than the recent trend of late twenties / early thirties. There are a lot of things baked into our society to delay family formation, which we should consider changing.
I’m not saying tax credits wouldn’t be part of it, but it feels like there’s a lot of non-monetary low hanging fruit as well.
How are parents’ lives different if public schools are actually trying to optimize for parental convenience, rather than mostly ignoring that as a concern? How many more people do get full-time nannies if the State Department’s Consular Bureau is instructed that their new top priority is making it maximally cheap and easy for American parents to hire an au pair?
It feels like right now there are a lot of areas where we’re just not even trying.
This ^^, as a fellow having-bred female ;P I completely agree. I would add as well that pregnancy itself is hard, I went through it once, and I am so very grateful for my one son and would never trade him for anything, but pregnancy was not overall physically easy, and my delivery was not ideal (required a C-Section and had some complications), I could not see going back through what was a very taxing physical experience on purpose - even for a refundable tax credit lol. And I was relatively younger (27 at the time), healthy and fit (not overweight or experiencing any pre-existing health conditions) - the risk of complications increases the older a woman and of course the less healthy so if it was hard for me, it's probably even more of a potential physical risk for the current generation of childbearing aged women that is overall heavier and on average older before their first pregnancy (the average I think now is around mid-30's!)
I would also add that our society is particularly not very friendly to the "post-pregnancy" body that most women will experience, even under the best circumstances, and there may be some more subliminal incentives from women not wanting to undergo the physical changes that will mark them as "less attractive" in our society - which is not just an abstract concern as these "ideals" can be very much filtered down to and expressed by their partners... It just seems that up through the Boomer generation of parents, it was a lot more common (and acceptable) to "look old" as soon as the 30's hit. I can look at photos of my parents, relatives and their peers from that era and it's very noticeable how much older adults in their 30's presented up through the 90s even than adults in their 30's present today (and it's not just the styles of the era but the big distinction between how a "mom" dressed and styled versus single women in their 20s even in the styles of that era, where now that distinction is a lot blurrier). And they had more kids (although Boomers definitely had fewer kids than their parents, my mom from a family of 9 where this was not uncommon in the 1950s had only 2, and 2-4 kids was about the norm for suburban/middle class families in the 80s I think?), which accelerated that "older" appearance, whereas today having more kids and leaning into "old" seems much less the norm. And the appearance as very much hand in hand with adapting into an "older" lifestyle habits that is also becoming more socially normed for people well into their late middle ages to continue having "fun" and "experiences" whereas for my parents in the 80s settling into the middle class "family" lifestyle was the expectation and norm, whereas now there are many other options that have been "normed" for what early-to-mid-to-late middle age can and even "should" look like (or aspire to).
Lifestyle, culture, the sheer physical difficulty of pregnancy/childbirth, appearance and attractiveness standards, yeah these are all likely pretty salient (dis)incentives that may be factoring in sub-consciously (or not) in the decisions to not have/limit child bearing that go beyond the (relatively more) simple solvable-by-policy prescriptions of the cost factors. Shallow (or not, I don't think it's shallow IMO), women don't want to be prematurely aged by their 30's, having had multiple by then pregnancies perhaps as they saw their grandmothers and mothers experienced, their partners likely also would not prefer to have (or to be prematurely aged themselves in companionship), young singles/couples enjoy having a longer young adulthood it seems with options for leisure, travel and personal/career development that childbearing necessarily interrupts (at best), etc.
Not to say we shouldn't be better subsidizing of those families that do want to have more children - we should! And particularly for the lower income end of the scale where considerations like "taking more vacations" and "looking fit and sexy at age 35" are probably not as salient disincentives for not having kids but costs really are. But it shouldn't be expected as the cure-all for an overall lower birthrate across society, as I do strongly think there's a lot of non-monetary reasons for that.
"I could afford another but it would limit my career options, free time, public engagement, and time that I get to spend with my current child."
Well, I think the point is that to the extent we can shift the American economy so that a second child does *not* reduce your "career options, free time, [and] public engagement," we should do so. It's fine to say that a tweak to tax policy can't do that, but I don't think it's justified to give up entirely on the project and assume "that in a society in which women have both free access to family planning and anything approaching economic and social equality we are going to see mostly smaller families."
I don't see how the "economy" could be shifted to accomplish this. Parenting a second child would take time from my career, free time, public engagement, and time with my current child" simply because parenting in the way most of us understand it is time consuming and time is a finite thing and choices have tradeoffs. I think the only thing that could change that really would be a change in expectations about how much time parenting requires.
Some of that could be relatively easily reduced by providing free or reduced childcare before and after school so that was more universally available. But otherwise, I think we hit up against some cultural norms that are hard to shift. I personally think it would be lovely to reduce some of the ultracompetetive norms and keeping up with the Jones parts of modern parenting.
But ultimately, I think that part of what makes parenting more time consuming is the desire on the part of both parents to spend time with their kids and having meaningful careers and lives. Some of us grew up in the first generation where a lot of mom's worked and that meant less active care than a prior generation of stay at home mom's could provide. Many of us wanted something different. We could do that by not having careers or we could do that by starting families later in life and having fewer kids.
I am a parent of an only child and was an only child. My parents both had very successful and high pressure careers. My mom in particular broke a lot glass ceilings in her profession, mostly by working twice as hard as her male colleagues. I had a good childhood and a lot of good quality time with my parents because they prioritized it. But there were still a lot of mixed school concerts, making my own dinner, and unsupervised time in my teens. If I try to imagine the attention that I got and splitting it in half, it would have been less than I needed.
I opted for a career with a more flexible schedule but still one kid so I would be as torn as my mother was. I can't imagine having two or three more and not feeling spread too thin. Frankly, I end up picking up a ton of slack for the parents of my friends who have more kids. I end up doing the carpools, chaperoning the field trips, and planning activities for lots of my daughter's friends. I don't mind but I don't feel like there is this whole untapped capacity for parenting in my world other than the ones who don't have kids at all. Folks who wanted two have two. Folks who wanted three have three. Folks who have four got hit with twins they weren't expecting.
Correction. I do have friends who want more kids than they have but that is because of fertility issues. I do think more universal access to fertility treatment would be good for many reasons and would result in more kids.
I also have friends who birthed fewer kids than they intended because they ended up adopting one or more dids out of the foster care system and took up their capacity to parent. One of my friends was planning to have two kids. She signed up to be a temporary foster parent for 18 months until the 12 year could be placed with family members who needed to prove they could stay drug free. She got pregnant and three months before she had her kids, DHSH let her know the family had failed to be in compliance and they were going to put her foster daughter up for adoption. They offered to adopt her and she said she would like that but what she was most looking forward to with going to her family was being able to live with her two siblings who were also in other foster care homes and asked if they would adopt all three of them. So within 3 months they went from having 0 kids to 4 kids aged 0, 10, 12, and 14.
I have several other friends who also signed up to foster and ended up adopting one or more kids. One adopted their first and then ended up adopting each of their siblings as they were born to their first's birth mother as her parental rights got terminated each time due to drug use. They ended up with five kids in the end without having any bio kids of their own.
These adoptive parents are all great but they face real challenges with kids who have to deal with some early life trauma or medical issues.
My overall sense is that the US ought to be doing a much better job of taking care of the kids we have now in terms of feeding them, housing them, providing them adequate medical care and mental health services, and providing them with safe communities and excellent public education before we start trying to figure out how to churn out more.
Yup, it also doesn't help that even supposed liberal-minded people who say, write books about this issue and the reason behind it, and claim don't want to shame women who don't want kids or single mothers, end up openly allying with conservatives who openly talk about their support for lessened reproductive rights and general conservative policy, because of seemingly a couple of overheated negative reviews.
I think defeatism about fertility is dangerous. It is going to cause huge problems and as you note one reliable solution is to restrict the freedom of women. Which is bad!
Increasing productivity is good in its own merits of course but “we just need to make this giant problem no longer a problem with unspecified productivity gains” doesn’t fund pensions or increase the workforce.
I think slow population decline combined with better productivity and sharing of resources is a path that has some benefits in terms of our taxing of natural resources. To the extent that is happening quickly in some places while it grows in others, I am good with immigration as a solution.
The problem is that a TFR 1.5 (Germany) or 1.3 (Japan, Italy) nothing of the .9 and falling rate of Korea, are not compatible with a slow decline nor are they holes small enough to be filled with any remotely plausible amount of migration from Africa and SE Asia (though more immigration absolutely helps and should be encouraged).
They are just a recipe for extreme degrowth and elderly poverty (which, I fear, will actually be a recipe for a bunch of rollbacks of women’s liberation and for other extreme political movements).
It’s also not great that all the nicest places in the world with good institutions have a declining relative population.
I think that Japan, Italy, and Korea are going to face some real challenges. I also think that they have sufficient wealthy and a culture of taking care of elders that they can get through this period without widespread elderly poverty. But they may have some some periods of stagnating growth or even recession until they get over their grey waves. We may also get to learn some lessons from them on how they address that.
I don't think US TFR is in the panic threshold yet especially since we are a country that has a long history of immigration to buffer us. What concerns me about the grey wave in the US isn't how distorted population groups may become but that we have a horrible system for taking care of our elderly. Private nursing homes and end of life care in a health care system that is largely profit driven leads to insane costs and not very humane outcomes. It contributes to having an aging population be an unsustainable option.
I work in elder law. The aging baby boomers are kicking the legal system in the ass right now. They have much lower rates of planning in terms of wills or durable powers of attorney which means that when they get sick or die, the court needs to make a lot of decisions on their behalf. A huge part of my workload is acting as a court investigator when the court needs to make decisions about end of life care or address fights between adult children about care options. It is weird work. It feels very strange for me as a stranger to be determining what quality of life might mean for a stranger and it is very expensive.
As a practical matter, our benefit system makes nursing home care a much easier option than in home care even when in home care would be cheaper and better.
The only plus I can see is that when this wave passes we are going to have a lot of excess nursing home space and assisted living space that we might be able to convert for hospital space and housing in areas that need it along with reclaiming a lot of underused housing that seniors are sitting on that would be better used by young families.
Genuine history question: did the Holy Roman Emperors ever claim to be *philosopher* kings? Universal monarch, sure, but never a philosopher-king I think.
It's wrong to blame declining birth rates on the cost of child rearing, birth rates are declining everywhere, even in nations that have done a lot to decrease the cost of having kids. There is very little correlation between cost and birth rate.
The "cost" is high if you define "cost" by how much of a pain in the ass we have made child rearing as a society. It is so much more work than it used to be.
- schools are closed a lot more than they used to be, and generally spend less time there.
- day care is expensive. Yes, this is a money problem, but it also thereby becomes a *time* problem. Kids in daycare less == parents working harder to care for kids
- societal expectations are whack. I don't want to be "old man yells at clouds" but it is just crazy how we do not allow kids to be alone, like, ever. When I was a kid, I walked a mile home from school alone, from the second grade on. Now we don't even let 6th graders walk alone from the house to the bus stop.
This is smart, except what are some parental benefits that have been cut in the last two decades? I can't think of any. Most of what's happening is just additional debt that could require middle class taxes to go up in the future. Policy-wise, the tax credit and tax cut is king right now. Bill Clinton and Newt Gingrich fought, Jack Kemp won.
Speaking to the piece, Matt's central argument is Democrats will create a bold new coalition to significantly raise government revenue for more social democracy. They didn't pull that off in 2009 and 2021. And if you look at the past 50 years[1], it's not clear anybody ends up doing that. Revenue has been at 17-18% of GDP for a while. It's smart to eloquently lay out the items you think your party should prioritize and the other party should not.
But Obama did the same thing in his negotiations that went nowhere, as Bob Woodward documented in The Price of Politics. At one point in the book, Biden comes to the realization that many items the Congressional Dems are asking for in a compromise do not actually have the votes in their own party. An interesting question is if the Democratic party's rhetorical move leftward on economics has made them more or less aware of that fact. The same could be said for rhetorical plays to younger culture politics and reliance on defending costly entitlements for older voters.
It's worth pointing out that the "Social Security cliff" isn't real.
If the system isn't reformed ahead of time and the trust fund runs out, Congress will not vote to make drastic cuts in current benefits. They just won't. They'll vote to use general revenue to cover the shortfall and run up the budget deficit even further.
The trust fund is a meaningless accounting fiction—the federal government is lending money to itself, which makes the balance in the fund both an asset and a liability—so there won't be any macroeconomic impact if that happens. There's no difference between running down the volume of Treasury bonds owned by the fund (which is what the shortfall does before exhaustion) and running up the volume of Treasury bonds owned by private investors (which is what it would do after exhaustion).
The reality is that Social Security funding is a long-term problem which gets gradually and continuously worse as long as you don't fix it. There may be a sudden crisis at some point if the ratio of federal debt to GDP becomes visibly unsustainable, but exhaustion of the trust fund isn't a crisis point.
Matt’s pedantry has a firmer basis. Benefits cuts are written into current law. The accounting fictions would trigger benefits cuts absent Congressional majorities choosing to kick the can. Yet we all know the can would be kicked.
That's right. The trust fund was created to provide an artificial sense of urgency about making one particular set of taxes match one particular set of expenditures. But since the real issue is the overall solvency of the federal government, it doesn't actually matter if they match. And since Congress knows the urgency is fake, they probably won't make hard decisions that they'd refused to make previously.
Worked for a bit on budget projections, this problem happens all over the place because Congress writes lots of expenditures to have an expiration date for CBO scoring reasons even though everyone knows it's a fiction and will be changed. The way the people doing the projections dealt with it was to do two different projections:
- "current law" with fake expirations
- "current policy" with realistic can-kicking included
And then just highlight the current policy projection in all your charts.
But they might. The just might. 2032 is 8 years from now, as is 2016. Think about the changes in the country since 2016. Let's not pretend we can predict the future that well. We have no idea who will be in power when we go over the cliff nor what the Republican Party will be like.
I think artificial intelligence makes this entire set of issues a lot less interesting, to be honest.
Nobody has any idea how AI is going to affect productivity growth, or life expectancy, or healthcare costs. We also don't know whether it's likely to exterminate humanity ten or fifteen years from now, or to elevate us to some unimaginable utopia within a similar timeframe.
Maybe we should be thinking about those things, rather than trying to project when the Social Security trust fund will run out.
Matt wrote one odd thing today: "[Trump's] plan is to make no changes to Social Security, run off the exhaustion cliff, and then everyone’s benefits are exhausted."
I assume that was a result of too fast writing, since Matt obviously doesn't think that (and said as much a couple paragraphs earlier).
I don't know. If it takes an act of Congress to prevent cuts then it's not hard to imagine Congress not getting it done. If there's a conservative majority in Congress at that time, I have a hard time imagining them intervening to run up the deficit further.
Every Republican congressman who allowed Social Security benefits to be cut would be voted out of office, regardless of how conservative their districts were. It would make "Dobbs" look like a walk in the park.
I think this was true in 2004, but I'm not sure about 2024. Most Trumpist seniors I've seen would happily starve in the street if it meant Trump in power and minorities worse off.
Of course it will not make much difference but I wish we WOULD agree, no champion, raising the retirement age. We should destroy the social norm of age-based "retirement" and open up space for mid-career education to make longer working careers more productive. [This could be especially beneficial to women who take (a smaller % of) time out of working life for children.]
Maybe if you're a a lawyer or coder, this sounds like a great idea, but if you've spent your whole life working as a grocery store clerk, a construction worker, or in nursing, I doubt you want another 10 years of a "productive career."
Plus, part of the reason for some of our stagnation is the Boomers won't stop bleeping working.
I half-liked your comment! The first part is spot-on. The last sentence assumes facts not in evidence -- we are not in stagnation. Our economy is the best in the developed world.
Oh, economy for lower-income and even many middle-income and such people is great! I'm all on Yglesian/Stancil thought on that.
But, there is stagnation in the middle/upper middle class seemingly, even if not directly economic, but through lots of complaints about a lack of upward trajectory in their professional lives, compared to prior generations, is because the old boss who would've died from a heart attack at 66, is now living to 80 and enjoys his job, which means your manager can't become the big boss, and you can't become the manager.
So, you may even get a raise, but you feel stuck in space, and that's something a raised retirement age will make even worse.
Meh, the stagnation seems more that people assume they can move into a role once their boss retires. If you want to be in charge of something, go start something new.
Your later comment reflects to tired old "lump of labor" view: there are only a certain number of jobs and we have to ration them out ("immigrants take 'our' jobs") or on the margin, "create" them with "jobs programs" ( to gesture to both the right and left wing version of it).
I've always preferred the idea of retirement ages being dependent on work history and the type of work. Social Security already categorizes people's work history for disability assessment, so it's not like it's beyond them to interpret someone's employment and make assumptions about how demanding the physical labor is. SSA already has a mechanism in place to determine if someone's been doing arduous labor, if they can return to that labor, and if they have transferrable skills to other jobs.
The disability process is a nightmare, but I could see some of the functional aspects of it being repurposed to determine if someone should work until 70 or not. Do they have transferrable skills to a job that isn't exertionally demanding? Can they continue their laborious job as is? No? Eligible for early retirement at 62, full retirement at 67. Yes? Early retirement at 67, full retirement at 70.
I get the idea that some people want to "retire" and even "need to" retire at 67. I just want to make it (as someone said) "fuzzy." But for sociological ground. NOT to reduce the taxes that will be needed to pay for whatever benefit we can decide on.
I love that idea. I have a recurring daydream where we create massive programs for the hiring of the capable elderly as extra hands and eyes for childcare. Maybe even a minimum wage carve out, if we’re considering unpopular policies.
Research seems to be moving in the direction of retirement being bad for health, but at the same time there are so many jobs that you just can’t (or don’t want) to keep doing. Meanwhile we’re suffering from a lack of affordable childcare, a loneliness epidemic that hits the oldest people hardest, and we’re struggling at the margins to subsidize retirement. Seems to me it would kill three birds with one stone.
That could be one dimension. But I also want to see more years of engagement with conventional jobs, though perhaps with more flexibility/less than top lifetime pay.
"Raising the retirement age" is a deeply misleading phrase. Currently, Social Security can be taken starting at 62, and the maximum benefits are available if you wait until age 67. The RSC proposal (and everything else that uses that phrase) is about changing 67 to a higher number, which is functionally a benefit cut for anyone who retires from 62-67. No one has proposed (that I know of) to raise the minimum age from 62. Furthermore, because both retirement and Social Security enrollment are complex and significant financial decisions, they do not always happen at the same time -- many people retire before taking Social Security, people keep working while on Social Security, people enroll in SS and Medicare at different ages, etc.
The "retirement age" is a cultural notion (AARP allows you to enroll at age 55). Cutting Social Security benefits is not going to change it meaningfully.
>> and the maximum benefits are available if you wait until age 67
As I understand it, 67 is considered full retirement age, but retirees get maximum benefits by waiting until age 70 to start receiving benefits.
I believe the way it works is that every year they delay starting benefits between full retirement age and age 70 increases their lifetime monthly payment by 8% (adjusted for inflation) versus starting benefits at their full retirement age.
I agree. I'm talking about changing norms, which could be reflected in 67 gradually increasing. And the norms include both worker expectations and firm's policies. This is related to the issue of falling fertility rates and possible disruption of careers by AI. The desirability of reducing the part of the defect coming from Social Security is just a nice hook.
And 55 is a perfectly reasonable time for people to leave the damn workforce for a younger person to take their job. There should be full benefits at 55, but also mandatory retirement then. The less one has to work for money during one’s life the better
Why are young people more worthy than old? Who decided 55 is "old"?
I am guessing that the answer to the second question is that you did, and is highly correlated to why you, who are younger than 55, think that those older than you are less worthy to work.
Perhaps we should have full social security for those who want to retire at any age in the form of an incredibly generous UBI then. I just know I don’t want to be forced to work at all, much less when my health is starting to fail. Plus it’s more important for those with young families to have jobs, at least for a breadwinner, than those without.
"Screw that old people working keeps the young out of jobs."
As Thomas Hutchinson pointed out elsewhere in the thread, this is the lump of labor fallacy. An old person working doesn't "keep the young out of jobs"; it means the young need to develop different skills from the previous generation so they don't have to compete with them.
The problem there is that white collar voters are (generally speaking) the most politically influential class of voters since they are more likely to vote, more likely to donate money, and more likely to actively lobby their elected officials.
True, but pissing off some of the electorate is better than pissing off all of it, and maybe class resentment would even win you some votes. It's probably true that the most successful white collar workers would be the most against it but fwiw a few years of SSN income is trivial for many of those people.
The thing about the retirement age is it doesn't directly stop you from working, it just stops you from taking benefits that *could* replace your income.
Very successful white collar workers who either love their jobs or have plenty of money are the least effected by changes in retirement age.
A 65 year old school secretary is a different matter, she (or he) probably wants to stop working but needs the income. For a 65 year old partner at a law firm a couple years of SSN income don't matter.
Let's just raise the cap on taxable earnings first. Then, down the road and if we're still in a hole, maybe then we can talk about changing the retirement age.
The problem as some other people have noted here is that we're close enough to running out the SS surplus that lifting the cap on taxable income only pushes the date of insolvency back by a short period of time. (If it had been done a couple decades ago, it would have extended the insolvency date far more.)
I used to think this was a terrible idea politically, because it'd turn SS into a 'welfare' plan instead of an entitlement, but old people vote anyway, but I'd still want this to be a "hard" compromise that a future Democratic President has to make after a Republican congress makes him, not something a Democratic trifecta agrees too.
SS has always been welfare. It is an income transfer from currently working people to formerly working people. Politicians just lie about what people put in is what they get out.
Oh, I agree - I just necessarily don't trust the voters to be OK with their Social Security now being welfare, especially if the GOP can try to attack it. In a perfect world, yes, it's welfare, and that's a good thing.
That’s nuts. The retirement age should be, like, 41, because I just turned 41. Who on earth wants to have to work in their 60s? It’s unacceptable for a modern society and that’s what the money printer is for
Doesn't that require a job market that wants to hire and retain older workers though? Age discrimination is a real thing for workers starting in their 50s across the board. In white collar/corporate/office type jobs they either become too costly salary-wise when employers start weighing the trade-offs of letting them go and hiring an entry level college replacement for much less and managing the experience gap, and then there's the company health plan where age is one of the few rating variables allowed (and having more older workers on a plan means it costs more for everyone). In other jobs and professions it's a physical ability issue if the job is manual labor or otherwise physically demanding - even in professional jobs, like, do you want to be operated on by a 75 year old surgeon with arthritis and shaky hands, even if they're mentally "on top of their game"? Do we want 70 year old cops doing beat duty?
It does nothing other than shift the costs off the government's books to make some policy decision about holding back full SS benefits until age 72 or whatever they want if employers overall do not want to hire 72 year olds to work for them or keep workers on the job until they're 72. And there are very strong market signals that we have from the past decades that employers barely want to hire and retain 65 year olds, so what do we expect will happen by raising the retirement age other than helping the government's books, but offloading the cost of that onto a demographic share that will just have their most precarious employment years extended (and while the cost of their health care in particular will dramatically increase during this time - which is another consideration, what's the over under on how private insurers will rate private health care plans before a Medicare age of eligibilty into the 70s??) before they can "fall" into the safety of SS and Medicare - and that's even if they have private savings, which they now run through in that precarious time (if allowed to tap) which will make them even more dependent on Medicare and SS when they finally do qualify.
I agree that this is more than just "raise the retirement age. Paying (less) for (declining) performance is fine. It's a mind set I'm talking about. Firms ought to actually manage worker skills. not just the birthdays. But as lifespans have increased, presumably too has peromant of the oldest workers. Oh of course the crazy US system of having employers buy health insurance for their workers is a problem.
"Critics sometimes analogize Social Security to a “pyramid scheme” which I think is unfair"
It owns no revenue-generating assets except US gov't debt with almost no returns. It relies on funding from future contributors to pay current contributors. It's not a scam, it's upfront about what it's doing, but of course it's a pyramid scheme in structure.
Honestly, the best solution historically would have had nothing to do with taxes or benefits. It would have been to make the trust fund instead be a sovereign wealth fund investing in assets that generate actual returns. There's no reason whatsoever that "15% of everyone's income up to >$160k" shouldn't be enough to provide a much *higher* level of benefits to everyone than we currently have. Even for an individual, that's a high enough contribution rate to replace your entire (non-retirement-fund-contribution) income in retirement, assuming 8% average investment return and a 40 year working life. Pension funds can usually do better for lots of reasons. The $1T that was in the trust fund in 2000, properly invested, would have been worth $1T/yr in 2032, aka around 70% of current total social security spending.
At this point it's likely too late for that to push back the 2032 date too much.
I think the sovereign wealth fund could make a killing here. For example, it could put a lot of money into, say, Lockheed Martin and then -- amazingly! -- Lockheed Martin wins the next big fighter jet contract and its share value soars!
Of course, the government could sue itself for insider trading.
Even that would basically just be a weirdly distributed stimulus package, putting lots of money in the hands of lawyers and paying itself fines to build up the treasury.
Now I'm wondering what would've happened if we'd responded to the dearth of 2009-era "Shovel ready" projects by hiring a bunch of lawyers to sue everyone doing something wrong.
A sovereign wealth fund may make sense for smaller countries because it would largely be invested in the overall world economy. A US fund would be mostly invested in the US economy and, thus, dependent on US economic growth. But that is equally true of the tax system.
It isn't a pyramid scheme because no one has a right to the funds they paid in. If you pay in for 40 years and die at age 60, then you get nothing back. That's why it's correctly characterized as a form of insurance, specifically insurance against living longer than expected and thus having more living expenses than expected. It may be the case that the actuarial calculations for this insurance program as presently run don't add up, but they could be made to add up, with or without subsidies. There's no reason why the program would be necessarily doomed to collapse, whereas a pyramid scheme is inherently doomed.
Yes, legally no one has a right to the money they put into social security, or to anyone else's money in the future. It's all very public, how it's organized, and not illegal in any way. Everyone *should* know that they're paying today for someone else's benefits, not for their own benefits in the future.
A large fraction of people, though, *don't* know that. 80 years of rhetoric to the contrary isn't law, but woe betide anyone who actually has to make those possibly-necessary changes. Once multiple entire generations have organized their life plans and lifetime savings strategies around a program's existence, it might as well be law for practical purposes. Hence all the can-kicking.
But just to be clear, following your reasoning: If I were running an actual pyramid scheme, but had fine print where I technically reserved the right to just tell people "Sorry, no more payouts," it would no longer be a pyramid scheme? Because it wouldn't be necessarily doomed? I don't buy it. I suspect that wouldn't save a private actor in court. I think that would come down to the degree to which the person running the scheme deliberately deceived those giving them money, both about what they're doing and about future expectations.
I guess the private sector equivalent would be if you ran a charity which took donations to give cash grants to people who need them. Nothing wrong with that! But constantly talking about how the same program will be there for those people in the future, without actually making preparations to shore up the economics to ensure that? Not the same thing!
They do, but not everyone has a surviving spouse. The point still stands, that this is an insurance program where getting benefits is dependent on meeting the terms of the policy. It isn't a property right the way an investment is. A pyramid scheme is only a pyramid scheme because every investor in the scheme has been given a property right. If that feature isn't present, then it is by definition not a pyramid scheme. It may or may not be a well-designed insurance program, but it is an insurance program.
You’re assuming facts not in evidence. The US is so large and so rich it very much remains to be seen if global markets could absorb that kind of capital.
I agree that trying to invest $1-3T at once would be very hard to absorb, but by 2000 we'd been building the surplus up gradually for decades, at a rate of <$200/American/year. It seems... unduly pessimistic to think the market wouldn't be able to find productive uses for an extra $40-80B/yr. That'd be roughly equivalent to saying, "If the average American family skipped a long weekend vacation a few hours drive away once a year, and put the difference in savings, global market returns would be substantially lower, and after 40 years the market still wouldn't be able to adjust and make use of the increase."
Considered another way, total global wealth was around $450T in 2000, and the trust was $1T, so we're talking a quarter percent difference in total wealth at that time? Still <1% if we only look at stocks and bonds instead of total wealth?
There are several sectors today that I'm confident could absorb tens of billions in investment a year, each, especially if they had a couple of years warning it was coming. And even if not, frankly, why is it the US government's problem if world market returns are slightly lower than they would be counterfactually?
Also, in the world where social security was well managed and invested like a large pension plan, we'd plausibly also see somewhat less private retirement savings, and increased spending, but I'm less sure of that.
“ There are several sectors today that I'm confident could absorb tens of billions in investment a year, each, especially if they had a couple of years warning it was coming.”
We’re talking about $1.6 trillion a year which is nearly double the Norwegian Sovereign Wealth Fund. Double! Per year being injected into global capital markets. And I assume we’re investing in all global markets? Argentinian cattle ranches, Indian power plants, Chinese electric car manufacturers…? Russia? Because if your limiting it to only our strongest allies or especially domestic markets then the problem is even bigger.
Per year? The social security trust fund is <$3T, total, currently. Over time, we've been putting tens of billions of new savings into it annually to get to that point.
Yes, if we'd been investing it all in the market since 1980 we'd now be increasing the size of the fund by about $1.5T annually as of 2024. This is equivalent to suggest US GDP could be 6% higher today if we'd had better economic policy since Reagan took office. Some of that would be due to growth, some would be due to us owning more of the rest of the world, and some would not happen due to lower world market returns. In all three cases the US is in a better position than it actually is, and the world as a whole would be net richer.
Did you mean a simple one off conversion of the trust fund to a sovereign wealth fund? 3% of 9T is $270billion that’s not nothing but it’s not all that much in terms of federal budgeting.
Sorry for not being clear. I meant, I think this is how we *should have* been handling the trust fund all along since it began, and/or how we should handle it moving forward for new money going into the fund. If we were to convert the current trust fund to a wealth fund, I agree that it would need to be done carefully and judiciously, not just dumping trillions into the market all at once willy-nilly.
Military: "You're going to give us money, and we're going to hire people to do a thing we need done."
Medicaid: "You're going to give us money, and we're going to spend it on goods and services for someone else."
Social security: "You're going to give us money, we're going to give it to another group of people who we took money from in the past, and you can hope that when you're old or disabled we'll still be doing that, but in public we'll talk about it as if it's a pension fund."
Also: There is government spending on revenue generating assets. Just not much of it, and most of it generates revenue for the public through externalities instead of profits flowing straight back to the government. And many assets that generate some revenue still operate at a loss, often intentionally.
How did social security begin? Did it really start with no one collecting benefits, and people paying in while it built up a trust, until the people who paid in started retiring? With twenty years until anyone had paid in the full twenty years to collect full benefits?
No, people started getting paid benefits almost immediately after the program launched. (My recollection is that the first recipient only paid into the system for a few weeks and then collected benefits for like 20+ years before their death.)
This. It was 1937, part of the New Deal, and a lot of people who were too old to keep working and couldn't have found employment needed help immediately.
Yes, and I think until quite recently almost all of the shortfall was due to the system initially paying out much greater benefits vs contributions to those first retirees
Reading about Republicans' desire for huge cuts to low income health care, I couldn't help but reflect on how good they are at keeping quiet about their unpopular ideas, the exact opposite of the Democrats. I mean, just imagine a bizarro universe where there was a large activist class of young Republicans who held tremendous sway at universities, legacy media, and prestigious institutions more generally. Any time someone on their side suggested easing up on proposed cuts to Medicaid, they screamed at that person and called them a Communist, socially and professionally shunning them. At the same time, Democrats focused heavily on advertising their support for things like affordable childcare and a living wage, while keeping any support for de-facto racial quotas, banning gasoline-powered vehicles and making it very difficult to purchase firearms on the DL.
Vocal young educated Republicans who take serious policy stances actually are pretty repulsive to normal people— Blake Masters is pretty representative of the type— but there just aren’t many of them. (Smarter conservative-leaning young people tend to focus on just making money.) The downside for the Rs is that this deficit makes it much harder for them to construct policy and staff government with people who will advance their interests.
The difference is the number of people who want say, Mediciad cut to ribbons or the ability to spill pollution into rivers are very small, but they're powerful, and know the politicians directly, so they can be assured the politicians are on their side.
OTOH, the people who want various things you think are unpopular or bad ideas are less connected to power and don't trust the poltiicians will pass what they want, so they have to be loud and pressure the Democrat's.
Also, the GOP has laid out these plans concretely before - but as the Obama team would tell you in 2012 when they showed people the Romney/Ryan plan, low-info voters literally didn't believe it was true.
There are lots of odious Republican activists out there but Democrats are terrible at playing offense and attacking, while Republicans and their noise machine is great at the game of politics (and terrible at governing).
Also, this. GOPers say plenty of crazy things, but even MSNBC is less partisan than FOX News, and there isn't a whole completely partisan left-wing interconnected heavily funded by rich people group of organizations with massive reach.
Like, I know progressives are a punching bad here. But, even folks like Hasan, Chapo Trap House, The Young Turks, Majority Report, and so on are basically all listener/viewer supported for the most part, while The Daily Wire has tens of millions of dollars of right-wing backing and that's just one group. That's not even getting into Prager U, and so on.
If instead of reactionary to fascist politics, those billionaires got behind spending hundreds of millions on Larry Hoganism or Charlie Bakerism, the GOP would be the LDP of America.
1. Spend a disproportionate amount of the budget on medicare and social security
2. Wage earners are taxed and parental benefits are cut to pay for this
3. People feel it's too expensive to have kids
4. The electorate skews older and votes for more spending on medicare and social security
5. And the cycle repeats
So own the libs by increasing immigration. And with a bigger tax base, we make social security solvent without having to significantly increase taxes or cut parental benefits. Thereby, increasing U.S. citizen birth rates.
Yeah that's my preferred solution.
Owning the libs to do liberal things is generally a good approach to policy.
Throwback to Matt's blog days at The Atlantic:
https://www.theatlantic.com/politics/archive/2007/07/whig-measures-and-tory-men/43273/
Yeah, I really don't understand the Republican stance against almost all immigration since immigrants from many countries are more likely to be conservative
Conservatism is substantively against changes in the population composition, even if the new people are conservative in their own ways.
People have legitimate concerns about changes in culture. All people everywhere have this concern. It is not just an American White Nationalist concern. My guess is it goes back a very long time and is embedded in our tribal instincts. It is rooted in a very deep instinct for survival.
Hint: skin color
Neither party seems to understand this. Don't know why.
How much is Biden's controversial asylum legal immigration reducing entitlement costs by? I feel like I would've heard him brag about it by now if it was a big number...
It doesn’t reduce costs at all - it just increases revenue and keeps the actual costs (which remain unchanged) affordable for longer.
I should've said shortfall instead of costs, thanks for clarifying. But my question remains what fraction of that shortfall is being fixed by Biden's move.
I agree with this broadly, but given the wage structure of our current immigrants, it is not true in a broad sense. Yes, more immigrants will help SS and Medicare/Medicaid, but given the wage structure of our current immigrants, the total costs exceed the total benefits for about a generation. This is one reason you see states (who actually fund the services used) freaking out about immigration, even (or lately especially) blue states.
I would like to see more immigration (a lot more actually) but balance it so that it allows more highly skilled immigrants who will make above median wages and roughly the same amount of lower-skilled immigrants. We need more people, period. This approach would also lessen income inequality, and I suspect it would introduce a less conservative political balance. It would also increase the benefits of immigration to lower skilled US workers by increasing demand for their skills, further decreasing income inequality and potentially building support for more immigration.
Unfortunately, I do not see this happening as Republicans are generally opposed to immigration, and the democratic political base of upper-middle-class professionals has been resistant to allowing people with comparable skill sets into the country.
The amount of immigration needed to fix the problem would be unacceptable to about 80% of the population
It’s not just spending, it’s regulation too. Retirees are less likely to support pro growth regulation because they have far less participation in the upside. They’re gonna be impacted by the disruption of building that new semiconductor fab but they’re not gonna get a job working there or even live to see the majority of the economic benefit it will provide for the community.
The biggest example is housing imo.
Not only do they not support growth but they believe they have the greatest standing in being against it. I’ve lived in this community for 35 years and….
A lot of it is status quo bias. Older people have already went through a lot of existing hoops, and reforming various regulations puts them in a position to be worse off.
Now, if those laxing of regulations makes it so that there is more wealth around, people feel like starting up families and working more, then the case is obvious that the old would be better off.
I agree that some regulations can support growth - by building confidence in new, unknown technologies or procedures - but in what sense is building a semiconductor fab "pro growth regulation"? Did you mean *removing* regulations, like land use? Or were those two different thoughts? (And it's hard to imagine seniors objecting to the regulations I'm talking about here).
I think the main problem is housing, not income transfers.
Yeah my thinking is you're right
Ok, but how elastic is fertility to parental allowances. Don’t most of the European countries with child allowances have low fertility? Would $350/monty really make you want to go out and get someone pregnant?
Reposting an earlier comment (from https://www.slowboring.com/p/sunday-thread-49d/comment/51365554 ):
Zvi has looked into the topic of whether government policy can increase fertility, and IIRC his conclusion was that it was definitely possible in principle, but that governments typically don't make efforts commensurate with the size of the problem. See here: https://thezvi.substack.com/p/fertility-rate-roundup-1 and https://thezvi.substack.com/p/fertility-roundup-2
Quote: "The core point here is merely to illustrate that yes, government policies absolutely can increase birth rates, and can do so at reasonable prices. Prospective parents choosing how many children to have, or whether to have children at all, very much respond to incentives about what their lives and finances would look like."
“Would $350/month really make you want to go out and get someone pregnant?”
I’d do it for free.
We really need more female commenters here on Slow Boring.
I don't want to attempt to speak for them but . . . . ewww.
Yeah, I'm gonna go ahead and second that.
I find it very weird that that Ken in MIA's comment is what's getting the pushback. David Abbott's comment was the creepy one.
It was a ferocious battle for first place. I think the making it personal pushed Ken's into the winner's circle.
Am I *that* hideous?
Stop digging that hole, Ken.
yeah
Boy's club hyuk hyuk sex joke nonsense like this always just makes me think of dogs going around pissing on streetlamps and fire hydrants to mark their territory.
If I may speak in my own defense, I found David A's idea that men "go out and get someone pregnant" funny, but unintentionally so. If I was marking my territory, it was only to say, hey, bud, I write the punchlines here.
This is the whitest, most middle class comment I've ever seen on SB (with Ben's being #2).
Re the female commenters or lack thereof, I’m curious how much this has been a topic of discussion behind closed doors in meetings of SB management
Basically every online forum in the world that isn't about a female-coded topic is heavily male.
Men love to share opinions!
It's not that forums have to be female-coded. They just have to be female-dominant. I'm in plenty of forums or online social circles for gender-neutral interests (genre fiction, art, outdoor activities, etc.) that are female-dominant, but usually they were started by a woman or had a big female userbase early on that generated some gendered momentum.
The politics forums tend to be male unless female-coded, though - but female-coded tends to be about schools or reproductive rights or healthcare, and those are all pretty big topics people get passionate about.
I'm a female subscriber! But not a commenter. I love sharing my opinions in real life. On the internet? Not so much.
Socialist! : D
That really is the biggest complaint about Ken, around here. Too much goddamn socialism.
I know! It's like KEN stop talking about dialectical materialism and the inevitable failure of the capitalist class!
Charity is not socialism.
A weird half-baked idea that I have is that we should have a massively generous child tax credit (like $10K+ a year or something) but it should be non-refundable. It won't incentivize people to have kids they can't afford and would be a net transfer from childless adults to parents.
Always want to hear more half baked ideas in the comment section
Isn't this exactly the opposite of proposals to extend and enhance the Child Tax Credit (i.e., making it more refundable)?
I've read so much commentary about how the pandemic-era expanded Child Tax Credit was an unparalleled way to end child poverty, without even mentioning the possible negative consequences it might have for child-bearing behavior.
income and education are negatively correlated with fertility (because opportunity costs)
How much is choice based around opportunity cost and how much is way fewer unplanned pregnancies?
seems like those are endogenous
Much better to prevent the poor, dumb, or shitty from having children via legally mandated sterilization or abortion.
France and Sweden have much more generous family benefits than the rest of Europe and they also have non-catastrophic TFRs, although still below replacement. I think the Occam's Razor approach to declining fertility is to spend as much as France before seeing if other steps are needed. (The benefits would be expensive, but the US doesn't have a value-added tax so bringing one in would be an option for financing them.)
According to Ezra’s guest in a recent podcast episode the TFR for the US is 1.66. The TFR for Sweden is 1.67. Is that an improvement we should shoot for? How much should we spend on it?
That was an interesting episode! But it really just cemented the fact that the factors driving lower birthrates in developed economies are so deeply multifaceted and seemingly non-solvable.
There are so many different factors in play, you can't just isolate one. For example, the religiosity of Americans probably cancels out some of the effects.
In that case I consider it a little weird that the Swedish rate so closely followed ours from 2015-today despite our significant cultural differences.
But do you think that Sweden’s policies (visavi the US) only adds up to a 0.01% increase in TFR? That sounds weird. I think it increases it (a bit) more but there are other factors which increases US fertility.
I don't think we should be doing it to improve the birth rate. I think we should be doing it out of concern for kids and families. That episode also discussed how little we seem to care for you g families - not just financially, but culturally - than peer countries.
Desired fertility rate is a thing and building a society that doesn’t care about it causes real people real pain. Native-born American women deserve to have the children they want to raise and we should prioritize ways that allow them to do so.
1.67 sounds pretty good for me tbh. It’s generally too cold to fk in Sweden anyway, so maybe climate change will help their fertility
I just googled, and the Swedish allowance is 1250 kroner (~$120) a month.
They also have free public child care, which must cost a lot more. (I don't think that's the right approach; it should all be cash so parents have freedom of choice.)
A cash benefit of $1000 per month for every child under 18 would cost a little over 3 percent of GDP. Since the US is a low-tax country with no VAT, that could easily be done if the political will existed. And I think it would virtually wipe out poverty among families with children, not to mention making the old-age programs more solvent.
There's no other type of welfare state expansion that could potentially get buy-in from the right, so this is worth pushing
"I don't think that's the right approach; it should all be cash so parents have freedom of choice."
The Swedish Christian Democratic Party still advocates for - and managed to implement once in the past - giving a lump sum of money to parents which they can spend on kindergarten or on themselves to stay at home with the kids, but it was abolished (rightly so IMO) since the left thought it was bad for women (more women staying home which affects all women's career opportunities and makes some women dependent on their husbands for pension etc) and the right thought it was bad for the economy since it kept many women from participating in the work force.
lol I love how a policy where some women choose to stay home with their children is labelled “bad for women” and required changing to remove this choice and put a thumb on the scales of women going back to work and having someone else care for their child. I think feminists should take a hard look at themselves if they favour this position.
OECD data on "family policy" expenditures as a share of GDP:
https://data.oecd.org/socialexp/family-benefits-public-spending.htm
France comes in at just under 3 percent, with Sweden at 3.4. So these wouldn't be crazy levels of spending, especially for an economy that's already lower-tax than Europe's.
Totally agree, and my kids are mostly grown. I know so many people who miss days of work because of child care issues. On the lower end of the income spectrum, this means people losing their jobs, high turnover, etc. it seems like a program for under 5s would be good for business too.
I would love to see the program also pay for training and certification of child care workers. There are not enough people doing this job, and it is something that would not take a lot of training to give people interested in working with kids a way to a job. With subsidized care, those jobs might be more stable, too.
You could structure it a lot of different ways. (I think benefits should be much higher for the first child than for subsequent children, because it's with the first child that women's lifetime earnings take a huge hit. And they should probably be higher in the first few years than afterwards.)
I just wanted to put a number down that shows the right order of magnitude for total spending. Three percent of GDP is what France and Sweden allocate, and it does seem to make a significant difference to the birth rate.
What's the native born birth rate compared to immigrant birth rate in those countries?
I think the gap in Sweden is pretty large. They have a sizable Muslim underclass due to their generous asylum policies in the past.
This may be one reason they've stuck with the free public daycare. It's not worth anything to a family where the mother stays home, so one effect is to encourage migrants to adopt more Scandinavian gender norms.
I suspect a lot of white voters think the incentives of an all-cash family policy for those communities would be... suboptimal.
Except, as Ruxandra Teslo writes, echoing Anna Rotkirch, research director at the Family Federation of Finland’s Population Research Institute: "there is no obvious policy-level explanation for the European country with the highest birth rate - France" (https://www.writingruxandrabio.com/p/culture-over-policy-the-birth-rate). Not to say it's hopeless, and she argues otherwise in the rest of her piece (as does Zvi in the pieces MondSemmel linked). Nonetheless it is not simple, and I am very pessimistic, as industrialized countries have struggled just to claw back a tiny fraction of our premodern birth rates.
I don't care about TFR. What I do care about is the reality that productive abilities are more broadly distributed in the population than income is. It's bad for the future productivity of the nation to be constrained by the luxury childcare preferences/economic indifference of the electorate.
Ezra just did a podcast on how Sweden provides a heavenly level of benefits compared to the US and still hasn’t managed to raise its birth rate more than one-hundredth of a kid above ours; that’s what, a . The route to more naturally born citizens does not run through increased parental/childcare benefits.
I think that's the wrong comparison. Sweden's TFR is well above the European average. So unless there's a specific reason to think they're more culturally similar to the US than to the rest of Europe, the spending does seem to have an effect.
Yeah, it certainly seems like a deeply shady assumption to say that Sweden's natural TFR is equal to America's, and the marginal effect of their natalist policies is +0.01 TFR.
My general impression of Sweden is that it's very culturally different from America, and kind of nihilistic.
"Songs from the Second Floor" is one of my favorite films. But you can see how those people might just give up on reproducing the human race
Population aging is a consequence of things that most of us— correctly— consider desirable (economic growth, medical technology improving, lengthening lifespans), but it really has created a bunch of tough political problems. I’ll be interested in seeing how Japan and South Korea try to handle it; they’re the closest to having population pyramids which break everything.
Yes. So we need to figure out how to manage those pyramids with better productivity and distribution of assets. We ain't going to breed our way out of it short of handmaid's tale forced birth.
But we may need to only delay it for a few more generations before AI/robots essentially solve the problem for us (for good or bad depending on your outlook!).
"but it really has created a bunch of tough political problems."
The population aging isn't what caused those problems, it's anti-growth policy all the way down. Restricting supply and stimulating demand, in tandem, in many areas of the economy.
(A) key error here is that it is wage earners rather than consumers that are being taxed. Substitute a VAT for the wage tax.
Plus deficit drag on growth contributes to fewer kids.
"3. People feel it's too expensive to have kids"
Again, as talked about a few days (?) ago in here, this is part of the reason, just like I'm sure the ordenous regulations at the corners, and that combines why our TFR in 1.67, not 1.87, but the main reason is all women in the US are far more educated (including young barely high school educated girls via 16 & Pregnant + IUD's not having as many babies), raising a baby is a tough time, especially with heightened non-economic expectations for being a good parent, plus as noted below, even programs I support as a good social democrat who believes in a welfare state, not natalism, doesn't seem to help things.
I don't think the cost of child rearing is why TFR is declining greatly basically everywhere but some African countries and among ultra-orthdox people in Israel.
As a woman, I always find these conversations really creepy. I have one kid because I want one kid. I could afford another but it would limit my career options, free time, public engagement, and time that I get to spend with my current child. You could offer to pay me $300 a month or $3,000 a month and I am not having another kid for you to avoid a population age distribution problem.
I think we should be supporting families with kid more because I care about the families and kids in my community and because I think supporting families and kids is a good investment in our future.
I do think that there are probably women who would be having a few more kids if there were better financial supports for both infertility treatment and parenting. But I think that is going to be on the margin. For them, great because people who want to parent should have that opportunity.
But I think we may just have to deal with the reality that in a society in which women have both free access to family planning and anything approaching economic and social equality we are going to see mostly smaller families which appears to be a widespread preference by women. Where you see big families it is mostly in areas with low rates of equality for women, limited access to birth control, and low rates of infant survival. Most women are not looking to go back to that.
So we are going to need to come up with solutions that don't involved forcing or ineffectually bribing women to birth more babies. Some of that is allowing for immigration into richer countries to spread the young around. But it probably also involves actually using increased productivity in more socially meaningful ways so that a smaller group of younger people can economically afford to support a large aging population.
Right now, our society is structured such that having kids comes with very high costs, in terms of both money and time, that are not borne by childless adults.
I don’t think of pro-natalist policy as being about bribing people to be parents. I think of it as restructuring our modern economy and society sufficiently that people are not dissuaded from having children due to these kinds of costs.
Within our existing primarily market-driven system, a person can say, “I really love to travel, so I’m not looking to have kids anytime soon.” and this is completely comprehensible and rational on its own terms.
But imagine if taxes, transfers, airline tickets, hotels, and childcare worked in such a way that the one thing didn’t really have anything to do with the other. If DINK couples and couples with young kids both went on similar numbers of vacations per year. That kind of rough equivalence is the goal as I see it, and I don’t think it requires rejecting modernity, family planning, or equality.
I guess, I just see a significant part of those costs in time and opportunity loss and lifestyle limitations as being baked into the parenting package independent of expense.
When someone says, as my of my friends do, "I don't want kids because I really love to travel," they are not primarily thinking about the costs of bringing along extra bodies in terms of airline tickets and hotel rooms. They are thinking that they want the sponiatity to travel whenever they want without regard to school vacation schedules. They want to be able to visit romantic or exotic locations without having the romance ruined by having a crying toddler at the table or having to worry about how to keep a little kid safe. They want to be able to go a museum and linger over art without having to worry about a six year old's attention span or stay out late eating dinner in Madrid without worrying about bedtime meltdowns.
Having kids necessitate a reduction in your freedom of movement and time. They are little dependent humans whose needs are going to have take priority over yours or at least be considered with them. I can't think of anything that would necessitate a larger lifestyle change than taking in a elderly parent with dementia or inviting a friend with an ongoing heroine addiction to move into your place.
The research suggests that kids actually do reduce the day to day happiness of their parents in meaningful ways even as they increase their sense of purpose, meaning, and joy. It's a real trade off. Each additional kid adds differently to each side of that scale.
The only way to have my happily childless friends not face those tradeoffs would be to give them so much stinking money that they could hire a full time nanny which doesn't seem like a viable option.
When I think about my friends who would ideally like to have kids but don't or don't have as many as they might the reasons are usually tied up with either not have stable romantic partnerships, disability concerns, or issues with fertility. There are probably some policy changes we could make that would make it easier for folks to marry and maintain marriages by reducing economic stress for everyone and we could certainly work to make fertility treatments more widely available.
But my friends who don't want kids are not going to bought at a price anyone wants to pay them and honestly probably shouldn't have kids. They love hanging out with mine but are happy to hand her back when they are done. Folks who don't find the idea of parenting joyful or enticing may just not be the right people to parent. We can find them other "it takes a village jobs." My friends who have small families also never mention cost as why they don't have more.
The only things I have heard with regard to expense and kids is folks who say they are delaying having kids because they want to buy a house or pay of student loans first. That might be a population who would parent if they could afford it but they would probably need to be bought with debt forgiveness and cheaper housing prices rather than a per child credit.
Again, all about the child tax credit because parenting is important and should be done well and money helps. I just don't see it making anything but a tiny shift in family size.
"The research suggests that kids actually do reduce the day to day happiness of their parents in meaningful ways even as they increase their sense of purpose, meaning, and joy. It's a real trade off. Each additional kid adds differently to each side of that scale."
This has been my exact experience since becoming a parent. Especially as a relatively older one who really enjoyed his day-to-day life prior to becoming a father.
Most of the declining fertility rate, I believe, is explained by smaller family sizes not childless couples. That is an easier problem to solve (though still very hard) and doesn’t squash quite so many preferences. For example, earlier family formation is highly correlated with more kids. People have their first kid at 22 are much more likely to have multiples than the recent trend of late twenties / early thirties. There are a lot of things baked into our society to delay family formation, which we should consider changing.
I’m not saying tax credits wouldn’t be part of it, but it feels like there’s a lot of non-monetary low hanging fruit as well.
How are parents’ lives different if public schools are actually trying to optimize for parental convenience, rather than mostly ignoring that as a concern? How many more people do get full-time nannies if the State Department’s Consular Bureau is instructed that their new top priority is making it maximally cheap and easy for American parents to hire an au pair?
It feels like right now there are a lot of areas where we’re just not even trying.
This ^^, as a fellow having-bred female ;P I completely agree. I would add as well that pregnancy itself is hard, I went through it once, and I am so very grateful for my one son and would never trade him for anything, but pregnancy was not overall physically easy, and my delivery was not ideal (required a C-Section and had some complications), I could not see going back through what was a very taxing physical experience on purpose - even for a refundable tax credit lol. And I was relatively younger (27 at the time), healthy and fit (not overweight or experiencing any pre-existing health conditions) - the risk of complications increases the older a woman and of course the less healthy so if it was hard for me, it's probably even more of a potential physical risk for the current generation of childbearing aged women that is overall heavier and on average older before their first pregnancy (the average I think now is around mid-30's!)
I would also add that our society is particularly not very friendly to the "post-pregnancy" body that most women will experience, even under the best circumstances, and there may be some more subliminal incentives from women not wanting to undergo the physical changes that will mark them as "less attractive" in our society - which is not just an abstract concern as these "ideals" can be very much filtered down to and expressed by their partners... It just seems that up through the Boomer generation of parents, it was a lot more common (and acceptable) to "look old" as soon as the 30's hit. I can look at photos of my parents, relatives and their peers from that era and it's very noticeable how much older adults in their 30's presented up through the 90s even than adults in their 30's present today (and it's not just the styles of the era but the big distinction between how a "mom" dressed and styled versus single women in their 20s even in the styles of that era, where now that distinction is a lot blurrier). And they had more kids (although Boomers definitely had fewer kids than their parents, my mom from a family of 9 where this was not uncommon in the 1950s had only 2, and 2-4 kids was about the norm for suburban/middle class families in the 80s I think?), which accelerated that "older" appearance, whereas today having more kids and leaning into "old" seems much less the norm. And the appearance as very much hand in hand with adapting into an "older" lifestyle habits that is also becoming more socially normed for people well into their late middle ages to continue having "fun" and "experiences" whereas for my parents in the 80s settling into the middle class "family" lifestyle was the expectation and norm, whereas now there are many other options that have been "normed" for what early-to-mid-to-late middle age can and even "should" look like (or aspire to).
Lifestyle, culture, the sheer physical difficulty of pregnancy/childbirth, appearance and attractiveness standards, yeah these are all likely pretty salient (dis)incentives that may be factoring in sub-consciously (or not) in the decisions to not have/limit child bearing that go beyond the (relatively more) simple solvable-by-policy prescriptions of the cost factors. Shallow (or not, I don't think it's shallow IMO), women don't want to be prematurely aged by their 30's, having had multiple by then pregnancies perhaps as they saw their grandmothers and mothers experienced, their partners likely also would not prefer to have (or to be prematurely aged themselves in companionship), young singles/couples enjoy having a longer young adulthood it seems with options for leisure, travel and personal/career development that childbearing necessarily interrupts (at best), etc.
Not to say we shouldn't be better subsidizing of those families that do want to have more children - we should! And particularly for the lower income end of the scale where considerations like "taking more vacations" and "looking fit and sexy at age 35" are probably not as salient disincentives for not having kids but costs really are. But it shouldn't be expected as the cure-all for an overall lower birthrate across society, as I do strongly think there's a lot of non-monetary reasons for that.
"I could afford another but it would limit my career options, free time, public engagement, and time that I get to spend with my current child."
Well, I think the point is that to the extent we can shift the American economy so that a second child does *not* reduce your "career options, free time, [and] public engagement," we should do so. It's fine to say that a tweak to tax policy can't do that, but I don't think it's justified to give up entirely on the project and assume "that in a society in which women have both free access to family planning and anything approaching economic and social equality we are going to see mostly smaller families."
I don't see how the "economy" could be shifted to accomplish this. Parenting a second child would take time from my career, free time, public engagement, and time with my current child" simply because parenting in the way most of us understand it is time consuming and time is a finite thing and choices have tradeoffs. I think the only thing that could change that really would be a change in expectations about how much time parenting requires.
Some of that could be relatively easily reduced by providing free or reduced childcare before and after school so that was more universally available. But otherwise, I think we hit up against some cultural norms that are hard to shift. I personally think it would be lovely to reduce some of the ultracompetetive norms and keeping up with the Jones parts of modern parenting.
But ultimately, I think that part of what makes parenting more time consuming is the desire on the part of both parents to spend time with their kids and having meaningful careers and lives. Some of us grew up in the first generation where a lot of mom's worked and that meant less active care than a prior generation of stay at home mom's could provide. Many of us wanted something different. We could do that by not having careers or we could do that by starting families later in life and having fewer kids.
I am a parent of an only child and was an only child. My parents both had very successful and high pressure careers. My mom in particular broke a lot glass ceilings in her profession, mostly by working twice as hard as her male colleagues. I had a good childhood and a lot of good quality time with my parents because they prioritized it. But there were still a lot of mixed school concerts, making my own dinner, and unsupervised time in my teens. If I try to imagine the attention that I got and splitting it in half, it would have been less than I needed.
I opted for a career with a more flexible schedule but still one kid so I would be as torn as my mother was. I can't imagine having two or three more and not feeling spread too thin. Frankly, I end up picking up a ton of slack for the parents of my friends who have more kids. I end up doing the carpools, chaperoning the field trips, and planning activities for lots of my daughter's friends. I don't mind but I don't feel like there is this whole untapped capacity for parenting in my world other than the ones who don't have kids at all. Folks who wanted two have two. Folks who wanted three have three. Folks who have four got hit with twins they weren't expecting.
Correction. I do have friends who want more kids than they have but that is because of fertility issues. I do think more universal access to fertility treatment would be good for many reasons and would result in more kids.
I also have friends who birthed fewer kids than they intended because they ended up adopting one or more dids out of the foster care system and took up their capacity to parent. One of my friends was planning to have two kids. She signed up to be a temporary foster parent for 18 months until the 12 year could be placed with family members who needed to prove they could stay drug free. She got pregnant and three months before she had her kids, DHSH let her know the family had failed to be in compliance and they were going to put her foster daughter up for adoption. They offered to adopt her and she said she would like that but what she was most looking forward to with going to her family was being able to live with her two siblings who were also in other foster care homes and asked if they would adopt all three of them. So within 3 months they went from having 0 kids to 4 kids aged 0, 10, 12, and 14.
I have several other friends who also signed up to foster and ended up adopting one or more kids. One adopted their first and then ended up adopting each of their siblings as they were born to their first's birth mother as her parental rights got terminated each time due to drug use. They ended up with five kids in the end without having any bio kids of their own.
These adoptive parents are all great but they face real challenges with kids who have to deal with some early life trauma or medical issues.
My overall sense is that the US ought to be doing a much better job of taking care of the kids we have now in terms of feeding them, housing them, providing them adequate medical care and mental health services, and providing them with safe communities and excellent public education before we start trying to figure out how to churn out more.
Yup, it also doesn't help that even supposed liberal-minded people who say, write books about this issue and the reason behind it, and claim don't want to shame women who don't want kids or single mothers, end up openly allying with conservatives who openly talk about their support for lessened reproductive rights and general conservative policy, because of seemingly a couple of overheated negative reviews.
I think defeatism about fertility is dangerous. It is going to cause huge problems and as you note one reliable solution is to restrict the freedom of women. Which is bad!
Increasing productivity is good in its own merits of course but “we just need to make this giant problem no longer a problem with unspecified productivity gains” doesn’t fund pensions or increase the workforce.
I think slow population decline combined with better productivity and sharing of resources is a path that has some benefits in terms of our taxing of natural resources. To the extent that is happening quickly in some places while it grows in others, I am good with immigration as a solution.
The problem is that a TFR 1.5 (Germany) or 1.3 (Japan, Italy) nothing of the .9 and falling rate of Korea, are not compatible with a slow decline nor are they holes small enough to be filled with any remotely plausible amount of migration from Africa and SE Asia (though more immigration absolutely helps and should be encouraged).
They are just a recipe for extreme degrowth and elderly poverty (which, I fear, will actually be a recipe for a bunch of rollbacks of women’s liberation and for other extreme political movements).
It’s also not great that all the nicest places in the world with good institutions have a declining relative population.
I think that Japan, Italy, and Korea are going to face some real challenges. I also think that they have sufficient wealthy and a culture of taking care of elders that they can get through this period without widespread elderly poverty. But they may have some some periods of stagnating growth or even recession until they get over their grey waves. We may also get to learn some lessons from them on how they address that.
I don't think US TFR is in the panic threshold yet especially since we are a country that has a long history of immigration to buffer us. What concerns me about the grey wave in the US isn't how distorted population groups may become but that we have a horrible system for taking care of our elderly. Private nursing homes and end of life care in a health care system that is largely profit driven leads to insane costs and not very humane outcomes. It contributes to having an aging population be an unsustainable option.
I work in elder law. The aging baby boomers are kicking the legal system in the ass right now. They have much lower rates of planning in terms of wills or durable powers of attorney which means that when they get sick or die, the court needs to make a lot of decisions on their behalf. A huge part of my workload is acting as a court investigator when the court needs to make decisions about end of life care or address fights between adult children about care options. It is weird work. It feels very strange for me as a stranger to be determining what quality of life might mean for a stranger and it is very expensive.
As a practical matter, our benefit system makes nursing home care a much easier option than in home care even when in home care would be cheaper and better.
The only plus I can see is that when this wave passes we are going to have a lot of excess nursing home space and assisted living space that we might be able to convert for hospital space and housing in areas that need it along with reclaiming a lot of underused housing that seniors are sitting on that would be better used by young families.
Gerontocracy is bad.
The clear solution is to limit voting to ages 18 through, say, 70
What about just having a monarchy? Just some sort of philosopher king? That would fix things! : )
So long as they are a Democrat!
Elect the philosopher king. Bring back the Holy Roman Emperor!
Genuine history question: did the Holy Roman Emperors ever claim to be *philosopher* kings? Universal monarch, sure, but never a philosopher-king I think.
A shorter age span, but: https://www.youtube.com/watch?v=t28ZB1t6gg8
No, just limit voting to Democrats. We need to be lowering the retirement age, not raising it
Why would that change anything? Millennials have been the biggest voting block for a while now, and they fall neatly into that age range.
This would solve basically all problems in the US
It's wrong to blame declining birth rates on the cost of child rearing, birth rates are declining everywhere, even in nations that have done a lot to decrease the cost of having kids. There is very little correlation between cost and birth rate.
The "cost" is high if you define "cost" by how much of a pain in the ass we have made child rearing as a society. It is so much more work than it used to be.
- schools are closed a lot more than they used to be, and generally spend less time there.
- day care is expensive. Yes, this is a money problem, but it also thereby becomes a *time* problem. Kids in daycare less == parents working harder to care for kids
- societal expectations are whack. I don't want to be "old man yells at clouds" but it is just crazy how we do not allow kids to be alone, like, ever. When I was a kid, I walked a mile home from school alone, from the second grade on. Now we don't even let 6th graders walk alone from the house to the bus stop.
It is very clear that voters are going to demand the government provide entitlement programs such that they can retire after decades of drudgery.
It is upto policymakers to avoid the cycle you outline but no old-age entitlements is a complete dead end politically.
This is smart, except what are some parental benefits that have been cut in the last two decades? I can't think of any. Most of what's happening is just additional debt that could require middle class taxes to go up in the future. Policy-wise, the tax credit and tax cut is king right now. Bill Clinton and Newt Gingrich fought, Jack Kemp won.
Speaking to the piece, Matt's central argument is Democrats will create a bold new coalition to significantly raise government revenue for more social democracy. They didn't pull that off in 2009 and 2021. And if you look at the past 50 years[1], it's not clear anybody ends up doing that. Revenue has been at 17-18% of GDP for a while. It's smart to eloquently lay out the items you think your party should prioritize and the other party should not.
But Obama did the same thing in his negotiations that went nowhere, as Bob Woodward documented in The Price of Politics. At one point in the book, Biden comes to the realization that many items the Congressional Dems are asking for in a compromise do not actually have the votes in their own party. An interesting question is if the Democratic party's rhetorical move leftward on economics has made them more or less aware of that fact. The same could be said for rhetorical plays to younger culture politics and reliance on defending costly entitlements for older voters.
[1] See first line graph: https://www.cbo.gov/publication/59946
It's worth pointing out that the "Social Security cliff" isn't real.
If the system isn't reformed ahead of time and the trust fund runs out, Congress will not vote to make drastic cuts in current benefits. They just won't. They'll vote to use general revenue to cover the shortfall and run up the budget deficit even further.
The trust fund is a meaningless accounting fiction—the federal government is lending money to itself, which makes the balance in the fund both an asset and a liability—so there won't be any macroeconomic impact if that happens. There's no difference between running down the volume of Treasury bonds owned by the fund (which is what the shortfall does before exhaustion) and running up the volume of Treasury bonds owned by private investors (which is what it would do after exhaustion).
The reality is that Social Security funding is a long-term problem which gets gradually and continuously worse as long as you don't fix it. There may be a sudden crisis at some point if the ratio of federal debt to GDP becomes visibly unsustainable, but exhaustion of the trust fund isn't a crisis point.
Matt’s pedantry has a firmer basis. Benefits cuts are written into current law. The accounting fictions would trigger benefits cuts absent Congressional majorities choosing to kick the can. Yet we all know the can would be kicked.
That's right. The trust fund was created to provide an artificial sense of urgency about making one particular set of taxes match one particular set of expenditures. But since the real issue is the overall solvency of the federal government, it doesn't actually matter if they match. And since Congress knows the urgency is fake, they probably won't make hard decisions that they'd refused to make previously.
Worked for a bit on budget projections, this problem happens all over the place because Congress writes lots of expenditures to have an expiration date for CBO scoring reasons even though everyone knows it's a fiction and will be changed. The way the people doing the projections dealt with it was to do two different projections:
- "current law" with fake expirations
- "current policy" with realistic can-kicking included
And then just highlight the current policy projection in all your charts.
+100
Uncap FICA
But they might. The just might. 2032 is 8 years from now, as is 2016. Think about the changes in the country since 2016. Let's not pretend we can predict the future that well. We have no idea who will be in power when we go over the cliff nor what the Republican Party will be like.
I think artificial intelligence makes this entire set of issues a lot less interesting, to be honest.
Nobody has any idea how AI is going to affect productivity growth, or life expectancy, or healthcare costs. We also don't know whether it's likely to exterminate humanity ten or fifteen years from now, or to elevate us to some unimaginable utopia within a similar timeframe.
Maybe we should be thinking about those things, rather than trying to project when the Social Security trust fund will run out.
Well said.
Matt wrote one odd thing today: "[Trump's] plan is to make no changes to Social Security, run off the exhaustion cliff, and then everyone’s benefits are exhausted."
I assume that was a result of too fast writing, since Matt obviously doesn't think that (and said as much a couple paragraphs earlier).
I don't know. If it takes an act of Congress to prevent cuts then it's not hard to imagine Congress not getting it done. If there's a conservative majority in Congress at that time, I have a hard time imagining them intervening to run up the deficit further.
Every Republican congressman who allowed Social Security benefits to be cut would be voted out of office, regardless of how conservative their districts were. It would make "Dobbs" look like a walk in the park.
I think this was true in 2004, but I'm not sure about 2024. Most Trumpist seniors I've seen would happily starve in the street if it meant Trump in power and minorities worse off.
There is no fury greater than the fury of seniors facing Social Security cuts. Ask Dan Rostenkowski.
>They'll vote to use general revenue to cover the shortfall and run up the budget deficit even further.<
I hope you're right. I wish they'd take that vote now.
To the extend the trust fund being exhausted helps motivate needed reforms it's a good concept
And thank God for that. Still, the mere suggestion of cutting social security or raising the retirement age should be a capital crime
Of course it will not make much difference but I wish we WOULD agree, no champion, raising the retirement age. We should destroy the social norm of age-based "retirement" and open up space for mid-career education to make longer working careers more productive. [This could be especially beneficial to women who take (a smaller % of) time out of working life for children.]
Maybe if you're a a lawyer or coder, this sounds like a great idea, but if you've spent your whole life working as a grocery store clerk, a construction worker, or in nursing, I doubt you want another 10 years of a "productive career."
Plus, part of the reason for some of our stagnation is the Boomers won't stop bleeping working.
I half-liked your comment! The first part is spot-on. The last sentence assumes facts not in evidence -- we are not in stagnation. Our economy is the best in the developed world.
https://www.slowboring.com/p/why-are-young-liberals-so-depressed
https://www.slowboring.com/p/debbie-downer-progressives-arent-3ab
Oh, economy for lower-income and even many middle-income and such people is great! I'm all on Yglesian/Stancil thought on that.
But, there is stagnation in the middle/upper middle class seemingly, even if not directly economic, but through lots of complaints about a lack of upward trajectory in their professional lives, compared to prior generations, is because the old boss who would've died from a heart attack at 66, is now living to 80 and enjoys his job, which means your manager can't become the big boss, and you can't become the manager.
So, you may even get a raise, but you feel stuck in space, and that's something a raised retirement age will make even worse.
Meh, the stagnation seems more that people assume they can move into a role once their boss retires. If you want to be in charge of something, go start something new.
Need faster growth (boo deficits!), more firms with more VP's. :)
Your later comment reflects to tired old "lump of labor" view: there are only a certain number of jobs and we have to ration them out ("immigrants take 'our' jobs") or on the margin, "create" them with "jobs programs" ( to gesture to both the right and left wing version of it).
I've always preferred the idea of retirement ages being dependent on work history and the type of work. Social Security already categorizes people's work history for disability assessment, so it's not like it's beyond them to interpret someone's employment and make assumptions about how demanding the physical labor is. SSA already has a mechanism in place to determine if someone's been doing arduous labor, if they can return to that labor, and if they have transferrable skills to other jobs.
The disability process is a nightmare, but I could see some of the functional aspects of it being repurposed to determine if someone should work until 70 or not. Do they have transferrable skills to a job that isn't exertionally demanding? Can they continue their laborious job as is? No? Eligible for early retirement at 62, full retirement at 67. Yes? Early retirement at 67, full retirement at 70.
You spelled 30 wrong
I get the idea that some people want to "retire" and even "need to" retire at 67. I just want to make it (as someone said) "fuzzy." But for sociological ground. NOT to reduce the taxes that will be needed to pay for whatever benefit we can decide on.
I love that idea. I have a recurring daydream where we create massive programs for the hiring of the capable elderly as extra hands and eyes for childcare. Maybe even a minimum wage carve out, if we’re considering unpopular policies.
Research seems to be moving in the direction of retirement being bad for health, but at the same time there are so many jobs that you just can’t (or don’t want) to keep doing. Meanwhile we’re suffering from a lack of affordable childcare, a loneliness epidemic that hits the oldest people hardest, and we’re struggling at the margins to subsidize retirement. Seems to me it would kill three birds with one stone.
That could be one dimension. But I also want to see more years of engagement with conventional jobs, though perhaps with more flexibility/less than top lifetime pay.
Indeed. It would be very useful to have a much fuzzier border between employment, training, and retirement.
Oh, 100%. That’s just the rider I’d add to your comprehensive bill.
"Raising the retirement age" is a deeply misleading phrase. Currently, Social Security can be taken starting at 62, and the maximum benefits are available if you wait until age 67. The RSC proposal (and everything else that uses that phrase) is about changing 67 to a higher number, which is functionally a benefit cut for anyone who retires from 62-67. No one has proposed (that I know of) to raise the minimum age from 62. Furthermore, because both retirement and Social Security enrollment are complex and significant financial decisions, they do not always happen at the same time -- many people retire before taking Social Security, people keep working while on Social Security, people enroll in SS and Medicare at different ages, etc.
The "retirement age" is a cultural notion (AARP allows you to enroll at age 55). Cutting Social Security benefits is not going to change it meaningfully.
>> and the maximum benefits are available if you wait until age 67
As I understand it, 67 is considered full retirement age, but retirees get maximum benefits by waiting until age 70 to start receiving benefits.
I believe the way it works is that every year they delay starting benefits between full retirement age and age 70 increases their lifetime monthly payment by 8% (adjusted for inflation) versus starting benefits at their full retirement age.
I agree. I'm talking about changing norms, which could be reflected in 67 gradually increasing. And the norms include both worker expectations and firm's policies. This is related to the issue of falling fertility rates and possible disruption of careers by AI. The desirability of reducing the part of the defect coming from Social Security is just a nice hook.
And 55 is a perfectly reasonable time for people to leave the damn workforce for a younger person to take their job. There should be full benefits at 55, but also mandatory retirement then. The less one has to work for money during one’s life the better
"The less one has to work for money during one’s life the better"
Ah yes, democracy at its finest, where everyone must behave according to one group's specific preferences.
Maybe we should, instead, have a reasonable safety net, and then just let everyone do what they want, like in a .... free country?
Screw that old people working keeps the young out of jobs. Social security should be full salary replacement but the jobs should be freed up
Why are young people more worthy than old? Who decided 55 is "old"?
I am guessing that the answer to the second question is that you did, and is highly correlated to why you, who are younger than 55, think that those older than you are less worthy to work.
Perhaps we should have full social security for those who want to retire at any age in the form of an incredibly generous UBI then. I just know I don’t want to be forced to work at all, much less when my health is starting to fail. Plus it’s more important for those with young families to have jobs, at least for a breadwinner, than those without.
"Screw that old people working keeps the young out of jobs."
As Thomas Hutchinson pointed out elsewhere in the thread, this is the lump of labor fallacy. An old person working doesn't "keep the young out of jobs"; it means the young need to develop different skills from the previous generation so they don't have to compete with them.
That’s just CEO approved victim blaming right there.
Not to mention it’s bullshit bc ageism and the application process prevents the hiring of mid-career job changers anyway.
Maybe this is even more infeasible, but it might make sense to raise the retirement age for white collar workers only.
The problem there is that white collar voters are (generally speaking) the most politically influential class of voters since they are more likely to vote, more likely to donate money, and more likely to actively lobby their elected officials.
True, but pissing off some of the electorate is better than pissing off all of it, and maybe class resentment would even win you some votes. It's probably true that the most successful white collar workers would be the most against it but fwiw a few years of SSN income is trivial for many of those people.
I think means-testing benefits is the closest thing to this. Richer workers will take less in retirement which is _kind of_ like retiring later.
But do all white collar workers really WANT to stop working?
I say raise for all but with easier (but enforced) disability. Like maybe being dismissed for cause as evidence.
The thing about the retirement age is it doesn't directly stop you from working, it just stops you from taking benefits that *could* replace your income.
Very successful white collar workers who either love their jobs or have plenty of money are the least effected by changes in retirement age.
A 65 year old school secretary is a different matter, she (or he) probably wants to stop working but needs the income. For a 65 year old partner at a law firm a couple years of SSN income don't matter.
Let's just raise the cap on taxable earnings first. Then, down the road and if we're still in a hole, maybe then we can talk about changing the retirement age.
The problem as some other people have noted here is that we're close enough to running out the SS surplus that lifting the cap on taxable income only pushes the date of insolvency back by a short period of time. (If it had been done a couple decades ago, it would have extended the insolvency date far more.)
But “insolvency” is just a political statement. We as a country actually print dollars so benefits should only get more generous
I have been supporting this for years, but can't see how it would ever happen practically.
Or just cut SS benefits for high-income retirees.
I used to think this was a terrible idea politically, because it'd turn SS into a 'welfare' plan instead of an entitlement, but old people vote anyway, but I'd still want this to be a "hard" compromise that a future Democratic President has to make after a Republican congress makes him, not something a Democratic trifecta agrees too.
SS has always been welfare. It is an income transfer from currently working people to formerly working people. Politicians just lie about what people put in is what they get out.
Oh, I agree - I just necessarily don't trust the voters to be OK with their Social Security now being welfare, especially if the GOP can try to attack it. In a perfect world, yes, it's welfare, and that's a good thing.
That’s nuts. The retirement age should be, like, 41, because I just turned 41. Who on earth wants to have to work in their 60s? It’s unacceptable for a modern society and that’s what the money printer is for
"that’s what the money printer is for"
You mean, besides inflation?
Yes, raise the retirement ageand index it to life expectancy
Doesn't that require a job market that wants to hire and retain older workers though? Age discrimination is a real thing for workers starting in their 50s across the board. In white collar/corporate/office type jobs they either become too costly salary-wise when employers start weighing the trade-offs of letting them go and hiring an entry level college replacement for much less and managing the experience gap, and then there's the company health plan where age is one of the few rating variables allowed (and having more older workers on a plan means it costs more for everyone). In other jobs and professions it's a physical ability issue if the job is manual labor or otherwise physically demanding - even in professional jobs, like, do you want to be operated on by a 75 year old surgeon with arthritis and shaky hands, even if they're mentally "on top of their game"? Do we want 70 year old cops doing beat duty?
It does nothing other than shift the costs off the government's books to make some policy decision about holding back full SS benefits until age 72 or whatever they want if employers overall do not want to hire 72 year olds to work for them or keep workers on the job until they're 72. And there are very strong market signals that we have from the past decades that employers barely want to hire and retain 65 year olds, so what do we expect will happen by raising the retirement age other than helping the government's books, but offloading the cost of that onto a demographic share that will just have their most precarious employment years extended (and while the cost of their health care in particular will dramatically increase during this time - which is another consideration, what's the over under on how private insurers will rate private health care plans before a Medicare age of eligibilty into the 70s??) before they can "fall" into the safety of SS and Medicare - and that's even if they have private savings, which they now run through in that precarious time (if allowed to tap) which will make them even more dependent on Medicare and SS when they finally do qualify.
I agree that this is more than just "raise the retirement age. Paying (less) for (declining) performance is fine. It's a mind set I'm talking about. Firms ought to actually manage worker skills. not just the birthdays. But as lifespans have increased, presumably too has peromant of the oldest workers. Oh of course the crazy US system of having employers buy health insurance for their workers is a problem.
"Critics sometimes analogize Social Security to a “pyramid scheme” which I think is unfair"
It owns no revenue-generating assets except US gov't debt with almost no returns. It relies on funding from future contributors to pay current contributors. It's not a scam, it's upfront about what it's doing, but of course it's a pyramid scheme in structure.
Honestly, the best solution historically would have had nothing to do with taxes or benefits. It would have been to make the trust fund instead be a sovereign wealth fund investing in assets that generate actual returns. There's no reason whatsoever that "15% of everyone's income up to >$160k" shouldn't be enough to provide a much *higher* level of benefits to everyone than we currently have. Even for an individual, that's a high enough contribution rate to replace your entire (non-retirement-fund-contribution) income in retirement, assuming 8% average investment return and a 40 year working life. Pension funds can usually do better for lots of reasons. The $1T that was in the trust fund in 2000, properly invested, would have been worth $1T/yr in 2032, aka around 70% of current total social security spending.
At this point it's likely too late for that to push back the 2032 date too much.
Absolutely. The restriction to wasting the SS surplus on treasuries truly does seem like a staggeringly stupid own goal.
I think the sovereign wealth fund could make a killing here. For example, it could put a lot of money into, say, Lockheed Martin and then -- amazingly! -- Lockheed Martin wins the next big fighter jet contract and its share value soars!
Of course, the government could sue itself for insider trading.
>Of course, the government could sue itself for insider trading
The Matt Levine column on this would be off the hook
Even that would basically just be a weirdly distributed stimulus package, putting lots of money in the hands of lawyers and paying itself fines to build up the treasury.
Now I'm wondering what would've happened if we'd responded to the dearth of 2009-era "Shovel ready" projects by hiring a bunch of lawyers to sue everyone doing something wrong.
That would have been the equivalent to Keynes' program of digging holes and burying money in them.
Correct.
A sovereign wealth fund may make sense for smaller countries because it would largely be invested in the overall world economy. A US fund would be mostly invested in the US economy and, thus, dependent on US economic growth. But that is equally true of the tax system.
It isn't a pyramid scheme because no one has a right to the funds they paid in. If you pay in for 40 years and die at age 60, then you get nothing back. That's why it's correctly characterized as a form of insurance, specifically insurance against living longer than expected and thus having more living expenses than expected. It may be the case that the actuarial calculations for this insurance program as presently run don't add up, but they could be made to add up, with or without subsidies. There's no reason why the program would be necessarily doomed to collapse, whereas a pyramid scheme is inherently doomed.
Yes, legally no one has a right to the money they put into social security, or to anyone else's money in the future. It's all very public, how it's organized, and not illegal in any way. Everyone *should* know that they're paying today for someone else's benefits, not for their own benefits in the future.
A large fraction of people, though, *don't* know that. 80 years of rhetoric to the contrary isn't law, but woe betide anyone who actually has to make those possibly-necessary changes. Once multiple entire generations have organized their life plans and lifetime savings strategies around a program's existence, it might as well be law for practical purposes. Hence all the can-kicking.
But just to be clear, following your reasoning: If I were running an actual pyramid scheme, but had fine print where I technically reserved the right to just tell people "Sorry, no more payouts," it would no longer be a pyramid scheme? Because it wouldn't be necessarily doomed? I don't buy it. I suspect that wouldn't save a private actor in court. I think that would come down to the degree to which the person running the scheme deliberately deceived those giving them money, both about what they're doing and about future expectations.
I guess the private sector equivalent would be if you ran a charity which took donations to give cash grants to people who need them. Nothing wrong with that! But constantly talking about how the same program will be there for those people in the future, without actually making preparations to shore up the economics to ensure that? Not the same thing!
I think everyone knows that if they die at age 60, they won't get any Social Security.
I thought surviving spouses get their husband/wife's SS benefits if they die?
They do, but not everyone has a surviving spouse. The point still stands, that this is an insurance program where getting benefits is dependent on meeting the terms of the policy. It isn't a property right the way an investment is. A pyramid scheme is only a pyramid scheme because every investor in the scheme has been given a property right. If that feature isn't present, then it is by definition not a pyramid scheme. It may or may not be a well-designed insurance program, but it is an insurance program.
That's true.
Your spouse, if any, still may, though.
You’re assuming facts not in evidence. The US is so large and so rich it very much remains to be seen if global markets could absorb that kind of capital.
I agree that trying to invest $1-3T at once would be very hard to absorb, but by 2000 we'd been building the surplus up gradually for decades, at a rate of <$200/American/year. It seems... unduly pessimistic to think the market wouldn't be able to find productive uses for an extra $40-80B/yr. That'd be roughly equivalent to saying, "If the average American family skipped a long weekend vacation a few hours drive away once a year, and put the difference in savings, global market returns would be substantially lower, and after 40 years the market still wouldn't be able to adjust and make use of the increase."
Considered another way, total global wealth was around $450T in 2000, and the trust was $1T, so we're talking a quarter percent difference in total wealth at that time? Still <1% if we only look at stocks and bonds instead of total wealth?
There are several sectors today that I'm confident could absorb tens of billions in investment a year, each, especially if they had a couple of years warning it was coming. And even if not, frankly, why is it the US government's problem if world market returns are slightly lower than they would be counterfactually?
Also, in the world where social security was well managed and invested like a large pension plan, we'd plausibly also see somewhat less private retirement savings, and increased spending, but I'm less sure of that.
“ There are several sectors today that I'm confident could absorb tens of billions in investment a year, each, especially if they had a couple of years warning it was coming.”
We’re talking about $1.6 trillion a year which is nearly double the Norwegian Sovereign Wealth Fund. Double! Per year being injected into global capital markets. And I assume we’re investing in all global markets? Argentinian cattle ranches, Indian power plants, Chinese electric car manufacturers…? Russia? Because if your limiting it to only our strongest allies or especially domestic markets then the problem is even bigger.
Per year? The social security trust fund is <$3T, total, currently. Over time, we've been putting tens of billions of new savings into it annually to get to that point.
Yes, if we'd been investing it all in the market since 1980 we'd now be increasing the size of the fund by about $1.5T annually as of 2024. This is equivalent to suggest US GDP could be 6% higher today if we'd had better economic policy since Reagan took office. Some of that would be due to growth, some would be due to us owning more of the rest of the world, and some would not happen due to lower world market returns. In all three cases the US is in a better position than it actually is, and the world as a whole would be net richer.
Did you mean a simple one off conversion of the trust fund to a sovereign wealth fund? 3% of 9T is $270billion that’s not nothing but it’s not all that much in terms of federal budgeting.
Sorry for not being clear. I meant, I think this is how we *should have* been handling the trust fund all along since it began, and/or how we should handle it moving forward for new money going into the fund. If we were to convert the current trust fund to a wealth fund, I agree that it would need to be done carefully and judiciously, not just dumping trillions into the market all at once willy-nilly.
What area of government spending is on revenue-generating assets? Is military spending or Medicaid spending also a pyramid scheme?
No, in part because of how it's being presented.
Military: "You're going to give us money, and we're going to hire people to do a thing we need done."
Medicaid: "You're going to give us money, and we're going to spend it on goods and services for someone else."
Social security: "You're going to give us money, we're going to give it to another group of people who we took money from in the past, and you can hope that when you're old or disabled we'll still be doing that, but in public we'll talk about it as if it's a pension fund."
Also: There is government spending on revenue generating assets. Just not much of it, and most of it generates revenue for the public through externalities instead of profits flowing straight back to the government. And many assets that generate some revenue still operate at a loss, often intentionally.
How did social security begin? Did it really start with no one collecting benefits, and people paying in while it built up a trust, until the people who paid in started retiring? With twenty years until anyone had paid in the full twenty years to collect full benefits?
No, people started getting paid benefits almost immediately after the program launched. (My recollection is that the first recipient only paid into the system for a few weeks and then collected benefits for like 20+ years before their death.)
This. It was 1937, part of the New Deal, and a lot of people who were too old to keep working and couldn't have found employment needed help immediately.
That’s what I assumed, which meant that current proceeds were needed to fund these benefits and there was no time for an investment fund to build up.
Yes, and I think until quite recently almost all of the shortfall was due to the system initially paying out much greater benefits vs contributions to those first retirees
Not to mention a massive shot in the arm for investment into productive companies etc
Reading about Republicans' desire for huge cuts to low income health care, I couldn't help but reflect on how good they are at keeping quiet about their unpopular ideas, the exact opposite of the Democrats. I mean, just imagine a bizarro universe where there was a large activist class of young Republicans who held tremendous sway at universities, legacy media, and prestigious institutions more generally. Any time someone on their side suggested easing up on proposed cuts to Medicaid, they screamed at that person and called them a Communist, socially and professionally shunning them. At the same time, Democrats focused heavily on advertising their support for things like affordable childcare and a living wage, while keeping any support for de-facto racial quotas, banning gasoline-powered vehicles and making it very difficult to purchase firearms on the DL.
Vocal young educated Republicans who take serious policy stances actually are pretty repulsive to normal people— Blake Masters is pretty representative of the type— but there just aren’t many of them. (Smarter conservative-leaning young people tend to focus on just making money.) The downside for the Rs is that this deficit makes it much harder for them to construct policy and staff government with people who will advance their interests.
The difference is the number of people who want say, Mediciad cut to ribbons or the ability to spill pollution into rivers are very small, but they're powerful, and know the politicians directly, so they can be assured the politicians are on their side.
OTOH, the people who want various things you think are unpopular or bad ideas are less connected to power and don't trust the poltiicians will pass what they want, so they have to be loud and pressure the Democrat's.
Also, the GOP has laid out these plans concretely before - but as the Obama team would tell you in 2012 when they showed people the Romney/Ryan plan, low-info voters literally didn't believe it was true.
There are lots of odious Republican activists out there but Democrats are terrible at playing offense and attacking, while Republicans and their noise machine is great at the game of politics (and terrible at governing).
Also, this. GOPers say plenty of crazy things, but even MSNBC is less partisan than FOX News, and there isn't a whole completely partisan left-wing interconnected heavily funded by rich people group of organizations with massive reach.
Like, I know progressives are a punching bad here. But, even folks like Hasan, Chapo Trap House, The Young Turks, Majority Report, and so on are basically all listener/viewer supported for the most part, while The Daily Wire has tens of millions of dollars of right-wing backing and that's just one group. That's not even getting into Prager U, and so on.
If instead of reactionary to fascist politics, those billionaires got behind spending hundreds of millions on Larry Hoganism or Charlie Bakerism, the GOP would be the LDP of America.