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The point is social security is a major function of most developed countries and as far as I know, the US isn't much different. Here's a list of SS costs against GDP for various countries. Sweden is on top while the US is in 13th place.

And, major reform of the SS system involves "means testing" which turns SS into a welfare program, which politicians and voters don't like. Now, you could argue it's already a welfare program, but so are all the other systems. So, what is your solution, other than complaining about deficits which is pretty much world wide?

And the solution is not to let everybody worry about their own retirement, since a good number would be irresponsible, make foolish investments, buy penny stocks, and end up on welfare.

-Bill

How do yo know that? What even makes you suspect it? Trend for GDP growth is 4%, and we usually regress to that.

If we stop regressing to that, the accounting is the least of our problems.

-- Les Cargill

It really isn't. They can print the money - they can issue long bonds to cover the costs. Whole thing's over by 2050 at the latest - it's a couple T shortfall for the whole time.

It's a singular demographic event. The people who say "BUH IT DEBASEZ TEH KURRNCY" know not of what they speak. They bring up Wiemar, various South American regimes, African nations - all cases in which *political* instability undermined the full faith and credit of the money supply, not monetary or fiscal policy. Same thing happened in the US around the Civil War....

I personally think the answer is to basically cut all Medicare pricing to 60% of present value, and stick to it. Wanna treat Medicare patients? Take it or leave it. That puts the onus on somebody to figure out how to do it - to innovate a good-enough solution.

Seriously, William F. Hummel has a very good primer on this stuff.

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???? Er, no. It's not a in a passbook account you can draw down on. Look, gummint accounting is all hall of mirrors stuff. The biggest error people make is assuming that it works like household or business accounting. It doesn't.

England/Britain still holds bonds from the Napoleonic Wars, for some reason.

You guys are having your leg pulled. One narrative is a sort of Hamlet-story - playing GenX off of their Boomer parents ( when what the GenXers really need are better jobs ). The other is a variation on good old Apocolysm. It's Aimee Semple McPherson with exciting graphics effects...

-- Les Cargill

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And since you haven't done it, we can be confident that the total still falls a long way short of $42 trillion dollars.

You can count the unfunded liabilities as debt, but nobody does - they just see the business of looking after the disadvantaged as part of the running costs of human society.

But it doesn't say who put it together, and why it has chosen the particular numbers it displays - which makes it more of your self- serving right-wing propaganda.

You were comparing it with the unemployment figures from the 1930's, when they didn't count reduced working hours as a form of unemployment. It was one of the many occasions when you have equated apples and pears, to the short-term advantage of your argument and the long term destruction of your credibility.

Actually, you are borrowing a lot more from the Chinese ... and you are going to pay that back, otherwise they will stop being your manufacturing industry. The US voter will not have a lot of patience with a government that can't ensure a steady flow of black and white goods.

-- Bill Sloman, Nijmegen

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But since your brain is in some kind of strait-jacket, you are one of the intellectually disabled who have to be looked after by society as a whole.

You think you have this super-natural ability to see where money is going - so the interest on the national debt is all being spent on debts that were incurred to pay for social security expenditures, while all you wars were paid for out of revenue.

To an objective observer, it looks more as if you are prepared to make any kind of unfounded claim to sustain your patheric arguements.

-- Bill Sloman, Nijmegen

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Modern Germany seems to be racking up quite a lot of success without needing to expose it citizens to the prospects of ignominious poverty and inadequate health care if they don't try hard enough - or make the mistake of going for broke at the wrong point in the economic cycle.

-- Bill Sloman, Nijmegen

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Which, the 1st, or the 2nd?

As to the 1st, we're obviously not literally any kind of mortgage, sub- prime or otherwise, it's just that crisis and the debt crisis have so much in common.

As to the quality of our credit, as a borrower our history of making payments is that we borrow more money to make our payments. Our income history is that the increase in our expenses outstrip our income. And our history of raising revenue is that we don't. Last week even Obama declared taxes are the lowest in a generation (totally false).

So, government's growing far faster than our ability to support it, and faster than the political will to pay for it. It was growing @ ~7% p.a. under Bush, and now ~12% p.a. under Obama, not including his new insurance mandates.

Obama's legacy will permanently reduce productivity and growth, that's simply a fact. Obamacare, for example, and all the debt we're acquiring frivolously will weight on everyone and everything. Ditto his anger against coal, oil, and energy in general. Ditto the cost of misallocating resources to his unionized supporters on misconceived replacements for those vital resources.

If we treat the debt literally as a 50-year mortgage with monthly payments, etc., the necessary debt service would make people scream right now (because of the $$ diverted from candy), and soon will simply be beyond our means.

Do you see the nation cutting $1.6T from the budget, doubling the income tax, or other such steps this year? I don't.

-- Cheers, James Arthur

Surely the value of a dollar =3D (value of everything in the United States) / (number of dollars)?

The Fed continually prints more to counter productivity gains, ensuring some small amount of inflation, but exceeding that rate dilutes the currency in direct proportion, yes?

Doctors already lose money on so many of those patients at today's payout rates, @ 60% they'd just quit.

Rep. Paul Ryan correctly said what I've been saying: the cost will never be contained until until the people receiving the service have some connection to the cost.

Socialized Medicare and Medicaid are the reason costs have increased as they have.

It's a shell game, complicated by design. We're forced to use analogies that ordinary people can understand.

The short version is that the gov't takes your money, and has no legal obligation to give /any/ of it back. They can set the payout whatever at they want to pay each year, regardless of what you put in. Everything else is diversion.

Who's pulling my leg? I'm reading Obama's budget from his OMB and crunching the numbers.

We're up to our eyeballs in debt and spending 1.79x our income. Our expenses are increasing far faster than our income ever will, and accelerating.

Meanwhile, our "investing" is directed so as to permanently increase future expenses, grow them more rapidly, and decrease productivity.

It's a magic combination.

-- Cheers, James Arthur

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Which politician would invest your money better, Nancy Pelsoi, or Barney Frank? Or Obama, who couldn't make ends meet on $247k/year?

I think we should all work on collective farms and let the government manage everything. They're super good at it.

-- Cheers, James Arthur

Let's just cast off the euphemisms, shall we?

Mr. Bowden is arguing that we ought to force youngsters to support retired people, and that it's good because other countries do it. The promise to the youngsters is that they'll be able to enslave their juniors some day and recoup.

The downside to the youngsters is that they can't save for their own retirement because the government's taken 14% from their pay.

If Americans saved 14% of their pay, not only would they not need SS, they'd be able to do many other things to improve their lives and security, like buy houses.

-- Cheers, James Arthur

Hmm, how do you define (value of everything in the United States)? == (number of dollars)? How does the equation change when China buys a piece of the US (or buys it from Japan).

...and when they leave it?

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It's not "pump-priming," it's borrowing money from people who have it to subsidize Cash-for-Clunkers, ethanol, and bailouts, mis-allocating resources in the hope that this will somehow fool businesses (and these same people) into making long-term hiring commitments.

Keynes' con might've had a chance back before electricity and telephones, when people were islands. Now it's just a transparent swindle--everyone knows today's deficits are tomorrow's taxes. We'll all see, just as soon as Obama's re-elected.

Cheers, James Arthur

They're the same thing, no? If we're not going to pay, then that is what makes us a bad risk.

There is a fundamental difference. I'll expand a bit down the page.

But this goes back to "government finance/debt does not work like individual or corporate debt/finance." The received wisdom is that government debt can roll forever - and the British are the standard case.

At least the people who deny this never explain why it has worked so far. Yes, the Bank of England has had disasters ( and the small, private-money Socts Banks did not ) but central banking is just a fact of how we live now.

Meh. That's not been shown. The only thing that has any sort of shortfall coming is Medicare. That means means testing, paying less than market for services or both. That is what it really does mean. Everything else is in reasonably good shape.

But Obama is in a slump economy. The standard model for government right now is to run debt when there's a slump, to support the declining velocity of money. I realize many people find this disturbing ( and they don't bother to explain themselves very well ) but that's just the case. Bush43 did same starting in 2003.

You can't project from that, SFAIK. If you *can*, then the Long Boom ( I am thinking from 1820 to the present ) is over, and we have worse problems than accounting.

I just don't see that. I see people moving from consumption to saving. That reduces the velocity of money, and that completely explains everything we see. It has nothing to do with policy.

Productivity is through the roof. Growth isn't because wages are off. Wages are off because the velocity of money is down. That happens because people ( both kinds; corporations and hu-mans ) are saving/hoarding and not spending.

The hoarding started after Enron - VC would not fund anything. They tried a couple of oddball things that worked out - Facebook and Twitter - but are complete empty shells, once people get bored with them.

The bang per buck now is phenomenal excepting three or four things - government, education and housing. Housing is trying real hard to join that parade but the banks and the i-Banks behind 'em are doing everything in their power to keep prices up.

Sorry, but Obama's basically the bag-holder. This has been building for as long as I've been alive.

That doesn't matter. Oil/gas/coal are in a supply shift - at least the Saudis are acting funny. Obama has put a thin veneer hopey-changey foo raw on basically the policies of the Bush administration, just as Bush had very few active policy shifts from Clinton.

To wit:

"Traditionally, Hamilton says, Saudi Arabia, the world?s largest producer of oil, would smooth out spikes in demand. But around 2007, Saudi Arabia stopped. They left oil in the ground, assuming they could sell it for more later. Hamilton calls this ?the beginning of a new era for oil pricing dynamics: without the Saudis? willingness or ability to adjust production to smooth out price changes, any disturbance to supply or demand will have a much larger effect on prices than in earlier periods.? Greenstone agrees with Hamilton, and says that this can hardly be overstated. Saudi Arabia is the one player with the power to really do what people think speculators do: take enormous amounts of potential oil off the market because they think they can get a better deal later."

There's something going on there. Maybe it *is* Obama's behavior, but that's not clear right now.

That might make a difference, but probably not. It's not enough ... mass to matter - those are old guard "dying" industries, not things that'll matter WRT growth.

There is plenty of rent-seeking out there, but there always has been. I say tax hell outta it.

but that is the mistake... it's *NOT* 50 year mortgages - it's a securitized vote on political stability. Government debt can roll forever, so long as there is basic regime stability.

The gold standard was shown to not-work - that's the fundamental driver behind the Great Depression - so ... we have what we have.

it would be *nice* to have government out of banking ( I assume; we don't really know ) but geez, that's run that way for a very long time - at least to before the industrial Revolution.

I see that we either grow to where $1.6T doesn't matter, or we accept a new, non-growth equilibrium. There might be a middle ground, but I doubt it.

If all the conventional wisdom has been overturned, then there's no known path here.

-- Les Cargill

The funding certainly _is_ socialist, as is any editorial content.

I used to be an annual Gold Card Member.

Then they started running the good stuff only during "gimme" weeks.

So I stopped contributing and watch all the creative stuff on HBO and Showtime... costs me considerably less :-) ...Jim Thompson

It's not *nearly* that sensible :) The value of a dollar is like any other price. It's what people guess it's worth. I mean, why did the Euro rise so fast starting around

Something like that, actually - yes.

There are two philosophies, best I can tell -

There's no clear distinction between 'em, SFAIK. It's just that people tend to like one or the other because they think it will work out one way or the other.

Cool. Problem solved.

And here's where it stops making sense - but people don't *WANT* to know or be connected to the cost. So by arbitrarily saying "60% - take it or leave it", I'm bootstrapping a price level.

I dunno what else to think about it.

Socialized employer provided insurance, dewd. Pay taxes on it unless you want costs to go up... this is a carefully crafted, no-consumer- choice monoposomy priced racket.

I once argued with my doctor when they prescribed something expensive*, and they appeared to be completely unaccustomed to that. So I went to a different doctor, and it turned out it was a lab error.

That would have been both harmful *and* expensive.

Understood. but this is a problem - people take the metaphor seriously, and freak out over it.

But the track record has been for us ot get more back than we put in. Y'know? That's ... uh, why we have deficits.:)

Sometimes the *last* thing you want is to get what you deserve :)

no, I know. But there are story-tellers out there having way too much fun playing Budget Doom on talk radio and cable. They're mostly wrong, too - I've heard callers correct them pretty regularly.

But our income is off about that much, depending on when yoou start measuring. That's the real problem - people are saving and not spending. That's because we're "schizophrenic" - as producers, it is in our interest to save.

But of everybody else does that, there's no flow and we go out of business.

Productivity is through the roof :

If it wasn't I'd be pretty scared.

but this creates a serious money velocity problem, and depresses price levels. You get something a lot like deflation. Deflation bad... hopefully, it's ending.

There are just too many of us idiots out here for Gummint to help much, y'know?

-- Les Cargill

This is pretty good:

It's, uh , PBS :)

-- Les Cargill

Do you know who Sir David Attenborough is?