Will Wilkinson - Latest Comments in The Forecasting Debate and the Brittleness of PAYGO

Re: The Forecasting Debate and the Brittleness of PAYGO

Micha Ghertner — Wed, 26 Jan 2005 17:31:15 -0000

It would include obligations under Social Security; what makes you think it wouldn't? Cato's proposals don't include repudiation of government debt.

Re: The Forecasting Debate and the Brittleness of PAYGO

Gareth — Wed, 26 Jan 2005 14:30:35 -0000

Micha,

I suppose it is unreasonable for me to ask you what someone you disagree with would say. But the problem is that if you take for granted that the government should meet its contractual obligations, why wouldn't that include accrued obligations under Social Security? Bush's plan might arguably be consistent with this, although it is hard to say because we haven't seen it.

Re: The Forecasting Debate and the Brittleness of PAYGO

Micha Ghertner — Wed, 26 Jan 2005 13:08:25 -0000

Epstein deviates from many other libertarians in a number of areas, most notably with his support of eminent domain. I believe he is a more of a consequentialist than a deontologist, and yes, he does think government is necessary and moral. Other minarchists, however, share the anarchist view that taxation is tantamount to theft, but do not take this to its logical conclusion.

It's not clear to me what problem a libertarian who thinks the government must meet its contractual obligations needs to address. By definition, this person opposes the federal government repudiating its obligations.

Re: The Forecasting Debate and the Brittleness of PAYGO

Gareth — Wed, 26 Jan 2005 11:40:54 -0000

Micha,

As I understand it, not all libertarians think that government is illegitimate, and therefore that taxes are theft. The libertarian whose views I am most familiar with -- Richard Epstein -- definitely thinks the government must perform its contractual obligations.

Even an anarcho-capitalist might wonder about the transitional costs invovled in having the government default on all its obligations (except to the extent they could be fulfilled by selling Yellowstone and a few aircraft carriers).

So, I concede that my argument that government must meet its obligations to the SS trust fund does not work from your premises, since you don't think the government must meet its obligations, to the extent these would be paid out of taxes. However, I would still be interested in how a libertarian who thinks the government must meet its contractual obligations addresses this problem.

Re: The Forecasting Debate and the Brittleness of PAYGO

Micha Ghertner — Wed, 26 Jan 2005 10:26:40 -0000

If you are happy to be this consisent, good on ya. However, you will have to excuse me if I don't take your intervention in contemporary policy debates seriously.

Would I be happier if I were inconsistent?

Earlier in this thread, you asked why it is a libertarian position to support the federal government repudiating its obligations. I demonstrated that this follows directly from the libertarian view of taxation is tantamount to theft. Why did you bother asking if you were not interested in the answer?

Re: The Forecasting Debate and the Brittleness of PAYGO

monkyboy — Wed, 26 Jan 2005 09:15:37 -0000

Micha, China currently has 25 billionaires. All are members of the communist party or the Red Army. There is a small percentage of the people who earn almost western wages, and then there are over a billion people living in poverty. In a way, China is a glimpse of America in the future...if the Republicans have their way.

Re: The Forecasting Debate and the Brittleness of PAYGO

Gareth — Wed, 26 Jan 2005 07:40:42 -0000

Micha,

It isn't hard to prove that the premise that taxes are theft leads to anarchist conclusions. One of these anarchist conclusions is that owners of US Government bonds would have to make do with a part ownership of the Lincoln memorial and the Yellowstone National Park.

If you are happy to be this consisent, good on ya. However, you will have to excuse me if I don't take your intervention in contemporary policy debates seriously.

Re: The Forecasting Debate and the Brittleness of PAYGO

Micha Ghertner — Wed, 26 Jan 2005 04:51:12 -0000

So in China, there is no private ownership of the means of production? All economic activity is planned by the state? There is no free trade with capitalist countries? The cause of China's impressive economic growth are those aspects of the economy which are truly communist, and not the newly instituted market reforms?

In its thousands of years of existence, China has frequently opened its borders to foreign businessmen, and then slammed them shut. That the next time they do it they will collect hundreds of billions of dollars is...almost comical.

So the best way to make hundreds of billions of dollars...is to restrict free trade? Free money! Every country should move towards autarky if they want to be rich, right?

Re: The Forecasting Debate and the Brittleness of PAYGO

monkyboy — Tue, 25 Jan 2005 17:34:21 -0000

Yes, Micha, China is a communist country. That they have instituted a few market reforms doesn't change that.

Re: The Forecasting Debate and the Brittleness of PAYGO

Micha Ghertner — Tue, 25 Jan 2005 17:16:54 -0000

This is apt:

"My political views seem natural and obvious—to me. Others find them peculiar. Their peculiarity consists largely of carrying certain statements, familiar enough in political oratory, to their natural conclusions"

- David Friedman, Machinery of Freedom

We recognize the moral error when high school upperclass men try to justify the tormenting of their younger peers with the excuse that they themselves were tormented. Yet we refuse to follow this same logic and apply it to senior citizens.

Re: The Forecasting Debate and the Brittleness of PAYGO

Micha Ghertner — Tue, 25 Jan 2005 16:35:40 -0000

You do see that the logic of your position is that the Government shouldn't pay its debts

No, my position is that government shouldn't pay its debts with more theft. If the government can pay its debts by selling the assets it already controls, that would be a moral improvement.

I'd love to see what Cato's funders thought of that one!

Since many of Cato's funders (not to mention a number of its employees) are anarchists, or at least acknowledge that taxation is at best a necessary evil (but an evil nonetheless), I don't think they'd find it all that surprising.

Re: The Forecasting Debate and the Brittleness of PAYGO

Micha Ghertner — Tue, 25 Jan 2005 16:29:22 -0000

Given that China's economy is growing radiply and may eclipse the US economy in size fairly soon, libertarians may have to ponder...is communism the most efficient means of allocating scarce resources?

You think China's economy is communist?

Re: The Forecasting Debate and the Brittleness of PAYGO

Gareth — Tue, 25 Jan 2005 11:21:00 -0000

Micha,

You do see that the logic of your position is that the Government shouldn't pay its debts (since any of its revenues would come from taxation, which you consider "theft").

I'd love to see what Cato's funders thought of that one!

Re: The Forecasting Debate and the Brittleness of PAYGO

monkyboy — Tue, 25 Jan 2005 10:46:42 -0000

Re: The Forecasting Debate and the Brittleness of PAYGO

Micha Ghertner — Tue, 25 Jan 2005 10:36:46 -0000

Micha's fundamentalist position doesn't make sense to me. Would he have any objection to a private defined benefit pension scheme? Would an insurance company who sponsored such a scheme wrong retirees if it refused to pay them promised benefits? Of course.

Of course, I agree. But would it be a lesser wrong for this private insurance company to pay its debts by stealing more cash? I don't see why it would be. Government may have an obligation to pay off debts, but unless it can do so using the funds it already has, it is merely compensating one theft with another. That doesn't strike me as a moral improvement.

What do libertarians do if the least expensive long-term insurer is the state? By the looks of this argument, they just deny that spreading risk has any utility and misrepresent pension systems.

If we believed the least expensive long-term insurer was the state, we probably wouldn't be libertarians. That's like asking, "What would libertarians do if the most efficient means of allocating scarce resources was central planning?" Well, if socialism was truly better than capitalism, then wouldn't be many libertarians, and for good reason.

Re: The Forecasting Debate and the Brittleness of PAYGO

Will Wilkinson — Tue, 25 Jan 2005 08:43:43 -0000

Gareth, It's not dishonest to call it pay as you go, since the government in fact pays as it goes. Paycheck witholding goes into to the SSA, who pays current obligations out of current revenues. The surplus revenues are then sent to the general fund, where it is spent, and replaced with a bookmaking notation in the form of bonds. No benefits will be paid out of the trust fund until obligations begin to outpace witholding revenues, in which time some percentage of benefits will be paid out of the general fund.

Re: The Forecasting Debate and the Brittleness of PAYGO

Gareth — Tue, 25 Jan 2005 08:36:29 -0000

Look. You can't have it both ways.

If we assume that the SS payroll tax is just another tax, and SS payments are just another government program, then it makes no sense to talk about Social Security going "broke". Under these assumptions, the solvency of Social Security is just the solvency of the US Government, and Bush is to blame for any deterioration.

If we can talk about the solvency of Social Security at all, then we assume some distinct existence for the trust fund. Nothing wrong with that. But then calling it Pay-As-You-Go is just dishonest, because Social Security has built up substantial assets.

What is the libertarian position on government debt? Can it just be repudiated? What about other government contracts? Isn't government morally and legally obliged to fulfill them? If so, then why isn't it in the same position as a private insurance company which has sponsored a defined benefit plan?

What do libertarians do if the least expensive long-term insurer is the state? By the looks of this argument, they just deny that spreading risk has any utility and misrepresent pension systems.

Re: The Forecasting Debate and the Brittleness of PAYGO

monkyboy — Mon, 24 Jan 2005 14:46:41 -0000

It's hard to imagine anyone who did more for America than Thomas Jefferson. He died a poor man. What does the current, corrupt system get us? Greedy little shits who risk nothing yet make millions off the government.

Yes, it would be nice for people to invest some of their Social Security funds in competitive US companies. Unfortunately, a few years worth of SS funds will buy a controlling interest in every single US company that fits that description. After that, the people would be getting shares in dog companies that only have a few years to live...

Re: The Forecasting Debate and the Brittleness of PAYGO

Micha Ghertner — Mon, 24 Jan 2005 13:34:55 -0000

Lets join together and call for an 80-90% tax on the salary of anyone who makes more than, say, 4 times the median US income at companies that exist suckling at the government teat.

With the end result being...only the companies with the crappiest, straight-out-of-Devry-weeknight-MBA-program CEOs will be willing to sell to the government. Great plan, Einstein. Instead of getting overprice aircrafts, we would get overpriced aircrafts that fly straight into the ground. Brilliant.

Let's grab Bill Clinton's $10 million book advance, Dick Cheney's ranch, Rudi Giulinani's $8 million a year in speaking fees and Jack Abramoff's $70 million from tribal gaming interests...and let's fund the private Social Security accounts with the proceeds.

I think we can all get behind a plan like that.

Unlike you, most of us don't consider thievery and jealousy to be virtues.

What happens, for instance, if the stock market tubes and we're all left holding a bunch of worthless paper?

What happens if foreign investors realize that the U.S. is bankrupt and cash out all their dollars and U.S. investments for Euros? Would you rather invest in an area of the economy which rapidly and decisively responds to the Enrons in their mists, or an area of the economy which actively and openly encourages Enron-type shenanigans by calling them Pay-As-You-Go retirement insurance?

Re: The Forecasting Debate and the Brittleness of PAYGO

monkyboy — Mon, 24 Jan 2005 01:08:36 -0000

It's true, Sean, that Corporate Executives and Stockbrokers are all a bunch of straight arrows who never break the law, but making them all even richer isn't the only problem with private accounts.

What happens, for instance, if the stock market tubes and we're all left holding a bunch of worthless paper?

Re: The Forecasting Debate and the Brittleness of PAYGO

sean mccray — Sun, 23 Jan 2005 23:28:16 -0000

I just dont get it!
i dont understand the argument that opposes private accounts because it will create "fat cats" on wall street who will take the money and run. Exactly where they will run, i dont know. Also, they ignore that wall street people are tax paying Americans who will have to perform in order to make money. So jobs will be created. Also, the govt can pass a law limiting the type of funds, and the amount of fees that can be charged. "gasp", liberals should know this better than anyone! In other words, it is a weak argument based on absolutely no factual basis. Just based on trying to create fears.

Re: The Forecasting Debate and the Brittleness of PAYGO

monkyboy — Sun, 23 Jan 2005 21:55:49 -0000

You were almost there, Micha, and then you fell back to exactly where the politicians and the people who get rich from the government want you.

Sugar subsidies might be a bad first target for the Coalition of the Efficient. How about Lockheed first? Here is a company that gets almost all its funding from the government, yet its CEO, Vance Coffman, a virtual employee of the federal government, has made $70 million in the past few years.

Lets join together and call for an 80-90% tax on the salary of anyone who makes more than, say, 4 times the median US income at companies that exist suckling at the government teat. Hell, make it apply to anyone who worked for the government in the last 10 years and got rich because of it. And make it retroactive, hehe.

I think we can all get behind a plan like that.

Re: The Forecasting Debate and the Brittleness of PAYGO

Micha Ghertner — Sun, 23 Jan 2005 21:05:39 -0000

Public waste and fraud exists because it is not in the interests of politicians as a class to eliminate waste and fraud. The costs of agricultural subsidies, for instance, are distributed across millions and millions of consumers, who do not have the cooridinating ability to join together and protest against a quadruple increase in the price of sugar. Even if they could coordinate, these costs are so small for each individual sugar consumer that they wouldn't even bother. The benefits if this subsidy, though, are concentrated among the few firms that produce sugar. These sugur producers can easily join together, form a common interest group, and lobby a politician with political donations to create a subsidy for them.

Nobody supports these policies except the sugar producers and their hired political help, but they are the only people that matter. No politician is going to complain because no one else cares enough to vote for or donate to a candidate who calls for an end to these subsidies. A politician who make such a call would lose by a landslide, for challenging the "you scratch my back, I'll scratch yours" mentality of Washington.

Wouldn't everyones time be better spent joining forces to first get rid of government fraud rather than fighting each other on divisive issues like SS reform?

I'm not interested in making the mafia more efficient, less wasteful, and better functioning. One of the only values of government is that it achieves its goals so poorly.

Re: The Forecasting Debate and the Brittleness of PAYGO

monkyboy — Sun, 23 Jan 2005 19:15:02 -0000

Color me confused, Micha.

If "Everyone from the most hardcore libertarian to the most hardcore socialist believes that government waste and fraud should go. " why does it exist?

Wouldn't everyones time be better spent joining forces to first get rid of government fraud rather than fighting each other on divisive issues like SS reform?

Re: The Forecasting Debate and the Brittleness of PAYGO

Micha Ghertner — Sun, 23 Jan 2005 16:41:38 -0000

The Libertarian Party's motto has never been "standing athwart history, yelling stop." There is another name for people who fight that battle, and it isn't libertarian.

Everyone from the most hardcore libertarian to the most hardcore socialist believes that government waste and fraud should go. That is not a uniquely libertarian position, any more than "people shouldn't eat babies" is a uniquely libertarian position.