Wednesday Evening Highlights

Good day. at last those links.

  1. Plywood wheels!
  2. 5-stroke engine?
  3. If time permitted I’d fisk this. Suffice it to say claims that government spending are the proximate cause for the recover (when the majority of the stimulus remains to be spent) and oops pesky data contradicts the premise. Bleeding was thought to cure disease and often the patient recovered, too.
  4. Right leaning humor, heh
  5. Obama/Pelosi Not in tune.
  6. Cash for clunkers … to purchase clunkers.
  7. Logic and global warming.
  8. Medvedev speaks to the Ukraine. and an a colourful interpretation from the Ukraine.
  9. Home schooling stats.
  10. A book suggested.
  11. Sudan.
  12. Watching Afghanistan.
  13. Off with her head … and that tag line is the main reason I linked that piece.
  14. Insane civilization … ours.
  15. Oh, Ninevah.

59 responses to “Wednesday Evening Highlights

  1. Mark

    I have not argued for taxing assets! I corrected that mistaken impresson once.

    OK fair enough, this is a disconnect that is often seen between lawyers and economists. Economists look at incentives and find legal conventions little more than polite fictions while lawyers focus on legal conventions as highly important. In truth both matter.

    You have not argued for taxing assets but your proposal is essentially the same as one from the POV of incentives. Slashing social security for those who have accumulated assets is reducing the incentive to accumulate assets (i.e. save) during your working years. This is functionally the same as ‘taxing assets’. Granted the legal convention is different in that a tax is a payment you must make while a benefit reduction simply lowers a check you would have normally received.

    What I suggested was that payments of SS benefits be only paid based on means testing, i.e., you don’t get payment unless your assets and income are both below a set minimum. That would drastically limit the amount paid to SS.

    Again this requires people to report their assets as well as their income. Income reporting can be complicated but in most cases its simple. Asset reporting is a whole different animal when you consider the vast diversity of assets (401ks to real estate to comic books) as well as the vast diversity of ways to hide them (‘give’ them to your kids, bury them behind the rock in your back yard etc.).

    Look you’re arguing basically arguing that in the specific case of retirement funds, incentives don’t work and that the reverse incentive of SS is helpful. if you think that incentives aren’t important or don’t work

    I’m not sure how I’ve argued that. On the contrary I think you’re the one whose arguing for an incentive against retirement funds. I think the more important issue with your proposal, though, is that you haven’t thought about the implications of the mechanics behind it.

    If you recall my argument was that Social Security was an example of a safety net type program that provided an incentive for people to take positive risks that they might not have otherwise taken. I’m not sure how you translate that into asserting that ‘incentives don’t work’.

  2. And we have just jumped head first into a global financial crises which had a center around the issue of how do you properly value assets, esp. ones based on real estate. We have large developments where homes were selling for hundreds of thousands just a few years ago that now see 50%+ foreclosure rates. Can you imagine the outcry as people are told they ‘technically’ have too many assets because their homes are valutated at the purchase price therefore cannot get social security?

  3. Boonton,

    Again this requires people to report their assets as well as their income. Income reporting can be complicated but in most cases its simple. Asset reporting is a whole different animal when you consider the vast diversity of assets (401ks to real estate to comic books) as well as the vast diversity of ways to hide them (’give’ them to your kids, bury them behind the rock in your back yard etc.).

    There is no requirement to report assets. Only if you are declaring that you need SS to collect from the “safety net”, i.e., benefits, do you have to demonstrate that you actually need them. We means test for welfare payments, why is this any different?

    Slashing social security for those who have accumulated assets is reducing the incentive to accumulate assets (i.e. save) during your working years.

    Uhm, no. Welfare dependence today is not “desired.” Why? Well, because you can’t get the things most people find necessary. This serves as an incentive to work. You don’t starve if you don’t work … but your life is much better if you do. Likewise, means testing SS increases the incentive to save, to insure you don’t depend on a small stipend from the state for living expenses in your old age. It only decreases is the incentive to save if the payment level that one can get from the state is deemed to be comfortable (an assumption I’m not making).

    I’d not I’m not arguing against retirement planning per se, just that the public option is one to plan to depend upon. Somehow you seem to equate the two?

    If you recall my argument was that Social Security was an example of a safety net type program that provided an incentive for people to take positive risks that they might not have otherwise taken.

    If every one must participate SS is not a safety net, it’s a mandatory retirement plan, which for the average person (middle class employed) has a particularly poor rate of return. Furthermore, I disagree that this is an incentive to work. I think it’s the reverse, it’s an incentive to not personally plan and save for retirement.

  4. There is no requirement to report assets. Only if you are declaring that you need SS to collect from the “safety net”, i.e., benefits, do you have to demonstrate that you actually need them. We means test for welfare payments, why is this any different?

    Your parents must be either in good health, have died early and quickly or are relatively young. You might want to explore the difference between medical expenses for the old (usually covered by Medicare) and nursing home expense which is not. To get Medicaid to cover nursing home expense, you have to essentially have zero assets and to generate that requires a lot of paperwork and hassel.

    Most seniors do not need nursing home care so for many this is not an issue. Even those that do often need only a brief period of care that Medicare pays for so the difficulty of this type of ‘means testing’ is pretty much hidden from most people. For many seniors, social security makes the differnce between poverty and a somewhat dignified old age. Again you don’t really understand what you’re proposing nor have you made an argument for why it should be adopted.

    Uhm, no. Welfare dependence today is not “desired.” Why? Well, because you can’t get the things most people find necessary. This serves as an incentive to work.

    that’s cute. The prime incentive to work is that working makes you financially better off than not working. You propose a policy that shifts that scale so working pays off less financially (or actually blowing all your assets when your young pays off better) you are going to harm the incentive to accumulate assets.

    If every one must participate SS is not a safety net, it’s a mandatory retirement plan, which for the average person (middle class employed) has a particularly poor rate of return.

    I must pay for my local police force even if I’m not the victim of any crime requiring their attention. I must pay even if I feel I’m strong enough to fend off any criminals that may cause me trouble. Yet the existence of that ‘safety net’ allows me to take risks that I might not otherwise take such as choosing not to cower to some local ‘warlord’ for protection or spending half my income turning my home into a fortress.

    Now you’re wrong about SSI’s rate of return but since you don’t even know how much you pay in tax I’m not really surprised.

  5. Boonton,
    My parents are in good health, retired, and in their early 70s. My wife’s parents are a few years younger and her father is terminally ill with a unknown illness (it’s one (or more) of several alternatives none of which have a cure and some of which are “syndromes”, i.e., dr-speak for we-don’t-know-anything-yet).

    To get Medicaid to cover nursing home expense, you have to essentially have zero assets and to generate that requires a lot of paperwork and hassel.

    Hmm, I thought you said it was basically impossible to determine this, yet here it is not so. And it sounds like a distinct disincentive not to prepare beforehand.

    You propose a policy that shifts that scale so working pays off less financially (or actually blowing all your assets when your young pays off better) you are going to harm the incentive to accumulate assets.

    You have this backwards. It is your policy which is the disincentive.

    Now you’re wrong about SSI’s rate of return but since you don’t even know how much you pay in tax I’m not really surprised

    Yawn. I pay 15%. We discussed this.

    I must pay for my local police force even if I’m not the victim of any crime requiring their attention.

    Your argument unchanged can apply for why the government should provide you with clothing and food.

  6. Hmm, I thought you said it was basically impossible to determine this, yet here it is not so. And it sounds like a distinct disincentive not to prepare beforehand.

    Not impossible, but invasive. There’s a 3 year ‘lookback’ on financial records as well as real estate and if jockeying for Medicaid was more common the investigations (and game playing) would be a lot more. Nursing home need is a lot less common than the need for a regular and predictable income in old age.

    You have this backwards. It is your policy which is the disincentive.

    Let’s see, current policy is having assets at 65 does NOT result in loss of SSI. Your policy is having assets at 65 does result in loss of SSI. Your response is that even though having assets causes you to loose a financial benefit people will want to have assets in order to satisfy their ‘pride’ in not being on any type of gov’t welfare. Strange.

    Your argument unchanged can apply for why the government should provide you with clothing and food.

    It’s more efficient to provide myself with clothing and food, esp. considering that these are relatively fixed expenses and subject to quite a bit of personal taste. Providing for a stable economy and stable retirement allows me to provide better for myself and others by removing a risk at a reasonable expense. A universal clothing voucher might be somewhat harmless but is unlikely to produce the benefits of the things we as a society have collectively decided merit a safety net.

  7. Boonton,

    Let’s see, current policy is having assets at 65 does NOT result in loss of SSI. Your policy is having assets at 65 does result in loss of SSI. Your response is that even though having assets causes you to loose a financial benefit people will want to have assets in order to satisfy their ‘pride’ in not being on any type of gov’t welfare. Strange.

    Oddly enough my policy does not require devoting ~15% of your wages to SSI leaving one with far more money with which to plan for retirement and not depend on a SS policy which has a negative rate of return. You keep forgetting that. Strange.

    It’s more efficient to provide myself with clothing and food, esp. considering that these are relatively fixed expenses and subject to quite a bit of personal taste.

    It’s also more efficient for me to provide myself for my retirement as these too reflect quite a bit of personal taste and indidivual family circumstance.

    The Soviet’s had hot water provided by the state. Do you think individual vs collective hot water heating a good idea? How about your car? Why not your employement? Gosh … here JA was arguing that the left side of the aisle these days had set communism aside.

  8. Boonton,
    Oh, I think the correction for adding the 7.5 employer portion correctly to your income makes that 13.9% instead of 15.

  9. It’s also more efficient for me to provide myself for my retirement as these too reflect quite a bit of personal taste and indidivual family circumstance.

    Possibly, unfortunately the game of providing for retirement is one shot while providing for clothing is not. In other words, if you blow the next paycheck on booze and nonesense the worse that’s likely to happen to you clothing wise is some embarassment, the social stigma of which, for most people, will result in some wiser choices in clothing the next go around (granted you could still be a fashion criminal but you’re probably not going to end up naked on the street). Your inability to correctly plan for retirement, on the other hand, doesn’t provide for many do-overs. If you hit 65 with just enough for, say, 5 years, you are unlikely to be able to return to work at 70 if it turns out you’re healthy enough to live to 90.

    Consider that despite massive publicity, massive advertising by the financial industry, and massive tax incentives, many 401K’s barely are able to get balances in the 5 digits (and by that closer to $30K rather than $99K). A 401K with $30K would replace maybe 3 years of checks at best.

    Oh, I think the correction for adding the 7.5 employer portion correctly to your income makes that 13.9% instead of 15.

    A static analysis though. If they abolished Social Security just for you it would probably make sense to think of the situation like this. A mass abolition of it for everyone, though, alters the equation drastically. It’s not as simple as you just getting a 13.9% increase in pay (assuming your employer opts to pass their savings onto you). To use the police example, abolishing law enforcement in the name of mass anarchy is likely to have a more dramatic impact on you than a simple reduction of your property taxes by the level allocated to your local police dept.

    The Soviet’s had hot water provided by the state. Do you think individual vs collective hot water heating a good idea? How about your car? Why not your employement?

    I think this would be a good example of where the principle of subsidary comes into play. In most case individual provision of hot water is most efficient (although NYC, due to its density, has a municiple steam system where buildings buy heat and hot water from the city service rather than running boilers in all the buildings).

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