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The Economist magazine pension issue

blogs.law.harvard.edu

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Re: The Economist magazine pension issue

#11

Post by chrismealy »

rglullis wrote: post #8
chrismealy wrote: post #7

If economic growth averages 2% for the next 35 years America will be twice as rich as it is now. We can provide for old folks now, just like we did 35 years ago, and we can definitely do it 35 years from now. This is just another rich dude complaining about the proles.

No account for inflation? No account for the rising costs in healthcare, and diminishing returns on that "investment"? No account for the fact that 35 years ago the proportion of economic active people to retired ones was completely different? If you are going to dismiss a (very middle class, by social standards) dude, at least you should do a little bit more than hand-waving.

2% is real. The US has average around 3% for years now. And since I don't believe in the tendency of the rate of profit to fall I don't think assuming at least 2% is unreasonable. But let's say zero. Does anyone really think we'll lose the ability to care for the old?

Here's the simple way to think about pensions/SS: we take about 4% of GDP and cut checks to old people. They buy food and pay their rent. Nobody starves. It always works, in 1961, 2011, 2061, whenever. Anybody who says otherwise is trying to fool you.

Re: The Economist magazine pension issue

#12

Post by rglullis »

chrismealy wrote: post #11
rglullis wrote: post #8

Earlier quoted context omitted.

No account for inflation? No account for the rising costs in healthcare, and diminishing returns on that "investment"? No account for the fact that 35 years ago the proportion of economic active people to retired ones was completely different? If you are going to dismiss a (very middle class, by social standards) dude, at least you should do a little bit more than hand-waving.

2% is real. The US has average around 3% for years now. And since I don't believe in the tendency of the rate of profit to fall I don't think assuming at least 2% is unreasonable. But let's say zero. Does anyone really think we'll lose the ability to care for the old? Here's the simple way to think about pensions/SS: we take about 4% of GDP and cut checks to old people. They buy food and pay their rent. Nobody starve…

Define "old people".

Re: The Economist magazine pension issue

#13

Post by bluedanieru »

chrismealy wrote: post #11
rglullis wrote: post #8

Earlier quoted context omitted.

No account for inflation? No account for the rising costs in healthcare, and diminishing returns on that "investment"? No account for the fact that 35 years ago the proportion of economic active people to retired ones was completely different? If you are going to dismiss a (very middle class, by social standards) dude, at least you should do a little bit more than hand-waving.

2% is real. The US has average around 3% for years now. And since I don't believe in the tendency of the rate of profit to fall I don't think assuming at least 2% is unreasonable. But let's say zero. Does anyone really think we'll lose the ability to care for the old? Here's the simple way to think about pensions/SS: we take about 4% of GDP and cut checks to old people. They buy food and pay their rent. Nobody starve…

It should be this simple. Hopefully circumstances will force society to cut some of the bullshit and implement it. At the moment there is a lot of waste and mis-allocation of resources.

Re: The Economist magazine pension issue

#14

Post by alanh »

high5ths wrote: post #2

I like this blog (other entries of which have been posted here before), but I find it a bit misleading that it shows up on HN as coming from "harvard.edu" -- which I assume to be Harvard's official web portal. (Clicking through reveals it to be a posting on blogs.law.harvard.edu, which provides free blog webspace to anyone with a Harvard-affiliated email address.) Am I just being too picky?

Not at all, it’s a known problem here on HN; while this case is relatively untroubling, other domains can be much more problematic (e.g. google.com entries are not always written by Googlers at all).

Re: The Economist magazine pension issue

#15

Post by jacques_chester »

bluedanieru wrote: post #10
dman wrote: post #5

I wonder if at some point some sections of society will voluntarily move to less efficient methods of production to generate employment - aka resurrecting the self sufficient village.

If that does occur I'd take it as a sign of some serious problems with social order. More efficient production should see gains for everyone, but a look at the last thirty years suggests otherwise.

If you look at industries with an irreducible reliance on labour (eg medicine, law) then productivity has surged through the accumulation of capital. Programmers today can achieve in minutes what used to take years, because of the accumulation of software and faster hardware.

This leads to the paradoxical situation that as a percentage of GDP, those irreducible-labour sectors begin to loom larger and larger.

Re: The Economist magazine pension issue

#16

Post by teyc »

This is the usual demographic problem. However, the problem is bigger on the military end - you can't defend your interests if 1) you don't have the money 2) if you don't have the manpower.

However, the back to the problem with taxing jobs out of existence: fortune is on youths side. As bad as the problem may sound, once the problem hits criticality, you get a sudden societal upheaval and things right itself immediately. No one should count on their pensions as being forever.

Re: The Economist magazine pension issue

#18

Post by jshen »

chrismealy wrote: post #11
rglullis wrote: post #8

Earlier quoted context omitted.

No account for inflation? No account for the rising costs in healthcare, and diminishing returns on that "investment"? No account for the fact that 35 years ago the proportion of economic active people to retired ones was completely different? If you are going to dismiss a (very middle class, by social standards) dude, at least you should do a little bit more than hand-waving.

2% is real. The US has average around 3% for years now. And since I don't believe in the tendency of the rate of profit to fall I don't think assuming at least 2% is unreasonable. But let's say zero. Does anyone really think we'll lose the ability to care for the old? Here's the simple way to think about pensions/SS: we take about 4% of GDP and cut checks to old people. They buy food and pay their rent. Nobody starve…

He mentioned this, "Part of the magic is that they don’t promise unlimited inflation indexing. If their country gets poorer, the pain will be shared by the working and non-working alike. "

Will we have the political will to do it any time soon?

Re: The Economist magazine pension issue

#19

Post by wladimir »

dman wrote: post #5

I wonder if at some point some sections of society will voluntarily move to less efficient methods of production to generate employment - aka resurrecting the self sufficient village.

Yes, this might happen eventually, as more and more jobs are automated. Automation pushes down the value of things. So people might start to prefer "genuine" hand crafted items to mass produced stuff, and this will spawn an economy of itself.

Re: The Economist magazine pension issue

#20

Post by jacques_chester »

jacques_chester wrote: post #15
bluedanieru wrote: post #10

Earlier quoted context omitted.

If that does occur I'd take it as a sign of some serious problems with social order. More efficient production should see gains for everyone, but a look at the last thirty years suggests otherwise.

If you look at industries with an irreducible reliance on labour (eg medicine, law) then productivity has surged through the accumulation of capital. Programmers today can achieve in minutes what used to take years, because of the accumulation of software and faster hardware. This leads to the paradoxical situation that as a percentage of GDP, those irreducible-labour sectors begin to loom larger and larger.

Correction: industries without an irreducible reliance on labour haven't seen productivity surges.
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