5 ms·

But what to say about Americans, who squandered natural resources to help the rich, and now the funding to their own social security is en route to insolvency?

maxerickson 7y ago
It would be easy to make social security solvent far into the future. There's no shortage of resources to do it, just lack of political will. One step would be to move it away from an insurance model and raise the cap on contributions. Another would be to modestly increase the contribution rates.
- Majromax 7y ago
  > One step would be to move it away from an insurance model and raise the cap on contributions. Another would be to modestly increase the contribution rates. This is essentially what happened in the mid-90s with the Canada Pension Plan (https://en.wikipedia.org/wiki/Canada_Pension_Plan#1996_reforms https://en.wikipedia.org/wiki/Canada_Pension_Plan#1996_refor...): an increase of contribution rates to move beyond PAYGO solvency to a partial advance-funding model. As a result, the CPP now has a few hundred billion dollars in assets (invested largely in equities) providing income to support long-term solvency.
  - eloff 7y ago
    The downside of that is the Canadian pension doesn't provide a livable amount. One ex tech worker in Calgary who's collecting pension now told me it pays his electric bill.
- jdavis703 7y ago
  If they do raise the cap on contributions people should have the option of either paying more in to social security or paying more into an uncapped IRA or 401(k).
  - pkaye 7y ago
    Maybe a social security tax on capital gains.
  - maxerickson 7y ago
    Almost the entire point of raising the cap would be the resulting wealth transfer. Doing it with an opt out wouldn't fix the problem.
bobwaycott 7y ago
PS: You mean en route—sounds the same, but that's how to correctly spell the phrase.
spamizbad 7y ago
America should seriously consider nationalizing its resources and using that money to either fund programs to reverse the trend of its declining life expectancy or at the very least reduce the deficit (and perhaps, one day, bootstrap a sovereign wealth fund of its own)
- mruts 7y ago
  One of my clients at my old finance firm was Alaska’s oil fund. They do pretty well for themselves and dole out 2k/year in cash to everyone living there. It’s unsurprisingly a very popular program, though I’m kind of morally opposed to a government function like that.
  - js2 7y ago
    The amount varies from year to year. It's mostly been less than 2k. https://en.wikipedia.org/wiki/Alaska_Permanent_Fund#Annual_individual_payout https://en.wikipedia.org/wiki/Alaska_Permanent_Fund#Annual_i...
  - kwhitefoot 7y ago
    The Norwegian fund is principally for our descendants. The state has a self-imposed limit on how much of the revenue of the fund can be spent each year, the capital is untouched as far as I know. Also what money is spent is spent by the state rather than by individuals; no guarantee that it will be spent wisely of course but a greater degree of likelihood that it will be spent on something of lasting value perhaps.
  - umeshunni 7y ago
    The Alaska Permanent Fund is unsurprisingly popular. To the extent that the state recently voted to cut essential services rather than to cut handouts from the fund: https://www.nytimes.com/2019/07/07/us/alaska-university-budget-cuts.html https://www.nytimes.com/2019/07/07/us/alaska-university-budg...
  - pjc50 7y ago
    > though I’m kind of morally opposed to a government function like that. Yes, it's much better for the government to allow a single person to appropriate all that wealth for themselves. /s
ashaikh 7y ago
A fundamental difference is that for Americans, natural resources are owned by the individual property owner rather than the state. If you find oil on your land in the US, it is yours and you decide what to do with it. In most other countries if there is oil on your land, the government has the exclusive right to oil (or other sub-surface minerals).
- Spooky23 7y ago
  Lol. No. Usually where there are significant amounts of minerals, there are separate mineral rights. Mineral rights trump surface ownership, and usually the rights were sold off decades or centuries ago. If you find something under your property, it probably doesn't belong to you. Also, state laws vary in weird ways. Should you find gold in New York, it's the property of the state.
  - hcurtiss 7y ago
    Outside developed oil or coal plays, severed mineral estates in the US are the exception, not the rule. Also, to the point above, those severed mineral interests are almost always privately held.
    - kevin_thibedeau 7y ago
      Unless they happen to be on "sovereign" indian reservation land.
navigatesol 7y ago
>But what to say about Americans, who squandered natural resources Yeah, they squandered their natural resources on the way to becoming the richest, most powerful nation in the history of the planet... How can people say things like this with a straight face? The fact that there are some tough political issues that have or may span a couple decades doesn't erase centuries of history, or millennia of future prospects.
- hcurtiss 7y ago
  Exactly right. Many Americans are so ashamed of the US, when in many ways it's a shining example of how to do things right -- certainly relative to many other countries. The US is a spectacularly prosperous country, and all it seems anyone talks about is how to fundamentally change the systems that made it that way. There are always in which a society can improve, but man -- let's not forget what's worked well.
  - kaibee 7y ago
    > The US is a spectacularly prosperous country, and all it seems anyone talks about is how to fundamentally change the systems that made it that way. The things that made America so wealthy were changed pre-2000. It takes time for those changes to really impact society, and for people to realize it. And no one really talking about "fundamental" change. They're talking about raising taxes back to what they used to be like in the 60s and 70s. Not just in terms of the rate, but the percentage of the tax burden that falls on each segment of society.
    - hcurtiss 7y ago
      While there are many other proposals, that kind of tax policy change would, in itself, definitely be a big change. I encourage people to use this calculator to determine your effective tax rate at various times in the past. If your family is like mine, reverting to the tax policy of the 60s and 70s would be a very large hit to us every year. https://qz.com/74271/income-tax-rates-since-1913/ https://qz.com/74271/income-tax-rates-since-1913/
  - 7y ago

maxerickson 7y ago

It would be easy to make social security solvent far into the future. There's no shortage of resources to do it, just lack of political will. One step would be to move it away from an insurance model and raise the cap on contributions. Another would be to modestly increase the contribution rates.

Majromax 7y ago
> One step would be to move it away from an insurance model and raise the cap on contributions. Another would be to modestly increase the contribution rates. This is essentially what happened in the mid-90s with the Canada Pension Plan (https://en.wikipedia.org/wiki/Canada_Pension_Plan#1996_reforms https://en.wikipedia.org/wiki/Canada_Pension_Plan#1996_refor...): an increase of contribution rates to move beyond PAYGO solvency to a partial advance-funding model. As a result, the CPP now has a few hundred billion dollars in assets (invested largely in equities) providing income to support long-term solvency.
- eloff 7y ago
  The downside of that is the Canadian pension doesn't provide a livable amount. One ex tech worker in Calgary who's collecting pension now told me it pays his electric bill.
jdavis703 7y ago
If they do raise the cap on contributions people should have the option of either paying more in to social security or paying more into an uncapped IRA or 401(k).
- pkaye 7y ago
  Maybe a social security tax on capital gains.
- maxerickson 7y ago
  Almost the entire point of raising the cap would be the resulting wealth transfer. Doing it with an opt out wouldn't fix the problem.

bobwaycott 7y ago

PS: You mean en route—sounds the same, but that's how to correctly spell the phrase.

spamizbad 7y ago

America should seriously consider nationalizing its resources and using that money to either fund programs to reverse the trend of its declining life expectancy or at the very least reduce the deficit (and perhaps, one day, bootstrap a sovereign wealth fund of its own)

mruts 7y ago
One of my clients at my old finance firm was Alaska’s oil fund. They do pretty well for themselves and dole out 2k/year in cash to everyone living there. It’s unsurprisingly a very popular program, though I’m kind of morally opposed to a government function like that.
- js2 7y ago
  The amount varies from year to year. It's mostly been less than 2k. https://en.wikipedia.org/wiki/Alaska_Permanent_Fund#Annual_individual_payout https://en.wikipedia.org/wiki/Alaska_Permanent_Fund#Annual_i...
- kwhitefoot 7y ago
  The Norwegian fund is principally for our descendants. The state has a self-imposed limit on how much of the revenue of the fund can be spent each year, the capital is untouched as far as I know. Also what money is spent is spent by the state rather than by individuals; no guarantee that it will be spent wisely of course but a greater degree of likelihood that it will be spent on something of lasting value perhaps.
- umeshunni 7y ago
  The Alaska Permanent Fund is unsurprisingly popular. To the extent that the state recently voted to cut essential services rather than to cut handouts from the fund: https://www.nytimes.com/2019/07/07/us/alaska-university-budget-cuts.html https://www.nytimes.com/2019/07/07/us/alaska-university-budg...
- pjc50 7y ago
  > though I’m kind of morally opposed to a government function like that. Yes, it's much better for the government to allow a single person to appropriate all that wealth for themselves. /s

ashaikh 7y ago

A fundamental difference is that for Americans, natural resources are owned by the individual property owner rather than the state. If you find oil on your land in the US, it is yours and you decide what to do with it. In most other countries if there is oil on your land, the government has the exclusive right to oil (or other sub-surface minerals).

Spooky23 7y ago
Lol. No. Usually where there are significant amounts of minerals, there are separate mineral rights. Mineral rights trump surface ownership, and usually the rights were sold off decades or centuries ago. If you find something under your property, it probably doesn't belong to you. Also, state laws vary in weird ways. Should you find gold in New York, it's the property of the state.
- hcurtiss 7y ago
  Outside developed oil or coal plays, severed mineral estates in the US are the exception, not the rule. Also, to the point above, those severed mineral interests are almost always privately held.
  - kevin_thibedeau 7y ago
    Unless they happen to be on "sovereign" indian reservation land.

navigatesol 7y ago

>But what to say about Americans, who squandered natural resources Yeah, they squandered their natural resources on the way to becoming the richest, most powerful nation in the history of the planet... How can people say things like this with a straight face? The fact that there are some tough political issues that have or may span a couple decades doesn't erase centuries of history, or millennia of future prospects.

hcurtiss 7y ago
Exactly right. Many Americans are so ashamed of the US, when in many ways it's a shining example of how to do things right -- certainly relative to many other countries. The US is a spectacularly prosperous country, and all it seems anyone talks about is how to fundamentally change the systems that made it that way. There are always in which a society can improve, but man -- let's not forget what's worked well.
- kaibee 7y ago
  > The US is a spectacularly prosperous country, and all it seems anyone talks about is how to fundamentally change the systems that made it that way. The things that made America so wealthy were changed pre-2000. It takes time for those changes to really impact society, and for people to realize it. And no one really talking about "fundamental" change. They're talking about raising taxes back to what they used to be like in the 60s and 70s. Not just in terms of the rate, but the percentage of the tax burden that falls on each segment of society.
  - hcurtiss 7y ago
    While there are many other proposals, that kind of tax policy change would, in itself, definitely be a big change. I encourage people to use this calculator to determine your effective tax rate at various times in the past. If your family is like mine, reverting to the tax policy of the 60s and 70s would be a very large hit to us every year. https://qz.com/74271/income-tax-rates-since-1913/ https://qz.com/74271/income-tax-rates-since-1913/
- 7y ago