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One big challenge I see with the whole business about pension reform (and government spending in fact) as a public debate is that two sides are talking on total

One big challenge I see with the whole business about pension reform (and government spending in fact) as a public debate is that two sides are talking on totally different planes. In France, and someday very soon, here in the US. And the public in a certain sense, will problematically have to end up voting a simple yes/no on extremely complex topics which are incentivized to push buttons on single issues. cf. Brexit. On the one side (hopefully meaningful to this crowd) is a group that when confronted with the sheer numbers involved and tradeoffs that would make any dent in the coming demographic-driven bankruptcy (shorthand name for it), have to keep things running and try to come up with the actually mathematically workable or "implement this decision" plans with the resources they have. Not aspirations. Take a look at this for example: https://www.nytimes.com/interactive/2023/03/06/upshot/balancing-budget-painful-spending-cuts.html https://www.nytimes.com/interactive/2023/03/06/upshot/balanc... See those numbers/scenarios, there is no getting around the severity of the situation. Then on the other plane, there are people (politicians, and people in general in the country) who deal in "symbols" and qualitative statements about what they think who is entitled to, what was promised, etc. "Eat the rich!" etc. And lately it seems, rarely the twain shall meet. Or at least, it's quite rare to find leaders who are equally incentivized or capable of handling both sides of this adeptly. Also, the people who don't understand the numbers generally tend to shout and insist they're right. On the other hand, numbers people don't usually shout (and underplay the severity of coming problems; the type that analyzes is usually civil about it). Also, and this is an evolving thought -- I don't think democracies are very well suited to allocating the pain of a country's long-term downturn very well, or having people understand when your country's resources are actually decreasing. One thing is for sure -- there is a massive unpleasant reckoning coming in terms of what benefits and tax rates people believed they would experience. There is no magic getting out of this hole, it will be one of / combination of: -- taxes will rise (for whom?) -- benefits will decrease (for whom?) -- retirement age will increase -- borrowing will increase (from whom?) And undoubtedly it will largely fall on the next generations. Or just in time for my retirement.

noobermin 4y ago
I read the article and no, I do not see that there is no getting around the severity of the situation. The very last plot is ridiculous, how can they even extrapolate that from the graph given?
- supernova87a 4y ago
  Maybe you should read more about it. If you know how many people are going to be aging into the Social Security system, and needing Medicare/Medicaid, and some simple assumptions about the budget and tax revenue, you can easily generate the approximate shape and amounts of those financial projections. It is so simple a calculation and so ridiculous a situation, as you say (but in a different way than you mean), that this is a huge problem that will have to be confronted. The CBO generates those kinds of calculations, and they're not a group known for making up things out of thin air.
nebula8804 4y ago
Pardon my language but where the f** is all this money going? Is it even humanly possible for a group of regular joes to audit where all the money is going? I think thats the first thing that HAS to happen, a clear transparent audit down to the penny. As a coder, this kind of complexity just drives me up the wall. Also on a side note, I love how sneaky that NY Times article leaves out the option to cut defense. After all we can NEVER reduce our military industrial complex, only cut everything else to the bone.
- creato 4y ago
  The top 3 chunks of spending are social security, Medicare, and Medicaid. The majority of that spending is payments to individuals or on behalf of individuals for medical bills. You can probably find the exact fraction of overhead for each program somewhere.
  - rootusrootus 4y ago
    > The top 3 chunks of spending After national defense, you mean. https://www.usaspending.gov/explorer/budget_function https://www.usaspending.gov/explorer/budget_function
    - creato 4y ago
      According to the link in the parent I replied to, social security and Medicare are larger, by more than 0.7%
      - rootusrootus 4y ago
        Hmmm, so do I trust a media source, or the gov't themselves. Decisions, decisions!
        hcurtiss 4y ago
        On the site you link, 2020 and 2021 tell a different story, though only on the margin.
croes 4y ago
>There is no magic getting out of this hole. There is magic, the rise of productivity. It just didn't reach the ordinary people.
icelancer 4y ago
These pensions were bankrupt the minute they were implemented - the capital appreciation rates were completely insane to start, and have only looked worse as time rolls on (which, I have to stress, is extremely tough to imagine). Delusion around pension portfolios eclipses all but the most insane crypto scams. Quite a bit of my university work in the early 2000s revolved around studying and modeling pension-type retirement plans, primarily in the United States (Chicago and Philadelphia mostly come to mind), but a little in foreign countries. While EU pensions tend to be in worse positions, it's a distinction without a difference: Pension reform is basically impossible. Catastrophic bankruptcy and refusal to pay benefits is coming to a theatre near you, because the political will to even begin meager cuts (and so-called "drastic" cuts are indeed merely meager) does not exist. Politicians who propose meaningful cuts to pensions are guaranteed a single term in office while the candidates waiting in line promise to keep the Ponzi scheme going.
- ecshafer 4y ago
  Philadelphia's pension "scheme" is crazy and borderline criminal how its implemented. Pay days on retirement date based on salary in the past several years, absolutely rampant overtime fraud, cronyism abound everywhere. There are plenty of stories of people retiring milking tens of thousands of dollars from fraudulent overtime, getting a one time payment on retirement in the hundreds of thousands, and then getting a pension higher than their real salary. I support pensions, but this has to be done at the federal level, and funded heavily through taxes and pro-natalist policies to keep demographics correct. Cities, states, counties and companies are not able to adequately fund defined benefit pensions.
  - 76384638 4y ago
    A federal system sounds like a horrible idea and a really dangerous single point of failure. The consequences of such a system collapsing would be apocalyptic, and forcing everyone into a single system without competition all but guarantees corruption and mismanagement. Social security is bad enough, please don't expand it.
    - 4y ago
Convolutional 4y ago
The US has spent $100 billion in the Ukraine over the past year, with more on the way, it is sending billions a year to Israel and Egypt, is involved in Iran, China, Venezuela etc. It just stopped spending a ton in Afghanistan. All the money spent there seemed to have no positive effect. The US seems to have money to throw all over the world for this kind of bloodthirsty waste, if it cuts it can cut there. People getting back money they put into Social Security should be the last thing to go. The US spends hundreds of billions on these wars of choice, that can be cut very easy.
- TheGigaChad 4y ago
  [dead]
- realjhol 4y ago
  Bizarre that you're getting down-voted. Though the answer to your suggestions is that any populist conception of the American Empire is delusional. Like a mafia they will take your money and spend it in whatever way they damn well wish, and there's nothing you can do about it
- ars 4y ago
  You call them wars of choice. It would be more correct to call this preventative money. They spend this money in order to prevent having an actual war later. Also a lot of the aid is actually jobs program where the aid recipient is required to spend the money on American made goods. So it's not quite as simplistic as you're making it out to be.
  - OrvalWintermute 4y ago
    > You call them wars of choice. It would be more correct to call this preventative money. No, we that served don't. > They spend this money in order to prevent having an actual war later. Having spent a good part of my life prepping for Fulda Gap defense against the USSR I know that is incorrect. The US has spread NATO right up to Russian doorstep, on the cusp of inside their early warning systems for missiles, having fomented revolution and armed the Western Ukrainians in their civil war against the Eastern Ethnic Russian Ukrainians. Iraq, Afghanistan, Syria, the Arab Spring turned Winter - more of American Adventurism than critical national security objectives. Am all for a strong military, just not it being overutilized for incorrect purposes.
dangus 4y ago
Do you have some kind of similar study that doesn't come out of the Republican Party? Maybe something a little more non-partisan? An example of the flaws of this argument/article is how Social Security is self-funded, and not in any financial jeopardy on its own. [1] Some of the other entitlement programs on the list also work that way. Regardless, my understanding is that a government's budget never has to be balanced. It doesn't operate like a family household. Oftentimes, national debt is used for pursuits that return on their investment, just like how startup companies operate at a deficit on purpose to prioritize growth that will make the company more valuable in the long term. Inflation also lessens the value of the national debt over time. I quite like one of those options: taxes on the wealthy and ultra-wealthy have a lot of room to rise. Jack them up, billionaires shouldn't exist, and people like Jeff Bezos shouldn't have a single-digit tax rate. The other part would be looking at government inefficiencies and flawed policies that aren't on your list, the kind that result in wasted spending that's hard to demonstrate tangibly. For example, should we not talk about how suburban development and the interstate highway system is a monetary drain on wealth for the majority of the country? It's really obvious to me how building more sewer, road, and utilities per person and forcing everyone to own one car per capita or more is a dumb waste of money on a national level. Our government on every level plays a heavy hand in subsidizing that development pattern. It would be really easy to afford my tax rate increasing to a much higher level if I wasn't forced to own more than one car just to get myself to work. It would also be easier for me to afford housing if a bunch of single family home owners weren't preventing dense housing from being built, and then all that extra money I saved could go toward something more economically productive than a parking lot. The average American spends somewhere between $5,000 to $10,000 per vehicle annually. Imagine a USA where everyone could go down to one car per family and how the rest of that money could be used. But no, instead let's add one more lane and make our retirees work until they're 85 rather than fixing our structural problems that make America a very expensive and energy-wasteful place to live. Because, when you think about it, national wealth is basically access to energy, and America is squandering their own wealth by dumping it into their GMC Yukon Denali Ultimate that gets 14MPG. I don't understand why there's a temptation to jump to the conclusion that the answer is to make people retire later in life or cut safety net programs, which are often investments with ROI (e.g., hungry kids learn poorly, hungry kids result in reduced workforce education and productivity). Are 70 year old employees particularly productive for the economy in the first place? It seems like there are smarter ways to save wealth or earn more wealth for the nation. [1] https://www.aarp.org/retirement/social-security/info-2020/10-myths-explained.html https://www.aarp.org/retirement/social-security/info-2020/10...
silisili 4y ago
Maybe I'm too pessimistic, but sometimes I feel that bloc got all the goodies at everyone else's expense. This isn't a typical 'boomers' or anything argument against the people, but perhaps the demographic itself and the way politics played out. Pensions are unheard of now, and companies are still struggling to keep up with them, likely meaning lowered wages for the next group(and no pensions). Tough luck. I fully expect to pay social security my entire life to subsidize those getting it now, and to be dead before I'm ever able to collect a dime. Honestly, even having paid into it my whole life, I wish they'd just kill it off. It's an unsustainable pyramid scheme, especially as birth rates flattened. Even if I do live long enough to collect, I don't want that burden on the next generations. The age is going to keep being raised. A quarter of Americans don't even live to 'full retirement age.' And when it's raised so high it's profitable, the USG is just going to raid it like a slush fund.
- phpisthebest 4y ago
  >>I feel that bloc got all the goodies at everyone else's expense Pensions and SocSec were both Ponzi Schemes, Only government could allow something so fraudulent to legally exist. (Interesting Fact, the original SocSec retirement age was 2 years higher than the Life Expectancy Age, now it is something like 8-10year lower... ) It could have kept working provided the population continued to grow at an ever increasing rate keeping the worker to retired person ratio at 10:1, but 2 or 3 generations of declining birth rates, and low immigration means the scheme is coming apart More so your 401K is currently, and will continue to be reduced in value as the boomer take more and more capital out of the market for their final years. I think we will need to reassess what "normal" returns on a 30 year portfolio looks like as well, in addition to inflation which I think will stabilize at more than the target 2%.. Simply put.. we are economically stag net, and if you are under 40 retirement will be much harder
ErikVandeWater 4y ago
Is there a fundamental reason that cuts would have to be to benefits? Why not cut xx% of the government budget anywhere but pensions?
avgcorrection 4y ago
What’s your annual income?
mzs 4y ago
That's about debt not social security.
scotty79 4y ago
> -- taxes will rise (for whom?) Is this a real question? Top few percent of capital owners captured nearly 100% of productivity inrease that came from last few decades of technological development. It's obvious who should be taxed.

noobermin 4y ago

I read the article and no, I do not see that there is no getting around the severity of the situation. The very last plot is ridiculous, how can they even extrapolate that from the graph given?

supernova87a 4y ago
Maybe you should read more about it. If you know how many people are going to be aging into the Social Security system, and needing Medicare/Medicaid, and some simple assumptions about the budget and tax revenue, you can easily generate the approximate shape and amounts of those financial projections. It is so simple a calculation and so ridiculous a situation, as you say (but in a different way than you mean), that this is a huge problem that will have to be confronted. The CBO generates those kinds of calculations, and they're not a group known for making up things out of thin air.

nebula8804 4y ago

Pardon my language but where the f** is all this money going? Is it even humanly possible for a group of regular joes to audit where all the money is going? I think thats the first thing that HAS to happen, a clear transparent audit down to the penny. As a coder, this kind of complexity just drives me up the wall. Also on a side note, I love how sneaky that NY Times article leaves out the option to cut defense. After all we can NEVER reduce our military industrial complex, only cut everything else to the bone.

creato 4y ago
The top 3 chunks of spending are social security, Medicare, and Medicaid. The majority of that spending is payments to individuals or on behalf of individuals for medical bills. You can probably find the exact fraction of overhead for each program somewhere.
- rootusrootus 4y ago
  > The top 3 chunks of spending After national defense, you mean. https://www.usaspending.gov/explorer/budget_function https://www.usaspending.gov/explorer/budget_function
  - creato 4y ago
    According to the link in the parent I replied to, social security and Medicare are larger, by more than 0.7%
    - rootusrootus 4y ago
      Hmmm, so do I trust a media source, or the gov't themselves. Decisions, decisions!
      - hcurtiss 4y ago
        On the site you link, 2020 and 2021 tell a different story, though only on the margin.

croes 4y ago

>There is no magic getting out of this hole. There is magic, the rise of productivity. It just didn't reach the ordinary people.

icelancer 4y ago

These pensions were bankrupt the minute they were implemented - the capital appreciation rates were completely insane to start, and have only looked worse as time rolls on (which, I have to stress, is extremely tough to imagine). Delusion around pension portfolios eclipses all but the most insane crypto scams. Quite a bit of my university work in the early 2000s revolved around studying and modeling pension-type retirement plans, primarily in the United States (Chicago and Philadelphia mostly come to mind), but a little in foreign countries. While EU pensions tend to be in worse positions, it's a distinction without a difference: Pension reform is basically impossible. Catastrophic bankruptcy and refusal to pay benefits is coming to a theatre near you, because the political will to even begin meager cuts (and so-called "drastic" cuts are indeed merely meager) does not exist. Politicians who propose meaningful cuts to pensions are guaranteed a single term in office while the candidates waiting in line promise to keep the Ponzi scheme going.

ecshafer 4y ago
Philadelphia's pension "scheme" is crazy and borderline criminal how its implemented. Pay days on retirement date based on salary in the past several years, absolutely rampant overtime fraud, cronyism abound everywhere. There are plenty of stories of people retiring milking tens of thousands of dollars from fraudulent overtime, getting a one time payment on retirement in the hundreds of thousands, and then getting a pension higher than their real salary. I support pensions, but this has to be done at the federal level, and funded heavily through taxes and pro-natalist policies to keep demographics correct. Cities, states, counties and companies are not able to adequately fund defined benefit pensions.
- 76384638 4y ago
  A federal system sounds like a horrible idea and a really dangerous single point of failure. The consequences of such a system collapsing would be apocalyptic, and forcing everyone into a single system without competition all but guarantees corruption and mismanagement. Social security is bad enough, please don't expand it.
  - 4y ago

Convolutional 4y ago

The US has spent $100 billion in the Ukraine over the past year, with more on the way, it is sending billions a year to Israel and Egypt, is involved in Iran, China, Venezuela etc. It just stopped spending a ton in Afghanistan. All the money spent there seemed to have no positive effect. The US seems to have money to throw all over the world for this kind of bloodthirsty waste, if it cuts it can cut there. People getting back money they put into Social Security should be the last thing to go. The US spends hundreds of billions on these wars of choice, that can be cut very easy.

TheGigaChad 4y ago
[dead]
realjhol 4y ago
Bizarre that you're getting down-voted. Though the answer to your suggestions is that any populist conception of the American Empire is delusional. Like a mafia they will take your money and spend it in whatever way they damn well wish, and there's nothing you can do about it
ars 4y ago
You call them wars of choice. It would be more correct to call this preventative money. They spend this money in order to prevent having an actual war later. Also a lot of the aid is actually jobs program where the aid recipient is required to spend the money on American made goods. So it's not quite as simplistic as you're making it out to be.
- OrvalWintermute 4y ago
  > You call them wars of choice. It would be more correct to call this preventative money. No, we that served don't. > They spend this money in order to prevent having an actual war later. Having spent a good part of my life prepping for Fulda Gap defense against the USSR I know that is incorrect. The US has spread NATO right up to Russian doorstep, on the cusp of inside their early warning systems for missiles, having fomented revolution and armed the Western Ukrainians in their civil war against the Eastern Ethnic Russian Ukrainians. Iraq, Afghanistan, Syria, the Arab Spring turned Winter - more of American Adventurism than critical national security objectives. Am all for a strong military, just not it being overutilized for incorrect purposes.

dangus 4y ago

Do you have some kind of similar study that doesn't come out of the Republican Party? Maybe something a little more non-partisan? An example of the flaws of this argument/article is how Social Security is self-funded, and not in any financial jeopardy on its own. [1] Some of the other entitlement programs on the list also work that way. Regardless, my understanding is that a government's budget never has to be balanced. It doesn't operate like a family household. Oftentimes, national debt is used for pursuits that return on their investment, just like how startup companies operate at a deficit on purpose to prioritize growth that will make the company more valuable in the long term. Inflation also lessens the value of the national debt over time. I quite like one of those options: taxes on the wealthy and ultra-wealthy have a lot of room to rise. Jack them up, billionaires shouldn't exist, and people like Jeff Bezos shouldn't have a single-digit tax rate. The other part would be looking at government inefficiencies and flawed policies that aren't on your list, the kind that result in wasted spending that's hard to demonstrate tangibly. For example, should we not talk about how suburban development and the interstate highway system is a monetary drain on wealth for the majority of the country? It's really obvious to me how building more sewer, road, and utilities per person and forcing everyone to own one car per capita or more is a dumb waste of money on a national level. Our government on every level plays a heavy hand in subsidizing that development pattern. It would be really easy to afford my tax rate increasing to a much higher level if I wasn't forced to own more than one car just to get myself to work. It would also be easier for me to afford housing if a bunch of single family home owners weren't preventing dense housing from being built, and then all that extra money I saved could go toward something more economically productive than a parking lot. The average American spends somewhere between $5,000 to $10,000 per vehicle annually. Imagine a USA where everyone could go down to one car per family and how the rest of that money could be used. But no, instead let's add one more lane and make our retirees work until they're 85 rather than fixing our structural problems that make America a very expensive and energy-wasteful place to live. Because, when you think about it, national wealth is basically access to energy, and America is squandering their own wealth by dumping it into their GMC Yukon Denali Ultimate that gets 14MPG. I don't understand why there's a temptation to jump to the conclusion that the answer is to make people retire later in life or cut safety net programs, which are often investments with ROI (e.g., hungry kids learn poorly, hungry kids result in reduced workforce education and productivity). Are 70 year old employees particularly productive for the economy in the first place? It seems like there are smarter ways to save wealth or earn more wealth for the nation. [1] https://www.aarp.org/retirement/social-security/info-2020/10-myths-explained.html https://www.aarp.org/retirement/social-security/info-2020/10...

silisili 4y ago

Maybe I'm too pessimistic, but sometimes I feel that bloc got all the goodies at everyone else's expense. This isn't a typical 'boomers' or anything argument against the people, but perhaps the demographic itself and the way politics played out. Pensions are unheard of now, and companies are still struggling to keep up with them, likely meaning lowered wages for the next group(and no pensions). Tough luck. I fully expect to pay social security my entire life to subsidize those getting it now, and to be dead before I'm ever able to collect a dime. Honestly, even having paid into it my whole life, I wish they'd just kill it off. It's an unsustainable pyramid scheme, especially as birth rates flattened. Even if I do live long enough to collect, I don't want that burden on the next generations. The age is going to keep being raised. A quarter of Americans don't even live to 'full retirement age.' And when it's raised so high it's profitable, the USG is just going to raid it like a slush fund.

phpisthebest 4y ago
>>I feel that bloc got all the goodies at everyone else's expense Pensions and SocSec were both Ponzi Schemes, Only government could allow something so fraudulent to legally exist. (Interesting Fact, the original SocSec retirement age was 2 years higher than the Life Expectancy Age, now it is something like 8-10year lower... ) It could have kept working provided the population continued to grow at an ever increasing rate keeping the worker to retired person ratio at 10:1, but 2 or 3 generations of declining birth rates, and low immigration means the scheme is coming apart More so your 401K is currently, and will continue to be reduced in value as the boomer take more and more capital out of the market for their final years. I think we will need to reassess what "normal" returns on a 30 year portfolio looks like as well, in addition to inflation which I think will stabilize at more than the target 2%.. Simply put.. we are economically stag net, and if you are under 40 retirement will be much harder

ErikVandeWater 4y ago

Is there a fundamental reason that cuts would have to be to benefits? Why not cut xx% of the government budget anywhere but pensions?

avgcorrection 4y ago

What’s your annual income?

mzs 4y ago

That's about debt not social security.

scotty79 4y ago

> -- taxes will rise (for whom?) Is this a real question? Top few percent of capital owners captured nearly 100% of productivity inrease that came from last few decades of technological development. It's obvious who should be taxed.