10 ms·

I mean that fiat will continue to work as long as people believe in it. Social security, now that I think about it, does sound much like a Ponzi scheme.

skj 13y ago
Populations grow exponentially, and the whole population is required to pay into SS.
- paul_f 13y ago
  Except they don't. Populations in developing countries have now stabilized and in some cases, Japan, are well below replacement level.
  - skj 13y ago
    Population growth is a fundamentally exponential process, even if that exponent is very close to 1 in some cases, or even less than 1.
    - 2stop 13y ago
      but you said exponentially growing... which typically means "doubling". You are now saying the 'exponent' could be < 1... then you aren't 'growing' anymore... so you refuted your own statement.
    - gnaritas 13y ago
      > Population growth is a fundamentally exponential process No it isn't. If everyone has one or less children, the population does not grow exponentially.
      - hueving 13y ago
        skj was trolling by changing the common definition of exponential by saying the exponent could be 1 or less than one.
        lutusp 13y ago
        > skj was trolling by changing the common definition of exponential by saying the exponent could be 1 or less than one. That's not trolling. It's called "mathematics."
        gnaritas 13y ago
        Which is trolling in a discussion that isn't about mathematics.
        lutusp 13y ago
        Wait, what? Replying to a comment that is clearly about mathematics, with a comment that is clearly about mathematics, is trolling? The OP's comment, including " ... changing the common definition of exponential by saying the exponent could be 1 or less than one" is (a) mathematical and (b) wrong and misleading. The "common definition of exponential" accommodates any valid argument to exp(x), and to claim otherwise requires a mathematical correction to avoid misleading people.
        gnaritas 13y ago
        Trolling.
        skj 13y ago
        This is a very disappointing comment line. I know not everyone here is a CS major, but if you're even CS-knowledgable you should understand what an exponential process is. It is not, as many laypeople assume, something that is "very big". That said, I was not intentionally trolling. I do think it's possible for a SS-style benefit to sustain itself provided that an exponentially growing population, whose exponent is greater than 1, is obligated to pay in. A country with a stagnant or declining population will probably have trouble. You may disagree, that's fine. Nevertheless, any population whose growth (or lack of growth) is defined by the average number of children per member will behave exponentially.
      - lutusp 13y ago
        > If everyone has one or less children, the population does not grow exponentially. False. An exponential function, and a growing exponential function, differ only in the value of the exponent. Here's an equation that predicts future population based on the value of an exponential term: The equation: pt - p0 e^rt pt = population at time t p0 = present population r = rate of population growth, 1% = .01 t = time A result at 40 years for a population rate of change of -1.7% per year: e^(-.017 * 40) = .5066 This result says that, for a population growth rate of -1.7%, after 40 years the population will be about half its present size. It's an exponential result, it's even an exponential growth rate, but the growth rate is negative. In this image: http://i.imgur.com/LW6bk8t.png http://i.imgur.com/LW6bk8t.png The red trace is an exponential rate of change for r = +1.7%, the green trace for r = -1.7%. Both are exponential results, and both reflect what a population would look like for given r values.
        gnaritas 13y ago
        False. Put all your bullshit math aside because that's what it is, bullshit trying to move the goalpost. The statement I made is absolutely factually true. If everyone has one or less children, the population does not grow exponentially. We're not talking about how to model population growth, or functions, we're talking about whether every couple having one child results in exponential growth and it simply does not. If the population decreases, that is not exponential growth. An exponential result != exponential growth. You are wrong and we are done.
        lutusp 13y ago
        > The statement I made is absolutely factually true. If everyone has one or less children, the population does not grow exponentially. You need to learn mathematics (as well as grammar). Also learn "negative growth rate" while you're about it: http://wiki.answers.com/Q/Is_it_possible_to_have_a_negative_growth_rate http://wiki.answers.com/Q/Is_it_possible_to_have_a_negative_... And, everything else aside, all the described rates are exponential. > We're not talking about how to model population growth ... WHAT?? Here is what you said: "If everyone has one or less children, the population does not grow exponentially." How exactly is that NOT talking about how to model population growth? Also, it's "one or fewer children," not "one or less children." > An exponential result != exponential growth False in a discussion about population and exponential growth rates, terms you chose.
- CamperBob2 13y ago
  The whole working population.
CamperBob2 13y ago
Anyone who doubts that Social Security is a Ponzi scheme should try starting a similar one themselves, and see how it goes.
- saalweachter 13y ago
  It is called an annuity. It is one of the more basic forms of insurance, offered widely since forever by more or less everyone.
  - patio11 13y ago
    The difference between Social Security and an annuity is that Social Security charges too little and promises payouts of too much. It cannot sustain the payouts which are promised in 2014 from revenues available to it in 2014 or the investment returns reasonably possible as a result of those revenues (and its accumulated capital). It must therefore increase the amount of revenues it receives, by a) increasing the SS tax rate and b) increasing the number of people who pay into SS until c) it inevitably defaults on promises to some portion of beneficiaries, for example by adopting e.g. means testing and retroactively stating that people born after a certain day will get the payout they've been promised their entire lives iff they have less income/wealth than $INSERT_CUTOFF and, if they exceed that, they'll receive $CONSOLATION_PRIZE_FORMULA instead. Did you know that Social Security taxes were once 2.25% of income? Before they were 4.5%? Before they were 6.9%? Before they were 8.1%? Before they were 15.3%? That's where we are in 2014. To be fair, while Social Security is clearly not an annuity, as of 2014 it isn't yet in default of its obligations. There's some dispute about what year that will inevitably happen. It will not be described as a default when it does, but rather tweaking a few formulas to protect America's most vulnerable citizens. Edit: Social Security also has some "constructive default" options which are available outside of the program, because it is coextensive with the taxing power of the federal government. For example, SS benefits were once untaxed but are now taxed. There exist plausible ways by which every dollar promised of SS benefits can be "paid" but in which many get immediately recaptured by the government, which avoids formally adjusting the terms of the promise but which is indistinguishable from default in its impact on e.g. your family's budgeting process in 2070. Another option is inflating away the insolvency. Japan will probably do this. It will pay out every yen of the promised monthly 200,000 yen due to pensioners, but pay it with yen which buy half as many apples as they did back when the pensioners were working.
deleted 13y ago
[deleted]
gnaritas 13y ago
> now that I think about it, does sound much like a Ponzi scheme. Think harder, it's nothing like a Ponzi scheme, it's just like any other insurance; payout is not guaranteed.

skj 13y ago

Populations grow exponentially, and the whole population is required to pay into SS.

paul_f 13y ago
Except they don't. Populations in developing countries have now stabilized and in some cases, Japan, are well below replacement level.
- skj 13y ago
  Population growth is a fundamentally exponential process, even if that exponent is very close to 1 in some cases, or even less than 1.
  - 2stop 13y ago
    but you said exponentially growing... which typically means "doubling". You are now saying the 'exponent' could be < 1... then you aren't 'growing' anymore... so you refuted your own statement.
  - gnaritas 13y ago
    > Population growth is a fundamentally exponential process No it isn't. If everyone has one or less children, the population does not grow exponentially.
    - hueving 13y ago
      skj was trolling by changing the common definition of exponential by saying the exponent could be 1 or less than one.
      - lutusp 13y ago
        > skj was trolling by changing the common definition of exponential by saying the exponent could be 1 or less than one. That's not trolling. It's called "mathematics."
        gnaritas 13y ago
        Which is trolling in a discussion that isn't about mathematics.
        lutusp 13y ago
        Wait, what? Replying to a comment that is clearly about mathematics, with a comment that is clearly about mathematics, is trolling? The OP's comment, including " ... changing the common definition of exponential by saying the exponent could be 1 or less than one" is (a) mathematical and (b) wrong and misleading. The "common definition of exponential" accommodates any valid argument to exp(x), and to claim otherwise requires a mathematical correction to avoid misleading people.
        gnaritas 13y ago
        Trolling.
        skj 13y ago
        This is a very disappointing comment line. I know not everyone here is a CS major, but if you're even CS-knowledgable you should understand what an exponential process is. It is not, as many laypeople assume, something that is "very big". That said, I was not intentionally trolling. I do think it's possible for a SS-style benefit to sustain itself provided that an exponentially growing population, whose exponent is greater than 1, is obligated to pay in. A country with a stagnant or declining population will probably have trouble. You may disagree, that's fine. Nevertheless, any population whose growth (or lack of growth) is defined by the average number of children per member will behave exponentially.
    - lutusp 13y ago
      > If everyone has one or less children, the population does not grow exponentially. False. An exponential function, and a growing exponential function, differ only in the value of the exponent. Here's an equation that predicts future population based on the value of an exponential term: The equation: pt - p0 e^rt pt = population at time t p0 = present population r = rate of population growth, 1% = .01 t = time A result at 40 years for a population rate of change of -1.7% per year: e^(-.017 * 40) = .5066 This result says that, for a population growth rate of -1.7%, after 40 years the population will be about half its present size. It's an exponential result, it's even an exponential growth rate, but the growth rate is negative. In this image: http://i.imgur.com/LW6bk8t.png http://i.imgur.com/LW6bk8t.png The red trace is an exponential rate of change for r = +1.7%, the green trace for r = -1.7%. Both are exponential results, and both reflect what a population would look like for given r values.
      - gnaritas 13y ago
        False. Put all your bullshit math aside because that's what it is, bullshit trying to move the goalpost. The statement I made is absolutely factually true. If everyone has one or less children, the population does not grow exponentially. We're not talking about how to model population growth, or functions, we're talking about whether every couple having one child results in exponential growth and it simply does not. If the population decreases, that is not exponential growth. An exponential result != exponential growth. You are wrong and we are done.
        lutusp 13y ago
        > The statement I made is absolutely factually true. If everyone has one or less children, the population does not grow exponentially. You need to learn mathematics (as well as grammar). Also learn "negative growth rate" while you're about it: http://wiki.answers.com/Q/Is_it_possible_to_have_a_negative_growth_rate http://wiki.answers.com/Q/Is_it_possible_to_have_a_negative_... And, everything else aside, all the described rates are exponential. > We're not talking about how to model population growth ... WHAT?? Here is what you said: "If everyone has one or less children, the population does not grow exponentially." How exactly is that NOT talking about how to model population growth? Also, it's "one or fewer children," not "one or less children." > An exponential result != exponential growth False in a discussion about population and exponential growth rates, terms you chose.
CamperBob2 13y ago
The whole working population.

CamperBob2 13y ago

Anyone who doubts that Social Security is a Ponzi scheme should try starting a similar one themselves, and see how it goes.

saalweachter 13y ago
It is called an annuity. It is one of the more basic forms of insurance, offered widely since forever by more or less everyone.
- patio11 13y ago
  The difference between Social Security and an annuity is that Social Security charges too little and promises payouts of too much. It cannot sustain the payouts which are promised in 2014 from revenues available to it in 2014 or the investment returns reasonably possible as a result of those revenues (and its accumulated capital). It must therefore increase the amount of revenues it receives, by a) increasing the SS tax rate and b) increasing the number of people who pay into SS until c) it inevitably defaults on promises to some portion of beneficiaries, for example by adopting e.g. means testing and retroactively stating that people born after a certain day will get the payout they've been promised their entire lives iff they have less income/wealth than $INSERT_CUTOFF and, if they exceed that, they'll receive $CONSOLATION_PRIZE_FORMULA instead. Did you know that Social Security taxes were once 2.25% of income? Before they were 4.5%? Before they were 6.9%? Before they were 8.1%? Before they were 15.3%? That's where we are in 2014. To be fair, while Social Security is clearly not an annuity, as of 2014 it isn't yet in default of its obligations. There's some dispute about what year that will inevitably happen. It will not be described as a default when it does, but rather tweaking a few formulas to protect America's most vulnerable citizens. Edit: Social Security also has some "constructive default" options which are available outside of the program, because it is coextensive with the taxing power of the federal government. For example, SS benefits were once untaxed but are now taxed. There exist plausible ways by which every dollar promised of SS benefits can be "paid" but in which many get immediately recaptured by the government, which avoids formally adjusting the terms of the promise but which is indistinguishable from default in its impact on e.g. your family's budgeting process in 2070. Another option is inflating away the insolvency. Japan will probably do this. It will pay out every yen of the promised monthly 200,000 yen due to pensioners, but pay it with yen which buy half as many apples as they did back when the pensioners were working.

deleted 13y ago

[deleted]

gnaritas 13y ago

> now that I think about it, does sound much like a Ponzi scheme. Think harder, it's nothing like a Ponzi scheme, it's just like any other insurance; payout is not guaranteed.