May 13, 2010

"The welfare state is today's equivalent of the gold standard."

Robert Saumuelson explains.

26 comments:

Big Mike said...

He's right, of course. But now that I'm within sight of retirement age, and having paid in the maximum social security withholding for over thirty-five years, there is no effing way I will stand for cuts in my social security and Medicare benefits.

edutcher said...

Saw this article earlier. He's a little more gloomy than Roubini, who was on Hannity talking on the same subject.

Roubini thinks we ducked a bullet last year with TARP and the stimuli, but still thinks we could could go bad later this year. Samuelson's big point is that the things Roubini thinks postponed a Depression may in fact have exacerbated it. He seems to feel it's a lot more inevitable.

Comes down to which flavor of disaster you like better; everybody seems to be very apprehensive about later this year.

TosaGuy said...

Samuelson forgot to mention how some of the gov't responses at the beginning of the Great Depression deepened it -- tax hikes and the Smoot-Hawley Tariff which further depressed the US export economy.

former law student said...

If beauty operators can retire at 53 with a pension enhancement for working with hazardous permanent wave chemicals and hair dyes -- well in that case it's hard to see how Greece would not have been a basket case.

Paul Snively said...

As long as the fantasies that we HAVE to have a central bank, fractional reserve banking, and a fiat currency persist, economic booms and busts of accelerating frequency and deepening intensity will continue.

GMay said...

"He's right, of course. But now that I'm within sight of retirement age, and having paid in the maximum social security withholding for over thirty-five years, there is no effing way I will stand for cuts in my social security and Medicare benefits."

Hell, I'd just be happy if they gave me back every red cent I've contributed so far and don't take another one. They wouldn't need to give me the tiniest percentage of interest or inflation adjustment. Just give it back to me and I'll do a helluva lot better than the gubmint.

Hagar said...

"30 and out" is quite common for state and local employees - and not just for police and firefighters.

former law student said...

"30 and out"

Time was when the prospect of a pension allowed government to pay lower salaries than did private enterprise. But now government pays healthy salaries and offers pensions.

Calypso Facto said...

We can argue about whether TARP was a good idea (my personal view is that the support of banks helped restore confidence, but, in keeping with Rahm's "never let a serious crisis go to waste" philosophy, we ended up with way too much money authorized),but to add expensive ADDITIONAL entitlements at this point, ala Obamacare, is just plain fiscal suicide.

SteveR said...

Another problem with "30 and out" is many people in that system spend a good portion of that time trying to shorten the 30 and maximize the pension. Seems incomprehensible that someone could retire at 80% of an already high salary.

virgil xenophon said...

Until the late 70s, IIRC, police and fire could retire with full pay at the end of FIFTEEN (15) years! Yet another reason why they say New Orleans has a "Mediterranean" culture.

Fred4Pres said...

Big Mike said...
He's right, of course. But now that I'm within sight of retirement age, and having paid in the maximum social security withholding for over thirty-five years, there is no effing way I will stand for cuts in my social security and Medicare benefits.

5/13/10 10:03 AM


That is exactly what they are hoping for. I am more pragmatic. Having the system collapse is not much of an option. Insane taxes to keep it afloat will be devestating too. The only option is to cut benefits, or rather delay them a few years. This system never made sense financially, it is not your money they took to invest, it was taxes they took and spent, and is basically the government's version of Maddoff's plan. Stagger and prorate the pain them so guys like Mike do not get waylayed too badly short term but that twenty somethings now can plan on working till they are seventy.

If we cannot do that, then let the whole mess collaspe and deal with that reality.

Lem said...

This is the very ef**ng message of the ef**ng tea party..

The MSM is not reporting this clear and present danger.. they are ef**ng clueless.

raf said...

And our reaction to the coming crisis will be to even further expand the welfare state, that being the appropriate way to not "let a serious crisis go to waste."

On the bright side, this should lead to more (and more severe) crises to take advantage of.

wv: presse. That which is pressured. Like anything taxable.

ricpic said...

We were told a great depression would ensue if the financial sector, which had made spectacularly bad financial bets on worthless bundles of subprime mortgage paper, weren't bailed out. The whole system would seize up. It would be the end of the world, blah blah blah. And the bailout had to be done immediately if not sooner! This was the do or die message of Goldman Sachs alum Hank Paulson. But it wouldn't have been the end of the world, unless a hit to the financial sector is the end of the world to you, as it obviously was to Paulson and Bernanke. It would have been a correction in which capitalism would have punished studid capitalists and the whole system would be much healthier today as a result. But since Paulson wasn't a capitalist and Bush wasn't a capitalist what we now have is the problem pushed down the road, at the expense of us, the suckers, the little guys, and an even bigger collapse up ahead.

Hagar said...

@ FLS & Steve R.

What gets even better is that they can "retire," collect for unused vacation and sick hours and any applicable bonuses, sit out for 30 or 90 days depending on the local rules, and return to their old job at full salary while also collecting their pension earned for the first 30 years.

The best one here locally was an agency head who did all of the above and also gave himself a raise to return to work, and he was the official that authorized the scheme!

Hoosier Daddy said...

We just need higher taxes, especially on the rich and productive members of society and we won't have any problems.

I don't understand why no one sees how easy it is.

Night2night said...

He's right, it's not a sustainable course of action, but most of us will just stay focused on those government checks. Of course rather than proactively reacting to this huge financial disaster in the making we'll put together a financial reform bill which focuses on the last disaster. My two favorite people collections; generals fighting the last war and people who ignore catastrophes because they haven't happened yet (and therefore must be unlikely).

c3 said...

I'd just be happy if they gave me back every red cent I've contributed so far and don't take another one.

I won't be happy because I could've done a lot more with that money.

Just Lurking said...

This is the very ef**ng message of the ef**ng tea party..

That so many seemingly intelligent people refuse to get this, is telling. They would rather cling to their bigotry and project it onto others, than admit that people they disdain have a legitimate point.

edutcher said...

Big Mike said...

He's right, of course. But now that I'm within sight of retirement age, and having paid in the maximum social security withholding for over thirty-five years, there is no effing way I will stand for cuts in my social security and Medicare benefits.

I don't think you'll have a choice. As the Xers and Yers age and the burden of carrying the greedy geezers gets to be too much for them, the weight of numbers will start to swing in their favor.

Frankly, I'd like to see someone try to make the administration more efficient (something the Demos always demagogued as the backdoor to cutting benefits; after all a lot of government employment is just another welfare program for substandard workers) before cutting benefits, but, when you have a system where raising benefits was done every 2 years as a vote-buying scheme (which most of the voters understood), the day when benefits are cut won't be that far away.

I've read a thousand times since I was a kid (50s) how the system could never withstand the press of the Boomers and it looks as if all those doomsayers were right.

Big Mike said...

@edutcher, the specter of the "greedy geezers" as supplemented by entertaining MSM videos showing multimillionaires collecting social security while reclining on a 100 foot yacht moored in front of one of their five or six homes is not the reality. The reality is that most of us -- and me, for certain -- will lose money on social security. Well that's not completely true -- I might get back what I paid in, adjusting for inflation and interest, providing I live to about 120 or so.

c3 said...

More musical inspiration from today's listening re: the future.

change,
everything you are
and everything you were
your number has been called
fights, battles have begun
revenge will surely come
your hard times are ahead

Eric said...

It is now conventional wisdom that the world has avoided a second Great Depression.

It was conventional wisdom by mid 1930 the depression of 1929 was over.

Methadras said...

GMay said...

Hell, I'd just be happy if they gave me back every red cent I've contributed so far and don't take another one. They wouldn't need to give me the tiniest percentage of interest or inflation adjustment. Just give it back to me and I'll do a helluva lot better than the gubmint.


That's exactly my sentiment as well. They don't give you the interest on the money they've wasted via tax return, so fine, give me back the money I've contributed to a system that is insolvent and can't possibly be sustained for much longer. I'll deal with it myself. Then you can shut of the tap. But alas this will never happen. The welfare state si a failure. A big fat failure and legislators just don't get it and they pass nonsense spending to line the pockets of their special interests (aka unionists) and tell us that it's good business. Isn't the welfare state fun?

lyssalovelyredhead said...

I'm 30. If they would just agree to stop taking, I'd let them keep what they've taken so far.