Re: Rant: The U.S. facing the largest financial collapse ever
Tim May writes:
As everyone should know by now, and probably does, the Social Security scheme in the U.S. is nothing more than a large Ponzi scheme. Payroll taxes, amounting to about 15% of income up to some level (ratcheted upwards every few years), go straight into the General Fund, where the 34%-39% top tax rate funds and all of the other taxes go into.
The General Fund (not its official name...it may not have one) issues the SS Geheimstatssecuritatwelfarefund an "IOU" for the trillions owed by the General Fund to the SS G.
Those IOUs are not even computed as part of the national debt. (!!) Talk about using Enron accounting!
Standard accounting rules are completely inappropriate when looking at the situation for an entire country over a period of decades. By this reasoning, a young family borrowing money to buy a house is making a huge mistake because it will be in debt to the tune of several years' salary. What is overlooked in this analysis is that the family, just starting out in the world, can expect increased income over years to come. In the long run, that house will be very affordable based on the expected growth in income. But standard accounting principles do not take into account expected future income. This shows up most drastically in the case of Social Security, where we are supposedly $20 trillion in debt. What about the income which will be used to pay off that debt? Those figures are not included. The fact is, like a young family starting out in the world, we have every reason to expect our income levels to rise steadily over future decades, just as they have done in the past. The world is not a static place. Technology and science are improving at an ever-increasing rate. These translate into productivity improvements, greater national income, and a higher standard of living. In fact, with biotech, nanotech, and all the other -techs that are expected to become feasible within the next few decades, there is every reason to expect that our income will begin growing at unprecedented rates. See some of the predictions at www.kurzweilai.net for examples of what the future is likely to bring. (For a good laugh, get Tim May to repeat his prediction about how nanotech will never go anywhere! This at a time when you can hardly pick up a business magazine without finding another article about this new investment opportunity. Take it as further evidence of his prognosticative abilities, which are demonstrated in this thread as well.) Against this background, it's pointless to worry about a Social Security debt amounting to $200,000 per household over many decades. By the time today's young people are old enough to begin collecting retirement, two major changes will have occured: First, the world will be a much wealthier place; standards of living will likely have more than doubled; technology will have created commonplace devices that would be literally priceless today. For such a world, providing the retirement benefits at the levels specified by today's laws will be easy and cheap. But second, and more importantly, health and longevity will likely have increased substantially as well. By 2040 it's highly unlikely that a 65 year old man will be facing the kinds of health limitations that a man of that age has to deal with today. Four decades of medical research will allow people who are elderly by today's standards to retain considerable health and vigor. There will be no need to retire by 65 if people don't want to; they can work productively for many more years. Of course these changes will have almost infinite ramifications as they affect other parts of society. The world is likely to be a very different place in the next decades, as the pace of progress continues to quicken. It's impossible to predict how it will all work out. But it seems safe to say that the world will give people far more choices and opportunities than we see today. Those people who do choose to retire at a youthful 65 can be easily supported by the incredible productivity increases which the working population enjoys. In fact, retirement benefits may well be increased far beyond what seems practical today, as by the standards of our future wealth, today's comfortable living is seen as the squalor of poverty. We have seen this trend going on for many decades, and it is only going to increase in the future. There are great things ahead, and it's sad to see someone who claims to have a clear vision of the future get caught up in such petty concerns as Social Security obligations. There are serious problems ahead, some of which were brought up by Bill Joy in his famous article. But paying for Social Security isn't one of them.
The problem with your analysis is that it completely misses the impact of the extended lifetimes (~150 years for anyone alive in or after 2020 that doesn't die from accident or intent) that are going to accrue. And it's only going to go up from there. Within 200 years the effective lifetimes will be irrelevant. The current insurance and investment industry is toast in about 20 years. The current economics is based (unknowningly) on 'fast cycle' times regarding resources and how quickly resources get returned to the pool as individuals and such die out (it's that 'property right' thing). That is about to change, so rapidly it will be a eyeblink (something 2-3 years) compared to anything before. Coupled with this is the DECREASED interaction between groups that these technologies foster. They will create a force to fractionalize the 'market' into smaller more goal focused groups. An additional stressor, and one which all current estimates ignore, is the 3rd World. One day in the very near future we will all, across the globe, get up one morning and be confronted with a virus based solution for aging (at least as we currently understand it). If a small group of people (ala Beggars in Spain) are allowed and the rest are denied then a 'social divide' (aka All hell breaking out all over at one time) is going to occur. It will be violent, and it will have a negative effect on the technology curve. This saving technology might kill us via side effects. People came together because the technology wasn't there to allow them to live alone. One day soon technology will reverse this as the level of technology that is possible, compared to the level of technology in general, to that available to the individual will become unity. Why unity? Because technology will not, can not, extend forever. It will not go on and on. The universe is too filled with 'exclusion rules' to allow this. Yes the technology is rising exponentialy, because it's a function of tanh. Thermodynamics will not be denied. [1] Couple this with the fact that irrespective of the technology level the Earth doesn't have the resources to support life indefinitely. The Earth is not indefinite. This has some serious implication of its own. The most important is that we must get off the planet as a race. Living on planets that support life should, and will, become gardens where people visit on vacations. Too precious to waste on individual ego. This implies that mankinds future is to the stars. But this very boundary condition limits the time that a planet has to get off the planet, or drown in its own waste. My estimate is that it's about 200-250 years and we're about 50 years into it. We're not doing very well. This also raises another potential explanation of why we don't see Roger. The vast majority (as in asymptotic to 1) don't make it within the 200 year window. The result is a slow slide to eternity with the planet getting more fucked up on a daily basis. If you really understood what was going on, you wouldn't give a shit about Social Security. Tim's understanding of human psychology is about as swift as his understanding of the Uncertainty Principle and running time 'backward'. As usual he confuses ego and individual perspective as some universal. He just can't seem to grasp the concept of 'observer dependency'. I guess that's another example of 'May Pole Physics'. ps I'm back, as I slowly dig out from a two month blizzard of work... [1] As a complete aside, the realy interesting question here is will when it is all said and done, will the maximum technology allow the creation of other cosmoses? It would certainly explain why we don't see Roger Ramjet scooting around on a daily basis. On Fri, 12 Jul 2002, Anonymous wrote:
Tim May writes:
As everyone should know by now, and probably does, the Social Security scheme in the U.S. is nothing more than a large Ponzi scheme. Payroll taxes, amounting to about 15% of income up to some level (ratcheted upwards every few years), go straight into the General Fund, where the 34%-39% top tax rate funds and all of the other taxes go into.
The General Fund (not its official name...it may not have one) issues the SS Geheimstatssecuritatwelfarefund an "IOU" for the trillions owed by the General Fund to the SS G.
Those IOUs are not even computed as part of the national debt. (!!) Talk about using Enron accounting!
Standard accounting rules are completely inappropriate when looking at the situation for an entire country over a period of decades. By this reasoning, a young family borrowing money to buy a house is making a huge mistake because it will be in debt to the tune of several years' salary.
What is overlooked in this analysis is that the family, just starting out in the world, can expect increased income over years to come. In the long run, that house will be very affordable based on the expected growth in income. But standard accounting principles do not take into account expected future income.
This shows up most drastically in the case of Social Security, where we are supposedly $20 trillion in debt. What about the income which will be used to pay off that debt? Those figures are not included.
The fact is, like a young family starting out in the world, we have every reason to expect our income levels to rise steadily over future decades, just as they have done in the past. The world is not a static place. Technology and science are improving at an ever-increasing rate. These translate into productivity improvements, greater national income, and a higher standard of living.
In fact, with biotech, nanotech, and all the other -techs that are expected to become feasible within the next few decades, there is every reason to expect that our income will begin growing at unprecedented rates. See some of the predictions at www.kurzweilai.net for examples of what the future is likely to bring. (For a good laugh, get Tim May to repeat his prediction about how nanotech will never go anywhere! This at a time when you can hardly pick up a business magazine without finding another article about this new investment opportunity. Take it as further evidence of his prognosticative abilities, which are demonstrated in this thread as well.)
Against this background, it's pointless to worry about a Social Security debt amounting to $200,000 per household over many decades. By the time today's young people are old enough to begin collecting retirement, two major changes will have occured:
First, the world will be a much wealthier place; standards of living will likely have more than doubled; technology will have created commonplace devices that would be literally priceless today. For such a world, providing the retirement benefits at the levels specified by today's laws will be easy and cheap.
But second, and more importantly, health and longevity will likely have increased substantially as well. By 2040 it's highly unlikely that a 65 year old man will be facing the kinds of health limitations that a man of that age has to deal with today. Four decades of medical research will allow people who are elderly by today's standards to retain considerable health and vigor. There will be no need to retire by 65 if people don't want to; they can work productively for many more years.
Of course these changes will have almost infinite ramifications as they affect other parts of society. The world is likely to be a very different place in the next decades, as the pace of progress continues to quicken. It's impossible to predict how it will all work out. But it seems safe to say that the world will give people far more choices and opportunities than we see today.
Those people who do choose to retire at a youthful 65 can be easily supported by the incredible productivity increases which the working population enjoys. In fact, retirement benefits may well be increased far beyond what seems practical today, as by the standards of our future wealth, today's comfortable living is seen as the squalor of poverty. We have seen this trend going on for many decades, and it is only going to increase in the future.
There are great things ahead, and it's sad to see someone who claims to have a clear vision of the future get caught up in such petty concerns as Social Security obligations. There are serious problems ahead, some of which were brought up by Bill Joy in his famous article. But paying for Social Security isn't one of them.
-- ____________________________________________________________________ When I die, I would like to be born again as me. Hugh Hefner ravage@ssz.com www.ssz.com jchoate@open-forge.org www.open-forge.org --------------------------------------------------------------------
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