Read it at CNBC NetNet
The Problem With Social Security
by John Carney/ Senior Editor
Looks to me like the causation of lower fertility rate is complex and welfare programs like Social Security cannot account for it, although it seems to be a contributory factor. See, NEBR working paper, Fertility and Social Security by Michele Boldrin, Univ. of Minnesota, Fed. Res. Bank of Mpls, and CEPR, Mariacristina De Nardi, Univ. of Minnesota and Fed. Res. Bank of Mpls, amd Larry E. Jones Univ. of Minnesota, Fed. Res. Bank of Mpls, and April 29, 2004, Preliminary and Incomplete. See also, Baby Boom and Baby Bust: Fertility Rates and Why They Vary, by Robert L. Brown, Contingencies, Jan/Feb 2004.
This seems to argue the other way with the world facing exponential population growth and finite resources. It appears to me that anything that contributes to controlling population growth is a plus for economic sustainability.
Moreover, productivity is not correlate with population but in increase in output per work unit, which comes not chiefly from the side of labor, but rather from scaling up technological innovation and increasing efficiency of production. For example, firm productivity goes up after a visit from the efficiency experts and expendable workers are laid off. Over the previous several decades, many US firms have been shedding workers, resulting in productivity gains.
16 comments:
"The moral of this story, of course, is that we need to be very cautious when erecting vast government programs. Very often they have unforeseen consequences that can undermine their own goals."
I hope John is converting to some Amish faith. The Amish are a minority who spend a lot of time thinking about how changes impact their lives - family life specifically. Our entire privately developed world may actually lead to the end of civilization as we know it, but we're suppose to worry about social security and fertility. Talk about a strawman!
There is just too much tit for tat in those 2-3 articles including Wray's to respond to.
Let's ignore the fact that the way SocSec is treated in the US, that you allegedly have to pay into it (what a BS system) and just assume it works like a decent government system would, credited accounts for those on various benefits.
If we assume someone is on SocSec all their life, Carney is correct. If we assume that ppl are only on SocSec when required then Wray is correct.
There seems to be some fallacies committed here.
What better economic options do we have to transfer a basic subsistence to the elderly and sick from the healthy, young and productive?
I cant recall the specific instance exactly, but I'm pretty sure I wasnt thinking about government programs around the moment my son was concieved.... ;)
Resp,
I don't know about anyone else, but I'm getting a little tired of this Wray/Carney tit for tat. It's getting tedious. Like schoolboys. Why doesn't Wray just take the high road, move on, and stop feeling like he has to write 7000 word essays every time Carney says something? He should be more like Warren.
Mike, John is acting as a foil for mainstream objections to MMT. The MMT economists need to address these commonly held perceptions, and John Carney is providing a valuable service in facilitating a dialogue. Randy is responding to John becuase John understands MMT and can formulate the issues intelligently rather than based on off-base assumptions.
In the past, this debate has taken place chiefly through dueling papers. This is a very slow route and is restricted to professionals, especially when it is carried on behind the firewall of subscription only journals.
The blogs offer a much faster and accessible way to deal with these issues, not that they don't have to be addressed in depth in papers, too. But overall, this is a net positive, and the debate has been pretty civil in my view. The blogs are much more informal about it, but the professional debates can be fierce, even though the language is lofty. There are a lot of ways of calling an opponent an idiot or a moron with using those kinds of terms. In fact, that is part of the art of traditional debate, as in damning with faint praise.
I agree with Tom that the debate is constructive, but I agree with Mike that it would be best to keep it on a high level and avoid the personal jibes and digs. There's no need for defensiveness and thin skins.
Just treat criticisms as a welcome opportunity to explain one's position better and learn from other people.
In the course of my life I have had the good fortune to have several mentors. They encouraged spirited debate, and discouraged deference. One even called it "trading punches."
Those who take the give and take personally, lose, since it is giving into ego instead of staying centered and on target. Part of the art of debate is throwing opponents off center so they make careless mistakes, like revealing real feelings and hidden assumptions that undermine a position when made explicit.
I've actually enjoyed these debates:
Carney: BLAH, BLAH, BLAH
Wray: RAWR
Carney: Btw, you misquoted me. Just FYI.
Wray: Yeah, sorry, I suck at this internet stuff.
Carney: Mkay, carry on.
WRAY: BLAH, BLAH, BLAH
Carney: RAWR
To me, these exchanges don't have the 'Fatal Attraction' rabbit-in-a-pot feel to them. Which is when you need to start backing away. Very slowly.
Looks to me like the causation of lower fertility rate is complex and welfare programs like Social Security cannot account for it, although it seems to be a contributory factor.
I mentioned to John yesterday that there's a bigger causal issue to consider, what Steve Sailer termed Affordable Family Formation.
http://monetaryrealism.com/the-self-defeating-politics-of-affordable-family-formation/#comments
I think Prof Wray has always exhibited a visceral dislike of this class of people (I have to see his point here as this body of people are truly contemptible), but his willingness to engage in this sensational manner ($29T loan) has increased since his affiliation with the Roubini people here:
http://www.economonitor.com/?gclid=CMS2i4ai3K4CFcMQNAodmkMzZg
The Roubini people have used a media-centric and oft times sensationalist style (Dr "Doom") as part of their approach, this 'Jerry Springer' like exchange with Carney is in this spirit imo.
Tom, I see your points. It looks like the difference between a system of 'competing academies' vs 'the synagogue'. I think the blogs are closer to the synagogue, ie much more open to direct presentation/confrontation of both opposing and compatible views in the pursuit of truth and edification. Censorship seems like the synagogue's worst enemy, where censorship seems like the preferred method in an academy, "whitewashing".
I remember when Mike had his radio show and he would have people on who were used to the academy treatment (ie Melissa Lee with Ron Paul), used to sycophants, etc.., Mike would instead challenge them on the facts and some (Ann Coulter, Phil Flynn, Dennis Gartman, Marc Farber, the list goes on..) would indeed basically lose it... it was great radio, THE best.
Resp,
Steve Randy Waldman posted a link to this article on Twitter. It gets right to the meat of the same issue here: Social distortions caused by policies of wealth redistribution.
Thanks Ryan. I read Rodrick's post when it came up at Project Syndicate. The problem with it is that the issues can largely be addressed by implementing an MMT approach, regarding which he seems oblivious.
Exactly Tom, If MMT were implemented, people would have economic security in their lives and could afford to have children. Social security reducing birth rates would be a non-issue. The hypocrisy of supporting policies (trade) that redistribute wealth to the rich but (SS) not to the poor is just an extra juicy morsel to chew on.
The "baby boom" happened directly after WW2.
Hard to tell if it was caused by a generation that was immersed in death that instead then wanted to exhibit creation of life, or if all of the NFAs created by the fiscal policies of WW2 gave those people economic confidence to create mucho babies...
Resp
I think people throw around insults more easily on the internet.
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