Texas Death Penalty Archive

[Part of the Death Penalty Survey]

Online Resources

PDM - Texas
Belgium’s Amnesty International’s chapter’s Texas Death Penalty website.

Texas Coalition to Abolish the Death Penalty

Texans for Public Justice

Debate Chronology/Meta-Narrative

1998

3/1
The Death Penalty in Texas: Lethal Injustice
An Amnesty International report on the Texas Death Penalty.

2000

3/3
The Death Penalty Is Fair and Effective in Texas
Morgan Reynolds of the right-wing NCPA.
5/11
The hanging governor
Salon magazine covers the controversial execution of Gary Graham.
6/11
STATE OF EXECUTION: THE DEATH PENALTY IN TEXAS
Classic Chicago Tribune coverage.
8/28
Texas incarceration rate leads nation; crime rate lags behind other states
Another report on Texas’ lagging crime statistics
9/20
Don't Mess with Texas on Crime
Morgan Reynolds at NCPA.
10/1
Texas Tough?
"An Analysis of Incarceration and Crime Trends in The Lone Star State authored by Vincent Schiraldi and Jason Ziedenberg" from Justice Policy Institute.

Death Penalty Archive

Texas Death Penalty Survey

Online Resources

Abolish List FAQ
Archives of Abolish - The Mailing List For People Working to Abolish the Death PenaltyAbolish List FAQ
Amnesty International - The Death Penalty
The Liebman Report: "A Broken System:Error Rates in Capital Cases, 1973-1995"
Paul G. Cassell - Drafts of Working Papers and Articles
Campaign to Abolish the Death Penalty
Not to be confused with Campaign to End the Death Penalty.
Campaign to End the Death Penalty
Not to be confused with Campaign to Abolish the Death Penalty.
Capital Punishment and the Catholic Church
Clark County Prosecutor
Constitution Project
Critique of DPIC list
Death Penalty
Salon Magazine’s index of Death Penalty articles.
Death Penalty Debate
Death Penalty Issues
From truthinjustice.org
Deterrence and the Death Penalty:The Views of the Experts
Michael L. Radelet and Ronald L. Akers
DPIC
Federal Death Penalty Biased Against Whites
Focus on the Death Penalty
The Justice Project
Looking at the Death Penalty
Professor David’s death penalty resources.
Rick Halperin's DEATH PENALTY NEWS
Religion and the Death Penalty
Southern Center for Human Rights
Stephen Bright’s defendant advocacy organization.
Spotlight on the Death Penalty
A libertarian anti-Death Penalty site.
Wesley Lowe's Pro Death Penalty Webpage
What Politicians Don't Say About the High Costs of the Death Penalty
Richard C. Dieter of the Death Penalty Information Center on the Death Penalty’s impact on public finance.
Yahoo! Full Coverage US Death Penalty

Debate Chronology /Meta-Narrative


1988

10/13
The Second Bush-Dukakis Presidential Debate

SHAW: On behalf of the Commission on Presidential Debates, I am pleased to welcome you to the second presidential debate. I am Bernard Shaw of CNN, Cable News Network. My colleagues on the panel are Ann Compton of ABC NEWS; Margaret Warner of Newsweek magazine; and Andrea Mitchell of NBC NEWS. The candidates are Vice President George Bush, the Republican nominee; and Governor Michael Dukakis, the Democratic nominee. (Applause)

SHAW: For the next 90 minutes we will be questioning the candidates following a format designed and agreed to by representatives of the two campaigns. However, there are no restrictions on the questions that my colleagues and I can ask this evening, and the candidates have no prior knowledge of our questions. By agreement between the candidates, the first question goes to Gov. Dukakis. You have two minutes to respond. Governor, if Kitty Dukakis were raped and murdered, would you favor an irrevocable death penalty for the killer?

DUKAKIS: No, I don't, Bernard. And I think you know that I've opposed the death penalty during all of my life. I don't see any evidence that it's a deterrent, and I think there are better and more effective ways to deal with violent crime. We've done so in my own state. And it's one of the reasons why we have had the biggest drop in crime of any industrial state in America; why we have the lowest murder rate of any industrial state in America. But we have work to do in this nation. We have work to do to fight a real war, not a phony war, against drugs. And that's something I want to lead, something we haven't had over the course of the past many years, even though the Vice President has been at least allegedly in charge of that war. We have much to do to step up that war, to double the number of drug enforcement agents, to fight both here and abroad, to work with our neighbors in this hemisphere. And I want to call a hemispheric summit just as soon after the 20th of January as possible to fight that war. But we also have to deal with drug education prevention here at home. And that's one of the things that I hope I can lead personally as the President of the United States. We've had great success in my own state. And we've reached out to young people and their families and been able to help them by beginning drug education and prevention in the early elementary grades. So we can fight this war, and we can win this war. And we can do so in a way that marshals our forces, that provides real support for state and local law enforcement officers who have not been getting that support, and do it in a way which will bring down violence in this nation, will help our youngsters to stay away from drugs, will stop this avalanche of drugs that's pouring into the country, and will make it possible for our kids and our families to grow up in safe and secure and decent neighborhoods.

SHAW: Mr. Vice President, your one-minute rebuttal.

BUSH: Well, a lot of what this campaign is about, it seems to me Bernie, goes to the question of values. And here I do have, on this particular question, a big difference with my opponent. You see, I do believe that some crimes are so heinous, so brutal, so outrageous, and I'd say particularly those that result in the death of a police officer, for those real brutal crimes, I do believe in the death penalty, and I think it is a deterrent, and I believe we need it. And I'm glad that the Congress moved on this drug bill and have finally called for that related to these narcotics drug kingpins. And so we just have an honest difference of opinion: I support it and he doesn't.

1997

8/4
Danger of Executing the Innocent On the Rise
David Revola writes in the National Law Journal.
10/1
DEATH PENALTY AND SENTENCING INFORMATION
Dudley Sharp of prodeathpenalty.com.
11/4
New Fervor For Death Penalty
Christian Science Monitor coverage of Death Penalty resurgence.

1998

April
What do Murderers Deserve?
David Gelernter in Commentary.

2000

5/18
Death by misadventure: the death penalty in America
Kristen Edwards on the Death Penalty.
6/12
Dartmouth Chance News: Liebman v. Cassell
8/28
Paul Cassell and the Goblet of Fire
Edward Cohn profiles death penalty advocate Paul Cassell in The American Prospect.

2002

8/7
The New Abolitionism
Roger Parloff on the death penalty.

2005

A Cognitive Scientist Looks At Daubert
George Lakoff:

Politically, trial lawyers tend to be liberals; the wealthy ones tend to use their wealth to support liberal causes. Since the highest moral imperative for conservatives is to support and defend Strict Father morality itself, trial lawyers doing tort law are anathema to conservatives on the following grounds: the cases that trial lawyers win tend to support a liberal world view, the Public Interest Perspective, while conservatives tend to hold the Corporate Interest Perspective; and trial lawyers contribute money that they earn through verdicts they win to liberal causes and to the defeat of conservative causes. Daubert thus has a direct political role: it supports a conservative worldview over a liberal one, and it takes a lot of money out of liberal coffers and keeps it in conservative coffers.

Technically, Daubert ought to apply beyond tort law to scientific and other experts in criminal cases. If it did, defendants in criminal cases (some facing the death penalty) could challenge the use of expert testimony (e.g., fingerprinting "experts") by the prosecution. If Daubert could be used in this way, it would work against application of the death penalty. But the vast majority of criminal cases are not federal cases, which is where Daubert applies. The actual effect once more is to spread the influence of Strict Father morality in society. Daubert, as applied, tends to protect the wealth and influence of corporations, to lessen the protection of ordinary citizens, and to forbid an important range of challenges to the death penalty.

3/1
Roper v Simmons[PDF]
Supreme Court decision banning capital punishment for juveniles.
3/6
Decision on Juvenile Death Penalty
Suite101 article.

Social Security Meta-Archive: December 2004

[Part of the Social Security Meta-Archive: 2004]

12/5
DEAN RESPONDS TO SAMWICK
Dean Baker's test:

1) I have a test of my own that I have been trying to get economists to take (thus far unsuccessfully), in which I ask proponents of privatization to write down the set of dividend yields and capital gains that will give them the 6.5-7.0 percent real stock returns that they conventionally assume. Such returns were possible in the past because the price to earnings (PE) ratios have historically been much lower and profit growth was much faster.

The price to earnings ratio averaged about 14.5 to 1 over the last seventy years, compared to more than 20 to 1 today. This is important, because if 60 percent of profits are paid out as dividends (or used for share buybacks), this gets you a dividend yield of over 4.0 percent with a PE ratio of 14.5 to one. It gets you just 3.0 percent with a PE ratio of 20 to 1, and of course less when the PE ratio is higher.

12/7
Dean Baker Gives Us All a Social Security Test
Brad Delong takes Dean Baker's test:

Let's see... Assume a payout ratio of 60%. Earnings yield of 5% per year... That gives you a dividend yield of 3% per year... That means that the profits of currently existing and traded companies (not aggregate profits!) have to grow at 3.5%-4% per year... That means that the economy as a whole has to grow at 4.5%-5% per year forever... That's much higher than the Social Security actuaries' long-run growth assumption, which heads for productivity growth of about 1% per year and very low population growth by 2050...

In other words, the stock market can attain its 6-7% per year real payoff only if the macroeconomic news in the future is much better than Social Security is projecting, in which case there's no Social Security financing problem at all. What grade do I get?

Inventing a Crisis
Krugman on privatization's effect on Social Security financing.
The General Fund Crisis II
DeLong:

Paul Krugman points out that right now General Fund revenues cover only 68% of non-Social Security federal expenditures, and that a generation from now--when the Social Security Trust Fund balance is projected to reach zero--Social Security revenues will still cover 81% of Social Security expenditures.

We have much worse fiscal problems elsewhere than we have with Social Security.

12/8
Is the Social Security Trust Fund worth less than zero?
Jim Glass follows up the Angry Bear's discussion of Kent Smetters'2003 Trust Fund paper [PDF] which suggests that the Trust Fund has had a net negative impact on the budget.

But much of the negative impact seems to stem from LBJ's bringing Social Security into the budget combined with the move from pay-as-you-go to "partial-funding" of the Trust Fund in 1983 giving the subsequent false impression of a better General Fund stance than the reality.

The paper says the Trust Fund has been a bad deal from the late 1940s on but doesn't seem to clearly isolate the intrinsic effect of the Trust Fund itself as opposed to its shell function in fiscal shell games.
12/9
Anti-Social Security
Dean Baker writes in The Nation.
Social Security: Bush's quiet war
Christian Science Monitor coverage.
12/10
Borrow, Speculate and Hope
Krugman: Borrowing to privatize.
12/11
Real Reform for Social Security
New York Times Op-ed columnist David Brooks.
Taking a Hard Line On Social Security
The blog MyDD plots pro-Social Security strategy.
12/12
Brad DeLong Is Driven Into Shrill Unholy Madness:

The chart below shows the Gale-Orszag baseline for the federal government: current policies, with a fix of the AMT so that it does not replace the general tax system, and with the extension of those tax provisions currently scheduled to expire:

The U.S. government's fiscal problems are not in the Social Security system. The U.S. government's fiscal problems are in the General Fund. And these fiscal problems are dire indeed.

12/13
SOCIAL SECURITY DOOM MONGERING
Kevin Drum on the receding of Social Security's "doom":

WOULD BORROWING $2 TRILLION FOR INDIVIDUAL ACCOUNTS
ELIMINATE $10 TRILLION IN SOCIAL SECURITY LIABILITIES?
Jason Furman, William G. Gale, and Peter R. Orszag at the Center on Budget and Policy Priorities.
12/14
Twelve Reasons Why Privatizing Social Security is a Bad Idea
Greg Anrig, Jr., and Bernard Wasow of The Century Foundation.
THE NEW PROPOSAL TO OMIT SEVERAL TRILLION DOLLARS
IN COSTS FOR SOCIAL SECURITY PRIVATE ACCOUNTS
FROM THE FEDERAL BUDGET
TELECONFERENCE
TUESDAY, DECEMBER 14, 2004 AT 11:00 AM (ET)[PDF]
Center on Budget and Policy Priorities.
For a lockbox
Mark Kleiman:

As Kevin Drum pointed out, the Trust Fund could sell its bonds on the open market and by other assets; at that point, no one would doubt that the bond obligations were real, or that the assets were real assets of the Trust Fund.

But the problem would remain that the trustees are mere servants of the current administration, with no authority to sue if the President and the Congress refused to spend the Trust Fund assets to pay Social Security benefits. So here's Plan B:

Make the Social Security System a separate legal entity, as the Federal Reserve System is, with its own governing body and the right to sue. The trustees would be appointed by the President, of course, but they would have a fiduciary obligation to Social Security beneficiaries and the right to sue the Federal government if it tried to confiscate retirement assets to spend them for other purposes.

I'm not sure this is necessary, but it's certainly possible. And since it's possible, the argument that we can't ensure that the Social Security Trust Fund will be spent to fund the pension system is simply false. We can. We should.

12/15
Talking Points Memo
Joshua Micah Marshall's take on the Bush privatization drive and strategy for a Democratic response.
Michael Kinsley on Why Privatization Can't Work
Dallas Mavericks owner Mark Cuban cites economist Hal Varian's discussion of corporations moving from defined benefits to 401ks and the failure of the government to protect soldiers from being scammed by brokers as reasons not to privatize SS and hands over the proverbial microphone of his blog to Michael Kinsley:

1. To "work," privatization must generate more money for retirees than current arrangements. This bonus is supposed to be extra money in retirees' pockets and/or it is supposed to make up for a reduction in promised benefits, thus helping to close the looming revenue gap.

2. Where does this bonus come from? There are only two possibilities: from greater economic growth, or from other people.

3. Greater economic growth requires either more capital to invest, or smarter investment of the same amount of capital. Privatization will not lead to either of these.

a) If nothing else in the federal budget changes, every dollar deflected from the federal treasury into private social security accounts must be replaced by a dollar that the government raises in private markets. So the total pool of capital available for private investment remains the same.

b) The only change in decision-making about capital investment is that the decisions about some fraction of the capital stock will be made by people with little or no financial experience. Maybe this will not be the disaster that some critics predict. But there is no reason to think that it will actually increase the overall return on capital.

4. If the economy doesn't produce more than it otherwise would, the Social Security privatization bonus must come from other investors, in the form of a lower return.

a) This is in fact the implicit assumption behind the notion of putting Social Security money into stocks, instead of government bonds, because stocks have a better long-term return. The bonus will come from those saps who sell the stocks and buy the bonds.

b) In other words, privatization means betting the nation's most important social program on a theory that cannot be true unless many people are convinced that it's false.

c) Even if the theory is true, initially, privatization will make it false. The money newly available for private investment will bid up the price of (and thus lower the return on) stocks, while the government will need to raise the interest on bonds in order to attract replacement money.

d) In short, there is no way other investors can be tricked or induced into financing a higher return on Social Security.

5. If the privatization bonus cannot come from the existing economy, and cannot come from growth, it cannot exist. And therefore, privatization cannot work.

Q.E.D.

12/16
Could Social Security Privatization Succeed?
Brad DeLong responds to Kinsley:

Marty Feldstein and company might say that Kinsley's (4c) is false: the inflow of money will bid up the price and lower the return on stocks a bit, but not enough to make long-run stock market investments by private account holders a bad deal. And he would say that taking some of the high returns earned by today's stockholding rich and transferring them to Social Security beneficiaries is the point of the exercise.

Kent Smetters and company might say that Kinsley's (3a) is wrong: that once the privatized parts of Social Security are off the books, the Republican High Politicians will have no option but to propose serious spending cuts or tax increases in order to bring the Federal Government's General Fund into long-term balance. These changes in fiscal policy triggered by the fact that the government is no longer allowed to use the Social Security surplus to pretend that it has a plan for funding general spending will raise national saving, and boost economic growth.

Andrew Samwick and company might say that we dare not raise Social Security taxes without establishing private accounts because we do not dare have the Federal Government voting for CEOs and Directors. This line of thought is that Kinsley is not wrong but incomplete: private accounts then make the policy of raising Social Security contributions a good one.

Ned Gramlich and company might say that raising Social Security contributions becomes politically possible once you have private accounts--that it is the fear that people won't see any return for their contributions that blocks raising more resources for the system. This line of thought is that Kinsley is not wrong so much as incomplete: it's not a privatization bonus, it's the tax increases that privatization will make possible.

All these arguments have, I think, some force. None of them--not even all of them taken together--make a case for whatever monstrosity is about to emerge from the Bush administration.

Imitation is the Sincerest Form of Flattery...the FT on Social Security...
Economist Nouriel Roubini on the FT editorial.
President Discusses Budget, Tax Relief at White House Conference
White House transcript: Bush discusses Social Security with former Colorado congressman Tim Penny and others.
Groups Line Up to Oppose Bush Social Security Plan
Reuters coverage.
Economic Summit Takes Up Social Security Reform
Link to NPR coverage.
On Point: Retire At Your Own Risk
Link to radio broadcast including John Shoven and Paul Krugman.
12/17
SOCIAL SECURITY AND ME....
Kevin Drum of The Washington Monthly summarizes the evolution of his views on Social Security.
Social Security: Red Ink's Benefits
Michael Mandel of Business Week slams Democrats for being against borrowing to finance Social Security - but doesn't weigh in on Bush's tax cuts
Buying Into Failure
Krugman. New York Times abstract:

“Paul Krugman Op-Ed column says Chile's and Britain's experiences with privatized retirement plans show folly of Pres Bush's plan for privatizing Social Security; says privatization dissipates large fraction of workers' contributions on fees to investment companies and leaves many retirees in poverty.”

More on Privatization
Arnold Kling mentions Krugman’s column.
Paul Krugman: Lies, Evasions or Simple Ignorance?
Tim Worstall decries Krugman’s description of UK pension reform.
Basic reading on Social Security privatisation
A nicely concise summary from the blog Technopolis.
12/19
Good-Will Is Low for Social Security Talks
New York Times coverage.
Cause for Concern
Democratic activist David Sirita speculates on the role to be played in the Social Security debate by the DLC.
Questions, Questions
Matthew Yglesias asks:

The first thing that would be nice to calculate if someone can figure out how to do it is the exact average productivity growth over the next 75 years that we need to make sure that the Trust Fund is never exhausted. We know that under the "low cost" projection, the fund stays solvent forever, but the low cost scenario is actually lower in cost than needed. Where's the tipping point? I can't begin to understand how one would do the requisite math.

The other set of questions I have in mind right now pertain to the point I made here about how they estimate producitivity growth. This is done by breaking up the past into a series of economic cycles measured peak-to-peak (with the most recent peak in 2000) calculating the average annual producivity growth for each cycle, and then averaging together the results for the last four cycles. That's obviously a pretty arbitrary method. I'd be interested in knowing what you get if you try some different methods. What happens if you use the last four business cycles measured trough to trough? Or what if you use the last five (or six or...) business cycles? What happens if, instead of using the double-averaging method, you just take average annual productivity 1966-2000? How sensitive, in other words, are the long-term projections of doom to minor changes in how the analysis is done? Has the SSA just happened to pick the most pessimistic possible way to do this? That'd be quite the coincidence.

Ask Dr. Social Security Projections
Brad DeLong answers:

The current low-cost estimate has the 75-year balance at +0.41% of taxable payroll; the intermediate estimate is at -1.89% of taxable payroll; the high-cost estimate is at -4.96% of taxable payroll. The long-run economy-wide productivity growth rates for those three projections are 1.9%, 1.6%, and 1.3% per year, respectively. The crossover point--the 75-year balance of zero--currently comes at a productivity growth rate of 1.85% per year.

The average productivity growth rate over the 40 years from 1960-2000 was 1.76% per year. Add in 2001-2004 (unless the fourth quarter of 2004 is really bizarre) and find that the average productivity growth rate over 1960-2004 is 1.85% per year. Up until the late 1990s there was a reason to project future productivity growth to be slower than the long-run past average: productivity growth did seem to be gradually slowing down. Since the late 1990s that is no longer the case: there is no longer any good reason to project that future productivity growth will be slower than in the past (unless you believe that we are going to fail to undo the Bush policy mistakes, that is).

You shouldn't try to compute averages by calculating trough-to-trough numbers. Different business cycle troughs are very different in their characteristics. By contrast, while all peaks are not identical, they are closer along a number of dimensions like capacity utilization and upward pressure on inflation than are troughs.

The 44 years since 1960 give you an average growth rate of 1.86% per year; the 39 years since 1965 give you 1.69% per year; the 34 years since 1970 give you 1.66% per year. Moving forward: since 1975, 1.58%; since 1980, 1.70%; since 1985, 1.73%; since 1990, 1.91%; since 1995, 2.37%. Personally, if I had to give an estimate of what productivity growth will be over the next 75 years, I'd guess 1.9% per year because it seems to me that 1960-2004 includes a uniquely bad period in 1973-1989 or so. I'd be really surprised if the productivity growth rate averaged less than 1.6% per year. And I'd be really surprised if it averaged more than 2.3% per year. But that probability distribution is worth exactly what you paid for it.

12/20
Crisis? What Social Security Crisis?
DeLong on on the positive impact on the end of the 1973-95 productivity slowdown on Social Security finance.
12/22
Long-Term Analysis of the Diamond-Orzsag Social Security Plan
CBO scoring.
12/23
The Bottom Line on Overhauling Social Security
Jeff Madrick:

To determine how sensitive retirement income is to the rate of investment return, Mr. Dudley worked out some calculations under Reform Model 2. The results are stunning.

If a worker earns just the respectable expected bond rate of 3 percent a year, or 2.7 percent after transactions costs, then the typical one-earner family will retire on only about 58 percent of the projected benefits under current law. If the investor earns zero over time, which may well occur for some investors, the projected retirement benefit is only a little more than 38 percent of the current benefit. These are considerably worse than the projected adjustments needed to bring the present system into balance.

And there are other costs to privatization. Consider the potential impact from borrowing as much as $2 trillion, which many experts see as the projected transition costs to cover the gap that would arise in payments to current retirees and those retiring soon once workers started diverting into private accounts some of the payroll taxes used to pay benefits. Financial markets may not absorb that debt without interest rates rising and the dollar falling.

The Economic Policy Institute on Social Security
DeLong links...
12/26
The Andrew Samwick Fraction Grows with the Defection of the Renegade Froomkin
DeLong vs. Samwick & Froomkin on government vs. private investment in equities.
If It's Right, It's Wrong
Michael Kinsley responds to DeLong and others:

Whatever its flaws, is privatization inferior to the current system, with its looming inability to keep its promises? One problem with this question is that privatization itself doesn't address this looming gap. Privatization plans call for borrowing a "transitional" gazillion dollars to close the gap. With a transition like that, any plan will work, including no plan at all.

Berkeley economist Brad DeLong and blogger Mickey Kaus, among others, challenged my argument that nothing about privatization promises to increase private investment. They cited the well-known research by economist Martin Feldstein showing that Social Security reduces personal savings. Big surprise: If you know you've got a bit of a nest egg coming from the government, you may not be as avid a saver. It follows that less Social Security should increase personal savings.

But privatization is not supposed to produce a net loss in anyone's retirement nest egg. In fact, if it worked as promised, it would enlarge the nest egg. By the Feldstein thesis, that would reduce private saving. So, once again: Privatization relies on a theory that is wrong if it's right, and right only if it's wrong.

Stephen Moore, known as "the Club for Growth" (actually, that's the name of his organization, but it fits him pretty well) is an omnipresent Washington operative and talking head, and probably the leading non-administration voice in favor of privatization. His e-mail, direct from Bush's economic conference last week, made only two fresh points.

One was that the Social Security money that people keep and invest for themselves amounts to "a big supply side tax cut." If Moore envisions reducing what people owe the government in taxes without reducing what the government owes people in benefits, if he therefore plans to solve the problem of a huge deficit by making it bigger and if he fantasizes that cutting Social Security taxes will increase Social Security revenue, we are indeed back in the dream world of supply side tax cuts, with predictable results. But if he contemplates reducing Social Security payments proportionally to the reduction in taxes -- and counting on people to make up the difference with their new investments -- people will be, and will feel, no richer than they were before and there will be no supply-side incentives.

Social Security Yet Again: A Clarification
DeLong responds:

I was actually thinking of a different line of argument that Marty makes. These days he is more likely to stress not the reduction in personal savings that may be generated by expectations of the continuation of the pay-as-you-go Social Security system, but the gap between stock and bond returns. Marty's argument these days is much more likely to be the claim (with which I have a lot of sympathy) that the stock market does a lousy job of mobilizing society's risk-bearing resources. Stocks appear to be priced as though the marginal investor is a rich 62-year old with some clogged arteries and a fifteen-year life expectancy who is not expecting to leave a fortune to his descendants. But if the stock market were working well, the marginal investor would be a 40-year old in his or her peak earning years looking out to retirement spending 40 years in the future--an investor much less averse to risk than the 62-year old.

Turning Social Security into a forced-equity-savings program would, Marty believes, not only produce huge profits for the system but also materially improve the efficiency of U.S. financial markets.

12/27
Social Insecurity: the annuity problem
Mark Kleiman on supplanting Social Security with Social Risk.
12/28
Diamond and Orszag's Social Security Plan
Commentary from the blog The Dead Parrot Society
What Social Security Reform Should Democrats Propose?
Andrew Samwick notes the failure of Democratic politicians to rally behind Diamond-Orszag.
12/30
Social Security Part I: Insurance and Risk Premiums
Angry Bear on the insurance role of Social Security.

Social Security Meta-Archive: January 2005

Social Security Meta-Archive: 2005

Social Security Meta-Archive: 2004

[Part of The Earth-Based Initiative: Social Security Meta-Archive]

1/10
A Progressive Framework for Social Security Reform
A Center for American Progress production with presentations by Gene Sperling and Dean Baker.
1/20
The Clown Show that Is Bush Administration "Social Security Reform" Opens
Brad DeLong links to Kash of the American Street, followed by extended comment.
1/29
Saving Social Security
Diamond and Orszag present Saving Social Security at AEI. With video and other multimedia.
2/27
01:23 PM
Hell Is Briefing George W. Bush on a Complicated Issue Like Social Security Reform
Brad DeLong examines the latest document in the hopper at Ron Suskind's website.
4:27 PM PT
The Free Lunch Bunch
Ron Suskind on the the "Lindsey Plan" to issue new debt financed by private plan revenues back in 2001.
2/28
Saving Social Security
DeLong examines the arguments presented in the Suskind article.
3/4
The Biggest Risk-Arb Transaction Ever
Brad Delong reports on eight estimates of the Larry Lindsey-Feldstein-Samwick plan which has influenced Bush administration thinking:

The plan, you remember, was for the federal government to sell a huge number of Treasury bonds, invest the proceeds in stocks, distribute the stocks to individuals as their Social Security Private Accounts, and use the equity premium--the average spread on the return on stocks over the return on Treasury bonds--to reap immense profits and save Social Security.

Of the eight back-of-the-envelope point estimates:

Two say zero: even though there was a substantial equity premium in the past, there is no compelling reason to think that the risk-adjusted equity premium will be large in the future. And policy should not be made on the gamble that it will.

Two more say zero: even though there is compelling evidence that the equity premium is excessively high from the government's perspective--that the government is so risk-tolerant an institution that the expected risk-adjusted profits from the government's going short Treasuries and long stocks--the Lindsey-Feldstein-Samwick plan transfers the risk that the stock market will tank from the government back to Social Security beneficiaries, and there is no compelling reason to think that beneficiaries have enough risk tolerance to make this a good tihng to do.

Two more say zero: even though there is compelling evidence that the equity premium is too high and that there is lots of profit to be earned by long-run bets that go short Treasuries and long stocks, enactment of the Lindsey-Feldstein-Samwick plan will cause an immediate jump in the stock market. Current owners of stock will profit massively as people's expectations of the massive future demand from Social Security Private Accounts. The equity premium will shrink quickly. And there will be little profit captured by beneficiaries and little money to save Social Security. (However, the falling equity premium will boost corporate investment, real profits, and real wages by eliminating the Harberger triangle currently created by the market inefficiency underlying the excessive equity premium.)

One says that you might make $2.4 trillion in present value--that price pressure from the demand for stocks for Social Security Private Accounts will eventually shrink the excess equity premium to close to zero, but that will take a generation. And in the meantime, as the excess equity premium is still there (but shrinking), you do profit from the wedge caused by the fact that the private stock market grossly overprices systematic risk.

One says $12 trillion. In his view Lindsey-Feldstein-Samwick are probably right. The world capital market of the twenty-first century will be much bigger than the U.S.-centered capital market of the twentieth century. The equity premium appears to be a persistent structural feature of the world economy. U.S. Treasury bonds will be an immensely attractive investment to the rich of industrializing Asia (as a form of political risk insurance if nothing else). Given these considerations the Lindsey-Feldstein-Samwick belief that the Treasury can go short $4 trillion of Treasuries and long $4 trillion of stocks and earn huge profits does not look unreasonable. He says that you might well make $12 trillion in present value profits on this most mammoth of risk-arbitrage transactions. And that is in the ballpark of being enough money to pay current-law Social Security benefits without increasing Social Security taxes.

My own view? I'm half in the "about $2.4 trillion of profit" camp, half in the "this is no bargain if the risk the stock market will tank is borne by beneficiaries" camp.

And further comments in the subsequent thread:

Re: "Is there someplace where a mathematically literate (but helas non-economist) individual e.g. me, can follow this conversation? Its content is more than a mere technical curiosity and I would like to be reasonably informed about it. I understand what the Lindsey-Feldstein-Samwick proposal is, but I don't have the background to judge the risk factors of the various portfolios."

There really is no place to follow this discussion, alas...

Feldstein and Samwick have written various NBER working papers on this: www.nber.org. Peter Orszag at brookings.edu has run similar numbers for his book on Social Security reform with Peter Diamond, but Orszag is in Florida right now on a no-cell-phone vacation. Bob Cumby at Georgetown explored these issues during the late Clinton Treasury, and is looking through his files. John Karl Scholz at Wisconsin and Kent Smetters at Pennsylvania are people I need to talk to about this, and haven't.

On what to do with Social Security, I favor putting Peter Orszag and Kent Smetters in a locked room without food (but with plenty of caffeinated and other beverages), and doing whatever they manage to agree on.

With subsequent commentary by Robert Waldman:

risk soudning like a broken record (and besides Brad made this point

The Lindsey-Feldstein-Samwick has two components. The first is social security private acocunts (SSPA). This might be good for participants, but would cost the SSA on the order of 1 trillion. The thought that this is the first step in saving social security is crazy. The grim fact is that Bush wasn't dishonest when he stated that thought.

The other is the SSTF investing in private assets especially stock. This appears via a tax on ss private accounts. Now it might be socially useful for the SSTF to go long in stock if there wree still a puzzling equity premium. There is no logical connection between the two aspects.

It is easy to convince people they could do better with private accounts if you "neglect" to mention the tax on returns of private accounts. I'd say Lindsey-Feldstein-Samwick are trying a major bait and switch, arguing that private accounts are a great deal for particpants because they get to take 1 trillion from the SSTF (don't mention the tax) and a great deal for the SSTF beaxue it will get to take N trillion in taxes from the participants. My sense is they plan to save the SSTF with fraud.

Why would I accept a taxed SSPA rather than keeping my social security pension and buying stock on my own ? That way all is the same except the SSA gets less from me. The SSPA would be a rational investment only for the liquidity constrained and those excluded from the stock market by borkerage fees on odd lots of index funds.

The N trillion for the SSA would come mostly from cheating people who don't understand that they are principally signing on to pay a brand new tax.

And Jim Glass:

"One says that you might make $2.4 trillion in present value--that price pressure from the demand for stocks for Social Security Private Accounts will eventually shrink the excess equity premium to close to zero, but that will take a generation."

Over the last 20 years $11 trillion additional went into private retirement accounts such as IRAs. The capitalization of markets available for that to be invested in was much smaller 20 years ago than today -- and certainly much much smaller than the world-wide markets of 20 years from now.

Why would a much smaller new "pressure" of a mere $2T in the future have a such dramaticaly greater effect on the equity premium than the much larger new pressure in the past? Nobody has ever explained this to me.

And the equity premium has existed for at least 200 years, puzzle or not. Grant that someone truly believes it must go away "sooner or later". What objective *reason* can such a someone give to explain why "sooner or later" will arrive within the next 20 years? I mean a reason that also explains why it didn't arrive in 1960 or 1920 and won't delay its arrival until 2110?

3/11
Think Again: Spinning Social Security
Matthew Yglesias, writing for the Center for American Progress on the under-reported brazen Social Security hypocrisy of Alan Greenspan.
June
The Outlook for Social Security
CBO analysis.
6/24
Reducing Budget Deficits
"Remarks by Edward M. Gramlich Member Board of Governors of the Federal Reserve System at the Concord Coalition Policy Conference Dirksen Senate Office Building Washington, D.C."
8/11
Marty Weitzman Is *Much* Smarter Than I Am
DeLong samples a paper on the equity premium.
8/13
Dazzle Them With Demographics
James Galbraith reviews The Coming Generational Storm by Laurence J. Kotlikoff and Scott Burns in the Texas Observer.
8/17
Fact vs. Fancy: The Skinny on Social Security[PDF]
Martin Feldstein, writing in The Wall Street Journal:

Reforming Social Security finances is the major domestic challenge that the president will face in the next four years...

9/29
Are There Reasons to Be in Favor of Social Security Privatization?
In response to Atrios, DeLong responds affirmatively:

There are five reasons to be in favor of Social Security privatization. They are:

1. There are large-scale financial market failures which cause the equity premium to be *way* too high: the stock market does a lousy job at mobilizing society's risk-bearing capacity as applied to investment. Privatizing Social Security and mandating that such accounts be invested in stocks rather than holding the public Social Security Trust Fund in Treasury bonds is a powerful way to try to repair this market failure by boosting demand for equities
2. Too many households are myopic: they do not save enough. Households resist increases in Social Security taxes--they see no link between the taxes and their future benefits. But if Social Security were privatized so that households saw their Social Security contributions as their own, in the future there would be much less objection to upping the contribution rate--and so creating a real and more effective forced saving program to raise the national savings rate.
3. Prefunding Social Security is moral: it is unfair to make tomorrow's young bear the entire burden of financing the retirement of the baby-boom generation. But prefunding requires raising Social Security contributions and building up huge assets in the Social Security Trust Fund--enough assets to give the Managing Trustee of the Trust Fund effective voting control over corporate America. The Managing Trustee is the Secretary of the Treasury. Do we want the Secretary of the Treasury casting the deciding votes in every election for corporate boards of directors? No. Hence privatization is a necessary first step to create the possibility of doing the moral thing--making the boomers build up the assets needed so that they can shoulder a greater share of the burden of financing their own retirement.
4. We need to raise our national savings rate. But if we just raise Social Security taxes, Congress will treat these taxes as general revenue and spend them. Only by funneling Social Security contributions into some vehicle that Congressional representatives cannot interpret as a resource available to fund current spending can we raise the national savings rate. And private accounts are the best vehicle we can find to (a) accumulate contributions without (b) allowing Congressional representatives to seize them as resources available to fund current federal spending.
5. At present, your Social Security benefits are yours only by grace of Congress: Congress could cut them if it wished. But if your privatized Social Security account were *yours*, then it would be yours not by grace of Congress but by right of property: courts would stand ready to defend it against any casual attempt to cut or confiscate it.

The problem is that I cannot see any of these as a reason for George W. Bush to be in favor of Social Security privatization. (It does seem likely to me that (1) and (3) are Marty Feldstein's and Andrew Samwick's reasons for being strong advocates of privatization, and that (4) is Kent Smetters's reason for being a strong advocate of privatization. But their reasons aren't the administration's reasons, and hence whatever plan a second Bush administration might ultimately propose would be unlikely to be crafted to achieve goals (1), (3), or (4).

9/30
Daniel Davies responds:

Christ on a bike! If you don't mind my saying so, Brad, these reasons range from "weak" to "mad".

1. The stock market is not a material source of funds for investment. There is no reason to suppose that it would become one simply if one threw a load of money at the stock market.

2. Aside from the fact that this is social engineering far more radical than the French working hours legislation, savings are fungible. It could easily go the other way; that households do not currently count SS as part of their savings and would reduce other savings if they began to do so.

3. This is insanity of a level which requires a very great degree of intelligence to achieve. In primitive societies in the Kalahari, they are aware that the duty of the young to support the old is a moral duty. This moral duty even made it into the Ten Commandments. It takes years of education to get someone to the point where they believe that it is "immoral" to believe that the old have a claim on the young for no better reason than that they gave birth to them and raised them.

4. In general, projections of catastrophe which have as one of their premises that people will do obviously crazy things, are built on sand.

5. The Labour government's first action on coming to power in 1997 was to pass a law which effectively represented a 10% windfall tax on private pension funds (they removed the tax credit on dividends). The courts didn't make a squeak.

I've never understood how anyone can end up believing that small risk pools are better than big ones, or that equities make a better matching asset for certain future liabilities than bonds. I note idly that in the USA it would be illegal to run a life annuity company on the basis suggested for Social Security; in the UK it is legal, and ask any Equitable Life policyholder how well that turned out.

The Top 10 Myths About Social Security Reform
The Heritage Foundation.
10/13
The Third Bush-Kerry Presidential Debate

SCHIEFFER: Mr. President, the next question is to you. We all know that Social Security is running out of money, and it has to be fixed. You have proposed to fix it by letting people put some of the money collected to pay benefits into private savings accounts. But the critics are saying that's going to mean finding $1 trillion over the next 10 years to continue paying benefits as those accounts are being set up.

So where do you get the money? Are you going to have to increase the deficit by that much over 10 years?

BUSH: First, let me make sure that every senior listening today understands that when we're talking about reforming Social Security, that they'll still get their checks.

I remember the 2000 campaign, people said if George W. gets elected, your check will be taken away. Well, people got their checks, and they'll continue to get their checks.

There is a problem for our youngsters, a real problem. And if we don't act today, the problem will be valued in the trillions. And so I think we need to think differently. We'll honor our commitment to our seniors. But for our children and our grandchildren, we need to have a different strategy.

And recognizing that, I called together a group of our fellow citizens to study the issue. It was a committee chaired by the late Senator Daniel Patrick Moynihan of New York, a Democrat. And they came up with a variety of ideas for people to look at.

I believe that younger workers ought to be allowed to take some of their own money and put it in a personal savings account, because I understand that they need to get better rates of return than the rates of return being given in the current Social Security trust.

And the compounding rate of interest effect will make it more likely that the Social Security system is solvent for our children and our grandchildren. I will work with Republicans and Democrats. It'll be a vital issue in my second term. It is an issue that I am willing to take on, and so I'll bring Republicans and Democrats together.

And we're of course going to have to consider the costs. But I want to warn my fellow citizens: The cost of doing nothing, the cost of saying the current system is OK, far exceeds the costs of trying to make sure we save the system for our children.

SCHIEFFER: Senator Kerry?

KERRY: You just heard the president say that young people ought to be able to take money out of Social Security and put it in their own accounts.

Now, my fellow Americans, that's an invitation to disaster.

The CBO said very clearly that if you were to adopt the president's plan, there would be a $2 trillion hole in Social Security, because today's workers pay in to the system for today's retirees. And the CBO said -- that's the Congressional Budget Office; it's bipartisan -- they said that there would have to be a cut in benefits of 25 percent to 40 percent.

Now, the president has never explained to America, ever, hasn't done it tonight, where does the transitional money, that $2 trillion, come from?

He's already got $3 trillion, according to The Washington Post, of expenses that he's put on the line from his convention and the promises of this campaign, none of which are paid for. Not one of them are paid for.

The fact is that the president is driving the largest deficits in American history. He's broken the pay-as-you-go rules.

I have a record of fighting for fiscal responsibility. In 1985, I was one of the first Democrats -- broke with my party. We balanced the budget in the '90s. We paid down the debt for two years.

And that's what we're going to do. We're going to protect Social Security. I will not privatize it. I will not cut the benefits. And we're going to be fiscally responsible. And we will take care of Social Security.

SCHIEFFER: Let me just stay on Social Security with a new question for Senator Kerry, because, Senator Kerry, you have just said you will not cut benefits.

Alan Greenspan, the chairman of the Federal Reserve, says there's no way that Social Security can pay retirees what we have promised them unless we recalibrate.

What he's suggesting, we're going to cut benefits or we're going to have to raise the retirement age. We may have to take some other reform. But if you've just said, you've promised no changes, does that mean you're just going to leave this as a problem, another problem for our children to solve?

KERRY: Not at all. Absolutely not, Bob. This is the same thing we heard -- remember, I appeared on "Meet the Press" with Tim Russert in 1990-something. We heard the same thing. We fixed it.

In fact, we put together a $5. 6 trillion surplus in the '90s that was for the purpose of saving Social Security. If you take the tax cut that the president of the United States has given -- President Bush gave to Americans in the top 1 percent of America -- just that tax cut that went to the top 1 percent of America would have saved Social Security until the year 2075.

The president decided to give it to the wealthiest Americans in a tax cut. Now, Alan Greenspan, who I think has done a terrific job in monetary policy, supports the president's tax cut. I don't. I support it for the middle class, not that part of it that goes to people earning more than $200,000 a year.

And when I roll it back and we invest in the things that I have talked about to move our economy, we're going to grow sufficiently, it would begin to cut the deficit in half, and we get back to where we were at the end of the 1990s when we balanced the budget and paid down the debt of this country.

Now, we can do that.

Now, if later on after a period of time we find that Social Security is in trouble, we'll pull together the top experts of the country. We'll do exactly what we did in the 1990s. And we'll make whatever adjustment is necessary.

But the first and most important thing is to start creating jobs in America. The jobs the president is creating pay $9,000 less than the jobs that we're losing. And this is the first president in 72 years to preside over an economy in America that has lost jobs, 1. 6 million jobs.

Eleven other presidents -- six Democrats and five Republicans -- had wars, had recessions, had great difficulties; none of them lost jobs the way this president has.

I have a plan to put America back to work. And if we're fiscally responsible and put America back to work, we're going to fix Social Security.

SCHIEFFER: Mr. President?

BUSH: He forgot to tell you he voted to tax Social Security benefits more than one time. I didn't hear any plan to fix Social Security. I heard more of the same.

He talks about middle-class tax cuts. That's exactly where the tax cuts went. Most of the tax cuts went to low- and middle-income Americans. And now the tax code is more fair. Twenty percent of the upper-income people pay about 80 percent of the taxes in America today because of how we structured the tax cuts. People listening out there know the benefits of the tax cuts we passed. If you have a child, you got tax relief. If you're married, you got tax relief. If you pay any tax at all, you got tax relief. All of which was opposed by my opponent.

And the tax relief was important to spur consumption and investment to get us out of this recession.

People need to remember: Six months prior to my arrival, the stock market started to go down. And it was one of the largest declines in our history. And then we had a recession and we got attacked, which cost us 1 million jobs.

But we acted. I led the Congress. We passed tax relief. And now this economy is growing. We added 1. 9 million new jobs over the last 13 months.

Sure, there's more work to do. But the way to make sure our economy grows is not to raise taxes on small-business owners. It's not to increase the scope of the federal government. It's to make sure we have fiscal sanity and keep taxes low.

11/1
Privatize Social Security? No
Henry Aaron of Brookings.
11/8
The Simple Arithmetic of Social Security Privatization
Brad DeLong on a workable PRIVATIZATION.
Social Security: What's Next?
Wall Street Journal ECONOBLOG debate between Tyler Cowen and John Irons.
11/12
TWO MORE QUESTIONS ABOUT PRIVATE ACCOUNTS....
Kevin Drum pursues the conversation...
11/14
Basic Facts on Social Security and Proposed Benefit Cuts/Privatization[PDF]
Dean Baker and David Rosnick.[Center for Economic and Policy Research]
11/15
Social Security Reform
A primer from the blog The Lowest Deep.
11/20
What is the Low Cost alternative? What does it mean?
The Bruce Web on the Trustees' handling of the low projections.
11/22
Is the Social Security Trust Fund Worth Anything?
The economics blog Angry Bear links to a paper by Kent Smetters in the context of Smetter's previous calculation of a $44 trillion present value debt in perpetuity as previously discussed by Bruce Bartlett.
11/23
Yet More on Social Security
DeLong:

The Social Security problem does have two parts: (i) How are Social Security's own internal accounts to be balanced? And (ii) how do we make sure that Social Security's investments are sound--that those with whom Social Security invests its balances don't lose them so that the kitty is bare when it is time to pay beneficiaries?

When Kent Smetters worries that the Social Security Trust Fund's balances are not safe because, as Angry Bear puts it, the assumption that "policymakers set spending and tax rates for the other levels of government so as to insure that the General Fund adheres to a long-run balanced budget constraint" is unwarranted, that's what he's talking about: an implicit or explicit default by the Treasury on that tranche of its bonds that are owned by the Social Security Trust Fund: the U.S. Treasury behaving like the Confederate Treasury. And I think that in Kent's mind the principal virtue of private accounts is to change the perceptions of Tom Delay, Bill Frist, and other congressional leaders in a way that makes such a default much less likely. The mechanism by which private accounts accomplish this is, however, unclear to me. The normal mechanism would be that transferring money to private accounts raises the reported budget deficit, which alarms deficit hawks and leads to tax increases and spending cuts. But Kent is now on record as saying that shifting money to private accounts shouldn't be counted as an increase in the budget deficit. There seems to be an inconsistency here...

11/28
Social Security Privatization as the Mother of All Con-Man Smoke-and-Mirrors Shell-Games
Nouriel Roubini.

Social Security Meta-Archive: December 2004

Social Security Meta-Archive: 2005

[Part of The Earth-Based Initiative: Social Security Meta-Archive]

Social Security Meta-Archive: December 2004
Social Security Meta-Archive: January 2005
Social Security Meta-Archive: February 2005
Social Security Meta-Archive: March 2005
Social Security Meta-Archive: April 2005
Social Security Meta-Archive: May 2005

June
Social Security Smorgasbord? Lessons from Sweden's Individual Pension Accounts
R.Kent Weaver in Brookings Institution Policy Brief #140:

A Default Fund

The Swedish experience clearly suggests the importance of a default fund for nonchoosers if the United States moves to a system of universal rather than optional individual accounts. In the United States, establishing a new government-affiliated management entity for the default fund would be both costly and politically controversial. Contracting out management of a default fund to several different fund management firms by competitive bidding would likely spark less opposition.

At least as important as who administers the default fund is the question of how the default option is designed. The experience of the Swedish Seventh Pension Fund's Premium Savings Fund shows that there are very real trade-offs between long-term growth and protection of investment capital for those who, for whatever reason, abstain from making a fund choice. There is no obvious "correct" answer to the growth-versus-security trade-off, but it is probably best to offer different defaults for younger and older workers, and to progressively move the funds of older "abstaining" workers into more secure investments.

If a government-operated default fund were to be set up as part of an individual account tier in the United States, Swedish experience also suggests that it would not be free of controversies over environmental, ethical, and domestic investment criteria. Of course, such criteria would not necessarily be adopted in a political system that is much more conservative than Sweden's—or there might be pressures for a different set of criteria.

For example, should equity funds exclude companies that manufacture tobacco products, firearms or alcoholic beverages? Companies that employ or contract with suppliers using sweatshop labor? Companies that invest in countries with unusually repressive regimes? The experiece of the Swedish default fund shows that individual companies can be excluded with little or no increase in fund management costs—which could make it more difficult to avoid political battles over whether to do so, and what criteria to use in making those decisions.

6/5
Friedman's 'heresy' hits mainstream
A Brief San Francisco Chronicle profile of Milton Friedman:

President Bush's proposal to incorporate private accounts in the giant retirement program is easily traced to Friedman.

"He's the originator of it and all the discussion can be traced back to him," said the Cato Institute's Michael Tanner, a leading advocate of partial privatization.

"I've always been opposed to Social Security," Friedman said in a recent interview at his home in San Francisco. "I think it's a very unethical program. "

6/9
Riding Into the Sunset
Writing about retirement security for The Nation, William Greider profiles the proposals of economist Robert Fogel:

Fogel's solution is a new national pension system alongside Social Security--a universal "provident fund" that requires all workers to save a significant portion of their wage incomes every year to provide for their future. He proposes a savings rate of 14.7 percent (though taking Social Security benefits and taxes into account, a lower rate would suffice for a start). The contributions would be mandatory but set aside as true personal savings, not as a government tax. The accumulating nest eggs would belong to the individual workers and become a portable pension that goes with them if they change jobs, but the wealth would be invested for them through a broadly diversified pension fund. Employers would no longer be in charge (though they could still contribute to worker savings to attract employees). The government or independent private institutions would manage the money, investing conservatively in stocks, bonds and other income-generating assets while allowing workers only limited, generalized choices on their investment preferences.

The concept resembles the forced savings plans adopted in some Asian and Latin American countries, but Fogel's favorite prototype is American: TIAA-CREF, the pension system that exists for nearly all college professors (a nonprofit institution founded in 1917 by Andrew Carnegie). Another model could be the government's own Thrift Savings Plan, which manages savings wealth for federal employees. Lifelong healthcare, Fogel adds, could be guaranteed for all by setting aside another 9.8 percent from current incomes. "If you take the typical academic, we all have TIAA-CREF," he explains. "The universities require of us that we invest anywhere from 12.5 to 17.5 percent of our salaries in a pension fund--mandatory--but it's all in my name. I can leave it to whomever I want. It has entered my sense of well-being for many years. The fund has earned about 10 percent a year since the 1960s, so retirement is not a burden to the university."

Obviously, people with low or even moderate incomes could not afford such savings rates, and even diligent savings from their low wages would not be enough to pay for either retirement or healthcare. Fogel has a straightforward solution: Tax the affluent to pay for the needy. A tax rate of 2 or 3 percent, applied progressively to families in the top half of income distribution, could finance the "provident fund" for those who can't pay for themselves. "This is a problem, not of inadequate national resources, but of inequity," he observes.

6/15
The luckiest Ponzi scheme
A Nevada Op-ed which asserts that Social Security is doomed, and can only be brought to solvency through private accounts.
LIFTING THE CAP
TV reporter Paul Solman of the NewsHour on raising the payroll cap.
6/18
GOP Senators to Propose New Tack On Social Security
Charles Babington of the Washington Post.
6/23
We'll Need DeMint to Pay for This Proposal
Mark Thoma responds to SocialSecurityChoice.Org's claims regarding the DeMint proposal.
GOP wants Social Security surplus in private accounts
Carolyn Lochhead of the San Francisco Chronicle.
6/24
Another Social Security proposal I don't like
Economic blogger William J. Polley on the DeMint proposal.
6/28
Noble Lies, Liberal Purposes, and Personal Retirement Accounts
Will Wilkinson of CATO says Social Security is a scam.
7/15
Feldstein Comments on Social Security Reform
Mark Thoma links to a Martin Feldstein Op-ed which advocates a coupling of the DeMint-Ryan congressional proposal with automatic voluntary add-on savings account subsidized by the until-2018 surplus.
7/19
Bernanke Says Social Security Reform Must Include Private Accounts and Ensure Solvency
Mark Thoma links to Washington Post coverage.
Tyler Cowen Changes James Glassman’s Mind on Social Security
Mark Thoma on James "DOW 36,000" Glassman's retreat from privatization in favor of "solvency."

Bruce Webb in comment:

I am not suggesting the battle is over. This war didn't start in a debate over numbers, it won't end in an agreement on numbers, in many ways the numbers are just a sideshow in a seventy year old ideological struggle. The Right chose Social Security as their opening battle in the effort to discredit FDR and dismantle the New Deal. They chose it because they thought it was low lying fruit, there was agreement on all sides that in the long run it was unsustainable as currently configured, and they simply assumed they could leverage that.

But they got lazy, apparently no one was assigned to actually pay attention to the key numbers. When the battle broke out and they reached into the quiver for numeric arrows they came up empty.
Privatizers remind me of Custer at Big Horn. They rode right into this one with shiny buttons and buglers just assuming the natives would scatter before them. They didn't prepare themselves by studying the ground, they never dreamed they would need to. The numbers were supposed to be there. Now they are discovering that Hope is not a Plan.

Is the Social Security System in Need of Reform?
Mark Thoma.
7/25
Bi-Partisan Support for Add-On Accounts Appears Possible
Mark Thoma links to a Jonathon Weisman Washington Post article about Congressional efforts to address low savings rates outside of the Social Security debate.
7/29
Bush's Massive New Spending Plan Dwarfs Military: Gene Sperling
Former Clinton economic adviser on the fiscal implication of Bush's policies.
8/1
Social Security Reform Stopped by Democrat’s Radical Economists
Mark Thoma responds to Kevin Hassett.
It's Been Mostly Dead All Day
Andrew Samwick follows up, with subsequent comment by JG and Bruce Webb.
8/3
Social Security Reform
The latest formulation of Brad DeLong's position, in response to Mark Thoma's coverage of the AARP's late focus on solvency.
8/5
. . . And a Pony!
Matthew Yglesias, at TPMCafe, on the latest iteration of the Laurence Kotlikoff demographic argument.
8/8
The New Republic: Straight Out of Boston
Brad DeLong compares two Social Security proposals spring from New Republic articles, one the Greg Mankiw piece from March, the other a cover story by Ferguson and Kotlikoff.
8/11
The Uncertainty in Forecasts Used to Assess Social Security Solvency
Economist Mark Thoma breaks out the chalk before linking to an account to a debate between Dean Baker and Representative Paul Ryan (No, Jack Ryan is Jeri Ryan's Ex.)
8/12
On Its 70th Birthday, Put Social Security Out of Our Misery
The Ayn Rand Institute.
NPR: Remembering Social Security's Forgotten Shepherd
Link to a 7 minute radio profile of Frances Perkins.
8/14
Fool Me Once, Shame on You...
DeLong links to Krugman's summary of the Social Security debate and its implications for tax reform.
8/22
Why Immigration Can't Fix the Social Security Deficit
Michael Lind cites a report without stipulating the source of a "deficit."
8/25
Carl P. Leubsdorf: Bush's Social Security plan may hinge on the House
Dallas Morning News coverage of developing GOP congressional proposals.
8/31
NIGHT OF THE LIVING SCAM
TAPPED's Matthew Yglesias links to New York Times coverage of Bush's latest aspersions on Social Security's solvency and resolve to establish private accounts.
9/22
Why Soundbites Aren't Enough to Change Policy
Virginia Postrel on bumping up against Social Risk when trying to reform or replace Social Security.
10/5
We won on social security
The Daily Kos declares victory.
10/6
7thWorkshop Marie Curie Research Training Network “the Economics of Ageing"
10/19
KUDOS TO MAX:SOCIAL SECURITY REDUX
Barkley Rosser of Maxspeak.org:

For me personally, I had known this stuff was a crock of goulash since it first appeared thanks to reading "Save Social Security from its saviors," by the eminent and late Robert Eisner, Journal of Post Keynesian Economics, Fall 1998, vol. 21, no. 1, pp. 77-92, who showed especially on p. 82 the three projections and how a) the optimistic one was the most likely (and has been followed since) and b) that the system would never run a deficit at all if that one held. It was getting the essential truth of this argument that Eisner made back then out to the community of economists that broke the back of this absurd consensus that had become so deeply entrenched. It is my view that Max Sawicky and MaxSpeak played a crucial role in this development, and that whatever else he does or this blog does, he deserves a vote of thanks and recognition for this achievement. Kudos, Max!

Crisis Averted
Matthew Yglesias at TPMCafe riffs of of Rosser's post to mock the sudden disappearance of the Social Security "crisis" from the media.
10/20
Jackie Calmes's Retrospective on the Bush Social Security Campaign
Brad DeLong links to and critiques a Wall Street Journal retrospective autopsy of the Bush plan. Lee Arnold follows up in comment:

When I made the flow-chart movie "Social Security: The Real Connections" at http://www.ecolanguage.net/, I used information from Brad DeLong, Max Sawicky, Dean Baker, Jason Furman, Peter Orszag, Paul Krugman, and a few others, plus data from the Fed, Census, and IRS. It's all in there. But I've never read anywhere the two strategic flaws I've come to believe are central to the Administration's failure:

(1) You cannot drive a wedge between the retirees and the workers. They are the parents and the children, so they've sat at the same dinner table. The President's handlers were evidently sensitive to this, and tried to overcome it by the choice of speakers used at his phony town-hall meetings, but there's really no tactical way to drive a public wedge into those dinner-table discussions, and so it never made any emotional sense.

(2) Forcing a choice between (a) private saving for retirement, vs. (b) contributing to the oldest public insurance program, simply rings hollow. We are at a highly advanced stage of economic development, in an era promising more growth, so the natural response is another question: WHY CAN'T WE DO BOTH? That is, why are we being forced into a choice? And being told it means more freedom? The supposed answer turns out to be more theory from ideologists

If journalism is first draft of history
Reed Hundt, at TPMCafe, decries Jackie Calme's ignoring the blogosphere's impact on the tanking of Bush's SS plan.
10/22
Edward Prescott: Privatization of Social Security Should Happen and Will Happen
Mark Thoma presents the assertions of a Nobel Prize winner, but the linked article has no supporting numbers.
10/29
Is Bush Playing Pin the Social Security Tales on the Obstructionist Donkeys?
Mark Thoma wonders why Team Bush is still talking about Social Security.
10/31
Let's Make a Deal
Matthew Yglesias on the Washington Post's endorsement of pre-emptive benefit cuts.
Halloween Special: Return of the Dead Proposal
Mark Thoma quotes the White House's top Social Security analyst:

An issue that I've been talking about for quite a while is one that, oh, some said you probably shouldn't talk about. But I didn't come here not to deal with major problems. .... And the reason I've been talking about it is because I understand the mathematics of Social Security

Meanwhile in comment, economist Brad Setser responds to the Washington Post editorial:

...there are issues, but not the ones the wapo highlighted.

re: another question you raised -- i think the social security system only starts redeeming its stock of bonds, as opposed to using the interest on its bonds after say 2030 (I would need to look it up). obviously, once you start doing this, the system starts looking worse b/c as you use up the principal, you get less interest.

I don't think it is a big problem for the bond market tho. the bonds in the social security system won't necessarily be sold in the market -- they will be redeemed by the Treasury as they come due, and the Treasury will issue new bonds into the market to cover its obligations. that is what the treasury does all the time -- it works out like a refinancing, just with the maturing bond being out of the market and the new bond in the market. The big issue would come if the overall budget then looks dicey, since the Treasury would need to sell bonds to cover any deficit, refinance maturing market debt, and to refinance (in effect) the social security trust fund bonds with new market debt.

but this stuff is so far off that no bond trader i know worries about it/ thinks about it seriously. note the absence of market reaction to the prescription drug benefit, which is a much nearer term worry.

11/9
Senator Grassley: Social Security Reform Unlikely Before 2009
Mark Thoma links to Reuters and CNN coverage, Bruce Webb follows up in comment:

1996 Report "depletion" in 2026
2005 Report "depletion" in 2041

Fifteen years of pushback over a nine year period. Do the math, extrapolate the numbers. Or explain to me why I should not expect this proven trend to continue.

Someone needs to back their claims to superior knowledge about cash flow and demographics with some actual numbers. If I was as simpleminded as rustbelt believed the professionals would have gently but firmly explained that I didn't know what I am talking about. And until they do I plan to weigh in on every Social Security thread until people show they actually understand the numbers at play.

11/21
ACLU suing over ouster from event
Rocky Mountain News coverage of aftermath of taxpayer-financed ejection of those who drove to the Bush Social Security event with the wrong bumper sticker.
11/30
Worried about social security?
The blog Asymmetrical Information asserts Social Security is only "relatively" in good shape.
12/18
Talking Points Memo
Josh Marshall responds to Joe Klein on "industrial age" Social Security.
12/24
That Was Scary!
DeLong does a double-take on Luskin's take on Peter Ferrera's being on the take.

Social Security Meta-Archive: 2006

100,000 and not counting

Daniel Davies, who back in November responded to numerous attacks on the Lancet study in the liberal Anglo-American social sciences blog Crooked Timber -

“This isn’t an estimate. It’s a dart board”. The critique here, from Slate, is that the 95% confidence interval for the estimate of excess deaths (8,000 to 200,000) is so wide that it’s meaningless. It’s wrong. Although there are a lot of numbers between 8,000 and 200,000, one of the ones that isn’t is a little number called zero. That’s quite startling. One might have hoped that there was at least some chance that the Iraq war might have had a positive effect on death rates in Iraq. But the confidence interval from this piece of work suggests that there would be only a 2.5% chance of getting this sort of result from the sample if the true effect of the invasion had been favourable. A curious basis for a humanitarian intervention; “we must invade, because Saddam is killing thousands of his citizens every year, and we will kill only 8,000 more”.

- recently muses over the response:

Les Roberts, the principal author, is going through long dark nights of the soul, wondering if it was a tactical mistake to request accelerated peer review and to have been so vocal about the US elections (btw, the Chronicle reiterates the point we made here earlier; that accelerated peer review is uncommon but by no means unknown with important papers). The Lancet editor Richard Horton refuses to comment, and well he might given that he wrote an entirely misleading summary of the paper which referred to “100,000 civilian deaths” when the paper did not make this distinction.

But there is no way on earth that I am going to write a comment harping on about this or that minor faux pas on the part of the authors.

Because the fundamental point that Roberts makes in the article is absolutely correct; it is a far greater disgrace that 100,000 people can be needlessly killed and everybody carries on as they were before. You don’t have to accept an entirely consequentialist view of wars to accept that the consequences of wars have to be relevant to assessing whether they’ve succeeded or not. The best evidence that we have is that the consequences of this one were bloody disastrous.

...And links to a new article in the Chronicle of Higher Education which documents how rushing the study to print has ironically sunk rather than augmented its impact:

In late October, a study was published in The Lancet, a prestigious British medical journal, concluding that about 100,000 civilians had been killed in Iraq since it was invaded by a United States-led coalition in March 2003. On the eve of a contentious presidential election -- fought in part over U.S. policy on Iraq -- many American newspapers and television news programs ignored the study or buried reports about it far from the top headlines.

The paper, written by researchers at the Johns Hopkins University, Columbia University, and Baghdad's Al-Mustansiriya University, was based on a door-to-door survey in September of nearly 8,000 people in 33 randomly selected locations in Iraq. It was dangerous work, and the team of researchers was lucky to emerge from the survey unharmed.

The paper that they published carried some caveats. For instance, the researchers admitted that many of the dead might have been combatants. They also acknowledged that the true number of deaths could fall anywhere within a range of 8,000 to 194,000, a function of the researchers' having extrapolated their survey to a country of 25 million.

But the statistics do point to a number in the middle of that range. And the raw numbers upon which the researchers' extrapolation was based are undeniable: Since the invasion, the No. 1 cause of death among households surveyed was violence. The risk of death due to violence had increased 58-fold since before the war. And more than half of the people who had died from violence and its aftermath since the invasion began were women and children.

Neither the Defense Department nor the State Department responded to the paper, nor would they comment when contacted by The Chronicle. American news-media outlets largely published only short articles, noting how much higher the Lancet estimate was than previous estimates. Some pundits called the results politicized and worthless.

Les F. Roberts, a research associate at Hopkins and the lead author of the paper, was shocked by the muted or dismissive reception. He had expected the public response to his paper to be "moral outrage."

On its merits, the study should have received more prominent play. Public-health professionals have uniformly praised the paper for its correct methods and notable results.

"Les has used, and consistently uses, the best possible methodology," says Bradley A. Woodruff, a medical epidemiologist at the U.S. Centers for Disease Control and Prevention.

Indeed, the United Nations and the State Department have cited mortality numbers compiled by Mr. Roberts on previous conflicts as fact -- and have acted on those results.

What went wrong this time? Perhaps the rush by researchers and The Lancet to put the study in front of American voters before the election accomplished precisely the opposite result, drowning out a valuable study in the clamor of the presidential campaign.