Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (92) | Ignore Thread Prev | Next
Author: rmhj Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 441441  
Subject: Re: smaller government, DrB? Date: 5/16/2013 12:50 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 17
DB2: 65 this year. Life expectancy seems to be increasing about one year every two years, i.e., it's 85 now and 40 years ago it was 65 (more or less). I was thinking moving eligibility up one year every four years. I suppose one could have it 'indexed'.

Now here is another stupid little thing, and you really should know better at this point.

What matters is not total life expectancy, but *life expectancy at age 65*. This has been pointed out several times, at least.

That has not increased at anything like the rate you are claiming. The large majority of that increase has come because of diminished childhood mortality. At the time that SS was passed into law, average survival of 65-year olds at age 65 was about 14 years. It's now about 18 years.

For blue-collar workers, it has changed even less.

Recent statistics suggest it has stopped increasing entirely.

----

Now, aside from that, our economy is still depressed. Our workforce participation has declined substantially, and our official unemployment numbers, which are lower, are still far too high.

This is economic *waste*, pure and simple. People who would like to work, but cannot find work. Many have given up. This is decreased GDP, decreased tax base, increased safety-net spending.

It has been irrefutably demonstrated that cutting spending in this situation -- interest rates are zero, unemployment high -- is deflationary, and will harm GDP substantially more than the spendings cut. There is now *no* credible academic support for the proposition that cutting government spending will help the economy. Nor are there any credible case histories showing this.

Conversely, there is credible academic support showing that "multipliers" for government spending are larger than 1. Every $1 spent hiring teachers, for instance, brings something over $1.50 into the economy. (This is both argued solidly in theoretical academic papers and shown conclusively by real-life econometrics.) *AND* it decreases safety-net spending. Even the IMF (not a bastion of liberal economists) has concluded this.

Even the mild improvements in unemployment over the last several months have yielded substantial improvements in the long-term debt prognostications.

Japan, after 20 years in this situation (high unemployment, zero inflation), is just now (over the loud objections of their fiscal debt hawks) reversing course and has started spending. And, surprise, surprise! preliminary indications suggest their economy is improving!

So... why is it that you want to cut spending... now?

rj

"For every complex problem there is an answer that is clear, simple, and wrong." -- H. L. Mencken
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (92) | Ignore Thread Prev | Next

Announcements

Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Value Hounds

Back to the Future Buffalo Wild Wings
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement