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Subject:  Re: smaller government, DrB? Date:  5/16/2013  12:50 PM
Author:  rmhj Number:  423073 of 511569

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?


"For every complex problem there is an answer that is clear, simple, and wrong." -- H. L. Mencken
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