A Plan to Replace the Welfare State

[Roxanne Appleby]

The future equivalent of $253,000 in 45 years assuming an annual inflation rate (conservative) of 2.5% annually buts the the correct answer at $778,000 will be needed to by what $253,000 could. A far cry from even.

Zeb, that sentence is not clearest I've ever read. Let me just give you the entire citation:

Let's say that we have a 21-year-old man before us who, for whatever reasons, will be unable to accumulate his own retirement fund. We accumulate it for him through a yearly contribution for 45 years until he retires at age 66. We can afford to contribute $2,000 a year and invest it in an index-based stock fund. What is the least he can expect to have when he retires? We are ridiculously conservative, so we first identify the worst compound average growth rate, using constant dollars, for any 45-year period in the history of the stock market (4.3% from 1887-1932). We then assume our 21-year-old will be the unluckiest investor in American history and get just a 4.0% average return. At the end of the 45-year period, he will have about $253,000, with which he could purchase an annuity worth about $20,500 a year.

 

[SEVERUSMAX]

Zeb, that sentence is not clearest I've ever read. Let me just give you the entire citation:

Let's say that we have a 21-year-old man before us who, for whatever reasons, will be unable to accumulate his own retirement fund. We accumulate it for him through a yearly contribution for 45 years until he retires at age 66. We can afford to contribute $2,000 a year and invest it in an index-based stock fund. What is the least he can expect to have when he retires? We are ridiculously conservative, so we first identify the worst compound average growth rate, using constant dollars, for any 45-year period in the history of the stock market (4.3% from 1887-1932). We then assume our 21-year-old will be the unluckiest investor in American history and get just a 4.0% average return. At the end of the 45-year period, he will have about $253,000, with which he could purchase an annuity worth about $20,500 a year.

Ah, a clash of conservative Titans!

 

[R. Richard]

I ask you do a little thought experiment. Imagine the world 60 years from now under this plan, compared to what it would look like under 60 years of continued welfare state decline. Is it a better world, or a worse one? If better, then apply your mental energy to thinking of ways to get from the current state to the desired future one. We'll give you however much time and resources as you think are needed. Is it possible? Of course it is. Is it easy? Probably not. Is it worth it? Certainly, if the alternative is continued social decline and eventual collapse.

I used to live in New York City. I used to ride the subways and the Staten Island Ferry. One day, stud boy was trying to convince hot young babe to "party hearty." Hot young babe said, "Look mofo, the gummint don't pay but five years nowadays. I aint gonna raise no baby by myself after the five years run out. You want sex, go fuck yourself!"

The new "harsh" welfare laws are having an effect. People who were part of five generation welfare families are now having to get out and find work, or not. Aer there horror stories and tragedies? Yes! Anytime you change a system, some people will get caught in the machinery. However, to let a bad system continue to run because some people will get hurt is insane.

The best solution, IMHO, is to require everyone to work. If there are people who can't work, that can be dealt with on a case by case basis. If you assume in advance that there are people who can't work, you will find legions of people who are unable to work.

One of the biggest problems in places like the poorer parts of NYC is time. An NBA star got a bunch of NBA players to go into one of the poorer areas of NYC for a free basketball clinic. Very few kids showed up. The guy was devastated. One of the NBA guys who came from a similar poor area told the organizer, "Chill, baby! Them kids aint got no alarm clocks. When they get up, they be coming!" The voice of experience was right. As time wore on, more and more kids drifted into the clinic until there was an overflow crowd. The point was that the kids lived in welfare households where there were no alarm clocks. With no jobs, the welfare family just got up whenever they woke up. That is why the hard core poor stay poor, they don't have a life style that enables them to move up in the world.

I been there!

 

[zeb1094]

Zeb, that sentence is not clearest I've ever read. Let me just give you the entire citation:

Let's say that we have a 21-year-old man before us who, for whatever reasons, will be unable to accumulate his own retirement fund. We accumulate it for him through a yearly contribution for 45 years until he retires at age 66. We can afford to contribute $2,000 a year and invest it in an index-based stock fund. What is the least he can expect to have when he retires? We are ridiculously conservative, so we first identify the worst compound average growth rate, using constant dollars, for any 45-year period in the history of the stock market (4.3% from 1887-1932). We then assume our 21-year-old will be the unluckiest investor in American history and get just a 4.0% average return. At the end of the 45-year period, he will have about $253,000, with which he could purchase an annuity worth about $20,500 a year.

Well now that I under stand the parameters it's becoming clearer!

I however do need a definition you are using for constant dollars as most dollars are usually quoted in todays dollars being adjusted for inflation since sometime in the past.

Edit: You are also assuming the insurance company that he buys his annuity from is also inept as they are only paying 4%.

 

[Pure]

Yep, that's it

RA: One way to think of this is to consider the way charity was done in America in 1900. We were a much poorer nation then, yet no one was allowed to starve. But people weren't allowed to abandon personal responsibility, either. Take that model, add $2 trillion (the amount handed back under the plan), and you can expect some pretty good social outcomes.

P: Yep, 1900 is the benchmark. Charity, but rationally administered. Handed out at the back door of the generous householder, or the side door at the church.

The slackers had to face reality and not just turn up at the 'welfare' office claiming an entitlement. Everyone is 'responsible,' esp. the 5 year old street kids.

Aw, those were the days. All they need is the Murray supercharge, pennies from heaven. Heck with that kinda 'bread' they needn't even bother coming to the church door, so scratch that embarrassment. The system is damn near perfect!

You haven't lost Ayn Rand's paradisiacal view, that about 1900, capitalism was at its best, its zenith, only to become gradually unravelled with the corruptions of democracy.

Looking a little further back, maybe the first step of the corruption, of the undoing of capitalism was the abolition of 'debtor's prisons.' What folly to license a life based on a lie (spending what one doesn't have). Bringing them back would surely help further 'personal responsibility.'

 

[amicus]

Not that it is my place to do so, but I wish to commend just about everyone on this thread and especially Roxanne and Colleen for perserverence and detail.

And...I offer this as food for thought:

Demonstrations in France by young people, young working people, who had been promised the old socialist dream of cradle to grave employment and benefits.

Secondly, the rather surprising demonstrations in American by second generation Mexican immigrants, who by birth, are citizens, but whose parents may be subject to deportation if laws are enforced.

But mainly this: Federal, State and local land use laws have forced the price of a parcel of buildable land to a record high.

Enforced, restrictive building codes, along with artificially high Union labor in the carpenter, electrician and plumber vocations have driven the price of a new residential construction to nearly a quarter million dollars, a record high.

Conclusion, government interference, management and restrictions in the housing market have caused an artificial shortage of product and thus high prices. This limits the availability of product, a shortage of employment and a growing number of home buyers who cannot afford the product.

All caused by government.

Point Deux: Health care. Government subsized health plans, first of all for government workers beginning nearly a century ago, spread to Union demands and enforced benefits for Union members.

Much of this thinking began pre 1930, with the October Revolution in Russia and the cafe' socialists pressure for an utopian socialist world in which all essential services were freely provided.

So the 'health care' situation, being effectively long removed from the market place, is now firmly controlled and directed by government intervention and can only continue to decline in quality and become more expensive.

A continuing and worsening problem with no solution.

Medical services of all kinds are hugely inflated, the number of actual practicing Doctors limited by the AMA and the Federal government to keep services scarce and high priced.

There is another more insideous pattern of disregard when people on government programs such as medicare and medicaid and even on government insurance aka Unions and government workers in that the 'individual' is out of the loop when it comes to paying for and being responsible for charges by medical service providers.

You, personally, would never tolerate a bill for $7.00 for an aspirin tablet, but as long as the insurance company is paying and not you, you remain quiescent.

Old age pensions. Mandatory taxation for Social Security, which amounts now, I think to over 15 percent of an employee's wages (half contributed by the employer) has frozen the market place in terms of an major 'private plans' of pension programs.

The 'Ponzi' program of forced social security payments, removes tremendous amounts of capital daily from the market and places it in limbo in the caverns of government where it accomplishes no 'marketable' function of creating wealth through the creation of goods and services.

So while I commend all who have contributed to this thread, it is my sincere opinion that you are bumping headfirst into a tree and do not see at all the forest of problems that face all of society, here and abroad.

And I accept the sincerity with which most address this subject, but I am sad to conclude that your best attempts are doomed to failure.

If you truly wish to comprehend a means by which to view the possible outcomes of the present multi dilemma filled future, then I suggest you attempt to envision a world, at least a nation, where 'government' is forbidden to tax and spend for social goals.

There is only one system, only one approach that offers both success and dignity and that is freedom. Freedom to work, freedom to earn, freedom to spend or invest, free from coersion, free from taxation, free from control and regulation.

amicus...

 

[SEVERUSMAX]

Not that it is my place to do so, but I wish to commend just about everyone on this thread and especially Roxanne and Colleen for perserverence and detail.

And...I offer this as food for thought:

Demonstrations in France by young people, young working people, who had been promised the old socialist dream of cradle to grave employment and benefits.

Secondly, the rather surprising demonstrations in American by second generation Mexican immigrants, who by birth, are citizens, but whose parents may be subject to deportation if laws are enforced.

But mainly this: Federal, State and local land use laws have forced the price of a parcel of buildable land to a record high.

Enforced, restrictive building codes, along with artificially high Union labor in the carpenter, electrician and plumber vocations have driven the price of a new residential construction to nearly a quarter million dollars, a record high.

Conclusion, government interference, management and restrictions in the housing market have caused an artificial shortage of product and thus high prices. This limits the availability of product, a shortage of employment and a growing number of home buyers who cannot afford the product.

All caused by government.

Point Deux: Health care. Government subsized health plans, first of all for government workers beginning nearly a century ago, spread to Union demands and enforced benefits for Union members.

Much of this thinking began pre 1930, with the October Revolution in Russia and the cafe' socialists pressure for an utopian socialist world in which all essential services were freely provided.

So the 'health care' situation, being effectively long removed from the market place, is now firmly controlled and directed by government intervention and can only continue to decline in quality and become more expensive.

A continuing and worsening problem with no solution.

Medical services of all kinds are hugely inflated, the number of actual practicing Doctors limited by the AMA and the Federal government to keep services scarce and high priced.

There is another more insideous pattern of disregard when people on government programs such as medicare and medicaid and even on government insurance aka Unions and government workers in that the 'individual' is out of the loop when it comes to paying for and being responsible for charges by medical service providers.

You, personally, would never tolerate a bill for $7.00 for an aspirin tablet, but as long as the insurance company is paying and not you, you remain quiescent.

Old age pensions. Mandatory taxation for Social Security, which amounts now, I think to over 15 percent of an employee's wages (half contributed by the employer) has frozen the market place in terms of an major 'private plans' of pension programs.

The 'Ponzi' program of forced social security payments, removes tremendous amounts of capital daily from the market and places it in limbo in the caverns of government where it accomplishes no 'marketable' function of creating wealth through the creation of goods and services.

So while I commend all who have contributed to this thread, it is my sincere opinion that you are bumping headfirst into a tree and do not see at all the forest of problems that face all of society, here and abroad.

And I accept the sincerity with which most address this subject, but I am sad to conclude that your best attempts are doomed to failure.

If you truly wish to comprehend a means by which to view the possible outcomes of the present multi dilemma filled future, then I suggest you attempt to envision a world, at least a nation, where 'government' is forbidden to tax and spend for social goals.

There is only one system, only one approach that offers both success and dignity and that is freedom. Freedom to work, freedom to earn, freedom to spend or invest, free from coersion, free from taxation, free from control and regulation.

amicus...

....and freedom to fuck whomever you wish to, as well, right? After all, that's part of freedom, too. Don't think that you want to be inconsistent. Or maybe I am assuming that there might still be hope for you.....

 

[Roxanne Appleby]

RA: One way to think of this is to consider the way charity was done in America in 1900. We were a much poorer nation then, yet no one was allowed to starve. But people weren't allowed to abandon personal responsibility, either. Take that model, add $2 trillion (the amount handed back under the plan), and you can expect some pretty good social outcomes.

P: Yep, 1900 is the benchmark. Charity, but rationally administered. Handed out at the back door of the generous householder, or the side door at the church.

The slackers had to face reality and not just turn up at the 'welfare' office claiming an entitlement. Everyone is 'responsible,' esp. the 5 year old street kids.

Aw, those were the days. All they need is the Murray supercharge, pennies from heaven. Heck with that kinda 'bread' they needn't even bother coming to the church door, so scratch that embarrassment. The system is damn near perfect!

You haven't lost Ayn Rand's paradisiacal view, that about 1900, capitalism was at its best, its zenith, only to become gradually unravelled with the corruptions of democracy.

Looking a little further back, maybe the first step of the corruption, of the undoing of capitalism was the abolition of 'debtor's prisons.' What folly to license a life based on a lie (spending what one doesn't have). Bringing them back would surely help further 'personal responsibility.'

Oh Pure, I know you are capable of better than that in cynicism! How about this one:

"Are there no prisons? Are there no workhouses?"

 

[amicus]

Pure, as per usual, pours a glob of socialist slime...


Thomas Edison, who electrified a one block area of New York City, long, long ago, the first commercial electric generation and distribution program, used, 'DC' Direct Current.

Edision had to 'invent' create, generators, means of distribution, wires, plugs, connectors, meters, switches and a whole host of equipment that never existed before.

Not much later, along came Westinghouse, with "AC" Alternating Current, which could be distributed more efficiently and more safely over long distances.

AC won out, Edison lost, Westinghouse won, but, mankind benefitted from the competition and from the creation of a new industry. Not only that, Whale Oil, Spermacetti, which had been used for residential lighting, went out of use, so the 'whales' were saved, thanks to the free market place.

And of course, there were the 'usual suspects', the naysayers who were opposed to electrification, they, like you, the detractors, are always with us.

The free market is not a guarantee of success, nor a guarantee to solve all human issues. It is, however, the only dignified approach to progress and enlightenment ever found to work in human society.


amicus...

 

[Colleen Thomas]

Response to Colly:

The Murray plan creates an entire new paradigm, and you keep viewing it through the lens of the current welfare state paradigm. It requires some imagination to do otherwise. Your story page demonstrates that you have imagination in ample measure. Please use it here!

You explain why a $3,000 per year insurance policy can't work, but you are viewing it through the current paradigm. Forget the current model. Start with a clean slate. Is $3,000 per adult sufficient to provide health care for life for every American? I have not read the book or done the arithmetic, but I suspect it approximates what we now spend. With a little imagination it's easy to devise a system that leaves no one uncovered, doesn't kick people out for using benefits, contains reasonable incentives to economize, and provides more freedom and choice than the current system. You write the rules, Colly - you have debated this issue, you know what's needed. I hereby turn over to you 15 percent of the US GDP to make it work.

"It's impossible to live in NYC for $10k." Hell, it's impossible to live anywhere for that! The idea is not create a nation of hippies living on $10k in teepees. It is to supercharge the institutions of civil society by handing over the resources and the responsibility. One way to think of this is to consider the way charity was done in America in 1900. We were a much poorer nation then, yet no one was allowed to starve. But people weren't allowed to abandon personal responsibility, either. Take that model, add $2 trillion (the amount handed back under the plan), and you can expect some pretty good social outcomes.

The examples you cite of individuals lacking personal responsibility are a direct product of the current system. So why are you defending it?

"Subjecting them to the tender mercies of an 'organization' that sprung up to help gives me the willies." There wouldn't be an organization - there would be thousands of them. If you don’t like one go to another.

"Murray's scenario assumes a responsible populace. Mine assumes an irresponsible populace." Correction: Yours creates an irresponsible populace. It provides incentives to be irresponsible. Murray's turns those incentives around.

Are you saying we're doomed, Colly? That no matter what we do it's hopeless, because the social decline will just continue until the whole thing collapses, and we should just accept it? Are you saying it's absurd to imagine that most of the populace can live responsibly, and practice virtue?

Fuck that.

Most people do live responsibly and practice virtue. If the number of those who don't is increasing, that's because we have created a corrupt system. You are making a case for just accepting that system and its consequences, and doing nothing to change it.

Fuck that.

It's in our power to change, to blow up that corrupt system and replace it with a better one. If we don't do it, and watch our freedom, comfort and security go down in flames as a result, that will happen because we are too timid and inert to change the system, not because of any fatal flaw in the human animal.

Lord knows we're not angels, and there will always be those among us determined to wreck their lives no matter what we do. They are not the majority, though. Here's a description of the majority penned by Tom Wolfe a few years back:

"The truth is that there is a common bond among all cultures, among all peoples in this world ... at least among those who have reached the level of the wheel, the shoe, and the toothbrush. And that common bond is that much-maligned class known as the bourgeoisie - the middle class . . . They are all over the world, in every continent, every nation, every society, every culture, everywhere you find the wheel, the shoe, and the toothbrush; and wherever they are, all of them believe in the same things. And what are those things? Peace, order, education, hard work, initiative, enterprise, creativity, cooperation, looking out for one another, looking out for the future of children, patriotism, fair play, and honesty. How much more do you want from the human beast? How much more can you possibly expect?"

I want to put the future into the hands of these people, not the politicians you properly excoriate, or the underclass you properly scorn.

Join me, don't fight me. If you need to, make a social version of "Pascal's wager." He argued that it's is a better "bet" to believe in God, because the expected value to be gained from doing so is greater than that from non-belief. (This made sense in the pre-Darwinian world he lived in.) We'll call it "Colly's wager." The expected value to be gained from believing in man is greater than that from non-belief, because non-belief guarantees continued decline into social collapse. I think you will agree that this is the likely result of an unreformed welfare state.

Why am I staring with a clean slate? Is that not tacit admission the plan won't work in the reality I know and have to apply it to? If that's the case, then we are dealing in a purely theoretical model with no intent to try and transpose it to the reality I know? If that is the case, then I will be glad to go to blank paper and discuss it as merely a theoretical model of how things could be different. Not sure how that is profitable, but I love debate so no harm no foul.

In that rosy theoretical world, I'll acept your three K per year figure. Why not? We aren't dealing with reality. if we were dealing with reality. My parents are in very good health for their ages, but they spend more than that a year on medicines alone. I spend that much on the simple yearly tests and X-rays I have to have. My roomate has PCOS, her annual bills are four to five times that. Just from the blood work ups she has to get done weekly and the regularly scheduled office visits and lab work. She's 36, I'm 35, my parents are in their late 60's. With a little luck, my folks will be around another twenty or so years. My roomie and I will both be around, with some luck, forty or more. Do you honestly expect me to envision a private helth care provider who will continue to cover us for a 3K per year premium? I can do that, Gomez Adam's consoldated Dirt comes to mind.


You explain why a $3,000 per year insurance policy can't work, but you are viewing it through the current paradigm. Forget the current model. Start with a clean slate. Is $3,000 per adult sufficient to provide health care for life for every American? I have not read the book or done the arithmetic, but I suspect it approximates what we now spend. With a little imagination it's easy to devise a system that leaves no one uncovered, doesn't kick people out for using benefits, contains reasonable incentives to economize, and provides more freedom and choice than the current system. You write the rules, Colly - you have debated this issue, you know what's needed. I hereby turn over to you 15 percent of the US GDP to make it work.

I'm fairly knowledgeable, but sans government intervention I can't make it work. One option would be price controls on medical expenses. I doubt you would be in favor of that. Another is something similar to unemployment insurance, where the government subsidises the insurers. Again, that seems counter productive to the idea of privatizing it. I see a simple, immutable algorithm here that I cannot find a way around. It works like this. As people age, their helth begins to fail. AS it does, they need more and more intervention. That intervention is expensive. I seriously dounbt, it falls below three K per person by as early as age 50 and I'm dead certain it averages well over that by age sixty. Further, if you are giving everyone free healthcare coverage, there is little incentive on the part of most to carry private policies. Som ein the upper reaches of the salary scale will, simply because they want the best, but by and large, the poor, the working class and I dareasay a good portion of the middle class, won't choose to spend the extra money for a better policy. You could of course, simply give it only to those people who don't qualify for other forms of insurance, but in that case, you're assuring yourself that nearly every recipient is using an inordinate amount while the insurers are recieving no influx of money on young, relatively healthy people who might not be going over the 3K limit.


"It's impossible to live in NYC for $10k." Hell, it's impossible to live anywhere for that! The idea is not create a nation of hippies living on $10k in teepees. It is to supercharge the institutions of civil society by handing over the resources and the responsibility. One way to think of this is to consider the way charity was done in America in 1900. We were a much poorer nation then, yet no one was allowed to starve. But people weren't allowed to abandon personal responsibility, either. Take that model, add $2 trillion (the amount handed back under the plan), and you can expect some pretty good social outcomes.

Fair enough. Your aim then isn't to provide for those who are living on public assistance, it's to improve the life of those who are already doing better? I get what I get for disability and I don't get anymore. Period. That is my income. You change the parameters of it, you change my income. There is no middle ground there. I can't subsidize my earnings, if I had any options to work, I wouldn't be living on disability in the first place. In my case, I HAVE to budget that ten K. And I don't have the option of living like a hippy, because I need medicine. So that makes me what? A throwaway? Seems a tad harsh, especially considering for over twenty years I paid into the system with payroll taxes year in and year out. But hey, that's just my opinion. I'm sure it counts as little as the opinon of other undesireables.

This ain't 1900 America. It's over 100 years later and the work ethic, the charity ethic from tithing etc. no longer exist as the main stream. In a theoretical world you can reinstall tithing and the Judeo Christian work ehtic as majority modles. Again, as long as we aren't trying to apply it to reality, no blood no foul.

"Murray's scenario assumes a responsible populace. Mine assumes an irresponsible populace." Correction: Yours creates an irresponsible populace. It provides incentives to be irresponsible. Murray's turns those incentives around.

I'll take exception to this. I didn't create the men I worked with. I didn't create their attitudes nor their situations. With all due respect, your off your fucking nut if you think you can change that situation and attitude with a snap of the fingers. The difference in Murray and myself is I acknowledge it exists, he tries to wish it away. You aren't going to make Freddy T. asolid citizen, not with 10K a year not with 100K a year. He's going to spend every penny on tricking out his car, booze, getting laid, getting high, or some combination of them. That's what life is abou tto him. good government and responsible consumption aren't just foerign concepts, they're laughable. He dosen't have to be that way. he could have been born into a different situation, raised with different life experiences, spared some of the horror that has formed his world view. But he wasn't. And thousands like him weren't. And you ain't gonna change that. He is what he is and he will remain more or less what he is till he dies. Mr. Lewis is 60 and guess what? He lives the same freaking way. Similar life experience, similar back ground, similar ideaof what life's about. Mr. Green took me to outback steakhouse to celebrate a promotion. Mr. Lewis took me to a titty bar. neither found their choice of ways to celebrate to be wrong, but neith found the other's to be kosher. You cannot slap people into a preconcived mold and turn them out like little good smaraitan army ants. It didn't work in the soviet union, it didn't work in cambodia and it won't work in the US. People are people and they are all different and ascribibng the same underlying priotrities and motivations to them en mass is an exercise in self delusion.

Are you saying we're doomed, Colly? That no matter what we do it's hopeless, because the social decline will just continue until the whole thing collapses, and we should just accept it? Are you saying it's absurd to imagine that most of the populace can live responsibly, and practice virtue?

I'm so glad you used that particular word Roxxanne. Virtue. Who's virtue are you talking about here? to some of my freinds, dropping 50 bucks on drinks and taking the drunk blonde home for a rousing one nighter is the highest virtue. They got drunk, they got laid, they had a good time and hurt none. Vituous life. Or do we need to assume here that virtue has but one definition and it applies to all? In which case, we're really back to religion aren't we? And I can do away with my entire argument, because we are going to take it on faith that this will work out just fine.

I never said we were doomed. I don't even beleive that's the case. IF we are so worried we buy into such grossly impractical schems to fix things then we probably are doomed, but I'm not ready to admit the majority of us are that blindly faithful. I believe I put forward a modest proposal of my own, to limit the damage and to build a basis for furhter modifications. I ttook us some sixty something years to reach this state of affiars. I think it's rational to assume it will take us a similar length of time to correct the problems. And I favor a reasoned and rational incremental approach to doing so. You can't fix it in a day a week or a month. You can't revamp the whole system arnboitarily without causing as much ill as good. You can begin, with prudent and intelligent modifications on a small scale that will allow you to effect more sweeping changes over time. So no, I don't think we are doomed. I just think we need to apply our minds to it, and do our best to make the transition workable in the long term.


It's in our power to change, to blow up that corrupt system and replace it with a better one. If we don't do it, and watch our freedom, comfort and security go down in flames as a result, that will happen because we are too timid and inert to change the system, not because of any fatal flaw in the human animal.

That's a purely liberal sentiment. Radical or even revolutionary change, for the sake of change. I repudiate it utterly. It's not in our power to effect sweeping, overnight change. It's not even in our power to know the changes we effected in such a hasty manner would be better than what we have now. Nor is it in our power to forsee what the backlash to such a change might bring. That's a horn bet. One desperate wager with rediculous odds against, in the hope to redeem a nights losing with one throw of the dice.

Join me, don't fight me. If you need to, make a social version of "Pascal's wager." He argued that it's is a better "bet" to believe in God, because the expected value to be gained from doing so is greater than that from non-belief. (This made sense in the pre-Darwinian world he lived in.) We'll call it "Colly's wager." The expected value to be gained from believing in man is greater than that from non-belief, because non-belief guarantees continued decline into social collapse. I think you will agree that this is the likely result of an unreformed welfare state.

There is acorrolary to Pascal's wager. With so many religions, each claiming to be the only truye religion, he concluded you were better off beliving in none and hoping the devin was a loving and forgiving god.

You belive man is intrinsically good. I can't make that leap. It dosen't jive with the evidence of my eyes or my experience. I believe human nature is a more or less enlightened form of self interest. The average guy will spend his ten bucks on HBO before he sends it to a pac or to a charity. If he can get his titty channels and he still has ten bucks left over, that might go to a charity, although i would be willing to bet in 9 cases in ten it went to the piza guy.

You are counting on humanity to conform to your idea of what is good. Nevermind that your idea of what is good would be bad to a great portion. returning to some of my coworkers, having fun was what life was about. Be that fun the praise of your buddies at your new sound systems ability to rattle glass at 500 years, the buzz of a good drunk, or the caress of a woman. to deny yourself these things is to not be living life as it was meant to be lived. That flies in the face of your virtue. But your virtue flies in the face of their world.

I feel I am on fairly certain ground when I say a plan that tries to mold all humanity, into one image is doomed to failure. this plan calls on all men to exercise a modicum of fiscal responsibility that is alien to many. they aren't going to do so naturally, or even voluntarily. You might be able to beat them into submission on it, but I believe in the pspirit of man and most would rather fight you than submit, no matter how good your intentions are.

I'll jump back to WWII for one more analogy. A japanese woman, in a post war interview, summed up the feelings of her nation pretty well. We were bringing you the enlightened rule of a demi god. We could not see how anyone would not be grateful to us for doing that. Americans weren't grateful. Nor were the chinese, the Phillipinos, the Javans, the malyasins, the Britsh, et al. the japanese never comprehended that their idea of virtue was not shared universally and that people fought them, not because their lots were neccissarily worse, but because they would not be beaten into a mold. You're tryihg to do the same, bring enlightened rulership to masses who don't see it as a good thing. And I fear you are doomed to the same results.

 

[Norajane]

Why would this plan would work, since things like Social Security and Medicare were created to fill a need that existed when things were left to individuals?

Presumably, before SS and Medicare deductions started draining everyone's paychecks, that $10k per year never left the pockets of the earners as it wasn't collected. So, what happened to that money? People spent it on living costs, and not in saving for retirement and the health care costs of retirement. If the gov first takes the $10k and then gives it back without any safety nets left, we're going back to how things were without the safety nets. Why would it be any different just because you 'market' it differently?

You're cutting out the safety net, and giving people money doesn't mean the community will do a damn thing about those in need.

 

[Colleen Thomas]

Colly:
In most cases it would not take until Monday for the empty pockets to come. Most of the really low class people I have had contact with don't think past the next couple of hours, forget tomorrow. Giving such people $10K would require more time and effort than throwing the money out on the sidewalk, with about the same result.

The "Texas plans" have been in place for more than 20 years. They are now having people retire. The people are very happy with the plans, as they have enough money to retire with dignity. One of the strongest opponents of the plans was an administrator with one of the state government agencies and he now admits that his opposition was stupid. He is now one of the biggest supporters of the plans.

The problem is twofold. The Social Security plan is run by Congress and will ALWAYS wind up being looted. The second problem is that the current Social Security plan is a Ponzi scheme. It is actuarially unsound and MUST be replaced. The sooner that the replacement is done, the better!

i kinda felt like you would have that sentiment. It's really something you cannot get unless you have been exposed to it. I've been exposed to it and it's still difficult to wrap my head around. But it isn't some kind of anaoly, it's the way a lot of people live. From moment to monet.

 

[Colleen Thomas]

To Colly's last:

Well look, he wrote a whole book describing this, and we've been discussing the plan based on a 1,000 word op-ed. That's why I've been begging you to stipulate this and stipulate that, because most of the objections you cite are details for which there are plausible answers.

Murray writes: "Many questions must be asked of a system that substitutes a direct cash grant for the current welfare state. Work disincentives, the comparative risks of market-based solutions versus government guarantees, transition costs, tradeoffs in health coverage, implications for the tax system, and effects on people too young to qualify for the grant all require attention in deciding whether the Plan is feasible and desirable. I think all of the questions have answers, but they are not one-liners; I lay them out in my book."

I ask you do a little thought experiment. Imagine the world 60 years from now under this plan, compared to what it would look like under 60 years of continued welfare state decline. Is it a better world, or a worse one? If better, then apply your mental energy to thinking of ways to get from the current state to the desired future one. We'll give you however much time and resources as you think are needed. Is it possible? Of course it is. Is it easy? Probably not. Is it worth it? Certainly, if the alternative is continued social decline and eventual collapse.

I apologize heartily. I haven't read the book and perhaps he does adress all my concerns. I am in the wrong for puning his plan based on a short synopsis of it and for that I apologize.

 

[Roxanne Appleby]

I apologize heartily. I haven't read the book and perhaps he does adress all my concerns. I am in the wrong for puning his plan based on a short synopsis of it and for that I apologize.

Well damn, I was about to lay into your last lengthy response, and then you go and post this one and make me get all teary eyed and choked up, and that is no state in which to carry on a contentious debate!

 

[Colleen Thomas]

Well damn, I was about to lay into your last lengthy response, and then you go and post this one and make me get all teary eyed and choked up, and that is no state in which to carry on a contentious debate!

I sometimes let my mouth run ahead of my brain, but my brain usually catches up at some point

 

[Roxanne Appleby]

Tender moment over! In a teary eyed state I will finish what I started to write on health care before we paused for a smooch:

I gave you clean slate and invited you to devise a health care system that leaves no one uncovered, doesn't kick people out for using benefits, contains reasonable incentives to economize, and provides more freedom and choice than the current system. I gave you 15 percent of the US GDP to make it work. Your first step was to impose some of the same constraints as the current system. No! Here's the kind of thing I'm thinking of:

At age 21 everyone is required to purchase a lifetime insurance plan and given $3,000 each year to do so. The plans must provide certain basics, but beyond that offer different packages of benefits. Choosing a plan will require tradeoffs. For example, if you smoke the amount of extra choices and benefits above the minimum will be less. Every plan has MSA-like aspects to provide incentives for prudence and thrift. These market-like features will restrain the overall costs of the health care system. The policy is a lifetime contract so the insurance company can never cancel. However there are periodic windows, say once every five years, in which the insured can switch to another company and plan, and the accrued unused premiums follow the insured to the new company. There will be some socialized aspects of this system, such as the insurance company cannot turn anyone away, and must provide the basic benefits package regardless of preconditions. The policy covers any kids you have until they get their own policies at age 21. The basic benefits package will be fairly comprehensive, and be far superior to Medicaid, but for more money you can buy extras, like more choices of doctors, etc.

I have no doubt there many flaws and holes in this, so don't anyone bother to attack me on it. I just spun it off the top of my head as an example of the kind of thing that is possible.

 

[Pure]

Ami said, I suggest you attempt to envision a world, at least a nation, where 'government' is forbidden to tax and spend for social goals.

I can envision that. I simply look at a history book for the US in 1900 and England in 1850.

What I can't envision is the government taxing for the 'supercharge' [post-welfare] fund of Mr. Murray, then handing back money, instead of doing anything with it (like run a postal service). Assuming a flat tax (a beloved idea of the right) of say 10%, Joe who now makes 5,000, has to put in $500. How is Joe to get 10K?? Well Bill makes $200,000 and has to pay $20,000 in tax. That covers just more than two people like Joe. What makes Bill want to do this? Perhaps he thinks, "ok i just cough up the 20K for the supercharge fund and I don't get nickled and dimed for all the separate welfare measures."

---
Roxanne said,
There will be some socialized aspects of this system, such as the insurance company cannot turn anyone away

My Oh My. Attilla is knocking at Roark's door. A capitalist is being told how to run his company! Command economy. Stalin. Monstrous undermining the holy determinants of everything, profit and loss.

 

[Roxanne Appleby]

---
Roxanne said,
There will be some socialized aspects of this system, such as the insurance company cannot turn anyone away

My Oh My. Attilla is knocking at Roark's door. A capitalist is being told how to run his company! Command economy. Stalin. Monstrous undermining the holy determinants of everything, profit and loss.

Careful, Pure: You may be among the first put up against the wall when my hordes overrun your community!

 

[R. Richard]

Roxanne Appleby:
Murray writes: "Many questions must be asked of a system that substitutes a direct cash grant for the current welfare state. Work disincentives, the comparative risks of market-based solutions versus government guarantees, transition costs, tradeoffs in health coverage, implications for the tax system, and effects on people too young to qualify for the grant all require attention in deciding whether the Plan is feasible and desirable. I think all of the questions have answers, but they are not one-liners; I lay them out in my book."

I can explain to you in short detail why direct cash grants will not work. Some years back, one of the big cities ran out of welfare money [Chicago IIRC]. OK, they forced rent vouchers down the throats of the landlords. They still had blankets and food to distribute from emergency warehouses. No one had to freeze to death or go hungry. THE WELFARE CASELOAD DECLINED BY 30%!

You can't buy booze or drugs [in any meaningful amount] with welfare blankets or welfare food. Once the money came back, so did the welfare caseload.

Direct cash payments don't work and can't work. Unless you have lived in a slum area, it may be difficult to understand why.

You list'nin' to Whi' Boy, grew up in an abandoned building in the South Central. He have to deal with the boyz in the hood ever' night [Whi' Boy sleep days and prowl nights.] The boyz learn quick you doan' mess with no Whi' Boy. Whi' Boy steal books from the public library and learn what he can, so he don't grow up one a' the boyz in the hood [Takes the books back after he finishes. After a time, the librarian begins to leave a suggested reading list.] The boyz still in the hood. Whi' Boy now call himself R. Richard in some arenas. The boyz live on welfare, R. Richard has a professional level job. If somebody started on a lower level than I did, I want to know what wolf pack raised him!

 

[Colleen Thomas]

Tender moment over! In a teary eyed state I will finish what I started to write on health care before we paused for a smooch:

I gave you clean slate and invited you to devise a health care system that leaves no one uncovered, doesn't kick people out for using benefits, contains reasonable incentives to economize, and provides more freedom and choice than the current system. I gave you 15 percent of the US GDP to make it work. Your first step was to impose some of the same constraints as the current system. No! Here's the kind of thing I'm thinking of:

At age 21 everyone is required to purchase a lifetime insurance plan and given $3,000 each year to do so. The plans must provide certain basics, but beyond that offer different packages of benefits. Choosing a plan will require tradeoffs. For example, if you smoke the amount of extra choices and benefits above the minimum will be less. Every plan has MSA-like aspects to provide incentives for prudence and thrift. These market-like features will restrain the overall costs of the health care system. The policy is a lifetime contract so the insurance company can never cancel. However there are periodic windows, say once every five years, in which the insured can switch to another company and plan, and the accrued unused premiums follow the insured to the new company. There will be some socialized aspects of this system, such as the insurance company cannot turn anyone away, and must provide the basic benefits package regardless of preconditions. The policy covers any kids you have until they get their own policies at age 21. The basic benefits package will be fairly comprehensive, and be far superior to Medicaid, but for more money you can buy extras, like more choices of doctors, etc.

I have no doubt there many flaws and holes in this, so don't anyone bother to attack me on it. I just spun it off the top of my head as an example of the kind of thing that is possible.

I can't do it. *shrugs*

I'm not built on flights of fancy. If you give me all power in a theoretical sense, I'm still going to apply it to the real word. Otherwise it's just mental mastrubation.

Any attempt i make involves one of a handful of expedients.

1. you can nationalize healthcare insurance providers. In which case, you still have government footing the bill, beyind your 3K premiums.

2. You can set price controls on medical proceedures. In which case you've just crippled athriving segment of the econmy.

3. You can socialize medicine all together, in which case, your 3K per person per policy dosen't even begin to cover it.

If I am freed from any logical restraint, then I would choose the catbert plan. Nobody gets sick...or else.

Your plan calls for a lifetime plan. It dosen't exist. Will you invent one, a policy for life, at 3k permium? If so, then you have to accept you just destroyed the insurance industry. If the Fed isn't going to bail them out, with millions upon millions in subsides, then nobody will have insurance inside of a few years. Simple econimics will tell you no bussiness can run indefintly at a loss and I am quite content in the assertion that 3K per person per policy won't be profitable by the time they reach 35. So you advocate either goernemnt run insurance or noone having insurance? Is either preferable to what we have now?

While I am at it, where do you get these acrrued unused premiums? I'd like to know. I don't know anyone off the top of my head who hasn't been to the doctor in the last year. Or any year. That goes rediculously double for young children, older people and teens. Are we foregoing all prevenative medicine, in an effort to make sure we don't cross the 3K boundary? Or is coverage stopped in any year where your 3K is suprpassed or in which you suprass your 3K plus your accrued good beahvior money from pervious years? If not, then the insurer is taking a loss from that point forward. And if I get cancer? Chemo, radiation, surgery? all under 3K? And I can't be dropped? they just have to keep on paying, for treatment and monitoring and ongoing screenings?

What a wonderful world!

I suppose these insurance companies will be staffed by altruistic volunteers, cause the lord knows they won't be able to pay anyone. And I assume the doctors and nurses, technicians and aides will all work free too, cause the hospitals aren't going to be getting money from broike ass insurers after a short period.

You can come up with a plan that covers everyone, no matter of age and infirmity. to think you can do so at 3k per person is sheerest fantasy. For it to work, money has to be no object and for that to happen, the government has to assume all costs, and for that to happen, the poulace has to be taxed until they bled white. Socialized medicine in a nutshell.

 

[Roxanne Appleby]

I can't do it. *shrugs*

I'm not built on flights of fancy. If you give me all power in a theoretical sense, I'm still going to apply it to the real word. Otherwise it's just mental mastrubation.

Any attempt i make involves one of a handful of expedients.

1. you can nationalize healthcare insurance providers. In which case, you still have government footing the bill, beyind your 3K premiums.

2. You can set price controls on medical proceedures. In which case you've just crippled athriving segment of the econmy.

3. You can socialize medicine all together, in which case, your 3K per person per policy dosen't even begin to cover it.

If I am freed from any logical restraint, then I would choose the catbert plan. Nobody gets sick...or else.

Your plan calls for a lifetime plan. It dosen't exist. Will you invent one, a policy for life, at 3k permium? If so, then you have to accept you just destroyed the insurance industry. If the Fed isn't going to bail them out, with millions upon millions in subsides, then nobody will have insurance inside of a few years. Simple econimics will tell you no bussiness can run indefintly at a loss and I am quite content in the assertion that 3K per person per policy won't be profitable by the time they reach 35. So you advocate either goernemnt run insurance or noone having insurance? Is either preferable to what we have now?

While I am at it, where do you get these acrrued unused premiums? I'd like to know. I don't know anyone off the top of my head who hasn't been to the doctor in the last year. Or any year. That goes rediculously double for young children, older people and teens. Are we foregoing all prevenative medicine, in an effort to make sure we don't cross the 3K boundary? Or is coverage stopped in any year where your 3K is suprpassed or in which you suprass your 3K plus your accrued good beahvior money from pervious years? If not, then the insurer is taking a loss from that point forward. And if I get cancer? Chemo, radiation, surgery? all under 3K? And I can't be dropped? they just have to keep on paying, for treatment and monitoring and ongoing screenings?

What a wonderful world!

I suppose these insurance companies will be staffed by altruistic volunteers, cause the lord knows they won't be able to pay anyone. And I assume the doctors and nurses, technicians and aides will all work free too, cause the hospitals aren't going to be getting money from broike ass insurers after a short period.

You can come up with a plan that covers everyone, no matter of age and infirmity. to think you can do so at 3k per person is sheerest fantasy. For it to work, money has to be no object and for that to happen, the government has to assume all costs, and for that to happen, the poulace has to be taxed until they bled white. Socialized medicine in a nutshell.

Colly, most young people use much less than $3,000 in health care each year. Most children too. (One reason states love to expand Medicaid to cover more kids is beause they know it's cheap. It's the old people in nursing homes that rack up the Medicaid costs.) So at $3k/year there is plenty of accrued premiums to cover the insured when he gets old, and cover other people who get sick and use more than $3,000 in a year. (Which is basically the defiintion of insurance.)

Actually I don't know if $3k is the right amount - I'm just going with it because that's the number Murray cited in the article, and him being a smart guy I assume he has a reason for that. Maybe the number is $5k. Whatever.

Yes, I am inventing a new insurance product and market and no, I'm not going to bankrupt or nationalize insurance companies. I am going to regulate them, and I am going to harness their core competence, which is actuarial equations and risk assessment. I am going to specify certain minimum requirements that must be included in these policies, and then let them go forth and compete for business by offering different choices and benefits above and beyond the minimum. Just as now there will be regulations on minumum reserves, etc.

 

[Roxanne Appleby]

PS. On health care. We spend 15 percent of GDP right now on it. Don't you think that if we eliminated the skewed incentives caused by the ridiculous third party payer system, the inefficiencies caused by the fact that almost half the money is disbursed by the government under command-and-control programs, and the skewed medical practices caused by the tort lottery (defensive medicine, et al), we could easily provide excellent health care to every American for that amount, with more choice and freedom to boot? It's clear to me that we could.

 

[Colleen Thomas]

Colly, most young people use much less than $3,000 in health care each year. Most children too. (One reason states love to expand Medicaid to cover more kids is beause they know it's cheap. It's the old people in nursing homes that rack up the Medicaid costs.) So at $3k/year there is plenty of accrued premiums to cover the insured when he gets old, and cover other people who get sick and use more than $3,000 in a year.

Actually I don't know if $3k is the right amount - I'm just going with it because that's the number Murray cited in the article, and him being a smart guy I assume he has a reason for that. Maybe the number is $5k. Whatever.

Yes, I am inventing a new insurance product and market and no, I'm not going to bankrupt or nationalize insurance companies. I am going to regulate them, and I am going to harness their core competence, which is actuarial equations and risk assessment. I am going to specify certain minimum requirements that must be included in these policies, and then let them go forth and compete for business by offering different choices and benefits above and beyond the minimum. Just as now there will be regulations on minumum reserves, etc.

When mommy is pregnant, whose 3K does all the prenatal care come off of? I've not met a mother yet who dosen't take baby to the doctor every single time there is a problem, at least until she gets used to being a mommy. Nor one who dosen't take baby to the doctor for regularly scheduled check ups. I never met a kid who wasn't constantly breaking bones. I assume dental care is included here, that means a good chunck of money on kids. Braces? Covered? or are bad teeth something you just have to live with? Glasses? Physicals for joining extra ciricular activities at school? Flu shots? Immunizations? All of these litle things add up quickly. So even if you postulate corectly that the kids won't go over their 3K, they most certainly will approach it. And that means you aren't saving much on your accrued unused premiums. It really makes no difference if the 3K comes off mommy's policy or if you open one for Jr. as soon as he's born. Someone is paying for it, and that someone is the insurer. And he is taking a beating on it for every kid raised.

No, no you're not. You're not harnessing anything. If they have no choice but to insure, then risk assessment is moot. It only has precedence now because it determines whom you will insure and at what premium. If the premium is set and you can't say no, then risk assessemnt won't even be done. It's primary reason to exist has been removed.

You can't regulate insurance in this way, because it's not like other bussinesses. It's a gamble. A wager made with the same exacting care that a bookie sets the odds to make sure he breaks even on uneven competition games. Removing thier option to say no is no different than hosting a poker game where the players can't fold. Even if they see they will loose the pot they just have to keep kicking in. Insurance is a mutual gamble. I am beting I need the coverage, before the premiums I pay would have allowed me to cover the need. They are betting they can collect enough in premiums and interest on those premiums to offest the costs when I have to use the policy. If you remove their ability to acces risk and charge acordingly, then they will go bankrupt.

I see some of this in unemployment insurance. But there, the insurer has to take clients, but he also sets his rates. And those rates are based on risk. If you fall into the assigned risk category, and most buissinesses do, then you are charged the absolute maximum they can charge you legally. The assigned risk category produces revenue well beyond the expected loss. And the rates go up over time and can be incresed if you have to make claims, beyond the mandate for assigned risk even. If they had to accept all comers, at a set rate, they too would be bankrupt inside a year or two.

 

[Roxanne Appleby]

When mommy is pregnant, whose 3K does all the prenatal care come off of? I've not met a mother yet who dosen't take baby to the doctor every single time there is a problem, at least until she gets used to being a mommy. Nor one who dosen't take baby to the doctor for regularly scheduled check ups. I never met a kid who wasn't constantly breaking bones. I assume dental care is included here, that means a good chunck of money on kids. Braces? Covered? or are bad teeth something you just have to live with? Glasses? Physicals for joining extra ciricular activities at school? Flu shots? Immunizations? All of these litle things add up quickly. So even if you postulate corectly that the kids won't go over their 3K, they most certainly will approach it. And that means you aren't saving much on your accrued unused premiums. It really makes no difference if the 3K comes off mommy's policy or if you open one for Jr. as soon as he's born. Someone is paying for it, and that someone is the insurer. And he is taking a beating on it for every kid raised.

No, no you're not. You're not harnessing anything. If they have no choice but to insure, then risk assessment is moot. It only has precedence now because it determines whom you will insure and at what premium. If the premium is set and you can't say no, then risk assessemnt won't even be done. It's primary reason to exist has been removed.

You can't regulate insurance in this way, because it's not like other bussinesses. It's a gamble. A wager made with the same exacting care that a bookie sets the odds to make sure he breaks even on uneven competition games. Removing thier option to say no is no different than hosting a poker game where the players can't fold. Even if they see they will loose the pot they just have to keep kicking in. Insurance is a mutual gamble. I am beting I need the coverage, before the premiums I pay would have allowed me to cover the need. They are betting they can collect enough in premiums and interest on those premiums to offest the costs when I have to use the policy. If you remove their ability to acces risk and charge acordingly, then they will go bankrupt.

I see some of this in unemployment insurance. But there, the insurer has to take clients, but he also sets his rates. And those rates are based on risk. If you fall into the assigned risk category, and most buissinesses do, then you are charged the absolute maximum they can charge you legally. The assigned risk category produces revenue well beyond the expected loss. And the rates go up over time and can be incresed if you have to make claims, beyond the mandate for assigned risk even. If they had to accept all comers, at a set rate, they too would be bankrupt inside a year or two.

As I said, I don't know that $3k is the right amount. Stipulate it is just to move the discussion, but maybe its more. Whatever - it doesn't matter what the exact amount is for this discussion. The amount must be more than sufficient to cover a basic lifetime health care package that is at least equivalent to Medicaid, and is subject to the socialized mandates I listed above. "More than sufficient" means that if these basic benefits are all the company provides for the $3k, it will make a large profit. But companies could offer extras, and would compete for business by assembling attractive packages of extras that would still let them earn a lesser profit.

 

[Colleen Thomas]

As I said, I don't know that $3k is the right amount. Stipulate it is just to move the discussion, but maybe its more. Whatever - it doesn't matter what the exact amount is for this discussion. The amount must be more than sufficient to cover a basic lifetime health care package that is at least equivalent to Medicaid, and is subject to the socialized mandates I listed above. "More than sufficient" means that if these basic benefits are all the company provides for the $3k, it will make a large profit. But companies could offer extras, and would compete for business by assembling attractive packages of extras that would still let them earn a lesser profit.

Well, if we are stipulating the companies can turn a profit, then I have no objections.

Without a dollar firugre we have entered a worls so theoretical you really can't object.