Something Feral

Digging up the flower-beds.

Thursday, June 4, 2009

*(Conor Clarke refutes his argument thusly.)

For those of you that like pictures, the government is not a socialist abomination! For those of you with basic reading-comprehension, this is a lie!
*(I'm using asset information from the US flow of funds account. This chart is basically an updated and modified version of one I did for the business site, using slightly different data and a slightly different metric. There were some very thoughtful criticisms of that chart, so I decided to make a new one using asset information.

That said, this measure isn't perfect. I'm excluding a lot of assets -- households, farms, the financial sector -- in part because there's no precise data (see here for more) and in part because I want to avoid the same assets being counted twice. And I don't include liabilities. Please let me know of other methodological suggestions in the comments section.)
Here's a methodological suggestion: try including the liabilities. Richard Fisher, of the Dallas Federal Reserve Board, takes pair of pliers and a blow torch to the argument:
Add together the unfunded liabilities from Medicare and Social Security, and [the total unfunded government liability] comes to $99.2 trillion over the infinite horizon. Traditional Medicare composes about 69 percent, the new drug benefit roughly 17 percent and Social Security the remaining 14 percent.

I want to remind you that I am only talking about the unfunded portions of Social Security and Medicare. It is what the current payment scheme of Social Security payroll taxes, Medicare payroll taxes, membership fees for Medicare B, copays, deductibles and all other revenue currently channeled to our entitlement system will not cover under current rules. These existing revenue streams must remain in place in perpetuity to handle the “funded” entitlement liabilities. Reduce or eliminate this income and the unfunded liability grows. Increase benefits and the liability grows as well.
Just a quick guess on my part, but I don't think that the collected assets of the government at any level amount to even one-tenth of their liabilities. Where exactly is this money supposed to come from, Mr. Clarke? When one starts to muddy the waters between public and private ownership and control, liabilities do not exist in some quantum-state, trapped in some Social Security lock-box like a geriatric and vegetative Schrödinger's cat; they exist as a real unfunded problem, growing exponentially and swallowing nations in the process.

Peddle your sophistry elsewhere, you sycophantic hack.

1 comment:

MikeT said...

I think what'll happen is that the Democrats will end up scaling it back. Just like it took Nixon to go to China, it took Clinton to give Congress the cover to reform welfare. Chances are, in 10 years, a Republican congress and a Democratic President will do the same thing with these programs. They'll have their 2 month hate on the rich, but then the poor will meekly accept it since the Democrats, the guys for the little man, said it was necessary.