Chile
You might remember that in 2020 Chile held a referendum where the public voted decisively to update their dictatorship-era constitution. The left wing government under Gabriel Boric wrote up a new constitution which was rejected in a September 2022 referendum by 62%, in large part for being too left wing, with built in stuff about gender equality and indigenous rights. The conservative party won the last elections and have now finished designing their own constitution which, surprise, surprise, is probably too right wing, featuring some stuff about abortion I don’t even understand. Polls indicate 54% of the public will likely reject it in the upcoming referendum.
Kenya
The United Nations has approved the Kenyan UN peacekeeping mission to Haiti. However, there’s one slight hangup: President Will Ruto didn’t actually run it by Kenyan parliament first. A bit awkward to be sure. The major opposition party has opposed it both as an excess of the President’s powers, and on grounds vaguely analogous to American conservatives who object to Ukraine aid as a distraction from Mexico: saying that Kenya is too wrapped up with its own various militant groups to be off foreign adventuring. They’ve raised the complaint to their court system which has temporarily barred the intervention from proceeding till they can review and make a decision. This will leave Haiti still without respite, though separately the Dominican Republic has said they will reopen their borders.
Speaking of multinational peacekeeping missions, Kenya is currently planned to withdraw its forces in Somalia, there by request of the Somali government to help deal with Al Shabaab. However, Al Shabaab has increased its own attacks into Kenya recently, killing dozens in the past few months, so I wonder if they will change their position and remain in place.
Iran
Republicans have blamed Biden for fueling the Israeli crisis by recently unfreezing $6 billion of Iranian assets (which presumably could have been sent to Hamas/Hezbollah), though the Biden Administration denies that any of the funds had been transferred prior to the present conflict. Competing articles have argued both that representatives from Hamas and Hezbollah have said Iran helped plot the attack on Israel but also that the Israeli military says they don’t have evidence of Iranian involvement yet and US intelligence officials says that Iran was completely surprised by it. Iran of course denies culpability, no clue which narrative is correct (their weapons were definitely used though).
The building diplomatic ties between Iran’s arch-nemeses (is that a word?) Saudi Arabia and Israel are of course imperiled by the now ongoing war between Israel and Hamas. A number of sources have shared a headline that Saudi Arabia has already announced that negotiations are over, but I haven’t seen it from a particularly credible source yet.
Separately, Iran has finally restored diplomatic relations with Sudan, who had broken them off seven years ago following Iranians storming the Saudi embassy in Khartoum.
Soriek
2yr ago
I'm not gonna look through his reddit profile cause I've always found that thing kinda weird, but pretty much everyone here assuredly (hopefully) sounds different on the non-motte subs they visit. While he was here he was a long-time familiar face on the quality contributions page.
Soriek
2yr ago
Darwin was quite notable both for his prodigious and sustained output and his dedication to dishonesty and bad-faith interaction at every possible opportunity.
I disagree. He often made quality arguments and was willing to buck the status quo here from an underrepresented angle, something we should want more. He was no more inflammatory or bad faith than plenty of others here, but people reacted absolutely viscerally against him at a level disproportionate to his behavior.
The point stands. Darwin is still free to post here, as are any of the others who think BLM is a good idea. The fact that the history of their previous positions and the observed results places them squarely in the center of a rhetorical kill-zone is their own fault.
Imo that too easily absolves us as a community for failing to create the kind of debate space we set out to build. People get bitter and hostile in response to users who have actually tried to buck majority opinion here. I experienced this kind of thing enough from the times I tried to engage in actual culture war issues that I'm pretty unwilling to do it anymore, and I'm a very long time contributor.
Either way it doesn't matter much anymore, we are what we are here and my reply to gatt was meant to be light hearted, not a declaration of conflict or something.
Soriek
2yr ago
Peace proposals for Texas and Californian independence and full recognition are floated, but they keep getting derailed because of one core Mexican demand: they demand right of return for all Mexicans to anywhere in the US, because this was their ancestral homeland if you go far back enough.
In fairness Mexico only had those territories formally for around 15 years and only had a few thousand settlers across them (many of them likely descended at least partially from European settlers themselves). The Palestinians have much longer ties to their homeland and were more recently displaced, within living memory of many people. Like you say though, Israel will assuredly not agree to their maximalist demands and is unlikely to care much about their history one way or the other in the face of terrorism.
Soriek
2yr ago
Unless they feel such unbearable mental pain from seeing other posters' contrary opinions
This is perhaps ironic on a thread where the OP is still frustrated years later by hearing a single user disagree with the dominant narrative here.
Soriek
2yr ago
If you're talking about how the tax will affect the rate of change wrt raises you definitely want to factor in the full tax burden. If you're just telling a family who makes $74,580 that they're getting a $2565 tax increase this isn't really accurate and I think this obfuscates more than it clarifies.
Soriek
2yr ago
The dark old days when we still had users who actually had different opinions.
Soriek
2yr ago
Granted, but your previous argument was not "preparing for people to mess up" but that one should cater to irresponsible people, if they will be "up in arms" about having outcomes that disatisfy them.
It feels like a distinction without a difference to me tbh, it's just a different way of wording the same policy need that we'll always have to deal with.
My point is that "living from paycheck-to-paycheck" doesn't mean that these people won't save more for their retirement under a different system. Whether they save enough depends on how smart and self-disciplined they are.
Them living paycheck to paycheck is less a particular reflection on SS and more on their spending habits with the money they do have control over; this seems like as good a starting place to make assumptions about how smart and disciplined the best of us are going to be with more cash in hand.
But really, this is part of why I wrote this post in the first place. We don't know fully what people will do under an alternative system, so it makes sense to look at examples of how that system looks in practice. If we note their savings accounts are worse, that certainly shouldn't upgrade our priors to thinking private retirement accounts will help us either.
Additionally, the evidence cited in the quote doesn't do much to support the quote's conclusion: you'd need to look at the overall savings rate (ceteris paribus) to make such a causal inference, not just one category of savings (the retirement accounts).
For the purpose of this discussion it seems most relevant to me whether or not they made use of the retirement savings, but fair enough. The best I can find for personal savings rates is for Latin America overall:
Saving rates in Southeast Asia have been on an upward trend over the period, while in Latin America the trend has been downward...
Government saving crowds out private saving only partially; social security expenditures are associated with lower private saving, and the fully funded pension schemes (which exist in some of the countries in the sample) generally have a positive effect on private saving.
Here's a little closer to the present and after all of these countries went through their SS reforms that seems to say the same thing about overall national savings (which correlates with private savings):
Latin America was the only region that exhibited lower savings in the early 2000’s as compared to the second half of the 1990’s. The gap in national savings rates between Latin America and East Asia widened to about 20 percentage points during 2000-03 from about 18 points in 1990-1994.
Public savings can be a mechanism to spur national savings given the empirical evidence showing that an increase in public savings is less than fully offset by a decline in private savings...
The association between savings and a private pension system has also been found controversial as it depends largely on fiscal policy developments and consumers’ reaction.
Note that you can look at the specific countries that reformed their SS (Chile, Colombia, Bolivia, Mexico, Peru, El Salvador, Argentina) on pages 12-15, though unfortunately they're not modeled on a chart for easy comparisons with other countries.
Also, events in social science are rarely monocausal, so it's not so much "Western European taxation causes slower growth than the US" but "Western European taxation and regulation are part of a set of factors that tend to leave them indefinitely stuck behind the US."
Sure, in the inverse, the multifactoral nature of growth is what makes me so suspicious of the original claim that we should be confident European higher government size is the main, or even primary factor here. I don't often see much attempt to isolate those affects, or to account for the fact that many of the countries that have maintained the highest tax levels, like the Scandanavians, have also maintained the highest growth rates (the graph I linked above was supposed to include all of the OECD growth rates, not just Sweden's - sorry about that). Heck, America's own government as a percent of gdp has been moving steadily up forever and we seem to have mostly just gotten richer.
Note how Germany actually caught up with the US by 1975, but then fell behind again.
Everywhere faltered around the mid 70s, but when we talk about Germany catching up to America before then it's worth noting this was under a period of famously active state intervention, tight regulations, high union participation, and an expanding welfare state - this is true not just of the Miracle on the Rhine, but of Les Trente Glorieuses, and the Belgium, Italian, Greek economic miracles, etc.
I am no particular advocate for dirigisme (and indeed many of these countries also had pro market reforms that I think contributed to growth as well) but I do need more of an argument for Europe's mild-by-historical standards government size is definitely responsible for its (relative) stagnation now, but its tightly regulated, highly interventionist and welfare expansionist state in the mid twentieth century definitely isn't responsible for its success then.
It's doesn't have to be either/or. An equal increase in the solvency of the system through tax rises and spending cuts (later payment age, slower uprating with inflation etc.) could be a reasonable compromise.
Agreed! A fair middle ground position.
But you aren't actually a 100k salary employee. Your post-payroll cost to your employer is 106.2k.
But the way you calculated your number is by taking the sticker salary, 100k, and applying the full 3.44% tax there instead of to the real 106.2K, which is why your estimate is higher than it should be. Or, more specifically you took the median household income, $74,580, and multiplied by 0.0344, when the total median compensation for purpose of tax burden is $79,203. If you're going to use sticker salary that's fine, but then you should multiply by 0.0172, which is $1282, half of what you cited. Do you seem what I'm trying to point out?
This is also of course the most extreme solution, equivalent to funding the full 75 year projection window. In reality we likely won't raise it anywhere near this high, we can't even agree on the proposal to raise the tax by $3/week/person to close the gap by a fifth.
Soriek
2yr ago
Remember that even though workers really shoulder the full burden of the tax, half of it comes from your employer's account so that's not literally a 3.44% increase on whatever your takehome salary was before.
Soriek
2yr ago
In practice, what does this look like? I honestly haven’t looked too much into the impact of cutting benefits (partially cause I consider it somewhat inevitable), but what are we thinking the consequences would be?
Right now our replacement rate is about 75%, cutting benefits by our projected shortfall would bring it to about 55-60%, which seems like a pretty massive drop in living standards for the quarter of Americans receiving SS.
Means testing seems maybe unnecessary given that we already have all the income data and do use it to factor in some progressivity to the payouts. We could just change the skew to slant even more towards lower income earners and away from the better off.
Soriek
2yr ago
So your principle is that, if someone threatens you after they suffer the consequences of bad decisions, then you'll give them what they want?
My principle is that if you can 100% count on people to mess up, prudence suggests preparing in advance. To not do so is poor governance.
This falls foul of the Lucas Critique: you're inferring saving behaviour under Policy Regime A from behaviour under Policy Regime B, when a switch from B to A would change the incentives for saving behaviour.
Well, that was why I tried to look into real world examples of what the system looked like in practice. Per the quote in the Brookings Report: “the system [in Chile, Mexico, Peru, El Salvador, Colombia, Argentina, and Bolivia] has done little to stimulate voluntary savings; few workers have channeled additional resources to their accounts.”
(Of course, someone might argue that European social democracy is preferable even given this relative stagnation, but that's a different argument.
I would be one of those people in favor for social democracy, partially because I’m pretty unconvinced taxation is really the root of their slower growth. Europe has had consistently high taxes than America for a long time but the divergence is only in the last 20 years, if anything a period marked more in Europe by slightly falling taxes. But as you say, that’s another argument.
My thesis is only that funding Social Security via increased taxation is one more step in that direction, and that that direction is not without costs.)
Sure, no disagreement there, my position is just that cutting SS by almost a quarter also has costs, and they seem larger to me than a small tax raise.
Soriek
2yr ago
Even if you multiplied that by two for a household, a 3.44% increase in the tax wouldn't come close to $2565.
Soriek
2yr ago
The most regressive aspect of social security is simply that poor people die younger than rich people.
https://crsreports.congress.gov/product/pdf/R/R44846 (pdf warning)
Good point, thanks for the link.
Soriek
2yr ago
Everyone understands this, they're clearly talking about earmarked tax payments plus interest exceeding defined tax outlays. If you want to be precise and call it accumulated payroll tax receipts plus 6% of money the US government will pay on treasuries, you can, but who cares? This is a semantic argument that doesn't have implications for the fiscal operations of the trust funds.
Soriek
2yr ago
Do we want a larger share of power and capital in the hands of dumb people?
I'd like for them to be provided for in retirement! Certainly better than them being up-in-arms against their poverty, even if it's self inflicted. The problem is much larger than a cohort of dumb people at the bottom of the population as well, insofar as you trust self-reported surveys, various studies are always showing that even surprisingly numbers of well-off people report living paycheck-to-paycheck (25% of people making over $200k, 30% of people making over $250k). If these were middle income folks I would happily accept the counter that raising their payroll taxes would make this worse, but if even the Americans with the most disposable income don't save any of it, it's hard to imagine this would be better in a less-guaranteed retirement system.
Similarly, the "funding solutions" you consider all involve taxing labour more...As Western Europe has already experienced, social democracy via tax-and-spend plus regulation ends up in a trap of stagnation that is politically hard to escape:
These just aren't very high taxes on labor. 0.3% isn't going to bring us to anywhere near Europe. I'll note that even if we were, the Scandanavian countries are the pretty central example of high taxes on labor/consumption, low taxes on capital, and have done some of the best in terms of keeping pace with the US.
But we could even skip that and go with option 2 and only tax the top 5% of laborers. If you'd rather fund it by taxing capital I'm fine with that too. But even the conservative Tax Foundation agrees payroll taxes are more efficient than taxes on capital:
due to the inelasticity of the supply of labor, payroll taxes generate a comparatively small amount of deadweight loss compared to other forms of taxation. This means that payroll taxes lead to a relatively small amount of economic inefficiency, since the quantity of labor in the market does not dramatically decline as a result. Overall, payroll taxes do much less economic harm than taxes on capital. This is evidenced by our analysis of Senator Bernie Sanders’ tax proposals, whose payroll tax rate increase raised nearly four times as much revenue as his proposed increases on capital gains and dividends, but with a fourth less of the impact on GDP.
We've also been pretty committed to keeping entitlements funded via payroll tax partially because it's the least unpopular tax, since people see it more as an investment.
Agreed that part of the problem with taxing wages is that businesses can respond by shifting compensation, generally to benefits. That's one of the problems "option 3: Widen the tax base" is trying to account for. Worth noting though that payroll tax is already considered the hardest to dodge:
payroll taxes are very hard to evade. According to the IRS’ criminal enforcement data, investigations into payroll tax abuse make up less than 3 percent of all tax investigations, despite payroll taxes generating about a third of all federal tax revenue.
I'll also note that the (conservative, pro-low tax) Tax Foundation has similarly ambitious estimates for raising the whole cap:
removing the payroll tax cap entirely would lead to $1.8 trillion in additional federal revenue over ten years on a static basis, and primarily impact high-earners. Furthermore, this additional revenue could be used to lower marginal rates on corporate and personal income, growing both wages and GDP by 2.2%, while still raising revenue.
Alternatively you could take the option of raising taxes very slightly on normal people, or even just tax capital directly if we really want to be sure the rich to pay.
Soriek
2yr ago
Everyone including the SSA themself refers to the trust fund's accumulated surpluses as reserves.
Soriek
2yr ago
Where did you get that number from? In 2017 the average person paid about $3,045 in SS tax. Even if you multiplied that by two for a household, a 3.44% increase in the tax wouldn't come close to $2565.
Remember that even though workers really shoulder the full burden of the tax, half of it comes from your employer's account so that's not literally a 3.44% increase on whatever your takehome salary was before.
Ecuador
I’ve covered in previous installations the (presumed) cartel assassination of a backbencher in the Presidential election, Fernando Villavicencio. Now 7 of the suspects in his murder have turned up dead. Either way, the cartel’s plan to intimidate Ecuadorian politicians may have backfired, with Americans offering military assistance, and now both candidates in the election this Saturday have vowed to pursue stricter security measures against drug trafficking if they win.
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