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Culture War Roundup for the week of October 2, 2023

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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.

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.

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.”

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.

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).

Europe has had consistently high taxes than America for a long time but the divergence is only in the last 20 years

The divergence in growth rates is recent. The divergence in levels is much older for most Western European economies:

https://fred.stlouisfed.org/graph/?g=19QJO

Note how Germany actually caught up with the US by 1975, but then fell behind again. 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." Of course, there are exceptions like Norway, but planning on the basis of a massive natural resource boon isn't a development policy; it's closer to a prayer to God.

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.

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.

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.