Ezra Klein: And Will Medicare Cover My X-Ray Eyes?

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March 29, 2005

And Will Medicare Cover My X-Ray Eyes?

In comments to my post on the absurdity of the infinite-horizon, TJon writes:

Why don't Democrats use this to mock Republicans. Use the infinite model to calculate how much SS will cost between 4050 and 4100. Ask Republicans if they agree with that prediction. Ask them details about it. How many workers will there be per retiree? How much will a retiree get in 2005 dollars? Will that cover the toll lanes on the commute from Mars to Venus? Economists can't predict what is going to happen next year, much less 75 years from now. Its a joke and we need to start mocking it.

Word.

March 29, 2005 | Permalink

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Comments

Add to this - what will be the accumulated costs of the Iraq War by 2525 - assuming any Iraqis are still alive.

Posted by: pgl | Mar 29, 2005 7:17:51 PM

Good idea!

Posted by: Mikhail Capone | Mar 29, 2005 8:24:50 PM

Hmmmm. Sounds a lot like what people who say we shouldn't worry about global warming say.

My understanding is that economic prediction is more advanced then weather prediction.

Are you sure you want to side with the argument that sense we can't be sure what will happen we shouldn't take prudent steps with the best understanding that we have?

Posted by: Dave Justus | Mar 29, 2005 10:06:34 PM

Democrats? Mock Republicans?

This would require an actual system whereby Democrats would go on television, radio and print media with spines intact.

The Schiavo thing should have the Democrats constantly on TV, riding the GOP for their extremely unpopular interference. Instead, Jesse Jackson whores himself out to pray with Schindlers.

Criminey.

Posted by: Carla | Mar 29, 2005 10:46:16 PM

Dave Justus: What is being mocked isn't that people are worrying about the future solvency of Social Security, but that people are using infinite-horizon models in calculations to show that S.S. runs an $11 trillion defecit. This is a meaningless figure--according to people who actually know stuff, such as actuaries. Not only is it meaningless, but it is ridiculous (as Ezra explains pretty clearly in his post).

So when you talk about "the best understanding that we have", you need to keep in mind that the infinite-horizon model (which, again, is what is being discussed here) is not part of that "best understanding." Anthropogenic global warming, on the other hand, is, according to our "best understanding", a real phenomenon that is confirmed on a surprisingly consistent basis. It has very little to do with weather prediction--in fact, actually predicting the effects global temperature increases will have on the weather is probably the most ambiguous aspect of climate change studies.

I've seen this comparison between the crisis in S.S. and the crisis of global warming before (someone on The Corner made a fool out of himself in a similar fashion several weeks ago), but I'm still surprised to see anyone repeat an argument that requires only a moment's thought to reveal its own absurdity.

Posted by: jjt | Mar 29, 2005 10:52:46 PM

The main problem with infinite future is not that it is ridiculous, although it is, but that it was a gimmick inserted into the Reports in 2003 simply to disguise the fact that the traditional 75 year window, the one used for the last sixty years of reporting, was no longer producing scary enough numbers to justify any kind of privatization plan. They simply decided to move the goalposts. It was blatant political bullshit and they deserve to be called on it.

They blandly inserted this into paragraph four on page one (2003 Report):
"In recent years the Trustees Report has characterized sustainable solvency as maintaining a trust fund balance that is positive and either level or increasing as a percent of the annual cost of the program at the end of the 75-year period. In this report the Trustees provide an additional indicator that measures the degree of solvency over the infinite future."

Note no discussion of how this indicator could have any statistical validity or what particular purpose it would serve in any debate about short term solutions. It was just snuck into the discussion to serve as a source of scary numbers.

Posted by: Bruce Webb | Mar 30, 2005 9:28:45 AM

Weather prediction and climate prediction isn't the same thing. One is about large averages over long periods of time, the other about precise temps at precise locations over short periods of time.

Posted by: Mikhail Capone | Mar 30, 2005 12:19:29 PM

Weather prediction and climate prediction isn't the same thing. One is about large averages, the other about precise things at precise locations.

Posted by: Mikhail Capone | Mar 30, 2005 12:21:51 PM

I was referring specifically to this part

Economists can't predict what is going to happen next year, much less 75 years from now. Its a joke and we need to start mocking it.

I will fully grant that climate prediction and weather prediction are not the same thing. That was a probably too understated joke.

Climatology as a science is very much in it's infancy however. I happen to agree that global warming is a real phenomena but I don't think that the Kyoto Protocol is the proper response. My belief is that the situation needs a lot more study and that a variety of options for mitigating the effects need to be explored.

Similarly I think that Social Security is fundamentally badly designed. The pay as you go system is flawed, which will be greatly exacerbated by a continual lowering of the ratio of workers to recipients. I like privatization for ideological reasons, but I am certainly open to other options as well. I do think that we need mechanisms to provide for those who are unable, for whatever reason, to provide for themselves.

One thing I have never quite understood is why liberals are so in love with Social Security in it's current form that any suggestion that their might be a better way to achieve the goals is considered heresy.

Posted by: Dave Justus | Mar 30, 2005 4:39:27 PM

Hey Dave,
The joke is the switch from 75 years to infinite. The 75 year projection is almost certain to be way off. Why switch to the even less reliable infinite projection? The only justification is to make SS look more expensive. That is sleazy and I think the best way to deal with it is to mock people who try to defend the infinite horizon.

Also, I think any comparison to global warming can only help liberals. There are a range of forecasts for SS and only the most pessimistic show a problem. That problem inolves the system running a little short in 40 years and can be fixed with very minor adjustments. Compare that to climate change. The only real debate is how much of the ongoing global warming that is already taking place is due to greenhouse gases. And even that is a little contrived with the vast majority of climatologist not tied to the oil industry saying it is due to human activity. Besides, nobody doubts the earth is getting warmer, the only question is, how fast and what can we do about? You said:

"Climatology as a science is very much in it's
infancy however. I happen to agree that global warming is a real phenomena but I don't think that the Kyoto Protocol is the proper response. My belief is that the situation needs a lot more study and that a variety of options for mitigating the effects need to be explored."

This needs more study? A situation which could destroy life as we know it needs more study? But a 25% shortfall in SS payments in 40 years (worst case scenario) needs immediate action? I appreciate your candor in saying you don't really like SS instead of pretending you want to fix it. However, people who pretend that SS is a more immediate danger than global warming have gone off the deep end in my view. What makes it even crazier is the little fact that we are going to run out of fossil fuels anyway. We have to wean ourselves eventually. Why wait? The sooner we switch, the less likely we are to destroy the earth. Why not act preemptively? If we find out later we were wrong and fossil fuels had nothing to do with it, we could go on a big fossil fuel burning extravaganza. We could hugely subsidize the oil industry to make gas really cheap. We could give tax breaks for people who drive cars that are really really big. We could base our foreign policy on getting more of that eco-friendly Hummer juice. We could totally relax fuel efficiency standards--even let them go backwards for awhile. It would be like the Romans, but with oil instead of vomit. But until then, we probably should continue with our forward looking energy policy, just to be safe.

Posted by: TJon | Mar 31, 2005 11:27:06 AM

Knowing that something is a problem doesn't mean we have the best solution or fully understand the ramifications of what we are facing.

The Kyoto Protocal in my opinion would damage our economy (and hence our ability to deal with climate change) without measurably effecting the extent of that change.

Quiting consumption of fossil fuels cold turkey without a replacement would result in millions of deaths. The long term solution is technoligical innovation which is much easier to achieve with a secure economic base. Damaging that base for little effect seems the height of foolishness to me.

Ironically, the only hope that SS has in it's present form is by increased productivity. I can promise you, if we enact the Kyoto Protocol (let alone the more draconian measures you advocate) Social Security will fail.

Posted by: Dave Justus | Mar 31, 2005 12:53:53 PM

I never said we should stop all oil consumption tomorrow. I think we need to start putting more money into cleaner energy sources and stop our policies that are designed to make oil artificially cheap. Will that destroy our economy? I don't think so. Lots of European countries seem to be doing ok, even with gas costing 6 bucks a gallon. All the money sqaundered in Iraq could have accounted for a lot of research and subsidies for clean eneergy and not many people would claim that Iraq ruined our economy. The point is, why wait until oil is almost gone to start looking around for the next energy source? Even if global warming were a non-issue it would seem to make sense to want to lead the way on the issue rather than play catch up after the fact. It would be nice to not have to import solar/wind/whatever technology from Asia once we no longer depend on importing oil from the Middle East. Global warming just makes it downright irresponsible to keep binging as we are. So you predict that Kyoto will destroy the countries that ratified it (those countries being every developed country besides the US)? I think any harm caused will come about because the US now has an unfair advantage. These kind of agreements work best with a level playing field and we destroyed any hope of that.

Posted by: TJon | Mar 31, 2005 1:19:16 PM

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