Re: NANO meets Social Security & Natl. Debt [was: Outlawing drug speech!]

From: Michael S. Lorrey (
Date: Mon Feb 14 2000 - 14:02:51 MST

Robert J. Bradbury wrote:

> On Mon, 14 Feb 2000, Ross A. Finlayson wrote:
> > If the government defaults on its debt, which is to some extent made up of
> > T-bonds bought by the should-be Social Security escrow, then when that
> > happens then there would be no more Social Security, and all of those
> > citizens having given the government peacefully their FICA taxes in return
> > for expectation of minimal retirement income would find themselves bereft.
> That's my point, the way the system is setup, the government is promising
> to take from the future generations to support the retirement of the current
> (or past generations). Now, I believe they will worm out of this by allowing
> an expansion of retirement accounts and a pseudo-privitization of the S.S.
> system allowing you to manage your own retirement.

INdexing the retirement age to the average life expectancy will also be a
necessary reform to stabilize the system as longevity increases. I do hope though
that they apply as much of these surpluses to paying down the debt as soon as
possible. Reducing the interest overhead by paying down the principal will go a
long way to staving off instability when the boomers retire.

> Now, if at some point the government hands you or sees the development of
> an "almost anything" box forthcoming, then it may feel free to eliminate
> social security. [It would have to substantially change the form anyway
> because there may be *many* fewer people working. (see below).] Sure,
> some people will be annoyed, but the government can point out that it
> is no longer needed. Since much of the National Debt has been bought
> by the S.S. trust funds, the accounts cancel each other out.
> I'd like to see a breakdown of the fraction of the National Debt owed
> to private citizens or corporations vs. the amount the government owes
> the S.S. fund(s).

As I recall, the big year that SS started buying federal debt in earnest was 1987
or 88, which was a big question I was bugging Bush with during the primaries
here. As I recall, we were at 3.5 or 4 trillion in debt at that point. SS
typically buys up all of the debt that isn't sold at auction. private (corporate
and union) and state pension funds are supposedly the largest stakeholders in
federal debt.

> >
> > I agree that growth is in a long term upswing, but planning on it is an
> > invitation to inflation.
> No!!! The huge productivity increases allowed by the "A.A." boxes
> should prevent any inflation. The key thing is do you have *growth*
> in excess of inflation. You might even get "deflation" because once
> the "A.A." boxes make you one of everything you need, you aren't
> going to be buying much in terms of raw materials.

The only invitation to inflation is built in COLA raises that are in excess of
the true increases in the CPI.

> > Properly directed government funding is that towards research and
> > development, as far as I know the only indicator of increase in
> > productivity, that is the rate of increase in productivity is
> > linearly and positively linked to R&D.
> Nope, we've discussed this before, the rate of increase in things
> like Medline articles is exponential (with a moderately low exponent).
> You can probably go back through the archives for last year and find
> discussions by Robin or myself on this.
> >
> > Well, people will grow older, and be older longer. Social Security will
> > have to be reformed, as is evidenced by rising retirement ages.
> Yep, raise them now to make it "look" good and not send people into
> a panic and then eliminate the entire program sometime down the road.
> > Health care costs would be a rising burden, that would have to be solved.
> That's why its important to distinguish between health care treatments
> that "fix" problems (e.g. replacement organs or gene therapies) vs.
> treatments that "manage" problem (e.g. drugs). You have to invest
> in "fixes".
> > At least by that time contemporary drug patents would be expired so that
> > the government could be mandated to purchase "generic" drugs in the
> > majority of necessary cases.
> Yes, but you still want investments (public & private) in things that
> eliminate problems on a long term basis. Think about a syn-immune
> system that recognizes all known viruses and bacteria and deals with
> them efficiently without causing things like septic shock (which
> kills a fairly large number of people each year).

I'm not one to advocate socialization of medicine, but has anyone noticed that
drugs which are WAY past the expiration date on their patent rights now cost ten
to twenty times what they cost when they were patent protected? Pennicillin is
one good example.

Mike Lorrey

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