Social Security - Is this what's going on?

I've been playing around with some of the numbers concerning the Bush plan for Social Security and have found something interesting. I'm actually looking at an analysis of the Lindsey Grahm's plan, but this is very similar to what Bush is proposing.

Specifically, I'm looking at the claim that the Bush plan has a claw back provision, and the fact that some on the right are saying that is a misrepresentation. In a sense the right wingers are correct. However, that is because the so-called 'guaranteed benefit' under the plan is not, in fact, guaranteed. So if we consider there example of a Ms. Smith in the 1990 cohort, here listed benefit is $13,104. However, it would be more accurate to consider her benefit to be this figure minus the annuity she is required to purchase (costing $8,169). In this case here guaranteed benefit (the benefit she will receive in any circumstances) is then $4,935. Now the first observation is that this figure is extraordinarily low and should be trumpeted for this reason. There is no claw back it's just that your benefits are being cut to the bone.

It struck me that this figure is also ridiculously low if it is covered by the 8.4% of your Social Security taxes remaining. On the other hand, if we ignore the employer's contribution there remains 2.2% of your salary in Social Security taxes. I'm not certain what the exact figure is for salary being used in the analysis (I just really started this morning). I chose a salary of about $32,000 a year and got numbers close to the referenced analysis. Then I considered that 2.2% of that salary is going toward the guaranteed benefit and got a figure very close to the $4,935 mentioned above.

The upshot is that I seem to be finding that the figures in the Lindsey Grahm plan at least, work out sensibly, if we assume that the employer's contribution to Social Security is going to be eliminated. I think it would be very wise for Democrats to look into this possibility and be prepared for that argument to come out from the right.

How do we count your payroll taxes?

One of the arguments about Social Security coming from the right is that the Trust Fund is just part of the regular budget, so there is no money owed to Americans from this fund. Essentially all of your payroll taxes are just like regular income taxes and in no way imply a promised benefit down the road.

It seems to me that this contradicts one of the insistent arguments the right wing was making only a few years ago. When tax cuts were being made one of the arguments was that the rich paid such a large fraction of taxes, that naturally they get the tax cut. However, the claim that the rich pay a disproportionate share of taxes must be based, on counting only income taxes not payroll taxes. If you count payroll taxes as part of the general budget then Americans pay very nearly the same rate across income levels. The payroll taxes were excluded by the conservatives at that time because the payroll taxes are deducted to fund social security and are held by the government for the payees. That is they form a separate part of the budget. And therefore the middle class doesn't get a large tax cut.

Move forward to today and the discussion turns to social security. Suddenly all those payroll taxes were for the general revenue after all and therefore the middle class will have to take large social security benefit cuts. Neat trick. Fundamentally dishonest, but neat trick.

Capitalism or Science

Kevin Drum has a post up, titled Capitalism and Science in which he expresses his opinion that

Although they're inextricably bound together in so many ways that this may be moot, I'd argue that the Renaissance formalization of the scientific method has been more important than capitalism per se.

In my opinion there are a more general set of ideas, that as systems or problems become sufficiently complex one cannot solve them directly. One must adapt a process whereby multiple possible solutions are developed and these are subjected to some type of critical review by a diverse group of independent reviewers. The best candidates to survive the critical review are then adapted. Another set of solutions are offered up by modifying the most recent survives of critical review, themselves reviewed and the process repeats. This process is at the heart of the scientific method and free market economics, as Kevin discusses. But these principals are also essential to the process of Systems Engineering in technology development and to the successful democratic process. Elements of these principals are incorporated into our legal system. Finally, nature has adopted this basic process to develop the complexity of life. It is an enormously powerful tool which can be used to solve problems that are far too complex for direct intellectual attack. The discovery and adaptation of these techniques of critical review are the greatest force for human good every achieved.

Larry Summers's Comment

This is a bit dated now, but I have to come down on the side of those who walked out and protested the comments by Larry Summer concerning genetic factors in the number of women in the sciences.

The first thing to understand is that the debate, at least as it is carried out in the popular press, is very confused. The way that genetic and environmental influences are discussed clouds the issue and makes for a great deal of silly commentary. People are often talking about characteristics and whether or not they are determined by environment or genes. This is a very misleading way to think about the role of genes and environment on the ultimate characteristics of an organism. Essentially every characteristic of an organism is, in some way, controlled by genes. However, some characteristics are highly sensitive to environment, others are not. For example, blood type is certainly determined by certain genes. There is, as far as I'm aware, no environmental influence that will change blood type at all. Blood type is extremely insensitive to environment. On the other hand, characteristics such as adult height or quality of vision are certainly determined by genes, but they are also extremely sensitive to environment. The typical nature vs. nurture distinction, unfortunately suggests that if you can identify a clear genetic component that there is therefore no significant environmental influence. This is just not the way that the universe we actually live in works.

So to bring this to relate to Larry Summers's comments, there is no doubt some genetic components, that might well we sex related to how one will perform as a scientist. But the important question then is, how sensitive to the environment are these factors. Now we already know that there is a great deal of sensitivity to some environmental factors. Having no graduate programs that will consider admitting a woman is an environmental factor which it has been well demonstrated will reduce the number of women scientists. But the question still remains as to how much of the difference today in the number of women and men in science is due to factors that are sensitive and insensitive to the environment.

Now to demonstrate the proposal that a given characteristic is insensitive to the environment is to try and demonstrate a universal negative. As far as I know, someone might well find a compound which if added to a mother's diet will change the blood type of a fetus. I doubt it, but I can't prove that no such thing can happen. The problem of the universal negative. For this reason, scientists will sensible investigate the proposal that a given characteristic is sensitive to the environment. This, it seems to me, was the goal of the conferees to whom Dr. Summers made his comments. Given what we know of sexism, women in the sciences in this century, etc. it seems to me to make a great deal of sense to continue to investigate the possibility that there remains some considerable environmental impact on the discrepancy between the number of men and women in science. Furthermore, if the discrepancy is sensitive to environmental influences, there is a great deal of social benefit to modifying environments so as to reduce the current imbalance. The social benefits flow not just to women who could have successful careers in science but are diverted away, or to those who are forced to put unnecessary effort into overcoming environmental obstacles. In addition, the process of science depends critically upon having a diverse group of independent critics to review scientific developments. The diversity of the group is necessary to insure that as many errors as possible can be caught in any given scientific proposal. To unnecessarily exclude a substantial number of individuals with potentially novel outlooks on scientific issues can be expected to impede scientific advances. So it is certainly sensible to investigate the potential existence of environmental factors influencing the disparity between numbers of men and women in science, which the conferees, by all accounts were in the process of doing.

But if what I've said so far is correct, Larry Summers's comment was at best of no value at all, and at worst intellectually vacuous and deeply insulting. Certainly there may well be genetic factors, but the only meaningful question is 'are there environmental factors'. The only sensible approach is to ask if there are environmental factors and search for them. Larry Summers's comment served to say no more than, maybe you shouldn't bother to look. No matter what genetic factors may be shown to shape performance as a scientist, the important question still is 'are these factors like blood type or are they like adult height or eye sight?'.

Larry Summers's comment strikes me as being very much like the ID movement, and intellectually vacuous for the same reason. In that case, there is considerable evidence that all species are linked by ties of common ancestry and the scientific community is sensibly searching for possible evolutionary mechanisms that link the different lineages and continuing to do so, so long as research continues to reveal promising lines of investigation. The ID movement is providing no new lines of investigation, it is simply trying to say stop looking, give up. Larry Summers's was doing the same thing, and given the potential social costs of the current arrangement, to advocate surrender is both an intellectual failure and insult.

Iraqi Elections

I'm pleased to see that the Iraqi elections went fairly well. This is a good thing and we can hope that it might indicate better times there to come. Much as I have had very grave doubts about this war, Sunday's elections were good news. There is much still to be done in Iraq and we will need to keep vigilant and to work hard. Also, while there is danger is being too jubilant, and many aspects of this election were not desirable, I do feel that we can be cautiously optimistic with the way things went on Sunday.

We can also stand in awe and amazement at the courage of the many Iraqi people who braved death and injury to participate in the elections. That is something that can only provoke admiration and hope for the future of the country. As I said, there are many trials still ahead, but the bravery and dedication of so many Iraqis is very encouraging for all who hope for peace, democracy and stability.