God bless socialism, or what of it we use

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Let's be honest here folks, whether you like socialism or not, it is part of EVERY country's political and economic system just to different degrees. You can disagree or agree, I don't care, I just want a debate.

 

Right now, I agree with you (even if you don't care) that there is some sort of socialism to be found in any country.

There's nothing wrong with that and I like the thought of people sharing with each other, to some degree. I don't like the thought of people laying back and getting money for doing nothing, while they're able to do something usefull.

 

Interestingly enough, all countries are turning more socialist while China is turning more capitalistic.

 

They are? What I am seeing is a dismantling of the welfare states all over the place, whether it is willingly or not. In Europe socialism is on its way down, not out of ideological reasons but because most countries cant afford the expensive safety net they had in the past.

 

I agree with Joacquin. Unfortunatly, with the way the world is going, real socialism will be even more far away than it already is.

Damn. Damn. Damn.

 

And that's the problem with social systems. The more you offer, the more it costs. The U.S. by and large is less socialistic than most European countries. However, tax rates there are also much higher than the U.S. Interestingly, Social Security reform is a big project now in the U.S., and it is because of the financing. The baby boomers will be entering retirement soon, and there's no way the current system can pay for them. Obviously, one solution would be to simply raise taxes, but any politician who suggests that would be committing career suicide.

 

Well, the people of Europe, or at least Scandinavia in general do not mind paying taxes. Especially not compared to the attitude dominant in the US. The problem is that the systems put in place in Europe are too big for any tax to pay, the welfare of the entire western world is built upon the demand created by the devastation of WW2 and we have pretty much been in decline since the seventies. As I have said previously, the Swedish social democratic government implemented a retirement (social security) which is pretty much the same as is being put forth by the Bush regime and is widely critisized for being too extreme. I believe it is but it is an indication on how desperate the government was. In my opinion so comes the slight edge the US have when it comes to finances from their vast military industri which is the engine and catalyst for the whole economy. The drawback is that to be able to justify fueling this engine you have to have enemies which can be painted up as threats which leads us to the current situation in the middle east. As long as the US has a reason to spend billion upon billion on the military the economy is forced into motion. This system serves pretty much the same function the bloated public sectors served in Europe but just as the money ran out in Europe they will run out sooner or later in the US as well.

 

Didn't Bush warned the people of the US to make a 'reserve'? Doesn't sounds like he wants to increase retirement funds given by the state...

Europe's system isn't a good one (the expenses are going to outweigh the income), but the US's system is much and much worse...

 

You're absolutely right with this one Tal. The baby boomers are now in their 40s and 50s (the oldest baby boomers will turn 59 this year). Not only do they represent a huge population segment, but they also represent the age group that is most likely to vote. So yes, it stands to reason that the baby boomers will be a huge force in the change of U.S. social policies for the next few decades to come. (Bascially until a decent chunk of them start dying off in about 20 years or so.)

The only reason that the U.S. isn't in the exact same boat as Europe is that there is still a decent population influx from other countries, and immigrants tend to be younger people. You don't immigrate to a new country a few years before you're ready to retire. Even with this, about 20 years from now, 1 in 3 Americans will be of retirement age.

The system is broke, but I don't think anyone is willing to risk their political careers over this. The problem really doesn't start until 2018. How many current politicians will still be in politics 13 years from now? Certainly none of the party leaders from either the democrats or the republicans. They'll all be old and retire.

To me, the most obvious solution is to raise the age when people can collect benefits. That's the reason for the problem anyway. People are living far longer now than they were 60 years ago, and thus are collecting benefits for far longer. I imagine the numbers improve dramatically if you say retirement age is now 70 instead of 65.

 

Well, if people only can retire from 65 years the problem isn't even that big... The problem in Europe is that some countries have an retirement age of 55 - 58 years... and that is a huge portion of the inhabitants.

Well, problem is that at some point there is no more money and politician can promises as much as they want, but I never met one with a donkey that craps money

 

Well, it seems to me Bush is going to get spanked on the Social Security privatization issue. Note how he totally played down the privitization part in the State of the Union address, and how he emphasized to current retirees that the system will stay exactly the same for them! And I think all the "coming social security crisis of 2018" talk hasn't been so convincing. But that's just one small victory in the tide of privatization...

The US is still socialistic -- or better, Keynesian -- in its basic policies. Granted, social services aren't as comprehensive as they are in Europe, but that doesn't mean that they aren't there. Nor does it mean that all the Milton Friedman-inspired privatizers are hoping, even in their biggest fantasies, to get rid of all social services. I imagine it more like a slider between gov't and private control; I think even the most rabid Friedmanite (say, Grover Norquist) realizes that you can't go completely over to privatization without totally breaking the system. So the changes tend to be relatively more small scale: no one wants to completely privatize the armed services, but Rummy et al are really happy to encourage private firms in certain cases. No one wants to completely get rid of Social Security (or Medicare or Medicaid, etc), but Bush et al wants to put some percentage of it in private markets.

So I think Keynes is very much alive, and much of Keynesianism was in fact arrived upon by the private sector, as when Henry Ford decided to pay his autoworkers a 5 dollar/day wage in the 1910s, which was well above what he could have hired his workers for, because he wanted them to be able to buy the Model-T's they were building. Keynes was aware that if capitalists took too great advantage of workers, that not only would worker unrest threaten the economy, but also the workers wouldn't be contributing to the economy as consumers, causing the economy to decline. So the point is, from an economic standpoint, to find the best position for the slider between gov't and private control of the economy...

 

Wow, this should be a bitter pill, but for some reason it doesn't really bother me to say it.

Tal, as Aldeth stated, is correct in his first thoughts. The baby boomers will vote to make sure they receive what they consider to be adequate Social Security Benefits, and there will not be enough youth around to keep the elderly in check.

Bion,

Bush has never stated that he wants to completely privatize social security. What he is trying to accomplish is to allow people to invest some of their own money so that they can get a better rate of return and be able to carry some of the burden for their own retirement, as there is no way that 2 workers can provide enough revenue to support 1 retired person. I would have no issue with a very slow phase of out retirement benefits, but I would still support a reasonable disability system.

Even as much as I disagree with socialism, there is a large gap between it and accepting social responsibility. I have probably been over zealous in my crusade against socialism, (as was recently pointed out to me - Quixote-ish? - ok, ok, I admit I have been, so give me a break will you!). But it seems that we have lost track of a reasonable sense of what is social responsibility and what is a grab for entitlements. I still believe that people have to take responsibility for themselves, and that includes planning for their retirement. Unfortunately, for some reason we can't make this a part of our public education system, and we don't provide enough tax benefits for those who do take responsibility for this.

As a side note, from what I remember of my brief (as in 1 chapter) reading about Ford in one of my finance classes, your view is a bit revisionist. Ford did pay a greater salary than was provided in comparable industries of the time, but he was also quite a task master and demanded a higher level of quality and output from his workers, and wouldn't hesitate to have someone fired for not maintaining his expected levels. So his reasons for paying such high wages could also be for not so altruistic reasons, such as he wanted a better work force, and was willing to pay for it, much as the world works today.

 

I'm not at all saying that Ford paid a relatively high salary out of the goodness of his heart: not at all! He was very conscious of the bottom line, and he wanted to extract as much work out of his workers as he possibly could. He paid a lot of attention to what was then called "scientific management," and was enough of an innovator that a much of the ethos behind mass production is still called Fordism today. The point was that he also saw the value of his workers as consumers, and he considered his high rate of pay not only as motivation for them to work harder, but also to get them to buy his cars. Keynes himself was in the end a conservative, and he thought of his theorization of what would become the welfare state as a way of protecting capitalism against communist revolt.

 

Sound advice, but something he and his administration are not following themselves. Same goes for many Western countries that continue to spend beyond their means. The socialist policies that are being discussed here are mostly internal anyway, so you can argue that as a whole, a country's wealth does not increase or decrease as a result of the amount of money a government does or does not hand out to its own citizens in the form of benefits.

Aldeth, that depends on the country. I know that many people come to New Zealand for a 'quiet life' when they are ready to retire. Plus, many English people move to the south of France or to Spain to retire.

 

Yes, Shrub said the same thing in 1978. Back then he predicted that Social Security would crater in "1988." He has never liked Social Security, and it helps to explain why he is attacking it despite pleas from many in his own party not to do so. But I think he will win enough of this "reform" to call it a victory. I think he will get his private accounts, but not the cuts in benefits, which will mean higher taxes in the long run. For him it is really about the private sector vs the public sector. And, he will declare private accounts a victory for those who like a "free economy" while giving away a trillion dollars to his friends on Wall Street. Welcome to the new, improved, "free economy" - a welfare state for the rich, and paid for by the US taxpayer. But we all know that the stock market always goes up... right?

 

@Harbourboy - Perhaps I was too specific in my comments. Generally speaking, when you are thinking of someone immigrating to another country, it is so they and their family can have a better life. Sure, lots of people move once they retire to live out their golden years, but I really don't consider them immigrants, because most of them never give up their status as citizens of their native country - immigrants on the other hand become citizens of the new country.

In principle, I don't have a problem with partial privatization of social security. However, one thing that Bush has yet to explain adequately is where the money is going to come to make up the shortfall between the benefits being paid out and the money coming in. Sure, that's going to happen eventually whether SS is privatized or not, but by placing 5% of the income into private accounts, it will cause the shortfalls to happen sooner, and be in larger amounts.

The other problem is that the ONLY solution is to cut program benefits. If you allow people to privatize thier accounts, guess what? That means the government has to pay less, so it's a cut in benefits. If you raise the age at which people can collect benefits, again that's a cut in benefits. Some people seem to think that the only type of benefit cut occurs when their check gets reduced. But the simple fact is by 2018, money in will stop exceeding money out, so some type of benefit cut needs to happen.

 

It is my understanding that the private accounts are not mandatory. That means that many would not opt to go private with their SS accounts. I've also heard that the private accounts can go as high as 33 percent. For the Republicans to cut benefits would be a politically risky venture - very risky, especially in the blue states. BTW, George II wants to screw up SS. He would like nothing better than to see the entire set of New Deal programs go away.

 

Aldeth, Europe get a huge boatload of immigrants, they just happen to come in the form of refugees most of the time. I dont have the numbers available but comparable so takes the US in a lot less people than Europe, at least in the official numbers. Then the US have the southern border over which millions of people are pouring in. For some reason most yanks dont like those but love all other immigrants, that is the tiny impression I have got.