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Conservatives don’t usually call for the US to emulate other countries when it comes to public policy, but one exception to that rule is Chile. The story of how Milton Friedman’s “Chicago Boys” turned Augusto Pinochet’s military dictatorship into a laboratory for successful free market policies which in turn lead to democracy is a milestone in the history of conservatism. At the September 7th GOP debate, presidential candidate Herman Cain specifically cited the “Chilean Model” of privatizing social security as a policy worth implementing.
So how many conservatives know that Chile’s privatized social security system makes use of a mandate to purchase private insurance in a regulated market, much like the tyrannical Romneycare and Obamacare?
The key architect of the Chile’s Pension system was José Piñera, currently a Distinguished Senior Fellow at Cato. FrumForum was unable to contact Mr. Piñera since he was traveling but he has lectured extensively about the pension reforms he implemented. Here is how he describes them:
10 percent of their pretax wage is deposited monthly into a personal account. Workers may voluntarily contribute up to an additional 10 percent a month in pretax wages. The invested amounts grow tax-free, and the workers pay tax on this money only when they withdraw it for retirement.
Upon retiring, workers may choose from three payout options: purchase a family annuity from a life insurance company, indexed to inflation; leave their funds in the personal account and make monthly withdrawals, subject to limits based on life expectancy (if a worker dies, the remaining funds form a part of his estate); or any combination of the previous two. In all cases, if the money exceeds the amount needed to provide a monthly benefit equal to 70 percent of the workers’ most recent wages, then the workers can withdraw the surplus as a lump sum.
Let me translate this for the Tea Party activists and Ayn Rand fans: the state says that 10% of your income must be put into an account that you had no say in setting up in the first place. You are allowed to put more into this private account if you so desire, but you are mandated to have this account. Upon retirement you can either keep your account and make withdrawals from it over time, or you must invest it with a private insurance company.
Make no mistake, this market works best if everyone participates and incentives were also created to get as many people to join as possible:
The Chilean PSA system includes both private and public sector employees. The only ones excluded are members of the police and armed forces, whose pension systems, as in other countries, are built into their pay and working conditions system. (In my opinion–but not yet theirs–they would also be better off with a PSA). All other employed workers must have a PSA. Self-employed workers may enter the system, if they wish, thus creating an incentive for informal workers to join the formal economy.
But surely, even if you are mandated to have this account, the private insurance companies you can purchase a plan from are given total free market flexibility to let the invisible hand work its magic? No! According to Piñera:
A worker chooses one of the private Pension Fund Administration companies (“Administradoras de Fondos de Pensiones,” AFPs) to manage his PSA. These companies can engage in no other activities and are subject to government regulation intended to guarantee a diversified and low-risk portfolio and to prevent theft or fraud. A separate government entity, a highly technical “AFP Superintendency,” provides oversight. Of course, there is free entry to the AFP industry.
Each AFP operates the equivalent of a mutual fund that invests in stocks and bonds. Investment decisions are made by the AFP. Government regulation sets only maximum percentage limits both for specific types of instruments and for the overall mix of the portfolio; and the spirit of the reform is that those regulations should be reduced constantly with the passage of time and as the AFP companies gain experience. There is no obligation whatsoever to invest in government or any other type of bonds. Legally, the AFP company and the mutual fund that it administers are two separate entities. Thus, should an AFP go under, the assets of the mutual fund–that is, the workers’ investments–are not affected.
This is the so called free market reforms that Tea Partiers and conservatives claim to be in favor of? What gives the federal government the right to coerce employers force me to put my own money into an account and use it to purchase a policy in a regulated marketplace? Haven’t the Chileans ever heard of the non-initiation of force?
In seriousness, the success of the Chilean model is worth emulating: Romneycare and Obamacare were onto something when they mandated that people would have to purchase insurance options in a regulated market. You avoid the pitfalls that come from an entirely single-payer system while still creating a system that is able to provide benefits for all citizens of the country. Piñera himself describes the free market benefits that come from coercing Chileans to be consumers of private social insurance:
Workers are free to change from one AFP company to another. For this reason there is competition among the companies to provide a higher return on investment, better customer service, or a lower commission. Each worker is given a PSA passbook and every three months receives a regular statement informing him how much money has been accumulated in his retirement account and how well his investment fund has performed. The account bears the worker’s name, is his property, and will be used to pay his old age pension (with a provision for survivors’ benefits).
To be sure, retirement insurance and health insurance are not the same. There could be sound economic arguments against this sort of mandate in health insurance - perhaps conservatives think it would be better to focus on cost cutting measures, perhaps they think it would only make sense to focus on catastrophic care. Maybe the more intellectually honest ones would want to make the argument that it is ok to ensure a right to a retirement account but that it would be a step too far to ensure a right to a minimum amount of healthcare. These would all be intellectually honest answers.
Instead, the movement has decided that mandates are evil and that the only way to rectify this is to convince Justice Anthony Kennedy that while Social Security is completely kosher, that a mandate to purchase private insurance is an unconstitutional abomination.
Some in the conservative movement think that the anti-Obamacare lawsuits are just the first steps in a long term plan to eventually overturn Wickard v. Filburn. Whether or not that is the true end goal, politicians and activists will be content to hold two completely contradictory ideas in their heads: mandating individuals to purchase private health insurance is an unconstitutional threat to the Republic, while a system that mandates individuals to purchase a plan from a private pension fund is a shining beacon of liberty that we should emulate.
And in case you forgot, Paul Ryan’s plan for Medicare also uses a similar architecture for regulated private insurance markets that the Chilean system, Romneycare, and Obamacare all use.
How many continent-sized countries are there on Earth? The US, Brazil, India, Russia and China. Maybe Indonesia and maybe Japan, and those are stretches. That’s it. Let’s be like Chile? I have a better idea, let’s be like Luxembourg or Monaco!
Please explain the relevance of size to the question of individual mandates.
Or how we are a continent size country, when even if you divide North and South America, we still share it with two other quite, large countries?
This article is much too sensible for most who label themselves “conservative” today to accept.
If a healthcare mandate is problematic – I see a private investment mandate as even more problematic, given our Constitutional limits on government.
The point of the mandate is to compel people to pay for something that we’ve guaranteed by law … access to emergency healthcare facilities, no matter whether they can or cannot demonstrate ability to pay at the moment they’re admitted. I’d have preferred a tax with a rebate to those having insurance, personally – but we’ve got what we’ve got and there is a rationale behind it.
Again – the point of the mandate is to facilitate a shared benefit – to help promote the general welfare. And again, Social Security is a Social Insurance pool, and not a private investment fund. General welfare.
The point of the private investment accounts I’ve already built up have nothing to do with the general welfare. Unlike insurance, and unlike Social Security, that’s not money that’s available to someone else if I don’t need it, or to be available to others if I no longer need it. Private investment funds are not a shared risk pool. It’s my money. And the idea that government should dictate that I contribute some additional portion to a government managed fund, rather than investing as I see fit (what say I think pouring all that into my startup business is a better use of my investment capital?) is abridging my freedoms in a way that Social Security or the mandate do not.
I would have no problem with the investment mandate employed in Chili’s pension system. The awesomeness of that system is that individuals own their benefits. What really irks me about social security is that I am paying into a system that isn’t being managed responsibly and I might very well never see benefits from.
The problem I have with government mandated health insurance is that I’m forced to participate in a system where I don’t own anything and the government runs it. Every government run system that I have been apart of has left me exhasperated and disappointed. The worst part is how structural and difficult government programs can be to change. Have a gripe with the education system, well it’s part of the system, good luck changing it. The idea that my health care will now be part of “the system” really does scare me. I want to own my health care. I want to be responsible for my own well being.
“Every government run system that I have been apart of has left me exhasperated and disappointed.”
You should go and live on a remote island without any govt where you can be completely responsible for your own survival Curiosity, then your life wouldn’t be such a disappointment to you.
No man is an island entire of itself; every man
is a piece of the continent, a part of the main;
if a clod be washed away by the sea, Europe
is the less, as well as if a promontory were, as
well as a manor of thy friends or of thine
own were; any man’s death diminishes me,
because I am involved in mankind.
And therefore never send to know for whom
the bell tolls; it tolls for thee.
trololololol
“trololololol”
Yeah the island of Trolololol…that would be a good place for you to move to. How clever of you to think of it. You could take a volume of Donne’s poetry to read on those long quiet nights when there’s no one other than you and the stars.
Thanks for the poetry break Otto. We don’t hear enough of this particular Donne poem.
I rather like poetry. Curiosity obviously doesn’t so perhaps he should take a marvel comic to his island.
Hemingway!
Daniel Defoe?
“No man is an island” is fine as far as it goes… until you land at the Gulag Archipelago…
any system can leave people frustrated and disappointed.
I can’t count the number of times that dealing with a company has left me frustrated and disappointed – just trying to actually reach a real person let alone then dealing with the call centers, managers who can’t understand what is being said, etc…
Even small businesses – just trying to get a contractor to show up to do the work they promised to do – in the time they said they would do it is enough to make a person crazy sometimes.
So its not just government – but I will say this about government – when I have been stuck dealing with a government entity – at least I could call my congressperson – someone always picks up the phone and I have had some success in getting my congressperson to assist me.
Unlike many companies where you have no ability at all to get anyone to help deal with the mess that often times companies themselves create.
+1
My landline doesn’t quite work since TS Irene. It’s not in my house lines; Verizon doesn’t give me a date by which it is fixed, and my neighbor who works for Verizon informs me that landlines have been de-prioritized pretty much permanently.
On the other hand, I am not aware of any failure to deliver any item to me by the post office for some years.
But gub’mint ruins everything is does, that’s an article of faith.
I have had any number of early fails for items I buy, late starts to concerts, non-appearance of private contractors and installers.
The much-maligned DMV now has a ticket system, you walk in, indicate the category of your reason for the visit; it’s now down to about 15 minutes max waiting time.
Even if I schedule in the morning, I can’t depend on my doctor seeing me within a half hour of my scheduled appointment.
But it’s gub’mint that can’t do anything right. It’s a matter of faith.
“But it’s gub’mint that can’t do anything right. It’s a matter of faith.”
Not at all.
Here is what I said: “Every government run system that I have been apart of has left me exhasperated and disappointed.”
This statement specifically speaks towards experience. I’m not sure how you got religion from it.
We are the government. Without it, as the events of the past few weeks have demonstrated we’d be lost.
curiosity – I got “religion from it” by noting how private vs. public endeavors are discussed in our national discourse. Yeah, you just made one little exasperation complaint. But it fits into that narrative.
“any system can leave people frustrated and disappointed.”
Very true.
It it also true that in some circumstances a government run system might very well be better than a privately run system.
What I don’t like is a system where I control/own little, and I have few (if any) options. In most circumstances the private market provides competitive alternatives. If I am frustrated with a particular company or product I can simply take my business elsewhere.
The current health care system isn’t a system I like. There are so many things wrong with it, I don’t know where to start. Government run health may very well be an improvement.
“If I am frustrated with a particular company or product I can simply take my business elsewhere.
After all it’s so easy to switch utility providers, insurance companies, refinance you’re mortgage, switch banks and credit card providers, change healthcare provider, nothing to it.
“The idea that my health care will now be part of “the system” really does scare me. I want to own my health care. I want to be responsible for my own well being.”
“The current health care system isn’t a system I like. There are so many things wrong with it, …. Government run health may very well be an improvement.”
Curiosity…as logical and intellectually consistent as ever!
Well, nobody in the US is talking about a “government-run system.”
The post-ACA health insurance landscape relies on existing private insurers.
The ACA didn’t even include a public option, even though the CBO said that it would reduce the deficit by $68 billion over the next ten years (not a whole ton, but better than a sharp stick in the eye). See: http://voices.washingtonpost.com/ezra-klein/2010/07/cbo_public_option_could_save_6.html
And certainly, no one is talking about a government-run health care system akin to the UK’s NHS.
Remember, this is the context here:
We spend more, and for not-any-better results, than the rest of the OECD, by a long shot.
That’s because health care isn’t like buying a car or a toaster. Five percent of the population accounts for almost half (49 percent) of total health care expenses. When we consume the most expensive kinds of health care, it’s in an emergency situation that requires expert decisions. No one knows when/if they’re going to fall into that five percent, so we have to insure.
Experience indicates that more universal health insurance brings health care costs down– by having everyone pay in, and by diminishing the amount we spend on emergency care.
That fact can make us happy, or it can make us sad, but it is a fact.
Yes, living in society is a bitch sometimes, with loads of impositions. I have to pay taxes, speak English, stop at traffic lights, keep my pants on in the restaurant. But the benefits are pretty high.
“In most circumstances the private market provides competitive alternatives. If I am frustrated with a particular company or product I can simply take my business elsewhere.”
That’s just it. What I find, is *barely* competitive. Firms benchmark against each other, keep their practices in line, differences are scant and mostly aimed at marketing. Indeed, I find myself relying on government to prevent a quality race to the bottom for many items (cars, appliances).
Where the free market obtains more completely, I find fewer choices. New housing construction, for example. There is more profit in a large house built on spec, than a small one, so if I look for a newly constructed house around here, they’re McMansions or mini-Macs. So I have to go find some plot (and they’re scattered, most suitable land belongs to the developers) and either contract for myself, or get a modular set up, for an ordinary decent 3 bedroom house. Or buy existing. Sure, I can, with extra effort and knowledge and luck, find (actually make) more choices for myself. But, normally, I don’t actually have the range of choices I need. The market mitigates against it.
IF it weren’t for the regulation of the auto industry, what I’d find would be cheep and dangerous, and extremely expensive and safe. And I’d have to drive my expensive and safe vehicle amongst mostly cheep and dangerous vehicles, dealing with tragedy in a mishap instead of a mostly just property damage.
This is a really good point Rob. My husband has worked with big, international companies his entire career, ones with good reps too. And one thing is consistent. The right hand does not know what the left hand is doing. Everyone is in their own little silo (that’s business’s term for it not mine). More often than not they work at cross-purposes or are unaware of what each other is doing. And that is just in the home office in the home country. Be in an office in another country, no matter how big the market, and it will be like talking through water.
As for me, I’ve been in small shops, agencies and non-profits and I am not much impressed with their efficiency, since then it is personality driven. If the boss has a favorite, there goes logical business decisions. Or the boss has given a certain section over to a beloved family member, better love everything they do. Or let’s say your starting a new endeavor and then the bosses divorce each other (not a situation I recommend.) There goes that growth spurt. Or perhaps, the founder just has a certain vision of the world, then your stuck with that vision not logic. This can be good like Apple but how many people with Steve Jobs’ personality have his genius as well?
Or you’ve got a great founder, no relatives, no favorites, but no capital to react to change with the speed necessary.
Yes, government (big or small) is inefficient, but big government is inefficient in very predictable, manageable ways.
+1
After the financial crisis in 2008, I saw all these articles about how small business was suffering in choosing what people to let go because (it would be stated something like this..):
“Some of these employees are not only like family to them, some are family.”
Yeah, well, nepotism lives. Small business is a place where families park their ne’er-do-wells, although granted some town government functions (like the highway dept. garage, say) also play that function.
You can think that good, you can think that bad, but it’s not the case that private enterprise is an unsullied example of lean, mean, and efficient capitalism in action.
The problem I have with government mandated health insurance is that I’m forced to participate in a system where I don’t own anything and the government runs it.
Where the hell do you get your information?
I would hope that anyone who claims to be an informed voter is aware that the ACA mandates that you purchase health insurance on the open market (in fact, you don’t even have the OPTION to buy into a federally-run system, something which still irks most progressives).
Why don’t you actually learn a little bit about things before you fulminate about them?
“I would have no problem with the investment mandate employed in Chili’s pension system.”
I assume you’re talking about the country, “Chile”, not pension plan for employees of “Chili’s”, the restaurant, in which case, please disregard the rest of my post.
“The awesomeness of that system is that individuals own their benefits. What really irks me about social security is that I am paying into a system that isn’t being managed responsibly and I might very well never see benefits from.”
Like the awesomely responsible way Lehman Bros., AIG, or any of these (http://www.fdic.gov/bank/individual/failed/banklist.html) managed their deposits? Not to mention the Bernie Madoffs in the world. Or do you think everyone ought to just do their own stock and bond research and invest the money themselves? Nothing could go wrong with that plan.
“The problem I have with government mandated health insurance is that I’m forced to participate in a system where I don’t own anything and the government runs it.”
Sounds kind of like every other health insurance plan there is, except shareholders — who couldn’t care less about you or your well-being — run it. But, even your premise is wrong. Medicare excluded, the mandate is not that you buy insurance from the government, but from one of the companies you seem to love working with so much.
“Every government run system that I have been apart of has left me exhasperated and disappointed. The worst part is how structural and difficult government programs can be to change.”
Sure, because private corporations are so nimble — and you have such a say in their leadership.
“Have a gripe with the education system, well it’s part of the system, good luck changing it. ”
Actually, that’s the good part of the education system. Don’t like something, go the school board, complain, and get it changed. Not thrilled with the curriculum at David Koresh Academy? Too bad.
“The idea that my health care will now be part of “the system” really does scare me.”
Because insurers like Blue Cross, Aetna, and the like have no bureaucracies to deal with, right? I hate to break the news to you, but unless you are independently wealthy, your healthcare has always been a part of “the system”.
“I want to own my health care. I want to be responsible for my own well being.”
I’m going to give you the benefit of the doubt and just assume you know this is silly. Everyone would like to “own their health care” and “be responsible for their own well-being”, but only young, healthy, affluent people can actually do it. Anyone sick enough to actually need healthcare resources couldn’t possibly afford them.
All insurance is based on shared risk and requires a large risk pool with enough healthy people so that the money coming from sick and healthy alike can go toward only the sick. Every civilized country on Earth where healthcare is a right and not a privilege (essentially every civilized country that isn’t the United States) realized long ago the necessity of an individual mandate in order to be able to afford that basic level of security.
It’s an awesome system if you are a middle class individual who can not only afford to have 10% taken out but have that 10% mean something.
If you on the other hand, you earn 18,000 a year, you’ll have 18 hundred a year taken out. If you work 40 years, that will only garner you about 200-400K. I don’t have the formula so I don’t stand by that number.) If we assume you live another 30 years, that’s 9-13K of principle, you can take out a year to live on. And you would not do much better, living off the interest since you would not be able to put it in anything much more risky than a savings account.
I really don’t get why this system is so much better. Big business is not a whit more efficient than Big government, and there’s the profit motive to consider. How soon before there is a push against the regulation of these organizations, or the ability to have other organizations reap the profits, the way we did with banks and mortgages.
Find the fastest car on the planet, and it won’t beat the lobbyists.
@ Curiosity: “The problem I have with government mandated health insurance is that I’m forced to participate in a system where I don’t own anything and the government runs it. Every government run system that I have been apart of has left me exhasperated and disappointed.”
First, gov’t mandated health insurance can take many forms. Gov’t mandaged does not mean gov’t run. I was in favor of a public option (not single payer), where as a self-employed person I could buy into an insurance program at a better price than available in the marketplace (which had huge profits built into every level, physican, hospital, insurance company, etc.). As to your second point that alludes that all gov’t run systems are bad, I’m not sure that is accurate. My mom, dad and mother in law have managed to get a check from social security every single month, on time without fail – along with tens of millions of other seniors – that’s pretty good. I recently had to go to a local (county) office to renew a business license. Iwas in and out in 15 minutes, it was a very pleasant experience (and I told the person helping me so). If we agitate to improve gov’t instead of working to make it more disfunctional, perhaps we’ll get better results from it.
The intent of my post was not to state that all government programs or regulations are bad.
You might want to stay away from Chile. They also mandate a 7% contribution to a public healthcare program. Those that can afford it can pay more for a private program but the public system is by far the most popular choice. Amusing that Mr. Cain would tout Chile as a model for a free market system.
Many existing laws and regulations apply specifically to pregnant women. Several provisions of the Affordable Care Act offer new benefits for expecting mothers. Search online for “Penny Health” if you need affordable insurance for yourself or your wife.
The problem most hard line conservatives have is that all their positions are binary. This all or nothing is a conundrum for them. How do you implement free market philosophies regarding retirement and health care without some government overisght and mandates. A shared benefit rationale is what creates affordability but if you have drunk the hemlock of a competitive market creating affordability, then you are prohibited from even considering anything similiar to the Chilean Model preferring instead to decry such things as a Ponzi scheme. Binarism is ultimately the hard line GOPs petard.
It’s the tendency to rigidity that was, for example, described regarding adding Canada to the list of countries Bush acknowledged during his speech. With the flight from the right by folks like you and me, all that is left is a very authoritarian, rigid group of people.
“The story of how Milton Friedman’s “Chicago Boys” turned Augusto Pinochet’s military dictatorship into a laboratory for successful free market policies which in turn lead to democracy is a milestone in the history of conservatism.”
This says it all. The U.S. orchestrated a military coup, which overthrew a democratically elected parliament and installed one of the most ruthless dictators of the 20th century, who partnered with the U.S. to institute neo-liberal economic policies at the point of a gun, and it’s considered a “milestone in the history of conservatism.”
Brilliant.
+1
If this were a dictatorship, it would be a heck of a lot easier…just so long as I’m the dictator.
GW Bush
Noah, Noah, Noah.
Weak try.
Drink some coffee and then try again.
Smegmalicious, Smegmalicious, Smegmalicious!
Noah’s thoughtful essay deserves more than fart noises from the Bible-bearing wing of the GOP. Although its nice to see something other than yet another display of your bleeding smegmata.
Yeah Noah, stop writing articles with facts in them. That is just weak.
Milton Friedman certainly has become a Rino in the last few years. Do we also remember that it was he who proposed the ‘Earned Income Tax Credit’ policy that Mr Nixon signed into law? That has now become the basis for accusing the lowest earning 50% of Americans of being parasitic scum — if you are a true conservative in the 21st century.
The rationale behind the earned income tax credit was to award and further incentivize work, for those close to needing public assistance. But now the discourse has taken on a punitive cast.
Which is interesting given that the rationale on the part of the right for eliminating business taxes and investment taxes, is to reward these things. But to eliminate a tax to reward someone in the lower echelons to work – that should happen.
I actually do think there is a point in that even paying a nominal tax reinforces a sense of participation in our society for everyone. But that’s not the rationale I hear. It’s more on the lines of wanting low-income people to join their ranks in being anti-tax too.
Surely, no one believes that conservatives actually give a shit about what Chile did.
It’s a talking point. The Conintern decided that “Chile = free markets = Reagan = awesome”, so GOP candidates say the word “Chile” sometimes.
Does anyone believe that Herman Cain knows what the Chile model is? Does anyone seriously believe he cares?
The answer to both your questions, Elvis, is certainly “no”. Moreover, if Obama were to the embrace the Chilean way, or even just mention it approvingly in an aside as a model that is worth having a look at, then Cain and every other Republican would immediately advocate a tactical nuclear strike on Santiago.
Mandates certainly seem republican to me. The idea that everyone take personal responsibility is a core value, isn’t it? Then there’s the fact that they cannot stand someone getting something for nothing, or even the mere thought of such and you realize they are lying about their objections to the mandate just as they lie about everything they say they stand for. Meanwhile I was strongly opposed to the idea when McCain was floating it around but have become convinced it is necessary to covering everyone and bringing down costs.
The problem with this idiot and anyone else who agrees with the comparison of this program to ObamaCare’s insurance mandate is that SS is MANDATED, idiots. Ever try not paying your SS tax, ever try having your employer pay the SS portion of their tax to you, idiots.
What stupidity. The comparison which you fools gloss over is that your money you pay into the Chilean system is YOURS, your family gets it when you pass away. And for the fiscally limited out there you notice that your return on investment nets you 70% of your salary. SS will only pay you 0.3% over your lifetime.
Of course the Libs/Lefty love the plan, now, but fought tooth and nail to prevent a similar program from being implemented here. Can’t have independent, fiscally free individuals making political decisions when they can keep them leashed and collared via SS now.
Noah try not being such a douche
“The comparison which you fools gloss over is that your money you pay into the Chilean system is YOURS, your family gets it when you pass away…..Of course the Libs/Lefty love the plan, now, but fought tooth and nail to prevent a similar program from being implemented here.”
Sure it is….that’s why the 401k pension program has been such a huge success….perhaps this is why Americans were so keen on Bush’s plans to privatize SS. In fact I think the Republicans should make privatizing SS a centerpiece of their campaign next year along with scrapping Medicare. A real winner. Springy guarantees it don’t you Springy.
BTW, why do “fiscally free individuals” choose to keep themselves “leashed and collared” to Medicare instead of going out and buying private health insurance on teh awesome open market and then relying on it for all their health care needs?
And for the fiscally limited out there you notice that your return on investment nets you 70% of your salary. SS will only pay you 0.3% over your lifetime.
Unless, say, you pass away at 32 leaving behind 4 children. In which case Social Security goes a long way to making sure your spouse isn’t left destitute.
What part of Social Insurance don’t you understand? All of it, I guess.
Nice try but that is not the intent of SS. It may have been a social contract to protect those without income but thats no longer the case, otherwise we would not be having this discussion.
SS is no longer a widows and orphans program, the Dems saw to that. Its a retirement program, and everyone expects more in benefits than they pay in, very similar to Medicare.
And since the Dems saw to the financial proceeds of SS tax being used for social programs there are no SS savings, no SS investment, and no SS program shortly.
And for the ignorant here, aka, Watusie, those individuals on Medicare do buy private insurance to supplement their Medicare benefit, those on Medicaid probably lack the funds but thats a separate program.
Nice try but that is not the intent of SS.
Hell yes it is.
“Nice try but that is not the intent of SS. It may have been a social contract to protect those without income but thats no longer the case,”
Oh really? This will be news to the 50% of seniors who rely on it for 100% of their incomes, not to mention the next 30% of seniors who rely on it for over 50% of their incomes. Alas Springy YOU define KNOW NOTHING. Your ignorance surpasses the pain threshold.
It did start out as a Widows and Orphans program, so in that Springy is right, I’m afraid to say. But it quickly morphed, since we had old people destitute and dying.
I also have to raise an objection this chilean program since it would punish those who stay home to take care their kids, or an elderly and disabled family member. Right now, I will get social security through my husband, the divorce rules are funny but I still get something.
This would require me to go to court to get it and I doubt very much the full amount would be considered joint marital property. And of course, if the breadwinner earns a small salary,the caretaker won’t be able to get a lawyer to take the case.
Considering the amount of women who take time out of the workforce to raise kids, or care for parents and then are subsequently divorced in late middle age (too late to set up a substantive career), this would leave a lot of women in even greater poverty.
“It did start out as a Widows and Orphans program, so in that Springy is right, I’m afraid to say.”
Primrose:
Err…no he’s not. It encompassed retirees from the start. Viz:
“President Roosevelt signed the Social Security Act, at approximately 3:30 pm EST on August 14, 1935. The Social Security Act was drafted during Roosevelt’s first term by the President’s Committee on Economic Security, under Frances Perkins, and passed by Congress as part of the New Deal. The act was an attempt to limit what were seen as dangers in the modern American life, including old age, poverty, unemployment, and the burdens of widows and fatherless children. By signing this act on August 14, 1935, President Roosevelt became the first president to advocate federal assistance for the elderly.
Provisions of the Act
The Act is formally cited as the Social Security Act, ch. 531, 49 Stat. 620, now codified as 42 U.S.C. ch.7. The Act provided benefits to retirees and the unemployed, and a lump-sum benefit at death. Payments to current retirees are financed by a payroll tax on current workers’ wages, half directly as a payroll tax and half paid by the employer. The act also gave money to states to provide assistance to aged individuals , for unemployment insurance (Title III), Aid to Families with Dependent Children (Title IV), Maternal and Child Welfare (Title V), public health services (Title VI), and the blind (Title X).[12]“
Hmm, I do remember from that it started as just for windows and orphans, and morphed in FDR’s time, to the larger elderly. But perhaps it morphed in congress as it was going from law to bill?
In any event, Springy saying, as I notice now he did, that it wasn’t for the 32 year old who dies with four kids, contradicts his own statement it was for Widows and Orphans.
.
So this must be what Springy and I are both referring to:
Social Security as it would be recognized today did not actually come into being in America until 1935, but there was one significant predecessor, a social security program intended for a particular segment of the American population. In the aftermath of the Civil War, there were hundreds of thousands of disabled veterans as well as widows and orphans. Their needs led to the development of a pension plan with similarities to later developments in Social Security. http://www.u-s-history.com/pages/h1609.html
No doubt such a reference appeared in one of my son’s terrible text books and it stuck in the mind. I can’t find the name of the pension program, sadly.
With egg on my face, the widows and orphans section of Social Security didn’t come until 1939. Still, I might add for Springy’s benefit, this was still in FDR’s administration, no great morphing going on.
“those individuals on Medicare do buy private insurance to supplement their Medicare benefit”
supplement? Why do “fiscally free individuals” choose to keep themselves “leashed and collared” to Medicare – even in part – instead of going out and buying private health insurance on teh awesome open market and then relying on it for all their health care needs, as I asked you originally?
Gosh, it is almost as if you are trying to dodge the question.
Paul Ryan made use of this aspect of SS I hear. i do not begrudge him, even though I didn’t get to use it. I am not crying about how it is not fair but them I am not a conservative.
I think you need to review those numbers. If you compare what you put in to what you take out over its lifetime, SS is really good.
Would you like fries with that?
Hell yes Noah you are on the RIGHT TRACK!!!
In your next article say the taboo word that the right is afraid to say BECAUSE IT IS WHAT THEY ARE BUT THEY DO NOT KNOW IT…..NEOLIBERAL…. Chile is in turmoil because of the Chicago boys social engineering, it is not a model of success.
NEOLIBERAL IS WHAT CHILE IS NOAH it was an experiment.
Friedman’s ideas are not based on the science of economics rather they are based on the science of psychology and that is, as we see around western oriented economies, a recipe for turmoil. Greece is a perfect example of the consequence of the neoliberal doctrine.
IS IT REALLY PSYCHOLOGY NOT ECONOMIC THEORY & IS IT UNHEALTHY?
http://www.opednews.com/articles/The-Awful-Revolution-Is-N-by-Benjamin-Winegard-110415-653.html
The Chicago school of economics describes a neoclassical school of thought within the academic community of economists.
Although neoclassical theory dominates the economics discipline it is actually a psychological theory:
At the core of the theory is a specific reductionist theory of human decision making and rationality that is then applied to economic (and other) phenomena.
All human decision making is assumed to be driven by the pursuit of individual pleasure/happiness.
This pleasure is defined, within the theory, as utility. Thus, the economic man (homo economicus) is a utility maximizer. Market exchanges are defined as simple trades between equally powerless economic men trying to maximize their individual pleasure………………
AND THE CONSEQUENCES OF THE CHICAGO BOYS INFLUENCE….. August 12, 2011
The recent outbreak of mass protests from Santiago to Tel Aviv shows that capitalism doesn’t need to be in “crisis” to be effectively contested.
It is an oft-repeated cliché in political economy and sociology that economic crises tend to lead to social unrest. As Jürgen Habermas wrote in his landmark text, Legitimation Crisis, crises of capitalism quickly tend to morph into crises of representative democracy. We have recently seen this in Spain and Greece, where millions of people have taken to the streets against their political representatives, demanding direct democracy instead.
But the recent outburst of mass demonstrations in Chile and Israel tells a different story altogether. Unlike Spain and Greece, where the economy has been stagnating or contracting for the past three years, and where unemployment is skyrocketing to obscene levels, Chile and Israel have been enjoying steady growth and low unemployment. Still, life in these countries is becoming increasingly unbearable for most of the lower and middle class.
As a result, these so-called neoliberal “success stories” are now both experiencing unprecedented social protests. And with the popularity of Netanyahu and Piñera collapsing, it is starting to look like 2011 could mark a watershed for these countries in their struggle for social justice.
Chile’s Students Protests
If the Arab Spring has lost its bloom halfway across the world, people here are living what some have come to call a Chilean Winter. Segments of society that had been seen as politically apathetic only a few years ago, particularly the youth, have taken an unusually confrontational stance toward the government and business elite, demanding wholesale changes in education, transportation and energy policy.
~ Alexei Barrionuevo, New York Times, August 5, 2011
This Tuesday, over 100,000 students, teachers, parents and sympathetic activists took to the streets of Santiago for the fifth time in just two months to demand radical reforms to the country’s education system and constitution. Occupying colleges, going into hunger strikes, and holding random kiss-ins, angry students have been protesting in innovative ways against the unaffordable cost and low quality of higher education in the country.
The fact that these protests are occurring in Chile makes them all the more relevant. During Pinochet’s brutal military dictatorship (1973-1990), Chile was considered the principal neoliberal laboratory in the world. Directly after the bloody US-backed coup against the democratically-elected socialist government of Salvador Allende, Milton Friedman, the godfather of the neoliberal Chicago School, visited Chile and advised Pinochet on economic reforms.
Immediately afterwards, a group of US-trained Chilean economists known as the Chicago Boys was brought in to oversee some of the most far-reaching neoliberal reforms ever attempted anywhere. The only reason they could be pushed through is because opponents of the regime were systematically exterminated — over 3,000 people were killed and at least 29,000 tortured. The reforms left Chile with one of the most market-oriented societies in the world.
According to the Guardian, the protests are the “latest evidence that long dormant Chilean youth are rebelling against the orthodox free market ideology that dominates everyday Chilean life. In recent years, for example, it was common for private hospitals to impose a 100% surcharge for babies born outside business hours.” It is against this autistic neoliberal idea that education and health care are services, not public goods, that young Chileans rebel.
According to a report by the Guardian, “[President] Piñera, who took power a year and a half ago and appointed a cabinet filled with technocrats in a perceived bid to make government run like a business, has alienated many Chileans with his policies.” Piñera’s approval rating has plummeted to a dismal 26 percent as a result, the lowest rating since the reintroduction of democracy in 1990. The students, in the meantime, enjoy an epic 72 percent rate of citizen support.
and the rest http://roarmag.org/2011/08/in-chile-and-israel-a-revolt-against-market-fundamentalism/
Any privatization will require the government to mandate people save money.
And any privatization carries with it a very real risk of later public program.
If we privatize “social security” – what happens if old folks lose money and don’t have enough to scrap by on?
Do you think that, given the numbers that old folks vote in, that politicians won’t have to deal with the problem?
We will see both Republicans and Democrats racing to establish “Social Security Part 2″ that will essentially recreate the social security we have today to help fund the loses suffered by letting people invest their money in the private accounts (because you know Wall Street will get the ability to let those people invest in investments that are to risky for their age) and the politicians will not have the guts to tell those old voters “Sorry, you are on your own, best of luck” because they will be voted out and replaced by the person who says, “Of course the government will help you”…
That’s why I see the whole privatization thing to be one more Wall Street backed scheme, where market upsides will see huge amounts of capital siphoned off to various pockets, and where market downsides will suddenly require federal bailout.
See S&L crisis. See derivatives meltdown. How many more times do we need to go through this before we realize what’s going on?
Oh yes, exactly, guys! If they got their dream to destroy SS I don’t know what they think would happen then. Eventually greedy capitalists with little or no regulation will cause a bursting bubble and old folk will be starving in the streets and then bingo SS will be safe for another hundred years. Same with Medicare. Same with Medicaid. Look what Bush did with part D. What a boondoggle to both the older folk AND the pharmaceutical companies. The right does not want to install or support sensible policy, I guess because their voters are nuts but come on.
On those online political tests, I scored as “authoritarian conservative.”
The two public figures whose political views scored closest to my own were: Rudy Giuliani and Augusto Pinochet.
“On those online political tests, I scored as “authoritarian conservative.”
What a surprise. And why leave out Mussolini? Disappeared anyone lately Sinz?
(Interestingly the only person to strike a bum note yesterday was Giuliani)
I scored as “authoritarian conservative.”
Shocking. In other, slightly more unexpected news, the sun rose today.
I suspect those who use the word ‘freedom’ the most, tend most to test ‘authoritarian’. Which is pretty ironic.
But it’s pretty much the stance, which can be summed up as “Freedom for me; Freedom for you if you do what is OK with me”
It was dead right then. As you advocate genocide you fit right alongside Pinochet.
Is Sinz trolling himself?
That is something you need to keep to yourself. Pinochet, really? My family is from South America, They are pretty moderate people. They, meaning grandma, grandpa, aunts, uncles FEARED Pinochet. And Giuliani, that man has no integrity what so ever. Just because you may share similar points of views, does not mean you should ignore the fact that he is an asshole.
Don’t worry, Sinz – I tested out as slighty to the Right of Attilla the Hun…
“Death Penalty for Parking Violations!”
For Sinz to sing in the shower:
http://www.youtube.com/watch?v=q6x9ZRlrjxw
I think we are all a bit confused what your point is here. Are you bragging about this connection or dismissing the test?
And if you are bragging about being like Mr. Pinochet, for lord’s sake why?
Elvis Elvisberg // Sep 12, 2011 at 9:59 am again sprawls his favorite bar chart across the browsers of a grateful nation. We are reminded that the USA spends the most money per capita on health care of any of the OECD nations. Elvis’s favorite diagram, as many of his posts, does make one pause to reflect on the fact. Herewith some reflections Mark Steyn on the matter:
“While we’re on the subject, why is our higher per capita health spending by definition a bad thing? We spend more per capita on public education than any advanced nation except Luxembourg, and at least Luxembourgers have something to show for it. But no one says we need to bring our education spending down closer to the OECD average. Au contraire, the same people who say we spend spend too much on health care are in favor of spending even more on education.”
While we’re on the subject, why is our higher per capita health spending by definition a bad thing?
It would be a wonderful thing if by all indices our healthcare was superior to other nations.
But we manage to spend that much and still not cover a significant portion of our population with basic healthcare … while countries spending half what we do per capita accomplish this function.
Not that Mark Steyn actually cares, mind you.
As far as outcomes are concerned, I expect that if you look at parts of the USA whose economic and social makeup is similar to that of Norway or Switzerland you would find health indices similar to those of Norway and Switzerland.
It would be informative if the bars in Elvis’s charts were split into two parts: care delivery and required overhead. Realistic figures would correct for regulatory, legal, and other overheads in the USA with those of other countries to put expenditures on a comparable basis. Compare the required office overhead staff necessary in a typical US practice or hospital with one, say, in Germany, France, or Switzerland and see how we come out.
Compare the required office overhead staff necessary in a typical US practice or hospital with one, say, in Germany, France, or Switzerland and see how we come out.
LOL – and then check just how much of that staff is necessary to deal with the multiple different formats that multiple different insurance companies require for filing claims, as well as the management of appeals for denied claims, as well as the pursuit of payment from recalcitrant insurance companies, foot-dragging former patients, and those who simply end up declaring bankruptcy when their medical bills get too great.
“I expect that if you look at parts of the USA whose economic and social makeup is similar to that of Norway or Switzerland you would find health indices similar to those of Norway and Switzerland.”
Apparently according to our ever so patriotic Churl all those red states aren’t actually part the USA. Statisticians please not in future all comparisons between the US and it peers groups will only be made using data subsets where the US numbers look best. Eg. The wealth of Sonoma county will be compared with that of Poland. You get the idea.
“Compare the required office overhead staff necessary in a typical US practice or hospital with one, say, in Germany, France, or Switzerland and see how we come out.”
Btw Churl I think Columbia have just released a study showing US doctors earn twice or more than their peer group in Europe. Yep it was Columbia but heck Churl what does empirical evidence mean to you.
http://www.nytimes.com/2011/09/08/us/08docs.html?scp=1&sq=US%20doctors%20paid%20more&st=cse
“Realistic figures would correct for regulatory, legal, and other overheads in the USA with those of other countries to put expenditures on a comparable basis.”
Churl is priceless. He thinks the regulatory burden on healthcare is greater here than in Europe. And for your info Churl (I know you’re a low info voter so see this as a public service) the total cost of all malpractice insurance premiums and payouts is less than 1% of GDP so how do explain the difference between our health system costing 16-17% of GDP whereas that of backward countries like Japan or France cost half this?
That would be the midwest, where lifestyles are the unhealthiest next to the South. So I think you’d lose that bet.
“Not that mark Steyn actually cares…”
No, not that.
Per capita. Per PUPIL, or as a percentage of GDP, we are fairly average for the OECD the last time I looked. It also matters at what level you are looking at (K-12? Including college? Including private dollars or just PUBLIC expenditures?) That said, I would agree our educational system does not serve us very well. However, as I am sure you are aware, most of the decisions are made at the state/local level. Are you advocating for more federal involvement? Or what are you advocating?
Well, you kinda have to look at percentages of GDP if you want to factor in the cost of living for teachers and administration and the costs of operating school facilities.
Sure, and that’s the answer to Mark Steyn’s question, isn’t it? Nobody talks about educational costs since as a percent of GDP they aren’t currently out of whack (and threatening to become overwhelmingly so) with the rest of the developed world.
And, for the record, I’m not saying it doesn’t need an overhaul, or that throwing more money will fix the structural problems endemic in the way we have developed the system.
Because we get bad results.
This study puts us in 37th place http://hipsubwg.blogspot.com/2009/08/how-does-us-health-care-rank-compared.html (this criticism says it should put us at 15 http://online.wsj.com/article/SB125608054324397621.html ).
This one gave us a failing grade, noting that of the couple dozen countries surveyed, we were worst in infant mortality and worst in life expectancy once people reached age 60: http://www.naturalnews.com/020493.html . On this one, we ranked 7th, 4 straight years: http://www.ritholtz.com/blog/2010/06/us-ranks-last-in-healthcare/ . Now the bad news: there were only 7 countries in the study.
balconesfault is quite right, of course– Steyn doesn’t care. That’s only policy, it’s only data about the quality of people’s lives. Such things pale in comparison to defending GOP talking points and the status quo.
Elvis,
Good for you in linking to that WSJ piece, which is the most important thing to read out of your links, and as a far as I’m concerned, destroyed the points made in the other links. Those statistics are misleading in so many ways. Life expectancy is not the best way to measure a nation’s health insurance system. Our life expectancy is dragged down by the fact that many Americans die of gunshot wounds and car accidents, which says nothing about our system of health insurance. Do liberals really think that if we had a public option or Medicare for all that America would magically see a drop in the rates of homicide and deadly car accidents? We also heroically try to save every premature infant no matter how long the odds are (my wife can attest to this have worked in a NICU), and any premature death is counted against our infant mortality rate, unlike many other countries that do not apply premature death rates against their infant mortality rate.
Hey, intellectual honesty is my middle name (I mean, why not, it’s already a silly enough name). It seemed fair & important to link to that criticism.
But I do think you’re overreading it.
Yes, comparisons are hard to do; yes, we can always criticize certain aspects of a given ranking; yes, mere citing of life span doesn’t address the whole issue of the quality of health care. All true and worth bearing in mind.
But these are a whole bunch of comprehensive studies that look at a whole range of issues, and they all conclude that the US does poorly, even apart from the fact that we pay twice as much as everybody else.
In the WSJ article you liked so much, Dr. Philip Musgrove said that not everything can be ranked— “I think it’s a fool’s errand.”
But elsewhere, Dr. Musgrove said, “The United States mostly manages to provide emergency care, but there’s no uniform system to guarantee that it happens, let alone to ensure that everyone is covered for nonemergency medical needs. In any comparison of health systems, the United States stands out at the extreme end of the spectrum, and not in a good way.” http://content.healthaffairs.org/content/25/6/1664.full?sid=1e6b2b9c-1b92-4ef9-972c-8a9dd6ef15d8
And the Natural News link above described a study that found:
We can’t just cling to that one WSJ article and say, “it’s all too hard, we can’t compare anything to anything else.” Yes, we can. It can be difficult, it can be done poorly, and any given comparison can contain a certain amount of arbitrariness. But study after study finds that we fall short on a whole bunch of measurements. It compels the conclusion that we are falling short on a whole bunch of measurements.
But since we have a higher infant mortality than most developed nations, the reason those babies are premature, has a lot to do with our healthcare system.
“While we’re on the subject, why is our higher per capita health spending by definition a bad thing?”
It is when the OECD also rank something us something like number 17 on outcomes like infant mortality, life expectancy etc. It’s called cost/benefit not that this concept means much Steyn, he thinks invading Iraq was great value for money. Apparently you aren’t too interested in cost/benefit either.
Well, I’d rather deal with Elvis’ charts than your vitriol sprawled across my browser.
Herman’s head might explode if he knew about their health care too:
“The National Health Fund (Fonasa), created in 1979, is the financial entity entrusted to collect, manage and distribute state funds for health in Chile. It is funded by the public. All employees pay 7% of their monthly income to the fund.”
http://en.wikipedia.org/wiki/Chile#Administrative_divisions
Hey Conservatives, Chile Has a Mandate! | PrecinctPolitics.net // Sep 12, 2011 at 10:23 am
[...] the entire article by Noah Kristula-Green at FrumForum. Tags: conservatism, FrumForum, health care, health care [...]
NOAH
if you read the two links i put in my previous comment you can see how what i said the other day about you being a leading voice to your generation is potentially just around the corner.
all of the neoliberal countries like us, israel, chile, greece spain etc. have an economic model that is a failed psychological experiment perpetrated by the richard nixon’s and milton friedman’s of the world and your generation is going to be the ones who have to dump it.
you have a real chance to be ahead of the game here when the inevitable change comes by putting yourself out there to young conservatives and explaining to them that the free market is actually not conservative and is totally destructive to the founding principles of republicanism.
Leadership has been described as the “process of social influence in which one person can enlist the aid and support of others in the accomplishment of a common task”. Definitions inclusive of the nature of leadership have also emerged. Alan Keith of Genentech states that “Leadership is ultimately about creating a way for people to contribute to making something extraordinary happen.”
go to israel and team up with a group of their anti neoliberal 20 somethings and then come back and start the movement here.
500,000 protest for social justice in Israel
Sunday 04 September 2011
Nearly 500,000 marchers took to the streets across Israel on Saturday night in protest at the country’s housing crisis and the high cost of living.
The country’s media estimated that 300,000 had demonstrated in Tel Aviv alone. Taken together the protests were the largest in Israel’s history and represent the high point so far of a summer of grass-roots activism under the slogan “The people demand social justice.”
The movement has seen repeated demonstrations and mushrooming “tent cities” across the country.
Marchers carried banners denouncing Prime Minister Benjamin Netanyahu’s NEOLIBERAL economic policies which read: “Privatisation kills the state” and “The market is free, but not us.”
Others made references to the Arab Spring which has swept other countries in the region. A popular sign waved by marchers read: “Revolution in Egypt? Done. Revolution in Tunisia? Done. Revolution in Israel? Under way.”
Crowds in the capital chanted: “Get off your balconies, the country is collapsing” and “Bibi, Bibi, go home,” a reference to demands that Mr Netanyahu leave office.
Some protesters carried placards reading “Social justice – leave the settlements,” but the majority confined their concerns to domestic issues including the rising cost of housing, education and food and the failure of wages to keep pace with inflation.
Sharon Riwkes, a clinical psychologist on the protests, said: “I’ve had enough of always working and never advancing. You have to work several jobs just to survive.”
National Students Union leader Itzik Shmuli said: “Tonight society will divide into an old type of Israeli who just accepts things the way they are and a new type who will join us in pushing for change.”
in short you, with a message of anti neoliberalism backed up by blatantly obvious facts not whitewashed by propaganda can be a pioneer in putting the cool factor back into conservatism.
I feel a great debate question coming on. Cain’s advisers better get him ready.
For his sake he’d better turn to a better crash tutor than the one who explained the “Palestinian right of return” to him.
wow great thread. This is the Noah I like to read (he has had a couple of sub par efforts lately)
“This is the so called free market reforms that Tea Partiers and conservatives claim to be in favor of?” Conservatives maybe, but Tea partiers could not identify Chile on a map of South America. I doubt most could identify it on a map of Chile with the words Chile written right down the spine.
And glad to see Sinz has finally taken the Brown shirt out of his closet. The guy has a bumper sticker that reads:
Everyone is entitled to my opinion.
I haven’t studied the Chilean SS model. The reason I was not for Bush’s SS makeover is that I believe if we had a financial/stock market crash, that the pressure to bailout the system of losses for our elderly would be too great and taxpayers would further have an SS bailout. Plus, the partial/full privatizing of SS is really only in the benefit of those who get to invest our money.
Think about it, trillions of new money put into the money management system. It is either (a) unregulated what is done with it or (b) subject to a whole host of new gov’t regulations (take that – Tea Party!). What happens if a 3rd of the recipients experience losses in their portfolio – who pays for that? What happens if we go through another deep crash where equity values drop 30% – who pays for that? You don’t think that a politician, looking to curry favor with the most reliable voting block on the planet might present a plan to “save America’s Seniors”?
BTW, I feel the same way about Ryan’s health plan. it puts all the onus on the individuals and the states – can’t you just see a trillion dollar bailout when things go sidewise?
Health Care Mandates-Socialistic; Savings Mandates-A great conservative idea // Sep 13, 2011 at 3:47 pm
[...] [...]
Retirement Pension Mandates in Chile and the USA | Brophy World // Sep 14, 2011 at 8:07 am
[...] President, advocate changing their retirement system to be more similar to Chile. In an article at Frum Forum, Noah Kristula-Green argues: Conservatives don’t usually call for the US to emulate other [...]
Gingrich touts mandate-driven ‘Chilean model’ for social security | My Blog // Apr 8, 2012 at 1:56 pm
[...] citing the individual mandate as a violation of personal liberty. But the Chilean pension model relies on a similar regulatory scheme, forcing workers to contribute at least 10 percent of their pre-tax [...]