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Culture War Roundup for the week of February 26, 2024

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Maybe I'm missing it, but isn't Kulak making the basic mistake that Social Security (etc) are, by design, an immediate transfer from the young to the old? I will pay so much more than my 633k in taxes over my career. I get that most people pay less tax, and it doesn't all go to Social Security. Still, the analysis seems to fall short of showing that amount can't be paid off per person.

My prior of "nothing interesting happens" strongly objects, e.g. to

Sometime soon, the economic weight will become non-viable, like a broke gambler doubling his bet each time he loses, the debts will go exponential then asymptotic… and instead of a a lifetime to find a way to squeeze all that money out, there will be a crisis, and the American, probably “provisional” government at that point, will have to decide:

As far as I understand the $200 trillion is the difference between liabilities and tax income if taken from the perspective of government's infinite horizon intertemporal budget constraint. It takes into account the net present value of such liability and the number is 200 trillion. I actually like this calculation even for home budget as you can put on the same playing field different type of spending. Imagine that you want to compare value of drinking a $3 coffee every day compared to let's say once in a lifetime expenditure you are about to undertake such as let's say some medical procedure or even a voucher entitling you to one free coffee for the rest of your life, which for that $3 coffee is around $20,000 net present value with around 5% interest rate. You can use this method to discover ponzi schemes if somebody tries to do magic with cash flow - as the US government wants to do.

Similarly here, the solution can only be to increase taxes to increase income to finance those liabilities, or decrease payouts which means reneging on those liabilities or some combination of thereof. Also you are correct that Social Security is a transfer from young to the old but with implicit assumption that the young will receive similar from young if they themselves are old. Except there is a huge risk that by the time it should happen the boomer or even Gen X generation will be long dead and the Millenials and Zoomers will end up with no place to sit in this metaphorical musical chairs game.

Unfunded liabilities have an open time window, ie those obligations are what we expect to pay out over the next 50, 75, 100, 200 years...

Most of the people who will pay the taxes for that money haven't been born yet.

So the operation of dividing that number by the total number of current citizens and saying we each have to pay our $X share, is just transparently wrong and misleading.

Nothing happens, until it does. The American currency depends on the American navy regulating and protecting international trade, and you can only get embarrassed by so many Vietnamese Aghans Iraqis Houthi "cavemen" until everyone just kind of shrugs