Chilean Social Security: You Had Me At "Handout"
During last week's little dust-up over Chilean social security, a rock of conservative wisdom was launched from the din:
Giving pensions to people who did not pay into the system is a disincentive to work.
At a simple squeeze of the fist, that rock stays firm and does not crumble like all its dirt clod compatriots. Why? Because social security is the same as welfare. Welfare is giving money to unemployed people of working age. Social security is giving money to unemployed people who are not of working age. There is no difference.
Now I know you bleeding heart Latte Liberals, you Cappuccino Communists, you Macchiato Marxists would pose some false choice like:
A hungry 30-year-old is offered a job. He will:
a) take the job and stave off starvation
b) refuse the job and why worry because in 35 years he knows Uncle Higgins is going to hand feed his lazy baby face with a tax-payer funded silver spoon
Sure those Triple-shot Trotskyites want to Manchurian Candidate us into choosing "a" but you can't fool me: there's a rabid mob of rank-in-file 30-is-the-new-20-something Eurotrash wannabes poised to pounce at the chance of starving while the government foots the bill.
And don't think I've forgotten about you Recreational Retirees who're now milking the system for all its worth after a life spent prancing about the south of France or, as the liberal biased media would have it, being:
Giving pensions to people who did not pay into the system is a disincentive to work.
At a simple squeeze of the fist, that rock stays firm and does not crumble like all its dirt clod compatriots. Why? Because social security is the same as welfare. Welfare is giving money to unemployed people of working age. Social security is giving money to unemployed people who are not of working age. There is no difference.
Now I know you bleeding heart Latte Liberals, you Cappuccino Communists, you Macchiato Marxists would pose some false choice like:
A hungry 30-year-old is offered a job. He will:
a) take the job and stave off starvation
b) refuse the job and why worry because in 35 years he knows Uncle Higgins is going to hand feed his lazy baby face with a tax-payer funded silver spoon
Sure those Triple-shot Trotskyites want to Manchurian Candidate us into choosing "a" but you can't fool me: there's a rabid mob of rank-in-file 30-is-the-new-20-something Eurotrash wannabes poised to pounce at the chance of starving while the government foots the bill.
And don't think I've forgotten about you Recreational Retirees who're now milking the system for all its worth after a life spent prancing about the south of France or, as the liberal biased media would have it, being:
the poor and self-employed, housewives, street vendors and farmers who saved little for retirementCry me a Riviera. I hope you're enjoying these retroactive government handouts that disincentivized you from working. But while I detest your Bohemian lifestyle, I have to handout it to you: that's a card well played.
posted by Chileno @ 11:50 PM
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4 Comments:
Chileno, I would actully reoword it:
Because social security is the same as welfare but not quite. Welfare is giving money to unemployed people of working age whilst they are actively seeking a job. Social security is giving their own money to unemployed people who are not of working age anymore after a life of hard work. There is no big difference but they are not the same.
(bold is your text, italics my corrections)
The problem I see is that the individual capitalisation system works for people who have a reasonably good income (in Chilean terms) or have been employed for most of their lives. But the new reform actually doesn't address the administration costs, and the libersalization of capital for foreign investment has been too slow. If anything, the reforms will make it more difficult for the poorer and less skilled workers to join the job market. I'm not too sure about the impact on inflation either, if the poor now have more disposable income, surely that will make inflation go up, so with higher prices and with less jobs for the poor, this is a recipe for utter disaster.
Ugh, CL, do you live in an irony-free zone? OBVIOUSLY, I think welfare and social security are extremely different. Prolly more different than you seem to think.
>>>I'm not too sure about the impact on inflation either, if the poor now have more disposable income, surely that will make inflation go up
Disposable income? What planet do you live on? Someone making 20 bucks a month now getting 160 bucks a month so now they've suddenly got "disposable income" ??? I met a taxi driver who worked in a mine his whole life and makes over 500 bucks a month and he's still driving a taxi to make ends meet go talk to him about his "disposable income".
And infusing a little bit more spending power into the economy sure might have some effect on inflation but the real cause of inflation is global food and oil prices and infusing a little bit of cash so that old people can get by slightly better is probably going to help the consumer economy.
Sure, but Lagos raised 1% the V.A.T. That's the kind of measures that really hurt the poor, amazingly, no one complained about it. Why do we pay more in Chile for locally-produced milk instead of saving money buying it from Argentina? That's an insult to the poor, and yes I mean the really poor, the ones who can't make ends meet each month like your taxi driver (by the way, there's a specific tax on fuel).
From my point of view, the actual underlyig issue here is Bachelet's obsession with equality, neglecting growth, let alone education. This reform has been presented to the public as THE big achievement and her legacy, so I share your opinion that this is populism. Although I fail to see why you don't want a fully privatized individual capitalization system in the US - incidentally, one of the richest countries.
If a handout was the solution, we would have solved our poverty problems years ago.
This reform is trying to make the poorest of the poor part of the AFP system. But the real solution is to boost the economy and to generate real jobs so then they can be part of it.
OK, fair enough, the poor will have a bit of extra cash. But what's the point if prices go up? Why there are so many Chileans complaining over lack of jobs, how do you explain so many Peruvians among many other non nationals doing all sort of odd jobs? I know you get quite sensitive over this but there's a real problem of lack of a hard-work ethics. I'm not looking down on anyone, but the least I expect is the government to care about incentives. But Mummy Bachelet is giving some pocket money to her voters so they can complain more and go on and on about "the government not helping us". As your ex president said: Government is not the solution to our problem. Government is the problem.
(Let's not forget that the Bush administration denial over climate change and all that biofuel rubbish is incentivazing the Latin Americans to grow corn making land even more expensive, and so food prices. But you're OK man, you're not a Bush supporter)
Has Bush taken the world so far right that a self-named "liberal" advocates privatized social security and tends to quote Reagan?
I mean, it's a free country you can say what you want but a bit of allegoric advice: if you're a rabid Nazi, not a good idea to go waving a solid red flag. It's confusing.
>>>Although I fail to see why you don't want a fully privatized individual capitalization system in the US - incidentally, one of the richest countries.
If it requires a bailout like the one Chile needs now, then no thanks! And, FYI, just because US is the richest country, doesn't mean US citizens are swimming in money. Ever heard of Katrina? Or dirt-floor houses in Kentucky? The amount of poverty in the US is staggering. In many ways the US is majorly third world and Inequality is getting worse. So just because some North Americans could handle it doesn't mean millions of poor North Americans wouldn't get fucked by the Chilean model.
And taking a step back, is that really how you see the world? That everything would work out fine if we were swimming in cash like every last gringo? What kind of insular, Hollywood-induced delusional weltanschauung ethanol is driving this "Chile Liberal" machine?
Makes corn ethanol look good, and corn ethanol is far less efficient - and way more destructive - than Brazilian cane-based ethanol. Corn ethanol spurring the rape of North American farmland as well (and while my preference among the remaining candidates, Barack Obama is pro-subsidy for corn farmers last time I checked. Wouldn't be surprised if all of them are. What we need is cane ethanol. And driving up sugar prices could only help incentivize the low-carb diet which is recommendable for Chile's severe childhood obesity problem). My point is you can hardly lay all the blame for the high corn prices on South American production.
>>>OK, fair enough, the poor will have a bit of extra cash. But what's the point if prices go up?
Giving cash to the poor is not the cause of rising prices. Inflation, like I explained, is based on many other factors. Giving money to the poor helps them keep pace with inflation. So there's is a point, a very good reason to give them more money. And any minor and marginal inflation caused by this pittance of a pension will be dwarfed by the inflation global oil and food prices have and probably will continue to cause.
>>>I know you get quite sensitive over this but there's a real problem of lack of a hard-work ethics. I'm not looking down on anyone, but the least I expect is the government to care about incentives.
Incentivize people to work hard for higher wages. Don't circle jerk over an "Ethical Wage". Instead, why not impose serious fines on firms that don't pay their workers enough to feed their children? Or shut up.
Also worth investing in education to arm Chileans with higher-paid skills, and developing local industry that requires those skills. Duh.
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