John Bogle and SS

[doodle]

What is Bogle talking about here?

Since when does SS and medicare rely on money? I thought it relied on the productivity of our workforce.

This whole discussion of when SS and medicare are going to be bankrupt flabbergasts me because it is so totally inane!!!

http://www.cnbc.com/id/100813619

[MediumTex]

It's just otherwise intelligent people caught up in a flawed mental framework.

He's accepting bad premises without realizing it, and it's leading to bad conclusions.

I wish I could say that this didn't happen very often, but unfortunately it happens all of the time, whether you are talking about economics, politics, religion or UFOs.

[jbrown]

Since when does SS and medicare rely on money? I thought it relied on the productivity of our workforce.

Doesn't compute. How does productivity translate into SS and medicare payments if not by money?

[Xan]

I think this analogy is on these boards elsewhere, but I'll paraphrase it.

Suppose in the future there's one doctor in the country, and millions of old people who all need medical services.

Regardless of how many billions of dollars these people have saved, there simply isn't enough medical care to go around (and it will be VERY expensive).  The same thing can extend to food, clothing, housing, whatever.

Basically, regardless of where the money is, the productive part of the country needs to be capable of providing for the unproductive part of the country.

[jbrown]

Suppose in the future there's one doctor in the country, and millions of old people who all need medical services.

How about we not suppose that since it's nonsense.

Regardless of how many billions of dollars these people have saved, there simply isn't enough medical care to go around (and it will be VERY expensive).

See above. If you only have one doctor I concede the point that it would get very expensive.

Basically, regardless of where the money is, the productive part of the country needs to be capable of providing for the unproductive part of the country.

So there really is no point in saving money then? Once we're unproductive we're totally at the mercy of the productive?

[doodle]

Suppose in the future there's one doctor in the country, and millions of old people who all need medical services.

How about we not suppose that since it's nonsense.

Regardless of how many billions of dollars these people have saved, there simply isn't enough medical care to go around (and it will be VERY expensive).

See above. If you only have one doctor I concede the point that it would get very expensive.

Basically, regardless of where the money is, the productive part of the country needs to be capable of providing for the unproductive part of the country.

So there really is no point in saving money then? Once we're unproductive we're totally at the mercy of the productive?

Im not saying that money isnt important. I just think it is a distraction from the real issue, which Xan so clearly explained. Its about productive resources, not money. To save money for medicare payments by cutting spending on health care education programs doesnt make much sense. Setting money aside for a second, our society will consume the health care services it is able to produce....no more and no less.

[Pointedstick]

Once we're unproductive we're totally at the mercy of the productive?

Uh, yeah. Who else is going to be providing the things we hope to buy with the money we've saved?

[Xan]

Suppose in the future there's one doctor in the country, and millions of old people who all need medical services.

How about we not suppose that since it's nonsense.

I don't think it's terribly nonsensical.  There could easily, even likely, be a doctor shortage going forward.  Taking it to the extreme makes it easier to see my point.  You might try stretching your brain a little more often to make sure it's flexible enough to handle a simple thought experiment.

Regardless of how many billions of dollars these people have saved, there simply isn't enough medical care to go around (and it will be VERY expensive).

See above. If you only have one doctor I concede the point that it would get very expensive.

I wasn't aware we were having an argument; you had asked a question and I attempted to answer it.  But thanks for the concession.  In any case, you realize that it would be expensive, but not that it would be completely unavailable to virtually everyone?

Basically, regardless of where the money is, the productive part of the country needs to be capable of providing for the unproductive part of the country.

So there really is no point in saving money then? Once we're unproductive we're totally at the mercy of the productive?

Of course there is.  We save money in the hope that somebody else will want that money later, so that we can exchange it for other things that we want.

There's no guarantee, really, that people will want what we've been saving up, nor that they'll have what we want in exchange.

[MediumTex]

jbrown is new.  Give him some time to let everything soak in.

Welfare programs of any kind never "go broke."  Rather, they simply begin poisoning the entire economy because they attempt to skim more off the private sector than the private sector can give up while continuing to function productively.  Sort of like what happens in communist countries.

Ironically, it's usually the private sector that goes broke long before the welfare programs do.