This cannot go on forever because at some point there just aren’t enough new investors to support the earlier entrants. Word gets around that there are no profits, just money transferred from new to old. The merry-go-round stops, the scheme collapses and the remaining investors lose everything.
Now, Social Security is a pay-as-you-go program. A current beneficiary isn’t receiving the money she paid in years ago. That money is gone. It went to her parents’ Social Security check. The money in her check is coming from her son’s FICA tax today—i.e., her “investment” was paid out years ago to earlier entrants in the system and her current benefits are coming from the “investment” of the new entrants into the system. Pay-as-you-go is the definition of a Ponzi scheme.
So what’s the difference? Ponzi schemes are illegal, suggested one of my colleagues on Inside Washington.
But this is perfectly irrelevant. Imagine that Charles Ponzi had lived not in Boston but in the lesser parts of Papua New Guinea where the securities and fraud laws were, shall we say, less developed. He runs his same scheme among the locals—give me (“invest”) one goat today, I’ll give (“return”) you two after six full moons—but escapes any legal sanction. Is his legal enterprise any less a Ponzi scheme? Of course not.
So what is the difference?
Proposition 2: The crucial distinction between a Ponzi scheme and Social Security is that Social Security is mandatory.
That’s why Ponzi schemes always collapse and Social Security has not. When it’s mandatory, you’ve ensured an endless supply of new participants. Indeed, if Charles Ponzi had had the benefit of the law forcing people into his scheme, he’d still be going strong—and a perfect candidate for commissioner of the Social Security Administration.
But there’s a catch. Compulsion allows sustainability; it does not guarantee it. Hence …
Proposition 3: Even a mandatory Ponzi scheme such as Social Security can fail if it cannot rustle up enough new entrants.
You can force young people into Social Security, but if there just aren’t enough young people in existence to support current beneficiaries, the system will collapse anyway.
When Social Security began making monthly distributions in 1940, there were 160 workers for every senior receiving benefits. In 1950, there were 16.5; today, 3; in 20 years, there will be but 2.
Now, the average senior receives in Social Security about a third of what the average worker makes. Applying that ratio retroactively, this means that in 1940, the average worker had to pay only 0.2% of his salary to sustain the older folks of his time; in 1950, 2%; today, 11%; in 20 years, 17%. This is a staggering sum, considering that it is in addition to all the other taxes he pays to sustain other functions of government, such as Medicare, whose costs are exploding.
The Treasury already steps in and borrows the money required to cover the gap between what workers pay into Social Security and what seniors take out. When young people were plentiful, Social Security produced a surplus. Starting now and for decades to come, it will add to the deficit, increasingly so as the population ages.
Demography is destiny. Which leads directly to Proposition 4: This is one Ponzi scheme that can be saved by adapting to the new demographics.
Three easy steps: Change the cost-of-living measure, means-test for richer recipients and, most important, raise the retirement age. The current retirement age is an absurd anachronism. Bismarck arbitrarily chose 70 when he created social insurance in 1889. Clever guy: Life expectancy at the time was under 50.
When Franklin Roosevelt created Social Security, choosing 65 as the eligibility age, life expectancy was 62. Today it is almost 80. FDR wanted to prevent the aged few from suffering destitution in their last remaining years. Social Security was not meant to provide two decades of greens fees for baby boomers.
Of course it’s a Ponzi scheme. So what? It’s also the most vital, humane and fixable of all social programs. The question for the candidates is: Forget Ponzi—are you going to fix Social Security?
The Washington Post, September 15, 2011
THE CHURCH OF GLOBAL WARMING
I’m not a global warming believer. I’m not a global warming denier. I’m a global warming agnostic who believes instinctively that it can’t be very good to pump lots of CO2 into the atmosphere but is equally convinced that those who presume to know exactly where that leads are talking through their hats.
Predictions of catastrophe depend on models. Models depend on assumptions about complex planetary systems—from ocean currents to cloud formation—that no one fully understands. Which is why the models are inherently flawed and forever changing. The doomsday scenarios posit a cascade of events, each with a certain probability. The multiple improbability of their simultaneous occurrence renders all such predictions entirely speculative.
Yet on the basis of this speculation, environmental activists, attended by compliant scientists and opportunistic politicians, are advocating radical economic and social regulation. “The largest threat to freedom, democracy, the market economy and prosperity,” warns Czech president Vaclav Klaus, “is no longer socialism. It is, instead, the ambitious, arrogant, unscrupulous ideology of environmentalism.”
If you doubt the arrogance, you haven’t seen that Newsweek cover story that declared the global warming debate over. Consider: If Newton’s laws of motion could, after 200 years of unfailing experimental and experiential confirmation, be overthrown, it requires religious fervor to believe that global warming—infinitely more untested, complex and speculative—is a closed issue.
But declaring it closed has its rewards. It not only dismisses skeptics as the running dogs of reaction, i.e., of Exxon, Cheney and now Klaus. By fiat, it also hugely re-empowers the intellectual left.
For a century, an ambitious, arrogant, unscrupulous knowledge class—social planners, scientists, intellectuals, experts and their left-wing political allies—arrogated to themselves the right to rule either in the name of the oppressed working class (communism) or, in its more benign form, by virtue of their superior expertise in achieving the highest social progress by means of state planning (socialism).
Two decades ago, however, socialism and communism died rudely, then were buried forever by the empirical demonstration of the superiority of market capitalism everywhere from Thatcher’s England to Deng’s China, where just the partial abolition of socialism lifted more people out of poverty more rapidly than ever in human history.
Just as the ash heap of history beckoned, the intellectual left was handed the ultimate salvation: environmentalism. Now the experts will regulate your life not in the name of the proletariat or Fabian socialism but—even better—in the name of Earth itself.
Environmentalists are Gaia’s priests, instructing us in her proper service and casting out those who refuse to genuflect. (See Newsweek above.) And having proclaimed the ultimate commandment—carbon chastity—they are preparing the supporting canonical legislation that will tell you how much you can travel, what kind of light you will read by and at what temperature you may set your bedroom thermostat.
Only Monday, a British parliamentary committee proposed that every citizen be required to carry a carbon card that must be presented, under penalty of law, when buying gasoline, taking an airplane or using electricity. The card contains your yearly carbon ration to be drawn down with every purchase, every trip, every swipe.
There’s no greater social power than the power to ration. And, other than rationing food, there is no greater instrument of social control than rationing energy, the currency of just about everything one does and uses in an advanced society.
So what does the global warming agnostic propose as an alternative? First, more research—untainted and reliable—to determine (a) whether the carbon footprint of man is or is not lost among the massive natural forces (from sunspot activity to ocean currents) that affect climate and (b) if the human effect is indeed significant, whether the planetary climate system has the homeostatic mechanisms (like the feedback loops
in the human body, for example) with which to compensate.
Second, reduce our carbon footprint in the interim by doing the doable, rather than the economically ruinous and socially destructive. The most obvious step is a major move to nuclear power, which to the atmosphere is the cleanest of the clean.
But your would-be masters have foreseen this contingency. The Church of the Environment promulgates secondary dogmas as well. One of these is a strict nuclear taboo.
Rather convenient, is it not? Take this major coal-substituting fix off the table and we will be rationing all the more. Guess who does the rationing.
The Washington Post, May 30, 2008
CHAPTER 9
BODY AND SOUL
THE DUTCH EXAMPLE
In 1991 in the Dutch city of Assen, a perfectly healthy 50-year-old woman asked her doctor to help her die. Her two sons had died, one by suicide, one by cancer. She wanted to join them. After many hours of consultation, Dr. Boudewijn Chabot consented. He was at her side when she swallowed the lethal pills he prescribed for her death.
In Holland, physician-assisted suicide is for all practical purposes legal, but Dr. Chabot was tried anyway because this woman wasn’t terminally ill. She wasn’t even ill. In fact, she wasn’t even psychiatrically ill, a point that at trial Dr. Chabot made in his own defense. She was as lucid as she was inconsolable.
The three-judge court in Assen acquitted Dr. Chabot. So did an appeals court. So did the Dutch Supreme Court. Thus, notes Dr. Herbert Hendin (in his indispensable study of euthanasia in Holland, Seduced by Death: Doctors, Patients, and the Dutch Cure), has Holland “legally established mental suffering as a basis for euthanasia.”
Why is this important for Americans? Because on Wednesday the U.S. Supreme Court was asked to decide whether physician-assisted suicide should be legal in America, as in Holland. The two cases before the court both involved the terminally ill. But the deployment of these heartrending cases of terminal illness is part of the cunning of the euthanasia advocates. They are pulling heartstrings to get us to open the door. And once the door opens, it opens to everyone, terminally ill or not.
How do we know? At oral arguments on Wednesday, Justice David Souter asked that question in one form or another at least four times: Once you start by allowing euthanasia for the terminally ill, what evidence is there that abuses will follow?
The answer, in a word, is Holland. I’m not even talking here about the thousand cases a year—in the United States that would translate into 20,000 cases a year—of Dutch patients put to death by their doctors without their consent. (Most, by the way, are killed not for reasons of pain but, as the doctors put it, for “low quality of life” or because “all treatment was withdrawn but the patient did not die.”) I’m talking here about Dutch doctors helping the suicide of people not terminally ill, not chronically ill, not ill at all but, like our lady of Assen, merely bereft.
Eugene Sutorius, the prominent Dutch attorney who defended Dr. Chabot, said after winning his case: “Euthanasia, which started with terminal illness, has moved to a different plane.” And so it must. Why? Because in moving “to a different plane,” the Dutch were not being perverse. They were being logical.
By what logical principle should the relief of death be granted only the terminally ill? Such a restriction is itself perverse. After all, the terminally ill face only a brief period of suffering. The chronically ill, or the healthy but bereft—they face a lifetime of agony. Why deny them the relief of a humane exit?
The litigants before the Supreme Court, however, claimed the right to assisted suicide on the grounds not of mercy but of liberty—the autonomy of individuals to determine when and how they will die.
But on what logical grounds can this autonomy be reserved only for the terminally ill? Why not for every mentally competent adult? Wednesday at the Supreme Court, the lawyers for the euthanasia side, Kathryn Tucker and Laurence Tribe, turned somersaults trying to answer the question. Tribe offered a riff on the stages of life—“life, though it feels continuous to many of us, has certain critical thresholds: birth, marriage, child-bearing. I think death is one of those thresholds.” It nearly got him laughed out of court when Justice Scalia cut him off with, “This is lovely philosophy. Where is it in the Constitution?”
Tribe had no answer because there is no answer. If assisted suicide is a right for the terminally ill, there is no argument that can be made to deny it on grounds of mercy or autonomy or nondiscrimination to anyone else who might request it.
That is why the Supreme Court decision in these two cases will be so fateful. That is why euthanasia advocates are so passionate about them. They know this is the beginning of something much larger: nothing less than historic legitimation—through the active, legal, societally blessed participation of the medical profession—of suicide.
In modern society, suicide is no longer punished (denial of burial on church grounds, denial of inheritance to the family). But it is still discouraged. When you see someone on a high ledge ready to jump, you are enjoined by every norm in our society to tackle him and pull him back from the abyss. We are now being asked to become a society where, when the tormented soul on the ledge asks for our help in granting him relief, we oblige him with a push.
They do it in Assen.
The Washington Post, January 10, 1997
STEM CELLS AND FAIRY TALES
After the second presidential debate, in which John Kerry used the word plan 24 times, I said on television that Kerry has a plan for everything except curing psoriasis. I should have known there is no parodying Kerry’s pandering. It turned out days later that the Kerry campaign has a plan—nay, a promise—to cure paralysis. What is the plan? Vote for Kerry.
This is John Edwards on Monday at a rally in Newton, Iowa: “If we do the work that we can do in this country, the work that we will do when John Kerry is president, people like Christopher Reeve are going to walk, get up out of that wheelchair and walk again.”
In my 25 years in Washington, I have never seen a more loathsome display of demagoguery. Hope is good. False hope is bad. Deliberately, for personal gain, raising false hope in the catastrophically afflicted is despicable.
Where does one begin to deconstruct this outrage?
First, the inability of the human spinal cord to regenerate is one of the great mysteries of biology. The answer is not remotely around the corner. It could take a generation to unravel. To imply, as Edwards did, that it is imminent if only you elect the right politicians is scandalous.
Second, if the cure for spinal cord injury comes, we have no idea where it will come from. There are many lines of inquiry. Stem cell research is just one of many possibilities, and a very speculative one at that. For 30 years I have heard promises of miracle cures for paralysis (including my own, suffered as a medical student). The last fad, fetal tissue transplants, was thought to be a sure thing. Nothing came of it.
As a doctor by training, I’ve known better than to believe the hype—and have tried in my own counseling of people with new spinal cord injuries to place the possibility of cure in abeyance. I advise instead to concentrate on making a life (and a very good life it can be) with the hand one is dealt. The greatest enemies of this advice have been the snake-oil salesmen promising a miracle around the corner. I never expected a candidate for vice president to be one of them.
Third, the implication that Christopher Reeve was prevented from getting out of his wheelchair by the Bush stem cell policies is a travesty.
George Bush is the first president to approve federal funding for stem cell research. There are 22 lines of stem cells now available, up from one just two years ago. As Leon Kass, head of the President’s Council on Bioethics, has written, there are 3,500 shipments of stem cells waiting for anybody who wants them.
Edwards and Kerry constantly talk of a Bush “ban” on stem cell research. This is false. There is no ban. You want to study stem cells? You get them from the companies that have the cells and apply to the Na
tional Institutes of Health for the federal funding.
In his Aug. 7 radio address to the nation, Kerry referred not once but four times to the “ban” on stem cell research instituted by Bush. At the time, Reeve was alive, so not available for posthumous exploitation. But Ronald Reagan was available, having recently died of Alzheimer’s.
So what does Kerry do? He begins his radio address with the disgraceful claim that the stem cell “ban” is standing in the way of an Alzheimer’s cure.
This is an outright lie. The President’s Council on Bioethics, on which I sit, had one of the world’s foremost experts on Alzheimer’s, Dennis Selkoe from Harvard, give us a lecture on the newest and most promising approaches to solving the Alzheimer’s mystery. Selkoe reported remarkable progress in using biochemicals to clear the “plaque” deposits in the brain that lead to Alzheimer’s. He ended his presentation without the phrase “stem cells” having passed his lips.
So much for the miracle cure. Ronald D. G. McKay, a stem cell researcher at NIH, has admitted publicly that stem cells as an Alzheimer’s cure are a fiction, but that “people need a fairy tale.” Kerry and Edwards certainly do. They are shamelessly exploiting this fairy tale, having no doubt been told by their pollsters that stem cells play well politically for them.
Politicians have long promised a chicken in every pot. It is part of the game. It is one thing to promise ethanol subsidies here, dairy price controls there. But to exploit the desperate hopes of desperate people with the promise of Christ-like cures is beyond the pale.
There is no apologizing for Edwards’ remark. It is too revealing. There is absolutely nothing the man will not say to get elected.
The Washington Post, October 15, 2004
THE TRUTH ABOUT
END-OF-LIFE COUNSELING
Let’s see if we can have a reasoned discussion about end-of-life counseling.
Things That Matter: Three Decades of Passions, Pastimes and Politics Page 16