The Full Outsourcing Discussion

GileadGreene writes "Thomas Friedman of the New York Times recently did an interesting Op-Ed piece about the "silver lining of overseas outsourcing": the growth that it generates in the US job market as Indian companies outsource work that US workers are better at. Apparently total exports from US companies to India have grown from $2.5 billion in 1990 to $4.1 billion in 2002 as well. So maybe this outsourcing thing isn't so bad after all." Ultimately, free trade works out well; I think one of the issues is that white collar jobs are just beginning to feel the pinch, and are acting like manufacturers did in the 1970s and 1980s.

Free Trade helps megacorps

Hemos adds: Ultimately, free trade works out well

then I read this in the article:

"look around this office." All the computers are from Compaq. The basic software is from Microsoft. The phones are from Lucent. The air-conditioning is by Carrier, and even the bottled water is by Coke, because when it comes to drinking water in India, people want a trusted brand. On top of all this, Nagarajan said, 90 percent of the shares in 24/7 are owned by U.S. investors.

OK, so that's how Free Trade works out well: domestic workers are put out of jobs but the big multinationals reap the benefits. Where are the phones from Lucent and the the Carrier air conditioners manufacturered? Where does Coke bottle the water? They don't ship it over from the US. They probably have a filtering and bottling plant down the street.

The 90% of the shares owned by US investors aren't owned by your next door neighbours, they're owned by multimillionaire investment traders. They don't give a shit about the people making them the money, they're just cogs in their money-machine.

Saying Free Trade works out well because faceless corporation make billions is just plain wrong.

Re:Free Trade helps megacorps

Also note how the fellow mentions that people want a good brand when buying water: The people don't care about the bottle, just who bottles it.

A good book on branding BS and the marketting that goes with it is No Logo (Naomi Klein) [amazon.ca]. A decent read.

Re:Free Trade helps megacorps

I've read No Logo and I disagree. Branding is an important function. When you run out of toothpaste, do you perform a complete, rational analysis of all competing products? Somehow, I doubt it. I'll bet you just go out and get the same kind you had before. If Colgate consistently produces a product that you like, then why shouldn't you keep buying it? Likewise, I own a Honda Accord and I'm quite pleased with it. I can reasonably expect to be to just as pleased with another Honda if I choose to buy another one. If cars weren't branded, I'd have to tear them apart to make a purchasing decision. I will admit that it's deceitful and stupid when a brand tries to attach itself to a lifestyle, but I think you're ignorant of your own tendencies if you claim that branding is somehow inherently bad.

Re:Free Trade helps megacorps

The only alternative to branding is a market with extremely high barriers to entry (maybe something like airlines), where licensing and government oversight (inspections and a chain of regulations) are required to operate. In such a market, products can be expected to meet certain standards, so the lowest priced option should be satisfactory if you consider those standards to be valuable (what you want). Note, this takes large scale government involvement and standards do not encompass all the needs/desires of the consumer - usually they only outline major needs and leave desire for the seller to detail. The government however, does not keep apace with a changing world as fast as a completely free market would, so innovation is not always invited and sometimes fought. Plus, all taxpayers (let's assume most of the market or consumer base for that market) pay taxes to sustain government regulation. So really, those standards are a tax in themselves.

But ultimately, brands still win because trust, whether the buyer identifies it as such or not, plays a role in economics. A brand functions similar to, but much more effectively, than a price. A brand can identify quality, a consistent product, past experience (HUGE+), and a host of other factors which can be unique or generic to that product. Similarly, price abstracts the value of something in terms which the buyer and seller can quickly relate ("Do I want to spend $x on this?", for example). Competitive price and recognized brand are a proven combination for success.

Re:Free Trade helps megacorps

Branding is an important function.

That is true as far as it goes; if nothing else a brand gives some reasonable assurance of product uniformity and a repeatable consumer experience. That's what you're looking for in your Honda; if your neighbor had a good experience with his/hers and recommends it to you, you'd like to be able to expect to duplicate that experience.

However, brands can also be surrogates for rational decision making. They are often favored simply because they are familiar, and of course marketers go to great expense to make them that way through advertising and other forms of exposure. It's easy to go into a grocery store and find branded breakfast cereal - cereal! - selling for $4 or $5 per pound, right next to virtually identical store brands at $2 or less. It's the consumer's choice, of course, but nearly all of the "information" and influence reaching the average consumer supports the more expensive option. In poorer (e.g., inner city) areas where large supermarkets are scarce, the cheaper option is often not accessible at all.

In general I've personally gotten into the habit of avoiding heavily advertised brands where possible, and cooking from scratch whenever I have the time (it takes less than most people think, if you keep a few basic ingredients on hand). I've found that cheaper is often better, and I'm not bothered at all that I don't see happy people using my toothpaste on TV a dozen times a day. That's not worth an extra penny.

Re:Free Trade helps megacorps

>The 90% of the shares owned by US investors aren't
>owned by your next door neighbours, they're owned
>by multimillionaire investment traders.

Wrong! Most of the shares are owned by individuals through:
1. pension funds
2. 401k plans
3. mutual funds

Institutional investors, such as those university endowments, own a much much smaller amount of stock than you think.

Most stock owners are way way below the millionaire level.

Get some facts and quit parroting democrat liberal mantra bs lines.

I really wonder if Harvard's endowment managers worry about whether or not the companies that they invest in send jobs overseas.

Please think it through

"Most of the shares are owned by individuals through: 1. pension funds, 2. 401k plans, 3. mutual funds."

Think about it. If the entire employment of the US is outsourced (other than politicians, lawyers, doctors, nurses, hair dressers, and food preparation workers), there isn't going to be much of a market for stocks among the peons. Not only that, but the lawyers will sue the doctors, the doctors will malpractice the lawyers, and the politicians will have no constituents, only a rebellion.

And don't bother accusing me of parroting "democrat liberal mantra bs lines" because it won't wash. I bucked the trend by backing Barry Goldwater in high school in 1964, and have always favored conservatives.

UNTIL NOW. Until this issue opened my eyes.

Face it, this isn't a liberal/conservative issue anyway. The US is staring at its onrushing demise just like the USSR was a few years ago. In both cases it will be due to corruption and selfishness.

In the USSR, the State owned industry, and corrupted its house to death.

In the US, industry owns the State, and is corrupting its house to death.

When you travel 180 degrees on a circle either to the Right or the Left, you end up in the same place.

Re:Please think it through

Pick some other arbitrary date than the worst excesses of the 19th Century, which caused the Panic of 1895, which caused the antitrust movement, which caused the "Sherman Antitrust Act", which collapsed the emerging monopolies over the American labor industry. Thanks to those wars a century ago, America actually took over the world, instead of remaining a manufacturing satellite for the British and German technology (steel and chemical) industries. Now the lesson *you've* learned from that triumph is that we should undo our victory? If you're going to talk like that, better make sure you cash your checks from the oil industry, or get a real job, overseas.

Re:Please think it through

Do a little research please...

The reason why the unemployment rate has been falling is because people have been being crapped out the other side of the unemployment intestine, so to speak.

The rate has been going down because less people have been in the workforce, as it's measured. Compared to the numbers normally entering the workforce, the number of jobs has been dropping like a rock for the last 3 years or so.

Re:Please think it through

The reason why the unemployment rate has been falling is because people have been being crapped out the other side of the unemployment intestine, so to speak.

In addition, the very statistics our government uses to compile thase numbers are flawed. The quote below comes from The Daily Reckoning [dailyreckoning.com]

"By now my readers should have a PHD (pretty high disdain) for Capitol Hill math," writes Crudele. "This one, though, is a cake taker. I'll translate: Included in the 112,000 new jobs in January were 76,000 jobs that supposedly exist because people who weren't hired in December couldn't be fired in January. Got that? They didn't get hired in December, or fired in January, so they showed up as new employees in January as a statistical fluke. So, really there were only an abysmally small 36,000 new jobs in January."

In other words, the 76,000 jobs are a fraud. "Weak holiday hiring," wrote the Labor Department in its release, "... meant that there were fewer workers to lay off in January, resulting in seasonally adjusted employment gains for the month." The key words here are 'seasonally adjusted' - meaning that although holiday hiring was weak, government quants went ahead and added imaginary seasonal jobs to the total figures anyway. [unquote]

So don't tell me that the unemployment numbers are going up. The real indicator of new job growth is the number of overtime hours being worked. When that number starts getting bigger then it indicates an increase in jobs is about to occur. But overtime hours have been flat for months. These "lower unemployment" numbers are a total fraud.

Re:Please think it through

The unemployment rate is dropping not because of domestic job creation, the rate is dropping because people are falling out of the bottom of the system. According to the Bureau of Labor Statistics, we are in the middle of the highest rate of long term unemployment (not working 6 months or longer) in 20 years. There are more than enough stats to support the arguments of liberal and conservative consituencies, which as one poster already suggested implies that the debate is not necessarliy a politically oriented one.

Proponents of offshoring like Bush economic advisor Gregory Mankiw like to talk about how increased productivity eventually leads to job creating investment in the economy. That's fine of you're talking about a domestic economy -- growth stays home. In a global economy, the same principle holds, in toto -- the job creation doesn't necessarily occur in the same countries where the productivity is reported because outsourcing works for commodities (sorry guys, software IS a commodity these days) and the focus is no longer placed on whiz-bang ways to make it, but rather how to make it cheaper. Hmmm, does this mean we can thank object oriented programming and code re-use for the outsourcing fiasco? Bring me the head of Grady Booch! :-)

Jokes aside, we need to remember that (especially since the bubble burst), corporations are run by bean counters. And to bean counters are like crackheads, if saving a little money is good, saving a shitload of money is great -- even if there are negative side effects (like the destruction of the middle class). And like the addicts they are, they will go through all sorts of mental gymnastics to explain/justify their addiction. Only when confronted with the truth, in the right way, can you make an addict accept the truth of his disease. What we could benefit from is an economic/mathematical model that would confirm the hollowing out effect we constantly complain about.

Just to qualify myself on that addiction stuff, I've been clean & sober for 16 years by the grace of God.

Re:Please think it through

The unemployment rate is dropping because there is less people looking for work. How can we have less unemployement when there are less jobs now than there was in 2001? So why are there less people looking for work? Is it because so many people are discouraged because they can not find any decent jobs? Are more people retiring each year than are being added because of immigrants and our youth? Just come to western Michigan and discover how many jobs are going to foreign workers and have yet to be replace with any new jobs. How can anyone have a decent career when one has to start over with every recession in another career thus losing any benifits one has earned in the previous career.

Re:Please think it through

Here's how you 'stop' looking for work. Let's say I'm a high power software developer, and get laid off. I apply for unemployment benefits, so now I'm included in the unemployment statistics. My unemployment benefits run out in say, 8 months, but I've stil not found a job. My unemployment benefits run out. Eventually I can't survive on $0/month any more, so I get a job at the local movie theatre. I'm no longer counted as unemployed.

Re:Please think it through

"our unemployment rate has been dropping steadily for the la[s]t 8 months"

1) That statistic offers no insight into how many former professionals or blue collar workers with good paying industrial jobs are now flipping burgers, cleaning rest rooms, or operating cash registers, having already forfeited their homes. Hey, a job is a job, right?

2) That statistic does not count those who are no longer interacting with the unemployment department because their benefits have run out, and they have despaired of ever finding suitable jobs again.

Re:Please think it through

When the US unemployment rate is spoken of, it's spoken as if there is one rate. There are actually several unemployment rates [bls.gov], the one usually spoken of, as here, is the U-3 unemployment rate. Currently the U-6 unemployment rate is 9.9%. The government defines U-6 as "total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers".

This is where comparison with American unemployment rates with European unemployment rates break down. For one thing, unemployment payments in the US lasts only six months (where I live anyway). In Germany you can stay on unemployment forever theoretically, as long as you're really applying for jobs. I'm sure if the US did away with unemployment payments altogether, unemployment rates would go down even more as people laid off from white-collar jobs would be applying to work at McDonalds and whatnot that much quicker. Whether this is good or bad depends on whether you are a worker, or a member of the idle class like Paris Hilton who benefits from the misery of people who work for a living.

Re:Please think it through

Think about it. If the entire employment of the US is outsourced (other than politicians, lawyers, doctors, nurses, hair dressers, and food preparation workers), there isn't going to be much of a market for stocks among the peons.

Yes, do as you say _think_ about it! But try to take it a step further. The scenario you've described is not that likely to happen, for a simple reason and that is: India won't be cheap forever! The Indian programmers will eventually start demanding better healthcare, education for the kids etc. Whether they pay for it themselves or the government taxes their income more does not really matter. The point is that it will evolve in some stable state, where the Indians will be as expensive as Americans. Want an example: Check out what's happening in Eastern Europe skilled workforce used to be dirt cheap there and is still probably cheaper than most Europe and e.g. in Prague the difference is becoming rather negligible.

Of course this might involve loss of income in America. But given the current situation, where couple of hundred million Americans consume rather bug share of worlds wealth, now that can't last forever can it?

The problem you're facing is to decide between being selfish and saying "all high paid jobs belong to us". Or being reasonable and saying, well acually the Indians deserve their share as well. Look up older Slashdot coverage of the topic to see that they're not working in sweatshops and that it's the Indians who benefit in the first place.

Of course you can resort to protectionism like you have with US and EU agricultural industry. Thirld world farmers can't export their cheap goods, because ours are far too subsidised. Furthermore EU and US dumps their produce in their market, below the production value, thus driving locals out of bussiness. See http://kickaas.typepad.com/ to get an idea of the outcome of protectionism.

Re:Please think it through

The scenario you've described is not that likely to happen, for a simple reason and that is: India won't be cheap forever!

India is already starting to hemmorage jobs to China and Malaysia, which are cheaper.

Any way you cut it, the data all point to a race to the bottom.

Re:Please think it through

> The scenario you've described is not that likely to happen, for a simple reason and that is: India won't be cheap forever! The Indian programmers will eventually start demanding better healthcare, education for the kids etc.

Yes, but India may well be cheap for a very long time. And then there's China. The point is that the potential pool of underemployed labor in the 3rd world is huge,. This pain's going to go on for quite some time before any equilibrium is reached.

>The problem you're facing is to decide between being selfish and saying "all high paid jobs belong to us".

Who said those jobs are "high paid"? Maybe they were reasonably high paid in the US, but these jobs are going to India specifically because they are not high paid there. Just because they're better for Indians than the alternatives doesn't make them high paid. And if Indian pay gets too high, that's when the jobs go to China.

It would seem reasonable to at least attempt to establish a minimum global standard of living to mitigate the race to the bottom. Otherwise, outsourcing becomes slave labor by another name (no health benefits, no job security, no wage leverage). How much difference does it make that the slaves' choices are so limited that they are willing slaves.

You're old enough to know better

Think about it. If the entire employment of the US is outsourced (other than politicians, lawyers, doctors, nurses, hair dressers, and food preparation workers), there isn't going to be much of a market for stocks among the peons. Not only that, but the lawyers will sue the doctors, the doctors will malpractice the lawyers, and the politicians will have no constituents, only a rebellion.

If you really are old enough to have remembered Goldwater, then you're old enough to have heard these tired arguments every five years every time ANY industry goes overseas. You're also old enough to (supposedly) have some historical context on this. Will all jobs go overseas? Well, over 50 years, almost ALL tech jobs will. I guarantee it. Hell, all the "tech" jobs from 1950 have. Is there anything wrong with that? No, because they're replaced by whatever becomes high tech.

Looked at another way, if the US maintains a static labor market, we will become irrelevant and reduced to 2nd-world status quickly. Would you want to have the same sort of jobs available to Americans now that existed 50 years ago? Of course not, because bolt-turning jobs don't pay well, because anyone in the world can do that now. Unless the US keeps innovating, there's nothing to sustain the high salaries commanded by US labor. Unfortunately, we haven't figured out a totally painless way of getting rid of jobs that become less-needed as we innovate, but getting rid of certain jobs has to happen. Don't worry, assuming the US economy stays healthy over the long term, they WILL be replaced. This has occurred in a healthy manner for 100 years. Note that the total loss of manufacturing jobs that has occurred over the last 50 years has had NO ill effect upon the US economy or unemployment. Do you have any reason to suspect this one is different as you claim? Or is it just because the white collar nature of these jobs hits too close to home?

Face it, this isn't a liberal/conservative issue anyway. The US is staring at its onrushing demise just like the USSR was a few years ago. In both cases it will be due to corruption and selfishness.

That's too ridiculous to even be speculative. The USSR collapsed because its centralized economy fundamentally didn't work, and because Reagan tricked them into a military spending spree - which gave us a bunch of debt but killed them. Put it this way - if you're so certain, how about a rough year for the US's USSR-style demise?

Re:You're old enough to know better

There's a difference between manufacturing outsourcing and the current trend.

That difference is the level of education required and the cost of reeducation.

A manufactoring worker loses his job, he needs to retrain himself in another field, but he's not out previously spent education dollars for his high school diploma.

A computer programmer, electrical engineer, or another white-collar worker loses his job and he's out 30,000+ in sunk education costs(counting room and board, and even more for lost wages over a 4 year degree).

Both people are now in the same boat, but one has just wasted a vastly greater sum of money to reach that point.

Re:Please think it through

The Cato Institute thinks the following:

"The large majority of America's nonfarm workers, about 85 percent, are employed in service-providing industries, construction, and government--sectors where import competition is minimal. To those workers, imports are an unambiguous blessing that spurs innovation, expands consumer choice, and raises real wages." Full Paper Here [freetrade.org]

Moreover, this breifing goes on to argue employment grows in proportion to imports . There's a fairly rational reason for this, if we can all stop foaming at the mouth long enough to actually think rationally: when employment grows we (consumers) have more cash to spend on goods and services. Since imports are a relatively fixed percentage of the overall economy, whenever the overall economy grows, so must imports. Why am I discussing imports if the argument is over services? Well, services are imported and exported just like goods. So, let's understand the real numbers, here:

The United States had a $64.8 billion trade (BEG ITAL) surplus in services in 2002, despite economic stagnation in Europe and Japan. Services accounted for 30 percent of all U.S. exports and 43 percent ($3.1 billion) of U.S. exports to India. Full Article Here [cato.org]

But, if half of our exports to India are in the form of services why are so many technical jobs going to India? Actually, there's no real evidence that's happening at all. There are two basic erroneous arguments made by the media today supporting the assumptions in this question. First, is the post hoc [datanation.com] mistake: because the US economy is losing jobs and because after that happened India started gaining technology jobs, then India must be responsible for losses in American technology jobs. Actually, poor investments by venture capitalists and fund managers caused the loss in US jobs. The fact those losses occured coincidentally with India's technology boom is completely irrelevant.

Second, is the hasty generalization [datanation.com] mistake: Bob Smith has just lost his job because his company opened a software development office in India, therefore all American technology jobs must be moving overseas. There just isn't enough evidence to support the generalization made by reporters. We may suspect that India is taking some portion of American jobs, but news reports by well-intentioned NPR and New York Times reporters aren't evidence that its hurting our economy.

All this panic and paranoia about jobs moving overseas doesn't even make sense when we consider the real economics of it. The "entire employment of the US" can't possibly be outsourced. Even if your argument wasn't a textbook example of the slippery slope fallacy [datanation.com], you'd still be wrong on an economic basis. If the USA loses a sufficient number of jobs, i.e. unemployment rises, the consumers will have less capital with which to buy foreign-made products. Domestic workers who are out of work will be willing to work for less, thus driving down the cost of locally made goods. When the cost of local goods and services drops below the cost of foreign made goods and services, then jobs will start to flow back into the USA. Adam Smith's invisible hand at work.

During the Clinton Administration monetary policy for the dollar kept our currency strong, which helped keep prices for foreign made consumer goods low. This was a good thing during that time because Asia and Europe were both in the midst of deep recessions and American consumer spending helped to bolster those economies through that trying time. The Bush Administration has since let the US Dollar sag in relation to other currencies. This has helped decrease the price of American goods and services abroad

Re:Please think it through

you're also forgetting about the ratchet effect. prices are ratchetted up because of an increase in costs...but when costs go down, prices don't go down unless they are forced to go down.

cars don't get cheaper. they will always be more expensive. even in years when there is very little innovation, cars are still more expensive. why? even when costs go down, multinats would rather profit margins be up than pass any savings onto the consumer.

okay, cars might not be the best example...but you get what i mean. i have little faith that the price of local goods and services will drop below the cost of foreign made goods for quite some time...if ever. we started the PC craze, but we can't make cheaper PCs here... the only way that's going to happen is if lawyers disappear along with our quality of life.

Re:let the lawyers compete against H1-Bs too

"I guarantee you we wouldn't have an H1-B and an outsourcing problem if these programs targeted lawyers."

Muahahaha! Quite so, sir. You're ahead of me.

I cheer myself by imagining a fantasy world where there are H1Bs for politicians.

Look sparky,

What you are saying is correct, but unless you own enough stock to live off dividends, that doesn't do 90% of the people any good. Who cares if the stock I own is doing great, IF I DON'T HAVE A FRICKIN JOB AND CAN'T PAY MY BILLS............... That is the boat that increasing numbers of Americans find themselves in. It's great if my investment is doing well because all the big multinationals have shipped jobs and manufacturing and accounting overseas, but my investment alone won't provide me a living....

This is a concept the young replublican, right wing, econ-nazis' need to learn to deal with, or as Dlyan said these times will be a changin'

Re:Look, Chicken Little

And I submit to you that those not in the workforce are those that "gave up" on looking for work after being unemployed for so long. Wish I had a link handy, but this has been well documented. There may be 17 million more people working than 10 years ago, but the population of the US increased by about 40 million in that time (not sure how much the working age population increased, obviously a figure less than that)

Re:Look, Chicken Little

Let's look at some Dept of Labor statistics, shall we? You can find them just like I did (given 5 minutes and an annoying Liberal cry-baby to spank).

Here's a hint, look under Employment Situation:
Jan 94: 121,971,000 employed. 65,286,000 not in workforce.
Jan 04: 138,566,000 employed. 75,298,000 not in workforce.

"Liberal cry-baby" ad hominem aside, it is of course the ratio of these numbers that we are interested in, not the absolute figures. By your measure, China and India have the strongest employment figures, because they have hundreds of millions more people working! The drop between the '94 and '04 figures you quote is a few tenths of a percent. No impending doom, to be sure, but hardly cause for celebration, or triumphalist chest-beating, come to that.

While there are significantly more people not in the workforce, I submit to you that most of those are retired! (baby boomers getting older, that sort of thing)

While that's partly true, most of the uptake in the "not in workforce" category is due to the increasing number of folks who are unemployed and have given up looking for work. Actually, this is discussed explicitly in the text of the report whose numbers you cite, so I presume you have read it. Anyone who had not actively looked for employment in the four weeks preceding the survey were counted as out of the workforce, but no longer considered technically unemployed either...

This is a concept the young liberalcrat, left wing, econ-morons need to deal with, or they'll get left behind

That's not much of an argument.

Mouser

Re:Free Trade helps megacorps

>Wrong! Most of the shares are owned by individuals through:
>1. pension funds
>2. 401k plans
>3. mutual funds

And when I don't have a job, who is going to be putting money aside in my 401K ? You ??

Social Security DID NOT FAIL

Social Security DID NOT FAIL.

On paper, it is flush. This is because back in '78 or so, we passed a major Social Security tax hike, with the express purpose of funding the payouts for Baby Boomers retiring post 2010.

In 1985, with eyes wide shut, the Social Security trust fund was completely wiped out. How? It was "borrowed". The fund is full of IOU's, due whenever. The money was grabbed with the sole reason of masking the humongous national deficit created by the supply sider's tax cuts.

The fund did not "fail". The same neocons that passed the tax cut made up the idiot idea that Social Security was "failing" to cover their own deception, and to create a meme that the more gullible would swallow. They knew it wasn't "failing" -- they were stealing it to get yummy tax breaks. And they had a Randian hatred of public programs, SS in particular, so they not only got gobs of cash, they also killed their hated liberal program, AND got to blame the program for a liberal "failure". A momumental game of chicanery that most Americans have swallowed.

Now, the national debt, that seven TRILLION dollars, is comprised somewhat of the IOU's owed the Social Security trust fund. IF the money was paid back, Social Security would not "fail". And as a sidenote, if the money had been left in the fund to gather interest, rather than being stolen by "borrowing" to finance giveaways to the wealthy, it would have generated large amounts of interest on investment over the last 23 years. Enough interest to have lowered Social Security taxes today.

And, one more thing: the Social Security program is still taking in more than it needs, even today. BUT THE MONEY IS BEING "BORROWED" AGAIN, for the same reason as in '85 -- to hide deficit spending.

To recap: Social Security was a success. Neocon ideologues hated it. They wanted tax cuts in '81. They hid the fiscal disaster of the tax cuts somewhat by robbing the trust fund. They blamed the trust fund for being a "failure" for having no money after they themselves robbed it. We have a stack of IOU's 7 trillion dollars high. And they are back in power, and are robbing what dreggs are left in the fund -- and Greenspan, that consistent Randian, proclaimed that we should cut SS because of the budget shortfalls.

Circular blame-the-victim garbage that will impoverish tens of millions of elderly people someday.

Let's keep this real. The program worked, was well funded, and was sucked dry by greedy rich people who didn't want to pay taxes. We need to pay the IOU's off, and restore the fund. That means RAISING TAXES. Go ahead, cry.

Re:Social Security DID NOT FAIL

Nope. It was a success then, and it would have been a success in the future.

You see, as I said, we had a massive FICA (SS) tax hike in '78. The hike ensured that we would take in far more money into the trust fund than was needed in the '70's, the '80's, the '90's, and the '00's. Jimmy Carter was lambasted for pushing the tax hike through. He took enormous political damage for it.

If the money would have remained untouched, the fund would have had hundreds of billions, if not trillions, ready and waiting for the Boomers come the teens and '20's.

The massive increase in retirees had been factored in by Carter and the tax hike supporters. Carter was an engineer, and could do arithmetic. They calculated exactly how much would be needed, and met the numbers with the tax. They made the fund successful and sustainable for all time.

The meme, as I have said, was exactly what you said. It just happens to be a lie, a marketed tool, a mathematical hoax. The fund had the cash. It did not matter how the old:young ratio increased. It was anticipated.

What was not anticipated was the outright theft of the trillions.

And your comment illustrates my "meme" comment in my original post. The devil's greatest accomplishment was in convincing others he did not exist, but the necon's greatest success was in convincing young libertarians that Social Security was bust. The numbers simply don't support it. I lived through it all; I watched it happen. It just isn't politically correct to discuss the theft anymore.

The young were never meant to support the old! The trust fund was invested in conservative instruments. It was to increase in value as taxes flowed into it over the decades, and additionally to accrue all that lovely interest. If it had not been stolen by 23 + years of ideologues and political ass-coverers who wanted to pretend that the tax cuts weren't bankrupting us, we would now be in no trouble funding the retirees. We were sold out in the '80's for tax cuts for the rich, as David Stockman, the Brock of the '80's, told us after he left Reagan's employ. And we are being robbed now, to cover up a fraction of the financial disaster caused by the present tax givaway.