Correspondence

...They have never succumbed to any political pressure—and only rarel y has there ever been any—either to make the costs look low so as to present a favorable picture or to make the cost s look high so as to discourage benefi t liberalizations . Almost without excep - tion, the SSA actuarial estimates have been accepted by members of Congres s of all political and philosophical views as the appropriate basis for considering the financial status of the Social Security program and any propose d changes therein . Mr...

...Bandow seems to imply tha t political forces have been at work to make them show a rosy picture for th e future...

...THE NEED FOR A NATIONAL INTEREST TRADE POLICY DR...

...The net trust-fund balance then (after deducting the loan from Medicare's Hospital Insurance Trust Fund, amounting to $10.6 billion) was $28.7 billion, and it is estimated now to increase to about $84.9 billion by the end of 1989, according to the intermediate estimate...

...The combined Old-Age and survivors Insurance and Disability Insurance Trust Funds on September 30, 1985 were $12.1 billion larger than shown for that date by the pessimistic-assumptions estimate in the 1983 Trustees Report (issued shortly after the 1983 Amendments were enacted...

...The next two days I used the pool and whirlpool only (I was under strict orders not to go near the gym or nautilus equipment as it could do internal damage for the next few months...

...The full story is as follows: Due to a rare glandular disorder, my weight rose to over 45 stone...

...For a case in which they are not, consider the hunting of buffalo a century ago...

...I could not even attend the funeral, and she never saw the results...

...Much initial enthusiasm of the movement seems to have been due to the attack on capitalism which the issue promised...

...Myers' s optimistic assumptions are correct, since strong real wage growth has many benefits, most unrelated to Social Security 's solvency...

...For buffalo hunters as a group, the optimal strategy would have been to limit the killing of buffalo so that the industry would maintain itself indefinitely...

...Peter Wilk, the problem was surgically repaired...

...It is most important to note tha t the actuaries of the Social Security Ad - ministration have, over the 50 years o f operation of the program, always at - tempted to do the highest level of professional work in making these estimates...

...George does manage to includ e a number of details and little-know n anecdotes about his subject in Where Did Our Love Go...

...What key...

...Bandow points out, as an example of possible pressure for costl y benefit liberalization, the action take n in late 1984 (not 1983, as he states) t o waive the 3-percent COLA threshold . Although this was legislated, it did no t become effective, because the measured increase turned out to be 3 .5 percent— well above the trigger point . More important, however, was the fact that suc h a waiver would not have increased th e cost of the program over the long run . Beneficiaries on the roll at the end o f 1984 would have received less in 198 5 if the waiver had not been in effect, and the threshold had not been reache d (but the same in 1986 and after, because the measurement of the COLA under the previous basis wa s cumulative) . However, offsetting the in - crease in cost due to the waiver, those who came on the roll in 1985 would— due to the previous law being incorrect - ly drafted—have received too large benefits in the absence of the waive r (by getting the 1984 COLA at the en d of 1985 in addition to the 1985 one — and this excessive amount would carr y on to all future years) . The author then goes on to asser t that Medicare (by which term he reall y only means the Hospital Insurance portion of that program) will "face a n estimated $250 billion cumulative defi - cit by 1995 ." This was the case accord - ing to the estimates made in 1983 . However, the benefit experience sinc e then has turned around, and it is now estimated that the H .I . program wil l have sufficient income to meet outg o completely until mid-1998 according t o the intermediate estimate and unti l early 1992 according to the pessimisti c estimate (with the cumulative defici t REFORMED THEOLOGY IN AMERICA provide s penetrating analysis o f these five traditions and the two leading theologians of each . The result is an important advance in our understanding of wha t being Reformed has meant and what it should no w mean in the late twentieth century . MODERN REFORMED theology in America ha s shown astonishing variety i n its expression . Grouped under the name "Reformed" are, i n fact, five diverse traditions — The Princeton theology , Westminster Calvinism, th e Dutch schools, Southern Reformed thought, an d Neoorthodoxy...

...The only place that fit these requirements was Jack La Lanne's...

...I shall not go into any details as t o why I believe that the Ferrara SuperIRA proposal is not feasible...

...Wilk's prescription, I called the Yonkers spa...

...Bandow superficially criticize s the assumptions underlying the actuarial estimates . He does not realize that the assumed level of the inflatio n rate is not important, but rather tha t the excess of the assumed rate of in - crease in wages over the rate of inflation is controlling . He criticizes the fer - tility assumptions without recognizin g that, if natural fertility remains below the replacement level (or even falls from the present level), this will very likel y be counterbalanced by increased immigration, legal or otherwise...

...She died Mothers Day while I was recovering in a clinitronic bed...

...eit IEEPERSON AVE . S.E...

...Gordy did, in fact, was to bring together singers, songwriters, and musicians in Detroit under one roof, and under stringent contracts givin g him almost total control over thei r development...

...Wilk's orders, they signed me up for their "executive con-tract" ($969.00 the first year, and $69.00 each year after...

...Myers and company are not incompetent, the only other logical explanation is that they cannot accept th e possibility that their handiwork i s headed for disaster, and therefore pu t off recognition of reality as long a s possible...

...A) The case involves their Yonkers, New York spa, not California...

...At the end of the second day, I was called into the office and told my contract was canceled because some of the "beautiful people" didn't want me in the same club with them...

...If previous economic trend s had continued—high inflation an d periodic recessions—the system woul d have run out of money before the en d of the decade...

...With the aide of Dr...

...I've had the same friends for years, including many in the media where I worked as a performer, producer, and director of radio drama and records...

...This difficulty explains why socialism's tradeoff is so unfavorable, that is, why it simultaneously provides its citizens with a low standard of living and serious problems with environmental degradation...

...Myers has spent most of his professional career promoting the Social Security system . Therefore, it is no t surprising that he refuses to ac - knowledge that another, likely fatal , crisis is inevitable...

...He drove his workers: "The whole thing a t the company was about competition , and competition breeds giants," one of his writers said . What happened then was inevitable...

...As th e author points out, the big stumbling block of huge amounts of genera l revenues needed is present . And this would, over the long run, be paid for largely by those high-paid young per - sons who opt out because they believe that they will receive larger benefits in that matter...

...Doc-tor Wilk was worried that I was also losing muscle tissue and recommended swimming in a warm pool, aquatic aerobics, and whirlpools...

...As it is now, if you use Social Security' s current pessimistic projections, th e disability fund will be depleted in 1988 , the hospital insurance fund will run dry in 1992, and the retirement fund wil l go negative after the turn of the century...

...Myers, who will shoulder the burden when the system collapses . It is true that the $165 billion bail - out in 1983 included a COLA delay...

...At the same time, the Hospital Insurance Trust Fund (which is financed by a portion of the payroll tax that also finances OASDI) was $12.6 billion higher as of September 30, 1985 than it had been estimated in 1983 to be then...

...Myers's support for lowering tax rates after 1989 is really quite touching, since he is one of th e architects of today ' s rapidly escalating rate schedule, as well as the overall financing structure of a system that wil l eventually require tax rates on th e magnitude of 40 percent to maintain it s solvency...

...He turned Motown into a finishing school that turned out som e slick and sophisticated products...

...Assuming Mr...

...As generous as is his proposal, it would merely accelerate th e tidal wave of red ink that now is expected to hit the retirement fund next century and all the funds combined a s early as 1998—for which his only solution presumably would be to increase taxes massively...

...bad explanation, blaming greed for these bad outcomes...

...Property rights force people to take into account all costs and benefits of their actions, and thus make those decisions consistent with the good of the group...

...I now am 20 stone, and have 3 stone to go to my normal weight (I am 75" tall...

...For Medicare spending has bee n reduced through a series of what are in effect price controls ; whether the limitations will, first, survive increasing complaints of premature patien t discharges and, second, do anythin g more than just temporarily slow th e growth of outlays is not clear...

...My mother, who had liver cancer, had only one wish—to see meback to normal...

...Since 1943 men at age 6 5 now live 2.6 years longer...

...This tradeoff is important, but it is not the whole story...

...Bandow points out, quite correctly, that the prestigious Committee for Economic Development stated that, if the economy performs even slightly less robustly than Congress assumed in 1983, the system may "be threatened again with insolvency before the end of the decade...

...And he does include some first - class photographs, of Smokey Robin - son crooning, Martha and the Vandellas singing in the back of a Cadillac, and one in particular that shows exactly why the Temptation s were superfine...

...If I would have had the proper therapy, I could have had my second surgery in January, and the third in April...

...This should be prevented—when it is obvious in the late 1980s that it will occur—by lowering the scheduled tax rates after 1989, so that a fund balance of only about 50-60 percent of annual outgo will be maintained . Such lowering could be done by ad hoc measure or, preferably, by automatic-adjustment procedures...

...After an interview and learning of Dr...

...The balance in the H.I...

...Over the last thirty year s real wage growth has been significantly less than one percent a year ; over the last fifteen years growth has bee n negative . I certainly hope Mr...

...Robert J. Myers (Chief Actuary, Social Security Administration, 1947-70) Silver Spring, Maryland...

...Myers ascribes to Medicare is hardly something to make one particularly cheery : the system will run a cumulative deficit of only $150 billion instead of $25 0 billion over the next nine years, running out of money as early as 1992...

...One must also look to the increased difficulty of coordinating decisions—of making individual decisions consistent with the good of the group—when private property and markets are eliminated...

...What Mr...

...It behooves us t o begin, now, searching for ways to avoi d such a political and economic disaster...

...However, if past experience is any guide, the estimates wil l bear little relationship to reality...

...Finally, Mr...

...But the important points not brought out are that (1) the financing developed in 1983 was on the basis of "worst-case" assumptions, not intermediate ones as the CED had thought, and (2) even then, the performance of the economy would have to be considerably worse than "slightly less robustly" to cause problems...

...He created a sort of black music hothouse, and was catapulted to the top...

...Myers, by the year 2035 the Medicare fund will be collecting onl y enough money to pay 40 percent of th e projected benefits . Under the pessimistic assumptions, Medicare wil l be able to cover only 17 percent of it s costs...

...Once the idea was proposed Congress spent virtually no time worrying about the cost involved . The turnaround which Mr...

...Myers's protestations t o the contrary, the 3 percent COLA waiver is the perfect example of th e politicization of the system . The original law was passed to take benefit s out of politics, but congressme n stumbled over themselves to demonstrate their concern for retirees who might not otherwise receive a COLA increase...

...On the contrary, economic analysis rather clearly predicts that the elimination of property rights will increase pollution problems...

...Myers to reject fundamental reform of the pro - gram, those of us who will pay the price of Social Security's comin g demise cannot afford to be quite so sentimental . After all, it is our retirement futures that are at stake . q COMING Shirley Robin Letwin on Sexual Desire 48 THE AMERICAN SPECTATOR MAY 1986...

...Perhaps I misunderstand what he means by this assertion, but I am unaware of any theories which give that result (other than those which assume perfect information...

...For ex-ample, look at Paul Erhlich's absurd explanation of "overwhaling" in Social Science Quarterly, March 1981...

...q . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORRESPONDENCE (continued from page 9) only OASDI (which I believe coul d have no financing problems for at least the next twenty-five years) . However, in other places it is used to mean OASD I plus H.I .—as, for example, in referring to A. Haeworth Robertson' s criticisms . The National Commission on Socia l Security Reform (whose recommenda - tions led to the 1983 Amendments) ha d the assignment of only looking a t OASDI, which was the immediat e problem . The National Commissio n did, however, recognize the problem fo r H.I . Mr...

...UNITED STATES INDUSTRIA L COUNCIL EDUCATIONA L FOUNDATION Mr...

...That members of Congres s continue to accept ludicrously optimistic estimates should come as n o surprise : elected officials don't like t o deal with unpleasant problems any more than does Mr...

...George writes, "There are no heroes in this book . There are n o villains...

...More - over, the new estimates may prove to b e unduly optimistic...

...Myers's discussion is disingenuous . Ob - viously the number of people living, as well as how long they live, affects Socia l Security's finances . The reduction in infant mortality rates has had a seriously negative impact on the solvency of Social Security because when beneficiaries receive up to five times as much as they and their employers contributed— as do current beneficiaries— every additional participant in - creases Social Security's net liabilities . Only as the "investment return" has dropped toward zero for new worker s have changes in infant mortality had less financial impact . Moreover, current longevity assumptions at age 65 are significantly lowe r than what has actually occurred in re - cent years...

...If the system survives to the end o f the decade, which now seems likely, w e can thank not the national commission's package, which Mr...

...There is nothing mysterious in any of this, of course...

...In a 60-day period following surgery I lost 5 stone...

...As to the mortality forecasts, Mr...

...So what else is new, right...

...In fact, all other things bein g equal, higher inflation worsens the system's financial troubles because it increases obligations...

...Over the last 43 years, for instance, the life expectancy of women has increased 5 .4 years ; the intermediate assumptions forecast an in - crease of only 4 .4 years between 1984 and 2060...

...For when the bail-out bill was passe d the system's cushion was no greate r than after Congress passed the 197 7 legislation...

...The analysis of overhunting buffalo or overusing water and air for dumping wastes illustrates an irony of the ecological movement...

...Whether or not the individuals' decisions will be good for the group depends on whether the costs and benefits they perceive are the "social" costs and benefits...

...Under Dr...

...Myers . Despite Mr...

...The most ambitious of them all, Berry Gordy, Jr., becomes a "big dog, " as he put it, but loses his soul . Or something like that...

...Ira D. Shprintzen New Rochelle, New York Toward a Theory of Pollution Arch Puddington's "East Bloc Ecology" (TAS, March 1986) is an interesting and valuable examination of pollution problems in the Communist nations, but it is flawed in its underlying theory...

...But analysis of the problems ends with a powerful justification of private property...

...I had never been treated this way in my life...

...As for the projected amount of immigration, Social Security increase d those projections last year, incorporating them into its ever-optimistic future assumptions . And with continuing political pressure for draconian immigration "reform," it is speculative a t best to assert that increased immigration will make up for any decline in fertility...

...When private ownership is not feasible, either technically or politically, the government can simulate private ownership...

...Myers contends, then why doe s Social Security bother issuing predictions...

...At this time, I contacted Harry Lipsig, the famous damage lawyer (Lipsig, Sullivan & Liapakis...

...He describes the an - tics of a pair of euphoniously name d free spirits, incid^ntally studio musicians, Benny Benjamin and Jame s Jamerson . He tells what Junior Walke r said at the end of "Shotgun," and tell s why, during Stevie Wonder's "Fingertipspt . 2," you can hear a musicia n shout "What key...

...Myers, having held a responsible position with Social Security, would encourage efforts to find solutions to financin g problems which everyone agrees ar e inevitable...

...RANI) RAPIDS, MICH . 49fo t THE AMERICAN SPECTATOR MAY 1986 47 thereunder up through 1995 being about $150 billion) . I do agree with Mr...

...Although it was believed in 1983 that the H.I...

...The growth in life expectancies may slow down, of course, but the opposite seems more likely as th e pace of technological growth an d medical advance accelerates...

...My family and friends were as shocked as I, and I went into a severe depression...

...If the inflation rate really is unimportant for the solvency of the fund , as Mr...

...with the more realistic scenario, the shortfall is three times as great . One would think that Mr...

...Trust Fund then was $32.0 billion (including, quite properly, the loan to the OASDI Trust Fund...

...And he gives the vitally important details o f how the Temptations and the Four Top s learned all those funky dance steps . The author tends to write in a n idiomatic style, referring to "cats" an d "chicks," but he avoids most of the silly drivel so characteristic of popular music writers, who when they do no t write in cliches like to describe rock an d roll in terms usually used for Bach's fugues...

...PROFESSOR WILLIAM R. HAWKINS argues the conservative case for a selectively mercantilist trade polic y aimed at protecting strategic/basi c industries . To order: send $2.00 to: USIC Educational Foundation, 200 Waverly Building, Brentwood, TN 37027, 615/377-4792...

...But cattle raisers in the West were probably as greedy as the buffalo hunters, andcattle were never in danger of extinction...

...In the intermediate case, th e financing gap to be filled is one-third greater than the entire deficit faced by the retirement program before the 1983 amendments...

...The intermediate projections for futur e 40-year periods are for increases of 1 .4 to 1 .5 years...

...After over a decade of speedy success , creative enterprise flagged, top talen t left for money, new talent went unsigned...

...Myers helpe d put together, but Reaganomics and th e resiliency of the American economy...

...He was a shrewd and creative businessman who "preached success—no t black success," and who hired whit e men when he thought they could d o something better than he could, the author notes with just an air of disapproval...

...Myers offers no arguments against the superIRA proposal because he has none, other than a nostalgic attachment t o the purity of Social Security, for which he labored so long . And while that may be reason enough for Mr...

...There are just ambitious people...

...First, the increase in the expectation of life at birth from 1935 t o 1984 was only 13 years (74 .7 vs . 61 .7) . Second, most of this increase was du e to reduction in infant mortality and in mortality at the younger ages ; the in - crease in life expectancy at age 65 from 1935 to 1984 was only 4 years (16 .8 vs . 12 .6) . Moreover, the actuarial estimate s assume that significant increases in life expectancy will occur in the future . The criticism of the accuracy and in - tegrity of the actuarial estimates is un - fair...

...Robert Schenk Rensselaer, Indiana Troubles with Social Security "Sun City for Social Security" by Doug Bandow (TAS, October 1985) is replete with factual errors, and thus comes to erroneous conclusions...

...And even under the new intermediate estimates, the ones preferred by Mr...

...The case is now awaiting its turn on the docket...

...He succumbs to the awful commercialism of Los Angeles and, if you ca n read between the lines, to the Powerful White Record Companies . Mr...

...This brings me to my next criticism—the confusion as to the meaning of "Social Security" in the article...

...Ecological evangelists often resort to a good-vs...

...The key difference between buffalo and cattle was that cattle were privately owned, and all the costs and benefits of killing cattle were borne by the owners...

...It took them 15 minutes to make the 10 miles from Yonkers to my home in New Rochelle...

...Instead, the second was put off until May...

...Trust Fund would have financial difficulties before 1990, current estimates (which consider the favorable experience in 1983-85) indicate that no problems will arise for at least ten years, and more likely not for at least fifteen years...

...I was feeling much stronger after the first two days...

...JOHN M. CULBERTSON, Professor of Economics at the Universit y of Wisconsin, argues that "'Balanced , mutually advantageous trade betwee n nations' is the valid goal that must replace the false goal of 'free trade...

...But if the individual hunter limited his killing, it is unlikely that he would have been the one who would benefit from that restraint...

...B . EERDMANS I PUBLISHING CO...

...With full inter-fund borrowing , the three will not have enough money to pay full benefits in 1998, just 1 2 years from now...

...ONTRIBUTORS to this volume are • George M. Marsden • Mark A . Noll • David F.• Wells • W. Andrew Hoffecker • W. Robert Godfrey • W. Stanford Reid • Wesley A . Roberts • James D . Bratt • Henry Zwaanstra • C . T. McIntire • Morto n Smith • Douglas Floyd Kell y • Luder G . Whitlock, Jr . • Dennis Voskuil • Gabrie l Fackre • Malcolm Reid • James Montgomery Boice At your bookstore, or write: WM...

...So I can only assume Mr...

...The bulk of the package, however, was made up of a variety of tax hikes...

...It is most unlikely that the system will have any financing problems in the next few years, despite Bandow's statement that "the solution is likely to last little longer" than the 1977 "solution...

...The growth in real wages is more im - portant, but let's consider the official estimates of that variable . The intermediate assumptions, which, as I pointed out in my article, consistently exceed actual experience—a point Mr . Myers does not contest because h e cannot—show real growth of 1 .5 to 1 . 6 percent through the year 2060 . The pessimistic forecast is for one percen t annual real growth over the sam e period...

...When resources are owned by all, such as buffalo, whales, air, or water, there is a strong tendency for individuals to misuse those resources...

...Unfortunately, however, it is today's young, and not "What man would be con - soled at the loss of an arm by the knowledge that he could buy his shirts 4 0 percent cheaper...

...Bandow that th e accumulation of large balances in th e OASDI Trust Funds in the 1990s and early 2000s (if the intermediate estimate turns out to be correct—as I believe it will) is undesirable...

...Gordy turned his attention to other areas, notably movie-making , and relaxed his intense managemen t style...

...Though having the government simulate private ownership is bet-ter than no ownership at all—the buffalo are still here—there is no reason to believe that government simulation of private ownership will be better than the real thing...

...Bandow states that life expectancy has increase d 14 years since 1935 and that this prove s that the projected improvements ar e too low...

...Puddington says that the major obstacle to environmental improvement in the Communist world is a tradeoff between economic growth and pollution control...

...But how does this compare with re - cent trends...

...Myers defends the integrity o f Social Security's forecasters, which i s all well and good...

...Weight Loss In "The Continuing Crisis," November 1985, you mention my case against Jack La Lanne Health Spas...

...My final surgery (cosmetic to remove skin folds from the rapid weight loss) will be at the end of April, and the last of the excess weight will come off on the operating table at that time...

...The buffalo which he did not kill would have been killed by someone else...

...No souls were sold, and no love was lost...

...I should like you to make the following corrections...

...But, as my articl e reported, the system's estimates hav e been consistently optimistic...

...Puddington asserts that "from a theoretical standpoint, Communism . . . should be able to manage the environment with considerably more efficiency than a system which gives relatively free rein to the market...

...Doug Bandow replies: Mr...

...The economic theory of pollution begins, as all economic theory does, with people making decisions based on the costs and benefits they perceive...

...As to the mortality assumptions no t containing sufficient allowance for future- improvements, Mr...

...The $165 billion figure that is referred to in connection with the 1983 Amendments is not "Social Security tax increases," but rather the addititional financial resources arising in 1983-89 from tax increases, benefit reductions, and extension of coverage to more people...

...B) They are charged by the New York State, not California, Division of Human Rights with violation of section 296--J-'Discrimination against the handicapped" (morbid obesity is a legal handicap as is any other physical impairment...

...The bloated Motown of today does not consistently put out hits, but it is axiomatic tha t small, independent operations turn ou t the best, most creative work . Such i s the explanation for Motown's golde n age, but it does not make for a movin g yarn...

...Suit was then filed with the Human Rights Commission...

...If it were possible for air and water to be privately owned, pollution would be limited because the owner would charge for the use of these resources...

...Usually, it is used as meaning (continued on page 47) THE AMERICAN SPECTATOR MAY 1986 9 great songwriting teams, destroying the Supremes, and inflating Diana Ross' s ego to the size of the Grand Canyon...