Paul Krugman on Quantum Mechanics

[Jolb]

Here's a funny blog post from Paul Krugman's blog http://krugman.blogs.nytimes.com/ :

Schroedinger’s Price Index

Apparently Republicans are trying, once again, to extract chain-linking of Social Security benefits as the price of some kind of deal. I have no idea whether this will go anywhere; my guess, or maybe just my hope, is that Obama the Grand Bargainer has vanished from the scene.

But there’s a funny point I hadn’t thought of until Matt O’Brien pointed it out. The alleged justification for chain-linking is that the conventional consumer price index overstates true inflation; it might overall, but probably not for seniors. In any case, however, as Matt points out, the very same Republicans who claim that Social Security benefits should be cut because the CPI overstates true inflation also insist that the Fed must stop quantitative easing, despite the absence of any visible inflation threat, because the real inflation rate is much higher than the official statistics indicate.

But Matt, I think, fails to grasp the subtlety of the GOP position here. He accuses them of not knowing what they’re talking about. But surely what’s really happening is that they have a quantum-mechanics view of the situation: the state of the world in which the CPI overstates inflation and the state in which it understates inflation coexist in a condition of superposition, and what happens when you collapse the wave function depends on the position of the observer — that is, whether he’s trying to slash Social Security or bash Ben Bernanke.

Or, on the other hand, maybe they don’t know what they’re talking about.

 

[russ_watters]

All the huff about Republicans wanting to cut SS is just a smoke-screen. Most people don't even realize just how badly SS has already crashed. In its heydey it was a viable replacement for retirement savings, but today it has no investment value whatsoever, which is an utter disaster for our personal finances.

 

[Evo]

Just my 2 cents, as a retirement plan, no. As a safety net for hard working people that suddenly find themselves 100% disabled, not enough can be said for how important it is. Remember, SS is not just retirement.

 

[D H]

This is not the first time, or the last time, that politicians appear to have grokked the inner workings of quantum mechanics. Or that maybe they just don't know what they're talking about.

 

[StevieTNZ]

All I can say is intelligence. Intelligence indeed.

 

[russ_watters]

Just my 2 cents, as a retirement plan, no. As a safety net for hard working people that suddenly find themselves 100% disabled, not enough can be said for how important it is. Remember, SS is not just retirement.

A couple of things:

First, the retirement savings part is the much larger part. Currently there are 44 million receiving retirement benefits and 10 million receiving disability (from the wiki), even with disability rising much faster than demographics would suggest it should over the past few decades. So I generally focus on the far lager part - and realistically they should have different funding since they have different economics. But point taken and there isn't much I think is wrong with/needs to change with that part.

Second, the benefits have suffered little, if at all, for any part of SS, so there is little to be concerned with there (that's the smokescreen). It's the taxes that have become disastrous. Just imagine how much better-off the economy would be today if the tax rate was more like 6% instead of 12%. 6% is all that is really needed for the program to be self-sufficient if the funds are invested instead of wasted and if our ancestors hadn't sucked the program dry at rates of 2-6% up until 1960.