The math either works or it doesn't

I wrote out the vocal lines for the exponential growth song this morning and began putting in some chords for the accompaniment. This may not end up straying too far from what I was hearing when I initially drafted the song, although I've already started playing with a few expectations.

I also told Larry last night what I had learned about my characters singing as a way to organize their thoughts, and he said "I knew that from the day you started writing this."

And then I told him what I had learned about Social Security.

(This, by the way, is not specifically related to the musical I'm writing, although MELISANDE is so mathy that you shouldn't be surprised I went and figured this out.)

What happened was that a friend saw that I had been reading Ayn Rand and then suggested I read a libertarian text that I don't intend to identify because the author is still living, although I will tell you that in the introduction the author states that his purpose for writing this book is to convert the reader to libertarianism, at least we're up front about it, and then we learn that private property is a net positive (I'll agree with that), that the only fair ways of exchanging value between individuals are love and trade (ditto), that heroin should be legally available and seatbelts should not be legally required (ummmm), and that Social Security should be abolished.

And at that point I was all "well, okay, I understand the argument that Social Security is a regressive tax, but it's also a savings account, you put in money now and you get it back later, the only reason to even consider abolishing Social Security would be if you didn't get at least as much money as you put in after adjusting for inflation, let me see if those numbers exist."

And guess what?

They do.

The Urban Institute has done all of the math for us, proving that most people who make it to retirement age get much more out of Social Security+Medicare than they put in. A married couple, retiring in 2025, that averages a combined annual income of $59,400 during their working years (2023 dollars, adjusted for inflation) will have paid $448,000 in Social Security+Medicare taxes and could receive $1,138,000 in benefits (again, adjusted for inflation).

As the Urban Institute explains:

When lifetime Social Security and Medicare benefits exceed lifetime Social Security and Medicare taxes, as is true for most households, the value of benefits from those programs becomes greater than the value of an annuity that the household would have been able to purchase with their lifetime taxes.

And trust me, most people are not going to take the money they would have paid in taxes and put it into an annuity. They're going to put it into the stock market (good luck with that) or use it to buy status symbols (ditto), or put it towards today's needs instead of tomorrow's – which is worth considering, and which this libertarian text suggests we should consider, but eliminating Social Security taxes doesn't even guarantee that people might be able to fund today (you'd get to keep an extra $6.02 of every $100 you earned, after all, with another $1.45 if we eliminated Medicare, which means that if your household's annual pretax household income is $59,400 you get an extra $369 every month) and it may effectively prevent them from being able to fund tomorrow.

The only instances in which a household can predictably receive less in benefits than they pay in taxes are 1) if their income exceeds the maximum taxable earnings, at which point they basically break even and 2) if they don't live long enough to retire.

(At this point I shall remind you that the first element of the Prime Directive, at least in our house, is to remain alive. Easier said than done, in some cases, but there's a doing to it that shouldn't be ignored.)

The thing about Social Security is that it's essentially a tax refund with a return attached, and I'm curious why we aren't promoting it that way.

I'm also curious why the Universal Basic Income people aren't looking to Social Security as an example of what people might do if they had a guaranteed minimum income every month. I mean, they must be, somewhere, but they keep running these other tests to try to prove that UBI is a good thing when we've got this gigantic test, right here, that we've been running since 1935.

The math on Social Security works, and the math on abolishing Social Security doesn't work nearly as well, and please email nicole@nicolediekerfinley.com if you think I'm wrong, and if you think I should open up the comments to allow a free and open discussion you may suggest that as well.

I will also let you know what I plan to read next, so you can anticipate the arguments I might be making –

First, George Eliot's Middlemarch. This is one of the few great novels I've never read, and I'm interested to read it first for the way it uses story to demonstrate how to live and second for the way it addresses the issue of understanding reality along with any ideas related to learning from the previous generation and teaching the next one.

Second, the chunk of Herbert Croly's The Promise of American Life that deals with how to create a progressive government that provides basic social services for everyone and encourages equal opportunity while understanding that it cannot guarantee equal outcomes and that exceptional minds are necessary for technological progress. I read and loved Croly two years ago (when Larry and I were on the boat, I kept telling everyone they had to read this book) and am ready to be reminded of how he solved this particular problem.

Third, the Federalist Papers. Maybe all of them? I believe that some of them specifically deal with rationality vs. populism, and I cannot believe I let that word slip out onto my blog because it hints at politics (perpetually a distraction) when I really want to be thinking entirely about organizing the mind around the best possible schemas.

But I got to the part in Plato's Republic where Socrates explains that the two states of man's nature are ignorance and knowledge, and those who do not have the courage to seek knowledge are only able to form opinions based on what they think will please the people around them, and you already know what I think about that.

So more Republic, too, which I am reading in chunks because it is both long and dense –

And then, if I get all of that done efficiently, Moby-Dick, because I want to both read and understand it before Dave Malloy's musical version is complete.