David R. Henderson  

My "Occupy Monterey" Talk, Part IV

Economists and Influence... An Institutional Check on Fina...

This is the last installment in my recounting of my "Occupy Monterey" speech. For the earlier parts, see here, here, and here.

When my talk ended, we went to Q&A. One of the first questions was about my preferred presidential candidate, the aforementioned X. Because I am not advocating his candidacy in this post, I can name him: Ron Paul. "One thing I don't like about Ron Paul," said one of the questioners, "is that he would end Social Security." "Actually," I replied, "he made it clear in one of the debates that he would use the savings from cutting defense spending to shore up Social Security. I disagree with him, but if you want to get upset about someone wanting to end Social Security, get upset at me, not him." Which many in the audience proceeded to do.

I noted in Part I much of what happened after that. But there are a few things I didn't mention. One is that a young person in the audience asked how people would provide for their own age if not for Social Security. I had the sense that he or she (I've forgotten who asked) wasn't talking about older people who had come to rely on Social Security but was, instead, thinking that without Social Security, there would be no way for people to save. "I don't think most Americans are stupid," I said, "I think they are capable of saving for their own age. Remember that Social Security began in 1935, during the Depression, when many people's savings were wiped out and remember also that in those days, few people had many years of retirement to provide for after they retired. So we can't take people's behavior then as an indicator of how they would act today." The sense I had, looking at the questioner as I spoke, was that he or she had not thought of that. Every time I give a talk like this or a talk to a Rotary Club, I'm reminded of how little most people know. Tell them a few important facts about economic history and you've told them a lot.

After the formal event broke up, one of the organizers yelled out "G.A." What's "G.A.?" I asked. "General assembly," he said. Most of the people went to another location on the City Hall grounds for a meeting. But about 6 or 8 people hung around to talk. A number of them were young people who told me how much they liked the talk and a few other young came by to say they liked the talk. One man in his 70s said that he liked the talk a lot and the way he said it, I knew there was going to be a "but." "There's a but coming, isn't there?" I said. "Everyone has a big but," he answered, and we laughed. "I've paid into Social Security all my life and I'm not asking the government for any money taken from others. I want the money I paid into it that the government put away for me." "That money is long gone," I said. "The government has already spent it." "But I want the money that I put into it," he replied. "That's reasonable," I said, "but the fact that the government took it from you doesn't make it right for you to have the government take money from a two-year old." "So how do I get my money back?" he asked. "Maybe you should take it from the estates of all the Congressmen who ever voted for Social Security," I replied, "and all that money might pay for Social Security for a week." "You're crazy," he said, laughing.

One guy and his lady friend, the aforementioned Russian immigrant (in Part I), hung around and the guy advocated that we get rid of markets and all share because technology is so advanced that we can have all we want. His lady friend, having grown up in Russia, wasn't buying. So it ended up being him versus his lady friend, a young student, a Republican official whom I've gotten to know from other events, and me. He felt overwhelmed. The day was beautiful and I suggested that we go for a walk. The Republican guy, the young Russian lady, and I went for a walk and, at the end, exchanged e-mails.

The next day, I received the following e-mail from one of the organizers:

Dear David,
I want to express my appreciation for your participation in OccuTalks yesterday. I'm sorry I didn't get a chance to introduce myself in person. I am even more sorry about the behavior of some of my colleagues. I may not agree with all your ideas, but I believe in treating everyone with respect and I am embarassed that some people were so rude to you. You have managed to stir up quite a bit of passion and lively debate amongst the Occupiers, though. Thank you for taking the time to work with Timothy and I to plan this and for attending.
With gratitude,

I replied:
Thank you so much, both for your note below and for Liz's and Timothy's impassioned and effective defense of my free speech. I had a great time. I know that when I speak to a group, many of whose members are unlikely to agree with me at first, that various passions will be aroused. But what was special was the vast majority who, whether they agreed with me or not, wanted to hear what I had to say and wanted the few who broke the rules to respect the rules. It was a special day and I would do it again.

Comments and Sharing

CATEGORIES: Social Security

COMMENTS (7 to date)
M.R. Orlowski writes:

During the segment of your talk in which you speak about Social Security's deleterious impact, did you mention the arguments against Social Security such as the changing of work and savings incentives, the lowering of GDP in the long run, and the low or perhaps (likely) negative rate of return that Social Security will have (and maybe currently has) on future (current) retirees?

David R. Henderson writes:

@M.R. Orlowski,
No, I didn’t. I didn’t deal with Social Security in my talk. One of the questioners asked about it and that’s what lead to the discussion. As I noted in Part I, once I said it was a Ponzi scheme, many in the crowd got riled and we never really got back to all the other negatives of SS. But your points are all good.

Mr. Econotarian writes:

I really appreciate you spending your time interacting with Occupy folks. I suspect 99% of these folks will disappear into the wallpaper, but I suspect 1% of them might become new political leaders in 20 years.

I wish I had more spare time in my life to do things like that...but for now I'm limited to commenting on blogs!

Notorious B.O.B. writes:

The answer to the current SS recipient, painful as it would be to him is this: it's not about his "contributions" having already been spent....it's that his benefit stream vastly exceeds those lifetime contributions...even allowing for a modest real return....

He wouldn't like it at all to receive only what he "paid into" SS "all his life" plus interest....

He IS receiving benefits from others above his SS "contributions"...that those others (younger cohorts) will never see themselves...that is what makes it a Ponzi scheme...

He either wouldn't believe these facts...or else change the terms and insist that he did all of what was demanded of him and is now "entitled" to all that was promised...

hard to argue against that....and it confuses the issue of current SS dependents vs younger SS taxpayers.

David R. Henderson writes:

@Mr. Econotarian,
@Notorious B.O.B.,
If we’re talking about “the” answer, as you put it, I disagree. The moral problem with SS is that the government will take it from the completely innocent.
As for his rate of return on SS, as I mentioned he appeared to be in his 70s, not his 90s. I think that means that he will get a much lower rate of return than he could have got with a 50/50 mix of stock and bond index funds. I could be wrong on this, but I don’t think so.

Notorious B.O.B. writes:
The moral problem with SS is that the government will take it from the completely innocent.

Completely agree....because they spent what he thought were "his" "contributions" on someone else in prior periods....

But "the" answer is with respect to your interlocutor's point of having paid into SS...the "real" issue --- even IF the "contributions" had not been spent as received --- is that he is receiving MORE....far more...than he ever paid in....

I do believe you are wrong about his returns....typically they would be far greater than low risk funds for anyone born before 1950..your statement is obviously true for younger cohorts....but incorrect for current recipients....numerous studies on returns by generation cohort (CATO, AEI) show this.

dullgeek writes:


Thank you for posting this series - which I have only discovered now (HT: Coyote Blog).

I wish three things:

1) that I could express this kind of thing so cogently and dispassionately, or
2) alternatively, that you could come to my monthly poker game and have this discussion, or
3) as a worst case, that this talk and the Q&A that followed were available as a video

I hope that someday I will be better at #1, but for now, none of these are much of an option. Sadly that means that I will have to continue to suffer the "crazy conservative" label at the table. (I haven't even convinced them to let me choose the "libertarian" label rather than conservative - so poor is my ability to persuade.)

My point: I loved the stories and look on with envy at the abilities you demonstrated in them.

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