OLD: Comprehensive Social Security Reform Act (See new thread: Reference Only)

[Marokai Backbeat]

Well they say the French are often unfashionably late.

Considering how long this bill has been in debate, I don't think it's just the French.

[Marokai Backbeat]

which of these insurances are new and which replace existing systems?

I honestly don't know. But the main point is precisely to create a consistent welfare system replacing several uncoordinated structures.

Does anyone know what current welfare systems we currently have in place?

We have assistance programs for home energy, government provided student loans instead of private ones, we have national healthcare programs (Medicare and Medicaid are gone), we have housing vouchers and public housing, food stamp programs, old-age pension programs, unemployment compensation, etc. Really, the usual stuff.

[Marokai Backbeat]

Antonio sent me the PM yesterday but even though I looked at my PM box a million times I swear to God I never noticed it for some reason. He sent me a PM about a half hour ago saying "Did you see my PM?" and I was confused until I looked up and then slapped myself.

I have to move some things from one house to another very shortly, so once I get back and get settled in I will do exactly as Yankee suggests; read the bill, tell you what I think, and give a rough estimation of what stuff will cost.

And despite Kalwejt, I do, in fact, "give a damn." (And would lay the majority of the blame on the Senate not caring very much lately.. But that's neither here nor there.)

[Marokai Backbeat]

Okay guys, I'm just going to start by looking at how much of a net increase we're talking here by each section because I don't like Badger's previous estimations one bit at all. I'll analyze the entire bill first so I know how much we're saving by slashing off sections of it after the fact.

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I honestly don't think this section needs to be here at all. It seems incredibly redundant considering the National Healthcare Act, which is much more detailed and handles any problem that this section is trying to talk about. If Antonio wants to set up another board to oversee the national health program, that's cool, but I don't see what this really does aside from that. If it were me I would just strike this entirely.

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I'm operating under the assumption that all of these things replace things that already exist. For instance, that Social Security is going to be replaced by what Antonio proposes here, and that Unemployment Insurance as it currently stands is going to be completely replaced by what he's proposing here as well.

We currently spent $139.33 billion on unemployment compensation. The maximum amount of time we allow most people to receive UI is six months, and it amounts to around 50% of the individual's former wages as an employee. The maximum someone can receive through UI is around $1800-$2400 a month, or something like that, so let's just assume for the sake of this argument that the max is $2200 a month.

Considering Antonio's proposals... this adds alot. Antonio's proposal institutes no maximum amount of time for getting UI. It makes the maximum amount $4000 a month instead of $2200 a month, and while 50% of the wage is what it is under the current system, that doesn't become the norm under this bill until 4 years have passed.

Now, in fairness, most people aren't going to be getting that maximum because most people probably don't make enough to qualify for that. And also, plenty of people will want to get a new job at some point, so not everyone is going to stay on UI forever. But considering that the first year is 90% of the person's wage, the second is 80%, and the third is 70% and so on.. you're not only looking at a spending problem in this section, but a lingering unemployment problem probably somewhere in the ballpark of, like, 20%. But anyway, that's not what I'm here to analyze, is it?

The cost of this section is pretty big.We currently spent $139.33 billion. Under Antonio's proposals as they stand, we will likely end up spending somewhere in the ballpark of $450 billion. (Or a net increase of $311 billion.) There is no way of being sure of this proposal until it goes into effect, but considering that the spending of this program will only increase until it's been in place for a few years, consider that $450 billion number lowballing it.

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To my knowledge we don't currently have a monthly child benefit or anything resembling it, so this is all new spending, and if anyone wants to correct me on that, go for it.

All in all I don't see the need for this section. For the purposes of guesstimating costs here I would say that the vast majority of households wouldn't take advantage of the credit, because if it was a mandatory benefit, it would get alot more costly. Consider this, at an average rate of 260 dollars a month, 12 months a year, for just six million kids, you're talking $18.72 billion dollars a year. So I'll be generous and say this is costing $20 billion a year flat. Compared to the UI changes, this is pocket change, but it's still all-new spending.

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As I said earlier, I'm assuming Social Security is either getting abolished or rebranded as this. So for future reference, we currently spend $454.4 billion purely on Social Security pensions not counting disability benefits.

Antonio proposes a minimum monthly pension benefit of $1000 a month. Considering that the RL average monthly benefit for Social Security is $1079, this isn't as dire as you would initially suspect. The money here, however, is being spent from his calculations of monthly payouts. Antonio's proposal calculates the payout from the highest point in the worker's salary (pretty much), and takes 80% of that as the payment.

Needless to say this adds up to far more than $1079 a month.

For the purposes of guesstimating, let's just say it's 80% of the average income of Atlasia. Let's also say that that income number is $46326 (it was roughly this in 2004 in RL.) 80% of said amount is $37060, which amounts to $3088 a month. If we're already spending $454.4 billion a year with $1079 as the average monthly payout, we're going to spend well over a trillion under Antonio's proposal. Probably closer to $1.2 trillion.

I'm going to be kind to my good friend Antonio and stop there.

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We spend about $90 billion in the Social Security disability payouts, so I'll assume alot of those same payouts carry over in Antonio's system. Considering the low amount that alot of the payouts amounted to in the child benefit program he proposed earlier, I really don't think this amounts to much of a net increase in spending. I'll assume we spent $10 billion more in disability payments than we do now for a total of $100 billion a year.


Added up, Antonio's ORIGINAL PROPOSALS, NOT HIS AMENDED PROPOSALS, come to a nicely guesstimated $1.68 trillion, or a net increase of $1.077 trillion.

NOW I SHALL GUESSTIMATE HOW MUCH ANTONIO IS SAVING IN HIS AMENDMENTS AND HOW MUCH THE REVENUE COMES TO FROM ALL THE TAXES.

[Marokai Backbeat]

Now how much we save by his amendments. I'll try to make this quicker:

This is what I propose (relative to the benefits) :

Health insurance no change

Get rid of it, guys. Cmon.

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We currently spent $139.33 billion on this. Under Antonio's proposals as they stand, we probably end up spending $450 billion just to start with. These amendments do cut off some of that cost, but they're still very generous and a serious expansion of the current UI system. Though it saves money, I don't think it saves much more than $50 billion. Let's say under these amendments we go down to $390 billion as opposed to $450.

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This saves $20 billion.

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I need clarification on this. This surely can't be meant to be a monthly benefit, as it would either change nothing, or cost a couple extra trillion more. If it's meant to be a yearly cap of $8000 (which seems out of place with Antonio's generosity elsewhere) then we'd end up spending less on elderly pensions than we already do now. So Antonio, please clarify.

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Nothing changes here, clearly.


For now the savings amount of $80 billion. Not a whole lot, until I get Antonio's clarification on the elderly pension savings. But even still, you guys are in deep s**t revenue wise because, savings from the elderly pension programs not in yet, you're still spending an extra trillion.

All told I think you are looking at significant taxation, and certainly more than 10%, all told.

I'm going to presume (correctly, I think) that all of the proposed taxes are in fact new taxes and not any sort of taxes that are carried over. I'm getting pretty tired at this point, but I think it would be a fair guesstimation to say that with the taxes combined capped out at 10% (we are talking the equivalent of an additional 10% in income tax, correct? that's what I'll presume) that we rake in an extra $300 billion a year.

This leaves you guys quite short.

As for where most of this money comes from in terms of individual taxes, the Unemployment Insurance tax levied in this bill as well as the additional Elderly Pensions salary tax bring in about 70% of that 300 billion. The rest comes from a combination of the Health taxes and Minor Insurance taxes, and I didn't factor in the child credit tax, since under Antonio's amendments, that section is stricken in it's entirety.

I normally wouldn't include this sort of thing, but I read through the bill before starting all of this and Antonio said he would've appreciated it if Badger did this before, so I've decided to at least give him a very rough idea of what's coming in from where.


At the end of this mess (which took me hours, by the way, Yankee. Not 30 minutes) we come up with the following:

Under Antonio's original proposals, you're spending an extra $1.077 trillion.

Under Antonio's amended proposals, until I get clarification on the elderly pension program amendment, you're still spending around $997 billion.

Which you're paying for by bringing in an additional $300 billion in revenue.

I suggest some work on that!

[Marokai Backbeat]

Yes, hence my considerable concerns about this Bill...

Also, I demand a pay raise.

[Marokai Backbeat]

Thank you Marokai for the work you put into this. You gave us the kind of numbers we needed to assess the bill's impact on economy and budget. If I get the numbers right, that means my bill would nearly triple the costs in Welfare State, from 0.6 trilion to 1.68, while only adding around 0.3 of taxation. As you put it, it seems the current bill is unworkable and needs a total rewriting. Something that is impossible to achieve before September.

Let's be more positive about it, Antonio. You can still do this. It's possible to cut this down to a deficit neutral package. I'd hate to see you go out like this.

[Marokai Backbeat]

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We currently spent $139.33 billion on this. Under Antonio's proposals as they stand, we probably end up spending $450 billion just to start with. These amendments do cut off some of that cost, but they're still very generous and a serious expansion of the current UI system. Though it saves money, I don't think it saves much more than $50 billion. Let's say under these amendments we go down to $390 billion as opposed to $450.

With those %:
How much  would placing a 3 year limit on UI compensation reduce the costs?  

With these:
- 75% in the 1st year
- 50% in the 2nd year
- 40% in the 3rd year.

350 billion. It's not necessarily the cost, it's making it last six times longer than it does as of now. Even though I don't think that many people would remain on unemployment benefits that long, it still presents a drain.

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300-310ish billion, I'd say. And not right away. It would take time to ramp up. Make it 70% and you get it down to 290-ish billion. (Also, taking time to ramp up.) Or a net increase in spending of 150 billion or so.

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This doesn't change a whole lot. As I alluded in my post before, the money from this is coming from Antonio's calculations of payouts. 80% of the highest wage in their lives is still going to cost a hefty sum, regardless of whether or not it's capped out at $2500 or $3000 monthly.

Capped at $3000 a month: This roughly around the average payout expected under Antonio's system. Considering that fact, capping it at this amount isn't saving anyone much. Probably $80 billion or so accounting for the edge cases that make a ton.

Capped at $2500 a month: You're getting somewhere here. I'd say this saves you $200 billion off of the total cost of the program. I think if you capped it at 2.5k or 3k a month and lowered the payout calculation to 60% or something, though, you'd have a much more reasonable outcome.

Even considering these additional amendments at their most optimistic:

The strictest proposal you make for UI benefits brings you down to a net increase of $161 billion. (or roughly 300 billion in total)

The strictest proposal you make for elderly pensions brings you down to a net increase of spending around $550 billion. (or roughly a trillion in total)

That's a total of $711 billion in additional spending, only $300 billion of which is accounted for in additional revenue.

[Marokai Backbeat]

Hate to keeping crushing Antonio's dreams like that. It's just that elderly pension programs cost a lot.

[Marokai Backbeat]

Ah, Marokai? Your work isn't yet complete.

I wasn't here for a day. Sheesh. This is a thankless job!

BTW, Marokai, can you give us an idea of how much revenue is levied through all taxes in Atlasia as of today ? If we raise it by 10%, we should be able to generate more than $300 bilions no ? If I read you correctly, your estimate only took into account the income tax (which is only a small part of all taxes if I remember correctly). If we can manage to get a 500 or 700 bio. increase, that should be fine as a compromise.

Sure, that's fairly simple. According to the last budget update, spending (for the year) is at $3453.31 billion, and the deficit is reducing at $40 billion a month (though that number will fluctuate constantly, but according to the last update, which is what we're going by) or $480 billion a year.

So, based on that we're bringing in around $3.9 trillion a year. (That is a ton ton ton of money!) Taxes in Atlasia are fairly high. Considering that, the idea that these taxes are bringing in 300 billion a year (remember that that is a yearly increase, which is alot of money in the long term, it's not a measly sum like you might think at first glance) makes perfect sense.

If you can cut down the cost of the pension program, though, I do have some suggestions. Introduce excise taxes on marijuana and tobacco products. Marijuana products are practically untaxed in Atlasia, to my knowledge, and though cigarette taxes are high, other tobacco products in Atlasia are not. If you increase excise taxes on those things you could probably raise 70 billion or so, and if you're comfortable going over the limit a bit, you can rest on the additional revenue we're already bringing in anyway. (The extra 400 billion a year that's currently paying down the deficit.) You'd be safe to increase net-spending by 500 or even 600 billion a year while only bringing in an additional 370 billion a year considering the other tax revenue we're bringing in, IF you're comfortable slowing deficit reduction.

That requires a complete overhaul in how we approach this issue, but for the meantime I suggest this:
70% of average lifetime earnings during employed years
maximum $2000/month

Doesn't save you a whole lot in comparison to Yankee's previous proposal of capping it at $2500 a month, not because of the lowering of the cap, but because that calculation of earnings. You probably save $300-350 billion off of the original cost of the program but that still leaves you spending $850-900 billion in total. (Which is a next increase of $400-450 billion.)

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A flat rate of 1500 would reduce costs quite a bit in most cases, but it would also raise them in others, since you're making it a flat rate instead of being dependent on the wages the person has earned in their life, who may also have a different cost of living from place to place. I'd say under this plan you reduce spending of the pension program to $700 billion a year, or a net increase of $246 billion.

A decent chunk of money would still depend on how you deal with people who haven't worked much, though. But this is still certainly the cheapest retirement scheme you've all come up with so far.

[Marokai Backbeat]

OK, I see. We have to work on retirement pensions and unemployment benefits. It really displeases me, because those were the most important parts of the bill IMO.

To be clear, we can have an additional revenue of around 390 bilion. The bill currently costs around 1080 bilion, so we have to reduce it by roughtly 700 bilion. That's certainly not gonna be easy.

Don't worry mate, it's not as difficult as it seems. You can still make both systems alot more generous than they are currently while being deficit-neutral.

[Marokai Backbeat]

Reduce that minimum to $500 and make it last just 2 years instead of 3. I'm sure that is workable.

But I can already tell you without even thinking about it that your ideas for the pension program are too much. Unless you propose more taxes (like additional excise taxes I mentioned above, or something) it cannot be that large.

[Marokai Backbeat]

OK, so the unemployment benefits might be :
- 70% in the first year
- 50% in the second year
- 30% in the other

How about
45% first 12 months
30% in months 13-18
20% in months 19-24
10% in the other

I don't think there would be much of a point to unemployment compensation after the first year in this case.

As for Antonio's other post, I'll get to it shortly.

[Marokai Backbeat]

Guys, I analyze, I don't write amendments. Come on.

[Marokai Backbeat]

Marokai, did you come up with any figures on the 70 and 50 percent rates Antonio had put forward? I'd sort of like to get an idea of how that would turn out before I offer my own plan/amendment.

It wasn't directly pointed at him, but in a proposal from Yankee, I suggested it on my own and guesstimated it on the side:

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300-310ish billion, I'd say. And not right away. It would take time to ramp up. Make it 70% and you get it down to 290-ish billion. (Also, taking time to ramp up.) Or a net increase in spending of 150 billion or so.

Short of making it last one year only, I don't think you guys can do any better than that if you're going to change the UI system at all. Your main focus should be the pension program.

[Marokai Backbeat]

How can we let people without any income after 2 years ? Nobody chooses to stay unemployed for so much time. There needs to be an universal minmum benefit for everyone : I find $500 to be extremely low, but it's still better than nothing. Otherwise, I'm fine with Shua's proposal.


If the original proposal cost $450 billion, with rates starting with 90% and ending with 50% indefinitely, I'm pretty sure such a proposal should be almost budget-neutral.

I think you are trying to roll all direct welfare payments to people into the UI system as part of the combination/consolidation effort, correct?

Your original minimum amount was $600, so I don't see the difference really.

I doubt shua's budget neutral. According to Marokai, 70/50, 2 years was an increase of $150 billion or so.  Considering shua's rates, it's probably $90 billion increase or so, though that has different minimum and maximum numbers.

You think so? I would guess more like a $110 or $120 billion increase. I don't think you get much savings from lowering the last 6 months to 40% (so you may as well keep it at 50% if you want) since I wouldn't suspect most people to stay on UI that long. A bit of savings from reducing the second six months, but remember, you're still expanding UI benefits and making them last 4 times as long as they currently do, traditionally. It's still going to cost alot.

[Marokai Backbeat]

What exactly are you asking from me, Shua?

I'm getting mildly irritated at you people. You don't need me for everything.

[Marokai Backbeat]

This is something that has bothered me... I don't think that all welfare payments should be lumped into one.

If someone is dependent for life on a disability pension, I completely understand that - but unemployment is different.

You could always do what Canada does, which is just change the name to "Employment Insurance" and include more broad benefits that aren't always related to job losses. It would at least be a bit more honest.

Marokai, is there any way to estimate roughly the cost of an extension that is indefinite in time?

What you're essentially doing here is creating a guaranteed minimum income system, not an unemployment insurance system. I'm not sure there's any way I can accurately give you the information you want. It would cost a significant chunk more than current estimations, I can certainly tell you that, but I'm not sure how many people would really be out of a job that long, and it would takes years for the cost numbers of people remaining on the system to really add up. I guess you could take my initial projections of how much it would cost as something close, but I really can't offer you anything specific.