Palko, from 2013 on “the rhetorical deception I [Palko] call the cigarettes and cocaine argument”:
“We just don’t have the money for you to keep smoking. Do you realize that between your smoking and my cocaine habit we’re spending more than two thousand dollars a week? You’re just going to have to give up cigarettes.”
Palko continues:
The gold standard of the C and C argument is the ever popular case for Social Security reform that goes like this:
I. We have to do something about SS
II. The combined costs of SS and Medicare is projected to be more than a gazillion dollars in the red by twenty-whatever
III. That’s why we need to cut/privatize/phase out SS.
I think the politicians have given up on the idea of privatizing or phasing out social security, but the general issue of inappropriate aggregation is still around, so it’s convenient that it has this catchy name.
Related is cheese heroin.
Reminds me of the politician’s syllogism:
https://en.wikipedia.org/wiki/Politician%27s_syllogism
The show referenced, “Yes, Minister” and its sequel, “Yes, Prime Minister”, is a masterclass in (British) politics, and simultaneously one of the wittiest comedy shows I ever watched. If you haven’t watched it, I would recommend unreservedly.
It illuminates and amuses at the same time, I wish there were more shows like that.
I notice this every time an article about “obesity” introduces the problem by saying “X% of Americans are overweight [ill-defined] or obese.”
… plain language is more helpful in effective communication than vague metaphors; what exactly is your point about SS ?
Avery:
There are two points here. One is the policy argument about Social Security, which indeed can be made directly without use of metaphor. I don’t know anything about Social Security so you’ll have to search that up on your own. The second point is the metaphor, which has value to the extent that these sorts of arguments come in various settings. “Cigarettes and cocaine argument” is more vivid than “fallacy of aggregation” or whatever. As always, there is a tradeoff between vividness and precision. I like giving names to arguments; see the lexicon.
Specifically, these are cases where the inappropriate aggregation is introduced mid-argument to support a claim that wouldn’t be true without it.
claim about A
supporting example about A and B
repeat claim about A
It doesn’t even have to be bad aggregation (though it usually is).
I think the aggregation bit is that maybe it’s the cost of Medicare that needs to be addressed?
yes, but keep in mind this is a 10 year old post and it took me years to get around to writing it up. Entitlements may no longer be the best example but there are plenty of others.
This is very close to what I optimistically call “Dorman’s Law”: the sum of a well-measured number and a poorly measured number is a poorly measured number. Of course, it all depends on their magnitudes and degree of mismeasurement, but the basic idea is clear. I came up with it in the context of benefit-cost analysis, where painstakingly exact estimates are made of various monetary consequences of an action and then tossed into the same hopper with immense speculative figures from willingness to pay studies and the like. The point is to keep the two kinds of items separate, one box for the precisely measured stuff, the other for the guesstimates.
Or to assess the uncertainty in each number and then propagate the uncertainty in a model, as we did in this analysis.
For an interesting example of mixing good and unreliable data, check out this tweet from Bret Devereaux
https://twitter.com/BretDevereaux/status/1665054690709499904?s=20
about this model
https://www.theatlantic.com/ideas/archive/2023/06/us-societal-trends-institutional-trust-economy/674260/
There is a bit of a disconnect between the metaphor and the example unfortunately, since SS is good (to those capable of compassion, anyway) while both cigarettes and cocaine are considered vices.
I do like giving snappy names to arguments as well, so I am happy to learn this one!
Are standards really so low that paying someone back what you owe them is considered “compassionate” now? Essentially not being a thief/scammer.
And the reason you owe them is you told them they are too stupid to save for retirement and involuntarily took the money, then turned around and spent it on a ponzi scheme.
The right thing to do is pay out what people are owed (properly adjusted for inflation, which likely means higher than current amounts). Then wind the whole thing down in an orderly fashion rather than waiting for the value to inflate away or some external event to trigger a sudden, catastrophic failure. I wouldn’t even call that compassionate.
Anon,
I wouldn’t want to defend all aspects of Social Security, but you seem to object to the idea that anything like Social Security could be considered ‘good.’
People don’t know how long they are going to live or how well their investments will do. I remember my great aunt Clarice telling me, when she was about eighty years old, that she thought she had saved enough money for retirement when she retired at 63 or so, but she was wrong: she thought she’d live another ten or maybe fifteen years but here she is seventeen years later and with who knows how many more years ahead of her; and her investments hadn’t kept up with inflation; and the value of her house had declined. At that point she was mostly living off Social Security, although my parents helped her out some in spite of not being really close and of course having expenses of their own.
I’m sure you can explain that in some libertarian utopia this sort of problem would be handled in such-and-such a manner that would be fairer and more efficient. If so, you might be right, but that still wouldn’t mean Social Security is bad, even if something else would be better.
Or perhaps you believe people like my great aunt should just be left to their own devices, like they used to be prior to the New Deal. If so, I’d say you have a compassion deficit.
I don’t read Anoneuoid as heartless, more like unconvinced that social security is the appropriate structure for actually achieving the goal of taking care of the elderly. His preferred strategy seems to be to do something like issuing bonds to the elderly guaranteeing them their future payments and then stop guaranteeing additional payments and “do something else” but he doesn’t specify what that is.
The concept behind SS is that it’s a transfer from the young to the old, and it relies on there being a lot more young people than old people. Demographically we are heading towards there being about 2 young people per old person compared with when the system was put in place it was about 10 young per old. So the cost to the young is 5x higher than it was in 1940 or whatever. If that cost was 10% of earnings back then it’ll be 50% of earnings in 10-20 years. It’s not a sustainable strategy.
Similarly the progressive tax relies on the idea that every family has one working man and one stay at home mother. If your income is 2x higher than median it’s because you’re selling 1 unit of time for 2x the median price (ie. You’re well paid, “rich”) but then in the 1970s women surged into the workforce. Now if your family income is 2x median it’s likely because you’re selling 2 units of time for median price. But two people working pay **even more** tax than one getting paid 2x the price, because ss+Medicare tax phases out for the rich earner but doesn’t for the couple!
The whole system is thoroughly broken because it’s built on very wrong assumptions which weren’t even true at the time it was all invented in 1940s-1960s. This is a case of extrapolating from the past in a bad way.
The solution is to eliminate the progressive tax in favor of a flat tax, which incentivizes a lot more labor force participation because it reduces marginal tax on second earners, add a universal basic income which acts in effect as a replacement for the progressive structure, reduces income inequality and provides both child care income as well as a social security type income for the elderly, and reap the increased productivity as well as the utility effect of redistribution of wealth (a flat tax would be a major transfer from the very-wealthy who utilize the complex tax code to avoid paying much tax at all)
Having looked at this in the ACS back in 2017 it’s clear there are a lot of educated women (mostly, though also some men) who aren’t working because it just doesn’t pay. If you have children and a spouse with a middle class income, after taxes and paying for childcare unless your income exceeds your spouse you will generally net about zero money by working. Who wants to work as a wage slave for zero benefit while missing your kids childhood? Not ~20M people with masters degrees or more who are currently at home taking care of their children. Most of them would probably prefer some middle ground, use their children’s UBI payments to buy some childcare and work part time at high wages while retaining their earnings. That labor would be more globally productive than purely staying home shuttling their kids to soccer, and their retained earnings would be used to demand more middle class goods and services shifting production away from crypto finance scams and tech scams like Metaverse or rent seeking schemes like app stores and streaming services and such. That increased productivity could fuel caring for elderly as well. Of course it also makes sense to recoup much of the wealth which has transferred to the ultra wealthy through rigging the system for the last 80 years.
I was struck when I recently read “The limits to growth” how accurate the qualitative picture was that Donella Meadows et al had in the early 1970s.
If the government was better at saving money than the average person it could be good. But we see that they saved 0% of the money and created a ponzi scheme.
Btw, last night I asked around 5 people under 50 whether they thought social security would give a meaningful payout when they retire. One person said maybe theyd get something, the rest said no. You can do your own informal poll.
> I’m sure you can explain that in some libertarian utopia this sort of problem would be handled in such-and-such a manner that would be fairer and more efficient
The Shangri-la binary mindset: Because something flawed it’s necessarily net negative and inferior to some fantasized alternative that’s magically free from unintended consequences.
And of course it’s entirely infalsifiable.
Daniel –
> The solution…
I find the complete confidence rather jarring. But regardless, if the success of a flat tax is contingent on UBI there’s an obvious basic plausibility problem.
As a Bayesian, how to you approach the possibility of this country ever adopting a UBI policy?
I know it has been adopted in chunks but I have a hard time thinking it’s even remotely plausible (politically) as a nationwide policy in this country.
As such, it seems to me to be better to to operate from the presumption that UBI isn’t going to happen and to view the relative merits of a flat tax in that context. I see it as a kind of risk scenario. We have an imperfect situation. What are the down side risks of changing it? Seems likely that we’ll get a reduction in the progressive ratio of taxation but no other substantive changes.
Joshua, I have no idea. The future is unclear to me enough that I’m not sure the country exists in 50 years. Seriously. Given the extreme uncertainty I’d say things previously considered implausible are no longer so implausible.
Flat tax is mathematically provably the only thing that can eliminate the asymmetry of taxation between the two members of a married couple. UBI is the lowest cost and most efficient way to reduce income inequality which is responsible for most of the poverty induced crime and inefficiency in allocating resources, hence the certainty that those are the correct solutions.
Daniel, you’re conflating the -idea- of Sovial Security with the -implementation- of Social Security. The concept of Social Security does not require more young people than old people and does not require it to be unsustainable. That’s how it is at the moment but the idea of the government insuring people against outliving their retirement savings is not inherently unsustainable even with the current basic structure. Changes like means testing and increasing the retirement age have long been proposed and gave this far failed, but then proposals like yours have also not been adopted. There’s no reason to believe your ideas are more likely to be acceptable politically.
Anon, I’m not sure why you’re so sure the government does a worse job investing money than the average person. I’m not saying you’re wrong but it’s not obvious to me.
But anyway the “average person” isn’t the issue. As a society we’ve decided to protect even the people who made bad investments or suffered any manner of financial disasters, even if they’ve ended up well below average or have lived far longer than average.
They saved 0% of the money. How could you do worse? Maybe by going into debt and paying off the old debt with new debt, which is what was done.
Which under 50 demographic believes they will derive meaningful benefit from it. I don’t think Ive ever known someone who expects to. It is obvious that the first ones into the ponzi are getting paid out and the last ones are the suckers who get 10 cents on the dollar or whatever.
But my original comment wasn’t about this, just that paying people back what was taken from them is not “compassionate”. Maybe there is a Darth Vader “pray I don’t alter the deal further” type of compassion.
Phil, when I hear Social Security I think of the system we have today. If you had said something generic like “protecting people from poverty” or something I would have responded differently.
The Social Security system we have hadn’t really been under serious pressure yet. It’s just starting to be strained. Take a look at the birth rate since 1950 and particularly the recent trend post 2008 though (especially in US but also globally) and ask what does it look like in another 15-20 years? That’s when the reckoning will really take place.
https://www.pewresearch.org/short-reads/2019/05/22/u-s-fertility-rate-explained/
https://econofact.org/the-mystery-of-the-declining-u-s-birth-rate
(Not a direct reply to Matt Skaggs, but since the SS issue has reared its ugly head,)
As a boomer who paid into Social Security starting when a dime would get me a 12 oz. sodfa, and a quarter would get me a burger, I don’t feel what I’ve gotten back in the ten years I’ve collected from SS comes anywhere near the value of what I put in, and I don’t expect to live another ten years. I’m being paid back in funny money after they got full value from my dimes and quarters at the time. But at least it does go up a little year by year, unlike my GE pension (which current GE employees don’t get now, thanks to all the union-busting).
Not that I have any financial cause to complain, and if taking away my SS would help some other people so be it, but don’t tell me I’m cheating somehow. (I didn’t vote for all the tax-cutters either.)
Also reminds me of the water shortage in California. Only 10% of water usage is for residential use (and that water is being paid the most for), but that is what is on the chopping block first.
Likely the problem is the seniority of the water rights. The farms were there before the large urban populations and thus have legally rights to the water.
It shouldn’t be surprising that urban water is far more expensive. It’s much cheaper to deliver a large volume of (probably untreated) water to a single farm via a ditch than to deliver the same volume of (treated) water to thousands of households via a network of buried pipes. Urban water infrastructure is so much more expensive that its falling apart in much of the US because many cities have other priorities.
Just the same, I’m aware that many agricultural water projects charge farmers well below cost of delivery.
This reminds me of the classic dril tweet:
:
Food $200
Data $150
Rent $800
Candles $3,600
Utility $150
someone who is good at the economy please help me budget this. my family is dying
: spend less on candles
: no
Lol
Ever tried to explain what a “dril tweet” is to someone unaware? That account holder really achieved something.
I can’t think of an example of the “cocaine and cigarettes” problem.
Seems like today no one would let something like that get out. Today, businesses, orgs and/or governments who want to keep snorting, or forecasting the benefits of snorting, their proverbial cocaine turn to the liar’s best friend: statistics and modelling!!! :)
What you need is a model with numerous false assumptions that inflate the price of cigs and deflate the price of blow. Don’t worry to much about hiding your assumptions – no one even knows how to spell that word! Here are some great ways to pump your smokin’ and deflate your cokin!
1. include the cost of the known health effects of cigs and blow – that should do a good job of downplaying the cost of blow, since as horrendous as the health effects of cocaine are likely to be, there’s probably not much data on it.
2. Badabing! You could add in the productivity benefits of toot! Hell yeah! You can work for days on end with a few thousand bucks worth of toot. Hey, it doesn’t matter if your model has never been tested in any other context! In fact that’s perfect, no one will know how bad it is!
3. What about the sobering effects of snort? While you’re working for six days straight, you’ll need to drive to the liquor store to grab a bottle a few times a day. But if you just chop up a line first, you’ll feel sober as the day you were born (depending on your mum) when you get behind the wheel! That should save a lot on DWI charges and insurance down the road!
4) create a model showing the outrageous growth in the future price of ash-trays vs. glass coffee-table tops! Price one ash tray at the dollar store on monday, then another ash tray at Neiman-Marcus on Wednesday, then project the rising cost of ashtrays 400 years into the future!!
5) engage your three children in an experiment. Randomly assign each child to be a smoker or a snorter. Then survey them on how long it took for each to quit their habit. Repeat until the surveys show that blow is far easier to quite that tobacco.
Yes that’s right America, with statistics and modelling, up is down, left is right, blue is red and truth is dead! No more worrying about the prices of cokes and smokes! It’s easy to fix the Cocaine and Cigarettes problem with statistical modelling!!! Just download R today!
I like the way you think. We can also control for the effects of other drugs, toss as many as we can in our model, until we get some good ole fashioned sign flippage and show that actuallyyyyy cocaine is associated with positive outcomes!
Catchy name but I think this sort of argument is less common than combining two things and then arguing that both (instead of just one) should be cut, etc. Something like, “Between your cigarettes and my cocaine we’re spending $2,000 a week. We’re both going to have to cut back”–when the cigarettes cost $10 a week.
I still love the cheese monologue.