Friday, January 29, 2010

Immortals and Social Security Part I: A Drain on the Economy?

See the bottom of this article for a question I pose to the readers!

Older superheroesKingdom Come by Mark Waid and Alex Ross

Comic book characters live forever. Sure, Captain America and Batman recently "died," but not really. They were actually just shot through time. The Martian Manhunter was recently killed off in DC's Final Crisis, but does anyone really expect him to stay dead?

Superheroes and villains who don't have an unnatural ability to cheat death also manage to live forever. Perhaps the main reason for this is the notorious retcon, which Mark discusses at greater length here. Despite these elements keeping characters alive, there are actually still some good old-fashioned immortals living in these universes. These are the heroes and villains who naturally age at a much slower pace than the rest of humanity, use magic, have healing factors, and have access to nanotechnology or to Lazarus Pits. Regardless, they all end up living to be hundreds or thousands of years old. These are people like Wolverine, Ra's Al Ghul, Deadpool, Vandal Savage, Nick Fury, Black Widow etc.

Take Superman. Although Superman technically ages and may one day die of natural causes, several comics have established the notion that his life span would extend considerably beyond that of the average human. In most elseworlds tales that depict the future of the DC Universe, Superman is still portrayed as being full of vitality and bearing the appearance of a much younger man than his cohorts in the Justice League. Superman, however, is actually Clark Kent, who works as an investigative journalist for the Daily Planet.

In fact, many of these immortals have day jobs. They earn disposable incomes, buys things, pay taxes, and have retirement accounts. And this is where the problem comes in from an economic standpoint.

Batman is rebornThe Dark Knight Returns by Frank Miller

The problem with having a population of these immortals running around is that they could actually be a drain on the U.S. economy. I'm not talking about the rampant destruction they cause either. Specifically, I'm referring to the expenditures of entitlement programs like Medicare and Social Security.

Medicare is simple enough. You hit age 65 and you are automatically enrolled in a social insurance programs that provides you with government-sponsored insurance for the rest of your life.

Social security, on the other hand, is a little more complicated. To receive retirement benefits, you need to have worked for at least 10 years. While you work, you pay what's known as the Federal Insurance Contributions Act (FICA) tax on your earnings (as does your employer), which goes directly towards funding retirees currently collecting on social security benefits. Once you hit retirement age (regular age for people born after 1960 is 67, or you can elect to retire at the early age of 62, but receive a smaller benefit), you become eligible to receive your annuity payment (a payment for the rest of your life). The benefit you receive is dependent income you've earned for the 35 years of work in which you earned the most. If you've worked for less than 35 years, the missing years are just filled in with 0s.

You can begin to see why this is problematic with a society populated by people who don't die for centuries or millennia. So what exactly happens when your life can extend many years beyond that of an ordinary human being or even indefinitely? Would social security and Medicare benefits still apply to you? Would you be allowed to work for 10 years, become a beneficiary at age 65, and then receive steady payments for the rest of your thousand-some-odd-year existence?

In actuality, the proportion of immortals to total citizens receiving social security and Medicare benefits is likely very small. As it stands, they're outliers and probably not really a significant cost for the government. However, it has the potential to become a real problem.

In fact, most of us are aware that social security is experiencing a major fiscal imbalance. According to Jon Gruber's wonderful textbook on public economics, over the next 70-75 years, the present discounted value of the program's obligations exceeds the present discounted value of the taxes it will collect by a considerable amount (something like $4.5 - $5 trillion). According to the 2009 Trustees report, the social security trust fund will be depleted by 2037, at which point payroll taxes will only be able to fund about 76% of expected payoffs to beneficiaries.


OOASDI Income and Cost Rates Under Intermediate Assumptions
(Reprinted from the 2009 Trustees Report)



There are many reasons for this. One is that that baby boomers are retiring. Another is that technology in the 20th century has improved life expectancy rates. Another is that birth rates have declined. Finally, the growth in wages has slowed in recent years. So, what we have is a new generation comprised of fewer workers paying taxes on earnings that have only marginally increased. And this is all to fund a population of elderly citizens that has grown considerably in recent years.

On top of this, consider how the population of mutants, aliens, sorcerers, demigods, and science-experiments-gone-wrong has increased in both the DC and Marvel universes in the past 20-25 years. If these groups continue to expand, then over time they may cease to be outliers and start posing a real cost burden for the United States.

Any government program is bound to run into the problem of moral hazard. Much like on real-Earth, I anticipate major reform social security financing reforms coming into play in comic book worlds. My question to you is: how can governments in DC and Marvel reform social security and Medicare to account for these immortal or long-living populations?

I'd like to hear from some of you and I'll make another post in the near future with some reform proposals!

28 comments:

SevenDollarPen said...

Looks like a job for... immigration reform! A steady influx of young, healthy, taxpaying workers should go a long way toward reconciling that deficit.

If Congress can turn off its super-ineptitude and implement some health care cost controls, some healthy population growth could help our budgetary ills.

Will said...

One option (although probably an incredibly unpopular one) is for a medical determination of inability to work a full-time job. Basically, require that everyone go through the disability process before collecting social security. It would be complex, but the processes are already in place, so it could be managed.

Another option would be a maximum number of years of collection. The number would need to be fairly high to prevent a long-lived normal person from being cut off on their 105th birthday (and with all the tech in comics, you assume people who avoid unnatural causes of death have a long life).

Chibithulhu said...

This looks like a job for... Lawyers! VA, SSI, and other benefit programs all have the option of denying a claim on one basis or another, at which point the applicant may appeal with the possibility of further denials. Bruce Wayne, Lex Luthor, and Tony Stark can afford good lawyers, but Wolverine, Superman, and Martian Manhunter are illegal immigrants and may not even be eligible to begin with.

colsmi said...

1.

Any competent Government working out how to pay for future expense begins with an audit of current & future resources. But the DC and Marvel Universes contain a significant number of variables affecting economic development which ours don't. Some argue that our aging population is a dangerous drain on resources – which I don’t accept – but the resources available to comic book universes are so much greater than ours that this premise isn’t transferable to them. For example, you refer to "the population of mutants, aliens, sorcerers, demigods, and science-experiments-gone-wrong" in both universes. Yes, we have to consider the cost of those of these communities which are long-lived to the state, but let us also consider the benefits. Sorcerers and demi-gods can potentially create wealth, and wealth-creating opportunities, which shatter the "laws" of economics and promise returns such as even Allen Sanford couldn't dream of pretending to offer. Mutants have a variety of abilities, from the apparently minor to the reality-changing, which could again promote small-scale and large-scale economic development. Aliens too offer considerable advantages in that most of them have access to technology, genetic diversity and socio-economic concepts which even in comic-book universes are divergent from standard forms of thinking and behaving. It's hard to see these long-lived citizens as being an economic drain. The truth is, I think, that their long-lived citizens offer huge potential for future growth, not drain.

Even if the economic potential of the various long-lived communities isn’t specifically tapped, I believe the rate of technological development in comic-book universes is so incredible that it’d easily allow them to stay ahead of economic troubles in the same way that the Industrial Revolution allowed Malthusian pessimisms to be denied by the unforeseen technological productive power of machines.(I wish I‘d the same faith in our future.)

colsmi said...

2.

Instead, if we accept that comic book science will inevitably power their economies to greater and greater output and wealth, 2 'realer' issues for comic book universes emerge. The first is how that technology is embedded in the wider economic, political and social structures: if the big superteams have intersteller-spaceships, then so will Governments and Corporations. I’d imagine some genius is already working out how to offer ordinary folks the fruits of FTL tech. The culture shock and economic dislocation of this pace of change could destabilise any culture: the real risk to the economy is not a drain on state resources, but the lack of a "new deal" to totally change the way in which comic book states are run. The old models of economic development would cease to function: left wing models could stifle the apparently anarchic potential of say magical production of wealth: right wing models would surely see the super-rich becoming so wealthy and rich that anything resembling contemporary western states would disappear. The answer to your question of how to pay for the comic-book long-lived is bound up in the need for the kind of social, political and economic development unseen since the revolutionary successes of America and the revolutionary failures of France and Russia. It will only appear that the long-lived are a drain if the old systems survive unchanged.

The second "realer" issue referred to before is how the (excessively?)hyper-massive profit of super-science and magic is divided up by the state. Those bodies with access to FTL - to take but one example - will quickly accrue riches unimaginable to the 'ordinary' citizen. The truth that I’m waffling towards is that there should be enough wealth for all the citizens of DC & Marvel Earth to live as long as they like in the lap of luxury, but whether those riches are going to be shared around in even the Rooseveltian sense - well, I'd better go before I'm accused of being the Marxist I'm certainly not. (I'm with Popper on Marx every time.)

Matt said...

Well eventually Social Security will have to be scrapped or the US will have to default on its debt which will effectively scrap it(one would think). If you look at the DC Universe and lets say Superman. He can't go on forever as Clark Kent. For one people would start to realize he hasn't aged when they are retiring. Superman would have to create a new identity every 50 years at the least to still be able to stay active as a super hero. The whole reason he works at the Daily Planet is to find when there is trouble without attracting attention. Going to Marvel I don't know how Wolverine makes his money but I thought most of his expenses were paid by Professor X and the X-Men in which case they are not immortal and he does not pay taxes on that so can't make Social Security. Before that he traveled around a lot and did jobs for cash or switched aliases frequently to avoid attention. My point is that most "immortals" will stay off the books or will have to change aliases so as not to attract attention. That is the whole point of their alternate identities.

Seangreyson said...

Actually you know. In order to keep social security from collapsing, I think we may need to round up all superhumans, put them in camps guarded by giant robots, and prevent them from breeding.

Otherwise social security will collapse, and the superhumans will become our masters, forcing us to build pyramids in thier honor as slave labor.

This message brought to you by the Bolivar Trask Foundation.

But seriously I think the point about secret id's is valid so long as comic book society continues to value it.

As soon as superhumans become public then we run into the problem of needing a benefit cap. That seems like it would be the easiest legislative solution (though it would likely need to be reviewed every 10-20 years to make sure it still reflects current life expectancy).

From a PR standpoint it would also be fairly easy to pass, as in general these functional immortals are generally not elderly and so the average AARP member isn't likely to see it as an attack on them.

Will said...

On a related point, in Marvel with the Registration, do registered heroes get put on federal health care plans? I would think that could be a bit of an expense for the Government (not to mention H.A.M.M.E.R. seeming like an even more expensive agency than SHIELD)

D. Watson said...

With all the anti-hero populism around, it wouldn't be hard to vote the supers out of the system altogether. Cheap, simple, low plot requirements.

But I can imagine the wonderful campaign advertisements from the few brave enough to stand up to the rhetoric: picture of a superhero in costume in a wheelchair. "He saved your grandmother's life, and by so doing saved yours. And now he can't afford his medicine to hold back the pain from the beating he took to save her. ..."

The solution I'd prefer is a super retirement community where they continue using their vast mental abilities to help the government in its ongoing struggle. But the nurses get hazard pay for trying to convince the Hulk to take his pills.

ShadowBanker said...

Guys, all your comments are awesome! I'm going to respond to each of them individually soon!

Steven Attewell said...

I don't think this is right.

Immortals in comics tend to be eternally young as well - who's to say that any of them retire and actually claim SS/Medicare benefits?

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