Paul, as a paying subscriber I do not have a problem if this post is made available to the wider audience. You must. People, especially fellow paying subscribers, LIKE if you agree.
Absolutely! And imagine if someone collected these Krugman primers (with permission/royalties) and made them available to high school students and college freshmen?
Medical debt *twice* has left me broke -- truly broke -- and therefore not a paying subscriber. I appreciate Prof K's making this public, and I appreciate your support for his doing so. Thank you, and best wishes.
I wanted to share with my local Nextdoor.com group, but not if they will have to pay to access it. This explanation is SO important and timely to get out there. We need to counter Musk's lies about Social Security.
Mr Krugman. I'd like to share or gift these excellent primers to family and other people I try to influence. Are you planning a collection of them to offer to subscribers to gift or as a small print selection for sale? I fear really good journalism, that in the public interest, may become paywalled and further the distance between those of us who are serious about being informed citizens and the seemingly growing (?) portion of fellow citizens who are clickbait voting. Thanks for your contributing to this 83-yearolds education.
That’s Heather Cox Richardson’s model for Letters from an American. But she has well over a million followers on Substack and over 200,000 are paying subscribers. $$$$$$$$$$$
Dr K, This concise and readable article has informed me enough to subscribe. I've been a follower of your articles for years now and now that I'm a retired boomer I look forward to them to help me navigate this current economic climate. Thank you so much for your knowledge and perseverance, and I dig your ending codas!
Make it available to everyone for free? Socialism! Which, ironically, is kind of appropriate given this article is about America's favorite intergenerational income transfer system.
The word "socialism" in American political discourse is so widely misused; it's almost as if people use the term without actually knowing what it means. Socialism is an economic system defined by social ownership and control of the means of production. Progressive taxation is not socialism. Progressive taxation is a measure taken in capitalist market economies to counter the disparities in income and wealth distribution; it helps ensure the lower to middle strata of the population can afford the costs of living in a capitalist economy.
There is simply no one better than Paul Kruman at explaining economic subjects that could be very complex in the simplest way possible, while still being accurate. It doesn’t matter whether you agree with him or not on matters of policy; anyone who doesn’t read him is dumber as a result.
There is simply no one better than Paul Kruman at explaining economic subjects that could be very complex in the simplest way possible, while still being accurate. It doesn’t matter whether you agree with him or not on matters of policy; anyone who doesn’t read him is dumber as a result.
In this particular case, that's clearly not true. He characterizes Social Security accurately, outlines the ways in which it fits the textbook definition of a Ponzi scheme, and then... declares that it isn't. For reasons.
Social security is funded on a pay-as-you-go basis, but it is not an investment account and not a Ponzi scheme. It’s more of a social compact in which, in return for paying in today, you’ll be paid tomorrow. You cannot “cash out” of it.
The system is sustainable as long as the proportion of workers to retirees is sufficient. As long as new workers are being created as retirees die off, it sustains itself. It’s simply a state run version of the ancient “pension system” that old people have relied on for all of human history, where the young in each generation grow up and take care of the old.
A Ponzi scheme relies on the hope that there is no upper bound to the number of new investors you’ll be able to attract (or that you’ll abscond with the cash before that happens), because; as soon as once you reach that upper bound, it’s doomed. social Security doesn’t rely on the population continuing to grow forever, just that people keep making babies forever.
Another scary note about the Social Security problem. The software that runs this beast is called COBOL, which was written in 1959. It is ancient and there are very few programmers that understand it. Firing the folks who currently maintain the system and expecting the Musk kids to pick it up guarantees catastrophe.
As a former COBOL developer back in the 70s and 80s, COBOL is NOT a problem other than people think it is a problem because it is not taught as a programming language much anymore. The software is solid and well tested unlike the crap that gets tossed out today by developers. If it is maintained, it will be fine.
The problems come when people believe they can replace it and do better. They typically sell management on the idea that they can replace it in short order without disruptions and management buys into it. Years later and little progress made, people finally realize that they were sold a pipedream and the project gets canned.
Current estimates are that there are around 2.4 TRILLION lines of COBOL code running everything from banks to the government. To replace all of that code correctly is estimated to take two to three generations because of the time to understand the code and then properly rewrite it, test it and then place it in production.
Jeff - I have been slinging COBOL code along with code from about 15 other languages for almost 50 years. You would likely agree that the first language you learn is the most difficult. Mine was IBM Basic Assembler Language. And then COBOL.
Musk and Trump obviously know little to nothing about programming or databases. While the database may have rules associated with each field, it would take one simple instruction to bypass paying anyone over the age of say 115 as has been reported in the press.
IF AGE < 116 AND DEATH DATE NE BLANKS
THEN PERFORM CALCULATION OF AMOUNT AND CREATE ACH TRANSACTION.
ELSE DONT PAY THEM
Obviously that's not exactly how it is coded. But, my point is that the morons that DOGE sent in there, probably have no idea to look in the program. They are just looking at the raw data.
What a maroon! Now that I am retired, I work part time for a government agency (city) creating Excel reports from data flowing in from external sources. Besides really knowing the data, the main requirement is SQL, although I let MS Access generate most of it for me. I never thought I would be spending so much time in Microsoft software! Of course, it has improved over the years.
Yeah, when I was in college they used Assembler language in your first two terms as the course to weed out the people that were not going to make it in Computer Science.
My favorite languages were IBM 360/370 Assembler and PL/1. But I also worked in 6502, Z80, x86 and 68000 assemblers. My least favorite language was APL (and I have a math degree). The last language I learned was C++.
I am now getting close to retirement and I am learning Go and Rust. Going back to my roots and starting to work on Operating Systems again.
Jeff - I remember PL/1. I did some work for a life insurance company in Minneapolis that had a home grown life insurance admin system written in PL/1. This was in the mid-1990's.
This company only hire programmers/analysts with Computer Science degrees that had 3.8 GPA or better from a Big Ten school. Not surprisingly they were desperate for help as they couldn't find enough qualified candidates to meet their qualifications. My degree is in Psychology from Iowa State University and the other consultant we brought in had a math degree from University of Nebraska/Lincoln. We both worked there for a couple of years. Very strange system and company.
What about Knuth's version? When he wrote it, it was for a theoretical chip, purely for pedagogical purposes. Then someone created an actual chip around it, and it worked like a charm.
They're not interested in the actual software. They're interested in getting personal data that they can use, misuse and abuse for profit. They're experts at that sort of thing.
And I'm sure Musk and his crew believe they can walk around a bit and whip out new code in an afternoon to replace it all. I hope somebody is sneaking away some backups of all this stuff.
It isn’t unusual for large systems to get backed up on a regular basis. Here’s hoping the kakistocrats don’t hear about it and try to destroy the copies.
I can’t tell you how many times some asshole came up with a new whatever, millions spent only to find it was shit. Millions more spent replacing it with what was orignally in place. That applied to all sorts of systems. That is waste, fraud, and abuse.
State governments are filled with this kind of shit. West Virginia switched from something called FIMS (that ran on the mainframe, didn't have a graphical interface, but everybody KNEW how to get the specific data they needed out of it) to something called OASIS. It's been a decade, and there are still users exporting data into spreadsheets so they can massage the data and get the reports they need, because nobody asked the users what they needed from this new financial system.
Yes,and Musk has taken this to a new level by eliminating the workers who know how things are supposed to work so he can replace them with an incompetent, inflexible chatbot. Citizens can expect to end up in endless do loops the same way customers experience corporate “customer service” nowadays.
2.4 trillion lines?!! A staggering figure difficult to even conceive! But then, can’t we rely on AI to bring new coding into production?…what could go wrong... : >/
I'm sure Musk and his team of true believers do think that AI can do that.
They wouldn't be the first tech people to think "hey this system is so complex, let's rewrite it from scratch." Then they find their rewrite doesn't cover all the unwritten edge cases the original system did. People keep calling them to ask why doesn't it do the special thing it used to do.
So Musk and his team would fix all the special cases, and bingo! The new system inevitably becomes just as complex as the original system.
We can make simpler software. Many programmers prefer it. But the real-world policies the software has to account for are not simple.
Or only executable modules exist, source code is long since gone. That used to happen once in a while even in mainframe days. Not every organization had a good source library system.
No, IBM moved to CRT-based terminals in the 1970s (IBM 3270) which are now emulated in software on PCs. Also, the hardware still emulates virtual punch card readers/writers, in case software needs to use them. Also, EBCDIC instead of ASCII. It's a different world. Curiously, you can run Linux in a VM on a mainframe and it looks very normal. IBM's had virtual machines since the 1970s.
I still have an EBCDIC chart. I'm not surprised about running Linux on a frame. Unix, and by extension Linux, was designed for portability right from the start.
Re: My comment on teletype machines, I should have clarified it with a '/s' at the end.
Hi, software developer with 35 years experience here.
COBOL isn't the difficult part. Programming languages can be learned. Professional programmers learn a new language every 2-3 years. I've worked in at least 9 programming languages.
The much more difficult part is understanding the intricate procedures that are implemented in part by the COBOL code, and in part by written policies, or even _unwritten_ policies. Those can take years to learn, if it's even possible to do so.
Think of any place you've ever worked. Hey, we've got to order more cardboard boxes because we only have one crate of them left. But we have to order some from three different cardboard box vendors, because we made agreements with those vendors for a certain amount of purchases every year, to lock in our discounted bulk rate. And we run out of boxes of different sizes at different rates, but one of our box vendors doesn't carry the size of box we're running out of fastest. And a third of the boxes we order need to go to the warehouse in Albuquerqe, because that's what we do in March. Etc., etc.
That's just an example. It isn't the choice of coding language that kills you. It's the special policies and rules and exceptions that add up layer by layer over decades. Those still need to be preserved in spirit, no matter what coding language you use to make them work.
You make a very important point that goes will beyond programming. The entire burecractic structure of the government is like this, and likely even more complicated. You can't fire your way out of this as Musk thinks, but you have to restructure the systems and processes. Very hard to do without creating a mess.
Well, every organization is like this, whether it's government or private-sector. At least that has been my experience as a human being for the past few decades.
It's not solvable by restructuring. You can try. Perhaps that's the idea behind the current purging. But they will inevitably recreate a complex web of policies for weirdly specific exception cases.
The reason for this is that we naturally want to accommodate people's needs. The only way to make sure the systems stay simple is to tell people "no, we won't make an exception for you," even if they have a really good reason for their request.
And that's exactly what they're trying to do, but only for the poor. "No, we're not going to provide Medicare/Medicaid anymore...No we're not going to continue Social Security...Yes Elon, we'll subsidize your next fantasy venture, how many trillions do you need?"
Right, someone has to understand the whole system.
I also read somewhere that in COBOL, all variables have global scope, making it very difficult to understand all the consequences of a particular bit of code, and this is particularly so when all the original developers are dead or retired.
Variable scope in COBOL only exists within a given program and not global in the sense of languages such as C, C++ and those newer languages where they can span individual programs.
If you break any task down into basic steps, almost anything can be programmed. There have been code generators for at least 30 years. But, it is often more time consuming to enter the program parameters than to do the analysis, the programming and then the testing. And the testing would turn up issues, so you'd have to go back and tweak the parameters.
I have worked mostly for large life insurance companies and banks. The system I have been maintaining for the past 5 years has about 11 million lines of COBOL and BAL code. It is one of a handful of packages that most life insurance companies use. There are over 5000 programs within the system. The SSA system likely has several thousand programs in it and millions of lines of code. Musk's toy boys are likely clueless about how the system works.
The youngsters are arrogant enough to assume payments were still being made to dead people. Or Trump/Musk figured MAGATS would be eager to believe the federal government was that incompetent. “Keep government hands off my Medicare” level of understanding.
More important, they don't care how the system works. They just want our private data to exploit for fun and profit, because that's all they've ever done, it's all they know. Although it wouldn't surprise me one bit if they were good writing malware.
Large old systems are not just programs. There is a control mechanism by which programs are run, including a scheduler and batch run controls. The databases are mostly updated by batch runs like this. When you put requests into the ATM, the system has a copy of your balance data and saves your request. At some point in the evening, the system slurps up all the requests and processes them against the real account data in the database. It then produces the brief copy of the accounts for use the next day by the ATMs.
Once in a while there is a drastic change in the data, for instance the format of a field. People like me write a little program to interpret the change so the next program will have no trouble with it. This little thing is inserted into the batch run control. A lot of these are written to make an exported file understandable by another system.
I can just see those toy boyz looking at JCL and copy library definitions!
Slight correction: COBOL is a programming language, not a type of software. Government agency programs ("software") are written in COBOL. And yes, a lot of banking systems still utilize COBOL, not just the Federal government.
I may be wrong, but COBOL is still used on a lot of big, legacy systems, even in the private sector. The problem is that redesigning these complex software systems is very, very expensive and very difficult. The old saw, if it ain't broke, don't fix it. Maybe AI will help write programs more cheaply and better at some point in the future. COBOL is very stable and reliable. It is outdated and the number of people who know it is shrinking. I invite others who know more to comment and correct me where I am wrong.
You are not wrong. And COBOL is not hard to learn, but it isn't cool and you can't build complicated things quickly or make changes quickly, so nobody writes new stuff using it. The actual problem is that we've built very complicated systems using it. Since the code has been running for decades, it is very reliable, and the folks supporting it are extremely careful when they make changes. They do *not* move fast and break things. So the work is tedious and rule-bound. Not fun.
Too many people poo-poo mainframes and older tech because it is not "sexy".
That said, nothing can outperform a mainframe. Back in the mid-1990s, Accenture (large consulting firm), HPE and Oracle told American Airlines that they could replace the airline's reservation system, which is on a mainframe, with a modern relational system running on clustered computers. After five years and a quarter of a billion dollars, the best they could do was around 30% of the transaction volume processed by the mainframe.
Also in the early 1990s, Delta attempted to move their ticketing system to a graphical user interface (GUI) like Windows and the Macintosh. They did and found that productivity at ticket counters fell by 40% due to the more user time it took to do tasks. Turned out that users could do more with the command line interface (CLI) quicker than using the more intuitive GUI with a mouse.
My personal favorite though was at a publishing firm that tracked orders by color coded punch cards (the company was the largest purchaser of punch cards in the world). I was tasked to look into automating it with an online system. But after watching the people that staffed the customer service desk it became obvious that an online system was not going to operate as fast as these people who knew the current order tracking card system. These people knew their card stacks and could look up the status of an order a lot of times just by looking at their card stacks. IN other cases, they would know the approximate location and could within less than five seconds find an order and its status. It was fascinating to watch.
So just because it is shiny and new does not mean it is better.
There are people learning COBOL and maintaining it. It's not the kind of bleeding edge work that kids want, but it pays better than those kids are getting writing Web code.
I had a friend who finally retired last year that was pulling in mid-6 figures working 20 to 36 hours a week from his Florida condo balcony overlooking the Atlantic supporting various corporations' mainframes. So it can be highly lucrative.
One of the reasons large companies and government entities use mainframes instead of servers is the data retrieval speeds and the speed of the processors is so much faster than server based systems. For most small to medium sized companies, server based systems are adequate, but when you are processing over 70 million payments each month, you need to have a mainframe. I don't recall the number of databases the SSA has, but it was several dozen.
Also the SSA personnel enter tens of thousands of transactions a day so they need reliable and very fast systems.
The 2.4 trillion lines of COBOL code currently running sounds like a reasonable.estimate.
In the 1980's and 1990's it was common for a company to install a new system and convert all of the companies data into the new system. But, when a company has a closed block of business, there is really no compelling reason to convert all of the data. You run multiple systems instead.
Interesting— I think cursive writing and the ability to read cursive is an important skill and we lose that skill at our peril. Honestly (as someone who has been teaching writing at a college level for 35 years) I fear for our culture because to lose the ability to write is to lose the ability to think. Cursive and other hand-writing activate parts of the brain that typing does not. And at this point we are on the precipice of losing the ability to write in any form.
But typing uses a part of the brain that was probably never used before. I notice I can think more smoothly when typing rather that writing by hand. It is closer to talking, Gain one thing, lose another. Nobody teaches kids today to manually derive square roots, but more kids are making it through calculus in high school than thedid 50 years ago.
I understand that cursive is being brought back. A whole generation missed out on it to their detriment. I wonder whose idea that was and why? In my own college studies, I discovered that cursive writing imprints the words in my memory. Typing the words has never done that for me.
For a while, when I was still putting handwritten comments on my college students' papers, they could not read them! (Now of course it's all done digitally on Canvas). My 7-year-old grandson recently asked to learn cursive--and started practicing it on his own, to my delight. When I was kid we were taught lettering in kindergarten and first, and Palmer method cursive at seven.
Because people want to learn the “latest and greatest “ and employers generally tout upskilling to new languages as well. But other comments are correct. Many core systems have been written in COBOL and the programmers are retiring.
Because there aren't that many jobs available in it. And it's not a low level language that allows writing system level code without resorting to Assembler.
And it's not as "cool" as Python. What's "cool" about Python? IDK, I scoured the web trying to find the answer and all that I came up with was "it's easy to learn". Apparently because it doesn't use "curly brace" {} block delimiters like C/C++. I've played around with it, and it's no better than Perl or PHP. Ironically, COBOL doesn't use curly braces either.
Karen- I ran a small mainframe shop in central Illinois for a life insurance company. When I started the job, there were 3 programmers and a fourth that had just been fired. The first day, I fired one of the programmers that was a consultant. He refused to work weekends or any overtime. He had tanked the morale of the others in the department so I escorted him out the door during my first hour on the job.
This left me with two programmers one of whom was a 1 on a scale of 1 to 10 and the other about a 4. After working with the 4 for a year, I got her up to a 5 1/2.
So here I am trying to run a department with myself and almost one other programmer.
A couple of miles from the office was a community college that taught COBOL, Assembler, Fortran and VSE JCL. They had about 50 students enrolled in their program. The 2nd day I was there, I went to the head of the department and asked him to tell his seniors that I was hiring. He sent me several excellent candidates and I hired two of them. Over the next 6 months I hired two more and then a year or so later I hired another one.
I arrived at that company in January, 1985 and left there in April, 1990. They shuttered their program in 1992. Was it due to lack of interest from students? No. Were they still able to find jobs when they graduated? Yes. It was because the school administration didn't want to pay for the mainframe when they could teach Visual Basic and C++ on a much less expensive server based platform.
This happened ALL over the country. One after another colleges and universities converted to server based applications. By 1999 there was only a handful of school in the US where you could learn COBOL or work on a mainframe.
I even offered one company I was working at to hold an evening class for a month where I would train the students on COBOL and JCL. I would help them write programs. At the end of the month they could hire all of the students or none. I offered to do this for free because they were so desperate for help. They turned me down flat.
That was 15 years ago and they are still struggling to find COBOL programmers. Just like with Trump voters, they were warned.
Thank you so much for explaining this, Gary! I have never studied CS, but when I was in college, back in 1980, I had many friends who learned these older programming languages — most of them were in Wharton. Until your explanation I didn’t understand that these programs only work on a mainframe. This is so demoralizing.
There are different versions of COBOL that can run on servers but they are unable to handle the volumes of data the mainframes can. Plus their instruction sets aren't as robust as the mainframe.
Professor Krugman: Please help me understand the ins and outs of how privatization will theoretically fix the problem, and then elaborate. I am confused. Thank you for your writing; a life raft amidst the churning seas of emotional discourse.
The goal of privatization is for a few to make a lot of money while screwing those who pay for it. Medicare Advantage is a classic example: take Medicare funds from gov, delay and deny coverage to individuals. Make money, lots of money. There is no up side to privatization for your SS or Medicare or VA care. Look at your retirement investments. How’d they do this week, during Covid, during Trump 1? I did a comparison between trump and Biden administrations. Even with the downturns under Biden, I came out ahead by 3% (that after regaining what I lost under trump 1). As a retiree, I’m very conservative with my retirement savings. Even more so under trump 2.
I have the Medicare Advantage and I think I'm going to change. I live in a rural area where the health care is sketchy. It takes a year to get in to see a dermatologist. Months to get in to a cardiologist. With real Medicare I can travel if I have a health care emergency...not with Med Advantage.
A few years ago when Medicare started touting Advantage as superior to just plain Medicare, I considered it. I called Medicare to find out what the “advantages” were. The (honest) representative I spoke to advised me there were none, that I should stick with Medicare I had because with Medicare Advantage is partly privatized. As a result, I’d be stuck in a network of doctors and would pay more out of pocket. I took his advice and never signed up for Advantage and can go to see any doctor I choose who takes Medicare. So glad I didn’t fall for this.
I almost switched to advantage when I read about all the extra benefits I could get. But when I inquired further I found that there were no doctors or dentists in my area that would be in my area to see. I read about the pre authorizations that happened all the time and the denials for treatment.
I stuck with my original Medicare. I have never been denied care or had a pre authorization required. The advantage plan is a rip off and I will never agree to privatize any government program. Privatized healthcare is for making money, not not helping people with health care.
I've got news for you, it's the same here in NYC, where we're literally surrounded by dozens of top ranked medical institutions. I've been told even people with private health insurance face the same problem. Hence Luigi.
My spouse and myself on MA for Nine yrs and it's works well for us. In 2019 spouse had quintuple heart bypass surgery. He paid $1600 out of pocket in total. We pay nothing extra in premium monthly but get back $100 every month in premium from insurer. Together, it's $2400 back yearly to pay towards out of pocket, co-pays, deductibles. Nothing as of today has been denied. Physical therapy, Orthopedic visits, ophthalmology visits. What we pay is what we expect from the policy. I read people criticizing MA without having been a subscriber to it.
But if you had wanted to go “out of network” MA wouldn’t have paid for it, and your bill would have been much higher. I haven’t been denied, or had to pay for surgery either—I’ve had a hip replacement and a meniscus repair. I like having a choice of doctors, not being confined to in-network doctors. That said, I don’t know if my doctors at Mt. Sinai or NYU/Langone but I’m happy with them.
Call your doctors and ask if they take a particular insurer's medicare ppo plan. Call the hospital whose services you use too. Ask. Look at the insurers coverages and the percentages they cover for services. Once you compare, then you can make an informed choice.
Katherine, my point is, on straight medicare with the purchase of a supplement you are still using the same physicians and facilities I use. You pay extra monthly to have to not pay much later for services. I pay nothing extra $0 monthly for all same services, more bc I have vision, dental. I get $2400 back a yr of my monthly premium, (I pay 74+ month). I have co-pays, $0 primary, deductibles for some services, out of pocket costs. I can choose my physicians and hospitals. For me, this is reasonable bc I don't need to to pay out monthly on a plan that costs more than I need. Other people want as much covered as possible.
If I go out of network as you point out, MA pays! They may may pay a percentage less, but they pay and I know in advance. I have a PPO. PPO gives you a choice. It's a Preferred Physician Network. I can go to any hospital facility or physician. They all take my insurer's MA Medicare PPO. Y'all should look up definitions and read about the coverages and how they pay. If you are healthy and exercise, see your physician a couple times a year, it works well and covers hospital, (copay & deductibles, out of pocket costs) most likely apply for those tomes you need Orthopedic, Opthalmalgic and primary services and tests.
I suspect it matters where you are geographically. I live in a rural area and there aren't a lot of options. The wait times are in the months, even for important things like cancer and cardiac problems.
The clear problem seen by the Republicans is that nobody running Social Security is getting filthy rich. They want to "fix" that, using cronies and family.
Instead of paying a tax to the government, you'll essentially pay into a 401(k) or some other similar retirement fund where your money is invested via a private investment firm.
That money will be invested in stocks, bonds, gold, NFTs, $TRUMP coin, or whatever you like. If the market goes up, you'll have a good retirement with steak, wine, caviar and a beach house.
If the market goes down, you'll be eating canned cat food and reminiscing about the good old days when America was great and you had heat in your tiny apartment.
Regardless of what the market does, the people who run the private investment firms will earn billions from management fees. Their retirements will be splendid.
Essmeiier Another plus of Social Security is that payments are raised each year by the cost if living. Permitting employees to ‘invest’ in a diversity of private financial instruments has a significant risk factor. And, as you point out, investment managers are almost certainly more focused on their incomes than those of these employees.
I think your reply is right on, but just for argument's sake I wonder if the privatization argument doesn't too often get reduced to this one scenario, wherein each individual gets more investment discretion for his/her own retirement funds. Yeah, pretty obviously a bad idea with strong arguments against it. But another way to think about this is "how does the trust fund get invested?", the bucket that's paying 23% of disbursements now and is running out in 10 years, which is not subject to individual foibles. As I understand it, it's only in US Treasury bonds, which are (theoretically) 100% safe, and this gains a small return that barely beats inflation. Alternatively, if even a small portion of the trust fund were invested in a total market index fund, or the SP500 index, the returns since the last fix in the 80's (I'm guessing) would have rendered the program viable for much longer than 2035. I'm guessing this would be illegal or at least inadvisable for several reasons, but it's exactly what conservative investors have been doing successfully forever; i.e. creating generational wealth instead of hyper-focused individual wealth. It's not unlike a sovereign wealth fund or an Ivy League endowment fund. Just curious what the primary reasons are that nobody seems to entertain this as a "privatization" solution?
The markets are volatile. With privatization, people who retired in 2007 or early 2008 would have been utterly screwed for reasons that are completely not their fault.
And another reason not to privatize is that people’s investment decisions are subject to all kinds of behavioral foibles and cognitive limitations. Granted, that’s a little bit of a paternalistic view, but it’s true. Letthem gamble with their non-Social Security retirement funds..
Social Security is not privatized. Republicans have been trying for years to privatize it. When things like SSA, Medicare, post office or anything run by the government, they don’t make a profit, they just help people. Private companies are in business to make profits, and answer to shareholders. They are mainly there to make money not help the little guy.
I agree with your comments. But want to add that the religious/republican right wing also do everything possible to keep government from working. The reason that Social Security computers run on COBOL is because they did not have the money to get modern computers. The GOP has hobbled the IRS so that it can audit few tax cheats, hobbled Medicare so that it can't go after health industry companies that over charge and over bill Medicare, and so forth. They do not want government to work.
That's half the reason they hobble it, so they can point to that and then say "see how inefficient it is?" Never mind that they're the ones who made it that way. See how that works?
Social Security has a very low overhead, less than 2% if I remember. Not so for the insurance companies. Soc Sec does not exist to make a profit either. I agree with Jane that it would be interesting to see how privatization would be argued for.
Bless your hands, your mind, and your heart for providing this primer on the mainstay of we the people, the ordinary people, who have labored all of our lives and deserve a partial payback for all of that, which allows for us to live in dignity as we approach our ends. I started working at age 11, babysitting for the neighbors. At age 15 I began cutting apricots for Del Monte, putting them on long wooden trays to dry in the sun. I went on to work as a teacher for students from blighted industrial areas in West Virginia, then farms in rural Virginia before going back for more education with the help of DOE Pell Grants (now under fire, like Social Security) ultimately becoming a clinical social worker who served the mental health needs of 'the underserved,' many of whom had been badly wounded by hard labor under unsafe conditions. Is this country for us, or against us? Right now that remains to be seen. Thanks for the leg up.
Is this the same "Elon Musk" who was born in South Africa, raised in Canada, is an immigrant (Eeeek!) to the US and a "citizen" of all 3 countries with vast global investments - all of which adds up to zero (0) loyalty to the America whose presidency he just publicly bought on the open market?
The same "Elon Musk" who became a gazillionaire in large part by sucking at the teat of US Government Welfare in the form of rebates, subsidies and tax cuts - all of which are funded by American workers?
To me the great mystery in all of these discussions is Why do people still believe what Donald and Elon say?
Elon calls Social Security a Ponzi scheme. Well so what. Elon is always blabbering on about something of which he often knows nothing. Why is his blabbering on about Social Security any different?
Does the public not have any common sense left? Maybe not. Maybe that is why the country is in this situation with ignorant and arrogant grifters in charge of important things.
Sorry to be so negative. But the nuttiness and ignorance get to me.
The answer is simple: they never hear the truth. They choose to watch Fox and Newsmax, which panders to their prejudices, whitewashes Krasnov's insanity and never ever mentions the truth except to deny and ridicule it. It has become their church.
The issue is that the birthrate in the US is falling below replacement level, so you’ll have ever-fewer workers supporting those collecting benefits. I’m not a Musk fan, but I think his POV on Social Security is informed by his belief that population decline is a serious problem facing the world.
This article is so important that it would nice to have it outside the paywall. Also I'm fine with additional taxes above the max, but maybe they should be progressive. For those of us making 300 or 400 K, taking the increment above the current max is a huge hit. For those making 10 million, it's nothing.
This is from the Census Bureau: Biden was in office. “Real median household income was $80,610 in 2023, a 4.0 percent increase from the 2022 estimate of $77,540 (Figure 1 and Table A-1). This is the first statistically significant annual increase in real median household income since 2019.” Many people make much less. A 4.5 Trillion tax cut for the 0.1% is simply screwing the public. Why the public tolerates this is beyond my comprehension.
As a former small business owner I suspect Elon’s objection to Social Security is all about the 6% employers contribution. He sees it as taking away from his profits.
Excellent article. One other point that is rarely mentioned is that undocumented workers using false or borrowed ITINs or SSNs currently contribute about $12 billion a year into the fund, which they will never receive any payment from. So, effectively, they are subsidizing all other participants. The SSA estimates that undocumented workers have contributed approximately $100 billion into the fund over the last decade.
"Yesterday, Treasury Secretary Scott Bessent made it clear that the Trump administration’s goal is to slash the federal government and to privatize its current services. As the stock market has dropped and economists have warned of a dramatic slowdown in the economy, he told CNBC “There’s going to be a natural adjustment as we move away from public spending to private spending. The market and the economy have just become hooked, we’ve become addicted to this government spending, and there’s going to be a detox period.” from Heather Cox Richardson's Substack Sunday, 3/9.
This is the language used to signal transfer of benefits (wealth) away from ordinary American citizens (who have paid into social security and medicare through FICA tax on wages). Notice the 'blaming the victim'. It's because the ordinary American citizen has become "addicted to government spending" and we must endure "detox", going without needed money.
The irony of this, Im sure is not lost on most of us as we endure a regime that monetizes the presidency by selling coins, etc. and utilizing the ambition of sycophants to transfer the commonwealth of the country's citizens, the entitlements of the American citizen and the power that accompanies both.
By the way when th4e system was restarted in 1950, the testimony was that aourd the eyar 2000 the trust fundss would start to require an infusion of general revenues. This seems to hve been forgotten.
Also Social Security is much more than a retirement system. It laos provides disability, auxiliary and survivors benefits. For many peoeple it't the life insurance tey didn't know they had.
Thanks - makes things a lot clearer to me how this operates. It's a brilliant plan and we can't let a parvenu like Musk, a billionaire blinded by his wealth, arrogance, abject stupidity and ketamine addiction - destroy this valuable government program.
Thank you Mr. Krugman for explaining this so succinctly. I am always amazed by the lack of understanding the general public has about how Social Security and Medicare are funded. I honestly wish they would teach this as a required class in high school. Increasing the income cap would be a first step in helping to solve this problem. I will definately be sharing this article. It is a great primer.
I have now become a paying subscriber. I found this post is incredibly helpful. It would be a public service if you could find a way to keep important explanations like this available outside the paywall for everyone. This is why I have become a paying subscriber today to help support publication for others who can’t afford to pay.
My question is this: Many baby boomers who are early or mid 60s in age and had planned to defer taking social security until age 67.5 or even age 70 are now getting spooked by the current government and wondering if they should start taking benefits now rather than waiting. They may be prompted to do this because they worry there will be so many changes before they turn 67.5 or 70 that social security will no longer be available to them.
If these younger baby boomers do go ahead and start taking their benefits now, when otherwise they would have waited until older, the forecasting and “actuarial” (is that the correct term) calculations which currently underpin social security financing assumptions could be affected, perhaps strongly, and then what are the implications?
Paul, as a paying subscriber I do not have a problem if this post is made available to the wider audience. You must. People, especially fellow paying subscribers, LIKE if you agree.
Absolutely! And imagine if someone collected these Krugman primers (with permission/royalties) and made them available to high school students and college freshmen?
My wife, who taught high school economics, used Dr. Krugman’s books in her classes.
Medical debt *twice* has left me broke -- truly broke -- and therefore not a paying subscriber. I appreciate Prof K's making this public, and I appreciate your support for his doing so. Thank you, and best wishes.
Definitely. People are so ignorant on this issue.
I wanted to share with my local Nextdoor.com group, but not if they will have to pay to access it. This explanation is SO important and timely to get out there. We need to counter Musk's lies about Social Security.
Mr Krugman. I'd like to share or gift these excellent primers to family and other people I try to influence. Are you planning a collection of them to offer to subscribers to gift or as a small print selection for sale? I fear really good journalism, that in the public interest, may become paywalled and further the distance between those of us who are serious about being informed citizens and the seemingly growing (?) portion of fellow citizens who are clickbait voting. Thanks for your contributing to this 83-yearolds education.
Thanks, Paul, for taking it out of the paywall!
💯
I think most paying subscriber would continue paying if all the post are made public to the wider audience.
That’s Heather Cox Richardson’s model for Letters from an American. But she has well over a million followers on Substack and over 200,000 are paying subscribers. $$$$$$$$$$$
Dr K, This concise and readable article has informed me enough to subscribe. I've been a follower of your articles for years now and now that I'm a retired boomer I look forward to them to help me navigate this current economic climate. Thank you so much for your knowledge and perseverance, and I dig your ending codas!
Make it available to everyone for free? Socialism! Which, ironically, is kind of appropriate given this article is about America's favorite intergenerational income transfer system.
The word "socialism" in American political discourse is so widely misused; it's almost as if people use the term without actually knowing what it means. Socialism is an economic system defined by social ownership and control of the means of production. Progressive taxation is not socialism. Progressive taxation is a measure taken in capitalist market economies to counter the disparities in income and wealth distribution; it helps ensure the lower to middle strata of the population can afford the costs of living in a capitalist economy.
As Sen. Elisabeth Warren has said, "Capitalism without any rules is theft."
Even with rules it's often theft, Skunk Musk being a prime example.
What? Reality? "Conservatives" won't have it.
Might be a good way to advertise....
Thank you for this excellent primer, delivered calmly and clearly with no hyperbole. Much appreciated.
There is simply no one better than Paul Kruman at explaining economic subjects that could be very complex in the simplest way possible, while still being accurate. It doesn’t matter whether you agree with him or not on matters of policy; anyone who doesn’t read him is dumber as a result.
There is simply no one better than Paul Kruman at explaining economic subjects that could be very complex in the simplest way possible, while still being accurate. It doesn’t matter whether you agree with him or not on matters of policy; anyone who doesn’t read him is dumber as a result.
In this particular case, that's clearly not true. He characterizes Social Security accurately, outlines the ways in which it fits the textbook definition of a Ponzi scheme, and then... declares that it isn't. For reasons.
Social security is funded on a pay-as-you-go basis, but it is not an investment account and not a Ponzi scheme. It’s more of a social compact in which, in return for paying in today, you’ll be paid tomorrow. You cannot “cash out” of it.
The system is sustainable as long as the proportion of workers to retirees is sufficient. As long as new workers are being created as retirees die off, it sustains itself. It’s simply a state run version of the ancient “pension system” that old people have relied on for all of human history, where the young in each generation grow up and take care of the old.
A Ponzi scheme relies on the hope that there is no upper bound to the number of new investors you’ll be able to attract (or that you’ll abscond with the cash before that happens), because; as soon as once you reach that upper bound, it’s doomed. social Security doesn’t rely on the population continuing to grow forever, just that people keep making babies forever.
Another scary note about the Social Security problem. The software that runs this beast is called COBOL, which was written in 1959. It is ancient and there are very few programmers that understand it. Firing the folks who currently maintain the system and expecting the Musk kids to pick it up guarantees catastrophe.
As a former COBOL developer back in the 70s and 80s, COBOL is NOT a problem other than people think it is a problem because it is not taught as a programming language much anymore. The software is solid and well tested unlike the crap that gets tossed out today by developers. If it is maintained, it will be fine.
The problems come when people believe they can replace it and do better. They typically sell management on the idea that they can replace it in short order without disruptions and management buys into it. Years later and little progress made, people finally realize that they were sold a pipedream and the project gets canned.
Current estimates are that there are around 2.4 TRILLION lines of COBOL code running everything from banks to the government. To replace all of that code correctly is estimated to take two to three generations because of the time to understand the code and then properly rewrite it, test it and then place it in production.
Jeff - I have been slinging COBOL code along with code from about 15 other languages for almost 50 years. You would likely agree that the first language you learn is the most difficult. Mine was IBM Basic Assembler Language. And then COBOL.
Musk and Trump obviously know little to nothing about programming or databases. While the database may have rules associated with each field, it would take one simple instruction to bypass paying anyone over the age of say 115 as has been reported in the press.
IF AGE < 116 AND DEATH DATE NE BLANKS
THEN PERFORM CALCULATION OF AMOUNT AND CREATE ACH TRANSACTION.
ELSE DONT PAY THEM
Obviously that's not exactly how it is coded. But, my point is that the morons that DOGE sent in there, probably have no idea to look in the program. They are just looking at the raw data.
Musk famously said governments don't run on SQL, which shows exactly how much he knows about programming.
What a maroon! Now that I am retired, I work part time for a government agency (city) creating Excel reports from data flowing in from external sources. Besides really knowing the data, the main requirement is SQL, although I let MS Access generate most of it for me. I never thought I would be spending so much time in Microsoft software! Of course, it has improved over the years.
Yeah, when I was in college they used Assembler language in your first two terms as the course to weed out the people that were not going to make it in Computer Science.
My favorite languages were IBM 360/370 Assembler and PL/1. But I also worked in 6502, Z80, x86 and 68000 assemblers. My least favorite language was APL (and I have a math degree). The last language I learned was C++.
I am now getting close to retirement and I am learning Go and Rust. Going back to my roots and starting to work on Operating Systems again.
Jeff - I remember PL/1. I did some work for a life insurance company in Minneapolis that had a home grown life insurance admin system written in PL/1. This was in the mid-1990's.
This company only hire programmers/analysts with Computer Science degrees that had 3.8 GPA or better from a Big Ten school. Not surprisingly they were desperate for help as they couldn't find enough qualified candidates to meet their qualifications. My degree is in Psychology from Iowa State University and the other consultant we brought in had a math degree from University of Nebraska/Lincoln. We both worked there for a couple of years. Very strange system and company.
What about Knuth's version? When he wrote it, it was for a theoretical chip, purely for pedagogical purposes. Then someone created an actual chip around it, and it worked like a charm.
Really, what chip?
https://en.wikipedia.org/wiki/MMIX
They're not interested in the actual software. They're interested in getting personal data that they can use, misuse and abuse for profit. They're experts at that sort of thing.
Wow! As a paid subscriber, I vote for opening your comment, along with this article, to the wider audience. People should know and not be bamboozled.
And I'm sure Musk and his crew believe they can walk around a bit and whip out new code in an afternoon to replace it all. I hope somebody is sneaking away some backups of all this stuff.
This seems to be their mindset about everything.
That's why MuskRat's #1 calls himself "BigBalls". Too bad he doesn't have the brain to match.
They've all got their O'Reilly Python cookbooks out :D
It isn’t unusual for large systems to get backed up on a regular basis. Here’s hoping the kakistocrats don’t hear about it and try to destroy the copies.
I can’t tell you how many times some asshole came up with a new whatever, millions spent only to find it was shit. Millions more spent replacing it with what was orignally in place. That applied to all sorts of systems. That is waste, fraud, and abuse.
State governments are filled with this kind of shit. West Virginia switched from something called FIMS (that ran on the mainframe, didn't have a graphical interface, but everybody KNEW how to get the specific data they needed out of it) to something called OASIS. It's been a decade, and there are still users exporting data into spreadsheets so they can massage the data and get the reports they need, because nobody asked the users what they needed from this new financial system.
Yes,and Musk has taken this to a new level by eliminating the workers who know how things are supposed to work so he can replace them with an incompetent, inflexible chatbot. Citizens can expect to end up in endless do loops the same way customers experience corporate “customer service” nowadays.
Nothing kills more IT careers than database “migrations”, usually forced by vendors unnecessarily.
2.4 trillion lines?!! A staggering figure difficult to even conceive! But then, can’t we rely on AI to bring new coding into production?…what could go wrong... : >/
I'm sure Musk and his team of true believers do think that AI can do that.
They wouldn't be the first tech people to think "hey this system is so complex, let's rewrite it from scratch." Then they find their rewrite doesn't cover all the unwritten edge cases the original system did. People keep calling them to ask why doesn't it do the special thing it used to do.
So Musk and his team would fix all the special cases, and bingo! The new system inevitably becomes just as complex as the original system.
We can make simpler software. Many programmers prefer it. But the real-world policies the software has to account for are not simple.
They have attempted using AI to convert COBOL to Rust and Go with varying accuracy and results. Then it all has to be tested which can take years.
One of the other problems organizations encounter is that a small percentage of the code is in repositories and is therefore lost.
Or only executable modules exist, source code is long since gone. That used to happen once in a while even in mainframe days. Not every organization had a good source library system.
And worse yet, no documentation.
Yes! That is one great reason Broadcom bought CA in 2018. Lots of mission critical COBOL and a team of people who know how to maintain and improve it.
And, it has an IDE and doesn't use IBM cards anymore.
It hasn’t used punch cards since the 80s. LOL!!!!
Oh, did they finally upgrade to teletype machines?
No, IBM moved to CRT-based terminals in the 1970s (IBM 3270) which are now emulated in software on PCs. Also, the hardware still emulates virtual punch card readers/writers, in case software needs to use them. Also, EBCDIC instead of ASCII. It's a different world. Curiously, you can run Linux in a VM on a mainframe and it looks very normal. IBM's had virtual machines since the 1970s.
I still have an EBCDIC chart. I'm not surprised about running Linux on a frame. Unix, and by extension Linux, was designed for portability right from the start.
Re: My comment on teletype machines, I should have clarified it with a '/s' at the end.
If someone can write code in one language they can easily learn another.
I wonder if AI could rapidly learn COBOL and use it to do Musk’s dirty work?
Hi, software developer with 35 years experience here.
COBOL isn't the difficult part. Programming languages can be learned. Professional programmers learn a new language every 2-3 years. I've worked in at least 9 programming languages.
The much more difficult part is understanding the intricate procedures that are implemented in part by the COBOL code, and in part by written policies, or even _unwritten_ policies. Those can take years to learn, if it's even possible to do so.
Think of any place you've ever worked. Hey, we've got to order more cardboard boxes because we only have one crate of them left. But we have to order some from three different cardboard box vendors, because we made agreements with those vendors for a certain amount of purchases every year, to lock in our discounted bulk rate. And we run out of boxes of different sizes at different rates, but one of our box vendors doesn't carry the size of box we're running out of fastest. And a third of the boxes we order need to go to the warehouse in Albuquerqe, because that's what we do in March. Etc., etc.
That's just an example. It isn't the choice of coding language that kills you. It's the special policies and rules and exceptions that add up layer by layer over decades. Those still need to be preserved in spirit, no matter what coding language you use to make them work.
Bill,
You make a very important point that goes will beyond programming. The entire burecractic structure of the government is like this, and likely even more complicated. You can't fire your way out of this as Musk thinks, but you have to restructure the systems and processes. Very hard to do without creating a mess.
Well, every organization is like this, whether it's government or private-sector. At least that has been my experience as a human being for the past few decades.
It's not solvable by restructuring. You can try. Perhaps that's the idea behind the current purging. But they will inevitably recreate a complex web of policies for weirdly specific exception cases.
The reason for this is that we naturally want to accommodate people's needs. The only way to make sure the systems stay simple is to tell people "no, we won't make an exception for you," even if they have a really good reason for their request.
And that's exactly what they're trying to do, but only for the poor. "No, we're not going to provide Medicare/Medicaid anymore...No we're not going to continue Social Security...Yes Elon, we'll subsidize your next fantasy venture, how many trillions do you need?"
Thanks for that, Bill!
Right, someone has to understand the whole system.
I also read somewhere that in COBOL, all variables have global scope, making it very difficult to understand all the consequences of a particular bit of code, and this is particularly so when all the original developers are dead or retired.
Variable scope in COBOL only exists within a given program and not global in the sense of languages such as C, C++ and those newer languages where they can span individual programs.
If you break any task down into basic steps, almost anything can be programmed. There have been code generators for at least 30 years. But, it is often more time consuming to enter the program parameters than to do the analysis, the programming and then the testing. And the testing would turn up issues, so you'd have to go back and tweak the parameters.
I have worked mostly for large life insurance companies and banks. The system I have been maintaining for the past 5 years has about 11 million lines of COBOL and BAL code. It is one of a handful of packages that most life insurance companies use. There are over 5000 programs within the system. The SSA system likely has several thousand programs in it and millions of lines of code. Musk's toy boys are likely clueless about how the system works.
Thanks, Gary!
The youngsters are arrogant enough to assume payments were still being made to dead people. Or Trump/Musk figured MAGATS would be eager to believe the federal government was that incompetent. “Keep government hands off my Medicare” level of understanding.
I'd say the latter case.
More important, they don't care how the system works. They just want our private data to exploit for fun and profit, because that's all they've ever done, it's all they know. Although it wouldn't surprise me one bit if they were good writing malware.
Large old systems are not just programs. There is a control mechanism by which programs are run, including a scheduler and batch run controls. The databases are mostly updated by batch runs like this. When you put requests into the ATM, the system has a copy of your balance data and saves your request. At some point in the evening, the system slurps up all the requests and processes them against the real account data in the database. It then produces the brief copy of the accounts for use the next day by the ATMs.
Once in a while there is a drastic change in the data, for instance the format of a field. People like me write a little program to interpret the change so the next program will have no trouble with it. This little thing is inserted into the batch run control. A lot of these are written to make an exported file understandable by another system.
I can just see those toy boyz looking at JCL and copy library definitions!
Slight correction: COBOL is a programming language, not a type of software. Government agency programs ("software") are written in COBOL. And yes, a lot of banking systems still utilize COBOL, not just the Federal government.
I may be wrong, but COBOL is still used on a lot of big, legacy systems, even in the private sector. The problem is that redesigning these complex software systems is very, very expensive and very difficult. The old saw, if it ain't broke, don't fix it. Maybe AI will help write programs more cheaply and better at some point in the future. COBOL is very stable and reliable. It is outdated and the number of people who know it is shrinking. I invite others who know more to comment and correct me where I am wrong.
You are not wrong. And COBOL is not hard to learn, but it isn't cool and you can't build complicated things quickly or make changes quickly, so nobody writes new stuff using it. The actual problem is that we've built very complicated systems using it. Since the code has been running for decades, it is very reliable, and the folks supporting it are extremely careful when they make changes. They do *not* move fast and break things. So the work is tedious and rule-bound. Not fun.
Too many people poo-poo mainframes and older tech because it is not "sexy".
That said, nothing can outperform a mainframe. Back in the mid-1990s, Accenture (large consulting firm), HPE and Oracle told American Airlines that they could replace the airline's reservation system, which is on a mainframe, with a modern relational system running on clustered computers. After five years and a quarter of a billion dollars, the best they could do was around 30% of the transaction volume processed by the mainframe.
Also in the early 1990s, Delta attempted to move their ticketing system to a graphical user interface (GUI) like Windows and the Macintosh. They did and found that productivity at ticket counters fell by 40% due to the more user time it took to do tasks. Turned out that users could do more with the command line interface (CLI) quicker than using the more intuitive GUI with a mouse.
My personal favorite though was at a publishing firm that tracked orders by color coded punch cards (the company was the largest purchaser of punch cards in the world). I was tasked to look into automating it with an online system. But after watching the people that staffed the customer service desk it became obvious that an online system was not going to operate as fast as these people who knew the current order tracking card system. These people knew their card stacks and could look up the status of an order a lot of times just by looking at their card stacks. IN other cases, they would know the approximate location and could within less than five seconds find an order and its status. It was fascinating to watch.
So just because it is shiny and new does not mean it is better.
Jeff, what happens when they retire (or are laid off by a DOGE apparatchik)?
There are people learning COBOL and maintaining it. It's not the kind of bleeding edge work that kids want, but it pays better than those kids are getting writing Web code.
I had a friend who finally retired last year that was pulling in mid-6 figures working 20 to 36 hours a week from his Florida condo balcony overlooking the Atlantic supporting various corporations' mainframes. So it can be highly lucrative.
Up until her retirement a neighbor of mine was a COBOL programmer for a very large insurer. It's used more widely than people realize.
One of the reasons large companies and government entities use mainframes instead of servers is the data retrieval speeds and the speed of the processors is so much faster than server based systems. For most small to medium sized companies, server based systems are adequate, but when you are processing over 70 million payments each month, you need to have a mainframe. I don't recall the number of databases the SSA has, but it was several dozen.
Also the SSA personnel enter tens of thousands of transactions a day so they need reliable and very fast systems.
The 2.4 trillion lines of COBOL code currently running sounds like a reasonable.estimate.
In the 1980's and 1990's it was common for a company to install a new system and convert all of the companies data into the new system. But, when a company has a closed block of business, there is really no compelling reason to convert all of the data. You run multiple systems instead.
I’d love to know more about this, too.
I took COBOL in college. It is not that hard. The newer languages are more complex.
I’ve been hearing this about COBOL for a while— why don’t more people just learn it?
Maybe the same reason that schools have stopped teaching cursive writing. 🤨
Interesting— I think cursive writing and the ability to read cursive is an important skill and we lose that skill at our peril. Honestly (as someone who has been teaching writing at a college level for 35 years) I fear for our culture because to lose the ability to write is to lose the ability to think. Cursive and other hand-writing activate parts of the brain that typing does not. And at this point we are on the precipice of losing the ability to write in any form.
But typing uses a part of the brain that was probably never used before. I notice I can think more smoothly when typing rather that writing by hand. It is closer to talking, Gain one thing, lose another. Nobody teaches kids today to manually derive square roots, but more kids are making it through calculus in high school than thedid 50 years ago.
I understand that cursive is being brought back. A whole generation missed out on it to their detriment. I wonder whose idea that was and why? In my own college studies, I discovered that cursive writing imprints the words in my memory. Typing the words has never done that for me.
For a while, when I was still putting handwritten comments on my college students' papers, they could not read them! (Now of course it's all done digitally on Canvas). My 7-year-old grandson recently asked to learn cursive--and started practicing it on his own, to my delight. When I was kid we were taught lettering in kindergarten and first, and Palmer method cursive at seven.
Because people want to learn the “latest and greatest “ and employers generally tout upskilling to new languages as well. But other comments are correct. Many core systems have been written in COBOL and the programmers are retiring.
Young people can easily learn it.
It seems to me like some of the programmers getting laid off due to AI could pretty easily learn COBOL and have plenty of work to do.
Because there aren't that many jobs available in it. And it's not a low level language that allows writing system level code without resorting to Assembler.
And it's not as "cool" as Python. What's "cool" about Python? IDK, I scoured the web trying to find the answer and all that I came up with was "it's easy to learn". Apparently because it doesn't use "curly brace" {} block delimiters like C/C++. I've played around with it, and it's no better than Perl or PHP. Ironically, COBOL doesn't use curly braces either.
Karen- I ran a small mainframe shop in central Illinois for a life insurance company. When I started the job, there were 3 programmers and a fourth that had just been fired. The first day, I fired one of the programmers that was a consultant. He refused to work weekends or any overtime. He had tanked the morale of the others in the department so I escorted him out the door during my first hour on the job.
This left me with two programmers one of whom was a 1 on a scale of 1 to 10 and the other about a 4. After working with the 4 for a year, I got her up to a 5 1/2.
So here I am trying to run a department with myself and almost one other programmer.
A couple of miles from the office was a community college that taught COBOL, Assembler, Fortran and VSE JCL. They had about 50 students enrolled in their program. The 2nd day I was there, I went to the head of the department and asked him to tell his seniors that I was hiring. He sent me several excellent candidates and I hired two of them. Over the next 6 months I hired two more and then a year or so later I hired another one.
I arrived at that company in January, 1985 and left there in April, 1990. They shuttered their program in 1992. Was it due to lack of interest from students? No. Were they still able to find jobs when they graduated? Yes. It was because the school administration didn't want to pay for the mainframe when they could teach Visual Basic and C++ on a much less expensive server based platform.
This happened ALL over the country. One after another colleges and universities converted to server based applications. By 1999 there was only a handful of school in the US where you could learn COBOL or work on a mainframe.
I even offered one company I was working at to hold an evening class for a month where I would train the students on COBOL and JCL. I would help them write programs. At the end of the month they could hire all of the students or none. I offered to do this for free because they were so desperate for help. They turned me down flat.
That was 15 years ago and they are still struggling to find COBOL programmers. Just like with Trump voters, they were warned.
Thank you so much for explaining this, Gary! I have never studied CS, but when I was in college, back in 1980, I had many friends who learned these older programming languages — most of them were in Wharton. Until your explanation I didn’t understand that these programs only work on a mainframe. This is so demoralizing.
There are different versions of COBOL that can run on servers but they are unable to handle the volumes of data the mainframes can. Plus their instruction sets aren't as robust as the mainframe.
It’s easy to learn.
Yeah, but it's not as "cool" as Python. I really don't know why. There's actually nothing special about Python.
Professor Krugman: Please help me understand the ins and outs of how privatization will theoretically fix the problem, and then elaborate. I am confused. Thank you for your writing; a life raft amidst the churning seas of emotional discourse.
The goal of privatization is for a few to make a lot of money while screwing those who pay for it. Medicare Advantage is a classic example: take Medicare funds from gov, delay and deny coverage to individuals. Make money, lots of money. There is no up side to privatization for your SS or Medicare or VA care. Look at your retirement investments. How’d they do this week, during Covid, during Trump 1? I did a comparison between trump and Biden administrations. Even with the downturns under Biden, I came out ahead by 3% (that after regaining what I lost under trump 1). As a retiree, I’m very conservative with my retirement savings. Even more so under trump 2.
I have the Medicare Advantage and I think I'm going to change. I live in a rural area where the health care is sketchy. It takes a year to get in to see a dermatologist. Months to get in to a cardiologist. With real Medicare I can travel if I have a health care emergency...not with Med Advantage.
A few years ago when Medicare started touting Advantage as superior to just plain Medicare, I considered it. I called Medicare to find out what the “advantages” were. The (honest) representative I spoke to advised me there were none, that I should stick with Medicare I had because with Medicare Advantage is partly privatized. As a result, I’d be stuck in a network of doctors and would pay more out of pocket. I took his advice and never signed up for Advantage and can go to see any doctor I choose who takes Medicare. So glad I didn’t fall for this.
I almost switched to advantage when I read about all the extra benefits I could get. But when I inquired further I found that there were no doctors or dentists in my area that would be in my area to see. I read about the pre authorizations that happened all the time and the denials for treatment.
I stuck with my original Medicare. I have never been denied care or had a pre authorization required. The advantage plan is a rip off and I will never agree to privatize any government program. Privatized healthcare is for making money, not not helping people with health care.
Wow. Thanks for the warning.
I've got news for you, it's the same here in NYC, where we're literally surrounded by dozens of top ranked medical institutions. I've been told even people with private health insurance face the same problem. Hence Luigi.
My spouse and myself on MA for Nine yrs and it's works well for us. In 2019 spouse had quintuple heart bypass surgery. He paid $1600 out of pocket in total. We pay nothing extra in premium monthly but get back $100 every month in premium from insurer. Together, it's $2400 back yearly to pay towards out of pocket, co-pays, deductibles. Nothing as of today has been denied. Physical therapy, Orthopedic visits, ophthalmology visits. What we pay is what we expect from the policy. I read people criticizing MA without having been a subscriber to it.
But if you had wanted to go “out of network” MA wouldn’t have paid for it, and your bill would have been much higher. I haven’t been denied, or had to pay for surgery either—I’ve had a hip replacement and a meniscus repair. I like having a choice of doctors, not being confined to in-network doctors. That said, I don’t know if my doctors at Mt. Sinai or NYU/Langone but I’m happy with them.
Call your doctors and ask if they take a particular insurer's medicare ppo plan. Call the hospital whose services you use too. Ask. Look at the insurers coverages and the percentages they cover for services. Once you compare, then you can make an informed choice.
Katherine, my point is, on straight medicare with the purchase of a supplement you are still using the same physicians and facilities I use. You pay extra monthly to have to not pay much later for services. I pay nothing extra $0 monthly for all same services, more bc I have vision, dental. I get $2400 back a yr of my monthly premium, (I pay 74+ month). I have co-pays, $0 primary, deductibles for some services, out of pocket costs. I can choose my physicians and hospitals. For me, this is reasonable bc I don't need to to pay out monthly on a plan that costs more than I need. Other people want as much covered as possible.
If I go out of network as you point out, MA pays! They may may pay a percentage less, but they pay and I know in advance. I have a PPO. PPO gives you a choice. It's a Preferred Physician Network. I can go to any hospital facility or physician. They all take my insurer's MA Medicare PPO. Y'all should look up definitions and read about the coverages and how they pay. If you are healthy and exercise, see your physician a couple times a year, it works well and covers hospital, (copay & deductibles, out of pocket costs) most likely apply for those tomes you need Orthopedic, Opthalmalgic and primary services and tests.
I suspect it matters where you are geographically. I live in a rural area and there aren't a lot of options. The wait times are in the months, even for important things like cancer and cardiac problems.
Yes. Different plans are offered geographically. I moved from one state to another and that is the case.
Exactly! Great explanation. To put it more simply, it's a "legal" theft.
The clear problem seen by the Republicans is that nobody running Social Security is getting filthy rich. They want to "fix" that, using cronies and family.
This is a great question. I am against privatization, but I am curious as to the way those who are in favor of it expect it to help.
Instead of paying a tax to the government, you'll essentially pay into a 401(k) or some other similar retirement fund where your money is invested via a private investment firm.
That money will be invested in stocks, bonds, gold, NFTs, $TRUMP coin, or whatever you like. If the market goes up, you'll have a good retirement with steak, wine, caviar and a beach house.
If the market goes down, you'll be eating canned cat food and reminiscing about the good old days when America was great and you had heat in your tiny apartment.
Regardless of what the market does, the people who run the private investment firms will earn billions from management fees. Their retirements will be splendid.
Essmeiier Another plus of Social Security is that payments are raised each year by the cost if living. Permitting employees to ‘invest’ in a diversity of private financial instruments has a significant risk factor. And, as you point out, investment managers are almost certainly more focused on their incomes than those of these employees.
I think your reply is right on, but just for argument's sake I wonder if the privatization argument doesn't too often get reduced to this one scenario, wherein each individual gets more investment discretion for his/her own retirement funds. Yeah, pretty obviously a bad idea with strong arguments against it. But another way to think about this is "how does the trust fund get invested?", the bucket that's paying 23% of disbursements now and is running out in 10 years, which is not subject to individual foibles. As I understand it, it's only in US Treasury bonds, which are (theoretically) 100% safe, and this gains a small return that barely beats inflation. Alternatively, if even a small portion of the trust fund were invested in a total market index fund, or the SP500 index, the returns since the last fix in the 80's (I'm guessing) would have rendered the program viable for much longer than 2035. I'm guessing this would be illegal or at least inadvisable for several reasons, but it's exactly what conservative investors have been doing successfully forever; i.e. creating generational wealth instead of hyper-focused individual wealth. It's not unlike a sovereign wealth fund or an Ivy League endowment fund. Just curious what the primary reasons are that nobody seems to entertain this as a "privatization" solution?
The markets are volatile. With privatization, people who retired in 2007 or early 2008 would have been utterly screwed for reasons that are completely not their fault.
And another reason not to privatize is that people’s investment decisions are subject to all kinds of behavioral foibles and cognitive limitations. Granted, that’s a little bit of a paternalistic view, but it’s true. Letthem gamble with their non-Social Security retirement funds..
They don’t. It will be a transfer of money to Wall Street just like 401Ks.
They don’t expect it to help. They’re looking at yacht catalogs and that million dollar sports car they want.
Social Security is not privatized. Republicans have been trying for years to privatize it. When things like SSA, Medicare, post office or anything run by the government, they don’t make a profit, they just help people. Private companies are in business to make profits, and answer to shareholders. They are mainly there to make money not help the little guy.
Only the super rich are in favor of it.
1. It will help them engorge on even more profits.
2. It will help politicians reward their biggest donors with big contracts.
It will >not< help you and me, but we're not the ones the politicians, especially on the right, are interested in helping.
I agree with your comments. But want to add that the religious/republican right wing also do everything possible to keep government from working. The reason that Social Security computers run on COBOL is because they did not have the money to get modern computers. The GOP has hobbled the IRS so that it can audit few tax cheats, hobbled Medicare so that it can't go after health industry companies that over charge and over bill Medicare, and so forth. They do not want government to work.
So they hobble and starve the system, then complain it’s inefficient.
Or they say, "See government does not work."
That's half the reason they hobble it, so they can point to that and then say "see how inefficient it is?" Never mind that they're the ones who made it that way. See how that works?
There’s nothing wrong with COBOL.
Yes! This!
Social Security has a very low overhead, less than 2% if I remember. Not so for the insurance companies. Soc Sec does not exist to make a profit either. I agree with Jane that it would be interesting to see how privatization would be argued for.
I agree, a life raft!
No elaboration needed. It's a lie. Just like the "trickle down" effect.
Just remember, if a "Conservative" says it, it's a lie. Especially if a MAGA "Conservative" says it.
Bless your hands, your mind, and your heart for providing this primer on the mainstay of we the people, the ordinary people, who have labored all of our lives and deserve a partial payback for all of that, which allows for us to live in dignity as we approach our ends. I started working at age 11, babysitting for the neighbors. At age 15 I began cutting apricots for Del Monte, putting them on long wooden trays to dry in the sun. I went on to work as a teacher for students from blighted industrial areas in West Virginia, then farms in rural Virginia before going back for more education with the help of DOE Pell Grants (now under fire, like Social Security) ultimately becoming a clinical social worker who served the mental health needs of 'the underserved,' many of whom had been badly wounded by hard labor under unsafe conditions. Is this country for us, or against us? Right now that remains to be seen. Thanks for the leg up.
Is this the same "Elon Musk" who was born in South Africa, raised in Canada, is an immigrant (Eeeek!) to the US and a "citizen" of all 3 countries with vast global investments - all of which adds up to zero (0) loyalty to the America whose presidency he just publicly bought on the open market?
The same "Elon Musk" who became a gazillionaire in large part by sucking at the teat of US Government Welfare in the form of rebates, subsidies and tax cuts - all of which are funded by American workers?
That "Elon Musk(rat)"??
Interesting that as a Canadian citizen, he has access to public health care. Why isn't he telling Canada to eliminate that?
To me the great mystery in all of these discussions is Why do people still believe what Donald and Elon say?
Elon calls Social Security a Ponzi scheme. Well so what. Elon is always blabbering on about something of which he often knows nothing. Why is his blabbering on about Social Security any different?
Does the public not have any common sense left? Maybe not. Maybe that is why the country is in this situation with ignorant and arrogant grifters in charge of important things.
Sorry to be so negative. But the nuttiness and ignorance get to me.
Thanks to Professor Krugman for this concise and easy to understand explanation of Social Security.
Elon is ignorant and stupid. Trump wants to make the US a “crypto nation.” Now, THAT’S a Ponzi scheme.
And the reason I know cryptocurrency is a Ponzi scheme is because Paul Krugman explained why it is on Substack! Thank you, Dr. Krugman.
The answer is simple: they never hear the truth. They choose to watch Fox and Newsmax, which panders to their prejudices, whitewashes Krasnov's insanity and never ever mentions the truth except to deny and ridicule it. It has become their church.
The issue is that the birthrate in the US is falling below replacement level, so you’ll have ever-fewer workers supporting those collecting benefits. I’m not a Musk fan, but I think his POV on Social Security is informed by his belief that population decline is a serious problem facing the world.
This article is so important that it would nice to have it outside the paywall. Also I'm fine with additional taxes above the max, but maybe they should be progressive. For those of us making 300 or 400 K, taking the increment above the current max is a huge hit. For those making 10 million, it's nothing.
This is from the Census Bureau: Biden was in office. “Real median household income was $80,610 in 2023, a 4.0 percent increase from the 2022 estimate of $77,540 (Figure 1 and Table A-1). This is the first statistically significant annual increase in real median household income since 2019.” Many people make much less. A 4.5 Trillion tax cut for the 0.1% is simply screwing the public. Why the public tolerates this is beyond my comprehension.
Probably because they don’t know about or understand it.
As a former small business owner I suspect Elon’s objection to Social Security is all about the 6% employers contribution. He sees it as taking away from his profits.
Not profits necessarily. He probably pays his employees about 6% less because he is contributing to a benefit.
Excellent article. One other point that is rarely mentioned is that undocumented workers using false or borrowed ITINs or SSNs currently contribute about $12 billion a year into the fund, which they will never receive any payment from. So, effectively, they are subsidizing all other participants. The SSA estimates that undocumented workers have contributed approximately $100 billion into the fund over the last decade.
"Yesterday, Treasury Secretary Scott Bessent made it clear that the Trump administration’s goal is to slash the federal government and to privatize its current services. As the stock market has dropped and economists have warned of a dramatic slowdown in the economy, he told CNBC “There’s going to be a natural adjustment as we move away from public spending to private spending. The market and the economy have just become hooked, we’ve become addicted to this government spending, and there’s going to be a detox period.” from Heather Cox Richardson's Substack Sunday, 3/9.
This is the language used to signal transfer of benefits (wealth) away from ordinary American citizens (who have paid into social security and medicare through FICA tax on wages). Notice the 'blaming the victim'. It's because the ordinary American citizen has become "addicted to government spending" and we must endure "detox", going without needed money.
The irony of this, Im sure is not lost on most of us as we endure a regime that monetizes the presidency by selling coins, etc. and utilizing the ambition of sycophants to transfer the commonwealth of the country's citizens, the entitlements of the American citizen and the power that accompanies both.
By the way when th4e system was restarted in 1950, the testimony was that aourd the eyar 2000 the trust fundss would start to require an infusion of general revenues. This seems to hve been forgotten.
Also Social Security is much more than a retirement system. It laos provides disability, auxiliary and survivors benefits. For many peoeple it't the life insurance tey didn't know they had.
Thanks - makes things a lot clearer to me how this operates. It's a brilliant plan and we can't let a parvenu like Musk, a billionaire blinded by his wealth, arrogance, abject stupidity and ketamine addiction - destroy this valuable government program.
Pitch perfect presentation that should be replicated by every serious news organization committed to the public interest and pursuit of the truth.
Thank you Mr. Krugman for explaining this so succinctly. I am always amazed by the lack of understanding the general public has about how Social Security and Medicare are funded. I honestly wish they would teach this as a required class in high school. Increasing the income cap would be a first step in helping to solve this problem. I will definately be sharing this article. It is a great primer.
I have now become a paying subscriber. I found this post is incredibly helpful. It would be a public service if you could find a way to keep important explanations like this available outside the paywall for everyone. This is why I have become a paying subscriber today to help support publication for others who can’t afford to pay.
My question is this: Many baby boomers who are early or mid 60s in age and had planned to defer taking social security until age 67.5 or even age 70 are now getting spooked by the current government and wondering if they should start taking benefits now rather than waiting. They may be prompted to do this because they worry there will be so many changes before they turn 67.5 or 70 that social security will no longer be available to them.
If these younger baby boomers do go ahead and start taking their benefits now, when otherwise they would have waited until older, the forecasting and “actuarial” (is that the correct term) calculations which currently underpin social security financing assumptions could be affected, perhaps strongly, and then what are the implications?