Climate and Social Security

by Steven F. Hayward

I hadn’t noticed until I received my latest NRODT in the mail that Ramesh’s piece on Social Security reform is adjacent to my piece on climate change. It is a fit pairing. Others have made the observation that liberals say there is no Social Security crisis, or if there is, we can wait and fix it later, while on the subject of climate change, their position is that we have to take drastic action RIGHT NOW to ward off harm that will not appear for 50 to 100 years or more. Conservatives, it might be said, take the opposite position on both issues.

This symmetry falls apart on close inspection. The probability of the Social Security smashup is fairly high, as Ramesh’s piece makes clear; the probability of a climate smashup is unknown, as I mention in my piece. But even if you assume the worst outcome, the discounted present value of the cost of climate catastrophe 100 years from now is very very low; it makes more economic sense to wait and deal with the problem when the world is richer and more technologically advanced, as it will be in 50 or 100 years. There will be more economic and technical options available to us that are much better than costly carbon suppression today. (Factoid: On its present course, India in 75 years will be as wealthy on a per capita basis as Singapore is today.) Conversely, waiting on Social Security reform will mean that the costs only grow larger, and the options for dealing with it narrower and more painful.

Now, if Ramesh and I can figure out a way to combine these two topics in a single article, we’ll have a good vaudeville act to take on the road. . .

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