Wednesday, January 10, 2007

Social Security and Ejection Seats

Many conservatives are highly in favor of eliminating (privitizing, same thing) Social Security.

I wonder if they also advocate the elimination of ejection seats in fighter jets?

The two share many characteristics, among them:

  • Both Social Security (SS) and Ejection Seats (ES) are very expensive to build, install and maintain.
  • In both cases, neither may actually be helpful in every emergency. Sometimes it works, sometimes it doesn't.

So if both are big, bulky and difficult to maintain, why have them?

I think that they share one more thing in common: they provide a psychological safety net that encourages people/pilots to take on more risks that they might otherwise.

Sure, ok, SS may encourage some non-so-bright individuals to gamble all their money in keno and rely on SS to provide for their retirement. Likewise, we have many documented cases of not-so-bright military pilots relying on their safety equipment as a way out while showing off hazardous stunts to their buddies. In both cases we have many examples of the hazards of relying on safety equipment to overpower stupidity.

For the vast majority, however, SS provides a psychological safety net that encourages people to invest and spent money now instead of socking it away in a mattress. Our banking system serves a similar purpose. Money stuffed in a mattress is money "lost" from a macro-economic view. Money stored in a bank account can be "borrowed" by the bank and lent to others to put the money "to work" instead.

In both cases, time and energy that people would otherwise be put to trying to store their hard-earned money in the safest manner possible ( or stitching together home-made parachutes in the fighter pilot case) can instead be put to spending, investing and starting new businesses.

Social Security and the banking system both rely on a precept of trust. People's trust that our stable government will ward over their banking accounts and retirement funds allows people to relax money that would otherwise be buried in pickle jars in their back yards. (The fanatical savings rate of Japan is a prime example of an economy stalled by excess personal stashing for retirement.)

Likewise, the fighter pilot knows that he is being sent on dangerous, even deadly assignments, but his government shows good faith in protecting his well-being by providing a means of escape as well as a promise to make every effort to retrieve him.

It might be cheaper in the short run to leave pilots to die. After all, a pilot may be expensive, but wouldn't a lack of promised rescue make him more likely to better shepherd an even more expensive fighter jet?

Yes it would. But he would also not exhibit the aggresiveness that might lose a battle. Battles are almost always more costly to lose than are airplanes.

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