There are two kinds of people, those who eat one marshmallow, and those who eat two. More specifically, The Economist reported:
FORTY years ago Walter Mischel, an American psychologist, conducted a famous experiment. He left a series of four-year-olds alone in a room with a marshmallow on the table. He told them that they could eat the marshmallow at once, or wait until he came back and get two marshmallows. Recreations of the experiment on YouTube show what happens next. Some eat the marshmallow immediately. Others try all kinds of strategies to leave the tempting treat alone.
Nothing surprising there. The astonishing part was the way that the four-year-olds’ ability to defer gratification was reflected over time in their lives. Those who waited longest scored higher in academic tests at school, were much less likely to drop out of university and earned substantially higher incomes than those who gobbled up the sweet straight away. Those who could not wait at all were far more likely, in later life, to have problems with drugs or alcohol.
I am a libertarian, but I am also a utilitarian, so I don’t really object to reasonable “nudge” policies like making the 401k plan the default option for new hires, or having banks warn people who rely too much on expensive overdrafts.
What bothers me is when I see attempts to redistribute wealth from the two marshmallow eaters to the one marshmallow eaters. For instance, by the time I retire in 6 years I will have probably averaged about $80,000/year over my working life, which makes me comfortably upper middle class. Because I am a two marshmallow personality, I’ve probably saved about half of that income. So I’m doing fine. Most Americans with similar incomes are one marshmallow types, and save something closer to 10% of their incomes.
What do we do if Social Security needs to be trimmed in order to balance the budget? I hear lots of talk about cutting back on benefits for those who “don’t need it.” That would be people like me. Here’s why I don’t trust the Dems—I see them as the party of one marshmallow eaters. They represent people who have less self-control. I fear they will cut my benefits, but not cut the benefits of people who didn’t save for retirement. I fear they will use “wealth” as the criterion to determine who is needy and who isn’t; not lifetime wage earnings.
In my view there is nothing egalitarian about redistributing income from two marshmallow eaters to one marshmallow eaters. They’ve already had their fun when young, loading up their three car garages with all sorts of fun toys. I’ve never even had a garage.
I’m not saying that the rich shouldn’t be the ones who accept cutbacks in Social Security to save the system, that is a defensible argument (although interestingly many progressives oppose the idea, hoping that Social Security doesn’t become seen as “welfare.”) But if you are going to do means-testing, it should be on lifetime wage income, not wealth. If they do that then I need not fear for my SS benefits, as most Americans who have averaged about $80,000 a year over their lifetime have not saved much, and would march on Washington if their SS benefits were cut back.
Update: Commenter Edwin A pointed out that I shouldn’t have picked on the Dems. I do think they are usually the one marshmallow party, but in this case many Dems oppose means-testing Social Security, and some conservatives support the idea.
Tags: income inequality