tvb wrote:The system is destined to collapse just as a Ponzi Scheme would be.
I just don't see it happening particularly given the bailouts that have occurred since October '08. The drain on social services would be much costlier than any bailout of SS.
I'm more concerned about the ability of the big businesses that are allowed to retroactively trash retirement plans, and the fact that so few offer them anymore. Add in the fallacy of 401Ks being able to provide financial security when it's tied to something inherently insecure and I fear the real tragedy will be people not being able to retire at all. If I was a betting person, I'd start buying stock in Purina.
If you don't mind hyperinflation, there is no reason to worry.
The choices many businesses have is between failure and killing retirement plans and other hard-to-meet future obligations. There is a limit to what labor is worth. US rates of pay are flat or declining while commodities rise. Defined benefit plans are a thing of the past in private industry because of the uncertainty of investments. It's what is killing the US auto businesses. Defined contribution plans are risky as everyone was told in the fine print. Past performance is not an indicator of future returns. The trouble is, savings are chewed up by inflation. It's a lose-lose.
The biggest fallacy is that everyone can live and retire in relative luxury. Every chart of population or resources is a hockey stick up or inverted. It means our current lifestyles are not sustainable indefinitely. In economics, the "dismal science", there exist end-of- progress hypotheses. These are often ignored as pessimistic. But understand that resources are finite and population is growing geometrically.
The economic prosperity of the US in the last century was an anomaly. Resources were abundant and we got a nice head start but the rest of the world is catching up competitively as a result of our regulations, taxes, and high worker pay. The government's role in the last two decades is to let the US worker down as easily and as painlessly as possible. Inflation, debt and social programs are their tools.