3 ms·

I agree that private pensions are not necessarily Ponzi schemes. It is possible that they are operated that way. It is also possible that they are operated like

by uiri 9y ago

I agree that private pensions are not necessarily Ponzi schemes. It is possible that they are operated that way. It is also possible that they are operated like an actual investment fund. Without looking at the books, it is difficult to tell. However, social security and other government funded pensions are Ponzi schemes. The money you pay in is given to people who are retired at that time. The money you get out is paid by people who are working at that time.

Retric 9y ago
Social Security is running a ~$2.79 trillion dollar 'surplus' as they have collected more than they have paid out. Which means they have not been paying out 1:1 with money paid in. It's also not just a pension fund as you can receive benefits well before 62. Death of spouse with under age children or permanent disability. Now, this does not mean it's a great or even a good investment. But, the trade off of safety vs returns is not actually that bad assuming you live longer than average. PS: Another way of looking at it is there are no 100% safe approaches to investing 10's of trillions of dollars. Your stuck leveraging GDP growth which is only slightly better than inflation and frankly that's what SS does.
barrkel 9y ago
Keeping retired people alive requires devoting some proportion of current economic output to their welfare. Whether that proportion is paid from private savings, public savings, or current taxation ultimately doesn't change the fact that it comes out of current production. You can't save (nice) food, health workers, winter heating, etc. So the real fight is what proportion of current output goes to old people. Private schemes try to ensure wealthy old people get the biggest slice. Public schemes are more vote driven. It doesn't make them Ponzi schemes.

3 ms·

I agree that private pensions are not necessarily Ponzi schemes. It is possible that they are operated that way. It is also possible that they are operated like

by uiri 9y ago

Retric 9y ago
Social Security is running a ~$2.79 trillion dollar 'surplus' as they have collected more than they have paid out. Which means they have not been paying out 1:1 with money paid in. It's also not just a pension fund as you can receive benefits well before 62. Death of spouse with under age children or permanent disability. Now, this does not mean it's a great or even a good investment. But, the trade off of safety vs returns is not actually that bad assuming you live longer than average. PS: Another way of looking at it is there are no 100% safe approaches to investing 10's of trillions of dollars. Your stuck leveraging GDP growth which is only slightly better than inflation and frankly that's what SS does.
barrkel 9y ago
Keeping retired people alive requires devoting some proportion of current economic output to their welfare. Whether that proportion is paid from private savings, public savings, or current taxation ultimately doesn't change the fact that it comes out of current production. You can't save (nice) food, health workers, winter heating, etc. So the real fight is what proportion of current output goes to old people. Private schemes try to ensure wealthy old people get the biggest slice. Public schemes are more vote driven. It doesn't make them Ponzi schemes.