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This is only a problem if you take the view that a nation needs to (and is able to) save for its future in terms of a currency it issues. Increased taxation is
by dools 7y ago
This is only a problem if you take the view that a nation needs to (and is able to) save for its future in terms of a currency it issues.
Increased taxation is not required to support a growing population of retirees, increased production is.
Taxation is neither here nor there: it is required as an inflation control and to give value to the currency but the limits on spending at the federal level (where social security/pensions SHOULD reside instead of in privately held pension funds) are total spending this year, not tax receipts last year.
Tax receipts extinguish a liability that was created when the federal government spent the money into existence in the first place.
It's not true that current consumption is created by current workers. Retirees spend. What's true is that we have an incredibly inefficient means of funding their retirement through property as an asset class which sucks money out of the current working population via private financial institutions and hands it to retirees, some of whom support their kids in purchasing exorbitantly priced property, placing them in a very precarious financial position which lowers birth rates and further exacerbates the problem down the line.
Property isn't required as an asset class, it's just a convenient thing most people understand and governments worldwide have been able to conveniently take their hands off the wheel.
- ThrustVectoring 7y ago>This is only a problem if you take the view that a nation needs to (and is able to) save for its future in terms of a currency it issues. If you track the real goods and services involved, nations are essentially incapable of saving for the future. Ignore the financial claims and just look at the goods involved - today's retirees are consuming the fruit of today's labor, essentially. They're not making a car in 1980 so that they can drive it around today. >Increased taxation is not required to support a growing population of retirees, increased production is. Increased productivity definitely helps (see point 2 above). It has to grow in excess of the rate of growth of the gross retiree consumption, though, or else you're just facing a less intense version of the prior dilemma. >Taxation is neither here nor there: it is required as an inflation control Saying you don't have to tax workers and can allow inflation to rise instead is solving the problem through point 1: reducing the consumption of retirees (by inflating away their purchasing power). > It's not true that current consumption is created by current workers. Apologies for saying things in an unclear way - I probably should have used "produced" instead of "created", because I was getting at the physical act of producing goods and services for consumption, rather than the desire and means to consume goods and services.