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My perspective on this might be too naive; but it seems wealth inequality (which is the topic of this article) is inevitable since a significant proportion of t

My perspective on this might be too naive; but it seems wealth inequality (which is the topic of this article) is inevitable since a significant proportion of the population will spend their entire income and therefore never save. It seems like about 19% of all Americans have zero net worth, and something like 44% of single American retirees are dependent on Social Security for 90% or more of their income, implying they saved very little throughout their entire lifetimes.

thendrill 7y ago
Yeh but there is a difference between saving for retirement and being "filthy rich" Some people have other interests that gathering power and money. So why is it fair we build a world only for the powerfull and wealthy?
AnimalMuppet 7y ago
Hmm. If they depend on Social Security for 90% of their income, should Social Security be included in their savings? It's not conventional savings, and yet it's funding their retirement. In the same way, should pensions be counted as part of savings? And if you run the calculations that way, what does it do to the distribution of wealth? Note well: I am not saying that this is the right way to run the calculations. But I think it could be a somewhat informative alternate way to do them.
- travisoneill1 7y ago
  Yes, to be more accurate the net present value of future social security payments should be considered part of "wealth."
- turc1656 7y ago
  I would argue not to include SS benefits as savings purely because SS payments are a tax levied upon the rest of society rather than any sort of fund, trust, etc. that actually has money allotted to someone. It's basically just an IOU from Uncle Sam that they will tax other people to pay you. Therefore, that is subject to change at the whim of those in charge of changing the laws. Sure, it's politically ugly to reduce/eliminate, but a severe recession could easily change that.
  - AnimalMuppet 7y ago
    Yes and no. There actually is a trust fund with actual money in it. That money is invested in Treasury bonds. Individuals don't have "accounts", exactly, but they do have benefits allotted to them. Yes, it's a tax (though they don't call it that). No, it's not a savings account. And yet...
    - turc1656 7y ago
      True, but that general fund/account is routinely raided by congress periodically to pay for things so it being separated is purely for show and is totally meaningless since they take money from it from time to time.
- chii 7y ago
  but social security is funded via taxation, so it's somebody else's savings that's being forcibly taken away. Counting it as savings would give the wrong picture.
  - AnimalMuppet 7y ago
    Not really. It's your savings that are forcibly being taken away, at the time you earn the money. Your benefits are (within limits) proportional to your contributions to the system.
    - Domenic_S 7y ago
      GP is correct. Current taxpayers (individuals and their employers) pay tax into the trust fund, which then pays out to current social security recipients. You earn credits on the amount you pay in, which determines your eventual benefit, but make no mistake -- current taxes fund current recipients. This is why some people call social security a pyramid scheme - built into the system is an assumption that the number of workers will always increase or that interest rates will make that moot.
      - AnimalMuppet 7y ago
        Disagree in part. There is in fact this giant trust fund out there. The trust fund is taxes from people in the past. So current taxes aren't exactly funding current recipients. Past taxes are... ... but the trust fund is spending more than it's taking in. So current taxes are generating less than current recipients receive. Clearly that is unsustainable. And when the trust fund runs out of money, current taxes will have to equal current benefits, and one side or the other will have to give.
emmelaich 7y ago
In Australia we have a compulsory pension fund. https://en.wikipedia.org/wiki/Superannuation_in_Australia https://en.wikipedia.org/wiki/Superannuation_in_Australia The pros are obvious but the cons are significant; it can be a very poor investment for some people. It's also criticised for locking up a lot of savings in an unproductive way.

thendrill 7y ago

Yeh but there is a difference between saving for retirement and being "filthy rich" Some people have other interests that gathering power and money. So why is it fair we build a world only for the powerfull and wealthy?

AnimalMuppet 7y ago

Hmm. If they depend on Social Security for 90% of their income, should Social Security be included in their savings? It's not conventional savings, and yet it's funding their retirement. In the same way, should pensions be counted as part of savings? And if you run the calculations that way, what does it do to the distribution of wealth? Note well: I am not saying that this is the right way to run the calculations. But I think it could be a somewhat informative alternate way to do them.

travisoneill1 7y ago
Yes, to be more accurate the net present value of future social security payments should be considered part of "wealth."
turc1656 7y ago
I would argue not to include SS benefits as savings purely because SS payments are a tax levied upon the rest of society rather than any sort of fund, trust, etc. that actually has money allotted to someone. It's basically just an IOU from Uncle Sam that they will tax other people to pay you. Therefore, that is subject to change at the whim of those in charge of changing the laws. Sure, it's politically ugly to reduce/eliminate, but a severe recession could easily change that.
- AnimalMuppet 7y ago
  Yes and no. There actually is a trust fund with actual money in it. That money is invested in Treasury bonds. Individuals don't have "accounts", exactly, but they do have benefits allotted to them. Yes, it's a tax (though they don't call it that). No, it's not a savings account. And yet...
  - turc1656 7y ago
    True, but that general fund/account is routinely raided by congress periodically to pay for things so it being separated is purely for show and is totally meaningless since they take money from it from time to time.
chii 7y ago
but social security is funded via taxation, so it's somebody else's savings that's being forcibly taken away. Counting it as savings would give the wrong picture.
- AnimalMuppet 7y ago
  Not really. It's your savings that are forcibly being taken away, at the time you earn the money. Your benefits are (within limits) proportional to your contributions to the system.
  - Domenic_S 7y ago
    GP is correct. Current taxpayers (individuals and their employers) pay tax into the trust fund, which then pays out to current social security recipients. You earn credits on the amount you pay in, which determines your eventual benefit, but make no mistake -- current taxes fund current recipients. This is why some people call social security a pyramid scheme - built into the system is an assumption that the number of workers will always increase or that interest rates will make that moot.
    - AnimalMuppet 7y ago
      Disagree in part. There is in fact this giant trust fund out there. The trust fund is taxes from people in the past. So current taxes aren't exactly funding current recipients. Past taxes are... ... but the trust fund is spending more than it's taking in. So current taxes are generating less than current recipients receive. Clearly that is unsustainable. And when the trust fund runs out of money, current taxes will have to equal current benefits, and one side or the other will have to give.

emmelaich 7y ago

In Australia we have a compulsory pension fund. https://en.wikipedia.org/wiki/Superannuation_in_Australia https://en.wikipedia.org/wiki/Superannuation_in_Australia The pros are obvious but the cons are significant; it can be a very poor investment for some people. It's also criticised for locking up a lot of savings in an unproductive way.