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I do agree with this, but what of pension plans? At 2% inflation, a fund of $10,000 will deplete to slightly over $6000 (inflation adjusted) in 20 years...
by hliyan 7y ago
I do agree with this, but what of pension plans? At 2% inflation, a fund of $10,000 will deplete to slightly over $6000 (inflation adjusted) in 20 years...
- pjc50 7y agoWe're back to Picketty and "r > g" here; you're not holding the pension as cash, so you're making a return, so what rate is the return at? And how does the aggregate rate of return compare to the rate of growth in the economy? Or are people seriously proposing having 0 GDP growth and 0% interest rates and 0% expected stockmarket returns? A strange world that's almost certainly unstable. (There is a much broader question that if you expect a dollar to buy you a loaf of bread today, is it really reasonable to expect the same dollar to buy a loaf of bread in 40 years? And what level of stasis would be required to achieve that?)