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Probably massively oversimplifying things here, but why does the government have to provide us pensions anyway? Can't they just reduce the tax we pay and inste

by 7ewis 5y ago

Probably massively oversimplifying things here, but why does the government have to provide us pensions anyway? Can't they just reduce the tax we pay and instead state that everyone is responsible for their own pensions, so if you save up enough you don't have to work longer...

krastanov 5y ago
Because then too many people will not actually prepare their own pension. And sure, that is on them for being irresponsible stupid young people (i.e. young people), but then it becomes a societal / national problem when every old person is destitute, straining all other systems in the country. If I, selfishly, do not want to be surrounded by destitute old people that lower my quality of life, I have to ensure that there is some (national) system that ensures these people prepare a pension for themselves. Also, on the more utopic/hippy views, it is just nice to help others, so why not institutionalize/codify helping others.
- neilparikh 5y ago
  > Because then too many people will not actually prepare their own pension. It is worth noting that if your goal is just to handle the people who didn't make wise decisions when young, the current system does more than needed, and there's a much better way to accomplish that. You can simply force people to save n% in a retirement savings account, managed by the government; ie. take the current system, but keep everyone's money separate rather than merging it into a common pool. This is how Singapore's Central Provident Fund works. The current system really solves 2 problems: people who choose not to save enough, and people who didn't earn enough to save enough. You can solve the 2 separately: the first with the solution mentioned above, and the second with something like a negative income tax. Now, the problem with separating the 2 is that there may not be enough political will for the second system, because it makes it obvious that the amount you receive in retirement is not in proportion with what you contributed. That's the case now too, but it's obscured by the structure of the program.
dtech 5y ago
Because people generally cannot work anymore at a certain age, and most western countries do not think it is acceptable to let elderly people starve, even if they could have taken decisions to prevent that. Because you cannot expect all of the population to individually make wise financial decisions spanning multiple decades well past the years they can even generate income if they wanted. A lot of people already have problems budgeting for next month. Because spreading out the "risk" of living much longer than you anticipated prevents destitute 95 year olds.
- da_big_ghey 5y ago
  If I make dollars, I am trading time for money, some part from my life. I am never regain these years I spend earning. Now some other person is saying hunger from no good financial decision, means I now must give some of my dollars (years)? No, these policys are taking part of my life. I will give charity if such is my choosing but no government can take some from my life for sustaining of others.
munk-a 5y ago
Because economics be a cruel mistress that leaves a lot of people in permanent financial distress and working people into the grave because they still haven't saved up sufficiently is incredibly dismal and depressing. Pension related taxes exist to both ensure that everyone acts responsibly and to redistribute the wealth created over our lifetimes to ensure that everyone gets a chance at a pleasant retirement. Life is about happiness - it isn't about work.
redwood 5y ago
Then what happens to the people who choose not to invest in their pension? Are we comfortable allowing these elderly people to live on the streets?

by 7ewis 5y ago

krastanov 5y ago

Because then too many people will not actually prepare their own pension. And sure, that is on them for being irresponsible stupid young people (i.e. young people), but then it becomes a societal / national problem when every old person is destitute, straining all other systems in the country. If I, selfishly, do not want to be surrounded by destitute old people that lower my quality of life, I have to ensure that there is some (national) system that ensures these people prepare a pension for themselves. Also, on the more utopic/hippy views, it is just nice to help others, so why not institutionalize/codify helping others.

neilparikh 5y ago
> Because then too many people will not actually prepare their own pension. It is worth noting that if your goal is just to handle the people who didn't make wise decisions when young, the current system does more than needed, and there's a much better way to accomplish that. You can simply force people to save n% in a retirement savings account, managed by the government; ie. take the current system, but keep everyone's money separate rather than merging it into a common pool. This is how Singapore's Central Provident Fund works. The current system really solves 2 problems: people who choose not to save enough, and people who didn't earn enough to save enough. You can solve the 2 separately: the first with the solution mentioned above, and the second with something like a negative income tax. Now, the problem with separating the 2 is that there may not be enough political will for the second system, because it makes it obvious that the amount you receive in retirement is not in proportion with what you contributed. That's the case now too, but it's obscured by the structure of the program.

dtech 5y ago

Because people generally cannot work anymore at a certain age, and most western countries do not think it is acceptable to let elderly people starve, even if they could have taken decisions to prevent that. Because you cannot expect all of the population to individually make wise financial decisions spanning multiple decades well past the years they can even generate income if they wanted. A lot of people already have problems budgeting for next month. Because spreading out the "risk" of living much longer than you anticipated prevents destitute 95 year olds.

da_big_ghey 5y ago
If I make dollars, I am trading time for money, some part from my life. I am never regain these years I spend earning. Now some other person is saying hunger from no good financial decision, means I now must give some of my dollars (years)? No, these policys are taking part of my life. I will give charity if such is my choosing but no government can take some from my life for sustaining of others.

munk-a 5y ago

Because economics be a cruel mistress that leaves a lot of people in permanent financial distress and working people into the grave because they still haven't saved up sufficiently is incredibly dismal and depressing. Pension related taxes exist to both ensure that everyone acts responsibly and to redistribute the wealth created over our lifetimes to ensure that everyone gets a chance at a pleasant retirement. Life is about happiness - it isn't about work.

redwood 5y ago

Then what happens to the people who choose not to invest in their pension? Are we comfortable allowing these elderly people to live on the streets?