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Isn't the trust fund a fake concept? Benefits are always going to be paid from current year tax or borrowing. You can't actually "invest" trillions for the futu
by dboreham 3y ago
Isn't the trust fund a fake concept? Benefits are always going to be paid from current year tax or borrowing. You can't actually "invest" trillions for the future if you're a government. At least that's what my Economist mother told me.
- _uhtu 3y agoIf that's the case, then that's my point made exactly, it's public debt as much as any other.
- MattGaiser 3y agoThe USA is probably too large to invest it into stuff, but Canada does invest its public pension money into stocks, bonds, airports, etc. The Canada Pension Plan is a full fledged investment firm.
- bryanlarsen 3y agoIllustration: country A and B both see an upcoming demographic crisis and decide to get ahead of it. Country A ensures they don't run deficits and pay off their debts to prepare. Country B prepares by incurring a debt to build hospitals and train nurses. 20 years later the demographic crisis hits. Country A cannot build hospitals and train nurses fast enough to meet the need so the price of both skyrocket and the piles of money they "saved" is inflating away to almost nothing. Meanwhile country B is fine.
- deleted 3y ago[deleted]
- pc86 3y agoHow does this address the question "Isn't the trust fund a fake concept?"
- ballenf 3y agoDon't forget the maintenance costs and related expenses that Country B incurs. Not to mention that Country B has to guess the right amount of infrastructure to build. The costs Country A incurs are plowed back into Country A's economy during the "building boom". Don't know which country ends up better off, but there are many more variables than you imply.
- bryanlarsen 3y agoExactly! It's a lot more complicated than "deficits bad".