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Isn't it usually because our retirement systems assume the next generation can foot the bill for the current generation since they'll be a larger generation?
by andrewstuart2 3y ago
Isn't it usually because our retirement systems assume the next generation can foot the bill for the current generation since they'll be a larger generation?
- croes 3y agoNope, normally rising productivity can do the same unless you don't want workers to participate on the benefits of rising productivity.
- formerly_proven 3y agoWorker productivity is still going up. You can also just extract a larger share, it's not written in stone that 20% of gross income goes into paying pensions. There is no particular reason why that number can't be 30%. Or 40%.
- jandrewrogers 3y agoFor this to work you need the dwindling percentage of people working to voluntarily acquiesce to having a large portion of their income redirected to people who are not working.
- candiodari 3y agoSo what you're saying is that someone needs to lose something they currently have. Either people in general ... or the government. Which is what the original thesis was, I believe, that someone needs to lose. But it gets a lot worse. The problem is that growth AND decline are both exponential processes. Not just growth. Decline too. Which means whatever percentage you say has to go to taking care of old people ... give it 20 years and it'll be more. A factor more. In fact, it will quickly rise to over 100% if population doesn't stabilize. In nature, for many species the exponential nature of shrinking population causes, by itself, without other causes, extinction. Luckily, usually local extinction. Cats are a great example of this. Areas almost always have a lot of cats ... or none. If you take current examples (that are getting worse) you see that what happens is that every generation about halves. BUT 4-5 generations are alive simultaneously. So in order to keep the same level of elderly care the expenses need to double 5 times. There's a tiny problem ... even theoretically 20% expenses on the elderly can only double twice. The third time you double it, it goes over 100%. But when maintaining elderly care takes 100% of global human labor, we're only about halfway to a real declining population. Or to put it more realistically, after all humans don't just undergo natural processes (thankfully), we adapt: unless population is growing at a minimum rate, the elderly will be abandoned. As soon as it becomes clear that this cannot be avoided, if needed we'll breed humans like in the Matrix to prevent this from continuing. Why? The people making that decision ... are the ones who are about to meet that fate. This is be why a declining economy is so incredibly, incredibly destructive. Exponential growth, with a growth rate smaller than one, is a killer.
- peteradio 3y agoWhy should decline be exponential?
- candiodari 3y agoBecause babies come from adults (adults in the biological sense). That means if the number of adults decreases, the number of babies decreases with them. Then that smaller group of babies become adults ... and have yet again less babies.
- carlosjobim 3y agoThis happens in a way automatically with increased productivity, as prices go down.
- etempleton 3y agoNot just retirement systems, economies function on the assumption of growth.
- thefz 3y agoSo let's stop living on debt and make ourselves sustainable.