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Isn't it a pyramid scheme where we import younger people to pay for older people's pensions and benefits... unlikely to end well, like all pyramid schemes.

by pmg101 1y ago

bena 1y ago
Not necessarily in this case. You have those who pay in, but die before they fully collect. Then the collectors do die off, they aren’t expected to get returns in perpetuity or crazy large returns. Then you have a constant supply of new payees into the system. Only a devastating collapse of the population would cause it to go tits up
- rickydroll 1y ago
  And in your comment lies a possible solution. Support people into their mid-70s, and then the only medical care they get is palliative, so they don't suffer from whatever takes them out. Half of their estate is allocated to the social welfare fund. Another solution is to increase the sources of funding. For example, in the United States, your Social Security contributions are capped once your income exceeds approximately $160,000. Eliminate that cap, and include income from other sources (i.e., taxes on estates, capital gains, and buy-borrow-die) in the Social Security tax calculation.
  - nradov 1y ago
    Any "solution" will have to work within the realm of political possibility. Elderly people also get to vote and I doubt they will support cutting off their own access to healthcare, or drastic increases in estate taxes.
  - bena 1y ago
    No doubt we can probably do things better, my main thrust was to show how if you can force participation, you can kind of get away with it.
pixl97 1y ago
I'd say no. A pyramid has a wide base. The problem is the population shape is more of one of a christmas tree. The top is narrow, and it widens at the middle, then you have a trunk that is more narrow. https://en.m.wikipedia.org/wiki/Demographics_of_the_United_Kingdom https://en.m.wikipedia.org/wiki/Demographics_of_the_United_K... The UK doesn't even have that terrible of shape compared to many western countries, but a lot of that is because of immigration. Countries like Japan, S. Korea, and Italy are going to have far worse problems.
layer8 1y ago
Population has naturally been a pyramid, historically [0], and works well that way. The current problem is that it isn’t a pyramid anymore [1]. Not having an inverse pyramid (or kite) would already be helpful. [0] https://en.wikipedia.org/wiki/Population_pyramid https://en.wikipedia.org/wiki/Population_pyramid [1] https://en.wikipedia.org/wiki/Population_pyramid#Demographic_transition https://en.wikipedia.org/wiki/Population_pyramid#Demographic...
phatfish 1y ago
It's not a pyramid (far more balance between those entering and leaving to call it a "pyramid"). Unless you are Norway or the UAE and sitting on a massive sovereign wealth fund how else can a national welfare system possible function?
pmg101 1y ago
The replies to this made me think harder about pyramid schemes vs population pyramids. I concluded it is in fact OK to bring in young working people from elsewhere to fund the retirement and social services of those already here and ageing. I was thinking there would be a problem as those immigrants in turn aged and switched from net contributors to net claimants, but I hadn't taken into account that they like all of us die off as they age: indeed, what makes the pyramid a pyramid.

Isn't it a pyramid scheme where we import younger people to pay for older people's pensions and benefits... unlikely to end well, like all pyramid schemes.

by pmg101 1y ago

Isn't it a pyramid scheme where we import younger people to pay for older people's pensions and benefits... unlikely to end well, like all pyramid schemes.

bena 1y ago

Not necessarily in this case. You have those who pay in, but die before they fully collect. Then the collectors do die off, they aren’t expected to get returns in perpetuity or crazy large returns. Then you have a constant supply of new payees into the system. Only a devastating collapse of the population would cause it to go tits up

rickydroll 1y ago
And in your comment lies a possible solution. Support people into their mid-70s, and then the only medical care they get is palliative, so they don't suffer from whatever takes them out. Half of their estate is allocated to the social welfare fund. Another solution is to increase the sources of funding. For example, in the United States, your Social Security contributions are capped once your income exceeds approximately $160,000. Eliminate that cap, and include income from other sources (i.e., taxes on estates, capital gains, and buy-borrow-die) in the Social Security tax calculation.
- nradov 1y ago
  Any "solution" will have to work within the realm of political possibility. Elderly people also get to vote and I doubt they will support cutting off their own access to healthcare, or drastic increases in estate taxes.
- bena 1y ago
  No doubt we can probably do things better, my main thrust was to show how if you can force participation, you can kind of get away with it.

pixl97 1y ago

I'd say no. A pyramid has a wide base. The problem is the population shape is more of one of a christmas tree. The top is narrow, and it widens at the middle, then you have a trunk that is more narrow. https://en.m.wikipedia.org/wiki/Demographics_of_the_United_Kingdom https://en.m.wikipedia.org/wiki/Demographics_of_the_United_K... The UK doesn't even have that terrible of shape compared to many western countries, but a lot of that is because of immigration. Countries like Japan, S. Korea, and Italy are going to have far worse problems.

layer8 1y ago

Population has naturally been a pyramid, historically [0], and works well that way. The current problem is that it isn’t a pyramid anymore [1]. Not having an inverse pyramid (or kite) would already be helpful. [0] https://en.wikipedia.org/wiki/Population_pyramid https://en.wikipedia.org/wiki/Population_pyramid [1] https://en.wikipedia.org/wiki/Population_pyramid#Demographic_transition https://en.wikipedia.org/wiki/Population_pyramid#Demographic...

phatfish 1y ago

It's not a pyramid (far more balance between those entering and leaving to call it a "pyramid"). Unless you are Norway or the UAE and sitting on a massive sovereign wealth fund how else can a national welfare system possible function?

pmg101 1y ago

The replies to this made me think harder about pyramid schemes vs population pyramids. I concluded it is in fact OK to bring in young working people from elsewhere to fund the retirement and social services of those already here and ageing. I was thinking there would be a problem as those immigrants in turn aged and switched from net contributors to net claimants, but I hadn't taken into account that they like all of us die off as they age: indeed, what makes the pyramid a pyramid.