Re: Soc Sec: How do private investment accounts solve the problem?

From: Jim Blair (jeb_at_wisc.edu)
Date: 02/11/05 

Date: Fri, 11 Feb 2005 10:03:36 -0600

<ta6bx@yahoo.com> wrote in message
news:420c954f.961665@News.individual.de...
> On 10 Feb 2005 23:10:37 -0800, "Zerge" <zerge@hotmail.com> wrote:
> >
> >You have a very sketchy understanding of economy, I'm sorry to say.
> >The "retired one" does not "tax the productive two". The retired one
> >saved a % of his/her earnings and invested it in stocks and bonds. This
> >investment grew. Now he/she has a good amount of money to keep spending
> >without having to work. That amount of money will demand goods and
> >services from the economy. Entrepreneurs will build new companies to
> >serve that demand. The GDP of a country is not a limited asset to be
> >"taxed", as you suggest.
> >
> Who produces the GDP of the country if most of that country is
> retired. People do not eat stocks and bonds. Someone has to produce
> food.

Hi,

The point that you are missing is that the current FICA applies only to the
WAGES of AMERICAN (USA) workers.
Income from investments come from dividends and interest paid by companies
that are largely international and multinational.

While in the USA there is 3 or4 workers per retiree, projected to fall to 2
or below, worldwide that is not the case, and will not be for at least 50
years. So while personal savings accounts may not "solve" the demograghic
problem, they will delay the crisis until.... well until I won't be worring
about it :-(

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