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

From: The Trucker (mikcob_at_verizon.net)
Date: 02/11/05 

Date: Fri, 11 Feb 2005 11:22:25 -0800

Zerge wrote:

>
> ta6bx@yahoo.com wrote:
>> On 10 Feb 2005 23:10:37 -0800, "Zerge" <zerge@hotmail.com> wrote:
>>
>> >
>> >ta6bx@yahoo.com wrote:
>> >> Supposedly when SS was started there were many people working and
> few
>> >> people collecting, say 15 working to 1 collecting. (Don't know
> the
>> >> actuall numbers).
>> >>
>> >> Now there are maybe 3.5 working to 1 collecting and in the future
>> >> there will be 2 working to 1 collecting.
>> >>
>> >> Obviously this is a problem for SS. But, how do private
> investment
>> >> accounts solve the problem? If there are 2 people working for
> each
>> >> retired person, these 2 have to produce enough goods and services
> for
>> >> 3. It doen's matter how the retired (unproductive) person gets
> money
>> >> to purchase their share of the national product. If the retired
> one
>> >> taxes the productive two, those two have less to spend on goods
> and
>> >> services and the retired one gets to spend what has been taxed.
>> >>
>> >> Now, If instead of taxing, the retired person has a big investment
>> >> account you have three people spending money to aquire the product
>> >> produced by two. The working two still get "taxed" in a way
> because
>> >> they cannot purchase all of their product.
>> >>
>> >> In the extreme say every one was 25 years old and every one saved.
>> >> When they all retired on the same day, they would have enormous
>> >> accounts. They would also all starve as no one was producing any
>> >food
>> >> .
>> >> It seems that the actual problem is the ratio of non-productive to
>> >> productive, not how the non-productive finance their
>> >> non-productiveness.
>> >
>> >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.
>
> You are talking about a hypothetical scenario that will not ocurr:
> namely, where EVERYBODY is retired. The population pyramid will never
> be like that.
> And you forget foreign countries that export goods to the US.
> Don't worry, there will always be young, hungry, and ambitious people
> willing to produce goods and services for those retired.

And with Republicanomics they will be quite "hungry" indeed. Republicans
seek to maximize rent, rent, rent at all times. 

-- 
"I know no safe depository of the ultimate powers of society but
the people themselves; and if we think them not enlightened enough
to exercise their control with a wholesome discretion, the remedy
is not to take it from them, but to inform their discretion by
education." - Thomas Jefferson.  http://GreaterVoice.org

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