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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 71.08

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Nov 7 3:59 PM EST

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To: TigerPaw who wrote (59545)	5/18/2002 11:38:45 PM
From: Jacob Snyder	Read Replies (2) of 77397

<<Social Security represents is a defined benefit plan>> Unfortunately, that's not true. There have been a lot of promises made, about what benefits retirees will get. But those promises were made when the ratio of workers to retirees was higher, and when people didn't live as long as they do now. So, the current payments for Social Security (= the "defined" benefit you think you've been promised) are unlikely to happen in the future. They can only happen if future generations are willing to be taxed more (a lot more) than current workers are. Which doesn't seem like a sure thing. In fact, the rules for Social Security get changed all the time, depending on the balance of influence of various interest groups. That balance is likely to change in the future, in unpredictable ways. But I don't see how the Defined Benefit promises can be kept, when the Boomers retire, with the average lifespan around 80. What I see happening with Social Security, is a larger version of what's happened in the coal and steel industries: promises made when there were a lot fewer retirees, are now being defaulted on.

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