You are right.
Under a private pension program - such as Chile's - in the long-run every pensioner will come out ahead vs. the alternative of handing your money to the government in return for an unbacked check.
The problem is: how does one finance the conversion from a 'pay-as-you-go' redistribution system such as we have now (with all the the vast numbers of the Baby Boomers in it, who have already paid into the system, and have been denied the right to pay those contributions into private investments for their entire lives ), into a private investment program?
It would require VAST sums of money.
Now, I have supported a private pension system ever since Bill Buckley came out for it in 1969, and I examined the arguments.
The time to do it was in the 'fifties, the sixties... when demographically it could be financed.
But our gutless, vision-less politicians cared only about their next elections... and not about the demographic tidal wave that was building.
Because of the soaring current deficits, and the national debt left from the eighties decade of mis-management, and the nearing retirement of the boomers (some 40% of the population), it may now be well-nigh impossible to do a conversion politically.
Until, that is, the Boomers are all mostly dead, and a subsequent generation is approaching their work years. |
