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Politics : The Obama - Clinton Disaster
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To: Wayners who wrote (41619)11/27/2010 2:01:36 AM
From: DuckTapeSunroof  Read Replies (1) of 103300
 
Easy to understand why they came up with the plan though....

It was the depths of the Great Depression.

Old folks were starving in food lines and dying in poverty and despair all over the joint.

Too late to come up with a 'save for your own retirement' kind of program like the 401(k)s and such we have now.

At least, even if someone HAD come up with something like that back in the middle of the Great Depression it would not have done anything to help save *those* old folks.

So they came up with the idea of generational transfer. Each generations taxes pay for the retirement of the generation that preceded it. (Essentially.)

Solved the immediate problem that they had during the Great Depression and, so long as our population continued to grow, and the world didn't end, and they didn't raise benefits too unsustainably, than it could function into the future for a very long time with perhaps only minor tweaks now and then. (Every generation or two perhaps.)

Still... any such idea (even if mostly very successful and, this one has been at least when measured by public esteem, it has long been rated as the single most POPULAR of government programs) has that one big potential 'design flaw' at it's center: it is reliant upon predictions of a certain level of population growth.

If and when folks start having FEWER KIDS then you will predictably run into demographic issues that affect the annuitization stream....
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