To pay for LBJ's Medicare, Part D, and SS combined we would need $60 Trillion today.
I don't think $60tril would do it. That much money at normal fairly safe rates of return would do it, but if you invest that much additional money you drive down returns. If you "invest" it in treasury bonds, then you don't have any return (the government pays the interest and principal to itself).
Whatever the financial return is, you need more than financial return. For normal investments if the investment doesn't do anything useful for anyone, except generate cash income for you, that's fine, if it doesn't help the economy (even the miniscule amount normal investments often would), then you just take a slightly bigger piece of the pie later on.
When you get this big you need the money to actually increase the economies level of productive capital. If gives you a bunch of money in the future without increasing future production, then your just creating future inflation. As the baby boomers retire, and has people live longer and longer past the baby boom generation, all the retired people are going to need housing and food and health care, etc., not just cash balances. Give a lot of money to some of them and they can buy all the things they need. Give money to 100 million, and if you haven't increased the economies ability to produce all these things, you drive up prices, reduce the real wealth of everyone else, and perhaps still don't give the seniors all of what they need. |
