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To: Wyätt Gwyön who wrote (17024)	2/9/2004 3:04:32 PM
From: GraceZ	Respond to of 306849

by then, i expect people will be working well into their 70s and even 80s. I don't see an increase in the labor participation rate as a negative. Even a 2-5% increase has enormous positive effects on the economy. Nor do I think it will put downward pressure on wages even though traditionally people experience their highest salary levels between the ages of 35-45. If people have to work longer then the labor participation rate will rise and various costs aren't concentrated on the younger worker simply because the older worker is still paying in. It's not mathematically possible to raise taxes enough to pay current or even drastically reduced benefits to the boomer generation primarily because it was set up as a transfer program. SS will fail regardless of currently acceptable changes in premiums and benefits. This will be painfully clear in about 10 years. Consider it our failed experiment with collectivism. The window for privatizing it passed us by about 20 years ago. Now the power of compounding is no longer available for that generation or ones that followed. I got a good laugh at the recent West Wing episode where they "saved" Social Security simply by getting Dems and Reps in the same room to agree that all options were on the table. The current programs can't continue any more than the command economy in the former Soviet Union could continue. We may have to get to their level of collapse before people get this. The people who will suffer the most, of course, will be those at the lowest income levels who counted on those benefits, saving little, the very ones these programs were set up to benefit. Those who trusted the specious logic of their elected officials when they voted to expand these programs continuously over the last fifty years are both to blame and the victims. This is the unintended consequence of voting in these types programs. Instead of alleviating pain they simply defer it and create far more suffering in the future than if they'd been avoided altogether. If the elected officials attempt to cover current SS benefits levels by increasing taxes we'll have to put the equivalent of a Berlin Wall around the US to keep people in instead of the current barriers to entry we now have. People like you and me will vote with our feet as much as possible, just as Elroy here has voted by moving his capital off shore. The good news is that if you can find productive work late in your life, you won't care if you don't receive a paltry government check. I try to impart this idea to people, that they need to switch to something as they age which they can continue to work at in their 60-70s. This was part of my drive to train as a money manager and one of the reasons I'm driven to stay in good physical condition. Once you realize you aren't going to get bailed out, you make changes to make sure that you can take care of yourself. I don't pretend this is the prevailing view. that is, if civilization doesn't collapse due to a sudden ice age, which would eliminate many of our worries about the future... We are at the very end of the usual time period that stable climatic conditions have persisted in the past. But these things happen in geological time, which doesn't mean it can't happen tomorrow, but tomorrow in geological time could be a few thousand years from today.