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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: i-node who wrote (224507)	3/17/2005 12:30:15 PM
From: TimF	Read Replies (1) \| Respond to of 1571724

If you cut the growth in future benefits to equal the lesser of growth in prices and growth in wages, and you index the retirement age to changes in post retirement life expectancy (try to set it so the same percentage of people live past the designated retirement age no matter how life expectancy goes up), than it should be able to go on forever. SS resembles a ponzi scheme but it has its own characteristics that are different then a conventional ponzi scheme. A regular ponzi scheme claims enormous payouts for all, and gives them to a few by recruiting a lot more members (suckers). Eventually you can't keep getting suckers to join and the whole thing collapses. SS is structured in a somewhat similar way but 1 - It isn't a plan designed to enrich the a few people. at the expense of most of the participants. 2 - The government doesn't have to offer a huge rate of return to attract new members it can order people to become members. The main reason while the projected growth is unsustainable with the current program's structure is that there is no plan for raising retirement age (other than the one time raise to 67) and per capita benefits are allowed to grow faster than inflation. So you have more money going to each person, and you have more people receiving benefits (because the percentage of people living past 65 or 67 continues to increase). If you didn't have these problems you would still have the problem of the demographic bulge from the baby boom, but it would be a specific problem that while it might last awhile is not built in to the structure of the system. SS's returns are too low, and will be even lower if you limit benefit increases (or even cut benefits) but they don't have to be cut to nearly nothing in order for the system to be fairly stable. It still might be a bad deal for many of its participants but the deal can continue indefinitely if you build in limitations to growth of benefits and indexing of retirement age. Medicare has similar problems, plus the additional problem that medical care is getting more expensive. Tort reform will help but will not be a panacea, our tort system is not the only reason for expensive medicine. In addition to tort reform there may be ways to add competition or other ways to increase efficacy, but while our medical system is not at optimal efficacy, it probably isn't getting worse even as prices increase. The main reason for medical costs to increase probably is that we are consuming more medical care. This extra care should have health benefits but there is a limit to how long it can continue to grow at a rate that is much faster then the growth of the economy. Eventually there might have to be some rationing system for government paid health care. If you have your own money than fine spend what you want but the way medical costs are increasing will be too much of a burden on taxpayers at some point. The costs simply can not grow at this rate indefinitely, they have to be contained. Tim