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

To: TimF who wrote (224636)	3/17/2005 12:44:02 PM
From: i-node	Read Replies (1) \| Respond to of 1571775

Good post. I agree with your analysis -- rather than using the misleading payout promises, however, the government mandates participation. So, in that respect, the resemblence is not so great. I think the term "pyramid scheme" more closely matches what it is (if you remove the word "fraudulent"): "A fraudulent money-making scheme in which people are recruited to make payments to others above them in a hierarchy while expecting to receive payments from people recruited below them. Eventually the number of new recruits fails to sustain the payment structure, and the scheme collapses with most people losing the money they paid in." "Ponzi scheme" does imply the marketing aspect you refer to. 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. I think the problem could become manageable by raising the retirement age; however, there are practical limitations on how far you can go and still have the program be useful. The assumption is that people need the funding for retirement; but if we can't make it available when they must retire (for health reasons, if nothing else) then what good is it? If you could raise the retirement age to 80, the longer-term compounding of earnings would start to make a difference, as well as the many (most, actually) who don't make it to that age. But it doesn't meet the needs of the program. I just don't think there is a simple solution to the problem.