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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: JBTFD who wrote (17557)	2/10/2009 11:42:35 PM
From: GST	Read Replies (2) \| Respond to of 71456

<Nope. I don't believe it is inexorable> Perhaps you know this already, but social security is not designed to be funded. It is designed to be a pay as you go system. To offset the larger future payouts, social security was allowed to build up a temporary surplus -- and that surplus is fast being eaten up. As we feel the full impact of baby boomers retiring, the taxes collected are not enough to cover the payments being made. As the surplus is exhausted, the impact of an unfunded system is felt. This is not a matter of funding problems -- it was never designed to be funded. It is an income transfer mechanism -- not a funded pension plan. Perhaps you need to revisit the basic math underlying income transfer schemes. Social security is designed to go bankrupt. Unless it is redesigned it will do what it is designed to do -- it will inexorably go bankrupt. You can increase the amount paid in by workers in the future -- that is called taxation and the future taxpayer will take a huge wallop if that is the correction to the design. Or you can tell retirees they are not going to get thier money after all. This is not abstract conjecture -- it is basic math driven by basic demographics.