Skip to comments.Pay as You Go vs. Investments
Posted on 02/25/2011 8:47:47 AM PST by GarthVader
Consider first a static economy, with no inflation, no population growth, and stable wages. Under these conditions the rate of return for a pay as you go system is exactly zero, the same as putting money in a mattress. Social Security is purely insurance against living longer than average, with the benefits paid for by those who die younger than average. (Social Security also transfers some wealth between those making upper middle class wages over a long career to those making lower class wages.)
(Excerpt) Read more at freemoneyforall.org ...
My liberal friends do not think...they FEEL and they totally immune to facts and logic...Thanks anyway Garth...
This describes the situation during most of the Middle Ages.
Agreed. And the environmentalists think we will be going back to those conditions soon. But even under those conditions interest rates are not zero. There’s money to be paid for waiting, and pay-as-you-go denies it.
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