Pay as You Go vs. Investments

Free Money for All ^

[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.)

[GarthVader]

Some ammunition to use on your liberal friends who think Social Security is progressive. Social Security actually widens the gap between the working classes and the wealthy, and here are some numbers to prove it.

[Nat Turner]

My liberal friends do not think...they FEEL and they totally immune to facts and logic...Thanks anyway Garth...

[mlocher]

Consider first a static economy, with no inflation, no population growth, and stable wages

This describes the situation during most of the Middle Ages.

[GarthVader]

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.

[mlocher]

Well stated.