US Govt Strategic Default: Both parties mull raising retirement age

[jk]

Re: US Govt Strategic Default: Both parties mull raising retirement age

We should also think about unintended consequences. When business is the topic we hear much chatter about the damage caused by uncertainty and changing the rules in the middle of the game. Same is true for consumers.

The average American was more willing to make purchases and invest retirement funds in riskier ventures based on a known worst-case scenario; namely, if I loose it all I'll get my social security, enough to pay for a little efficiency apartment and food to eat. That basic belief is crucial to the behavior of millions of individuals and how they spend and invest.

If we take that away, inevitably the average Joe will cut back and stuff money under the mattress. None of us wants to be a vagabond bum at age 67 because we dared start a business or invested our savings in one and it all went under. If the belief takes hold that only cash under the mattress can be assured, well, that's what people will do. No more giant retirement cash flows to wall street, no more robust consumer spending.

it's the lack of safety nets that drives th high savings rates in asia, esp. china.

[raja]

Re: US Govt Strategic Default: Both parties mull raising retirement age

. . . but you have to consider that the Baby Boom generation as a whole benefited from the expenditure of their tax dollars, as much as citizens ever do.

In 1970, 5% of the population controlled 30% of the wealth . . . now it's nearly 60%. So, I wonder who really benefited.

If the Financial Elite had not been able to skim off obscene amounts of wealth, perhaps Soc Security would be solvent today . . . .

[runlikehe11]

Re: US Govt Strategic Default: Both parties mull raising retirement age

I demand a 700 Billion Dollar Bailout.... Social Security is to BIG to Fail..
b42d5e6b-d98e-4d43-a272-f5fc303630b1.jpg

[nathanhulick]

Re: US Govt Strategic Default: Both parties mull raising retirement age

This is true, but you have to consider that the Baby Boom generation as a whole benefitted from the expenditure of their tax dollars, as much as citizens ever do. Who, if not the voters, have a responsibility to understand the government that acts on their behalf, and to hold their government accountable? Surely not the unborn, or citizens below the age of majority. When politicians lie, they do so to get votes... the lie they told the Boomers was believed because it was appealing: you can spend your tax dollars twice, and earn interest on them besides, all on the backs of your children. And the voters of the early 80's -- not just Boomers, let us remember -- accepted this deal.

The idea that the Boomers are creditors of the federal government is meaningless because there is no "federal government" distinct from the people; the obligations of the federal government are the obligations of tax-payers. This isn't "us versus them"; this is simply "us versus us". As far as I'm concerned, the trust funds are a scheme by which the Boomers contrived to pre-obligate the tax revenue of future generations for their exclusive benefit, while also enjoying the benefit of their own taxes at the time they were collected (and lower taxes to fund the wars and bridges to nowhere that they ALSO voted for). The truth of the matter, as you well know, is that nothing of value was ever saved. Therefore, what moral right have Boomers to ask for "repayment" by their children of what was already spent on their behalf... with interest, no less? "I was told by the leaders I elected that you guys were going to honor the scam run in my favor?"

What you are saying would be true if the Boomers who pre paid for their retirement also received the benefits of the tax dollars spent on them. Also you are assuming that we live in a functioning democracy.