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As a Gen-Xer, I think that cynicism had its roots in both the 80s and 90s with the number of companies that left our parents out to dry with disappearing pensio

As a Gen-Xer, I think that cynicism had its roots in both the 80s and 90s with the number of companies that left our parents out to dry with disappearing pensions and people doing the math to realize that Social Security was unsustainable and would be gone by the time we retire. And somehow our generation was expected to support all of society including the generation behind us. I would postulate the opposite - I would have thought because we believe that neither companies nor the guvmint would be there to support us, we would have fended for ourselves better (I know that's how I personally took it, and many/most of my friends). But you might be right... sounds like an attitude of "ef it, we're doomed" set in.

toomuchtodo 7y ago
Social Security will not be gone, and it is not unsustainable at a macro level. Currently configured, it will pay out ~75% of earned benefits once the trust fund is exhausted in 2034. Several small changes, in concert, remove any insolvency concerns. It keeps 22 million Americans out of poverty [1], and is very efficient in terms of admin costs vs distributed benefits. I posit it's cheaper to keep those benefits recipients out of poverty, versus paying for what happens if they aren't kept out of poverty. Healthcare? Universal healthcare (Medicare For All), allowing for shedding the current jigsaw of healthcare benefits across the country. Less admin overhead, more care providers. If you're a pension that committed to healthcare expenses (state & local government, and manufacturers), you should be ringing the Medicare For All bell the hardest, to get the necessary infrastructure in place before your shortfalls arrive. > I would postulate the opposite - I would have thought because we believe that neither companies nor the guvmint would be there to support us, we would have fended for ourselves better (I know that's how I personally took it, and many/most of my friends). But you might be right... sounds like an attitude of "ef it, we're doomed" set in. Most Americans don't have the discretionary income after mandatory expenses to save to "fend for themselves" due to forty years of wage stagnation. This is why so many must rely on government programs to survive. [2] [1] https://www.cbpp.org/research/social-security/social-security-lifts-more-americans-above-poverty-than-any-other-program https://www.cbpp.org/research/social-security/social-securit... (Social Security Lifts More Americans Above Poverty Than Any Other Program) [2] https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/ https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us... (For most U.S. workers, real wages have barely budged in decades)
- treis 7y ago
  >Social Security will not be gone, and it is not unsustainable. Currently configured, it will pay out ~75% of earned benefits once the trust fund is exhausted in 2034 The trust fund is the government loaning money to itself. Ultimately, it is an accounting fiction. Instead of tax payers having to shore up a SS shortfall they have to pay back T-Bills. Either way, there's about 3 trillion dollars missing that will need to be paid.
  - toomuchtodo 7y ago
    As long as the US government exists and has taxing authority, the general fund will survive and be able to support paying back special issues securities [1] that were provided to Social Security. You can't invest the same way as Vanguard and Blackrock at nation state scale (ie "let's throw it all in a three fund/target date fund and call it a day"), although the Bank of Japan is going to be a pioneer in acquiring and distributing the gains from public companies in Japan [2] due to their demographic situation (which all first world countries will eventually transition through). I would agree there are lots of liabilities (somewhere between single and triple digital trillions) we should start paying back now versus later though, before the debt service becomes unmanageable and we steal from savers by inflating the debt away, but this is a policy issue. We must stop kicking the can down the road, as a society, as a country, and as a species. [1] https://www.ssa.gov/oact/progdata/fundFAQ.html https://www.ssa.gov/oact/progdata/fundFAQ.html (Frequently Asked Questions about the Social Security Trust Funds) [2] https://news.ycombinator.com/item?id=19686549 https://news.ycombinator.com/item?id=19686549 | https://asia.nikkei.com/Business/Markets/Bank-of-Japan-to-be-top-shareholder-of-Japan-stocks https://asia.nikkei.com/Business/Markets/Bank-of-Japan-to-be... (Bank of Japan to be top shareholder of Japan stocks )
    - ThrustVectoring 7y ago
      >You can't invest the same way as Vanguard and Blackrock at nation state scale You can, it's just that current consumption is fulfilled by current production. Current production gets allocated to some combination of return to labor, return on capital, and taxes. All else equal, the state owning more capital will just squeeze out some combination of return to labor and return on capital. If you look at the cash flows, there's no difference between the government owning 1% more of your employer vs taxing an extra 1% of the company's overall value. The biggest practical consideration is that taxation is a much more visible way of paying for benefits for current retirees, so replacing that with less obvious means is more politically viable.
dustinmr 7y ago
Agreed. My high school Econ teacher told me I was too young to be cynical after I told her I expected to pay into SS throughout my career, but I didn’t expect to receive it. This was early 90s. I’ve never included it in my retirement planning.
- marssaxman 7y ago
  Likewise - as far as I've ever been concerned, it's just another form of income tax. I don't really mind doing my bit to take care of the old folks, but I certainly don't imagine any of that will ever come back around for me. I didn't realize this was a generational thing.

toomuchtodo 7y ago

Social Security will not be gone, and it is not unsustainable at a macro level. Currently configured, it will pay out ~75% of earned benefits once the trust fund is exhausted in 2034. Several small changes, in concert, remove any insolvency concerns. It keeps 22 million Americans out of poverty [1], and is very efficient in terms of admin costs vs distributed benefits. I posit it's cheaper to keep those benefits recipients out of poverty, versus paying for what happens if they aren't kept out of poverty. Healthcare? Universal healthcare (Medicare For All), allowing for shedding the current jigsaw of healthcare benefits across the country. Less admin overhead, more care providers. If you're a pension that committed to healthcare expenses (state & local government, and manufacturers), you should be ringing the Medicare For All bell the hardest, to get the necessary infrastructure in place before your shortfalls arrive. > I would postulate the opposite - I would have thought because we believe that neither companies nor the guvmint would be there to support us, we would have fended for ourselves better (I know that's how I personally took it, and many/most of my friends). But you might be right... sounds like an attitude of "ef it, we're doomed" set in. Most Americans don't have the discretionary income after mandatory expenses to save to "fend for themselves" due to forty years of wage stagnation. This is why so many must rely on government programs to survive. [2] [1] https://www.cbpp.org/research/social-security/social-security-lifts-more-americans-above-poverty-than-any-other-program https://www.cbpp.org/research/social-security/social-securit... (Social Security Lifts More Americans Above Poverty Than Any Other Program) [2] https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/ https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us... (For most U.S. workers, real wages have barely budged in decades)

treis 7y ago
>Social Security will not be gone, and it is not unsustainable. Currently configured, it will pay out ~75% of earned benefits once the trust fund is exhausted in 2034 The trust fund is the government loaning money to itself. Ultimately, it is an accounting fiction. Instead of tax payers having to shore up a SS shortfall they have to pay back T-Bills. Either way, there's about 3 trillion dollars missing that will need to be paid.
- toomuchtodo 7y ago
  As long as the US government exists and has taxing authority, the general fund will survive and be able to support paying back special issues securities [1] that were provided to Social Security. You can't invest the same way as Vanguard and Blackrock at nation state scale (ie "let's throw it all in a three fund/target date fund and call it a day"), although the Bank of Japan is going to be a pioneer in acquiring and distributing the gains from public companies in Japan [2] due to their demographic situation (which all first world countries will eventually transition through). I would agree there are lots of liabilities (somewhere between single and triple digital trillions) we should start paying back now versus later though, before the debt service becomes unmanageable and we steal from savers by inflating the debt away, but this is a policy issue. We must stop kicking the can down the road, as a society, as a country, and as a species. [1] https://www.ssa.gov/oact/progdata/fundFAQ.html https://www.ssa.gov/oact/progdata/fundFAQ.html (Frequently Asked Questions about the Social Security Trust Funds) [2] https://news.ycombinator.com/item?id=19686549 https://news.ycombinator.com/item?id=19686549 | https://asia.nikkei.com/Business/Markets/Bank-of-Japan-to-be-top-shareholder-of-Japan-stocks https://asia.nikkei.com/Business/Markets/Bank-of-Japan-to-be... (Bank of Japan to be top shareholder of Japan stocks )
  - ThrustVectoring 7y ago
    >You can't invest the same way as Vanguard and Blackrock at nation state scale You can, it's just that current consumption is fulfilled by current production. Current production gets allocated to some combination of return to labor, return on capital, and taxes. All else equal, the state owning more capital will just squeeze out some combination of return to labor and return on capital. If you look at the cash flows, there's no difference between the government owning 1% more of your employer vs taxing an extra 1% of the company's overall value. The biggest practical consideration is that taxation is a much more visible way of paying for benefits for current retirees, so replacing that with less obvious means is more politically viable.

dustinmr 7y ago

Agreed. My high school Econ teacher told me I was too young to be cynical after I told her I expected to pay into SS throughout my career, but I didn’t expect to receive it. This was early 90s. I’ve never included it in my retirement planning.

marssaxman 7y ago
Likewise - as far as I've ever been concerned, it's just another form of income tax. I don't really mind doing my bit to take care of the old folks, but I certainly don't imagine any of that will ever come back around for me. I didn't realize this was a generational thing.