Zoomie1980
Senior Member
- Jan 16, 2008
- 1,658
- 128
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You can wipe out most of the liabilities by raising the retirement age to 72. There is no reason not to do this. When Social Security was changed in the 60s, the average expectancy was 65. The amount actually paid out wasn't that large. Today, the average life expectancy is 77. So we will change it to 72.
The reason why we will do this is because the other option is inflation, which will erode the value of Social Security anyways. Seniors live on fixed incomes. Inflation is bad for them. So they will have the option of inflation or changing social security.
But that is a different issue. It will not cause hyperinflation even if we have all these liabilities.
The single biggest source of governmental budget shortfalls and bad large corporate balance sheets are PENSIONS. And not just pensions, but pensions that were designed on actuarial statistics from 30, 50, 70+ years ago. That is true with Social Security, GM and Chrysler, and California, and countless municipalities that have ridiculous police, fire, and civil service pensions. Until we realize we have to tie pension benefits to life expectancy we will continue to have major budget and corporate profit issues.
Inflation and deflation are really simple things. If you have more "stuff" than is needed or at least "perceived" to be needed, you will have DEFLATION in that "stuff". Be than monetary supply, commodities, finished goods or services....