Rikurzhen
Gold Member
- Jul 24, 2014
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- #41
People like generational social welfare schemes, so society faces the problem of paying for the retirement of our seniors. A stable system would have each generation prepaying, over the course of their working lives, for their own retirement expenses That's not happening even now.
Look at those numbers. Contributions PLUS INVESTMENT GAINS that compound over a person's working life, create an mean asset base of $61,000 per senior citizen but the cost of supporting that senior with SS and their medical care requires an ADDITIONAL $180,000 for men and $207,000 for women. This money has to come from somewhere. It comes from those presently in the workforce.
Now if you keep population constant, and you assume no inflation over the generations, then you face massive FICA taxes increases to balance income against expenses. An expanding population allows you to dilute the costs and so charge lower premiums, but now we're into Ponzi scheme territory. A shrinking population actually exacerbates the problems, now you need even higher FICA tax increases.
Those high taxes on the young and working results in this outcome, the poor young are subsidizing the rich old:
This in turn further delays family formation, results in smaller families, and further distorts the generational math.
A liberal billionaire silenced the Sierra Club on limiting immigration and population growth. When we import a third worlder into the US we MASSIVELY increase their pollution footprint but liberals are full steam ahead on importing more third worlders. We've experienced massive third world immigration in the last decade and most all of these people are net tax consumers, that is, NET burdens on society, so we're both increasing our pollution footprint and making our public finances worse. The only group opposing immigration is found in conservative-land.
To square the circle as you propose requires the smaller and younger generation being more economically productive per capita than the older and larger generation. Look at what's happening with our population, male income is falling, marriage rate is falling, income inequality is growing, labor force participation is dropping. Society is sick and it's not working, it's moving in the wrong direction to what you propose and no higher taxes on the wealthy doesn't fix the problem because the economy is not a static function, it operates dynamically and this is what happens to Federal Tax Revenue when we modify marginal tax rates:
