23 lines
1.4 KiB
Plaintext
23 lines
1.4 KiB
Plaintext
Social Security and the Demography Bomb
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<p>A friend of mine, Russ Cage aka Engineer-Poet, comments on my essay<br />
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<a href="http://esr.ibiblio.org/index.php?m=200212#18">Demographics<br />
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and the Dustbin of History</a>:</p>
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<blockquote><p>
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People used to have children to take care of them in their old age.<br />
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Social Security took care of this by socializing the benefits, but all<br />
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of the costs still fell to individuals; worse, taking time out of the<br />
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workforce to raise kids reduces your Social Security benefits.<br />
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Rational actors will stop having kids to have a good retirement.
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</p></blockquote>
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<p>He’s right, and this applies to <em>all</em> public pension schemes.<br />
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It’s a very simple, very powerful mechanism. When you subsidize old<br />
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age, you depress birthrates. The more you subsidize old age, the more<br />
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you depress birthrates. Eventually…crash!</p>
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<p>It’s not just Euro-socialism that’s going to get trashed by<br />
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demographics, it’s the U.S’s own welfare state. It might take longer<br />
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here because our population is still rising, but it will happen.</p>
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<p>Now that the effects of income transfer on demography are no longer<br />
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masked by the Long Boom, this is going to become one of the principal<br />
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constraints on public policy.</p>
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<p><a href="http://enetation.co.uk/comments.php?user=esr&commentid=85477017">Blogspot comments</a></p>
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