A friend calls to my attending this quotation from Paul Samuelson. It is from a Newsweek column written inwards 1967, simply it has to a greater extent than or less modern relevance. Of course, at the time, Samuelson was non focused on the large unfunded liabilities nosotros forthwith face.
The beauty of social insurance is that it is actuarially unsound. Everyone who reaches retirement historic menstruum is given produce goodness privileges that far overstep anything he has paid inwards -- overstep his payments past times to a greater extent than than x times (or 5 times counting employer payments)!
How is it possible? It stems from the fact that the national production is growing at a chemical compound involvement charge per unit of measurement in addition to tin hold upward expected to produce in addition to thus for every bit far ahead every bit the pump cannot see. Always at that topographic point are to a greater extent than youths than former folks inwards a growing population.
More important, amongst existent income going upward at 3% per year, the taxable base of operations on which benefits residual is ever much greater than the taxes paid historically past times the generation forthwith retired.
Social Security is squarely based on what has been called the 8th wonder of the the world -- chemical compound interest. H5N1 growing acre is the greatest Ponzi game ever contrived.Sumber https://gregmankiw.blogspot.com/
