TonyCinTX

The U.S. on the Precipice

huangjin: Programs such as Social Security and Medicare do exactly the opposite of what you claim, they force people TO "save". Yes, I know they are not actually saving and their contributions are redistributed to the elderly. But historically, the problem was that *nobody* saved for retirement. If they did anything, they relied on lifelong employers to fund their retirement, and when those all went under in the Depression everybody was screwed.

We have already tried the alternative to SS, it fails miserably and creates poverty, disease, homelessness and crime. When it comes to planning for retirement, people are no smarter now than they were a century ago. They won't do it! They ignore their financial future and bet on schemes and wild chances and lose all their money! If you completely eliminate their taxes they will bet and lose that, too.

Politicians and corporations are just as bad as individuals, short term thinking is inherent human nature. There is absolutely no evidence that people are "discouraged" from saving by SS, in fact among people under 35 that firmly believe SS will be gone before they retire and they will have to fund their own retirement, they still do not save or invest anywhere close to what that would cost. Education is not the answer either, this same thing holds true for professors and college graduates. THEY JUST DON'T CARE ENOUGH to sacrifice this year's comfort for their future comfort, and NEVER WILL.

Some sort of mandatory, inescapable long term investment combined with a social safety net is the answer, and SS and Medicare taxes are the closest we can come. The big problem with SS and Medicare is they are managed by appointees and politicians that never have to face any consequences for their own short term thinking. But something must be done and this is as close as we get.