SPXplus10

In Madoff We Trust

On the other hand... what is an alternative (to the implicit pyramiding of SS)?

Consider: In a closed system where the costs can be (very roughly) divided into "maintenance of the retired class" and costs of the "safety net" for the working age class, it is not irrational to rely on the (presumably inflating) tax payments of the (presumably enlarging) working class to support the first class of costs.

The system fails only If the subsequent generation does not enlarge or if the tax payments do not inflate. (Even then, there are "automatic stabilizers: a reduced population in the subsequent generation reduces the costs of the second class of costs, ceteris paribus.) The bigger/more immediate flaw may result from the extended lifespans and the health care costs that are concentrated in that "extended" period.

Unfortunately, the combination of the baby boomer bubble running into the current spate of deflation tests (to the max) the robustness of the assumptions. (Throw in the hyperbolic health care cost increases, and the current strain on the system is very apparent.)

But over a long horizon, these "anomalous" periods should be exceptions - not the rule - and reliance on a printing press (to counter deflationary effects) may not be so sinful as implied.

Alternatives approach? One that offers as much of a "net net" benefit over 50 - 100 year horizons?

I hate to rely on the economist's paradox, but isn't a lot like the proverbial quarter on the sidewalk? (If there was a better alternative, it would be topic A of everyone's discussion right now.)

Why I've Decided to Raise Some Cash for March

Whoops! Looks like better luck next month!