[ExI] pensions

Brian Atkins brian at posthuman.com
Thu Sep 6 04:53:23 UTC 2007

spike wrote:
> True, the government sends
> the checks, but we the people sprovide that money, our own money, earned
> when we were younger

Not quite since the US system is a pay-as-you-go system. So the money you've 
been paying in has gone mainly every paycheck direct to other folks currently 
drawing benefits. Any excess is given to the rest of the federal government to 
spend immediately - the Social Security Trust Fund gets IOUs essentially in 
return. $2 trillion of them so far... conveniently kept off the official federal 
accounting debt total.

When it comes time for you to retire, you will be receiving cash payments 
directly from the pockets of the current US workforce at that time, plus 
hopefully the government will be able to afford to pay back some of the IOUs 
using its tax income or increased debt at that time. Not a penny of it though 
will be money you or the current workforce paid in; that money is already spent 
and gone.

Also if as expected in the future the ratio of retirees to workers increases, 
and/or the government has trouble coming up with $2 trillion to pay back the 
IOUs, then this whole ponzi-esque scheme runs into problems.

Brian Atkins
Singularity Institute for Artificial Intelligence

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