by: Gary North
For the same reason that my children will pay for yours: because the government has offered them a deal: it will pay for our retirement.
The problem is, Social Security goes bust this year. If you don’t believe me, click here.
The government has promised to pay for my retirement and yours. How? Congress has stuck a gun in the collective bellies of all of America’s workers and has said, “You owe the IRS the money to fund millions of oldsters. Your turn will come. Trust us.” What if our children ever decide that Congress’s promises are not reliable? What if they decide that their children – our grandchildren – will decide to stiff them? Will they pull the Medicare/Social Security plug?
Let’s think this through. If your children were to sit down with my children and talk through this problem, is it possible that they would come up with this conclusion? “If we take over the funding of our parents’ retirement, will you take over the funding of yours?”
There would be some negotiating. The outcome would depend on how old I am, how old you are, and how old the two sets of children are. If I am in good health but old, while you are in poor health but likely to survive another 20 years through constant medical care, my children would like the new arrangement, while yours might balk.
But there is no way for them to sit down together and negotiate a new arrangement.