Isn't this the tradition (not current) argument against deficits? On Fri, Nov 05, 2004 at 04:52:57PM -0800, David B. Shemano wrote: > > To be accurate, aren't you really saying that SS can't go broke because it is a > government obligation like any other obligation (e.g. Treasury bonds) and the > government can always raise taxes or borrow money to pay the obligation? > > I agree that SS is an inter-generational transfer program. Current workers are > taxed to pay for disbursements to the currently retired, and at the same time the > government is incurring a contingent liability to the current workers which will > become due when they retire, which will then necessitate taxing the then current > workers at that time. > > I would suggest that this is problematic, because while it would be democratic for > current workers to agree to tax themselves to transfer assets to the currently > retired, it is anti-democratic to bind future generations to tax themselves to > transfer funds to the current workers when the current workers retire. Among other > things, current workers (and current retirees) have no incentive to take into > consideration the effect of present decisions on future generations. SS payments > (and similar transfers like Medicare) continue to incease as a percentage of the > budget each year, which means the budget options for future generations will be > severely restricted. > > David Shemano
-- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
