You realize the government funds most people's pensions/retirement via investment right? Either directly via pension funds or indirectly by encouraging people to save in 401ks etc?
It used to be that companies paid pensions. They had to pay for the full life-cycle cost of the humans that they used for labor. Companies hated that of course both for practical reasons, but mostly because they'd rather that pension money went to shareholding executives.
The 401k was originally a special interest clause inserted in a bill designed for kodak employees (kodak was a crazy profitable company at the time, and with that came the power to lobby changes to bills). But others picked up on in and also used it as a tax haven, then over time its existence effectively eliminated private pensions. In the 80s there were a number of big pension blowouts (some real, some manufactured) so that companies could offload these commitments to the government, to externalize these costs. The 401k was then sold as the way retirement saving should be done.
Investments don't actually pay for retirement costs, only selling investments can do that. Younger people have to buy the stocks of the older people who need to sell them to pay living costs. So that of course leads to growth and demographics problems to keep the system working.
Yes, and what happens when the company paying your pension goes bankrupt? You're up sht creek.
At least 401ks let you diversify across the entire stock market, much less risk of every company in the US (or world) going bankrupt simultaneously.
> So that of course leads to growth and demographics problems to keep the system working.
Let me tell you a secret: even in a communist country demographics still matter. If you have just 1 healthy adult caring for 4 aging grandparents, that's going to be tough in communism or capitalism. Money is just an abstraction, what matters is resources, which young healthy people are.
> Let me tell you a secret: even in a communist country demographics still matter.
At no point did I suggest otherwise. Regardless of the political system at play, physics says that continued exponential growth is not an option. So how do get to a system that works on with a plateaued population / economy?
I think many systems can work with a plateau (but it will be less pleasant than the growth phase). Shrinking populations are much more unpleasant though, at least for the old people getting insufficient care.
