This blog contains posts and comments written by students in Dr. Tufte's economics classes at Southern Utah University.
2/28/2005
America's retirement, not as bad as other countries
America has one of the most diversified retirement systems. It entails; social security, company pensions, 401 (k) savings plans that are largely invested in stocks, and private insurance policies. The rest of the world is not as diversified as us and is in greater trouble with their retirement systems. The world has the same problem as we do with the baby-boom generation, but they do not have workers coming in from other countries everday. America, because of all the immigration, will genrate more workers to help pay for social security and other retirement systems. We have Mexico which helps in this process. My question is why is so much empasis put on social security when we have more retiremnet systems than the rest of the world? Also, if the social security fall happens, will it lower the standard of living?
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We are paying so much attention to social security right now because it has taken so long to get Congress to get the guts to do anything about it - nobody wants to blow the opportunity.
Our standard of living (on average) can't fall when social security fails or is reformed. All it does is transfer money around, it doesn't create any, so it can't make us better off. The failure of social security would make senior citizens poorer, but they are already the wealthiest demographic group, so I'm not sure we should care. Lastly, I'm not sure that there is any sense in which social security can ever "fail". It may not work the way we want it to, but it can't go broke either.
It is correct that our retirement systems are far more diverse in this country than in others. That is a good thing.
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