Tuesday, August 20, 2013

Intergenerational payments are not a zero sum game

Many complain that Social Security is taking from the young to pay for the old.  That is, this transfer is a zero sum game where the winnings of one are equal to the losses of others.

But consider that we play another zero sum game.  Think about those who complain about paying for schools because they don't have children or grandchildren in school.

Now if the older people are paying taxes to support public schools and the younger people are paying taxes for seniors' Social Security payments, isn't the combined system a win-win situation?

And there is more to support this win-win situation.

If older people don't pay for children's education where are the doctors going to come from?  Police and fire?  Government?  Inventors of devices and medicines to prolong life?  Sports figures to entertain?

If younger people don't pay for older peoples' retirement and health, might the older people stay working longer, leaving fewer jobs for younger people?

And the list goes on.  Older people paid for the infra-structure that younger people use today.  Would we have highways, communication systems, buildings, and much else that was paid for in full by people now dead?