Economic Stupidity at Politico

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This topic contains 5 replies, has 3 voices, and was last updated by  JonCr 6 months ago.

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  • #4324

    Creigh Gordon
    Moderator

    Politico has published an article by an economics professor berating millennials for not saving enough for retirement.

    https://www.politico.com/agenda/story/2018/06/07/millennials-preparing-for-retirement-000670

    It’s a truism of economics that a nation or society can only consume what it creates for itself, or, as a minor effect, what it can trade with other nations. The way for a nation or society to prepare for its future is to ensure that people with the necessary education, and that the necessary infrastructure–social as well as physical–will be in place. If that happens, millennials will be fine. If not, savings won’t help.

  • #4331

    Ryan Ashfyre
    Moderator

    I particularly liked this not-so-subtle jab at my generation: “My research suggests that those concerns are real, and millennials really are building wealth more slowly than the other working generations.

  • #4367

    JonCr
    Participant

    Umm you’re badly misreading that, Ryan. It doesn’t say “the other, working, generations” which would be a jab. And you added the emphasis. The adjective is there so to clarify that the wealth accumulation of Millennials is not being compared with that of children or, more importantly, retirees.
    Also there’s really not any blame handed out in this piece. If anything the author is sympathetic: Millennials suffer from “limited access to retirement plans at work” and “entered the labor market during tough times”.

  • #4368

    JonCr
    Participant

    Oh and by the way I much prefer the idea of building up equity and saving for retirement in a fund to a pyramid scheme in which the working pay for their parents/grandparents to retire.

    • #4369

      Creigh Gordon
      Moderator

      While the idea of rugged individualism is an attractive one, any insurance scheme is a recognition of rugged individualism’s limitations. In particular, a retirement or old age benefit is by necessity a “one generation takes care of another.” Someone, presumably in a younger generation, is going to have to produce the food, energy, and medical care you’ll need in retirement. You can’t eat money.

    • #4374

      JonCr
      Participant

      But there’s a big difference between someone’s accumulated wealth paying the young and middle-aged for their work, and the young and middle-aged’s taxes paying for their own work. It’s the difference between doing a job and doing the same job at less pay.
      In theory insurance exists to spread around risk. Based on your circumstances there is a random variable representing the payout you might have to suffer from whatever misfortunes, and instead of rolling the dice insurance lets you pay the expected value. There’s nothing charitable about it.

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