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December 18, 2007
That governmental Ponzi scheme
At the end of this common sense post that mostly points out that no useful public policy is served by the government denying grandparents the right to establish Health Savings Accounts for the benefit of their grandchildren, the always entertaining Art DeVany makes the following observation about a common topic on this blog -- Social Security reform (previous posts are here):
By the way, there is no such thing as social security. There are only people who are more or less secure against contingencies. They might pool their risks against these contingencies, but there is no effective way for a society to avoid risk. As a program for risk pooling, Social Security is very ineffective. It is not insurance, it is redistribution among generations. It is a Ponzi scheme because the risk pool is allocated from one generation to another. And, it is fraught with demographic risk and political risk. It will eventually go under or have to be modified substantially by disavowing the contract between generations because it is not sustainable.
Posted by Tom at December 18, 2007 12:05 AM
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