Monday, 8 December 2014

Retirement Planning

I signed up at a Liberal Party of Canada 'supporter' so that I could vote in their leadership race. I think I voted for Deborah Coyne, though that obviously doesn't matter at this point.

Anyway, they send me emails, mostly soliciting donations. The other day I got an email asking me what my opinion was on five big issues that will form the Liberal platform for the election about a year from now. One of the questions was about what the government needed to do to help Canadians save for retirement.

I've got some pretty strong feelings about retuirement schemes. I use the word "scheme" for a reason. Basically pensions are Ponzi schemes. They pay out the investors from new capital paid in by new investors. With a sufficiently high interest rate they might escape ponzi land and actually start funding themslves, but the whole reason why we are approaching a looming crisis in the field of retirement is because interest rates are so low to begin with. With interest rates as they are, saving is just kind of nonsense and pensions don't have a magic wand to get around that.

Pensions are certainly more reliable than most ponzi schemes, but that's only because people are obligated to put money into them, either by law or by their employer or union. Ponzi schemes can work for a long time if people don't have a choice but to dump more money in. To make them work forever, though, you'd need to keep expanding the number of people paying in, or expanding the salaries of people paying in, so that they could keep floating the people who paid in before.

We are not experiencing a population boom, we are not experiencing a salary boom. Pensions are in big trouble.

The survey asked what I thought should be done about it and gave me a number of equally futile options. The problem is that we have made pensions obsolete with low interst and stagnating population growth. People who are joining the workforce now have to bear the burden of paying into the ponzi scheme that is going to collapse before they ever get anything back out of it.

So I checked that box marked "other" and told them the real solution to retirement. It's called gauranteed income.

Too many seniors live in poverty, but too many young adults live in poverty and too many children live in poverty. These are not really different problems. The problem is that we live in a society that can easily produce enough food for everyone to eat and people still go hungry. We live in a society that can easily produce high tech gadgets for everyone and yet some children get to look on with envy at their peers from their own low social station. With live in a society where we are letting infrastructure crumble while we have a massive unemployment rate. Sure, things need to be fixed and sure there are tons of people desperate for work, but the work can't be done because despite the fact that there is enough of everything to go around, we still have to ask "Who is going to pay for it?"

For all of history that I'm aware of people have worried about jobs being automated or technology otherwise running people out of gainful work. At times I think this made more sense than others, but the current incarnation of it is completely insane. Major media outlets publish scare pieces about a future where robots have taken almost all the jobs.

Let's put this clearly: In the not too distant future we will be able to produce everything we need to survive plus a huge amount of other stuff just for fun with human beings doing next to no work. This is what we call a crisis.

All the stuff we want. Don't have to work. Crisis.

The crisis, of course, is that a very small number of people will own all of the machines and everyone else will be left to rot. Basically, the crisis is that the rich might one day no longer need the poor.

If that's the crisis then there is an easy answer, and it's not a big clever idea, it's probably one of the oldest ideas out there: kill the rich. The rich may one day not need the poor, but the poor have never needed the rich.

I'm not really an advocate of murder or of revolution. At this point I'd be willing to strike a deal with the very rich. We will cut the cord to their balloon economy and let if float away. They can busy themselves increasing the numbers in their bank accounts as if they were high scores in Joust, and we will give them pretty much whatever stuff they want. It will be hereditary, they and their families will simply be rich forever. But in exchange, they aren't allowed to mess with reality anymore. No more saying what can and cannot be done with land, who gets to live in what houses, what infrastructure projects get funded, which drugs get researched, and so on. We can afford this deal. Frankly, if others want to join them, we can afford that too. We'll make the ticket an economics degree - get one and you too can have all the stuff you want but you aren't allowed to decide how anything works. If you have an economics degree and you don't think this is a good deal for you, I'd love to hear why.

That's not going to happen, but gauranteed income is a real solution. If everyone could afford to live the kind of life that we can afford to give everyone then we could put retirement schemes to rest. Instead of being the society that is worried it will break it's work-until-you're-65-and-we'll-let-you-live deal, we could be a society that simply offers a you-get-to-live deal.

For those of you wondering and who didn't bother too sift through the information I dropped to get the clues, I came out of the Toronto Star survey as part of the Post-Materialist Left. Who knew?

1 comment:

  1. I came out as another version of Leftist but with leanings towards post materialist left. Mostly I think the questions being stupid is at fault since you and I tend to agree on political choices.

    Well, we agree on political choices within the real world. Our pie in the sky dreams differ fairly starkly I suspect.

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