Wednesday, November 29, 2006

Musings on Economics

Despite the lack of eye surgery or a broken back, I find myself up at 2:00 a.m. with a glass of Rebel Yell thinking about Things and Stuff.

And this evenings Things and Stuff is savings. More particularly, savings for retirement. And what the heck it all means.

As a traditional right wing/Republican/libertarian/etc., the idea that the people should save for their retirement appeals to me. And as a corollary to that, when the Government, contrary to all good sense, decides to set its self up as our retirement guarantor, it ought to "save" as well. Which is one of the things about Social Security that I find particularly annoying. As anyone who knows anything knows, nothing is saved; the trust fund is nothing more than an accounting gimmick; and at best we have promises from us that we'll tax our children to support us in our old age.

But let's pretend that the Social Security Trust Fund wasn't a colossal fraud. What difference would it make? Suppose, for instance, that instead of "investing" in a fund that will have expended itself long before any of us "young" folks would ever receive benefits, we were allowed to invest in the stock market. How could it make any difference thirty or forty years down the line? There would still be the same amount of natural resources; the same amount of stuff to go around; the same amount of everything. The only difference would be who, on paper, owns what. And what difference does it make whether we shuffle those papers now or later?

Ultimately, we have a limited supply of resources--and that includes renewable resources--and all we can do with them is play with them on paper. There's only so much we can produce, no matter how efficient we get.

Unless, of course, we "invest" elsewhere. But that would require that we actually "invest" elsewhere, which is sort of hard to do when our economy is running off of foreign investment (or at least that portion of the economy that isn't running off the currently bursting housing bubble).

But, of course, that's just if we look at it from a macroeconomic point of view. We can still screw our kids macroeconomically, so long as we take personal responsibility for out own retirement. But to the extent government is involved, it's gonna be pretty damn messy.

If that didn't make any sense, I apologize. Blame it on the Rebel Yell. But just keep in mind that it makes sense to me, and I'm pretty darned smart. Trust me, there's something there. Perhaps I just need to flesh it out a bit more.

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3 Comments:

Blogger Laurie said...

No eye surgery or broken back? My guess is you had a drink and a cigar with Denny and Alan and started ruminating.

I'm pretty sure I'll be working until I'm at least 80 so I don't think about retirement. (Worrying causes wrinkles.) Then, if I ever get to quit work, I'll be pleasantly surprised.

Wednesday, November 29, 2006 7:04:00 AM  
Anonymous Laura said...

Hi, Jack.

Yep, that's me. Good job! You are the first to figure it out. I'll take a look around your site.

Oh, here's a bit to make this post "on topic." I have an IRA with $4500. My SS contributions are close to nil. It's hard to maximize retirement investments of any sort when one is dependent on others.

I voted for Kinky, and for Libertarians in all of the state races. But I'd vote for a yellow dog before I'd vote for any Democrat outside of Hardin County.

Wednesday, November 29, 2006 10:28:00 AM  
Anonymous Susan in frigid, but snowless, St. Paul said...

Since I am planning on moving into your kitchen when I hit retirement, I probably don't really need my IRA, 403b, or whatever trust, socail security, ect...still exists when I hit retirement age.

Seriously, I never really dreamt of retirement, my parents are only semi retired, and I am only semi employed, so ....

If I am doing something I love, I become a workaholic so I hope that is what I will be doing.

However, tonight its getting a bit cold(6 degrees) and your kitchen is sounding pretty attractive ;-)

ps. something has changed about posting comments here, hmm.

Saturday, December 02, 2006 6:45:00 PM  

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