| Every scheme of retirement depends on the existence of successive generations. That is true whether you're talking about traditional societies where children take care of their parents, or modern societies where the childrens' generation makes payments to the parents' generation through either social security taxes, or dividend payouts from equity ownership. I was referring to individual-level retirement planning. That is, does it make sense for me to invest in one or more children based on the expectation that those children will directly help me (financially and otherwise) during retirement? Social security originated in a time when, barring catastrophic wars, it was inconceivable that the U.S. population could ever decrease. It has worked thus far because a productive younger generation has always been able to pay for a retired older generation. However, as far as I know, it was always a program whose ethical justification was that you get back what you put in, plus some return. Whether or not you have children is irrelevant. Furthermore, if we presume that the ethical justification for social security is that one's children are going to be productive members of society, how can we adjust for unproductive children? Should parents whose children die before entering the workforce be denied social security? What if their children live, but are unemployed for many years? These are serious questions that would have to be addressed, but doing so would simply not be possible in many cases since parents tend to die before the productive output of their children over the course of their working life is known. This is also true even when applied to future generations as a whole. A future generation can be less productive than the present one, just as one's future child can be less productive than you. If social security is an intergenerational contract that involves a transfer of wealth from the young to the old, then it's an unjust Ponzi scheme that will collapse as soon as demographic trends are no longer able to sustain it. Ideally, the benefits received from any retirement program, whether public or private, would be dependent upon an individual's productivity over the course of their life. Any other system inevitably involves some centrally managed authority attempting to equitably transfer wealth from one set of people to another, which is a prescription for corruption. |
I understand. I was pointing out what impact our national retirement policies had on individual incentives and how that translated into group incentives.
> However, as far as I know, it was always a program whose ethical justification was that you get back what you put in, plus some return. Whether or not you have children is irrelevant.
That's an abstraction. It doesn't matter if you only "take out" what you "put in." At the end of that day, somebody's kids are producing what you take out. Any retired generation inherently depends on the production of the working generation, and for a generation to retire, there has to be a working generation to take their place, which means having kids. Social security versus investing versus whatever is just a way of accounting for that basic transaction.
> Furthermore, if we presume that the ethical justification for social security is that one's children are going to be productive members of society, how can we adjust for unproductive children?
I'm speak at the group level. It's fairly irrelevant whether one person does or does not have kids, so it's useless to try and account for that at the level of Social Security. However, Social Security as an institution reduces the incentive for everyone to have kids, because they can just depend on the production of the kids of people who did. It's a free-rider problem.
> If social security is an intergenerational contract that involves a transfer of wealth from the young to the old, then it's an unjust Ponzi scheme that will collapse as soon as demographic trends are no longer able to sustain it.
It's a Ponzi scheme, but what makes it unjust? It's the circle of life, man. Your parents took care of you, and at the other end of the cycle you take care of them. The really useful insight is that it's a Ponzi scheme that's unavoidable, at least with existing technology. By and large, the human life is bookended by periods in which people are not self-sufficient and not able to produce. No matter how you abstract the underlying intergenerational transaction, you can't get away from it. We're engaging in the same intergenerational transaction people did tens of thousands of years ago--we just have a different, fancier way of accounting.