6% of GDP…so what!

Lifted from an e-mail from Dale Coberly regarding Social Security and the dangers of increasing ‘costs’ of helping our old folk live a bit above a level of destitution:

…that while SS will eventually cost 6% of GDP, this is not a lot of money for the basic needs of 25% of the population. Moreover, they will have paid for it themselves.

And that is what it is going to cost “us” in any case, however the money is arranged… that is what the old people will “eat.” And the bread will be baked by “us.” You can fool yourself with financial transactions, or you can take the money directly via a payroll “tax.” At the end of the day…in terms of distribution of goods and services to the elderly vs the “young,” it will come out exactly the same.

You would have to show that laundering the money through the financial markets will result in more production or a fairer distribution, and while the first is an article of religious faith with some people, there has been no evidence whatsoever to support it for the past eighty years. I suspect it has something to do with the maturation of capitalism, but I am no economist. Merely an observer of what is.

To put it in terms any might understand: Granny is going to consume 6% of what “we” produce. So what? (She produced a hell of a lot of what we consumed in her prime time.)

(Rdan…lightly edited for readability)

Angry Bear front page author Bruce Webb has kept the numbers straight and well covered, and Dales’s Northwest Plan offers an especially workable answer to the possible problems in the money stream for workers, but sometimes you just gotta say it out loud and in real family terms many of us actually believe about the over 65 group. Thanks for working hard.