Stay awake!
Does no-one in this country understand pensons? There seems to be a general view, held by government, journalists, City analysts and so on that you can have 'pre-funded' pensions. This is usually contrasted with 'pay as you go' pensions which are not 'pre-funded'.
Of course no pension can be pre-funded unless it is taken purely in the form of what you want to consume once retired, i.e. it may be possible in some ways with tinned- food and in a larger way with housing. Otherwise all you can do is accumulate claims on others' production in the future, and hope when you get to retirement that those claims are worth something.
From this follows another fact that no-one seems to understand -- if there is a demographic timebomb in the sense of a huge rise in the ratio of retired people to working people, then it is a demographic timebomb regardless of whether you fund pensions privately, publically, fully-funded, pay-as-you-go etc etc. All that matters is that a country has a national output, which you are sharing between the productive population (i.e workers) and the non-productive population (i.e. the retired).
posted by Matthew @ 12/18/2002 04:26:00 PM
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