... but an actual, real, funded pension does not hold the liabilities of the corporation that has the pension liabilities as the assets that fund the pension. Well, an actual, real, funded pension not set up on the Enron model, at any rate.

An actual, real, funded pension is based on the underlying fact that the organization holding the pension liability cannot simply issue new money, but must intermediate money already in existence in order to meet its contractual obligations.

The government is under no such finance constraint with respect to its own fiat-currency. Its domestic constraints are real, not financial ... the ability and willingness of others to produce goods and services in return for purchasing power, for one, and the impact of its actions on employment, price stability, national economic development, distribution of opportunity, and distribution of income.

Thus when the government holds in one hand as an asset a liability on itself, which it promises to pay out of the other hand with a financial asset consisting of its own liability of a different kind, it is on the one hand not funding anything, in any real sense, and on the other hand there is in itself no intrinsic financial harm to the interests of the future beneficiaries (unlike the Enron analogy), since it is not in the position of requiring an asset base.

Social Security is PAYGO on its own functions direct transfer between the current generations paying in and the generation(s) receiving payment. Since the 1980's, it also collects a surplus on top to shift the tax burden from progressive corporate income taxes to regressive payroll taxes.

And it does so because the top 20% of income earners have more than 50% of the annual income, and since they have more than 90% of the total financial wealth, on average it seems likely that they have more than 90% of the income available to be saved (including of course the income from holding wealth which creates a self-perpetuating aristocracy of wealth). And with that comes the ability to buy the policies that allow them to take a free ride on everyone else.

Certainly under the current US regime's economic underdevelopment policies, with a current account deficit exceeding 6% of GDP, there is not an abundance of aggregate Saving available to offer the entire population the opportunity at wealth accumulation, and given Corporate income earners first crack at retaining earnings for corporate savings and wealth-income's inside track on being recycled into wealth accumulation, there is very little Aggregate Saving available annually to the remainder of the population to allow them to acquire financial wealth.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.