Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
The Stock-Flow analysis applied to pensions! This goes a long way to justifying the US "pay as you go" approach originally intended. This system was modified in the '80s into one that was "actuarially sound" but that very soundness was converted, by looting, into apparent deficit, and the very existence of that deficit has been used by the looters to call into question the feasibility of the whole endeavor.

When a Stock approach is actually attempted, great care would have to be taken over the disposition of the Stock of money going into the pension both to avoid crashing the economy due to excessive reduction of the money supply, if the withholding is directed into gold, for instance, or loss of the money through mal-investment. Given the outcome we might conclude that the entire point of the US exercise was to create a pool of money that was available for subtle looting.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Oct 23rd, 2010 at 11:37:10 AM EST
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