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Ain't near as great as liberals make it out to be.
Not counting future Social Security and Medicare benefits - which individuals cannot monetize in advance - perhaps 10-20 percent of Americans have no positive net worth. I'm going to guess that most of these people are renters with little or no discretionary income. If this is correct, the well-known existing negative correlation between income and longevity suggests that low-income people tend to have low expected values of future SS and Medicare benefits, simply because they are expected to die earlier and therefore to collect benefits for fewer years. Also, since low-income people have low marriage rates, they also can be expected to have fewer qualifying survivors to collect SS survivor benefits.
That is one of the most ignorant columns I have ever read.
So if it could be said that a 20 year old will make 1.5 million over the next 30 years, that 20 year old has 1.5 million in wealth?
Would any bank give him a loan as if he had 1.5 million in the bank? Of course not.
S.S. is going out as fast as it comes in for many. You can't get squat for your Medicaid "wealth".
God, what an awful piece.
What they are talking about is the present value of those benefits. A standard economic concept.
You can get a loan based on your future income, be that a job or SS.
From the link:
Quote:
So, all of the things we do collectively, that we employ government to do on our behalf, which reduce wealth inequality are not included in our estimations of wealth inequality. That is to fall victim to Worstall’s Fallacy I’m afraid. To insist that something must be done without taking account of the things that are already done.
It’s also wrong economically. The first, the new, paper is making the point that peoples’ savings behaviour has changed as a result of the introduction of Medicare and Social Security (the same would also be true of the rest of the welfare state by the way, that SNAP exists means that people can have less in regular savings, that Section 8 does will, to some extent, reduce housing equity and so on and on). People no longer need to save capital, to create personal wealth, because they are being taxed in a manner that will provide the same end result: their old age living and medical expenses will be paid for. But if this is true then that promise of those old age expenses being taken care of is wealth. And we must count it as such too. For the two are economically similar: they are both access to the resources to pay for old age.
Last edited by whogo; 10-30-2016 at 07:14 AM..
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