dlo@drutx.UUCP (OlsonDL) (11/15/85)
[] In article: <812@whuxl.UUCP> orb@whuxl.UUCP (SEVENER) writes: >Opponents of the Social Security system like David Olson >apparently have trouble understanding the power of compound >interest. >> As it stands now, on the average for every dollar one collects of the >> money he paid into SS, he also collects about 3 from somebody else. In >> reality, SS is another pyramid scheme, no matter who collects it, or >> how badly it is needed. >> >The relation of 3 to 1 between payments during one's working life >and benefits upon retirement is hardly unreasonable when one >calculates the effects of compound interest. Tim, you obviously do not understand a pyramid scheme. People who collect from it (no matter how badly it is needed) are collecting from people at lower levels of the pyramid, who inturn must collect from still more peopel at still more levels. The money you put into SS does not grow; it goes right into somebody else's pocket. Once you have collected the same amount of money from SS as what you put in (you are actually collecting the equivalent amount of what someone else put in) on average, you will then start collecting on what 3 more people placed into the pot. Those 3 no longer have their hard earned dollars for a pension; you ate it up. For *each* of them to collect what they were "promised", requires 4 others (one to replace the money they placed into the pot + 3 others to provide what is needed once that is gone) to put their money into the system. And on, and on, and on... > tim sevener whuxn!orb My opinions are my own, and do not necessarily reflect those of my employer. David Olson ..!ihnp4!drutx!dlo