hank.walker@UNH.CS.CMU.EDU (08/06/86)
To: KFL%MX.LCS.MIT.EDU@mc.lcs.mit.edu By the high black teenage unemployment rate I meant that the teenage fathers didn't have any money to support their kids anyway. This was obvious when watching a few TV specials on unwed teenage mothers. These guys may be amazingly irresponsible, but the only money they have seems to come from dealing drugs. In general the amount of money obtained from child support is usually substantially higher than that provided by welfare. The problem in the past has been for the mother, lacking resources, to fight the legal battle to get the fater to pay (the case of the mother having money and the father having custody is rare enough that we will neglect it here). I know divorced mothers, and every one of them who wasn't getting their full child support was fighting to get it, not sitting around on welfare. By "retirement age" I actually meant the age that Social Security starts paying full benefits, minus whatever factor is used when you have other income. The age is scheduled to increase, in order to hold down the number of Baby Boomers receiving benefits at any one time. The Social Security system is not a Ponzi scheme, but an income transfer system, just like welfare. The difference is that your benefits are determined by your income, rather than need. The amount of the GNP going to the system is a political decision. If benefits are rising too fast, the rules are changed to limit them, as has been done. If taxes aren't high enough to provide the desired benefit levels, then taxes are raised, as they have been. Those who retired in the past got back way more than they would have by investing their money, unless they investment was fantastic. That obviously could not go on forever, and future retirees will do worse than private savings, since at best they will be getting Treasury Bond interest rates. My point on future productivity is that over time the average number of years worked has decreased, through earlier retirement, and longer schooling. But these trends only consume a factor of 2 or 4 increase in productivity. Beyond that, you have to really live like the filthy rich, or reduce your work hours, in order to blow all the money. -------