However, if you try to calculate the present value of future benefits for past contributions only, you get a big fat error because math doesn’t work that way.
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That’s exactly how you calculate the actuarial value.
The present value of the expected future cash flows.
It sounds like it’s important to you to prove that programs that lift seniors out of poverty are bad and doomed and useless
First. Is the system sustainable? If not then its going to push the old into poverty because it won’t pay them.
Second,the debt and the value of the payments is what the current system delivers. If you then compare that against a funded system you can also test to see if the system you think is good is bad or good.
For example, in the UK the payments in for Mr Median are £5 k a year of value [today’s value of money] for 47 years. Mr Median’s life exectancy at 65 is 18 years, and he gets 6K a year [today’s value again]
That’s 108K of value back fro 235K of payments in.
In the UK the pensions debts between 2005 and 2010 almost quadrupled. They increased at 636 bn a year, which is about the same as current total taxation.
So its completely unsustainable and that means poverty.
Current payouts are crap. The capitalist solution would have given vastly more comfortable retirements. 500% of the current income in the UK.
It also would have gotten rid of income inequality. People get no assets for their money. In fact they get debt.
The young are shafted.
And to cap it all,you think 30% cuts [which is highly optimistic even for the US], is a good system
Even in the last 5 years in the UK, the value of the pensions has been cut by 20%, but the debt is still bigger. The rate of increase in the debt exceeds the cuts that poltiicians can make. So it will collapse.
