Almost any modern state is based on the idea of a social contract - that is, for example, people delegate to state bodies the right to dispose of, including in the economic sphere, and in return they have the right to expect that in case of conscientious work for many years, they will receive guarantees of social security after retirement. Unfortunately, the situation with pensions in almost all countries is far from ideal, and these problems have not bypassed the largest economy in the world.
The current U.S. pension system is facing a major issue, somewhat similar to any financial bubble - in other words, in many states, if suddenly everyone who is eligible retires at the same time, little, if anything, remains in the budgets. And that's not just a theory. Moreover, those employees who are now in their working prime cannot count on a comfortable old age. More precisely, a comfortable old age guaranteed by the state and employers.
This very issue is covered, for example, in this post by user u/fordanjairbanks in the Reddit Antiwork community. A post written a few days ago went nearly viral with around 11.7K upvotes and almost 3K different comments. Yes, the approach of the author of the post can be considered a bit one-sided and leftist, but the issue they raise is absolutely topical and relevant.
More info: Reddit
The author of the post raises a question regarding the pension system crisis connected with the constant deficit of funds
Image credits: RODNAE Productions (not the actual image)
So, according to the author of the post, modern American society is facing the problem that the largest generation in history is retiring, almost solely using 401k’s and dividend stocks, which, according to the original poster, directly depreciates the value of all of their labor. The OP believes that pension funds get parked at hedge funds that exist by bankrupting or devaluing healthy companies. Thus, those generations that are actively working now can no longer count on a comfortable retirement.
Image credits: u/fordanjairbanks
According to the author of the post, there's no actual need for hard work under such circumstances
Thus, the OP notes, a completely logical question arises - why work at all in the existing paradigm of socioeconomic relations if this work will not bring any benefits in the long run? However, after this, the author of the post makes a number of not always logical conclusions, denouncing, firstly, capitalism per se, and secondly, claiming that a certain share of responsibility for the current situation lies with the baby boomers themselves.
Image credits: u/fordanjairbanks
The author is offended by baby boomers' attitude towards their own children's problems caused by the current situation in the pension system
In the OP's own words, they have talked to a lot of boomers and they "are clueless as to how hard younger generations have it, and how there's no incentive to perpetuate the system." The original poster wonders how the older generation can even retire peacefully after they've worked hard for this very system that now can't provide the same deal to their own children and grandchildren.
Image credits: RODNAE Productions (not the actual image)
Though capitalism isn't ideal, humanity has not, however, yet come up with anything better
Although, of course, the question here is not only and not so much in capitalism itself. In the end, the sad experience of the Soviet Union and the countries that formed after its collapse clearly shows that although capitalism is not ideal, humanity has not yet come up with anything better. As is often the case, the problem is not so much with the system as with the people who manage and regulate it.
Image credits: u/fordanjairbanks
The US Social Security system first showed a $40 billion deficit thirteen years ago, and this was due to two main factors - the massive retirement of the largest generation in the history of the country, as well as the global financial crisis. When losing their jobs, many of the people who normally would have worked to over 65 years of age chose to retire earlier, thereby placing additional strain on the system.
Image credits: u/fordanjairbanks
As of today, the US state and local pensions funds’ unfunded liabilities climbed to $1.45 trillion
In addition, the higher the unemployment rate, the less people pay taxes and, consequently, less money goes into the social security system. As a result, since 2015, the system began to experience an annual shortage of funds. And so, as of January 2023, US state and local pensions funds’ unfunded liabilities climbed to $1.45 trillion, according to Bloomberg.
Image credits: u/fordanjairbanks
There are two actual ways to cope with this and both are incredibly unpopular from a political standpoint
There are two ways to deal with this, and both of them are extremely unpopular: either raising taxes or cutting benefits. Perhaps that is why politicians have hesitated for so long, trying to avoid discussing such an unpopular issue in society. In any case, something needs to be done, and done urgently, to avoid further development of these problems.
Image credits: Inzmam Khan (not the actual image)
“There is going to be a reticence from state governments to raise taxes in the midst of a recession to try and provide the resources necessary to pay down that $1.45 trillion,” Anthony Randazzo, New York-based nonprofit Equable Institute's executive director, said in an interview with Bloomberg. It remains to be hoped that politicians will have enough determination, and society - the wisdom to cope with all this. However, over the two and a half centuries of its existence, America has come out of much more difficult trials with dignity.
People in the comments suppose that the real issue arises when the baby boomers can no longer take care of themselves
As for the commenters to the original post, opinions are divided. So, for example, people note that when they retire, baby boomers are actually passing their wealth down to their children. "That is the next phase in this process, which people get the generational wealth shuffle," some commenters state. But when these same boomers can no longer take care of themselves, then this concern will completely fall on the shoulders of their children.
Some of the people in the comments are also offended by the baby boomers' attitude to money in general and to the future of their own children in particular. "That's the mentality they have, them first, always has been, while we clean up after them," one commenter writes. Be that as it may, each next generation will always have complaints against its predecessors, so our attitude and approach to money and so on is likely to be criticized by our children as well. That is life, after all.
If you have your own point of view on this problem, and how you think it can be solved, then please let us know about it in the comments below. In the end, truth is born in disputes, and a good mutually respectful discussion on a socioeconomic topic never hurts.