“The myth underlying these attacks (including Simpson's misogynist bovine metaphor) is that most old people don't need their entitlements — that they are affluent pickpockets fleecing younger Americans. – LA Times”
Actually, the myth underlying the attacks is that the money is there, waiting to be paid to retires. By “money”, I don’t mean the check that is in the mail, or a social security trust fund. Instead, meaning that true purchasing power of goods equivalent to the amount (falsely believed to be) saved. The myth is that the goods will exist at the time I need them when I retire.
That “money” was spent the moment it was taken from the paycheck. The money that will be returned will look the same, function the same, but won’t be the same.
It is the same for the stock market and housing – two other retirement myths, cousins of the social security myth. There is only value in these upon retirement if there is productive capacity willing to trade some of that capacity for your retirement. The same is true for cash savings and gold – both worthless unless there is enough productive capacity willing to work in exchange for your leisure.
In the end, there must be enough productive willing to support the non-productive. When the system is voluntary, the system maintains some balance: both through the true worth of savings (true savings are the root of investment which is the root of productivity, thus allowing savers to retire based on their contribution to enhanced productivity…hence modifying and increasing the previously possible non-productive to productive ratio), and through extended families, as DB rightly points out. When the system is coerced, too many are falsely led into an impossible belief: others (the government, the stock market, financial planners, etc.) will be better stewards of your future (and care for you more) than you and your extended family.
DB: “Central banks and modern stock markets are the two halves of an efficient, middle-class money-extraction mechanism.”
Certainly true, as to stock markets for an additional reason: volume. A small cut off of the top of every trade. It doesn’t matter what the market does as long as people keep the faith and trade. Like the single-zero or double-zero on the roulette wheel (depending on where you play), this small cut ensures the house always wins.