America's pensions can't beat Vanguard but they can close a hospital • Hacker News Board

Re: America's pensions can't beat Vanguard but they can close a hospital

#211

Post by hypersoar » Tue, Feb 17, 2026, 5:19 PM UTC

MontyCarloHall wrote: post #128

Isn't the main problem with pensions today the dramatic increase in life expectancy post-retirement? They were never intended to support decades of retirement: in the old days, you retired at 65 and there was a good chance you'd be dead by 70, at most 75. (When Social Security was established in the 1930s, life expectancy was only 61.) Nowadays, there's a good chance you'll live beyond 90, with expenses increasing di…

Using overall life expectancy here is misleading, as it includes the risk of childhood mortality. You have to look at life expectancy at a given age. According to the SSA's life tables[0], life expectancy for men at 65 in 1930 and 1940 was about 12 years. In 2020, it was about 17. A significant increase, but not nearly as extreme as you're saying.

[0] https://www.ssa.gov/oact/NOTES/pdf_studies/study120.pdf

Re: America's pensions can't beat Vanguard but they can close a hospital

#212

Post by TimorousBestie » Tue, Feb 17, 2026, 5:19 PM UTC

horsawlarway wrote: post #169

TimorousBestie wrote: post #148

Earlier quoted context omitted.

What are the second-order effects of a subclass of citizens permanently encumbered by debt that (with rare exceptions) cannot be discharged through bankruptcy? Perhaps your analysis of second-order effects is not thorough and complete? Have you really considered all of them?

Not really sure why this is getting downvoted. I don't really think we need to forgive student loans - I think they should absolutely be dischargeable through bankruptcy, though. Bankruptcy isn't a "get out of jail free" card - it puts a huge burden on a student relatively soon after graduating that makes it harder to start a family or buy a home. So it incentives are still aligned for the students taking the loans.…

> I don't really think we need to forgive student loans.

Neither do I. I was happy with the status quo ante Trump where many classes of public servant could get their student debts forgiven after on the order of ten years of service. (An imperfect program with too many disqualifying loopholes, but it was better than nothing. Now, almost no one qualifies.) The Overton window has foreclosed on that kind of solution to the problem, however. Even military personnel have been disqualified from attending certain schools as part of their meager education benefit.

> Bankruptcy isn't a "get out of jail free" card

Indeed. One’s mid-twenties are arguably the worst period of one’s life to live with damaged credit.

> I think it's absolutely abusive that student debt can't be discharged, and is pretty heinous as policy.

Absolutely, it needs to go.

Re: America's pensions can't beat Vanguard but they can close a hospital

#213

Post by BobaFloutist » Tue, Feb 17, 2026, 5:19 PM UTC

TimorousBestie wrote: post #148

Aurornis wrote: post #123

Earlier quoted context omitted.

I’m always surprised that student loan forgiveness appeals to anyone who should otherwise be able to think about all of the bad second order effects. The more we inject money into the education system, the higher prices go. Setting a precedent that the government will just pay off your loans if you don’t pay them off only encourages more people to take out loans without thinking about paying them back. There are so m…

What are the second-order effects of a subclass of citizens permanently encumbered by debt that (with rare exceptions) cannot be discharged through bankruptcy? Perhaps your analysis of second-order effects is not thorough and complete? Have you really considered all of them?

The reason that you can't (default) discharge student loan debt in bankruptcy is that your degree can't be seized and sold off, so there's a pretty weak incentive to not declare bankruptcy as soon as you're handed your degree.

Re: America's pensions can't beat Vanguard but they can close a hospital

#214

Post by chasd00 » Tue, Feb 17, 2026, 5:19 PM UTC

stanmancan wrote: post #42

lotsofpulp wrote: post #31

Earlier quoted context omitted.

> bank depositors are not engaging in risky behavior, Because the taxpayers (and all users of USD) repeatedly bail them out. I could define anything as not being risky if I knew taxpayers would bail it out. More importantly, if there is no risk, what purpose does a bank serve? They’re a pretty bloated middleman if their sole purpose is to update a database to reflect incoming and outgoing cash flow. The government sh…

> Because the taxpayers bail them out. I could define anything as not being risky if I knew taxpayers would bail it out. I feel like I must be misunderstanding something here because it sounds like you're saying depositing funds in a bank is considered risky behaviour?

> depositing funds in a bank is considered risky behaviour?

of course it is, that's why the bank pays you interest on your deposit. They loan out what you deposit at a higher rate and collect the difference as profit. If that loan defaults then your money is gone because the bank was never able to collect it back. FDIC was invented to insure your deposit up to 250k so you're protected (up to 250k) in case that happens.

Re: America's pensions can't beat Vanguard but they can close a hospital

#215

Post by scottyah » Tue, Feb 17, 2026, 5:20 PM UTC

drakythe wrote: post #124

codexb wrote: post #68

Earlier quoted context omitted.

Ok, but forgiving student loans doesn't do that. It signals to borrowers that they don't have to repay high loans if their career can't support it. It tells borrowers that they can make risky loans without a chance of default. It tells universities that they can keep charging exorbitant tuitions because kids can still get loans to pay them. The solution is to allow judges the discretion to default them in bankruptcy…

That's why it should be a one time event in conjunction with reworking the whole system. Why can I, as an 18 year old, sign for a loan that _cannot_ be forgiven, graduate into a crashed economy, and still be held accountable for choices that impact me when I only had a small part in them? The system needs reformed, and we need to do something for the people still on the hook of the old system (and I say this as someo…

Same reason you can sign up for war, or ride a bike without a helmet (in some places). The world is a dangerous place and the less legislation we have blocking people from making decisions, the more likely they are to be capable of making their own. In 2009 when I graduated, it was common knowledge that any private colleges or abnormal degrees were an oddity only for rich people to buy a piece of paper for their more disappointing kids. I don't know what changed (or if it was just localized), but whoever convinced you to go for the scam is at fault here in your circumstance- not the "system" for allowing other people to benefit.

It's a bunch of able-bodied people who took the elevator instead of stairs thinking it was a shortcut, but the effort put in was the whole point. Anyone who told you otherwise is to blame. Punishing people who took the stairs sends a clear message to everyone else deciding which way to go.

Re: America's pensions can't beat Vanguard but they can close a hospital

#216

Post by tartoran » Tue, Feb 17, 2026, 5:20 PM UTC

AnthonyMouse wrote: post #176

drakythe wrote: post #124

Earlier quoted context omitted.

That's why it should be a one time event in conjunction with reworking the whole system. Why can I, as an 18 year old, sign for a loan that _cannot_ be forgiven, graduate into a crashed economy, and still be held accountable for choices that impact me when I only had a small part in them? The system needs reformed, and we need to do something for the people still on the hook of the old system (and I say this as someo…

> Why can I, as an 18 year old, sign for a loan that _cannot_ be forgiven, graduate into a crashed economy, and still be held accountable for choices that impact me when I only had a small part in them? Because you took the money promising to pay it back, spent it on something you wanted, and now it's gone and someone has to pay the money you spent. It's like saying why can I, as an 18 year old, purposely drive a car…

> Because you took the money promising to pay it back, spent it on something you wanted, and now it's gone and someone has to pay the money you spent.

How are they supposed to pay it back with a crashed economy? Look, I get it with personal responsibility and all that but these people were following the rules, did their part and now are burdened to their death while Big Co gets bailed out over and over and never learns responsibility. Why the double standard?

Re: America's pensions can't beat Vanguard but they can close a hospital

#217

Post by gruez » Tue, Feb 17, 2026, 5:20 PM UTC

dbspin wrote: post #78

jazz9k wrote: post #45

Earlier quoted context omitted.

I disagree about student loans. The entire system needs to be dismantled. Universities don't care if their majors will result in a job and the student loans are a source of risk-free money. They need to start taking on the risk of all student loan, not me, the tax payer.

Great example of narrow rationality. Huge amount of Americas current problems can be traced back to a poorly educated population. Universal access to third level education, combined with a school system designed to educate - in direct opposition to current goal of producing labour units for corporate; would massively improve pretty much ever aspect of American life. The market lens is myopic, the market cannot be exp…

>combined with a school system designed to educate - in direct opposition to current goal of producing labour units for corporate; would massively improve pretty much ever aspect of American life.

"producing labour units for corporate" at least pays the bills. What's the alternative? Education is for "finding yourself" or whatever? That's a nice platitude, but "finding yourself" with a film studies course doesn't pay the bills, and is arguably the reason why there's a student loan crisis in the first place.

Re: America's pensions can't beat Vanguard but they can close a hospital

#218

Post by TimorousBestie » Tue, Feb 17, 2026, 5:21 PM UTC

irishcoffee wrote: post #199

TimorousBestie wrote: post #148

Earlier quoted context omitted.

What are the second-order effects of a subclass of citizens permanently encumbered by debt that (with rare exceptions) cannot be discharged through bankruptcy? Perhaps your analysis of second-order effects is not thorough and complete? Have you really considered all of them?

> What are the second-order effects of a subclass of citizens permanently encumbered by debt that (with rare exceptions) cannot be discharged through bankruptcy? A harsh lesson in personal responsibility. If you went to an out-of-state school to major in criminology hoping to be the next CSI, and you borrowed 180k to do it, you've learned a valuable lesson. Don't give me "they're only kids, they aren't able to make t…

> Don't give me "they're only kids, they aren't able to make these decisions!"

You’re responding to something you imagined I said. We’re talking about economic effects here, not your vengeful little morality play.

Re: America's pensions can't beat Vanguard but they can close a hospital

#219

Post by odie5533 » Tue, Feb 17, 2026, 5:21 PM UTC

a_better_world wrote: post #142

jazz9k wrote: post #45

Earlier quoted context omitted.

I disagree about student loans. The entire system needs to be dismantled. Universities don't care if their majors will result in a job and the student loans are a source of risk-free money. They need to start taking on the risk of all student loan, not me, the tax payer.

if college education produces a public good (a more competent workforce), then it should be funded through public funds-- government should pay for education. If it does in fact lead to better outcomes, then the higher tax will cover the cost. running it through the private system builds in too many perverse incentives.

In theory that sounds good, but in practice our private system has created the best universities in the world and educates an immense number of students to highly employable levels.

Re: America's pensions can't beat Vanguard but they can close a hospital

#220

Post by avidiax » Tue, Feb 17, 2026, 5:22 PM UTC

MontyCarloHall wrote: post #128

Isn't the main problem with pensions today the dramatic increase in life expectancy post-retirement? They were never intended to support decades of retirement: in the old days, you retired at 65 and there was a good chance you'd be dead by 70, at most 75. (When Social Security was established in the 1930s, life expectancy was only 61.) Nowadays, there's a good chance you'll live beyond 90, with expenses increasing di…

Ultimately the way we will get out of this is inflation, except that so many pensions have COLA.

Years spent in retirement have roughly doubled, while the pyramid has shrunken from 16:1 workers to retirees in 1950 to 3:1 today.

Means testing and retirement age increases also cause a voter or worker revolt.

Going to be real hard to keep this on the rails.