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Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

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Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#51

Post by dsheets »

ben_w wrote: post #50
dsheets wrote: post #47

Earlier quoted context omitted.

In your simplification, you have removed everything that isn’t labor (i.e. demand for commodities) as well as labor. It is unsurprising that working to bury gold is a bad investment in this scenario. Instead, you should have invested in a farm and some robots. Sorry, there’s no free lunch if you can’t steal it from younger generations. Edit: you’ve revised history and now added a bit about “similar arguments” and inf…

> In your simplification, you have removed everything that isn’t labor (i.e. demand for commodities) Incorrect, I'm definitely including demand in there. I'm saying there's no supply. It's n/0, not 0/0. > Instead, you should have invested in a farm and some robots. Sorry, there’s no free lunch if you can’t steal it from younger generations. (1) OK, but that's not what you were saying before (2) (a) The AI to control…

You have demonstrated only that the thought experiment is dependent on the future market for a commodity and not on some future labor being exploited. Value in the future is dependent on demand and not on extraction from labor.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#52

Post by Terr_ »

YWall39 wrote: post #23
vkou wrote: post #19

Earlier quoted context omitted.

Basic demographic analysis will point out that in a world with a declining and aging population, private investments are probably not going to be doing so hot, either. Wealth creation requires work. Retirees don't work, but still require a portion of the wealth that workers create to live. It doesn't matter if it's a government pension or a 401K investment, a declining worker population will mean that you'll have the…

I am more optimistic. I always suggest automatically dropping x% of ones income into an index fund. At the least it will hedge against the very real chance governments will not be able to deliver on their promises.

Tangentially, I'd also suggest that you consider your own career-sector as something to be hedged/diversified against. This is especially true for people getting stock-thingies as compensation, but it might also apply for some index funds.

The worst-case scenario that comes to mind are all the Enron employees who focused their 401ks onto their own employer's hot stock, and then the implosion wiped out both their regular earnings and their reserves.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#53

Post by 09thn34v »

YWall39 wrote: post #15
kome wrote: post #7

i strongly oppose the American approach to pensions, which is regrettably spreading worldwide. relying on private savings to finance retirement is highly risky, and this is the crux of the article in question. pension systems should be administered through public programs, not turned into moralistic contests in which individuals are penalized if their investments fail for any reason (and it's only their fault... whil…

European pensions are predominantly unfunded, and promises typically amount to 3.5 times GDP. The prevailing view among those who have looked at this is that nobody under the age of 40 will get anything close to what is promised. The only exception is Netherlands, and maybe Sweden. Leaving private pensions the only option.

why is that? why couldn't the private approach (withholding x amount per paycheck, adding to a pension fund) work at scale?

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#54

Post by ben_w »

dsheets wrote: post #51
ben_w wrote: post #50

Earlier quoted context omitted.

> In your simplification, you have removed everything that isn’t labor (i.e. demand for commodities) Incorrect, I'm definitely including demand in there. I'm saying there's no supply. It's n/0, not 0/0. > Instead, you should have invested in a farm and some robots. Sorry, there’s no free lunch if you can’t steal it from younger generations. (1) OK, but that's not what you were saying before (2) (a) The AI to control…

You have demonstrated only that the thought experiment is dependent on the future market for a commodity and not on some future labor being exploited. Value in the future is dependent on demand and not on extraction from labor.

I demonstrated: without labour there is no value to be exchanged.

I did this by showing that your own suggested commodity asymptotically approaches buying zero of the available zero goods, services, and assets as the production of those also becomes zero.

You can buy all of the nothing being made.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#56

Post by ben_w »

KK7NIL wrote: post #31
kome wrote: post #22

Earlier quoted context omitted.

investment is literally future labor expectations. and a risk. in case of crisis the gov routinely starts bailouts and save the financial markets with interest rate operations or open market operations. those operations have deep re-distributive implications. don't think they are free.

> investment is literally future labor expectations. and a risk. This is simply Marxist crap and outright untrue. > in case of crisis the gov routinely starts bailouts and save the financial markets with interest rate operations or open market operations. those operations have deep re-distributive implications This is a rather new phenomenon and not at all necessary for profitable private investment. It's really comp…

> This is simply Marxist crap

Not only but also. Adam Smith counted labour this way, along with capital and natural resources.

Until we're all rendered unemployable by AI[0], there's still human labour doing stuff in the system — the bedrock foundation for all the rest.

[0] 2^(1 + roll a D4) years? I expect it to be relevant on the timescale of me reaching pension age, but between Scylla[1] and Charybdis[2] I'm not at all certain.

[1] smoke-and-mirrors marketing

[2] exponential growth

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#57

Post by intelVISA »

HPsquared wrote: post #40
kome wrote: post #22

Earlier quoted context omitted.

investment is literally future labor expectations. and a risk. in case of crisis the gov routinely starts bailouts and save the financial markets with interest rate operations or open market operations. those operations have deep re-distributive implications. don't think they are free.

Building a machine that does useful work is not "future labour". That kind of automatic production by machine is absolutely dominant today, none more so than in software.

Indeed it's future reduction, an equal or better output with less labor required.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#58

Post by dsheets »

ben_w wrote: post #54
dsheets wrote: post #51

Earlier quoted context omitted.

You have demonstrated only that the thought experiment is dependent on the future market for a commodity and not on some future labor being exploited. Value in the future is dependent on demand and not on extraction from labor.

I demonstrated: without labour there is no value to be exchanged. I did this by showing that your own suggested commodity asymptotically approaches buying zero of the available zero goods, services, and assets as the production of those also becomes zero. You can buy all of the nothing being made.

Yes, a nonzero quantity of labor is necessary to avoid a pathological economy? This is not debated.

The question is how the future value is priced. The original assertion was that future value must come from labor and there is no difference between direct redistribution and private transactions (of which only rent extraction was given as an example). My counter is that there are alternatives that are neither taxation nor rent-seeking. In particular, the holding of assets to be later sold is a store of value that notably does not depend on future labor any more than any functioning economy depends on labor as an input.

We have pretty robust systems for deciding what (most) things are worth via supply and demand. Claiming that future value must be extracted from future labor is just false — a system with some backpressure on the payouts to retirees is much more sustainable than one without backpressure. In your simplified thought experiment, you must agree that there is no dependence on future labor as none exists! The pension is also not effective, of course, but that is to be expected — essentially no pension is effective when stranded on a desert island.

(To be clear, I don’t advocate storing gold by birth year as a practical way to run a pension scheme.)

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#59

Post by equalsione »

09thn34v wrote: post #53
YWall39 wrote: post #15

Earlier quoted context omitted.

European pensions are predominantly unfunded, and promises typically amount to 3.5 times GDP. The prevailing view among those who have looked at this is that nobody under the age of 40 will get anything close to what is promised. The only exception is Netherlands, and maybe Sweden. Leaving private pensions the only option.

why is that? why couldn't the private approach (withholding x amount per paycheck, adding to a pension fund) work at scale?

People are living longer after retirement (over 10 years longer since the 1970s) and birth rates have fallen. Expenditure surpasses income eventually. There are other factors but that seems to be the main issue.

Re: Undiagnosed Cognitive Decline Eats into Seniors' Retirement Savings

#60

Post by roenxi »

dsheets wrote: post #47
ben_w wrote: post #42

Earlier quoted context omitted.

> If you redefine everything as deriving value from labor and labor alone "Alone" seems to be an unnecessary addition for the problem to exist. And until the AI really can take all our jobs, it's not a redefinition, labour is one of several pillars alongside capital, though specifics vary depending on your school of economics: https://en.wikipedia.org/wiki/Factors_of_production > Just as a thought experiment, conside…

In your simplification, you have removed everything that isn’t labor (i.e. demand for commodities) as well as labor. It is unsurprising that working to bury gold is a bad investment in this scenario. Instead, you should have invested in a farm and some robots. Sorry, there’s no free lunch if you can’t steal it from younger generations. Edit: you’ve revised history and now added a bit about “similar arguments” and inf…

I thought your basic argument was sound, but having read through the conversation twice, you might not be putting it in the best light. Your point seems to be that value can be extracted from capital and that is a substitute for value from labour. Seems good to me. But you then went with a gold-based example. Gold is money which is not really a productive form of capital because there is almost literally no way to extract value from gold. It is inert.

The value of gold is it makes the holder indistinguishable from someone who had enough resources to procure yea much gold. A useful signal in a healthy economy. But it was asking for the literal on-an-island example where there was no otherwise healthy economy. Since your argument depends on productive investment of capital IMO you should have hammered on that a bit more rather than trying to bring gold into the picture.

I'm seeing a lot of misconceptions about debt in this thread. It isn't possible to "burden" "unborn generations" with debt, they can always just renege on paying. The problem is what we see in the US, where the debt in financial markets is reflected in the real world by ... massive capital formation overseas in China. So the damage has already been done, unborn generations won't have access to the capital needed to live the lifestyle of their debtor parents. This is because the parents never built the capital to sustain their own lifestyle and eventually the capitalists will stop donating free stuff to debtors. IE, debt isn't a future problem to be paid back. The problem is always in the capital formation of the present and past. It is the future consequence of what capital got invested in, where & why. In that sense high debt can be good or bad depending on how much went in to capital formation and whether the capital is productive. But typically high debt matches to poor choices deploying capital.

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