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<<In a desperate period of economic collapse, nothing would prevent government from aiding the indigent if it has a desire to do so. Why throttle the economy with the disadvantages of such a system the other 98% of the time?

It is not merely a transitory period - about half to one-third of the population would lose the ability to support themselves in old age PERMANENTLY. Not only would the government have to support the vast majority of current pensioners, it would also have to support those who are still working but have now lost the ability to save up for retirement.
If you are 45-50, and your nest egg gets wiped out AND you have a period of 10 years of serious economic problems in front of you you will not be able to save enough for retirement.

If the goal of Social Security had been to relieve those who had been impoverished by bank failures and the economic failures of the Depression, I'd consider that reasonable. And indeed that's pretty much what Social Security did in it's early years.

Unfortunately, people who wanted ever more benefits made political demands and the programs have grown into monsters, in my opinion.

So as I've said many times before, I think there is an argument for government to relieve the plight of the indigent. If we have another Great Depression, there will again be an argument for a program to relieve the distress that some people will experience.

But this is 2007, not 1937. We don't need to relieve the distress of those injured by the Great Depression any more.

Also, your post didn't address the issue I have raised, which is means testing these programs so that we don't pay benefits to people that don't need them.

Seattle Pioneer

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