Wednesday, November 30, 2011

The Deserving

Everybody deserves everything, it seems.

Photo from Reuters here

What is a pension? It's either pay you haven't earned, which is robbery, or it's pay you have earned, just earlier, which is forced saving.

Most people demanding a pension would take umbrage with the "robbery" characterization, so let's look at the second claim. A pension is not the world's only saving vehicle. If you can't get a pension, create your own through saving. Problem solved.

"But wait," you say. "What if you planned on the pension as your method of saving and are now finding out it's not available?" That's a serious problem. But if you earned the money, the money should be there. If it's not, you either didn't really earn it (so we're back to "pension = robbery"), or it was mismanaged.

The thing about claims of mismanagement is that these are all constitutional democracies that are having these problems. The managers were chosen by the sovereign people. The managers spent the money in broad daylight. The people didn't replace the managers, thereby giving tacit approval to the looting of the pension. They earned the value of the pension, and they were repaid in expanded government programs and services. Now the erstwhile pensioners tell us we have to cover the costs, in effect paying them twice. Unless our calculations of the value of their work was off by half, they want money they didn't earn. And now we're back to "robbery."

Looted savings, when undertaken by a non-governmental agency, is a crime. But it's also a secret while it's going on. No one can really claim surprise that Social Security's "lockbox" is a filing cabinet in West Virginia filled with records of how much Social Security money the government has already spent. That's not saving; that's spending.

So no one "deserves" a pension unless he's earned it. If he's earned it, it should be there. If it's not, it was mismanaged. If it was publicly mismanaged, pensioners have a revealed preference for not receiving pensions. Why does this then impose an obligation on anyone else?

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