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created by [deleted] on 04/11/2024 at 09:31 UTC
0 upvotes, 10 top-level comments (showing 10)
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Comment by pinwale at 04/11/2024 at 09:42 UTC
17 upvotes, 1 direct replies
if we’re broke when we retire we’re broke and it’s our problem
You answered your own question. And generally if a lot of elderly people are broke, that is usually a problem for that society.
UAE solves that by revoking visas or deporting unproductive noncitizens. Most countries have citizens so they can’t really do that.
Comment by nana_3 at 04/11/2024 at 09:53 UTC
6 upvotes, 0 direct replies
Yes, the government benefits because the economy benefits.
The government takes the tax money. It is meant to invest that money and make more money / infrastructure that will help society run. Yay for the government, it has more money and can make more money.
If a person doesn’t manage their money well and runs out when they get old, they might be stuck either mooching off of family or begging/stealing. The government gets no benefit from this. If the old person gets arrested for stealing to survive the government will actively lose money keeping them in prison.
If the government gives the poor old person money, they will spend it on food and living expenses. The government benefits because this goes to businesses. The business pays its worker, which is taxed. The business also buys / imports goods, which are taxed. And the old person doesn’t go to prison, which saves money.
The UAE and places like Qatar get their tax money differently, by having a whole bunch of resources that they nationalise and export. They don’t get much benefit from funding the poor people because the return tax wise doesn’t exist. They also don’t have as many poor people - they have small populations of citizens who tend to be relatively wealthy with stronger family connections, and the poor of society are mostly migrant workers who are not permitted to stay once they’re old and not able to work. So they don’t face the same consequences as a lot of other countries do if all those poor migrant workers were locals.
Comment by kazosk at 04/11/2024 at 09:38 UTC
17 upvotes, 1 direct replies
Broke people tend to not like being broke and are going to resort to stealing.
What? Old people won't steal? They will and without hesitation.
Comment by Rubber_Knee at 04/11/2024 at 09:45 UTC
15 upvotes, 1 direct replies
Some people are too poor to have any money to save up. I know it's hard to magine for a guy like you. But try anyway.
In the system, you described, they still get a pension, because the people who made it, doesn't just care about themselves, like you clearly do.
A society should be judged by how it treats its weakest members. And by that mesurement, the UAE doesn't look too good.
Comment by ShodoDeka at 04/11/2024 at 10:07 UTC*
3 upvotes, 1 direct replies
The short answer is: It’s because Greece is a modern developed society, where it’s not acceptable to have people (regardless of age), starve to death in the streets.
In general the more developed a society is, the harder it is to fall between the cracks and end up not being able to afford food and shelter. Does it still happen, yes, but to a much less extend than in a place like the UAE, especially if the UAE didn’t just send people back to where they came from to starve to death.
Comment by 5zalot at 04/11/2024 at 10:04 UTC
3 upvotes, 1 direct replies
A solution to this problem is to pass a law that says you don’t have to use the government’s savings plan, but you do have to have a plan. Money can be taken out of your check for a retirement plan. In the USA we have two types of plans with tax benefits: 401K and IRA. if the government passed a law that says you don’t have to put money into Social Security but that same amount has to go somewhere, then it could go into one of these plans. That would force a lot of people to save for retirement.
Comment by ezekielraiden at 04/11/2024 at 10:13 UTC
2 upvotes, 0 direct replies
Separate from my other reply to you, answers to your title question and final question, since they're two different things.
Title question: Governments, in general, do not "benefit" from performing the functions they are legally required to perform. They just do those things, because it's what the law says. Criminal justice, armed forces, infrastructure...the law says to do those things, so they do. Which leads us to...
Final question: The law says to do that because legislators wrote those laws, and the legislators wrote them (generally) because they promised their voting constituents that they would do so. Some nations it's rather more complicated (e.g. China), but the net effect is the same: people in general STRONGLY support pension laws, so pension laws exist, and governments follow them.
It's really not hard to see why, as I answered in my other comment. "The best-laid plans of mice and men oft go awry," to use the English version of Robert Burns' poem. Having a near-guaranteed safety net (nothing is ever *absolutely* guaranteed) is a huge priority for many who want to live with at least some comfort when they're old.
Comment by Elfikos at 04/11/2024 at 10:54 UTC
1 upvotes, 0 direct replies
A quick Google search about UAE pension fund directs me to an official government sight about UAE pension fund. I'm confused why you say UAE doesn't have one? I could even find, that UAE changed from lump sum pension to a more western style pension.
Anyway, back to your question. In the Bismarck era, the Chancellor of Germany introduced the idea of universal pensions in order to combat political unrest. This way people don't need to be afraid of going broke if unforeseen circumstances happen. It is also a good alternative security for future. Back then, your only future policy where your kids - pensions created a new upportunity.
The general population is on average risk averse, meaning people are willing to pay in order to minimise risk. This is why insurances are popular. Now, take a risk averse population and grant them something that reduces their future risk. Obviously they will take it.
Which truly leads to why this exist - people are willing to pay money to have a guarantee for future. It's incredibly hard to decrease pensions in any way, because the voters will vote out anyone who tries.
Mathematically speaking, the pension models (OLG-diamomd models) predict that in absence of government pension, everyone will indeed do as you say and invest properly. This however is not how the real world works. Many people have no interest or idea how to invest, and end up mismanaging their funds. And even those who do may end up loosing all their life's saving because of an accident.
Couple this with the fact that people generally prefer to spend now rather than save, and you have a recipe for many broke people. And broke people do crime, no matter their age. Not all, but they definitely have more reason too than others. Pensions prevent this crime problem. Social problems aren't 'your' problems, they are everyone's problems!
To recap:
1. Pensions are an insurance for future
2. Strong voter preference for pensions
3. Stops potential social problems
Now to the question in title, does the government benefit from giving us pensions? The whole system is somewhat expensive, so that must be case, else more countries would get rid of it by now. Aside from the previously mentioned, actually paying out pensions grants an increase in consumption. People spending money is what drives a modern economy. If say, 15% are old and broke, then that's 15% less consumers meaning smaller demand and ultimately less income. By keeping everyone buying, you keep the economy going, and your pockets full.
Comment by Cautious_Radio_163 at 04/11/2024 at 12:16 UTC
1 upvotes, 0 direct replies
Uffff... I don't know specifics about your country, but in my country (that is also European one, as far as I know pension systems tend to be similar) the govt doesn't just store person's tax money in some vault until that person is old - any bank could do that if that was the case. And honestly, just saving money, like a proverbial dragon stores treasures in a cave, is freaking useless because of inflation. The money constantly lose value - "big savings" from the past would barely last for a few months now because everything is much more expensive (maybe this is not so useless for people from the US, but they are "special" as their currency is the strongest in the world). The taxes that are paid now are spent now on paying pensions for those who are old and retired right now, not in some distant future. The logic was "older people pay with their taxes for younger people's education, so younger people can get better jobs, and then younger people can pay from their taxes for old people's pensions", or "able-bodied, healthy, working adults pay for weak, jobless and not-able-bodied invalids, kids and elderly, because they received this support themselves as kids and they will receive it again when they old and weak". This is called something like "social agreement" or "generational agreement" within a society. People actually voted for this ages ago, generations ago, when no one could imagine our current problems - such problems didn't exist back then. Thus, in European countries usually basic school education is free of charge, and in some countries education in university is also either free or cheap, in other countries it's not for free for all students, but some programs with scholarships and other financial aids exist to make it still available for those from low-income families, who can't just pay for it themselves. So it's not "just pensions", it's actually a two-way support system, if you take out taxes for pensions now "because why I have to pay for them", then people would have to start to pay themselves for kids' education, kindergartens, schools and universities. This system actually works great in the most developed countries and if demographics of old and young is balanced out, but poorer European countries often don't feel full benefit from it because people in poor countries make less money and some might work illegally or have sketchy jobs that don't pay any taxes, so less money in taxes and in the economy, thus not enough for everyone (and in my country, I know, sadly is also ducking corruption, and education is fucked). Today most countries also have demographic problems, which also probably will negatively impact this system, but this system worked just fine for a long time.
This works differently in the US, their govt is apparently supposed to invest money for pensions in stocks instead of redistributing it (but they might do that half-assed now anyway), so it's incomparable to how these things work in Europe. (I have seen folks from the US who envy free childcare or education in the most developed European countries, which is possible particularly due to this system being different between the continents).
Politicians often care about being elected again in most democratic countries (they don't have to in authoritarian regimes), so they try to do what will give them the most votes. People wanted the weak and poor to be taken care of somehow, they asked for it and made it possible in some way. People do have some power, these days they are not always aware of it and don't know how to exercise it (especially how to exercise it without causing harm to themselves and others).
Comment by [deleted] at 04/11/2024 at 09:42 UTC
-2 upvotes, 1 direct replies
[deleted]