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News Link • Economy - Economics USA

Guest Post: Are We Approaching Peak Retirement?


If we look at the foundations of retirement--Social Security, stocks, bonds and real estate--it seems we may have reached Peak Retirement. Let's start the discussion by noting that the primary Federal retirement programs--Social Security and Medicare--are "pay as you go," meaning the checks sent out to beneficiaries this year are funded by payroll tax revenues collected this year from workers.

As Mish and I (as well as others) have tirelessly pointed out, the "trust funds" for these programs are phantoms of imagination. When these programs run deficits, the government raises the money to fund the deficit the same way it funds all its deficit spending--by selling Treasury bonds.

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