It takes something like 4 active workers to pay the pension of 1 current retiree. The proportion was fine after the baby boom, it's not anymore and it's getting worse.
What is happening in europe is that the right-hand side of the equation is producing a lower number (due to later career starts and less actively working population), which requires reducing the left-hand side accordingly (by increasing retirement age or cutting pensions). The system cannot collapse (there's always a right-hand side), but it can require severe adjustments.
You're right that it doesn't have to be a ponzi scheme. The government could increase the age of retirement and/or lower the pensions. However that's not possible in practice, it doesn't get you elected and it'd provoke massive strikes for months.
The government would rather accumulate debt for 20 years than cut any pension. Then the next generation has to deal with unfunded pensions and trillions of debt. It's actually possible to go beyond recoverable and collapse because of the non elasticity, this has happened before historically.
That doesn't make any sense. The next generation could have enough real resources or not. If they have they will be OK, if they don't they will have a problem. Real resources in the future come from investment now, not from "saving money".
Saving money makes sense in a personal perspective, but not as a nation.
In exchange, the nation promises to give you 80% of your last average salaries as a monthly income after you retire (in half a century) until the end of your life.
These numbers are not linked to real resources and are not adjusted periodically.
Number_of_retirees * averagr retirement_payment = number_of _people * average_retirement insurance_payments
You can also prop up the right side with tax money from other sources.
I'm not saying it's perfect or even that it works well.
But there is nothing inherent in it that requires a growing economy.
How is that when we talk about this, nobody mentions that if the gross domestic product per capita goes up enough, there is not problem.
The 'savings' perspective makes only sense in the personal sense.
I mean, the problem is not money. If in 20 years we have robots, infrastructure, cheap energy, etc enough for feeding and taking care of everybody there is not problem.
If we don't, never mind the 'savings' that you have, because the real limit are real resources.
In the end, the bread that goes on the table in 50 years will be produced by a farmer of the future generation.
Savings and social security are just two different ways of writing the same contract.
You can't live very comfortably on less than $8,000 / year. It takes nearly two workers (maybe three if you consider the average annual income, and that the fair majority workers aren't making maximum FICA payments) to cover every retiree -- which seems to logically require successively larger working age adults than prior generations.
In no away shape or form a ponzi scheme.
> A Ponzi scheme is a fraudulent investment operation where the operator generates returns for older investors through revenue paid by new investors, rather than from legitimate business activities or profit of financial trading.
Not surprised you're using a throw-away username and I'm going to downvote it accordingly.
> A Ponzi scheme is a fraudulent investment operation where the operator generates returns for older investors through revenue paid by new investors
It's not a 100% perfect match, but there are certainly enough similarities between how Social Security systems work and the basics of a Ponzi scheme that you'll have to make an actual criticism of the comparison if you want to argue how they're not the same.