I realize there's only so much you can fit into an article, but this article glosses over a monumental shift in welfare spending in the US: the transition from defined benefit retirement plans to defined contribution. It's not so simple as a split between private and public directed asset allocation: it affects the growth of companies that offer these plans and the wealth of participants in the plans.
The US has pushed the burden of retirement onto individuals, hoping that the private sector will offer incentives like 401k matching and generous health care plan subsidies, but this is a fundamental difference in who qualifies, what they receive, and how it's funded. These effects compound wealth and income inequality. If, for whatever reason, you're locked out from a job that would help pay for these programs, there's no coming back. You are dependent on the government at the same time as the government is underfunding the program you rely on. It's not a great situation.
Defined benefit plans have a fatal flaw: If the promised benefits don't match investment returns, the difference has to come from somewhere. It comes from some combination of broken promises, higher taxes, higher interest rates and inflation. All of which are political hot potatoes.
Defined contribution plans don't have the same flaw. What you get out of it depends on how much money you put in and how much alpha your investments get. If you don't have enough to support a comfortable lifestyle in retirement, it's not the government's fault, it's user error: You didn't put enough money in, or you didn't invest it properly. The politicians set up systems to help you; "If you didn't use them properly, too bad, so sad, but it's not our fault," they say.
There's also the inescable truth at the root of supporting retirees (and others who aren't working) - in the end, people who aren't working are being supported by those who are working. Investments, pensions, etc. are all just an abstraction around that fundamental reality.
being rich is pretty great almost anywhere in the world including the nordic countries. it's only "better" in america if you value having a huge gap between you and the poorest people in the country.
In some specific cases, the mortality rates of the wealthiest Americans were roughly equivalent to the poorest individuals in countries like Germany/France/the Netherlands.
If you're not rich, you'll need to bring a needed skill and be employable. They are not interested in people coming in just to claim social benefits and contribute nothing back.
Governments pick the size of their country's financial markets when they decide what parts of society get traded in those markets.
Pension and healthcare are the two most obvious pieces governments can decide to "make it themselves" or "let companies solve it", and the later option creates the pieces of paper that get traded in financial markets and "frees" money to buy those papers.
And the article ends with the obvious notice that "large markets" is not something good by itself.
He seems to be saying that Funded Pensions like 401k can lead to asset inflation such as high housing prices. While public pensions which are pay as you such as Social Security do not lead to financialization and asset bubbles.
It was a tough read. He should tighten his word choice.
It’s not just you, I also read it and had little idea what the central thesis was. I see there are a number of points made but the author could do better job bringing it all together.
>Public pensions and family benefits may seem old-fashioned compared with asset-based solutions. But they provide security without locking households into markets, without generating trillion-dollar investment pools, and without driving asset inflation that prices younger generations out of housing and wealth. Sometimes, the non-assetising path may simply be better.
It's an obvious propaganda post intended to demonize the financial markets, and promote unsustainable social security policies.
So why have pensions rather than direct ownership and control via a 401k?
It's pretty obvious that pension fund managers have ulterior motives. It also seems insane that a bad pension fund or company directors can destroy people's retirement.
kommunicate|19 days ago
The US has pushed the burden of retirement onto individuals, hoping that the private sector will offer incentives like 401k matching and generous health care plan subsidies, but this is a fundamental difference in who qualifies, what they receive, and how it's funded. These effects compound wealth and income inequality. If, for whatever reason, you're locked out from a job that would help pay for these programs, there's no coming back. You are dependent on the government at the same time as the government is underfunding the program you rely on. It's not a great situation.
csense|19 days ago
Defined contribution plans don't have the same flaw. What you get out of it depends on how much money you put in and how much alpha your investments get. If you don't have enough to support a comfortable lifestyle in retirement, it's not the government's fault, it's user error: You didn't put enough money in, or you didn't invest it properly. The politicians set up systems to help you; "If you didn't use them properly, too bad, so sad, but it's not our fault," they say.
Marsymars|19 days ago
oxqbldpxo|19 days ago
dopamean|19 days ago
Herring|19 days ago
https://www.brown.edu/news/2025-04-02/wealth-mortality-gap
In some specific cases, the mortality rates of the wealthiest Americans were roughly equivalent to the poorest individuals in countries like Germany/France/the Netherlands.
https://english.elpais.com/science-tech/2025-04-03/richest-a...
SoftTalker|19 days ago
RupertSalt|19 days ago
twoodfin|19 days ago
lazyeye|19 days ago
https://youtube.com/shorts/FMrmtZujIp4
michaelmrose|19 days ago
mikestew|19 days ago
https://web.archive.org/web/20260207195051/https://theloop.e...
betaby|19 days ago
marcosdumay|19 days ago
Pension and healthcare are the two most obvious pieces governments can decide to "make it themselves" or "let companies solve it", and the later option creates the pieces of paper that get traded in financial markets and "frees" money to buy those papers.
And the article ends with the obvious notice that "large markets" is not something good by itself.
rawgabbit|19 days ago
It was a tough read. He should tighten his word choice.
bluGill|19 days ago
appplication|19 days ago
jdasdf|19 days ago
It's an obvious propaganda post intended to demonize the financial markets, and promote unsustainable social security policies.
aeternum|19 days ago
It's pretty obvious that pension fund managers have ulterior motives. It also seems insane that a bad pension fund or company directors can destroy people's retirement.
edu|19 days ago