> Bagholders will be retirees who have no recourse when 99% of these schemes fail, while the hyenas laugh all the way to the bank.

And this is why I'm glad enough Germany has a public pension scheme that actually works and not some 401k crap. The last attempt to introduce something stock based here ("Riesterrente") ended up being an utter scam that made people distrust in the stock market ever since - and that's how things should be.

Stock markets should be for investors looking to raise investment capital to further the growth of their companies from other professionals, derivatives/futures markets should be heavily restricted (e.g. agricultural futures for a long time used to be reserved in trade for farmers and wholesale-scale buyers - nowadays the majority of trade is being made by speculative free-loaders), and pensions should be backed by the government because chances are higher there is still a government in 40 years than whatever hot tech startup is the utter hots these days.

Wow German has actual money saved in the pension system. Most public pension systems (whether in the EU or US) immediately pay out what is paid in, and are on track for bankruptcy.

Which is the flaw in most public systems. There is no way the pension system of the Netherlands will work for people currently younger than about 50. It seems pretty unlikely it will even work until death for people currently entering the system.

The actual problem is deeper. You don't care about money in old age. You care about living expenses, housing, and medical care. Most of that is effectively labor. Labor you get to use after you can't work anymore yourself. The money is a means to an end. And that's where just about every pension system fails, public or private. And that labor will definitely not be available in 20 years at the level it is today. Pensions being public or private simply change the method of failure: currency devaluation, raising costs or bankruptcy of the pension system, take your pick. It does not change whether they fail.

New York’s public system is fully funded. It’s pretty easy… you just fund it.

Social Security is a pretty amazing system. Inflation and a fixed cap for taxation has led to a relatively minor revenue shortfall, 90s welfare reform pushing welfare recipients to SS Disabilty, and a few other factors driving the spend side higher. We also tax those benefits for many, and fund Medicare through premium payments.

You need to raise taxes and push out the the cash flow issue a decade. Then demographic trends fix it. Instead, we’re exploring this cruel & destructive approach, which will trigger a depression in the end. Between housing defaults, implosion of medical facilities as Medicare funding gets slashed, and god knows what else, we’re damaging the country.

> Then demographic trends fix it.

Demographics is the core thing that dooms all current forms of pensions, no matter if government, stonks or people just hoarding cash or other assets - in the end it's all fundamentally "IOUs" assuming that in 30, 40 years someone will be willing to trade that IOU from decades past into care. The one sole exception is real estate because a roof over the head doesn't need to be traded to be worth something for survival.

Up until now, this expectation has largely worked out over the millennia. People had ample children (by necessity), so there was always a healthy supply of working power to back the value of IOUs with work or consumables, old people plainly didn't live long (up until the 1800s, average life expectancy was barely 40!), and the young generation used to get at least some scraps of inheritance.

But at the moment, this is all broken across Western societies. People barely have children due to a number of factors (the pill, demands of employers, working too long hours, housing shortages, exploding costs of living, the economic and social poly-crises ever since 2001 9/11 ...) which will throw wrenches into the core promise of someone being there to trade the IOUs, old people live way too long (we're at about 80-ish years now) for any system to be sustainable because you can only get about 45 to 50 years worth of full-time working out of a human but they'll be living double that on the dime of society, and by the time my generation can hope to get some assistance in starting our families in form of inheritance we'll be long past the time where we could actually have used it.

Long term we're fucked, and I'd hope our governments show to be more deserving of our trust than tech and finance bros.

> (up until the 1800s, average life expectancy was barely 40!),

This is mostly tangential to your point, but life expectancy for those that survived the first five years of life has never been 40. The averages for older populations are massively dragged down by the deaths of babies and small children either in childbirth or due to infectious diseases.

There’s alot of things that just aren’t correct in your analysis. Most obviously, you don’t understand what life expectancy is.

The US doesn’t have a fertility problem, we have interest in immigration and do a great job at keeping people poor and ignorant.

Lack of inheritance as far as that goes is mostly because for regular people, the estate tax is a casino. If you’re lucky to die quickly, your kids let stuff. If not, you’ll end up expending your assets on long term care as we don’t have a rational healthcare system, and rich people can use trusts to avoid that landmine.

> And that labor will definitely not be available in 20 years at the level it is today. Pensions being public or private simply change the method of failure: currency devaluation, raising costs or bankruptcy of the pension system, take your pick. It does not change whether they fail.

Indeed but a government at least has some sort of accountability and long term thinking built in. The forces of the market are by nature short-term dominated and are accountable to effectively no one (but a few select billionaires).

A government's policies are dominated by the need to think about getting re-elected (democracies) or the need to get people to fight and commit violence on others (everything else).

Neither of which seem a particularly strong incentive to think long term.

Are you talking about the german Rentensystem or something else? All I've ever heard about it living in Germany was that it won't cover your expenses anymore by the time you retire which is why they tried Riester Rente (and yes that failed). "Privatvorsorge" is a must, so I don't know why you'd say it's working.

Also 401ks don't invest in single stocks, but mostly index funds...

Only the first sentence is sarcastic. By sentence two it is abundantly obvious what GP meant in sentence one. This comment would be hard to misinterpret.

That is correct, but it's good discipline to just never use it because one can become careless with its application.

I agree with you. People type out the complete opposite of what they mean, leaving it up to the readers to make sense out of it. This is extremely prevalent on Reddit and has started to bleed into hn a lot more lately (along with politics but its obvious the mods are stamping that out).

Yea but the wealthy elite need more bagholders to continue transferring the world's wealth to themselves. And the wealthy elite are now in complete and full control of the US government.

This is going to happen guaranteed now.

It's funny because the elite will be accumulating a currency that will keep losing real value very fast to inflation.

Isn't crypto much sketchier than private equity?

As a concept? No. In practice? Also no.

Crypto scammers take millions, private equity takes hundreds of billions. It hollows out entire industries; kills hundreds and hundreds of thousands of jobs. In PE funded nursing homes the mortality rate is 10% higher. PE owned hospitals raise prices by 20-30% while cutting staff.

PE firms pay lower tax rates (carried interest loophole), ie, they steal from everyone. A 2022 ProPublica investigation estimated that tax loopholes exploited by PE cost the U.S. government $180 billion annually in lost tax revenue.

'Dividend recapitalizations' have extracted hundreds of billions from businesses, often leading to their failure.

The estimated economic damage from PE is well over a trillion dollars; and I'd say that's extremely lowballed.

Crypto might be riddled with scammers from top to bottom, but there is real potential there; and even if there wasn't, it still wouldn't have a patch on private equity as far as "sketchiness".

Good points. Would you say this is all PE, or only some?

I can't speak for all PE. However, even their lauded 'success stories' - Hilton Hotels, AirBnb, Tesla etc - seem to generally turn out pretty evil.

How can they not... The whole goal of PE is to extract value from workers and the Earth, and funnel it into the pockets of the .01%. This, in a world where inequality is stifling our potential as a species, and as a planet, on a truly unimaginable scale?

Beyond the hype and the rationalizations, fundamentally, the investors always win and society always loses. They've turned our industries into a casino, and they're the house. Sometimes good people win in a casino, and sometimes they even get paid out, but it's a fucking mugs game that preys on our blind spots and is leading us into some very dark places.

but sarcasm is fun. like:

This will solve the problem with boomers holding all the wealth. yay!