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Small-Scale Question Sunday for February 18, 2024

Do you have a dumb question that you're kind of embarrassed to ask in the main thread? Is there something you're just not sure about?

This is your opportunity to ask questions. No question too simple or too silly.

Culture war topics are accepted, and proposals for a better intro post are appreciated.

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Very open ended question: What do you think is going to happen with pension systems in the next 50 years? Where I live, investing the maximum tax deductible amount into pension contributions is a no brainer if the government won’t change the rules of the game down the road. But I have a hard time believing this.

I expect the government will keep social security solvent by lying about the inflation rate, mostly. It’s decent evidence that they’re already doing it; ultimately it’s one of the saner solutions.

How would lying about the inflation rate work?

What evidence is there that the government has done this already?

My understanding is that there’s no magic data or math here: prices are public knowledge. I’m aware of debates over what the best formula is, but we aren’t talking about hyperinflation.

“Inflation is low pay no attention to rising prices of basic goods or exchange rates.” I’m unaware of any government being able to successfully lie about inflation because you can’t hide shortages and/or rising prices for very long at scale.

If you peg your payments to an inaccurate inflation measure, that means you can reduce them over time without actually needing to directly say you're cutting payments.

I agree it’s possible they will try that, but I can’t seem them escaping major political backlash for it.