"One day, you will get old, just like Granny, and you won't be able to have a job any more. Or at least, not a job you would like. Because it'll just be too hard, because you are too old and your health isn't so good." "Right!" he said enthusiastically.
"So what will you do for food? Where will you get the money?" "You would.. No... My ... family, my kids will help me!"
"Yeah, that's a good thought! Your family would take care of you when you are old! OK, let's suppose, you don't have any kids. Like our friend Mike. What would you do then?" "Mmm... I don't know..."
"Well, think about it, if you were to give Mike advice for what to do, what would you say?"
"Make so much money that there is enough left over!" Alex was quick to come up with a rather reasonable solution.
"Right, so perhaps a good idea is to put away a little money every month your whole life and then you will have enough that you won't need to worry."
Ok, so we got the concept of retirement. Now to the heart of the matter...
"What about those people who didn't plan ahead? Didn't save any money? Now they can't work and don't have enough to eat. What would they do?" "Ask neighbors to help?"
"Yeah, great idea. People do tend to help each other. There are lots of organizations whose business it to help people find help from each other. They are called charities. But our government has come up with another approach. Basically, young people save money, just like we talked, but instead of saving it in their own account, they give it to the government. The government in turn pays it out to the old people. Now when the young people get old, the new young people would be giving money to the government to pay them. So it kind of works, right?" "Yeah! It rolls over and over and over!" Clearly, Alex saw the concept in his mind, and it sounded just as good as it did to the FDR generation.
"There are a couple of problems with this approach. First, what happens if there are more old people than young ones?" "Oh..." "And there is a bigger one. See, you might decide that you can do better at managing your old age money than the government and have more money in the end. So shouldn't you get to decide, you would prefer not to pay the government, but do it on your own instead?" "Yes, of course! I can do it better, I am sure!" "But then who would put in the money to pay people that are old?" "Well, not everyone would decide to do it on their own!" "Hmm... if you think you can do it better, don't you suppose, most of your friends would too?" "Yeah..." "So all of you would tell the government, you can't control my heart! I am doing it on my own!" (You can't control my heart is Alex's favorite expression, which means, he gets to make decisions that concern his own self.) "But the government doesn't have enough money to pay the old people. So they say, 'Yes we can!' And you say, 'No, you can't!' And they say, 'Yes, we can, it's the law!' Doesn't that hurt your feelings?"
"Yeah... I wish they didn't decide to do that. I wish, they didn't have this law and this program... I wish, I could manage my own money!"
"And that, my dear child, is what daddy and I were just talking about... It makes us sad that we don't have a choice." "Can I play on your computer, mom?"
Heh... life clearly goes on! For Alex, and for the rest of us...
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