Two questions, two observations: Do you have health insurance? Do you have life insurance?
I have commented on your line of reasoning before and and it still seems to me that an important part of the discussion is missed. Specifically, that anyone can "save for a rainy day" and still not be able to provide for events
At 10:18 AM 9/16/96 EST, jbugden@smtplink.alis.ca wrote: that can
always happen: Heart attack, stroke, car accident, pinched nerve that leaves you in excruciating pain and unable to work for several years.
However, one can also prepare in the traditional way by having friends and family. If you have same, you will always have enough to eat and someone to take care of you (and also to kick you in the ass when you need it.
I don't think that a reasonable person would argue that medical insurance should be outlawed because everyone should take care of their own needs. A social safety net is simply a form of health and life insurance. Statistical arbitrage if you will. By spreading the risk you minimize the cost.
Somewhat actuarily unsound however. If "the welfare" or SS were private charities or insurance schemes, their management would be in prison for self-dealing and fraud because of the high overhead of welfare and the Ponzi scheme nature of SS. Note too the recent article in the Economist about how European firms are raising capital in the UK and the US because it is available there in private pension savings while European government retirement systems suck loads of capital out of the system leaving nothing but massive government debts. DCF