>The government borrows from the fund, and leaves treasury bonds in it. If you personally save your money in treasuries, it's still considered savings. This is not different.
We're using a different definition of savings. I mean savings as in not-consuming. By this sense, investing in treasuries is only 'saving' in the grander scale if the government doesn't spend the money, or if it invests it. If the government uses it for consumption or in transfer payments to people who then use it for consumption, it's ultimately not 'saved', it's consumed. This means that when the original saver gets the money back, they're not getting the money they saved, they're actually receiving a transfer payment, as the money (value) they saved no longer exists.
This is why American social security could potentially "run dry"[1], which wouldn't happen in a system where people only got back exactly what they put in (plus interest) and the money wasn't used for anything else.
>Why would preserving wealth differences be important to a forced savings scheme?
If you're not 'preserving wealth differences', you're transferring money to people who didn't originally earn it. This makes it a transfer scheme, not necessarily a savings scheme. The parent seemed to be looking for alternatives to transfer schemes.
We're using a different definition of savings. I mean savings as in not-consuming. By this sense, investing in treasuries is only 'saving' in the grander scale if the government doesn't spend the money, or if it invests it. If the government uses it for consumption or in transfer payments to people who then use it for consumption, it's ultimately not 'saved', it's consumed. This means that when the original saver gets the money back, they're not getting the money they saved, they're actually receiving a transfer payment, as the money (value) they saved no longer exists.
This is why American social security could potentially "run dry"[1], which wouldn't happen in a system where people only got back exactly what they put in (plus interest) and the money wasn't used for anything else.
>Why would preserving wealth differences be important to a forced savings scheme?
If you're not 'preserving wealth differences', you're transferring money to people who didn't originally earn it. This makes it a transfer scheme, not necessarily a savings scheme. The parent seemed to be looking for alternatives to transfer schemes.
1. http://www.marketwatch.com/story/social-security-trust-fund-...