For the same reason that my children will pay for yours: because the government has offered them a deal: it will pay for our retirement.

The problem is, Social Security goes bust this year. If you don't believe me, click here.

The government has promised to pay for my retirement and yours. How? Congress has stuck a gun in the collective bellies of all of America's workers and has said, "You owe the IRS the money to fund millions of oldsters. Your turn will come. Trust us." What if our children ever decide that Congress's promises are not reliable? What if they decide that their children – our grandchildren – will decide to stiff them? Will they pull the Medicare/Social Security plug?

Let's think this through. If your children were to sit down with my children and talk through this problem, is it possible that they would come up with this conclusion? "If we take over the funding of our parents' retirement, will you take over the funding of yours?"

There would be some negotiating. The outcome would depend on how old I am, how old you are, and how old the two sets of children are. If I am in good health but old, while you are in poor health but likely to survive another 20 years through constant medical care, my children would like the new arrangement, while yours might balk.

But there is no way for them to sit down together and negotiate a new arrangement. There are 100 million families in the United States. Almost all of them are either in the Social Security/Medicare tax system, or else they have been before their retirement. There will be no face-to-face negotiations, family by family. Instead, there will continue to be voting blocs. Each bloc will want its members to pay less into the system, while pulling out more.

It's politics, after all. It has been politics ever since 1935, when Roosevelt's New Deal proposed this system to my grandparents. They supported it. They did not think about my generation. I was not even born. They did not think about my children's generation. They thought, following John Maynard Keynes, "in the long run, we're all dead." Then they added, "so, before we die, we want the government to pay us some retirement money." Initial cost: $30 per year per worker, and $30 per year per employer, maximum. A bargain!

It was a Ponzi scheme. They got in early.

continue:
http://www.lewrockwell.com/north/north826.html