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Our current system does not serve savers well, because our markets offer inadequate ways of purchasing claims on future consumption (as opposed to claims on future production).
But high quality claims on future wealth are in reality very scarce.
There are three claims on future income: consumption, debt service and taxes.
But it surely also applies to the prices of claims on future goods and services, such as equities or property.
Because assets are claims on future goods and services, their prices are proxies for the prices of future consumption.
The trust fund consists of Treasury bonds which are claims on future taxpayers; this is a convoluted accounting process.
Similar(42)
Buttonwood recently pointed out that any pension, even funded ones, is really a claim on future workers' output.
A state-funded pension is clearly a claim on future taxpayers.
Individual accounts create a contractual claim on future resources very different from the fickle promise of traditional state pension benefits.
Stocks are simply a claim on future corporate earnings: if you can buy those claims at a discount, you should do well.
Debt is a claim on future wealth; when it becomes clear that future wealth will not be sufficient to service this debt, a crisis will ensue.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com