I partially agree with this, very often socialist countries make short-sighted decisions (like non-capitalized pensions systems). I don't know if it's ignorance (thinking that the system will be able to grow forever) or entitlement (why would the old generation get to profit from this without any contribution ?).
Only partially? It can be demonstrated easily that this is absolute truth.
How a pension/welfare/social system works?
1) You pay taxes every month
2) Taxes go into a fund that is a collection of all paid-in taxes
3) Every month the pension/welfare/or other stuff gets paid out of it.
Until the in-payments are higher than the out-payment , the system works.
HOWEVER, when the unemployment is high and wages low, so that less people pay in, and they pay in less, then the balance is shaken. Because more people will need to be paid out from it.
PLAN A) Therefore, you have to raise taxes. If you raise taxes then the system gets even worse, since if you suffocate businesses in more taxes, then wont grow, wont hire more people, and wont expand to generate more wealth, that gets taxed.
So many governments that have any intellect, wont raise taxes because that will put them at an economic collapse.
PLAN B) They dont raise taxes, and just continue to pay out the pension/welfare etc. from the money that is taken in, even if the cashflow balance is negative and the fund is in deficit every single month.
THIS IS A PONZI SCHEME, AND MOST GOVERNMENTS CHOOSE THIS OPTION.
YES YOUR PENSION SYSTEM IS A PONZI SCHEME, AND IF YOU ARE YOUNG YOU ARE MOST LIKELY NOT SEEING ANY MONEY FROM THAT, IT WILL COLLAPSE BEFORE YOU GET OLDNow of course normally the ponzi scheme would collapse after a few years, so they have to rely on the banks and the central bank to hide their ponzi in inflation , endless loans, bank derivatives, financial instruments.
Basically all funds like this issue bonds or take out endless loans of faked credit ratings and other instruments to hide their ponzi in, and thats how the entire global economy works today.
So an economic collapse is around the corner once the ponzi gets out of control, all thanks to the socialist.