A better system might be mandated savings. This is not redistribution, so the only cost is enforcing the scheme. Australia has this in the form of compulsory superannuation, and Singapore has it in the form of the Central Provident Fund. This prevents people with poor self control from squandering all their income. It also contributes to overall economic growth, by increasing the national savings rate and hence increasing the amount that can be invested.
Note that the American Social Security system is not a mandatory savings scheme. The money paid into it is not necessarily saved/invested, and can in fact be spent by the government however it wishes. The amount of money a person receives back from the scheme is also not proportional to the amount they paid in.
>The money paid into it is not necessarily saved/invested, and can in fact be spent by the government however it wishes.
This is not true. 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.
>The amount of money a person receives back from the scheme is also not proportional to the amount they paid in.
Why would preserving wealth differences be important to a forced savings scheme?
>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.
Note that the American Social Security system is not a mandatory savings scheme. The money paid into it is not necessarily saved/invested, and can in fact be spent by the government however it wishes. The amount of money a person receives back from the scheme is also not proportional to the amount they paid in.