At this scale, it's not just about money. You have to think about social structure as well. Suppose we did inflate the heck out of our currency and hand it all to our retirees. What would that do to the economy? Well, it would make it so that you'd make a lot more money serving old people, be it for their needs or their wants, than doing other things that people current profitably do. It rearranges the entire economy, in ways that are not necessarily sustainable in the long term. For instance, just as a limit exercise, you can't afford everyone go into geriatric care and stop growing food because food is no longer profitable enough. You can't actually get to that point because everyone would starve, of course, but you can get seriously deep into that sort of misallocation at smaller scales. (More realistically, "should I go into a STEM career or go work at the old folk's home?" Of course you can't get 100% to the latter but you can reallocate a lot in that direction.) Individually the economy doesn't care if one person goes into engineering or goes to work for retirees, but at scale that matters a lot.
The real problem with these pension promises isn't just that we're promising money we don't actually have... the problem is that we're promising a quality of life we can't sustain. We can't give every retiree a life that matches their pre-retiree life in most material ways (perhaps minus a mortgage), and promise them all the best health care that they could possibly want, and promise them that they can retire into this at 65 and keep all these benefits no matter how long their life span may improve, and that no matter how the social winds may blow in the future or how the economic winds may blow in the future that these benefits are written in stone. This ultimately isn't about the money, it's about what they expect this money to be buying them. No amount of accounting tricks can fix these problems for real; focusing too much on "dollars" obscures this fact.
The entire concept of fixed benefits in the future is a lie. It was always a lie, even if some people have managed to cash some in. The future is not predictable enough even before we consider people trying to game the predictions themselves or changing their behavior in light of the predictions.
The real problem with these pension promises isn't just that we're promising money we don't actually have... the problem is that we're promising a quality of life we can't sustain. We can't give every retiree a life that matches their pre-retiree life in most material ways (perhaps minus a mortgage), and promise them all the best health care that they could possibly want, and promise them that they can retire into this at 65 and keep all these benefits no matter how long their life span may improve, and that no matter how the social winds may blow in the future or how the economic winds may blow in the future that these benefits are written in stone. This ultimately isn't about the money, it's about what they expect this money to be buying them. No amount of accounting tricks can fix these problems for real; focusing too much on "dollars" obscures this fact.
The entire concept of fixed benefits in the future is a lie. It was always a lie, even if some people have managed to cash some in. The future is not predictable enough even before we consider people trying to game the predictions themselves or changing their behavior in light of the predictions.