It isn’t a problem that people in the modern world are living longer. The average working stiff should have paid attention in math class. People should have saved at least 10% of their income per year in order to ensure a retirement not based on eating Alpo three days per week. Sadly, few people understand math. They were lured into debt by the Wall Street/corporate Media machine and forgot to save. Now they’re panicked and want BIG GOVERNMENT to save their sorry asses. Well guess what? The corrupt politicians didn’t pay attention in math class either. They are REALLY REALLY good at making promises in order to get elected, they just aren’t very good at figuring out how to fullfill those promises.
The chart below paints about as bleak a picture of our future as you can get. You have hundreds of millions of Boomer era people who are retiring at ages between 59 and 65 who will live another 20 years, expecting BIG GOVERNMENT to fund their old age. This is supposed to be paid for by a dwindling number of younger workers. One itsy bitsy tiny problem. MATH!!!!
It is mathematically impossible to fund 23 year retirements for hundreds of millions of old folks with money that does not exist and cannot be generated by the existing number of younger workers. Your options are few. You can dramatically increase the retirement age. You can reduce the promised benefits. You can dramatically increase taxes on the younger workers. Or you can print the money out of thin air and destroy the purchasing power of the younger generations through inflation.
I wonder which “solution” our fearless leaders will choose?
Fun with pensions
Jun 11th 2012, 15:48 by The Economist online
The burden of increased longevity in the rich world
ON JUNE 6th François Hollande, France’s new president, unveiled plans to reverse a planned rise in the official retirement age to 62. In most other countries the trend is in the other direction. According to a new report from the OECD, increases in the official retirement age are planned or underway in 28 out of its 34 member countries. As can be seen from the chart below, pensionable ages have failed to keep pace with longevity. This comes at an increasing cost to the state. The OECD expects governments’ expenditure on pensions to rise from 8.4% to 11.4% of GDP between 2010 and 2050. And in most countries people retire earlier than the official retirement age. In 1970 the average Frenchman entering retirement could expect to live for just over ten years. Now he could expect to live for 23.