If you thought Social Security in the United States was in crisis mode then you should take a look over in Europe.
According to a chart posted by Economic Policy Journal, the projected old-age dependency ratio (number of citizens over 65 as a percentage of citizens between 16 and 64) is becoming a major problem in many European countries. It’s a problem, because much like the U.S., these states run a Ponzi scheme style of their respective retirement benefits.
Here is the chart:
In other words, these countries rely on new workers to pay for retired workers’ benefits. This is a disaster just waiting to happen.
As EPJ’s Robert Wenzel opines:
“If such schemes weren’t in place in the first place, individuals would think much more about personally saving for retirement—end of crisis.
“In fact, without government ponziment, it is very likely that the standard of living across the globe would increase as workers would save more, adding to the capital base that could create greater amounts of goods and services.”
At least the people are waking up. Polls suggest that millions of younger North Americans already concede to the fact that Social Security (or the Canadian Pension Plan) won’t be there for them when they hit 65 or 67. Nonetheless, this isn’t prompting them to save or invest more (SEE: Retirement Crisis: One-third of Americans don’t have $1,000 for retirement).
We all know the perils of Social Security (SEE: David Walker warns of Social Security, state pensions insolvency), but the Great White North is also facing a crisis. In the next few years, the CPP will officially be paying out more than it takes in. Therefore, the funds will begin to dwindle and by the time Generation Z retires, there will likely be pittance available for them.
It’s best that the public pension system reforms in the next several years. By reform, we mean the federal government allows younger workers to opt out of the system if they wish to do so. Eventually, Social Security comes to an end and everyone else starts to look after themselves again.
About 7% of the population can save $500,000 for retirement. Without social security this would not be enough to get by for very long. The suggestion that ” Eventually, Social Security comes to an end and everyone else starts to look after themselves again.” seems unworkable. Today half the population shares just 1% of the wealth. Those people can’t save because they live hand to mouth. Today half the people have IQ’s under 100. Those people have little chance in a competitive economy.
Correct. Though some still attempt to push the spent line repeated above. Essentially based around the outdated notions about self-reliance and this country actually being a land of equal opportunities to advance personal and collective material liberty and success for all. The American Dream, et al. For awhile the hourly/salaried wage concept functioned well enough. But not anymore.
No Time
The Guess Who
Teenage Wastelands
The Who
Won’t Get Fooled Again – The Who
It should be the national anthem around the world.
Of course, I am being entirely to idealistic here, because it’s hopeless beyond one level of generational memory.
Ironically as surreal as it sounds, in fact a real time point of diminishing returns to continue leveraging crowd-sourced volume based profits against debts/costs was crossed over around the infamous Maya/Toltec date- only now beginning to become evident in hindsight (2020, another crazy election year).
Sure, never in a Bazillion years. But now time is money/productivity is spent of further cost effective capacity globally at once. Hourly/salaried wage concept is likewise no longer a tenable condition moving forward.
The trusty friend of the conserative-dominant business profiled mindset, passing time, will increasingly no longer line their volume-happy eccentric pockets anymore. Capital markets worldwide will become no longer operable for s host of realistic reasons.
Almost Party Time.