The french pension reform attempts have been going on for decades. I remember in the mid-90s a huge, weeks- (months-?) long public transit strike which, funnily enough, kick-started Parisian's interest in roller-blading (and led to the awesome weekly Friday-night roller-blading tour [1]. If it's your thing, I highly recommend it! But be prepared to have to go over some cobblestone sections)
France's system has the working population pay for the pension on the retirees, as a social security tax. With the retirement age around 62-65, with the lifespan increasing, and with the Baby Boomers retiring, it isn't a sustainable system.
Every president, be they socialist or liberal, have attempted to tackle the issue, only to get country-paralyzing backlash. People will nitpick the details of whatever current plan proposes, but the fundamental problem remains.
the system IS sustained. the main white collar one even generates profits. increase the salaries that will increase money being sent to retirement funds and it won’t be a problem anymore. france income per capita has been the same for the past 20 years. they are stealing our wages to make us slaves and they blame us for not working enough.
christine lagarde pushed for blocking wage rise in the EU, european commission non elected leaders are pushing for it too. salaries for blue collar in france are becoming those of much poorer countries and in a globalised world where most of the goods are made in countries where salaries are rising as well as inflation, blocking our wages is only sending us to the third world .
it is nothing else than a betrayal at the highest level of the state
By increasing everybody's salaries, it seems likely to me the cost of goods and services would go up by virtue of inflation. There is no free lunch. At the same time, prosperity is not a zero sum game. The rise of China has coincided with increased living standards in nearly every country. I'm not sure who would be "stealing" your wages. If I were to say, it's French labor policies that are stifling innovation and productivity, and it's manifesting in a decrease in living standards. I once met a couple French businessmen in a bar, both in the tech space. They bemoaned how difficult it was to fire anybody in France, meaning they worked very hard to not hire people to begin with. They were also in the US specifically to look for investment opportunities. This is the kind of thing that's choking France.
> and in a globalised world where most of the goods are made in countries where salaries are rising as well as inflation, blocking our wages is only sending us to the third world .
Just throwing this out here, but in a globalized world, by what mechanism would one expect Europeans and Americans will be able to enjoy a greater standard of living than people in, say, Asia?
Are they somehow smarter? More productive? In control of more natural resources? If not, why would you expect that the first-third world gap to not continue to normalize?
I'll admit that I don't understand French social security well at all, but based on what I've read online it seems like increasing salaries would actually reduce the amount of money going to social security because that would mean lower profits for employers (who contribute a higher percentage of their income). Obviously, in terms of wealth redistribution, it's better to have higher wages. But increasing them would actually hurt the social security system.
regardless of whether this is correct or not (difficult to predict the future, even the COR only has "scenarios" to talk about, but nobody knows really what will happen), the current system is unjust in many ways (some "special regimes" are super favorable, with little justification other than legacy, and some workers should have more favorable regimes because of their work conditions, yet they do not and the reform does nothing for these people).
>it is nothing else than a betrayal at the highest level of the state
Agreed.
Still, this is less worse (I can't really say "better") than the first attempt at reform during Macron's first mandate: that first attempt included a contribution rate falling from 28% to 2.8% above 120Keuro/year (if I recall correctly), which was effectively a tax cut for the wealthy.. If anything above this threshold, the contribution rate should increase (i.e. be progressive instead of regressive).
The main issue is that the whole thing is un-reformable because so many consistuencies have vested interest in the status quo.
Every single pension system has the working population pay for the retirees. Where do you think the money comes from? Thin air? Any increase in the value of pension funds (for example) is coming from the workers.
> Every single pension system has the working population pay for the retirees.
Which is just a socialized form of the previous social security system which had children or grandchildren look after their parents. Of course, the glaring difference is that social security schemes have motivated many millions, who otherwise might have, to not have children at all or an inadequate number and so contribute very little to nothing towards the future maintenance of the system while still cashing the checks once they retire. Of course this system does help the minority who can't have children for whatever reason but it does look like we've swapped looking after that cohort for a few decades for effectively no social security system for anyone once this ponzi scheme collapses.
The money is just an entry in the accounting ledger allocating society's labor. The pension fund can increase to trillions and quadrillions, and it will not make a difference if there is not enough people willing to change bedpans for as low of a price as was originally expected.
> Every single pension system has the working population pay for the retirees.
Nope. At least not completely. Canada switched away from a pure pay-as-you-go (PAYG) system in the 1990s:
> Move towards a hybrid structure to take advantage of investment earnings on accumulated assets. Instead of a "pay-as-you-go" structure, the CPP is expected to be 20 per cent funded by 2014, such funding ratio to constantly increase thereafter towards 30 per cent by 2075 (that is, the CPP Reserve Fund will equal 30 per cent of the "liabilities" - or accrued pension obligations).
I think a lot of people assume that pension systems ought to or actually do work as savings/investment systems, like private 401(k)s do. So you pay into the system when you're working age, your money is saved, then it is paid out to you later.
And it wasn't a problem when the working age population was always increasing... but when it no longer is (as is the case in much of Europe) it becomes problematic.
In Australia, it is a mix. Most people should have a self-funded retirement as a result of mandatory superannuation during their working life. Those who haven't accrued enough can fall back on the aged pension, but this should become less and less common (mandatory super was only introduced in the 90s).
China's building massive amounts of underused housing. US boomers could have built long-lived buildings and infrastructure (high-speed trains) which provide usefulness to people later in exchange for them paying some money for retirees.
Instead, they built ever-decaying roads and rotting ticky-tacky boxes and left nothing durable for future generations. Hell, they even ripped out trains in cities across the country. (Seattle interurban among so many examples).
The french pension reform attempts have been going on for decades ... Every president, be they socialist or liberal, have attempted to tackle the issue, only to get country-paralyzing backlash.... it isn't a sustainable system.
Good For them?
They've been trying to change this forty years? So they were trying to change this back when it ipso facto was sustainable, since it's survived 'till now. How credible does that make the current effort.
Certainly, America has changed a bunch of supposedly "unsustainable" things into ... utter misery for the average person.
> Every president, be they socialist or liberal, have attempted to tackle the issue, only to get country-paralyzing backlash. People will nitpick the details of whatever current plan proposes, but the fundamental problem remains.
The Touraine Law in 2014 raised the number of worked years from 36 to 43, which is a big deal. So it's not like nothing happened. Also there are good reasons to dispute the current proposal, it's not just nitpicking details, it will impact very negatively some people and perhaps there are other ways to fix the system.
Indeed even here in the comments everybody gets heated about the details, so on the streets it will be even worse. What everybody (how conveniently for them) ignores is why, when this pension was invented, did they choose a certain age when to benefit from it. They chosen it by age expectation, that not everybody gets to reach it so the survivors will benefit. Nowadays this very principle is broken and we all get hung on 63 or 65 while the average/median/whatever live over 70. So basically everybody requests and expects a pension which wasn't even thought for everybody. It's not the system's fault here - it wasn't designed for today's pyramid - but I also recognize you cannot expect people to accept that, so here we are.
> The Touraine Law in 2014 raised the number of worked years from 36 to 43, which is a big deal.
that's right, and what's so surprising (to me) today is that the Touraine law got enacted without much protest, while what's happening today is taking the same terms for retirement and extending them to younger generations (i.e. those born between 1960 and 1973) is causing protests. The current proposed reform looks like a big deal, but the bigger deal happened in 2014 and was barely noticed (because the lawmakers were careful enough to put it far enough in the future...).
Though the problem is well known (at least for 40 years),
No french governments has considered diversifying the source of the revenue funding the pension system. Actually its worse as the only capitalisation existing are in a process to be nationalised.
Moreover, this reform is purely the outcome of political game. Macron electorat is mainly the 'boomers' who fully beneficiated of th situation ( in fact their pension are impacted despite having higher wealth than the majority of the workers).
I personally would consider a reform only if there an effort requested for everyone.
In other news, lawyers say you need a lawyer, plumbers say you need a plumber, etc.
Not a single pension program on earth is sustainable - including the US' Social Security System. All of them are political 3rd rails and kill careers of anyone seeking to do meaningful reform.
Why did we get to a situation where the government is in charge of safeguarding your retirement and wellbeing? It's insane... we should compel people to have IRA's or some sort of retirement account, but the money needs to be under the control of the person it belongs to.
Parent comment is just wrong. The COR (Conseil d'Orientation des Retraites, meaning advisory board on retirement to the French Prime Minister) says this clearly: the current system is sustainable and does not need to be reformed. https://www.cor-retraites.fr/node/595. Or in video here: https://www.youtube.com/watch?v=GsL1wT8jxVU (subs auto-translated to English are available).
> France's system has the working population pay for the pension on the retirees, as a social security tax. With the retirement age around 62-65, with the lifespan increasing, and with the Baby Boomers retiring, it isn't a sustainable system.
It can be sustainable, even at comprable rates, especially with fewer younger workers if wages are allowed to increase to meet labor demand.
baby boomers aren't retiring, they're dying.
The pension system has already been through its worst period and managed to not get too badly hurt.
I really don't understand this reform. However for me to understand it, one would need an 8 hour video stream full of spreadsheet with an actual expert working on that reform.
If you both are not understanding the issue, and not interested in learning about the details, then maybe you shouldn't take a strong opinion on the matter.
https://www.populationpyramid.net/france/2022/ doesn't look like it. The bulk of population just started going through the retirement age. Click -5 6 times, then start clicking +5 and watch how it moves.
Who says its not a sustainable system? That is really just a popular assumption. The system is working well at this point with enough headroom. Lobbygroups from the EU and large institutions are pledging for this change. There is not enough workforce according to them. Their profits are endangered. Nobody from those entities are looking at the well being of the citizens.
These stats are for the U.S., but one thing that usually get ignored in these retirement discussions is just how massively life expectancy depends on income level and sex: http://www.equality-of-opportunity.org/health/
Raising the retirement pension age screws over the poor, especially poor men. Perhaps retirement age should be tied to income/wealth somehow ... and maybe even sex (as controversial as I imagine that would be).
I've always wondered about suing the government for raising the retirement age. They're changing the deal we agreed to, without my consent. If I had known the full extent of the altered deal (i.e. no retirement till 69), I would have made different decisions from the start.
If I have a 20 year mortgage with the bank I can't just change the terms so that the deal suits me better. Why can the government do that with my retirement age, with zero repercussions?
Wonder why race is the metric here? Men also have shorter lifespans, and I assume there will be other constants that correlate with life expectancy (height, hair colour, genetic disposition to disease, etc).
In Switzerland, also to retire earlier, which seems almost trivial given the 1 year difference between men and women, but by spending just 75 francs for the reassignment, they unlock of 28,680 francs of additional retirement over their lifespan: https://www.europeantimes.news/2022/02/a-man-changed-his-gen...
And I realize these sources are not great, but I chalk that up to the fact that this is an untouchable subject for mainstream, a taboo subject for many, and an uncomfortable subject for most of us. These are also still fringe cases, even if the benefits are quite clear. There is also something unsavoury about exploiting the system in this way, but it's counterbalanced by the fact that it's a system that's screwing you over.
In a way I do look forward to cases like these ending up in court, solely because I want to see the decisions that result. Do we get a legal ruling on the mutability of gender? Does gender become permanent at a certain age? Does the court instead decide to deal with each case individually, knowing they could potentially set up a tsunami of cases?
Pragmatically, it seems easiest if you just erase gender from these systems, but realistically that would benefit men which makes it unlikely from the current wave of Western-influenced lawmakers.
I figured the one upside of retirement was it was a baseline for the poor. If it screws them over too I think it should just be eliminated all together and return the tax to the worker to save/invest on their own.
The origin of the modern pension system in Prussia was not actually designed to let people retire; the age was initially pegged to 70, the life expectancy of Prussians in 1881.
American Social Security had an age of 65, but at the time of its passing life expectancy for American men was 58.
You know what would happen: they'd be taken by scams disproportionately, and we'd hear to no end how their lesser educations left them vulnerable to that. The taxpayer will still be on the hook to bail them out.
I mean if you want to be precise than maybe make the retirement age based on the health conditions of the individual in question? In good shape. Work more. Bad shape? Retire.
I'd like you to read about the Cobra effect first, though.
As a French citizen, I find it unsurprising that the usual top comments here are all about numbers. Life expectancy going up, do your part, work work work.
That people are angry is not about the damn numbers. It's about the attitude of a political class that had private restaurant dinners behind closed doors during lockdown times where the population was fined for being out walking their dogs, it's about a president that's been deliberately calling left-leaning ideas of the younger generations about ecology and equality "extreme-left" while joyfully siding persistently with the actual parties created by fascists, it's about a reform that comes in with a justification of a deficit that was literally created by giving money to large companies and rich people in the form of tax deductions, it's about some of his ministers who take part in all sorts of horrible things and continue to go unpunished, it's about people asking for compassion towards difficult jobs more than for their own selves, and I could go on...
> deficit that was literally created by giving money to large companies and rich people in the form of tax deductions,
I have no particular knowledge of French macro economic policies, but a tax deduction is not "giving money". It is "not taking money". Your framing assumes that corporate or individual earnings belong to the government and the government can decide to allow the money to be "given" to the taxpayer. Whether that is an appropriate arrangement of private property rights and the relationship between the people and the government is a hotly debated topic, to put it mildly.
Not taking money that otherwise would be taken absolutely is giving money. Let me know if the government decides to absolve you of all taxes if you don't think at the end of your year that you've been given money. Also that's conveniently the narrative that Macron's party would adopt were it the other way (read: when they "give" a one-off cheque to students or poor people). Accounting tricks have broad shoulders to take the load off the political bullshit of our era.
The thing is we are not talking about tax deduction but tax credit and yes it is sometimes literally giving money. In France it even happens that big companies are given money while they layoffs people while they're making a profit and distributing the artificially increased profit to their shareholders…
> left-leaning ideas of the younger generations about ecology and equality "extreme-left"
Whatever the labelling you want to use, but we know for a fact that extreme ecology is going to destroy our country. We saw what happened with French nuclear, we are seeing it in the EU car industry, we are seeing it in French housing. We already know that radical ecology is going to bring social unrest. That the first to suffer is going to be poorest people.
> deficit that was literally created by giving money to large companies and rich people in the form of tax deductions.
We are still one of the most tax heavy country with the most social contribution in Europe and in the world. Macron is just trying to level the playing field and make France attractive.
> it's about people asking for compassion towards difficult jobs more than for their own selves, and I could go on...
After this reform, we will still be one of the most generous country in the world even for pension and social net even among Europe and even more worldwide.
> Macron is just trying to level the playing field and make France attractive.
... to whom?
> After this reform, we will still be one of the most generous country in the world even for pension and social net even among Europe and even more worldwide.
Not sure why I'm thinking about a frog being slowly boiled alive.
>That people are angry is not about the damn numbers. It's about the attitude of a political class [...]
You say it's "not about the damn numbers", but what does that mean? Does the underlying problem with the numbers not exist? Would the french pension system be fine without such reforms? If not, and reforms are needed, why are is stuff boiling over now? Sure, all the things you listed are legitimate grievances, but it seems counterproductive to get mad at politicians doing painful stuff that needs to be done. It's like getting in a fight with your spouse about how they're "controlling" or whatever, when your house is on fire and you need to evacuate. The only sensible interpretation I can think of is that the people think the reforms are not warranted or there's a better reform that's not being considered, and that's the straw that broke the camel's back and caused people to come out and protest. If that's the case, I wouldn't exactly frame that as "not about the damn numbers".
First off it doesn't need to be done. You're taking a statement from the government as an axiom when it's not one. Secondly, the attitude matters. There is ni trust in the government to not swindle the population, mainly due to Macron's track record and the other mentioned things in my messages. Basically it is not about the numbers, it's about a well crafted narrative led by people who have done everything to wither away the trust given to them, time and time again.
I didn't even get into the minister pushing for the reform doing crosswords during a parliamentary session on his subject, the inflation absolutely exploding in France, the surge of students falling below poverty lines and needing food stamps worse than during covid, the ministers genuinely advising the population to "wear turtlenecks during the winter", the abuse of 49.3 article (similar to Canada's notwithstanding clause) exactly 10 times in order to push laws that were not democratically agreed upon, the fact that the prime minister got a football t-shirt for Christmas that had that very same "49.3" number on it and really appreciated it.
Or the political failure when handling the CCC (citizen's climate convention) that Macron himself created to satisfy people's expectations, and which actually delivered amazingly as a panel of 150 citizens representing all parts of France giving educated and actionable input on what the country should do. The energy prices putting small business owners on the street in a country where nuclear power could have pretty much carried the load but has been grossly mistreated (admittedly by nearly every single president in a long time). The recent Uber papers, where Macron was directly cited, at a crucial time where now most poor jobs in France have literally been called "uberized" in pejorative terms. And that his party calls for "decency" in the mist of all of this.
French people aren't dumb, contrary to what the sneering suits might believe. This was not only poorly timed, but absolutely tonedeaf by the government, and revealing of the amount of contempt they have for people who at a majority reluctantly elected Macron.
This is all dramatic and very tragic, but the numbers don't make sense. It's not something where passion should win over reason. Current and future generations will be screwed if this pension system isn't reformed. If anything Macron deserves applauses for committing political suicide for the greater good
Nobody is getting screwed if this isn't getting reformed, the central committee dedicated to making projections for retirement funds projected a mild deficit by 2070 in only 1 out of 4 of its scenarios. The government gave this money away to the already rich and is trying to bullshit everybody else that "there's no other way". People have had enough of this behaviour, and the strikes on a scale unseen since 95 show it.
This is not true. Numbers aren't alarming at all. And there are many solutions that could be deployed if it were the case. It is a matter of political choice.
As a french citizen, I agree it's not about numbers.
If young people were understanding the numbers, they would go on streets to push for the reform to be adopted.
The problem is, there is an extreme left group, dreaming of the big night of uprising and revolution to install a communist government in France. So they take every opportunity to block the country and mess everything up, even though they're not even concerned by the reform themselves.
There is a silent majority who is in favor of the reform, which will eventually pass, like always.
Your contempt won't do much in the face of an actual majority voicing its disagreement (you know, the majority that Macron did not deserve but got because people feared the extreme right). And your numbers would be wrong unless you chose to ignore the Cor.
Either you don't understand the risks of disregarding the political unrest or you actively want that unrest. Sorry but I'm not keen on having an extreme right president at the next election myself.
you have more at stake in the topic than i do, but as someone still affected by the strikes, i got a few words to retort:
if the way to go about protesting is to choose days as per convenience and to have barbeque on the tram tracks, then feel free to do this on a weekly basis. meanwhile, the people on the grind are being affected by disruption of essential public utilities. just like the roller-skating phenomenon mentioned by another poster in the thread, it is only reinforcing the belief of not relying on others in society for your day-to-day needs.
the way people go about it in this instance is not garnering any sympathy by those who need the most support in society.
My grandfather a few years back passed a rather profound point in his life - he had been retired so long that he officially spent less of his life not working than working (despite entering the workforce at 15).
And it's not lost on me I am essentially doing double work: it's not enough for me to generate enough economic value for myself, society kind of depends on me to generate enough surplus value to cover an entire life's worth of labor (Or more! After all I started much later than my grandfather).
In a way, when Keynes predicted that everyone in the future would work a 20 hour workweek, he was right! He just didn't appreciate how much we would use those productivity gains to backfill that vacation time later in life.
I have no comment on the issue at hand, but I've got to give it to the French for their always impressive level of civil engagement. It feels like Americans are far less willing to take to the streets to support/oppose political causes than they were in times past, and I think that's a shame.
In which states? Under what conditions? What is allowed if a mob threatens or begins to pull you and your family out of your car and beat you to death?
It s very hard for these reforms to pass in europe, to the point where it might be better to just let the pension systems collapse.
Raising the retirement age is not a great strategy, 70 yo people are not as productive and hoard jobs thus increasing unemployment of the most productive, the young. This is massively happening in all of southern europe and is a major reason for economic retardation.
Young people are increasingly aware that they will not get pensions. Old people hold vast amount of wealth in real estate which has become entirely unaffordable even to well-earning young professionals. At some point the collapse of pension funds will meet the need for housing. Hopefully there will be a tradeoff
One big challenge I see with the whole business about pension reform (and government spending in fact) as a public debate is that two sides are talking on totally different planes. In France, and someday very soon, here in the US. And the public in a certain sense, will problematically have to end up voting a simple yes/no on extremely complex topics which are incentivized to push buttons on single issues. cf. Brexit.
On the one side (hopefully meaningful to this crowd) is a group that when confronted with the sheer numbers involved and tradeoffs that would make any dent in the coming demographic-driven bankruptcy (shorthand name for it), have to keep things running and try to come up with the actually mathematically workable or "implement this decision" plans with the resources they have. Not aspirations.
See those numbers/scenarios, there is no getting around the severity of the situation.
Then on the other plane, there are people (politicians, and people in general in the country) who deal in "symbols" and qualitative statements about what they think who is entitled to, what was promised, etc. "Eat the rich!" etc.
And lately it seems, rarely the twain shall meet. Or at least, it's quite rare to find leaders who are equally incentivized or capable of handling both sides of this adeptly. Also, the people who don't understand the numbers generally tend to shout and insist they're right. On the other hand, numbers people don't usually shout (and underplay the severity of coming problems; the type that analyzes is usually civil about it). Also, and this is an evolving thought -- I don't think democracies are very well suited to allocating the pain of a country's long-term downturn very well, or having people understand when your country's resources are actually decreasing.
One thing is for sure -- there is a massive unpleasant reckoning coming in terms of what benefits and tax rates people believed they would experience. There is no magic getting out of this hole, it will be one of / combination of:
-- taxes will rise (for whom?)
-- benefits will decrease (for whom?)
-- retirement age will increase
-- borrowing will increase (from whom?)
And undoubtedly it will largely fall on the next generations. Or just in time for my retirement.
These pensions were bankrupt the minute they were implemented - the capital appreciation rates were completely insane to start, and have only looked worse as time rolls on (which, I have to stress, is extremely tough to imagine). Delusion around pension portfolios eclipses all but the most insane crypto scams.
Quite a bit of my university work in the early 2000s revolved around studying and modeling pension-type retirement plans, primarily in the United States (Chicago and Philadelphia mostly come to mind), but a little in foreign countries. While EU pensions tend to be in worse positions, it's a distinction without a difference: Pension reform is basically impossible. Catastrophic bankruptcy and refusal to pay benefits is coming to a theatre near you, because the political will to even begin meager cuts (and so-called "drastic" cuts are indeed merely meager) does not exist.
Politicians who propose meaningful cuts to pensions are guaranteed a single term in office while the candidates waiting in line promise to keep the Ponzi scheme going.
Philadelphia's pension "scheme" is crazy and borderline criminal how its implemented. Pay days on retirement date based on salary in the past several years, absolutely rampant overtime fraud, cronyism abound everywhere. There are plenty of stories of people retiring milking tens of thousands of dollars from fraudulent overtime, getting a one time payment on retirement in the hundreds of thousands, and then getting a pension higher than their real salary.
I support pensions, but this has to be done at the federal level, and funded heavily through taxes and pro-natalist policies to keep demographics correct. Cities, states, counties and companies are not able to adequately fund defined benefit pensions.
My experience from Finland is that there is always a pension reform going on, or at least people are planning the next reform. It's been recognized for decades that the pension system is unsustainable, and reforms have gradually made it more sustainable. Pension growth is now based on a mix of price and wage growth, the initial pension is based on lifetime contributions rather than final wages, retirement age automatically follows changes in life expectancy, and so on.
Older generations certainly got a better deal, and young people are always cynical. But as people age, they tend to gain confidence in the system, as they have seen it change over their careers.
Pardon my language but where the f** is all this money going? Is it even humanly possible for a group of regular joes to audit where all the money is going? I think thats the first thing that HAS to happen, a clear transparent audit down to the penny. As a coder, this kind of complexity just drives me up the wall.
Also on a side note, I love how sneaky that NY Times article leaves out the option to cut defense. After all we can NEVER reduce our military industrial complex, only cut everything else to the bone.
The top 3 chunks of spending are social security, Medicare, and Medicaid. The majority of that spending is payments to individuals or on behalf of individuals for medical bills. You can probably find the exact fraction of overhead for each program somewhere.
If you assume that most government programs have on the order of a very few % misspending or outright fraud (which is the case, aside from fiascos like the pandemic stimulus payments) then you just have to assume that the real decisions to be made are the "should we have this program at all" or "do rates need to increase / benefits need to decrease". The auditing and details will get worked out by an existing government apparatus designed to ensure this. You cannot let yourself get lost from the bigger picture believing that what is missing is the audit. The big questions are what need to be solved.
> Pardon my language but where the f* is all this money going? Is it even humanly possible for a group of regular joes to audit where all the money is going?
Not really, but for as bearish as I am on the government in general, the Congressional Budget Office (CBO) is a bright spot, and they do very good work at forecasting, auditing, and evaluating tax cuts, tax increases, budget cuts, and so forth. The average person can have faith that the CBO does mostly good work because politicians on both sides of the aisle really dislike the department when they tell the truth about their plans.
On the state/city level, all the money is going to former employees for labor performed in previous decades. The scheme is voters today purchase government employee labor for lower cash outlay today hence lower taxes today, then subsequent taxpayers pay higher and higher taxes as the can gets kicked down the road.
The reason this is different from regular old debt is that via questionable accounting methods and actuarial assumptions, the cost of the deferred compensation is presented as absurdly low compared to what it really is. So it does not show up on any official figures anywhere, just greater and greater portions of the government budget go to paying benefits.
The US has spent $100 billion in the Ukraine over the past year, with more on the way, it is sending billions a year to Israel and Egypt, is involved in Iran, China, Venezuela etc. It just stopped spending a ton in Afghanistan. All the money spent there seemed to have no positive effect.
The US seems to have money to throw all over the world for this kind of bloodthirsty waste, if it cuts it can cut there. People getting back money they put into Social Security should be the last thing to go.
The US spends hundreds of billions on these wars of choice, that can be cut very easy.
Though the answer to your suggestions is that any populist conception of the American Empire is delusional. Like a mafia they will take your money and spend it in whatever way they damn well wish, and there's nothing you can do about it
Is this a real question? Top few percent of capital owners captured nearly 100% of productivity inrease that came from last few decades of technological development.
I read the article and no, I do not see that there is no getting around the severity of the situation. The very last plot is ridiculous, how can they even extrapolate that from the graph given?
Maybe you should read more about it. If you know how many people are going to be aging into the Social Security system, and needing Medicare/Medicaid, and some simple assumptions about the budget and tax revenue, you can easily generate the approximate shape and amounts of those financial projections.
It is so simple a calculation and so ridiculous a situation, as you say (but in a different way than you mean), that this is a huge problem that will have to be confronted.
The CBO generates those kinds of calculations, and they're not a group known for making up things out of thin air.
Maybe I'm too pessimistic, but sometimes I feel that bloc got all the goodies at everyone else's expense. This isn't a typical 'boomers' or anything argument against the people, but perhaps the demographic itself and the way politics played out.
Pensions are unheard of now, and companies are still struggling to keep up with them, likely meaning lowered wages for the next group(and no pensions). Tough luck.
I fully expect to pay social security my entire life to subsidize those getting it now, and to be dead before I'm ever able to collect a dime.
Honestly, even having paid into it my whole life, I wish they'd just kill it off. It's an unsustainable pyramid scheme, especially as birth rates flattened. Even if I do live long enough to collect, I don't want that burden on the next generations.
The age is going to keep being raised. A quarter of Americans don't even live to 'full retirement age.' And when it's raised so high it's profitable, the USG is just going to raid it like a slush fund.
>>I feel that bloc got all the goodies at everyone else's expense
Pensions and SocSec were both Ponzi Schemes, Only government could allow something so fraudulent to legally exist. (Interesting Fact, the original SocSec retirement age was 2 years higher than the Life Expectancy Age, now it is something like 8-10year lower... )
It could have kept working provided the population continued to grow at an ever increasing rate keeping the worker to retired person ratio at 10:1, but 2 or 3 generations of declining birth rates, and low immigration means the scheme is coming apart
More so your 401K is currently, and will continue to be reduced in value as the boomer take more and more capital out of the market for their final years. I think we will need to reassess what "normal" returns on a 30 year portfolio looks like as well, in addition to inflation which I think will stabilize at more than the target 2%..
Simply put.. we are economically stag net, and if you are under 40 retirement will be much harder
Do you have some kind of similar study that doesn't come out of the Republican Party? Maybe something a little more non-partisan?
An example of the flaws of this argument/article is how Social Security is self-funded, and not in any financial jeopardy on its own. [1] Some of the other entitlement programs on the list also work that way.
Regardless, my understanding is that a government's budget never has to be balanced. It doesn't operate like a family household. Oftentimes, national debt is used for pursuits that return on their investment, just like how startup companies operate at a deficit on purpose to prioritize growth that will make the company more valuable in the long term. Inflation also lessens the value of the national debt over time.
I quite like one of those options: taxes on the wealthy and ultra-wealthy have a lot of room to rise. Jack them up, billionaires shouldn't exist, and people like Jeff Bezos shouldn't have a single-digit tax rate.
The other part would be looking at government inefficiencies and flawed policies that aren't on your list, the kind that result in wasted spending that's hard to demonstrate tangibly. For example, should we not talk about how suburban development and the interstate highway system is a monetary drain on wealth for the majority of the country?
It's really obvious to me how building more sewer, road, and utilities per person and forcing everyone to own one car per capita or more is a dumb waste of money on a national level. Our government on every level plays a heavy hand in subsidizing that development pattern.
It would be really easy to afford my tax rate increasing to a much higher level if I wasn't forced to own more than one car just to get myself to work. It would also be easier for me to afford housing if a bunch of single family home owners weren't preventing dense housing from being built, and then all that extra money I saved could go toward something more economically productive than a parking lot.
The average American spends somewhere between $5,000 to $10,000 per vehicle annually. Imagine a USA where everyone could go down to one car per family and how the rest of that money could be used.
But no, instead let's add one more lane and make our retirees work until they're 85 rather than fixing our structural problems that make America a very expensive and energy-wasteful place to live.
Because, when you think about it, national wealth is basically access to energy, and America is squandering their own wealth by dumping it into their GMC Yukon Denali Ultimate that gets 14MPG.
I don't understand why there's a temptation to jump to the conclusion that the answer is to make people retire later in life or cut safety net programs, which are often investments with ROI (e.g., hungry kids learn poorly, hungry kids result in reduced workforce education and productivity).
Are 70 year old employees particularly productive for the economy in the first place? It seems like there are smarter ways to save wealth or earn more wealth for the nation.
> "Do you have some kind of similar study that doesn't come out of the Republican Party? Maybe something a little more non-partisan?"
Not sure what your point is. I'm not sharing the article/infographic and animated budget scenarios as "this is what needs to happen" from some party's perspective. The point is a graphical display of the size of different buckets (which I take as fact) and the sliders that you can play with. The cases being presented are just examples. You can mentally slide the bars / cut line and see how much is required.
> "I also find it funny how the infographic doesn't show a scenario where only defense cuts are made, because it would show us how cutting defense spending is a really simple path toward a balanced budget without changing anything else.
I don't know if you have looked at it, but the defense bar is as big as each of the
Medicaid, other mandatory, and "all other" spending bars each. You would have to cut the entire defense budget and still not solve the problem, and only make a fractional share of what is achieved if you implemented cuts to those other programs.
> "Another example of the flaws of this argument/article is how Social Security is self-funded, and not in any financial jeopardy on its own. [1] Some of the other entitlement programs on the list also work that way."
Maybe you have to redefine your definition of self-funded. Sure it is self-funded, as long as taxes increase a lot, given the demographic wave coming. If taxes don't increase, or one of these other options, it will run out of funds. If we don't agree on that, we have a problem. This is the entire debate about the problem we face.
> "Regardless, my understanding is that a government's budget never has to be balanced. It doesn't operate like a family household...."
Well, correct, but the question is how deep do we go into the hole. If you read the story, and the charts, you can see the projections of debt going to 200% GDP. At that point we will be paying enough interest on our debt to have funded several large programs themselves.
> "You're saying our only options are for taxes to rise, benefits decreasing, increasing retirement age, or snowballing debt. But why are those our only options?"
And the other options are?
> "The other part would be looking at government inefficiencies and flawed policies that aren't on your list. For example, should we not talk about how suburban development and the interstate highway system is a monetary drain on wealth for the majority of the country?"
Sure, talk about it, but can you change the bulk of the US to capture whatever benefit you can from that change, within 50 years to save the programs needing the money?
> "I know I've spent a lot of time on this one issue as a specific example, but it's really just one of many ways in which being smart and efficient about the use of the vast wealth generated by the US would go a long way...."
The talking is all good, but the bottom line is will your proposals come up with the money in time?
Anytime a real protest occurs in the US, 100s of people wind up sitting in solitary confinement, uncharged, for months or years. We've only had one real protest in living memory (that I'm aware of) and that will probably be about it. No one really wants to go to the Gulag.
Thanks. Some of us were so well organized with cool songs and stuff, I'm jealous so we're writing one for next week (probably based on Vian, Lluis Llash or Ogeret).
Readit News
France's system has the working population pay for the pension on the retirees, as a social security tax. With the retirement age around 62-65, with the lifespan increasing, and with the Baby Boomers retiring, it isn't a sustainable system.
Every president, be they socialist or liberal, have attempted to tackle the issue, only to get country-paralyzing backlash. People will nitpick the details of whatever current plan proposes, but the fundamental problem remains.
[1] https://pari-roller.com
christine lagarde pushed for blocking wage rise in the EU, european commission non elected leaders are pushing for it too. salaries for blue collar in france are becoming those of much poorer countries and in a globalised world where most of the goods are made in countries where salaries are rising as well as inflation, blocking our wages is only sending us to the third world .
it is nothing else than a betrayal at the highest level of the state
Just throwing this out here, but in a globalized world, by what mechanism would one expect Europeans and Americans will be able to enjoy a greater standard of living than people in, say, Asia?
Are they somehow smarter? More productive? In control of more natural resources? If not, why would you expect that the first-third world gap to not continue to normalize?
And funneling even more money into it like you want to isn't an option, the GDP proportion dedicated to retirement increased a lot already.
You've seen the low salary but you didn't understand the cause of that, the cause of that is the money is being funneled to the retirement system.
regardless of whether this is correct or not (difficult to predict the future, even the COR only has "scenarios" to talk about, but nobody knows really what will happen), the current system is unjust in many ways (some "special regimes" are super favorable, with little justification other than legacy, and some workers should have more favorable regimes because of their work conditions, yet they do not and the reform does nothing for these people).
>it is nothing else than a betrayal at the highest level of the state
Agreed. Still, this is less worse (I can't really say "better") than the first attempt at reform during Macron's first mandate: that first attempt included a contribution rate falling from 28% to 2.8% above 120Keuro/year (if I recall correctly), which was effectively a tax cut for the wealthy.. If anything above this threshold, the contribution rate should increase (i.e. be progressive instead of regressive). The main issue is that the whole thing is un-reformable because so many consistuencies have vested interest in the status quo.
French government is not elected either. Like all European countries, by the way.
Dead Comment
Which is just a socialized form of the previous social security system which had children or grandchildren look after their parents. Of course, the glaring difference is that social security schemes have motivated many millions, who otherwise might have, to not have children at all or an inadequate number and so contribute very little to nothing towards the future maintenance of the system while still cashing the checks once they retire. Of course this system does help the minority who can't have children for whatever reason but it does look like we've swapped looking after that cohort for a few decades for effectively no social security system for anyone once this ponzi scheme collapses.
Nope. At least not completely. Canada switched away from a pure pay-as-you-go (PAYG) system in the 1990s:
> Move towards a hybrid structure to take advantage of investment earnings on accumulated assets. Instead of a "pay-as-you-go" structure, the CPP is expected to be 20 per cent funded by 2014, such funding ratio to constantly increase thereafter towards 30 per cent by 2075 (that is, the CPP Reserve Fund will equal 30 per cent of the "liabilities" - or accrued pension obligations).
* https://en.wikipedia.org/wiki/Canada_Pension_Plan#1996_refor...
Asset returns are used to help fund benefits. A number of pension funds in Canada have moved away from a (pure) PAYG model:
* https://en.wikipedia.org/wiki/Pensions_in_Canada#Canada_Mode...
Instead, they built ever-decaying roads and rotting ticky-tacky boxes and left nothing durable for future generations. Hell, they even ripped out trains in cities across the country. (Seattle interurban among so many examples).
Disagree.
Counter-examples:
401k in the US
Second pillar in Switzerland.
The money comes from the people saving and investing their own money for their old age.
Shocker, I know.
Good For them?
They've been trying to change this forty years? So they were trying to change this back when it ipso facto was sustainable, since it's survived 'till now. How credible does that make the current effort.
Certainly, America has changed a bunch of supposedly "unsustainable" things into ... utter misery for the average person.
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The Touraine Law in 2014 raised the number of worked years from 36 to 43, which is a big deal. So it's not like nothing happened. Also there are good reasons to dispute the current proposal, it's not just nitpicking details, it will impact very negatively some people and perhaps there are other ways to fix the system.
that's right, and what's so surprising (to me) today is that the Touraine law got enacted without much protest, while what's happening today is taking the same terms for retirement and extending them to younger generations (i.e. those born between 1960 and 1973) is causing protests. The current proposed reform looks like a big deal, but the bigger deal happened in 2014 and was barely noticed (because the lawmakers were careful enough to put it far enough in the future...).
Though the problem is well known (at least for 40 years), No french governments has considered diversifying the source of the revenue funding the pension system. Actually its worse as the only capitalisation existing are in a process to be nationalised.
Moreover, this reform is purely the outcome of political game. Macron electorat is mainly the 'boomers' who fully beneficiated of th situation ( in fact their pension are impacted despite having higher wealth than the majority of the workers).
I personally would consider a reform only if there an effort requested for everyone.
But as usual they'll fight tooth and nail to keep their monopoly, as they like us to depend on them as much as possible.
This is wrong. We have an institute that has one mission. Evaluate its sustainibility, and it disagrees with you.
Not a single pension program on earth is sustainable - including the US' Social Security System. All of them are political 3rd rails and kill careers of anyone seeking to do meaningful reform.
Why did we get to a situation where the government is in charge of safeguarding your retirement and wellbeing? It's insane... we should compel people to have IRA's or some sort of retirement account, but the money needs to be under the control of the person it belongs to.
It can be sustainable, even at comprable rates, especially with fewer younger workers if wages are allowed to increase to meet labor demand.
I really don't understand this reform. However for me to understand it, one would need an 8 hour video stream full of spreadsheet with an actual expert working on that reform.
And no media is ready to do that
There is a coming wave of retirees, and an associated decrease in the workers per retiree to support them.
https://www.ssa.gov/OACT/tr/2022/
See page 12, page 15.
If you both are not understanding the issue, and not interested in learning about the details, then maybe you shouldn't take a strong opinion on the matter.
The fact that it’s running out of money
Oops I forgot about the Euro. Oh well, so much for sovereignty.
So, printing money to meet pension obligations has a similar effect to reducing the amount which is paid out.
Also, I don't think many people accept Francs as currency anymore.
No it does not. It uses the Euro, which technically requires it to maintain a balance.
Raising the retirement pension age screws over the poor, especially poor men. Perhaps retirement age should be tied to income/wealth somehow ... and maybe even sex (as controversial as I imagine that would be).
https://www.sbs.com.au/nitv/article/uncle-dennis-is-taking-t...
If I have a 20 year mortgage with the bank I can't just change the terms so that the deal suits me better. Why can the government do that with my retirement age, with zero repercussions?
It's been done before:
In Canada, to deal with the sexism of car insurance premiums for example: https://nationalpost.com/news/canada/alberta-man-legally-cha...
In Argentina, to retire 5 years earlier as a woman: https://www.dailymail.co.uk/news/article-5544173/Argentinian...
In Switzerland, also to retire earlier, which seems almost trivial given the 1 year difference between men and women, but by spending just 75 francs for the reassignment, they unlock of 28,680 francs of additional retirement over their lifespan: https://www.europeantimes.news/2022/02/a-man-changed-his-gen...
And I realize these sources are not great, but I chalk that up to the fact that this is an untouchable subject for mainstream, a taboo subject for many, and an uncomfortable subject for most of us. These are also still fringe cases, even if the benefits are quite clear. There is also something unsavoury about exploiting the system in this way, but it's counterbalanced by the fact that it's a system that's screwing you over.
In a way I do look forward to cases like these ending up in court, solely because I want to see the decisions that result. Do we get a legal ruling on the mutability of gender? Does gender become permanent at a certain age? Does the court instead decide to deal with each case individually, knowing they could potentially set up a tsunami of cases?
Pragmatically, it seems easiest if you just erase gender from these systems, but realistically that would benefit men which makes it unlikely from the current wave of Western-influenced lawmakers.
American Social Security had an age of 65, but at the time of its passing life expectancy for American men was 58.
Unfortunately it doesn't work for everyone, though, and a traditional pension is still needed as a backup.
You can be poor and be an outlier who lives to 100, or a rich person who is an outlier and dies before even getting your first payment.
Saying the average life expectancy is lower ignores the huge overlap of actual life spans across both groups.
I'd like you to read about the Cobra effect first, though.
The whole reason of retirement is to have a bit of freedom in relative good health after a life of work
That people are angry is not about the damn numbers. It's about the attitude of a political class that had private restaurant dinners behind closed doors during lockdown times where the population was fined for being out walking their dogs, it's about a president that's been deliberately calling left-leaning ideas of the younger generations about ecology and equality "extreme-left" while joyfully siding persistently with the actual parties created by fascists, it's about a reform that comes in with a justification of a deficit that was literally created by giving money to large companies and rich people in the form of tax deductions, it's about some of his ministers who take part in all sorts of horrible things and continue to go unpunished, it's about people asking for compassion towards difficult jobs more than for their own selves, and I could go on...
I have no particular knowledge of French macro economic policies, but a tax deduction is not "giving money". It is "not taking money". Your framing assumes that corporate or individual earnings belong to the government and the government can decide to allow the money to be "given" to the taxpayer. Whether that is an appropriate arrangement of private property rights and the relationship between the people and the government is a hotly debated topic, to put it mildly.
Whatever the labelling you want to use, but we know for a fact that extreme ecology is going to destroy our country. We saw what happened with French nuclear, we are seeing it in the EU car industry, we are seeing it in French housing. We already know that radical ecology is going to bring social unrest. That the first to suffer is going to be poorest people.
> deficit that was literally created by giving money to large companies and rich people in the form of tax deductions.
We are still one of the most tax heavy country with the most social contribution in Europe and in the world. Macron is just trying to level the playing field and make France attractive.
> it's about people asking for compassion towards difficult jobs more than for their own selves, and I could go on...
After this reform, we will still be one of the most generous country in the world even for pension and social net even among Europe and even more worldwide.
... to whom?
> After this reform, we will still be one of the most generous country in the world even for pension and social net even among Europe and even more worldwide.
Not sure why I'm thinking about a frog being slowly boiled alive.
You say it's "not about the damn numbers", but what does that mean? Does the underlying problem with the numbers not exist? Would the french pension system be fine without such reforms? If not, and reforms are needed, why are is stuff boiling over now? Sure, all the things you listed are legitimate grievances, but it seems counterproductive to get mad at politicians doing painful stuff that needs to be done. It's like getting in a fight with your spouse about how they're "controlling" or whatever, when your house is on fire and you need to evacuate. The only sensible interpretation I can think of is that the people think the reforms are not warranted or there's a better reform that's not being considered, and that's the straw that broke the camel's back and caused people to come out and protest. If that's the case, I wouldn't exactly frame that as "not about the damn numbers".
I didn't even get into the minister pushing for the reform doing crosswords during a parliamentary session on his subject, the inflation absolutely exploding in France, the surge of students falling below poverty lines and needing food stamps worse than during covid, the ministers genuinely advising the population to "wear turtlenecks during the winter", the abuse of 49.3 article (similar to Canada's notwithstanding clause) exactly 10 times in order to push laws that were not democratically agreed upon, the fact that the prime minister got a football t-shirt for Christmas that had that very same "49.3" number on it and really appreciated it.
Or the political failure when handling the CCC (citizen's climate convention) that Macron himself created to satisfy people's expectations, and which actually delivered amazingly as a panel of 150 citizens representing all parts of France giving educated and actionable input on what the country should do. The energy prices putting small business owners on the street in a country where nuclear power could have pretty much carried the load but has been grossly mistreated (admittedly by nearly every single president in a long time). The recent Uber papers, where Macron was directly cited, at a crucial time where now most poor jobs in France have literally been called "uberized" in pejorative terms. And that his party calls for "decency" in the mist of all of this.
French people aren't dumb, contrary to what the sneering suits might believe. This was not only poorly timed, but absolutely tonedeaf by the government, and revealing of the amount of contempt they have for people who at a majority reluctantly elected Macron.
Some sources:
Students hardships: https://www.euronews.com/2022/12/23/inflation-crisis-french-...
Dussopt and his crosswords: https://todaytimeslive.com/world/219510.html
49.3 t-shirt: https://24newsrecorder.com/politics/226033
Wear turtlenecks: https://www.thelocal.fr/20220927/french-minister-advises-wea...
CCC: https://en.wikipedia.org/wiki/Citizens_Convention_for_Climat...
CCC: https://www.publicdeliberation.net/the-promises-and-disappoi...
Uber papers: https://www.theguardian.com/news/2022/jul/10/emmanuel-macron...
If young people were understanding the numbers, they would go on streets to push for the reform to be adopted.
The problem is, there is an extreme left group, dreaming of the big night of uprising and revolution to install a communist government in France. So they take every opportunity to block the country and mess everything up, even though they're not even concerned by the reform themselves.
There is a silent majority who is in favor of the reform, which will eventually pass, like always.
https://www.cor-retraites.fr/node/595
if the way to go about protesting is to choose days as per convenience and to have barbeque on the tram tracks, then feel free to do this on a weekly basis. meanwhile, the people on the grind are being affected by disruption of essential public utilities. just like the roller-skating phenomenon mentioned by another poster in the thread, it is only reinforcing the belief of not relying on others in society for your day-to-day needs.
the way people go about it in this instance is not garnering any sympathy by those who need the most support in society.
EDIT: grammar
And it's not lost on me I am essentially doing double work: it's not enough for me to generate enough economic value for myself, society kind of depends on me to generate enough surplus value to cover an entire life's worth of labor (Or more! After all I started much later than my grandfather).
In a way, when Keynes predicted that everyone in the future would work a 20 hour workweek, he was right! He just didn't appreciate how much we would use those productivity gains to backfill that vacation time later in life.
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Raising the retirement age is not a great strategy, 70 yo people are not as productive and hoard jobs thus increasing unemployment of the most productive, the young. This is massively happening in all of southern europe and is a major reason for economic retardation.
Young people are increasingly aware that they will not get pensions. Old people hold vast amount of wealth in real estate which has become entirely unaffordable even to well-earning young professionals. At some point the collapse of pension funds will meet the need for housing. Hopefully there will be a tradeoff
On the one side (hopefully meaningful to this crowd) is a group that when confronted with the sheer numbers involved and tradeoffs that would make any dent in the coming demographic-driven bankruptcy (shorthand name for it), have to keep things running and try to come up with the actually mathematically workable or "implement this decision" plans with the resources they have. Not aspirations.
Take a look at this for example:
https://www.nytimes.com/interactive/2023/03/06/upshot/balanc...
See those numbers/scenarios, there is no getting around the severity of the situation.
Then on the other plane, there are people (politicians, and people in general in the country) who deal in "symbols" and qualitative statements about what they think who is entitled to, what was promised, etc. "Eat the rich!" etc.
And lately it seems, rarely the twain shall meet. Or at least, it's quite rare to find leaders who are equally incentivized or capable of handling both sides of this adeptly. Also, the people who don't understand the numbers generally tend to shout and insist they're right. On the other hand, numbers people don't usually shout (and underplay the severity of coming problems; the type that analyzes is usually civil about it). Also, and this is an evolving thought -- I don't think democracies are very well suited to allocating the pain of a country's long-term downturn very well, or having people understand when your country's resources are actually decreasing.
One thing is for sure -- there is a massive unpleasant reckoning coming in terms of what benefits and tax rates people believed they would experience. There is no magic getting out of this hole, it will be one of / combination of:
-- taxes will rise (for whom?)
-- benefits will decrease (for whom?)
-- retirement age will increase
-- borrowing will increase (from whom?)
And undoubtedly it will largely fall on the next generations. Or just in time for my retirement.
Quite a bit of my university work in the early 2000s revolved around studying and modeling pension-type retirement plans, primarily in the United States (Chicago and Philadelphia mostly come to mind), but a little in foreign countries. While EU pensions tend to be in worse positions, it's a distinction without a difference: Pension reform is basically impossible. Catastrophic bankruptcy and refusal to pay benefits is coming to a theatre near you, because the political will to even begin meager cuts (and so-called "drastic" cuts are indeed merely meager) does not exist.
Politicians who propose meaningful cuts to pensions are guaranteed a single term in office while the candidates waiting in line promise to keep the Ponzi scheme going.
I support pensions, but this has to be done at the federal level, and funded heavily through taxes and pro-natalist policies to keep demographics correct. Cities, states, counties and companies are not able to adequately fund defined benefit pensions.
That probably depends on the culture.
My experience from Finland is that there is always a pension reform going on, or at least people are planning the next reform. It's been recognized for decades that the pension system is unsustainable, and reforms have gradually made it more sustainable. Pension growth is now based on a mix of price and wage growth, the initial pension is based on lifetime contributions rather than final wages, retirement age automatically follows changes in life expectancy, and so on.
Older generations certainly got a better deal, and young people are always cynical. But as people age, they tend to gain confidence in the system, as they have seen it change over their careers.
Also on a side note, I love how sneaky that NY Times article leaves out the option to cut defense. After all we can NEVER reduce our military industrial complex, only cut everything else to the bone.
Not really, but for as bearish as I am on the government in general, the Congressional Budget Office (CBO) is a bright spot, and they do very good work at forecasting, auditing, and evaluating tax cuts, tax increases, budget cuts, and so forth. The average person can have faith that the CBO does mostly good work because politicians on both sides of the aisle really dislike the department when they tell the truth about their plans.
For states and cities, see local government websites for reports. Or you can start here:
https://www.truthinaccounting.org/
On the state/city level, all the money is going to former employees for labor performed in previous decades. The scheme is voters today purchase government employee labor for lower cash outlay today hence lower taxes today, then subsequent taxpayers pay higher and higher taxes as the can gets kicked down the road.
The reason this is different from regular old debt is that via questionable accounting methods and actuarial assumptions, the cost of the deferred compensation is presented as absurdly low compared to what it really is. So it does not show up on any official figures anywhere, just greater and greater portions of the government budget go to paying benefits.
The US seems to have money to throw all over the world for this kind of bloodthirsty waste, if it cuts it can cut there. People getting back money they put into Social Security should be the last thing to go.
The US spends hundreds of billions on these wars of choice, that can be cut very easy.
They spend this money in order to prevent having an actual war later.
Also a lot of the aid is actually jobs program where the aid recipient is required to spend the money on American made goods.
So it's not quite as simplistic as you're making it out to be.
Though the answer to your suggestions is that any populist conception of the American Empire is delusional. Like a mafia they will take your money and spend it in whatever way they damn well wish, and there's nothing you can do about it
Dead Comment
There is magic, the rise of productivity. It just didn't reach the ordinary people.
Is this a real question? Top few percent of capital owners captured nearly 100% of productivity inrease that came from last few decades of technological development.
It's obvious who should be taxed.
It is so simple a calculation and so ridiculous a situation, as you say (but in a different way than you mean), that this is a huge problem that will have to be confronted.
The CBO generates those kinds of calculations, and they're not a group known for making up things out of thin air.
Pensions are unheard of now, and companies are still struggling to keep up with them, likely meaning lowered wages for the next group(and no pensions). Tough luck.
I fully expect to pay social security my entire life to subsidize those getting it now, and to be dead before I'm ever able to collect a dime.
Honestly, even having paid into it my whole life, I wish they'd just kill it off. It's an unsustainable pyramid scheme, especially as birth rates flattened. Even if I do live long enough to collect, I don't want that burden on the next generations.
The age is going to keep being raised. A quarter of Americans don't even live to 'full retirement age.' And when it's raised so high it's profitable, the USG is just going to raid it like a slush fund.
Pensions and SocSec were both Ponzi Schemes, Only government could allow something so fraudulent to legally exist. (Interesting Fact, the original SocSec retirement age was 2 years higher than the Life Expectancy Age, now it is something like 8-10year lower... )
It could have kept working provided the population continued to grow at an ever increasing rate keeping the worker to retired person ratio at 10:1, but 2 or 3 generations of declining birth rates, and low immigration means the scheme is coming apart
More so your 401K is currently, and will continue to be reduced in value as the boomer take more and more capital out of the market for their final years. I think we will need to reassess what "normal" returns on a 30 year portfolio looks like as well, in addition to inflation which I think will stabilize at more than the target 2%..
Simply put.. we are economically stag net, and if you are under 40 retirement will be much harder
An example of the flaws of this argument/article is how Social Security is self-funded, and not in any financial jeopardy on its own. [1] Some of the other entitlement programs on the list also work that way.
Regardless, my understanding is that a government's budget never has to be balanced. It doesn't operate like a family household. Oftentimes, national debt is used for pursuits that return on their investment, just like how startup companies operate at a deficit on purpose to prioritize growth that will make the company more valuable in the long term. Inflation also lessens the value of the national debt over time.
I quite like one of those options: taxes on the wealthy and ultra-wealthy have a lot of room to rise. Jack them up, billionaires shouldn't exist, and people like Jeff Bezos shouldn't have a single-digit tax rate.
The other part would be looking at government inefficiencies and flawed policies that aren't on your list, the kind that result in wasted spending that's hard to demonstrate tangibly. For example, should we not talk about how suburban development and the interstate highway system is a monetary drain on wealth for the majority of the country?
It's really obvious to me how building more sewer, road, and utilities per person and forcing everyone to own one car per capita or more is a dumb waste of money on a national level. Our government on every level plays a heavy hand in subsidizing that development pattern.
It would be really easy to afford my tax rate increasing to a much higher level if I wasn't forced to own more than one car just to get myself to work. It would also be easier for me to afford housing if a bunch of single family home owners weren't preventing dense housing from being built, and then all that extra money I saved could go toward something more economically productive than a parking lot.
The average American spends somewhere between $5,000 to $10,000 per vehicle annually. Imagine a USA where everyone could go down to one car per family and how the rest of that money could be used.
But no, instead let's add one more lane and make our retirees work until they're 85 rather than fixing our structural problems that make America a very expensive and energy-wasteful place to live.
Because, when you think about it, national wealth is basically access to energy, and America is squandering their own wealth by dumping it into their GMC Yukon Denali Ultimate that gets 14MPG.
I don't understand why there's a temptation to jump to the conclusion that the answer is to make people retire later in life or cut safety net programs, which are often investments with ROI (e.g., hungry kids learn poorly, hungry kids result in reduced workforce education and productivity).
Are 70 year old employees particularly productive for the economy in the first place? It seems like there are smarter ways to save wealth or earn more wealth for the nation.
[1] https://www.aarp.org/retirement/social-security/info-2020/10...
Not sure what your point is. I'm not sharing the article/infographic and animated budget scenarios as "this is what needs to happen" from some party's perspective. The point is a graphical display of the size of different buckets (which I take as fact) and the sliders that you can play with. The cases being presented are just examples. You can mentally slide the bars / cut line and see how much is required.
> "I also find it funny how the infographic doesn't show a scenario where only defense cuts are made, because it would show us how cutting defense spending is a really simple path toward a balanced budget without changing anything else.
I don't know if you have looked at it, but the defense bar is as big as each of the Medicaid, other mandatory, and "all other" spending bars each. You would have to cut the entire defense budget and still not solve the problem, and only make a fractional share of what is achieved if you implemented cuts to those other programs.
> "Another example of the flaws of this argument/article is how Social Security is self-funded, and not in any financial jeopardy on its own. [1] Some of the other entitlement programs on the list also work that way."
Maybe you have to redefine your definition of self-funded. Sure it is self-funded, as long as taxes increase a lot, given the demographic wave coming. If taxes don't increase, or one of these other options, it will run out of funds. If we don't agree on that, we have a problem. This is the entire debate about the problem we face.
> "Regardless, my understanding is that a government's budget never has to be balanced. It doesn't operate like a family household...."
Well, correct, but the question is how deep do we go into the hole. If you read the story, and the charts, you can see the projections of debt going to 200% GDP. At that point we will be paying enough interest on our debt to have funded several large programs themselves.
> "You're saying our only options are for taxes to rise, benefits decreasing, increasing retirement age, or snowballing debt. But why are those our only options?"
And the other options are?
> "The other part would be looking at government inefficiencies and flawed policies that aren't on your list. For example, should we not talk about how suburban development and the interstate highway system is a monetary drain on wealth for the majority of the country?"
Sure, talk about it, but can you change the bulk of the US to capture whatever benefit you can from that change, within 50 years to save the programs needing the money?
> "I know I've spent a lot of time on this one issue as a specific example, but it's really just one of many ways in which being smart and efficient about the use of the vast wealth generated by the US would go a long way...."
The talking is all good, but the bottom line is will your proposals come up with the money in time?
That seems dubious under any plausible definition of "real protest".
> We've only had one real protest in living memory (that I'm aware of)
(1) Taken as true, the sample size of 1 undermines the impact of the preceding claim.
(2) Define "real protest".
(3) What is the single example in living memory?