The Babe Theory Of Political Movements.
Mar. 21, 2005 11:50 AM
Iran's Sham Election In Houston.
June 20, 2005 5:36 AM
Yes, Kanye, Bush Does Care.
Oct. 31, 2005 12:41 AM
Health Care vs. Wealth Care.
Nov. 23, 2005 3:28 PM
Americans Voting With Their Feet.
Nov. 30, 2005 1:33 PM
Idea Majorities Matter.
May 12, 2006 6:15 PM
Twilight Zone Economics.
Oct. 17, 2006 12:30 AM
The "Shrinking" Middle Class.
Dec. 13, 2006 1:01 PM
From Ashes, GOP Opportunities.
Dec. 18, 2006 6:37 PM
Battle Between Entitlements & Pork.
Dec. 21, 2006 12:31 PM
Let Economic Freedom Reign.
Dec. 22, 2006 10:22 PM
Biggest Health Care Moment In Decades.
July 25, 2007 4:32 PM
Unions Antithetical to Liberty.
May 28, 2008 11:12 PM
Right To Work States Rock.
June 9, 2008 12:25 PM
Social Security Reform Thursday.
March 13, 2008
Caption Contest: Enter Today!
Due: July 29, 2008
The Carnival Of Classiness.
Mar. 14, 2006
Quotational Therapy: Obama.
Apr. 4, 2008
Mainstream Melee: Wolfowitz.
May 19, 2007
Pundit Roundtable: Leaks.
July 9, 2006
A WILLisms.com(ic), by Ken McCracken
July 14, 2006
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Social Security Reform Thursday: Week Forty-Two -- Overpromising, The World Over.
Thursdays are good days for reform, because they fall between Wednesdays and Fridays. And reform is a long-haul process, not a fleeting event. So we're going to keep plugging along with the case for reform, even as the issue goes off the political radar screen.
That's why WILLisms.com offers a chart or graph, every Thursday, pertinent to Social Security reform.
This week's topic:
Unkeepable Promises, Around The World.
The American Social Security crisis (or "looming crisis," or "ordeal," or "problem," or "coming trainwreck," whichever you prefer) is nothing unique to the United States. Around the world, governments face demographic realities and fiscal shortfallls that clamp down on the excessive promises made by politicians throughout the 20th century.
Great Britain is one such country. The Economist magazine notes that finding solutions for the nation's retirement pension crunch is easier said than done:
Britain’s Turner Commission has recommended raising the retirement age to 68 and introducing a new type of savings scheme.
While the problems are practically undeniable, politics have a way of clouding things up. Moreover, while the evidence for a problem is overwhelming, the solutions are often controversial, if only because people find it easier to demagoguge and distort the issue than change the status quo.
And it's not just the United States and the United Kingdom, either:
Continental Europe’s lavish government benefits guard the old against poverty, but are threatening to bankrupt the states that offer them; the French finance minister told parliament this week that the government was looking at an unfunded pensions liability of €900 billion ($1.1 trillion) on top of already record levels of public debt.
Indeed, as this United Nations map indicates, it is primarily Europe that faces an aged population today (.pdf):
Extended life expectancies are becoming a truly worldwide miracle, but they will also present worldwide problems (.pdf):
There are so many countries facing the same dilemma, the same falling birthrates, the same extensions of longevity, and the same overpromises first made so many decades ago. In the middle of this century, the percentage of old folks (I will be one of them) will strain the pensions systems of nearly every country on earth (.pdf):
In some ways, the U.S. is lucky. We can almost see into our future. The dysfunctional pension systems and sluggish growth in Europe should and can be warning signs. We should act now to avoid derailing our own economy (which is kicking much rear end right now, if you hadn't noticed).
The retirement component of Social Security is known as "Old Age Insurance." Fine -- then let's start by limiting it to bona fide "old age."
The fashioners of the Social Security systems in the United States, Great Britain, and most everywhere else all have one thing in common: none of them will be around when the pension systems they designed go bust.
Interestingly, my wife's spunky 93-year-old grandmother, now an American citizen but born and raised in Germany, spoke glowingly of Germany's old age pension system at Thanksgiving, raving about how wonderful it was-- when they set it up, at least. Maybe they messed it up somewhere along the way, she asserted, but in the 1930s it was a thing of brilliance. Unfortunately, she's both way off and totally on at the same time.
Part of her admiration for the disastrous German Social Security system could be that she still collects *plump* checks from the German government, although she hasn't lived there in well over 50 years. But part of the admiration is that, all over the world, when the plans were first announced, everyone bought into the pension schemes whole-heartedly. Apparently nobody thought twice about the tenuous pyramid scheme methods of funding. After all, there will always be more and more workers.
But surely someone thought ahead about expanding life expectancies?
When most pensions were first implemented, benefits went to the average recipient for a year or two at the most. People just rarely lived past about 65. The planners did not expect so many 93-year-olds running around collecting checks for decade upon decade.
And they certainly didn't expect that 100 year life expectancies could become the norm, not the exception by the middle of the 21st century. That's right. It may sound wild, but it's where we're headed. Even today, we constantly underestimate the awesome power of medicine, technology, and science to extend our lives, and because of that underestimation, we plan inadequately for the future.
The United States still has time to prevent a full-blown crisis in Social Security, but we're rapidly running out of time. Each day we fail to reform the system, we're letting the ticking time bomb take on more explosive punch. But more importantly, we're robbing younger people of the power of long-term compound interest. If Democrats were truly the progressive world-changers they claim to be, they would: a) stop pretending there is no crisis; b) offer creative solutions; and c) share those solutions with every country on earth.
The United States of America is rarely behind the curve on anything. We're pretty much the world's trendsetters. But on the Social Security issue, we're sure deferring to others to take the first step. This is unfortunate, because as we compete increasingly with emerging powers in Asia and elsewhere, we need to be clicking on all cylinders, using our resources as efficiently and productively as possible. We need to bring our 'A' Game, because staying on top forever is not a given.
It's time for reform.
The clock is ticking.
Previous Reform Thursday graphics can be seen here:
-Week One (Costs Exceed Revenues).
Tune into WILLisms.com each Thursday for more important graphical data supporting Social Security reform.
Posted by Will Franklin · 1 December 2005 10:08 PM
Oma sure is interesting...It amazes me to how politically incorrect she can be! I guess if we live to be 93 years old we can be politically incorrect too? ...
Posted by: Zsa Zsa at December 3, 2005 01:36 PM