French workers protest plan to increase retirement age
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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.
Oops I forgot about the Euro. Oh well, so much for sovereignty.
No it does not. It uses the Euro, which technically requires it to maintain a balance.
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.
Pension payments cover basic subsistence-level costs for goods that can be mitigated by supply-side production and productivity increases. Claiming that they cause inflation is just rebranded austerity politics. Inflation is caused by fraudulent debt-relief for "businesses" like we saw with PPP and low interest rates that create asset price and shitcoin bubbles.
Sure? Tell that to Argentina, Venezuela, Zimbawe and Turkey.
Takes one to know one
You can always lose your money. Best to accept that and not worry too much.
Hence why I think an SP500 investment is risk free on a >3 year timeline.
The stock market went to shit, not the providers. The 401k appeal is that it's an account you *own* and the government can't touch for money, it would be the same as expropriating a bank account, which to be fair, the Argentinian goverment kind of did in 2001, hence why since then, people there save money in usd cash or in a foreign account, not in the local financial system. If the US government has to expropriate or do weird stuff in general with 401k accounts, we are in a situation where shit hit the fan long ago.
It went somewhere.
All investment systems suffer from this exact problem: returns aren't guaranteed. Even people with 401ks might experience this same issue if investment returns fall below the conventional wisdom rate of ~7% (or 4% real). But even if that rate holds up over the long-term, there's still to risk of a "lost decade" of no-returns or losses for and extended period, followed by a sudden market pop.
Pensions are hard.
If a government "invests" in its own bonds, that's not an investment.
Boomer generation globally accumulated a lot of claims and considered them their "wealth" but forgot to produce enough people that are going to be willing to put an effort to satisfy these claims.
Now is the time when boomers will want to use their savings and discover their error.
It works more like a Ponzi scheme.
Although I admit that there being other countries in the world does change the calculus a bit; it would be possible (albeit weird and unsustainable) for everyone in France to be retired, so long as say the Philippines was young and working and French retirees owned all the shares in Philippine companies.
In the more common model, you pay for the previous generation hoping that the next one will pay for you, and you need intergenerational agreement on what's a fair amount. You don't need that with the fund model, as you (usually) agree & know beforehand how much you'll pay and how much you'll get.
I'm fortunate to not be part of it, but I'm pretty sure German employees are looking at France where rents are higher and retirement age is lower and think "hey, you can do that?". I guess we'll see whether you can (though, fair enough, Germany is a special case, the reunification cost a lot of money).
Consider this extreme edge case: If everybody is retired and no is is working, inflation goes to infinity and all those savings and stocks become worthless.
In the "having money" case, you have more options, but if you're given options, you also have more opportunity to make terrible decisions. And if it's a lump sum (or private investment of some kind), you can pass it on to your children - you can't do that with pensions in the other type.
On the other hand, in the current system as it's used in France, Germany etc, their incentive is that hopefully someone else will do it for them in 40 years. But from what I gather, very few members of GenZ believe that our pension system will survive in its current form until it's their turn to benefit from it. They expect it to collapse, so everything they'd now put in would be wasted, much like if you invest in something after it has signaled that it will default soon.
How do you save labor for later? Current retirees need young folks to do the work they cannot do, and thus those young folks are paying in today.
When those young folks retire they will be relying on even younger folks to do the work for them. If there are not enough younger folks to do that work, the money saved between generations will become relatively worthless.
Thought another way: The same amount of labor needs doing. If the current generation of workers stops paying in (read: working), then the entire system stops. One generation saving more (or being larger) than the next doesn't change much other than that saved wealth chases a decreasing amount of available labor once that generation retires. Quality of living will be predicated on the amount of available labor - not saved capital.
It gets a little more wishy washy when you can plow capital into long-lasting infrastructure, international wage arbitrage, etc. but in the end you simply cannot run retirement systems if you have less labor available while keeping the same quality of life for all parties. Someone is going to lose.
That doesn’t seem beneficial to workers as a whole. I thought innovation was supposed to benefit everyone? Where’s the hole in this logic?
By 2030 this is expected to be about 2, which is better than I expected. You would need massive productivity gains inside the span of the past 40 years to make up 4-6 workers per retiree in labor.
The fact I have 4-6 less cousins my age to sell my labor to to help take care of grandma doesn't seem to offset that huge amount of labor now needed to be expended on largely unproductive tasks. We went from 4-6 people pitching in to help out grandma each day to just myself. If you look at that in hours vs. dollars, the problem starts to become quite apparent to me. I don't feel I'm 500% more efficient at what I do than my elders.
Perhaps we've innovated so well that we can now support old folks with a fraction of the labor, but I'm skeptical. Fixed costs seem rather fixed, and from where I'm sitting I think a whole lot of that "innovation budget" has been spent already on rising expectations of minimum quality of living.
That is basically the same situation, but you are replacing local people that see the retired ones with remote people that can refuse to send any money and won't even see old people starving.
A strong military can make the situation more sustainable, in a highly immoral way. But that again isn't new, you can enslave people near you too.
It's debatable whether paying into your own account is a transfer of wealth at all, even if you're not able to withdraw your money until retirement.
Imagine a future where there are half as many the workers as retirees. It doesn't matter how much money retirees have in their pensions if they cannot hire workers to look after them (do their healthcare, produce the food they eat etc). You'd just get rampant inflation as the richer retirees competed to get workers, and everyone else goes without. In other words, in that scenario the value of the saved money would be eroded by inflation.
Now I will admit that this is complicated by there being other countries, or if we invent humanoid healthcare robots or whatever. But there's a principle involved that someone (/ thing) has to do the work.
Yes, and that's why this basic pension can only be something guaranteed by the state. In case of war or massive devaluation or change or currency, the state (maybe not even the same one under which "rights" were acquired) can guarantee these things (and will want to guarantee them, in order to preserve the pensioners from poverty).
Not necessarily. What matters here is whether production matches demand. If the proportion of people in the workforce declines, but their productivity increases by the same amount (which isn't far from being the case in Europe) you don't have a problem.
And even that is too simple. As the population ages, demand changes. It increases im certain domains (health) so productivity increase might not suffice.
...but then of course the productivity of older people declines too, together with their health (higher unemployment, more sick leaves), so there is a lower and lower ROI as you put these people in the workforce. And then making people work longer accelerates the health decline, and so increases the demand. Except those people die younger on average, lowering the demand.
So it's a supply and demand issue, but not quite a supply and demand of workers. It's a complicated economic problem. All of this is talked about in the French debate, which is a lot more subtle than the loud vociferations reported in the news make it out to be.
If caring for the elderly is made more valuable than say, slinging JavaScript, that’s where some of the labor will go.
And the key factor is that if everyone (or their government) saved twice as much, that wouldn't help because if the worker/retiree ratios are the same, then twice as much retirement savings should simply lead to a twice higher market clearing price for that work due to "these accounting mechanizations".
You assume:
* The labor market isn't flexible, that higher pay won't attract new workers
* There isn't a wage at which workers would be satisfied meeting their basic needs.
And this makes your conclusion that the labor would simply absorb additional funding too rigid.
Why yes, looking from a whole market macroeconomic perspective, we should assume that the labor market won't magically generate an arbitrary number of new workers just because the pay is higher - the total number of potential workers is set by demographics and cannot rapidly adjust due to market pressure. The pay rate does affect the labor participation rate, but there isn't that much room for maneuver there, the changes in proportion of workers-to-retirees are much larger than what you can fill with non-working potential workers.
Well, one way that does get new workers is massive immigration of working-age people (which is the strategy used, perhaps unintentionally, by some countries), but if their birth rate and life expectancy is similar, that only postpones the issue until those immigrants themselves reach non-working age.
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.
This implied link between public pensions and demographic collapse paints a picture that social security was destined to fail because people wouldn't have children for the purpose of taking care of them in old age. The millennial generation, the largest American generational cohort, were born almost 50 years after the founding of social security. How does it make sense that public pensions motivated millennials to not have children, but not their parents?
Across all developed countries where you have demographic collapse you have societies where it becomes more and more expensive to raise children. The public pension system requires that the economy grows year after year and that becomes hard when your population shrinks. As to why the population is shrinking you have to look at why people aren't having children. And when you ask that question you get way more "I can't even afford to buy a house" and not "the government is going to take care of me when I'm old".
1. Have children and treat them well. 2. Save and invest, so capital is available for the few children of the next generation to work with.
As long as millennials are doing option 2. there isn't a problem. If they rely on the pension system, then that would be a problem.
These systems are very sustainable, and the solution to the funding issues would be best served by indexing the cutoff for contributions to inflation.
As to birth rates, how do you expect people earning less than their parents to absorb the exponentially higher costs? My son was born over a decade ago. Thanks to a moderate, common complication, his birth cost $85k. His childcare at age 3 cost as much as our mortgage.
I am only arguing with "The point is that having children is simply too expensive, partly due to cost disease in healthcare." Typically, the main cost of having children involves preschool childcare and good colleges.
> What is the financial risk of having a child who needs insulin?
How many children need insulin? Again, I only contend with the broad generalization that having children is expensive due to healthcare costs.
Insurance profit margins are pretty tiny. We (or our employers) pay a ton for insurance because healthcare costs are beyond ridiculous in our country.
All the retirement savings won't make a difference if there is no one to spend them on. If the population is expected to decline, then you better hope your retirement investments are going into technology that can yield sufficient future productivity gains.
It's apparent if you just think about the farm labor required to produce food, which can't be stored as easily and long term as money. (On that note, maybe the best retirement strategy is a whole bunch of kerosene and shelf stable foods...)
Edit: As said elsewhere in the thread, I fully agree that the problem is due to children being too expensive, not that people just expect the government to take care of them.
Social Security caps are indexed to inflation (they went up 9% from 2022 to 2023): https://www.ssa.gov/benefits/retirement/planner/maxtax.html
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.
For example, your 401k ability to pay for your retirement will depend on productivity gains , growth, saving, investments happen in the future. Those will look very different if you have 4 working age people for one non working person, vs 2 working age people for one non working one. In the extreme case, if nobody is working anymore when you retire, your 401k will likely worth almost nothing.
The problem in France is not how it s funded, but the fact that retirement incomes are way above the funding level. France, with Italy, are the only two OECD countries where retirees have a higher income that working people, which is insane. However, since retirees vote much more than other demographics, their too large income will not be touched.
This change in retirement age only partially applies to those who started working before 1995. Therefore, it is still in a transition phase, and it will take some time before it takes full effect.
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...
The central issue is that physical goods and services need to be produced around the time that they're consumed, and at a given point in time, an economy has a fixed capacity to generate these goods and services.
If you have a non-producing population, and a producing population, then the only way for the non-producing population to consume a given quantity of goods and services is for the producing population to not consume those goods and services. Whether you call the reduction in consumption ability of the working population "taxes" or "investments" doesn't change this fundamental fact, except insofar as it alters certain behavioral incentives around deferring consumption and legal frameworks around property rights.
(This isn't 100% of the story, since you can "lay claim" to production of working people overseas via international investment, but is accurate in broad strokes.)
Populating aging happens over time, not all at once. Overall production also changes over time. It’s not inherently true that for “non-producing” (not sure exactly how you’d define that) people to consume goods the “producing” people must consume less, at least not relative to past levels of consumption.
"Non-producing" people are retirees (as well as children). People who don't produce market goods/services that make up the vast bulk of our material needs.
Isn't this true of capitalism generally, and not just for retirees and young workers?
The "non-producing population" is commonly called "capital", and the "producing population" is commonly called "labor".
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).
This is wrong. We have an institute that has one mission. Evaluate its sustainibility, and it disagrees with you.
So it's why polls quite unanimously report that 70% of the population is opposed of this reform on a quite developer friendly axiom : "When it ain't broken don't try fix it!"
Bonus fun fact 1 : Even with the cherry picked scenario of our gov the system might be in slight imbalance starting 2027 while it's currently balanced. To put this in perspective 10 years ago the same organisation predicted a great imbalance for today.
Bonus fun fact 2 : The 70% rejection poll is an average. One of the only group that is less rejecting the reform consist of already retired people. There is a growing resentment against baby boomers in the xyz generation.
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.
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.
The thing is I distrust big corporations almost as much as I distrust big government, but at least, it's easier to move to a different company when one of them really sucks, provided there's a bit of competition.
With governments, there's no such thing, you're stuck with them for 5 years, and their power only keeps growing.
The French gov, like most others, basically only seeks more money and power over society. Whatever the ruling party.
There are many other countries on Earth.
Many of them measurably better than France on very many dimensions.
Go give them your hard earned tax money instead of wasting it on a lost cause.
a biased model that is financed by private pension funds and led by mckinsey… I have a very simple way to make enough funds to maintain current retirement age : increase our salaries. france income per capita is the same for the past 20 years, if you raise salaries it will raise how much money goes to pension funds. problem solved
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.
It's going to be 10 more rough years, until 2032, and then the shape stabilizes. Changing the age from 62 to 64 won't change anything to this generation impact on the system.
Now is the 2032 shape sustainable with the current retirement age ? that's another question, but it's not a matter of protecting against the baby boomer impact.
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?
That's why.
You may work yourself to the bone but pretty much anybody in the US can make a killing.
when you're working 16 hours a day 7 days a week you don't really notice much outside of the factory floor anyway. Whether it was remote or in Manhattan you wouldn't feel the difference as you do nothing but work. I was working ~112 hours a week when I was in Alaska.
And the settlers nearly starved the first few winters in every colony despite that.
And in pre-industrial times, when 70% of the population were farmers, land was a direct, and immediate proxy for wealth. Wealth that stayed with you and your family. You were the owner, instead of some shitty sharecropper for a landlord.
[1] I mean, aside from the natives.
As for land being a proxy for wealth that stayed with you, that worked out OK as long as there was lots of land for people to grab up and claim as their own (or take from some natives who don't have the weapons technology to fight back well). And it's the reason people colonized North America: because all the land in Europe had been claimed by some shitty landlord. These days, that's all gone: now you're stuck living with a shitty landlord again, and there's no new continents left to colonize, so we need to come up with a better economic system.
I mean… yeah. That's not really related to the thread's topic, though.
> why would you expect that the first-third world gap to not continue to normalize?
I don't think that's the criticism. "Blocking our wages" probably isn't increasing the wealth of the people in Cold War non-aligned countries: is the money going to them, somehow? The direct effect is that employers (= the people who would be paying the extra wages) don't have to spend as much money paying their employees. What knock-on effects would lead to that improving things for people?
Fair to whom? Why should middle class in the West vote to allow outsourcing to cheaper countries? That will just destroy their well-paying jobs in exchange for some cheap Chinese goods and Indian call centers.
I also feel the same way about current "remote first" trend - American software engineers are shooting themselves in the foot by embracing remote work. Wait until your salaries get normalized to Brazil or Indian levels. Anecdotally, my company had multiple rounds of layoffs and has started hiring all the backfills in the third world now.
Because you can run but you can't hide. If you institute protectionist policies, you will in turn become less competitive. Hence, you will require even more protectionist policies, that in turn will make you even more uncompetitive. In the end, you will have higher prices for lower quality domestic products.
I don't like gravity, but it doesn't mean I can ignore it and jump from tall buildings. While economics is not an exact science (probably not even a science), you cannot ignore its principles.
If protectionist policies worked, we would have figured out by now. The truth is that limited protectionist policies might work to give a push to a nascent industry in the short to medium term. But it does hurt the country as a whole in the long term.
less competitive against whom? If West had not shipped its factories to China, I am sure West would have still stayed competitive against China by miles. In fact, by shipping its technical know-how for manufacturing, West has allowed China to become more competitive.
> I don't like gravity, but it doesn't mean I can ignore it and jump from tall buildings.
Sure, but outsourcing is nothing like gravity. It is a mixture of greed on part of corporations to reduce labor costs, naivete on behalf of politicians who thought China and others would welcome Western values along with Western jobs and stupidity on part of voters who traded short term cheap junk for long term stable jobs.
Consumers have vastly benefited from that competition, far in excess of any losses from the domestic automaker labor group.
It’s not entirely voluntary, but if you want to see what protectionism and economic isolation will bring, go visit Cuba. Then hop over to Grand Cayman, Grand Bahama, or Puerto Rico to see what being more integrated but competitive has to offer.
Also, if the long term cost is "Western lifestyle regressing to mean" (original context I replied to), I'd still prefer crappy cars to preserve well-paying jobs.
Hasn't its neighbour and biggest economy in the world been levying an embargo on Cuba for over half a century? Doesn't seem like the appropriate example for your argument.
Trade helps poorer nations more than it helps richer nations, but it helps both.
There is no justification for the embargo. It was Cold War aggression, pure and simple, now sustained for the last decades purely because of electoral reasons.
Agreed. Fundamentally, if you want to institute protectionist policies for labour, you also need capital controls to prevent all your businesses from exporting their operations to avoid these policies.
I don’t understand why this isn’t common sense.
> some cheap Chinese goods and Indian call centers
Then again, if you have such a naive view of globalisation, you probably need to read more.
> a naive view of globalisation
I am talking about jobs in Western societies which were relocated elsewhere. And I admit that my views might be naive. But it is on you to convince Western middle class that shipping their jobs overseas, without an equally good job or social safety net lined up, is actually better for them. If you are just going to move jobs in the name of efficiency and let the Western labor rot and fend for itself, you are going to get Trump, Le Pen, AfD and Brexit.
In this whole thread, I still haven't seen a compelling case about how getting some goods cheaper / better is a worthy tradeoff to moving my stable job overseas.
I’m just talking about reality - where Western governments, companies, and manufacturers decided that profit trumps employment. At the same time, without cheaper goods, given wage stagnation, consumers couldn’t have afforded local goods anyways.
It’s quite complicated really, and I don’t see a solution in capitalism.
I mean if you believe, as I do, that money (especially at trillion level) is direct substitution for power over people and even whole societies then what happens if we let this global game of Monopoly to play to its seemingly inevitable conclusion ?
Isn't this somehow antidemocratic in nature?
And if you notice that inheritance is not unlike inheriting stance in aristocratic societies this capitalistic abstraction of ownership through money seems to crack.
Regarding the rich having an outsized influence in politics, I do agree, but I think the solution is to get rid of PAC's. Give the rich the same donation limits as everyone else. Strict legal enforcement should be put in place.
I believe if you set a limit on an individuals net worth, the economy will lose one of its major drivers and job creators will potentially just hit that net worth, shrug and shut their companies down or pass them on to less capable people costing millions of jobs. Depending on the net worth cap, this could happen relatively early in a companies growth.
I do strongly agree with a strong inheritance tax for individuals over an arbitrary net worth, something in the hundred millions range.
Of course they don't, they just take loans against their assets. The banking sector is happy to provide them with liquidity at almost no cost.
This is a really intresting intuition. My off the cuff resposne would be something like this:
So what? This does not mean anything without understanding what is the social impact of the jobs that were created - I have a bit of doubt that all 80000+ jobs at Facebook is really a net benefit for a world as a whole.
I'm from former Eastern Block country which went through full blown comunism era and we really did not need billioners to help create unlimited amount of bullshit jobs.
And what is more important for me, as I'm in the process of going through Shirer The Rise and Fall of Third Reich, and it had a real impact on my understanding of democracy - I believe at this point that it is paramount to create system in which no single individual or party has the ability to accumulate infinite power, no matter what cost it bears for economy. If anyone have some reservations - find the part where the infamous German "leader" explains to his generals why the war with west is inevitable and why it has to happen now and not in next few years.
Those 80,000 jobs may not have a social impact as far as moving the world in the a desired direction but what jobs do?
Does a plumber? A teacher? What if they are not teaching what the party in charge wants taught?
Are we going to put someone in charge of determining if a job has meaning and eradicate the job if they don't? What happens when a different political party wins election and starts eliminating positions that the prior party thought had meaning? Can we say certain political parties have no net world benefit and remove them from contention?
That much power in government hands is a slow march back to the communism from which your country escaped.
Hitler was able to do what he did because the government had so much power. Less power in the hands of the government prevents that, not giving the government more power to police who can earn how much money and what jobs are worthy of existing.
I understand what you are saying especially when taken in the context of your childhood but I just disagree with giving anyone the power to enforce it.
So let's start with the obvious - I was not trying to propose "big government" as a solution here, sorry if this was not clear enough - I completly agree that using government as a substitution for private ownership mostly does not work.
My main point was "power accumulation" in hands of few or even one. Elon Musk is good example here - his accumulated wealth give him real power to decide what life of thouseds of people will look like (for better or worse). You may claim that this is not politcal power, but it still is power nontheless. And thus lifes of thousends wages on his mental state which at any moment can go full Caligula. I know this will sound idealistic .. but I do not like to live in a society where we leave so much power in hands of one individual. This also applies to politicians.
I know trying to solve this problem will probably throttle economic development but as lord Farquaad said "it's a Sacrifice I am Willing to Make" :).
>>Those 80,000 jobs may not have a social impact as far as moving the world in the a desired direction but what jobs do? >>Does a plumber? A teacher? What if they are not teaching what the party in charge wants taught?
This sounds a bit nihilistic - extrapolating this line of though leads quite easyly to conclusion that nothing matters (and as Camus has written we are then only left with one important question to answer).
>> Are we going to put someone in charge of determining if a job has meaning and eradicate the job if they don't?
Aren't we already doing it with capitalism and statism? :) Or did I missed ChatGPT-XXX taking over the world already (I swear I was trying to pay attention :))? But in all seriousness - I only propose limiting power of individualsm institutions and corporatios, not giving it to government.
>> What happens when a different political party wins election and starts eliminating positions that the prior party thought had meaning?
And what do you think happes when new CEO takes over company? Because I have seen far worse cleanings done through corporations that were taken over by competition than the biggest governments cleanigs of institutions done by new party taking over government (I happen to have some inside access to local govermants organizational data and know some people that worked for big companies that were raided).
>> Hitler was able to do what he did because the government had so much power.
Still the underling problem is power accumulation - governmant from my point of view was only means to obtaining it. I believe that we are living in times when new doors opened for power accumulation that will grant some individuals almost comparable power. And I would gladly sacrifice parts of economic development potential to do that.
The idea of joint-stock companies is antidemocratic in nature. If you were to propose that people could buy votes in parliament, everybody would (rightly) be outraged. But this is how joint-stock companies work: workers have 0 say in how things are run and how resources are allocated, owners can buy and sell voting rights and dividend rights.
When I was in morocco 10 years ago one of the buckles for my motorcycle pants suspenders broke. I was able to get a local leather worker to create a pattern from the broken piece, craft the replacement, and integrate it into my suspenders overnight for under 5 USD. This was arranged by the hotel I was staying at, and wasn’t some special inside knowledge on my part.
The mass manufactured replacement were more than 10x that cost, and made of lower quality materials.
Morocco is not a rich country, but a lot of the world is even less wealthy.
Yes. Capital let's you be more productive. Rest of the world is building up capital to increase productivity, but is also increasing demand. Resource limits are blips on the market.
The world standard of living should be equalized globally but it should be the present first world standard, not the present third world standard.
This is certainly possible given increasing world productive capacities.
Certainly the phone you’re using and almost certainly the clothes you’re wearing were not made by people making a median Western wage.
If the third world raises to the first world standards, then great. If that process involves first world standards falling to meet third world ones in the middle at the cost of first-world middle class, then there is a big problem. See where Trump and Sanders got most of their votes and you will start to see a pattern here.
One of the biggest differences is functioning institutions. As bad as some first world governments can seem from our perspective, they’re way better than the kleptocrats and warlords who rule some parts of the world. And yeah, when you have functioning institutions, you do end up with smarter and more productive populations because children can go to school instead of slaving away in the cobalt mines.
Almost as if there's multiple supply chain disruptions (from pandemic to ukraine) causing goods to be more scarce, causing consumers to bid up the prices for the goods that remain.
> the US COVID-19 inflation is predominantly a sellers’ inflation that derives from microeconomic origins, namely the ability of firms with market power to hike prices.
I understand that monopolies and barriers to entry can exist. The government should be much more focused on eliminating those rather than central planning through things like pensions that are shockingly complex and have a penchant for unintended consequences. I believe in a social safety net but markets with a little guidance can do most of the government's work for it and avoid be better at avoiding a ton of pitfalls like runaway inflation.
But then everybody's salary stagnating hasn't made the cost of goods stagnate. There's no such simple and direct link between the two.
Example: supermarkets where I live co-ordinate their prices. There are 5 big chains and they all increased prices in tandem (and margins, so nothing to do with increased costs). They get slapped with a 100 miliion euro fine every year or two, but what do they care? It's a drop compared to the amount they profit from the cartelisation.
Because Apple, Tesla and the international market for fungible goods like gas or grain, doesn't care about the stagnating salary in your country. They'll still want X USD for their products.
French government is not elected either. Like all European countries, by the way.
In France think about it, the majority of the working population voted for Marine LePen, the majority of retired people voted for Macron, Young non working people voted for Melenchon. Hence why macron needs to satisfy his base, old people that retired early and now wants us to work more so that they can enjoy more their stress free life while everything is more expensive for the rest of us.
No, for equivalent 'net money on your wallet after tax' a company pay more tax for employees than for company owner.
Without detailling too much (and by choosing an 'arbitrary but realistic situation') the are two ways of getting money from your company to your personal bank account :
- a specialy taxed "company owner" salary (you can make simulation here : https://mon-entreprise.urssaf.fr/simulateurs/eurl , yes I choose a specific company category, but it's a common one, you can compare with a the 'standard' employee tax numbers : https://entreprise.pole-emploi.fr/cout-salarie/ ) which give you benefit from the social security system and which cost a bit less (for a standard company owner range of pay) than an employee salary.
- A 'company profit share' at the end of each year. You 'decide' how much you company profit was this year and that you want to give to owner, you pay a "less important tax than on salaries" give it to the owner, and then they pay their personnal income tax on it.
The optimisation game is to ensure yourself a sufficient salary to have a good social protection (and other perk like being abble to rent/buy/loan money easily) but also benefit from company income share wich is less taxed.
I dont even talk about legal trick to avoid parts of the company income tax, wich is way more complex to handle than a salary.
The law defines the minimum legal wage. History has shown that increasing the minimum wage generally quickly end up increasing all salaries.
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.
The COR (Conseil d'orientation des retraites) has 4 working scenarios and only a single one of them has the retirement system going temporarily into the negatives. The situation is not alarming at all. In addition, there are a lot of solutions that have been on the table to help the retirement system do even better and allow people to retire earlier (for example paying women the same as men: the salary resulting increase will mechanically make more money go towards contributing to retirement funds).
If the GDP portion dedicated to the elderly is maintained at around 14% the system has nothing to worry about, the goal of Macron's reform is to lower this number because he prefers to use public money to fund private companies that are already making profits (through tax mechanism such as the CICE or the CIR for example).
Also, low salaries actually means less money "funneled to the retirement system", since this money is a percentage of salaries. Also, low retirements income means people still working have to financially support their parents. The elderly have to be supported one way or another. The question is whether you choose to do it collectively as a society, or go with the individualistic solution that won't work for everyone.
Secondly, 14% of GDP is massive, workers have been paying more and more towards the retirement system, salaries did increase a lot already, it's just that all of the increase went towards retirement
> The elderly have to be supported one way or another.
Nice way to avoid the fact that France spends a lot of money towards high retirement salaries which don't need it. Additionally low salaries live less longer, making the system even more injust.
The way to fix it and transform it into a social system is to tax the high retirements for the benefit of the workers. In a social system the money should go towards the people who need it the most and not the opposite, France's retirement system isn't a social system anymore.
> 14% of GDP is massive
That's very subjective, and even someone agreeing to call it "massive" could not necessarily see a problem with that, if we can afford it (which it seems, we can).
> Additionally low salaries live less longer, making the system even more injust.
That's a good point. And the reform Macron is trying to pass will make this even worse: low salaries live less longer and are already dead or in very bad health by the time they can retire (and a big part cannot even work up to that age). Making the minimum retirement age two years later will greatly increase this injustice: most low salaries will contribute their whole life to pay for the pensions of the richer who actually still have living time in good health after they retire.
Concerning the high retirement salaries and the necessity to tax them more, I mostly agree. But that's not at all what Macron's reform is about.
No, they do agree with me, read it yourself again, in the most optimistic scenario, France needs to wait until 2045 (!!) for the deficit to be reduced. That's terrible in itself, and that's the most optimistic scenario as well... What I would consider reasonable is a few years of deficit, not from 20 up to 50 years.
> That's very subjective, and even someone agreeing to call it "massive" could not necessarily see a problem with that, if we can afford it (which it seems, we can).
You can't complain of stagnating salaries if you are okay with increasing the share of workers salaries going towards retirement. "we can afford it" doesn't seem to be the opinion of the people concerned paying it.
> Concerning the high retirement salaries and the necessity to tax them more, I mostly agree. But that's not at all what Macron's reform is about.
Let's not pretend like anybody else is proposing this solution either.
Then how do you explains the massive strikes and demonstration? Do you think these millions of people and the millions more that support them are all dumb?
> Let's not pretend like anybody else is proposing this solution either.
Politics don't for obvious electoralistic reasons, but the idea is at least discussed in some unions.
Not many people understand how the retirement system works in France and its direct impact on salaries. It's not the simplest retirement model either and people don't take the time understand it.
> Politics don't for obvious electoralistic reasons, but the idea is at least discussed in some unions.
Sure but then what's the point? There's much more people retired than people working, the democratic system is broken.
Why would you bother to understand it? It will have changed, and be much worse, by the time you retire. The state is, of course, counting on people misunderstanding the fact that there is not a single guarantee you get paying into this system, as nothing stops politicians from changing it.
And, as you point out, plenty of factors force, to a lesser or greater extent politicians into making the system worse.
So why bother understanding it? France is like most European nations: either you own a comfortable home + some supplemental income by the time you retire or you're f*cked.
(source: my dad was a teacher (in a neighboring country with a very similar system), and is now on the pensioner side of this system. He is single-digit percentage points above the minimum, despite his ability to show a contract, with the government, stating explicitly, in 3 languages, that he's guaranteed at least 40% above minimum. But, you see, "a decree goes above contracts". The state cannot, and will not uphold it's promises made under this system, so it doesn't matter. They just want you to work your ass of, and pay taxes correctly to extract maximum work from you while not upholding their end)
it states that in 10 years there will be 20 billion deficit , that doesn’t include the raise of salaries to match inflation (it was removed in france in 1983) I ll wonder what would be the numbers if we do this simulation but pretty sure it will be positive.
Finally, 20 billions is nothing for france, we spend 40 billions on immigration so by your logic we should just stop pouring money and lock our country?
You have to realize that debt and GDP spending are competing with each other.
So it's EU commissar (appointed) -> Foreign Minister of member country (appointed) -> Coalition government (appointed) -> Head of the executive of member country (ie. the king, in most cases) -> Parliament of member country (elected)
Certain member countries don't have very stable coalitions, which means there's always a few EU commissars that don't have the support of their host governments. This is especially true now that Christian parties are in the process of being voted into irrelevancy in a lot of countries (unfortunately to be replaced by rightist and in some cases extreme-right parties)
So, what you said. With one very important difference: there isn't one level of indirection, there's at least 4 or 5 levels of indirection. It isn't very democratic, especially since EU law means these people have law-giving power, power to override the parliaments of member countries (that would be why Christine Lagarde proposed using that power to freeze wages)
US supreme court judges get nominated and confirmed. The president is elected (well, kind of, but most agree that he/she is elected by the people even though the electoral college is mixed in there) and then nominates a judge and the Senate confirms the nomination. I don't think it's common to call the supreme court judges 'elected' though, despite their selection by two elected parties.
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.
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.
Do you have any argument that these two questions should be approached the same way?
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...).
It can be sustainable, even at comprable rates, especially with fewer younger workers if wages are allowed to increase to meet labor demand.
The fact that it’s running out of money
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).
Unfortunately it doesn't work for everyone, though, and a traditional pension is still needed as a backup.
The system that GP described forces people to put their money into superannuation funds (not government) that invest on their behalf, which I'd say is pretty competent government policy. For the most part it works well, but it does distort the market (e.g., super funds buy housing stock, old people have more money available to them), and not everyone can contribute enough before retirement age. The counterfactual would be a whole lot of people that have spent all their savings by retirement age.
Maybe you were referring to another country though.
There is also the option of running a self-managed fund, where you invest the money yourself.
That said, it has created an incredibly politically powerful industry managing $3.3 trillion, which comes with its own issues.
For further clarification, it's the employer who has to pay the super contribution, not the worker.
And if anyone is about to claim "same thing, if the employer didn't have to pay that, they would pay it out as additional wages", my only response is a heartfelt "lol".
I can't see how it is not the same thing. The employer looks at the total cost of employment and works out if it's worth hiring someone. If that cost is 10% higher because of super, that means there is 10% less to go to (direct) wages.
Now granted, that will differ at different points in the labour market. For minimum wage jobs, I agree that employers wouldn't suddenly start paying 10% above award if super was scrapped.
American Social Security had an age of 65, but at the time of its passing life expectancy for American men was 58.
As you can already read sidethread, a life expectancy of 70 means huge majorities of people living well past 70. Every baby who dies at the age of 8 months means half a dozen people die in their 80s. (Or, you know, several dozen people die in their 70s.)
Even if lifespans weren't skewed low, which they are, 50% of all people would live beyond the life expectancy at birth.
That was life expectancy at birth. It makes more sense when considering retirement system design to consider the life expectancy of people who are at least old enough to be in the workforce.
Of the people who were 21 when Social Security passed around 65% of them survived to at least 65.
Of the people who were born around the time Social Security passed, over 70% of those that made it to 21 made it to 65.
I think still today that is a deciding factor, as some economies have high unemployment and there retirement can be cheaper and better than caring for unemployed people at all ages. And other economies have high employment and would even benefit economically from a larger workforce.
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.
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?
So I'll go to the bank tell them I'm just not going to pay the last year or two of my mortgage?
Or a car dealer and tell them I'm simply going to pay less for their car without them being able to say no?
You just said the same thing - "it's only a small inconvenience, so it's fine".
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
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.
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 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...
The ability for a government to not slip is crucial for slowing the decay.
How about having the government actually do better and be accountable for it instead? How about Macron promising to follow the CCC's recommendations on dealing with the climate crisis and instead throwing it all in the trash?
That you attribute my remarks to some kind of misled social media craze is what's actually messed up in this exchange. And as far as I can tell, the guardian or euro news are far from being simple tiktok ads, but people who refuse to see things will continue to find arguments in bad faith to do so.
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.
I... wouldn't? It just wouldn't have been taken from me.
Why would I think it would have been given to me? I'm perfectly aware it's money I earned in the first place.
In contrast with stimulus checks, for example, which were given, because even if you earned no money at all you still got them.
At the end of the day, there's no difference from a fiscal perspective between handing a company a $1M check and giving them a $1M tax deduction. While I agree that this is technically a distinction (ie. tax deductions require a tax liability to actually be used, as opposed to cash which can be spent as-is), I don't think it's relevant here because the companies were already known to be making money. Even if they had a bad year and the tax credits could only be used on profits, they'd likely turn a profit sooner or later.
Tax deductions are equivalent to tax credits once you factor in the marginal tax rate.
>and even then there is a substantial difference from a fiscal perspective.
Specifically... how? Giving a company a $1M check has the same effect on the government's balance sheets as giving them a $1M tax credit, given the assumptions listed in my previous comment.
But the point is that there is meaning to the words give and take. It's about language not finances.
If you take less that doesn't mean you're giving. Similarly if you give less that doesn't mean you're taking.
Words matter.
Businesses don’t count their VAT as profit either.
If you start with the idea that the money belongs to the government and you have to ask to get it back (via the legislative process) the discussion is going to be very different than if you start with the idea that the money belongs to the people and there has to be a very strong reason for the government to get any of it (via the legislative process).
I don't know, I feel like it's somewhat reaching to make them alike. Government taxes are virtually universal across an entire country.
Those two mindsets are very different and I would argue is one of the ways that the left and the right are different.
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".
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.
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.
Tax apply to income generating people by design. You pay very little tax in France if you're poor (as a percentage of income). Macron reduced tax on what is comparable: corporate tax, flat tax on certain income such as dividend. Now, did he go overboard? I will let you judge: https://tradingeconomics.com/country-list/corporate-tax-rate with https://tradingeconomics.com/country-list/social-security-ra...
France has been very generous during COVID, has been very generous during the Energy Crisis with the `bouclier tarifaire` that has helped most the poorest. We really have to put that in a world context where most does not get anything during time like this. Can we really say that France is boiling alive its people?
To the people whose job it is to advocate for the privileges of the wealthy. And that is a frightening number of highly-trained, well-paid people.
They are starting with the foundational belief that taking any privileges whatsoever from the wealthy will end in complete catastrophe for all of society. This is, of course, not true, but it's a story that pays well to tell and re-tell. So, it gets told a lot, particularly here in the Anglosphere, and also apparently now in France.
It is true that this reform (like all others before it, they revolve every 5-10 years in France) is only modifying the system at the margin, so it really is a slow boil.
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.
FWIW it looks like there's a injunction against the law being implemented while courts decide on whether it infringes right to protest [1]. From what I understand though, that means any civil suits trying to use that defense would be on hold.
[1] https://wusfnews.wusf.usf.edu/courts-law/2023-01-25/floridas...
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.
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.
After national defense, you mean.
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.
If you want to attack efficiency, you have a lot of work to deeply change how the government, and in fact many aspects of our public / government works. How they use contractors, the kinds of contracts they're allowed to enter into, the reviews and permitting and public commenting they need to engage in, unions, labor rates, etc. That would be as big a challenge as the above debate.
That isn't fraud or corruption as most folks understand those terms. It is more simply not designing for efficiency. People are more concerned with other factors like fairness transparent process.
I've dealt with both commercial contracts and government contracts.
Commercial contracts are more lucrative with overhead rates that are truly illegal on govt contracts.
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.
This is why contracting out services makes public sector CFOs so happy.
Replace a large % of your civil servant workforce with a company that specializes in that one function, eat potentially higher or inflated OPEX, but no long-term costs regarding pensions. If the requirement for services change, scale down the contract.
There is magic, the rise of productivity. It just didn't reach the ordinary people.
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.
Luckily, most Americans have pensions outside Social Security, so you won't end up in a situation where nobody has a pension if it collapsed. It would still be bad, but not as bad as if the federal government had a pension monopoly.
If I was a pension rep or director for the cops, teachers, firefighters, or whatever, best believe I would maximize my members' benefits to the maximum extent the law and guidelines allowed. That's really all that is happening with these unions. Sure, there is some corruption going on (when isn't there in any large organization, much less government agencies) that isn't helping matters, and there are idiots that are making things worse. But these issues are in the seriously tiny minority of the real problem: People who could not do math properly or were corrupt from the get-go set up an insane pyramid scheme built on ridiculous population growth and capital appreciation models, and no one wanted to stop the music for decades on end.
The most likely scenario by a WIDE margin is that pensioners are wiped out or forcibly restructured in a court of law, getting a small reduced fraction of their promised ("guaranteed") benefit. It just is. In America, we don't fix gradual issues - there is simply no incentive to do so. We ignore them until they blow up and then we do something about it. This sounds stupid, but it's perfectly rational on an individual level.
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.
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
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.
No, we that served don't.
> They spend this money in order to prevent having an actual war later.
Having spent a good part of my life prepping for Fulda Gap defense against the USSR I know that is incorrect.
The US has spread NATO right up to Russian doorstep, on the cusp of inside their early warning systems for missiles, having fomented revolution and armed the Western Ukrainians in their civil war against the Eastern Ethnic Russian Ukrainians.
Iraq, Afghanistan, Syria, the Arab Spring turned Winter - more of American Adventurism than critical national security objectives.
Am all for a strong military, just not it being overutilized for incorrect purposes.
That's... interesting.
I don't know what point that serves, but I do find it difficult to see membership as something imposed on them. If they weren't allowed to join, I don't really know where that would go?
To this day, Fulda Gap Defense is a part of US military practice in Europe. Most people that work for a NATO flagged unit practice this also.
> but don't think that the countries that were beind the iron curtain should have been allowed to join nato?
First of all, US leaders from the past have made numerous promises not to extend NATO that far East.
When you take what was intended to be a defensive alliance and extend it right up to a potential enemy's doorstep, inside their missile defense early warning shield, when you foment a number of color revolutions in another country's sphere of influence (Ukraine, Kazakhstan, Georgia, etc), and threaten their sphere of control, you are not just on the path to war, you are provoking it.
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?
We can start changing it today, and save ourselves the pain of having to deal with it when we retire.
It would also improve the quality of our day-to-day life on many dimensions, long before we do.
What the grandparent poster is alluding to is that our culture is sick with a myopic, penny-wise-pound-foolish mentality, where people are personally spending tens of thousands of dollars for a service that could be provided collectively for thousands of dollars. While also complaining about outrageous taxes.
The infographic sliders are reinforcing the idea that “the money must come from one of these things” when it really should just come from progressive taxation at a reasonable rate instead of letting the wealthy off easy.
The Republican Party cut the taxes of the wealthy in 2017 and increased the deficit by doing so. They can’t be trusted to give advice about government spending because their basic party platform is that government is bad, the wealthy need tax relief, and their actual legislative track record is increasing the deficit. And yet here they are telling us through their study and this complimentary article that the only way to cut the deficit is to fuck the poor and the elderly.
https://www.npr.org/2017/12/19/571754894/charts-see-how-much...
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
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.
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.
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?
As populations age into a higher percentage of retirees, the system is forced to cope with more people who are purely consumers, and contribute nothing to the system. In a post-scarcity world, this would not be a problem, but currently with the oldest generations owning the vast majority of wealth and real estate, and with college, housing, and many costs of living having inflated 3-20x since the older generations were younger, it is a problem.
Giving old people money for free when their 10x more valuable houses inflate the market, keeping the younger generation from being able to start families, is a killing blow for population growth and the livelihoods of younger generations.
Also interesting that the inflationary effect of this phenomenon is starting to be recognized. A large fraction of the population has nothing to do but sit around spending money. I'd never considered this point before now, but hopefully the Fed takes it into account when they decide how much to hose the rest of us with high interest rates (which the Boomers also DGAF about.)
Still will lead to inflation though, as you point out, since production will drop.
I also wonder what that means for index funds and the stock market in general. Every month massive amounts of retirement savings get directed there because there is really no other place to invest. What is gonna happen when contributions turn into withdrawals?
The status quo is so bizarre. Human life has no inherent value unless it makes continuous contributions to "the economy". It would be economically most efficient to drop dead on the day you retire. Thanks, human!
All of this to keep a machine running that wrecks the planet and everything living on it, including ourselves. Probably some 50% of the economy is pure bullshit that nobody asked for, just keeping each other busy.
At some point we lost the plot. The economy doesn't work for the people anymore and drastic productivity increases have somehow not really improved our lives in terms of freedom, time, physical/mental health, quite the opposite.
It’s the software running on all our “wet ware” that convinces us to value productivity and money over human life, the environment, or happiness. It is the paper clip maximizer and it’s happily churning away.
But we’re not maximizing paper clips we’re maximizing profits .
Why would we value the environment over human lives? That just seems like nature-worship.
Why not?
Obviously this cannot be true. "The economy" isn't some magical object somewhere, but the emergent behavior from all our needs, desires and faults. If something is truly not wanted by anyone, nobody will pay for the work to get done. That's the magic of the invisible hand of capitalism. Doing stuff that truly nobody wants and getting paid for it is usually more of a feature of socialism and bureaucracies.
There are cases where individual motive leads to macro behavior that's not desirable by any individual, those are the cases where we need to tax negative externalities or regulate, depending on the problem. These issues usually don't emerge though because nobody wants something but because too many wanting a thing creates side effects that nobody likes. The book Micromotived and Macro behavior by Thomas Schelling covers that nicely.
It's not magical, granted. "The economy" is a subjective state (eg metrics) that solely resides in the human mind, rather than a singular thing.
It most certainly is and I have not encountered anything to indicate otherwise. Individual transactions are no more relevant than GDP is. These are individual metrics or acts that influence those metrics, which try to quantify aspects of an aggregate concept.
I would frame it with a different emphasis. Want is inherent to living organisms, humans and others alike. The economy discovers, amplifies, and satisfies our wants. But it is also important to remember that economies emergent, not some external object imposed on humans.
Is that an issue? There's not much demand for 8k ohm SMD resistors from people, but people do want smartphones that require 8k ohm SMD resistors to manufacture. The same applies for stuff like managers and other "bullshit jobs". Nobody wants them, but they're nonetheless required to keep the company/economy humming along. And if they're actually not required, then the economy that supposedly cares what's "economically most efficient" should have eliminated them.
There is a mountain of trash end-products out there, which marketing is creating the want for. These products may not otherwise exist without the manufactured want, and could be removed entirely without much detriment to the very small amount of people that conscientiously decided of their own free will they wanted that product.
Marketing is what makes something like a Peloton a viable business, rather than those customers just taking a regular static bike and adding a tablet mount to the handlebars.
In some senses, I think the economy isn't always looking for the most efficient methods. I believe there is some political input involved to keep everybody's heads down under a quagmire of pointless work, so those people (even in a democracy) don't start asking too many questions. Some people could easily be automated out of work, yet they aren't, despite the efficiency it would bring.
To each their own, but I'd be fine with a huge amount of (what I deem) useless products and jobs being removed from the market. Most serve very little real purpose and as somebody else stated, are destroying our planet and wasting away the best years of our lives to attain them.
One of the best known examples is the PR-manufactured tradition of diamonds in engagement rings, which sky-rocketed the demand for diamonds in the general population.
Another great example is the huge industry of "supplements" which is legalized fraud on a massive scale, selling useless pills to people with a promise of making them better in some way, and relying solely on the fact that it's hard to prove that they don't actually do anything since their claims are so vague.
These are prime examples of entirely artificial demand created out of whole cloth through manipulation. There are numerous other cases of more subtle effects, where marketing is significantly inflating a demand which would exist but be much smaller otherwise (toys, smartphone upgrades, new cars every few years, beauty products, fashion etc).
Here's where the money went:
https://www.federalbudgetinpictures.com/federal-spending-per...
And that doesn't include all the state and local government.
https://www.reuters.com/article/us-usa-fiscal-deficit-idUSKB... (Republican tax cuts to fuel historic U.S. deficits: CBO)
Sources at bottom of the first link.
This doesn’t include healthcare cost inflation due to a grossly inefficient healthcare model.
https://www.healthsystemtracker.org/chart-collection/u-s-spe...
https://www.commonwealthfund.org/publications/fund-reports/2...
The US does have a lot of sovereign debt, no doubt, but that’s not why Labor isn’t seeing a greater share of the productivity gains since the 70s. A loss of collective labor power and 10% of the country owning 89% of public equities gets us here.
To arrived at an improved end state, one would need more unions and labor organizing, as well as perhaps ratcheting down the work week to 4 days.
https://www.epi.org/productivity-pay-gap/
https://www.epi.org/blog/growing-inequalities-reflecting-gro...
https://www.cnbc.com/2021/10/18/the-wealthiest-10percent-of-...
Globalization seems like a major factor that's often ignored for that. We had productivity gains. We didn't benefit from them as much as expected because people in Asia had bigger productivity gains. Joe six pack now competes with people in China working 996 instead of just his neighbors like in the 70s.
The other political sports team cuts taxes for the rich too. For instance they recently removed the cap on the SALT tax deduction which primarily benefits rich people, largely in coastal cities, i.e. those most likely to vote for and donate to them.
Some members of congress, apparently from both major parties, are proposing legislation to raise the cap from $10,000 to $100,000 or otherwise raise or remove the cap. But these proposals are not certain to go anywhere.
You mean that 50% of the economy is bullshit that you think nobody should ask for. You and I may agree that developer at an online gambling company is economically useless, but the their boss certainly doesn't and the gamblers probably don't either.
Even if we accept your premise, you can't just assume that tanking the economy will only cut out the useless jobs instead of the useful ones. Useful jobs are perhaps more likely to survive, but that's not always going to be the case. During the next recession, people will more likely give up on a solar roof than give up gambling.
> The economy doesn't work for the people anymore and drastic productivity increases have somehow not really improved our lives in terms of freedom, time, physical/mental health, quite the opposite.
People's lives are objectively improving. It mostly just happening in Asia though. It requires a lot of money to build power plants, hospitals, and water towers, and much of that was financed by selling "useless" trinkets from the West.
If trees could just all agree to remain short, they wouldn't need to waste resources to outgrow each other to reach sunlight.
What I love most of all about this is the fact "the economy" has only existed for a few hundred years.
I wonder how modern humans found purpose for the previous 199,700 years?
In the context of this discussion, they're contributing tax revenue. Very important for pension plans!
That said, there are some jobs we can easily label as zero wroth. E.g., jobs where people dig pits and fill them up (common in job schemes in socialist countries). These are jobs that powerful folks invent to remain in power by bribing poorer folks.
https://finance.yahoo.com/news/mgnrega-easy-jobs-may-harmed-...
A mega job-guarantee program to alleviate massive rural distress may have had an unexpected, deleterious effect: luring India’s skilled labour away from the organised sector. ... Lured by the lesser effort involved—MGNREGA jobs like digging pits and filling them don’t need any skills—they leave their factory jobs to work for 100 days under the program and then take up other contractual jobs for the rest of the year.
https://en.wikipedia.org/wiki/Nokku_kooli
Nokku kooli is a euphemism for extortion by organized labour unions in Kerala under which bribes are paid to trade union activists in exchange for allowing unaffiliated workers to unload their own belongings and materials.[1] This happens with the tacit support of political parties including those in government. In Malayalam, 'nokku kooli', translates into 'gawking wages' or 'wages for (just) looking on'.[2]Yes, but unlike in socialist governments, companies with a lot of bullshit jobs will die due to being inefficient. Thats the point of capitalism. Nobody has to work to support other able bodied humans rent seeking off their labor and capital.
But in the US this is not true, as we don't have true capitalism in the US, we have a socialist mix and the govt can sometimes prop up inefficient companies.
But in socialism, authoritarians will remain in power for decades even if the majority doesn't like it. Rent seeking is a natural state of affairs in more socialist countries.
This is the "no true capitalist" fallacy. The reality of capitalism is that big companies get to impose whatever they want on any smaller entity they want. They may either do so directly (e.g. when operating in a weak country, like Chiquita's Banana Republics) or by co-opting government (either in cahoots with an authoritarian government like the USSR or China, or a democratic government like the USA or Europe). And big corporations will always have local fiefdoms with bullshit jobs, since corruption rears its ugly head in any large org - be it Oracle or the US Federal government.
> Thats the point of capitalism. Nobody has to work to support other able bodied humans rent seeking off their labor and capital.
Before claiming such hilarious idealism, maybe take a look at the capitalist US South and the way it was built by 150 years or more of slave labor.
How is it different from the "no true socialist/communist" fallacy that is more common?
> Before claiming such hilarious idealism, maybe take a look at the capitalist US South and the way it was built by 150 years or more of slave labor.
A free market requires free participants. Therefore, the US South was not purely capitalist. Also, slavery was not the only component in building the South. Other continents and countries have/had slavery for longer periods and are poorer.
The US South was an exploitative mix of socialism + capitalism that was defeated by the more capitalist and freer North.
> The reality of capitalism is that big companies get to impose whatever they want on any smaller entity they want.
Which exploitative project by a company has the lifespan and reach of CCP or Soviet Russia's decades long exploitation and rent seeking?
The difference is Oracle can't force you to buy their database for your small company but you have to pay gawking wages even if you are a poor person.
> weak country ... or by co-opting government (either in cahoots with an authoritarian government like the USSR or China, or a democratic government like the USA or Europe).
Thank you, thats my point. They can't survive long unless they are supported by an authoritarian govt or by a weak govt.
It is obvious now that we are arguing in circles with you supporting my point. So I guess we can end the conversation here.
However, that is not how those terms are normally defined or used. Capitalism means "an economic system where most enterprises are wholy owned by those who invest the initial capital". This differs from earlier economic models like feudalism, where enterprises were typically wholy owned by a lord through hereditary rule.
Socialism is normally defined as "an economic system where most enterprises are wholy owned by the workers who work in them".
Socialism can very well be a free market system, just like workers co-ops compete today with other worker's co-ops and more traditional capitalist corporations. Conversely, an economic system doesn't stop being capitalist just because there are tariffs or subsidies or other interventions by the state.
In particular, you can have a purely capitalist system with slave labor, since workers' rights are entirely irrelevant to whether a system is capitalist or not. In fact, freeing slaves has usually posed a problem to those with capital, and so the states that forced them to free their slave typically had to reimburse the owners for their loss of property as if they had nationalized a piece of land.
Later edit:
> Thank you, thats my point. They can't survive long unless they are supported by an authoritarian govt or by a weak govt.
My point about the weak government was that a powerful corporation faced with a weak government will just hire its own mercenaries and do what it wants, ignoring any law (usually forcing people to work) - like Chiquita and other banana companies did in South America.
Sort of off topic, but I do agree that the older generations in the western world, particularly the american baby boomers, act sociopathic as a group. There is a good book about this: A generation of sociopaths. [1]
Sad to watch an entire generation hate their children and grandchildren (if they even have them). Believe me, I do not enjoy painting an entire group of people with a shit-stained brush, but it is what it is and it should be called out.
[1] https://www.amazon.com/Generation-Sociopaths-Boomers-Betraye...
Anxiety can be (and is often) situational, and anxious situations can be a catalyst for general anxiety disorder, etc. I’m not gonna sit here and pretend to know what it’s like to be an average income earning millennial, even though I am a millennial. But the fact that I’m sitting here on my nice fat tech worker salary (after still finding it quite hard to buy a house), supporting my partner who is studying and working part-time, and am still feeling the pinch of inflation, makes me completely sympathise with those earning less than me that are surely freaking the fuck out.
Maybe they have a good reason for it, which is the point? :p
Aren't you having a fundamental misunderstanding about what the purpose of SS is?
And not sure if you know, but the dollar figures are more like:
Max pay into the program: ~$300k over your 40 year working life (if you maxed out the contribution cap, 6% tax on $167k currently)
Max payout from the program: ~$600k (if you draw the maximum when you retire and luckily live a long time, ~20 years)
Not "paying in $1m, and only getting $200k", by a long shot.
I think it's quite in the opposite direction of how you think you're being taken for a ride.
Yes, this is a fundamental misunderstanding of social security. Social security isn't insurance or an investment, it's a tax that's presented as an insurance or investment in order to make it more palatable. The social security tax rates were set with the demographics and life expectancies in mind decades ago. And now that these demographics and life expectancies have changed we'll either have to drastically increase the tax workers are paying, or drastically cut the amount that people withdraw.
I prefer what we have here in Australia where you are required to pay money into an account that is actually yours, with a balance that you can watch grow, and that you can withdraw as you need when you retire.
The Age Pension is designed to support the basic living standards of older Australians. It is paid to people who meet age and residency requirements. It is targeted through the means test to those who need it most. Pension rates are indexed to ensure they keep pace with Australian price and wage increases.
If you only have the house you live in (that's more or less median) and no income (from additional rental properties | other investments) then you might qualify for a pension.
Typically people might draw on their superannuation fund to provide a weekly income for themselves although they are free to use it for their retirement plans as they see fit.
I don't know if I agree with your example figures. SS was meant to be self-funding, and lately it hasn't been. This is partially because people are living longer.
Furthermore, the decline of pensions and rise of the 401(k) has enabled Americans to blow their opportunity to save for retirement, often on things like housing and college tuition (but that's another topic).
I think that either SS needs to be THE retirement plan, or it's the 401(k). As someone who maxes out their 401(k) each year, I do not want to participate into SS. I don't want it taken out of my paycheck, because that money would otherwise go into my 401(k) (technically), which I have more control over (where it's invested), which I can draw from in case of hardship, and which I can access at 55 1/2 instead of 65.
I do think SS is a good safety net to have, and I don't necessarily want to be disqualified from it because I "opted" for a 401(k), but realistically SS payments are so low relative to the cost of living that if I found myself living on it exclusively, I'd probably be only slightly more-comfortable than if I didn't have it. It's a shitty retirement either way. You're definitely not traveling or eating out or anything like that.
Do the math but ignore inflation (because the cap and payment is indexed to inflation)
If you work 30 years at $150,000 per year, you've put in 6.2% per year ($9,300) or a total of $280,000 (your employer put in another $280,000). You can't contribute more than that, since income above ~$150,000 is exempt from the social security tax.
Assume a 3% real return, your contribution turns into $500,000 plus the employers $500,000, so $1M.
If you get the max payment (because you put in the max contribution), you'll get $3,627 per month or $43,524 per year. If you retire at 65 and die at 95, you would have drawn over $1.3M. That's more than what you put in.
I'm not sure where the "rip off" is? I guess it is if you die early, but hey, that's how pensions work.
You're using 95 when the average lifespan in the US is 77 ($522k given back to you in SS payments).
At least with an IRA/401(k) next of kin can get the money if I die at, say, age 66.
In order to pay $1M into social security and see less than $200k back you would need to die less than three years after starting to collect social security (assuming you don't retire early, which you probably didn't with a 45 year long career).
This is an extreme example.
There are probably more people who pay more into SS than they get back, than you think, whether they make it to age 68 or not. Many Americans don't even make it to 65 because they had a heart attack at 58... So yes I would agree that the odds of you not making it to 68 but making it to 65, are low, but even at 68 you're still way way underwater vs what you paid in over your career.
https://www.cairn-int.info/article-E_POPU_1204_0683--the-mos...
People were not "old" and dying at appreciably higher rates given they reached age 60 back then. The general premise that there's a lot of rich old people now is true. But the factors that have raised life expectancy are probably working against this trend, and to minor effect, as they primarily raise the current number of kids.
This is a huge departure from almost all of human history except the last 100 years in the developed world, where the family formerly was the safety net so these kind of investments and arrangements stayed in the family leaving a much stronger economic incentive for children.
except the evidence seems to point towards kids being a net drain, even in preindustrial societies.
https://www.econlib.org/archives/2009/10/was_having_kids.htm...
Would you give up planning for retirement just because all of the options were unreliable? I wouldn't, I'd pick the least bad and try anyway.
OK but nobody is making that decision "purely economically." Returning to a world of filial piety laws and no real social safety net sounds nightmarish.
The system is built on everything growning.
The premise wasn’t that you the worker would pay your own retirement but that you would pay for the current crop of retirees and then when you retire the younger age bands would be paying for your retirement.
If the worker would be funding their own retirements then they have to pay in a whole lot more.
What? That doesn't make any sense. If my social security contributions went into a bank account that was invested, I'd be way ahead of what social security will pay me.
https://www.statista.com/statistics/241530/birth-rate-by-fam...
Kids used to be cheap labor plus a retirement package. Now they are an expensive hobby. With privatized costs and socialized benefits (or, if you prefer, benefits that get sucked to the top of the social pyramid), kid production stopped making sense for kid producers and we are seeing a supply shortfall. If we fix the incentives we can fix the supply shortfall. Even a partial fix is probably sufficient -- people enjoy having kids, they just need the personal economic consequences to be less of a flaming trainwreck.
If you look at the link I previously posted, the under $10k a year group have the highest birthrate. So it can be done.
Cheap labor is no more, especially in the age of highly specialized jobs requiring education (manual labor is greatly automated now, especially in agriculture, compared to 100 years ago).
How else would we incentivise it? Money payouts on birth don't work -- only poor people would make good use of it, middle class would see the payouts too small for them anyway.
Then instead of having kids people will work on saving money for the old age.
...
people enjoy having kids, they just need the personal economic consequences to be less of a flaming trainwreck.'
You start out saying one thing and end up saying something different.
The point is, even when people have the money, they don't want kids, or at least not very many. If people truly want kids, then they are already incentivized and just need to be able to.
Parents already get tax breaks for kids. Primary and secondary education costs are mostly covered via taxes, whether one has kids or not. So there are already economic incentives, they just aren't a net benefit to the parents. I don't believe making them a net benefit is the right course of action since that has potential problems as well.
If you have 100 people of which 50 died below age 10 and the 50 that survived lived to 75 that's a lot of retirees.
If all 100 survive past age 10 but 90 of them die before age 65 you have not a lot of retirees.
The exact numbers can work out to the same "life expectancy" with wildly different results for retirement planning. And also in genealogy the high infant mortality rate makes for small average life expectancies and you might be surprised how old most people that survived to adulthood actually got.
1. A high infant mortality rate brings average lifespan down.
2. Infants don't contribute to the economy nor to public pension funds.
A country might have low life expectancy, but a relatively close number of workers and retirees, as life expectances can be (even more so in developing countries) multimodal.
The average lifespan is very insufficient to tell you how many people you can expect to be retired at a given moment.
The "life expectancy" of someone given they made it to 60 was similarly high. Highlighted only to dispel people's imaginations that people used to be "old" when they reached their society's average life expectancy. They don't look physically old. Nor are they even outliers. 1930s French society would have had lots of people in their 60s, 70s, and 80s,
The most common age of death in France, for both men and women, in 1930 was 0.
An integer age of "0" at death means they died after birth but before age "1".
Didn’t they pay into Social Security?
It’s not a forced retirement savings scheme where you “pay into” it. At anytime Congress can change what the benefits are and the only reason it hadn’t happened yet is because it’s such a popular welfare program.
This was settled by the US Supreme Court in 1960.
I wouldn't describe myself has having "paid in" to SNAP, or disaster relief funds, etc. Just as I wouldn't describe myself as having "paid in" to social security. I simply paid an income tax at the time like any other. If I'm lucky, when I'm in need some other poor sap will be paying it forward as well.
Don't all insurance and investments work that way?
Why make it seem that the enforced payment into SS is any different?
Second, wealth is not zero-sum, there isn't a magic pot of gold redistributed between people. As value and demand are added to the economy, so is wealth because the new young people with demands can provide skills or time to be used in value creation and then they also (and older folks that are not creating value because they are not working) can consume and create demand which defines the amount of wealth they create. Poor old people are a net negative but rich old people create demand and thus wealth for value creating youth, unless of course they have everything they need and live in the woods or something. But even poor old people need to eat and have health care demands that young people provide.
The forest you are missing for the trees here is the greed of corporations who are not increasing wages to keep up with not just inflation but the value young people are creating. Things like labor unions are a joke in the US and politicians need corporations like fish need water. So the profit margins of companies and the wealth of shareholders is increasing as a result of the young people who are creating that wealth and giving it away to them because they can't collectively bargain and say they want fair pay. as individuals they can be replaced easily if they don't like the compensation.
So this whole old people vs young people and millenials destroying things and boomers hoarding wealth and all that is bullshit.
The education in the US is shit, you can't compete in a global economy and keep up with wealth creation as a result (still at the top but getting closer to stagnation). And the US is essentially and oligarchy at this point. The richest country in the world and it is the rich share holding class that only care about amassing enough wealth that their descendants will make it through whatever shit the country goes through, so they don't care how much americans suffer or get robbed in day light.
This comes down to democracy being a game of information. Whoever controls information controls democracy and this means two things, education and media. You have so many idiots even young ones fall for the trump bullshit because of education and media/social media bubbles and it isn't an accident that education is shit either, it isn't an accident that racism and xenophobia and other hateful things are the tools the ruling class uses to manange democracy.
America embraced greed as a way of life and the greedy rule and we are finding out why greed is evil in all forms as If we are part of a fable people will tell their children ages from now to teach them to avoid greed and pride.
But not all hope is lost, information and disinformation are education and self education are still popular thanks to the internet. Americans need to pursue truth and justice and fight evil because nothing built on lies and evil lasts.
Democracy can still work, but if the voters embrace greed, the the result is what you see. Ask most americans what they think of basic welfare and they'll tell you it's just black people being lazy and taking from the government (in reality it is mostly not black people but why does race matter at all?). We all know greed and hated are wrong, we can't blame corporations and politicians when we choose hatred and greed, these things must be adressed before you can change the way things are done and have fair wages and a stable democracy and solve so many other major issues in the US.
Forgive the long post, let me know if you disagree.
The old and conservative make too powerful a voting block, and it perpetuates every corporate, oligarchic, xenophobic greed cycle one could point to as a rot in our system. I don't think old people are bad because they're just taking government money and have big fancy houses, but largely they do vote the same way and that way they are voting is causing problems.
> First of all, you don't freaking need your own new house to start a family. In most countries most people never buy a new house.
It's important to understand the similarities and differences between "need" and "precipitates conditions that massively increase the chance of", when it comes to demographic trends.
I see this suggestion a lot, but I struggle to understand what problem it's expected to solve. It certainly wouldn't help voter turn-out. Most service sector jobs (the kind where it's hard to get a couple of hours off to vote) require you to work more on national holidays, not less. It's mostly the relatively voting friendly office jobs that give the day off for a national holiday.
If you actually want to improve turnout, enact compulsory voting. That is much better, but still no silver bullet to electing sane competent and not corrupt politicians.
You must have missed the part where they referred to human beings who they disagree with as "a rot in our system". The fact that you're apparently blind to such toxic rhetoric isn't surprising--it is increasingly common among progressives.
It’s not the voting humans who are labeled as the rot, it’s the cycles that result from the exercise of that bloc’s outsized voting power—as said in the second part of your quoted excerpt: “… that way they are voting is causing problems.”
I’m not suggesting the original wording was great and non-toxic, but I don’t think the poster said what you interpreted them as saying.
The road to hell is paved with good intentions.
>The old and conservative make too powerful a voting block, and it perpetuates every corporate, oligarchic, xenophobic greed cycle one could point to as a rot in our system. I don't think old people are bad because they're just taking government money and have big fancy houses, but largely they do vote the same way and that way they are voting is causing problems.
Please refrain from toxic Othering.
Having a nation of renters renting from rich old oligarchs is not efficient. some redistribution may be necessary.
The fact is, their money is not stored in Scrooge McDuck cash vaults. It's all invested in the economy.
Another example of socially irresponsible investing is in any company that hires minimum wage employees for 39.5 hours a week, just under what's needed to qualify for company-sponsored health insurance. The market's slowly changing, but you're deluded if you think that's not still happening and that corporations are just happen to make small accidental practices that result in wage theft from employees, especially those at the bottom rungs.
There are bourgeoisie who pride themselves on their philanthropic work, and socially responsible investing, but greed's a more reliable driver for how people invest.
This occurred in the Great Depression where inequality rose and in turn debt loads. The fed has papered over this problem by simply printing more money. However historically, the US faired better following the massive federal wealth redistribution that was ww2.
The US government can’t afford ww2 style spending programs, and increasing evidence shows that money printing isn’t helping the economy.
Which it is. All of it, except for the reserve requirement. The idea that wealthy people hoard money is simply not true. The money is put back to work in the economy.
Land is zero sum. The easy (partial) solution to that is just to build more housing on the same land, except older homeowners spend their time blocking new housing, which has essentially turned housing into a zero sum market as well.
> greed of corporations who are not increasing wages
Increasing wages will do nothing if those wages end up chasing the same fixed amount of housing/land.
Now, people are going to point out that the US is a big country and there's lots of land and so on. And that's true, but a lot of the economic growth and opportunity is concentrated in the cities where housing growth is being blocked. The same problem occurs in Canada (and a few other Western developed countries too).
Regarding college inflation, that's purely caused by young people taking out loans. Don't do that. My kid is taking a good number of his classes at the community college. If y'all started shopping for the cheapest way to get an education, costs would come down.
Here is the official history: https://www.ssa.gov/oact/cola/cbb.html
The jump between 2022 and 2023 is huge.
It's not that far off from actual inflation during that period (and inflation that is currently ongoing).
Rather, the tax is extremely progressive due to the various "bends". As you contribute more into the system, they make the per-dollar value of your contributions go from .9 to .3 to .15.
Anyway, Social Security is fine. It's Medicare/Medicaid that's going to nuke the budget.
0-147k: 12.4%
147k+: 0%
The number goes down at the higher income bracket, which means you pay less % of your money in payroll taxes the more you make. That is the very definition of regressive.
That aside, as a matter of policy, uncapping the taxes would destroy the popular notion that the amount of Social Security you receive reflects your contributions. If the public believed it was literally just income tax, and if there was no cap there would be no reason to not just adjust the income tax by that amount, it would be subject to the same politics as income taxes and could be cut on a whim. Treating it differently than income taxes, even when it is not, is essential for its survival. If they didn’t cap it, top income tax rates would be >60%, and there isn’t much appetite for that.
Corporate profits in the US amount to about $10T/year [1]. You can and should view this as an estimate of the surplus value of labor that is being extracted. This amounts to $36,000 for every adult (~275M) in the US per year.
We could absolutely afford an unimaginable increase of standard of living for retirees and workers. We simply choose not to.
[1]: https://tradingeconomics.com/united-states/corporate-profits
Aside from that money not being "free", the important part of your observation is on the housing price and how the market works I think. These are IMO way more important issues than wether elderlies should work until 65 or 95.
Maybe the system needs to adapt to humans not the other way around. Why human worth is only linked of how much money they make? It's dystopian.
Its 73.5 for males. you only have 8 years after retirement :/
I'm sorry but I've contributed a fuckload of money to this system and I better be getting the value I paid for out of it when it comes to that time. These people are not 'consumers'
These people are not contributing during retirement, but HAVE contributed in the past. In fact people pay (especially in places like France) into a government retirement fund.
And this happens over 20-40 years of work. This is a long time and if properly managed, should be fine.
So people aren't just being given "free money", this is something that they have paid for and so they are protesting, because it's basically a kind of service that they have been promised in exchange for being taxed each pay check.
But I still come back to the question of what you will do at retirement?
well, France really has 2 systems (to simplify, it's really more like 42+), the "public" one (i.e. civil servants) and the "private" one (i.e. anyone employed by an employer other than the state).
The "public" retirement is based on the assumption that the state guarantees its liability for future pensions but doesn't actually put it on the books (if it did real debt would be another 2,000 billions euros), while the "private" retirement does have a "fund" (really several of them, one per sector of the economy) but it's revolving money put in by the current workforce but paying immediately current pensioners. This second system can in theory have excess money (but every time it does, a law is passed to extract some more money out of it to the benefit of the first!).
Part of the issue in France is the existence of these 2 systems and the very fact that the state allows itself to do its accounting differently (in a way that unlawful for anybody else). If at least the state played by the same rules... (of course then it would have to recognize this extra debt of 2,000 billions euros, and that would disqualify the country from the eurozone!).
But in short, yes it is very much the government's problem. They (since 1945) have "organized" pensions in a way that makes them a time bomb both in its accounting, and in its unjust rules (rules vary a lot per sector of the economy).
Instead they gave their money to governments who immediately consumed, mismanaged, gave it to themselves and while kicking the can down the road with cheap loans.
Now, current governments are left with old people with no money demanding benefits and young people getting taxed into poverty.
Oh wait, the whole article is about protests in France, where they are asking for change, instead of just blaming old people -- which is easy.
uh, didn't the old people finance their own social security? Didn't they give up money their whole lives to finance their homes? Don't they contribute to society in other less-measurable ways?
That said, there could be some ways to retire, but be able to work in such a way that retirement is not adversely affected. Some of my friends who retired had to carefully not work or social security was adversely affected.
No, that's the original marketing but the payments you get out of it aren't related to the ones you put into it i.e. they're just a tax to fund the program.
When I’ll retire (will never happen at this rate) I’ll get a pension that’s based on how much I contributed but the money will come from people who will still be working.
That's from https://www.ssa.gov/history/briefhistory3.html - so generally, the old were financed by the younger at inception, and that's basically continued ever since. Nobody funded their own SSN fully between 1937 and 1940.
That sort of insurance is still a good idea.
The "house" part of the person you're replying to's post is interesting: "Giving old people money for free when their 10x more valuable houses inflate the market"
By definition, anyone whose house is 10x more valuable than it was when they bought it is not inflating the market. The people buying at the new price are the ones driving the current valuation of that house.
But constrained supply does also come into play; and other forms of social assistance are conditional on income levels and such; it wouldn't be totally unreasonable or unprecedented to make some benefits conditional on assets in cases like that - if you're sitting on a 900k asset, maybe leverage that first if you don't otherwise have any savings? And in doing so, open up that spot for a younger generation that still has to commute, etc?
Also, it might be the relative value of money.
https://en.wikipedia.org/wiki/United_States_dollar#Value
The $30,000 paid for a 1960 house would be worth $223,000 50 years later in 2010.
It will, ineluctably, but if you can push the date further, then maybe you can get away with it.
To postpone its fate, they'll advocate for a harsher taxation of their neighbor and the business next door so they can profit from them the most ("I know they have money, while I'm so poor you know..."). They also need newcomers in the pyramid, so they advocate for more recruits.
Then they will call that "solidarity" so they don't have to face their short-term, greedy mindset, the same they blame others for.
This is one "benefit" of inflation. Whatever you did 50 years ago in exchange for your wealth isn't worth as much to society today as it was back then, in general. So you can continue to do something productive or hope you were productive enough before you retired that your compensation lasts.
To add, simply take a look at the % of USA federal spending that goes to Medicare and Social Security, which are benefits for the over 65 population. It's 1/3rd.
1/3rd of Americans are also over the age of 55, which will push that number higher.
We are consuming our young. As a 29 year old, unless technology advances radically and I have positions in the companies controlling it, I will not get what I put in.
There are many advanced economies in worse positions. France for example spends ~15% of it's total GDP on pensions alone.
We can all blame whatever severely rich people exist, however the death by a thousand cuts brought on by too few supporting too many is the root of the issue.
The worst part is, many of these supported elderly aren't even able to live decent lives.
However, congress raided the social security fund, spent the money, and now they are deflecting blame away from themselves by claiming the system was insolvent by design.
Technologically, imho we have been beyond a post scarcity level for quite a while - its our economic system and its poor allocation of wealth and resource allocation that is antiquated, irrational, and constraining the system. Austerity is just giving up at actually building the system in the ways needed for more people to retire or even live out their lives avoiding things like climate change.
Same with companies: the larger the more annoying, but at least you can choose them, and there's competition. Not so much with governments, they just act like a powerful monopolistic megacorp.
The goal is to make power decentralized, not further concentrated in a few hands, especially not a government that can get away with it as much as they want, and even use violence, contempt and oppression if needed.
I would say that government and a healthy protest of government as the French are exercising is one way to check the over accumulation of oppressive power.
This is an ageist perspective and foundational to what you've written. Older people have a lot to contribute and it's unmeasured.
The same goes for partners who stay at home with young people instead of working. They're DEEPLY contributing without pay.
You're going after old people in a faux-scarcity world. How about you take on the collective issues, like capitalism choosing to gatekeep resources behind labor?
https://www.sciencedaily.com/releases/2017/01/170131190102.h...
First, average life expectancy is absolutely not an interesting measure. You should at least look at the average age up to which people are alive and in good health. And this is much lower. Also, life expectancy is very different depending on your social class. Construction workers die much younger than software engineers. And this is even more true regarding life expectancy in good health. By increasing the age at which one can retire, what you actually do is to make the poorer contribute to retirement money they won't be able to benefit of because they'll be dead before or soon after while the rich will enjoy their retirement since they live longer in good health.
Concerning the whole there is more old people thing: yes, there is, but at the same time workers have never been as productive as they're now. And France as never been as rich as it is now. There is no technical problem here, just a political choice. The Cor (Conseil d'orientation des retraites, which is the official institution that studies retirement in France with projections into the future etc) says our retirement system is currently stable with no real risk to its equilibrium (actually there is one scenario over four in which it may temporarily have a deficit in a few years but that resorbs itself over a few years as well — and you have to know that a few years back they made projections and were quite pessimistic for the situation today, but the reality is that nowadays our retirement system is afloat and well, with multiple billions in positive this year for example). Also, there are solutions if we need more contribution to retirement fund: one of which is to increase wages, another one of which is to pay women the same as men (in France the gap is still between 15% and 20%), another one is to tax the richest more, or simply to politically accept to keep the portion of GDP we spend on the elderly the same rather than wanting to keep the absolute amount the same or lower (which is what Macron wants).
Finally, retirement pension is not "giving people money for free". Retired people are not "just consumers", they contribute a lot to society, even if from a capitalist point of view it is not directly visible: more than a third of the volunteering in (quite sadly, indispensable) non-profit is done by young retirees who can still do it, almost half of baby-sitting is done by grand-parents who can do it because they're retired, etc.
What kills the livelyhoods of younger generation is small wages, no political control over rent prices, a partly artificial inflation which main effect is to make everyone pay more at the supermarket to enrich shareholders who bet on the inflation even more, and soon, if this law passes, it will be the burden of having to take care of their parents who could not work til the increased retirement minimum age for health reasons and will therefore have way too small pensions to be independent.
Here in the US, people do not give a sh**. Already benefits have been reduced to the point were you cannot live on Social Security unless you pitch a tent next to a dumpster outside of a restaurant.
Not only that, every year the retirement age is increased. For people born after 1960 full retirement is 67. The GOP in congress is trying to raise it to 70.
Do US people care, no they do not. If this happened in France I think the full government would be dragged out and "guillotined".
I admire the French for standing up for their rights.
https://www.ssa.gov/benefits/retirement/planner/agereduction...
Pretty sure employee wages aren't tracking anywhere near that.
This is a problem with Congress not managing the Social Security system properly over the last 85 years.
> Not only that, every year the retirement age is increased. For people born after 1960 full retirement is 67. The GOP in congress is trying to raise it to 70.
See the life expectancy and demographic tables published here by none other than the SSA: https://www.ssa.gov/history/lifeexpect.html
That's because the combination of benefits times life expectancy times demographics is either going to result in a 25% reduction in benefits that the SSA can pay out or result in a high tax burden on workers (read: major economic drag and recessions) or some kind of half-assed compromise in between.
Had Congress continuously and properly managed the retirement ages, contributions, and SS trust funds properly over the last 85 years we would not be having this conversation. But they haven't, and now there will be pain for almost everyone because of it.
Correct, but most of this issue is because on Party has been trying to eliminate it since its inception.
>demographics is either going to result in a 25% reduction in benefits that the SSA can pay out or result in a high tax burden on workers
Right now the Tax cap is 160,200, Congress should eliminate that tax cap, then there will be plenty of $. That cap is about equal to 9300 in 1938. Lots of people in Mang. makes well over that amount.
What the system ought to be is:
1) Everyone who can't work gets a pension/state support/whatever you want to call it. If you get run over by a car at 25, you are on this list until you die and the state supports you. It's expensive, but there aren't that many people who end up in this state. Maybe a few percent, eg 3%.
2) We set a pensioner ratio. For instance if it's 20%, the 3% of people in cat 1 above get a pension, and the 17% oldest people who aren't in cat 1 get a pension.
This would naturally change the age at which people get to retire, moving it up and down depending on birth rates.
What we have is not workable. There aren't enough young people for the number of boomers who are retiring, and not only that, the older people turn out more and have more votes, enabling them to force worse conditions on everyone else.
I figured people would understand that this is an option when people like Jack Ma go missing for a few months.
You do realise the guillotines in the French revolution weren't used on "rich people", they were used on the nobility (ruling class)? And in the times that approach was used on the rich people, e.g. Stalinist Russia, Maoist China, Pol Pot's Cambodia, the countries in which it occurred was plunged into decades of extreme poverty and genocides.
This isn't a maths equation, it's a societal choice, that's why Macron doesn't get it, he's a bead counter for Maastricht, what he does is making sure the spreadsheet is balanced
What I don't understand is how people can't see through the framing. Do old people deserve to retire? Sure. Who is going to take care of them? Younger people. How do they not get a raw deal out of this?
Of course, this creates a giant perverse incentive to get yourself classified as "can't work". Ask the US Social Security disability system how that goes.
There's no way around it though. Either you make a judgement about who gets a pension, or you just let people who've gotten paralyzed in an accident try to fend for themselves.
With advanced interfaces and equipment for instance, a paralyzed person could control delivery robots to help deliver food or items to people, allowing them to earn an income and pay their costs of living and perhaps even invest their money to eventually retire.
Or maybe they could just do typical office work, just wouldn’t be with a mouse and keyboard. No reason why they can’t join zoom calls.
I currently live in Germany, like about half of the population is in the age group that is allowed to work. About 1/4th of these work at minimum wage, and I would wager a guess that up to about another 1/4th is either officially declared "unemployed" (the official definition of that gets regularly messed with, guess why) or in a state every normal would declare "unemployed" one way or another.
On the other hand you have massive automation everywhere, but taxes for companies are totally different to taxes for people, and the basic idea of retirement is that the current production output is paying the retirement for the current old people. From a large scale view on this it shouldn't be an issue for Germany, but they face similar issues like France and sticking through the status quo doesn't leave many options in the end with a system like that.
And yes, it obviously is larger scale, because as you see, it is not just retired people affected by the problem, it is everyone, kids included (their parents being the proxy).
Now think about how multinational corpos use nation states for their own benefits and other such stuff and you see that where things are currently heading on the larger scale is actually the worst possible option to fix anything, it just speeds this entire process up towards the breaking point. For all this "intelligence" humans supposed to have, this whole thing is a terrible joke.
fyi taxing the 40 richest people in France 2% more would cover the same amount of money as having the entire active population work 2 more years.
edit: since it's not clear, I'm talking about pension related debt (the main argument of the french government for raising the retirement age), obviously not the national debt/deficit
edit2: ah and 25% of the poorest workers are already dead by 62 https://www.liberation.fr/resizer/J5W0vs_DrAdsjx5xHUxhhC_otn...
and 30% of people above 60 are unemployed because nobody hire seniors https://lemagdusenior.ouest-france.fr/article-78-combien-fra...
> I just really wish the "eat the rich" UBI crowd wasn't so innumerate.
It was +3.2b in 2022, + 0.9m in 2021, with a slight deficit predicted in the short term and equilibrium from 2030s (average scenario)
tl;dr : it's not a big deal, and certainly not the real reason of the change in retirement age
The deficit due to the pension system*, even the governmental agency in charge of it said so
Edit: I looked it up and the net worth of all of France's billionaires is ~half a trillion dollars, so even if you seized it all it would basically cover the French government's budget deficits for a grand total of two years, assuming they were actually able to seize it all and it didn't have disastrous economic side effects. That's France's total deficit, not sure how much of that is directly attributable to the pension system.
> Kind of like how at the start of COVID in the US there were arguments like "We can't close down schools because poor kids won't be able to get their free school lunches."
You should ask yourself why kids can't get their basic needs such as nutrition covered then...
I'd love to find where your information come from, mine is from the Cors (public entity) and from Agirco (private entity). Do you have this information from Facebook?
Edit: full disclosure, I just walked 3 hours, danced in front of the police while holding a sign, so I might have my sources wrong, but I tried to only get them from ddg front page. Didn't see the 30B figure anywhere, I know it's a lie, and I just want to embarrass parent poster for it.
Slight deficit expected in short term
Equilibrium at medium term
here France revenues brakdown: https://www.oecd.org/tax/revenue-statistics-france.pdf
I don't feel like they're doing much better, especially for the bottom 30%
Which reasons ? Both systems are about as opposed as you can imagine without straight up walking out of capitalism
Until you are able to successfully do so, the rest of us will work on other solutions.
You seem to be confusing the top 1% with the top 0.01%. The vast majority of top 1% income earners -- in Canada, the number was recently reported as 95% by Statistics Canada -- are employed, with the largest numbers being in management, medicine, and "business professional" (lawyers, accountants, etc) professions.
And for the invading France via Belgium joke, it is hilarious bcs one of the compelling reasons why he started his aggressions in 1939 before the nation was ready was because he emptied German coffers to prop up his Nationalsocialistic welfare system and (he felt he) needed just an imperialistic trip to refill them[0]. the rest is history
as an engineer, you choose to stay in France for the values, for the quality of life, for your family, or from some kind of patriotism after having had free college.
And you go the USA for money !
Median earnings for engineering graduates is 36k/year in most schools. After direct 'contributions', you're lucky to get about 2000k€ /month (on which you have to save for other income taxes for the end of the year)
My first engineering job, during COVID, was paid 20k€/year ! (bellow the legal minimum, but it was declared as an internship)
It's far from the 6 figure salaries in cali !
Medical doctors should do about 6000€/month too.
Companies in here don't care about hiring skilled workers. They want cheap workers, because they have no long term R&D.
ok
That's exactly what's wrong and why people protest against this system so you're making my point
Moreover, the prospect of profits is what gets the supply going in the first place. Many shortsighted politicians have proposed to instate price caps to curb "immoral" profits - which would make an actual shortage more likely. After all, some gas at a high price is better than no gas, at any price.
I am in fact not making your point. Your moral concerns are completely independent of whether your proposal would work. I'd be in favor of wealth tax if it worked. It doesn't work.
My back-of-the-envelope calculations:
Sum of wealth of top 40 richest people in France: 556 billion [1]
Annual income of top 40 richest people in France, assuming 10% growth of wealth: 56 billion
2% additional tax on that income: 1 billion
Size of active working population of France: 40.8 million [2]
Size of about-to-retire population: 1 million (guess based on [3])
Annual pension cost per retiree: 18000 [4]
Direct pension savings by delaying retirement by 1 year: 18 billion
[1] https://en.wikipedia.org/wiki/List_of_French_billionaires_by...
[2] https://fred.stlouisfed.org/series/LFWA64TTFRQ647N
[3] https://www.statista.com/statistics/464032/distribution-popu...
[4] https://www.connexionfrance.com/article/Practical/Everyday-L...
Moving the 2% to that puts it in the right order of magnitude; at that point, the discrepancy is likely to be in the guess of the retiring population size.
> taxing the 40 richest people in France 2% more...
That quote is about a 2% wealth tax.
The richest family of France counts at least 700 members and most of these people run businesses from retail to mobile apps to media.
The French are no stupid. The state can not easily extort money from the likes of Mulliez, but it should try harder, not seek easy money from the working class.
Unrealized capital gains aren't "income". Are the words "wealth tax" scary or something?
Even if you ate the rich and took all of their money, all you've done is created inflation because the actual value of the economy hasn't shifted. An economy is more about the "stuff" than the money - even Marx would have agreed with as much.
So this is only ostensibly about funding a deficit - this is just as much a measure to prevent a GDP freefall from a shrinking aging working population.
It's not an immediate effect, but give people money to people who want food and more food will be purchased, which in turn increases the production of food.
If people get older on average, and there’s less young people to take care of them (pension wise), then the old people will have to work longer. It’s not a hard equation.
You can change more than the retirement age in the equation, or change the equation.
You can pay people even less. Can you imagine how that would go?
You can make fewer young people pay even more.
You can redirect other taxes to cover the gap.
You can print more money to cover the gap (until your economy collapses from interest payments).
Retirement age is the least contentious variable as far as I’m concerned.
Paying people less is a common option. You just increase their payments slower than the inflation so they don't burn the country down immediately.
You can make people pay more, that's also a common option. A frequent feeling in France is that some people don't pay enough taxes.
You can also redirect other taxes, the retirements pension scheme doesn't have to be a zero-sum actually.
You can also print more money, because everyone does that all the time and it works well in practice.
Modifying the retirement age is the lazy and capitalist way.
Thankfully I'm not in charge, but I would do a bit of everything (including changing the retirement age of some category of workers).
It depends on who you ask.
At first, macron is neoliberal. He doesn't believe in the role of the democratic representation in the economy, nor taxes nor wealth redistribution. On his first mandate, he deleted capital tax at the same time he lowered housing subsidies for the worse off. Today, he saves on social security to fund tax breaks.
Then some say it's "pantouflage", and he's pleasing future employers. Indeed, a lot of formerly high ranking politicians and civil servants ended up on the board of profitable companies. For example, Nicolas Sarkozy was hired on the board of Accor (Europe #1 hotel company). François Fillon, a former prime minister, joined the board of a Russian state owned oil company after he lost a presidential election (he was a conservative and nationalist candidate). So politicians and regulators can just make financial companies happy to get a top job.
A third explanation is that poor workers won't vote for him anyway. Macron's party only rely on 20% of the voters. Raising retirement pleases them.
It's ok if he upsets the other 80%, as other political wings suffer from too many similar parties that compete (we had 3 trostskyist candidate during the last election, 1 communist, 2 socialists) so they number of voters get split. or they don't get along (traditional right wing was weak after the cases with Sarkozy and Fillon)
We can all learn A LOT from how the French hold their elected representatives accountable, and don't let them get away with BS.
edit:can't
Plenty seek high paying jobs elsewhere.
Literally paying your most experienced people not to work is a little … not so good.
Maybe they have been heard and listened too and the democratically elected government of the people disagrees. Just because you don't get your way doesn't mean you haven't been listened to.
> "We are using the only means we have left: it's the hard strike ... we are not going to give up."
This is the part where the petulant child that doesn't get what it wants threatens to hold its breath until it turns blue. This is anti-democratic and nothing but coercive, naked extortion. Like literally extortion.
Consider the fact that politicians can be elected and then break the promises they made during the campaign. The electoralist response to this is 'well you can vote them out next time,.' But that ignores the cost of the damage that can occur during the interval, plus it's not clear how the populace is supposed to hold other politicians to account - to the point that there is a general expectation of politicians being dishonest and mendacious.
Really, in what other job are you only subject to review every few years and if people don't like what you're doing in the meantime you can reply with complete BS, often overtly?
Democratic elections are a good thing, but they are not the be-all and end-all of politics. Strikes and boycotts are absolutely a legitimate form of political expression, in which labor or consumer market participants coordinate their economic activity to obtain political leverage. If you won't tolerate anything other than elections, North Korea has those.
Protesting is the mechanism they have at their disposal.
Seriously, it’s been at least 35 years since I’ve heard about a French person actually working..
In principle, a pension scheme will work forever, in isolation, as long as the following inequality holds true:
(A:=(working_pop * avg_income * avg_pension_tax_%)) >= (B:=(retirement_pop * avg_benefit_payout))
If investments are allowed in said scheme, the inequality can be relaxed slightly:
A + (C:=(investments * return_ratio * withdrawl_%)) >= B
with (investments:=(previous_investments + A-B)), and (return_ratio:=(1 + return_%)).
From here, 2 long-term paths can emerge:
a) C >= B : The entire scheme can run off of investment returns, reducing reliance on A. This is the ideal.
b) A + C < B : To rebalance & reaffirm the inequality, more is taken from A or C to return back to A + C >= B (see below). Future C may be less than Current C as a result, making the chances of (b) happening again increase.
The vehicle begins to fall apart when A + C < B, with no alarms sounded until it's been made known.
From there, the following solutions are brought out to reaffirm the inequality:
- Increase any(working_pop, avg_income, avg_pension_tax_%)
- Decrease any(retirement_pop, avg_benefit_payout)
Some of those modifications are unpalatable to some of the voting population, and thus can't be changed:
- The elderly will not be happy if avg_benefit_payout decreases
- The 'close-to-retire's & the general working pop in general will not be happy if the retirement age increases, in an attempt to reduce retirement_pop
- The working pop, depending on culture, will not be happy if avg_pension_tax_% increases
- Anti-immigrants will not be happy with immigration, in an attempt to increase working_pop
That leaves very little on the table:
- Child tax breaks & incentives in trying to increase working_pop, but this takes time
- Increase avg_income, increasing pressures on businesses in order to keep margins the same
---
There is a way to always keep the scheme alive, when all else fails, but it's a last-ditch effort only reserved for emergencies.
Referring back to the relaxed inequality above (A + C >= B), we can append another inflow stream to the left side of the inequality:
A + C + (D:=(treasury_money_printing)) >= B
This will keep the scheme working, but it sacrifices the long-term value retention of the currency being used. The baseline inflation for said currency increases, giving everyone a 'soft tax' via the debasement of the currency in question.
The implications of incorporating D into the inequality would mean that the currency's ability to keep its value long term will be brought into question. Very little good will come from a weakening currency, unless the country is a net exporter.
There's a similar situation with the UK's universal credit. On the face of it it was replacing a patchwork of benefits with a single unified benefit, which should be better and more efficient. However the implementation was designed to actually reduce benefits paid out (e.g. they replaced up front payments with payment in arrears, made it difficult to sign on to, kick people off for small issues, etc etc).
Changes labelled with the same name can be radically different in actual results, you really have to look into any given proposal.
Let’s say Arnault, the wealthiest French guy, decides to decamp for Switzerland were the French to introduce a wealth tax, then one of the most obvious solutions would be to nationalize his assets with pennies on the dollar, introduce an “emergency societal clause” in the mix to make it more “legal”, and I can assure you that the rest of French billionaires will be happy to pay an effective tax rate of 50% (let’s say) as long as the State will still allow them to keep a nominal hold on things.
And before anyone comes in and says “nationalization is a thing that only dictators do”, the modern history of France is full of examples to the contrary. As recently as 1981 Mitterrand won the presidency by promising just that, i.e. nationalizations.
Or what do you think is going to happen? The billionaires will pull out, but they'll make sure to retain ownership of all the businesses they ran—and fire everyone, thus ensuring that those are just losing them money? How is that going to be better for them than paying the tax?
And how long before France just nationalizes the businesses and puts people back to work without the billionaires getting a cent?
And what a colossal failure that was. After two years of this policy, he was forced into a severe austerity turn. France's economy was never the same afterwards.
After all you're right, if there's true political will, anyone can shoot themselves in the foot.
$160k - $1.9M: 1% per year
$1.9M and above: 1.4% per year
- wealth tax is the best way
- capital hoarding is a thing
- capital hoarding is destroying modern society
You're clearly trying to shorthand a lot of disparate political topics into one point (a good share of hospitals and insurance companies in the US are non-profit - it clearly doesn't affect medical prices), but I don't think it's as clear cut an issue as you are making it.
But France is in a demographic collapse the likes of which has never been seen before in the country. There simply not going to be enough working age adults to supply all of the goods and services the dependents of the state are going to need. Furthermore, major international trading partners are a) increasingly cutting them out of trade deals and b) waging wars amongst each other.
So while I think inequality is certainly something to deal with, it is not the sole boogeyman. The idea that wealth is just some sort of economic piggy-bank that can be raided for easy gains is vaporware.
https://www.investorschronicle.co.uk/education/2021/02/11/le...
What’s more, it led to an exodus of France’s richest. More than 12,000 millionaires left France in 2016, according to research group New World Wealth. In total, they say the country experienced a net outflow of more than 60,000 millionaires between 2000 and 2016. When these people left, France lost not only the revenue generated from the wealth tax, but all the others too, including income tax and VAT.
Save your own money. If Social Security exists by the time I retire, great. I'm planning as if it won't.
Banks go bankrupt, gold changes value, cash gets stolen. Seems like the U.S. government is the best option.
I'd love to have to repay my debts with those conditions.
I would trust my retirement to the US Treasury. No sane human would trust their retirement to the US Congress.
Hear, hear, especially given the historical priors : (hint: across a generation-sized time spans, governments never keep their promises. Why should they, they usually are in power for decades at most).
And yes, relying on governments to handle your retirement money is completely insane, but the vast majority of folks in e.g. the EU have drunk that kool-aid even though it was guaranteed to fail since day one.
Retirement plans the way they work in Western Europe were always an absolute con, very much like a ponzi scheme (new players pay for the earlier players).
When the young, working population was vastly larger than the old retiree population (because the retirement age was designed so that most people died before reaching it), the government milked their working young for all they were worth.
Now that the age pyramid has inverted (large retiree population, few working youngs), there simply isn't enough income generated by the young to pay for the old and retirement income is paid using debt.
What a freak show.
That's pretty much how families worked before retirement plans, the kids payed for the parents.
This just got transferred to the whole society. And it worked as long the rise of productivity led to a rise of wages.
It worked as long as people had more than 2 kids. There was always a larger young population supporting the smaller old population.
And the GDPs are growing faster than the population, at least in the first world. So it's bo a matter of quantity but of distribution.
Nothing stopped about this. Our demographics have changed for the worse in this regard, is all. From the latest report from the SSA's Board of Trustees:
"Social Security and Medicare both face long-term financing shortfalls under currently scheduled benefits and financing. Costs of both programs will grow faster than gross domestic product (GDP) through the mid-2030s primarily due to the rapid aging of the U.S. population. Medicare costs will continue to grow faster than GDP through the late 2070s due to projected increases in the volume and intensity of services provided."
Furthermore:
"For the sixth consecutive year, the Trustees are issuing a determination of projected excess general revenue Medicare funding, as is required by law whenever annual tax and premium revenues of the combined Medicare funds will be below 55 percent of projected combined annual outlays within the next 7 fiscal years. Under the law, two such consecutive determinations of projected excess general revenue constitute a “Medicare funding warning.” Under current law and the Trustees’ projections, such determinations and warnings will recur every year through the 75-year projection period."
It's a good read beyond the summary, too:
I'm all for a safety net. Scaling the system way down so that it only serves the people who need it would reduce the tax burden and solvency issues.
Although not perfect, taxes work quite well in France to reduce inequality. And the low taxes in the USA have the effect of helping a handful of super wealthy whilst leaving a lot of poor people behind, without access to good higher education, medical benefits, etc.
High earners and capital owners should most likely be taxed more in the USA, so the gov can redistribute have a better education & healthcare system, if the USA is to reduce inequality and become again the land of opportunity it once was.
If you save for yourself it's likely that you lose.
The part where it takes people's money and prevents them from bettering the life of themselves and their families in favor of feeding that money into older people, most of whom are wealthier than the working person you're taking money from in real terms (e.g. most are homeowners)?
I wouldn't classify that part as "pretty nice", but you do you.
If you trust the financial markets more than the government that you elect, I have a bridge to sell you.
Sure some smart people will be able to extract profit from the market but most won't. I'd rather live in a country where the people I chose can organize to ensure that nobody needs for anything rather than in a country where I gamed the system and now have to protect my loot against hordes of have-nots.
And if I can't do that, the joke is on me.
Source? Put your money in an index fund. The S&P 500 from 1958 to 2008 went up 90x. The worst case scenario - All your savings are in stocks and you retire during the second worst financial crisis ever. And your returns are 90x. Not 90%, 9000%.
The idea that "most won't extract profit" is nonsense. In the long term, its free money for everyone.
https://www.officialdata.org/us/stocks/s-p-500/1958?amount=1...
I would guess that most people my age (between 35-45) got told some variant of this in their business and economics classes in university. At least, I hope they did.
Looking at Social Security budgets for about 20-30 minutes and what politicians have proposed to do to fix it is enough to make most reasonably-minded people understand that expecting anything more than token amounts of money from the program is idiotic.
If you had invested that into a Roth 401k and invested it in the market at an annualized average return of 7.3% instead, it'd be $2.25M in retirement savings.
Social Security is a Ponzi Scheme because it's taking money as an "investment" from people working today, to pay out returns to previous "investors" who are now retired, while the government has raided it and filled it with IOUs to support spending unrelated to the pension.
Here in the Netherlands, we pride ourselves on our "polder model", a trinity of government, employers and unions that come to a consensus, hence no need to strike. That system worked well for some decades hence society runs on auto pilot.
Trouble is, due to globalization and ever more temp contracts (fire at will), the power of unions have been decimated and the combination government/employers are calling the shots, slowly eating away at worker rights.
Our "holy" retirement age used to be 65, unchanged for a huge amount of time. It was declared as unsustainable to keep it that way, instead it should become a rolling number, coupled with life expectancy. My pension fund predicts my retirement age at about 70.5.
This change was pushed through because keeping it at 65 would cost 5B per year for the foreseeable future. Absolutely unaffordable for our tiny country.
40B in support to keep businesses open during COVID though...just pulled from a hat. 25B in energy compensation so that households don't freeze to death...arranged in mere weeks.
Just saying...unaffordable means no political will.
Anyway, regardless of the money mechanics, retiring at 70+ is absurd. It effectively means no retirement at all. I know a huge amount of boomers, many were able to retire at 58-62, especially blue collar. Most by then already were in poor health but managed to pull off a decent decade of rest and joy with still some activity like going on holidays.
By 70 it's over. Some dead, the others depleted. Their partner may have died. They have severe health issues. No energy or will power left to truly have one more adventurous run. Hobbies abandoned. Health and quality of life declines exponentially. 60-70 and 70-80 are not the same thing.
Further, nobody actually wants these old people at work. Blue collar people are broken by then and white collar is either obsolete and outdated or strongly discriminated. I'm in my 40s and struggling to stay relevant.
The point of my rant is that there's always an economic reason to make workers' lives shittier. Always. Every time there's a rational reason to do so that seems to make sense. And that's how you end up working as a couple for 50 years straight. It's never going to be enough.
Only with unity as seen in France can you call out their bluff.
The age should actually be 60 and we should be having ever shorter worker weeks. A concept I call "time for wealth". In the future we probably have to do with less stuff. But it's not a vision for the future to say to people that their wealth is under pressure whilst still needing to work themselves to death.
Hence, we trade that wealth for time. You learn to live with less material goods which increases your appreciation of them. More durable/reparable products. Higher prices because externalities are included. Doesn't have to be bad at all, restoring some sanity here. In return for this material "poverty", you get more economic security, more free time, retire earlier. Also fits in well with our AI future that will disrupt work.
I think that's a vision people can get behind, and we'll still leave the door open for the super achievers that want more stuff.
France is not alone, other country's have raised the pension age, but other countries use their food legislation to keep the population docile, high house prices to keep people from protesting for fear of losing a roof over their head, and other tactics people are getting wise to and slowly rejecting when they wake up to the subtle forms of manipulation that goes on.
If the government can not get something basic like covering subsistence-level costs for its population over 62 working without bankrupting the country, the government is broken, the economic system is broken and shutting it down is an appropriate response.
Technology and efficiency has caused labor productivity to increase [1] and that increase has not been captured in wages. It has been instead captured by private capital as profit.
1. https://www.lemonde.fr/blog/piketty/2017/01/09/of-productivi...
> The truth is that this trade surplus is not really a choice: it is the outcome of decentralised decisions made by millions of economic actors and in the absence of an adequate mechanism for correction. To put it simply: there is no pilot in the plane, or at least the pilots available are not very accurate.
> In contrast, the persistent backwardness in British productivity, which never reached the American level, is usually attributed to the historical weaknesses in the educational system.
The British state getting rid of grammar schools is often highlighted, but during the 70's and 80's the old rote ways of teaching were scrapped, but continued in overseas territories and the results spoke for themselves, higher literacy and education were achieved on average in these overseas territories than back in the UK.
https://en.wikipedia.org/wiki/Rote_learning
"However, advocates of traditional education have criticized the new American standards as slighting learning basic facts and elementary arithmetic, and replacing content with process-based skills. In math and science, rote methods are often used, for example to memorize formulas."
This US driven process based thinking, is an attempt and demonstration of the US' desire to have everyone in front of a computer where they can be monitored surreptitiously.
Something else not mentioned is the difference in the US diet compared to the European diet.
If you need a diet to boost GDP, to constantly stimulate then the US diet is it, but it will burn people out more quickly with ill health.
The European model with higher food standards currently is a good standard, especially when comparing how the Chinese have been taught to eat anything that moves, hence their diverse range of palatable foods.
This blog, could enhance its credibility by taking into account factors like diet and health care, instead of just muddying the waters.
France already has high taxes and amazing work-life balance. I don't know much about state of medical industry to comment. However, if its not completely terrible, then raising the retirement age seems like the only knob that could be turned.
France pension system isn't close to bankruptcy. It needs some adjustment but pushing retirement age isn't the only option. Also one thing to understand is that there are two criteria to get a full pension
1. work 43 years (this used to be 36.5 but has been increased 10 years ago), so we're not feeling this yet
2. be at least 62
The reform wants to push 62 to 64 in 2. The problem is that educated people will already retire after 64 because of the first constraint. So this reform targets explicitly those who started to work younger, and who are also those with lower life expectancy and with the hardest job. This is unfair. At the same time, France (as in French citizen) has never been as rich in history as it is now. There should be better wealth redistribution here. It's very apparent when you look at the numbers.
Another issue is employment. In practice, a lot of people struggle to find a job when they are 55+. These reforms will increase poverty in the country.
Last point. France isn't like the US were people are incentized to build equity for their retirement. The rule of the game here is that current employees pay for retirees and in exchange expect their pension to be taken care of when they are older. The rules are changing midway and people are upset about it.
It seems like a pretty hard fact to demonstrate. If you look at the production of france-based international companies, then you're also including the production performed by citizen of other countries. If you look at total revenue per inhabitant, then you need to adjust for inflation, and the fact that some citizen gain revenues from production performed in other countries (via shares, or simply working in a multinational company)
What's clear however, is that france as never been ranked lower in every international ranking (education and economy) as today.
So yeah maybe it's time to stop trying to fix the french model by applying the same recipes that increased inequalities in the US in the first place...
It’s a disaster, but it’s very very far from anything remotely looking like a liberal economy..
French neo-liberalisme is what you describe, the worst of both world. A strong state that impose highly impacting laws on both public and private sector.
The difference between left wing strong state policies is that theses laws tends to benefit huge companies and shareholders instead of common people and small business.
C'est ce que faisaient regan et thatcher, et ça n'a rien à voir avec les politiques de de gaulle chirac ou françois hollande. Même les plus à droite comme sarkozy continuaient d'avoir une vision très jacobine de l'état.
En fait il y a un ambiguïté forte autour de ce terme et une différence observable entre la théorie et les politiques menées qui sont censées s'en inspirer.
Donc pour ma part quand je me réfère au néolibéralisme français je pense plutôt à "la doctrine politique néolibérale appliquée en France ces 20 dernières années et ce qu'elle a entraînée". Parce qu'une théorie économique coupée de son contexte et de ses conséquences n'est qu'un objet intellectuel abstrait et inutile.
Si on excuse les conséquences de l'application du néolibéralisme, on devrait par exemple excuser de la même manière les conséquences de l'application du communisme en URSS. Pour ma part j'estime qu'aucune des deux doctrines (parmi d'autres) n'ont résistées a l'épreuve du réel. La doctrine de demain, adaptée au défi climatique notamment reste à inventer (et dans l'idéal via une transition démocratique et pas un bain de sang).
France will (have to) move to 64 and later to 67. If not this year, then in a few years.
Any many EU countries might even have to move to 70, Germany for sure.
People live longer (great), so they also have to work longer.
Edit: Also this math involve predictions about demographics evolution over the next decades in a global warming and war in europe context. Both can result in unpredictable populations movements. This is never simple ask any demographer around.
Edit2: What is complicated about politics especially in french strong state tradition is that laws reform are precisely meant to alter the input data of your model, often with unforeseen side effects, so it's not simple math ask any historian around.
This especially worst in France because it's a known and widely discussed issue that the government is indirectly doctoring some key statistics like unemployment data. Changing the metric while you are rolling out a reform is at this point a patented french strategy to prevent any citizen to evaluate a new policy.
That seems absurd, and it seems like if that is truly the case, then a lot of other things should change before this.
France does have a history of not accepting crap from the ruling class with bloody results for the ruling class. Less the ruling class forget that.
So for a lot of people pushing the retirement age means surviving two more years with their savings and the small welfare benefit (as regular unemployment benefit is capped at two years).
This is not addressed at all by this reform.
Also the government was caught lying about some aspects of this reform (and still do).
edit: not sure why downvoted for adding facts
> 62 to 67: Depends on the duration of contribution (minimum 43 years)
For instance, for me it will be 67. Besides, these numbers don't mean anything without context.
Unless the limit is raised of course.
It's not that easy unfortunately ;)
If you have less than 43 years, the amount of your pension will be decreased according to some formula. At 67, you'll get the full pension no matter what. But this amount is also determined by the number of years you worked. So if you take a sabbatical, or go work abroad for a few years, you won't get the full amount.
I recommend that you do a simulation of what your retirement will be. I think it's something like 50% of your 25 best years, if you worked 43 years. Then it depends what you invested outside of the system.
This is true but puzzling for one reason: the US pension system (Social Security) pays retirees the same amount of money as the French one. US pensions are not ungenerous compared to Europe. Americans are incentivized by the government to build equity in addition to their government pension, so that they are not wholly dependent on the government pension -- this has been a consistent part of the messaging.
I think this takes some pressure off the US pension system, since it creates a joint responsibility between the individual and the government, rather than putting it all on the government to unilaterally solve this problem to everyone's satisfaction. I do understand that it is easier to build equity in the US than Europe, so that probably is a factor in how the population views it.
I think, for most French, the retirement model was that we should own a house/apt by the time we retire, and then our pension would be enough to cover our expenses. It seems we're transitioning to a system more akin to the US and it's causing some friction as we're not prepared.
Another interesting point to me is that the retirement age is causing protests, but we were essentially screwed when they increased the number of worked years from 36 to 43 - which arguably was a necessary reform. Someone who started to work at 23 (college graduate - HN demographics) won't retire before 66. At that point, my concern isn't so much about working until 66, but having a job at that age. Working in tech, I don't see many people over 50 around me.
Citation required.
Last I looked, France's national debt as a percent of its GDP wasn't exactly in happy territory.
On the other hand, if you believe that France will continue to be able to borrow for eternity to feed its increasingly large retiree population, then yes you are correct: when a banker is always ready to lend you money however large your existing debt, you can never physically go bankrupt.
https://www.retraite.com/dossier-retraite/le-deficit-du-syst...
Roughly 20 billion euro per year, which isn't big.
For comparison, public debt is 3000 billion. Bernard Arnault net worth is 120 billion (6 times more than 10 years ago), Total profit in 2022 is 40 billions.
There must be ways to have better wealth redistribution.
The reason french people in general are poor is because france, as a country, is collapsing, because french people have been voting for the wrong people for the last 50 years.
People that managed to sell their skills to other countries are less affected.
You are in the Euro zone now and whilst France, Germany and Italy are the main sponsors, I haven't forgotten the Greek Govt crisis of 2009.
I know Norwegians are paper millionaires because of where the Norwegian govt has invested like a state hedge fund, but start cashing that in and and like share prices, the status of paper millionaire will decline rapidly, in much the same way if Zuck cashed in his Facebook shares.
> France isn't like the US were people are incentized to build equity for their retirement.
I know, the price of some of your chateaux's are an absolute steal compared to UK houseprices.
> The rule of the game here is that current employees pay for retirees and in exchange expect their pension to be taken care of when they are older. The rules are changing midway and people are upset about it.
Well the US Boomer rhetoric perhaps exemplifies the younger generations dislike of their grandparents (and parents) being able to raise a family on one wage, job for life, afford a reasonable family sized home, and have a comfortable lifestyle and retirement, shows how some countries have kind of shafted their young.
Here in the UK, the North Sea oil and gas revenues were _supposed_ to have paid off the UK's national debt, I see that hasnt happened!
But with govt's like this, who needs enemies, when the vampire state sucks the life out of you with the "Death and taxes" idiom.
Even when people do vow not to cut these programs, they are planning on making a change, it's just what they plan to change is the tax rate or amount of debt issued.
Politicians constantly move the goal posts, to deliberately muddy the water, as we see with annual budget days.
Banksters print new money when they lend out money without explaining how their Basel Bank of International Settlements approved ponzi scheme works.
I can not for the life of me figure out why the public put up with this status quo, but their audacity is on display for all to see.
We have the means to do it.
Upto 75% of population is employed in bullshit jobs anyway (= not producing anything, or even being harmful to the society).
Only 2% of population working in agriculture already produces food for 10+ billion people, just 8% works in manufacturing (IIRC).
Give the basic income population plant-based food (== use just 25% of agriculture land) and automate transport (trains) and distribution (like amazon with its warehouses).
Everybody can choose to work on anything they want, and be compensated for doing so, of course.
We'd save the environment, stop biodiversity loss and store more carbon than produced since 1750 (reforesting grazing lands), solve the world hunger, save the environment (no need to own so much cars, burn so much fuel and time going to meaningless jobs, to pay for a roof over a head with 40 years of life, no need for so much pesticides/herbicides, deforestation etc.) ...
Hm ... time to stop dreaming. Back to work.
That's all we need. Basic income will allow people to get housing, internet and food.
I wanted to emphasize the level of sufficiency it should provide.
Source?
I love that so many people are convinced everyone but them is doing nothing and somehow getting paid for it.
> Only 2% of population working in agriculture already produces food for 10+ billion people.
What's your point?
Who's going to take care of sick people? Who's going to educate our next generation? Who's going to maintain our infrastructure? Who's going to police people? Who's going to defend our country from war? Who's going to make sure your cellphone still works? Who's going to make sure your house still has electricity? Who's going to make sure the laws are being followed? Who's going to make new entertainment for you?
We need to do more than just have beans to eat.
That's not the point. The point is what they are producing isn't contributing value to our lives, or actually creating negative value. Building highways looked very productive on paper in the 50's, but now we live in car dependent sprawl, and we continue to pay people to maintain that sprawl when we could have walkable cities that are human friendly.
I love it in the city, can't imagine living where you literally cannot walk anywhere - but most of those people out there like it or they wouldn't be out there.
So, no, the people maintaining those highways aren't doing nothing. Maybe they're doing nothing for you. Maybe you can argue you're subsidizing other people's lives. But you can't say that people maintaining highways are doing nothing or are net negative.
Our preferences, choices and decisions have ripple effects.
Maybe if we'd intentionally designed our society/environment differently, we wouldn't need so many highways, and so many people managing them.
https://libcom.org/article/phenomenon-bullshit-jobs-david-gr...
https://en.wikipedia.org/wiki/Bullshit_Jobs
> Who's going to take care of sick people? Who's going to maintain our infrastructure? Who's going to police people? Who's going to defend our country from war? Who's going to make sure your cellphone still works? Who's going to make sure your house still has electricity? Who's going to make sure the laws are being followed? Who's going to make new entertainment for you?
You simply seem uninformed. My english is not so good to be persuasive enough, somebody please help me.
Basic income doesn't mean all people will stop working. Jobs would still exist, and people would still choose to work, but for different reasons than they do now. They could do what they want, and stop anytime for any period of time, and start again whenever and with what ever they would feel like it.
We have voluntary firefighters now, don't we?
People just wouldn't have to choose job based on its capacity to provide sustenance for their family, but do what they love no matter the financials.
For example many teachers and nurses are now leaving the profession (in the US), because they're unable to earn enough to sustain their living expenses and would have to work multiple jobs.
> Who's going to take care of sick people?
Do you think that doctors and nurses are in it for the money, and nothing else than money? No, they do it because they want to help people. I don't fully understand it, but it is so. And they would still be awarded for choosing that vocation.
> Who's going to defend our country from war?
You're an american, are you not? Are you people really that scared? With all the money on your offensive defences and with bases in 3/4 of all countries of the world?
> Who's going to police people?
Don't keep people in poverty, and you wouldn't need so many policemen and prisons. Do you know you're 1st in the world in this area too? And do you think there would not be anyone who would want to police, without being forced to earn a living?
> Who's going to make new entertainment for you?
All those youtube attention seekers are not going anywhere.
Basic income would start a massive creativity boom. I'm sure of it.
> We need to do more than just have beans to eat.
We can be forced to do something, or choose to do something. That's the difference. The beans are just the failsafe.
With UBI, you will have to drive your trash to the nearest landfill yourself. And the car will barely work for lack of mechanics. And the road will barely function for lack of construction workers. And the landfill will just be a disordered rubbish tip, and not a proper facility. Because no one--and I mean no one--is working in garbage, grease, or tar when they can sit at home instead.
It's the purest idiocy anyone ever thought of.
And yeah, doctors and nurses are in it for the money. No one works in shit and puke for fun either.
Maybe (ignoring the fact that ours is the age of trash, one of the things that should be solved first) those jobs you've mentioned are in fact essential and the only thing it shows is that the way how incentives are set is artificial and has nothing to do with the real utility of the job.
Making majority of population to work their whole lives although there are (will be) ways to automate it completely just because we need few dirty & greasy jobs done is not a stupidity?
And I for one don't believe that doctors and nurses are in it only for the money, there are many examples of people choosing jobs and risking their lives for others, no money are worth that. People (can) act out of their heart, not just out of their greed.
It's a complicated topic, with many unknowns and many things that would have to change, but insisting that status quo is the best way to handle things ... that seems like blindness to me.
Not everyone is a cynical monster who would only ever do anything that benefitted themselves personally.