Government Pensions
The New York Times is concerned about the future of Western Europe's welfare state:
"Across Western Europe, the “lifestyle superpower,” the assumptions and gains of a lifetime are suddenly in doubt. The deficit crisis that threatens the euro has also undermined the sustainability of the European standard of social welfare, built by left-leaning governments since the end of World War II." (http://www.nytimes.com/2010/05/23/world/europe/23europe.html?hp)
Among the concerns are generous public pension plans. With many Europeans able to retire shortly after 50 and lifespans increasing, the cost of paying for extended retirements is breaking the budgets of many European states (and many US States as well).
On proposal on both sides of the pond is to raise the retirement age. Let's just think about this for a moment. Why is the government telling us when we can retire? If each person were responsible for his or her own retirement savings, we each could decide on our own when we wanted to retire. If someone wants to work 14-hour days to earn a bunch of money and retire at 45, that should be their prerogative. If another person wants to keep working until 70, that should be their choice as well. That's what freedom is all about. When the government tells you when to work and when to retire, I call that serfdom.
Of course the big problem with government run pension plans is that any money collected by the government is immediately spent rather than saved. So by the time we retire, current workers have to pay our retirement. In contrast is a true savings plan where each person has a "nest egg" to spend for retirement.
Transitioning away from government-run plans toward the freedom of individual retirement accounts has the problem of what to do with current retirees. It is too late for them to build up their own retirement savings. Those still working would have the dual burden of paying into their own account and paying current retiree's benefits at the same time. Any plan to phase out Social Security would have to take that into account
"Across Western Europe, the “lifestyle superpower,” the assumptions and gains of a lifetime are suddenly in doubt. The deficit crisis that threatens the euro has also undermined the sustainability of the European standard of social welfare, built by left-leaning governments since the end of World War II." (http://www.nytimes.com/2010/05/23/world/europe/23europe.html?hp)
Among the concerns are generous public pension plans. With many Europeans able to retire shortly after 50 and lifespans increasing, the cost of paying for extended retirements is breaking the budgets of many European states (and many US States as well).
On proposal on both sides of the pond is to raise the retirement age. Let's just think about this for a moment. Why is the government telling us when we can retire? If each person were responsible for his or her own retirement savings, we each could decide on our own when we wanted to retire. If someone wants to work 14-hour days to earn a bunch of money and retire at 45, that should be their prerogative. If another person wants to keep working until 70, that should be their choice as well. That's what freedom is all about. When the government tells you when to work and when to retire, I call that serfdom.
Of course the big problem with government run pension plans is that any money collected by the government is immediately spent rather than saved. So by the time we retire, current workers have to pay our retirement. In contrast is a true savings plan where each person has a "nest egg" to spend for retirement.
Transitioning away from government-run plans toward the freedom of individual retirement accounts has the problem of what to do with current retirees. It is too late for them to build up their own retirement savings. Those still working would have the dual burden of paying into their own account and paying current retiree's benefits at the same time. Any plan to phase out Social Security would have to take that into account
posted by CBDenver at 2:15 PM
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