The Great Pension Lie

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"More
than 3 million demonstrators — one in 20 of all French people —
marched yesterday against the President’s plans to raise the standard
retirement age from 60 to 62," reported
the UK Independent last week.

Strictly speaking,
the protests are not really about France’s retirement age. After
all, Frenchmen are perfectly free to retire at any age. There is
nothing that holds them from quitting their jobs at 55 or 50 or
even earlier should they be so inclined.

What the protests
are really about is the desire of the French to begin state-sponsored
retirement at one of the lowest retirement ages in Europe. For comparison,
the retirement age in Germany and Denmark is 67. Britain is planning
to increase pension eligibility to 68.

But the French
have a problem: The government does not have the money to indulge
the wishes of its citizenry. The French state is broke. France’s
pension program is currently running a u20AC32 billion deficit. With
increasing life expectancy and fewer young people in the workforce,
the figure is estimated to double within a couple of decades.

The fact is
that the French government cannot afford to provide the kind of
pensions demanded by the population. The French people, however,
are apparently unimpressed by such excuses. They demand that the
state provide anyway. And to get their way, they are prepared to
turn their country upside down. This is how bad things stood last
week:

Rail and air
services were severely disrupted… Many schools and government
offices, and even the Eiffel Tower, closed. Eleven out of the nation’s
12 oil refineries were wholly or partially closed in what local
union branches threaten could become an indefinite stoppage to topple
the pension reform. The state railway company, the SNCF, warned
last night that it expected widespread cancellations…

This is a
truly desperate situation: The impossible is demanded and social
disorder is threatened if the impossible is not delivered. The
state cannot make good on its promises and the citizens refuse
to acknowledge that fact.

The coming
on of this impasse was not unpredictable. It was, in fact, unavoidable.
This is because no government can provide for the well-being of
its citizens over the long run, be it through healthcare, employment
or retirement. All such efforts inevitably culminate in fiscal calamity,
which then morphs into social crisis.

Experience
shows that all large-scale public retirement programs sooner or
later turn into Ponzi schemes whereby pensions of current retirees
are drawn from taxes paid in by the working population. Due to falling
demographic trends that afflict welfare countries, there inevitably
comes a point a point when the racket runs out of money. The citizens,
however, do not easily relinquish the promised goodies. The politicians
in charge have to give in if they want to stay in office. The enraged
populace will accept nothing less. Kicking the can down the road
is the pretty much the only option for politicians in modern western
democracies where people have been conditioned to be taken care
of by their government. But deficits and borrowing cannot go on
forever. Things must eventually come crashing down, and in a bad
kind of way.

This fatal
dynamic is also playing itself out in the United States, where the
government has promised to provide for citizens in their old age.
This is a high-sounding notion, but one that can never be fulfilled.
As in France, the US government is broke and in no position to deliver
on its promises. Estimates of entitlement liabilities inherent in
Social Security and Medicare range from $65 trillion to $200-plus
trillion
. Even the lower end estimate is completely out
of the realm of fiscal possibility.

Nor will anything
be done about it, since it is not for nothing that entitlements
are called the third rail of American politics. Politicians just
keep kicking the can down the road while contracting ever greater
debts. Bad though they may be, it is wrong to blame the politicians
for our woes, for they ultimately only do our bidding. The idea
that Social Security needs to be scrapped would not go down well
with the voting public.

We set out
on the road to fiscal woe when we fell for that great lie: that
the state will provide for our well-being and welfare. But this
is an unaccomplishable task. Despite what we have been told, the
state cannot provide education, retirement and job security over
the long haul. The only way to have these things is to obtain them
through our own efforts.

Self-reliance
is not always be easy, but it can be done. Our ancestors showed
us how. They managed to live in functioning civil society with almost
no federal involvement. There was no Social Security or government
healthcare then. It bears to keep in mind that they lived in a technologically
far less advanced age, when life was much harder than it is today.
And yet they did not look to the state to take care of their needs.
They did what they had to do themselves.

Why could we
not do the same? Why do we now instinctively turn to government
the moment we encounter trouble or experience a need? It is this
attitude that in the final analysis accounts for the fact that we
are now broke as a country. In a mob democracy such as we have today,
the state’s tendency is to promise all things to all people. Unfortunately,
this can never work.

The choice
we face is stark: Either we summon the strength to face the truth
and choose to follow the path of self-reliance treaded by our forefathers,
or we will continue on the road to doom with open eyes. The former
would certainly seem the more courageous and sensible way. It would
also be much less painful.

Reprinted
with permission from the American
Thinker
.

October
23, 2010

Born
and raised under a totalitarian regime, Vasko Kohlmayer [send
him mail
] is a freelance writer who loves liberty.

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