Monday, May 02, 2005
Cross-Country Pension Comparisons (Kash)
Right now, according to the study, the US ranks 25th out of 30 countries in pension generosity toward the average individual - or, put another way, the US is fifth from the top when it comes to stinginess toward retirees. But clearly Bush is not happy with America's fifth place position - his proposal will substantially reduce benefits for "average" Americans (defined as those who make around $36,500 per year right now), dropping the replacement rate toward the mid-20s, as a percent of pre-retirement income.
There is no doubt the Bush Social Security Plan stands as a ideological attempt to destroy the Social Security system. A Concept battle rages among Economists today over the real value of Welfare programs--which, in truth, Social Security and Pension benefits are. Extreme Conservative--like the current NeoConservatives in the Administration--dream of the complete elimination of Welfare programs; second Option being crippling such programs so they cannot function. Liberal and Moderate Economists are hamstrung by the current Vogue of Economic thought.
This Author does not know how Economic Growth became the supreme God of Economics, where everything need be sacrificed to it. All Economists, Right and Left, assert Economic Growth is propelled by aggregation of Capital, which is produced by Business Profits. Such sentiment remains fallacy! Aggregation of Capital comes from the modern Banking system, and expert manipulation of Financial instruments. Business Profits--except at the level of International Corporations--has little to do with the process. Another great fallacy lies in the claim that all Profits must go to Corporate Executives or Stockholders, who invest such Profits--rather than Consume. Labor, in aggregate, invest significant share of Income, when such Income exists. There is a Case for a Living Wage, just as there is a Case for a Viable Pension.
Labor, through their efforts and skill, produce the Business Profits described; something which no Stockholder can claim, unless the Stockholder is directly involved in the Business management or Production. A viable Pension system provides their real Profit-sharing within the Business format and Economy; like unto Dividends and Stock sales insure Stockholder Profit-sharing.
Kash states other OECD countries may have to lessen their pension benefits schedule. This Author disagrees! Economic Growth will eventually decline, this due to declining Labor participation, and Technological innovation propels Overproduction of Goods. Conservative Economists ignore the real need to generate Consumer Demand for the Goods produced. Reduction of Pension Benefits will reduce Consumer Demand, and thereby, destroy future efficient Economic performance. This will be coupled with the real fact depleted Pension benefits will lead to eventual higher alternate Welfare Costs. lgl