"This Is A Crisis Greater Than Any Government Can Handle": The $400 Trillion Global Retirement Gap

Tyler Durden's picture

Submitted by John Mauldin of Mauldin Economics

Today we’ll continue to size up the bull market in governmental promises. As we do so, keep an old trader’s slogan in mind: “That which cannot go on forever, won’t.” Or we could say it differently: An unsustainable trend must eventually stop.

Lately I have focused on the trend in US public pension funds, many of which are woefully underfunded and will never be able to pay workers the promised benefits, at least without dumping a huge and unwelcome bill on taxpayers. And since taxpayers are generally voters, it’s not at all clear they will pay that bill.

Readers outside the US might have felt smug and safe reading those stories. There go those Americans again, spending wildly beyond their means. You are correct that, generally speaking, we are not exactly the thriftiest people on Earth. However, if you live outside the US, your country may be more like ours than you think. Today we’ll look at some data that will show you what I mean. This week the spotlight will be on Europe.

First, let me suggest that you read my last letter, “Build Your Economic Storm Shelter Now,” if you missed it. It has some important background for today’s discussiion.

Global Shortfall

I wrote a letter last June titled “Can You Afford to Reach 100?” Your answer may well be “Yes;” but, if so, you are one of the few. The World Economic Forum study I cited in that letter looked at six developed countries (the US, UK, Netherlands, Japan, Australia, and Canada) and two emerging markets (China and India) and found that by 2050 these countries will face a total savings shortfall of $400 trillion. That’s how much more is needed to ensure that future retirees will receive 70% of their working income. This staggering figure doesn’t even include most of Europe.

This problem exists in large part because of the projected enormous increase in median life expectancies. Reaching age 100 is already less remarkable than it used to be. That trend will continue. Better yet, I think we will also be healthier at advanced ages than people are now. Could 80 be the new 50? We’d better hope so, because the math is pretty bleak if we assume people will stop working at age 65–70 and then live another quarter-century or more.

That said, I think we’ll see a great deal of national variation in these trends. The $400 trillion gap is the shortfall in government, employer, and individual savings. The proportions among the three vary a great deal. Some countries have robust government-provided retirement plans; others depend more on employer and individual contributions. In the aggregate, though, the money just isn’t there. Nor will it magically appear just when it’s needed.

WEF reaches the same conclusion I did long ago: The idea that we’ll enjoy decades of leisure before our final decline simply can’t work. Our attempt to live out long and leisurely retirements is quickly reaching its limits. Most of us will work well past 65 whether we want to or not, and many of us will not have our promised retirement benefits to help us through our final decades.

What about the millions who are already retired or close to retirement? That’s a big problem, particularly for the US public-sector workers I wrote about in my last two letters. We should also note that we’re all public-sector workers in a way, since we must pay into Social Security and can only hope Washington gives us something back someday.

Let’s look at a few other countries that are not much better off.

UK Time Bomb

The WEF study shows that the United Kingdom presently has a $4 trillion retirement savings shortfall, which is projected to rise 4% a year and reach $33 trillion by 2050. This in a country whose total GDP is $3 trillion. That means the shortfall is already bigger than the entire economy, and even if inflation is modest, the situation is going to get worse. Further, these figures are based mostly on calculations made before the UK decided to leave the European Union. Brexit is a major economic realignment that could certainly change the retirement outlook. Whether it would change it for better or worse, we don’t yet know.

A 2015 OECD study (mentioned here) found that across the developed world, workers could, on average, expect governmental programs to replace 63% of their working-age incomes. Not so bad. But in the UK that figure is only 38%, the lowest in all OECD countries. This means UK workers must either build larger personal savings or severely tighten their belts when they retire. Working past retirement age is another choice, but it has broader economic effects – freezing younger workers out of the job market, for instance.

UK employer-based savings plans aren’t on particularly sound footing, either. According to the government’s Pension Protection Fund, some 72.2% of the country’s private-sector defined-benefit plans are in deficit, and the shortfalls total £257.9 billion. Government liabilities for pensions went from being well-funded in 2007 to having a shortfall 10 years later of £384 billion (~$500 billion). Of course, that figure is now out of date because, just a few months later, it’s now £408 billion – that’s how fast these unfunded liabilities are growing. Again, that’s a rather tidy sum for a $3 trillion economy to handle.

UK retirees have had a kind of safety valve: the ability to retire in EU countries with lower living costs. Depending how Brexit negotiations go, that option could disappear.

Turning next to the Green Isle, 80% of the Irish who have pensions don’t think they will have sufficient income in retirement, and 47% don’t even have pensions. I think you would find similar statistics throughout much of Europe.

A report this summer from the International Longevity Centre suggested that younger workers in the UK need to save 18% of their annual earnings in order to have an “adequate” retirement income – which it defines as less than today’s retirees enjoy. But no such thing will happen, so the UK is heading toward a retirement implosion that could be at least as damaging as the US’s.

Swiss Cheese Retirement

Americans often have romanticized views of Switzerland. They think it’s the land of fiscal discipline, among other things. To some extent that’s true, but Switzerland has its share of problems, too. The national pension plan there has been running deficits as the population grows older.

Earlier this month, Swiss voters rejected a pension reform plan that would have strengthened the system by raising women’s retirement age from 64 to 65 and raising taxes and required worker contributions. From what I can see, these were fairly minor changes, but the plan still went down in flames as 52.7% of voters said no.

Voters around the globe generally want to have their cake and eat it, too. We demand generous benefits but don’t like the price tags that come with them. The Swiss, despite their fiscally prudent reputation, appear to be not so different from the rest of us. Consider this from the Financial Times:

Alain Berset, interior minister, said the No vote was “not easy to interpret” but was “not so far from a majority” and work would begin soon on revised reform proposals.

Bern had sought to spread the burden of changes to the pension system, said Daniel Kalt, chief economist for UBS in Switzerland. “But it’s difficult to find a compromise to which everyone can say Yes.” The pressure for reform was “not yet high enough,” he argued. “Awareness that something has to be done will now increase.”

That description captures the attitude of the entire developed world. Compromise is always difficult. Both politicians and voters ignore the long-term problems they know are coming and think no further ahead than the next election. The remark that “Awareness that something has to be done will now increase” may be true, but there’s a big gap between awareness and motivation – in Switzerland and everywhere else.

Switzerland and the UK have mandatory retirement pre-funding with private management and modest public safety nets, as do Denmark, the Netherlands, Sweden, Poland, and Hungary. Not that all of these countries don’t have problems, but even with their problems, these European nations are far better off than some others.

(Sidebar: low or negative rates in those countries make it almost impossible for their private pension funds to come anywhere close to meeting their mandates. And many of the funds are by law are required to invest in government bonds, which pay either negligible or negative returns.)

Pay-As-You-Go Woes

Pay-As-You-Go WoesThe European nations noted above have nowhere near the crisis potential that the next group does: France, Belgium, Germany, Austria, and Spain are all pay-as-you-go countries (PAYG). That means they have nothing saved in the public coffers for future pension obligations, and the money has to come out of the general budget each year. The crisis for these countries is quite predictable, because the number of retirees is growing even as the number of workers paying into the national coffers is falling. There is a sad shortfall of babies being born in these countries, making the demographic reality even more difficult. Let’s look at some details.

Spain was hit hard in the financial crisis but has bounced back more vigorously than some of its Mediterranean peers did, such as Greece. That’s also true of its national pension plan, which actually had a surplus until recently. Unfortunately, the government chose to “borrow” some of that surplus for other purposes, and it will soon turn into a sizable deficit.

Just as in the US, Spain’s program is called Social Security, but in fact it is neither social nor secure. Both the US and Spanish governments have raided supposedly sacrosanct retirement schemes, and both allow their governments to use those savings for whatever the political winds favor.

The Spanish reserve fund at one time had €66 billion and is now estimated to be completely depleted by the end of this year or early in 2018. The cause? There are 1.1 million more pensioners than there were just 10 years ago. And as the Baby Boom generation retires, there will be even more pensioners and fewer workers to support them. A 25% unemployment rate among younger workers doesn’t help contributions to the system, either.

A similar dynamic may actually work for the US, because we control our own currency and can debase it as necessary to keep the government afloat. Social Security checks will always clear, but they may not buy as much. Spain’s version of Social Security doesn’t have that advantage as long as the country stays tied to the euro. That’s one reason we must recognize the potential for the Eurozone to eventually spin apart. (More on that below.)

On the whole, public pension plans in the pay-as-you-go countries would now replace about 60% of retirees’ salaries. Further, several of these countries let people retire at less than 60 years old. In most countries, fewer than 25% of workers contribute to pension plans. That rate would have to double in the next 30 years to make programs sustainable. Sell that to younger workers.

The Wall Street Journal recently did a rather bleak report on public pension funds in Europe. Quoting:

Europe’s population of pensioners, already the largest in the world, continues to grow. Looking at Europeans 65 or older who aren’t working, there are 42 for every 100 workers, and this will rise to 65 per 100 by 2060, the European Union’s data agency says. By comparison, the U.S. has 24 nonworking people 65 or over per 100 workers, says the Bureau of Labor Statistics, which doesn’t have a projection for 2060. (WSJ)

While the WSJ story focuses on Poland and the difficulties facing retirees there, the graphs and data in the story make clear the increasingly tenuous situation across much of Europe. And unlike most European financial problems, this isn’t a north-south issue. Austria and Slovenia face the most difficult demographic challenges, right along with Greece. Greece, like Poland, has seen a lot of its young people leave for other parts of the world. This next chart compares the share of Europe’s population that 65 years and older to the rest of the regions of the world and then to the share of population of workers between 20 and 64. These are ugly numbers.


Source: WSJ

The WSJ continues:

Across Europe, the birthrate has fallen 40% since the 1960s to around 1.5 children per woman, according to the United Nations. In that time, life expectancies have risen to roughly 80 from 69.

In Poland birthrates are even lower, and here the demographic disconnect is compounded by emigration. Taking advantage of the EU’s freedom of movement, many Polish youth of working age flock to the West, especially London, in search of higher pay. A paper published by the country’s central bank forecasts that by 2030, a quarter of Polish women and a fifth of Polish men will be 70 or older.

 
Source: WSJ

Next week we will look at the unfunded liabilities of the US government. It will not surprise anyone to learn that the situation is ugly, and there is no way – zero chance, zippo – that the US government will be able to fund those liabilities without massive debt and monetization.

Now, what I am telling you is that every bit of analysis about the pay-as-you-go countries in Europe suggests that they are in a far worse position than the United States is. Plus, the economies of those countries are more or less stagnant, and they are already taxing their citizens at close to 50% of GDP.

The chart below shows the percentage of GDP needed to cover government pension payments in 2015 and 2050. But consider that the percentage of tax revenues required will be much higher. For instance, in Belgium the percentage of GDP going to pensions will be 18% in about 30 years, but that’s 40–50% of total tax revenues. That hunk doesn’t leave much for other budgetary items. Greece, Italy, Spain? Not far behind.

And there is other research that makes the above numbers seem optimistic by comparison. The problem that the European economies have is that for the most part they are already massively in debt and have high tax rates. And they can’t print their own currencies.

Many of Europe’s private pension companies and corporations are also in seriously deep kimchee. Low and negative interest rates have devastated the ability of pension funds to grow their assets. Combined with public pension liabilities, the total cost of meeting the income and healthcare needs of retirees is going to increase dramatically all across Europe.

Macron, the new French president, really is trying to shake up the old order, to his credit; and this week he came out and began to lay the foundation for the mutualization of all European debt, which I assume would end up on the balance sheet of the ECB. However, that plan still doesn’t deal with the unfunded liabilities. Do countries just run up more debt? It seems like the plan is to kick the can down the road just a little further, something Europe is becoming really good at.

In this next chart, note the line running through each of the countries, showing their debt as a percentage of GDP. Italy’s is already over 150%. And this is a chart based mostly on 2006 and earlier data. A newer chart would be much uglier.

I could go on reviewing the retirement problems in other countries, but I hope you begin to see the big picture. This crisis isn’t purely a result of faulty politics – though that’s a big contributor – it’s a problem that is far bigger than even the most disciplined, future-focused governments and businesses can easily handle.

Look what we’re trying to do. We think people can spend 35–40 years working and saving, then stop working and go on for another 20–30–40 years at the same comfort level – but with a growing percentage of retirees and a shrinking number of workers paying into the system. I’m sorry, but that’s magical thinking. And it’s not what the original retirement schemes envisioned at all. Their goal was to provide for a relatively small number of elderly people who were unable to work. Life expectancies were such that most workers would not reach that point, or would at least live just a few years beyond retirement.

As I have pointed out in past letters, when Franklin Roosevelt created Social Security for people over 65 years old, US life expectancy was about 56 years. If the retirement age had kept up with the increase in life expectancy, the retirement age in the US would now be 82. Try and sell that to voters.

Worse, generations of politicians have convinced the public that not only is a magical outcome possible, it is guaranteed. Many politicians actually believe it themselves. They aren’t lying so much as just ignoring reality. They’ve made promises they aren’t able to keep and are letting others arrange their lives based on the assumption that the impossible will happen. It won’t.

How do we get out of this jam? We’re all going to make big adjustments. If the longevity breakthroughs I expect happen soon (as in the next 10–15 years), we may be able to adjust with minimal pain. We’ll work longer years, and retirement will be shorter, but it will be better because we’ll be healthier.

That’s the best-case outcome, and I think we have a fair chance of seeing it, but not without a lot of social and political travail. How we get through that process may be the most important question we face.

I haven’t even thrown in the complications that are going to arise because of changes in the nature of employment and the future of work that will be caused by technological change in the next 10–20 years. That will mean even fewer workers for each retiree. Facebook’s Zuckerberg talks about a basic minimum income. I think that is the wrong thing to do. It is the nature of human beings to need to do things that contribute meaningfully to the lives of their family and society. But the reality is that increasing numbers of people are already having trouble finding that sort of work.

Maybe we should think about basic minimum employment. FDR put a generation of people to work building public projects that helped get us through the Great Depression. Our world is going to change in ways that we don’t yet understand and that we are not prepared for, psychologically, socially, politically, or economically.

In the US and much of Europe we have developed social echo chambers in which we talk just to ourselves and those who are like-minded, ignoring or demonizing the other side. We have lost the ability to disagree rationally and productively. When the children’s books written by Dr. Seuss are considered by some to have been written by a white racist and are therefore deemed unacceptable to be in a public library, you know the quality of civil discourse has spiraled downward.

I do not like that, Sam I am.

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ebworthen's picture

Since the 2008 and onward bailouts there is no such thing as money, or savings, or "retirement".

 

stizazz's picture

A society that strives on debt is a doomed society.

old naughty's picture

"  Dingus sums up the opinions of most experienced observers when he says, “Governments taking over the private pension business is a bad idea. Public pensions are a disaster and combining private pensions with them is the equivalent of ‘tying two rocks together and hoping they will float.’”

And, from the venerable Python, we now only two things float.

Ducks…

…and witches. "

 

http://fiduciarynews.com/2014/08/are-pensions-merely-ponzi-schemes/


Mtnrunnr's picture

There's more than enough stuff (housing, food, medicine, etc) to take care of these people. I know I'll be supporting my parents soon enough. Its a forgone conclusion at this point.

Escrava Isaura's picture

Mtnrunnr: There's more than enough stuff

Ohps!

You forgot one minor detail: Capitalism, meaning, you can’t afford to lose or you’ll fall behind.

Sorry.

 

Billy the Poet's picture

Just get a job and stop making up excuses as to why everyone else owes you a living.

When the sun comes up I'm heading down to Job's Hole to cut some firewood for the winter. If I listened to you I'd sit here freezing while demanding that you owe me a blanket.

Paul Kersey's picture

One simple and quick solution to the world wide pension problem would be a world wide nuclear war. America, always at the forefront, is already working on this solution.

yogibear's picture

Loads of able people collecting Social Security disability.

Free medicare to go along with that as well.

Kidbuck's picture

Yeah, but they are all dependent for life. Have you seen anyone in government talking about cleaning up that mess? Just another hive of democrat voters.

bluez's picture

"I'll gladly pay you Tuesday for a hamburger today."

Stuck on Zero's picture

Here in California tens of thousands of public servants are retiring at 62 and collecting >120% of their working wages. The retirement pay is set by the last years wages. Bosses give big fat bonuses to retirees in their last year and they take their vacation and sick leave in their last year also.

americanreality's picture

Imagine the filth we'd live in if everyone "cut fire wood for the winter" like yourself.  Third world pollution levels and lung cancer for all.  If wood burning is so great, try sealing your chimney instead of dumping your waste off into the sky.  "But-but-but I live in a rural area, mah neighbors live way down yonder, etc".  Might as well urinate in someone's well, not much different than inhaling toxic wood smoke.  But you're such a rugged, wood chopping individualist.  No way are you a pig.

libertyanyday's picture

plug your cars exhaust.  plug your gas heaters exhaust, vent your oven and dryers into the house. run your weed whacker and lawnmowers in you bedroom.

mankind has been burning coal and wood for 1000's of years...........and mother nature is managing just fine,,,, pissing in someones well.....open wells have been outlawed for 80 yrs.

rockstone's picture

You're right. It'd be much easier if most of you froze to death. Better yet, why wait until winter?! Save the planet now by standing in front of an organic compost dump and slitting your own throat. Be careful where the knife lands.

Planet saved

Billy the Poet's picture

Firewood is carbon neutral. YOU are turning the planet into a desert, or so I'm told.

JRobby's picture

Cutting and transporting firewood is pretty good exercise (OH! that word again! Arrrgggh!). A worthwhile endeavor in the fall.

If you can't run, you might be rounded up soon enough.

Billy the Poet's picture

Firewood warms you up twice.

DanDaley's picture

More like about 5 or 5 times...cut, move, move to splitter, split, stack, move to house, ashes, etc.

LittleGreenMan's picture

In the case of private pensions, there's no excuse for them to be underfunded. It's simple math.  Greed and corruption is why they're underfunded.  Heads should have rolled a long time ago.

techpriest's picture

Well, its a better alternative to socialism, where you fall behind no matter what you do, unless the elites like you or you happen to be in the "golden generation" that has a lot of other people's money to steal.

I doubt we'll have the same level of entitlement, and want freedom again, once *ism finishes spending all of the wealth, and puts humanity back in the dark ages for another 4-6 centuries.

americanreality's picture

Socialism should be partner to capitalism.  Too much either way is a problem.  

Escrava Isaura's picture

Ohh boy.

How old is Zero Hedge? Two thousand years old?

And most cannot articulate the basics?

Core of Socialism: The workers, the craftsmen, the artists own their production, meaning, they are not hourly wage slave of people with the capital.

Core of Capitalism: You, and your government work for the owners of capital, the bankers/investors.

Core of Communism: Means of production and money issuance reside within the state, meaning, communism is super-capitalism.

Core of Religion: You don’t need proof (high faculty brain), you need faith.

Core of Fascism: When either capitalism and communism structures fail. Fascism is a by-product of power structures. Fascism could never be implemented in a socialist/anarchist systems because those don’t come with structures —with bosses.

Socialism doesn't’ exist in America but in ones brain.

America state is state capitalism, meaning, America doesn’t issue its own money like Japan, Canada use to do. America borrows money from the banks into existence. Then, charges taxes to pay the banks back.

Every government expenditures/subsidies are welfare programs ‘employment’ for the nation such as in the Department of Defense, Department of Education, and so on.

The reason that the government intervenes are, basically, two.

1) No growth. When there’s no growth in the real market (free market), there is no profits. Because the dollar is lent into existence with interest, if there’s no growth, that debt can never be paid back.

The second reason of government subsidies is to survive losses.  We wouldn’t have had the transistor, even less a computer.

Wonder why?

Because no company would be willing, even less be able to survive decades of losses like the government can.

Free market is only to sell oranges, but don’t tell that to the believers —the idiots.

 

 

WHATDIFFERENCEDOESITMAKE's picture

For the love of God, is this what they are teaching in universities these days?Idiot, socialism does not allow you to own anything, it is the first of many steps to communism. You actually fantasize that everyone is self motivated too! That's my clue you are an indoctrinated fool. ????????????????

Oldwood's picture

Socialists believe in owning their means of production, but NOT earning it or even working to preserve it. They simply rely on government to "own" and protect it for THEM, ignoring that government is protecting "it" from THEM, and meanwhile it only appears to benefit the "trustee".

And yes it does inevitably advance to full on communism, as the resulting slow degradation of the economy resulting from an ideology of entitlement evolved from one of responsibility. It ultimately requires tyranny, dictatorship, to manage a chaos.

Escrava Isaura's picture

You mean the ignoramus classes on Exceptionalism? Realism? Economics?

I am so sorry, you’re correct, I missed those academic classes.

Please, fill us in.

 

WHATDIFFERENCEDOESITMAKE's picture

For the love of God, is this what they are teaching in universities these days?Idiot, socialism does not allow you to own anything, it is the first of many steps to communism. You actually fantasize that everyone is self motivated too! That's my clue you are an indoctrinated fool. ????????????????

techpriest's picture

*ism: Don't look at the official definitions, but look at what is actually done, or represented.

This is IMO the problem with the word "capitalism." Socialists have redefined the word into a childish battle between "the people" and "the corporations." In reality, government is a corporation, and labor unions are also corporations. Most *isms are about promoting a certain ratio of different kinds of corporations, but the overall system is the Platonic rule of experts over the public, in the form of that *ism's particular mix of ruling organizations.

What I am talking about is the ability for anyone to form or dissolve their own organization at will, and to join or leave organizations at will. This can only happen when people can accumulate enough personal wealth to have the freedom to join or leave, and *isms generally oppose this, either through taxes, or regulations, or manipulating the money supply, or all three. In the USA we call this kind of freedom "capitalism," but maybe in Brazil there is another word.

max2205's picture

Why would anyone trust the govt to manage a retirement fund? They can't manage to get to work every day? We're all fucked but they get annual bonuses?   Sure makes cents 

Bobbyrib's picture

It's like hiring a known embezzler to handle your finances.

j0nx's picture

It makes dollars too!

Cloud9.5's picture

By what standard is their enough?  My mother’s last stay in the hospital was, $47,000.  Fortunately Medicare picked up the lion’s share of the cost.  Without subsidies, elder care will bankrupt you in a heart beat.

JRobby's picture

$47k sounds average these days. Outpatient Chemo $12.5k / week,  ICU $100k/ day, etc. Until the mechanism that created the healthcare mess is understood, it will never be sorted out.

Oldwood's picture

So we understand that we are captured by our dependencies. People used to get sick and die. Now they spend every dime they can beg, borrow or steal.....from you and me, to survive. What costs can be incurred by a society who has been indoctrinated to believe we are "entitled" to live forever?

The mental disease of entitlement has gone viral, and our healthcare cost and our earthly debt are symptoms.

Pausebreak's picture

If healthcare wasn't subsidized by the government it would be much, much cheaper.

ResistTemptation's picture

kimchee = Kimchi ... sorry.

 

Endgame Napoleon's picture

In times past, most moms did not work in the paid workforce. Two parents did not take two jobs out of the economy, concentrating the wealth from two high-paying jobs in one household in the case of the assortative mates and lowering the wage base of single breadwinners in the case of moms who can work for a pittance due to a spousal income, a child support check that covers rent or welfare and taxfare for reproducing while single. These moms often accept extremely liberal absenteeism privileges for moms as a consolation for decent pay.

In the past, moms took care of their kids, raising them instead of farming it out, and they took care of their elderly parents, too. Today, the elderly parents often do a ton of the childcare, letting the mommas working the welfare-reform required 20 hours per week show proof of a minimal childcare expense and then giving them back the money. That is one reason why those $6,269 child tax credits, awarded on top of free rent and free groceries to single parents, often get spent on motel rooms to entertain their latest boyfriend in FL.

Parents take most of the safe, salaried and hourly positions with benefits, with employers accomdating them to the max on absenteeism issues, and they pay into the SS retirement fund at a little over 7.5%. Childless, single individuals get no welfare and no massive child tax credits, and like non-custodial parents, we must cover rent and other unaffordable bills on one stream of earned-only income.

All of the breaks and freebies are for parents--designed to encourage more parents to work, if only for 20 non-productive, mandatory hours per week, resulting in an avalanche of freebies for some parents, including free food and free rent as long as they stay below the income limits for welfare. All of these parents pay into the SS retirement fund at 7.5%.

Due to the family-focused workplaces of the feminist era, it is the childless who are often in self employment, where you pay twice as much into the SS retirement fund -- a little over 15%, no matter how little you are paid as a 1099 contractor and no matter how low your net income is after covering commercial rent, a business loan, your own living expenses, higher taxes, business fees imposed by the state, operating expenses, etc. When you are a self-employed shop owner, you keep about 1/3rd of your gross income.

The richest among us pay either 7.5% or 15% up to the $127,200 SS cap. This includes dual, high-earner households, taking two safe, salaried jobs out of the economy without creating jobs for others. Those two jobs could support 4 or more households in middle-class style. Many of them have unearned income from inheritances on top of it.

Some of these dual earners hold jobs paying $10,000 [per month] or more apiece, holding onto the jobs through protracted absences during multiple pregnancies and with lots of additional absenteeism for kids long after the kids are born, not because of rare skills that most lack in many cases. Most are doing jobs that many others could perform. These employees with dual incomes adding up to $200,000 [per year] or more pay 7.5% into SS up to the cap.

A self-employed person grossing $90,000 something [per year] and netting only $30,0000 [per year] is paying 15% SS tax on every dime earned, often working much longer hours for that $30k in net income, while these dual-earner parents pay only 7.5% up to the $127,200 SS cap.

It is all for baby, I know.

Put a baby bow on it.

But at low end of the labor market, I see a lot of excused absenteeism and moms with free rent and groceries, bragging about spending their "child" tax credits of up to $6,269 on master bedroom furniture or trips with boyfriends. I also know that America has 25% of the world's incarcerated people and 5% of its population, suggesting that accommodating working moms to the endth degree with privileges and freebies is not working,

I do not see many people making sacrifices for kids these days at the top, either. I notice a lot of parents taking lengthy and excused babyvacations every few months from workplaces where childless employees who show up for work every day, stay all day and meet the quotas every month so that the well-vacationed momma manager gets her bonus are fired for 5 minutes of absenteeism. Taking a lot of babyvacations with your former college buds while dropping the kids off with grandparents is not a sacrifice for the sake of the babies, even if described as a way for busy-working parents to get a break.

That said, retirement-age people with plenty of unearned retirement income are contributing to mass underemployment in the same way that moms with plenty of spousal income do. Point taken that some of them may be trying to hang onto homes, although many of them end up sinking money from homes into assisted living and other medical-related expenses.

However, many single, childless people who work for low wages all their lives, never earning a lot for 5 consecutive years and never married to someone who earns a lot for 5 years, are beaten down in the SS-retirement system, just like in these babyvacationing, parent-clique, back-watching workplaces. They end up without the two SS checks of married retirees. They end up without a house. With the full cost of unaffordable rent to cover on one low and fixed income, they have to work, usually in miserable, low-paying jobs, long into old age. They are the arthritic cashiers of the world.

political_proxy's picture

Tiny pebbles are offended by your discriminatory coment.

Blue Steel 309's picture

This just sounds like more "buy the dip, retard".

Justin Case's picture

The rise and the ravages of the classic European fascism are blamed largely on Adolf Hitler and Benito Mussolini, not the socio-economic circumstances that gave rise to those instrumentally “useful” characters. An obvious flaw of this interpretation of fascism is that it cannot explain recent manifestations of fascism: since the archetype European fascism is attributed to Hitler and Mussolini, their demise ought to have logically meant the end of fascism. Yet, manifestations of fascism has been a recurring phenomenon characteristic of periods of capitalist crisis, as evinced by today’s expressions of fascistic tendencies in most of the core capitalist countries.

These ominous developments are testament to the fact that the germs of fascism are intrinsic to capitalism, as periodic economic crises are intrinsic to capitalism. As such, it is bound to periodically resurface as long as capitalism continues to be the dominant mode of socio-economic production.

Just as the original European fascism was blamed on Hitler and Mussolini, so is today’s display of fascistic propensities blamed on characters such as Donald Trump (in the U.S.), Marine Le Pen (in France), Norbert Hofer (in Austria), Alexander Gauland (in Germany), and so on. The real culprit, however, has been market failure and economic insecurity, both now and then.

Oldwood's picture

Cycles of worsening convulsions, each enabling the next. Destruction drives chaos and ultimate loss of confidence in government, but also...and more importantly ourselves.

Solio's picture

Bailouts=Accelerated Inflation

Theta_Burn's picture

No problems for me.. I'll be sending 2 girls to college soon, so i'll just work till I drop dead..

swampmanlives's picture

Just get them to work on myfreecams. Those girls there make a killing, if you're hot.

JRobby's picture

43 week cretin devoid of any morality whatsoever would enjoy the symptoms of decay and collapse.