D H
May 26 ยท Last update 2 mo. ago.

How important is the pensions crisis?

The pensions crisis is a shortfall in resources to pay state or corporate pensions due to changing demographics causing a drop in the ratio between retirees and workers. Planning a pension system is near impossibly difficult, as it involves planning a retirement pay-out over very large timescales by governments who most likely will not be in power when the majority of workers retire. However the issues remains hugely controversial with economists debating the scale, relevance and even the very existence of the pensions crisis. So, how important is the pensions crisis? Either way, what is the solution to securing adequate living standards for retirees?
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The stealing of pensions is the bigger scandal
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The pensions crisis is overstated
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A huge time-bomb that few do justice
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The stealing of pensions is the bigger scandal

Far from just the economic imbalances brought on by changing birth rates over time the direct abuse of pension funds by politicians and bankers is the biggest elephant in the room that undermines pension funds. This story is a common one in many US cities, where politicians are often elected on promises of more money pensions, but as soon as they are in power contributions into pension funds are one of the first things to be reigned in. This problem has become so bad in states like Rhode Island that some cities have paid zero into pension funds for years on end. But this problem doesn't stop at politicians, as pensions are not simply a savings account but part of a security that is then sold off to investors. If a city has failed to meet the payments on pensions and bankers are allowing them to be traded this is technically a form of securities fraud as the investors are paying more than they worth and the city is much more destitute than it is willing reveal. Solving fraudulent over-valuations and the mis-allocation of pensions funds should be a first step in fixing pensions before the much more complex issue of demographics is addressed.

rollingstone.com/politics/politics-news/looting-the-pension-funds-172774/#! independent.co.uk/news/business/sib-says-pension-transfer-scandal-is-not-exaggerated-1392589.html

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D H
Jun 14
Created

The pensions crisis is overstated

While many economists question the very idea of saving a fiat currency directly, arguing it is effectively the same process as just printing currency at a later date, a number of studies have demonstrated that the pensions crisis is overstated or nonexistent and just part of a demographic shift. Critics of the crisis often argue that changes in the number of citizens of working ages and the transition from a 'short-lived, high birth-rate' society to 'long-lived, low birth-rate' society is part of the society reaching its population equilibrium. This transitional period will eventually return the dependency ratio, the level of new non-working child compared to non-working retirees, to "normal" in subsequent generations.

That would indicate that this isn't simply a crisis in the sense of something that needs to be addressed, and is overstated in its importance as there is no direct solution per se. However providing other forms of adequate social welfare, i.e. UBI or a similar scheme, would render the counter arguments and supporters of addressing the pensions crisis mute. If we bridge any gaps in pension payout due to demographic shifts, so that despite drops in birth rate everyone in the society is guaranteed a basic living income for that society, there is no need to worry about a pensions crisis even if it were true. Recognising caregivers as vital economic contributors and reimbursing them accordingly would also help bridge this gap and would recognise the important role that many pensioners still play in contributing to societies other dependents, children.

moslereconomics.com/wp-content/powerpoints/7DIF.pdf theguardian.com/money/2004/jun/22/business.pensions

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D H
Jun 14
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DH edited this paragraph
http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf https://www.theguardian.com/money/2004/jun/22/business.pensions

A huge time-bomb that few do justice

The many countries of the world facing an ageing population also face a huge pension crisis as well as other economic problems caused by this changing demographic. In the United States for example estimates for the underfunding of state pension programs ranged from $1 trillion to $3.23 trillion in 2008, jumping to approximately $5.4 trillion by 2010 [1], and according to American Legislative Exchange Council the unfunded liability hit $6 trillion in 2019 [2]. There is now no choice but to take this seriously, the future of pensions look grim and addressing the debt ratio by reducing obligations and increasing resources is sadly the only way to do this.

ssa.gov/OACT/TR/2010/trTOC.html express.co.uk/finance/personalfinance/1443918/pension-UK-retirement-savings-consolidation-money-investment-2021-exclusive forbes.com/sites/johnmauldin/2019/05/20/the-coming-pension-crisis-is-so-big-that-its-a-problem-for-everyone/?sh=2be7ed3037fc

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D H
Jun 10
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DH edited this paragraph
The many countries of the world facing an ageing population also face a huge pension crisis as well as other economic problems caused by this changing demographic. In the United States for example estimates for the underfunding of state pension programs ranged from $1 trillion to $3.23 trillion in 2008, jumping to approximately $5.4 trillion by 2010 [1], and according to American Legislative Exchange Council the unfunded liability hit $6 trillion in 2019 [2]. There is now no choice but to take this seriously, the future of pensions look grim and addressing the debt ratio by reducing obligations and increasing resources is sadly the only way to do this.
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