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but again, is it really a problem? Pension payments grew from basically nil to 10% of GDP in 40 years without obviously bankrupting any country today. Why wouldn't we succeed in climbing to 15% of GDP in 20-30 years, in a slow process which simply reflects the shifting priorities of our societies;
Let me address this in a personal, and perhaps roundabout, way.  I was drawn to write this diary because of my familiarity with the demographic issue in the US.  The bulge of "baby boomers" in the US has had unbelievable impact on the US economy and society since 1946.  For example, when the baby boomers hit the school systems,,,,it was an explosive impact.  Where I lived as a youth, the high school system was totally unprepared for the mass of baby boomers coming into the system.  Class size exploded because there were not enough teachers; schools were overcrowded and the district reacted belatedly to create new physical buildings, etc., etc.  (I saw it more than most because the area I lived in was the fasted growing in the US,,,in addition to having the baby boom explosion).  But the impact has been dramatic on every age group as the boomers come to that group.  If one is aware of this, one can benefit--so for example when the baby boomers reached the stage of where a part of the age group starts buying 2nd homes,,,,guess what happened?,,,,yes, of course, an explosion in the market for 2nd homes.  These are just two examples,,,,there are thousands of them.

So this issue of what happens when the boomers retire has received a lot of attention in the US (not enough action, but a lot of analysis and attention).  And there is general agreement that we have a problem, particularly with pensions and healthcare costs as the boomers retire.

I have not looked at this as an issue outside the US, though I have read that other countries, particularly Japan, has even bigger issues with this demographic bulge (note Japan in the demographic chart).  But I was particularly surprised to see that France, according to that chart, has a larger demographic issue than the US.  And we had recently discussed the higher retirement rates of the French economy, which led me to look at this issue.

So, voila, we in the US are heading to a problem.  You in France seem to have a larger demographic issue, complicated by an earlier retirement pattern.  But Jerome, you say

but again, is it really a problem?
and evidently France has not seen these demographic issues I have described for the baby boomers in the US.  So maybe you are right,,,,and there is no problem.  I just can't see why it's not a problem, when a use the same analytical prism to look at France, that I do when I look at the US--a prism by the way that has no nefarious motivation to make France look bad, just a fact based analytical technique,,,,,,one that has worked on the boomer impact for decades in the US,,,,,but maybe I'm missing something, and I'll find it based on your comments and others in this dialogue.
by wchurchill on Tue Apr 4th, 2006 at 03:37:32 PM EST
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We do have a very real babyboom bulge, but again, it creates problems which are no unsurmountable. It is not a hard transition to focus spending on the people that need it most (especially if they are the biggest voting block) - and if that changes some big macroeconomic numbers, so be it. It is a choice of society, and society can well afford it.

What makes you think that we won't be able to afford to pay for a larger number of pensioners? Why wouldn't all our productivity growth oriented towards preserving the income of the pensioners rather than the revenues of the workers? It's a distribution choice, i.e. a social/political issue, not an economic problem. And for individual workers, little will actually change.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Apr 4th, 2006 at 06:30:49 PM EST
[ Parent ]
What makes you think that we won't be able to afford to pay for a larger number of pensioners?
I have been through the impact in the US of the baby boomer "bulge" on the social security system and on Medicare/Medicaid.  It is a problem for the US to handle this upcoming impact, and one that we should make some adjustments now, so the impact is lessened in the future.

As I look at the OECD numbers, they say that many countries have a bigger "baby boom bulge" than the US does.  So I conclude that, for example France, may have an even bigger problem than the US does.

Now, the US "can afford to pay for a larger number of pensioners".  It's just that if the problem is not addressed earlier, the impacts on the future US economy are pretty harsh.

So, I can only conclude that I am missing something about US pension/healthcare programs, that causes us to have a more significant problem than France, or other countries; or, France is more willing to pay the price later and live with the adverse consequences; or France has not looked at the impact of this in detail.  My hunch is that the first is the answer, "I am missing something about US pension/healthcare programs, that causes us to have a more significant problem than France", but I just don't know what I'm missing yet,,,,,and being curious about things, would like to find out.

Frankly I'm a little disappointed in this dialogue on my diary (not with you Jerome as I think you have taken time to thoughtfully respond).  But what I have previously normally found as ET's more thoughtful approach to problems, seems to have broken down here.  For some 80%ish of the poll takers to respond that there is not a problem, or there is no answer among the alternatives, leads me to the conclusion that people are not looking at the issue,,,,,or are taking the easy way out and attacking the message, or messanger, as someone who is a "neocon", and just wants to defend the "anglosaxon model" and attack the "socialized European systems"--whatever any of those things in quotes means.  That is certainly not my goal.  I'm here to debate and learn from the debate,,,,and my learning on this the debatge in this diary is very low.

by wchurchill on Wed Apr 5th, 2006 at 03:04:43 AM EST
[ Parent ]
I think we're tired: I am. I'm tired of fighting the assumptions underlying the stories underlying this diary. Let's focus for a moment  on the options you provided in your poll:

.    The analysis is flawed, no change is required, and everything will be fine.     17%


This is slightly silly: clearly some change will be required, it always is. And the analysis is flawed.


.    Politicians will articulate the problem, and present a combination of programs involving benefit cuts, higher taxes, later retirement, and more debt. This will work well, with little disruption.     5%

This is both funny - politicians doing their job right! - and includes the assumption that the solutions presented form a basis for a solution.


.    Strikes will prevent adequate change, a fiscal crisis will develop as debt soars, the economy will falter. Change will be in a crisis mode, with extreme disruption.     11%

This encodes the lazy-reform-resisting-frogs-are-preventing-necessary-change assumption. The resistance is to piecemeal change imposed in accordance with dogma and underwritten by misrepresentations.


.    The above disruption scenario will occur, with similar episodes in other EU countries. The EU will disolve, as a result.     0%

Make that lazy-reform-resisting Europeans.


.    None of the above.     64%

The only one most of us can vote for.

You've even failed to clearly show that there is a real problem - the "problem" with US pensions and healthcare is arguably simple underfunding by ideologues who disapprove of welfare and taxation in any form though I'll leave it to the dKos people to go into the detail of that - I think boondad did a series on this that makes it clear that the problem is actually nowhere near as serious as presented by some people. As did Brad de Long if I recall properly.

by Colman (colman at eurotrib.com) on Wed Apr 5th, 2006 at 03:52:07 AM EST
[ Parent ]
For some 80%ish of the poll takers to respond that there is not a problem, or there is no answer among the alternatives, leads me to the conclusion that people are not looking at the issue

wc, you put up a provocative title and invited people to take a poll. Now you complain people didn't answer the way you say they should if they were serious and "thoughtful", and were facing the issues. So next time, either don't do a poll, or make an effort to do a less transparently loaded one. (See Colman's analysis).

Also, the quality of "debate" seems to you "disappointing". So, next time, don't do a diary based on yet another tiresome rubbish column from an American pundit who trots out the usual stereotypes on France-which-is-not-facing-up-to-facts etc. Don't make this disingenuous attempt to invite "debate" when your aim is so clearly prescriptive (ie these are the problems; if you say "No, they're not," you're not facing up to the problems).

by afew (afew(a in a circle)eurotrib_dot_com) on Wed Apr 5th, 2006 at 04:41:17 AM EST
[ Parent ]
Also, the quality of "debate" seems to you "disappointing". So, next time, don't do a diary based on yet another tiresome rubbish column from an American pundit who trots out the usual stereotypes on France-which-is-not-facing-up-to-facts etc. Don't make this disingenuous attempt to invite "debate" when your aim is so clearly prescriptive
You nailed it, also on the Gnomemoot.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Apr 5th, 2006 at 05:44:55 AM EST
[ Parent ]
I think the large part of the problem is that Europeans, especially the French, are sick and tired of being treated like the world's economic idiots by the press -- something I understand well after reading the articles that Jerome and others have debunked -- just as many Americans (myself included in some cases) are sick and tired of being looked at as a bunch of warmongering assholes simply for being citizens of a country in which Bush is the president, as though we were all members of the right wing.  (My mother's long-time friend was shocked when she and her husband visited Paris and people began spitting at them -- yes, spitting -- and insulting them for being Americans.  They've been a Democrats throughout their entire lives and were very much opposed to the Iraq War.)

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Wed Apr 5th, 2006 at 03:21:31 PM EST
[ Parent ]
Spitting at them? What the fuck? How'd they manage that?
by Colman (colman at eurotrib.com) on Wed Apr 5th, 2006 at 03:25:31 PM EST
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