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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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