August 22, 2016

How to solve our pension crisis

Posted in Sunday Business Post · 91 comments ·
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How much will be left for your pension? This is the question you should be asking yourself because the notion that the tap will be still on, with crisp euros gushing out when you reach retirement age, is at the very least a dubious proposition.

 

At the moment, unlike most of the rest of Europe, Irish demographics are still just about right, thanks in the main to the Pope’s Children baby boom that peaked in June 1980 – nine months after the Pope kissed the tarmac in Dublin in September 1979. These workers are paying for their parents now.

 

After 1980, the Irish birth rate dropped off substantially and only began to recover in the 2000s. But it never recovered to its 1980 peak. This is typical of most mature democracies. And we are all living longer so there are now, and will be in the future, more old people knocking about who need to be paid.

 

In the next few years, retirement age is slated to rise to 68 and it may well have to rise again. The mathematics are very simple: unless we have more workers paying for the older cohort, either the weekly pension falls or taxes on younger workers have to rise to pay for the existing pension.

 

It will come down to a choice between different generations.

 

Many years ago, Tony Benn, the English socialist, remarked to me that “the young and the old have one thing in common, they are both bullied by the middle-aged.” For now, as long as the middle-aged hold the reins of power, public pension provisions will be eked out for as long as possible.

 

But something has to give because unless we have a massive increase in immigration, it’s hard to see how the present system can be maintained.

 

There is another argument which is that given high levels of job insecurity among young people, should the state be handing over so much cash to the elderly, when arguably the young are the ones most in need of a helping hand?

 

The central assumption of the pension system is that the old need the money more than the young. But is this the case now, or will it be the case in the future?

 

Consider the following.

 

The nature of work is about to be transformed by artificial intelligence that could wreak havoc on all forms of traditional work, particularly white-collar work. For example, in many “safe” professions such as law and accountancy, much work will be done by machines.

 

One implication of this is that unemployment in what used to be the solid professions will increase. Ultimately, only the very creative or entrepreneurial will thrive. This means we have to think very differently about how we organise our economy. It implies that younger people will have to reassess their futures, what they are going to do and how they will make a living.

 

Those who are content to “outsource” entrepreneurial ventures to others and are merely happy to become workers, might find that easy option closed off. If not closed off altogether, it’s highly unlikely to be the road to prosperity.

 

When faced with these types of dilemmas, societies will also need to reassess how they spend their resources and this brings me back to pensions.

 

Why spend so much money exclusively to prop up older people’s incomes via pensions when maybe we should be spending some of this money on a start-up fund for younger people?

 

Implicit in the pension debate is that the economy will be able to provide the jobs, to generate the income, to generate the taxes, to pay the pensions. What if AI undermines this?

 

In this case, we would need far more entrepreneurs. However, one of the major impediments to “start-ups” is a lack of capital. Banks are not in the business of seed capital for small businesses. As well as having a state pension fund for the elderly, imagine if we were to share some of the resources and have a state start-up fund for young people?

 

This is a half-baked idea right now, and needs refinement, but think about what is going on.

 

We are spending huge resources at one end of the age cohort – which is right and proper – yet at the other end, when people just come into the labour market, they are falling behind. We know that this generation of Irish people could well be the first in many generations to be poorer than their parents. What is their future?

 

It seems to me that the future is a creative entrepreneurial one and that standing on your own two feet will require people to take more risks in order to set up businesses. But in the same way as children need stabilisers when they first learn to cycle, people (all citizens) will need some help to start their own businesses. People need collateral to start and if you don’t have collateral or capital, you won’t get started.

 

Here’s where the idea of a “start-up fund” as well as a “pension fund” comes in to help at both ends of the labour market. To avoid wasting money and rather than give younger people cash as income, why not pledge collateral to them backed by their small but not insignificant part of a sovereign wealth fund? They could “bank” this collateral with one of the banks, releasing seed capital. This move will give them the leg-up they need and will also begin the process of actually fostering a real self-sufficient, entrepreneurial economy that may be able to withstand the assault of artificial intelligence on the work force.

 

I know its counterintuitive to imagine that you can become self-sufficient while depending on a state fund for collateral, but when was the last time you saw a child just get up on a bike for the first time and cycle off?


  1. michaelcoughlan

    Up early this morning Dathi? Me too!

    • michaelcoughlan

      Hi,

      This McWilliams is probably the most dreadful article you have written in the few years I have been active on the blog. I will explain but please don’t get the hump like Pat Flannery.

      The most important thing it demonstrates is the complete disconnection between reality and economics the result in my view of the same type of Bernake/Bonbon type idealogical madness (in your case keynesianism) now literally and metaphorically consuming the planet. For the purposes of my response I am going to assume you actually believe what you say and take it at face value.

      “These workers are paying for their parents now”

      Really David? Are the pensions for their parents not being paid from the stamp money fund their parents contributed to from taxes on their salaries working all those years? Are their parents private pensions not being paid from the fund THEY THEMSELVES Built up over the years of contributions?

      “But something has to give because unless we have a massive increase in immigration, it’s hard to see how the present system can be maintained”

      Really David? How about this idea? How about we do the exact opposite and close the border to immigrants and allow the RECORD BREAKING NUMBERS OF IRISH GRADUATES VOTING WITH THEIR FEET LEAVING THE PLACE an opportunity to get entry level salaries and experience here in Ireland commensurate with the opportunities abroad. Why not ensure a society capable of providing them with a properly functioning housing industry giving them affordable modern housing? How about we encourage those same graduates to sire families and produce the new young boys and girls needed to maintain the continuity of our nation?

      If this drivel you are producing passes for acceptable economic commentary in the circles in which you operate McWilliams then Ireland is well and truly;

      FUCKED!

      • wdetuncq

        I would encourage you to read, if you haven’t yet, Yanis Varoufakis’ book, “And the Weak Suffer What They Must”. The give and take of deficit and surplus vanished with 2008. Providing capital for beginners is a real step towards recovery. At some point, the system either by some step puts more money in the game or nothing will improve.

      • Sideshow Bob

        I dunno about it being the worst, I would have said the Prince article was worse, or even last Wednesday´s.

        A case of a longer (and proper) holiday required? He appears to be a bit intellectually tired at the moment.

      • ps200306

        Michael Coughlan, with respect — you are being completely delusional, and doing David McW a disservice into the bargain. You don’t honestly believe that _”their parents private pensions [are] being paid from the fund THEY THEMSELVES Built up over the years of contributions?”_

        Hah hah. That would be hilarious if it wasn’t evidence of a frightening ignorance of how the system works. THERE IS NO FUND! PRSI contributions go into the general pot of exchequer revenue, and is spent on current expenditure. It does not get put into any kind of fund and it goes out as soon as it comes in. Even the meagre National Pension Reserve Fund — a lukewarm attempt to put some of our excess income from the boom aside for a rainy day — got plundered for the bank bail out. There literally is zero in the pot for pensions. Nothing. Nada.

        David is quite right that unless current tax revenue provides the means to pay pensions, they simply won’t be paid. You may argue till the cows come home about the rightness or justice of this, but that is exactly the way it is.

        As for incentivising young graduates to suddenly start producing hordes of offspring, you are away with the fairies on that one too. Look at the average fecundity of the most well off in society, and you will see that financial opportunity is no longer any kind of incentive to bear children. The native Irish will face the same demographic cliff as the rest of Europe. Apart from a handful of traditional religionists still having large families — the Pope’s Grandchildren, to steal McWilliam’s parlance — most of Ireland does not want its affluence upset by too many demanding juveniles. The problem is they will turn up their noses at immigrants who will do the childbearing for them. Well, it doesn’t take a genius to figure out you can’t have it both ways.

        There is one exception I take with David’s article. AI is not going to take over the world anytime soon. That prospect has been trumpeted for the 30+ years I’ve been involved in IT, and is no nearer coming to pass. Increased connectivity and Big Data will certainly generate many innovations and opportunities, but software is still largely dumb. The AI meme is put about by consultancy gangsters who promise revolutionary software intelligence for your business … and then hire out bodies at a thousand a day for doing stapling. The grandaddy of them all is IBM and their Watson malarkey. Look at their actual technical material, at least what little of it that they have put out to prop up the marketing hype. Google “IBM cognitive computing” (their latest buzzword). It’s mostly complete bunk, designed to bedazzle the unwary IT budget manager.

        • michaelcoughlan

          Hi,

          Thanks for this ps200306. You should re read my post because it seems you can’t read plain english. For Example;

          “their parents private pensions [are] being paid from the fund THEY THEMSELVES Built up over the years of contributions?”

          Did you miss the word private?

          “PRSI contributions go into the general pot of exchequer revenue, and is spent on current expenditure”

          If true which I am sure it is that funds are taken from the citizen and used for purposes other than that which they are being sourced is that not evidence of FRAUD and embezzlement?

          “David is quite right that unless current tax revenue provides the means to pay pensions, they simply won’t be paid. You may argue till the cows come home about the rightness or justice of this, but that is exactly the way it is”

          I know. Which is why the alternative I suggested is more sustainable than that preferred by McWilliams.

          Your apathy is shocking and typical.

          Michael.

          • bluegalway

            Sociopath Peter Sutherland is doing his damnedest to make sure, as he told the BBC in an interview three years ago, to make sure the EU “undermines the homogeneity of Europe”. He is working the plan of his paymasters at Goldman Sachs and in his role as head of the ‘Steering Committee’ of the Bilderberg Group. As Douglas Murray has argued well in public speeches, we are being spun the lie that we need mass immigration to pay for our pensions. Well guess what, immigrants get old too, so how will their pensions be paid? Yet more immigration.
            Canada has faced up to the pension problem already, and Ireland should follow suit. You can either cut the State pension or raise taxes, but Canada decided on a little bit of both. And as has been said on here already, start with keeping the native Irish from leaving with affordable housing and realistic job prospects and salaries.
            Ireland is already progressing at more than the pace of immigration in England. It will have a profound effect on Irish society. And not in a good way.

          • michaelcoughlan

            Thanks bluegalway.

            It seems common sense isn’t all that common.

            warm regards,

            Michael.

          • CorkRob

            Here ! Here !
            Government is broken – a lot has been ignored over the last 30 years in the name of “Balance”. Surely PRSI payments should be exclusively managed to derive a future return for the purpose for which they were paid ?
            We cannot continue to “massage” the figures by blending all your revenue sources solely to deliver short term current a/c balance – that’s delusional.
            I like DMCW but I think he’s away off the mark here with some very notional theories on how EVERYONE young could be turned into an entrepreneur…think about all the people you know – how many of them have the wherewithal to run & manage a successful business, not to mind coming up with a sustainable and viable business idea or proposition.
            I’m sue David’s long term future is well provided for by tasty fees from speeches and corporate advisory roles, but Joe citizen is depending on and expecting his retirement payout of €240/wk in return for a lifetime of paying into the system.
            If we have a massive future shortfall in meeting this obligation then we need to revisit our stance on such potentially game-changing revenue generators as our offshore oil & gas resources and our multinational corporate tax system (I think Shares for taxes for the government is a great idea).
            We also need to look at how we educate our children , for as we move towards more automated roles, we continue to need to import foreign workers to do the manual trade jobs that used to be the remit of the Irish fitter, plumber, chippy and Sparks.
            These are all roles that could well be provided by Irish born & educated people (they are no longer Low Cost jobs – just try and hire a plumber !!!)
            I also note David is not suggesting any degree of equity for his proposed investment of starter capital – why the Free Lunch David ?

          • Grzegorz Kolodziej

            “Well guess what, immigrants get old too, so how will their pensions be paid? Yet more immigration.”

            Or by them having many kids who are working (so unlike the recent invasion of Jihadists on Europe): unlike what Lord Keynes was saying, supply creates its own demand, not vice versa (see George Gilder, “Wealth and Poverty” – one of the 10 books which made the biggest impression on me in my life).

            The problem is that since we have in power the 68 generation (Rudi Dutsche and his long march through the institutions), all people in Europe are encouraged to have 1 child, or preferably no children (and buy a granite kitchen instead).

            If someone wants to point a finger at someone, they should primarily point it at politicians who encourage abortions (the whole German elite is ruled by such people – and now Germany has the worst demographics in the world so they even tried to get 800,000 largely illeterate Muslims to fill the gap: because they turned out to be unemployable, they are now going to build the most powerful army in Europe out them: history repeats itself and this time not as a farce).

            I wonder if any of you heard about the gentleman called Karl Krauberg. I have an uneasy feeling that even if I put up a money price, no one would be able to come up with any answer what exactly did he write, because nowadays generations have this self-congratulatory attitude that they no longer need books because everything in on the internet. The thing is, not everything, and furthermore, the most interesting things are not on the internet.

            Karl Krauberg was an employee of Sicherheitsdients. In cooperation with Dr Wetzel and Dr Hetzl they worked out a plan how to make sure that the nations of Europe will never be able to challenge the 1,000 years Reich. In 1939, they published a little brochure (which was analysed at Dr Krauberg’s court case). I am quoting from that brochure (old readers would remember I once took up a course comparing legal systems of the Third Reich, fascist Italy – many Irish governments introduced legislation inspired by it and we see some elements of it in the US – btw, some Nazi legislation is still valid in Germany, and bolshevik Russia).

            Oh, I almost forgot – this is not just SOME brochure – this was the basis of the so called Himmler’s plan for eastern Europe.

            So in the brochure we find the following:

            “All contraceptive means should be tolerated or encouraged. Abortion must be legalised. All means that can be used to lower fertility must be tolerated or encouraged. Homosexualism must be legal.”

            The study further explains how the propaganda should discourage women in conquered nations from having kids and encourage them to buy the German industry fashion items instead of spending that money on kids.

            Now, take a look at Ireland. Look very closely and see which politicians say that abortion and homesexualism should be encouraged (do not get me wrong – I am not saying that homesexualism should be illegal – few people know that Poland introduced the first legislation that legalised it – but making it legal by not penalising it and encouarage it is a completely different thing).

            Are Sinn Féin for example any different on that than FF, FG, or Labour-Does-Not-Work?

            Yes, I know – there are difficult cases, foetus abnormalities – all of that makes for an interesting discussion – but the gist of the issue remains the same.

            Folks, you do not want to bring immigrants and have pensions – you must stop the abortionists and have 2-3 kids at least: it ain’t rocket science.

            I know, I know – this angers many people, many would say “you are a right winger, out, out, out” – no, it’s not even a right wing thing (the left before WWII, apart from Soviet agents, were AGAINST those two things that they saw as bourgeiosie attempt to finish the so called working class (I hate that stupid term) – it’s only the post 1968 salmon socialists who suddenly did a U-turn on that).

            So, if some of you feel angry, they should be angry at people who propose unlimited abortion. These are the ones they should be pointing their angry fingers at. Do you really think that Himmler’s plan was only meant for and implemented for Mittel-Europa? Roish.

            And, btw, consider this:

            https://www.youtube.com/watch?v=pZidxKCwWnw

            P.S. No time for proofreading as always (either I am writing fast or accurately – and I am trying to give you folks all I have), but the quote is accurate – I translated it myself and triple checked it.

      • Grzegorz Kolodziej

        “Why not ensure a society capable of providing them with a properly functioning housing industry giving them affordable modern housing?”

        Michael, the answer to it seems to be as disarmingly simple as it is sad – it’s because the majority of all the main parties electorate are home owners, and out them a considerable part are renting out their houses to those graduates and students (who have to compete with rent allowance recipients outbidding them – hence my perennial desideratum to abolish rent allowance), so they (FG, FF, SF – who voted for the bank guarantee in case someone forgot) would not do anything to burst the housing bubble and give the graduates affordable housing because in an environment when the real wages everywhere apart from India and China have been falling for a few decades, all that keeps the banksters show going is to enslave more people with mortgages to give them an illusion of wealth (I paid half a million for a house in Longford with no electricity, creche and playing ground – an authentic case from RTE documentary – but it will be worth a million and meanwhile, I can always rent it: that’s the mindset).

        And one more thing – I have been listening to Mr McWilliams since 2003 (because he is worth it) but we should also bear in mind that 10 years ago he was worried that there are to many empty houses. My question: what happened to them (not all of them were built 150k from Dublin – it’s quicker for example to get from Tullow in a car to some places in Dublin than WITHIN Dublin on a bus) remains unanswered (in the past I attached some links proving the government – I cannot now remember which one – has deliberately knocked down finished houses – I was shocked that did not shock anyone).

  2. Pedro Nunez

    In Irish public service, they could start with more transparency and accountability and stop abusing ‘ill-health retirement’ as a management tool.
    see http://www.audit-scotland.gov.uk/docs/local/2003/nr_030612_early_retirement.pdf

    http://www.audit-scotland.gov.uk/uploads/docs/report/1997/nr_9712_early_retirement.pdf

    http://www.audit-scotland.gov.uk/docs/central/2013/nr_130523_early_departures.rtf

    But with the political sinecures that goes for regulation in Ireland, don’t hold your breath!

  3. ART6

    The observation about artificial intelligence is appropriate since job losses through the growth of digital systems has actually been going on for many years, Example: the third engineering process plant I built in 1990 employed sixty people. The last and much larger one built 1n 2003 employed nine — its production lines were fully automated from a central control room. Sadly all of the state start-up funds would not provide means of earning a living for those other fifty because it is a good bet that the majority of them would be incapable of taking advantage of it.

    Perhaps another way of addressing the pension (and unemployment) problem is to consider that when an employer exploits automation and artificial intelligence his costs plummet and his productivity increases, resulting in increased profitability. That is from where the money needed for pensions etc. must come in the future, as corporation taxes. because technology will increasingly eliminate the need for employees in the future and there is no stopping it!

  4. HoChi

    Nigerians tell me that 70% of them are self employed, in common with a lot of ‘Third world countries’. We should encourage immigration and entrapeneurism because we’ve’exported’ so much of our best talent overseas, and need to maximize Ireland’s vast agri resources . You go shopping in Dublin and half the shops are empty while paying high rents, does that happen in Lagos/Tokyo/London. Encourage and support entrapeneurism.

    • DJR

      Or maybe stop exporting our own best talent so we don’t need to import ‘entrapreneurs’?

    • CorkRob

      If they’re doing SOOOOO well as entrepeneurs in Nigeria, why are so many of them trying to emigrate to Europe (50,000 here and climbing).?

    • Grzegorz Kolodziej

      “half the shops are empty while paying high rents” – there is this thorny issue of upwards only rent reviews (and some absurdities in legislation that encourage landlords to keep their offices above the flats idle by just ripping off a bathroom in them making it inhabitable for tax purposes – we had large discussion on it here on this blog and I believe that the Sideshow Bob is an expert on that topic).

      Of course, any government minister would tell you about the sanctity of the contract and bla bla bla, bla gobbledygook bla, but that did not stop in the past the government and the opposition to apply a communist solution to pension funds by… well, just stealing pensioners money from it because of the Emergency (again); also, I had a go in Indo in the past at Minister Gilmore for his breathtaking hypocrisy regarding unsecured bondholders (my experience with politics slowly pushes me towards the conclusion that I would only vote for a politician who promises blood, sweat and tears).

  5. AlfieMoone

    ‘How much will be left for your pension?’ DMcW

    Nothing, whether public or private as during the next leg down of the GFC the fearl faux-Capitalism of The Globalist will only have pension honey pots left to raid, having robbed the social & financial Capital of the entire Progressive progress of working people since the C18th, having hoovered up & ‘privatised’ the post-war Welfare State to asset strip it to make good bankster gamblers.

    ‘This is the question you should be asking yourself because the notion that the tap will be still on, with crisp euros gushing out when you reach retirement age, is at the very least a dubious proposition.’ DMcW

    It’s a question I asked myself a decade ago when I joined this blog as part of a project to decode ‘economics’ as a gap in my ontological landscape. That quickly became a project to debunk ‘economics’ & then ridicule it as the posturing intellectual armour of The Globalist which turns out to be The Emperor’s New Clothes. Or, if you will, The Globalist’s New Clothes..

    Crip EU-ros? Erm……LOL! The EU-ro will go tits up once Grexit can no longer be avoided. The Brits, if they’ve any sense will just sit back in Whitehall and play chess with the Brussels, Berln & Dublin numpties who think they have a p-p-p-Poker Face for Article 50 to which the only possible reply would be “Stick it up ya jumper, Juncker! As for your prize pupil & prefect Enda Kenny….well, he reads this blog….he knows who’s behind these words….he isn’t going to do what you want him to do, he’s going to do exactly what I tell him to do…isn’t that right, boy?”

    Bismarck only set up a State Pension fund to foil the rise of Bolshevikism but as Martin Jacques and other realise, #ClassIsBack & once us Brexit BrummieBoys storm UKIP for the working-class of Core UK England and Wales, leaving the Special Snowflake Cultural Marxist EU fluffers of Racist-Humanitarian-Imperialist pseudo-multikulti ‘diversity’ in a metaphorical smoking ruin for avenging the betrayal of the Industrial Working Class then we’ll restore Ken Loach to Prime Minister, re-instate The Spirit Of 45 post-war settlement and tell the Yanks, Krauts and Paddies to go to hell with their nonsense. Just as we told Hitler, De Valera and Harry S Truman to do one after WW2 when a supposedly bankrupt Great Britain told the world’s bankers & their crony Churchill to take a hike and funded the rise of the NHS & tax funded public education & pension provision. Anyone who thinks Great Brexitan is Trumpism just isn’t paying attention. But that’s fine because us Shire Irish don’t give a damn what anyone else thinks, never have, never will, that’s why England could only rise amidst The Shires full of Irish refugees and rebels which has been the case since ‘Irish’ slavers captured St Patrick on the nearby banks of the River Severn. No doubt the Yanks will step in once again to fund a New Marshall Plan to rescue Europe but don’t expect us Brits to fund the bill and don’t expect the US Globalist Clinton to be able to deny conceding to Trumpists that NATO free-riders like Ireland need to pay up or be buzzed 24/7 by Russian jets taunting their fake neutrality.

    And then we come to Immigration. Ah yes, ‘we’ need to poach, cajole or steal the emerging Health Care infrastructure of Afric and Asia because ‘we’ can’t be arsed to re-train the abandoned Industrial Working Class (in Ireland, that’s an abandoned Agricultural and Construction Class) so ‘we’ will use the racist EU shield of ‘multi-culturalism’ to hide our sleveen dream of replacing the demoralised, betrayed supposedly ‘indigent’ indigenous serfs with a more compliant cadre of model workers stolen from the developing world? And that’s not Racist? And it’s not Racist to say if your white and East European you can walk through any Schengen door but if you’re black or brown, get on that dinghy with the gangmaster traffickers and prove you really want it, because that’s all you’ll face in the Precariat Neu Europa of Angela’s Ashes.

    I’ve been saying it for years but I’ll repeat it again: When Robotics throws the Globalist Middle Class fantasy under the bus, don’t expect ‘solidarity’ from the abandoned Industrial Working Class, expect payback. We do not forgive. We do not forget. Expect us! 4 decades of Globalist Class War Against The Working Poor & you think it will go unpunished? One word answer: BREXIT

    And when young English kids expel Scotland from the UK for the betrayals over Brexit and Student Loans, don’t come moaning, Jock. You won’t see that theme anywhere else because it’s only now that folk in E’bro realise what they’ve done and that if they don’t defenestrate that eejit Sturgeon pdq, then they will be cut off and sent into endless EU-ro oblivion once their Axis Of Eejitry co-dependent victim script provisionally entitled SCINI by 1916 revisionist Fintan O’Toole kicks off. Or blows up on day one…LOL!

    Then we have the myth of atomised boot-strapped world economy of entrepreneurial individuals whose efforts can only exist amidst the lavish tax backstop of publicly funded infrastructure. Forget all this nonsense about Tech Overlords being our Saviours, without the US & UK military publicly funded origins of the WWW/Internet as a war technology, none of their fantasy Globalist nonsense would have been possible. The WWW/Internet is funded and maintained by taxes as is the entire infrastructure wherein such individualistic behaviour takes place. Elizabeth Warren’s ‘you didn’t built this speech’ has been appropriated by O’bama, Clinton but most deviously by Trump. Any so-called ‘entrepreneur’ who doesn’t admit their Standing On The Shoulders Of Giants who did the Vision Thing to enable turbo-Capitalism and that most of them were as much collectivists as individualists is beyond ridicule. I walked past the Adam Smith statue in E’bro last week as blue-face painted EU eejits joined blue-face painted Braveheart tossposts in fake tartan kilts singing their Remain ditties. I laughed and told them to sing “I’d Like To Teach The World To Sing” as their Coke-advert silliness was so utterly delusional. Globalism is dead but The Globalist will not accept that #ClassIsBack and will fight a nuclear war rather than admit ideological defeat. Martin Jacques has it exactly right, so do I. Everybody else? …epicFAIL!

    There will either be a Citzen’s Income or Debt Serfdom via student, medical and mortgage debt. This ‘angel capital’ for each young person’s kick-starter? Drop dead with any futher attempts to cross-collateralise young lives for profit. Or see the world go up in flames…

    And for the record, before I’m ‘banned’: I’m in charge of The Narrative of The Global Irish Diaspora of the 5th Province. Not Enda Kenny. Not David McWilliams. Not Fintan O’Toole, but me: Andy Mooney, currently being channeled via Zozo & the Ouija Board by Alfie Moone. That’s a Ouija Qwerty keyboard by the way…and The Globalist will NOT destroy Ireland because when Andy met Michael Collins at the cross-roads at midnight in Cork recently, the Big Fella gave Andy some tips, tactics and reflections on what he’d have done differently now that he’s able to view the last century since 1916 through Andy’s eyes.. Do NOT think that the current process of exporting Irish youth to replace them with more compliant immigrant youth is sustainable. Do not think that creating artificial scarcity in housing to provide windfall profits to Vulture Funds off the back of Odious Debt is anything other than the actions of Traitors. And do not, on any account, forget that Padraig Pearse’s father was a Atheist from Birmingham and that the real Irish Revolution could and should have brought peace and prosperity to both these Isles of Wonder but didn’t because: The Catholic Church….

    As I watched the end of the Rio Olympics and the frankly astonishing achievements of Team GB being derided as Soviet by embittered Remain scribes who know full well what this means for Brexit ‘going forward’ I smiled. And I remembered London 2012 when the ‘Brits’ began to rise up once again but this time as a world-beating Cultural Empire that everybody wants to be part of. But not everyone can live in London. Or Dublin. Demographics, my arse. Japanese youth have given up having kids because they refuse to be shafted by the older generation anymore and they are right to rebel. That will happen here where only The Rich and The Very Poor now can have large families. In Small Heath the average Irish family size was probably 6 like ours was…now it’s the same amidst the Muslim immigrants but white people have wised up to The Globalist betrayals thus Brexit. Punk economics: “white riot, I wanna a riot of my own…” And before any wanker thinks quoting The Clash is ‘white supremacist’ of Andy, have a look at the lyrics to ‘White Man In The Hammersmith Palais’.

    I’m in Iceland in a few weeks and was blessed to be there for the Free The Nipple rally last summer and was doubly blessed to be there the night they qualified for the Euro ‘soccer’. [Stop appropriating English culture, Paddy. It's Association Football.....”..but Premier League's a different article thread...]

    I met a young Icelandic woman who knows the score about the Vikings of 1066, of Dublin and those who raided the Wild Atlantic Way to take slaves to Iceland to found it. She knows the Icelandic fantasy of ‘pristine nature’ is nonsense, that the Vikings cut down all the trees for longboats just as they did on these island for Viking-Tudor longboats to enslave the world. But she also told me how young Icelandic women like her have options. They can choose to have a ‘teenage baby’ knowing that the kid will be at school by the time they need to kick off a career and that because the culture always had men ‘lost at sea’ there’s always been pragmatism about these matters or was, before the foreign feminist moralisers started sticking their oar into hard-core Icelandic culture. We drank Brennivin in my hotel room then she propositioned me…I told her I’d had a vasectomy which she didn’t believe so she did the deed anyway. Many times. I’ve had a reversal. I’m heading back to Reykjavik as she thinks my genes are hot and hasn’t found another suitable candidate. My wife’s ok with this but it’s taken a lot of negotiation, but I’m an Alpha Male so it’s only right that I do my duty and add to the stock.

    Lads! Imagine if even 25% of this is true?

    It’s always the quiet ones….

    #TGIM “Mooneboy loves Mondays”

  6. Thriftcriminal

    Given that 7/10 new businesses fail within 10 years the main benefit of entrepreneurial activity to GDP is that investment money that would otherwise have been sitting in savings is pushed out into circulation. The chance of benefit for the actual entrepreneur is slim, while the rest of society benefits regardless of their success or failure.

  7. E. Kavanagh

    Why not put €10K to €20K in a market tracking fund for each child upon their birth. Over longer periods that would grow into to a minimum of €1M (€10K @ 7% for 70yrs) and with historic averages much closer to €20MM (€20K @ 10% for 70yrs).

  8. Paul Williams

    David,
    There is one serious problem with your solution.
    You make the assumption that NEW entrepreneurial activity is in the 20-34 age group…..this is a false assumption.. and you’re not alone in believing this.
    The actual truth is(as always) much more interesting.
    The most active as NEW entrepreneurs are in the 55-64 age group.

    http://www.kauffman.org/~/media/kauffman_org/research%20reports%20and%20covers/2009/07/thecomingentrepreneurialboom.pdf

  9. Paul Williams

    “The fact that the largest age group of our population is also the most entrepreneurial bodes well for the United States’ economic future,” said Robert E. Litan, vice president of Research and Policy at the Kauffman Foundation. “This study shows how several other emerging trends, from job tenure to regulatory changes due to the current recession, should facilitate entrepreneurship in coming years.” Contrary to popularly held assumptions, it turns out that over the past decade or so, the highest rate of entrepreneurial activity belongs to the 55-64 age group. The 20-34 age bracket, meanwhile, which is usually identified with swashbuckling and risk-taking youth (think Facebook and Google), has the lowest. Perhaps most surprising, this disparity occurred in the 11 years around the dot-com boom—when the young entrepreneurial upstart became a cultural icon.”

    • EugeneN

      Entrepreneurship in this sense is probably forced on people who would prefer a comfortable job trending towards employment. In fact poor countries have more entrepreneurs than rich ones, mostly dirt poor people scrabbling in a market stall somewhere, or shining shoes.

      If that’s the future of capitalism then capitalism has no future.

  10. StephenKenny

    People have this dewy eyed, almost mystical, view of start-ups. I guess they’ve been watching too much TV, and believing the, quite frankly, fictional ‘histories’ of successful startups. Except in a handful of cases, start-ups are part of a business ecosystem: Big companies, medium sized companies, public sector, and all sorts of small companies. They aren’t sudden left-field inspirations, followed by some wacky, epoch changing, technology that leaves the world gasping in wonder. They’re mainly small, simple ideas, that do some small thing significantly better, or in a different way. But they are part of a larger whole.

    To encourage start-ups, you need to realign the large, medium, and existing small companies. You need to realign the public sector. They need to be realigned to be more start-up friendly. This can partly done with the tax system (in all sorts of ways), and with the legal system.

    But, as Adam Smith pointed out on his Theory of Moral Sentiments, there also needs to be a supportive culture, or sentiment. Friendly and helpful interactions, a strong culture of support. The start-up-er’s are obviously keen, but there needs to be a supportive culture in the possible partner sectors, the big players have to have an interest in how they can get involved to encourage mutual benefit.

    In some countries, it’s dog-eat-dog so-called ‘market forces’. Start-ups are little less than raped by larger companies, who use their size and strength to extract some little short term benefit, at the expense of the start-ups existence. In others, large organisations see possible longer term benefit in small partnerships with small companies.

    Without the sentiment, the money will just wash into cunningly created, generally asset investing, newly created member companies of existing large corporate groups. Sure, the stats show a huge increase in new companies, but closer inspection shows a completely different picture.

    It’s not just money.

  11. Paul Williams

    “The nature of work is about to be transformed by artificial intelligence that could wreak havoc on all forms of traditional work, particularly white-collar work. For example, in many “safe” professions such as law and accountancy, much work will be done by machines.” : D.McW

    Where have I heard that one before …mmm oh I remember ….. “The chips are down” Horizon 1977 https://youtu.be/HW5Fvk8FNOQ?t=2848

    • McCawber

      That was then and this is now almost 40 years later.
      Quite simply you are thinking in the past.

      • Paul Williams

        Yes it is 40 years ago but the analogy between the advent of the microprocessor in the late 70s and the advent of AI now is valid.

        I was using it to highlight Mr Mac’s flawed assumptions about AI and it’s perceived impact on employment.

        My point is that with every wave of technology change, old jobs are lost but new opportunities(and jobs) are created by the new technology.

        There is a great example of this at the very beginning of the program about how the American vacuum tube(valve) industry was wiped out by the Japanese transistor industry(an American invention) but then taken back again by the Americans with the invention of the integrated circuit(this time they capitalized on their invention).
        This new industry created the original silicon valley.

        All of this happened in a relatively short period of time.

        But then….history never repeats…right ;)

        • McCawber

          You are arguing with yourself.
          All this happened in a relatively short time.
          The advent of the comouter chip allied tothe iInternet is creating a future that has no historical reference point.
          AI, Robotics, 3D printing, Nanotech to name just a few related technologies have no historical comparstors.
          We are in serious ground breaking future forming and it is starting to touch the early stages of exponential rates of advance.
          A postive feedback loop is developing and most of humanity is ill equipped and out of its depth in even beginning to comprehend what lies ahead.

          • EugeneN

            AI has been around in some shape or form since the 80′s. Expert systems it was then. Robotics too. The Japanese have been building cars robotically since the 70′s. 3D printing is a hobby, and nanotechnology was the next big thing when I was in university 15 years ago.

            What’s new is possibly big data, and it’s manipulation but moral panics about AI happen at the frequency of once per decade.

  12. Gobnait O'Lunacy

    The other issue i think is the number of older people sitting on property that is their biggest asset but they cannot release any equity from it.
    There has to be a market for reverse mortgages or “en viager” as it is called in France.
    this would at least allow people to access the equity in their property in their old age without worrying about losing the property while they are alive.

  13. ex_pat_northerner

    Technology will change, but it will also create opportunities. I’m not so sure on the AI thing just yet. And there will be certain areas where people will still be needed – We could make all airliners into pilotless drones but its going to take a big cultural shift.
    All this is going to be based on networks and processing power with instantaneous answers .. which in turn is all based on energy to power the control technology. Its also got to be based on a system where computing power when decommissioned has to be recycled.
    The energy will have to come from renewable – the recent forecasts show that IPCC predictions are on the low end of what will happen – its becoming clear there will be more warming sooner.
    So the older generation has screwed the younger generation once again- by using the easy to get, cheap to get fossil fuels and other resources and poisoned many areas of the planet in doing so.
    It will require global action to actually have a world the young can inherit. – Earth Resource day gets earlier every year. We cannot any longer look at consumerism to drive the economy. No longer should GDP be the sole economic metric – a quality index will also have to be developed and we’re going to have to start planning long term for all these issues. pensions- demographics – climate change and resources – all interlinked.

  14. Pat Flannery

    The Wealth of Nations is passed from generation to generation. Very little of that wealth is created by any one generation. I do not see any recognition of that fundamental fact is David’s analysis. He treats the older generation as a burden on the young with “unless we have more workers paying for the older cohort, either the weekly pension falls or taxes on younger workers have to rise to pay for the existing pension.”

    He says “The central assumption of the pension system is that the old need the money more than the young”. That is quite wrong. The central assumption is that a pension system is the price a younger pays for its inheritance.

    Today’s digital inheritance i.e. the invention of better ways of feeding, clothing and housing people, poses similar challenges to those the invention of farming posed to obtaining employment as spear throwers.

    In effect David argues that the older generation of hunter gatherers should have been penalized for inventing farming. He argues that their income should have been reduced to pay for the capital required for farm implements. He argues that society should rob the old and provide “start-up funds” for the young.

    Yes David, this is a half-baked idea. If the next generation of Irish people are poorer than the last, as you predict, it will be because the young have refused to give up the spears and clubs of yesterday’s economy for the digital and broadband tools their parents fashioned for them.

    • michaelcoughlan

      Hi Pat,

      I feel I tackled you to hard last time out. Just to let you know I had the biggest eye opener here on the blog myself when a view I held re China, hard currency, gold, deflation/inflation was found to be 100% backwards and 100% totally inaccurate.

      The robustness of the blog which McWilliams facilitates allows us to get a better understanding of what’s really going on and sometimes each one of us winds up with egg and cream etc all over our faces so please don’t be offended by the robust nature of the exchanges.

      Michael.

    • StephenKenny

      People learn from their elders. If they’re under about 45, all they will have seen is that asset speculation and public sector are the only sensible route to wealth (the pension, in the public sector’s case).
      Anything else is stupid.

    • Sideshow Bob

      Hi Pat,

      I really didn´t like this article but looking at you comment I would have to disagree with your points. You seem , I am guessing to be taking this a bit personally and to be getting drawn into a generational battle here, but you needn´t.

      Wealth hasn´t generally moved down from generation to generation in Ireland recently. It has by en large moved the other way, upwards, as David McWilliams has pointed out when he has spoken about the accidental property millionaires created by the boom here. If there is any wealth being passed down (or shared) if it strictly from these people to their progeny. Most single people I know who bought a house between 2005-2011 got a 50-100k subsidy from their parents, who came from the generation that McWilliams described as the accidental millionaires. They benefited extensively from rising house prices, lowering interest rates and rising wages and Bertie´s one sided free-for-all called social partnership. These were mainly insider or establishment people and their sheltered progeny will inherit the land the best jobs and the low level gombeen-ism too will largely continue as a result.

      The second point that I would like to make concerns the central assumption of the why and wherefore of state pension system ( we are talking about the state system here aren´t we?). It is something that has oft been mentioned hereabouts before, or at least I think so. It is that the state system for pensions was never meant to be a big burden to the state and this notion that pensioners automatically deserve a pension for building wealth is an ill-founded justification that has been added on afterwards. Central to this is the point that the state pension system as created by Bismarck (a right-winger) in the 19th century was entirely a low cost populist gesture designed to head off the political advance of the socialists and their ideas in Germany. He did this by appropriating their ideas ( before they could be elected to implement them ) of wealth redistribution via universal payments and giving them a twist that would make the proposal palatable for the rich right who supported him, i.e. the creation of the pension system we have was conceived was a kind of giant political PR stroke. It was not conceived to build or nurture a nation. The change involved giving a universal payment ONLY to people who lived beyond the average life expectancy at the time. The equivalent today would be to offer pensions only to those who are 80+ years old.Imagine the reduced social welfare costs if this was implemented? The pension system was never meant to overwhelm the state coffers, Bismarck had too many guns to buy.

      Bismarck was a master of strokes and getting away with them. One such stroke involving a falsified telegram was getting France and Prussia to go to war in order to create Germany. It was found out but he continued on, all brass neck.

      But I digress. So back to the unquestioned state pension system. It, along with other benefits for pensioners fuel, electricity, housing repair grants, free travel, medical cards, etc is badly in need of reform. Here it is simply an on-going and huge bribe to older voters at whatever cost to the rest of society, as social partnership was for the trade unions.

      And when passing all this money through the hands of Irish ( senior) civil servant and political class of pocket-lining insider kleptocrats it end up pitting Ireland´s outsider generations present and past against each other in both class and generational conflict and damages their collective futures in a financially destructive way. This of course has other real-life implications and other unmeasured costs for society.

      I think if you want an efficient positive solution to all of this I think you first have to cut out the rent seeking middle men (i.e. the Government & Civil Service). Then you would have to figure out how to make it equitable for the generations concerned.

    • Sideshow Bob

      Two more points, Pat.

      No digital app or software can feed, clothe or house a single person. The digital world has pulled-off an amazing piece of brain-washing in convincing us that it is responsible for things it clearly isn´t, while quietly hovering up as much as possible of the money involved for itself ( and off-shoring it, too).

      Also, I would question the idea of who it was who bequeathed these digital tools to the current generation and who has driven the progress of the digital age to date too. I don´t most of them can be more than forty and I think they are one and the same bunch of people. This is one revolution that dosen´t owe so much to the generation that preceded it, I think.

    • Sideshow Bob

      Hi Adam,

      Did you see the Brazilian Police were looking to have a wee chat with one of your favourite people, Mr John Delaney, on the subject of some funny business with tickets for the Olympics? But the b***** unfortunately managed to evade their attentions.

      Maybe we could get together organise a posse, catch him tie him up and put him on a plane with a one-way ticket there? Brazilian jails are a lot of fun…

  15. Deco

    The amount of mind altering substances consumed between 1998 and 2008 will eliminate the number of future pensioners.

    Type 2 Diabetes (booze), Heart attacks in middle age (Cocaine), and tables (mental degradation) etc… will reduce the numbers enter the senior bracket.

    Our real problem is the Health system, and funding that. And our declining productivity.

    One good means of resolving the pension problem would be to reduce the debt level. That would mean reducing the nonessential elements of the Welfare state, to merely providing welfare to those that need it. Welfare for failed politicians, quango bosses, insiders, incompetent bankers, bank bondholders, is a massive black hole in the Irish public accounts.

  16. How to solve our pension crisis, is the question.

    What is the pension crisis?
    It seems there are several basic problems.
    Some sectors of the economy where people are employed does not provide enough income for the people to live in the fashion they expect. They spend more than they earn, and go into lifetime debt and end up broke. Society, has attempted to provide a pension by taking enforced deductions, and additional taxes from the income and investing it in pension funds that would accumulate to be paid out incrementally in retirement.
    In Canada this is in two sectors. The Old Age Pension paid to all from government current income and the Canada Pension Plan paid out to those who contributed. Contributions to CPP are mandatory and paid by both employer and employee.
    In 1997 the Canada Pension Plan started to pay out more in benefits than was received in donations.

    The provincial and federal governments came up with a plan the save the CPP.

    The result was the formation of the CPP Investment Board. Its mandate to manage the fund on a low risk basis to provide sustainability of the plan indefinitely.

    It is invested across many sectors of the economy and diversified around the world in investment strategy with the production of a 7.5% return. By federal legislation it is severed from government and decisions made are without political considerations. It seems to be succeeding.

    Here is the CCP Investment board web site for you to review.

    http://www.cppib.com/en/beneficiaries.html

    There are many tabs/pages to go to that discuss the accumulative effect of all retirement fund options that range from corporate pensions, personal tax free savings account, Registered retirement personal funds that defer income tax, to personal savings and investment strategies.

    The biggest struggle for pension funds to remain solvent is inflation and low/negative interest rates imposed by central bankers. These problems can be laid firmly at the feet of the central bankers. The unlimited production of debt based money (our current fiat based money system) and the accumulated debt this has generated. One result is the debt based economy is stifled and shrinking. The other is that money market funds show no return on investment. Pension funds now have to look for income in more risky investment vehicles. It appears the CPP has achieved success and can,perhaps, be looked at to be emulated.

    Perhaps that is how to solve our pension crisis. Over to you David. :-)

    As a personal aside. I have always been aware that my retirement would have to be self funded and so a considerable part of my production was saved and invested. some times successfully and other times not. I receive both OAP and the CPP but the monthly income provided of about 1200 would not, does not fund accommodation in a one bedroom apartment, 850-1000 and food for one at 500 a month. Start adding in transport, clothing, entertainment, hobbies, utilities, maintenance, furniture, services, VAT and income taxes etc. the income requirement is 200% more or more like 3500 a month. The balance for me is made up from savings and personal investment. If I had not taken care I would be living in poverty. In addition my children have no debt for education or other things and all have substantial savings to give them a far better kick off in life than I had arriving in Canada totally broke, a high school education, no trade or other training. What I did have was a will to work at anything, a fir body and a strong back would allow. In some ways I was a third generation navvy arriving in the New World alone without support just like my Irish ancestors.
    Like them I have survived and prospered. I could not rely on government largess. I have provided for the future generation not filched the future from them. In addition I have paid six figure amounts in taxation to fund any government benefits I may receive as I age or become infirm.

    That is another solution to the pension problems. Individual self reliance!!

  17. goldbug

    @DAVID

    IF MACHINES TAKE THE JOBS

    WHO WILL HAVE MONEY TO SPEND

    -> TO BUY THE PRODUCTS OF THESE STARTUPS?

    WHAT WILL THESE STARTUPS PRODUCE?

    PRODUCTS FOR THE GREAT STARVING MASSES?

    WHAT WILL A RETAIL SHOP OF THE FUTURE SELL?

    -> WILL MACHINES BUY THESE PRODUCTS?

    -> OR WE GET FREE MONEY FROM SOMEWHERE?

    => WHAT WILL THAT DO TO THE VALUE OF MONEY?

    OR NONE OF THE ABOVE

    => ANOTHER GREAT CULLING?!

  18. skippy

    Interesting article and glad that you articulated the imminent arrival of AI technology and the impact it will have on how we work and the job market. Over the next 10 years (or less even) there will be huge transformations in how we live, work and play. AI technology has already crept into our everyday life thru the use of Smartphones and operating system… the most well know of these are Google Now, Siri (Apple), Cortana (Windows) and Alexa (Amazon)… and the One to Rule them all: Watson from IBM… Google/Apple/Window/Amazon are pretty much commercial products and are fun to use but they are learning fast…. but look at what IBM’s Watson is doing (and has achieved) across a wide range of industries over the past few years especially in Health/Medicine and you can begin to see the potential of AI. Watson will literally find a needle in a haystack, and will understand every straw that makes up that haystack. 80% of the worlds data is unstructured (Tweets, social media, books, article etc) [think of this as the haystack] and thru the use of AI we can now consume all this data and rapidly look for patterns and make some sense of it (the needle). This technology is and will continue to revolutionize research and discovery in some many ways… and this is where many future jobs will be… we (parents, students, industry, education system and govt) need to understand where these future highly educated and high paying jobs are going to come from and put in place the education/training and support (and this must include funding) systems to enable our current and future generations to take advantage of these new technologies to invent the future.

  19. Deco

    I actually don’t believe the standard story that we are presented with regard to the pensions issue. This is because money, vested interests, the state system, the FIRE economy (Finance, Insurance, Real Estate), the media and consumer spending are all involved.

    And based on my experience, we should not expect an honest public discussion when these players are involved.

    We have a money crisis, and a productivity crisis. And the money problem is exemplified by the prevailing policies based on ponzi scheming the real estate market, and driving p public debt. The productivity crisis is exemplified by the costs of health care (despite the demographics). The productivity crisis is also indicated by the residential distribution in Leinster.

    If these problems get addressed, then we have no hope of addressing the pension crisis.

    The standard outlook, is actually hopeless. For clarity on this, observe the the north-eastern US. Or Italy. High costs, and structural productivity problems are driving employment out. Savings are being depleted.

    We simply need to completely rethink the entire model.

  20. Deco

    We need a government minister responsibel for productivity. With special focus on the state sector. The greatest flaw in Keynesian economics as it is currently practiced, is it’s determination to prevent any productivity improvement in the public sector. Investment yes. But productivity improvement gets a No. The Nevin Institute, as the think tank driving increased state power in the society, is advocating investment, but not if it it improves the shadow of state power over the populace.

    • EugeneN

      Nobody is practising Keynsian economics anymore. When it was practised the west boomed like never before.

      • Grzegorz Kolodziej

        All major western central banks practice Keynesian economics. Qne should not confuse a monetary policy with monetarism – QU is a m o n e t a r y, but NOT m o n e t a r i sm-inspired policy (and I am not a monetarist). First QE was used before monetarism anyway – by FED in the 30s and 40s:

        http://www.hoover.org/sites/default/files/14110_-_bordo_-_exiting_from_low_interest_rates_to_normality_-_an_historical_perspective.pdf
        ).

        Modern QE was first used in Japan, as a result of implementing arguably the most Keynesian plan in OECD. We are now into the third decade of that plan and it’s still not working. I have been waiting for years for some article from David McWilliams explaining that phenomena that the more Keynesism you have in Japan, the more stagnation there is, but perhaps he is not ready for that yet because that would mean admitting Mr Paul Krugman was wrong all across the board in his adivory role to Japan. But I am a very patient person – everyone in his own time.

        West was booming in the 60s thanks to a demographic boom and Presidents Truman/Kennedy tax cuts, while Germany was booming because of deregulation, London Debt Agreement and the safely located money/gold they robbed from half of Europe coming back to Germany along with their not-denazified experts.

  21. Deco

    At the current rate of public sector borrowing, and given the absurd level of ambition expressed in the electoral based political system (Kildare Street), and the undemocratic political system (IBEC, ICTU, Banks, mncs, large hedge funds), the state will go for bankruptcu long before there is a pensions crisis.

    Therefore nobody should assume that the pension system will “work” – when there will be no money in it.

    In the US, the demographics are favourable, and there is a serious income crisis in the labour market.

    That model is failing. [ how many millions are on foodstamps ? ]. productivity is decling as retail service jobs replace manufacturing employment ].

    There is an urgent requirement to rethink the entire concept of productivity, and pension provision. And indeed also the concept of care for the elderly, and productivity.

  22. Deco

    TV – the productivity cancer. It misleads people into thinking that they are more advanced. And in the process it retards their development.

  23. Grzegorz Kolodziej

    I thought that today, instead of my comment, I’ll choose a lazy and quicker way and translate (it is a quick translation) of an article on pension systems written 8 years ago by a Polish MEP Janusz Korwin-Mikke (with whom I agree on many, though not all issues).

    Janusz Korwin-Mikke

    “Three concepts of retirement”

    January 22, 2008

    “Because a number of misunderstandings came to the fore in relation to this topic – this is an attempt to explain them.

    Pension, as is known, was introduced by the late Otton von Bismarck – in order to prevent the socialists, who were hoodwinking people by promising all security police ( “social security”). Any normal man knows that prosperity comes with risks: “Nothing ventured – nothing gained.” Without risk, which was undertaken by a hunter, his women and children left in safe caves, would have died of hunger.

    Unlike normal people, humanoid socialists argue that life is good only when it is SAFE. Fortunately, it is impossible to achieve absolute security (because it would mean an end to any development – EVERY change is associated with some risk!) – But the Socialists have attained their ends, among other things, through democracy by giving voting rights to women (who by nature find safety as the most desired thing). Today’s society puts security in the first place among the desired qualities !!! Roald Amundsen – or even skater on a skateboard – are a dying caste crazy. Standards impose “humanoid norms.”

    Pensions are an element of the social security system. I distinguish three concepts of retirement:

    I) Socialist. Retirement is a “social benefit”. Every citizen is taxed; for traditional reasons this is called “social insurance” – but there is not much connection between the paid premium and retirement. The state can at any time increase or decrease your pension; increase or lower the retirement age…. It pays as much as it likes – and how much they can afford. The Constitution says is true, that “everyone is entitled to retirement” – but it does not say that this may perhaps be 50 euro a month … Pensions are generally diverse – this, however, is not a result of different premiums, but the fact that the state will pay more to more outstanding and meritorious citizens – which at any moment may indeed change. You can also shift money between categories of people: eg. to reduce it for all men – and pick up more from the pool to increase it for all women. It is not important whether it is “fair” – the one who pays more, receives more; it is important that pensions paid were “socially just”.
    In relation to state employees the question of the contribution does not make sense. Officers can be paid a high retirement – assuming the fiction that their gross salary was was very high – and they were paid little after taxation because a very high premium was subtracted from it … It is fully compatible with the system! In this way, the Polish Peoples Republic flipped on the Polish Third Republic part of its cost!

    II) Conservative. Retirement is earnings delayed in time. The state forces each of us to give up on a percentage of his earnings – hoping that he will live, for example, 100 years – and begins to pay when a person reaches the retirement age. If someone dies the fund is not exhausted – the money is paid to the heirs; if you live more than 100 years – the state takes on the (albeit small) burden of further payments. Retirement thus depends on the amount of contributions and the length of its payment. Of course, neither the retirement age can be reduced or increased, nor the amount of the promised retirement can change – because it is a binding contract.

    III) Liberal. Retirement is a gambling bet. Everyone (willing, or in socialist societies: all mandatory) assume the Great Tontine – and pay a fixed fee, which determines the amount of pension (but you can establish that we all pay the same premium – and after the equal period of contributions are given equal retirement!). The difference in comparison with the conservative concept lies in the fact that the contributions of those who lost the wager (ie. died before reaching the retirement age) are pass on for the benefit of those who survived – indeed in proportion to the contributions they paid (nota bene those who claim that the “victors” in this lottery are not these ones who lived to retirement age – but the person who recovered their contributions with the interest rate – are right) … For the ease of the calculation: almost half of men die before reaching the retirement age, and the average dying age of those who reached the 65 years threshold is 72 years – the average time of getting a pension is 7 years. Now you understand what is the compulsive retirement?).

    With this understanding of the pension system you should only ask: “And by what right the state forces me to participate in gambling?”.
    Today we stand at a crossroads. In fact, none of the political class says clearly what concept of retirement is in force!! In fact: a bit of each of them. The Constitutional Tribunal held a year ago that there is no link between the contribution and the pension, opting for the socialist concept. But there are conservative and a liberal elements too..

    Let me end with an excerpt from an article “Theft exceptionally audacious” by Stanislaw Michalkiewicz, written in July 2007.

    “Taking advantage of the presence of Ms Ewa Tomaszewska, who, as an honest woman, tells the truth, I wanted to ask her, who owns the money that will be invested in the second pillar, that is, the open pension funds. Ewa said that will be owned by the insured.
    - Ah, yes – I said – that is, if a man desires, i.e., to take a trip around the world and ask for the payment of money, an open fund will pay it to him without batting an eye? – No, of course not – answered surprised Ewa – How so? – I asked no less amazed – the fund does not pay the money to his owner at his request? – No, because everyone would like to do so – snapped upset Ms Ewa Tomaszewska, whereupon Prof. Hausner rebuked me that I reduce every case to the absurd…

    What, incidentally, it implies that the Third Polish Republic maintains a system which nobody wants.”

    • Sideshow Bob

      Interesting but I think he should have added a 4th category to that: The vote fixing Irish Kleptocrat viewpoint.

      Here how it works: First off, you ( members of the dominating political class ) make sure the national elections NEVER occur on a Sunday, like in most democracies. This guarantees that the voter age profile will be older ( i.e. the grey vote will be more significant) and therefore the voting tendency will be more conservative than if the election was held on the day that everyone could most easily get to where their vote is registered and vote. Most certainly the idea of compulsory voting is also out as the young are more likely to vote against the establishment. Then you promise and give a progressively more outlandish proportion of the countries tax income to this older voter group ( retirement age and pre-retirement) to have immediately or in the near future, and without question until they die (and worst-case scenario some of it will go to their progeny). Put simply you keep them very, very sweet. Meanwhile they grow in numbers and their sense of unquestioning self-righteousness and inaccurate justification for their new “free´´ source of wealth increases (something like the “new paradigm´´ in mania phase of bubble psychology). Other people in the economy have little or no right to question this due to the sanctity that surrounds the blessed older generation. If these people ever earned this money or paid this money over or contributed this to the economy in some way is not established, nor related to what they receive. They simply receive without end. And so, the election FIX as they say is then IN and you as a kleptocratic member of the political elite ( and all your mates) can keep working your kleptocratic magic without fear of the game ever being stopped.

      BTW I also heard (from a reliable source) that Central Bank Employees would normally get last minute promotions in grades just before retirement to make sure the related pension was maxx-ed up. So here is a suggestion; get the responsible Minister to mount a HR analysis of all Civil Service pensions and reduce ex-Civil Servants back a grade officially in the records, reduce their pensions accordingly and demand any monies paid over in excess as a result if the false promotions returned. Anybody who authorized such promotions should be fired or have their pensions stopped and prosecuted for fraud.

      So to finish I say the kleptocrats need to be stopped! ( however I doubt they will be).

      • In Canada, the voting time is 12 hours, 8 am – 8 pm. Everyone must have at least 4 hours of available time to get to the poll. This means they have the right to have time off in the morning or the afternoon on the voting day. (Lots of people here work on Sundays and Saturdays.)
        Advance polls are open, in advertised locations, the week before voting day for anyone away on voting day. If arrangements are made people out of town on vacation or travelling can make arrangement to be able to vote wherever they may be.

        Here is the BC regulation on voting e.g.
        http://www.elections.bc.ca/index.php/voting/

        • Sideshow Bob

          Hi Tony. Thanks for posting that . It is interesting and simply put too. The `advance´ and `absentee´ voting possibilities are a very sensible democratic addition to the basic provisions.

      • Grzegorz Kolodziej

        “make sure the national elections NEVER occur on a Sunday, like in most democracies”

        Yes, that week-day thing has always puzzled me; additionally, there are some cases when you wou;d literally take a day off if you wanted to vote (I am thinking of one of my jobs 10 years ago when on the voting day I would have to leave home at 6.30am to be at work at 9am, then I would do 12 hours shift, be back at home after 11pm, quick microwaved Tarka Dahl and something to watch on TG4 as weird as they are – they are the only Irish TV station that does not feature shouting idiots – Murphy’s, and back on the bus stop at 6.30 (btw, I was the only non-Irish person at that job so it wasn’t like I was exploited or something – just the genius of Dublin Bus that does not run buses west-east, only south-north and thus was stealing 4 hours a day from my life).

        Another thing worth mentioning is that Irish emigrants do not have rights to vote, which I frankly could not believe; and there is not any movement in Ireland (or outside to put pressure on politician to grant them rights to vote.

        Btw, in Poland all elections are on Sundays and the voting is done from 6am-10pm; the first results are at 10.01pm (exit poll) and they only vary 2-3pc from the final results (this is since 1989, because before the elections were rigged anyway – people would still have voted though to vent their anger by crossing out all candidates ).

        I think that if those who left Ireland could vote, it would be much harder for the mutual admiration society in the Dáil (just look at how few TDs – including the so called opposition parties – voted against raising their salaries)

        • ART6

          The problem with allowing Irish emigrants to vote is that there are vastly more of them scattered around the world than there are resident citizens in Ireland so it would, at least, have to be restricted to first generation emigrants. Even so the balance might be no better that 50/50, which would wildly affect the vote. Then there is the question of whether someone who has chosen to live in another country should be able to affect the laws and customs of the country he has left. Perhaps let them vote in their new country, where their vote will have significance for their lives?

          Other than that I agree with your post. Why in the name of God do we always have to have referendums and elections during working days? Perhaps, as you and others have suggested, it is nothing more than a political ploy by successive administrations obsessed with the self defence that has defined the Irish political establishment for generations. If elections and referendums were held on weekends, maybe more of the working and middle class might be able to vote instead of taking time off work and losing wages and salaries that they can’t afford to lose given their burden of taxes, fees, levies, charges, and whatever stealth taxes the finance minister might invent in order to ensure that the outrageous salaries, expenses, and pensions of the political elite are maintained and foreign gamblers are paid in full. And the catastrophic waste of the people’s money on endless and pointless “inquiries” and “Committees” and vanity projects that are solely intended to protect politicians or boost them in the eyes of their electorate.

          • Grzegorz Kolodziej

            1. “at least, have to be restricted to first generation emigrants” – I think that just limiting it to holders of Irish passports (like it is done in other countries) would solve the dillemma.

            Of course, embracing a broad definition of being Irish would lead to absurds as even President Obama is a bit Irish (and after all, God knows what our DNA is unless we take a test – apparently 10pc of all people in Europe come from the same European mother, says Dr Alice in BBC series). So yea, first generation Irish passport holders only.

            2. “Then there is the question of whether someone who has chosen to live in another country should be able to affect the laws and customs of the country he has left.” – it is a valid point (especially if you, say, are Irish but serve in Bundeswehr, which will now be possible thanks to changes in German law) but even more valid a question is whether public sector employees should be able to vote as this defies the legal principle nemo judex in causa sua (at they would always vote for the budget to increase). My doubt is not as academic and eccentic as it may at first appear – before World War I and even WWII, in some countries policemen, soldiers, state teacher were not allowed to vote as they were paid from the budget (but then again, the state was then spending only a few percent, so very few groups were excluded that way); also, in Poland – I think this went until WWI – being a concillor was an honorary function and you one actually be successful enough to maintain oneself (I am not sure if England did not have the same); this is still the case in some small towns in the US.

            Finally, if emigrants should not be allowed to vote (for the reasons above), then of course the same reasons would apply to all convicts or mental hospital patients. Btw, not all immigrants left the country voluntarily, although I read recently that even in the recent post-Celtic Tiger recession over 80pc of those who left actually had jobs and left for better jobs/cheaper environments (that would make sense – usually you have to have money to emigrate unless you marry). I remember that when the recession came David McWilliams wrote that his advice for mortgage slavery (you cannot just hand in the keys to your house and there is no Chapter 13 in Ireland really) was go to Australia and do not come back for 20 years.

            3. “Perhaps let them vote in their new country, where their vote will have significance for their lives?” – I do not see those two things as mutually exclusive, and double citizenship solves the problem (so i.e. Irish immigrants first generation should be able to vote in both Ireland and the US, etc).
            Btw, Poland has quite generous solution when it comes to major ethnic minorities – it guarantees each of them a seat in the Parliament (which means access to legislation process). Germany, for a change, applies the Nazi laws in that respect (i.e. they have confiscated all properties of Polish ethnic minority organisations in 1940 devoiding them of their status and have still not amended that; as a result, there are no Polish schools in Germany while there are German schools in Poland, and their courts can actually forbid access to children in mixed marriages if the second person speaks Polish to the child; even the EU asked them a few years ago what the story was, but they did not bother to answer).

            Of course, going to another extreme and having, say, purely Arabic language schools would also be bad as you would end up with students totally not assimilated.

            Another thing you might find interesting is that the third party in the Polish Parliament had copying the Irish STV system in their program. They abandoned that finally because… it was shown in the debates that this system, although more fair than Polish d’Hondt method, actually ossifies the political scene rather than helps to reform it.

  24. McCawber

    It’s Time to THINK outside the box.
    Starting with – Why is everyone hung up on work and productivity?
    In the future the work will be done by the machines.
    So ask yourselves this very simple question!
    If we shouldn’t be hung up on work, what should we be thinking about.
    Bear in mind “who controls the machines controls you”

    • Back to the simple things of life. The joy of picking free blackberries, the thrill of scrumping apples and pears, the intrigue of watching your vegetables grow, the health obtained from the exercise of foraging and weeding, the casting of the eye to the sky to appraise the weather.

      Then the processing and saving of the food for future consumption, the pleasure of knowing your food is pure and unadulterated, a walk around the field or garden, a pause to watch the bees and butterflies, the birds in the bushes.

      Pondering how to keep out the rabbits from stealing your greens, how to stop the grouse from eating your seedlings, does the land need compost or lime, is the water supply adequate or the land too wet, should I get some chickens to have decent eggs, would I go as far as getting a goat or cow, would the milk be enough or would I eat their offspring.

      All the tools have no motors, the scythe cuts grass and weed, the hoe cleans the land, the shovel digs the ditch, the hand repairs the wall, the fruit picker is on a long stick, the seeds cast by hand, the food goes from garden to table by hand, I am the Jack with the bean stalk up on the roof, I climb a ladder to harvest the beans, gifting a handful of produce to a neighbour is a pleasure given and received, smiles are free.

      There is something to be said for subsistence living. What do I need more than a warm comfortable place to rest, good food and pleasant company? A robot gives me none of those things.

      • McCawber

        A good place to be no doubt.
        However I would like to hang on to my creature comforts too, the Zimmer Frame is coming up slowly on the inside lane.
        I feel it might be far more dignified for all concerned if it were a robot wiping my backside at some future date.
        But you are right, it’s all about the basics.

  25. Further to the above, it is not pension funds we should worry about but the economy as a whole. Over the last 100 years it has expanded with the use of cheap energy. As energy production costs are rapidly rising the economy will retract to reflect the cost of energy.

    The value of true money has been artificially repressed during this time and is significantly undervalued. The place to be is to have and to own real money. Do not be deceived by obtaining a paper promise to give you real money. Do not buy paper funds, exchange traded funds or any form of proxy if you intend to own real money. Get Physical!!

    https://srsroccoreport.com/unlocking-golds-true-value-the-economic-code-finally-revealed/

    “However, over the next 45 years, clever bankers on Wall Street, London and etc, have hoodwinked investors into putting their surplus funds into paper assets which have become the GREATEST PONZI SCHEME in history.

    This paper ponzi scheme can only work on RISING OIL PRODUCTION. Again, the GREATEST PONZI SCHEME in history can only work on rising oil production. Furthermore, it can only work on rising CHEAP oil production. Unfortunately, the world has peaked in cheap oil production a decade ago. We are filling in the gaps with very expensive oil production that the world cannot afford without the massive increase of debt.”

  26. McCawber

    At present the success of the global depends on increasing demand and price inflation of 2% annually.
    Neither of the above criteria are being met nor are they likely to be ever again.
    Technology is overpowering current economic thinking.
    It’s the machines stupid.
    At the risk of repeating myself – The single most important issue facing mankind is “Who should control the intellectual property of machines”

  27. No matter where one resides the plan is the same. One world government.

    Create the chaos. Out of chaos, order. The New world order.

    https://www.dollarvigilante.com/blog/2016/08/23/merkel-prepares-deliberate-crisis-white-house-plans-disastrous-succession.html

  28. Biased one sided media is the norm. There are no objectively reasoned articles anymore. Well few and far between.

    http://nypost.com/2016/08/21/american-journalism-is-collapsing-before-our-eyes/

  29. http://journal-neo.org/2016/08/22/the-collapse-of-rome-washington-s-6-5-trillion-black-hole/

    There goes your pension. Down the Black Hole.

    “”The corruption, falsification, probable fraud and embezzlement is so huge and so endemic that it will destroy any effort at transparency, buried under the cover of bureaucratic ineptitude. It’s symptomatic of the rot of Washington and a nation that only a few decades ago held a tradition of honesty and integrity in public service. If we want to give a name to a faceless bureaucracy responsible for accurate reporting of that unaccountable $6.5 trillion, his current name is Colonel (retired) Robert M. Speer, Assistant Secretary of the Army Financial Management and Comptroller, formerly with PwC, one of the mega accounting firms. Presumably he understands how to do basic accounting.”"

  30. If you have the option, buy out your pension for cash and by gold and silver!! Soon!

    http://usawatchdog.com/giant-fraud-economy-crashes-before-end-of-2016-gerald-celente/

    • McCawber

      Doing one of those famius thought experiment.
      At circa $20 per ounce, a $1000 is 50 ounces.
      Say 3lb.
      Buying any significant amount of silver become a weight issue delivery wise.
      The there is the whole on site storage issue.
      I am open to suggestions re the storage because delivery is really only a transitory problem.

      • Private vaults can be used for a modest fee to store bullion . do not use banking vaults. i.e. Cube Storage in Victoria stores the box but has no idea what it contains. http://www.cubeglobalstorage.com/index.html
        OR It can be stashed at home or office in the desk , under the bed, in the attic, wherever you feel secure.
        There is no opportunity cost for this now as fiat banking currency pays no interest either but may charge you interest or worse yet bail-in your savings.

  31. Grzegorz Kolodziej

    Those of you who are interested in foreign affairs might find interesting this excerpt from an interview the Polish Minister for Foreign Affairs Witold Waszczykowski gave this week to Deutsche Presse-Agentur:

    “DPA: Five years ago your predecessor Radek Sikorski demanded that Germany assumes a leadership role in Germany because he was “more afraid of German inaction than German power”. Do you agree with this statement?

    Minister Waszczykowski: A few years ago I used to say the same thing. We are interested in Germany playing a significant role in Europe and the European Union, because Germany’s potential is so big that the country deserves an important role. However, it is up to Germany what role it will play. Whether it will focus exclusively on its own national interest or whether it will also take into consideration the interests of other member states. This is a big responsibility for Germany. Unfortunately, there are many cases where Germany is shirking this responsibility. In many cases we are seeing Germany pursue its own national interest. It is normal for every country to pursue its own national interest however we would expect a certain level of compromise regarding some areas.

    DPA: In which situations have the Germans recently acted selfishly?

    Minister Waszczykowski: There was a lot of talk in recent months about security interests of NATO’s so-called Eastern Flank. During this time we heard different opinions from Germany in this regard. There were sympathetic words but also statements putting in question the logic of strengthening the Flank. A case in point is the recent speech by Foreign Minister Frank Walter Steinmeier, who expressed his doubts about the Anakonda exercises in Poland – about whether it made sense to have defence exercises on the territory of the Eastern Flank. Or the doubts voiced by people regarding energy co-operation. It is also worth remembering that the Nordstream 1 and Nordstream 2 projects are investments driven by political considerations rather than economic calculations. Such measures are harmful to European solidarity. And, last but not least, relations with Russia: is it worth developing these relations at the cost of those with Poland. Very few Germans are aware that economic relations between Germany and Poland are larger than those between Germany and Russia. Our turnover is close to 100 billion euros. These are real means. We should nurture these relations and develop them even further.

    DPA: Last year, the Germans stormed ahead alone regarding the issue of refugees. Would you say that Angela Merkel and her policy towards refugees has backfired?

    Minister Waszczykowski: This is an issue that I will leave to the Germans to decide upon. However, I think that taking in migrants as well as taking in refugees needs to be determined by several factors – above all, the security of one’s own country, the labour market and social policy. Not everyone in Europe can afford the type of policy proposed by Germany. Many countries, including Poland, has very limited capabilities and means. Due to this, what is euphemistically called “relocation” and what we call “forced resettlement” is not something that can be accepted by our country.

    We have bad experiences as a country with regards to the concept of resettlement. Our citizens were resettled in the past, for example to Siberia, we had to emigrate often under the pressure of occupying powers. We cannot now force other nationalities, people who have come to Europe to escape wars, to resettle in Poland against their will. This is unacceptable for us, both ideologically and historically. We don’t want Poland to be known around the world as a country that resettles people by force.”

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