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| No way out...? |
Agent Smith, The Matrix
It seems some people loathe my pal Agent P because he doesn’t like public servants that well. And we both dislike how governments recklessly spend our tax money. The #OccupyWallStreet movement protests the obvious carelessness of the incredibly short-termed mind of the current business model, sheltered by government old chums (They just don’t see that way). People good, corporate greed bad, we know that song.
Ever thought of government greed? Or public “servants” greed? You think that does not exist? Lookit shorty here: this Friday the 13th of January, Standard & Poor's will cut the credit ratings of Italy, Spain and Portugal by two notches and downgrade France and Austria by one notch. Yes, just like the USA were downgraded last year.
But didn’t Merkozy grab the bull by the horns and drove into submission the unruly PIGS? Didn’t France and Germany send the right signals to the markets? Apparently not. There are a lot of people not buying the White Knight rescue fairytale. You see, there’s some information that’s not a secret at all, but European politicians prefer not to talk about, because of the election cycle, they are as short-term minded as those ugly Wall Street capitalists.
Because of that it is a downright horror story, not a fairy tale what the Europeans prefer not to face: the state-funded pension obligations in France and Germany are three times the GDP of those two countries. Together they total 13.9 trillion Euros, very nearly half of the pension bills of the 19 nation States studied in this 2009 report of the Research Center for Generational Contracts from the Freiburg University.
Expert used to call that mess “the retirement bomb.” Sooner or later the public will realize that the lavish public employee pensions and most of the rest of the perks of the welfare state are impossible to meet by taxpayers. It has nothing to do with wealth redistribution; the pension liabilities exceed three times the GDP of two of the most stable and wealthiest states of the European Union. In three decades, there will be no wealth to be redistributed. Same goes for the PIGS and everyone else in the Union. Same goes for Medicare and Social Security in the USA.
If that’s not greed, to mortgage several times the future of their countries to satisfy public employees demands, then the definition must be changed.
The future is already here. After all, Greece and several other countries already spend way more than they earn.
Most of us will worry when we hear the downgrade news. But when they find out the bigger picture, they will consider this nothing compared with what lies beneath the abyss of the welfare state.
Keynes said “In the long term we all be dead”, but if he were alive today he would say “Who, me?”
H/T The Slog
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I hate these days. People are telling you to STFU. Just say it, no matter how stupid or offensive it is.