Pyramid?

Our pension system, at least in most of the Western world is based on a pyramid, in which (at least it used to be like that) the bottom of the pyramid is the working part of the population that pays taxes for the retired top part of the pyramid.

In theory there is nothing wrong with this system, as long as enough babies are born and people don’t get older and older. Both of these important variables have been going in the wrong direction in the last 40 years.

There is no pyramid anymore, more of a Venus of Milo shape. Which makes pension payments unsustainable in the future.

Solutions?

There are some options:

• import young migrant workers, a solution that has been going horribly wrong in the last 15 years. Differences in cultural upbringing and religion divide the population. And most of the migrants don’t work but cost money to society.

• print more money, another solution that has been tried and failed because of rapid rising inflation. Another short term fix that delays the problem a few years.

• work longer, no more pension at 67, but work until you die, like in Japan. Very hard to sell to the people!

• AI, bots do the works and we reap in the rewards… How will this be financed, and what is the risk?

• …

A very tough problem for the Western economy, which will have to be dealt with sooner rather than later!

Sincerely,

Pele23

Posted Using INLEO