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Thread: Ponzi financing of welfare states will end in tears

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    Default Ponzi financing of welfare states will end in tears

    See Mauldin Economics - Investment, Economic & Financial Analysis, Research The ageing of populations in advanced economies and sharp falls in workforces will make it increasingly difficult for governments to pay for promised retirement pensions and health care in the next ten to twenty years. Economic growth is unlikely to come to the rescue given excessive debt burdens of consumers,businesses and governments; falling or slowly growing labour forces;underinvestment in both business plant and basic economic infrastructure; and the reduced impact of technological change.

    Countries like Germany that face these realities could cope.But many countries using Ponzi style financing may face the necessity for emergency draconian cuts in government spending as bond markets become reluctant to finance them. Possibly,a crisis in Japan which is the most heavily indebted government could provide an object lesson for all governments.

    Since the entitlement culture makes people complacent about the financing of welfare states,considerable social upheaval is likely in future financial crises. Resort to supertaxes is likely to lead to decades of economic stagnation and emigration of the ambitious to youthful countries in Asia and South America which by then should offer good career prospects.
    Last edited by patslatt; 8th January 2013 at 06:31 AM.

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    Politics.ie Member momentimori's Avatar
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    Raise taxes to pay for them. Tax is relatively low compared to the rates typical 30+ years ago.

    For example, higher death duties are an obvious way to recoup the cost of medical treatment for the elderly.
    These men had only learned how to act in the interest of their own...private monopolies which may be likened to totalitarian oligarchies within our democratic State.

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    Quote Originally Posted by momentimori View Post
    Raise taxes to pay for them. Tax is relatively low compared to the rates typical 30+ years ago.

    For example, higher death duties are an obvious way to recoup the cost of medical treatment for the elderly.
    Increases in taxes reduce private sector savings and would further reduce the weak economic growth trends of advanced economies. Higher taxes would pay for the promises but at the cost of a generation of no growth. In some countries,there will be only two workers supporting each person out of the labour force,so the tax rates would have to be very high. Would workers stick around to pay them or head for youthful countries like Mexico or Brazil which should offer good career prospects in 10 to 20 years?

    Advanced economies should stop fooling themselves with Ponzi financing and do everything possible to promote economic growth,including facing down politicians who make irresponsible promises on pensions and health care.

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    Quote Originally Posted by patslatt View Post
    See Mauldin Economics - Investment, Economic & Financial Analysis, Research The ageing of populations in advanced economies and sharp falls in workforces will make it increasingly difficult for governments to pay for promised retirement pensions and health care in the next ten to twenty years. Economic growth is unlikely to come to the rescue given excessive debt burdens of consumers,businesses and governments; falling or slowly growing labour forces;underinvestment in both business plant and basic economic infrastructure; and the reduced impact of technological change.

    Countries like Germany that face these realities could cope.
    But many countries using Ponzi style financing may face the necessity for emergency draconian cuts in government spending as bond markets become reluctant to finance them. Possibly,a crisis in Japan which is the most heavily indebted government could provide an object lesson for all governments.

    Since the entitlement culture makes people complacent about the financing of welfare states,considerable social upheaval is likely in future financial crises. Resort to supertaxes is likely to lead to decades of economic stagnation and emigration of the ambitious to youthful countries in Asia and South America which by then should offer good career prospects.
    Only because they have the might to bully lesser countries into coughing up as some have been saying for a while now.

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    Politics.ie Member Kevin Doyle's Avatar
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    Quote Originally Posted by patslatt View Post
    Increases in taxes reduce private sector savings and would further reduce the weak economic growth trends of advanced economies. Higher taxes would pay for the promises but at the cost of a generation of no growth. In some countries,there will be only two workers supporting each person out of the labour force,so the tax rates would have to be very high. Would workers stick around to pay them or head for youthful countries like Mexico or Brazil which should offer good career prospects in 10 to 20 years?

    Advanced economies should stop fooling themselves with Ponzi financing and do everything possible to promote economic growth,including facing down politicians who make irresponsible promises on pensions and health care.
    Economic growth at all costs eh Pat? Even at the expense of the elderly and sick. Where have we heard this before?
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    So what you do, if you can't leave the country, is save as much as you can, avoid as much taxation as you can and find a place for those savings as far away from future seizure as possible.

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    Quote Originally Posted by patslatt View Post
    See Mauldin Economics - Investment, Economic & Financial Analysis, Research The ageing of populations in advanced economies and sharp falls in workforces will make it increasingly difficult for governments to pay for promised retirement pensions and health care in the next ten to twenty years.
    I think that historically the swing is complete from the Laissez-faire of 1912 to the nanny-State of 2012.

    The balance is somewhere in between..

    I suspect that many state-funded items will disappear over the next 50 years. the basic safety net may remain:Basic Free Health cover for under 18's and over 65's, Basic free education up to 18 years old, and a basic social welfare net (not cash) that ensures people dont starve or get turned out onto the street in tough times.

    These three pillars will be strenghtened and enhanced.

    the answer may be a combination of the european and the American systems.

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    Politics.ie Member Howya's Avatar
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    Quote Originally Posted by hiker View Post
    I think that historically the swing is complete from the Laissez-faire of 1912 to the nanny-State of 2012.

    The balance is somewhere in between..

    I suspect that many state-funded items will disappear over the next 50 years. the basic safety net may remain:Basic Free Health cover for under 18's and over 65's, Basic free education up to 18 years old, and a basic social welfare net (not cash) that ensures people dont starve or get turned out onto the street in tough times.

    These three pillars will be strenghtened and enhanced.

    the answer may be a combination of the european and the American systems.
    Or perhaps adopting some of the Asian aspects which focus on reliance on the family before reliance on the State.
    “Still paying, still to owe. Eternal woe! ” ― Paradise Lost, John Milton

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    Quote Originally Posted by patslatt View Post
    See Mauldin Economics - Investment, Economic & Financial Analysis, Research The ageing of populations in advanced economies and sharp falls in workforces will make it increasingly difficult for governments to pay for promised retirement pensions and health care in the next ten to twenty years. Economic growth is unlikely to come to the rescue given excessive debt burdens of consumers,businesses and governments; falling or slowly growing labour forces;underinvestment in both business plant and basic economic infrastructure; and the reduced impact of technological change.

    Countries like Germany that face these realities could cope.But many countries using Ponzi style financing may face the necessity for emergency draconian cuts in government spending as bond markets become reluctant to finance them. Possibly,a crisis in Japan which is the most heavily indebted government could provide an object lesson for all governments.

    Since the entitlement culture makes people complacent about the financing of welfare states,considerable social upheaval is likely in future financial crises. Resort to supertaxes is likely to lead to decades of economic stagnation and emigration of the ambitious to youthful countries in Asia and South America which by then should offer good career prospects.
    Wasn't FG's manifesto pledge on Universal health care supposed to deal with the health issue?
    “Still paying, still to owe. Eternal woe! ” ― Paradise Lost, John Milton

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    A report from a privately owned investment firm.

    Oooh thats going to be an indepth and balanced report isn't it Pat?
    Britain operated death squads - ''97% of the Loyalists I interviewed were working directly for the State.'' - Nuala O'Loan. #FreeAhedTamimi

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