24 June 2013

Stockton, Detroit, Pensions, ... and Portuguese Babies

A quick click here and here will send you to some thoughts about the financial troubles of Detroit and yet here and here for some about the bankruptcy of Stockton. Along with many others I've alluded to the self-imposed but unsustainable financial burdens of generous retiree benefits as a principal cause of the distress of these cities (and a number of American states as well). Of course, foolish borrowing, misdirected spending, and reckless investments by state and municipal governments have contributed as well.

But go here for a WaPo article about the plummeting birth rate in Portugal and its implications for that nation's social security safety net. As the article puts it, "Portugal is at the forefront of Europe’s latest baby bust, one that is shortening the fuse on a time bomb of social costs in some of the world’s most rapidly aging societies." The nearly world-wide phenomenon of a falling birthrate looms large for the planet's equivalent of baby-boomers and millennials. In other words, who's going to work hard to keep folks of my ilk going after we're cut from the income-earning economy? I suppose that's why my annual Social Security statement of earnings never fails to mention that the system looks to run out of money sometime in the 2030s.

The same article observes that America seems to be avoiding the worst of this problem. While "the U.S. birthrate has also come down sharply since the 1960s. ... [T]he United States is projected to have a generous influx of immigrants in the years ahead while also maintaining a more robust birthrate than those European nations hit the hardest." Good news, but only relatively speaking.

Children: a heritage from the Lord. Where have I read that novel concept?

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