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Something’s Gotta Give

At the very time when the social safety net is most needed, investors the world over are calling it a drag on the world economy.

Here in the U.S., wages are stuck, income is down, unemployment remains around 10 percent, with almost half of those out of work for six months, consumption trends are flat, and Main Street is hurting.

In Europe, where the safety net is a proud tradition, cries for cuts are even louder. “The current system,” wrote the New York Times of Europe over the weekend, “is unsustainable.”

According to the European Commission, in the 1950s there were seven workers for every retiree in advanced economies. By 2050, Europe’s ratio will flip, with less workers supporting more pensioners.

With the retirement of the baby boomers, the number of pensioners will rise 47 percent in France between now and 2050. The French state pension system today is running a deficit of 11 billion euros.

French state pensions, Social Security in the U.S.–investors are pushing hard to cut these programs, unwilling to entertain higher taxes.

But people who sound alarms about fiscal demise rarely point out that stagnant wages leave little room for enhanced savings and putting a lid on retirement income — here and in Europe — drives down consumption. There are alternatives but low consumption means low growth.

Something’s gotta give.

LAURA FLANDERS is the host of GRITtv, which broadcasts weekdays on satellite TV on cable, public television and online at GRITtv.org and TheNation.com. Follow GRITtv or GritLaura on Twitter.com.

WORDS THAT STICK

 

Laura Flanders interviews forward-thinking people about the key questions of our time on The Laura Flanders Show, a nationally syndicated radio and television program also available as a podcast. A contributing writer to The Nation, Flanders is also the author of six books, including The New York Times best-seller, BUSHWOMEN: Tales of a Cynical Species.  She is the recipient of a 2019 Izzy Award for excellence in independent journalism, the Pat Mitchell Lifetime Achievement Award for advancing women’s and girls’ visibility in media and a 2020 Lannan Cultural Freedom Fellowship for her reporting and advocacy for public media. lauraflanders.org

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