People are upset and hunting for culprits\u2014incompetent governments, the E.U., the U.S. federal government, billionaires, migrants\u2014fuelling the very populism that makes rational discussions impossible.<\/p>\n
But few dare to mention the elephant in the room: an unfair Gerontopia. <\/p>\n
France is almost a caricature. French pensions consume about a quarter of the state budget<\/a>. Current retirees worked when many contributors supported few beneficiaries. Then they lowered the pension age by five years as life expectancy rose by 10. Today, a shrinking workforce struggles to sustain a generation that granted itself guaranteed retirement incomes close to working people\u2019s wages<\/a>. French pensioners are so rich that those over 70 save a quarter of their income<\/a>, while workers under 50 save barely half that rate.<\/p>\n As boomers die, many will pass massive inheritances<\/a> to their children, locking in decades of unfairness. In Western Europe, the size of your house says more about your parents\u2019 wealth<\/a> than your own job. French governments fill the holes in pension deficits by taxing their own workers. As the country sinks in the OECD\u2019s PISA rankings<\/a> (international tests of 15-year-olds\u2019 skills), voters blame the youth, smart-phones, Islam, or a political class wasting public money. But the two Prime Ministers who dared to suggest freezing the highest public pensions were immediately voted<\/a> out of office<\/a> by both the Left and Marine Le Pen\u2019s far-right.<\/p>\n Britain got there differently. The (much smaller) state pension is guaranteed by the \u201ctriple lock<\/a>,\u201d which ensures it rises faster than the economy. In the 1980s, the U.K. sold off<\/a> Jaguar, Rolls-Royce, British Airways, and national telecom, gas, oil, utilities and train companies to fund everyday government spending. Now, taxpayers scramble to rescue failing private water companies<\/a>, build high-speed rail<\/a>, or improve the electricity grid<\/a>. <\/p>\n When former Prime Minister Theresa May suggested that wealthier pensioners might pay for their own care<\/a> by selling assets, she faced a backlash, and ultimately lost an election. Keir Starmer\u2019s popularity started to nosedive when he tried to stop sending \u00a3200 checks<\/a> every winter to the wealthiest pensioners. Child poverty rates are twice as high as pensioners\u2019<\/a>, but there is no comparable outrage.<\/p>\n The West is not alone in struggling with ageing societies. The median Chinese<\/a> is 40 years old, only two years below France. As China\u2019s population declines<\/a>, young workers face a mountain of public sector debt<\/a>, youth unemployment, and low salaries<\/a>. <\/p>\n All over the world, fertility rates<\/a> are falling below the 2.1 replacement rate. Women in Latin America and the Caribbean currently have 1.8 children each, compared to almost six in the early 1960s. Even Africa, still with a rate slightly above four, is following the same downward trajectory. The U.N. regularly updates their population projections downward: Peak Humanity is getting nearer with every iteration (currently mid-2080s<\/a>).<\/p>\n The rest of the world should learn from Europe\u2019s failures, and not burden its relatively younger and poorer citizens with funding benefits for its relatively wealthy and retired elderly ones. But even Europe can have a second chance. <\/p>\n The working population needs to move through the stages of grief to acceptance of the massive benefits boomers gave themselves. Younger generations will not get this money back. Europe needs a new social contract, at least for future pensions. Instead of being linked to inflation, they could be tied to an index of workers\u2019 purchasing power, housing affordability, and public investment\u2014the opposite of Britain\u2019s triple lock. Reward with lower local taxes those who dare to say yes to housing and infrastructure. This can help better interwine all our economic fortunes. <\/p>\n Shift more taxes away from labour to income. Taxing the value of the land instead of what sits on it<\/a> encourages development, and land cannot be moved offshore for tax avoidance. Taxing the highest inheritances does the same redistributive job as capital taxation but without hindering innovation. Once people understand \u201cdeath taxes\u201d apply only to a minority of households<\/a>, they are not so unpopular.<\/p>\n The entire world must build something other than a Gerontopia. <\/p>\n We will be fewer and older, but there is no reason to be miserable. We could live on a sustainable and comfortable planet, where automation compensates for a dwindling share of working arms and brains. Free trade will be less scary once we stop worrying about factory jobs. We have learned how to make food, water, and electricity, without destroying the planet, but these efforts must be scaled up. And medicine is progressing<\/a> at astonishing speed. <\/p>\n What if fewer people simply meant more affordable cities, more abundant nature, and an aging society where all of us are better off?<\/p>\n","protected":false},"excerpt":{"rendered":"People are upset and hunting for culprits\u2014incompetent governments, the E.U., the U.S. federal government, billionaires, migrants\u2014fuelling the very…\n","protected":false},"author":2,"featured_media":43399,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[114,184,9884,85,46],"class_list":{"0":"post-43398","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-freelance","11":"tag-il","12":"tag-israel"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/43398","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=43398"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/43398\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/43399"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=43398"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=43398"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=43398"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}