People with privileged jobs are always writing crap like this. Why shouldn't people retire?
Journalists, programmers, scientists, executives...we have jobs that can be interesting and fulfilling and are not physically demanding. There's no reason to stop unless you want to.
News flash: not everyone has an interesting job that they want to keep doing until they drop dead. A lot of people work manual labor, or mind-numbing service jobs. 45 years of that and you'd be ready to retire too.
In the Western world at least, our societies are rich enough to support this. I think we should. And almost everyone agrees with me. Check the polls on raising the retirement age.
Medicare costs are rising astronomically, but no more than private health insurance. It is a symptom of the broader health care problem. This needs to be fixed, along with the rest of the health care system.
Social Security is only 4.4% of our GDP and is projected to go up to 6.2%. Oh noes! That is a truly minor cost. We CAN afford it.
Healthcare is a bubble that has been created by removing the actual costs from the providers and the consumers (until you are outside it and have to pay outside insurance). When healthcare is removed from being tied to employers this market will change dramatically.
Healthcare, private IRA accounts, savings etc are all needed today separated from employers as people rapidly change jobs.
Social Security isn't actually much of a problem (in fact the gov't uses it for funds all the time) it is Medicare and Medicaid.
US healthcare cost is actually dominated by overhead. Add up malpractice insurance, medical billing, drug advertizing, insurance companies (more advertizing, administration, reviewing claims etc.), hospital overhead, and proft every step of the way. Overhead just dominates heal care spending which is why Canida has universal heathcare while spending less government money per person than the US.
A lower population means less need be spent to provide health-care services per individual. That three-quarters of the Canadian population living within 150 kilometers (which is approximately 62% the distance of 150 miles) means that fewer resources need be expended to provide that level of service due to population density. If we assume that an identical proportion of the United States population lives within 150 miles of an ocean, that still leaves a population that is more than twice the total population of Canada in the interior. Reaching those people with the same standard of service will not cost as little as the Canadian system.
A lower population means less need be spent to provide health-care services per individual. Why? If the average cost of 300 million people was say 5k/year why would the average decrease when only caring for 30 million people?
The US has ~10x the population density of Canada.
United States — Population - Density: 31/km2
Canada — Population - Density: 3.2/km2
And the population density of a state does not really correlate with its healthcare costs so I think it's a pointless comparison.
PS: You seem to be confusing total cost with average costs.
Social Security is a very, very small part of it. The largest part is medical care. Here is a bite sized 30 min version of a movie called IOUSA that outlines the major problems that are ahead: http://www.youtube.com/watch?v=O_TjBNjc9Bo
There will not be enough money. Period.
The US cannot unlimitedly tax young workers for the rich. They cannot go into unlimited debt. They cannot inflate the currency without major negative repercussions on their currency.
Actuarially speaking, the US cannot afford to pay for 25 to 30 years of both retirement income and medical costs. There is a saying in Canada that probably exists in the States: "If you get to 60, you are more likely to live to 90 than not." Those are a ton of years to pay for. Social security. Medicare. All the other "normal" portions of the US budget, like defense, intelligence, and infastructure.
When you say "6.2% of our GDP" it doesn't sound like a lot, but it is. 4.06% of the current GDP of the United States is spent on their military. That is a TON of planes, missiles, and carriers that are being kept afloat right now and you want Social Security to receive 50% more than that?
Also, The federal budget is not the be all and end all. State budgets, municipal budgets, family budgets all need portions of the 100% of the GDP. The United States has over consumed for far too long and major contractions will take place before normalcy will return.
Government pensions can't be discharged in bankruptcy[1], nor can PBGC[2] take them over. Some rust belt communities are seeing 25% of tax revenues [3] going to pay retired police and school teachers even as the towns dwindle and get bulldozed like Flint, MI. Because courts routinely treat the 14th amendment, section 4, to mean that such debts cannot possibly be made to go away, then taxes will have to be raised just to pay past promises.
3 - The state of NJ is currently spending about 9% of tax revenues to retirees in the form of pensions and health care. A reasonable rule of thumb is that if a growing community is spending less than 10% of their tax revenues on pensions, then they either don't have one, or they're dangerously underfunding their current pension plan.
So Australia just announced raising the Pension age (from 65 to 67 -- applies to people who are now about 50 and younger). The figure that came out with that - was that when the pension was established 80 odd years ago - it was for a life expectancy of about 67 - the expectation was that it was support for old people about to die. Since then - people are living much longer - and the age hasn't gone up.
Also note that Australia has compulsory Retirement savings (9% of Gross Income) for all employees! Which is probably going to be my plan A, since I don't expect the Gov to be able to afford to pay for me when I retire.
Exactly, most people would retire if they could there are plenty of people well over the elderly gap still working because of high costs of living and such terrible retirement plans or lack thereof.
I agree and it's usually knee jerk stuff in response to whatever the current economic situation is. I wouldn't be surprised if they had contradictory articles 10 years ago.
Unfortunately The Economist is not some noname pageview hunting crystal ball blog; they have a surprisingly good history of hitting the nail on the head with their analyses and predicting the future. This article is a part of a series about old age and pensions (you can find all of them in this week's printed edition) and after reading through all of them, I'm afraid to say, it makes a lot of sense.
Journalists, programmers, scientists, executives...we have jobs that can be interesting and fulfilling and are not physically demanding. There's no reason to stop unless you want to.
News flash: not everyone has an interesting job that they want to keep doing until they drop dead. A lot of people work manual labor, or mind-numbing service jobs. 45 years of that and you'd be ready to retire too.
In the Western world at least, our societies are rich enough to support this. I think we should. And almost everyone agrees with me. Check the polls on raising the retirement age.