May 25, 2006
HIGHER & FASTER:
Britain to boost retirement age to 68 (JANE WARDELL, 5/25/06, Associated Press and Canadian Press
The British government unveiled a major overhaul of the state pensions system Thursday, revealing that it will gradually raise the retirement age to 68 and link benefits to earnings to avert a looming funding crisis as people live longer and have fewer children.Posted by Orrin Judd at May 25, 2006 2:44 PMThe government said that, beginning in 2024, it will begin increasing the retirement age from the current 65 to 66 and later to 68. That will also help pay for the government's plan to restore the link between state pensions and earnings by 2012 if fiscal conditions allowed, it said.
The link to average pay was removed by former Conservative prime minister Margaret Thatcher in 1980 in one of the first acts of her government to tackle a system that was deemed too expensive. The link to prices since then has significantly reduced the value of post-work benefits.
So then you agree there's an entitlement problem that needs fixing in the UK, but here in the US there's no such problem?
Posted by: PapayaSF at May 25, 2006 7:29 PMThe UK faces a declining population. We're going to add 200 million people over the next fifty years.
Posted by: oj at May 25, 2006 8:09 PMPerhaps, but I don't think that changes the situation:
Earlier this month, the trustees of the Social Security and Medicare trust funds issued their annual report on the future of the programs-to little fanfare. Yet the report merits large headlines. It's important. And it's grim.
The trustees report that the two programs have promised $37 trillion more in benefits than they can deliver. In years to come, these entitlements are set to eat up shocking amounts of tax income.
One of the trustees estimates that, unless we fix these programs now, more than a quarter of all federal income taxes in 2020 will be spent on Social Security and Medicare benefits. That's up from about 7 percent today, in addition to the more than $764 billion in payroll taxes in 2005, to fund the two programs. By 2030, roughly half of all income taxes would be needed to keep these two programs afloat.
Posted by: PapayaSF at May 25, 2006 10:04 PMSo even the most lunatic hysterians say we won't spend half of the current tax burden on those entitlements absent any tweaks whatsoever?
Posted by: oj at May 25, 2006 11:16 PMSo the trustees (a.k.a. "the most lunatic hysterians") point out that Social Security and Medicare benefits will go from consuming 7% of income tax revenues to 50% of revenues in 25 years, and you don't think that's kind of a major problem? You think it'll be trivially easy to cover that extra 43% with tax increases or spending cuts or deficit spending?
Posted by: PapayaSF at May 26, 2006 2:40 PMWhat extra? It's just a matter of what you want government to pay for. We'd just have less of other stuff.
Posted by: oj at May 26, 2006 2:54 PM