November 3, 2013
WE ALL KNOW WHERE WE'RE HEADED:
What America Can Learn from the Faroe Islands about Social Security Reform (Daniel J. Mitchell, Nov 03, 2013, Townhall)
Posted by Orrin Judd at November 3, 2013 9:51 AMThe current government of the Faroe Islands, which includes the People's Party, has modernized its Social Security regime with a system of personal retirement accounts. Starting next January, workers will begin setting aside some of their income to finance a comfortable retirement income. When fully implemented, workers will be putting 15 percent of their income in their accounts, creating a system that's even larger than the private retirement models in Australia andChile.So why did Faroese politicians take this step? Well, unlike politicians in most nations, they looked at the long-run data, saw that they had an aging population, realized that a tax-and-transfer scheme no longer could work, and decided to reform now instead of waiting for the old system to collapse.