Yes, dear reader, it looks to us as though the welfare state is kaput. Because it depends on the future to support it. And guess what, there is no future…
Remember the Population Bomb of the ’70s? If we’re not mistaken that was Paul Erhlich’s dire, neo-Malthusian warning. There were soon going to be more people than the world could support.
Well, the population bomb turned out to be a dud. And now, in the developed world, the really explosive danger is not too many people, but too few people. It’s blowing up the social welfare systems put in place in the early and mid-20th century.
“By 2050,” writes Giulio Meotti in The Wall Street Journal, “60% of Italians will have no brothers, no sisters, no cousins, no aunts, no uncles.”
Gee, wonder what the weddings, funerals, family reunions and estate battles will be like. You may want to fight over dad’s bank account, but who will you fight with?
According to Meotti, Italy is approaching the point of no return. Once you get to a certain level, there aren’t enough fertile young people to replace the population that is retired and aging.
“According to demographic forecasts, it is highly unlikely that the number of people under 20 will ever again exceed the number of people over 60,” he writes.
Italians are committing social suicide, he says, disappearing by choice.
What happens to the social welfare state when the number of people who are meant to be supported becomes larger and larger…while the number of people who are meant to be supporting them becomes smaller and smaller? We don’t know. But we’re going to find out.
Italy and Japan are leading the world in the race to self-extermination. Others are coming along. But the financial problems caused by too many old people are ubiquitous. France was paralyzed by strikes yesterday because the government threatened to raise the retirement age from 60 to 62. Sacre bleu! Most likely, people will work ’til 70 before the welfare state finally dies.
Bill Bonnerfor The Daily Reckoning
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill's daily reckonings from more than a decade: 1999-2010.
This is only half the problem. The other half is that Europe is importing people to address the problem of lack of workers. These foreign workers will eventually displace the native population.
I keep getting the duplicate comment message yet you will not post the comment!
Personally I have always admired the French and their appetite for life. I would assume you do as well? If the horrors of the welfare state consist of 6 weeks vacation and retiring at 60 or 62 versus working till you drop, being swindled by the stock market and your pension fund and never being able to retire because health care is unaffordable then I am going to have to embrace the welfare state at some point. What I like about the French is they enjoy living so much, smoking and drinking, staying out all night yet still finding time to climb Mt Everest and hang glide off it, row across the Atlantic, drive across the Sahara etc. Where do they find the time? Shouldn’t they be putting their noses to the grindstone so they can buy more junk, get obese and unhealthy and be prisoners to their jobs? Like Americans?
BB does not allow postings of comments that he does not like or that put him in a bad light.
Hey, it is his site and we can read and laugh at his writings without paying anything so if he won’t let us post, so be it………
Well that’s all nice if you live in a country that does have welfare such as pensions, and health safety nets. For the rest of us we’ll continue to have 5 or 6 children and hope one or two can get a ride with Uncle Sam on immigration merry-go-round
One thing this world certainly does not need more of and that is people. Last time I checked we had 7 billion and rising. And then the oil experts tell us we have peak oil coming fast.
Dave H – just like any ponzi scheme, the only ones who profit are the ones at the top of the pyramid (the oldest, being the first ones to exit the system). The suckers who enter later in the scheme (young people who pay for social security) are going to be left holding an empty bag.
Well then, we will obviously have to “freeze” (cryogenically) everyone over the age of 65 until we can solve the problem! This may hurt AARP enrollment, but on the bright side, it would create more jobs for the cryogenics industry, and ease up the over-stressed healthcare industry!
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