Post #2918 by Timer321 on the Macroeconomic Trends and Risks board

Personal Finance Topics / Macroeconomic Trends and Risks

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https://www.nakedcapitalism.com/2025/11/european-n...
Citizens in EU states have been rebelling against social program cuts, like pension reforms. Are changes in the retirement age necessary?

Europe’s population is aging. The birth rate is declining. Life expectancy is growing ever longer. Fewer people are contributing to fund public systems that will have more people drawing money from them for longer periods of time. At the same time, technological disruption is reducing the share of labour income in gross domestic product.

Since most of Europe’s pay-as-you-go systems were designed when demographics were entirely different, they must be adjusted to reflect the current reality.

Pension reforms keep failing because the politics overrules the economics.

“Relax tj. The European nations will figure it out.”

I dunno they have been dithering for 3 1/2 years and counting.

June 7 2022:
https://www.politico.eu/article/retirement-dreams-...
Public pension systems are stretched thin by an aging demographic, but political bias prevents solutions from emerging.

The root cause is an aging population, characterized by fewer births and longer life expectancy. This increases the so-called old age dependency ratio, whereby a growing share of an ever-grayer population’s pension payments rests on a shrinking labor force.

In some countries, like Germany, that ratio is already high, at 40 percent. But by 2050, that ratio will be even more extreme, topping 75 percent in the cases of Italy, Spain and Greece. It’s projected to grow to above 50 percent in most EU countries, including in relatively rich places like the Nordics and the Netherlands.

9/16/2025
https://fortune.com/2025/09/16/france-retirees-hig...
65-year-old retirees in France now have higher incomes than working-age adults

1970 to 2020-in France wages rose 100%, retirements benefits 160%

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Really the US needs to do the same thing. You can't afford military, law enforcement, etc. to retire after only 20 years and then pay a pension for another 30-50+ years. Just not wise economically.

I know when I used to work for the federal government people always thought we could retire after 20 yrs and get a huge pension but that wasn't the case and the pension got significantly reduced in the early 80s.

Unfortunately we keep adding expenses without cutting back in some areas. Tough decisions but the spend, spend, spend and kick the can down the road process is going to be painful for people in the future. I'll be gone so I guess I shouldn't be concerned with it but it makes little sense.

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Rich,

The US is heading to demand side econ. We need to raise the tax rates on the top bracket and corporations to incentivize GDP growth and economies of scale. The EU is heading to supply side econ. They need to cut taxes and make the EUR the main reserve currency.

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