Re: It's official: Dearest rail fares in Europe

On 24 Jan, 18:52, Graeme Wall <R...@xxxxxxxxxxxxxxxxxxxx> wrote:
We have a cohort of soon-to-retire baby boomers who don't understand
the economic reality that a ratio of one retiree for every two workers
is unsustainable (whether it's funded by shares or current taxation),
and we have a government that doesn't quite have the balls to tell
them they'll need to keep working for longer or accept much lower
retirement payments.

That, in my book is a pensions crisis, because they were told their pensions
were fine for the whole of their working lives nad then when they need it
they are told they should have paid more.

You're still not following. It wouldn't have made a blind bit of
difference if near-retirees *had* paid more, because that still
wouldn't magically have made productive workers appear to wipe their
arses, generate their electricity, grow their food, and so on.

This is not the same thing, and blaming left-wing governments for it
is only true to the extent that the creation of the Welfare State has
driven changes in life expectancy.

I blamed all governments, not just whichever bunch of incompetents you (or
anyone else) happens to support. They all made the mistake of funding todays
pensions out of todays income and made no provision for future pensions.

But the actual stuff that pensioners buy (which is presumably the
point of paying pension in the first place) is part of today's
output.

All your pension fund
ever does is to entitle you to a greater or lesser share of present
output at the time of your retirement.

Which was my complaint in the first place and Luko was promoting as a good
idea.

Now I'm lost. Even if you have saved 25% of your income for 40 years
and now have a stonking great pension fund that you've wisely invested
in things that didn't go under, and get annual income of GBP30,000
from it, all you can do with that GBP30,000 is buy goods and services
that are produced *now* by workers who are active *now*. Exactly the
same would be true if the government gave you a GBP30,000 transfer
payment paid for by taxing current workers.

The exception is if you save for retirement by spending 10% of your
monthly income on a stockpile of tinned food, bottled water and
candles, I suppose...

There are more ways of saving than just material goods.

But buying material goods is the only way of saving which doesn't rely
on the output generated by non-retired people.

(this analysis is a bit simplistic, since it ignores investment in
foreign assets, immigration and imports - theoretically, everyone in
the UK could retire having spent 40 years investing in foreign assets,
and spend their dividend cheques on Chinese electronics, Australian
food and Polish nurses. I'm not sure this is sustainable, however...)

--
John Band
john at johnband dot org
www.johnband.org
.

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