From this side of the Atlantic, the furious protests in France over raising the retirement age have seemed — well, petulant. After all, Americans already have to work to age 62 to qualify for early Social Security benefits and to 66 (eventually to 67) to get full benefits. Germany is also moving to 67. So the French government raising the age for a minimum pension to 62 and to 67 for a full one hardly seems cruel.
And France has no choice but to do something. Its pension system already has to borrow to pay retirees, an imbalance that will steadily deepen as Baby Boomers age. The French protesters who took to the streets in violent strikes apparently think denial can make that reality go away.
Oh, those irresponsible French, right? Americans might not want to be too smug. The U.S. retirement system isn't quite as rickety as France's, but it's not far behind. Social Security is in the red this year, too, forcing the Treasury to borrow to pay benefits, just as France is.
Social Security is projected to get better once the economy recovers, but only temporarily. The system is forecast to go into the red again in 2015 and then get steadily worse. That means more borrowing until U.S. politicians acquire the courage — so far lacking — to make benefits match payroll tax revenues at the risk of French-like protests. The argument that the system can simply spend its huge trust fund is nonsense, unfortunately. The trust fund's cash was spent long ago. It is a moral and political obligation, but the money still has to come from somewhere else.
Social Security is hardly the USA's only budget problem. Massive borrowing is driving the national debt to unsustainable levels. Running such deficits is inevitable — even smart — during a recession, when government revenues fall. Increased spending for things such as unemployment benefits hastens economic recovery. But neither party has a credible plan to restore balance after the economy gets better. The best President Obama could do was to punt the problem to a deficit commission that's due to report a plan by Dec. 1.
Britain's government, by contrast, decided to act. Faced with budget deficits just a little bigger in relative terms than the ones in the U.S., Britain has just announced its most far-reaching deficit reduction in 60 years. Most government departments will be cut by an average of 20%, almost half a million government workers will lose their jobs and many taxes will go up.
The plan is so tough that economists worry it will wreck Britain's fragile economic recovery, a valid fear. Many economists believe it was a well-intended but premature bout of deficit reduction that halted the steady recovery from the Great Depression in 1937.
But deficit reduction doesn't have to be done this abruptly. Changes that start out modestly can grow over time. But there's no getting around the need to get started and to range widely. The sheer scope of Britain's spending cuts and tax increases is a pretty good road map for where U.S. politicians will have to go if they're serious about getting the budget near balance.
The hitch is that it took remarkable political compromise by Britain's coalition government to do this. Conservatives agreed to increase taxes and cut defense, while liberals agreed to slash government and cut entitlements.
It's almost impossible to imagine compromise like that here, where Republicans and Democrats keep digging themselves deeper into no-compromise positions. For example, it's hard to find any GOP member of Congress who hasn't signed a pledge never to raise taxes, and more than half of House Democrats have signed a letter to President Obama warning that they "oppose any cuts to Social Security benefits."
They are equally dug in on addressing spiraling health care costs in both the public and private sectors. Obama's health care plan didn't tackle them, and neither did his Republican critics. But the scale of the problem dwarfs Social Security's.
If only the current political campaign offered hope for a change after next week's elections. It does not. With only the rarest exceptions, candidates have refused to spell out serious spending cuts and are competing to see how much worse they can make the revenue side. Republicans would keep the Bush tax cuts for everyone, which would dig the deficit hole another $4 trillion deeper over the next 10 years. President Obama wants to end the cuts for the wealthiest Americans. Wow. That would only make the deficit problem $3 trillion worse.
It wasn't so long ago that Congress and presidents produced serious deficit-reduction plans that helped balance the budget from 1998-2001. That took courage and serious leadership, both of which appear utterly absent today. Before making fun of the French, Americans ought to take a hard look in the mirror.
The French are addressing their problems. So are the British. American leaders are not.
Assignment #3: Post-Modernist Literature - Compare and Contrast the 2 Post-Modern Works with 2 of the other 4 Works you have read. books: The Atrocity Exhibition by Ballard, J.G and The Russia House...
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