Arnold Kling

Missing the Point

Arnold Kling, Great Questions of Economics
Previous Entry Next Entry

Here is how The Economist summarizes a long series of articles on public pensions--what we call Social Security.

PRESENT pension structures no longer work. They were established in a more youthful era with relatively few older people who were often poor and ill, and typically spent only a short time in retirement. In rich countries today, older people are often well-off and in good health, and are spending around 20 years in retirement.

This is true. It is a particular problem in Europe and Japan, where the population is aging even more rapidly than in the U.S. However, the editors completely miss the fact that the only solution is to raise the retirement age. They need to read Farmers and Parasites.

Discussion Question. Why doesn't the option of raising the retirement age come up more often in discussion of ways to address the pending demographic crisis in pensions?

Return to top