Pensions coming: another great political fraud

Much complaint these days that the "pension piggy bank", the reserve fund created to pay pensions if necessary, is overdue. But this alarm is set in a virtual reality. The concept of "pension piggy bank" is fictitious. It is an accounting ruse to sell to the gullible that, despite being indebted to the eyebrows, the state had some savings.

It is a tiny block of flats, those mushrooming national geography. Most of its residents live in rented, only a few have been mortgaged. The thirties are mostly couples, although there are younger groups, to reduce costs, share an apartment. With so many people of childbearing age, it is noteworthy that only children are running around the public areas. What there are dogs. In the absence of kids, residents pamper, pet and coo to their pets. It is the portrait of a generation that lives a day, the reflection of Spain that, after a period of high birth, plunges at full speed in the demographic winter.

Dogs do not contribute to Social Security. And it seems that they will do in the future, though its fans demand their rights as "human beings". Children on the other hand, work and listed as adults do. Current workers are securing pensions to retirees today, but will not be reciprocated to the same extent in the future, a problem which all have closed their eyes. Politicians, because ruled in the short term, triggering a bomb; citizens, because they lived a day, confident that the State would guarantee a dignified old age for pay their contributions. "Contributing entitled to demand" is the great slogan on which rested until today our innocent and interested naivete.

30 years ago it was known that if no action were taken, the pension system would enter a colossal mismatch

It has been stated ad nauseam that our pension system is based on the distribution mechanism of intergenerational solidarity: youth pay retirement of their elders, receiving it in the future of their descendants. But the concept of solidarity, always voluntary, is incompatible with the mandatory nature of contributions to Social Security. However, the discussion is not philosophical but technical. And above all, political. Therein lies the crux of the matter ... behold the problem.

They preferred to squander our complicity ...

The revelation that, from the next decade, retirees would receive much less than promised is almost as novel as the discovery that the Earth is round. After a period of high birth, births began falling sharply from 1975. Shortly thereafter, between 1985 and 1990, it was found that the plunging birthrate and the consequent aging of the population, were not passing phenomena but permanent. That is, already it knew then that if no action were taken, the pension system would enter a colossal gap by 2025, when they reached retirement age exceptionally many generations.

In other words, three decades ago we received two news, bad and another good. We learned that the pension system rested on a devastating bomb. But also that the explosive had a very long fuse, 35 years, long enough to generate extra public savings and gradually introduce elements of capitalization. However, time passed and none of it did, why?

They were allowed, for example, granting too many early retirements in favor of influential groups

It is easy to understand. When the generations born between 1960 and 1980, much more numerous than their predecessors and their predecessors, began to work, the huge collection meant an irresistible political temptation, why save the considerable resources that stage of abundance if they could use them to favoring friends and buy wills and votes? They were allowed, for example, granting too many early retirements in favor of influential groups. Them a damn about the danger that lurked in the future. According to his myopic vision, thirty-five years were comparable to the period between the Jurassic and Cretaceous: an eternity. Thus, they devoted themselves with great enthusiasm to generate public deficits rather than surpluses. Carpe diem, and come back, that arree.

A story for unwary

Much complaint these days that the bank of pensions reserve fund created to pay pensions if necessary, is overdue. But this alarm is set in a virtual reality. The concept of "pension piggy bank" is fictitious. Besides derisory compared to the chilling future needs, is an accounting ruse to sell to the gullible that, despite being indebted to the eyebrows, the state had some savings. If this game was used to buy government debt, ie, to finance other expenses, what does it matter what you call it? Since the State is responsible for social security, the important thing is the deficit or consolidated surplus, all levels of government and social security as a whole: the rest is countable engineering, political sleight of hand to reassure fools.

Brussels had to be, by the grace of a risk premium shot, who warned in 2012 that the fuse of the bomb was already alarmingly short. That both make Don Tancredo, we finally had caught the bull. Then, in extremis, the pension reform of 2013, which comes into force in 2019, whose philosophy is basically that the amount received will be adjusted to what the system can afford is illuminated. The amount of pensions not only be reduced with increasing life expectancy; also it is adapted to demographic cycle: more pensioners, less pension. Which they dealt that stands between them and, if they are many, bad luck.

Those born between 1960 and 1980 receive lower revenues by 40% to what would have been entitled before the reform

They are lentils. The contributor will have to contribute a fixed amount per month (increasing for the autonomous, prepare yourselves), but the state will transfer to each according to blow the wind of circumstances amount. And what is the hurricane blows demographic winter ... voila !, downward adjustment for those belonging to the numerous generations born between 1960 and 1980 receive lower revenues by 40% to what would have been entitled before of reform.

The delusion that always pensions consist of defined benefit led many people to save sufficiently for retirement: trust be guaranteed a decent life and not be so. Within a couple of decades, Spain spew a generation of older almost destitute, of which no one will or can take over. Our retirees will no longer be the proverbial safeguard major recessions but an additional burden.

And it is that one of the lessons of this crisis is that man's best friend is not the dog but the grandfather. So at least it certifies the study of Salvetti & amp; Llombart, which reveals that in 2015 80% of retirees had to help their children. This percentage was 20% only five years earlier, in 2010.

The drama of the recession has softened because current retirees belong to a smaller generation, with more or less decent pensions. But if the current crisis is repeated in the future, this valve will no longer exist. Tomorrow's pensioners can not even support themselves. Only one way out: private savings. But today it is very difficult to save given the high unemployment, job insecurity and the growing tax burden. It is the price we pay for having squandered touches 30 years.

In the state no money boxes, only a single case where money, as it enters, instantly poured by countless nooks

Another myth tatters

The pension crisis is another example of the perverse functioning of the Spanish political system, stuffed full of myths, deception, high-sounding but empty declarations and, above all, marked by myopic short-term goals, always favorable to the political class, his cronies and lobbyists, never serve the common citizen. Pensions can no longer be a weapon to convert millions of retirees in captive voters, or a legal scam for current contributors. But this is another taboo that constrict the debate to a set of inviolable beliefs, lies, and that only the State, through the distribution system, can guarantee decent pensions. We have proof that it is not.

In this policy framework, increase contributions and raising taxes is not the solution, gentlemen bureaucrats. No fool, in the state no money boxes, only a single case where money, as it enters, instantly poured by countless nooks and was never heard. We need reform that will lead to a savings-based, the decisions of each person, which significantly reduces the ability of parties to arbitrarily manipulate our old age pension system. The free man is one who owns his future. And today, dear reader, your future does not belong