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ATHENS — Vasia Veremi may be only 28, but as a hairdresser in Athens, she is keenly aware that, under a current law that treats her job as hazardous to her health, she has the right to retire with a full pension at age 50.

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And Greece may be an early indicator of troubles to come. Bigger countries like Germany, France, Spain and Italy have relied for decades on a munificent state financed by a range of stiff taxes to keep the political peace. Now, governments are being pressed to re-examine their commitments to generous pensions over extended retirements because the downturn has suddenly pushed at least part of these hidden costs to the surface.

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According to research by Jagadeesh Gokhale, an economist at the Cato Institute in Washington, bringing Greece’s pension obligations onto its balance sheet would show that the government’s debt is in reality equal to 875 percent of its gross domestic product, which is the broadest measure of a nation’s economic output. That would be the highest debt level among the 16 nations that use the euro, and far above Greece’s official debt level of 113 percent.

Other countries have obscured their total obligations as well. In France, where the official debt level is 76 percent of economic output, total debt rises to 549 percent once all of its current pension promises are taken into account. And in Germany, the current debt level of 69 percent would soar to 418 percent.

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negative population growth is a bad thing...

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ORIGINAL: LadyEllen

Its a simple matter of mathematics DS, and the current problem is one comprising a huge rise in retirees from the "baby boomer" generation combined with medical advances making for greater longevity, a falling birth rate and economic decline.

When old age pensions were introduced in the UK (early 20th century), the retirement age was set at 65 and very few lived more than a few years after retirement. The working population, which was fully employed and growing, paid a small premium in taxes to support the retired and the system made a surplus.

Fast forward to today and we have in the UK a huge proportion of people over 65, set to become the majority in a few more years as the baby boomers start to retire, and they are living much longer, requiring support for decades rather than years. And that support is costing more than before too, in terms of medical treatments and care, whereas when the system was introduced it was merely living costs being provided. At the same time the population of workers has diminished as a proportion of the total population and there is 20% of the working population classed as economically inactive - roughly 10% unemployed and 10% on long term incapacity. Factoring in the further 20% who are employed by the state and we are left with 50% of the workers generating all of the tax incomes to cover retirement support as well as all the other burdens that have arisen over the decades - unemployment benefits, housing allowances, incapacity benefits, health service, military etc etc

The problem of overpopulation - out of control population growth, is one which concerns primarily third world and developing countries and impacts globally. As regards most of Europe, the native population is in steep decline, necessitating immigration to make up the numbers. And the numbers are important, because if the proportion of the population who generate the tax revenues - the private sector, declines further, then the tax incomes fall further and the burden of liabilities not covered rises, necessitating further borrowing.

The one factor that this mathematical calculation (that we need approximately 20 private sector workers for each retiree,. not to mention the others requiring support) fails to address however, is that in a global economy, our performance can only decline as long as we are not price competitive with emerging economies, regardless of how many workers we might have. If there are no jobs, then there are no workers, lower tax revenues and a higher benefits burden.

Ultimately therefore this is not a population issue, nor even an issue of the level of benefit recipients vs the number of tax generating workers - rather it is an economic problem that must be addressed. And so far at least, there is no sign whatever of our political leaders having any idea whatsoever of how to address it, though it is notable to observe that those in positions to engage a resolution have occupied themselves in gaining sufficient wealth such that the problem is one to which they are immune.

We either accept third world living standards for 95% of the population, or we resolve the economic mess we have gotten into over the last few decades of offshoring, trade deals and globalisation.

E