French Pension Reform Will Go Nowhere

Have you seen the photo of the one million French people protesting Emmanuel Macron’s pension reform? It is pretty darned breathtaking. If you were in the middle of it, a snack and a bathroom break would be a long struggle. Trade unions are urging even more strikes, far be it that they urge more work to make up for the shortfall in funding of these retirement plans.

We have the same problem here with Social Security and the can gets kicked down the road. We all think we deserve our Social Security. We paid into it. Unfortunately, when it was designed the number of retirees was tiny compared to the number of taxpayers. Like the deceptive computer models for coming famine or climate disaster, there was no allowance made for adjustments to changing future conditions.

Tragically, the retirement funding scheme that could have worked was in place already. But some politician thought he could get reelected if part of the process was taken from us and given to the government.

People all over the world have saved for their retirement. Others have their whole adult life ahead of them and only need to borrow some cash to make their dreams come true. A more direct way to connect savers with borrowers would be through borrowers selling stock and savers buying shares. The system exists.

The idea that savings must be managed or redistributed by government is flawed as evidenced by the waste within the Department of Defense.

The Pentagon failed its fifth audit, not accounting for $220 billion in government property furnished to contractors just last week. In November of 2022 the DOD could not prove expenditures for 61% of its $3.5 trillion in assets. I ask, is the U.S. government to be trusted with our “investments?” If we invest in a private company and it commits fraud we have recourse through the courts. It doesn’t work that way with government. As my dad said years ago when the Farmers Home Administration reneged on our house project, “You can’t fight city hall.”

Anyone who has diversified savings has seen the comparably miserable return on investment offered by Social Security.

The U.S. government is paying interest on the garganchuan debt we owe. Interest rates have risen and so has the cost to our government. But they keep on spending.

The most equitable way to fund retirement is to connect savers with borrowers so the borrowers can pay interest to use cash earned by savers over the years. The closer the connection we can make between them, the less waste and more cash available for each.

It is no surprise that French unions are urging strikes. Unions are like government; force is their language. Fair exchange makes them feel cheated.

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