Wednesday, March 23, 2005

What Used to Be in the News

From a reading of mine on the welfare state. More timely before the news got obsessed with one woman. If you're interested in the full chapter, I can send it on per request:

Most countries operate pensions on a pay-as-you-go basis:
current workers pay ‘contributions’ that finance the previous generation’s
retirement. Once they have been in place for a long time, pay-as-you-go systems
may face incremental cutbacks and adjustments, but they are highly
resistant to radical reform. Shifting to private, funded arrangements would
place an untenable burden on current workers, requiring them to finance
the previous generation’s retirement while simultaneously saving for their own.
Even partial privatization has generally proven possible only in the relatively
few countries lacking extensive and mature pay-as-you-go systems.

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