Ageing populations 'will create crippling debt'

[Milesian]

Source: Financial Times
Date: 02/04/2004


Industrialised countries face crushing debt burdens - greater even than those during the second world war - unless governments make politically painful cuts in social spending in the next few years (or perhaps stop promoting declining birth-rates ), according to Standard and Poor's.

In research published on Thursday, the credit ratings agency says continental European countries - including Germany, France, Portugal, Greece, Poland and the Czech Republic - would see their public debt grow to more than 200 per cent of gross domestic product by 2050.

In spite of immigration and higher birth rates than in many European countries, the US is also expected to see its government debt spiral higher as age-related spending grows. S and P says the sharp deterioration in US public finances over the past couple of years has prompted it to revise US debt forecasts sharply higher. "The US debt ratio is now projected to reach 158 per cent of GDP, almost double the 83 per cent projected two years ago."

Japan faces the world's heaviest debt load - more than 700 per cent of forecast GDP by 2050 - reflecting not only its generous pension promises but the longest life expectancy, and among the lowest rates of fertility, in the industrialised world.

Richard Jackson, senior fellow in charge of the demography project at the Center for Strategic and International Studies, a US think tank, says future pension promises pose a risk to political stability. "If you assume countries do not cut benefits, you are looking at fiscal Armageddon."

He noted that the report might understate the size of future deficits because the calculations use statistics that understate consensus of forecasts for improvements in life expectancy and overstate future fertility rates. "In a scenario which is about as optimistic as you can get, that still leaves fiscal meltdown in just about every country in 25 years," Mr Jackson said.

To avert an explosion in debt, the worst-affected countries must keep their budgets consistently in surplus, S and P says.

The alarming scenario painted by S and P contrasts with a less threatening one for Ireland at the moment because of more favourable demographics and early pension reforms.

[Gladstone]

"If you assume countries do not cut benefits, you are looking at fiscal Armageddon."

Let's see...the social experimenters (ie rad-libs, multi-cultists, etc) gave us the catastrophe last century of Communism and the needless deaths of one hundred million human beings. The past fifty years they gave the West more cultural and outright physical destruction than Ghengis Khan could ever have hoped for by way of the multi-cult. And now they have us on the precipice of "fiscal Armageddon" thanks to their spendthrift ways. One would hope these "elite" types would sense something's not quite working with their plans and turn from their ways...and maybe...just maybe...give the world a breather.

That's probably expecting too much though.

[kinvolk]

The social security taxes that I pay merely go to pay the s.s. of the people that are collecting it now. I read somewhere that it only takes 4 years to recieve all of the $'s that one puts in over 40 years of paying in. I will never see any benefits from this. Now that the "baby-boomers" are hitting retirement age we are fast approaching a disaster. Also the so called""social security trust fund" does not exist, open that box and the only thing it has in it are I.O.U.'s because the actual cash has been looted to pay for other programs. The national dept , Social Security, and tax cuts for the very richest americans are leading us down a road to ruin. Add in a few wars that we cannot afford, And we are looking , well,,,,not so fresh. Right now 5% of the U.S. population owns 95% of the wealth. And that my friend is a perfect recipe for civil war. I am part of the 95% who are left fighting over the scraps as the zionist occupiers of my country loot the treasuries to give to themselves and thier friends. Bring on the second american revolution. Who knows, A little luck and I may end up on top! And boy howdy will things be different!

[Mac Seafraidh]

Yeah, in fact, I was reading something on the Italian culture dimishing because they are emigrating leaving there towns/cities deserted. On top of that the birth rate is lower. So, I see a large Muslim community wanting to completely move their families and links of families in to those places.

[Strengthandhonour]

MVSSOLINI MIT VNS speaks the truth. Most small towns in Italy are going to dissapear from the map soon. Specially in the south.