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TMFBro (< 20)

No, you can't retire at 53

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August 09, 2010 – Comments (5)

Oaktree's Howard Marks posted an excellent discussion of the state of government finaces (including international, federal, and state problems). Here's a paragraph: 

"In April, as the problem began to unfold, I heard a Greek taxi driver express his worry on the
radio: 'I might not be able to retire at 53,' the average retirement age.  How can it be rational
for a nation with a limited economy to enable its citizens to retire at age 53?  Well, it isn’t. 
Greece was able to outspend its revenues for years because it benefited from the 'reflected
halo' of the E.U.’s financial strength and low euro-related interest rates."

That pretty much epitomizes the world's financial challenges: People wanting something they can't afford, and expecting the government to provide it with borrowed money.

5 Comments – Post Your Own

#1) On August 09, 2010 at 12:03 PM, brickcityman (< 20) wrote:

How is a 53 year old cabby expecting to retire with government aid any different than an established corporation expecting government subsidies to perform research, buy capital goods, or hire more workers?

 

Aren't the upper and mid-level managers of any corporation that pays less than the going tax rate, and/or receives government subsidies for any private benefit, just as "Lazy" as someone who expects the entitlements they've been promised?

 

At least the cabby had worked for a living instead of marshalling resources to lobby for a competitive advantage....

 

Point being that we've all lost site of the rightful role of government...   While the lazy welfare recipient might be the boogey man of the right,  There are plenty of corporate welfare cases out there as well (e.g. the boogeymen of the left).  Both are natural outcomes for a system where the cost benefit of leaning on the government stands as it does today.

 

I'm not sure how to correct these things...  But I may I suggest at least one question for any government representative that seeks your vote....  "What directly applicable skills qualify you for this role?".  If they give you BS about leadership, faith, values, or which party they belong to then thats probably a red flag.  If they can cite a background in economics or skills related to the formation of effective policy then they might be worth another look.

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#2) On August 09, 2010 at 12:33 PM, TMFBro (< 20) wrote:

@brickcityman

Good point. I don't mean to focus on this fellow just because he's a cabby. My point was that people can't expect something from governments that can't afford it, especially being able to retire at 53 -- whether you're a cabby or corporate executive.

Also, in his letter Marks bring up a conundrum: All the measure necessary to make governments more fiscally sound (cutting services, raising taxes) are anti-stimulative, and the recovery is very fragile. This is a very difficult balancing act.  

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#3) On August 11, 2010 at 2:48 PM, dwot (45.74) wrote:

That's an awesome link.

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#4) On August 11, 2010 at 2:52 PM, dwot (45.74) wrote:

The Wall Street Journal of November 24, 2008 carried the following quotation from Irving Fisher, writing 76 years ago (“The Debt-Deflation Theory of Great Depressions,” Econometrica, March 1933): 

 

When it comes to booms gone bust, “over-investment and over-speculation are often important; but they would have far less serious results were they not conducted with borrowed money.”

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#5) On August 14, 2010 at 12:07 AM, samual135 (< 20) wrote:

53 is not the age for retirement

van

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