THE LAST DITCH An Englishman returned after twenty years abroad blogs about liberty in Britain
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Kill me. Just kill me now.

A tale of two public pension problems

America’s Urban Distress: Why the Public Pension Problem Is Worse than You Think | Zero Hedge.
The linked article is typical of two things. Firstly why I had to smile when, on my recent tour of their country, American Conservatives told me their country was turning "socialist." And secondly why that's unlikely ever to happen.


As I understand it, the equivalent shortfall in the UK is near-total. There are no pension funds for most state employees (though the teachers do have one - massively underfunded, of course). No money has been invested to provide for the future pensions of most state employees, any more than it has for future state pensions for the rest of us. It's a pure Ponzi scheme. As Nye Bevan said in a rare burst of humour and honesty;
The great secret about the National Insurance fund is that there ain't no fund
Yes, America's pubic authorities have under-funded their employees' pensions, but ours have not funded them at all. They have simply expected from the outset to take the necessary money by force from future taxpayers. After all, what honest return in investment could possibly compete with the infinite return on money taken by violence at merely administrative cost? Our rulers have disregarded the Jeffersonian wisdom that has restrained American public spending for most of its history;
I place economy among the first and most important of republican virtues, and public debt as the greatest of the dangers to be feared.
Hence the last Labour government's panic-stricken importation of millions of immigrants to make up for the declining birth-rate of the underpaid and over-taxed locals who have economised in the face of rising overt taxation and the relentless covert taxation of inflation by cutting back on the size of their familes. Hence also, perhaps, the oddly perverse incentives to breed - regardless of ability to pay for the resulting childrens' upbringing. A Ponzi scheme backed by violent force can last longer than a private sector version, of course, but it can still be brought down prematurely by demographics.

So why does the story suggest it's unlikely that socialism will ever arrive in the US of A? Because of the writer's delightfully thoughtless assumption that future obligations should be funded. Of course there are economic idiots everywhere (and dishonest self-serving rascals too) but there are fewer people in the US prepared to dispute Adam Smith's truism that; 
What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom
America's free speech is constitutionally entrenched - as witness the delightful puzzlement of American tech companies such as Google and Twitter when European authoritarians demand they censor their services. The media (particularly local media) routinely use their freedom to challenge particular line items of public spending, even if lax in holding politicians to account for the overall ballooning of the American state and its various extortions.

Again, their failings pall into insignificance compared to ours. Here, a multi-billion pound hole in the Ministry of Defence's budget didn't even pass the Alistair Campbell "crisis management" test of remaining in the headlines for more than ten days. The public sector incompetents who lost billions down the backs of their ministry's sofas faced - as far as we know - no consequences at all. This, though whole cities of taxpayers will have to work for years to meet the shortfall.

I am optimistic enough to believe that America's good sense will one day benefit us too. The statist tide is turning there, as was clear from my conversations with many people on my tour. In recent press reports I have even read the words "libertarian populism" - a phrase as unexpected and delightful to me as was "the fall of communism" two decades ago. If the state can be scaled down in the United States and the resulting economic benefits compared and contrasted with the moribundity elsewhere, that will arm lovers of freedom everywhere.


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You are in no danger here. You are among friends, even if they do not always express themselves clearly. 


Yep, way too many expensive, unproductive employees. Mostly minority/womyn hires too, which is another problem.


For those who are unfamiliar, Matt's reference to the two books written by Mark Steyn give a very good non-technical explanation why the USA is falling into the same rat-hole that Europe finds itself.

The basic thesis is that a country's destiny is tied up with demographics when they succumb to Ponzi scheme financing-basically only an expanding productive population can mask a Ponzi scheme. Of course Europe and the USA have declining birth rates and huge desire for more expensive government schemes, that can only lead to disaster.

Check your library or Mark Steyn's website they are well worth reading, and humourous too.


Goodness me !! I read two books which I rate very highly then I read a post by the illustrious TOM which makes me see that maybe the fabled doom-monger may be too doom-laden and I get savaged by someone called Moggsy attributing things to me I have never said or thought.And all this before I get a chance to get back to my drawing board to have a mental re-assessment.

Find me a stone to hide under. I hope this guy is not actually dangerous.

Thank Cascadian -good post.


America's pubic authorities! Presumably one of them is the NSA, but which others fit that description? The Internal Revenue Service must be a candidate.


I am James again? You're confusing the poor chap further, Moggsy (not to mention me). I think you mean "Tom, aka LDW" (for Last Ditch Writer). 


Um, I am saying he (James aka LDR) has just got back from the States and he based what he said on people he spoke to there and what he saw.

You seem to be basing what you say on other peoples older superceded data and your own "crazy, zaney, mixed up, cute" (no, cute is going way too far ^_^) way of thinking..


Hmmmmm.....I would agree that the USA started off correctly and made contributions to the various pension plans BUT the present maladministration is apparently plundering them at a fierce rate to stay under the Congress approved "debt ceiling" leaving only worthless IOU's. There is an article at Z
Zero-hedge recently detailing the sleight of hand.

So perhaps what you are comparing are degrees of socialism. On that point I am in agreement with you that the UK is massively socialist ,(it does not matter which party is elected, no effort has ever been made to fund the pension schemes) and the Ponzi pension "schemes" cannot and will not pay out at anything like the promised rates.

I do believe your friends are correct, in the short space of five years the US economy which was already weakened has been devastated by socialist dogma, one example only is the GM bailout which was essentially a pension fund bailout for the UAW. That "investment" will never be recouped.

Perhaps the most notable difference between the USA and UK until recent times was the majority of self-sufficient citizens, that has been rapidly eroded by poor government, there now exists a slim majority who will forever be beholden to government largesse. Unless these folk are extraordinary and vote against their own best interests the downfall is bound to accelerate.

Since my pension plan is funded by (among other things) investments in British water companies and the Crosslink project please be kind and keep drinking, p*ssing and taking trains. I am rather enjoying retirement.


------It's also more credible because it is him saying it instead of you ^_^--------

The above quote should have appeared in my post above.




What ???? For the life of me I just cannot make any sense of that.

Could you please translate.

james higham

American Conservatives told me their country was turning "socialist."

Excellent to see perception and awareness in that country though - here they're deadheads in the main.


But Matt, LDR's personal data sample is much more recent and more credible because of that. It's also more credible because it is him saying it instead of you ^_^


Crikey. And I've just read America Alone and After America.

Back to the drawing board.

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