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Challenging the Narrative of European Decline

paulkrugman.substack.com

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Re: Challenging the Narrative of European Decline

#101

Post by jraph »

patrickmcnamara wrote: post #92
lp4v4n wrote: post #22

As someone who lives in Europe, my impression is that the continent's first priority is how to keep paying the fat pensions it pays to its retired class, the second priority is how to keep paying the pensions followed by a distant third about how to keep paying the pensions. For me it's remarkable how the continent lives looking at the past and not at the future. The older people I talk to show no concern about Europ…

I don't know why everyone is being so dismissive. Pensions in Europe nowadays are just transfers from young and poor to older and wealthier. The average French pensioner (not working) has a higher income than the average French worker (working).

> The average French pensioner (not working) has a higher income than the average French worker (working).

That doesn't seem true. End of 2023 the mean retired net income in France seems to be 1 541 € [1] while the mean net salary of a worker is between 1 940 € and 4 630 € depending on whether the person works in the public sector and depending on the class.

> I don't know why everyone is being so dismissive

Because that's mostly unsubstantiated random feeling that has implications that look quite bad. What do you want, when you stress that retired people earn too much (which seems mostly wrong, as we just saw), blaming this as major¹ cause of a European decline? Do you wish we would just stop providing income to the retired people?

¹ because if it's not a major cause, why even mention it?

[1] https://drees.solidarites-sante.gouv.fr/publications-communi...

[2] https://www.insee.fr/fr/statistiques/7457170

Re: Challenging the Narrative of European Decline

#103

Post by patrickmcnamara »

jraph wrote: post #101
patrickmcnamara wrote: post #92

Earlier quoted context omitted.

I don't know why everyone is being so dismissive. Pensions in Europe nowadays are just transfers from young and poor to older and wealthier. The average French pensioner (not working) has a higher income than the average French worker (working).

> The average French pensioner (not working) has a higher income than the average French worker (working). That doesn't seem true. End of 2023 the mean retired net income in France seems to be 1 541 € [1] while the mean net salary of a worker is between 1 940 € and 4 630 € depending on whether the person works in the public sector and depending on the class. > I don't know why everyone is being so dismissive Because…

https://www.ft.com/content/d419bd2d-a6ba-44a5-a93a-1276f3e5d...

This is the article I was thinking of. I don't think we can pretend that pensions are not a problem, and not a massive strain on government budgets. Incomes of pensioners have increased a lot more than incomes of working-age people, and French over 65 earn more than French working-age (slightly different claim than I made).

> What do you want, when you stress that retired people earn too much

I want to pay less into unsustainable pension system and to be able to save for my own future instead. I would love more of Europe to get a system similar to Australia's superannuation system.

Re: Challenging the Narrative of European Decline

#104

Post by barrkel »

jraph wrote: post #59
lp4v4n wrote: post #22

As someone who lives in Europe, my impression is that the continent's first priority is how to keep paying the fat pensions it pays to its retired class, the second priority is how to keep paying the pensions followed by a distant third about how to keep paying the pensions. For me it's remarkable how the continent lives looking at the past and not at the future. The older people I talk to show no concern about Europ…

IMHO, we do want retirement (it is essential that past a certain age, you are not forced to work anymore - at least because you are too tired to work, at best so you can enjoy life full time as you see fit - retired people also babysit and run a lot of important stuff thanks to their free time, so they still work but outside wage labor in a way - so much so that many things would break if they didn't). This being est…

The second mode is another way of doing the first, actually.

Either way, working people's output today needs to support the non-working people today (unless you let them starve). Whether that is done via taxation or via wealth accumulation, one way or another, more and more young people will be supporting old people.

And it's not even clear the wealth accumulation angle is good. It requires young people to own a lower amount of wealth so that old people can dangle it in from of them to keep them supported.

Re: Challenging the Narrative of European Decline

#105

Post by NooneAtAll3 »

pjc50 wrote: post #23
stevesimmons wrote: post #15

Earlier quoted context omitted.

I don't buy into this critique at all... I live in two cities in Europe. I like our size of houses. I like not needing to own a car. I like that in both of the cities I live in there are 8 supermarkets within ten minutes walk. I like that I never have to think about healthcare costs. I've never felt the need for air conditioning. And when I see Americans' lives, they seem full of crappy stuff that I have no need for,…

I think it's valid to question whether and how GDP translates into happiness, but America (as a whole) does just have .. more and bigger. We will eventually start cottoning on to air conditioning as people realize it's a bidirectional solution that can warm you in the winter. The need is genuinely less than the US as Europe is both further north (New York is the same latitude as Lisbon) and currently benefiting from…

something I keep failing to understand in Europe is lack of central heating

US has an excuse of suburbia - but what's the deal with compact pedestrian european cities?

Re: Challenging the Narrative of European Decline

#106

Post by pjc50 »

NooneAtAll3 wrote: post #105
pjc50 wrote: post #23

Earlier quoted context omitted.

I think it's valid to question whether and how GDP translates into happiness, but America (as a whole) does just have .. more and bigger. We will eventually start cottoning on to air conditioning as people realize it's a bidirectional solution that can warm you in the winter. The need is genuinely less than the US as Europe is both further north (New York is the same latitude as Lisbon) and currently benefiting from…

something I keep failing to understand in Europe is lack of central heating US has an excuse of suburbia - but what's the deal with compact pedestrian european cities?

District heating only works if the whole district is built at once with it in mind, it's not really viable to retrofit. And the compact cores were often built before the industrial era.

Re: Challenging the Narrative of European Decline

#107

Post by nec4b »

jraph wrote: post #59
lp4v4n wrote: post #22

As someone who lives in Europe, my impression is that the continent's first priority is how to keep paying the fat pensions it pays to its retired class, the second priority is how to keep paying the pensions followed by a distant third about how to keep paying the pensions. For me it's remarkable how the continent lives looking at the past and not at the future. The older people I talk to show no concern about Europ…

IMHO, we do want retirement (it is essential that past a certain age, you are not forced to work anymore - at least because you are too tired to work, at best so you can enjoy life full time as you see fit - retired people also babysit and run a lot of important stuff thanks to their free time, so they still work but outside wage labor in a way - so much so that many things would break if they didn't). This being est…

Why would you limit yourself to only those two options? E.g. You could also have a collective system of pension funds where money you pay for your future pension would accumulate (invest) instead of pay as you go system, where the money is immediately spend by the state.

Re: Challenging the Narrative of European Decline

#108

Post by jraph »

nec4b wrote: post #107
jraph wrote: post #59

Earlier quoted context omitted.

IMHO, we do want retirement (it is essential that past a certain age, you are not forced to work anymore - at least because you are too tired to work, at best so you can enjoy life full time as you see fit - retired people also babysit and run a lot of important stuff thanks to their free time, so they still work but outside wage labor in a way - so much so that many things would break if they didn't). This being est…

Why would you limit yourself to only those two options? E.g. You could also have a collective system of pension funds where money you pay for your future pension would accumulate (invest) instead of pay as you go system, where the money is immediately spend by the state.

I'm sure there are plenty other options, those are the ones I know exist (there are variants).

I'm not sure what benefits your proposal brings.

Whenever you have an amount of money you don't spend immediately, you have to worry about inflation and investing (that's also of course true for the second option)

And the first option force pensions to be in the country's annual budget. For the better and the worse.

Re: Challenging the Narrative of European Decline

#109

Post by jraph »

patrickmcnamara wrote: post #103
jraph wrote: post #101

Earlier quoted context omitted.

> The average French pensioner (not working) has a higher income than the average French worker (working). That doesn't seem true. End of 2023 the mean retired net income in France seems to be 1 541 € [1] while the mean net salary of a worker is between 1 940 € and 4 630 € depending on whether the person works in the public sector and depending on the class. > I don't know why everyone is being so dismissive Because…

https://www.ft.com/content/d419bd2d-a6ba-44a5-a93a-1276f3e5d... This is the article I was thinking of. I don't think we can pretend that pensions are not a problem, and not a massive strain on government budgets. Incomes of pensioners have increased a lot more than incomes of working-age people, and French over 65 earn more than French working-age (slightly different claim than I made). > What do you want, when you s…

> I don't think we can pretend that pensions are not a problem, and not a massive strain on government budgets

Indeed we can't. Now, you have to prove that the alternatives wouldn't be worse. And you have to prove that they are unsustainable as is.

> I want to [...] be able to save for my own future instead.

No thanks. But I suspect our disagreement here comes from having very different perspectives.

Re: Challenging the Narrative of European Decline

#110

Post by jraph »

barrkel wrote: post #104
jraph wrote: post #59

Earlier quoted context omitted.

IMHO, we do want retirement (it is essential that past a certain age, you are not forced to work anymore - at least because you are too tired to work, at best so you can enjoy life full time as you see fit - retired people also babysit and run a lot of important stuff thanks to their free time, so they still work but outside wage labor in a way - so much so that many things would break if they didn't). This being est…

The second mode is another way of doing the first, actually. Either way, working people's output today needs to support the non-working people today (unless you let them starve). Whether that is done via taxation or via wealth accumulation, one way or another, more and more young people will be supporting old people. And it's not even clear the wealth accumulation angle is good. It requires young people to own a lowe…

> The second mode is another way of doing the first, actually.

The two major differences are that in the first, no money is stored, has to undergo inflation or risk disappearing. It's also not your individual money coming back to you.

I agree with the rest.

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