pension time bomb

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The Weightless World: Strategies for Managing the Digital Economy by Diane Coyle

Alan Greenspan, barriers to entry, Berlin Wall, Big bang: deregulation of the City of London, blue-collar work, Bretton Woods, business cycle, clean water, company town, computer age, Corn Laws, creative destruction, cross-subsidies, David Ricardo: comparative advantage, dematerialisation, Diane Coyle, Edward Glaeser, everywhere but in the productivity statistics, financial deregulation, flying shuttle, full employment, George Santayana, global village, Great Leap Forward, hiring and firing, Howard Rheingold, income inequality, informal economy, invention of the sewing machine, invisible hand, Jane Jacobs, Joseph Schumpeter, Kickstarter, knowledge economy, labour market flexibility, laissez-faire capitalism, lump of labour, Mahbub ul Haq, Marshall McLuhan, mass immigration, McJob, Meghnad Desai, microcredit, moral panic, Neal Stephenson, Network effects, new economy, Nick Leeson, night-watchman state, North Sea oil, offshore financial centre, pension reform, pension time bomb, pensions crisis, Robert Solow, Ronald Reagan, Silicon Valley, Snow Crash, spinning jenny, The Death and Life of Great American Cities, the market place, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tobin tax, Tragedy of the Commons, two tier labour market, very high income, War on Poverty, winner-take-all economy, working-age population

THE END OF WELFARE 92 97 100 108 109 118 121 122 Building New Jerusalem The growing cost The failures of welfare The Thatcher experiment Next steps Health and Education Welfare and inequality The limits of the twenty-first century welfare state Notes CHAPTER SEVEN. THE AGEING OF NATIONS 124 127 131 133 136 140 142 144 146 147 A pension time bomb? Caring for the old The other costs of ageing Conventional solutions Lateral solutions Virtual immigration A new framework Notes CHAPTER EIGHT. GLOBALISM AND GLOBALONEY 150 153 155 157 161 163 164 165 166 The power of the financial markets Markets go global Speculators as vigilantes More than sado-monetarism A sustainable future A Global Agenda Beyond currencies The biggest challenge Notes 168 171 177 180 182 186 189 190 191 CHAPTER NINE.

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What does it mean, then, that birth rates in some industrial countries have fallen well below replacement levels? That the over-60s will become the biggest group in the population? The easy although unpalatable part of the answer concerns what governments will have to stop paying for. The Weightless World 150 A pension time bomb? Eavesdrop on any gathering of pensioners, and you will find that they hate paying taxes. No matter what their income, they feel they have worked hard, paid their dues, and the time has come for them to get their reward. This is an attitude ingrained in our culture. It can be found in the Bible.

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Studies by the United Nations, the World Bank and the Organisation for Economic Co-operation and Development, covering the gamut of ideological starting points, have demonstrated that the public sector in most industrialised economies can not afford to meet its existing pension liabilities. Some researchers have dubbed it a ‘pensions time bomb’.1 The position differs widely between countries — partly because the demographic trends differ, partly because of differences in state pension schemes. Take the demographics first. The ageing of the population between now and 2030 will be most dramatic in Japan and some continental European economies — Germany, France, Italy, Austria and Benelux.

The New Economics: A Bigger Picture by David Boyle, Andrew Simms

Abraham Maslow, Alan Greenspan, Alvin Toffler, Apollo 11, Asian financial crisis, back-to-the-land, banking crisis, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, Bonfire of the Vanities, Bretton Woods, capital controls, carbon footprint, carbon tax, clean water, collateralized debt obligation, colonial rule, Community Supported Agriculture, congestion charging, corporate raider, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Crossrail, delayed gratification, deskilling, digital divide, en.wikipedia.org, energy transition, financial deregulation, financial exclusion, financial innovation, full employment, garden city movement, Glass-Steagall Act, green new deal, happiness index / gross national happiness, if you build it, they will come, income inequality, informal economy, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, John Elkington, junk bonds, Kickstarter, land bank, land reform, light touch regulation, loss aversion, mega-rich, microcredit, Mikhail Gorbachev, Money creation, mortgage debt, neoliberal agenda, new economy, North Sea oil, Northern Rock, offshore financial centre, oil shock, peak oil, pension time bomb, pensions crisis, profit motive, purchasing power parity, quantitative easing, Ronald Reagan, seigniorage, Simon Kuznets, sovereign wealth fund, special drawing rights, systems thinking, the long tail, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, trickle-down economics, Vilfredo Pareto, Washington Consensus, wealth creators, working-age population

The answer is that they nationalized the football club’s sponsor, the insurance giant AIG. Add to this crisis the increasing failure of the great bureaucracies of state, struggling under the weight of their own complexity, the rise of externalities capable of crushing the basic tasks of welfare, health and education, the pensions time bomb and other crises outlined in Chapter 1, and you have the background to the rise of the new economics – and a handful of reasons why it will become increasingly prominent. The emerging crisis is, in its own way, speeding the adoption of new economics solutions. But the crisis that is driving change most immediately apart from that is probably about our energy and climate.

No Ordinary Disruption: The Four Global Forces Breaking All the Trends by Richard Dobbs, James Manyika

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, access to a mobile phone, additive manufacturing, Airbnb, Amazon Mechanical Turk, American Society of Civil Engineers: Report Card, asset light, autonomous vehicles, Bakken shale, barriers to entry, business cycle, business intelligence, carbon tax, Carmen Reinhart, central bank independence, circular economy, cloud computing, corporate governance, creative destruction, crowdsourcing, data science, demographic dividend, deskilling, digital capitalism, disintermediation, disruptive innovation, distributed generation, driverless car, Erik Brynjolfsson, financial innovation, first square of the chessboard, first square of the chessboard / second half of the chessboard, Gini coefficient, global supply chain, global village, high-speed rail, hydraulic fracturing, illegal immigration, income inequality, index fund, industrial robot, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, inventory management, job automation, Just-in-time delivery, Kenneth Rogoff, Kickstarter, knowledge worker, labor-force participation, low interest rates, low skilled workers, Lyft, M-Pesa, machine readable, mass immigration, megacity, megaproject, mobile money, Mohammed Bouazizi, Network effects, new economy, New Urbanism, ocean acidification, oil shale / tar sands, oil shock, old age dependency ratio, openstreetmap, peer-to-peer lending, pension reform, pension time bomb, private sector deleveraging, purchasing power parity, quantitative easing, recommendation engine, Report Card for America’s Infrastructure, RFID, ride hailing / ride sharing, Salesforce, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart cities, Snapchat, sovereign wealth fund, spinning jenny, stem cell, Steve Jobs, subscription business, supply-chain management, synthetic biology, TaskRabbit, The Great Moderation, trade route, transaction costs, Travis Kalanick, uber lyft, urban sprawl, Watson beat the top human players on Jeopardy!, working-age population, Zipcar

That’s a start, but it’s not nearly sufficient to keep pace with the demographic changes the world is seeing. A recent analysis of forty-three mostly developed countries found that between 1965 and 2005 the average legal retirement age rose by less than six months.44 In the same period, male life expectancy rose by nine years. In graying Europe, Danish legislation recognized the impending pension time bomb early, and the country decided to index the pension age to life expectancy and place restrictions on early retirement. As a result, Denmark’s population of people aged fifty-five to sixty-four has a higher labor participation rate (58 percent) than the average EU country (less than 50 percent) and will have the highest retirement age (sixty-nine years) among all OECD countries by 2050.45 In response to the demographic tide, Japan’s government introduced compulsory long-term care insurance contributions by citizens over age forty in the early 2000s.46 Countries—particularly countries with underdeveloped financial institutions or specific risk exposures to global flows—use the regulatory approach to manage their vulnerability to global participation.

The Precariat: The New Dangerous Class by Guy Standing

8-hour work day, banking crisis, barriers to entry, basic income, behavioural economics, Bertrand Russell: In Praise of Idleness, bread and circuses, call centre, Cass Sunstein, centre right, collective bargaining, company town, corporate governance, crony capitalism, death from overwork, deindustrialization, deskilling, emotional labour, export processing zone, fear of failure, full employment, Herbert Marcuse, hiring and firing, Honoré de Balzac, housing crisis, illegal immigration, immigration reform, income inequality, independent contractor, information security, it's over 9,000, job polarisation, karōshi / gwarosa / guolaosi, labour market flexibility, labour mobility, land reform, libertarian paternalism, low skilled workers, lump of labour, marginal employment, Mark Zuckerberg, mass immigration, means of production, mini-job, moral hazard, Naomi Klein, nudge unit, old age dependency ratio, Panopticon Jeremy Bentham, pension time bomb, pensions crisis, placebo effect, post-industrial society, precariat, presumed consent, quantitative easing, remote working, rent-seeking, Richard Thaler, rising living standards, Ronald Coase, Ronald Reagan, science of happiness, shareholder value, Silicon Valley, technological determinism, The Market for Lemons, The Nature of the Firm, The Spirit Level, Tobin tax, transaction costs, universal basic income, unpaid internship, winner-take-all economy, working poor, working-age population, young professional

By 2004, in OECD countries, only 60 per cent of those aged 50–64 were in jobs, compared with 76 per cent of those aged 24–49. Meanwhile, in rich countries, young women stopped having babies; the fertility rate fell to below the reproduction rate. Suddenly, governments became alarmed at the ‘pension time bomb’, as the number approaching pension age exceeded the number of young workers entering the labour force who could contribute to pension schemes. A crisis was building up. The slow death of pensions The era of pensions was a wonder of the modern world, even though it lasted for only a tiny fraction of history.

Expected Returns: An Investor's Guide to Harvesting Market Rewards by Antti Ilmanen

Alan Greenspan, Andrei Shleifer, asset allocation, asset-backed security, availability heuristic, backtesting, balance sheet recession, bank run, banking crisis, barriers to entry, behavioural economics, Bernie Madoff, Black Swan, Bob Litterman, bond market vigilante , book value, Bretton Woods, business cycle, buy and hold, buy low sell high, capital asset pricing model, capital controls, carbon credits, Carmen Reinhart, central bank independence, classic study, collateralized debt obligation, commoditize, commodity trading advisor, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, deal flow, debt deflation, deglobalization, delta neutral, demand response, discounted cash flows, disintermediation, diversification, diversified portfolio, dividend-yielding stocks, equity premium, equity risk premium, Eugene Fama: efficient market hypothesis, fiat currency, financial deregulation, financial innovation, financial intermediation, fixed income, Flash crash, framing effect, frictionless, frictionless market, G4S, George Akerlof, global macro, global reserve currency, Google Earth, high net worth, hindsight bias, Hyman Minsky, implied volatility, income inequality, incomplete markets, index fund, inflation targeting, information asymmetry, interest rate swap, inverted yield curve, invisible hand, John Bogle, junk bonds, Kenneth Rogoff, laissez-faire capitalism, law of one price, London Interbank Offered Rate, Long Term Capital Management, loss aversion, low interest rates, managed futures, margin call, market bubble, market clearing, market friction, market fundamentalism, market microstructure, mental accounting, merger arbitrage, mittelstand, moral hazard, Myron Scholes, negative equity, New Journalism, oil shock, p-value, passive investing, Paul Samuelson, pension time bomb, performance metric, Phillips curve, Ponzi scheme, prediction markets, price anchoring, price stability, principal–agent problem, private sector deleveraging, proprietary trading, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, random walk, reserve currency, Richard Thaler, risk free rate, risk tolerance, risk-adjusted returns, risk/return, riskless arbitrage, Robert Shiller, savings glut, search costs, selection bias, seminal paper, Sharpe ratio, short selling, sovereign wealth fund, statistical arbitrage, statistical model, stochastic volatility, stock buybacks, stocks for the long run, survivorship bias, systematic trading, tail risk, The Great Moderation, The Myth of the Rational Market, too big to fail, transaction costs, tulip mania, value at risk, volatility arbitrage, volatility smile, working-age population, Y2K, yield curve, zero-coupon bond, zero-sum game

In fact, if pension liabilities are ironclad, they should be discounted using the Treasury rate (assuming we still assign riskless status to Treasuries despite the fiscal troubles). A lower discount rate would push many overfunded pension plans to underfunded status—arguably making them face the reality and, more generally, forcing society to deal with the pension time bomb. Source notes. On investment lessons, see Swensen (2009), Ang–Goetzmann–Schaefer (2009), Asness–Kabiller–Mendelson (2010), Drobny (2010), and Leibowitz–Bova–Hammond (2010). Appendix A World wealth This appendix reviews evidence on the relative sizes of various parts of world wealth.