Entitlements Europe's Coming Fiscal Cliff

Europe's welfare systems won't be able to handle an aging society without a lot more money

eports from the European front might be positive today, but the optimism is sure to fade again. Bailing out struggling banks, consensus on a tighter union, and a stimulus fund to create jobs and economic growth, not only sound good, but have some concrete specifics attached. 

Urgent steps have been taken to fortify financial systems in Greece, Spain, Portugal, Italy or, we might recall, even the normally financially solid and fiscally reliable Dutch.  Yet, as European leaders conclude their 22nd Summit in Frankfurt, Germany on the debt and financial crisis, they have ignored the more compelling problems of an aging society. 

H/T Lord Humungus

Comments

[JWatts]

Europe will present a vivid warning for the US and despite all the heated rhetoric to the contrary, the US is still in better shape than Europe. We are spending a smaller percentage of revenues on entitlements, our labor force is more flexible, our growth better and our taxes on all brackets are less. The US needs to move the SS retirement age and Medicare age to 70+ soon, but we have a little more leeway than Europe and Europe's trauma will serve as a warning. It would also be nice if SS became an investment (such as Chile's) not a transfer payment, but that's probably wishful thinking.