Wednesday, June 6, 2012

Francois Hollande is Deluded

Like Scott Walker, Francois Hollande is delivering on his promises...unfortunately.  His first real proposal is to lower the retirement age for social security back to 60 from 62, reversing the move, instituted by Sarcozy, from 60 to 62.  This is really not as big a deal as it looks, since no one under the age of 50 will receive any benefits anyway, whether they retire at 60 or 62.

But, it does reveal the clear direction of Hollande's thinking.  Like many French politicians who preceded him, he thinks France is rich and can afford to fund more than half of its population in a life of leisure.  It turns out he's wrong, like many French politicians who preceded him, but if he can just fool enough people before he leaves office then I think he'll be happy.

France has been trying to slide into total decadence and chaos for several generations. Only the strength of the world economy has kept this sick puppy afloat.  But, the world economy isn't likely to oblige this time around and it is probably over for France.  So why not cut the retirement age.  Why not take it to 55?  If you're going to go bust anyway, what real difference does it make where you set the retirement age.  Make it zero and cut to the chase.  There are no funds set aside for it anyway and the shrinking work force can't possibly pay for it.  So, why not go for it.

Hollande, of course, has found the magic elixir -- tax rich people -- the Obama theme song.  But even if you confiscated all the wealth of every single French family with more than $ 1 million in assets, you still could not come close to funding their social security system, even if you left the age at 62.  So really.  What difference does it make whether the retirement age is 60 or 62.  Not much.

Watch Greece carefully.  Greece is everyone's future.

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