The Danes, the Dutch, the Swedes and the feasibility of walking away from pay-as-you-go pensions

This could be an interesting working paper!

"This paper examines whether the pension systems of Denmark, the Netherlands and Sweden outperform predominantly pay-as-you-go (PAYG) systems, and whether their development provides a replicable reform path for other European Union countries. 

We find that Denmark, the Netherlands and Sweden have developed multi-pillar systems combining public pensions with large, prefunded components. These systems deliver comparatively high final-wage replacement rates and low old-age poverty, while limiting long-term fiscal pressures and supporting higher national savings, deeper capital markets and the supply of long-term risk capital. The experience of these three countries demonstrates that a substantial shift towards prefunded, predominantly defined-contribution pensions need not undermine retirement income security and can strengthen long-term fiscal sustainability.  

However, other EU countries will struggle to replicate the historical transitions seen in Denmark, the Netherlands and Sweden. In the three countries, prefunded pension assets accumulated gradually over decades, supported by favourable demographic and economic conditions and strong social-partner institutions. ..."

PUBLICATION ALERT | The Danes, the Dutch, the Swedes and the feasibility of walking away from pay-as-you-go pensions

Vorzeitiger Ruhestand belastet die Renten­kasse in Deutschland

Bedenklich! Vielleicht sind die Frührentner aber dennoch aktiv in der Wirtschaft und im Arbeitsmarkt als z.B. Selbstständige, freiwillige Kurzeitarbeitnehmer, job hopping usw.!

Ich bin auch mit etwa 62 in den vorzeitigen Ruhestand gegangen, aber in den USA.

"... Das wird für die Rentenkasse zur wachsenden finanziellen Belastung, denn seit einiger Zeit erreichen die geburtenstarken Jahrgänge 1954 bis 1969 nach und nach das rentennahe Alter. Viele von ihnen entscheiden sich dafür, ihre Rente vorzeitig in Anspruch zu nehmen ...

Ende 2024 bezogen rund 1,1 Millionen Menschen in Deutschland eine Rente, die 1959 oder später geboren waren und damit die Regelaltersgrenze noch nicht erreicht hatten.

Insgesamt waren zu diesem Zeitpunkt bereits rund sechs Millionen Babyboomer verrentet. ..."

Vorzeitiger Ruhestand belastet die Renten­kasse - iwd.de "Immer mehr Menschen in Deutschland, die zur Generation der Babyboomer gehören, gehen in den Ruhestand – viele von ihnen vorzeitig. Dies konterkariert das Ziel der Politik, die Lebensarbeitszeit zu erhöhen und das Rentensystem zu stabilisieren."

Social Security Paper Checks and mailing of them End September 30

Good news! Good riddance!

However, the Danes go further. They are about to end all traditional mailing by December 31st!

"After 90 years, social security payments will no longer be sent by mail starting Sept. 30, with paper checks being phased out to reduce fraud, cut costs, and speed up delivery.

Paper checks cost around 50 cents each, more than three times the cost of an electronic transfer, and are 16 times more likely to be lost or stolen, according to the Social Security Administration. 

Fewer than 1% of the nearly 70 million recipients—about 500,000 people—still rely on physical checks and will need to switch to direct deposit or a prepaid Direct Express card."

Friday, September 5, 2025 - Join The Flyover

The Social Security Administration Applauds Passage of Legislation (One Big, Beautiful Bill) Providing Historic Tax Relief for Seniors

Good news! Something to celebrate this 4th of July!

"The Social Security Administration (SSA) is celebrating the passage of the One Big, Beautiful Bill, a landmark piece of legislation that delivers long-awaited tax relief to millions of older Americans.

The bill ensures that nearly 90% of Social Security beneficiaries will no longer pay federal income taxes on their benefits, providing meaningful and immediate relief to seniors who have spent a lifetime contributing to our nation’s economy. ..."

Social Security Applauds Passage of Legislation Providing Historic Tax Relief for Seniors | SSA

The socialist Architect of Social Security Frances Perkins is an alumnus of Columbia University

Columbia University celebrates the terrible socialist alumnus Frances Perkins (1880-1965)! She was a proponent of Big Government and one size fits all solutions!!

FDR was a horrible US president!

"Perhaps no Columbian has affected daily American life more than Frances Perkins 1910GSAS. As secretary of labor from 1933 to 1945 under President Franklin D. Roosevelt ’08HON, Perkins — the first woman to hold a cabinet position — responded to the Great Depression by proposing far-reaching economic protections [???] for American workers and retirees. These radical plans included a minimum wage [???], a forty-hour workweek [???], universal health insurance [??], unemployment insurance [???], workers’ compensation [???], and social security [???]. ...

The Triangle Shirtwaist Factory disaster claimed 146 lives and drew attention to dangerous and exploitative labor conditions. “The New Deal was born that day,” Perkins later said. ..."

The Architect of Social Security | Columbia Magazine "America’s most popular social program turns 90 this year. Thank Frances Perkins 1910GSAS."

Trump Vows to Cut Taxes on Social Security Payments for Seniors and more!

Very recommendable! Bravo!

Rente von der Börse ist eine gute Idee – aber so machen Lindner und Heil die Rentner ärmer statt reicher

Ob das nicht wieder mal eine Schnapsidee von lebenslangen Berufspolitikern ist? Oder heilloser Unsinn?

"... Wir machen das mit Schulden! Wir leihen uns Geld und machen mehr daraus, alles für unsere lieben Rentner. ..."

Rente von der Börse ist eine gute Idee – aber so machen Lindner und Heil die Rentner ärmer statt reicher Christian Lindner und Hubertus Heil zur Finanzierung der Rente: Geld soll in einer Stiftung angesammelt und an den Börsen investiert werden, die Gewinne daraus sollen dann die Renten erhöhen. Eine gute Idee. Aber die Fehler liegen in der Finanzierung – und daran, dass Regierungen jede Kasse plündern. Beispiel von heute.

Mit Staatsmännern wie Christian Lindner und Hubertus Heil

Why Social Security Is A Really Bad Idea!

Posted: 3/7/2015

Trigger

Just read “Aus der Rentenkasse Griechenland leiht sich selbst Geld Die griechische Regierung leiht sich Geld bei der Rentenkasse des Landes - und zahlt es angeblich auch pünktlich zurück. Die Zinsen sind niedriger als auf dem freien Markt.”.

The new, leftist Greek government just ‘borrowed’ money from the Greek retirement savings system promising to pay it back later and to borrow it only for 15 days. Reportedly, it is undisclosed how much money the Greek government borrows, but it is estimated at least 4-5 billion euros.

For anyone, who is not following the news the Greece has been bankrupt and has been extremely indebted.

The U.S. Social Security

The U.S. Congress has for decades appropriated the surpluses of Social Security to spend the money on God knows what instead of responsibly reinvesting the money so that one day this pay as you go system could be replaced by a capital saving system.

Better even Social Security should be phased out in favor of private, individual savings for retirement!

IRS Self Employment Tax Misnomer

Trigger

While preparing my tax return for 2013, I could not help myself but to write this blog post.

If you are not sure what I am talking about, then check out following IRS documents:

http://www.irs.gov/pub/irs-pdf/i1040sse.pdf

http://www.irs.gov/pub/irs-pdf/i1040sse.pdf

http://www.irs.gov/publications/p334/ch10.html

What An Humbug!

This tax is anything but a self employment tax. It is the Social Security payroll tax (12.4%) plus Medicare tax (2.9%). So as a sole proprietor I have to pay both the employer and the employee portion of the Social Security payroll tax adding up to 12.4%.

Big Government Fools Its Citizens For Too Long A Time

It is outrageous that employees pay only half the Social Security payroll tax in the U.S. as well as in e.g. Germany. This is a great deception and a great fiction implemented by big government to fool its citizens.

Social Security Is Worse Than A Ponzi Scheme

Free To Choose

A Ponzi or Pyramid Scheme is committed by one or more criminals and victims were free to choose to participate. Once the criminal is caught, the criminal will be indicted and sentenced to jail terms.

No Choice

Social Security is a big government run scheme that coerces every worker to pay taxes for a promise that he or she will receive some arbitrary benefits in retirement. Thus, big government discourages responsible workers to set aside part of their earnings for retirement as they see fit. Social Security should never be applied to the whole population as a one size fits all big government solution.

Greed Of Big Government

From about 1987 until today the Social Security Trust Fund has generated considerable surpluses year after year (officially referred to as Net Asset Increase), which the US Congress has appropriated to pay for their pet projects. The proper thing to do for the US Congress was to lower the FICA taxes or refund workers. To skim these profits was too much temptation for each Administration and US Congress since 1987.

Year	Workers With Taxable Earnings	Net Asset Increase	Net Asset Increase Per Worker
2011	157,736,000	$     95,031,000,000	$             602
2005	158,511,000	$  162,415,000,000	$         1,025
2000	154,732,000	$  132,174,000,000	$             854
1995	141,000,000	$     45,041,000,000	$             319
1990	133,600,000	$     59,134,000,000	$             443
1987	125,600,000	$     23,068,000,000	$             184
1985	119,800,000	$       8,725,000,000	$               73
1980	113,000,000	$     (2,001,000,000)	$             (18)
1970	93,090,000	$       2,371,000,000	$               25
1960	72,530,000	$           184,000,000	$                  3
1950	48,280,000	$       1,905,000,000	$               39
1940	35,390,000	$           306,000,000	$                  9

Source: http://www.socialsecurity.gov/policy/docs/statcomps/supplement/2012/4b.html#table4.b1

& http://www.socialsecurity.gov/policy/docs/statcomps/supplement/2012/4a.html

Missing Constitutional Amendments

In order to establish a society of free, responsible, and self governing individuals following amendments are missing from the US Constitution:

1.       For as long as government runs a central bank the function of this central bank should only be concerned with internal and external monetary stability. Nominal interest rates cannot be set lower than the inflation rate plus some factor (e.g. long-term trend of real GDP growth). The central bank is strictly prohibited from direct or indirect financing of government.

2.       Supreme Court justices should be randomly drawn from a considerable pool of suitable candidates, which ought to include people without judiciary experience or law degrees. Term limits for Supreme Court justices are overdue.

3.       The size of federal government as measured by revenue or expenditures should be limited to a maximum of let’s say 20% of GDP except for extremely extraordinary events. For this purpose, federal government should be defined in a comprehensive way, e.g. including off budget items, Social Security, Medicare etc.

4.       Federal government debt should be limited to maximum of let’s say 30% of GDP except for extremely extraordinary events. For this purpose, federal government debt should be defined in a most comprehensive way, e.g. including promises to future retirees etc.

5.       Federal government needs to completely stay out of providing subsidies to businesses, education, health care, welfare, unemployment insurance, and retirement security except perhaps for the most needy individuals. Free individuals and free markets are capable of handling these areas without government meddling. Besides, if these areas need government intervention at all these areas are prerogatives of the individual states.

6.       Federal taxes should never be confiscatory and should only serve as a source of revenue and not to implement any social or economic policies. Ideally, taxes should be paid exclusively by voluntary choice of free individuals. Confiscatory taxes are defined as cumulative taxes exceeding let’s say 30% of a person’s income irrespective of the form of taxation (e.g. income or sales taxes). The tax code has to be kept very simple. A person’s wealth should be tax free. Businesses should not be taxed.

7.       It is overdue to reign in the many abuses of the Commerce Clause by the federal government and the US Supreme Court. It is quite clear that the original meaning of this clause was limited to commerce in the narrow sense of economic exchange like foreign trade or trade between states.

What’s Really Not Behind The Entitlement Crisis

What Is This About?

On the Opinion page of the US Edition of The Wall Street Journal was an article published on 7/15/12 headlined “What’s Really Behind theEntitlement Crisis” (subscription required) by Ben J. Wattenberg with the American Enterprise Institute.

All Alarm Bells Started Ringing

“Entitlement Crisis” made me curious. However, if someone claims to tell you “What’s Really Behind” something then my alarm bells start ringing immediately. What is the author selling, e.g., snake oil, cheap analysis etc.?

Abstract Of Article

Wattenberg bases his explanation on demography. “[The] heart of the problem are birth rates … total fertility rates … that have fallen sharply all over the world”. Thus, “there will be relatively few working age people to underwrite the benefits of the many seniors who have paid into national retirement systems such as Social Security and Medicare”. Nothing new here. This has been well known for decades.

However, then the author discusses so called “pro-natal” (According to Wikipedia also known as Natalism or a belief that promotes human reproduction) programs that were in particular employed in Western Europe to increase total fertility rates. Wikipedia again: “It [pro-natal] typically advocates policies such as limiting access to abortion and contraception, as well as creating financial and social incentives for the population to reproduce.”. He admits that the actual effects of such programs are hard to quantify.

Further, the author argues that “[i]n theory, pro-natal programs are the best bet”. As he hopes it would perhaps be “reflating fertility”.

Another Look At The Entitlement Crisis

First, I think, the author is quite wrong to believe that promoting the total fertility rate to go up again is a solution. The worldwide, decades long trend for TFR is downward towards 2 or below for good and well understood reasons. Thus, pro-natal policies are an exercise in futility. These demographic trends probably have to be accepted. In the following decades, the human approach to procreation may dramatically change anyway thanks to advances in medicine and genetics etc.

Second, the author implicitly presumes that big government pay as you go entitlement programs like Social Security are a given and are desirable. He is wrong on this too. It is high time to get big government out of the way to provide one size fits all retirement benefits for the whole population. Pay as you go national retirement systems are akin to Ponzi schemes. Such systems are but huge power grabs by big government. In recognizing this lies a much better solution to the entitlement crisis: individual self reliance in form of personal retirement savings. The earlier we get young people to accept this form of responsibility, the better. Once implemented, total fertility rates become much less relevant.