The Money Isn’t There

Safety Valve Stuck

Having Cake

Debase as Necessary

Magical Thinking

St. Louis, Los Angeles, Grand Lake Streams, Maine, Beaver Creek, and Boston

Italian dictator Benito Mussolini at least made the trains run on time, according to legend. But other sources say the nation’s railway system remained horrible under his rule (see here, here, and here).The same may be true of modern Europe’s (and Canada and Australia and…) vaunted social welfare programs. Certainly, they have helped many people, but they haven’t eliminated poverty, nor let everyone retire in comfort. Could they simply have shifted spending forward, leaving future generations with the bill? Today, we’ll explore that question as part of my continuing Train Wreck series.

Last week, I looked at US public pension funds, many of which are woefully underfunded and will likely never pay workers the promised benefits—at least without dumping a huge and unwelcome bill on taxpayers. And taxpayers are generally voters, so it’s doubtful they will pay that bill. (Even the Swiss, as we will see below, voted against a mild reform to pay for their pension system.)

Non-US readers might have felt a little satisfaction at that. There go those crazy Americans again, spending wildly beyond their means. You are partly correct; we aren’t exactly the thriftiest people on Earth. However, your country may be more like the US than you think.

This letter is chapter 7 in my Train Wreck series. If you’re just joining us, here are links to prior installments.