Socialism And The Welfare State Are Imploding All Over The World



Greece is the welfare state, the nanny state, the Socialist Utopia gone wild. Europeans from every country flocked to Greece 30 years ago. They had the ultimate in government benefits and government mandated perks. While the official retirement age in Greece is 61 many Greeks were retiring in their 40’s and 50’s on the most liberal pensions in the world. It would be these pensions that would bankrupt the nation, especially the government employee pensions. The bureaucracy of Greece became so large that it is estimated than more than 50% of Greeks were government employees. When the private economy and tax revenues failed to keep up with all these “freebies” then Greece had to borrow money to sustain itself. We are now at the point where Greece needs more and more influx of cash and cannot repay any of its loans.

What is worth noting here is that the road Greece took is the same road that Barrack Obama is taking the United States. And we are not the only ones in trouble.

Steven Malanga’s in his article “The Demise of the European Welfare Nation” tells us:

Europe’s other most troubled countries share many of Greece’s characteristics. Italy and Spain have birth rates that have slipped as low as Greece’s and shrinking labor working age populations. Yet early retirement is the norm. In Italy the average retirement age is 59, among the lowest in industrialized nations, and Spain is ranked only slightly higher. Only one-third of Italy’s population aged 55-to-64 is in the workforce, and the average male worker in Italy will spend more than 25 years in retirement. In fact, with life expectancy increasing, a growing chunk of European adults spend more of their [adult] life retired than working. But the costs are staggering. Italy now spends 15 percent of its GDP on pensions, the highest in the Europe.

The Toronto Star reports some of these wild benefits:

From a bonus for showing up to work to a dead father’s pension going to an unmarried daughter, arcane benefits bloat Greece’s budget by billions of euros a year.

Tens of thousands of unmarried or divorced daughters of civil servants collect their dead parents’ pensions, weighing on a social security system that experts say will collapse in 15 years unless it is overhauled.

About 40,000 women benefit from the allowance at an annual cost of around 550 million euros ($731.5 million Cdn.), according to economic website

While the law protects civil servants from dismissal, it allows them to retire with a pension in their 40s.

Greek pension spending is expected to rise by 12 per cent of gross domestic product by 2050, according to European Union data. That compares with an EU average of less than 3 per cent of GDP.

In a system where bonuses can add 5 to 1,300 euros to a monthly paycheck, some civil servants are paid extra for using a computer. Some get a bonus for speaking a foreign language and others for arriving at work on time, while many foresters get a bonus for working outdoors. All Greek public and private sector workers get 14 monthly salary payments a year, a structure aimed at keeping basic monthly salaries, and the pensions that are based on them, low.

Half a month’s extra salary is paid at Easter and another half during the summer. The 14th salary is paid to civil servants at Christmas when the whole economy is geared to consuming it. Taxis, restaurants and hairdressers are legally allowed to charge extra as a “Christmas present.”

Labour unions foiled government attempts to sell debt-ridden Olympic Airways for decades, costing Greek taxpayers millions while employees enjoyed generous benefits—their family members could fly around the world for free.

The state owns 74 companies, mainly utilities and transport firms, many of which are overstaffed and loss-making, according to the Organization for Economic Cooperation and Development. The main rail company employs about 9,000 people and reported losses of 800 million euros ($1.06 billion) in 2008.

Hundreds of state-appointed committees employ staff though it is not clear what they all do. Greece has a committee to manage Lake Kopais, which dried out in the 1930s.

One Greek newspaper estimated that committees employ more than 10,000 people and cost over 220 million euros ($292.6 million) a year.

Tensions with arch-rival Turkey have kept Greek military spending well above that of other EU members, reaching 14 billion euros, or 6 per cent of GDP, in 2007 and 2009.

Budget woes have limited military procurements and the 2010 defence budget now stands at 6.7 billion euros ($8.91 billion).

But nearly 80 per cent of Defence Ministry spending goes on administrative costs and payments of army staff.

Melanga continues:

Greece is a good example of a country whose labor laws and social policies are at odds with its population trends. Yes, a series of Greek governments have been profligate, running up debt and financing the welfare state with long-term borrowing. But they’ve been doing this precisely because they are trying to swim against long-term demographic trends that are inexorable. Greece has one of the lowest fertility rates of any country in Europe, just 1.3 children per woman, nearly a full child below what’s considered replacement rate. Moreover, this rate has been falling for decades, so that Greece’s 65-and-over population has soared from just 11 percent of the country in 1970 to 24 percent today, and is projected to grow to one-third of the population by 2050. By contrast, Greece’s working age population (defined as those ages 15-to-64) has reached its peak and is projected to decline 20 percent over the next 40 years.

Given these demographics, Greece has exactly the wrong labor and retirement policies in place. According to the Organization for Economic Cooperation and Development, Greece has among the most liberal pension systems, with generous payouts to encourage workers to retire early, including whole categories of workers in jobs deemed “arduous.” Incentives matter, of course, so that even while Greece needs to be encouraging more of its citizens to work longer, they are doing the opposite: Only 42 percent of Greece’s population aged 55-to-65 are employed, compared to 52 percent of the OECD on average and 62 percent in the United States.

Greece suffers not only from the lost national productivity of a shrinking workforce, but from the cost of high retirement payouts. Greece spends nearly 12 percent of its gross domestic product on pensions-compared to 6 percent in the United States. To support that burden Greece has among the highest rate of taxes on the average worker in Europe, 42 percent of income earned, compared to 37 percent in the OECD on average and 30 percent in the United States. No wonder so many Greek workers find it more profitable to retire or to evade taxes, another of Greece’s problems.

Many Americans tend to associate the term “welfare state” with a regime of anti-poverty programs reminiscent of the Johnson administration’s War on Poverty. But in Europe the welfare state generally refers to an extensive array of entitlements enjoyed by middle and upper-middle income citizens. That’s one reason why efforts to reform (that is, reduce) these entitlements have met with so much resistance in Europe. Even in staid Austria workers have taken to the streets to protest changes in the country’s pension system. Still, change is coming because the traditional European welfare state is an anachronism that’s unsustainable. Already countries like Sweden, Austria and Germany have made alterations to their pension systems, including Sweden’s efforts to follow the Chilean model with a partial privatization of social security.


Wayne Allyn Root in his article “Government Employees – The True 1 Percent” tells us:

How did America become broke and insolvent? How did we build up an unimaginable $115 trillion in debt and unfunded liabilities? How did we allow the American Dream to become a nightmare?

All we need do is look at the primary demand the Eurozone and IMF are placing on hopelessly bankrupt Greece to get their new $170 Billion bailout — Greece has agreed to cut 150,000 government employees. Even Cuba’s leader Raul Castro recognizes government employees are at the root of economic destruction, as he is cutting over 2 million of them to save Cuba from bankruptcy.

The truth is that government employees are the true 1%. We have far too many of them (21 million), many of them are paid too much, and their union demands are straining taxpayers to the breaking point.

They have become a privileged class that expects to be treated superior to the taxpayers — the same folks who pay their salaries and pensions. But it is their obscene pensions that are the big problem moving forward for America.

How would you like to retire with $6 million? $8 million? $10 million? All you have to do is become a government employee to hit the jackpot.

You don’t believe me? Do the math.

I recently talked with a retired New York City toll taker. His salary averaged about $70,000 per year over 20 years. But in his last few years he worked loads of overtime and added in accumulated sick days to get his salary in those final years up to $150,000.

His pension is based on his final years’ salary. This is a common pension-padding ploy.

He bragged that he will now get a taxpayer funded pension of $120,000 a year for the rest of his life. He’s only 50 years old.

The average 50-year old male has a life expectancy of almost 80. With automatic cost of living increases, that’s a bill to taxpayers of $5 million for the next 30 years –for not working. THREE TIMES WHAT HE EARNED WHILE WORKING.

And, of course, we’re also paying his medical bills.

No country, no budget, and no taxpayers anywhere in the world can afford this. Ask Greece.

But here’s a frightening question- what if he lives to 90? Or 100? His pension could rise to $8 million or higher.

Multiply this times 21 million government employees (on the federal, state and local level) and you now get a sense of what is bankrupting America.

Are these stories the exception, rather than the rule? Over 77,000 federal government employees earned more than the governor of their state.

On the federal level, it was just reported by USA Today that the average federal civil servant compensation is $123,049 per year.

That’s more than double what private sector workers earn (average of $61,051). Since 2000, federal government employee compensation has grown by 36.9% versus 8.8% for private sector employees.

In Las Vegas (Clark County) the average firefighter earns $199,678 per year.

When he retires at age 45 or 50, we owe his pension based on that obscene salary. But here’s the clincher –when he finally dies, the taxpayer has to continue paying the pension to his spouse. Add up the damage to the economy. It is catastrophic. Talk about a 1 per center — a single firefighter could retire with $8 to $10 million for not working for the rest of his life.

This is madness.

Now it’s true that policemen and firefighters are heroes. But they make up a small portion of government employees.

Recent studies prove the average janitor that works for government makes over $600,000 more in his career than a private sector janitor. Are janitors heroes too?

Again, this is madness.

Three stories on the same day in this past Sunday’s Las Vegas newspapers sum up this national outrage.

Let’s start with the Las Vegas teachers union. It was reported that more than a third of the union’s entire $4.1 million annual budget went to pay just nine union leaders.

The Teachers Union Executive Director received $632,546, while the CEO of the union-created Teachers Health Trust was paid $546,133.

So next time you hear educators scream that we must spend more money on education, because “it’s for the kids,” you’ll know the truth. It’s for the unions.

It’s always been for the unions.

Bernie Madoff has nothing on the government employee union scam.

Article number two in Sunday’s Las Vegas Review Journal was about those highly paid Las Vegas firefighters.

It turns out they weren’t satisfied with making almost $200,000 per year. They also abused sick leave, rigged work schedules to pump up their pensions, and appear to have engaged in widespread disability fraud.

About half of all Clark County firefighters retired with work-related injuries in recent years- garnering bonus payments averaging $320,000 apiece. That’s in addition to their obscene pensions for life.

Is this also “for the kids?”

Article number three in Sunday’s paper was about a now retired Las Vegas homicide detective and possible police brutality. It had nothing to do with pensions. But interestingly, the retired homicide detective they quote in the story is 47 years old.

He’s 47 and already retired?

Want to bet that you and I are on the hook for $5 to $10 million in pension and health benefits from now until the day he dies- for not working. Is this also “for the kids?”

I’ll say it one more time… this is madness.

These aren’t CEO types. These are average government employees retiring with the equivalent of $5 to $10 million. These are the true 1% privileged class that are bankrupting our country and destroying the once great U.S. economy.

Something is very wrong here.

No one has a right to complain about the high incomes of business owners in the private sector (the 1%). We rarely have pensions and our compensation doesn’t cost taxpayers a dime. We risk our own money to start our businesses and often work 16 hour days, weekends and holidays.

Yet for all that risk and hard work, do you know any small business owners who retire with $5 to $10 million? They are few and far between. But that’s exactly what a private sector employee would need in the bank on the day of his or her retirement to match the $100,000 per year pensions (plus health care benefits and cost of living increases) of government employees paid out over 30 to 50 years.

Keep in mind that government employees never risk a dollar of their own money. They have lifetime job security. And they rarely work beyond 9 to 5, let alone weekends or holidays.

Yet government employees are paid millions by taxpayers to retire early, often on pensions fattened by gaming the corrupt system.

They are the true 1%.

This is a national disgrace that is bankrupting America. The gall of this scam would make Bernie Madoff blush.

But hey…”It’s for the kids!”



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