Socialist pensions

You had better get a private pension even though it is not tax-deductible

Civilisations have always brought together private mechanisms to help their elderly. From the public point of view, they firstly legislated to oblige children. The nation state emerges with the Peace of Westphalia treaties at the end of the Thirty Years War (1648). The State’s tax voracity knows no limits. The best tax is that which is not perceived as such, just as the best slavery is that in which slaves do not realise they are not free. Today, Spain is packed with unaware slaves.   

The origin of modern pensions is attributed to Otto von Bismark (1881) in Germany. He came up with the idea of an old-age social security scheme. It became a tax and was the first public system of pay-as-you-go pensions. The idea was to promote workers’ future well-being and to avoid social revolts. The Bismark system was compulsory, and there was a direct relation between workers making payments and the pensions they would obtain when they retired. It looked like insurance, but was compulsory. It inspired other contributory pay-as-you-go systems throughout continental Europe. 

Later in 1942, the British introduced the Welfare System by means of the Beveridge Report, and a minimum payment system acting as an instrument to fight poverty that provided a set state pension for most workers. This British system, a state system that was public and equal for everyone, provided a very modest pension. It was a solidarity tax that guaranteed everyone a small minimum pension.

The present-day Spanish system began in 1978 and was like (until quite recently) the German system. However with the latest Socialist changes, the direct relation between pensions and payments has been broken because the former are limited and the latter are not, and they are also progressive insofar as the more income earned, the higher the payments workers pay. In Spain it is now socialist redistribution poison, to the extent that although civil servants have paid much more than other workers from lower categories, they are all paid virtually the same pension. Everyone is practically the same. In other words, today’s pensions system obliges us like the German system, but pays us (at least civil servants) like the British system. We are all practically the same. It redistributes with a tax, but no insurance is left. The leftish get caviar and unaware socialists should take note. 

Who says that governors have to redistribute nothing?! What they should do is to enable everyone to earn a living, save and not squander money. Socialists hate savings, which is a capitalist virtue. Why? Because whoever has savings has properties and freedom, and does not depend on the state, even though they cannot avoid paying compulsory taxes.

There is neither freedom of choice nor proportionality of payments/sharing. Moreover, politicians’ privileges (on this blog, read: Laundered Privileged People, published in the Las Provincias newspaper in July 2020) are unconstitutional, and they apply privileges to themselves.

The correct regulation of a contract ensures that involved parties comply

Civil servants are forced to pay a monthly payment that is deducted from every payslip. We believe that the state cannot go bankrupt, but it can (e.g., Argentina).  

Spaniards’ lack of memory is considerable. It was only 13 years ago when president Zapatero left. Then the EU bailed Spain out in 2010, and made Spain cut public salaries and freeze pensions. The Spanish debt with Zapatero was 0.8 billion euros and public spending was 45% of the GDP. In 2003 with Aznar, debt was lower than 0.4 billion euros and public spending was 38.4% of the GDP. 

For two decades, every socialist government has doubled debt and increased the public sector. Yet the GDP does not increase, which means that public activity grows and private activity diminishes. This “progressive” characteristic implies higher tax pressure and more private unemployment. When they bailed us out, cuts were made for several years (PP administered the disaster caused by PSOE). Today debt comes to 1.6 billion euros, which is double that left by Zapatero, and public spending has increased by 41.5% compared to that which Rajoy left in 2018. The Sanchez governments, regional governments, city and town councils, TV channels and public universities all squander money. Why? 

The answer is they do not how to improve citizens’ lives by spending correctly and making good decisions, which simply involves removing what is surplus and amortising thousands of public jobs by retiring workers. However, the money-squandering principle continues: growing is good and deceleration is bad, which is where we find ourselves. 

It is incredible to hear: we have simplified regulations to help to create companies; we have done such and such to improve juridical security. We have done such and such to defend illegal occupations of homes. Nobody says we have streamlined public university degrees so they do not coincide in nearby universities; we have digitised communication by digitising and removing unnecessary administration workers, etc. They are all content to go on spending.

Eliminating what is surplus means saving, spending less and improving. Apparently what they call “progress” is merely showing more spent quantities of money as if those reading the message were stupid, and better identifying with more spending and being worse off with less. What they do save is paying civil servants practically the same pension, even though some have paid much more than others. This is socialist egalitarianism for fools.  

When they improperly spend, squander money, they must apply more taxes to earn money to cover excess spending. This obstructs private initiatives, which are precisely those that take risks, and also create jobs and prosperity. It is not clumsiness, but shameful wickedness. Such practice does not spell prosperity for the majority because because the free self-employed worker does not depend much on the state.

 Socialist voters should know the consequences of their votes, and also those for their children. Unaware socialists who do not vote socialists, but favour increased public spending, cause the same harm without realising it. 

When Aznar governed, there was money put aside for pensions. We have always been led to believe that what is deducted from our earnings goes towards our pension when we retire. It was “saved”, invested, in some conservative fund to ensure a pension upon retirement. This is a lie. There is no money put aside for pensions. The governments that came after Aznar (of PP, including that of Rajoy, also of PP) have spent all that money while in government. They have also left us in debt and kept quiet about it. Trade unions should protest, but also keep quiet.

On YouTube, watch the speech “Pensions and the state” by expert in Public Policies and State Administration, Prof. Miguel Anxo Bastos. 

States go bankrupt (Argentina). Before they do, they are bailed out for not being viable if those which borrow cannot be paid back debt. Is our pension in danger?

That depends on whether the state is bailed out or goes bankrupt. Spain has no money put aside for pensions. It is an ageing country with 10 million pensioners. This number will soon rise when the baby boom generation retires. Today financing pensions represents 37.2% of the whole General State Budget (GSB). The cost of paying civil servants and public workers their salaries has doubled in two decades and is more than 35% of today’s GSB. The annual payment related to public debt is 30,175 million euros; 6.57% of the GSB. That only leaves 21.2% of the GSB (115,000 million euros), and a budget is still needed to pay separatist cheques (the Catalan debt alone comes to 85,000 million euros), defence, infrastructures (separatists and others), research, health, tourism, foreign affairs, education, subsidies, transfers, equality, etc.  

Sustainable? Believable? No, neither. Budgets are false, except for the enormous debt. PP and PSOE, plus trade unions, keep quiet when paid subsidies, and agreed to spend the money put aside for pensions at the time, all of it, and have since then spent all money of workers’ payments from their income for their future pensions. Be prepared to pay all kinds of new taxes.

The Sánchez governments have contracted more new public job holders than those retired. Soon the EU will make Spain cut pensions and public salaries, and will apply more taxes. Not having money put aside for pensions is certainly a risk with no execution date, and will mean a considerable cut in pensions. Future generations will most certainly live worse off than us.

We have no social contract for our pension and no insurance to be paid a set amount as a pension. The amount of paid pension is not set. There is no set date when we will be paid a pension. Nor does the amount we have paid in taxes correspond to the pension we will obtain. Civil servants who retire will wonder, and find out, that they have paid much more, but will be paid the same pension as others who have paid much less than them. This is socialist progressivism 

The indifference shown to changes in our pensions is surprising; a high accumulated tax imposed on work, paid punctually from our income monthly and is compulsory, which they will return to new pensioners “as and when they can” in the British style of everyone being paid practically the same small amount, at least civil servants. No-one informs and trade unions do not react.

 If everyone who squanders money is denied a vote, things would be very different. Continuing to vote the same ensures that money-squandering politicians will keep spending too much money. Saint John of the Cross stated that you must take a very different route to reach a new position.

Pensions will always be paid because there would be a revolution otherwise. The debt per capita in Greece was 32,133 euros. Today, that of Spain is 32,245 euros. Bear in mind that the relevance of Spain is much greater and more serious for the EU. When will they bail Spain out? Pensions in Greece were cut by 30% and it had to sell national heritage to make being bailed out viable.

The only way to avoid bankruptcy is to cut public spending, amortise thousands of surplus civil servant jobs (by retiring people), and to reduce the size of universities, TV channels and public firms, and also the number of politicians, their advisors, escorts, foundations, official cars and trade union subsidies, and increase university rates. The longer this therapy is delayed, the longer it will be before the sick person gets better. Everyone should face up to their responsibilities. Here what will happen is explained, along with those responsible, voters included.

By the way, von Bismark said that Spain was the most resistant country in the world because Spaniards had been trying to destroy Spain for centuries, and had still not managed it. However, that was 140 years ago, and von Bismark would never have imagined the Zapatero-Sánchez tandem, nor governments also attempting to destroy Spain.   

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