The demise of social security

Although the government has not yet initiated a serious dialogue with opposition parties, workers’ unions and employers’ groups, all sides have come to realize that the existing social security system is near to collapse. One after the other, social security funds are reporting losses, due in particular to adverse demographic developments, given that for every pensioner there are just 1.75 workers, as opposed to five workers per pensioner in the early 1990s. Pensions, which today account for approximately 13 percent of gross domestic product, will soar to about 25 percent of GDP by 2050. Meeting these pension needs will require a larger budget that can only come from much higher taxation – something no society will tolerate. One wonders whether the political parties and the various foundations and bodies which stubbornly resist change understand that certain privileges cannot continue, and that sacrifices must be made by those who are enjoying social subsidies and allowances so that today’s 30- and 40-year-olds will be able to receive a full pension when the time comes. Isn’t it populism when certain parties demand that the social security deficit be met exclusively by the state, which would mean nothing would really change and the fortunate can continue enjoying their special privileges? And when we demand that the increasing social security deficit – which has doubled between 2000 and 2007 – be covered by the budget, do we really understand what we are asking? Do we take the time to consider, for example, that some 85 percent of the budget revenue comes from middle- and lower-income groups? What purpose, moral or social, can possibly be served by making workers pay for their pensions twice, once through insurance payments and once through taxes?