FionaK |
|
| @davidb
There is no difference between a ponzi scheme and a pyramid scheme: they are merely the american and british terms for the same thing. But it is no accident that the american term is now preferred, because the debate is entirely predicated on the analysis of the neoliberals. They are not without an agenda. In one sense it matters not what you call it, as you say. But it does matter if what you call it does not adequately describe the model and replaces explanation with a boo word which is inherently misleading. For that reason I do not think it is moot.
I am not sure what you are getting at when you say we have an insurance scheme in which the returns bear no relation to the premiums. I think you need to tease that out a bit because I don't see the point you are making.
National insurance has never been a hypothecated income tax at any stage in its existence. One may perhaps argue that its relationship to an insurance scheme is no less tangential depending on how you categorise such things, but it is also part of the neoliberal agenda to pretend that it is no different from general taxation: they believe that tax is inherently bad and so that suits them very well. It does not make it true.
As to the contributions: both employers and benficiaries do pay in so I do not understand the point you seek to make in raising Singapore. However your statement that people effectively look out for themselves is laughable if you stop to think about it. That cannot possibly work in a funded system. A working life is about 30-40 years. Assuming that one is in employment throughout and that one is prudent and well paid enough to save from the outset it is still the case that what one can save is not a percentage alone: it is an absolute amount of money. As I have said before, Say the average wage in 1970 was £30 per week and that it is £475 now. If we assume that the amount required to meet current expenditure is 80% in both cases (not very realistic as it is far too high, but it serves) then a very prudent person in 1970 could save £6 per week. £312 per year. If all else remains equal (which it doesn't but let that pass), and assuming interest at an average of 2% on savings throughout, and inflation at 7.34%, then total savings over a lifetime of work are £88,139. If you change the interest/return to 5% it results in savings of £139,424. It bears no relation at all to what is need to keep you in old age: and it cannot. What it means in practice is that if you live 15 years after retirement you can spend 15% of average income each year on the 2% assumption: and about 30% on the 5% assumption. Which is poverty by anybody's standards.
The actual amount you can save in the early years cannot increase enough because, whatever inflation does, interest rates and returns on savings are not high enough over the whole period, and saved wealth is taxed by inflation. The rate of interest/return can vary and be higher than that: but the fact is that low levels of saving get low returns. I used 20% savings because that is close to the level of income tax in this country: so that is the amount one can reasonably expect if that tax is reduced by 20%, as neoliberals propose.
There are other scenarios but I do not think this one implausible. And that is why the surface plausibility of saving directly for old age is not necessarily superior to pay as you go. The reason we are told that it is is because there is a great deal of profit to be made by private management of pension funds. They are not necessarily a good basis for a state pension, even in principle.
You are correct to say that independence is not aligned on left or right in the crude sense. But for me it is absolutely about the kind of society I want to live in and that is a society which retains the values of the post war consensus which represented goals and aspirations shared by right and left alike: the argument was not about what we wished to achieve but rather in how best to achieve it. That is no longer true. Neoliberals do not want a more equal society: quite the opposite. If you want to live in a society where people cannot afford to eat or to call a doctor despite the fact that we have great wealth and no need for absolute poverty and misery for many then I suggest that you are better voting no, at least on those issues: for that is the unambiguous aim of our neoliberals.
That is not where I wish to live and for me we can make different choices if we vote yes: that is what this is about for me: I am tired of living with the shame of abject poverty for the many
|
| | |
