France's President: Powerful as well as Dangerous

[MachineGhost]

It's mind boggling how batshit insane the French are.  It's one thing for some crony douchebag to come to power in Venezeuela, Zimbabwe, Moldova or some other basket case full of economically-illiterate and impoverished peons, but France...?  LOL!

This is why Mr Hollande will start by cutting the retirement age for some workers to 60, putting the top marginal income-tax rate up to 75%, raising taxes on wealth, inheritance and dividends, increasing the minimum wage and making it much harder for employers to fire workers. Far from curbing the size of the public sector, at 56% of GDP the biggest in the euro zone, he seems likely to expand it. With these policies he is acting against the grain of change in the rest of the EU. This will do nothing to improve France’s competitiveness which, as its gaping trade deficit shows, has declined fast. Nor will it make the business climate any friendlier (see Schumpeter).

http://www.economist.com/node/21557338

[MediumTex]

I guess we will find out one more time what these policies tend to lead to.

[Greg]

I guess we will find out one more time what these policies tend to lead to.

I really wonder about things such as retirement at 60. Either people would need to save for perhaps 25+ years in retirement or need a pension, etc. It's amazing that it wasn't too many years ago that people would work until they died. Now we might be looking at 1/3 of our life in retirement which seems peculiar to me unless you have a ton saved up for that.

It just seems like the system would collapse with that but I'll cross my fingers of luck for them.

[FarmerD]

It's mind boggling how batshit insane the French are.  It's one thing for some crony douchebag to come to power in Venezeuela, Zimbabwe, Moldova or some other basket case full of economically-illiterate and impoverished peons, but France...?  LOL!

It's easy to pick on the French but I think stupidity is a basic human attribute and isn't soley limited to just the French. Look at our country - Obama's response to our mountain of debt is to create another trillion dollar entitlement.  In fact I'd argue all fiat currencies eventually fail because of governmental and general population stupidity like this.   

[gizmo_rat]

Look at it this way, we know what applying the polar opposite policies does deeply unpleasant things to a country so why not try this? I'm not sure that it'll be worse for the population than mass unemployment, recession, social unrest etc.   

[Pointedstick]

Look at it this way, we know what applying the polar opposite policies does deeply unpleasant things to a country so why not try this? I'm not sure that it'll be worse for the population than mass unemployment, recession, social unrest etc.     

The polar opposite? It's been a long, long time since France tried any freedom-oriented policies. I mean heck, their government eats up 56% of GDP!

[Ad Orientem]

It's mind boggling how batshit insane the French are.  It's one thing for some crony douchebag to come to power in Venezeuela, Zimbabwe, Moldova or some other basket case full of economically-illiterate and impoverished peons, but France...?  LOL!

This is why Mr Hollande will start by cutting the retirement age for some workers to 60, putting the top marginal income-tax rate up to 75%, raising taxes on wealth, inheritance and dividends, increasing the minimum wage and making it much harder for employers to fire workers. Far from curbing the size of the public sector, at 56% of GDP the biggest in the euro zone, he seems likely to expand it. With these policies he is acting against the grain of change in the rest of the EU. This will do nothing to improve France’s competitiveness which, as its gaping trade deficit shows, has declined fast. Nor will it make the business climate any friendlier (see Schumpeter).

http://www.economist.com/node/21557338

ROFL I am stealing your post for my blog.

[Odysseusa]

It's mind boggling how batshit insane the French are.  It's one thing for some crony douchebag to come to power in Venezeuela, Zimbabwe, Moldova or some other basket case full of economically-illiterate and impoverished peons, but France...?  LOL!

This is why Mr Hollande will start by cutting the retirement age for some workers to 60, putting the top marginal income-tax rate up to 75%, raising taxes on wealth, inheritance and dividends, increasing the minimum wage and making it much harder for employers to fire workers. Far from curbing the size of the public sector, at 56% of GDP the biggest in the euro zone, he seems likely to expand it. With these policies he is acting against the grain of change in the rest of the EU. This will do nothing to improve France’s competitiveness which, as its gaping trade deficit shows, has declined fast. Nor will it make the business climate any friendlier (see Schumpeter).

http://www.economist.com/node/21557338

Don't we in the U.S. already have this by allowing people to withdraw from retirement account such as 401K/IRA after 59.5 which allows us Americans to postpone withdrawing from Social Security until 70?

[Pointedstick]

Don't we in the U.S. already have this by allowing people to withdraw from retirement account such as 401K/IRA after 59.5 which allows us Americans to postpone withdrawing from Social Security until 70?

Isn't that a good thing, though? It means old people are relying on their own income for longer, thereby being less of a burden on the welfare system.

[MediumTex]

It's mind boggling how batshit insane the French are.  It's one thing for some crony douchebag to come to power in Venezeuela, Zimbabwe, Moldova or some other basket case full of economically-illiterate and impoverished peons, but France...?  LOL!

This is why Mr Hollande will start by cutting the retirement age for some workers to 60, putting the top marginal income-tax rate up to 75%, raising taxes on wealth, inheritance and dividends, increasing the minimum wage and making it much harder for employers to fire workers. Far from curbing the size of the public sector, at 56% of GDP the biggest in the euro zone, he seems likely to expand it. With these policies he is acting against the grain of change in the rest of the EU. This will do nothing to improve France’s competitiveness which, as its gaping trade deficit shows, has declined fast. Nor will it make the business climate any friendlier (see Schumpeter).

http://www.economist.com/node/21557338

Don't we in the U.S. already have this by allowing people to withdraw from retirement account such as 401K/IRA after 59.5 which allows us Americans to postpone withdrawing from Social Security until 70?

They are withdrawing their own money if they are drawing down their own accounts.  By allowing government funded retirements at a younger age, however, the retirees are basically withdrawing other people's money.

As far as the connection between individual retirement accounts and Social Security goes, I know of no connection between individual account withdrawals starting at age 59 and delays in the commencement of Social Security benefits.

In any case, since Social Security benefits are actuarially equivalent no matter when they commence, it really doesn't matter whether someone starts at 62 or 70.

[AdamA]

In any case, since Social Security benefits are actuarially equivalent no matter when they commence, it really doesn't matter whether someone starts at 62 or 70.

Can you explain that a little bit more so that some of the slower members can understand?  (Not me, of course). 

 

[SteveGo]

Actuarial equivalence means that the Net Present Value of the income stream of benefits is the same for different payout schemes.

Assuming you drop dead at 83, you can either start your SS benefits at age 62 or later, say age 66.

From 62 up to 66 (full retirement age for me), if you start receiving benefits, you get less per month, and that amount stays the same (adjusted for inflation) until you die. The amount of the benefit is set at a value depending on your age compared to your full retirement age.

If you die when you are supposed to by the actuarial tables, then you get the same total amount of money, Net Present Value, and the government is out that same amount.

If you live on past your drop dead date, you get more money. If you delay getting SS benefits until you are 70 for example, and then live to be 85, you could get more total money than if you start benefits at 62 and live to be 85.

However those actuarial tables are very accurate. There is a loser, someone who dies early, for every winner.

If you have reason to believe you are going to live a long time, then delay your benefits as long as you can, provided you can support yourself in the meantime. If your ancestors tended to die young, take the benefits early.


Here is a document that actually graphs out the outcomes:

http://www.noyescapital.com/Newsletters ... -2011F.pdf

[AdamA]

Actuarial equivalence means that the Net Present Value of the income stream of benefits is the same for different payout schemes.

Assuming you drop dead at 83, you can either start your SS benefits at age 62 or later, say age 66.

From 62 up to 66 (full retirement age for me), if you start receiving benefits, you get less per month, and that amount stays the same (adjusted for inflation) until you die. The amount of the benefit is set at a value depending on your age compared to your full retirement age.

If you die when you are supposed to by the actuarial tables, then you get the same total amount of money, Net Present Value, and the government is out that same amount.

If you live on past your drop dead date, you get more money. If you delay getting SS benefits until you are 70 for example, and then live to be 85, you could get more total money than if you start benefits at 62 and live to be 85.

However those actuarial tables are very accurate. There is a loser, someone who dies early, for every winner.

If you have reason to believe you are going to live a long time, then delay your benefits as long as you can, provided you can support yourself in the meantime. If your ancestors tended to die young, take the benefits early.


Here is a document that actually graphs out the outcomes:

http://www.noyescapital.com/Newsletters ... -2011F.pdf

Got it.  Thanks for taking the time to explain.

[MachineGhost]

If you have reason to believe you are going to live a long time, then delay your benefits as long as you can, provided you can support yourself in the meantime. If your ancestors tended to die young, take the benefits early.

At what age should someone planning to live to 120 at the very least, beging drawing their benefits?

Until this year or last, you used to be able to pay back all of the early-taken SSA benefits and reset the amount up to age 70.  It was, in essence, a relatively cheap annuity from the SSA akin to I-Bonds in being stupid for the government but great for the beneficiary.

[SteveGo]

I believe 70 is the maximum age to start benefits.

Yes, that amounted to an interest free loan for up to 8 years. I know a couple of people who did just that.