On May 23, I rejoiced to find that the Associated Press actually recognized that there might be some slight problem with the welfare state. It published a dispatch called “Fiscal Crises Threaten Europe’s Generous Benefits.” Of course, the item invoked the obligatory Keynesian bogeyman about what happens when there’s an attempt to balance government budgets: “The move is risky: experts warn the cuts could undermine the growth needed to pull budgets back on a sustainable path.” (Assignment: try to picture a “path” that’s “sustainable.”)
But what really got my attention was a couple of paragraphs about Spain, where the socialist government “has frozen increases in pensions meant to compensate for inflation for at least two years.” Of course, one might ask why there should be inflation at a time when the European economy is in recession, but never mind. There followed a quotation from one Federico Carbonero, described as a retired soldier, on pension. Sr. Carbonero said, “They’ve hit us really hard.” He also “said he was unlikely to live long enough to see the worst of the pension freeze, but had no doubts he would have to start relying on savings to maintain his lifestyle.”
Now, guess how old Carbonero is. God bless him, he has arrived at his 93rd year. At that age, don’t you think he should be willing to start dipping into his savings?