| Alan Greenspan believes it is necessary to raise the retirement age in the United States For the successful development of the American economy, the authorities and society need to undertake painful reforms - restructuring the pension system and increasing the retirement age, which is now 65 years. This is the only way to solve the problem of the aging of the nation, said America's economic guru, 78-year-old Chairman of the Federal Reserve System Alan Greenspan, at the end of last week. In recent years, the population in the United States has been aging so quickly that it will soon become a real threat to economic growth and the development of the country's public financing system. Even if we take into account the most optimistic forecasts of economic development, the state's financial resources will not be enough to provide for new retirees at the level at which their parents were provided, AP quoted Greenspan as saying.
Independent forecasts predict that by 2035, the number of Americans over 65 will double. “American society is aging. Our economy will not be able to cope with the burden that will fall on its shoulders. If we have promised retirees more than our economy delivers without unduly reducing workers' real income, we must reconsider our programs so that those preparing to retire have time to take advantage of other sources of funding," Mr. Greenspan said. If this is not done, the consequences could be “terrible” and “painful,” the head of the Fed believes.
Experts say the main reason for American aging is the improvement in the quality of medical services and general improvement in living conditions. To deal with these "troubles", America's chief economist urged taxpayers to be prepared for the coming reforms. To reduce the pressure on the financial system from pensioners, it is not enough to increase the amount of payments to pension and health insurance funds. This will only complicate the situation by increasing the current costs of the working population. According to Mr. Greenspan, one of the possible options for the upcoming reform is to increase the number of working pensioners. "Growing pressure from an aging population calls for urgent reform of the social security system, including raising the retirement age," he said.
The dilemma is obvious: to provide for aging taxpayers, Social Security payments must be reduced, but this requires reaching an agreement with unions, which is not easy to do. Trade union representatives are firmly convinced that it will be mainly low-income citizens who will suffer as a result. To mitigate the brewing battles, Alan Greenspan proposed not to cut pensions and benefits for those citizens who have already reached retirement age. Since the American economy is stable, he emphasized, reforms will proceed more smoothly than in other countries. Even though the US population is aging much more than other countries due to high levels of immigration. Currently, the nominal retirement age in America is 65. In the near future it may be increased to at least 67. Denis UVAROV |
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