I just love these articles in the American press that claim China’s rise to wealth and superpower status is doomed to fail because of some impassable snag — environmental unsustainability, energy scarcity, the instability of non-democratic governance, etc. — which for some reason still hasn’t kicked in but is sure to do so, just around the corner… and surely before their GDP passes the US’s. Today’s Howard French article in the NY Times identifies what is surely a serious problem: the shrinking of the ratio of workers to retirees as the population ages, due in large measure to the one-child policy. But one still detects those notes of breathless hyperventilation:
Most troubling to financial experts, the government has used payroll taxes paid by the current generation of workers, who in theory are paying into their individual retirement accounts, to pay pensions for the previous generation.
Using payroll taxes to pay pensions for the previous generation?! Folly! Why, that’s as unsustainable as — Social Security, the US’s national guaranteed pension system…which, in the 70 years since it first began paying pensions out of payroll taxes, has
brought the US economy to its knees kept tens of millions of elderly Americans out of poverty without preventing the US economy, the world’s wealthiest, from continuing to grow faster than any other advanced economy over the long term!
Clearly, China is doomed. Doomed, I say!
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