UK needs +7 Million immigrants to keep debt down

HAMISH_MCTAVISH

Generali wrote: »

If we define a pyramid scheme as one which pays returns to existing members from the investment of new members rather than by investment returns then the state pension is a pyramid scheme.

We're not the only people that think so:

A lazy and attention seeking journalist may fall for the superficial similarities between pyramid schemes and pensions.

However more thoughtful commentators would see beyond the surface and disagree.

The following quote is from the US dept of social security, and accurately describes the benefits and drawbacks of intergenerational pension and healthcare schemes.

There is a superficial analogy between pyramid or Ponzi schemes and pay-as-you-go insurance programs in that in both money from later participants goes to pay the benefits of earlier participants.

But that is where the similarity ends.

A pay-as-you-go system can be visualized as a simple pipeline, with money from current contributors coming in the front end and money to current beneficiaries paid out the back end.

As long as the amount of money coming in the front end of the pipe maintains a rough balance with the money paid out, the system can continue forever.

There is no unsustainable progression driving the mechanism of a pay-as-you-go pension system, and so it is not a pyramid or Ponzi scheme.

If the demographics of the population were stable, then a pay-as-you-go system would not have demographically-driven financing ups and downs, and no thoughtful person would be tempted to compare it to a Ponzi arrangement.

However, since population demographics tend to rise and fall, the balance in pay-as-you-go systems tends to rise and fall as well. This vulnerability to demographic ups and downs is one of the problems with pay-as-you-go financing.

But this problem has nothing to do with Ponzi schemes or any other fraudulent form of financing; it is simply the nature of pay-as-you-go systems.

HAMISH_MCTAVISH

Sampong wrote: »

ONS data reveals that Immigrant mothers have a higher birth rate than the rest of the population - they account for a quarter of all births in the England and Wales, so probably not much chance of keeping that "stability".

Then we can adjust immigration downwards to suit, after they produce all these new British people and they grow to an economically productive age.

Sounds like a debate we need to have.

In 20 years or so....

John_Pierpoint

HAMISH_MCTAVISH wrote: »

Was there a part of net fiscal gain you didn't understand the first time?

Translation:
We are already extracting nearly 50% of the GDP of this country into government coffers by taxation or dishonestly by inflation (we cannot tax it so we print it).

At this level it is looking like push is coming to shove, where can we find some more tax payers?

Let us import some, that will be a short term internal fix.

The real problem in this country is:
Now that the oil and taxation boom is over, how can our population, now expanded by 10 million, pay its way in the world - seeing as it cannot even feed itself?

Cornucopia

HAMISH_MCTAVISH wrote: »

Then we can adjust immigration downwards to suit, after they produce all these new British people and they grow to an economically productive age.

Sounds like a debate we need to have.

In 20 years or so....

Whilst I agree with your analysis of the problem, I disagree with this as the solution.

Clearly, it would be possible to have a new immigration status for certain people who are interested - admission to the UK on time-limited licence. A person would get 10, 20 years maybe to come here and work, and then leave.

This probably needs to be part of a bigger/better/more rational understanding of immigration in terms of the UK's obligations and needs.

The other aspect of the demographic issue which has not been mentioned is the physical lack of workers to provide care for an aging population.

Sampong

HAMISH_MCTAVISH wrote: »

Then we can adjust immigration downwards to suit, after they produce all these new British people and they grow to an economically productive age.

Sounds like a debate we need to have.

In 20 years or so....

Oh my gawd.

So that's your solution is it.

Brush the problem under the carpet........

Sampong

HAMISH_MCTAVISH wrote: »

A lazy and attention seeking journalist may fall for the superficial similarities between pyramid schemes and pensions.

However more thoughtful commentators would see beyond the surface and disagree.

The following quote is from the US dept of social security, and accurately describes the benefits and drawbacks of intergenerational pension and healthcare schemes.

It's a bit pointless having a debate about what is and what is not a Ponzi and Pyramid scheme. Both are unsustainable, one is fraudulent, but there is a definite similarity with pensions particularly when the population is due to grow.

When someone points out that similarity as graham did, it is not meant to be taken literally but to point out that the sustainability of this OBR "solution" is in question.

The comparisons between Ponzi's, Pyramids and pensions has been debated in another thread - at great length, which went round in circles and ranks only slightly below your Nazi salute campaign in terms of pointlessness.

The question that should be being debated is just how is this sustainable? And why is there such an opposing view between what the OBR say and what the Select Committee of Economic Affairs say?;

Arguments in favour of high immigration to defuse the “pensions time bomb” do not stand up to scrutiny as they are based on the unreasonable assumption of a static retirement age as people live longer and ignore the fact that, in time, immigrants too will grow old and draw pensions. Increasing the retirement age, as the Government has done, is the only viable approach to resolving this issue.

http://www.publications.parliament.uk/pa/ld200708/ldselect/ldeconaf/82/82.pdf

So another set of "highly trained" individuals, and the don't agree with the OBR. Perhaps they should all meet up and thrash it out?

The problem is with this latest OBR report is that if it is wrong, which I and a lot of others (including the link above) think that it is, it will create a huge mess in 20 years when it all unravels.

CLAPTON

current figures (2011) are that 17% of the population is over 65 and the projections (don't know what assumptions are being made) are that this will increase to 24% by 2050 (i.e. 37 years time)

if we import millions of say 20-30 years olds now then in 37 years time many will be part of the problem and not part of the solution.

Given we are already increasing the retirement age and the general level of health of 65 years old, there doesn't seem to be a resource problem in 2050.

grizzly1911

HAMISH_MCTAVISH wrote: »

Then we can adjust immigration downwards to suit, after they produce all these new British people and they grow to an economically productive age.

Sounds like a debate we need to have.

In 20 years or so....

If they are producing offspring then the costs associated with the first 21 years are brought into the picture, not just their eventual retirement costs. Where is the saving and positive net contribution?

grizzly1911

HAMISH_MCTAVISH wrote: »

Then we can adjust immigration downwards to suit, after they produce all these new British people and they grow to an economically productive age.

Sounds like a debate we need to have.

In 20 years or so....

If they are producing offspring then the costs associated with the first 21 years are brought into the picture, not just their eventual retirement costs. Where is the saving and positive net contribution?

More so if 2.5m+ unemployed are continuously being carried

HAMISH_MCTAVISH

Sampong wrote: »

why is there such an opposing view between what the OBR say and what the Select Committee of Economic Affairs say?

Because the "select committee on economic affairs" consists of a dozen old politicians in the House of Lords. The paper you quoted from is 7 years old...

Whereas the OBR report is from an entity full of expert economists, specifically tasked with neutrality and non-political advice on economic and fiscal issues. And is based on the latest data available.