The European welfare states’ pension systems are fraudulent, pyramid schemes. The huge proportion of income workers pay in is not capitalized but spent immediately on current outlays to retirees and maintaining the bureaucratic infrastructure used to administer the system. Today’s workers’ pensions do not, then, depend on what they pay but on there being more young workers in the future and the State being able to confiscate a good chunk of their incomes. As an upcoming study from the Instituto Juan de Mariana explains, these pyramid systems are prohibited by Spanish legislation (as well as in all the other EU member states) and are sustained thanks to innumerable myths propping up public intervention in this matter. But few dare to call things by their name when the State is involved.

 

The Belgian government has proposed retouching this fraud to keep it going for a few more years and delay its inevitable collapse. Specifically, it proposes reducing possibilities for early retirement, prohibiting people who work past the age of 65 from receiving higher pensions, granting favorable tax treatment to those who wait until 65 to start cashing in their pension funds, limiting subsidized leaves of absence, increasing aid to incorporating young people into the labor market and funds dedicated to social security by charging a new fixed percentage tax on capital gains. In short, the government wants to force people to retire later so they contribute longer to paying pensions while at the same time shortening the number of years they will be being paid their pensions, limiting sabbatical years and raising taxes.

 

The socialist union does not comprehend the future of its socialist distribution system is in danger and instead is demanding current benefits be maintained and taxes increased through a new “general social contribution” in addition to the above mentioned tax on capital gains: as if Belgium’s main problem were not its total lack of competitiveness due to the country’s astronomical public debt and sky-high taxes! The Catholic union also wants to keep the socialists system but is more coherent than its competitor. This is why it accepts reforms to delay the collapse for a few decades and enjoy however long this scam lasts –it feel there will be time later to sit down and search for solutions.

 

No politician wants his name burning at the stake of social demagoguery and this why even the Prime Minister Guy Verhofstadt, who has the gall to call himself a free marketer, opts for small changes and to continue with this public pension plan con-trick. No one dares to call a spade a spade. No one will come out and say the pension system is plain robbery and much less let people contract the pension plan that best suits their particular needs.