Sir, – It is interesting to note that while the Tánaiste urges USC assistance for the old, officials in the Department of Public Expenditure and Reform argue for cuts in State pensions ("Cuts to State pension must be considered, review finds", December 29th).
State pensions are probably the only model of pension that will endure – the payment of entitlements from current expenditure rather than from funds built on years of growth in growing economies.
The penny or cent appears not to have dropped yet; economic growth on the scale needed to furnish lavish or even moderate pension funds is over. The world has reached a level of productive ability, including goods and services, which renders further substantial growth unnecessary and impossible. We have been extraordinarily successful in reaching an era of sufficiency; instead of growth we need planned restraint of our extraordinary unprecedented ability to produce made possible by the advent of computerisation.
Pension funds depend on market investment and substantial growth. Although at the moment markets appear to forge ahead they are built on very fragile foundations and virtual values that have little to do with tangible provision of goods and services for the world. If they collapse, as many reputable US economists predict, pension carnage will be horrendous.
This should not be a pessimistic outlook, however, as real wealth, which is the ability to provide goods and services and a good life in abundance for all, was never more powerful, secure or in better shape. There is more wealth created in the present world than at any previous time – more than adequate to give everybody, including the greedy, a decent share. The methods of distribution through employment and entitlements must, however, be reconstituted. It is impossible to manage economics of sufficiency and automation with an ideology of continual growth and working hard. If we persist there will be enormous casualties, with pensions one of the first. – Yours, etc,
PADRAIC NEARY,
Tubbercurry,
Co Sligo.