Graphic: Bloomberg Markets.
Last week I commented on the proposition that retirees living too long was putting serious pressures on the state pension systems and the entire economy of Illinois and the nation.
We retired public employees are what are being labeled a negative demographic change.
There are too many of us living too long, say the bean counters – although a recent study suggests the average American life span may be declining.
It turns out that the retirement check my fellow retirees and I receive helps the economy. Each dollar paid out in benefits supports $2.36 in economic activity, according to the National Institute on Retirement.
In other words, we spend the money we get and that’s a good thing.
There are things that get old that are a drain on the economy.
According to Bloomberg Markets:
The average age of all fixed assets stood at 22.8 years in 2015, the oldest in records going back to 1925, according to U.S. Bureau of Economic Analysis figures. It’s been rising because companies and governments — state, local and federal — have been reluctant or unable to spend money to swap out the old for the new.
Illinois is the perfect example. Our taxing system – a flat income tax that taxes the income of the most wealthy at exactly the same rate as a working stiff – cannot begin to pay the state’s bills and support modernizing an aging infrastructure. And that was before Governor Rauner’s budget fiasco.
That’s bad news for the economy and for Americans’ living standards. It means workers are toiling away at less-efficient factories and using computers that are not as powerful as they could be. Doctors are working at hospitals that are crumbling with wear. And commuters are having to put up with more frequent train delays and breakdowns.
It won’t come as a surprise to anyone who’s had to maneuver their car around a gaping pothole that the average age of government fixed assets was a record 24 years, according to the BEA data released Sept. 7 and updated annually. Within that category, highways and streets at 28.4 years in 2015 were also the oldest since 1925.
It seems that those who want to blame retirees and public pensions have it all wrong.
We help the economy.
It is an aging infrastructure and a refusal to raise the revenue to fix it that is a problem.