Brazil pension facts of the day

Pension spending is already the equivalent of 12% of GDP, half as much again as the average among members of the OECD, a club of mostly rich countries that have many more senior citizens (see chart). The combined annual shortfall of the pension schemes is 4.8% of GDP, equivalent to more than half the government budget deficit. The state of Rio supports more public-sector pensioners than working civil servants; for every police colonel on active duty five are retired. The state is nearly bankrupt.

…Its citizens collect pensions when they are 58 on average; Mexicans toil into their 70s. Brazilians on average incomes get pensions worth four-fifths of their pre-retirement earnings, which is generous by most countries’ standards. Widows and widowers inherit the full pensions of their deceased spouses, which they can combine with their own.

…Inflated by big increases in the minimum wage, pensions now account for more than half of the government’s non-interest spending.

Here is the full story in The Economist.

Comments

The problem with socialism, as someone once said, is that eventually you run out of other people's money. Or in Brazil's case, everyone has been looting the country since the Portuguese arrived. Everyone has tried to live a life of leisure at the expense of someone else.

When Brazil was run by a small oligarchy that was affordable. When Brazil is a democracy and the Left tries to buy everyone's loyalty, that is not sustainable.

The question is whether the US will allow the military to do the usual Latin thing and step in, or will they keep them in the barracks. The latter looks more likely. The US has refused to allow the Venezuelan military to save the country from itself. So we will see if the Left learns or it blames the Americans, capitalism, the Jews, whoever.

"But I make a profit of three and a quarter cents an egg by selling them for four and a quarter cents an egg to the people in Malta I buy them from for seven cents an egg. Of course, I don't make the profit. The syndicate makes the profit. And everybody has a share."

T.S. Eliot

Maltese Falcon eggs have sure dropped in price.

This must be one of the most detached from reality posts you have made Jan. Where have I ever even mentioned Soros? Or called him a Communist? Or said anything about him blaming Jews? What is more important, what is the link with Brazilian pensions?

I can't even figure out what delusion is behind this. Which is saying something.

You're right. I've really gone off the deep end here. It's The Left that blames Soros and the Jews (or whoever!).

I must admit: Fascist ignorance can be amusing. The Army saving the Latin American economies... like inArgentina, where they destroyed the little industry they had. Or in Brazil, where the military regime ended with sky-high inflarion and a technical moratorium of debt payments. To be sure, American-imposed "free market"reforms helped to dollapse Mexico's economy and overthrow the PRI's dictatorship (which was called the perfect dictatorship and lasted longer the Soviet one). So I guess, it is a point for American-imposed reforms.

I am sorry but you are calling me a Fascist now? I guess pointing out that you are not Brazilian and demonstrating you know nothing of Brazilian history really stung. No matter.

The military regime did end in sky high inflation but the military also changed Brazil from a low-wage agricultural country to a low-wage small scale manufacturing nation. Companies like Embraer and Petrobras would be unthinkable without them. Also the military of Argentina hardly destroyed the country's industry. The Perons managed that quite well on their own.

"Also the military of Argentina hardly destroyed the country’s industry."

"The era of import substitution ended in 1976, but at the same time growing government spending, large wage increases and inefficient production created a chronic inflation that rose through the 1980s.The measures enacted during the last dictatorship also contributed to the huge foreign debt by the late 1980s, which became equivalent to three-fourths of the GNP."

José Alfredo Martínez de Hoz, as Minister of Economy, destroyed the country's economy.

"Petrobras would be unthinkable without them."
It was created way before the coup, at least ten years before. So much for your knowledge of Brazil's history. Again they did such a good job that there was no money left to pay foreign debts they made. Also sky-high inflation and the greatest recession in recorded Brazilian history until then.

And what was industrial production under the Perons? Especially under the last wife?

I do like retired accountants in Ohio whose entire knowledge of the country they claim to come from is Wikipedia. Yes, Petrobras is slightly older than the military dictatorship. As Wikipedia so rightly says. But that is not what I claimed. I claimed the military shaped it and made it what it is today. Which they did. Embraer suddenly ceases to get a mention. I guess that means you did look it up.

Someone like Lula would never admit it, but the Military junta made him. They enabled his father to put agriculture behind him and move to work in a car factory.

Boy, have you ever heard of the Oil is Ours campaign, which led to the company's creation? It happened more than ten years before the oup and its leaders were persecuted by the outchists, so no, there is no relationship at all between Petrobras' existence and the military rule. Sorry, but your ignorance betrayed you. By the way, why Ohio? As long as you are dreaming my life, why not Hawaii?

"Someone like Lula would never admit it, but the Military junta made him. They enabled his father to put agriculture behind him and move to work in a car factory."
His parents parted when he was a boy and his father went to the big city years before the coup, so only God knows what the generals have to do with it. He got his first formal job at the São Paulo state five years before the coup happened. In 1964, he was already a lathe operator, his job for the rest of his workman's career. And the only junta we had ruled for a few months between the death of one general and the choice of his replacement. We didn't have juntas anymore than, say, China have them now.

"I claimed the military shaped it and made it what it is today. Which they did. Embraer suddenly ceases to get a mention. I guess that means you did look it up."

Yet in twenty years, they systematically failed in exploring the country's oil - Brazil was hit mightly by the oil shock even after more than years of military rule. Embraer was a failed company until, get this, the democratic regime sold it out in the 1990s. I still remember when the company was a joke that only knew how to build toys for the military. Sorry guy, but you should try your scam with someone who didn't actually grow up in Brazil -or someone who is younger than 21. Can I mention all the white elaphants the generals created? Angra 3, Transamazônica, Siderbras, IBC, Embraer itself etc., etc, etc..... Brazil had more failed companies to sell dor nothing after the regime ended than East Germany --with no West Germany to help us out. There are some unqualified success, that real Brazilians know, like EMBRAPA, for example, but neither Embraer nor Petrobras were this in 1985 when military rule ended.

"And what was industrial production under the Perons? "

How goes that joke? A teacher asks a student: "How many British soldiers went back to England after the Revolution?" And the student answers: "A lot fewer than have went out of it in first place". I can tell you with no doubt that there was a lot less industrial activity in Hoz's last day as minister than in his first day at the job.

* more than fifteen years of military rule.

SMFS

Did you not get the memo? I am a centrist but even I shake my head at the ease with which anyone right of centre is tarred with the fascist brush. I would say it's the slur de jour, except it has been trotted out since Nixon.

I am not sure defending death squads, martial law, suppression of press freedom, torture and economic ruin (and foreign war in Argemtina's case) are centrist policies. Maybe they are in the USA.

death squads, martial law, suppression of press freedom, torture and economic ruin

All in a day's work for the Bolsheviks. Venezuela desperately needs a Pinochet but they've probably chased everybody capable off.

Words like "fascist" and "Nazi" have long been used as insults, but their frequnecy of use has proliferated to the extent that it might be easier to in fact introduce facism or Nazism for the fact that "wolf" has been cried so many times in such poorly substantiated ways.

When the word "genocide" is used to describe the sexual servitude of some few thousand women and some tens of thousands of battlefield and extralegal killing with ethnic dimensions (but really, most of which battlefield deaths), then the word loses its ability to motivate to action.

Among experts and decision makers, the facts themselves will presumably always be the only relevant thing, regardless of what verbal manipulations, etc. exist. But when it comes time to trot out the word "genocide" to prevent a million deaths in Rwanda on a few days notice .... people will just hear "blah blah blah ... something or other bad and someone or other moaning about it."

"When Brazil was run by a small oligarchy that was affordable."

You mean when half of the workforce were slaves without pensions or even wages?

Most likely he means the period after emancipation, but always interpret people in the least charitable fashion- otherwise people might forget about slavery.

Well, so long as there are helpful people to remind us that historic slavery has no relevance in the present day, then what's the harm in bringing it up?

What can I say? We were libertarians before it was cool.

"We were libertarians before it was cool"

Brazilians, libertarians??!!

I'd say more like schizophrenics: Brazilians have this love/hate relationship with the State. They hate the corruption, but at the same time they want the State to look after them.

Seriously? We paid labor as much as we could get away with - which happened to be nothing. No benefits, no paid leave (or unpaid by the way), no pension. Little to no public education. Nine in ten Brazilians could not read. Voting tied to income - most men did not qualify, no women qualified. State Church - other religions couldn't build temples in the country. Non-Catholics were all but banned from the public service. No OSHA, EPA or FDA. Theatre (the only way to communicate ideas to the masses in a country of illiterate people) was under heavy censorship. Except for the Catholic thing, it is the perfect Tea Part platform. Poor immigrants were bought to replace the natives (the freed or soon-to-be-freed Blacks). Yet, with all those wonderful advantages, somehow Brazil failed to become a paradise in the late 1880s, early 1900s.

As a portuguese man, i have to blame it on the catholic church (which is also the same reason why portugal sucks btw)

Yes, The Left constantly blames The Jews. I'm sure you saw all those Bernie supporters who have been vandalizing Jewish cemeteries like crazy.

Funny thing is you could have put your big boy pants on and made a couple of these points legitimately, but you couldn't help but slip into your natural, infantile approach to discourse, so you convince nobody.

I mean Clinton officials did discuss playing the Jew card against Bernie Sanders in emails that emerged from the leaks- but I mean that's just emails from high ranking officials in the Democratic presidential candidates campaign.

I thought the previous posters comment was stupid, but in your haste to tribalize it you went and made an even more odious comment.

Nope, that's not what the Clinton staff emails said at all. That was a staffer talking about the possibility of letting it be known that Sanders is actually an atheist, rather than a follower of Judaism, which he had implied by talking about his "Jewish heritage." They thought the atheist thing might have been helpful in certain places, like WV, but of course never did anything of the sort. Here's a link for you to educate yourself: http://nypost.com/2016/07/22/leaked-emails-show-how-democrats-screwed-sanders/

But seriously, it's all these liberals coming out with anti-semitic garbage right and harassment, right? David Duke supported Clinton, correct? The alt-right, economic nationalists and every other sliver of the Trump coalition, like Richard Spencer are on record supporting Jewish people. Right, Sam?

And by the way Sanders actually came out and said he's not an atheist. I don't really know and don't really care whether he is, like 99% of liberals.

Jan you don't want to play this game considering who you Party just made deputy chairman.

Rub a little Robitussin on that gaping wound. You walked right into again Jan. Up your game lil' buddy.

A sizable block of democrat voters support Hamas which aims to eradicate Jews from the Earth. A sizable block of democrat voters support importing hundreds of thousands of people who overwhelmingly hate Jews. End of discussion.

Thomas, that is utter horseshit.

There is no denying an increasing trend among the Left internationally to blame a lot of things on the Jews. Some of Keith Ellison's supporters have been blaming Jewish influence for his loss, I see. Although in fairness that might be true.

Thank you for being concerned about my ability to convince though. That was very nice of you.

The existence of some vague example is not evidence of a trend.

However, just before the electio, Trump's election add was critical of a number of things, and the faces attached to the things he was critical of included many Jews.

Consdiering that Jews are highly overrepresented in media and finance (it's OK to say so if you use language that expresses it as at least potentially positive), this shouldn't be too surprising.

High school stats is quite sufficeint to show that the probability of its not being intentional is ... extremely low.

Up until last year, widows could inherit their spouses pensions indefinitely, even if they remarried. The benefits were so enticing that young women married old men so often it was called the "viagra effect": https://www.ft.com/content/49cf52d2-9343-11e4-879e-00144feabdc0

Sad to read that even though Rousseff killed this little scheme there are still a lot of painful reforms ahead.

When we lived in NZ the state superannuation arrangements were such that poorly paid workers would get a 'pay rise' when they retired. Or so the newspapers said. My right to an Australian Age Pension is worth nothing because the pension is means tested.

In British news this week Defined Benefit pension schemes have started to activate clauses in their T&Cs that let them cut spouses' pensions if the age gap in the marriage was greater than yen years.

In other words, 'abroad' is like a foreign country, they do things differently there.

And this is different from California...how?

http://www.financialsense.com/independent-institute/californias-growing-public-pension-crisis

At least California taxes pensions. Here in Illinois the retired public employee with a 200k pension doesn't pay a dime in state income taxes.

Are there any Actuarys in Brasil?

I've never actuarily met one. .

"Are there any Actuarys in Brasil?"

They all took early retirement .. on really fabulous pensions.

After marrying a young widow of an old man.

If there's a place where retiring young must be fun, it is Brazil :).

As a matter of fact, therw are lots of Brazilian actuaries, they have helped to review and reform the system. They are aiding President Temer's wise reforms, that are being introduced at neckbreakIng speed. They have concluded there are screws to be, but the system's funsamentals are good, as food as Brazil's fundamentals themselves. Things are getting better, shares prices are at an all-time high, the unemployment rate is almost stoping to rise, the Brazilian real got a record rise in its valuation vis-à-vis the dollar. The police strike is over and oreder has being succesfully imposed. The rescue of Rio de Janeiro's economy is progressi g fast (no Ford to say "drop dead"). Presidrt Temer os the most enlightened Brazilian president since Floriano Peixoto in the 1890s.

What, no Thiago (real or fake) chiming in to tell us how great Brazil is again? Must be late getting started this morning.

Look above.
I could blame the Carnival holidays, but actually I actually am on a business trip.

"Look above." First thread.

"Business trip" means Thiago is in mommy's basement with a hooker...paid for by her luxurious pension.

My parents don't have a basement, just an apartment and I don't live in the same city they do- but you are half-right (close enough for American work): I am at my home city, helping to straight things at the local branch after the last weeks of civil disturbances. I also took the opportunity to walk with the old man at the beach (two blocks from home, althought I do not like sand or the sea). He won't live forever, unfortunately. And neither he or she earns a "luxurious pension", alrhough I admit a certain kind of person, both in the USA and in Brazil, ressent the idea of old people not actually having to starve or look for food at garbage cans or, at the best possible case, depending on their children and their children's mates' goodwill. I guess those people would say my parents' pensions are luxurious.

But Thiago, baby, why would they have to "...starve or look for food at garbage cans..." when Brazil is (according to you) a light unto other nations?

One of the reasons we are the Lighthouse of Mankind is exacrly because we don't intend to make people in their 70's beg for food or work like a team of animals under one whip. We call it empathy and most Brazilians feel it.

Thiago, baby, be honest: "empathy" is just another way of saying that you want me my brothers keeper. Am I right?

Using the word "baby" like this... Could this be Milo staging a comeback through MR comments? That is starting small...

If you want to use Cain's famous expression... Actually, why not? If greed is good, why wouldn't fratricide be? But evidently I and the old folks everywhere are conspiring against you. You know, Brazil is much bigger than the Roman Empire ever was and we have no intention to repeat the history of a people about whom one of the Gracchi Brothers said,

"The wild beasts of Italy have their caves to retire to, but the brave men who spill their blood in her cause have nothing left but air and light. Without houses, without settled habitations, they wander from place to place with their wives and children; and their generals do but mock them when, at the head of their armies, they exhort their men to fight for their sepulchers and the gods of their hearths, for among such numbers perhaps there is not one Roman who has an altar that has belonged to his ancestors or a sepulcher in which their ashes rest. The private soldiers fight and die to advance the wealth and luxury of the great, and they are called masters of the world without having a sod to call their own."

Make no mistake, our people is the sole master of one of the greatest empires Mankind has ever seen and it will be treated accordingly whether you like it or not.

Thiago, baby, attacking the greatest Empire in history (the Roman Empire) to prop up the supposed greatness of Brazil is to pay the former a great compliment in the sense that, as the old adage goes, hypocrisy is the tribute which vice pays to virtue.

Why the greatest empire? Because they conquered lands? We conquered much more with much less blood? Because they had slaves? We did, we freed them. Because they killed God? We haven't. Because we won't oppress our citizens like they did? Sorry, but I am proud of our history of peace and fraternity.

So the issue isn't the one we constantly hear about, jobs, or the lack thereof. Jobs are unimportant except as an introduction to retirement benefits but when everyone is happily retired with substantial benefits who will supply the funding to keep forty year-old cops, firemen, school teachers, etc. on 365 day vacations? The answer, of course, is taxing private sector employees, many of whom will have incomes smaller than the benefits of the retirees. This is different than feudal society in only the details.

I think the minimum retirement age in the US should be 70. If someone is smart enough to have had a good job, such as a CEO who makes 400 times his employees, then obviously he can retire earlier. But if someone is dumb, such as a bricklayer or other manual laborer, he should work even a little longer than that, maybe to age 74. I'm sure the pharmaceutical companies who we subsidize for the rest of the world to the tune of >$100 billion/year are already sinking all that extra revenue into great R&D to produce miracle drugs that will keep geezers doing physical labor for decades longer than "retirement age."

I see you have been reading some of the proposals to reform our pensions system. Will those miracle drugs be produced soon?

I believe they will, so long as the US keeps agreeing to cover almost any drug at any price the companies request. The huge revenue stream goes almost exclusively to R&D efforts, making it the most innovative industry in the world.

I guess if money is no object, it can work out... for some people at least.

In fact, there is a solution to problems like the California pension fund travesty. The various municipal entities that have given away money to their employees have to go out of business. Los Angeles County must be declared bankrupt and dissolved, to be replaced by Cinema County and Sunset County. Orange County could become Disney County and Surf County. Start all over again. The existence of particular counties isn't ordained by God, they're just abstractions.

Same with states and even countries, when you think about it.

That the party of 'science' is so fiscally illiterate and/or blind, especially among left coast techies, perplexes me. Most of them I've known identify as socially / culturally progressive but "fiscally conservative". That their representative never follow through on the fiscal end is, of course, ignored.

If pressed about the looming public pension disaster, they dissemble and change the subject. They may go NPR and throw out something dumb Bush or an obscure Alabama GOP state rep did - so Republicans are much worse, see?

I think the real reason is more fundamental. Maybe it's my sample size, but a lot of left coast tech-dudes have wives/girlfriends in the public or non-profit sectors. So being outspoken against government spending correlates strongly in to NOT getting laid.

I imagine how hard it must be for those techie titans to get laid, to use your expression. I shed a tear for them

Nice try and (subtle) lie with the 'tech titans' crap.

Average left coast tech workers can struggle balancing work, insane living costs, and socializing / dating. If you can ease the last of those by conforming to the dominant political culture (of the spend thrift left), why not?

Because communists are unattractive, and tech work can be done anywhere.

"Nice try and (subtle) lie with the ‘tech titans’ crap."

At least we are told again and again by the far-right, how the big guys in techie, from Bill Gates to Mark Zuckerberg, are part of the liveral conspiration to make the state bigger. How Facebook and Twitter want to silence conservatives and all that. As we say in Brazil, you should balance better your lies,

"How Facebook and Twitter want to silence conservatives and all that."

Since, there's evidence of that happening that's not been seriously refuted, why would you doubt it?

Generally, the rebuttals have been that Facebook and Twitter are private companies and they are free to limit speech on their platforms as they see fit.

"Former Facebook Workers: We Routinely Suppressed Conservative News

Facebook workers routinely suppressed news stories of interest to conservative readers from the social network’s influential “trending” news section, according to a former journalist who worked on the project. This individual says that workers prevented stories about the right-wing CPAC gathering, Mitt Romney, Rand Paul, and other conservative topics from appearing in the highly-influential section, even though they were organically trending among the site’s users."

http://gizmodo.com/former-facebook-workers-we-routinely-suppressed-conser-1775461006

If you check the numbers, in fact, parties identified as "left wing" in many countries have a much better record in finances.

Partly this is because they are honest about what they will do (excluding the Chavez's of the world), so this gives lots of opporutnities for response in case they're going off the deep end or being generally dumb. But the main thing is that tax cuts are not a magical formula to produce revenue growth, and the right wing still allows itself to be mesmerized by observations from when the super high tax rates of WWII and the post-WWII era were reduced.

Given our policies it's incredible how the country has managed to grow at all over the past 60 years.

It hasn't grown very much.

Between 1981 and 2003, GDP per capita was basically flat. They had two lost decades in a row.

Savings rates are low, even by Latin American standards.

Comments for this post are closed