Exile of the Oldies

President Putin’s party is looking at shipping pensioners abroad to reduce pension costs.

A radical way of improving Russian pensioners’ lives has been put forward by a United Russia member.

Instead of raising pensions, the activist has proposed shipping Russia’s elderly abroad, where it would be much cheaper to live.

According to his calculations, the average Russian pension of $200 a month would be enough to lead a decent life in Latvia, Uzbekistan, India or Bulgaria, while a Moscow pensioner’s $330 would make for a good standard of living in Turkey or Egypt.

As an example, he cited the experience of the1990s when many pensioners emigrated to Israel, Germany, Egypt and Bulgaria. Even now, he added, many well-off Russian send their parents abroad to live in a nice house on the sea shore where their grandchildren often come to enjoy the fresh air.

“We have a choice – either to keep raising pensions, give subsidies and invest money into pensioner-support programs; or to help them move, saving up for the budget and really helping people out,” the activist said.

Is this any different in tine to the Intergenerational Foundation’s Hoarding on Housing report found that 51.5% of over-65s live in homes with two or more bedrooms they do not need or use.

I keep coming across reports from rural district saying they want to reduce in-migration of older people to retain a balanced population, which is a very good excuse for building less housing if you ask me.  Why not just put up signs at the district boundary, oldies keep out?

There is a serious point here.  Over 1 million elderly people live in sunnier climes abroad, evolutionarily, because they sold there English homes.  But how many elderly people trapped in social housing would choose the same, and still be able to claim their pensions, probably a million more.  How many vacant/half built houses are they in the south of Spain?  1.6 million.

Spanish banks who have now repossessed these homes could swap them for social housing in the UK on which they could claim the receipts of affordable rents. Freeing up a million homes in the UK and bailing out a nation in one move, plus retiring in the sun and not Rotherham.  Spain has a surplus of homes we have a shortfall, the homes/jobs balance is not an issue if you are retired.  Its a no brainer.

More Migration Watch and Sun Lies on Immigration and Housing

The Sun headline today booms – ‘Migrants need 415,000 new council homes’ over the next 25 years. Based on a report by migration watch.

As we have reported on earlier there is a fundamental flaw in their figures as less than half of net international migration translates into household formation. This has led to them to overestimate the contribution to housing need from immigration by 141%.

This error is repeated in their estimate of need for new Council housing published today, even though I directly pointed this out to them. There refusal to correct and response show that they have a racist axe to grind and their ‘research’ is not to be trusted.

They make an additional error in the new report which they try to conceal. Their gross total figure for new council housing demand includes EU migration. Of course this is almost balanced out by UK citizens working in the rest of the EU. 28% of all immigration is from the EU. If for example we pulled out of the EU, hypothetically, UK citizens working in the EU might have to leave and vice versa. So the migration watch figures overestimate the proportion of council house homes caused by immigration by 1.28 x 1.41=180%

Baby Boomers to Blame for the Debt Crisis?

Surprising good piece at CNN about whether the ageing of the baby boom generation is responsible for the debt crisis

Good quote
‘any good demographer would have told you 20 years ago that we would be hitting the wall around now’ (William Frey, Senior fellow in the Metropolitan Policy Program at the Brookings Institute.)

Im sure in 20 years time the economic history books will be stressing structural issues from demography, peak energy, uneven development and inequality, and capture of elites by the financial sector, over and above ‘stupid’ bankers, and ‘dumb’ politicians. Stupid and dumb forever and always in history.

You cannot get away from that the Baby Booming generation is the main recipients of rentier income from land, from stocks, and from transfer payments from taxpayers.  Whilst their children’s generation is the main payers of rent and taxes with limited potential to save,

Demographic Change and Economic Growth – Some Hypotheses

A few hypotheses about population and economic growth – by themselves I don’t think any of them are really disputed although they are rarely put together

1. A wide variety of different levels of population can be sustainable providing the population can be sustained by non-fossil fuel sources of energy and there is sufficient land for growing food that does not require clearance of important biosinks
2. It is changes to population that are most important as a cause (and effect) of economic growth – more so than the absolute level of population
3. The most important factor is the changes that lead to changes of the dependency ratio – (proportio of working to non-working)
4. Very high birth rates are associated with poverty – because of the number of mouths to feed per working adult
5. Falls in high birth rates increase growth – immediately through increasing female participation and reducing dependency ratios – and a secondary pulse in 18 or so years time – this is what we have seen in Ireland
6 But very rapid falls in infant mortality caused by economic growth cause a ‘demographic drag’ effect through increasing the dependency ratio and young people coming onto the labour market more quickly than they can be absorbed – this is what we are seeing in Arab cities
7 Rapid increases in death rates of adults have a strong wealth effect through inheritance of middle and upper classes (as we saw after the black death and wars) that is likely to outweigh the increased dependency ratio – as we are now seeing in Russia with men dying of alcoholism and population falling yet very strong economic growth – the dependency ratio falls if men never reach old age – one of the the causes of the baby boom long economic boom
8. A sharp fall in the birth rate will in the short term boost growth through reducing the dependency ratio but after 18+ years will increase it causing a fierce slow down in growth – this is what we are seeing in China
9. If a society is heavily indented it needs a falling dependency ratio to pay it off – heavy debt and a rising ratio is a recipe for disaster – Japan a decade ago – US now – Germany in 10 years time.
10. If a society has a low level of debt it can afford a rising dependency ratio as it can borrow to make up the difference.
11 If a society/economic system runs out of agricultural land food prices will rise causing immense disruption and instability – there will be an incentive to innovate raising agricultural productivity (the Boserup effect) but the effects will take a number of years – so in the short term regimes have to borrow and import.
12. If the level of debt gets too high and real incomes fall too much relative to rising food prices then you get regime change, land reform and debt cancellation.
13. See 1 above we are running out of agricultural land and in recent years productivity of food/unit of agricultural land has been rising slowly compared to the massive increases in the 70s and 80s.